EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
DATED AS OF DECEMBER 16, 2001,
AS AMENDED AS OF APRIL 12, 2002,
BY AND AMONG
CONEXANT SYSTEMS, INC.,
WASHINGTON SUB, INC.
AND
ALPHA INDUSTRIES, INC.
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TABLE OF CONTENTS
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ARTICLE I THE MERGER.................................................. A-6
SECTION 1.1 The Merger.................................................. A-6
SECTION 1.2 Closing; Effective Time..................................... A-6
SECTION 1.3 Effects of the Merger....................................... A-6
SECTION 1.4 Conversion of Washington Common Stock....................... A-6
SECTION 1.5 Alpha Common Stock.......................................... A-7
SECTION 1.6 Certificate of Incorporation................................ A-7
SECTION 1.7 By-Laws..................................................... A-7
SECTION 1.8 Officers.................................................... A-7
SECTION 1.9 Board of Directors.......................................... A-7
SECTION 1.10 Name; Corporate Offices..................................... A-7
SECTION 1.11 Fiscal Year................................................. A-8
ARTICLE II OPTIONS..................................................... A-8
SECTION 2.1 Option Conversion........................................... A-8
SECTION 2.2 Incentive Stock Options..................................... A-8
SECTION 2.3 Shares Reserved; Registration............................... A-8
ARTICLE III EXCHANGE OF SHARES.......................................... A-8
SECTION 3.1 Alpha to Make Shares Available.............................. A-8
SECTION 3.2 Exchange of Shares.......................................... A-9
SECTION 3.3 Affiliates.................................................. A-10
ARTICLE IV CERTAIN PRE-MERGER TRANSACTIONS............................. A-10
SECTION 4.1 Ancillary Agreements........................................ A-10
SECTION 4.2 Contribution................................................ A-11
SECTION 4.3 Distribution................................................ A-11
ARTICLE V REPRESENTATIONS AND WARRANTIES.............................. A-11
SECTION 5.1 Representations and Warranties of Alpha..................... A-11
SECTION 5.2 Representations and Warranties of Conexant.................. A-19
ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS................... A-28
SECTION 6.1 Covenants of Alpha.......................................... A-28
SECTION 6.2 Covenants of Conexant and Washington........................ A-30
SECTION 6.3 Reports; SEC Reports........................................ A-33
SECTION 6.4 Control of Other Party's Business........................... A-33
ARTICLE VII ADDITIONAL AGREEMENTS....................................... A-33
SECTION 7.1 Preparation of Proxy Statement; Stockholders Meeting........ A-33
SECTION 7.2 Combined Company Board of Directors and Management.......... A-35
SECTION 7.3 Access to Information....................................... A-35
SECTION 7.4 Reasonable Best Efforts..................................... A-35
SECTION 7.5 Acquisition Proposals....................................... A-36
SECTION 7.6 Employee Benefits Matters................................... A-38
SECTION 7.7 Fees and Expenses........................................... A-39
SECTION 7.8 Directors' and Officers' Indemnification and Insurance...... X-00
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SECTION 7.9 Public Announcements........................................ A-40
SECTION 7.10 Accounting Matters.......................................... A-40
SECTION 7.11 Listing of Shares of Alpha Common Stock..................... A-41
SECTION 7.12 Affiliates.................................................. A-41
SECTION 7.13 Section 16 Matters.......................................... A-41
SECTION 7.14 Takeover Statutes........................................... A-41
SECTION 7.15 Advice of Changes........................................... A-41
SECTION 7.16 Shareholders Agreement...................................... A-41
SECTION 7.17 Tax Ruling.................................................. A-41
SECTION 7.18 Option Acceleration......................................... A-42
SECTION 7.19 Employment and Severance Arrangements....................... A-42
SECTION 7.20 Transition Services Agreement............................... A-42
ARTICLE VIII CONDITIONS PRECEDENT........................................ A-42
SECTION 8.1 Conditions to Each Party's Obligation to Effect the A-42
Merger......................................................
SECTION 8.2 Additional Conditions to Obligations of Alpha............... A-43
SECTION 8.3 Additional Conditions to Obligations of Washington.......... A-44
ARTICLE IX TERMINATION AND AMENDMENT................................... A-45
SECTION 9.1 Termination................................................. A-45
SECTION 9.2 Effect of Termination....................................... A-46
SECTION 9.3 Amendment................................................... A-46
SECTION 9.4 Extension; Waiver........................................... A-47
ARTICLE X GENERAL PROVISIONS.......................................... A-47
SECTION 10.1 Non-Survival of Representations, Warranties, Covenants and A-47
Agreements..................................................
SECTION 10.2 Notices..................................................... A-47
SECTION 10.3 Interpretation.............................................. A-48
SECTION 10.4 Counterparts................................................ A-48
SECTION 10.5 Entire Agreement; No Third Party Beneficiaries.............. A-48
SECTION 10.6 Governing Law............................................... A-48
SECTION 10.7 Severability................................................ A-48
SECTION 10.8 Assignment.................................................. A-49
SECTION 10.9 Submission to Jurisdiction; Waivers......................... A-49
SECTION 10.10 Enforcement................................................. A-49
SECTION 10.11 Definitions................................................. A-49
SECTION 10.12 Disclosure Schedule......................................... X-00
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XXXXXXXX
Exhibit A -- Form of Contribution and Distribution Agreement
Exhibit B -- Form of Amended and Restated Certificate
Exhibit C -- Form of By-Laws
Exhibit D -- Form of Certificate of Merger
Exhibit E -- Certain Alpha Agreements
Exhibit F -- Form of Tax Allocation Agreement
Exhibit G -- Form of Employee Matters Agreement
Exhibit H -- Form of Affiliate Agreement
Exhibit I -- Parties to Shareholder Agreement
Exhibit J -- Form of Shareholder Agreement
Exhibit K -- Terms of Newport Supply Agreement
Exhibit L -- Terms of Newbury Supply Agreement
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AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, dated as of December 16, 2001, as
amended as of April 12, 2002 (this "Agreement"), by and among CONEXANT SYSTEMS,
INC., a
Delaware corporation ("Conexant"), WASHINGTON SUB, INC., a
Delaware
corporation and a wholly-owned subsidiary of Conexant ("Washington"), and ALPHA
INDUSTRIES, INC., a
Delaware corporation ("Alpha").
W I T N E S S E T H :
WHEREAS, simultaneously with the execution and delivery of this Agreement,
Conexant and Washington are entering into a contribution and distribution
agreement in the form attached hereto as Exhibit A (the "Distribution
Agreement") pursuant to which (a) all the Washington Assets (as defined in the
Distribution Agreement) will be assigned to Washington and/or to one or more of
the Washington Subsidiaries (as defined in the Distribution Agreement) and all
of the Washington Liabilities (as defined in the Distribution Agreement) will be
assumed by Washington and/or by one or more of the Washington Subsidiaries, all
as provided in the Distribution Agreement (the "Contribution") and (b) all of
the issued and outstanding shares of common stock, par value $.01 per share, of
Washington (the "Washington Common Stock") will be distributed on a pro rata
basis to Conexant's stockholders as provided in the Distribution Agreement (the
"Distribution");
WHEREAS, the Boards of Directors of Conexant, Washington and Alpha deem it
advisable and in the best interests of each corporation and its respective
stockholders that Washington and Alpha enter into a merger transaction in order
to advance the long-term strategic business interests of Conexant, Washington
and Alpha;
WHEREAS, the Boards of Directors of Conexant, Washington and Alpha have
determined to consummate such merger transaction by means of the business
combination transaction provided for herein in which, immediately following the
Distribution Washington will, subject to the terms and conditions set forth
herein, merge with and into Alpha (the "Merger"), with Alpha being the surviving
corporation (hereinafter sometimes referred to in such capacity as the "Combined
Company") in the Merger;
WHEREAS, the parties to this Agreement intend that the Contribution and the
Distribution qualify under Sections 355 and 368 of the Internal Revenue Code of
1986, as amended (the "Code"), as a reorganization, that the Merger qualify
under Section 368 of the Code as a reorganization and that this Agreement shall
constitute a "plan of reorganization" for purposes of Sections 354 and 361 of
the Code;
WHEREAS, the parties desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also to prescribe
certain conditions to the Merger;
WHEREAS, capitalized terms used in this Agreement will have the respective
meanings set forth (i) in Section 10.11 or (ii) in the Sections of this
Agreement or in the relevant Reorganization Agreement (as defined in Section
10.11) set forth opposite such terms in Section 10.11; and
WHEREAS, subsequent to the execution and delivery of this Agreement as of
December 16, 2001, Alpha, Conexant and Washington agreed effective as of April
12, 2002 to amend this Agreement to (a) incorporate a change in the Exchange
Ratio (as defined in Section 1.4(a)) in order to adjust for certain options
issued to employees of Conexant's Mindspeed Technologies business that will not
be adjusted in the Distribution, pursuant to the Employee Matters Agreement (as
defined in Section 4.1), and the Merger, pursuant to this Agreement, in the same
manner as other Conexant Stock Options (as defined in Section 5.2(b)(i)), and
the holders of which will not receive Converted Options (as defined in Section
10.11) in respect thereof, and (b) amend Sections 1.8 and 10.3, it being
understood and agreed by the parties that in all other respects, this Agreement
shall remain in effect in the form executed and delivered by the parties as of
December 16, 2001. The revised Exchange Ratio was calculated to maintain the
same proportional ownership of the Combined Company immediately following the
Merger by holders of Conexant Common Stock (as defined in Section 5.2(b)(i)) and
the holders of Alpha Common Stock (as
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defined in Section 1.4(a)) as would have existed if these options had been
excluded from the parties' original calculations.
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Upon the terms and conditions of this Agreement,
and in accordance with the General Corporation Law of the State of
Delaware (the
"DGCL"), at the Effective Time (as defined in Section 1.2(b)), Washington shall
merge with and into Alpha. Alpha shall be the surviving corporation in the
Merger and shall continue its corporate existence under the laws of the State of
Delaware. Upon consummation of the Merger, the separate corporate existence of
Washington shall terminate.
SECTION 1.2 Closing; Effective Time.
(a) The closing of the Merger (the "Closing") will take place as soon as
practicable, but in any event within three Business Days, after the satisfaction
or waiver (subject to Applicable Laws) of the conditions (excluding conditions
that, by their nature, cannot be satisfied until the Closing Date (as defined
below)) set forth in Article VIII, unless this Agreement has been theretofore
terminated pursuant to its terms or unless another time or date is agreed to in
writing by the parties hereto (the actual time and date of the Closing being
referred to herein as the "Closing Date"). The Closing shall be held at the
offices of Xxxxxxxxxx & Xxxxx LLP, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx,
unless another place is agreed to in writing by the parties hereto.
(b) The Merger shall become effective as set forth in the certificate of
merger relating thereto substantially in the form attached hereto as Exhibit D
that shall be filed with the Secretary of State of the State of
Delaware (the
"
Delaware Secretary") on the Closing Date (the "Certificate of Merger"). The
term "Effective Time" shall be the date and time when the Merger becomes
effective, as set forth in the Certificate of Merger. The Effective Time shall
occur immediately after the Time of Distribution (as defined in the Distribution
Agreement).
SECTION 1.3 Effects of the Merger. At and after the Effective Time, the
Merger shall have the effects set forth in the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all of
the properties, rights, privileges, powers and franchises of Washington shall
vest in Alpha, and all debts, liabilities and duties of Washington shall become
the debts, liabilities and duties of Alpha.
SECTION 1.4 Conversion of Washington Common Stock. At the Effective Time,
by virtue of the Merger and without any action on the part of Washington, Alpha
or the holders of any capital stock of Washington or Alpha:
(a) Subject to Section 3.2(d), each share of Washington Common Stock
issued and outstanding immediately prior to the Effective Time (after
giving effect to the Distribution), other than shares of Washington Common
Stock held in Washington's treasury or owned by Alpha or any wholly-owned
Subsidiary of Washington or Alpha, shall automatically be converted into
the right to receive 0.351 shares (the "Exchange Ratio") of common stock,
par value $.25 per share, of Alpha (including the associated preferred
share purchase rights, the "Alpha Common Stock"). If (i) between the date
hereof and the Effective Time, the outstanding shares of Alpha Common
Stock, (ii) between the date hereof and the Time of Distribution, the
outstanding shares of Conexant Common Stock (as defined in Section
5.2(b)(i)) or (iii) following the Time of Distribution and prior to the
Effective Time, the outstanding shares of Washington Common Stock, shall
have been increased, decreased, changed into or exchanged for a different
number or kind of shares or securities (or a record date within any such
period shall have been established for any of the foregoing) as a result of
a reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar change in capitalization (other
than solely as a result of the Distribution or the Merger, but including
any
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increase or decrease in the outstanding shares of Conexant Common Stock as
a result of the issuance of any security in accordance with the Conexant
Rights Agreement (as defined in Section 5.2(b)(i)), an appropriate and
proportionate adjustment shall be made to the Exchange Ratio to the extent
necessary to reflect such reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or
similar change in capitalization.
(b) All shares of Washington Common Stock converted into the right to
receive Alpha Common Stock pursuant to this Article I shall no longer be
outstanding and shall automatically be canceled and shall cease to exist,
and each certificate or book-entry credit previously evidencing any such
shares of Washington Common Stock (a "Washington Certificate") shall
thereafter evidence only the right to receive (i) the number of whole
shares of Alpha Common Stock (which shall be in uncertificated book-entry
form unless a physical certificate is requested) and (ii) cash in lieu of
fractional shares of Alpha Common Stock into which the shares of Washington
Common Stock formerly evidenced by such Washington Certificate have been
converted pursuant to this Section 1.4 and Section 3.2(d), without any
interest thereon.
(c) All shares of Washington Common Stock held in Washington's
treasury or owned by Alpha, or any wholly-owned Subsidiary of Washington or
Alpha shall be canceled and shall cease to exist and no shares of Alpha
Common Stock or other consideration shall be delivered in exchange
therefor.
SECTION 1.5 Alpha Common Stock. At and after the Effective Time, each
share of Alpha Common Stock issued and outstanding immediately prior to the
Effective Time shall remain an issued and outstanding share of common stock of
the Combined Company and shall not be affected by the Merger.
SECTION 1.6 Certificate of Incorporation. At the Effective Time, the
certificate of incorporation of the Combined Company shall be in the form
attached hereto as Exhibit B, with such changes thereto as shall be mutually
agreed upon by Conexant and Alpha (the "Restated Certificate"), until thereafter
amended in accordance with the terms thereof and Applicable Laws (as defined in
Section 10.11).
SECTION 1.7 By-Laws. At the Effective Time, the by-laws of the Combined
Company shall be in the form attached hereto as Exhibit C, with such changes as
may be mutually agreed upon by Conexant and Alpha (the "By-Laws"), until
thereafter amended in accordance with the terms thereof, the Restated
Certificate and Applicable Laws.
SECTION 1.8 Officers. At the Effective Time, Xxxxx X. Xxxxxxx shall be
Chief Executive Officer of the Combined Company and otherwise the initial
officers of the Combined Company shall be as Conexant and Alpha shall agree
prior to the Effective Time, and such officers shall hold office until their
respective successors are duly appointed and qualified, or their earlier death,
resignation or removal.
SECTION 1.9 Board of Directors. At the Effective Time, until duly changed
in compliance with the Restated Certificate, the By-Laws and Applicable Laws,
the Board of Directors of the Combined Company shall consist of either nine or
eleven persons (as agreed by Conexant and Alpha prior to the Effective Time),
including (a) four (in the case of a nine-person Board of Directors) or five (in
the case of an eleven-person Board of Directors) persons (one of whom shall be
Chairman of the Board of the Combined Company) to be named by the Board of
Directors of Conexant, (b) four (in the case of a nine-person Board of
Directors) or five (in the case of an eleven-person Board of Directors) persons
to be named by the Board of Directors of Alpha and (c) one person to be jointly
named by the Boards of Directors of Conexant and Alpha. The directors named by
Conexant and Alpha shall be allocated proportionately among the classes of the
Board of Directors of the Combined Company as shall be agreed between Conexant
and Alpha prior to the Effective Time.
SECTION 1.10 Name; Corporate Offices.
(a) At the Effective Time, the name of the Combined Company shall be
as agreed by Conexant and Alpha prior to the Effective Time.
(b) At the Effective Time, the Combined Company shall have joint
headquarters located in Newport Beach, California and Woburn,
Massachusetts.
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SECTION 1.11 Fiscal Year. The fiscal year of the Combined Company will
initially end on September 30 of each year.
ARTICLE II
OPTIONS
SECTION 2.1 Option Conversion. At or prior to the Effective Time,
Washington and Alpha will take all action necessary such that each Washington
Option (as defined in the Employee Matters Agreement) that is outstanding and
unexercised immediately prior thereto (after giving effect to the adjustments to
Conexant Stock Options (as defined in Section 5.2(b)(i)) to be effected in
connection with the Distribution as provided for in the Employee Matters
Agreement) shall cease to represent a right to acquire shares of Washington
Common Stock and shall, as of the Effective Time, automatically be converted
into a Converted Option exercisable for a number of shares of Alpha Common Stock
and at an exercise price determined as provided below (and otherwise subject to
the terms of the appropriate Washington Stock Plan (as defined in the Employee
Matters Agreement) governing such option and the agreements evidencing grants
thereunder):
(i) The number of shares of Alpha Common Stock to be subject to the
Converted Option shall be equal to the product of the number of shares of
Washington Common Stock subject to the unexercised portion of the
Washington Option (as adjusted in connection with the Distribution)
multiplied by the Exchange Ratio, provided that any fractional shares of
Alpha Common Stock resulting from such multiplication shall be rounded down
to the nearest whole share; and
(ii) The exercise price per share of Alpha Common Stock under the
Converted Option shall be equal to the exercise price per share of
Washington Common Stock under the Washington Option (as adjusted in
connection with the Distribution) divided by the Exchange Ratio, provided
that such exercise price shall be rounded up to the nearest whole cent.
SECTION 2.2 Incentive Stock Options. The adjustment provided herein with
respect to any options that are "incentive stock options" (as defined in Section
422 of the Code) shall be and is intended to be effected in a manner that is
consistent with Section 424(a) of the Code. Except as set forth in this Section
2.2, the duration and other terms of such Converted Option shall be the same as
the Washington Option, except that all references to Washington shall be deemed
to be references to the Combined Company (but taking into account any changes
thereto provided for in the Washington Stock Plans by reason of this Agreement
or the transactions contemplated hereby).
SECTION 2.3 Shares Reserved; Registration. Following the Effective Time,
the Combined Company shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Alpha Common Stock for delivery upon
exercise of the Converted Options pursuant to the terms set forth in this
Article II. As soon as practicable but in any event not later than five days
following the Effective Time, the shares of Alpha Common Stock subject to the
Converted Options will be covered by an effective registration statement on Form
S-8 (or any successor form) or another appropriate form and the Combined Company
shall use its reasonable best efforts to maintain the effectiveness of such
registration statement for so long as the Converted Options remain outstanding.
ARTICLE III
EXCHANGE OF SHARES
SECTION 3.1 Alpha to Make Shares Available. From time to time, prior to,
at or after the Effective Time, Alpha shall deposit, or shall cause to be
deposited, with a bank or trust company appointed by Conexant and reasonably
acceptable to Alpha (the "Exchange Agent"), for the benefit of the holders of
the Washington Certificates, for exchange in accordance with this Article III,
the shares of Alpha Common Stock to be issued pursuant to Section 1.4 and
delivered pursuant to Section 3.2(a) in
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exchange for Washington Certificates (such shares of Alpha Common Stock,
together with any dividends or distributions with respect thereto, the "Exchange
Fund").
SECTION 3.2 Exchange of Shares.
(a) As soon as reasonably practicable after the Effective Time, the
Exchange Agent shall make book-entry credits as of the Closing Date for each
holder of record of Washington Common Stock immediately prior to the Effective
Time for that number of whole shares of Alpha Common Stock into which the shares
of Washington Common Stock formerly evidenced by such holder's Washington
Certificate shall have been converted pursuant to this Agreement and shall
deliver to each such holder (x) an account statement indicating the number of
whole shares of Alpha Common Stock that such holder owns of record as of the
Effective Time and (y) a check representing the amount of any cash in lieu of
fractional shares that such holder has the right to receive pursuant to Section
3.2(d) in respect of such holder's Washington Certificate. No interest will be
paid or accrued on any cash in lieu of fractional shares or on any unpaid
dividends and distributions payable to holders of Washington Certificates.
(b) If any certificate or book-entry credit evidencing shares of Alpha
Common Stock is to be registered in a name other than that in which the
Washington Certificate is registered, it shall be a condition of the issuance
thereof that an appropriate instrument of transfer of Washington Certificates be
delivered and that the person requesting such exchange will have paid to the
Exchange Agent in advance any transfer or other taxes required by reason of the
issuance of a certificate or book-entry credit evidencing shares of Alpha Common
Stock in any name other than that of the registered holder of the Washington
Certificate formerly held, or required for any other reason, or shall have
established to the satisfaction of the Exchange Agent that such tax has been
paid or is not payable.
(c) After the Effective Time, there shall be no transfers on the stock
transfer books of Washington of the shares of Washington Common Stock that were
issued and outstanding immediately prior to the Effective Time.
(d) (i) Notwithstanding anything to the contrary contained herein, no
certificates or scrip representing fractional shares of Alpha Common Stock or
book-entry credit of the same shall be issued in exchange for Washington
Certificates, no dividend or distribution with respect to Alpha Common Stock
shall be payable on or with respect to any such fractional share, and such
fractional share interests shall not entitle the owner thereof to vote or to any
other rights of a stockholder of Alpha. In lieu of the issuance of any such
fractional share, Alpha shall pay to each holder of Washington Certificates who
otherwise would be entitled to receive such fractional share an amount in cash
determined in the manner provided in clauses (ii) and (iii) of this Section
3.2(d).
(ii) As promptly as practicable following the Effective Time, the
Exchange Agent shall determine the excess of (x) the number of full shares
of Alpha Common Stock delivered to the Exchange Agent by Alpha pursuant to
Section 3.1 for issuance to holders of Washington Certificates pursuant to
Section 1.4 over (y) the aggregate number of full shares of Alpha Common
Stock to be distributed to holders of Washington Certificates pursuant to
this Section 3.2 (such excess being herein referred to as the "Excess Alpha
Shares"). As soon as reasonably practicable following the Effective Time,
the Exchange Agent, as agent for such holders of Washington Certificates,
shall sell the Excess Alpha Shares at then prevailing prices on the Nasdaq
National Market System, all in the manner provided in clause (iii) of this
Section 3.2(d).
(iii) The sale of the Excess Alpha Shares by the Exchange Agent shall
be executed on the Nasdaq National Market System through one or more member
firms of the National Association of Securities Dealers, Inc. and shall be
executed in round lots to the extent practicable. Until the net proceeds of
any such sale or sales have been distributed to the holders of Washington
Certificates, the Exchange Agent will hold such proceeds in trust for such
holders as part of the Exchange Fund. The Combined Company shall pay all
commissions, transfer taxes and other out-of-pocket transaction costs of
the Exchange Agent incurred in connection with such sale or sales of Excess
Alpha Shares. In addition, the Combined Company shall pay the Exchange
Agent's compensation and expenses in
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connection with such sale or sales. The Exchange Agent shall determine the
portion of such net proceeds to which each holder of Washington
Certificates shall be entitled, if any, by multiplying the amount of the
aggregate net proceeds by a fraction, the numerator of which is the amount
of the fractional share interest to which such holder of Washington
Certificates is entitled (after taking into account all Washington
Certificates then held by such holder) and the denominator of which is the
aggregate amount of fractional share interests to which all holders of
Washington Certificates are entitled. As soon as practicable after the
determination of the amount of cash, if any, to be paid to holders of
Washington Certificates with respect to any fractional share interests, the
Exchange Agent shall promptly pay such amounts to such holders of
Washington Certificates subject to and in accordance with this Section 3.2.
(e) Any portion of the Exchange Fund that remains unclaimed by holders of
Certificates for twelve months after the Effective Time shall be delivered to
the Combined Company, and any holders of Washington Certificates who have not
theretofore complied with this Article III shall thereafter look only to the
Combined Company for payment of the shares of Alpha Common Stock, cash in lieu
of any fractional shares and any unpaid dividends and distributions on the Alpha
Common Stock deliverable in respect of each share of Washington Common Stock
formerly evidenced by such Washington Certificate as determined pursuant to this
Agreement, without any interest thereon. Any such portion of the Exchange Fund
remaining unclaimed by holders of Washington Certificates five years after the
Effective Time (or such earlier date immediately prior to such time as such
amounts would otherwise escheat to or become property of any Governmental Entity
(as defined in Section 5.1(c)(iii)) shall, to the extent permitted by Applicable
Laws, become the property of the Combined Company free and clear of any claims
or interest of any Person previously entitled thereto.
(f) None of the Combined Company, Conexant, Washington, the Exchange Agent
or any other Person shall be liable to any holder of Washington Certificates for
any shares of Alpha Common Stock, cash in lieu of fractional shares thereof and
any dividend or other distribution with respect thereto delivered in good faith
to a public official pursuant to applicable abandoned property, escheat or
similar Applicable Laws.
(g) The Exchange Agent shall invest any cash included in the Exchange Fund,
as directed by the Combined Company, on a daily basis. Any interest and other
income resulting from such investments shall be paid to the Combined Company
promptly upon request by the Combined Company.
(h) The Combined Company shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
Washington Certificates such amounts as the Combined Company or the Exchange
Agent is required to deduct and withhold with respect to the making of such
payment under the Code, or any provision of state, local or foreign tax law. To
the extent that amounts are so withheld by the Combined Company or the Exchange
Agent, such withheld amounts shall be treated for all purposes of this Agreement
as having been paid to the holder of the shares of Alpha Common Stock in respect
of which such deduction and withholding was made by the Combined Company or the
Exchange Agent.
SECTION 3.3 Affiliates. Notwithstanding anything to the contrary herein,
to the fullest extent permitted by law, no certificates or book-entry credits
evidencing shares of Alpha Common Stock or cash shall be issued or delivered
pursuant to this Article III to a Person who may be deemed an "affiliate" of
Washington in accordance with Section 7.12 hereof for purposes of Rule 145 under
the Securities Act of 1933, as amended (the "Securities Act"), until such Person
has executed and delivered an Affiliate Agreement (as defined in Section 7.12)
pursuant to Section 7.12.
ARTICLE IV
CERTAIN PRE-MERGER TRANSACTIONS
SECTION 4.1 Ancillary Agreements. Prior to the Time of Distribution,
Conexant, Washington and Alpha will execute and deliver a tax allocation
agreement substantially in the form attached hereto as
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Exhibit F (the "Tax Allocation Agreement") and an employee matters agreement
substantially in the form attached hereto as Exhibit G (the "Employee Matters
Agreement"). Prior to the Effective Time, Conexant and Alpha will execute and
deliver a Newport Supply Agreement substantially on the terms attached hereto as
Exhibit K (the "Newport Supply Agreement"), a Newbury Supply Agreement
substantially on the terms attached hereto as Exhibit L (the "Newbury Supply
Agreement") and a Transition Services Agreement in accordance with Section 7.20
(the "Transition Services Agreement").
SECTION 4.2 Contribution. Prior to the Time of Distribution and pursuant
to the terms and conditions of the Distribution Agreement, Conexant and
Washington will consummate the Contribution contemplated by Article II of the
Distribution Agreement.
SECTION 4.3 Distribution. Prior to the Effective Time, and pursuant to
the terms and conditions of the Distribution Agreement, Conexant will cause
Washington to be recapitalized and effect the Distribution.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of Alpha. Except as set forth
in the Alpha Disclosure Schedule delivered by Alpha to Conexant prior to the
execution of this Agreement (the "Alpha Disclosure Schedule") (each section of
which, to the extent specified therein, qualifies the correspondingly numbered
representation and warranty or covenant of Alpha contained herein and, to the
extent it is apparent on the face of such disclosure that such disclosure
qualifies another representation and warranty of Alpha contained herein, such
other representation and warranty of Alpha), Alpha represents and warrants to
Conexant as follows:
(a) Organization, Standing and Power; Subsidiaries.
(i) Each of Alpha and its Subsidiaries is a corporation or other
organization duly organized, validly existing and in good standing
(where applicable) under the laws of its jurisdiction of incorporation
or organization, has the requisite power and authority to own, lease and
operate its properties and to carry on its business as now being
conducted and as it will be conducted through the Effective Time, except
where the failure to be so organized, existing and in good standing or
to have such power and authority, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on
Alpha and its Subsidiaries, and is duly qualified and in good standing
to do business in each jurisdiction in which the nature of its business
or the ownership or leasing of its properties makes such qualification
necessary, other than in such jurisdictions where the failure so to
qualify or to be in good standing, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on
Alpha and its Subsidiaries. The copies of the certificate of
incorporation and by-laws of Alpha which were previously furnished or
made available to Conexant are true, complete and correct copies of such
documents as in effect on the date of this Agreement.
(ii) Exhibit 21 to Alpha's Annual Report on Form 10-K for the year
ended April 1, 2001 includes all the Subsidiaries of Alpha which as of
the date of this Agreement are Significant Subsidiaries of Alpha (as
defined in Rule 1-02 of Regulation S-X of the Securities and Exchange
Commission (the "SEC")). All the outstanding shares of capital stock of,
or other equity interests in, each such Significant Subsidiary have been
validly issued and are fully paid and nonassessable and are owned
directly or indirectly by Alpha, free and clear of all material pledges,
claims, liens, charges, encumbrances and security interests of any kind
or nature whatsoever (collectively, "Liens") and free of any other
material restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other equity
interests, but excluding restrictions under the Securities Act). None of
Alpha or any of its Subsidiaries directly or indirectly owns any equity
or similar interest in, or any interest convertible into or exchangeable
or exercisable for any equity or similar interest in, any
A-11
corporation, partnership, joint venture or other business association or
entity (other than Subsidiaries of Alpha), that is or would reasonably
be expected to be material to Alpha and its Subsidiaries taken as a
whole.
(b) Capital Structure.
(i) The authorized capital stock of Alpha consists of 100,000,000
shares of Alpha Common Stock. As of December 14, 2001, 44,174,096 shares
of Alpha Common Stock were issued and outstanding and no other shares of
capital stock of Alpha were issued and outstanding. As of December 14,
2001, 10,370,507 shares of Alpha Common Stock were reserved for issuance
upon exercise of options outstanding under Alpha Stock Plans. As of
December 14, 2001, no shares of Alpha Common Stock were held as treasury
shares. Since December 14, 2001 to the date of this Agreement, no shares
of capital stock of Alpha or any other securities of Alpha have been
issued other than shares of Alpha Common Stock issued pursuant to
options or rights outstanding as of December 14, 2001 under the Alpha
Stock Plans. All issued and outstanding shares of capital stock of Alpha
are duly authorized, validly issued, fully paid and nonassessable, and
no class of capital stock of Alpha is entitled to preemptive rights.
There are outstanding as of the date hereof no options, warrants or
other rights to acquire capital stock from Alpha other than options and
other rights to acquire Alpha Common Stock from Alpha ("Alpha Stock
Options") representing in the aggregate the right to purchase 6,619,900
shares of Alpha Common Stock under the Alpha Stock Plans. Section 5.1(b)
of the Alpha Disclosure Schedule sets forth a complete and correct list
as of a recent date of all outstanding Alpha Stock Options and the
exercise prices thereof.
(ii) No bonds, debentures, notes or other indebtedness of Alpha
having the right to vote on any matters on which stockholders of Alpha
may vote ("Alpha Voting Debt") are issued or outstanding.
(iii) Except as otherwise set forth in this Section 5.1(b), as of
the date of this Agreement, there are no securities, options, warrants,
calls, rights, commitments, agreements, arrangements or undertakings of
any kind to which Alpha or any of its Subsidiaries is a party or by
which any of them is bound obligating Alpha or any of its Subsidiaries
to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other voting securities of Alpha
or any of its Subsidiaries or obligating Alpha or any of its
Subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or
undertaking. As of the date of this Agreement, there are no outstanding
obligations of Alpha or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of Alpha or any of its
Subsidiaries.
(c) Authority; No Conflicts.
(i) Alpha has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated
hereby, subject, in the case of the consummation of the Merger, to the
approval and adoption of this Agreement and the Merger by the Required
Alpha Vote (as defined in Section 5.1(g)). The execution and delivery of
this Agreement by Alpha and the consummation by Alpha of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Alpha, subject in the case of
the consummation of the Merger, to the approval and adoption of this
Agreement and the Merger by the Required Alpha Vote. This Agreement has
been duly executed and delivered by Alpha and, assuming the due
authorization and valid execution and delivery of this Agreement by each
of Conexant and Washington, constitutes a valid and binding agreement of
Alpha, enforceable against Alpha in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and similar Applicable
Laws relating to or affecting creditors generally or by general equity
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
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(ii) The execution and delivery of this Agreement by Alpha does
not, and the consummation by Alpha of the Merger and the other
transactions contemplated hereby will not, conflict with, or result in
any breach or violation of, or constitute a default (with or without
notice or lapse of time, or both) under, or give rise to a right of or
result by its terms in the termination, amendment, cancellation or
acceleration of any obligation or the loss of a material benefit under,
or the creation of a Lien, charge, "put" or "call" right or other
encumbrance on, or the loss of, any assets (any such conflict, breach,
violation, default, right of termination, amendment, cancellation or
acceleration, loss or creation, a "Violation") pursuant to: (A) any
provision of the certificate of incorporation or by-laws or similar
organizational documents of Alpha or any Significant Subsidiary of Alpha
or (B) except as, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect on Alpha and its
Subsidiaries or, to the Knowledge of Alpha, the Combined Company and its
Subsidiaries following the Merger, subject to obtaining or making the
Alpha Necessary Consents (as defined in paragraph (iii) below), (I) any
loan or credit agreement, note, instrument, mortgage, bond, indenture,
lease, benefit plan or other contract, agreement or obligation (a
"Contract") to which Alpha or any of its Subsidiaries is a party or by
which any of them or any of their respective properties or assets is
bound, or (II) any permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
Alpha or any Subsidiary of Alpha or their respective properties or
assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any supranational, national,
state, municipal, local or foreign government, any instrumentality,
subdivision, court, administrative agency or commission or other
authority thereof, or any quasi-governmental or private body exercising
any regulatory, taxing, importing or other governmental or
quasi-governmental authority (a "Governmental Entity") or any other
Person is required by or with respect to Alpha or any Subsidiary of
Alpha in connection with the execution and delivery of this Agreement by
Alpha or the consummation by Alpha of the Merger and the other
transactions contemplated hereby, except for those required under or in
relation to (A) the Required Alpha Vote, (B) the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (C)
state securities or "blue sky" laws, (D) the Securities Act, (E) the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (F)
the DGCL with respect to the filing of the Certificate of Merger with
the
Delaware Secretary, (G) the rules and regulations of Nasdaq, (H)
antitrust or other competition laws of other jurisdictions and (I) such
consents, approvals, orders, authorizations, registrations, declarations
and filings the failure of which to make or obtain, individually or in
the aggregate, would not reasonably be expected to have a Material
Adverse Effect on Alpha and its Subsidiaries. Consents, approvals,
orders, authorizations, registrations, declarations and filings required
under or in relation to any of the foregoing clauses (A) through (H) or
set forth in Section 5.1(c)(iii) of the Alpha Disclosure Schedule are
hereinafter referred to as "Alpha Necessary Consents".
(d) Reports and Financial Statements.
(i) Alpha has filed all registration statements, prospectuses,
reports, schedules, forms, statements and other documents required to be
filed by it with the SEC since January 1, 2000 (collectively, including
all exhibits thereto, the "Alpha SEC Reports"). No Subsidiary of Alpha
is subject to the periodic reporting requirements of the Exchange Act.
None of the Alpha SEC Reports, as of their respective dates (or, if
amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the
financial statements (including the related notes) included in the Alpha
SEC Reports fairly presents, in all material respects, the consolidated
financial position and consolidated results of operations and cash flows
of Alpha and its consolidated Subsidiaries as of the respective dates or
for the respective periods set forth therein, all in conformity with
generally
A-13
accepted accounting principles ("GAAP") consistently applied during the
periods involved except as otherwise noted therein, and subject, in the
case of unaudited interim financial statements, to normal and recurring
year-end adjustments that have not been and are not expected to be
material in amount. All Alpha SEC Reports, as of their respective dates
(and as of the date of any amendment to the respective Alpha SEC
Report), complied as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and
the rules and regulations promulgated thereunder.
(ii) Except as disclosed in the Alpha SEC Reports filed and
publicly available prior to the date hereof (the "Alpha Filed SEC
Reports"), since April 1, 2001, Alpha and its Subsidiaries have not
incurred any liabilities that are of a nature that would be required to
be disclosed on a balance sheet of Alpha and its Subsidiaries or in the
footnotes thereto prepared in conformity with GAAP, other than
liabilities incurred in the ordinary course of business or that,
individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on Alpha and its Subsidiaries.
(e) Information Supplied.
(i) None of the information supplied or to be supplied by Alpha for
inclusion or incorporation by reference in (A) the Form S-4 (as defined
in Section 7.1(a)) will, at the time the Form S-4 is filed with the SEC,
at any time it is amended or supplemented or at the time it becomes
effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and (B) the
Proxy Statement/Prospectus (as defined in Section 7.1(a)) will, on the
date it is first mailed to Conexant stockholders or Alpha stockholders
or at the time of the Alpha Stockholders Meeting (as defined in Section
7.1(b)), contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(ii) Notwithstanding the foregoing provisions of this Section
5.1(e), no representation or warranty is made by Alpha with respect to
statements made or incorporated by reference in the Form S-4 or the
Proxy Statement/Prospectus based on information supplied by Conexant or
Washington for inclusion or incorporation by reference therein, or based
on information with is not included or incorporated by reference in such
documents but which should have been disclosed therein pursuant to
Section 5.2(e).
(f) Board Approval. The Board of Directors of Alpha, by resolutions
duly adopted by unanimous vote at a meeting duly called and held and, other
than as provided for in Section 7.5, not subsequently rescinded or modified
in any way, has duly (i) determined that this Agreement and the Merger are
advisable and in the best interests of Alpha and its stockholders, (ii)
approved this Agreement and the Merger, (iii) resolved to recommend that
the stockholders of Alpha approve and adopt this Agreement and the Merger
and directed that this Agreement and the Merger be submitted for
consideration by Alpha's stockholders at the Alpha Stockholders Meeting and
(iv) taken all other action necessary to render (A) the limitations on
business combinations contained in Section 203 of the DGCL (or any similar
provision) and (B) the provisions of Article Fifteenth of Alpha's
Certificate of Incorporation inapplicable to the transactions contemplated
hereby. To the Knowledge of Alpha, except for the limitations on business
combinations contained in Section 203 of the DGCL (which have been rendered
inapplicable), no state takeover statute is applicable or purports to be
applicable to the Merger or the other transactions contemplated hereby.
(g) Vote Required. The affirmative vote of the holders of a majority
of the outstanding shares of Alpha Common Stock (the "Required Alpha Vote")
to approve and adopt this Agreement and the Merger is the only vote of the
holders of any class or series of Alpha capital stock necessary to approve
or adopt this Agreement and the Merger and the other transactions
contemplated hereby.
A-14
(h) Litigation; Compliance with Laws.
(i) Except as set forth in the Alpha Filed SEC Reports, there is no
suit, action, proceeding or regulatory investigation pending or, to the
Knowledge of Alpha, threatened, against or affecting Alpha or any
Subsidiary of Alpha or any property or asset of Alpha or any Subsidiary
of Alpha which, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect on Alpha and its
Subsidiaries, nor is there any judgment, decree, injunction, rule or
order of any Governmental Entity or arbitrator outstanding against Alpha
or any Subsidiary of Alpha which, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect on Alpha
and its Subsidiaries.
(ii) Except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Alpha and
its Subsidiaries, Alpha and its Subsidiaries hold all permits, licenses,
franchises, variances, exemptions, orders and approvals of all
Governmental Entities which are necessary for the operation of the
businesses of Alpha and its Subsidiaries, taken as a whole (the "Alpha
Permits"), and no suspension or cancellation of any of the Alpha Permits
is pending or, to the Knowledge of Alpha, threatened, except for
suspensions or cancellations which, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on
Alpha and its Subsidiaries. Alpha and its Subsidiaries are in compliance
with the terms of the Alpha Permits, except where the failure so to
comply, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Alpha and its
Subsidiaries. None of Alpha or any of its Subsidiaries is in violation
of, and Alpha and its Subsidiaries have not received any notices of
violations with respect to, any Applicable Laws, except for violations
which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Alpha and its
Subsidiaries.
(i) Absence of Certain Changes or Events. Except as set forth in the
Alpha Filed SEC Reports, since April 1, 2001, Alpha and its Subsidiaries
have conducted their business only in the ordinary course, consistent with
past practice. Except as set forth in the Alpha Filed SEC Reports, since
April 1, 2001, there has not been any event, change, circumstance or
development which, individually or in the aggregate, has had, or would
reasonably be expected to have, a Material Adverse Effect on Alpha and its
Subsidiaries. Since April 1, 2001 through the date of this Agreement, none
of Alpha or any of its Subsidiaries has taken any action that, if taken
during the period from the date of this Agreement through the Effective
Time, would constitute a breach of Section 6.1 (other than Section
6.1(a)(i)).
(j) Environmental Matters. Except as set forth in the Alpha Filed SEC
Reports and except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Alpha and its
Subsidiaries, (i) the operations of Alpha and its Subsidiaries have been
and are in compliance with all applicable Environmental Laws (as defined
below) and with all Alpha Permits required by applicable Environmental
Laws, (ii) there are no pending or, to the Knowledge of Alpha, threatened,
actions, suits, claims, investigations or other proceedings (collectively,
"Actions") under or pursuant to Environmental Laws against Alpha or its
Subsidiaries or involving any real property currently owned or, to the
Knowledge of Alpha, formerly owned, or currently or formerly operated or
leased, by Alpha or its Subsidiaries and (iii) to the Knowledge of Alpha,
Alpha and its Subsidiaries are not subject to any Environmental Liabilities
(as defined below), and no facts, circumstances or conditions relating to,
arising from, associated with or attributable to any real property
currently or formerly owned, operated or leased by Alpha or its
Subsidiaries or operations thereon would reasonably be expected to result
in Environmental Liabilities for Alpha or its Subsidiaries. The
representations and warranties in this Section 5.1(j) constitute the sole
representations and warranties of Alpha concerning environmental matters in
this Agreement.
As used in this Agreement, "Environmental Laws" means any and all
federal, state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decisions, injunctions, orders, decrees,
requirements of any Governmental Entity, any and all common law
requirements, rules and
A-15
bases of liability regulating or imposing liability or legally binding
standards of conduct concerning pollution, Hazardous Materials (as defined
below) or protection of human health, safety or the environment, as in
effect on or prior to the Closing Date and includes the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section
9601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901 et seq., the Clean Water Act, 33 U.S.C. Section 1251 et seq., the
Clean Air Act, 33 U.S.C. Section 2601 et seq., the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq., the Occupational Safety and Health
Act, 29 U.S.C. Section 651 et seq. and the Oil Pollution Act of 1990, 33
U.S.C. Section 2701 et seq., as such laws have been amended or
supplemented, and the regulations promulgated pursuant thereto, and all
analogous state or local statutes. As used in this Agreement,
"Environmental Liabilities" with respect to any Person means any and all
liabilities of or relating to such Person or any of its Subsidiaries
(including any entity which is a predecessor of such Person or any of such
Subsidiaries and for which such Person has liability by law or contract),
whether vested or unvested, contingent or fixed, which (i) arise under or
relate to matters covered or regulated by, or for which liability is
imposed under, Environmental Laws and (ii) relate to actions occurring or
conditions existing on or prior to the Closing Date. As used in this
Agreement, "Hazardous Materials" means any hazardous or toxic substances,
materials or wastes, defined, listed, classified or regulated as such in or
under any Environmental Laws and which includes petroleum, petroleum
products, friable asbestos, urea formaldehyde and polychlorinated
biphenyls.
(k) Intellectual Property. Except as set forth in the Alpha Filed SEC
Reports and except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Alpha and its
Subsidiaries: (i) Alpha and each of its Subsidiaries owns, or is licensed
to use (in each case, free and clear of any Liens), all Intellectual
Property (as defined below) used in or necessary for the conduct of its
business as currently conducted; (ii) to the Knowledge of Alpha, the use of
any Intellectual Property by Alpha and its Subsidiaries does not infringe
on or otherwise violate the rights of any Person; (iii) the use of
Intellectual Property by or on behalf of Alpha and its Subsidiaries is in
accordance with any applicable license pursuant to which Alpha or any
Subsidiary acquired the right to use any Intellectual Property; (iv) to the
Knowledge of Alpha, no Person is challenging, infringing on or otherwise
violating any right of Alpha or any of its Subsidiaries with respect to any
Intellectual Property owned by and/or licensed to Alpha or its
Subsidiaries; and (v) Alpha does not have any Knowledge of any pending
claim, order or proceeding with respect to any use of Intellectual Property
by Alpha and its Subsidiaries and, to the Knowledge of Alpha, no
Intellectual Property owned and/or licensed by Alpha or its Subsidiaries is
being used or enforced in a manner that would reasonably be expected to
result in the abandonment, cancellation or unenforceability of such
Intellectual Property. For purposes of this Agreement, "Intellectual
Property" shall mean trademarks, service marks, brand names, certification
marks, trade dress and other indications of origin, the goodwill associated
with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing, including any
extension, modification or renewal of any such registration or application;
inventions, discoveries and ideas, whether patentable or not, in any
jurisdiction; patents, applications for patents (including divisions,
continuations, continuations in part and renewal applications), and any
renewals, extensions or reissues thereof and rights to apply for any of the
foregoing, in any jurisdiction; nonpublic information, trade secrets and
confidential information and rights in any jurisdiction to limit the use or
disclosure thereof by any Person; writings and other works, whether
copyrightable or not, in any jurisdiction; and registrations or
applications for registration of copyrights in any jurisdiction, and any
renewals or extensions thereof; and any similar intellectual property or
proprietary rights.
(l) Title to Properties. Each of Alpha and its Subsidiaries has good
and valid title to, or, in the case of leased properties and assets, valid
leasehold interests in, all of its tangible properties and assets, except
where the failure to have such good and valid title, or valid leasehold
interest, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Alpha and its Subsidiaries.
A-16
(m) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in
connection with any of the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Alpha or any of its
Subsidiaries, except U.S. Bancorp Xxxxx Xxxxxxx (the "Alpha Financial
Advisor"), whose fees and expenses will be paid by Alpha in accordance with
Alpha's agreement with such firm.
(n) Opinion of Alpha Financial Advisor. Alpha has received the
opinion of the Alpha Financial Advisor, dated the date of this Agreement,
to the effect that, as of such date, the consideration to be paid to
Washington's stockholders in the Merger is fair, from a financial point of
view, to Alpha and its stockholders.
(o) Taxes.
(i) Each of Alpha and its Subsidiaries has timely filed or has
caused to be timely filed all Tax returns or reports required to be
filed by it, or requests for extensions to file such returns or reports
have been timely filed, granted and have not expired, and all such
returns and reports are complete and correct, except to the extent that
such failures to file, to have extensions granted that remain in effect
or to be complete or correct, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on Alpha
and its Subsidiaries. Alpha and each of its Subsidiaries has paid or
caused to be paid all Taxes shown as due on such returns and the most
recent financial statements contained in the Alpha Filed SEC Reports
reflect an adequate reserve in accordance with GAAP for all Taxes
payable by Alpha and its Subsidiaries for all taxable periods and
portions thereof accrued through the date of such financial statements.
(ii) No deficiencies for any Taxes have been proposed, asserted or
assessed in writing against Alpha or any of its Subsidiaries that are
not adequately reserved for, except for deficiencies that, individually
or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on Alpha and its Subsidiaries. The U.S. federal income
Tax returns of Alpha and each of its Subsidiaries consolidated in such
returns have been either examined by and settled with the IRS or closed
by virtue of the applicable statute of limitations and no requests for
waivers of the time to assess any such Taxes are pending.
(iii) None of Alpha or any of its Subsidiaries has taken any
action, and Alpha has no Knowledge of any fact, agreement, plan or other
circumstance, that is reasonably likely to prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of
the Code.
(iv) None of Alpha or any of its Subsidiaries is a party to any Tax
sharing or Tax indemnity agreements (other than agreements between or
among Alpha and its Subsidiaries).
(v) Within the past five years, none of Alpha or any of its
Subsidiaries has been a "distributing corporation" or a "controlled
corporation" in a distribution intended to qualify under Section 355(a)
of the Code.
(vi) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Alpha and
its Subsidiaries, none of Alpha or any of its Subsidiaries is obligated
to make any payments, or is a party to any contract that could obligate
it to make any payments, that would not be deductible by reason of
Section 162(m) or Section 280G of the Code.
(vii) None of Alpha or any of its Subsidiaries has agreed to make,
or is required to make, any material adjustment under Section 481(a) of
the Code or any similar provision of state, local or foreign law by
reason of a change in accounting methods or otherwise.
(p) Certain Contracts. As of the date hereof, none of Alpha or any of
its Subsidiaries is a party to or bound by (i) any non-competition
agreement or any other Contract that limits or otherwise restricts Alpha or
any of its Subsidiaries or any of their respective affiliates or any
successor thereto,
A-17
or that would, after the Effective Time, to the Knowledge of Alpha, limit
or restrict the Combined Company or any of its Subsidiaries or any of their
respective affiliates or any successor thereto, from engaging or competing
in any line of business in any geographic area, which agreements or other
Contracts, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect on the Combined Company and its
Subsidiaries, after giving effect to the Merger or (ii) any employee
benefit plan, employee contract or any other material Contract, pursuant to
which any benefits will arise or be increased, or the vesting of the
benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement. All material Contracts of
Alpha and its Subsidiaries are valid and binding on Alpha and its
Subsidiaries, as applicable, and in full force and effect except to the
extent they have previously expired in accordance with their terms or if
the failure to be valid, binding and in full force and effect, individually
or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on Alpha and its Subsidiaries. None of Alpha or any of its
Subsidiaries has Knowledge of, or has received notice of, any violation or
default under (nor to their Knowledge does there exist any condition which
with the passage of time or the giving of notice would cause such a
violation or default under) the provisions of any Contract of Alpha or any
of its Subsidiaries, except for violations or defaults which, individually
or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on Alpha and its Subsidiaries.
(q) Employee Benefits.
(i) With respect to each Alpha Plan, except for Alpha Plans the
liabilities under which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Alpha and
its Subsidiaries, Alpha has made available to Conexant a true, correct
and complete copy of: (A) all plan documents, trust agreements, and
insurance contracts and other funding vehicles; (B) the three most
recent Annual Reports (Form 5500 Series) and accompanying schedules and
exhibits, if any; (C) the current summary plan description and any
material modifications thereto, if any (in each case, whether or not
required to be furnished under ERISA); (D) the three most recent annual
financial reports, if any; (E) the three most recent actuarial reports,
if any; (F) the most recent determination letter from the IRS, if any;
and (G) the annual compliance testing under Sections 401(a) through 416
of the Code for the three most recently completed plan years, if any.
(ii) With respect to each Alpha Plan, Alpha and its Subsidiaries
have complied with, and are now in compliance with, all provisions of
ERISA, the Code and all other Applicable Laws and regulations applicable
to such Alpha Plans and each Alpha Plan has been administered in
accordance with its terms, in each case except as would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Alpha and its Subsidiaries. Each Alpha Plan
that is required by ERISA to be funded is fully funded in accordance
with reasonable actuarial assumptions, except as would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect on Alpha and its Subsidiaries.
(iii) All Alpha Plans subject to the Applicable Laws of any
jurisdiction outside of the United States (A) have been maintained in
accordance with all applicable requirements, (B) if they are intended to
qualify for special tax treatment meet all requirements for such
treatment, and (C) if they are intended to be funded and/or
book-reserved are fully funded and/or book-reserved, as appropriate,
based upon reasonable actuarial assumptions, in each case except as
would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Alpha and its Subsidiaries.
(iv) None of Alpha or any of its Subsidiaries has any liability
under or obligation to any Multiemployer Plan.
(r) Labor Relations. As of the date of this Agreement, (i) none of
Alpha or any of its Subsidiaries is a party to any collective bargaining
agreement, (ii) except as would not, individually or
A-18
in the aggregate, reasonably be expected to have a Material Adverse Effect
on Alpha and its Subsidiaries, no labor organization or group of employees
of Alpha or any of its Subsidiaries has made a pending demand for
recognition or certification, and there are no representation or
certification proceedings or petitions seeking a representation proceeding
presently pending or, to the Knowledge of Alpha, threatened to be brought
or filed, with the National Labor Relations Board or any other domestic or
foreign labor relations tribunal or authority and (iii) except as would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Alpha and its Subsidiaries, there are no
organizing activities, strikes, work stoppages, slowdowns, lockouts,
arbitrations or grievances, or other labor disputes pending or, to the
Knowledge of Alpha, threatened against or involving Alpha or any of its
Subsidiaries.
(s) Insurance. Alpha maintains insurance coverage with reputable
insurers in such amounts and covering such risks as is deemed reasonably
appropriate for its business (taking into account the cost and availability
of such insurance).
(t) Liens. No Liens exist on any assets of Alpha or any of its
Subsidiaries, except (i) Liens expressly set forth in the notes to Alpha's
audited consolidated financial statements as of April 1, 2001 included in
the Alpha Filed SEC Reports, (ii) Liens consisting of zoning or planning
restrictions, easements, permits or other restrictions or limitations on
the use of real property or irregularities in title thereto which do not
materially detract from the value of, or impair the use of, such property
by Alpha and its Subsidiaries, (iii) Liens for current taxes, assessments
or governmental charges or levies on property not yet due or which are
being contested in good faith and for which appropriate reserves in
accordance with GAAP have been created and (iv) Liens which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Alpha and its Subsidiaries.
SECTION 5.2 Representations and Warranties of Conexant. Except as set
forth in the Conexant Disclosure Schedule delivered by Conexant to Alpha prior
to the execution of this Agreement (the "Conexant Disclosure Schedule") (each
section of which, to the extent specified therein, qualifies the correspondingly
numbered representation and warranty or covenant of Conexant contained herein
and, to the extent it is apparent on the face of such disclosure that such
disclosure qualifies another representation and warranty of Conexant contained
herein, such other representation and warranty of Conexant), Conexant represents
and warrants to Alpha as follows:
(a) Organization, Standing and Power; Subsidiaries.
(i) Conexant and each Subsidiary of Conexant engaged in the
Washington Business (as defined in the Distribution Agreement) is a
corporation or other organization duly organized, validly existing and
in good standing (where applicable) under the laws of its jurisdiction
of incorporation or organization, except where the failure to be so
organized, existing and in good standing, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Washington Business. Each of the Washington Companies (as
defined in Section 10.11) has the requisite power and authority to own,
lease and operate its properties and to carry on its business as now
being conducted and as it will be conducted through the Effective Time,
except where the failure to have such power and authority, individually
or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on the Washington Business, and is duly qualified and in
good standing to do business in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such
qualification necessary, other than in such jurisdictions where the
failure so to qualify or to be in good standing, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Washington Business. The copies of the certificate of
incorporation and by-laws of Conexant which were previously furnished or
made available to Alpha are true, complete and correct copies of such
documents as in effect on the date of this Agreement.
(ii) Washington is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware.
Washington is a direct wholly-owned subsidiary of
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Conexant. The copies of the certificate of incorporation and by-laws of
Washington which were previously furnished or made available to Alpha
are true, complete and correct copies of such documents as in effect on
the date of this Agreement.
(iii) Section 5.2(a)(iii) of the Conexant Disclosure Schedule sets
forth a list of the Washington Companies which as of the date of this
Agreement would be Significant Subsidiaries of Washington (as defined in
Rule 1-02 of Regulation S-X of the SEC) if the Distribution had occurred
immediately prior to the date hereof (the "Washington Significant
Subsidiaries"). All the outstanding shares of capital stock of, or other
equity interests in, each Washington Significant Subsidiary have been
validly issued and are fully paid and nonassessable and are owned
directly or indirectly by Conexant, free and clear of all material Liens
and free of any other material restriction (including any restriction on
the right to vote, sell or otherwise dispose of such capital stock or
other equity interests, but excluding restrictions under the Securities
Act). None of the Washington Companies directly or indirectly owns any
equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business association or
entity (other than Subsidiaries of Conexant) that is or would reasonably
be expected to be material to the Washington Business taken as a whole.
(b) Capital Structure.
(i) The authorized capital stock of Conexant consists of
1,000,000,000 shares of Common Stock, par value $1.00 per share (the
"Conexant Common Stock"), and 25,000,000 shares of preferred stock,
without par value (the "Conexant Preferred Stock"), 1,500,000 shares of
which are designated as "Series A Junior Participating Preferred Stock"
and one share of which is designated as "Series B Voting Preferred
Stock". As of November 30, 2001, (A) 254,423,819 shares of Conexant
Common Stock and (B) one share of Conexant Preferred Stock designated as
"Series B Voting Preferred Stock" were issued and outstanding and no
other shares of capital stock of Conexant were issued and outstanding.
As of November 30, 2001, 84,082,811 shares of Conexant Common Stock were
reserved for issuance upon exercise of options outstanding under
Conexant Stock Plans. As of November 30, 2001, no shares of Conexant
Common Stock were held as treasury shares. Since November 30, 2001 to
the date of this Agreement, no shares of capital stock of Conexant or
any other securities of Conexant have been issued other than shares of
Conexant Common Stock (and accompanying Conexant Rights (as defined
below)) issued pursuant to (w) the Conexant Systems, Inc. Retirement
Savings Plan and the Conexant Systems, Inc. Hourly Employees Savings
Plan, (x) options or rights outstanding as of November 30, 2001 under
Conexant Stock Plans and (y) the exchange or retraction of Exchangeable
Shares of Philsar Semiconductor Inc. All issued and outstanding shares
of capital stock of Conexant are duly authorized, validly issued, fully
paid and nonassessable, and no class of capital stock of Conexant is
entitled to preemptive rights. There are outstanding as of the date
hereof no options, warrants or other rights to acquire capital stock
from Conexant other than (w) rights (the "Conexant Rights") distributed
to the holders of Conexant Common Stock pursuant to the Rights Agreement
dated as of November 30, 1998, as amended as of December 9, 1999,
between Conexant and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent (the "Conexant Rights Agreement"), (x) options and other rights to
acquire Conexant Common Stock from Conexant ("Conexant Stock Options")
representing in the aggregate the right to purchase 51,394,095 shares of
Conexant Common Stock under the Conexant Stock Plans, (y) $94,849,000
aggregate principal amount of Conexant's 4 1/4% Convertible Subordinated
Notes due 2006 and $615,000,000 aggregate principal amount of Conexant's
4% Convertible Subordinated Notes due 2007 which are, on the date
hereof, convertible into Conexant Common Stock at exercise prices of
$23.098 and $108, respectively, per share (collectively, the "Conexant
Convertible Notes") and (z) Exchangeable Shares of Philsar Semiconductor
Inc. which are exchangeable into, or subject to retraction in exchange
for, an aggregate of 357,640 shares of Conexant Common Stock. Section
5.2(b) of the Conexant Disclosure Schedule sets forth a
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complete and correct list as of a recent date of all outstanding
Conexant Stock Options and the exercise prices thereof.
(ii) On the date hereof, the authorized capital stock of Washington
consists of 1,000 shares of Washington Common Stock, all of which are
issued and outstanding.
(iii) Except as otherwise set forth in this Section 5.2(b) or as
provided for in the Reorganization Agreements, as of the date of this
Agreement, there are no securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to
which Conexant or any member of the Washington Group (as defined in the
Distribution Agreement) is a party or by which any of them is bound
obligating any of Conexant or any member of the Washington Group to
issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other voting securities of
Conexant or any member of the Washington Group or obligating Conexant or
any member of the Washington Group to issue, grant, extend or enter into
any such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. As of the date of this Agreement, there are
no outstanding obligations of Conexant or any member of the Washington
Group to repurchase, redeem or otherwise acquire any shares of capital
stock of Conexant or any member of the Washington Group.
(c) Authority; No Conflicts.
(i) Conexant has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions
contemplated hereby, subject to further action of the Board of Directors
of Conexant to establish the Record Date and the Distribution Date (each
as defined in the Distribution Agreement) and provided that the
effectiveness of the declaration of the Distribution by the Board of
Directors of Conexant is subject to the satisfaction of the conditions
set forth in the Distribution Agreement. The execution and delivery of
this Agreement and the Reorganization Agreements by Conexant and the
consummation by Conexant of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on
the part of Conexant, subject to further action of the Board of
Directors of Conexant to establish the Record Date and the Distribution
Date and provided that the effectiveness of the declaration of the
Distribution by the Board of Directors of Conexant is subject to the
satisfaction of the conditions set forth in the Distribution Agreement.
This Agreement and the Distribution Agreement have been, and the other
Reorganization Agreements will be, duly executed and delivered by
Conexant and, assuming the due authorization and valid execution and
delivery of this Agreement by Alpha, constitute or will constitute valid
and binding agreements of Conexant, enforceable against Conexant in
accordance with their respective terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar Applicable Laws relating to or
affecting creditors generally or by general equity principles
(regardless of whether such enforceability is considered in a proceeding
in equity or at law).
(ii) Washington has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by
Washington and the consummation by Washington of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of Washington. Conexant, as the sole stockholder of
Washington, has duly approved and adopted this Agreement and the Merger
and has duly approved the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Washington and
constitutes a valid and binding agreement of Washington, enforceable
against Washington in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and similar Applicable Laws relating
to or affecting creditors generally and by general equity principles
(regardless of whether such enforceability is considered in a proceeding
in equity or at law).
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(iii) The execution and delivery by Conexant and Washington of this
Agreement and the Distribution Agreement do not, the execution and
delivery by Conexant and Washington of the other Reorganization
Agreements will not, and the consummation by Conexant and Washington of
the Contribution, the Distribution, the Merger and the other
transactions contemplated hereby and thereby will not result in a
Violation pursuant to: (A) any provision of the certificate of
incorporation or by-laws or similar organizational documents of
Conexant, Washington or any Washington Significant Subsidiary or (B)
except as, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on the Washington Business
or, to the Knowledge of Conexant, the Combined Company and its
Subsidiaries following the Merger, subject to obtaining or making the
Conexant Necessary Consents (as defined in paragraph (iv) below), (I)
any Contract included in the Washington Assets or by which any of the
properties or assets included in the Washington Assets is bound, or (II)
any permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to any of the
Washington Companies or the properties or assets included in the
Washington Assets.
(iv) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity or any
other Person is required by or with respect to Conexant or any
Subsidiary of Conexant in connection with the execution and delivery of
this Agreement and the Reorganization Agreements by Conexant or
Washington or the consummation by Conexant or Washington of the
Contribution, the Distribution and the Merger and the other transactions
contemplated hereby and thereby, except for those required under or in
relation to (A) the HSR Act, (B) state securities or "blue sky" laws,
(C) the Securities Act, (D) the Exchange Act, (E) the DGCL with respect
to the filing of the Certificate of Merger with the
Delaware Secretary,
(F) the rules and regulations of Nasdaq, (G) antitrust or other
competition laws of other jurisdictions, (H) the further action of the
Board of Directors of Conexant to establish the Record Date and the
Distribution Date, and the effectiveness of the declaration of the
Distribution by the Board of Directors of Conexant (which is subject to
the satisfaction of the conditions set forth in the Distribution
Agreement) and (I) such consents, approvals, orders, authorizations,
registrations, declarations and filings the failure of which to make or
obtain, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on the Washington Business.
Consents, approvals, orders, authorizations, registrations, declarations
and filings required under or in relation to any of the foregoing
clauses (A) through (H) or set forth in Section 5.2(c)(iv) of the
Conexant Disclosure Schedule are hereinafter referred to as the
"Conexant Necessary Consents".
(v) The Board of Directors of Conexant, by resolutions duly adopted
by a unanimous vote of those in attendance at a meeting duly called and
held, a quorum being present, has duly (i) determined that this
Agreement is advisable and in the best interests of Conexant and its
stockholders and (ii) approved this Agreement and the Distribution
Agreement and the transactions contemplated hereby and thereby. The
Board of Directors of Washington, by resolutions duly adopted by a
unanimous vote at a meeting duly called and held, or by action by
unanimous written consent, has duly (i) determined that this Agreement
is advisable and in the best interests of Washington and its
stockholders and (ii) approved this Agreement and the transactions
contemplated hereby.
(d) Reports and Financial Statements.
(i) No member of the Washington Group is subject to the periodic
reporting requirements of the Exchange Act. With respect to the
Washington Business, none of the registration statements, prospectuses,
reports, schedules, forms, statements and other documents required to be
filed by Conexant and its Subsidiaries with the SEC since January 1,
2000 (collectively, including all exhibits thereto, the "Conexant SEC
Reports"), as of their respective dates (or, if amended or superseded by
a filing prior to the date of this Agreement, then on the date of such
filing) contained any untrue statement of a material fact or omitted to
state a material fact
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required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(ii) Included in Section 5.2(d)(ii) of the Conexant Disclosure
Schedule are a special purpose statement as of September 30, 2001 of
tangible assets and liabilities to be contributed by Conexant and its
Subsidiaries to the Washington Group (together with the notes thereto,
the "Unaudited Special Purpose Statement of Tangible Net Assets") and a
special purpose product line contribution statement with respect to the
Washington Business for the year ended September 30, 2001 (together with
the notes thereto, and collectively with the Unaudited Special Purpose
Statement of Tangible Net Assets, the "Washington Financial
Statements"). The Washington Financial Statements fairly present, in all
material respects, the tangible assets and liabilities to be contributed
by Conexant and its Subsidiaries to the Washington Group as of September
30, 2001 and the product line contribution of the Washington Business
for the year ended September 30, 2001.
(iii) Except as disclosed in the Conexant SEC Reports filed and
publicly available prior to the date hereof (the "Conexant Filed SEC
Reports") or in the Washington Financial Statements, since September 30,
2001, Conexant and its Subsidiaries have not incurred any liabilities
that are of a nature that would be required to be disclosed on a
statement of assets and liabilities of the Washington Business or in the
footnotes thereto prepared in conformity with GAAP, other than
liabilities incurred in the ordinary course of business or that,
individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on the Washington Business.
(e) Information Supplied.
(i) None of the information supplied or to be supplied by Conexant
or Washington for inclusion or incorporation by reference in (A) the
Form S-4 will, at the time the Form S-4 is filed with the SEC, at any
time it is amended or supplemented or at the time it becomes effective
under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading and (B) the Proxy
Statement/Prospectus will, on the date it is first mailed to Conexant
stockholders or Alpha stockholders or at the time of the Alpha
Stockholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(ii) Notwithstanding the foregoing provisions of this Section
5.2(e), no representation or warranty is made by Conexant with respect
to statements made or incorporated by reference in the Form S-4 or the
Proxy Statement/Prospectus based on information supplied by Alpha for
inclusion or incorporation by reference therein, or based on information
which is not included or incorporated by reference in such documents but
which should have been disclosed pursuant to Section 5.1(e).
(f) Litigation; Compliance with Laws.
(i) Except as set forth in the Conexant Filed SEC Reports or in the
Washington Financial Statements, there is no suit, action, proceeding or
regulatory investigation pending or, to the Knowledge of Conexant,
threatened, against or affecting any of the Washington Companies or any
property or asset included in the Washington Assets which, individually
or in the aggregate, would reasonably be expected to have a Material
Adverse Effect on the Washington Business, nor is there any judgment,
decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against any of the Washington Companies which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on the Washington Business.
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(ii) Except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the
Washington Business, the Washington Companies hold all permits,
licenses, franchises, variances, exemptions, orders and approvals of all
Governmental Entities which are necessary for the operation of the
Washington Business, taken as a whole (the "Washington Permits"), and no
suspension or cancellation of any of the Washington Permits is pending
or, to the Knowledge of Conexant, threatened, except for suspensions or
cancellations which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the
Washington Business. The Washington Companies are in compliance with the
terms of the Washington Permits, except where the failure so to comply,
individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on the Washington Business. None of the
Washington Companies is in violation of, and the Washington Companies
have not received any notices of violations with respect to, any
Applicable Laws, except for violations which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Washington Business.
(g) Absence of Certain Changes or Events. Except as set forth in the
Conexant Filed SEC Reports or in the Washington Financial Statements, since
September 30, 2001, the Washington Companies have conducted the Washington
Business only in the ordinary course, consistent with past practice. Except
as set forth in the Conexant Filed SEC Reports, since September 30, 2001,
there has not been any event, change, circumstance or development which,
individually or in the aggregate, has had, or would reasonably be expected
to have, a Material Adverse Effect on the Washington Business. Since
September 30, 2001 through the date of this Agreement, none of the
Washington Companies has taken any action that, if taken during the period
from the date of this Agreement through the Effective Time, would
constitute a breach of Section 6.2 (other than Section 6.2(a)(i)).
Washington has not conducted any activities other than in connection with
the organization of Washington, the negotiation, execution and performance
of this Agreement and the Reorganization Agreements and the consummation of
the transactions contemplated hereby and thereby.
(h) Environmental Matters. Except as set forth in the Conexant Filed
SEC Reports or in the Washington Financial Statements and except as,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect on the Washington Business, (i) the operations of
the Washington Companies have been and are in compliance with all
applicable Environmental Laws and with all Washington Permits required by
applicable Environmental Laws, (ii) there are no pending or, to the
Knowledge of Conexant, threatened, Actions under or pursuant to
Environmental Laws against the Washington Companies or involving any real
property currently owned or formerly owned, or currently or formerly
operated or leased, by the Washington Companies and (iii) to the Knowledge
of Conexant, the Washington Companies are not subject to any Environmental
Liabilities and no facts, circumstances or conditions relating to, arising
from, associated with or attributable to any real property currently or
formerly owned, operated or leased by the Washington Companies or
operations thereon would reasonably be expected to result in Environmental
Liabilities for the Washington Companies. The representations and
warranties in this Section 5.2(h) constitute the sole representations and
warranties of Conexant concerning environmental matters in this Agreement.
(i) Intellectual Property. Except as set forth in the Conexant Filed
SEC Reports or in the Washington Financial Statements and except as would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Washington Business: (i) the Washington
Companies own, or are licensed to use (in each case, free and clear of any
Liens), all Intellectual Property used in or necessary for the conduct of
the Washington Business as currently conducted; (ii) to the Knowledge of
Conexant, the use of any Intellectual Property by the Washington Companies
does not infringe on or otherwise violate the rights of any Person; (iii)
the use of Intellectual Property by or on behalf of the Washington
Companies is in accordance with any applicable license pursuant to which
the Washington Companies acquired the right to use any Intellectual
Property; (iv) to the Knowledge of Conexant, no Person is challenging,
infringing on or
A-24
otherwise violating any right of the Washington Companies with respect to
any Intellectual Property owned by and/or licensed to the Washington
Companies; and (v) Conexant does not have any Knowledge of any pending
claim, order or proceeding with respect to any use of Intellectual Property
by the Washington Companies and, to the Knowledge of Conexant, no
Intellectual Property owned and/or licensed by the Washington Companies is
being used or enforced in a manner that would reasonably be expected to
result in the abandonment, cancellation or unenforceability of such
Intellectual Property.
(j) Title to Properties. Each of the Washington Companies has good
and valid title to, or, in the case of leased properties and assets, valid
leasehold interests in, all of the tangible properties and assets that are
Washington Assets, except where the failure to have such good and valid
title, or valid leasehold interest, would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Washington Business.
(k) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in
connection with any of the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Conexant or any of its
Subsidiaries, except Credit Suisse First Boston Corporation (the "Conexant
Financial Advisor"), whose fees and expenses will be paid by Conexant in
accordance with Conexant's agreement with such firm.
(l) Opinion of Conexant Financial Advisor. Conexant has received the
opinion of the Conexant Financial Advisor, dated the date of this
Agreement, to the effect that, as of such date, the Exchange Ratio is fair,
from a financial point of view, to holders of Conexant Common Stock.
(m) Taxes.
(i) Each of the Washington Companies has timely filed or has caused
to be timely filed all Tax returns or reports required to be filed by it
with respect to Taxes for which the Washington Group will have liability
following the Time of Distribution pursuant to the Tax Allocation
Agreement, or requests for extensions to file such returns or reports
have been timely filed, granted and have not expired, and all such
returns and reports are complete and correct, except to the extent that
such failures to file, to have extensions granted that remain in effect
or to be complete or correct, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on the
Washington Business. The Washington Companies have paid or caused to be
paid all Taxes shown as due on such returns, other than Taxes for which
the Conexant Group will have liability following the Time of
Distribution pursuant to the Tax Allocation Agreement.
(ii) No deficiencies for any Taxes have been proposed, asserted or
assessed in writing against the Washington Companies that are not
adequately reserved for, except for deficiencies that, individually or
in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on the Washington Business and deficiencies with respect
to Taxes for which Conexant will have liability following the Time of
Distribution pursuant to the Tax Allocation Agreement. The U.S. federal
income Tax returns required to be filed with respect to Taxes for which
the Washington Group will have liability following the Time of
Distribution pursuant to the Tax Allocation Agreement have been either
examined by and settled with the IRS or closed by virtue of the
applicable statute of limitations and no requests for waivers of the
time to assess any such Taxes are pending.
(iii) None of Conexant or its Subsidiaries has taken any action,
and Conexant has no Knowledge of any fact, agreement, plan or other
circumstance, that is reasonably likely to prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of
the Code.
A-25
(iv) No member of the Washington Group is a party to any Tax
sharing or Tax indemnity agreements (other than agreements between or
among members of the Washington Group) that will be in effect after the
Time of Distribution.
(v) Within the past five years, no member of the Washington Group
has been a "distributing corporation" or a "controlled corporation" in a
distribution intended to qualify under Section 355(a) of the Code.
(vi) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the
Washington Business, no member of the Washington Group is obligated to
make any payments, or is a party to any contract that could obligate it
to make any payments, that would not be deductible by reason of Section
162(m) or Section 280G of the Code.
(vii) No member of the Washington Group has agreed to make, or is
required to make, any material adjustment under Section 481(a) of the
Code or any similar provision of state, local or foreign law by reason
of a change in accounting methods or otherwise.
(n) Certain Contracts. As of the date hereof, none of the Washington
Companies is a party to or bound by (i) any non-competition agreement or
any other Contract that will be binding on any member of the Washington
Group following the Time of Distribution that limits or otherwise restricts
the Washington Companies or any of their respective affiliates or any
successor thereto, or that would, after the Effective Time, to the
Knowledge of Conexant, limit or restrict the Combined Company or any of its
Subsidiaries or any of their respective affiliates or any successor
thereto, from engaging or competing in any line of business in any
geographic area, which agreements or other Contracts, individually or in
the aggregate, would reasonably be expected to have a Material Adverse
Effect on the Combined Company and its Subsidiaries, after giving effect to
the Merger or (ii) any employee benefit plan, employee contract or any
other material Contract that will be binding on any member of the
Washington Group following the Time of Distribution, pursuant to which any
benefits will arise or be increased, or the vesting of the benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which
will be calculated on the basis of any of the transactions contemplated by
this Agreement. All material Contracts that will be included in the
Washington Assets are valid and binding on the Washington Companies, as
applicable, and in full force and effect except to the extent they have
previously expired in accordance with their terms or if the failure to be
valid, binding and in full force and effect, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Washington Business. None of the Washington Companies has
Knowledge of, or has received notice of, any violation or default under
(nor to their Knowledge does there exist any condition which with the
passage of time or the giving of notice would cause such a violation or
default under) the provisions of any Contract of the Washington Companies
that will be included in the Washington Assets, except for violations or
defaults which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on the Washington Business.
(o) Employee Benefits.
(i) With respect to each Washington Plan, except for Washington
Plans the liabilities under which, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on
the Washington Business, Conexant has made available to Alpha a true,
correct and complete copy of: (A) all plan documents, trust agreements,
and insurance contracts and other funding vehicles; (B) the three most
recent Annual Reports (Form 5500 Series) and accompanying schedules and
exhibits, if any; (C) the current summary plan description and any
material modifications thereto, if any (in each case, whether or not
required to be furnished under ERISA); (D) the three most recent annual
financial reports, if any; (E) the three most recent actuarial reports,
if any; (F) the most recent determination letter from the IRS, if any;
and (G) the annual compliance testing under Sections 401(a) through 416
of the Code for the three most recently completed plan years, if any.
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(ii) With respect to each Washington Plan, Conexant and its
Subsidiaries have complied with, and are now in compliance with, all
provisions of ERISA, the Code and all other Applicable Laws and
regulations applicable to such Washington Plans and each Washington Plan
has been administered in accordance with its terms, in each case except
as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on the Washington Business. Each
Washington Plan that is required by ERISA to be funded is fully funded
in accordance with reasonable actuarial assumptions, except as would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Washington Business.
(iii) All Washington Plans subject to the Applicable Laws of any
jurisdiction outside of the United States (A) have been maintained in
accordance with all applicable requirements, (B) if they are intended to
qualify for special tax treatment meet all requirements for such
treatment, and (C) if they are intended to be funded and/or
book-reserved are fully funded and/or book-reserved, as appropriate,
based upon reasonable actuarial assumptions, in each case except as
would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Washington Business.
(iv) None of the Washington Companies has any liability under or
obligation to any Multiemployer Plan that will be included in the
Washington Liabilities.
(p) Labor Relations. As of the date of this Agreement, (i) none of
the Washington Companies is a party to any collective bargaining agreement,
(ii) except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Washington Business, no
labor organization or group of employees of the Washington Business has
made a pending demand for recognition or certification, and there are no
representation or certification proceedings or petitions seeking a
representation proceeding presently pending or, to the Knowledge of
Conexant, threatened to be brought or filed, with the National Labor
Relations Board or any other domestic or foreign labor relations tribunal
or authority and (iii) except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Washington Business, there are no organizing activities, strikes, work
stoppages, slowdowns, lockouts, arbitrations or grievances, or other labor
disputes pending or, to the Knowledge of Conexant, threatened against or
involving any of the Washington Companies.
(q) Insurance. The Washington Companies maintain insurance coverage
with reputable insurers in such amounts and covering such risks as is
deemed reasonably appropriate for its business (taking into account the
cost and availability of such insurance).
(r) Liens. No Liens exist on any of the Washington Assets, except (i)
Liens expressly set forth in the Washington Financial Statements, (ii)
Liens consisting of zoning or planning restrictions, easements, permits or
other restrictions or limitations on the use of real property or
irregularities in title thereto which do not materially detract from the
value of, or impair the use of, such property in the Washington Business,
(iii) Liens for current taxes, assessments or governmental charges or
levies on property not yet due or which are being contested in good faith
and for which appropriate reserves in accordance with GAAP have been
created and (iv) Liens which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Washington
Business.
(s) Ownership of Alpha Common Stock. Conexant, together with its
affiliates and associates (as those terms are defined in Rule 12b-2
promulgated under the Exchange Act), is not the beneficial owner of 5% or
more of the outstanding shares of Alpha Common Stock. For purposes of this
Section 5.2(s), a Person shall be deemed to be the "beneficial owner" of
Alpha Common Stock if such Person, directly or indirectly, controls the
voting of such Alpha Common Stock or has any options, warrants, conversion
or other rights to acquire such Alpha Common Stock.
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ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 6.1 Covenants of Alpha. During the period from the date of this
Agreement and continuing until the Effective Time, Alpha agrees as to itself and
its Subsidiaries that (except as required or otherwise expressly contemplated or
permitted by this Agreement or Section 6.1 (including its subsections) of the
Alpha Disclosure Schedule or as required by a Governmental Entity or to the
extent that Conexant shall otherwise consent in writing, which consent shall not
be unreasonably withheld or delayed):
(a) Ordinary Course.
(i) Alpha and its Subsidiaries shall carry on their respective
businesses in the ordinary course, in substantially the same manner as
heretofore conducted, and shall use all reasonable efforts to preserve
intact their present business organizations, keep available the services
of their current officers and other key employees and preserve their
relationships with customers, suppliers and others having business
dealings with them to the end that their ongoing businesses shall not be
materially impaired at the Effective Time; provided, however, that no
action by Alpha or its Subsidiaries with respect to matters specifically
addressed by any other provision of this Section 6.1 shall be deemed a
breach of this Section 6.1(a)(i) unless such action would constitute a
breach of one or more of such other provisions.
(ii) Other than in connection with acquisitions permitted by
Section 6.1(e) or investments permitted by Section 6.1(g), Alpha shall
not, and shall not permit any of its Subsidiaries to, (A) enter into any
new material line of business or (B) incur or commit to any capital
expenditures or any obligations or liabilities in connection with any
capital expenditures other than capital expenditures and obligations or
liabilities in connection therewith incurred or committed to in the
ordinary course of business consistent with past practice.
(b) Dividends; Changes in Share Capital. Alpha shall not, and shall
not permit any of its Subsidiaries to, and shall not propose to, (i)
declare or pay any dividends on or make other distributions (whether in
cash, stock or property) in respect of any of its capital stock, except for
dividends by any direct or indirect wholly-owned Subsidiaries of Alpha,
(ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in
lieu of or in substitution for, shares of its capital stock, except for any
such transaction by a wholly-owned Subsidiary of Alpha which remains a
wholly-owned Subsidiary after consummation of such transaction or (iii)
repurchase, redeem or otherwise acquire any shares of its capital stock or
any securities convertible into or exercisable for any shares of its
capital stock.
(c) Issuance of Securities. Alpha shall not, and shall not permit any
of its Subsidiaries to, issue, deliver, sell, pledge or otherwise encumber,
or authorize or propose the issuance, delivery, sale, pledge or encumbrance
of, any shares of its capital stock of any class, any Alpha Voting Debt or
any securities convertible into or exercisable for, or any rights,
warrants, calls or options to acquire, any such shares or Alpha Voting
Debt, or enter into any commitment, arrangement, undertaking or agreement
with respect to any of the foregoing, other than (i) the issuance of Alpha
Common Stock upon the exercise of Alpha Stock Options outstanding on the
date hereof in accordance with their present terms or pursuant to Alpha
Stock Options or other stock based awards granted pursuant to clause (ii)
below, (ii) the granting of Alpha Stock Options or other stock based awards
under the Alpha Stock Plans in a manner consistent with Alpha's established
policies and guidelines in effect on the date hereof relating to the
granting of Alpha Stock Options or other stock based awards or (iii)
issuances by a wholly-owned Subsidiary of Alpha of capital stock of such
Subsidiary to such Subsidiary's parent or another wholly-owned Subsidiary
of Alpha.
(d) Governing Documents. Except to the extent required to comply with
its obligations hereunder or with Applicable Laws, Alpha shall not amend or
propose to so amend its certificate of incorporation, by-laws or other
governing documents.
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(e) No Acquisitions. Alpha shall not, and shall not permit any of its
Subsidiaries to, acquire or agree to acquire by merger or consolidation, or
by purchasing a substantial equity interest in or a substantial portion of
the assets of, or by any other manner, any business or any corporation,
partnership, limited liability entity, joint venture, association or other
business organization or division thereof or otherwise acquire or agree to
acquire any material assets (excluding the acquisition of assets used in
the operations of the business of Alpha and its Subsidiaries in the
ordinary course consistent with past practice, which assets do not
constitute a business unit, division or all or substantially all of the
assets of the transferor); provided, however, that the foregoing shall not
prohibit (x) internal reorganizations or consolidations involving existing
Subsidiaries of Alpha or (y) the creation of new direct or indirect
wholly-owned Subsidiaries of Alpha organized to conduct or continue
activities otherwise permitted by this Agreement.
(f) No Dispositions. Other than (i) internal reorganizations or
consolidations involving existing Subsidiaries of Alpha or (ii) as may be
required by or in conformance with Applicable Laws in order to permit or
facilitate the consummation of the transactions contemplated hereby, Alpha
shall not, and shall not permit any of its Subsidiaries to, sell, lease,
license or otherwise encumber or subject to any Lien or otherwise dispose
of, or agree to sell, lease, license or otherwise encumber or subject to
any Lien or otherwise dispose of, any of its assets (including capital
stock of Subsidiaries of Alpha but excluding inventory and obsolete
equipment in the ordinary course of business consistent with past
practice).
(g) Investments; Indebtedness. Alpha shall not, and shall not permit
any of its Subsidiaries to, (i) make any loans, advances or capital
contributions to, or investments in, any other Person, other than (A) loans
or investments by Alpha or a Subsidiary of Alpha to or in Alpha or a
Subsidiary of Alpha, (B) pursuant to any contract or other legal obligation
of Alpha or any of its Subsidiaries as in effect at the date of this
Agreement, (C) employee loans or advances for travel, business, relocation
or other reimbursable expenses made in the ordinary course of business, (D)
loans, advances, capital contributions or investments which in the
aggregate do not exceed the amount specified in Section 6.1(g) of the Alpha
Disclosure Schedule or (E) loans, advances, capital contributions or
investments in the ordinary course of business which are not, individually
or in the aggregate, material to Alpha and its Subsidiaries taken as a
whole or (ii) create, incur, assume or suffer to exist any indebtedness,
issuances of debt securities, guarantees, loans or advances not in
existence as of the date of this Agreement except in the ordinary course of
business which are not, individually or in the aggregate, material to Alpha
and its Subsidiaries taken as a whole. Without limiting Alpha's covenants
contained in this Section 6.1, Alpha will consult with Conexant in any
efforts by Alpha to obtain financing with respect to Alpha's obligations
under the Facility Sale Agreement, provided that Conexant's consent in
writing, which shall not be unreasonably withheld or delayed, shall be
required prior to Alpha agreeing or committing to such financing. Conexant
will cooperate with and reasonably assist Alpha, at Alpha's expense, in
Alpha's efforts to obtain such financing.
(h) Tax-Free Qualification. Alpha shall use its reasonable best
efforts not to, and shall use its reasonable best efforts not to permit any
of its Subsidiaries to, take any action (including any action otherwise
permitted by this Section 6.1) that would prevent or impede the
Contribution and Distribution from qualifying as a reorganization under
Sections 355 and 368 of the Code or the Merger from qualifying as a
reorganization under Section 368 of the Code.
(i) Compensation. Except (x) as set forth in Section 6.1(c), (y) as
required by Applicable Laws or by the terms of any collective bargaining
agreement or other agreement currently in effect between Alpha or any
Subsidiary of Alpha and any executive officer or employee thereof or (z) in
the ordinary course of business, Alpha shall not increase the amount of
compensation or employee benefits of any director, officer or employee of
Alpha or any Subsidiary or business unit of Alpha, pay any pension,
retirement, savings or profit-sharing allowance to any employee that is not
required by any existing plan or agreement, enter into any Contract with
any of its employees regarding his or her employment, compensation or
benefits, increase or commit to increase any employee benefits, issue any
additional Alpha Stock Options, adopt or amend or make any commitment to
adopt or amend
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any Alpha Plan or make any contribution, other than regularly scheduled
contributions, to any Alpha Plan. Alpha shall not accelerate the vesting
of, or the lapsing of restrictions with respect to, any stock options or
other stock-based compensation, except as required by Applicable Laws or in
the ordinary course of business or in accordance with this Agreement, and
any option committed to be granted or granted after the date hereof shall
not accelerate as a result of the approval or consummation of any
transaction contemplated by this Agreement. Notwithstanding the foregoing,
Alpha may, without Conexant's consent but only after consultation with
Conexant, enter into retention or other similar agreements with employees
of Alpha on terms, and with such number of employees, as are substantially
comparable to the severance or other similar agreements to be entered into
between the Washington Companies and their employees.
(j) Accounting Methods; Income Tax Elections. Except as disclosed in
the Alpha Filed SEC Reports, as required by a Governmental Entity or as
required by changes in GAAP as concurred in by Alpha's independent public
accountants, Alpha shall not make any material change in its methods of
accounting in effect at April 1, 2001. Alpha shall not, and shall not
permit its Subsidiaries to, (i) change its fiscal year or (ii) make any
material Tax election or settle or compromise any material income Tax
liability, other than in the ordinary course of business consistent with
past practice.
(k) Certain Agreements and Arrangements. Alpha shall not, and shall
not permit any of its Subsidiaries to, enter into any Contracts that limit
or otherwise restrict Alpha or any of its Subsidiaries or any of their
respective affiliates or any successor thereto, or that would, after the
Effective Time, limit or restrict the Combined Company or any of its
Subsidiaries or any of their respective affiliates or any successor
thereto, from engaging or competing in any line of business in any
geographic area which agreements or arrangements, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect
on the Combined Company and its Subsidiaries following the Merger.
(l) No Related Actions. Alpha will not, and will not permit any of
its Subsidiaries to, agree or commit to do any of the foregoing actions.
SECTION 6.2 Covenants of Conexant and Washington. During the period from
the date of this Agreement and continuing until the Effective Time, Conexant, as
to the Washington Companies, and Washington each agrees that (except for the
Contribution, the Distribution, as required or otherwise expressly contemplated
or permitted by this Agreement, the Reorganization Agreements or Section 6.2
(including its subsections) of the Conexant Disclosure Schedule or as required
by a Governmental Entity or to the extent that Alpha shall otherwise consent in
writing, which consent shall not be unreasonably withheld or delayed):
(a) Ordinary Course.
(i) The Washington Companies shall carry on the Washington Business
in the ordinary course, in substantially the same manner as heretofore
conducted, and shall use all reasonable efforts to preserve intact their
present business organizations, keep available the services of their
current officers and other key employees of the Washington Business and
preserve their relationships with customers, suppliers and others having
business dealings with them to the end that the Washington Business
shall not be materially impaired at the Effective Time; provided,
however, that no action by the Washington Companies with respect to
matters specifically addressed by any other provision of this Section
6.2 shall be deemed a breach of this Section 6.2(a)(i) unless such
action would constitute a breach of one or more of such other
provisions.
(ii) Other than in connection with acquisitions permitted by
Section 6.2(e) or investments permitted by Section 6.2(g), the
Washington Companies shall not (A) enter into any new material line of
business that would be part of the Washington Business or (B) incur or
commit to any capital expenditures or any obligations or liabilities in
connection with any capital expenditures other than capital expenditures
and obligations or liabilities in connection therewith incurred or
committed to in the ordinary course of business consistent with past
practice.
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(b) Dividends; Changes in Share Capital. The members of the
Washington Group shall not, and shall not propose to, declare any dividends
on or make other distributions (whether in cash, stock or property) in
respect of any of their capital stock that will be payable after the
Effective Time, except for dividends payable entirely to members of the
Washington Group. Prior to the Time of Distribution, Conexant will not, and
following the Time of Distribution and prior to the Effective Time,
Washington will not, (i) split, combine or reclassify any of its capital
stock or issue or authorize or propose the issuance of any other securities
of Conexant or Washington, as the case may be, in respect of, in lieu of or
in substitution for, shares of its capital stock or (ii) repurchase, redeem
or otherwise acquire any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital stock.
(c) Issuance of Securities.
(i) Prior to the Time of Distribution, Conexant shall not issue,
deliver, sell, pledge or otherwise encumber, or authorize or propose the
issuance, delivery, sale, pledge or encumbrance of, any shares of
Conexant Common Stock or any securities convertible into or exercisable
for, or any rights, warrants, calls or options to acquire, any such
shares, or enter into any commitment, arrangement, undertaking or
agreement with respect to any of the foregoing, other than (A) the
issuance of Conexant Common Stock (and the associated Conexant Rights)
(w) pursuant to the Conexant Systems, Inc. Retirement Savings Plan and
the Conexant Systems, Inc. Hourly Employees Savings Plan, (x) upon the
exercise of Conexant Stock Options outstanding on the date hereof in
accordance with their present terms or pursuant to Conexant Stock
Options or other stock based awards granted pursuant to clause (B)
below, (y) upon conversion of the Conexant Convertible Notes or (z)
pursuant to the exchange or retraction of Exchangeable Shares of Philsar
Semiconductor Inc., (B) the granting of Conexant Stock Options or other
stock based awards under the Conexant Stock Plans in a manner consistent
with Conexant's established policies and guidelines in effect on the
date hereof relating to the granting of Conexant Stock Options or other
stock based awards or (C) issuances in accordance with the Conexant
Rights Agreement.
(ii) Following the Time of Distribution and prior to the Effective
Time, no member of the Washington Group will issue, deliver, sell,
pledge or otherwise encumber, or authorize or propose the issuance,
delivery, sale, pledge or encumbrance of, any shares of its capital
stock of any class or any securities convertible into or exercisable
for, or any rights, warrants, calls or options to acquire, any such
shares, or enter into any commitment, arrangement, undertaking or
agreement with respect to any of the foregoing, other than (A) the
granting of options to purchase Washington Common Stock upon conversion
of Conexant Stock Options in connection with the Distribution in
accordance with the Employee Matters Agreement or (B) issuances by a
wholly-owned Subsidiary of Washington of capital stock of such
Subsidiary to such Subsidiary's parent or another wholly-owned
Subsidiary of Washington.
(d) Governing Documents. Except to the extent required to comply with
its obligations hereunder or under the Reorganization Agreements or with
Applicable Laws, Washington shall not amend or propose to so amend its
certificate of incorporation, by-laws or other governing documents.
(e) No Acquisitions. The Washington Companies shall not acquire or
agree to acquire by merger or consolidation, or by purchasing a substantial
equity interest in or a substantial portion of the assets of, or by any
other manner, any business or any corporation, partnership, limited
liability entity, joint venture, association or other business organization
or division thereof or otherwise acquire or agree to acquire any material
assets (excluding the acquisition of assets used in the operations of the
Washington Business in the ordinary course consistent with past practice,
which assets do not constitute a business unit, division or all or
substantially all of the assets of the transferor), in each case, that
would be part of the Washington Business; provided, however, that the
foregoing shall not prohibit (x) internal reorganizations or consolidations
involving existing Subsidiaries of Conexant or
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(y) the creation of new direct or indirect wholly-owned Subsidiaries of
Conexant organized to conduct or continue activities otherwise permitted by
this Agreement.
(f) No Dispositions. Other than (i) internal reorganizations or
consolidations involving existing Subsidiaries of Conexant (with respect to
which, to the extent involving Washington Assets or Washington Liabilities,
Conexant shall reasonably consult with Alpha) or (ii) as may be required by
or in conformance with Applicable Laws in order to permit or facilitate the
consummation of the transactions contemplated hereby or by the
Reorganization Agreements, the Washington Companies shall not sell, lease,
license or otherwise encumber or subject to any Lien or otherwise dispose
of, or agree to sell, lease, license or otherwise encumber or subject to
any Lien or otherwise dispose of, any Assets that would constitute
Washington Assets if the Distribution Date were the date hereof (including
capital stock of members of the Washington Group, but excluding inventory
and obsolete equipment in the ordinary course of business consistent with
past practice).
(g) Investments; Indebtedness. The Washington Companies shall not (i)
make any loans, advances or capital contributions to, or investments in,
any other Person that will be included in the Washington Assets, other than
(A) loans or investments by a member of the Washington Group to or in
another member of the Washington Group, (B) pursuant to any contract or
other legal obligation of any of the Washington Companies as in effect at
the date of this Agreement, (C) employee loans or advances for travel,
business, relocation or other reimbursable expenses made in the ordinary
course of business, (D) loans, advances, capital contributions or
investments which in the aggregate do not exceed the amount specified in
Section 6.2(g) of the Conexant Disclosure Schedule or (E) loans, advances,
capital contributions or investments in the ordinary course of business
which are not, individually or in the aggregate, material to the Washington
Business taken as a whole or (ii) create, incur, assume or suffer to exist
any indebtedness, issuances of debt securities, guarantees, loans or
advances not in existence as of the date of this Agreement that will be
included in the Washington Liabilities except in the ordinary course of
business which are not, individually or in the aggregate, material to the
Washington Business taken as a whole.
(h) Tax-Free Qualification. Conexant and Washington shall use their
reasonable best efforts not to, and shall use their reasonable best efforts
not to permit any of their Subsidiaries to, take any action (including any
action otherwise permitted by this Section 6.2) that would prevent or
impede the Contribution and Distribution from qualifying as a
reorganization under Sections 355 and 368 of the Code or the Merger from
qualifying as a reorganization under Section 368 of the Code.
(i) Compensation. Except (x) as set forth in Section 6.2(c), (y) as
required by Applicable Laws or by the terms of any collective bargaining
agreement or other agreement currently in effect between any of the
Washington Companies and any Washington Employee or (z) in the ordinary
course of business, none of the Washington Companies shall increase the
amount of compensation or employee benefits of any director or any
Washington Employee, pay any pension, retirement, savings or profit-sharing
allowance to any Washington Employee that is not required by any existing
plan or agreement, enter into any Contract with any Washington Employee
regarding his or her employment, compensation or benefits, increase or
commit to increase any employee benefits for Washington Employees, issue
any additional Conexant Stock Options, adopt or amend or make any
commitment to adopt or amend any Washington Plan or make any contribution,
other than regularly scheduled contributions, to any Washington Plan for
the benefit of Washington Employees. The Washington Companies shall not
accelerate the vesting of, or the lapsing of restrictions with respect to,
any stock options or other stock-based compensation, except as required by
Applicable Laws or in the ordinary course of business or in accordance with
this Agreement, and any option committed to be granted or granted after the
date hereof shall not accelerate as a result of the approval or
consummation of any transaction contemplated by this Agreement.
Notwithstanding the foregoing, the Washington Companies may, without
Alpha's consent but only after consultation with Alpha, enter into
retention or other similar agreements with employees of the Washington
Business on terms, and with such number of employees, as are substantially
comparable to the severance or other similar agreements currently in effect
or to be entered into between Alpha and its employees.
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(j) Accounting Methods; Income Tax Elections. Except as disclosed in
Conexant Filed SEC Reports or the Washington Financial Statements, as
required by a Governmental Entity or as required by changes in GAAP as
concurred in by their independent public accountants, the Washington
Business shall not make any material change in its methods of accounting in
effect at September 30, 2001. No member of the Washington Group will (i)
change its fiscal year or (ii) make any material Tax election or settle or
compromise any material income Tax liability with respect to matters that
will be a liability of the Washington Group after the Time of Distribution
pursuant to the Tax Allocation Agreement, other than in the ordinary course
of business consistent with past practice.
(k) Certain Agreements and Arrangements. Except as contemplated by
the Reorganization Agreements, the Washington Companies shall not enter
into any Contracts that will bind any member of the Washington Group after
the Time of Distribution that limit or otherwise restrict any of the
Washington Companies or any of their respective affiliates or any successor
thereto, or that would, after the Effective Time, limit or restrict the
Combined Company or any of its Subsidiaries or any of their respective
affiliates or any successor thereto, from engaging or competing in any line
of business in any geographic area, which agreements or arrangements,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on the Combined Company and its Subsidiaries
following the Merger.
(l) No Washington Business Activities. Prior to the Effective Time,
Washington will not conduct any activities other than in connection with
the organization of Washington, the negotiation and execution of this
Agreement, the Reorganization Agreements, the Mexican Stock and Asset
Purchase Agreement dated as of the date hereof between Conexant and Alpha
(the "Facility Sale Agreement"), the U.S. Asset Purchase Agreement dated as
of the date hereof between Conexant and Alpha (the "U.S. Asset Purchase
Agreement"), the Facility Services Agreement to be entered into prior to
the Effective Time between Conexant and Alpha (the "Facility Services
Agreement"), the Newport Supply Agreement, the Newbury Supply Agreement and
the consummation of the transactions contemplated hereby and thereby.
(m) No Related Actions. None of Conexant or its Subsidiaries (as to
the Washington Companies) or Washington will agree or commit to do any of
the foregoing actions.
SECTION 6.3 Reports; SEC Reports. Each of Conexant (with respect to the
Washington Business) and Alpha shall (a) confer on a regular and frequent basis
with the other and (b) report to the other (to the extent permitted by law or
regulation or any applicable confidentiality agreement) on operational matters.
Each of Conexant (with respect to the Washington Business) and Alpha shall file
all reports required to be filed by each of them with the SEC between the date
of this Agreement and the Effective Time and shall deliver to the other parties
copies of all such reports promptly after the same are filed.
SECTION 6.4 Control of Other Party's Business. Nothing contained in this
Agreement shall give Conexant, directly or indirectly, the right to control or
direct Alpha's operations prior to the Effective Time. Nothing contained in this
Agreement shall give Alpha, directly or indirectly, the right to control or
direct the operations of the Washington Business prior to the Effective Time.
Prior to the Effective Time, each of Conexant and Alpha shall exercise,
consistent with the terms and conditions of this Agreement, complete control and
supervision over its respective operations.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.1 Preparation of Proxy Statement; Stockholders Meeting.
(a) As promptly as reasonably practicable following the date hereof, Alpha
and Conexant shall prepare and Alpha shall file with the SEC proxy materials
which shall constitute the Proxy Statement/ Prospectus to be mailed to Alpha's
stockholders in connection with the Alpha Stockholders Meeting (such proxy
statement/prospectus, and any amendments or supplements thereto, the "Proxy
Statement/
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Prospectus") and Conexant and Alpha shall prepare and Alpha shall file with the
SEC a registration statement on Form S-4 with respect to the issuance of Alpha
Common Stock in the Merger (the "Form S-4"). The Proxy Statement/Prospectus will
be included in and will constitute a part of the Form S-4 as Alpha's prospectus
and will be mailed to Conexant's stockholders as an Information Statement in
connection with the Distribution. The Form S-4 and the Proxy
Statement/Prospectus will comply as to form in all material respects with the
requirements of the Exchange Act and the Securities Act and the rules and
regulations of the SEC thereunder. Alpha shall use reasonable best efforts to
have the Proxy Statement/Prospectus cleared by the SEC as promptly as reasonably
practicable after filing with the SEC, to have the Form S-4 declared effective
by the SEC as promptly as reasonably practicable after filing with the SEC and
to keep the Form S-4 effective as long as is necessary to consummate the Merger
and the transactions contemplated thereby. Alpha shall, as promptly as
practicable after receipt thereof, provide to Conexant copies of any written
comments and advise Conexant of any oral comments with respect to the Proxy
Statement/Prospectus and the Form S-4 received from the SEC. Alpha shall provide
Conexant with a reasonable opportunity to review and comment on any amendment or
supplement to the Form S-4 or the Proxy Statement/Prospectus prior to filing
such with the SEC, and with a copy of all such filings made with the SEC.
Notwithstanding any other provision herein to the contrary, no amendment or
supplement (including by incorporation by reference) to the Proxy
Statement/Prospectus or the Form S-4 shall be made without the approval of both
Conexant and Alpha, which approval shall not be unreasonably withheld or
delayed. Alpha will use reasonable best efforts to cause the Proxy Statement/
Prospectus to be mailed to Alpha's stockholders, and Conexant will use
reasonable best efforts to cause the Proxy Statement/Prospectus to be mailed to
Conexant's stockholders, in each case as promptly as practicable after the Proxy
Statement/Prospectus is cleared by the SEC and the Form S-4 is declared
effective under the Securities Act. Alpha shall also take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
qualified or to file a general consent to service of process) required to be
taken under any applicable state securities laws in connection with the issuance
of Alpha Common Stock in the Merger and Alpha and Conexant shall furnish all
information concerning Alpha, Washington and Conexant and the holders of
Conexant Common Stock as may be reasonably requested in connection with any such
action. Alpha will advise Conexant, promptly after it receives notice thereof,
of the time when the Form S-4 has become effective, the issuance of any stop
order with respect to the Form S-4, the suspension of the qualification of the
Alpha Common Stock issuable in connection with the Merger for offering or sale
in any jurisdiction, or any request by the SEC for amendment of the Proxy
Statement/Prospectus or the Form S-4. If at any time prior to the Effective Time
any information relating to Alpha or Washington, or any of their respective
affiliates, officers or directors, should be discovered by Alpha or Conexant
which should be set forth in an amendment or supplement to the Form S-4 or the
Proxy Statement/Prospectus so that any of such documents would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, the party which discovers such information shall promptly
notify the other parties hereto and, to the extent required by Applicable Laws,
an appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and disseminated to the stockholders of Alpha and
Conexant.
(b) Alpha shall duly take all lawful action to call, give notice of,
convene and hold a meeting of its stockholders on a date determined in
accordance with the mutual agreement of Alpha and Conexant (the "Alpha
Stockholders Meeting") for the purpose of obtaining the Required Alpha Vote with
respect to the transactions contemplated by this Agreement and shall take all
lawful action to solicit the approval and adoption of this Agreement and the
Merger by the Required Alpha Vote, and the Board of Directors of Alpha shall
recommend approval and adoption of this Agreement and the Merger by the
stockholders of Alpha to the effect as set forth in Section 5.1(f) (the "Alpha
Recommendation"), and shall not withdraw, modify or qualify (or propose to
withdraw, modify or qualify) such recommendation (a "Change in the Alpha
Recommendation"); provided, however, that the Board of Directors of Alpha may
make a Change in the Alpha Recommendation pursuant to Section 7.5.
Notwithstanding any Change in the Alpha Recommendation, this Agreement shall be
submitted to the stockholders of Alpha at the Alpha
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Stockholders Meeting for the purpose of approving and adopting this Agreement
and the Merger, and nothing contained herein shall be deemed to relieve Alpha of
such obligation.
SECTION 7.2 Combined Company Board of Directors and Management. At or
prior to the Effective Time, the parties will take all action necessary to
effectuate the provisions of Sections 1.8 and 1.9.
SECTION 7.3 Access to Information. Upon reasonable notice, each of
Conexant and Alpha shall (and shall cause its Subsidiaries to) afford to the
officers, employees, accountants, counsel, financial advisors and other
representatives of the other reasonable access during normal business hours,
during the period prior to the Effective Time, to all its books, records,
properties, plants and personnel (in the case of Conexant and its Subsidiaries,
only with respect to the Washington Business) and, during such period, such
party shall (and shall cause its Subsidiaries to) furnish promptly to the other
party all information concerning it and its business, properties and personnel
(as to Conexant and its Subsidiaries, only with respect to the Washington
Business) as such other party may reasonably request; provided, however, that
either party may restrict the foregoing access to the extent that (i) any
Applicable Laws or Contract requires such party or its Subsidiaries to restrict
or prohibit access to any such properties or information or (ii) the information
is subject to confidentiality obligations to a third party. The parties will
hold any such information obtained pursuant to this Section 7.3 in confidence in
accordance with, and will otherwise be subject to, the provisions of the Mutual
Confidentiality Agreement dated September 28, 2001 between Conexant and Alpha
(as it may be amended or supplemented, the "Confidentiality Agreement"). Any
investigation by either Alpha or Conexant shall not affect the representations
and warranties contained herein or the conditions to the respective obligations
of the parties to consummate the Merger.
SECTION 7.4 Reasonable Best Efforts.
(a) Subject to the terms and conditions of this Agreement, each party will
use its reasonable best efforts to take, or cause to be taken, all actions and
to do, or cause to be done, and to assist and cooperate with the other parties
in doing or causing to be done, all things necessary, proper or advisable under
this Agreement and Applicable Laws to consummate the Merger and the other
transactions contemplated by this Agreement as soon as practicable after the
date hereof, including (i) taking all reasonable actions to cause the conditions
set forth in Article VIII to be satisfied as promptly as reasonably practicable;
(ii) preparing and filing as promptly as practicable all documentation to effect
all necessary applications, notices, petitions and filings and to obtain as
promptly as practicable the Tax Ruling, all Alpha Necessary Consents and
Conexant Necessary Consents and all other consents, waivers, licenses, orders,
registrations, approvals, permits, rulings, authorizations and clearances
necessary or advisable to be obtained from any third party and/or any
Governmental Entity in order to consummate the Merger or any of the other
transactions contemplated by this Agreement (collectively, the "Required
Approvals") and (iii) taking all reasonable steps as may be necessary to obtain
all Required Approvals. In furtherance and not in limitation of the foregoing,
each party hereto agrees to make (i) an appropriate filing of a Notification and
Report Form pursuant to the HSR Act with respect to the transactions
contemplated hereby as promptly as practicable after the date hereof, (ii)
appropriate filings, if any are required, with the European Commission and/or
other foreign regulatory authorities in accordance with applicable competition,
merger control, antitrust, investment or similar Applicable Laws, and (iii) all
other necessary filings with other Governmental Entities relating to the Merger,
and, in each case, to supply as promptly as practicable any additional
information and documentary material that may be requested pursuant to such
Applicable Laws or by such authorities and to use reasonable best efforts to
cause the expiration or termination of the applicable waiting periods under the
HSR Act and the receipt of the Required Approvals under such other Applicable
Laws or from such authorities as soon as practicable. Notwithstanding the
foregoing, nothing in this Section 7.4 shall require any of Alpha and its
Subsidiaries, Conexant and its Subsidiaries, Washington and its Subsidiaries or
the Combined Company and its Subsidiaries to sell, hold separate or otherwise
dispose of any assets of Alpha, Conexant, Washington, the Combined Company or
their respective Subsidiaries (including the capital stock of any Subsidiary) or
conduct their business in a specified manner, or agree to do so, whether as a
condition to obtaining any approval from a Governmental Entity or any other
Person or for any other reason, if such sale, holding separate or other
disposition or the conduct of their business in a specified manner is not
conditioned on the Closing or, individually or in the
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aggregate, would reasonably be expected to have a Material Adverse Effect on the
Combined Company and its Subsidiaries, after giving effect to the Merger (or,
only with respect to Conexant and its Subsidiaries, to have a Material Adverse
Effect on Conexant and its Subsidiaries, after giving effect to the
Distribution).
(b) Each of Alpha, on the one hand, and Conexant and Washington, on the
other hand, shall, in connection with the efforts referenced in Section 7.4(a)
to obtain all Required Approvals, use its reasonable best efforts to (i)
cooperate in all respects with each other in connection with any filing or
submission and in connection with any investigation or other inquiry, including
any proceeding initiated by a private party, (ii) promptly inform the other
party of any communication received by such party from, or given by such party
to, the Antitrust Division of the Department of Justice (the "DOJ"), the Federal
Trade Commission (the "FTC") or any other Governmental Entity and of any
material communication received or given in connection with any proceeding by a
private party, in each case regarding any of the transactions contemplated
hereby, and (iii) permit the other party to review any communication given by it
to, and consult with each other in advance of any meeting or conference with,
the DOJ, the FTC or any such other Governmental Entity or, in connection with
any proceeding by a private party, with any other Person, and to the extent
appropriate or permitted by the DOJ, the FTC or such other applicable
Governmental Entity or other Person, give the other party the opportunity to
attend and participate in such meetings and conferences.
(c) In furtherance and not in limitation of the covenants of the parties
contained in Section 7.4(a) and Section 7.4(b), if any administrative or
judicial action or proceeding, including any proceeding by a private party, is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of any Applicable Laws, or if any
statute, rule, regulation, executive order, decree, injunction or administrative
order is enacted, entered, promulgated or enforced by a Governmental Entity
which would make the Merger or the other transactions contemplated hereby
illegal or would otherwise prohibit or materially impair or delay the
consummation of the Merger or the other transactions contemplated hereby, each
of Conexant and Alpha shall cooperate in all respects with each other and use
its respective reasonable best efforts, including, subject to the last sentence
of Section 7.4(a), selling, holding separate or otherwise disposing of any
assets of Alpha or its Subsidiaries or the Washington Companies (including the
capital stock of any Subsidiary) or conducting their business (in the case of
Conexant, only with respect to the Washington Business) in a specified manner,
or agreeing to do so, to contest and resist any such action or proceeding and to
have vacated, lifted, reversed or overturned any decree, judgment, injunction or
other order, whether temporary, preliminary or permanent, that is in effect and
that prohibits, prevents or restricts consummation of the Merger or the other
transactions contemplated by this Agreement and to have such statute, rule,
regulation, executive order, decree, injunction or administrative order
repealed, rescinded or made inapplicable so as to permit consummation of the
transactions contemplated by this Agreement. Notwithstanding the foregoing or
any other provision of this Agreement, nothing in this Section 7.4 shall limit a
party's right to terminate this Agreement pursuant to Section 9.1(b) or Section
9.1(c) so long as such party has complied with its obligations under this
Section 7.4.
(d) Each of Alpha, Conexant and Washington shall cooperate with each other
in obtaining opinions of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel to
Alpha, and Xxxxxxxxxx & Xxxxx LLP, counsel to Conexant and Washington, to
satisfy the conditions set forth in Section 8.2(c) and Section 8.3(c). In
connection therewith, each of Alpha and Conexant shall deliver to such counsel
customary representation letters in form and substance reasonably satisfactory
to such counsel.
SECTION 7.5 Acquisition Proposals.
(a) Without limiting Alpha's other obligations under this Agreement
(including under Article VI hereof), Alpha agrees that from and after the date
of this Agreement until the earlier of the Effective Time or the termination of
this Agreement in accordance with Article IX, neither it nor any of its
Subsidiaries shall, and it shall use its reasonable best efforts to cause its
and its Subsidiaries' officers, directors, employees, agents and representatives
(including any investment banker, attorney or accountant
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retained by it or any of its Subsidiaries) not to, directly or indirectly, (i)
initiate, solicit, encourage or knowingly facilitate (including by way of
furnishing information) any inquiries or the making of any proposal or offer
with respect to, or a transaction to effect, any Alpha Acquisition Proposal (as
defined below), (ii) have any discussions with or provide any confidential
information or data to any Person relating to an Alpha Acquisition Proposal, or
engage in any negotiations concerning an Alpha Acquisition Proposal, or
knowingly facilitate any effort or attempt to make or implement an Alpha
Acquisition Proposal, (iii) approve or recommend, or propose publicly to approve
or recommend, any Alpha Acquisition Proposal or (iv) approve or recommend, or
propose to approve or recommend, or execute or enter into, any letter of intent,
agreement in principle, merger agreement, acquisition agreement, option
agreement or other similar agreement related to any Alpha Acquisition Proposal.
(b) For purposes of this Agreement, "Alpha Acquisition Proposal" means any
inquiry, proposal or offer from any Person with respect to (A) a merger,
reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Alpha or any of its Significant Subsidiaries (as defined in Rule 1-02 of
Regulation S-X of the SEC), (B) any purchase or sale or other disposition of 20%
or more of the consolidated assets (including stock of its Subsidiaries) of
Alpha and its Subsidiaries, taken as a whole, or (C) any purchase or sale of, or
tender or exchange offer for, or similar transaction with respect to, the equity
securities of Alpha that, if consummated, would result in any Person (or the
stockholders of such Person) beneficially owning securities representing 20% or
more of the total voting power of Alpha (or of the surviving parent entity in
such transaction) or any of its Significant Subsidiaries, including in the case
of each of clauses (A) through (C), any single or multi-step transaction or
series of related transactions (other than a proposal or offer made by Conexant
or a Subsidiary thereof).
(c) Notwithstanding anything in this Agreement to the contrary, Alpha or
its Board of Directors shall be permitted to (i) to the extent applicable,
comply with Rule 14d-9 and Rule 14e-2 promulgated under the Exchange Act with
regard to an Alpha Acquisition Proposal, (ii) effect a Change in the Alpha
Recommendation or (iii) engage in any discussions or negotiations with, or
provide any information to, any Person in response to an unsolicited bona fide
written Alpha Acquisition Proposal by any such Person (which has not been
withdrawn) in order to be informed with respect thereto in order to make any
determination permitted in clause (ii), if and only to the extent that, in any
such case referred to in clause (ii) or (iii), (A) the Alpha Stockholders
Meeting shall not have occurred, (B) it has received an unsolicited bona fide
written Alpha Acquisition Proposal from a third party (which has not been
withdrawn) and (x) in the case of clause (ii) above, its Board of Directors
concludes in good faith that such Alpha Acquisition Proposal constitutes a
Superior Alpha Proposal and (y) in the case of clause (iii) above, its Board of
Directors concludes in good faith that there is a reasonable likelihood that
such Alpha Acquisition Proposal would constitute a Superior Alpha Proposal, (C)
its Board of Directors, after consultation with its outside counsel, determines
in good faith that such action is required by its fiduciary duties to
stockholders under Applicable Laws as a result of such Alpha Acquisition
Proposal, (D) in the case of clause (ii) above, it shall provide Conexant
immediate written notice of such action, (E) prior to providing any information
or data to any Person in connection with an Alpha Acquisition Proposal by any
such Person, it receives from such Person an executed confidentiality agreement
containing terms substantially the same as the Confidentiality Agreement and (F)
prior to providing any information or data to any Person or entering into
discussions or negotiations with any Person, it notifies Conexant promptly of
such inquiries, proposals or offers received by, any such information requested
from, or any such discussions or negotiations sought to be initiated or
continued with, such Person or any of its representatives indicating, in
connection with such notice, the name of such Person and the material terms and
conditions of any inquiries, proposals or offers, and furnishes to Conexant a
copy of any such written inquiry, proposal or offer. Alpha agrees that it will
promptly keep Conexant informed of the status and terms of any such proposals or
offers and the status and terms of any such discussions or negotiations and will
promptly provide Conexant with any such written proposals or offers. Alpha
agrees that it will, and will cause its officers, directors and representatives
to, immediately cease and cause to be terminated any activities, discussions or
negotiations existing as of the date of this Agreement with any Persons
conducted heretofore with respect to any Alpha Acquisition Proposal, and request
the return or destruction of all non-
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public information furnished in connection therewith. Alpha agrees that it will
use reasonable best efforts to promptly inform its directors, officers, key
employees, agents and representatives of the obligations undertaken by Alpha in
this Section 7.5. Nothing in this Section 7.5 shall (x) permit Alpha to
terminate this Agreement (except as specifically provided in Article IX) or (y)
affect any other obligation of Alpha or Conexant under this Agreement. Alpha
shall not submit to the vote of its stockholders any Alpha Acquisition Proposal
other than the Merger.
(d) For purposes of this Agreement, "Superior Alpha Proposal" means a bona
fide written Alpha Acquisition Proposal (for purposes of this definition of
"Superior Alpha Proposal", references to 20% in the definition of "Alpha
Acquisition Proposal" shall be deemed to be references to 50%) made by a Person
other than a party hereto which is on terms which the Board of Directors of
Alpha in good faith concludes (following receipt of the advice of its financial
advisors), taking into account, among other things, all legal, financial,
regulatory and other aspects of the proposal and the Person making the proposal,
(x) would, if consummated, result in a transaction that is more favorable to its
stockholders (in their capacities as stockholders), from a financial point of
view, than the transactions contemplated by this Agreement and (y) is reasonably
likely to be completed.
(e) Without limiting Conexant's other obligations under this Agreement
(including under Article VI hereof), Conexant agrees that from and after the
date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement in accordance with Article IX, neither it nor any
of its Subsidiaries shall, and it shall use its reasonable best efforts to cause
its and its Subsidiaries' officers, directors, employees, agents and
representatives (including any investment banker, attorney or accountant
retained by it or any of its Subsidiaries) not to, directly or indirectly, (i)
initiate, solicit, encourage or knowingly facilitate (including by way of
furnishing information) any inquiries or the making of any proposal or offer
with respect to, or a transaction to effect, any Washington Acquisition Proposal
(as defined below), (ii) have any discussions with or provide any confidential
information or data to any Person relating to a Washington Acquisition Proposal,
or engage in any negotiations concerning a Washington Acquisition Proposal, or
knowingly facilitate any effort or attempt to make or implement a Washington
Acquisition Proposal, (iii) approve or recommend, or propose publicly to approve
or recommend, any Washington Acquisition Proposal or (iv) approve or recommend,
or propose to approve or recommend, or execute or enter into, any letter of
intent, agreement in principle, merger agreement, acquisition agreement, option
agreement or other similar agreement related to any Washington Acquisition
Proposal.
(f) For purposes of this Agreement, "Washington Acquisition Proposal" means
any inquiry, proposal or offer from any Person with respect to any purchase or
sale or other disposition of 20% or more of the consolidated assets (including
stock of subsidiaries) of the Washington Business, including any single or
multi-step transaction or series of related transactions (other than a proposal
or offer made by Alpha or a Subsidiary thereof).
SECTION 7.6 Employee Benefits Matters.
(a) Continuation and Comparability of Benefits. Subject to the Employee
Matters Agreement, from and after the Effective Time, the employee benefit plans
established or assumed by Washington pursuant to the Employee Matters Agreement
and the Alpha Plans in effect as of the date of this Agreement and at the
Effective Time shall remain in effect with respect to Washington Participants
(as defined in the Employee Matters Agreement) and employees and former
employees of Alpha and its Subsidiaries (collectively, the "Combined Company
Employees"), covered by such plans at the Effective Time, until such time as the
Combined Company shall otherwise determine, subject to Applicable Laws and the
terms of such plans. Prior to the Effective Time, or as soon as reasonably
practicable thereafter, Conexant and Alpha shall cooperate in reviewing,
evaluating and analyzing the Washington Plans and the Alpha Plans with a view
towards developing appropriate new benefit plans for Combined Company Employees.
It is the intention of Conexant and Alpha, to the extent permitted by Applicable
Laws, to develop new benefit plans prior to the Effective Time or as soon as
reasonably practicable after the Effective Time which, among other things, (i)
treat similarly situated employees on a substantially equivalent basis, taking
into
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account all relevant factors, including duties, geographic location, tenure,
qualifications and abilities and (ii) do not discriminate between Combined
Company Employees who were covered by Washington Plans, on the one hand, and
those covered by Alpha Plans, on the other, at the Effective Time. Nothing in
this Section 7.6 shall be interpreted as preventing the Combined Company from
amending, modifying or terminating any employee benefit plans established or
assumed by Washington pursuant to the Employee Matters Agreement or any Alpha
Plan or other contract, arrangement, commitment or understanding, in accordance
with its terms and Applicable Laws.
(b) Pre-Existing Limitations; Deductibles; Service Credit. With respect to
any employee benefit plans in which any Combined Company Employees who were
employees of Conexant or Alpha (or their Subsidiaries) prior to the Effective
Time first become eligible to participate on or after the Effective Time, and in
which the Combined Company Employees did not participate prior to the Effective
Time (the "New Combined Company Plans"), the Combined Company shall: (A) waive
all pre-existing conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to the Combined Company
Employees and their eligible dependents under any New Combined Company Plans in
which such employees may be eligible to participate after the Effective Time,
except to the extent such pre-existing conditions, exclusions or waiting periods
would apply under the analogous Washington Plan or Alpha Plan, as the case may
be; (B) provide each Combined Company Employee and their eligible dependents
with credit for any co-payments and deductibles paid prior to the Effective Time
under a Washington Plan or an Alpha Plan (to the same extent such credit was
given under the analogous employee benefit plan prior to the Effective Time) in
satisfying any applicable deductible or out-of-pocket requirements under any New
Combined Company Plans in which such employees may be eligible to participate
after the Effective Time; and (C) recognize all service of the Combined Company
Employees with Conexant and Alpha, and their respective affiliates, for purposes
of eligibility to participate, vesting credit, entitlement to benefits and,
other than with respect to defined benefit pension plans, benefit accrual, in
any New Combined Company Plan in which such employees may be eligible to
participate after the Effective Time, to the extent such service is taken into
account under the applicable New Combined Company Plan; provided that the
foregoing shall not apply to the extent it would result in duplication of
benefits.
SECTION 7.7 Fees and Expenses. Subject to Section 9.2(c) of this
Agreement and Section 4.09 of the Distribution Agreement, whether or not the
Merger is consummated, all Expenses (as defined below) incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such Expenses, except Expenses incurred in connection with
the filing, printing and mailing of the Form S-4 and the Proxy
Statement/Prospectus, which shall be shared equally by Alpha and Conexant. As
used in this Agreement, "Expenses" means all out-of-pocket expenses (including
all fees and expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party or on its
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby, including the preparation, printing, filing and mailing of
the Form S-4 and the Proxy Statement/ Prospectus and the solicitation of
stockholder approval and all other matters related to the transactions
contemplated hereby.
SECTION 7.8 Directors' and Officers' Indemnification and Insurance.
(a) The Combined Company shall (i) indemnify and hold harmless, and provide
advancement of expenses to, all past and present directors, officers and
employees of Alpha and its Subsidiaries (in all of their capacities as such), to
the same extent such persons are indemnified or have the right to advancement of
expenses as of the date of this Agreement by Alpha pursuant to Alpha's
certificate of incorporation, by-laws and indemnification agreements, if any, in
existence on the date hereof with any such directors, officers and employees of
Alpha and its Subsidiaries for acts or omissions occurring at or prior to the
Effective Time (including for acts or omissions occurring in connection with the
approval of this Agreement and the consummation of the transactions contemplated
hereby) and (ii) cause to be maintained for a period of six years after the
Effective Time the current policies of directors' and officers' liability
insurance and fiduciary liability insurance maintained by Alpha (provided that
the Combined
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Company may substitute therefor policies of at least the same coverage and
amounts containing terms and conditions which are, in the aggregate, no less
advantageous to the insured than the current policies maintained by Alpha) with
respect to claims arising from facts or events that occurred on or before the
Effective Time; provided, however, that in no event shall the Combined Company
be required to expend in any one year an amount in excess of 200% of the annual
premiums (on a per capita basis) currently paid by Alpha for such insurance;
and, provided, further, that if the annual premiums of such insurance coverage
exceed such amount, the Combined Company shall be obligated to obtain a policy
with the greatest coverage available for a cost not exceeding such amount.
(b) The Combined Company shall (i) indemnify and hold harmless, and provide
advancement of expenses to, all past and present directors, officers and
employees of the Washington Companies (in all of their capacities as such), to
the same extent such persons are indemnified or have the right to advancement of
expenses as of the date of this Agreement by Conexant pursuant to Conexant's
certificate of incorporation, by-laws and indemnification agreements, if any, in
existence on the date hereof with any such directors, officers and employees of
the Washington Companies for acts or omissions occurring at or prior to the
Effective Time (including for acts or omissions occurring in connection with the
approval of this Agreement and the consummation of the transactions contemplated
hereby) and (ii) maintain in effect for each of the applicable persons referred
to in clause (i) for a period of six years after the Effective Time policies of
directors' and officers' liability insurance and fiduciary liability insurance
of at least the same coverage and amounts as, and containing terms and
conditions which are, in the aggregate, no less advantageous to the insured
than, the current policies of directors' and officers' liability insurance
maintained by Conexant, with respect to claims arising from facts or events that
occurred on or before the Effective Time; provided, however, that in no event
shall the Combined Company be required to expend in any one year an amount in
excess of 200% of the annual premiums (on a per capita basis) currently paid by
Conexant for such insurance; and, provided, further, that if the annual premiums
of such insurance coverage exceed such amount, the Combined Company shall be
obligated to obtain a policy with the greatest coverage available for a cost not
exceeding such amount.
(c) The provisions of this Section 7.8 are intended to be for the benefit
of and shall be enforceable by each indemnified or insured party referred to
above in this Section 7.8.
SECTION 7.9 Public Announcements. Alpha and Conexant each shall use
reasonable best efforts to develop a joint communications plan and each party
shall use reasonable best efforts (i) to ensure that all press releases and
other public statements with respect to the transactions contemplated hereby
shall be consistent with such joint communications plan, and (ii) unless
otherwise required by Applicable Laws or by obligations pursuant to any listing
agreement with or rules of any securities exchange or automated quotation
system, to consult with each other before issuing any press release or, to the
extent practicable, otherwise making any public statement with respect to this
Agreement or the transactions contemplated hereby.
SECTION 7.10 Accounting Matters.
(a) Alpha shall use reasonable best efforts to cause to be delivered to
Conexant two letters from Alpha's independent public accountants, one dated
approximately the date on which the Form S-4 shall become effective and one
dated the Closing Date, each addressed to Alpha, Conexant and Washington, in
form and substance reasonably satisfactory to Conexant and reasonably customary
in scope and substance for comfort letters delivered by independent public
accountants in connection with registration statements similar to the Form S-4.
(b) Conexant shall use reasonable best efforts to cause to be delivered to
Alpha two letters from Washington's independent public accountants, one dated
approximately the date on which the Form S-4 shall become effective and one
dated the Closing Date, each addressed to Conexant, Alpha and Washington, in
form and substance reasonably satisfactory to Alpha and reasonably customary in
scope and substance for comfort letters delivered by independent public
accountants in connection with registration statements similar to the Form S-4.
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SECTION 7.11 Listing of Shares of Alpha Common Stock. Alpha shall prior
to the Effective Time use reasonable best efforts to cause the shares of Alpha
Common Stock to be issued in the Merger and the shares of Alpha Common Stock to
be reserved for issuance upon exercise of the Converted Options to be approved
for listing on the Nasdaq National Market System prior to the Closing Date.
SECTION 7.12 Affiliates. Not less than 45 days prior to the Effective
Time, Conexant shall deliver to Alpha a letter identifying all persons who, in
the judgment of Conexant, may be deemed at the time this Agreement is submitted
for approval by Conexant as the sole stockholder of Washington, "affiliates" of
Washington for purposes of Rule 145 under the Securities Act and applicable SEC
rules and regulations, and such list shall be updated as necessary to reflect
changes from the date of delivery thereof. Conexant shall use reasonable best
efforts to cause each person identified on such list to deliver to Alpha not
less than 30 days prior to the Effective Time, a written agreement substantially
in the form attached hereto as Exhibit H (an "Affiliate Agreement").
SECTION 7.13 Section 16 Matters. Prior to the Effective Time, Alpha shall
take all such steps as may be required to cause any acquisitions or dispositions
of Alpha Common Stock (including derivative securities with respect to Alpha
Common Stock) resulting from the transactions contemplated by this Agreement by
each individual who is or will be subject to the reporting requirements of
Section 16(a) of the Exchange Act with respect to Alpha to be exempt under Rule
16b-3 promulgated under the Exchange Act, such steps to be taken in accordance
with applicable SEC rules and regulations and interpretations of the SEC staff.
SECTION 7.14 Takeover Statutes. If any "fair price", "moratorium",
"control share acquisition" or other form of antitakeover statute or regulation
shall become applicable to the transactions contemplated hereby, each of
Conexant, Alpha and Washington and their respective Boards of Directors shall
use all reasonable efforts to grant such approvals and take such actions as are
reasonably necessary so that the transactions contemplated hereby may be
consummated as promptly as practicable on the terms contemplated hereby and
otherwise act to eliminate or minimize the effects of such statute or regulation
on the transactions contemplated hereby.
SECTION 7.15 Advice of Changes. Each of Conexant and Alpha shall as
promptly as reasonably practicable after becoming aware thereof advise the
others of (a) any representation or warranty made by it contained in this
Agreement that is qualified as to materiality becoming untrue or inaccurate in
any respect or any such representation or warranty that is not so qualified
becoming untrue or inaccurate in any material respect, (b) the failure by it to
comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement or (c) any
change or event (i) having, or which would, individually or in the aggregate,
reasonably be expected to have, in the case of Alpha, a Material Adverse Effect
on Alpha and its Subsidiaries, and, in the case of Conexant, a Material Adverse
Effect on the Washington Business, or (ii) which has resulted, or which, insofar
as can reasonably be foreseen, would result, in any of the conditions set forth
in Article VIII not being satisfied; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
SECTION 7.16 Shareholders Agreement. Concurrently with the execution and
delivery of this Agreement, each of the directors and executive officers of
Alpha set forth on Exhibit I shall execute and deliver a Shareholders Agreement,
substantially in the form attached hereto as Exhibit J (the "Shareholders
Agreement").
SECTION 7.17 Tax Ruling. In connection with the Distribution, Conexant
shall use its reasonable best efforts in seeking, as promptly as practicable,
the Tax Ruling. Prior to filing with the Internal Revenue Service (the "IRS"),
Conexant shall furnish Alpha with a draft of the ruling request letter with
respect to the Tax Ruling and of any substantive supplemental submission in
respect thereof. Alpha may review and provide any comments on such drafts and
Conexant shall reasonably consider any comments provided in a reasonably prompt
manner by Alpha. Conexant shall keep Alpha fully informed of the status of the
Tax Ruling request. At Conexant's request, Alpha shall cooperate with and use
its reasonable best efforts to assist Conexant in connection with the Tax Ruling
request. At Alpha's reasonable request,
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Conexant shall cooperate with Alpha and use its reasonable best efforts to seek
to obtain, as promptly as practicable, any supplemental Tax Ruling or other
guidance from the IRS.
SECTION 7.18 Option Acceleration.
(a) Except with respect to the acceleration of the vesting and the
extension of the exercise period of the Alpha Stock Options set forth in Section
7.18 of the Alpha Disclosure Schedule, Alpha will take all action necessary to
prevent the acceleration of the vesting of, or the lapsing of restrictions with
respect to, any stock options, restricted stock or other stock-based
compensation (including the Alpha Stock Options, and whether granted under the
Alpha Stock Plans or otherwise) as a result of the approval or consummation of
any transaction contemplated by this Agreement.
(b) Washington will take all action necessary to prevent the acceleration
of the vesting of, or the lapsing of restrictions with respect to, any stock
options, restricted stock or other stock-based compensation (including the
Washington Options and any Converted Options into which they may be converted
hereunder, and whether granted under the Conexant Stock Plans, the Washington
Stock Plans or otherwise) as a result of the approval or consummation of any
transaction contemplated by this Agreement.
SECTION 7.19 Employment and Severance Arrangements. Except with respect
to the acceleration of the vesting and the extension of the exercise period of
the Alpha Stock Options set forth in Section 7.18 of the Alpha Disclosure
Schedule, Alpha will take all action necessary to ensure that no officer,
director or other employee of Alpha or any of its Subsidiaries will become
entitled to receive any change of control or other payment or benefit under any
employment, severance or other agreement with Alpha or any of its Subsidiaries,
including those agreements set forth on Exhibit E, that may otherwise arise as a
result of the approval or consummation of any transaction contemplated by this
Agreement.
SECTION 7.20 Transition Services Agreement. Promptly following the date
hereof, Alpha and Conexant will discuss the scope, nature, term and pricing of
the transition services to be provided by Conexant to Alpha following the
Effective Time pursuant to the Transition Services Agreement. Alpha and Conexant
will negotiate in good faith with respect thereto and prior to the Effective
Time will enter into the Transition Services Agreement in a form reasonably
satisfactory to Alpha and Conexant. The Transition Services Agreement will
provide that either party may terminate any services provided under the
Transition Services Agreement upon such prior written notice as the parties
shall mutually agree prior to the Effective Time.
ARTICLE VIII
CONDITIONS PRECEDENT
SECTION 8.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of Washington and Alpha to effect the Merger
are subject to the satisfaction or waiver prior to the Effective Time of the
following conditions:
(a) Stockholder Approval. Alpha shall have obtained the Required
Alpha Vote.
(b) No Injunctions or Restraints, Illegality. No Applicable Laws
shall have been adopted, promulgated or enforced by any Governmental
Entity, and no temporary restraining order, preliminary or permanent
injunction or other order issued by a court or other Governmental Entity of
competent jurisdiction (an "Injunction") shall be in effect, having the
effect of making the Merger illegal or otherwise prohibiting consummation
of the Merger.
(c) No Pending Governmental Actions. No proceeding initiated by any
Governmental Entity seeking, and which is reasonably likely to result in
the granting of, an Injunction shall be pending.
(d) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or
shall have expired.
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(e) EU Antitrust. If required, Alpha and Conexant shall have received
in respect of the Merger and any matters arising therefrom confirmation by
way of a determination from the European Commission under Regulation
4064/89 (with or without the initiation of proceedings under Article
6(1)(c) thereof) that the Merger and any matters arising therefrom are
compatible with the common market.
(f) Governmental and Regulatory Approvals. Other than the filings
provided for under Section 1.2 and filings pursuant to the HSR Act and, if
required, the EC Merger Regulation (which are addressed in Section 8.1(d)
and Section 8.1(e)), all consents, approvals, orders or authorizations of,
actions of, filings and registrations with and notices to any Governmental
Entity (i) required of Alpha, Conexant, Washington or any of their
Subsidiaries to consummate the Merger and the other transactions
contemplated hereby, the failure of which to be obtained or taken would
reasonably be expected to have a Material Adverse Effect on the Combined
Company and its Subsidiaries, taken together after giving effect to the
Merger or (ii) set forth in Section 8.1(f) of the Alpha Disclosure Schedule
or Section 8.1(f) of the Conexant Disclosure Schedule shall have been
obtained and shall be in full force and effect.
(g) Nasdaq Listing. The shares of Alpha Common Stock to be issued in
the Merger and to be reserved for issuance in connection with the Merger
shall have been approved for listing on the Nasdaq National Market System.
(h) Effectiveness of the Form S-4. The Form S-4 shall have been
declared effective by the SEC under the Securities Act and no stop order
suspending the effectiveness of the Form S-4 shall then be in effect and no
proceedings for that purpose shall be pending before or threatened by the
SEC.
(i) Pre-Merger Transactions. The Contribution and the Distribution
shall have been consummated in accordance with the terms of this Agreement
and the Distribution Agreement (which includes additional conditions to
such consummation) and in all material respects in accordance with the Tax
Ruling, provided that the failure of the Contribution and the Distribution
to be consummated shall not be a condition to the obligations of a party
whose breach (or breach by an Affiliate thereof) of the Distribution
Agreement has been the cause of, or resulted in, such failure.
(j) Tax Ruling. Conexant shall have received the Tax Ruling and the
Tax Ruling shall be in full force and effect and shall not have been
modified or amended in any respect adversely affecting the Tax consequences
set forth therein.
(k) Mexicali Conditions. Each condition to the closing of the
Facility Sale Agreement set forth in Article VI thereof (other than in
Section 6.4 thereof) shall have been satisfied.
SECTION 8.2 Additional Conditions to Obligations of Alpha. The obligation
of Alpha to effect the Merger is subject to the satisfaction or waiver by Alpha
prior to the Effective Time of the following additional conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Conexant set forth in this Agreement and in Section
2.01(d)(i) of the Distribution Agreement shall be true and correct (without
giving effect to any qualification or limitation as to materiality or
Material Adverse Effect set forth therein), in each case as of the date of
this Agreement and (except to the extent that such representations and
warranties speak solely as of another date) as of the Closing Date as
though made on and as of the Closing Date, except where the failure of such
representations and warranties to be true and correct would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Washington Business, and Alpha shall have received a
certificate of Conexant executed by an executive officer of Conexant to
such effect.
(b) Performance of Obligations of Conexant and Washington. Each of
Conexant and Washington shall have performed or complied with all
agreements and covenants required to be performed by it under this
Agreement at or prior to the Closing Date that are qualified as to
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materiality or Material Adverse Effect and shall have performed or complied
in all material respects with all other agreements and covenants required
to be performed by it under this Agreement at or prior to the Closing Date
that are not so qualified, and Alpha shall have received a certificate of
Conexant executed by an executive officer of Conexant to such effect.
(c) Tax Opinion. Alpha shall have received an opinion from Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, dated the Closing Date, to the effect
that, on the basis of facts, representations and assumptions, including the
validity of the Tax Ruling, set forth in such opinion which are consistent
with the state of facts existing at the Effective Time, the Merger will
constitute a reorganization under Section 368 of the Code.
(d) Net Assets Statement. Conexant shall have delivered the Special
Purpose Statement of Tangible Net Assets in accordance with Section
2.01(d)(ii) of the Distribution Agreement.
(e) Mexicali Conditions. Each condition to the closing of the
Facility Sale Agreement set forth in Section 7.2 thereof shall have been
satisfied.
(f) Ancillary Agreements. The Employee Matters Agreement and the Tax
Allocation Agreement shall have been executed and delivered by Conexant and
Washington and the Facility Services Agreement, the Newport Supply
Agreement, the Newbury Supply Agreement and the Transition Services
Agreement shall have been executed and delivered by Conexant.
SECTION 8.3 Additional Conditions to Obligations of Washington. The
obligation of Washington to effect the Merger is subject to the satisfaction or
waiver by Conexant prior to the Effective Time of the following additional
conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Alpha set forth in this Agreement shall be true and correct
(without giving effect to any qualification or limitation as to materiality
or Material Adverse Effect set forth therein), in each case as of the date
of this Agreement and (except to the extent that such representations and
warranties speak solely as of another date) as of the Closing Date as
though made on and as of the Closing Date, except where the failure of such
representations and warranties to be true and correct would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Alpha and its Subsidiaries, and Conexant shall have
received a certificate of Alpha executed by an executive officer of Alpha
to such effect.
(b) Performance of Obligations of Alpha. Alpha shall have performed
or complied with all agreements and covenants required to be performed by
it under this Agreement at or prior to the Closing Date that are qualified
as to materiality or Material Adverse Effect and shall have performed or
complied in all material respects with all other agreements and covenants
required to be performed by it under this Agreement at or prior to the
Closing Date that are not so qualified, and Conexant shall have received a
certificate of Alpha executed by an executive officer of Alpha to such
effect.
(c) Tax Opinion. Conexant and Washington shall have received an
opinion from Xxxxxxxxxx & Xxxxx LLP, dated the Closing Date, to the effect
that, on the basis of facts, representations and assumptions, including the
validity of the Tax Ruling, set forth in such opinion which are consistent
with the state of facts existing at the Effective Time, the Merger will
constitute a reorganization under Section 368 of the Code.
(d) Employment and Severance Arrangements. Conexant shall have
received written evidence reasonably satisfactory to Conexant that Alpha
has taken all action necessary to ensure that no officer, director or other
employee of Alpha or any of its Subsidiaries has received or will become
entitled to receive any change of control or other payment or benefit under
any employment, severance or other agreement with Alpha or any of its
Subsidiaries (except with respect to the acceleration of the vesting and
the extension of the exercise period of the Alpha Stock Options set forth
in Section 7.18 of the Alpha Disclosure Schedule), including those
agreements set forth on Exhibit E, that may otherwise arise as a result of
the approval or consummation of any transaction contemplated by this
Agreement.
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(e) Mexicali Condition. Each condition to the closing of the Facility
Sale Agreement set forth in Section 7.1 thereof shall have been satisfied.
(f) Ancillary Agreements. The Employee Matters Agreement, the Tax
Allocation Agreement, the Facility Services Agreement, the Newport Supply
Agreement, the Newbury Supply Agreement and the Transition Services
Agreement shall have been executed and delivered by Alpha.
ARTICLE IX
TERMINATION AND AMENDMENT
SECTION 9.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, by action taken or authorized by the Board of
Directors of the terminating party or parties, and except as provided below,
whether before or after approval of the matters presented in connection with the
Merger by the stockholders of Alpha:
(a) by mutual written consent of Conexant and Alpha;
(b) by either Conexant or Alpha if the Effective Time shall not have
occurred on or before September 30, 2002 (the "Termination Date");
provided, however, that the right to terminate this Agreement under this
Section 9.1(b) shall not be available to any party whose failure to fulfill
in any material respect any obligation under this Agreement (including such
party's obligations set forth in Section 7.4) has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before the
Termination Date;
(c) by either Conexant or Alpha if any Governmental Entity (i) shall
have issued an order, decree or ruling or taken any other action (which
such party shall have used its reasonable best efforts to resist, resolve
or lift, as applicable, in accordance with Section 7.4) permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling or other
action shall have become final and nonappealable or (ii) shall have failed
to issue an order, decree or ruling, or to take any other action, necessary
to fulfill any conditions set forth in subsections 8.1(d) and (e), and the
failure to issue such order, decree, ruling or take such action shall have
become final and nonappealable; provided, however, that the right to
terminate this Agreement under this Section 9.1(c) shall not be available
to any party whose failure to comply with Section 7.4 has been the cause
of, or resulted in, such action or inaction;
(d) by either Conexant or Alpha if the approval by the stockholders of
Alpha required for the consummation of the Merger shall not have been
obtained by reason of the failure to obtain the Required Alpha Vote upon
the taking of such vote at a duly held meeting of stockholders of Alpha or
at any adjournment thereof;
(e) by Conexant, if (i) Alpha's Board of Directors shall have (A)
failed to make the Alpha Recommendation, (B) withdrawn the Alpha
Recommendation, (C) modified or qualified the Alpha Recommendation in any
manner adverse to Conexant or Washington or (D) failed to confirm the Alpha
Recommendation within five Business Days of Conexant's request to do so (or
resolved or proposed to take any such action referred to in clause (A),
(B), (C) or (D)), in each case, whether or not permitted by the terms
hereof, (ii) Alpha shall have breached its obligations under this Agreement
by reason of a failure to call and hold the Alpha Stockholders Meeting in
accordance with Section 7.1(b) or a failure to prepare and mail to its
stockholders the Proxy Statement/Prospectus in accordance with Section
7.1(a) or (iii) a tender or exchange offer relating to securities of Alpha
shall have been commenced by a Person unaffiliated with Conexant, and Alpha
shall not have sent to its stockholders pursuant to Rule 14e-2 under the
Exchange Act, within ten Business Days after such tender or exchange offer
is first published, sent or given, a statement that Alpha recommends
rejection of such tender or exchange offer;
(f) by Conexant, if Alpha shall have breached or failed to perform any
of its representations, warranties, covenants or other agreements contained
in this Agreement, such that the conditions set
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forth in Section 8.3(a) or Section 8.3(b) are not capable of being
satisfied on or before the Termination Date; or
(g) by Alpha, if Conexant or Washington shall have breached or failed
to perform any of its representations, warranties, covenants or other
agreements contained in this Agreement, such that the conditions set forth
in Section 8.2(a) or Section 8.2(b) are not capable of being satisfied on
or before the Termination Date.
SECTION 9.2 Effect of Termination.
(a) In the event of termination of this Agreement by either Conexant or
Alpha as provided in Section 9.1, this Agreement shall forthwith become void and
there shall be no liability or obligation on the part of Alpha, Conexant or
Washington or their respective officers or directors under this Agreement,
except that (i) the provisions of Section 5.1(m), Section 5.2(k), the second
sentence of Section 7.3, Section 7.7, this Section 9.2 and Article X shall
survive such termination, and (ii) notwithstanding anything to the contrary
contained in this Agreement (including Section 7.7), none of Alpha, Conexant or
Washington shall be relieved or released from any liabilities or damages arising
out of its willful breach of any provision of this Agreement.
(b) If:
(i) (A)(x) either Conexant or Alpha shall terminate this Agreement
pursuant to Section 9.1(b) without the Alpha Stockholder Meeting having
occurred or pursuant to Section 9.1(d) or (y) Conexant shall terminate this
Agreement pursuant to Section 9.1(f) as a result of any intentional breach
or failure to perform by Alpha (unless covered by clause (ii) below), and
(B) at any time after the date of this Agreement and before such
termination an Alpha Acquisition Proposal shall have been publicly
announced or, in the case of termination of this Agreement pursuant to
Section 9.1(b) or Section 9.1(f), publicly announced or otherwise
communicated to the senior management, Board of Directors or stockholders
of Alpha, and
(C) within nine months of such termination Alpha or any of its
Subsidiaries enters into a definitive agreement with respect to, or
consummates, any Alpha Acquisition Proposal (for purposes of this clause
(C), references to 20% in the definition of "Alpha Acquisition Proposal"
shall be deemed to be references to 50%); or
(ii) Conexant shall terminate this Agreement pursuant to Section
9.1(e);
then Alpha shall promptly, but in no event later than the date of such
termination (or in the case of clause (i), if later, the date Alpha or its
Subsidiary enters into such agreement with respect to or consummates such Alpha
Acquisition Proposal), pay Conexant an amount equal to Forty-Five Million
dollars ($45,000,000), by wire transfer of immediately available funds.
(c) The parties acknowledge that the agreements contained in this Section
9.2 are an integral part of the transactions contemplated by this Agreement, and
that, without these agreements, the parties would not enter into this Agreement;
accordingly, if Conexant or Alpha fails promptly to pay any amount due pursuant
to this Section 9.2, and, in order to obtain such payment, the other party
commences a suit which results in a judgment against such party for the fee set
forth in this Section 9.2, such party shall pay to the other party its costs and
expenses (including attorneys' fees and expenses) in connection with such suit,
together with interest on the amount of the fee from the date such payment is
required to be made until the date such payment is actually made at the prime
rate of Citibank, N.A. in effect on the date such payment was required to be
made. The parties agree that any remedy or amount payable pursuant to this
Section 9.2 shall not preclude any other remedy or amount payable hereunder, and
shall not be an exclusive remedy, for any willful breach of any provision of
this Agreement.
SECTION 9.3 Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
this Agreement and the Merger by the stockholders of Alpha, but, after any
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such approval, no amendment shall be made which by law or in accordance with the
rules of any relevant stock exchange or automated quotation system requires
further approval by such stockholders without such further approval. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
SECTION 9.4 Extension; Waiver. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties of other
parties contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions of other parties
contained herein or in any document delivered pursuant hereto. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in a written instrument signed on behalf of such party. The failure
of any party to this Agreement to assert any of its rights under this Agreement
or otherwise shall not constitute a waiver of those rights.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.1 Non-Survival of Representations, Warranties, Covenants and
Agreements. None of the representations, warranties, covenants and other
agreements in this Agreement or in any certificate delivered pursuant to this
Agreement, including any rights arising out of any breach of such
representations, warranties, covenants and other agreements, shall survive the
Effective Time, except for those covenants and agreements contained herein and
therein that by their terms apply or are to be performed in whole or in part
after the Effective Time.
SECTION 10.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally, (b) upon confirmation of receipt if delivered by
telecopy or telefacsimile, (c) on the first Business Day following the date of
dispatch if delivered by a recognized next-day courier service, or (d) on the
fifth Business Day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the party to receive such notice:
(a) if to Conexant or Washington to
Conexant Systems, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. X'Xxxxxx
Senior Vice President, General
Counsel and Secretary
with a copy to
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
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(b) if to Alpha to
Alpha Industries, Inc.
00 Xxxxxx Xxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
Chief Financial Officer
with a copy to
Alpha Industries, Inc.
00 Xxxxxx Xxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
General Counsel
SECTION 10.3 Interpretation. When a reference is made in this Agreement
to Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". All references in this Agreement to "the date of this Agreement",
"the date hereof", "a recent date" or similar references shall refer or relate
to the date as of which this Agreement was originally executed and delivered
(December 16, 2001) and not the date as of which this Agreement was amended
(April 12, 2002).
SECTION 10.4 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that the
parties need not sign the same counterpart.
SECTION 10.5 Entire Agreement; No Third Party Beneficiaries.
(a) This Agreement, the Confidentiality Agreement, the Reorganization
Agreements, the Facility Sale Agreement, the U.S. Asset Purchase Agreement, the
Facility Services Agreement, the Newport Supply Agreement, the Newbury Supply
Agreement and the exhibits and schedules hereto and thereto and the other
agreements and instruments of the parties delivered in connection herewith and
therewith constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof.
(b) This Agreement shall be binding upon and inure solely to the benefit of
each party hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement, other than
Section 7.8 (which is intended to be for the benefit of the Persons covered
thereby).
SECTION 10.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (without giving
effect to choice of law principles thereof).
SECTION 10.7 Severability. If any provision of this Agreement or the
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon any such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties.
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SECTION 10.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise), without
the prior written consent of the other parties, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
SECTION 10.9 Submission to Jurisdiction; Waivers. Each of Alpha, Conexant
and Washington irrevocably agrees that any legal action or proceeding with
respect to this Agreement, the transactions contemplated hereby, any provision
hereof, the breach, performance, validity or invalidity hereof or for
recognition and enforcement of any judgment in respect hereof brought by another
party hereto or its successors or permitted assigns may be brought and
determined in any federal or state court located in the State of Delaware, and
each of Alpha, Conexant and Washington hereby irrevocably submits with regard to
any such action or proceeding for itself and in respect to its property,
generally and unconditionally, to the exclusive jurisdiction of the aforesaid
courts. Each of Alpha, Conexant and Washington hereby irrevocably waives, and
agrees not to assert, by way of motion, as a defense, counterclaim or otherwise,
in any action or proceeding with respect to this Agreement, the transactions
contemplated hereby, any provision hereof or the breach, performance,
enforcement, validity or invalidity hereof, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason
other than the failure to lawfully serve process, (b) that it or its property is
exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise), and (c) to the fullest extent permitted by Applicable Laws, that (i)
the suit, action or proceeding in any such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper and (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
SECTION 10.10 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
SECTION 10.11 Definitions. As used in this Agreement:
(a) "affiliate" means (except as specifically otherwise defined), as
to any Person, any other Person which, directly or indirectly, controls, or
is controlled by, or is under common control with, such Person. As used in
this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") means the possession,
directly or indirectly, of the power to direct or cause the direction of
management or policies of a Person, whether through the ownership of
securities or partnership or other ownership interests, by contract or
otherwise.
(b) An "Alpha Plan" means any employee benefit plan, program, policy,
practice or other arrangement providing benefits to any current or former
employee, officer or director of Alpha or any of its Subsidiaries or any
beneficiary or dependent thereof that is sponsored or maintained by Alpha
or any of its Subsidiaries or to which Alpha or any of its Subsidiaries
contributes or is obligated to contribute, whether or not written,
including any employee benefit plan within the meaning of Section 3(3) of
ERISA (whether or not such plan is subject to ERISA) and any bonus,
incentive, deferred compensation, vacation, stock purchase, stock option,
severance, employment, change of control or fringe benefit plan, or similar
program or agreement.
(c) "Alpha Stock Plans" means, collectively, the Alpha Industries,
Inc. 1986 Long-Term Incentive Plan; the Alpha Industries, Inc. 1999
Employee Long-Term Incentive Plan; the Alpha Industries, Inc. Long-Term
Compensation Plan; the Alpha Industries, Inc. 1994 Non-Qualified Stock
Option Plan for Non-Employee Directors; the Alpha Industries, Inc. 1997
Non-Qualified Stock Option Plan for Non-Employee Directors; the Alpha
Industries, Inc. 1996 Long-Term Incentive Plan;
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the Alpha Industries, Inc. Directors' 2001 Stock Option Plan; and the Alpha
Industries, Inc. Employee Stock Purchase Plan.
(d) "Applicable Laws" means all applicable laws, statutes, orders,
rules, regulations, policies or guidelines promulgated, or judgments,
decisions or orders entered, by any Governmental Entity.
(e) "beneficial ownership" or "beneficially own" (except as
specifically otherwise defined) shall have the meaning under Section 13(d)
of the Exchange Act and the rules and regulations thereunder.
(f) "Board of Directors" means the Board of Directors of any specified
Person and any committees thereof.
(g) "Business Day" means a day other than a Saturday, a Sunday or a
day on which banks are required or authorized to close in the City of New
York.
(h) "Conexant Stock Plans" means, collectively, the Conexant Systems,
Inc. 2001 Employee Stock Purchase Plan; the Conexant Systems, Inc. 2001
Performance Share Plan; the Conexant Systems, Inc. 1999 Non-Qualified Stock
Purchase Plan; the Conexant Systems, Inc. 1998 Stock Option Plan; the
Conexant Systems, Inc. 1999 Long-Term Incentives Plan; the Conexant
Systems, Inc. 2000 Non-Qualified Stock Plan; the Conexant Systems, Inc.
Directors Stock Plan; the Istari Design, Inc. 1997 Stock Option Plan; the
Microcosm Communications Limited Stock Option Plan; the Maker
Communications, Inc. 1999 Stock Incentive Plan; the Maker Communications,
Inc. 1999 Non-Employee Director Stock Option Plan; the Maker
Communications, Inc. 1996 Stock Option Plan; the Applied Telecom, Inc. 2000
Non-Qualified Stock Option Plan; the Philsar Semiconductor Inc. Stock
Option Plan; the Sierra Imaging, Inc. 1996 Stock Option Plan; the HotRail,
Inc. 2000 Equity Plan; the HotRail, Inc. 1997 Equity Incentive Plan; the
Novanet Semiconductor Ltd. Employee Shares Option Plan; the NetPlane
Systems, Inc. Stock Option Plan; and the HyperXS Communications, Inc. 2000
Stock Option Plan.
(i) "Converted Option" means a Washington Option which has been
converted into an option to purchase shares of Alpha Common Stock pursuant
to the Merger.
(j) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
(k) "Known" or "Knowledge" means, (i) with respect to Conexant, the
knowledge of any of Xxxxxx X. Xxxxxx, Xxxxxxxxxxxx X. Xxxx, Xxxxxx X.
X'Xxxxxx, Xxxx X. Xxxxxxxx and Xxxx Xxxxxxxxx after reasonable inquiry and
(ii) with respect to Alpha, the knowledge of any of Xxxxxx X. Xxxxxxx,
Xxxxx X. Xxxxxxx, Xxxx X. Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx Xxx, Xxxxx
Xxxxxxxx and Xxxx-Xxxxxx Xxxxxxx after reasonable inquiry.
(l) "Material Adverse Effect" means, with respect to any entity or
business (or group of entities or businesses taken as a whole), any event,
change, circumstance or development that is materially adverse to (i) the
ability of such entity or business (or group of entities or businesses
taken as a whole) (or, in the case of a Material Adverse Effect with
respect to the Washington Business, Conexant and its Subsidiaries) to
consummate the transactions contemplated by this Agreement or (ii) the
business, financial condition or results of operations of such entity or
business (or, if with respect thereto, of such group of entities or
businesses taken as a whole), other than, with respect to this clause (ii),
any (1) change in the stock price of such entity or business, in and of
itself, or (2) event, change, circumstance or development (A) resulting
from any action taken in connection with the transactions contemplated
hereby pursuant to the terms of this Agreement, (B) relating to the economy
or financial markets in general, (C) relating in general to the industries
in which such entity or business operates and not specifically relating to
such entity or business or (D) relating to any action or omission of
Conexant, Alpha or Washington or any Subsidiary of any of them taken with
the express prior written consent of the parties hereto.
(m) A "Multiemployer Plan" means any "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA.
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(n) "Nasdaq" means The Nasdaq Stock Market, Inc.
(o) "Person" means an individual, corporation, limited liability
entity, partnership, association, trust, unincorporated organization, other
entity or group (as defined in the Exchange Act), including any
Governmental Entity.
(p) "Reorganization Agreements" means collectively, the Distribution
Agreement, the Employee Matters Agreement, the Tax Allocation Agreement and
the Transition Services Agreement.
(q) "Subsidiary" when used with respect to any Person means any
corporation or other organization, whether incorporated or unincorporated,
at least a majority of the securities or other interests of which having by
their terms ordinary voting power to elect a majority of the Board of
Directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or
controlled by such Person or by any one or more of its Subsidiaries, or by
such Person and one or more of its Subsidiaries.
(r) "Tax" (and, with correlative meaning, "Taxes" and "Taxable") shall
mean (i) any federal, state, local or foreign net income, gross income,
receipts, windfall profit, severance, property, production, sales, use,
license, excise, franchise, employment, payroll, withholding, alternative
or add-on minimum, ad valorem, transfer, stamp, or environmental tax, or
any other tax, customs, duty or other like assessment or charge of any kind
whatsoever, together with any interest or penalty, addition to tax or
additional amount imposed by any governmental authority; (ii) any liability
for payments of a type described in clause (i) as a result of being a
member of an affiliated, consolidated, combined or unitary group; and (iii)
any liability for the payment of any amounts as a result of being party to
a tax sharing arrangement or as a result of any express or implied
obligation to indemnify any Person with respect to the payment of amounts
of the type described in clause (i) or clause (ii).
(s) "Tax Ruling" means a private letter ruling issued by the IRS in
form and substance reasonably satisfactory to Conexant and Alpha indicating
that the Contribution and the Distribution will qualify as a reorganization
under Sections 355 and 368 of the Code.
(t) "Washington Companies" means, collectively, Conexant and its
Subsidiaries who are engaged in the Washington Business, in each case,
solely to the extent related to the Washington Business, it being
understood that the term "Washington Companies" shall not be deemed to
refer to Conexant and its Subsidiaries to the extent not related to the
Washington Business.
(u) "Washington Employee" means any employee or former employee of the
Washington Business with respect to whom a member of the Washington Group
will have liability pursuant to the Employee Matters Agreement.
(v) A "Washington Plan" means any employee benefit plan, program,
policy, practice or other arrangement providing benefits to any Washington
Participants or any beneficiary or dependent thereof that is sponsored or
maintained by Conexant or any of its Subsidiaries or to which Conexant or
any of its Subsidiaries contributes or is obligated to contribute, whether
or not written, including any employee benefit plan within the meaning of
Section 3(3) of ERISA (whether or not such plan is subject to ERISA) and
any bonus, incentive, deferred compensation, vacation, stock purchase,
stock option, severance, employment, change of control or fringe benefit
plan, or similar program or agreement.
Each of the following terms is defined in the Section of this Agreement or
the agreement set forth opposite such term:
TERM SECTION
---- -------
Actions................................................. 5.1(j)
Affiliate Agreement..................................... 7.12
Agreement............................................... Preamble
Alpha................................................... Preamble
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TERM SECTION
---- -------
Alpha Acquisition Proposal.............................. 7.5(b)
Alpha Common Stock...................................... 1.4(a)
Alpha Disclosure Schedule............................... 5.1
Alpha Filed SEC Reports................................. 5.1(d)(ii)
Alpha Financial Advisor................................. 5.1(m)
Alpha Necessary Consents................................ 5.1(c)(iii)
Alpha Permits........................................... 5.1(h)(ii)
Alpha Recommendation.................................... 7.1(b)
Alpha SEC Reports....................................... 5.1(d)(i)
Alpha Stock Options..................................... 5.1(b)(i)
Alpha Stockholders Meeting.............................. 7.1(b)
Alpha Voting Debt....................................... 5.1(b)(ii)
Assets.................................................. Distribution Agreement
By-Laws................................................. 1.7
Certificate of Merger................................... 1.2(b)
Change in the Alpha Recommendation...................... 7.1(b)
Closing................................................. 1.2(a)
Closing Date............................................ 1.2(a)
Code.................................................... Recitals
Combined Company........................................ Recitals
Combined Company Employees.............................. 7.6(a)
Conexant................................................ Preamble
Conexant Common Stock................................... 5.2(b)(i)
Conexant Convertible Notes.............................. 5.2(b)(i)
Conexant Disclosure Schedule............................ 5.2
Conexant Filed SEC Reports.............................. 5.2(d)(iii)
Conexant Financial Advisor.............................. 5.2(k)
Conexant Necessary Consents............................. 5.2(c)(iv)
Conexant Preferred Stock................................ 5.2(b)(i)
Conexant Rights......................................... 5.2(b)(i)
Conexant Rights Agreement............................... 5.2(b)(i)
Conexant SEC Reports.................................... 5.2(d)(i)
Conexant Stock Options.................................. 5.2(b)(i)
Confidentiality Agreement............................... 7.3
Contract................................................ 5.1(c)(ii)
Contribution............................................ Recitals
Delaware Secretary...................................... 1.2(b)
DGCL.................................................... 1.1
Distribution............................................ Recitals
Distribution Agreement.................................. Recitals
Distribution Date....................................... Distribution Agreement
DOJ..................................................... 7.4(b)
Effective Time.......................................... 1.2(b)
Employee Matters Agreement.............................. 4.1
Environmental Laws...................................... 5.1(j)
Environmental Liabilities............................... 5.1(j)
Excess Alpha Shares..................................... 3.2(d)(ii)
Exchange Act............................................ 5.1(c)(iii)
Exchange Agent.......................................... 3.1
Exchange Fund........................................... 3.1
Exchange Ratio.......................................... 1.4(a)
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TERM SECTION
---- -------
Expenses................................................ 7.7
Facility Sale Agreement................................. 6.2(l)
Facility Services Agreement............................. 6.2(l)
Form S-4................................................ 7.1(a)
FTC..................................................... 7.4(b)
GAAP.................................................... 5.1(d)(i)
Governmental Entity..................................... 5.1(c)(iii)
Hazardous Materials..................................... 5.1(j)
HSR Act................................................. 5.1(c)(iii)
Injunction.............................................. 8.1(b)
Intellectual Property................................... 5.1(k)
IRS..................................................... 7.17
Liens................................................... 5.1(a)(ii)
Merger.................................................. Recitals
New Combined Company Plans.............................. 7.6(b)
Newbury Supply Agreement................................ 4.1
Newport Supply Agreement................................ 4.1
Proxy Statement/Prospectus.............................. 7.1(a)
Record Date............................................. Distribution Agreement
Required Approvals...................................... 7.4(a)
Required Alpha Vote..................................... 5.1(g)
Restated Certificate.................................... 1.6
SEC..................................................... 5.1(a)(ii)
Securities Act.......................................... 3.3
Shareholders Agreement.................................. 7.16
Special Purpose Statement of Tangible Net Assets........ Distribution Agreement
Superior Alpha Proposal................................. 7.5(d)
Tax Allocation Agreement................................ 4.1
Termination Date........................................ 9.1(b)
Time of Distribution.................................... Distribution Agreement
Transition Services Agreement........................... 4.1
Unaudited Special Purpose Statement of Tangible Net 5.2(d)(ii)
Assets................................................
U.S. Asset Purchase Agreement........................... 6.2(l)
Violation............................................... 5.1(c)(ii)
Washington.............................................. Preamble
Washington Acquisition Proposal......................... 7.5(f)
Washington Assets....................................... Distribution Agreement
Washington Business..................................... Distribution Agreement
Washington Certificate.................................. 1.4(b)
Washington Common Stock................................. Recitals
Washington Financial Statements......................... 5.2(d)(ii)
Washington Group........................................ Distribution Agreement
Washington Liabilities.................................. Distribution Agreement
Washington Option....................................... Employee Matters Agreement
Washington Participant.................................. Employee Matters Agreement
Washington Permits...................................... 5.2(f)(ii)
Washington Significant Subsidiaries..................... 5.2(a)(iii)
Washington Stock Plan................................... Employee Matters Agreement
Washington Subsidiaries................................. Distribution Agreement
SECTION 10.12 Disclosure Schedule. The mere inclusion of an item in the
relevant Disclosure Schedule as an exception to a representation, warranty or
covenant shall not be deemed an admission by a
A-53
party that such item represents a material exception or material fact, event or
circumstance or that such item has had or would have a Material Adverse Effect
with respect to Conexant, Alpha, Washington, any Subsidiary of the foregoing or
the Washington Business, as applicable.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement, as
amended, to be signed by their respective officers thereunto duly authorized.
CONEXANT SYSTEMS, INC.
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Xxxxxx X. Xxxxxx
Chairman of the Board and Chief
Executive Officer
WASHINGTON SUB, INC.
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Xxxxxx X. Xxxxxx
Chairman of the Board and Chief
Executive Officer
ALPHA INDUSTRIES, INC.
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Xxxxx X. Xxxxxxx
President and Chief Executive
Officer
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