AGREEMENT AND PLAN OF REORGANIZATION
AMONG
WESTERN MULTIPLEX CORPORATION,
WALNUT-PINE MERGER CORP.
AND
PROXIM, INC.
DATED AS OF JANUARY 16, 2002
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TABLE OF CONTENTS
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ARTICLE I THE MERGER............................................................................ 2
1.1 The Merger....................................................................... 2
1.2 Effective Time; Closing.......................................................... 2
1.3 Effect of the Merger............................................................. 2
1.4 Certificate of Incorporation; Bylaws............................................. 2
1.5 Effect on Capital Stock.......................................................... 2
1.6 Surrender of Certificates........................................................ 4
1.7 No Further Ownership Rights in Proxim Common Stock............................... 6
1.8 Lost, Stolen or Destroyed Certificates........................................... 6
1.9 Tax Consequences................................................................. 6
1.10 Taking of Necessary Action; Further Action....................................... 6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF PROXIM............................................. 6
2.1 Organization of Proxim........................................................... 7
2.2 Proxim Capital Structure......................................................... 7
2.3 Obligations With Respect to Capital Stock........................................ 7
2.4 Authority........................................................................ 8
2.5 SEC Filings; Proxim Financial Statements......................................... 9
2.6 Absence of Certain Changes or Events............................................. 10
2.7 Taxes............................................................................ 10
2.8 Proxim Intellectual Property..................................................... 11
2.9 Compliance; Permits; Restrictions................................................ 15
2.10 Litigation....................................................................... 15
2.11 Brokers' and Finders' Fees....................................................... 16
2.12 Employee Benefit Plans........................................................... 16
2.13 Absence of Liens and Encumbrances................................................ 18
2.14 Environmental Matters............................................................ 18
2.15 Labor Matters.................................................................... 19
2.16 Agreements, Contracts and Commitments............................................ 19
2.17 Title to Proxim Properties....................................................... 21
2.18 Statements; Joint Proxy Statement/Prospectus..................................... 21
2.19 Board Approval................................................................... 22
2.20 Opinion of Financial Advisors.................................................... 22
2.21 Vote Required.................................................................... 22
2.22 State Takeover Statutes.......................................................... 22
2.23 Proxim Rights Agreement.......................................................... 22
ARTICLE III REPRESENTATIONS AND WARRANTIES OF WESTERN MULTIPLEX AND MERGER SUB.................. 23
3.1 Organization of Western Multiplex................................................ 23
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3.2 Western Multiplex Capital Structure.............................................. 23
3.3 Obligations With Respect to Capital Stock........................................ 24
3.4 Authority........................................................................ 24
3.5 SEC Filings; Western Multiplex Financial Statements.............................. 25
3.6 Absence of Certain Changes or Events............................................. 26
3.7 Taxes............................................................................ 26
3.8 Western Multiplex Intellectual Property.......................................... 27
3.9 Compliance; Permits; Restrictions................................................ 31
3.10 Litigation....................................................................... 31
3.11 Brokers' and Finders' Fees....................................................... 31
3.12 Employee Benefit Plans........................................................... 31
3.13 Absence of Liens and Encumbrances................................................ 34
3.14 Environmental Matters............................................................ 34
3.15 Labor Matters.................................................................... 35
3.16 Agreements, Contracts and Commitments............................................ 35
3.17 Title to Western Multiplex Properties............................................ 36
3.18 Statements; Joint Proxy Statement/Prospectus..................................... 37
3.19 Board Approval................................................................... 37
3.20 Opinion of Financial Advisor..................................................... 37
3.21 Vote Required.................................................................... 38
3.22 State Takeover Statutes.......................................................... 38
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME.................................................. 38
4.1 Conduct of Business by Proxim.................................................... 38
4.2 Conduct of Business by Western Multiplex......................................... 41
ARTICLE V ADDITIONAL AGREEMENTS................................................................. 44
5.1 Prospectus/Proxy Statement; Registration Statement............................... 44
5.2 Meetings of Stockholders; Board Recommendation................................... 45
5.3 Acquisition Proposals............................................................ 46
5.4 Confidentiality; Access to Information; No Modification of
Representations, Warranties or Covenants......................................... 50
5.5 Public Disclosure................................................................ 50
5.6 Regulatory Filings; Reasonable Efforts........................................... 50
5.7 Notification of Certain Matters.................................................. 52
5.8 Third-Party Consents............................................................. 53
5.9 Stock Options and Employee Benefits.............................................. 53
5.10 Form S-8......................................................................... 54
5.11 Indemnification.................................................................. 54
5.12 Board of Directors and Executive Officers of Western Multiplex; Name Change...... 55
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5.13 Nasdaq Listing................................................................... 55
5.14 Proxim Affiliates; Restrictive Legend............................................ 55
5.15 Treatment as Reorganization...................................................... 56
5.16 Section 16 Matters............................................................... 56
5.17 Assumption of Agreements......................................................... 56
5.18 Bylaws of Proxim................................................................. 56
5.19 Directors and Officers of the Surviving Corporation.............................. 56
ARTICLE VI CONDITIONS TO THE MERGER............................................................. 57
6.1 Conditions to Obligations of Each Party to Effect the Merger..................... 57
6.2 Additional Conditions to Obligations of Proxim................................... 58
6.3 Additional Conditions to the Obligations of Western Multiplex.................... 58
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER................................................... 59
7.1 Termination...................................................................... 59
7.2 Notice of Termination; Effect of Termination..................................... 61
7.3 Fees and Expenses................................................................ 62
7.4 Amendment........................................................................ 64
7.5 Extension; Waiver................................................................ 64
ARTICLE VIII GENERAL PROVISIONS................................................................. 64
8.1 Non-Survival of Representations and Warranties................................... 64
8.2 Notices.......................................................................... 64
8.3 Interpretation; Knowledge........................................................ 65
8.4 Counterparts..................................................................... 66
8.5 Entire Agreement; Third-Party Beneficiaries...................................... 66
8.6 Severability..................................................................... 67
8.7 Other Remedies; Specific Performance............................................. 67
8.8 Governing Law.................................................................... 67
8.9 Rules of Construction............................................................ 67
8.10 Assignment....................................................................... 67
8.11 Waiver of Jury Trial............................................................. 67
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INDEX OF DEFINED TERMS
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Acquisition........................................................................... 63
Acquisition Proposal.................................................................. 49
Action................................................................................ 15
Affiliate............................................................................. 16
Agreement............................................................................. 1
Amended Stockholders' Agreement....................................................... 1
Atheros............................................................................... 56
Atheros OEM Agreement................................................................. 56
Board Recommendation.................................................................. 37
Broadview............................................................................. 16
Certificate of Merger................................................................. 2
Certificates.......................................................................... 4
Change of Recommendation.............................................................. 48
Closing............................................................................... 2
Closing Date.......................................................................... 2
Code.................................................................................. 2
Confidentiality Agreement............................................................. 50
Copyrights............................................................................ 12
Delaware Law.......................................................................... 1
DOJ................................................................................... 50
DOL................................................................................... 16
Effect................................................................................ 66
Effective Time........................................................................ 2
End Date.............................................................................. 59
ERISA................................................................................. 16
Exchange Act.......................................................................... 9
Exchange Agent........................................................................ 4
Exchange Ratio........................................................................ 3
FICA.................................................................................. 10
FTC................................................................................... 50
FUTA.................................................................................. 10
GAAP.................................................................................. 9
Governmental Entity................................................................... 8
Hazardous Material.................................................................... 18
Hazardous Materials Activities........................................................ 19
HSR Act............................................................................... 9
Indemnified Parties................................................................... 54
Intellectual Property................................................................. 11
IRS................................................................................... 16
Joint Proxy Statement/Prospectus...................................................... 21
JP Morgan............................................................................. 16
Knowledge............................................................................. 66
Legal Requirement..................................................................... 8
Material Adverse Effect............................................................... 66
Merger................................................................................ 1
Merger Sub............................................................................ 1
Nasdaq................................................................................ 4
Necessary Consents.................................................................... 9
Patents............................................................................... 11
Person................................................................................ 66
Proxim................................................................................ 1
Proxim Affiliate...................................................................... 55
Proxim Affiliate Agreement............................................................ 56
Proxim Balance Sheet.................................................................. 9
Proxim Board Recommendation........................................................... 22
Proxim Common Stock................................................................... 3
Proxim Contracts...................................................................... 19
Proxim Designated Directors........................................................... 55
Proxim Disclosure Letter.............................................................. 6
Proxim Environmental Permits.......................................................... 19
Proxim Financials..................................................................... 9
Proxim Insider........................................................................ 56
Proxim Intellectual Property.......................................................... 12
Proxim Leases......................................................................... 21
Proxim Material IP Contracts.......................................................... 13
Proxim Options........................................................................ 3
Proxim Permits........................................................................ 15
Proxim Plans.......................................................................... 16
Proxim Purchase Plan.................................................................. 39
Proxim Registered Intellectual Property............................................... 12
Proxim Registered Intellectual Property Rights........................................ 12
Proxim Rights......................................................................... 22
Proxim Rights Agreement............................................................... 22
Proxim SEC Reports.................................................................... 9
Proxim Stock Option Plans............................................................. 3
Proxim Stockholder Approval........................................................... 8
Proxim Stockholders' Meeting.......................................................... 21
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INDEX OF DEFINED TERMS
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Proxim Termination Fee................................................................ 62
Proxim Voting Agreements.............................................................. 1
PTO................................................................................... 12
Registered Intellectual Property...................................................... 12
Registration Statement................................................................ 9
Returns............................................................................... 10
SEC................................................................................... 9
Securities Act........................................................................ 9
Share Issuance........................................................................ 1
Siemens............................................................................... 56
Siemens Technology License Agreement.................................................. 56
Stockholders' Meeting................................................................. 45
Superior Offer........................................................................ 49
Surviving Corporation................................................................. 2
Tax................................................................................... 10
Taxes................................................................................. 10
Trademarks............................................................................ 12
Triggering Event...................................................................... 61
Voting Agreements..................................................................... 1
Western Multiplex..................................................................... 1
Western Multiplex Balance Sheet....................................................... 26
Western Multiplex Board Recommendation................................................ 37
Western Multiplex Common Stock........................................................ 3
Western Multiplex Contracts........................................................... 35
Western Multiplex Designated Directors................................................ 55
Western Multiplex Disclosure Letter................................................... 23
Western Multiplex Environmental Permits............................................... 34
Western Multiplex Financials.......................................................... 25
Western Multiplex Intellectual Property............................................... 28
Western Multiplex Leases.............................................................. 37
Western Multiplex Material IP Contracts............................................... 29
Western Multiplex Permits............................................................. 31
Western Multiplex Plans............................................................... 32
Western Multiplex Purchase Plan....................................................... 54
Western Multiplex Registered Intellectual Property.................................... 28
Western Multiplex Registered Intellectual Property Rights............................. 28
Western Multiplex SEC Reports......................................................... 25
Western Multiplex Spin-Out............................................................ 30
Western Multiplex Stock Option Plans.................................................. 24
Western Multiplex Stockholder Approval................................................ 25
Western Multiplex Stockholders' Meeting............................................... 21
Western Multiplex Termination Fee..................................................... 62
Western Multiplex Voting Agreements................................................... 1
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INDEX OF EXHIBITS
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Exhibit A Western Multiplex Voting Agreement
Exhibit B Proxim Voting Agreement
Exhibit C Amended and Restated Stockholders' Agreement
Exhibit D Form of Certificate of Incorporation of Surviving Corporation
Exhibit E Proxim Affiliate Agreement
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AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "AGREEMENT") is made and
entered into as of January 16, 2002 among Western Multiplex Corporation, a
Delaware corporation ("WESTERN MULTIPLEX"), Walnut-Pine Merger Corp., a Delaware
corporation and a wholly owned direct subsidiary of Western Multiplex ("MERGER
SUB"), and Proxim, Inc., a Delaware corporation ("Proxim").
RECITALS
A. Upon the terms and subject to the conditions of this Agreement and in
accordance with the Delaware General Corporation Law ("DELAWARE LAW"), Western
Multiplex and Proxim will enter into a business combination transaction pursuant
to which Merger Sub will merge with and into Proxim (the "MERGER").
B. The Board of Directors of Western Multiplex (i) has determined that
the Merger is advisable, consistent with and in furtherance of the long-term
business strategy of Western Multiplex and fair to, and in the best interests
of, Western Multiplex and its stockholders, (ii) has approved this Agreement,
the Merger and the other transactions contemplated by this Agreement and (iii)
has approved and determined to recommend that the stockholders of Western
Multiplex vote to approve the issuance of shares of Western Multiplex Common
Stock (as defined below) to the stockholders of Proxim pursuant to the terms of
this Agreement (the "SHARE Issuance").
C. The Board of Directors of Proxim (i) has determined that the Merger
is consistent with and in furtherance of the long-term business strategy of
Proxim and fair to, and in the best interests of, Proxim and its stockholders,
(ii) has approved this Agreement, the Merger and the other transactions
contemplated by this Agreement and declared this Agreement advisable and (iii)
has determined to recommend the adoption of this Agreement to the stockholders
of Proxim.
D. Concurrently with the execution of this Agreement and as a condition
and inducement to Western Multiplex's and Proxim's willingness to enter into
this Agreement, certain affiliates of Western Multiplex are entering into voting
agreements in substantially the form attached hereto as Exhibit A (the "WESTERN
MULTIPLEX VOTING AGREEMENTS"), and certain affiliates of Proxim are entering
into voting agreements in substantially the form attached hereto as Exhibit B
(the "PROXIM VOTING AGREEMENTS" and, collectively with the Western Multiplex
Voting Agreements, the "VOTING AGREEMENTS").
E. Concurrently with the execution of this Agreement and as a condition
and inducement to Proxim's willingness to enter into this Agreement, WMC Holding
L.L.C. and GTI Acquisition Corporation are entering into an Amended and Restated
Stockholders' Agreement in substantially the form attached hereto as Exhibit C
(the "AMENDED STOCKHOLDERS' AGREEMENT"), such agreement to be effective upon
consummation of the Merger.
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F. For United States federal income tax purposes, the parties intend, by
executing this Agreement, to adopt a plan of reorganization within the meaning
of Section 368 of the Internal Revenue Code of 1986, as amended (the "CODE").
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of Delaware Law, Merger Sub shall be merged with and into
Proxim, the separate corporate existence of Merger Sub shall cease and Proxim
shall continue as the surviving corporation. Proxim as the surviving corporation
after the Merger is hereinafter sometimes referred to as the "SURVIVING
CORPORATION."
1.2 Effective Time; Closing. Subject to the provisions of this
Agreement, the parties hereto shall cause the Merger to be consummated by filing
a Certificate of Merger (the "CERTIFICATE OF MERGER") with the Secretary of
State of the State of Delaware in accordance with the relevant provisions of
Delaware Law (the time of such filing with the Secretary of State of the State
of Delaware (or such later time as may be agreed in writing by the parties and
specified in the Certificate of Merger) being the "EFFECTIVE TIME") as soon as
practicable on or after the Closing Date (as herein defined). The closing of the
Merger (the "CLOSING") shall take place at the offices of Wilson Sonsini
Goodrich & Rosati, Professional Corporation, located at 650 Page Mill Road, Palo
Alto, California, at a time and date to be specified by the parties, which shall
be no later than the second business day after the satisfaction or waiver of the
conditions set forth in ARTICLE VI, or at such other time, date and location as
the parties hereto agree in writing (the "CLOSING DATE").
1.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement and the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges, powers and
franchises of Proxim and Merger Sub shall vest in the Surviving Corporation, and
all debts, liabilities and duties of Proxim and Merger Sub shall become the
debts, liabilities and duties of the Surviving Corporation.
1.4 Certificate of Incorporation. At the Effective Time, the Certificate
of Incorporation of the Surviving Corporation shall be amended so as to read in
its entirety in the form attached hereto as Exhibit D.
1.5 Effect on Capital Stock. Subject to the terms and conditions of this
Agreement, at the Effective Time, by virtue of the Merger and without any action
on the part of Merger Sub, Proxim or the holders of any of the following
securities, the following shall occur:
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(a) Conversion of Proxim Common Stock. Each share of common
stock, $0.001 par value per share, of Proxim (the "PROXIM COMMON STOCK"), issued
and outstanding immediately prior to the Effective Time (other than any shares
of Proxim Common Stock to be canceled pursuant to Section 2.23), together with
any associated Proxim Rights (as defined in Section 2.23) under the Proxim
Rights Agreement (as defined in Section 2.23), will be canceled and extinguished
and automatically converted (subject to Sections 1.5(e) and 1.5(f)) into the
right to receive 1.8896 (the "EXCHANGE RATIO") shares of Class A common stock,
par value $0.01 per share, of Western Multiplex (the "WESTERN MULTIPLEX COMMON
STOCK") upon surrender of the certificate representing such share of Proxim
Common Stock in the manner provided in Section 1.6 (or in the case of a lost,
stolen or destroyed certificate, upon delivery of an affidavit (and bond, if
required)) in the manner provided in Section 1.8).
(b) Cancellation of Treasury and Western Multiplex-Owned Stock.
Each share of Proxim Common Stock held in the treasury of Proxim or owned by
Merger Sub or Western Multiplex immediately prior to the Effective Time shall be
canceled and extinguished without any conversion thereof.
(c) Stock Options. The parties shall take all requisite action
such that, at the Effective Time, all options to purchase Proxim Common Stock
then outstanding (the "PROXIM OPTIONS") under Proxim's 1986 Stock Option Plan,
1994 Director Option Plan, 1995 Long-Term Incentive Plan and 1999 Nonstatutory
Stock Option Plan (collectively, the "PROXIM STOCK OPTION PLANS") shall be
assumed by Western Multiplex in accordance with Section 5.9 hereof. Prior to the
Closing Date, the Board of Directors of Western Multiplex shall take all
necessary action to assume and adopt, as of the Closing Date, Proxim's 1995
Long-Term Incentive Plan, and shall have the discretion to adopt, as of the
Closing Date, any other Proxim Stock Option Plan. Rights outstanding under
Proxim's 1993 Employee Stock Purchase Plan shall be treated as set forth in
Section 5.9 hereof.
(d) Capital Stock of Merger Sub. Each share of common stock,
$0.01 par value per share, of Merger Sub issued and outstanding immediately
prior to the Effective Time shall be converted into and exchanged for one
validly issued, fully paid and nonassessable share of common stock, $0.01 par
value, of the Surviving Corporation. Each stock certificate of Merger Sub
evidencing ownership of any such shares shall continue to evidence ownership of
such shares of capital stock of the Surviving Corporation.
(e) Adjustments to Exchange Ratio. The Exchange Ratio shall be
adjusted to reflect appropriately the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of securities
convertible into Western Multiplex Common Stock or Proxim Common Stock),
extraordinary cash dividends, reorganization, recapitalization,
reclassification, combination, exchange of shares or other like change with
respect to Western Multiplex Common Stock or Proxim Common Stock occurring on or
after the date hereof and prior to the Effective Time.
(f) Fractional Shares. No fraction of a share of Western
Multiplex Common Stock will be issued by virtue of the Merger, but in lieu
thereof, each holder of shares of Proxim
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Common Stock who would otherwise be entitled to a fraction of a share of Western
Multiplex Common Stock (after aggregating all fractional shares of Western
Multiplex Common Stock to be received by such holder) shall receive from Western
Multiplex an amount of cash (rounded to the nearest whole cent), without
interest, equal to the product of (i) such fraction, multiplied by (ii) the
average closing price of one share of Western Multiplex Common Stock for the
five (5) most recent days that Western Multiplex Common Stock has traded ending
on the trading day immediately prior to the Effective Time, as reported on the
Nasdaq National Market System ("NASDAQ").
1.6 Surrender of Certificates.
(a) Exchange Agent. Western Multiplex shall select an institution
reasonably satisfactory to Proxim to act as the exchange agent (the "EXCHANGE
AGENT") in the Merger.
(b) Western Multiplex to Provide Common Stock. Promptly after the
Effective Time, Western Multiplex shall make available to the Exchange Agent for
exchange in accordance with this Article I, (i) certificates for the shares of
Western Multiplex Common Stock issuable pursuant to Section 1.5 in exchange for
outstanding shares of Proxim Common Stock, (ii) cash in an amount sufficient for
payment in lieu of fractional shares pursuant to Section 1.5(f) and (iii) any
dividends or distributions to which holders of shares of Proxim Common Stock may
be entitled pursuant to Section 1.6(d).
(c) Exchange Procedures. Promptly after the Effective Time,
Western Multiplex shall cause the Exchange Agent to mail to each holder of
record (as of the Effective Time) of a certificate or certificates (the
"CERTIFICATES") that immediately prior to the Effective Time represented
outstanding shares of Proxim Common Stock whose shares were converted into the
right to receive shares of Western Multiplex Common Stock pursuant to Section
1.5, cash in lieu of any fractional shares pursuant to Section 1.5(f) and any
dividends or other distributions pursuant to Section 1.6(d), (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as Western Multiplex may reasonably specify) and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for
certificates representing whole shares of Western Multiplex Common Stock, cash
in lieu of any fractional shares pursuant to Section 1.5(f) and any dividends or
other distributions pursuant to Section 1.6(d). Upon surrender of Certificates
for cancellation to the Exchange Agent or to such other agent or agents as may
be appointed by Western Multiplex, together with such letter of transmittal,
duly completed and validly executed in accordance with the instructions thereto
and such other documents as may reasonably be required by the Exchange Agent,
the holders of such Certificates shall be entitled to receive in exchange
therefor certificates representing the number of whole shares of Western
Multiplex Common Stock (after taking into account all Certificates surrendered
by such holder) to which such holder is entitled pursuant to Section 1.5(a)
(which, other than for Proxim Affiliates shall be in uncertificated book entry
form unless a physical certificate is requested or is otherwise required by
applicable law rule or regulation), payment in lieu of fractional shares which
such holder has the right to receive pursuant to Section 1.5(f) and any
dividends or distributions payable pursuant to Section 1.6(d), and the
Certificates so surrendered shall forthwith
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be canceled. Until so surrendered, outstanding Certificates will be deemed from
and after the Effective Time, for all corporate purposes, to evidence only the
right to receive, upon due surrender thereof, the number of full shares of
Western Multiplex Common Stock issuable pursuant to Section 1.5, cash in lieu of
the issuance of any fractional shares in accordance with Section 1.5(f) and any
dividends or distributions payable pursuant to Section 1.6(d).
(d) Distributions With Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the date of this
Agreement with respect to Western Multiplex Common Stock with a record date
after the Effective Time and no payment in lieu of fractional shares pursuant to
Section 1.5(f) will be paid to the holders of any unsurrendered Certificates
with respect to the shares of Western Multiplex Common Stock issuable pursuant
to Section 1.5, until such Certificates shall have been duly surrendered.
Subject to applicable law, following surrender of any such Certificates, the
Exchange Agent or any other agent designated by Western Multiplex shall deliver
to the holders thereof, without interest, (i) promptly after such surrender, the
number of whole shares of Western Multiplex Common Stock issued in exchange
therefor along with payment in lieu of fractional shares pursuant to Section
1.5(f) and the amount of any such dividends or other distributions with a record
date after the Effective Time and theretofore paid with respect to such whole
shares of Western Multiplex Common Stock and (ii) at the appropriate payment
date, the amount of dividends or other distributions with a record date after
the Effective Time and a payment date subsequent to such surrender payable with
respect to such whole shares of Western Multiplex Common Stock.
(e) Transfers of Ownership. If certificates for shares of Western
Multiplex Common Stock are to be issued in a name other than that in which the
Certificates surrendered in exchange therefor are registered, it will be a
condition of the issuance thereof that the Certificates so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the persons
requesting such exchange will have paid to Western Multiplex or any agent
designated by it any transfer or other taxes required by reason of the issuance
of certificates for shares of Western Multiplex Common Stock in any name other
than that of the registered holders of the Certificates surrendered, or
established to the satisfaction of Western Multiplex or any agent designated by
it that such tax has been paid or is not payable.
(f) Required Withholding. Each of Western Multiplex, the Exchange
Agent and the Surviving Corporation shall be entitled to deduct and withhold
from any consideration payable or otherwise deliverable pursuant to this
Agreement to any former holder of Proxim Common Stock such amounts as may be
required to be deducted or withheld therefrom under the Code or under any
provision of state, local or foreign Tax law or under any other applicable legal
requirement. To the extent such amounts are so deducted or withheld, the amount
of such consideration shall be treated for all purposes under this Agreement as
having been paid to the person to whom such consideration would otherwise have
been paid.
(g) No Liability. Notwithstanding anything to the contrary in
this Section 1.6, none of the Exchange Agent, Western Multiplex, the Surviving
Corporation or any party hereto shall be liable to a holder of shares of Western
Multiplex Common Stock or Proxim Common Stock for
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any amount properly paid to a public official pursuant to any applicable
abandoned property, escheat or similar law.
1.7 No Further Ownership Rights in Proxim Common Stock. All shares of
Western Multiplex Common Stock issued in accordance with the terms hereof
(including any cash paid in respect thereof pursuant to Section 1.5(f) and
1.6(d)) shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Proxim Common Stock, and there shall be no further
registration of transfers on the records of the Surviving Corporation of shares
of Proxim Common Stock that were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as provided in
this Article I.
1.8 Lost, Stolen or Destroyed Certificates. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, such shares of
Western Multiplex Common Stock, cash for fractional shares, if any, as may be
required pursuant to Section 1.5(f) and any dividends or distributions payable
pursuant to Section 1.6(d); provided, however, that Western Multiplex may, in
its discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Certificates to deliver a bond in such
sum as it may reasonably direct as indemnity against any claim that may be made
against Western Multiplex, Proxim or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.
1.9 Tax Consequences. It is intended by the parties hereto that the
Merger shall constitute a reorganization within the meaning of Section 368 of
the Code. The parties hereto adopt this Agreement as a "plan of reorganization"
within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a).
1.10 Taking of Necessary Action; Further Action. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of Proxim and Merger Sub, the officers and directors of Proxim
and Merger Sub will take all such lawful and necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PROXIM
Proxim represents and warrants to Western Multiplex and Merger Sub,
subject to the exceptions specifically disclosed in writing in the disclosure
letter supplied by Proxim to Western Multiplex (the "PROXIM DISCLOSURE LETTER")
and specific statements of historical fact disclosed in the Proxim SEC Reports
(to the extent the relevance of the disclosure in the Proxim SEC Report to a
representation and warranty is reasonably apparent), as follows:
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2.1 Organization of Proxim.
(a) Proxim and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; has the corporate power and authority to own,
lease and operate its assets and property and to carry on its business as now
being conducted and as proposed to be conducted; and is duly qualified to do
business and in good standing as a foreign corporation in each jurisdiction in
which the failure to be so qualified, individually or in the aggregate, would
have a Material Adverse Effect (as defined in Section 8.3) on Proxim.
(b) Proxim has delivered to Western Multiplex a true and complete
list of all of Proxim's subsidiaries, indicating the jurisdiction of
incorporation of each subsidiary and Proxim's equity interest therein.
(c) Proxim has delivered or made available to Western Multiplex a
true and correct copy of the Certificate of Incorporation and bylaws of Proxim
and similar governing instruments of each of its material subsidiaries, each as
amended to date, and each such instrument is in full force and effect. Neither
Proxim nor any of its subsidiaries is in violation of any of the provisions of
its Certificate of Incorporation or bylaws or equivalent governing instruments.
2.2 Proxim Capital Structure. As of January 11, 2002, the authorized
capital stock of Proxim consisted of 100,000,000 shares of Proxim Common Stock,
of which 31,366,656 shares were issued and outstanding and 5,000,000 shares of
Preferred Stock, par value $0.001 per share, of which no shares are issued or
outstanding. All outstanding shares of Proxim Common Stock are duly authorized,
validly issued, fully paid and non-assessable and are not subject to preemptive
rights created by statute, the Certificate of Incorporation or Bylaws of Proxim
or any agreement or document to which Proxim is a party or by which it is bound.
As of January 11, 2002, Proxim had reserved an aggregate of 14,162,812 shares of
Proxim Common Stock, net of exercises, for issuance to employees, consultants
and non-employee directors pursuant to the Proxim Stock Option Plans, under
which options are outstanding for 8,579,089 shares and under which 5,583,723
shares are available for grant. All shares of Proxim Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, would be duly authorized,
validly issued, fully paid and nonassessable.
2.3 Obligations With Respect to Capital Stock. As of the date hereof,
except as set forth in Section 2.2, there are no equity securities, partnership
interests or similar ownership interests of any class of Proxim, or any
securities exchangeable or convertible into or exercisable for such equity
securities, partnership interests or similar ownership interests issued,
reserved for issuance or outstanding. As of the date hereof, except for
securities Proxim owns, directly or indirectly through one or more subsidiaries,
there are no equity securities, partnership interests or similar ownership
interests of any class of any subsidiary of Proxim, or any security exchangeable
or convertible into or exercisable for such equity securities, partnership
interests or similar ownership interests issued, reserved for issuance or
outstanding. As of the date hereof, except as set forth in Section 2.2, there
are no options, warrants, equity securities, partnership interests or similar
ownership interests, calls, rights (including preemptive rights), commitments or
agreements of any character to which Proxim
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or any of its subsidiaries is a party or by which it is bound obligating Proxim
or any of its subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, or repurchase, redeem or otherwise acquire, or cause the
repurchase, redemption or acquisition, of any shares of capital stock of Proxim
or any of its subsidiaries or obligating Proxim or any of its subsidiaries to
grant, extend, accelerate the vesting of or enter into any such option, warrant,
equity security, partnership interest or similar ownership interest, call,
right, commitment or agreement. There are no registration rights and, to the
Knowledge of Proxim there are no voting trusts, proxies or other agreements or
understandings with respect to any equity security of any class of Proxim or
with respect to any equity security, partnership interest or similar ownership
interest of any class of any of its subsidiaries.
2.4 Authority.
(a) Proxim 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 and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Proxim, subject only to the adoption of this
Agreement by Proxim's stockholders and the filing and recordation of the
Certificate of Merger pursuant to Delaware Law. This Agreement has been duly
executed and delivered by Proxim and, assuming the due authorization, execution
and delivery by Western Multiplex and Merger Sub, constitutes the valid and
binding obligation of Proxim, enforceable in accordance with its terms, except
as enforceability may be limited by bankruptcy and other similar laws and
general principles of equity. The execution and delivery of this Agreement by
Proxim does not, and the performance of this Agreement by Proxim will not, (i)
conflict with or violate the Certificate of Incorporation or bylaws of Proxim or
the equivalent organizational documents of any of its subsidiaries, (ii) subject
to obtaining the adoption of this Agreement by Proxim's stockholders as
contemplated in Section 5.2 (the "PROXIM STOCKHOLDER APPROVAL") and compliance
with the requirements set forth in Section 2.4(b) below, conflict with or
violate any law, rule, regulation, order, judgment or decree (each a "LEGAL
REQUIREMENT") applicable to Proxim or any of its subsidiaries or by which its or
any of their respective properties is bound or affected, or (iii) result in any
breach of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or impair Proxim's rights or alter the
rights or obligations of Proxim or any third party under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the properties, including any
leased real property, or assets of Proxim or any of its subsidiaries pursuant
to, any Proxim Contract (as defined in Section 2.16), except as individually or
in the aggregate would not be reasonably expected to have a Material Adverse
Effect. The Proxim Disclosure Letter lists all material consents, waivers and
approvals under any of Proxim's or any of its subsidiaries' agreements,
contracts, licenses or leases required to be obtained in connection with the
consummation of the transactions contemplated hereby.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency or
commission or other governmental authority or instrumentality ("GOVERNMENTAL
ENTITY") is required by or with respect to Proxim in connection with the
execution and delivery of this Agreement or the consummation of the transactions
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contemplated hereby, except for (i) the filing of the Certificate of Merger with
the Secretary of State of Delaware, (ii) the filing of the Joint Proxy Statement
(as defined in Section 2.20) with the SEC in accordance with the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), to be included in the
Form S-4 Registration Statement (the "REGISTRATION STATEMENT") to be filed by
Western Multiplex with the Securities and Exchange Commission ("SEC") in
accordance with the Securities Act of 1933, as amended (the "SECURITIES ACT"),
and the effectiveness of the Registration Statement, (iii) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable federal and state securities laws and the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR ACT")
and the comparable laws of any foreign country reasonably determined by the
parties to be required and (iv) such other consents, authorizations, filings,
approvals and registrations which, if not obtained or made, would not be
material to Proxim or Western Multiplex or have a material adverse effect on the
ability of the parties to consummate the Merger. The consents, approvals,
orders, authorizations, registrations, declarations and filings set forth in (i)
through (iii) are referred to herein as the "NECESSARY CONSENTS".
2.5 SEC Filings; Proxim Financial Statements.
(a) Proxim has filed all forms, reports and documents required to
be filed by Proxim with the SEC since January 1, 1999, and has made available to
Western Multiplex such forms, reports and documents in the form filed with the
SEC. All such required forms, reports and documents (including those that Proxim
may file subsequent to the date hereof) are referred to herein as the "PROXIM
SEC REPORTS." As of their respective dates, the Proxim SEC Reports (i) were
prepared in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Proxim SEC Reports, and (ii) did not at the time
they were filed (or if amended or superseded by a filing before the date of this
Agreement, then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. None of Proxim's
subsidiaries is required to file any forms, reports or other documents with the
SEC.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Proxim SEC Reports (the
"PROXIM FINANCIALS"), including any Proxim SEC Reports filed after the date
hereof until the Closing, (i) complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto, (ii) was
prepared in accordance with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited interim financial
statements, as may be permitted by the SEC on Form 10-Q under the Exchange Act)
and (iii) fairly presented the consolidated financial position of Proxim and its
subsidiaries at the respective dates thereof and the consolidated results of its
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments which were not, or are not expected to be, material in
amount. The balance sheet of Proxim contained in the Proxim SEC Reports as of
September 30, 2001 is hereinafter referred to as the "PROXIM BALANCE SHEET."
Except as disclosed
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in the Proxim Financials, neither Proxim nor any of its subsidiaries has any
liabilities (absolute, accrued, contingent or otherwise) of a nature required to
be disclosed on a balance sheet or in the related notes to the consolidated
financial statements prepared in accordance with GAAP which are, individually or
in the aggregate, material to the business, results of operations or financial
condition of Proxim and its subsidiaries taken as a whole, except liabilities
incurred since the date of the Proxim Balance Sheet in the ordinary course of
business consistent with past practices.
(c) Proxim has heretofore furnished to Western Multiplex a
complete and correct copy of any amendments or modifications that have not yet
been filed with the SEC but that are required to be filed, to agreements,
documents or other instruments that previously had been filed by Proxim with the
SEC pursuant to the Securities Act or the Exchange Act.
2.6 Absence of Certain Changes or Events. Since the date of the Proxim
Balance Sheet, there has not been: (i) any Material Adverse Effect on Proxim,
(ii) any change by Proxim in its accounting methods, principles or practices,
except as required by concurrent changes in GAAP, or (iii) any revaluation by
Proxim of any of its assets, including, without limitation, writing down the
value of capitalized inventory or writing off notes or accounts receivable other
than in the ordinary course of business.
2.7 Taxes.
(a) Definition of Taxes. For the purposes of this Agreement,
"TAX" or "TAXES" refers to any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes, together
with all interest, penalties and additions imposed with respect to such amounts.
(b) Tax Returns and Audits.
(i) Proxim and each of its subsidiaries have timely filed all
federal, state, local and foreign returns, estimates, information statements and
reports ("RETURNS") relating to Taxes required to be filed by Proxim and each of
its subsidiaries with any Tax authority, except such Returns that are not
material to Proxim. Such Returns are true and correct in all material respects
and have been completed in accordance with applicable law. Proxim and each of
its subsidiaries have paid all Taxes shown to be due on such Returns.
(ii) Proxim and each of its subsidiaries as of the Effective
Time will have withheld with respect to its employees (and timely paid over to
the appropriate Taxing authority) all federal and state income taxes, Taxes
pursuant to the Federal Insurance Contribution Act ("FICA") and the Federal
Unemployment Tax Act ("FUTA") and other Taxes required to be withheld, except
such Taxes that are not material to Proxim.
(iii) Neither Proxim nor any of its subsidiaries has been
delinquent in the payment of any material Tax nor is there any material Tax
deficiency or adjustment outstanding,
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proposed or assessed against Proxim or any of its subsidiaries, nor has Proxim
or any of its subsidiaries executed any unexpired waiver of any statute of
limitations on or extending the period for the assessment or collection of any
material Tax.
(iv) No audit or other examination of any material Return of
Proxim or any of its subsidiaries by any Tax authority is presently in progress,
nor has Proxim or any of its subsidiaries been notified in writing of any
request for such an audit or other examination.
(v) As of September 30, 2001, neither Proxim nor any of its
subsidiaries has any liability for any material unpaid Taxes that has not been
accrued or reserved on the Proxim Balance Sheet in accordance with GAAP, whether
asserted or unasserted, contingent or otherwise. Since September 30, 2001,
neither Proxim nor any of its subsidiaries has incurred any liability for any
material Taxes other than in the ordinary course of business.
(vi) There is no contract, agreement, plan or arrangement to
which Proxim or any of its subsidiaries is a party as of the date of this
Agreement, including but not limited to the provisions of this Agreement,
covering any employee or former employee of Proxim or any of its subsidiaries
that, individually or collectively, would reasonably be expected to give rise to
the payment of any amount in excess of $250,000 that would not be deductible
pursuant to Sections 280G, 404 or 162(m) of the Code. There is no contract,
agreement, plan or arrangement to which Proxim is a party or by which it is
bound to compensate any individual for excise taxes paid pursuant to Section
4999 of the Code.
(vii) Neither Proxim nor any of its subsidiaries (a) is party
to or has any obligation under any Tax sharing, indemnity or allocation
agreement or arrangement, (b) has ever been a member of an affiliated group
(within the meaning of Code Section 1504(a)) filing a consolidated federal
income Tax Return (other than a group the common parent of which was Proxim), or
(c) has any liability for the Taxes of any person (other than Proxim or any of
its subsidiaries) under Treas. Reg. Section 1.1502-6 (or any similar provision
of state, local or foreign law), as a transferee or successor, by contract, or
otherwise.
(viii) Neither Proxim nor any of its subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation" in
a distribution of stock intended to qualify for tax-free treatment under Section
355 of the Code (x) in the two years prior to the date of this Agreement or (y)
in a distribution which could otherwise constitute part of a "plan" or "series
of related transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Merger.
2.8 Proxim Intellectual Property. For the purposes of this Agreement,
the following terms have the following definitions:
"INTELLECTUAL PROPERTY" shall mean any or all of the following and all
rights in, arising out of, or associated therewith: (i) all United States,
international and foreign patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof ("PATENTS"); (ii) all inventions (whether
patentable or not), invention
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disclosures, improvements, trade secrets, proprietary information, know how,
technology, technical data and customer lists, and all documentation relating to
any of the foregoing; (iii) all copyrights, copyrights registrations and
applications therefor, and all other rights corresponding thereto throughout the
world ("COPYRIGHTS"); (iv) all industrial designs and any registrations and
applications therefor throughout the world; (v) all trade names, logos, common
law trademarks and service marks, trademark and service mark registrations and
applications therefor throughout the world ("TRADEMARKS"); (vi) all databases
and data collections and all rights therein throughout the world; (vii) all
moral and economic rights of authors and inventors, however denominated,
throughout the world, and (viii) any similar or equivalent rights to any of the
foregoing anywhere in the world.
"REGISTERED INTELLECTUAL PROPERTY" means all United States,
international and foreign: (i) Patents (including applications and provisional
applications); (ii) registered Trademarks, applications to register Trademarks,
intent-to-use applications, or other registrations or applications related to
Trademarks; (iii) registered Copyrights and applications for Copyright
registration; and (iv) any other Intellectual Property that is the subject of an
application, certificate, filing, registration or other document issued, filed
with, or recorded by any state, government or other public legal authority.
"PROXIM INTELLECTUAL PROPERTY" shall mean any Intellectual Property that
is owned or used by Proxim in the conduct of its business, as currently
conducted and currently proposed to be conducted.
"PROXIM REGISTERED INTELLECTUAL PROPERTY" means all of the Registered
Intellectual Property owned by, or filed in the name of, Proxim or any of its
subsidiaries.
(a) Except with respect to Proxim Registered Intellectual
Property that Proxim intentionally abandoned and/or is no longer used by or
intended to be used by Proxim which exception shall include, without limitation,
Proxim Registered Intellectual Property acquired in its acquisitions of Card
Access, Inc., Wavespan, Inc., and Farallon Communications, Inc., Schedule 2.8(a)
lists all Registered Intellectual Property owned by, filed in the name of, or
applied for, by Proxim (the "PROXIM REGISTERED INTELLECTUAL PROPERTY RIGHTS")
and lists any proceedings or actions before any court, tribunal (including the
United States Patent and Trademark Office (the "PTO") or equivalent authority
anywhere in the world) related to any of Proxim Registered Intellectual Property
Rights.
(b) During the five (5)-year period immediately prior to the date
hereof and, to the knowledge of Proxim after reasonable inquiry, during any time
prior to the five (5)-year period immediately preceding the date hereof, no
Proxim Intellectual Property or product or service that is owned by Proxim or
any of its subsidiaries is currently or was subject to any order, judgment, or
decree brought against it that restricted in any manner the use, transfer, or
licensing thereof by Proxim or any of its subsidiaries in a manner that would
reasonably be expected to have a Material Adverse Effect or that limits the
ownership, the validity, use or enforceability of any Proxim Intellectual
Property that is owned by Proxim in a manner that would reasonably be expected
to have a Material Adverse Effect.
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(c) Except with respect to Proxim Registered Intellectual
Property that Proxim intentionally abandoned and/or is no longer used by or
intended to be used by Proxim which exception shall include, without limitation,
Proxim Registered Intellectual Property acquired in its acquisitions of Card
Access, Inc., Wavespan, Inc., and Farallon Communications, Inc., each material
item of Proxim Registered Intellectual Property is valid and subsisting, all
necessary registration, maintenance and renewal fees currently due in connection
with such Proxim Registered Intellectual Property have been made and all
necessary documents, recordations and certificates in connection with such
Proxim Registered Intellectual Property have been filed with the PTO or United
States Copyright Office and other equivalent authorities in foreign
jurisdictions, as the case may be, for the purposes of maintaining such Proxim
Registered Intellectual Property. Except as set forth on Schedule 2.8(c), there
are no actions that must be taken by Proxim within ninety (90) days of the
Closing Date, including the payment of any registration, maintenance or renewal
fees or the filing of any responses to PTO office actions, documents,
applications or certificates for the purposes of obtaining, maintaining,
perfecting or preserving or renewing any Registered Intellectual Property
Rights.
(d) Other than inbound "shrink-wrap" and similar publicly
available commercial binary code end-user licenses, Section 2.8(d) of the Proxim
Schedules lists all material contracts, licenses and agreements to which Proxim
and any of its subsidiaries is a party with respect to any material Proxim
Intellectual Property ("PROXIM MATERIAL IP CONTRACTS").
(e) Proxim owns and has good and exclusive title to, or has
license (sufficient for the conduct of its business as currently conducted and
as proposed to be conducted) to use each material item of Proxim Intellectual
Property, free and clear of any lien or encumbrance; provided, however, that
claims of infringement or misappropriation of Proxim Intellectual Property shall
not be deemed liens or encumbrances for the purpose of this Section 2.8(e).
(f) With respect to material Proxim Intellectual Property owned
by Proxim that has been developed or created by a third party for Proxim or any
of its subsidiaries, Proxim has a written agreement with such third party with
respect thereto, whereby Proxim has obtained ownership of all such material
Proxim Intellectual Property as between Proxim and the third party, and is the
exclusive owner of all of that third party's rights in such material Proxim
Intellectual Property.
(g) Except as set forth on Schedule 2.8(g), in the five (5) years
prior to the date hereof, neither Proxim nor any of its subsidiaries (i) has
transferred ownership of any Intellectual Property that was material Proxim
Intellectual Property to any third party, or (ii) granted any exclusive license
with respect to any Intellectual Property that is or was material Proxim
Intellectual Property owned by Proxim, to any third party.
(h) To the knowledge of Proxim after reasonable inquiry, all
Proxim Material IP Contracts are in full force and effect. Except as set forth
in Schedule 2.8(h), to the knowledge of Proxim after reasonable inquiry, the
consummation of the transactions contemplated by this Agreement will neither
violate nor result in the breach, modification, cancellation, termination or
suspension of any Proxim Material IP Contract. Proxim and each of its
subsidiaries is in
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material compliance with, and has not materially breached any term of any Proxim
Material IP Contract and, to the knowledge of Proxim after reasonable inquiry,
all other parties to such Proxim Material IP Contracts are in compliance with,
and have not materially breached any term of such Proxim Material IP Contracts.
(i) Following the Closing Date, the Surviving Corporation will be
permitted to exercise all of Proxim's and each of its subsidiaries' rights under
such Proxim Material IP Contracts (a) to the same extent Proxim and its
subsidiaries would have been able to had the transactions contemplated by this
Agreement not occurred, and (b) without the payment of any additional amounts or
consideration other than the same amount of ongoing fees, royalties or payments
which Proxim or its subsidiaries would otherwise be required to pay. Except as
set forth in Schedule 2.8(i), neither this Agreement nor the transactions
contemplated by this Agreement, including the assignment to Western Multiplex or
Merger Sub by operation of law or otherwise of any Proxim Material IP Contracts
will result in (x) either Western Multiplex's or the Merger Sub's granting to
any third party any right to or with respect to any material Intellectual
Property that is owned by Proxim; or (y) either Western Multiplex's or the
Merger Sub's being bound by, or subject to, any non-compete or other material
restriction on the operation or scope of their respective businesses.
(j) To the knowledge of Proxim after reasonable inquiry, the
products, services and the operation of the business of Proxim and its
subsidiaries as such business currently is conducted, including Proxim's and its
subsidiaries' design, development, manufacture, marketing and sale of the
products or services of Proxim and its subsidiaries (including products
currently under development) has not and does not infringe, misappropriate or
otherwise violate the Intellectual Property of any third party or, to the
knowledge of Proxim after reasonable inquiry, constitute unfair competition or
trade practices under the laws of any jurisdiction.
(k) Except as set forth in Schedule 2.8(k), neither Proxim nor
any of its subsidiaries has received notice from any third party alleging that
the operation of the business of Proxim or any of its subsidiaries or any act,
product or service of Proxim or any of its subsidiaries, infringes,
misappropriates or otherwise violates the Intellectual Property of any third
party or constitutes unfair competition or trade practices under the laws of any
jurisdiction in a manner that would reasonably be expected to have a Material
Adverse Effect.
(l) Proxim and each of its subsidiaries has taken reasonable
steps to protect Proxim's and its subsidiaries' rights in all confidential
information and trade secrets of Proxim, and of third parties provided to Proxim
or any of its subsidiaries, and, without limiting the foregoing, each of Proxim
and its subsidiaries has and enforces a practice requiring each employee to
execute a proprietary information/confidentiality agreement substantially in the
form provided to Western Multiplex. All employees who worked for Proxim since
November 1, 1999 have (i) executed invention assignment agreements sufficient to
irrevocably transfer all rights in any Intellectual Property developed by such
employees to Proxim; and (ii) executed proprietary/confidential information
agreements pursuant to which they agreed to maintain as confidential all Proxim
proprietary information. Except as set forth in Schedule 2.8(l), all employees
who are listed as inventors on any Patents (including applications and
provisionals) that are Proxim Registered
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Intellectual Property have signed invention assignment agreements sufficient to
irrevocably transfer all such employee's rights in any such Proxim Patents to
Proxim. Proxim has no knowledge or notice of any adverse claim of ownership of
any Proxim Intellectual Property that is owned by Proxim by any past employee of
Proxim and, to the knowledge of Proxim, there is no valid basis for any such
claim.
2.9 Compliance; Permits; Restrictions.
(a) Neither Proxim nor any of its subsidiaries nor the conduct of
their respective businesses is, in any material respect, in conflict with, or in
default or violation of, (i) any Legal Requirement applicable to Proxim or any
of its subsidiaries or by which its or any of their respective businesses or
properties is bound or affected, or (ii) any material note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Proxim or any of its subsidiaries is a party
or by which Proxim or any of its subsidiaries or its or any of their respective
businesses or properties is bound or affected. No investigation or review by any
Governmental Entity is pending or, to the Knowledge of Proxim, threatened
against Proxim or its subsidiaries, nor has any Governmental Entity indicated to
Proxim an intention to conduct the same. There is no agreement, judgment,
injunction, order or decree binding upon Proxim or any of its subsidiaries which
has or could reasonably be expected to have the effect of prohibiting or
materially impairing any business practice of Proxim or any of its subsidiaries,
any acquisition of material property by Proxim or any of its subsidiaries or the
conduct of business by Proxim as currently conducted.
(b) Proxim and its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals from governmental authorities that
are material to the operation of the business of Proxim (collectively, the
"PROXIM PERMITS"). Proxim and its subsidiaries are in compliance in all material
respects with the terms of the Proxim Permits.
2.10 Litigation. Except as set forth in Schedule 2.10, as of the date of
this Agreement, there is no action, suit, proceeding, claim, arbitration or
investigation ("ACTION") pending, or as to which Proxim or any of its
subsidiaries has received any notice of assertion nor, to Proxim's Knowledge, is
there a threatened Action against Proxim or any of its subsidiaries that
reasonably would be likely to be material to Proxim or any of its subsidiaries,
or which in any manner challenges or seeks to prevent, enjoin, alter or delay
any of the transactions contemplated by this Agreement. Except for those facts
and information not disclosed by Proxim or Proxim's outside counsel because
Proxim or Proxim's outside counsel reasonably believed that such facts and
information were subject to a court ordered protective order, joint defense
agreement or attorney-client privilege, to the Knowledge of Proxim, Proxim and
Proxim's attorneys provided Western Multiplex and Western Multiplex's outside
counsel with facts and information as Proxim reasonably believes in good faith
are necessary to perform a reasonable evaluation of the potential outcome of the
Actions described on Schedule 2.10. Without limiting the foregoing, the facts
and information not disclosed by Proxim by reason of any joint defense
agreement, court ordered protective order or attorney-client privilege are not
inconsistent in any material respect with the facts and information that have
been disclosed by Proxim to Western Multiplex.
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2.11 Brokers' and Finders' Fees. Except for fees payable to JP Morgan
H&Q ("JP Morgan") and Broadview International LLC ("BROADVIEW") pursuant to
engagement letters dated December 23, 2001 and December 21, 2001, respectively,
Proxim has not incurred, nor will it incur, directly or indirectly, any
liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.
2.12 Employee Benefit Plans.
(a) The employee compensation, severance, termination pay,
deferred compensation, stock or stock-related awards, incentive, fringe or
benefit plans, programs, policies, commitments or other arrangements (whether or
not set forth in a written document and including, without limitation, all
"employee benefit plans" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) covering any
active employee, former employee, director or consultant of Proxim, any
subsidiary of Proxim or any trade or business (whether or not incorporated) that
is a member of a controlled group or that is under common control with Proxim
within the meaning of Section 414 of the Code (for purposes of Section 2.12 and
Section 3.12, an "AFFILIATE"), or with respect to which Proxim has or may in the
future have liability, are referred to herein as the "PROXIM PLANS." Proxim
Schedule 2.12(a) contains a complete and accurate list of each of the Proxim
Plans. Proxim has provided to Western Multiplex: (i) correct and complete copies
of all documents embodying each Proxim Plan including (without limitation) all
amendments thereto, all related trust documents, and all material written
agreements and contracts relating to each such Proxim Plan; (ii) the three (3)
most recent annual reports (Form Series 5500 and all schedules and financial
statements attached thereto), if any, required under ERISA or the Code in
connection with each Proxim Plan; (iii) the most recent summary plan description
together with the summary(ies) of material modifications thereto, if any,
required under ERISA with respect to each Proxim Plan; (iv) all IRS
determination, opinion, notification and advisory letters; (v) all material
correspondence to or from any governmental agency relating to any Proxim Plan;
(vi) all COBRA forms and related notices and (vii) all discrimination tests for
each Proxim Plan for the most recent three (3) plan years.
(b) Each Proxim Plan has been maintained and administered in all
material respects in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations (foreign or
domestic), including ERISA and the Code, that are applicable to such Proxim
Plans. No suit, action or other litigation (excluding claims for benefits
incurred in the ordinary course of Proxim Plan activities) has been brought, or
to the Knowledge of Proxim is threatened, against or with respect to any such
Proxim Plan. There are no audits, inquiries or proceedings pending or, to the
Knowledge of Proxim, threatened by the Internal Revenue Service (the "IRS") or
Department of Labor (the "DOL") with respect to any Proxim Plans. All
contributions, reserves or premium payments required to be made or accrued as of
the date hereof to the Proxim Plans have been timely made or accrued. Section
2.12(b) of the Proxim Disclosure Letter includes a listing of the accrued
vacation liability of Proxim as of January 3, 2002. Any Proxim Plan intended to
be qualified under Section 401(a) of the Code and each trust intended to qualify
under Section 501(a) of the Code (i) has either obtained a favorable
determination, notification, advisory and/or opinion letter, as applicable, as
to its qualified status from the IRS or
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still has a remaining period of time under applicable Treasury Regulations or
IRS pronouncements in which to apply for such letter and to make any amendments
necessary to obtain a favorable determination, and (ii) incorporates or has been
amended to incorporate all provisions required to comply with the Tax Reform Act
of 1986 and subsequent legislation. Proxim does not have any plan or commitment
to establish any new Proxim Plan, to modify any Proxim Plan (except to the
extent required by law or to conform any such Proxim Plan to the requirements of
any applicable law, in each case as previously disclosed to Western Multiplex in
writing, or as required by this Agreement), or to enter into any new Proxim
Plan. Each Proxim Plan can be amended, terminated or otherwise discontinued
after the Effective Time in accordance with its terms, without liability to
Western Multiplex, Proxim or any of its Affiliates (other than ordinary
administration expenses).
(c) Neither Proxim, any of its subsidiaries, nor any of their
Affiliates has at any time ever maintained, established, sponsored, participated
in, or contributed to any plan subject to Title IV of ERISA or Section 412 of
the Code and at no time has Proxim contributed to or been requested to
contribute to any "multiemployer plan," as such term is defined in ERISA.
Neither Proxim nor any Affiliate has at any time ever maintained, established,
sponsored, participated in or contributed to any multiple employer plan, or to
any plan described in Section 413 of the Code. Neither Proxim, any of its
subsidiaries, nor any officer or director of Proxim or any of its subsidiaries
is subject to any liability or penalty under Section 4975 through 4980B of the
Code or Title I of ERISA. No "prohibited transaction," within the meaning of
Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise
exempt under Section 4975 of the Code or Section 408 of ERISA, has occurred with
respect to any Proxim Plan.
(d) Neither Proxim, any of its subsidiaries, nor any of their
Affiliates has, before the Effective Time and in any material respect, violated
any of the health continuation requirements of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, the requirements of the Family Medical
Leave Act of 1993, as amended, or any similar provisions of state law applicable
to Proxim employees. None of the Proxim Plans promises or provides retiree
medical or other retiree welfare benefits to any person except as required by
applicable law, and neither Proxim nor any of its subsidiaries has represented,
promised or contracted (whether in oral or written form) to provide such retiree
benefits to any employee, former employee, director, consultant or other person,
except to the extent required by statute.
(e) Neither Proxim nor any of its subsidiaries is bound by or
subject to (and none of its respective assets or properties is bound by or
subject to) any arrangement with any labor union. No employee of Proxim or any
of its subsidiaries is represented by any labor union or covered by any
collective bargaining agreement and, to the Knowledge of Proxim, no campaign to
establish such representation is in progress. There is no pending or, to the
Knowledge of Proxim, threatened labor dispute involving Proxim or any of its
subsidiaries and any group of its employees nor has Proxim or any of its
subsidiaries experienced any labor interruptions over the past three (3) years,
and Proxim and its subsidiaries consider their relationships with their
employees to be good. Proxim (i) is in compliance in all respects with all
applicable foreign, federal, state and local laws, rules and regulations
respecting employment, employment practices, terms and conditions of employment
and wages and hours, in each case, with respect to its current or former
employees; (ii) has withheld and
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reported all amounts required by law or by agreement to be withheld and reported
with respect to wages, salaries and other payments to its current or former
employees; (iii) is not liable for any arrears of wages or any taxes or any
penalty for failure to comply with any of the foregoing; and (iv) is not liable
for any payment to any trust or other fund governed by or maintained by or on
behalf of any governmental authority, with respect to unemployment compensation
benefits, social security or other benefits or obligations for its current and
former employees (other than routine payments to be made in the normal course of
business and consistent with past practice). There are no pending, threatened or
reasonably anticipated claims or actions against Proxim under any worker's
compensation policy or long-term disability policy.
(f) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (either alone or upon
the occurrence of any additional or subsequent events) (i) result in any payment
(including severance, unemployment compensation, golden parachute, forgiveness
of indebtedness, bonus or otherwise) becoming due to any stockholder, director
or employee of Proxim or any of its subsidiaries under any Proxim Plan or
otherwise, (ii) materially increase any benefits otherwise payable under any
Proxim Plan, or (iii) result in the acceleration of the time of payment or
vesting of any such benefits.
(g) No payment or benefit which will or may be made by Proxim or
its Affiliates with respect to any employee or any other "disqualified
individual" (as defined in Code Section 280G and the regulations thereunder)
will be characterized as a "parachute payment," within the meaning of Code
Section 280G(B)(2).
2.13 Absence of Liens and Encumbrances. Proxim and each of its
subsidiaries has good and valid title to, or, in the case of leased properties,
including the Proxim Leases, valid leasehold interests in, all of its tangible
properties and assets, real, personal and mixed, used in its business, free and
clear of any liens or encumbrances except as reflected in the Proxim Financials
and except for liens for taxes not yet due and payable and such imperfections of
title and encumbrances, if any, which would not be material to Proxim.
2.14 Environmental Matters.
(a) Hazardous Material. Except as reasonably would not be likely
to result in a material liability to Proxim, no underground storage tanks and no
amount of any substance that has been designated by any Governmental Entity or
by applicable federal, state or local law to be radioactive, toxic, hazardous or
otherwise a danger to health or the environment, including without limitation,
PCBs, asbestos, petroleum, urea-formaldehyde and all substances listed as
hazardous substances pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, or defined as a hazardous
waste pursuant to the United States Resource Conservation and Recovery Act of
1976, as amended, and the regulations promulgated pursuant to said laws, but
excluding office and janitorial supplies (a "HAZARDOUS MATERIAL"), are present,
as a result of the actions of Proxim, or its subsidiaries or any affiliate of
Proxim, or, to the Knowledge of Proxim, as a result of any actions of any third
party or otherwise, in, on or under any property, including the land and the
improvements, ground water and surface water thereof, that Proxim or any of its
subsidiaries has at any time owned, operated, occupied or leased.
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(b) Hazardous Materials Activities. Except as reasonably would
not be likely to result in a material liability to Proxim (in any individual
case or in the aggregate), (i) neither Proxim nor any of its subsidiaries has
transported, stored, used, manufactured, disposed of, released or exposed its
employees or others to Hazardous Materials in violation of any law in effect on
or before the Closing Date, and (ii) neither Proxim nor any of its subsidiaries
has disposed of, transported, sold, used, released, exposed its employees or
others to or manufactured any product containing a Hazardous Material
(collectively, "HAZARDOUS MATERIALS ACTIVITIES") in violation of any law, rule,
regulation, treaty or statute promulgated by any Governmental Entity in effect
on or prior to or as of the Closing Date to prohibit, regulate or control
Hazardous Materials or any Hazardous Material Activity or in a manner that would
be likely to result in material liability to Proxim.
(c) Permits. Except as reasonably would not be likely to result
in a material liability to Proxim, Proxim and its subsidiaries currently hold
all environmental approvals, permits, licenses, clearances and consents (the
"PROXIM ENVIRONMENTAL PERMITS") necessary for the conduct of Proxim's and its
subsidiaries' Hazardous Material Activities and other businesses of Proxim and
its subsidiaries as such activities and businesses are currently being
conducted.
(d) Environmental Liabilities. No action, proceeding, revocation
proceeding, amendment procedure, writ, injunction or claim is pending, or to
Proxim's Knowledge, threatened concerning any Proxim Environmental Permit,
Hazardous Material or any Hazardous Materials Activity of Proxim or any of its
subsidiaries.
2.15 Labor Matters. (i) There are no controversies pending or, to the
Knowledge of each of Proxim and its respective subsidiaries, threatened, between
Proxim or any of its subsidiaries and any of their respective employees or
former employees; (ii) as of the date of this Agreement, neither Proxim nor any
of its subsidiaries is a party to any collective bargaining agreement or other
labor union contract applicable to persons employed by Proxim or its
subsidiaries nor does Proxim or its subsidiaries know of any activities or
proceedings of any labor union to organize any such employees; and (iii) as of
the date of this Agreement, neither Proxim nor any of its subsidiaries has any
Knowledge of any strikes, slowdowns, work stoppages or lockouts, or threats
thereof, by or with respect to any employees of Proxim or any of its
subsidiaries.
2.16 Agreements, Contracts and Commitments. The following agreements,
contracts or commitments with respect to which Proxim or one of its subsidiaries
is a party or is bound are referred to herein as the "PROXIM CONTRACTS":
(a) any employment or consulting agreement, contract or
commitment with any officer or director or higher level employee or member of
Proxim's Board of Directors, other than those that are terminable by Proxim or
any of its subsidiaries on no more than thirty (30) days' notice without
liability or financial obligation to Proxim;
(b) any agreement or plan, including, without limitation, any
stock option plan, stock appreciation right plan or stock purchase plan, any of
the benefits of which will be increased, or the vesting of benefits of which
will be accelerated, by the occurrence of any of the transactions
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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;
(c) any agreement of indemnification or any guaranty other than
any agreement of indemnification entered into in connection with the sale or
license of software products in the ordinary course of business;
(d) any agreement, contract or commitment containing any covenant
limiting in any respect the right of Proxim or any of its subsidiaries to engage
in any line of business or to compete with any person or granting any exclusive
distribution rights;
(e) any agreement, contract or commitment currently in force
relating to the disposition or acquisition by Proxim or any of its subsidiaries
after the date of this Agreement of assets in excess of $250,000 not in the
ordinary course of business or pursuant to which Proxim has any material
ownership interest in any corporation, partnership, joint venture or other
business enterprise other than Proxim's subsidiaries;
(f) any dealer, distributor, joint marketing or development
agreement currently in force under which Proxim or any of its subsidiaries have
continuing material obligations to jointly market any product, technology or
service and which may not be canceled without penalty upon notice of ninety (90)
days or less, or any material agreement pursuant to which Proxim or any of its
subsidiaries have continuing material obligations to jointly develop any
intellectual property that will not be owned, in whole or in part, by Proxim or
any of its subsidiaries and which may not be canceled without penalty upon
notice of ninety (90) days or less;
(g) any material agreement, contract or commitment currently in
force to license any third party to manufacture or reproduce any Proxim product
or service or any material agreement, contract or commitment currently in force
to sell or distribute any Proxim products or service, including any Proxim
Material IP Contract, except agreements with distributors or sales
representative in the normal course of business cancelable without penalty upon
notice of ninety (90) days or less and substantially in the form previously
provided to Western Multiplex;
(h) any mortgages, indentures, guarantees, loans or credit
agreements, security agreements or other agreements or instruments relating to
the borrowing of money or extension of credit;
(i) any settlement agreement; provided that a Proxim Contract
shall not include any settlement agreement entered into more than five (5) years
before the date of this Agreement; or
(j) any other agreement, contract or commitment (i) in connection
with or pursuant to which Proxim and its subsidiaries will spend or receive (or
are expected to spend or receive), in the aggregate, more than $250,000 during
the current calendar year or during the next calendar year, (ii) the
termination, expiration or loss of the counterparty's performance of which could
reasonably be expected to have a Material Adverse Effect on Proxim or (iii) that
is a material contract (as defined in Item 601(b)(10) of Regulation S-K of the
SEC rules).
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Neither Proxim nor any of its subsidiaries, nor to Proxim's Knowledge
any other party to a Proxim Contract, is in material breach, violation or
default under, and neither Proxim nor any of its subsidiaries has received
written notice that it has materially breached, violated or defaulted under, any
of the terms or conditions of any Proxim Contract in such a manner as would
permit any other party to cancel or terminate any such Proxim Contract, or would
permit any other party to seek material damages or other remedies (for any or
all of such breaches, violations or defaults, in the aggregate).
2.17 Title to Proxim Properties. Proxim owns no real property nor has it
ever owned any real property. All current Proxim leases, subleases or other
occupancy contracts or agreements and each amendment or other modification
thereto (the "PROXIM LEASES") are in full force and effect and are valid and
enforceable. Proxim is not in breach of or in default under any of such current
Proxim Leases and no event or condition has occurred which could (with the
giving of notice or the passage of time or both) constitute a breach of or
default by Proxim under any such current Proxim Lease. To Proxim's Knowledge, no
other party to any such current Proxim Lease is in breach of or in default under
any such current Proxim Leases and no event or condition has occurred which
could (with the giving of notice or the passage of time or both) constitute a
breach of or default by Proxim under any such current Proxim Lease. No party
other than Proxim has the right to occupy any Proxim real property currently
leased or otherwise occupied by Proxim.
2.18 Statements; Joint Proxy Statement/Prospectus. None of the
information supplied or to be supplied by Proxim for inclusion or incorporation
by reference in (i) the Registration Statement (as defined in Section 2.4(b))
will 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 in order to make the statements therein not
misleading and (ii) the joint proxy statement/prospectus to be sent to the
stockholders of Proxim and stockholders of Western Multiplex in connection with
the meeting of Proxim's stockholders to consider adoption of this Agreement (the
"PROXIM STOCKHOLDERS' MEETING") and in connection with the meeting of Western
Multiplex's stockholders to consider the approval of the Share Issuance pursuant
to the terms of the Merger (the "WESTERN MULTIPLEX STOCKHOLDERS' Meeting") (such
proxy statement/prospectus as amended or supplemented is referred to herein as
the "JOINT PROXY STATEMENT/PROSPECTUS") shall not, on the date the Joint Proxy
Statement/Prospectus is first mailed to Proxim's stockholders and Western
Multiplex's stockholders, at the time of the Proxim Stockholders' Meeting or the
Western Multiplex Stockholders' Meeting and at the Effective Time, 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 are made, not false or misleading,
or omit to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies for the Proxim
Stockholders' Meeting or the Western Multiplex Stockholders' Meeting which has
become false or misleading. The Joint Proxy Statement/Prospectus will comply as
to form in all material respects with the provisions of the Exchange Act and the
rules and regulations thereunder. If at any time before the Effective Time, any
event relating to Proxim or any of its affiliates, officers or directors should
be discovered by Proxim which should be set forth in an amendment to the
Registration Statement or a supplement to the Joint Proxy Statement/Prospectus,
Proxim shall promptly inform Western Multiplex.
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Notwithstanding the foregoing, Proxim makes no representation or warranty with
respect to any information supplied by Western Multiplex or Merger Sub that is
contained in any of the foregoing documents.
2.19 Board Approval. The Board of Directors of Proxim (i) has determined
that the Merger is advisable, consistent with and in furtherance of the
long-term business strategy of Proxim and fair to, and in the best interests of,
Proxim and its stockholders, (ii) has approved this Agreement, the Merger and
the other transactions contemplated by this Agreement and deemed this Agreement
advisable and (iii) has determined to recommend adoption of this Agreement by
the stockholders of Proxim (collectively, the "PROXIM BOARD RECOMMENDATION").
2.20 Opinion of Financial Advisors. The Board of Directors of Proxim has
received an opinion from each of JP Morgan and Broadview, 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 Proxim's stockholders, a signed copy of which
opinions will be delivered to Western Multiplex solely for informational
purposes as promptly as practicable after receipt thereof by Proxim.
2.21 Vote Required. The affirmative vote of a majority of the votes that
holders of the outstanding shares of Proxim Common Stock are entitled to vote
with respect to the Merger is the only vote of the holders of any class or
series of Proxim's capital stock necessary to adopt this Agreement and approve
the transactions contemplated hereby.
2.22 State Takeover Statutes. The Board of Directors of Proxim has
approved this Agreement and the Proxim Voting Agreements and the Merger and the
other transactions contemplated hereby and thereby, and such approval is
sufficient to render inapplicable to the Merger, and the other transactions
contemplated hereby and thereby the restrictions contained in Section 203 of the
Delaware Law to the extent, if any, such restrictions would otherwise be
applicable to the Merger, this Agreement and the Proxim Voting Agreements and
the other transactions contemplated by this Agreement and the Proxim Voting
Agreements. No other state takeover statute or similar statute or regulation
applies to or purports to apply to the Merger, this Agreement, the Proxim Voting
Agreements or the transactions contemplated hereby and thereby.
2.23 Proxim Rights Agreement. The Proxim Board has amended (in the form
provided to Western Multiplex) the Preferred Shares Rights Agreement entered
into as of March 31, 1997 (and amended and restated as of July 9, 1997) between
Proxim and the First National Bank of Boston (the "PROXIM RIGHTS AGREEMENT") so
that none of Western Multiplex, Merger Sub or any of their respective affiliates
shall become an "Acquiring Person," and no "Distribution Date" or "Triggering
Event" (as such terms are defined in the Proxim Rights Agreement) will occur as
a result of the approval, execution or delivery of this Agreement or the Proxim
Voting Agreements or the consummation of the transactions contemplated hereby
and thereby. The Proxim Rights Agreement and the outstanding rights thereunder
(the "PROXIM RIGHTS") shall terminate and be of no further force or effect as of
immediately prior to the Effective Time, without any consideration being payable
with respect to the outstanding Proxim Rights thereunder.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF WESTERN MULTIPLEX AND MERGER SUB
Western Multiplex and Merger Sub represent and warrant to Proxim,
subject to the exceptions specifically disclosed in the disclosure letter
supplied by Western Multiplex to Proxim (the "WESTERN MULTIPLEX DISCLOSURE
LETTER") and specific statements of historical fact disclosed in the Western
Multiplex SEC Reports (to the extent the relevance of the disclosure in the
Western Multiplex SEC Report to a representation and warranty is reasonably
apparent), as follows:
3.1 Organization of Western Multiplex.
(a) Western Multiplex and each of its subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation; has the corporate power and authority
to own, lease and operate its assets and property and to carry on its business
as now being conducted and as proposed to be conducted; and is duly qualified to
do business and in good standing as a foreign corporation in each jurisdiction
in which the failure to be so qualified, individually or in the aggregate, would
have a Material Adverse Effect (as defined in Section 8.3) on Western
Multiplex.
(b) Western Multiplex has delivered to Proxim a true and
complete list of all of Western Multiplex's subsidiaries, indicating the
jurisdiction of incorporation of each subsidiary and Western Multiplex's equity
interest therein.
(c) Western Multiplex has delivered or made available to Proxim
a true and correct copy of the Certificate of Incorporation and bylaws of
Western Multiplex and similar governing instruments of each of its material
subsidiaries, each as amended to date, and each such instrument is in full force
and effect. Neither Western Multiplex nor any of its subsidiaries is in
violation of any of the provisions of its Certificate of Incorporation or bylaws
or equivalent governing instruments.
3.2 Western Multiplex Capital Structure. As of January 15, 2002, the
authorized capital stock of Western Multiplex consisted of (A) 200,000,000
shares of Western Multiplex Common Stock, of which (x) 58,930,747 shares were
issued and outstanding and (y) 42,000,000 shares were held in treasury; (B)
100,000,000 shares of Western Multiplex Class B Common Stock, par value $0.01
per share, of which no shares were issued and outstanding; and (C) 25,000,000
shares of preferred stock, par value $0.01 per share, of which no shares were
issued and outstanding. The authorized capital stock of Merger Sub consists of
1,000 shares of Common Stock, par value $0.01 per share, all of which, as of the
date hereof, are issued and outstanding and are held by Western Multiplex. All
outstanding shares of Western Multiplex Common Stock are duly authorized,
validly issued, fully paid and nonassessable and are not subject to preemptive
rights created by statute, the Certificate of Incorporation or Bylaws of Western
Multiplex or any agreement or document to which Western Multiplex is a party or
by which it is bound. As of January 11, 2002, Western Multiplex had reserved an
aggregate of 13,822,587 shares of Western Multiplex Common Stock, net of
exercises, for issuance to employees, consultants and non-employee directors
pursuant to Western
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Multiplex's 1999 Stock Incentive Plan, 2000 Stock Option Plan for Non-Employee
Directors, Ubiquity Communication equity incentive plans and the WirelessHome
Platinum IP Stock Incentive Plan (the "WESTERN MULTIPLEX STOCK OPTION PLANS"),
under which options are outstanding for 10,307,075 shares and under which
3,515,510 shares are available for grant as of January 11, 2002. All shares of
Western Multiplex Common Stock subject to issuance as aforesaid, upon issuance
on the terms and conditions specified in the instruments pursuant to which they
are issuable, would be duly authorized, validly issued, fully paid and
nonassessable.
3.3 Obligations With Respect to Capital Stock. As of the date hereof,
except as set forth in Section 3.2, there are no equity securities, partnership
interests or similar ownership interests of any class of Western Multiplex, or
any securities exchangeable or convertible into or exercisable for such equity
securities, partnership interests or similar ownership interests issued,
reserved for issuance or outstanding. As of the date hereof, except for
securities Western Multiplex owns, directly or indirectly through one or more
subsidiaries, there are no equity securities, partnership interests or similar
ownership interests of any class of any subsidiary of Western Multiplex, or any
security exchangeable or convertible into or exercisable for such equity
securities, partnership interests or similar ownership interests issued,
reserved for issuance or outstanding. As of the date hereof, except as set forth
in Section 3.2, there are no options, warrants, equity securities, partnership
interests or similar ownership interests, calls, rights (including preemptive
rights), commitments or agreements of any character to which Western Multiplex
or any of its subsidiaries is a party or by which it is bound obligating Western
Multiplex or any of its subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause
the repurchase, redemption or acquisition, of any shares of capital stock of
Western Multiplex or any of its subsidiaries or obligating Western Multiplex or
any of its subsidiaries to grant, extend, accelerate the vesting of or enter
into any such option, warrant, equity security, partnership interest or similar
ownership interest, call, right, commitment or agreement. There are no
registration rights and, to the Knowledge of Western Multiplex there are no
voting trusts, proxies or other agreements or understandings with respect to any
equity security of any class of Western Multiplex or with respect to any equity
security, partnership interest or similar ownership interest of any class of any
of its subsidiaries.
3.4 Authority.
(a) Western Multiplex 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 and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Western Multiplex, subject only
to the approval of the Share Issuance by Western Multiplex's stockholders and
the filing and recordation of the Certificate of Merger pursuant to Delaware
Law. This Agreement has been duly executed and delivered by Western Multiplex
and, assuming the due authorization, execution and delivery by Proxim and Merger
Sub, constitutes the valid and binding obligation of Western Multiplex,
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy and other similar laws and general principles of equity.
The execution and delivery of this Agreement by Western Multiplex does not, and
the performance of this Agreement by Western
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Multiplex will not, (i) conflict with or violate the Certificate of
Incorporation or bylaws of Western Multiplex or the equivalent organizational
documents of any of its subsidiaries, (ii) subject to obtaining the approval of
the Share Issuance by Western Multiplex's stockholders as contemplated in
Section 5.2 (the "WESTERN MULTIPLEX STOCKHOLDER APPROVAL") and compliance with
the requirements set forth in Section 3.4(b) below, conflict with or violate any
Legal Requirement applicable to Western Multiplex or any of its subsidiaries or
by which its or any of their respective properties is bound or affected, or
(iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or impair Western
Multiplex's rights or alter the rights or obligations of Western Multiplex or
any third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties, including any leased real property, or
assets of Western Multiplex or any of its subsidiaries pursuant to, any Western
Multiplex Contract (as defined in Section 3.16), except as individually or in
the aggregate would not be reasonably expected to have a Material Adverse
Effect. The Western Multiplex Disclosure Letter list all material consents,
waivers and approvals under any of Western Multiplex's or any of its
subsidiaries' agreements, contracts, licenses or leases required to be obtained
in connection with the consummation of the transactions contemplated hereby.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity is required by
or with respect to Western Multiplex in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for (i) the Necessary Consents and (ii) such other consents,
authorizations, filings, approvals and registrations which, if not obtained or
made, would not be material to Western Multiplex or Proxim or have a material
adverse effect on the ability of the parties to consummate the Merger.
3.5 SEC Filings; Western Multiplex Financial Statements.
(a) Western Multiplex has filed all forms, reports and documents
required to be filed by Western Multiplex with the SEC since August 4, 2000, and
has made available to Proxim such forms, reports and documents in the form filed
with the SEC. All such required forms, reports and documents (including those
that Western Multiplex may file subsequent to the date hereof) are referred to
herein as the "WESTERN MULTIPLEX SEC REPORTS." As of their respective dates, the
Western Multiplex SEC Reports (i) were prepared in accordance with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the SEC thereunder applicable to such Western
Multiplex SEC Reports, and (ii) did not at the time they were filed (or if
amended or superseded by a filing before the date of this Agreement, then on the
date of such filing) contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. None of Western Multiplex's subsidiaries is required
to file any forms, reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Western Multiplex SEC
Reports (the "WESTERN MULTIPLEX
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FINANCIALS"), including any Western Multiplex SEC Reports filed after the date
hereof until the Closing, (i) complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto, (ii) was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the SEC
on Form 10-Q under the Exchange Act) and (iii) fairly presented the consolidated
financial position of Western Multiplex and its subsidiaries at the respective
dates thereof and the consolidated results of its operations and cash flows for
the periods indicated, except that the unaudited interim financial statements
were or are subject to normal and recurring year-end adjustments which were not,
or are not expected to be, material in amount. The balance sheet of Western
Multiplex contained in the Western Multiplex SEC Reports as of September 28,
2001 is hereinafter referred to as the "WESTERN MULTIPLEX BALANCE SHEET." Except
as disclosed in the Western Multiplex Financials, neither Western Multiplex nor
any of its subsidiaries has any liabilities (absolute, accrued, contingent or
otherwise) of a nature required to be disclosed on a balance sheet or in the
related notes to the consolidated financial statements prepared in accordance
with GAAP which are, individually or in the aggregate, material to the business,
results of operations or financial condition of Western Multiplex and its
subsidiaries taken as a whole, except liabilities incurred since the date of the
Western Multiplex Balance Sheet in the ordinary course of business consistent
with past practices.
(c) Western Multiplex has heretofore furnished to Proxim a
complete and correct copy of any amendments or modifications that have not yet
been filed with the SEC but that are required to be filed, to agreements,
documents or other instruments that previously had been filed by Western
Multiplex with the SEC pursuant to the Securities Act or the Exchange Act.
3.6 Absence of Certain Changes or Events. Since the date of the Western
Multiplex Balance Sheet, there has not been: (i) any Material Adverse Effect on
Western Multiplex, (ii) any change by Western Multiplex in its accounting
methods, principles or practices, except as required by concurrent changes in
GAAP, or (iii) any revaluation by Western Multiplex of any of its assets,
including, without limitation, writing down the value of capitalized inventory
or writing off notes or accounts receivable other than in the ordinary course of
business.
3.7 Taxes.
(a) Western Multiplex and each of its subsidiaries have timely
filed all Returns relating to Taxes required to be filed by Western Multiplex
and each of its subsidiaries with any Tax authority, except such Returns that
are not material to Western Multiplex. Such Returns are true and correct in all
material respects and have been completed in accordance with applicable law.
Western Multiplex and each of its subsidiaries have paid all Taxes shown to be
due on such Returns.
(b) Western Multiplex and each of its subsidiaries as of the
Effective Time will have withheld with respect to its employees (and timely paid
over to the appropriate Taxing authority) all federal and state income taxes,
Taxes pursuant to the FICA and FUTA, and other Taxes required to be withheld,
except such Taxes that are not material to Western Multiplex.
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(c) Neither Western Multiplex nor any of its subsidiaries has
been delinquent in the payment of any material Tax nor is there any material Tax
deficiency or adjustment outstanding, proposed or assessed against Western
Multiplex or any of its subsidiaries, nor has Western Multiplex or any of its
subsidiaries executed any unexpired waiver of any statute of limitations on or
extending the period for the assessment or collection of any material Tax.
(d) No audit or other examination of any material Return of
Western Multiplex or any of its subsidiaries by any Tax authority is presently
in progress, nor has Western Multiplex or any of its subsidiaries been notified
in writing of any request for such an audit or other examination.
(e) As of September 28, 2001, neither Western Multiplex nor any
of its subsidiaries has any liability for any material unpaid Taxes that has not
been accrued for or reserved on the Western Multiplex Balance Sheet in
accordance with GAAP, whether asserted or unasserted, contingent or otherwise.
Since September 28, 2001, neither Western Multiplex nor any of its subsidiaries
has incurred any liability for any material Taxes other than in the ordinary
course of business.
(f) There is no contract, agreement, plan or arrangement to
which Western Multiplex or any of its subsidiaries is a party as of the date of
this Agreement, including but not limited to the provisions of this Agreement,
covering any employee or former employee of Western Multiplex or any of its
subsidiaries that, individually or collectively, would reasonably be expected to
give rise to the payment of any amount in excess of $250,000 that would not be
deductible pursuant to Sections 280G, 404 or 162(m) of the Code. There is no
contract, agreement, plan or arrangement to which Western Multiplex is a party
or by which it is bound to compensate any individual for excise taxes paid
pursuant to Section 4999 of the Code.
(g) Neither Western Multiplex nor any of its subsidiaries (a) is
party to or has any obligation under any Tax sharing, indemnity or allocation
agreement or arrangement (b) has ever been a member of an affiliated group
(within the meaning of Code Section 1504(a)) filing a consolidated federal
income Tax Return (other than a group the common parent of which was Western
Multiplex) or (c) has any liability for the Taxes of any person (other than
Western Multiplex or any of its subsidiaries) under Treas. Reg. Section 1.1502-6
(or any similar provision of state, local or foreign law), as a transferee or
successor, by contract, or otherwise.
(h) Neither Western Multiplex nor any of its subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation" in
a distribution of stock intended to qualify for tax-free treatment under Section
355 of the Code (x) in the two years prior to the date of this Agreement or (y)
in a distribution which could otherwise constitute part of a "plan" or "series
of related transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Merger.
3.8 Western Multiplex Intellectual Property. For the purposes of this
Agreement, the following terms have the following definitions:
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"WESTERN MULTIPLEX INTELLECTUAL PROPERTY" shall mean any Intellectual
Property that is owned or used by Western Multiplex in the conduct of its
business, as currently conducted and currently proposed to be conducted.
"WESTERN MULTIPLEX REGISTERED INTELLECTUAL PROPERTY" means all of the
Registered Intellectual Property owned by, or filed in the name of, Western
Multiplex or any of its subsidiaries.