\nExhibit A Western Multiplex Voting Agreement<\/p>\nExhibit B Proxim Voting Agreement<\/p>\n
Exhibit C Amended and Restated Stockholders’ Agreement<\/p>\n
Exhibit D Form of Certificate of Incorporation of Surviving Corporation<\/p>\n
Exhibit E Proxim Affiliate Agreement
\n<\/c><\/s><\/table>\n
-vi-<\/p>\n
AGREEMENT AND PLAN OF REORGANIZATION<\/p>\n
This AGREEMENT AND PLAN OF REORGANIZATION (the “AGREEMENT”) is made and
\nentered into as of January 16, 2002 among Western Multiplex Corporation, a
\nDelaware corporation (“WESTERN MULTIPLEX”), Walnut-Pine Merger Corp., a Delaware
\ncorporation and a wholly owned direct subsidiary of Western Multiplex (“MERGER
\nSUB”), and Proxim, Inc., a Delaware corporation (“Proxim”).<\/p>\n
RECITALS<\/p>\n
A. Upon the terms and subject to the conditions of this Agreement and in
\naccordance with the Delaware General Corporation Law (“DELAWARE LAW”), Western
\nMultiplex and Proxim will enter into a business combination transaction pursuant
\nto which Merger Sub will merge with and into Proxim (the “MERGER”).<\/p>\n
B. The Board of Directors of Western Multiplex (i) has determined that
\nthe Merger is advisable, consistent with and in furtherance of the long-term
\nbusiness strategy of Western Multiplex and fair to, and in the best interests
\nof, Western Multiplex and its stockholders, (ii) has approved this Agreement,
\nthe Merger and the other transactions contemplated by this Agreement and (iii)
\nhas approved and determined to recommend that the stockholders of Western
\nMultiplex vote to approve the issuance of shares of Western Multiplex Common
\nStock (as defined below) to the stockholders of Proxim pursuant to the terms of
\nthis Agreement (the “SHARE Issuance”).<\/p>\n
C. The Board of Directors of Proxim (i) has determined that the Merger
\nis consistent with and in furtherance of the long-term business strategy of
\nProxim and fair to, and in the best interests of, Proxim and its stockholders,
\n(ii) has approved this Agreement, the Merger and the other transactions
\ncontemplated by this Agreement and declared this Agreement advisable and (iii)
\nhas determined to recommend the adoption of this Agreement to the stockholders
\nof Proxim.<\/p>\n
D. Concurrently with the execution of this Agreement and as a condition
\nand inducement to Western Multiplex’s and Proxim’s willingness to enter into
\nthis Agreement, certain affiliates of Western Multiplex are entering into voting
\nagreements in substantially the form attached hereto as Exhibit A (the “WESTERN
\nMULTIPLEX VOTING AGREEMENTS”), and certain affiliates of Proxim are entering
\ninto voting agreements in substantially the form attached hereto as Exhibit B
\n(the “PROXIM VOTING AGREEMENTS” and, collectively with the Western Multiplex
\nVoting Agreements, the “VOTING AGREEMENTS”).<\/p>\n
E. Concurrently with the execution of this Agreement and as a condition
\nand inducement to Proxim’s willingness to enter into this Agreement, WMC Holding
\nL.L.C. and GTI Acquisition Corporation are entering into an Amended and Restated
\nStockholders’ Agreement in substantially the form attached hereto as Exhibit C
\n(the “AMENDED STOCKHOLDERS’ AGREEMENT”), such agreement to be effective upon
\nconsummation of the Merger.<\/p>\n
F. For United States federal income tax purposes, the parties intend, by
\nexecuting this Agreement, to adopt a plan of reorganization within the meaning
\nof Section 368 of the Internal Revenue Code of 1986, as amended (the “CODE”).<\/p>\n
NOW, THEREFORE, in consideration of the covenants, promises and
\nrepresentations set forth herein, and for other good and valuable consideration,
\nthe receipt and sufficiency of which are hereby acknowledged, the parties agree
\nas follows:<\/p>\n
ARTICLE I
\n THE MERGER<\/p>\n
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
\nsubject to and upon the terms and conditions of this Agreement and the
\napplicable provisions of Delaware Law, Merger Sub shall be merged with and into
\nProxim, the separate corporate existence of Merger Sub shall cease and Proxim
\nshall continue as the surviving corporation. Proxim as the surviving corporation
\nafter the Merger is hereinafter sometimes referred to as the “SURVIVING
\nCORPORATION.”<\/p>\n
1.2 Effective Time; Closing. Subject to the provisions of this
\nAgreement, the parties hereto shall cause the Merger to be consummated by filing
\na Certificate of Merger (the “CERTIFICATE OF MERGER”) with the Secretary of
\nState of the State of Delaware in accordance with the relevant provisions of
\nDelaware Law (the time of such filing with the Secretary of State of the State
\nof Delaware (or such later time as may be agreed in writing by the parties and
\nspecified in the Certificate of Merger) being the “EFFECTIVE TIME”) as soon as
\npracticable on or after the Closing Date (as herein defined). The closing of the
\nMerger (the “CLOSING”) shall take place at the offices of Wilson Sonsini
\nGoodrich & Rosati, Professional Corporation, located at 650 Page Mill Road, Palo
\nAlto, California, at a time and date to be specified by the parties, which shall
\nbe no later than the second business day after the satisfaction or waiver of the
\nconditions set forth in ARTICLE VI, or at such other time, date and location as
\nthe parties hereto agree in writing (the “CLOSING DATE”).<\/p>\n
1.3 Effect of the Merger. At the Effective Time, the effect of the
\nMerger shall be as provided in this Agreement and the applicable provisions of
\nDelaware Law. Without limiting the generality of the foregoing, and subject
\nthereto, at the Effective Time all the property, rights, privileges, powers and
\nfranchises of Proxim and Merger Sub shall vest in the Surviving Corporation, and
\nall debts, liabilities and duties of Proxim and Merger Sub shall become the
\ndebts, liabilities and duties of the Surviving Corporation.<\/p>\n
1.4 Certificate of Incorporation. At the Effective Time, the Certificate
\nof Incorporation of the Surviving Corporation shall be amended so as to read in
\nits entirety in the form attached hereto as Exhibit D.<\/p>\n
1.5 Effect on Capital Stock. Subject to the terms and conditions of this
\nAgreement, at the Effective Time, by virtue of the Merger and without any action
\non the part of Merger Sub, Proxim or the holders of any of the following
\nsecurities, the following shall occur:<\/p>\n
-2-<\/p>\n
(a) Conversion of Proxim Common Stock. Each share of common
\nstock, $0.001 par value per share, of Proxim (the “PROXIM COMMON STOCK”), issued
\nand outstanding immediately prior to the Effective Time (other than any shares
\nof Proxim Common Stock to be canceled pursuant to Section 2.23), together with
\nany associated Proxim Rights (as defined in Section 2.23) under the Proxim
\nRights Agreement (as defined in Section 2.23), will be canceled and extinguished
\nand automatically converted (subject to Sections 1.5(e) and 1.5(f)) into the
\nright to receive 1.8896 (the “EXCHANGE RATIO”) shares of Class A common stock,
\npar value $0.01 per share, of Western Multiplex (the “WESTERN MULTIPLEX COMMON
\nSTOCK”) upon surrender of the certificate representing such share of Proxim
\nCommon Stock in the manner provided in Section 1.6 (or in the case of a lost,
\nstolen or destroyed certificate, upon delivery of an affidavit (and bond, if
\nrequired)) in the manner provided in Section 1.8).<\/p>\n
(b) Cancellation of Treasury and Western Multiplex-Owned Stock.
\nEach share of Proxim Common Stock held in the treasury of Proxim or owned by
\nMerger Sub or Western Multiplex immediately prior to the Effective Time shall be
\ncanceled and extinguished without any conversion thereof.<\/p>\n
(c) Stock Options. The parties shall take all requisite action
\nsuch that, at the Effective Time, all options to purchase Proxim Common Stock
\nthen outstanding (the “PROXIM OPTIONS”) under Proxim’s 1986 Stock Option Plan,
\n1994 Director Option Plan, 1995 Long-Term Incentive Plan and 1999 Nonstatutory
\nStock Option Plan (collectively, the “PROXIM STOCK OPTION PLANS”) shall be
\nassumed by Western Multiplex in accordance with Section 5.9 hereof. Prior to the
\nClosing Date, the Board of Directors of Western Multiplex shall take all
\nnecessary action to assume and adopt, as of the Closing Date, Proxim’s 1995
\nLong-Term Incentive Plan, and shall have the discretion to adopt, as of the
\nClosing Date, any other Proxim Stock Option Plan. Rights outstanding under
\nProxim’s 1993 Employee Stock Purchase Plan shall be treated as set forth in
\nSection 5.9 hereof.<\/p>\n
(d) Capital Stock of Merger Sub. Each share of common stock,
\n$0.01 par value per share, of Merger Sub issued and outstanding immediately
\nprior to the Effective Time shall be converted into and exchanged for one
\nvalidly issued, fully paid and nonassessable share of common stock, $0.01 par
\nvalue, of the Surviving Corporation. Each stock certificate of Merger Sub
\nevidencing ownership of any such shares shall continue to evidence ownership of
\nsuch shares of capital stock of the Surviving Corporation.<\/p>\n
(e) Adjustments to Exchange Ratio. The Exchange Ratio shall be
\nadjusted to reflect appropriately the effect of any stock split, reverse stock
\nsplit, stock dividend (including any dividend or distribution of securities
\nconvertible into Western Multiplex Common Stock or Proxim Common Stock),
\nextraordinary cash dividends, reorganization, recapitalization,
\nreclassification, combination, exchange of shares or other like change with
\nrespect to Western Multiplex Common Stock or Proxim Common Stock occurring on or
\nafter the date hereof and prior to the Effective Time.<\/p>\n
(f) Fractional Shares. No fraction of a share of Western
\nMultiplex Common Stock will be issued by virtue of the Merger, but in lieu
\nthereof, each holder of shares of Proxim<\/p>\n
-3-<\/p>\n
Common Stock who would otherwise be entitled to a fraction of a share of Western
\nMultiplex Common Stock (after aggregating all fractional shares of Western
\nMultiplex Common Stock to be received by such holder) shall receive from Western
\nMultiplex an amount of cash (rounded to the nearest whole cent), without
\ninterest, equal to the product of (i) such fraction, multiplied by (ii) the
\naverage closing price of one share of Western Multiplex Common Stock for the
\nfive (5) most recent days that Western Multiplex Common Stock has traded ending
\non the trading day immediately prior to the Effective Time, as reported on the
\nNasdaq National Market System (“NASDAQ”).<\/p>\n
1.6 Surrender of Certificates.<\/p>\n
(a) Exchange Agent. Western Multiplex shall select an institution
\nreasonably satisfactory to Proxim to act as the exchange agent (the “EXCHANGE
\nAGENT”) in the Merger.<\/p>\n
(b) Western Multiplex to Provide Common Stock. Promptly after the
\nEffective Time, Western Multiplex shall make available to the Exchange Agent for
\nexchange in accordance with this Article I, (i) certificates for the shares of
\nWestern Multiplex Common Stock issuable pursuant to Section 1.5 in exchange for
\noutstanding shares of Proxim Common Stock, (ii) cash in an amount sufficient for
\npayment in lieu of fractional shares pursuant to Section 1.5(f) and (iii) any
\ndividends or distributions to which holders of shares of Proxim Common Stock may
\nbe entitled pursuant to Section 1.6(d).<\/p>\n
(c) Exchange Procedures. Promptly after the Effective Time,
\nWestern Multiplex shall cause the Exchange Agent to mail to each holder of
\nrecord (as of the Effective Time) of a certificate or certificates (the
\n“CERTIFICATES”) that immediately prior to the Effective Time represented
\noutstanding shares of Proxim Common Stock whose shares were converted into the
\nright to receive shares of Western Multiplex Common Stock pursuant to Section
\n1.5, cash in lieu of any fractional shares pursuant to Section 1.5(f) and any
\ndividends or other distributions pursuant to Section 1.6(d), (i) a letter of
\ntransmittal (which shall specify that delivery shall be effected, and risk of
\nloss and title to the Certificates shall pass, only upon delivery of the
\nCertificates to the Exchange Agent and shall be in such form and have such other
\nprovisions as Western Multiplex may reasonably specify) and (ii) instructions
\nfor use in effecting the surrender of the Certificates in exchange for
\ncertificates representing whole shares of Western Multiplex Common Stock, cash
\nin lieu of any fractional shares pursuant to Section 1.5(f) and any dividends or
\nother distributions pursuant to Section 1.6(d). Upon surrender of Certificates
\nfor cancellation to the Exchange Agent or to such other agent or agents as may
\nbe appointed by Western Multiplex, together with such letter of transmittal,
\nduly completed and validly executed in accordance with the instructions thereto
\nand such other documents as may reasonably be required by the Exchange Agent,
\nthe holders of such Certificates shall be entitled to receive in exchange
\ntherefor certificates representing the number of whole shares of Western
\nMultiplex Common Stock (after taking into account all Certificates surrendered
\nby such holder) to which such holder is entitled pursuant to Section 1.5(a)
\n(which, other than for Proxim Affiliates shall be in uncertificated book entry
\nform unless a physical certificate is requested or is otherwise required by
\napplicable law rule or regulation), payment in lieu of fractional shares which
\nsuch holder has the right to receive pursuant to Section 1.5(f) and any
\ndividends or distributions payable pursuant to Section 1.6(d), and the
\nCertificates so surrendered shall forthwith<\/p>\n
-4-<\/p>\n
be canceled. Until so surrendered, outstanding Certificates will be deemed from
\nand after the Effective Time, for all corporate purposes, to evidence only the
\nright to receive, upon due surrender thereof, the number of full shares of
\nWestern Multiplex Common Stock issuable pursuant to Section 1.5, cash in lieu of
\nthe issuance of any fractional shares in accordance with Section 1.5(f) and any
\ndividends or distributions payable pursuant to Section 1.6(d).<\/p>\n
(d) Distributions With Respect to Unexchanged Shares. No
\ndividends or other distributions declared or made after the date of this
\nAgreement with respect to Western Multiplex Common Stock with a record date
\nafter the Effective Time and no payment in lieu of fractional shares pursuant to
\nSection 1.5(f) will be paid to the holders of any unsurrendered Certificates
\nwith respect to the shares of Western Multiplex Common Stock issuable pursuant
\nto Section 1.5, until such Certificates shall have been duly surrendered.
\nSubject to applicable law, following surrender of any such Certificates, the
\nExchange Agent or any other agent designated by Western Multiplex shall deliver
\nto the holders thereof, without interest, (i) promptly after such surrender, the
\nnumber of whole shares of Western Multiplex Common Stock issued in exchange
\ntherefor along with payment in lieu of fractional shares pursuant to Section
\n1.5(f) and the amount of any such dividends or other distributions with a record
\ndate after the Effective Time and theretofore paid with respect to such whole
\nshares of Western Multiplex Common Stock and (ii) at the appropriate payment
\ndate, the amount of dividends or other distributions with a record date after
\nthe Effective Time and a payment date subsequent to such surrender payable with
\nrespect to such whole shares of Western Multiplex Common Stock.<\/p>\n
(e) Transfers of Ownership. If certificates for shares of Western
\nMultiplex Common Stock are to be issued in a name other than that in which the
\nCertificates surrendered in exchange therefor are registered, it will be a
\ncondition of the issuance thereof that the Certificates so surrendered will be
\nproperly endorsed and otherwise in proper form for transfer and that the persons
\nrequesting such exchange will have paid to Western Multiplex or any agent
\ndesignated by it any transfer or other taxes required by reason of the issuance
\nof certificates for shares of Western Multiplex Common Stock in any name other
\nthan that of the registered holders of the Certificates surrendered, or
\nestablished to the satisfaction of Western Multiplex or any agent designated by
\nit that such tax has been paid or is not payable.<\/p>\n
(f) Required Withholding. Each of Western Multiplex, the Exchange
\nAgent and the Surviving Corporation shall be entitled to deduct and withhold
\nfrom any consideration payable or otherwise deliverable pursuant to this
\nAgreement to any former holder of Proxim Common Stock such amounts as may be
\nrequired to be deducted or withheld therefrom under the Code or under any
\nprovision of state, local or foreign Tax law or under any other applicable legal
\nrequirement. To the extent such amounts are so deducted or withheld, the amount
\nof such consideration shall be treated for all purposes under this Agreement as
\nhaving been paid to the person to whom such consideration would otherwise have
\nbeen paid.<\/p>\n
(g) No Liability. Notwithstanding anything to the contrary in
\nthis Section 1.6, none of the Exchange Agent, Western Multiplex, the Surviving
\nCorporation or any party hereto shall be liable to a holder of shares of Western
\nMultiplex Common Stock or Proxim Common Stock for<\/p>\n
-5-<\/p>\n
any amount properly paid to a public official pursuant to any applicable
\nabandoned property, escheat or similar law.<\/p>\n
1.7 No Further Ownership Rights in Proxim Common Stock. All shares of
\nWestern Multiplex Common Stock issued in accordance with the terms hereof
\n(including any cash paid in respect thereof pursuant to Section 1.5(f) and
\n1.6(d)) shall be deemed to have been issued in full satisfaction of all rights
\npertaining to such shares of Proxim Common Stock, and there shall be no further
\nregistration of transfers on the records of the Surviving Corporation of shares
\nof Proxim Common Stock that were outstanding immediately prior to the Effective
\nTime. If, after the Effective Time, Certificates are presented to the Surviving
\nCorporation for any reason, they shall be canceled and exchanged as provided in
\nthis Article I.<\/p>\n
1.8 Lost, Stolen or Destroyed Certificates. In the event any
\nCertificates shall have been lost, stolen or destroyed, the Exchange Agent shall
\nissue in exchange for such lost, stolen or destroyed Certificates, upon the
\nmaking of an affidavit of that fact by the holder thereof, such shares of
\nWestern Multiplex Common Stock, cash for fractional shares, if any, as may be
\nrequired pursuant to Section 1.5(f) and any dividends or distributions payable
\npursuant to Section 1.6(d); provided, however, that Western Multiplex may, in
\nits discretion and as a condition precedent to the issuance thereof, require the
\nowner of such lost, stolen or destroyed Certificates to deliver a bond in such
\nsum as it may reasonably direct as indemnity against any claim that may be made
\nagainst Western Multiplex, Proxim or the Exchange Agent with respect to the
\nCertificates alleged to have been lost, stolen or destroyed.<\/p>\n
1.9 Tax Consequences. It is intended by the parties hereto that the
\nMerger shall constitute a reorganization within the meaning of Section 368 of
\nthe Code. The parties hereto adopt this Agreement as a “plan of reorganization”
\nwithin the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a).<\/p>\n
1.10 Taking of Necessary Action; Further Action. If, at any time after
\nthe Effective Time, any further action is necessary or desirable to carry out
\nthe purposes of this Agreement and to vest the Surviving Corporation with full
\nright, title and possession to all assets, property, rights, privileges, powers
\nand franchises of Proxim and Merger Sub, the officers and directors of Proxim
\nand Merger Sub will take all such lawful and necessary action.<\/p>\n
ARTICLE II
\n REPRESENTATIONS AND WARRANTIES OF PROXIM<\/p>\n
Proxim represents and warrants to Western Multiplex and Merger Sub,
\nsubject to the exceptions specifically disclosed in writing in the disclosure
\nletter supplied by Proxim to Western Multiplex (the “PROXIM DISCLOSURE LETTER”)
\nand specific statements of historical fact disclosed in the Proxim SEC Reports
\n(to the extent the relevance of the disclosure in the Proxim SEC Report to a
\nrepresentation and warranty is reasonably apparent), as follows:<\/p>\n
-6-<\/p>\n
2.1 Organization of Proxim.<\/p>\n
(a) Proxim and each of its subsidiaries is a corporation duly
\norganized, validly existing and in good standing under the laws of the
\njurisdiction of its incorporation; has the corporate power and authority to own,
\nlease and operate its assets and property and to carry on its business as now
\nbeing conducted and as proposed to be conducted; and is duly qualified to do
\nbusiness and in good standing as a foreign corporation in each jurisdiction in
\nwhich the failure to be so qualified, individually or in the aggregate, would
\nhave a Material Adverse Effect (as defined in Section 8.3) on Proxim.<\/p>\n
(b) Proxim has delivered to Western Multiplex a true and complete
\nlist of all of Proxim’s subsidiaries, indicating the jurisdiction of
\nincorporation of each subsidiary and Proxim’s equity interest therein.<\/p>\n
(c) Proxim has delivered or made available to Western Multiplex a
\ntrue and correct copy of the Certificate of Incorporation and bylaws of Proxim
\nand similar governing instruments of each of its material subsidiaries, each as
\namended to date, and each such instrument is in full force and effect. Neither
\nProxim nor any of its subsidiaries is in violation of any of the provisions of
\nits Certificate of Incorporation or bylaws or equivalent governing instruments.<\/p>\n
2.2 Proxim Capital Structure. As of January 11, 2002, the authorized
\ncapital stock of Proxim consisted of 100,000,000 shares of Proxim Common Stock,
\nof which 31,366,656 shares were issued and outstanding and 5,000,000 shares of
\nPreferred Stock, par value $0.001 per share, of which no shares are issued or
\noutstanding. All outstanding shares of Proxim Common Stock are duly authorized,
\nvalidly issued, fully paid and non-assessable and are not subject to preemptive
\nrights created by statute, the Certificate of Incorporation or Bylaws of Proxim
\nor any agreement or document to which Proxim is a party or by which it is bound.
\nAs of January 11, 2002, Proxim had reserved an aggregate of 14,162,812 shares of
\nProxim Common Stock, net of exercises, for issuance to employees, consultants
\nand non-employee directors pursuant to the Proxim Stock Option Plans, under
\nwhich options are outstanding for 8,579,089 shares and under which 5,583,723
\nshares are available for grant. All shares of Proxim Common Stock subject to
\nissuance as aforesaid, upon issuance on the terms and conditions specified in
\nthe instruments pursuant to which they are issuable, would be duly authorized,
\nvalidly issued, fully paid and nonassessable.<\/p>\n
2.3 Obligations With Respect to Capital Stock. As of the date hereof,
\nexcept as set forth in Section 2.2, there are no equity securities, partnership
\ninterests or similar ownership interests of any class of Proxim, or any
\nsecurities exchangeable or convertible into or exercisable for such equity
\nsecurities, partnership interests or similar ownership interests issued,
\nreserved for issuance or outstanding. As of the date hereof, except for
\nsecurities Proxim owns, directly or indirectly through one or more subsidiaries,
\nthere are no equity securities, partnership interests or similar ownership
\ninterests of any class of any subsidiary of Proxim, or any security exchangeable
\nor convertible into or exercisable for such equity securities, partnership
\ninterests or similar ownership interests issued, reserved for issuance or
\noutstanding. As of the date hereof, except as set forth in Section 2.2, there
\nare no options, warrants, equity securities, partnership interests or similar
\nownership interests, calls, rights (including preemptive rights), commitments or
\nagreements of any character to which Proxim<\/p>\n
-7-<\/p>\n
or any of its subsidiaries is a party or by which it is bound obligating Proxim
\nor any of its subsidiaries to issue, deliver or sell, or cause to be issued,
\ndelivered or sold, or repurchase, redeem or otherwise acquire, or cause the
\nrepurchase, redemption or acquisition, of any shares of capital stock of Proxim
\nor any of its subsidiaries or obligating Proxim or any of its subsidiaries to
\ngrant, extend, accelerate the vesting of or enter into any such option, warrant,
\nequity security, partnership interest or similar ownership interest, call,
\nright, commitment or agreement. There are no registration rights and, to the
\nKnowledge of Proxim there are no voting trusts, proxies or other agreements or
\nunderstandings with respect to any equity security of any class of Proxim or
\nwith respect to any equity security, partnership interest or similar ownership
\ninterest of any class of any of its subsidiaries.<\/p>\n
2.4 Authority.<\/p>\n
(a) Proxim has all requisite corporate power and authority to
\nenter into this Agreement and to consummate the transactions contemplated
\nhereby. The execution and delivery of this Agreement and the consummation of the
\ntransactions contemplated hereby have been duly authorized by all necessary
\ncorporate action on the part of Proxim, subject only to the adoption of this
\nAgreement by Proxim’s stockholders and the filing and recordation of the
\nCertificate of Merger pursuant to Delaware Law. This Agreement has been duly
\nexecuted and delivered by Proxim and, assuming the due authorization, execution
\nand delivery by Western Multiplex and Merger Sub, constitutes the valid and
\nbinding obligation of Proxim, enforceable in accordance with its terms, except
\nas enforceability may be limited by bankruptcy and other similar laws and
\ngeneral principles of equity. The execution and delivery of this Agreement by
\nProxim does not, and the performance of this Agreement by Proxim will not, (i)
\nconflict with or violate the Certificate of Incorporation or bylaws of Proxim or
\nthe equivalent organizational documents of any of its subsidiaries, (ii) subject
\nto obtaining the adoption of this Agreement by Proxim’s stockholders as
\ncontemplated in Section 5.2 (the “PROXIM STOCKHOLDER APPROVAL”) and compliance
\nwith the requirements set forth in Section 2.4(b) below, conflict with or
\nviolate any law, rule, regulation, order, judgment or decree (each a “LEGAL
\nREQUIREMENT”) applicable to Proxim or any of its subsidiaries or by which its or
\nany of their respective properties is bound or affected, or (iii) result in any
\nbreach of or constitute a default (or an event that with notice or lapse of time
\nor both would become a default) under, or impair Proxim’s rights or alter the
\nrights or obligations of Proxim or any third party under, or give to others any
\nrights of termination, amendment, acceleration or cancellation of, or result in
\nthe creation of a lien or encumbrance on any of the properties, including any
\nleased real property, or assets of Proxim or any of its subsidiaries pursuant
\nto, any Proxim Contract (as defined in Section 2.16), except as individually or
\nin the aggregate would not be reasonably expected to have a Material Adverse
\nEffect. The Proxim Disclosure Letter lists all material consents, waivers and
\napprovals under any of Proxim’s or any of its subsidiaries’ agreements,
\ncontracts, licenses or leases required to be obtained in connection with the
\nconsummation of the transactions contemplated hereby.<\/p>\n
(b) No consent, approval, order or authorization of, or
\nregistration, declaration or filing with any court, administrative agency or
\ncommission or other governmental authority or instrumentality (“GOVERNMENTAL
\nENTITY”) is required by or with respect to Proxim in connection with the
\nexecution and delivery of this Agreement or the consummation of the transactions<\/p>\n
-8-<\/p>\n
contemplated hereby, except for (i) the filing of the Certificate of Merger with
\nthe Secretary of State of Delaware, (ii) the filing of the Joint Proxy Statement
\n(as defined in Section 2.20) with the SEC in accordance with the Securities
\nExchange Act of 1934, as amended (the “EXCHANGE ACT”), to be included in the
\nForm S-4 Registration Statement (the “REGISTRATION STATEMENT”) to be filed by
\nWestern Multiplex with the Securities and Exchange Commission (“SEC”) in
\naccordance with the Securities Act of 1933, as amended (the “SECURITIES ACT”),
\nand the effectiveness of the Registration Statement, (iii) such consents,
\napprovals, orders, authorizations, registrations, declarations and filings as
\nmay be required under applicable federal and state securities laws and the
\nHart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR ACT”)
\nand the comparable laws of any foreign country reasonably determined by the
\nparties to be required and (iv) such other consents, authorizations, filings,
\napprovals and registrations which, if not obtained or made, would not be
\nmaterial to Proxim or Western Multiplex or have a material adverse effect on the
\nability of the parties to consummate the Merger. The consents, approvals,
\norders, authorizations, registrations, declarations and filings set forth in (i)
\nthrough (iii) are referred to herein as the “NECESSARY CONSENTS”.<\/p>\n
2.5 SEC Filings; Proxim Financial Statements.<\/p>\n
(a) Proxim has filed all forms, reports and documents required to
\nbe filed by Proxim with the SEC since January 1, 1999, and has made available to
\nWestern Multiplex such forms, reports and documents in the form filed with the
\nSEC. All such required forms, reports and documents (including those that Proxim
\nmay file subsequent to the date hereof) are referred to herein as the “PROXIM
\nSEC REPORTS.” As of their respective dates, the Proxim SEC Reports (i) were
\nprepared in accordance with the requirements of the Securities Act or the
\nExchange Act, as the case may be, and the rules and regulations of the SEC
\nthereunder applicable to such Proxim SEC Reports, and (ii) did not at the time
\nthey were filed (or if amended or superseded by a filing before the date of this
\nAgreement, then on the date of such filing) contain any untrue statement of a
\nmaterial fact or omit to state a material fact required to be stated therein or
\nnecessary in order to make the statements therein, in the light of the
\ncircumstances under which they were made, not misleading. None of Proxim’s
\nsubsidiaries is required to file any forms, reports or other documents with the
\nSEC.<\/p>\n
(b) Each of the consolidated financial statements (including, in
\neach case, any related notes thereto) contained in the Proxim SEC Reports (the
\n“PROXIM FINANCIALS”), including any Proxim SEC Reports filed after the date
\nhereof until the Closing, (i) complied as to form in all material respects with
\nthe published rules and regulations of the SEC with respect thereto, (ii) was
\nprepared in accordance with generally accepted accounting principles (“GAAP”)
\napplied on a consistent basis throughout the periods involved (except as may be
\nindicated in the notes thereto or, in the case of unaudited interim financial
\nstatements, as may be permitted by the SEC on Form 10-Q under the Exchange Act)
\nand (iii) fairly presented the consolidated financial position of Proxim and its
\nsubsidiaries at the respective dates thereof and the consolidated results of its
\noperations and cash flows for the periods indicated, except that the unaudited
\ninterim financial statements were or are subject to normal and recurring
\nyear-end adjustments which were not, or are not expected to be, material in
\namount. The balance sheet of Proxim contained in the Proxim SEC Reports as of
\nSeptember 30, 2001 is hereinafter referred to as the “PROXIM BALANCE SHEET.”
\nExcept as disclosed<\/p>\n
-9-<\/p>\n
in the Proxim Financials, neither Proxim nor any of its subsidiaries has any
\nliabilities (absolute, accrued, contingent or otherwise) of a nature required to
\nbe disclosed on a balance sheet or in the related notes to the consolidated
\nfinancial statements prepared in accordance with GAAP which are, individually or
\nin the aggregate, material to the business, results of operations or financial
\ncondition of Proxim and its subsidiaries taken as a whole, except liabilities
\nincurred since the date of the Proxim Balance Sheet in the ordinary course of
\nbusiness consistent with past practices.<\/p>\n
(c) Proxim has heretofore furnished to Western Multiplex a
\ncomplete and correct copy of any amendments or modifications that have not yet
\nbeen filed with the SEC but that are required to be filed, to agreements,
\ndocuments or other instruments that previously had been filed by Proxim with the
\nSEC pursuant to the Securities Act or the Exchange Act.<\/p>\n
2.6 Absence of Certain Changes or Events. Since the date of the Proxim
\nBalance Sheet, there has not been: (i) any Material Adverse Effect on Proxim,
\n(ii) any change by Proxim in its accounting methods, principles or practices,
\nexcept as required by concurrent changes in GAAP, or (iii) any revaluation by
\nProxim of any of its assets, including, without limitation, writing down the
\nvalue of capitalized inventory or writing off notes or accounts receivable other
\nthan in the ordinary course of business.<\/p>\n
2.7 Taxes.<\/p>\n
(a) Definition of Taxes. For the purposes of this Agreement,
\n“TAX” or “TAXES” refers to any and all federal, state, local and foreign taxes,
\nassessments and other governmental charges, duties, impositions and liabilities,
\nincluding taxes based upon or measured by gross receipts, income, profits,
\nsales, use and occupation, and value added, ad valorem, transfer, franchise,
\nwithholding, payroll, recapture, employment, excise and property taxes, together
\nwith all interest, penalties and additions imposed with respect to such amounts.<\/p>\n
(b) Tax Returns and Audits.<\/p>\n
(i) Proxim and each of its subsidiaries have timely filed all
\nfederal, state, local and foreign returns, estimates, information statements and
\nreports (“RETURNS”) relating to Taxes required to be filed by Proxim and each of
\nits subsidiaries with any Tax authority, except such Returns that are not
\nmaterial to Proxim. Such Returns are true and correct in all material respects
\nand have been completed in accordance with applicable law. Proxim and each of
\nits subsidiaries have paid all Taxes shown to be due on such Returns.<\/p>\n
(ii) Proxim and each of its subsidiaries as of the Effective
\nTime will have withheld with respect to its employees (and timely paid over to
\nthe appropriate Taxing authority) all federal and state income taxes, Taxes
\npursuant to the Federal Insurance Contribution Act (“FICA”) and the Federal
\nUnemployment Tax Act (“FUTA”) and other Taxes required to be withheld, except
\nsuch Taxes that are not material to Proxim.<\/p>\n
(iii) Neither Proxim nor any of its subsidiaries has been
\ndelinquent in the payment of any material Tax nor is there any material Tax
\ndeficiency or adjustment outstanding,<\/p>\n
-10-<\/p>\n
proposed or assessed against Proxim or any of its subsidiaries, nor has Proxim
\nor any of its subsidiaries executed any unexpired waiver of any statute of
\nlimitations on or extending the period for the assessment or collection of any
\nmaterial Tax.<\/p>\n
(iv) No audit or other examination of any material Return of
\nProxim or any of its subsidiaries by any Tax authority is presently in progress,
\nnor has Proxim or any of its subsidiaries been notified in writing of any
\nrequest for such an audit or other examination.<\/p>\n
(v) As of September 30, 2001, neither Proxim nor any of its
\nsubsidiaries has any liability for any material unpaid Taxes that has not been
\naccrued or reserved on the Proxim Balance Sheet in accordance with GAAP, whether
\nasserted or unasserted, contingent or otherwise. Since September 30, 2001,
\nneither Proxim nor any of its subsidiaries has incurred any liability for any
\nmaterial Taxes other than in the ordinary course of business.<\/p>\n
(vi) There is no contract, agreement, plan or arrangement to
\nwhich Proxim or any of its subsidiaries is a party as of the date of this
\nAgreement, including but not limited to the provisions of this Agreement,
\ncovering any employee or former employee of Proxim or any of its subsidiaries
\nthat, individually or collectively, would reasonably be expected to give rise to
\nthe payment of any amount in excess of $250,000 that would not be deductible
\npursuant to Sections 280G, 404 or 162(m) of the Code. There is no contract,
\nagreement, plan or arrangement to which Proxim is a party or by which it is
\nbound to compensate any individual for excise taxes paid pursuant to Section
\n4999 of the Code.<\/p>\n
(vii) Neither Proxim nor any of its subsidiaries (a) is party
\nto or has any obligation under any Tax sharing, indemnity or allocation
\nagreement or arrangement, (b) has ever been a member of an affiliated group
\n(within the meaning of Code Section 1504(a)) filing a consolidated federal
\nincome Tax Return (other than a group the common parent of which was Proxim), or
\n(c) has any liability for the Taxes of any person (other than Proxim or any of
\nits subsidiaries) under Treas. Reg. Section 1.1502-6 (or any similar provision
\nof state, local or foreign law), as a transferee or successor, by contract, or
\notherwise.<\/p>\n
(viii) Neither Proxim nor any of its subsidiaries has
\nconstituted either a “distributing corporation” or a “controlled corporation” in
\na distribution of stock intended to qualify for tax-free treatment under Section
\n355 of the Code (x) in the two years prior to the date of this Agreement or (y)
\nin a distribution which could otherwise constitute part of a “plan” or “series
\nof related transactions” (within the meaning of Section 355(e) of the Code) in
\nconjunction with the Merger.<\/p>\n
2.8 Proxim Intellectual Property. For the purposes of this Agreement,
\nthe following terms have the following definitions:<\/p>\n
“INTELLECTUAL PROPERTY” shall mean any or all of the following and all
\nrights in, arising out of, or associated therewith: (i) all United States,
\ninternational and foreign patents and applications therefor and all reissues,
\ndivisions, renewals, extensions, provisionals, continuations and
\ncontinuations-in-part thereof (“PATENTS”); (ii) all inventions (whether
\npatentable or not), invention<\/p>\n
-11-<\/p>\n
disclosures, improvements, trade secrets, proprietary information, know how,
\ntechnology, technical data and customer lists, and all documentation relating to
\nany of the foregoing; (iii) all copyrights, copyrights registrations and
\napplications therefor, and all other rights corresponding thereto throughout the
\nworld (“COPYRIGHTS”); (iv) all industrial designs and any registrations and
\napplications therefor throughout the world; (v) all trade names, logos, common
\nlaw trademarks and service marks, trademark and service mark registrations and
\napplications therefor throughout the world (“TRADEMARKS”); (vi) all databases
\nand data collections and all rights therein throughout the world; (vii) all
\nmoral and economic rights of authors and inventors, however denominated,
\nthroughout the world, and (viii) any similar or equivalent rights to any of the
\nforegoing anywhere in the world.<\/p>\n
“REGISTERED INTELLECTUAL PROPERTY” means all United States,
\ninternational and foreign: (i) Patents (including applications and provisional
\napplications); (ii) registered Trademarks, applications to register Trademarks,
\nintent-to-use applications, or other registrations or applications related to
\nTrademarks; (iii) registered Copyrights and applications for Copyright
\nregistration; and (iv) any other Intellectual Property that is the subject of an
\napplication, certificate, filing, registration or other document issued, filed
\nwith, or recorded by any state, government or other public legal authority.<\/p>\n
“PROXIM INTELLECTUAL PROPERTY” shall mean any Intellectual Property that
\nis owned or used by Proxim in the conduct of its business, as currently
\nconducted and currently proposed to be conducted.<\/p>\n
“PROXIM REGISTERED INTELLECTUAL PROPERTY” means all of the Registered
\nIntellectual Property owned by, or filed in the name of, Proxim or any of its
\nsubsidiaries.<\/p>\n
(a) Except with respect to Proxim Registered Intellectual
\nProperty that Proxim intentionally abandoned and\/or is no longer used by or
\nintended to be used by Proxim which exception shall include, without limitation,
\nProxim Registered Intellectual Property acquired in its acquisitions of Card
\nAccess, Inc., Wavespan, Inc., and Farallon Communications, Inc., Schedule 2.8(a)
\nlists all Registered Intellectual Property owned by, filed in the name of, or
\napplied for, by Proxim (the “PROXIM REGISTERED INTELLECTUAL PROPERTY RIGHTS”)
\nand lists any proceedings or actions before any court, tribunal (including the
\nUnited States Patent and Trademark Office (the “PTO”) or equivalent authority
\nanywhere in the world) related to any of Proxim Registered Intellectual Property
\nRights.<\/p>\n
(b) During the five (5)-year period immediately prior to the date
\nhereof and, to the knowledge of Proxim after reasonable inquiry, during any time
\nprior to the five (5)-year period immediately preceding the date hereof, no
\nProxim Intellectual Property or product or service that is owned by Proxim or
\nany of its subsidiaries is currently or was subject to any order, judgment, or
\ndecree brought against it that restricted in any manner the use, transfer, or
\nlicensing thereof by Proxim or any of its subsidiaries in a manner that would
\nreasonably be expected to have a Material Adverse Effect or that limits the
\nownership, the validity, use or enforceability of any Proxim Intellectual
\nProperty that is owned by Proxim in a manner that would reasonably be expected
\nto have a Material Adverse Effect.<\/p>\n
-12-<\/p>\n
(c) Except with respect to Proxim Registered Intellectual
\nProperty that Proxim intentionally abandoned and\/or is no longer used by or
\nintended to be used by Proxim which exception shall include, without limitation,
\nProxim Registered Intellectual Property acquired in its acquisitions of Card
\nAccess, Inc., Wavespan, Inc., and Farallon Communications, Inc., each material
\nitem of Proxim Registered Intellectual Property is valid and subsisting, all
\nnecessary registration, maintenance and renewal fees currently due in connection
\nwith such Proxim Registered Intellectual Property have been made and all
\nnecessary documents, recordations and certificates in connection with such
\nProxim Registered Intellectual Property have been filed with the PTO or United
\nStates Copyright Office and other equivalent authorities in foreign
\njurisdictions, as the case may be, for the purposes of maintaining such Proxim
\nRegistered Intellectual Property. Except as set forth on Schedule 2.8(c), there
\nare no actions that must be taken by Proxim within ninety (90) days of the
\nClosing Date, including the payment of any registration, maintenance or renewal
\nfees or the filing of any responses to PTO office actions, documents,
\napplications or certificates for the purposes of obtaining, maintaining,
\nperfecting or preserving or renewing any Registered Intellectual Property
\nRights.<\/p>\n
(d) Other than inbound “shrink-wrap” and similar publicly
\navailable commercial binary code end-user licenses, Section 2.8(d) of the Proxim
\nSchedules lists all material contracts, licenses and agreements to which Proxim
\nand any of its subsidiaries is a party with respect to any material Proxim
\nIntellectual Property (“PROXIM MATERIAL IP CONTRACTS”).<\/p>\n
(e) Proxim owns and has good and exclusive title to, or has
\nlicense (sufficient for the conduct of its business as currently conducted and
\nas proposed to be conducted) to use each material item of Proxim Intellectual
\nProperty, free and clear of any lien or encumbrance; provided, however, that
\nclaims of infringement or misappropriation of Proxim Intellectual Property shall
\nnot be deemed liens or encumbrances for the purpose of this Section 2.8(e).<\/p>\n
(f) With respect to material Proxim Intellectual Property owned
\nby Proxim that has been developed or created by a third party for Proxim or any
\nof its subsidiaries, Proxim has a written agreement with such third party with
\nrespect thereto, whereby Proxim has obtained ownership of all such material
\nProxim Intellectual Property as between Proxim and the third party, and is the
\nexclusive owner of all of that third party’s rights in such material Proxim
\nIntellectual Property.<\/p>\n
(g) Except as set forth on Schedule 2.8(g), in the five (5) years
\nprior to the date hereof, neither Proxim nor any of its subsidiaries (i) has
\ntransferred ownership of any Intellectual Property that was material Proxim
\nIntellectual Property to any third party, or (ii) granted any exclusive license
\nwith respect to any Intellectual Property that is or was material Proxim
\nIntellectual Property owned by Proxim, to any third party.<\/p>\n
(h) To the knowledge of Proxim after reasonable inquiry, all
\nProxim Material IP Contracts are in full force and effect. Except as set forth
\nin Schedule 2.8(h), to the knowledge of Proxim after reasonable inquiry, the
\nconsummation of the transactions contemplated by this Agreement will neither
\nviolate nor result in the breach, modification, cancellation, termination or
\nsuspension of any Proxim Material IP Contract. Proxim and each of its
\nsubsidiaries is in<\/p>\n
-13-<\/p>\n
material compliance with, and has not materially breached any term of any Proxim
\nMaterial IP Contract and, to the knowledge of Proxim after reasonable inquiry,
\nall other parties to such Proxim Material IP Contracts are in compliance with,
\nand have not materially breached any term of such Proxim Material IP Contracts.<\/p>\n
(i) Following the Closing Date, the Surviving Corporation will be
\npermitted to exercise all of Proxim’s and each of its subsidiaries’ rights under
\nsuch Proxim Material IP Contracts (a) to the same extent Proxim and its
\nsubsidiaries would have been able to had the transactions contemplated by this
\nAgreement not occurred, and (b) without the payment of any additional amounts or
\nconsideration other than the same amount of ongoing fees, royalties or payments
\nwhich Proxim or its subsidiaries would otherwise be required to pay. Except as
\nset forth in Schedule 2.8(i), neither this Agreement nor the transactions
\ncontemplated by this Agreement, including the assignment to Western Multiplex or
\nMerger Sub by operation of law or otherwise of any Proxim Material IP Contracts
\nwill result in (x) either Western Multiplex’s or the Merger Sub’s granting to
\nany third party any right to or with respect to any material Intellectual
\nProperty that is owned by Proxim; or (y) either Western Multiplex’s or the
\nMerger Sub’s being bound by, or subject to, any non-compete or other material
\nrestriction on the operation or scope of their respective businesses.<\/p>\n
(j) To the knowledge of Proxim after reasonable inquiry, the
\nproducts, services and the operation of the business of Proxim and its
\nsubsidiaries as such business currently is conducted, including Proxim’s and its
\nsubsidiaries’ design, development, manufacture, marketing and sale of the
\nproducts or services of Proxim and its subsidiaries (including products
\ncurrently under development) has not and does not infringe, misappropriate or
\notherwise violate the Intellectual Property of any third party or, to the
\nknowledge of Proxim after reasonable inquiry, constitute unfair competition or
\ntrade practices under the laws of any jurisdiction.<\/p>\n
(k) Except as set forth in Schedule 2.8(k), neither Proxim nor
\nany of its subsidiaries has received notice from any third party alleging that
\nthe operation of the business of Proxim or any of its subsidiaries or any act,
\nproduct or service of Proxim or any of its subsidiaries, infringes,
\nmisappropriates or otherwise violates the Intellectual Property of any third
\nparty or constitutes unfair competition or trade practices under the laws of any
\njurisdiction in a manner that would reasonably be expected to have a Material
\nAdverse Effect.<\/p>\n
(l) Proxim and each of its subsidiaries has taken reasonable
\nsteps to protect Proxim’s and its subsidiaries’ rights in all confidential
\ninformation and trade secrets of Proxim, and of third parties provided to Proxim
\nor any of its subsidiaries, and, without limiting the foregoing, each of Proxim
\nand its subsidiaries has and enforces a practice requiring each employee to
\nexecute a proprietary information\/confidentiality agreement substantially in the
\nform provided to Western Multiplex. All employees who worked for Proxim since
\nNovember 1, 1999 have (i) executed invention assignment agreements sufficient to
\nirrevocably transfer all rights in any Intellectual Property developed by such
\nemployees to Proxim; and (ii) executed proprietary\/confidential information
\nagreements pursuant to which they agreed to maintain as confidential all Proxim
\nproprietary information. Except as set forth in Schedule 2.8(l), all employees
\nwho are listed as inventors on any Patents (including applications and
\nprovisionals) that are Proxim Registered<\/p>\n
-14-<\/p>\n
Intellectual Property have signed invention assignment agreements sufficient to
\nirrevocably transfer all such employee’s rights in any such Proxim Patents to
\nProxim. Proxim has no knowledge or notice of any adverse claim of ownership of
\nany Proxim Intellectual Property that is owned by Proxim by any past employee of
\nProxim and, to the knowledge of Proxim, there is no valid basis for any such
\nclaim.<\/p>\n
2.9 Compliance; Permits; Restrictions.<\/p>\n
(a) Neither Proxim nor any of its subsidiaries nor the conduct of
\ntheir respective businesses is, in any material respect, in conflict with, or in
\ndefault or violation of, (i) any Legal Requirement applicable to Proxim or any
\nof its subsidiaries or by which its or any of their respective businesses or
\nproperties is bound or affected, or (ii) any material note, bond, mortgage,
\nindenture, contract, agreement, lease, license, permit, franchise or other
\ninstrument or obligation to which Proxim or any of its subsidiaries is a party
\nor by which Proxim or any of its subsidiaries or its or any of their respective
\nbusinesses or properties is bound or affected. No investigation or review by any
\nGovernmental Entity is pending or, to the Knowledge of Proxim, threatened
\nagainst Proxim or its subsidiaries, nor has any Governmental Entity indicated to
\nProxim an intention to conduct the same. There is no agreement, judgment,
\ninjunction, order or decree binding upon Proxim or any of its subsidiaries which
\nhas or could reasonably be expected to have the effect of prohibiting or
\nmaterially impairing any business practice of Proxim or any of its subsidiaries,
\nany acquisition of material property by Proxim or any of its subsidiaries or the
\nconduct of business by Proxim as currently conducted.<\/p>\n
(b) Proxim and its subsidiaries hold all permits, licenses,
\nvariances, exemptions, orders and approvals from governmental authorities that
\nare material to the operation of the business of Proxim (collectively, the
\n“PROXIM PERMITS”). Proxim and its subsidiaries are in compliance in all material
\nrespects with the terms of the Proxim Permits.<\/p>\n
2.10 Litigation. Except as set forth in Schedule 2.10, as of the date of
\nthis Agreement, there is no action, suit, proceeding, claim, arbitration or
\ninvestigation (“ACTION”) pending, or as to which Proxim or any of its
\nsubsidiaries has received any notice of assertion nor, to Proxim’s Knowledge, is
\nthere a threatened Action against Proxim or any of its subsidiaries that
\nreasonably would be likely to be material to Proxim or any of its subsidiaries,
\nor which in any manner challenges or seeks to prevent, enjoin, alter or delay
\nany of the transactions contemplated by this Agreement. Except for those facts
\nand information not disclosed by Proxim or Proxim’s outside counsel because
\nProxim or Proxim’s outside counsel reasonably believed that such facts and
\ninformation were subject to a court ordered protective order, joint defense
\nagreement or attorney-client privilege, to the Knowledge of Proxim, Proxim and
\nProxim’s attorneys provided Western Multiplex and Western Multiplex’s outside
\ncounsel with facts and information as Proxim reasonably believes in good faith
\nare necessary to perform a reasonable evaluation of the potential outcome of the
\nActions described on Schedule 2.10. Without limiting the foregoing, the facts
\nand information not disclosed by Proxim by reason of any joint defense
\nagreement, court ordered protective order or attorney-client privilege are not
\ninconsistent in any material respect with the facts and information that have
\nbeen disclosed by Proxim to Western Multiplex.<\/p>\n
-15-<\/p>\n
2.11 Brokers’ and Finders’ Fees. Except for fees payable to JP Morgan
\nH&Q (“JP Morgan”) and Broadview International LLC (“BROADVIEW”) pursuant to
\nengagement letters dated December 23, 2001 and December 21, 2001, respectively,
\nProxim has not incurred, nor will it incur, directly or indirectly, any
\nliability for brokerage or finders’ fees or agents’ commissions or any similar
\ncharges in connection with this Agreement or any transaction contemplated
\nhereby.<\/p>\n
2.12 Employee Benefit Plans.<\/p>\n
(a) The employee compensation, severance, termination pay,
\ndeferred compensation, stock or stock-related awards, incentive, fringe or
\nbenefit plans, programs, policies, commitments or other arrangements (whether or
\nnot set forth in a written document and including, without limitation, all
\n“employee benefit plans” within the meaning of Section 3(3) of the Employee
\nRetirement Income Security Act of 1974, as amended (“ERISA”)) covering any
\nactive employee, former employee, director or consultant of Proxim, any
\nsubsidiary of Proxim or any trade or business (whether or not incorporated) that
\nis a member of a controlled group or that is under common control with Proxim
\nwithin the meaning of Section 414 of the Code (for purposes of Section 2.12 and
\nSection 3.12, an “AFFILIATE”), or with respect to which Proxim has or may in the
\nfuture have liability, are referred to herein as the “PROXIM PLANS.” Proxim
\nSchedule 2.12(a) contains a complete and accurate list of each of the Proxim
\nPlans. Proxim has provided to Western Multiplex: (i) correct and complete copies
\nof all documents embodying each Proxim Plan including (without limitation) all
\namendments thereto, all related trust documents, and all material written
\nagreements and contracts relating to each such Proxim Plan; (ii) the three (3)
\nmost recent annual reports (Form Series 5500 and all schedules and financial
\nstatements attached thereto), if any, required under ERISA or the Code in
\nconnection with each Proxim Plan; (iii) the most recent summary plan description
\ntogether with the summary(ies) of material modifications thereto, if any,
\nrequired under ERISA with respect to each Proxim Plan; (iv) all IRS
\ndetermination, opinion, notification and advisory letters; (v) all material
\ncorrespondence to or from any governmental agency relating to any Proxim Plan;
\n(vi) all COBRA forms and related notices and (vii) all discrimination tests for
\neach Proxim Plan for the most recent three (3) plan years.<\/p>\n
(b) Each Proxim Plan has been maintained and administered in all
\nmaterial respects in compliance with its terms and with the requirements
\nprescribed by any and all statutes, orders, rules and regulations (foreign or
\ndomestic), including ERISA and the Code, that are applicable to such Proxim
\nPlans. No suit, action or other litigation (excluding claims for benefits
\nincurred in the ordinary course of Proxim Plan activities) has been brought, or
\nto the Knowledge of Proxim is threatened, against or with respect to any such
\nProxim Plan. There are no audits, inquiries or proceedings pending or, to the
\nKnowledge of Proxim, threatened by the Internal Revenue Service (the “IRS”) or
\nDepartment of Labor (the “DOL”) with respect to any Proxim Plans. All
\ncontributions, reserves or premium payments required to be made or accrued as of
\nthe date hereof to the Proxim Plans have been timely made or accrued. Section
\n2.12(b) of the Proxim Disclosure Letter includes a listing of the accrued
\nvacation liability of Proxim as of January 3, 2002. Any Proxim Plan intended to
\nbe qualified under Section 401(a) of the Code and each trust intended to qualify
\nunder Section 501(a) of the Code (i) has either obtained a favorable
\ndetermination, notification, advisory and\/or opinion letter, as applicable, as
\nto its qualified status from the IRS or<\/p>\n
-16-<\/p>\n
still has a remaining period of time under applicable Treasury Regulations or
\nIRS pronouncements in which to apply for such letter and to make any amendments
\nnecessary to obtain a favorable determination, and (ii) incorporates or has been
\namended to incorporate all provisions required to comply with the Tax Reform Act
\nof 1986 and subsequent legislation. Proxim does not have any plan or commitment
\nto establish any new Proxim Plan, to modify any Proxim Plan (except to the
\nextent required by law or to conform any such Proxim Plan to the requirements of
\nany applicable law, in each case as previously disclosed to Western Multiplex in
\nwriting, or as required by this Agreement), or to enter into any new Proxim
\nPlan. Each Proxim Plan can be amended, terminated or otherwise discontinued
\nafter the Effective Time in accordance with its terms, without liability to
\nWestern Multiplex, Proxim or any of its Affiliates (other than ordinary
\nadministration expenses).<\/p>\n
(c) Neither Proxim, any of its subsidiaries, nor any of their
\nAffiliates has at any time ever maintained, established, sponsored, participated
\nin, or contributed to any plan subject to Title IV of ERISA or Section 412 of
\nthe Code and at no time has Proxim contributed to or been requested to
\ncontribute to any “multiemployer plan,” as such term is defined in ERISA.
\nNeither Proxim nor any Affiliate has at any time ever maintained, established,
\nsponsored, participated in or contributed to any multiple employer plan, or to
\nany plan described in Section 413 of the Code. Neither Proxim, any of its
\nsubsidiaries, nor any officer or director of Proxim or any of its subsidiaries
\nis subject to any liability or penalty under Section 4975 through 4980B of the
\nCode or Title I of ERISA. No “prohibited transaction,” within the meaning of
\nSection 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise
\nexempt under Section 4975 of the Code or Section 408 of ERISA, has occurred with
\nrespect to any Proxim Plan.<\/p>\n
(d) Neither Proxim, any of its subsidiaries, nor any of their
\nAffiliates has, before the Effective Time and in any material respect, violated
\nany of the health continuation requirements of the Consolidated Omnibus Budget
\nReconciliation Act of 1985, as amended, the requirements of the Family Medical
\nLeave Act of 1993, as amended, or any similar provisions of state law applicable
\nto Proxim employees. None of the Proxim Plans promises or provides retiree
\nmedical or other retiree welfare benefits to any person except as required by
\napplicable law, and neither Proxim nor any of its subsidiaries has represented,
\npromised or contracted (whether in oral or written form) to provide such retiree
\nbenefits to any employee, former employee, director, consultant or other person,
\nexcept to the extent required by statute.<\/p>\n
(e) Neither Proxim nor any of its subsidiaries is bound by or
\nsubject to (and none of its respective assets or properties is bound by or
\nsubject to) any arrangement with any labor union. No employee of Proxim or any
\nof its subsidiaries is represented by any labor union or covered by any
\ncollective bargaining agreement and, to the Knowledge of Proxim, no campaign to
\nestablish such representation is in progress. There is no pending or, to the
\nKnowledge of Proxim, threatened labor dispute involving Proxim or any of its
\nsubsidiaries and any group of its employees nor has Proxim or any of its
\nsubsidiaries experienced any labor interruptions over the past three (3) years,
\nand Proxim and its subsidiaries consider their relationships with their
\nemployees to be good. Proxim (i) is in compliance in all respects with all
\napplicable foreign, federal, state and local laws, rules and regulations
\nrespecting employment, employment practices, terms and conditions of employment
\nand wages and hours, in each case, with respect to its current or former
\nemployees; (ii) has withheld and<\/p>\n
-17-<\/p>\n
reported all amounts required by law or by agreement to be withheld and reported
\nwith respect to wages, salaries and other payments to its current or former
\nemployees; (iii) is not liable for any arrears of wages or any taxes or any
\npenalty for failure to comply with any of the foregoing; and (iv) is not liable
\nfor any payment to any trust or other fund governed by or maintained by or on
\nbehalf of any governmental authority, with respect to unemployment compensation
\nbenefits, social security or other benefits or obligations for its current and
\nformer employees (other than routine payments to be made in the normal course of
\nbusiness and consistent with past practice). There are no pending, threatened or
\nreasonably anticipated claims or actions against Proxim under any worker’s
\ncompensation policy or long-term disability policy.<\/p>\n
(f) Neither the execution and delivery of this Agreement nor the
\nconsummation of the transactions contemplated hereby will (either alone or upon
\nthe occurrence of any additional or subsequent events) (i) result in any payment
\n(including severance, unemployment compensation, golden parachute, forgiveness
\nof indebtedness, bonus or otherwise) becoming due to any stockholder, director
\nor employee of Proxim or any of its subsidiaries under any Proxim Plan or
\notherwise, (ii) materially increase any benefits otherwise payable under any
\nProxim Plan, or (iii) result in the acceleration of the time of payment or
\nvesting of any such benefits.<\/p>\n
(g) No payment or benefit which will or may be made by Proxim or
\nits Affiliates with respect to any employee or any other “disqualified
\nindividual” (as defined in Code Section 280G and the regulations thereunder)
\nwill be characterized as a “parachute payment,” within the meaning of Code
\nSection 280G(B)(2).<\/p>\n
2.13 Absence of Liens and Encumbrances. Proxim and each of its
\nsubsidiaries has good and valid title to, or, in the case of leased properties,
\nincluding the Proxim Leases, valid leasehold interests in, all of its tangible
\nproperties and assets, real, personal and mixed, used in its business, free and
\nclear of any liens or encumbrances except as reflected in the Proxim Financials
\nand except for liens for taxes not yet due and payable and such imperfections of
\ntitle and encumbrances, if any, which would not be material to Proxim.<\/p>\n
2.14 Environmental Matters.<\/p>\n
(a) Hazardous Material. Except as reasonably would not be likely
\nto result in a material liability to Proxim, no underground storage tanks and no
\namount of any substance that has been designated by any Governmental Entity or
\nby applicable federal, state or local law to be radioactive, toxic, hazardous or
\notherwise a danger to health or the environment, including without limitation,
\nPCBs, asbestos, petroleum, urea-formaldehyde and all substances listed as
\nhazardous substances pursuant to the Comprehensive Environmental Response,
\nCompensation, and Liability Act of 1980, as amended, or defined as a hazardous
\nwaste pursuant to the United States Resource Conservation and Recovery Act of
\n1976, as amended, and the regulations promulgated pursuant to said laws, but
\nexcluding office and janitorial supplies (a “HAZARDOUS MATERIAL”), are present,
\nas a result of the actions of Proxim, or its subsidiaries or any affiliate of
\nProxim, or, to the Knowledge of Proxim, as a result of any actions of any third
\nparty or otherwise, in, on or under any property, including the land and the
\nimprovements, ground water and surface water thereof, that Proxim or any of its
\nsubsidiaries has at any time owned, operated, occupied or leased.<\/p>\n
-18-<\/p>\n
(b) Hazardous Materials Activities. Except as reasonably would
\nnot be likely to result in a material liability to Proxim (in any individual
\ncase or in the aggregate), (i) neither Proxim nor any of its subsidiaries has
\ntransported, stored, used, manufactured, disposed of, released or exposed its
\nemployees or others to Hazardous Materials in violation of any law in effect on
\nor before the Closing Date, and (ii) neither Proxim nor any of its subsidiaries
\nhas disposed of, transported, sold, used, released, exposed its employees or
\nothers to or manufactured any product containing a Hazardous Material
\n(collectively, “HAZARDOUS MATERIALS ACTIVITIES”) in violation of any law, rule,
\nregulation, treaty or statute promulgated by any Governmental Entity in effect
\non or prior to or as of the Closing Date to prohibit, regulate or control
\nHazardous Materials or any Hazardous Material Activity or in a manner that would
\nbe likely to result in material liability to Proxim.<\/p>\n
(c) Permits. Except as reasonably would not be likely to result
\nin a material liability to Proxim, Proxim and its subsidiaries currently hold
\nall environmental approvals, permits, licenses, clearances and consents (the
\n“PROXIM ENVIRONMENTAL PERMITS”) necessary for the conduct of Proxim’s and its
\nsubsidiaries’ Hazardous Material Activities and other businesses of Proxim and
\nits subsidiaries as such activities and businesses are currently being
\nconducted.<\/p>\n
(d) Environmental Liabilities. No action, proceeding, revocation
\nproceeding, amendment procedure, writ, injunction or claim is pending, or to
\nProxim’s Knowledge, threatened concerning any Proxim Environmental Permit,
\nHazardous Material or any Hazardous Materials Activity of Proxim or any of its
\nsubsidiaries.<\/p>\n
2.15 Labor Matters. (i) There are no controversies pending or, to the
\nKnowledge of each of Proxim and its respective subsidiaries, threatened, between
\nProxim or any of its subsidiaries and any of their respective employees or
\nformer employees; (ii) as of the date of this Agreement, neither Proxim nor any
\nof its subsidiaries is a party to any collective bargaining agreement or other
\nlabor union contract applicable to persons employed by Proxim or its
\nsubsidiaries nor does Proxim or its subsidiaries know of any activities or
\nproceedings of any labor union to organize any such employees; and (iii) as of
\nthe date of this Agreement, neither Proxim nor any of its subsidiaries has any
\nKnowledge of any strikes, slowdowns, work stoppages or lockouts, or threats
\nthereof, by or with respect to any employees of Proxim or any of its
\nsubsidiaries.<\/p>\n
2.16 Agreements, Contracts and Commitments. The following agreements,
\ncontracts or commitments with respect to which Proxim or one of its subsidiaries
\nis a party or is bound are referred to herein as the “PROXIM CONTRACTS”:<\/p>\n
(a) any employment or consulting agreement, contract or
\ncommitment with any officer or director or higher level employee or member of
\nProxim’s Board of Directors, other than those that are terminable by Proxim or
\nany of its subsidiaries on no more than thirty (30) days’ notice without
\nliability or financial obligation to Proxim;<\/p>\n
(b) any agreement or plan, including, without limitation, any
\nstock option plan, stock appreciation right plan or stock purchase plan, any of
\nthe benefits of which will be increased, or the vesting of benefits of which
\nwill be accelerated, by the occurrence of any of the transactions<\/p>\n
-19-<\/p>\n
contemplated by this Agreement or the value of any of the benefits of which will
\nbe calculated on the basis of any of the transactions contemplated by this
\nAgreement;<\/p>\n
(c) any agreement of indemnification or any guaranty other than
\nany agreement of indemnification entered into in connection with the sale or
\nlicense of software products in the ordinary course of business;<\/p>\n
(d) any agreement, contract or commitment containing any covenant
\nlimiting in any respect the right of Proxim or any of its subsidiaries to engage
\nin any line of business or to compete with any person or granting any exclusive
\ndistribution rights;<\/p>\n
(e) any agreement, contract or commitment currently in force
\nrelating to the disposition or acquisition by Proxim or any of its subsidiaries
\nafter the date of this Agreement of assets in excess of $250,000 not in the
\nordinary course of business or pursuant to which Proxim has any material
\nownership interest in any corporation, partnership, joint venture or other
\nbusiness enterprise other than Proxim’s subsidiaries;<\/p>\n
(f) any dealer, distributor, joint marketing or development
\nagreement currently in force under which Proxim or any of its subsidiaries have
\ncontinuing material obligations to jointly market any product, technology or
\nservice and which may not be canceled without penalty upon notice of ninety (90)
\ndays or less, or any material agreement pursuant to which Proxim or any of its
\nsubsidiaries have continuing material obligations to jointly develop any
\nintellectual property that will not be owned, in whole or in part, by Proxim or
\nany of its subsidiaries and which may not be canceled without penalty upon
\nnotice of ninety (90) days or less;<\/p>\n
(g) any material agreement, contract or commitment currently in
\nforce to license any third party to manufacture or reproduce any Proxim product
\nor service or any material agreement, contract or commitment currently in force
\nto sell or distribute any Proxim products or service, including any Proxim
\nMaterial IP Contract, except agreements with distributors or sales
\nrepresentative in the normal course of business cancelable without penalty upon
\nnotice of ninety (90) days or less and substantially in the form previously
\nprovided to Western Multiplex;<\/p>\n
(h) any mortgages, indentures, guarantees, loans or credit
\nagreements, security agreements or other agreements or instruments relating to
\nthe borrowing of money or extension of credit;<\/p>\n
(i) any settlement agreement; provided that a Proxim Contract
\nshall not include any settlement agreement entered into more than five (5) years
\nbefore the date of this Agreement; or<\/p>\n
(j) any other agreement, contract or commitment (i) in connection
\nwith or pursuant to which Proxim and its subsidiaries will spend or receive (or
\nare expected to spend or receive), in the aggregate, more than $250,000 during
\nthe current calendar year or during the next calendar year, (ii) the
\ntermination, expiration or loss of the counterparty’s performance of which could
\nreasonably be expected to have a Material Adverse Effect on Proxim or (iii) that
\nis a material contract (as defined in Item 601(b)(10) of Regulation S-K of the
\nSEC rules).<\/p>\n
-20-<\/p>\n
Neither Proxim nor any of its subsidiaries, nor to Proxim’s Knowledge
\nany other party to a Proxim Contract, is in material breach, violation or
\ndefault under, and neither Proxim nor any of its subsidiaries has received
\nwritten notice that it has materially breached, violated or defaulted under, any
\nof the terms or conditions of any Proxim Contract in such a manner as would
\npermit any other party to cancel or terminate any such Proxim Contract, or would
\npermit any other party to seek material damages or other remedies (for any or
\nall of such breaches, violations or defaults, in the aggregate).<\/p>\n
2.17 Title to Proxim Properties. Proxim owns no real property nor has it
\never owned any real property. All current Proxim leases, subleases or other
\noccupancy contracts or agreements and each amendment or other modification
\nthereto (the “PROXIM LEASES”) are in full force and effect and are valid and
\nenforceable. Proxim is not in breach of or in default under any of such current
\nProxim Leases and no event or condition has occurred which could (with the
\ngiving of notice or the passage of time or both) constitute a breach of or
\ndefault by Proxim under any such current Proxim Lease. To Proxim’s Knowledge, no
\nother party to any such current Proxim Lease is in breach of or in default under
\nany such current Proxim Leases and no event or condition has occurred which
\ncould (with the giving of notice or the passage of time or both) constitute a
\nbreach of or default by Proxim under any such current Proxim Lease. No party
\nother than Proxim has the right to occupy any Proxim real property currently
\nleased or otherwise occupied by Proxim.<\/p>\n
2.18 Statements; Joint Proxy Statement\/Prospectus. None of the
\ninformation supplied or to be supplied by Proxim for inclusion or incorporation
\nby reference in (i) the Registration Statement (as defined in Section 2.4(b))
\nwill at the time it becomes effective under the Securities Act, contain any
\nuntrue statement of a material fact or omit to state any material fact required
\nto be stated therein or necessary in order to make the statements therein not
\nmisleading and (ii) the joint proxy statement\/prospectus to be sent to the
\nstockholders of Proxim and stockholders of Western Multiplex in connection with
\nthe meeting of Proxim’s stockholders to consider adoption of this Agreement (the
\n“PROXIM STOCKHOLDERS’ MEETING”) and in connection with the meeting of Western
\nMultiplex’s stockholders to consider the approval of the Share Issuance pursuant
\nto the terms of the Merger (the “WESTERN MULTIPLEX STOCKHOLDERS’ Meeting”) (such
\nproxy statement\/prospectus as amended or supplemented is referred to herein as
\nthe “JOINT PROXY STATEMENT\/PROSPECTUS”) shall not, on the date the Joint Proxy
\nStatement\/Prospectus is first mailed to Proxim’s stockholders and Western
\nMultiplex’s stockholders, at the time of the Proxim Stockholders’ Meeting or the
\nWestern Multiplex Stockholders’ Meeting and at the Effective Time, contain any
\nuntrue statement of a material fact or omit to state any material fact required
\nto be stated therein or necessary in order to make the statements therein, in
\nlight of the circumstances under which they are made, not false or misleading,
\nor omit to state any material fact necessary to correct any statement in any
\nearlier communication with respect to the solicitation of proxies for the Proxim
\nStockholders’ Meeting or the Western Multiplex Stockholders’ Meeting which has
\nbecome false or misleading. The Joint Proxy Statement\/Prospectus will comply as
\nto form in all material respects with the provisions of the Exchange Act and the
\nrules and regulations thereunder. If at any time before the Effective Time, any
\nevent relating to Proxim or any of its affiliates, officers or directors should
\nbe discovered by Proxim which should be set forth in an amendment to the
\nRegistration Statement or a supplement to the Joint Proxy Statement\/Prospectus,
\nProxim shall promptly inform Western Multiplex.<\/p>\n
-21-<\/p>\n
Notwithstanding the foregoing, Proxim makes no representation or warranty with
\nrespect to any information supplied by Western Multiplex or Merger Sub that is
\ncontained in any of the foregoing documents.<\/p>\n
2.19 Board Approval. The Board of Directors of Proxim (i) has determined
\nthat the Merger is advisable, consistent with and in furtherance of the
\nlong-term business strategy of Proxim and fair to, and in the best interests of,
\nProxim and its stockholders, (ii) has approved this Agreement, the Merger and
\nthe other transactions contemplated by this Agreement and deemed this Agreement
\nadvisable and (iii) has determined to recommend adoption of this Agreement by
\nthe stockholders of Proxim (collectively, the “PROXIM BOARD RECOMMENDATION”).<\/p>\n
2.20 Opinion of Financial Advisors. The Board of Directors of Proxim has
\nreceived an opinion from each of JP Morgan and Broadview, dated the date of this
\nAgreement, to the effect that, as of such date, the Exchange Ratio is fair, from
\na financial point of view, to Proxim’s stockholders, a signed copy of which
\nopinions will be delivered to Western Multiplex solely for informational
\npurposes as promptly as practicable after receipt thereof by Proxim.<\/p>\n
2.21 Vote Required. The affirmative vote of a majority of the votes that
\nholders of the outstanding shares of Proxim Common Stock are entitled to vote
\nwith respect to the Merger is the only vote of the holders of any class or
\nseries of Proxim’s capital stock necessary to adopt this Agreement and approve
\nthe transactions contemplated hereby.<\/p>\n
2.22 State Takeover Statutes. The Board of Directors of Proxim has
\napproved this Agreement and the Proxim Voting Agreements and the Merger and the
\nother transactions contemplated hereby and thereby, and such approval is
\nsufficient to render inapplicable to the Merger, and the other transactions
\ncontemplated hereby and thereby the restrictions contained in Section 203 of the
\nDelaware Law to the extent, if any, such restrictions would otherwise be
\napplicable to the Merger, this Agreement and the Proxim Voting Agreements and
\nthe other transactions contemplated by this Agreement and the Proxim Voting
\nAgreements. No other state takeover statute or similar statute or regulation
\napplies to or purports to apply to the Merger, this Agreement, the Proxim Voting
\nAgreements or the transactions contemplated hereby and thereby.<\/p>\n
2.23 Proxim Rights Agreement. The Proxim Board has amended (in the form
\nprovided to Western Multiplex) the Preferred Shares Rights Agreement entered
\ninto as of March 31, 1997 (and amended and restated as of July 9, 1997) between
\nProxim and the First National Bank of Boston (the “PROXIM RIGHTS AGREEMENT”) so
\nthat none of Western Multiplex, Merger Sub or any of their respective affiliates
\nshall become an “Acquiring Person,” and no “Distribution Date” or “Triggering
\nEvent” (as such terms are defined in the Proxim Rights Agreement) will occur as
\na result of the approval, execution or delivery of this Agreement or the Proxim
\nVoting Agreements or the consummation of the transactions contemplated hereby
\nand thereby. The Proxim Rights Agreement and the outstanding rights thereunder
\n(the “PROXIM RIGHTS”) shall terminate and be of no further force or effect as of
\nimmediately prior to the Effective Time, without any consideration being payable
\nwith respect to the outstanding Proxim Rights thereunder.<\/p>\n
-22-<\/p>\n
ARTICLE III
\n REPRESENTATIONS AND WARRANTIES OF WESTERN MULTIPLEX AND MERGER SUB<\/p>\n
Western Multiplex and Merger Sub represent and warrant to Proxim,
\nsubject to the exceptions specifically disclosed in the disclosure letter
\nsupplied by Western Multiplex to Proxim (the “WESTERN MULTIPLEX DISCLOSURE
\nLETTER”) and specific statements of historical fact disclosed in the Western
\nMultiplex SEC Reports (to the extent the relevance of the disclosure in the
\nWestern Multiplex SEC Report to a representation and warranty is reasonably
\napparent), as follows:<\/p>\n
3.1 Organization of Western Multiplex.<\/p>\n
(a) Western Multiplex and each of its subsidiaries is a
\ncorporation duly organized, validly existing and in good standing under the laws
\nof the jurisdiction of its incorporation; has the corporate power and authority
\nto own, lease and operate its assets and property and to carry on its business
\nas now being conducted and as proposed to be conducted; and is duly qualified to
\ndo business and in good standing as a foreign corporation in each jurisdiction
\nin which the failure to be so qualified, individually or in the aggregate, would
\nhave a Material Adverse Effect (as defined in Section 8.3) on Western
\nMultiplex.<\/p>\n
(b) Western Multiplex has delivered to Proxim a true and
\ncomplete list of all of Western Multiplex’s subsidiaries, indicating the
\njurisdiction of incorporation of each subsidiary and Western Multiplex’s equity
\ninterest therein.<\/p>\n
(c) Western Multiplex has delivered or made available to Proxim
\na true and correct copy of the Certificate of Incorporation and bylaws of
\nWestern Multiplex and similar governing instruments of each of its material
\nsubsidiaries, each as amended to date, and each such instrument is in full force
\nand effect. Neither Western Multiplex nor any of its subsidiaries is in
\nviolation of any of the provisions of its Certificate of Incorporation or bylaws
\nor equivalent governing instruments.<\/p>\n
3.2 Western Multiplex Capital Structure. As of January 15, 2002, the
\nauthorized capital stock of Western Multiplex consisted of (A) 200,000,000
\nshares of Western Multiplex Common Stock, of which (x) 58,930,747 shares were
\nissued and outstanding and (y) 42,000,000 shares were held in treasury; (B)
\n100,000,000 shares of Western Multiplex Class B Common Stock, par value $0.01
\nper share, of which no shares were issued and outstanding; and (C) 25,000,000
\nshares of preferred stock, par value $0.01 per share, of which no shares were
\nissued and outstanding. The authorized capital stock of Merger Sub consists of
\n1,000 shares of Common Stock, par value $0.01 per share, all of which, as of the
\ndate hereof, are issued and outstanding and are held by Western Multiplex. All
\noutstanding shares of Western Multiplex Common Stock are duly authorized,
\nvalidly issued, fully paid and nonassessable and are not subject to preemptive
\nrights created by statute, the Certificate of Incorporation or Bylaws of Western
\nMultiplex or any agreement or document to which Western Multiplex is a party or
\nby which it is bound. As of January 11, 2002, Western Multiplex had reserved an
\naggregate of 13,822,587 shares of Western Multiplex Common Stock, net of
\nexercises, for issuance to employees, consultants and non-employee directors
\npursuant to Western<\/p>\n
-23-<\/p>\n
Multiplex’s 1999 Stock Incentive Plan, 2000 Stock Option Plan for Non-Employee
\nDirectors, Ubiquity Communication equity incentive plans and the WirelessHome
\nPlatinum IP Stock Incentive Plan (the “WESTERN MULTIPLEX STOCK OPTION PLANS”),
\nunder which options are outstanding for 10,307,075 shares and under which
\n3,515,510 shares are available for grant as of January 11, 2002. All shares of
\nWestern Multiplex Common Stock subject to issuance as aforesaid, upon issuance
\non the terms and conditions specified in the instruments pursuant to which they
\nare issuable, would be duly authorized, validly issued, fully paid and
\nnonassessable.<\/p>\n
3.3 Obligations With Respect to Capital Stock. As of the date hereof,
\nexcept as set forth in Section 3.2, there are no equity securities, partnership
\ninterests or similar ownership interests of any class of Western Multiplex, or
\nany securities exchangeable or convertible into or exercisable for such equity
\nsecurities, partnership interests or similar ownership interests issued,
\nreserved for issuance or outstanding. As of the date hereof, except for
\nsecurities Western Multiplex owns, directly or indirectly through one or more
\nsubsidiaries, there are no equity securities, partnership interests or similar
\nownership interests of any class of any subsidiary of Western Multiplex, or any
\nsecurity exchangeable or convertible into or exercisable for such equity
\nsecurities, partnership interests or similar ownership interests issued,
\nreserved for issuance or outstanding. As of the date hereof, except as set forth
\nin Section 3.2, there are no options, warrants, equity securities, partnership
\ninterests or similar ownership interests, calls, rights (including preemptive
\nrights), commitments or agreements of any character to which Western Multiplex
\nor any of its subsidiaries is a party or by which it is bound obligating Western
\nMultiplex or any of its subsidiaries to issue, deliver or sell, or cause to be
\nissued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause
\nthe repurchase, redemption or acquisition, of any shares of capital stock of
\nWestern Multiplex or any of its subsidiaries or obligating Western Multiplex or
\nany of its subsidiaries to grant, extend, accelerate the vesting of or enter
\ninto any such option, warrant, equity security, partnership interest or similar
\nownership interest, call, right, commitment or agreement. There are no
\nregistration rights and, to the Knowledge of Western Multiplex there are no
\nvoting trusts, proxies or other agreements or understandings with respect to any
\nequity security of any class of Western Multiplex or with respect to any equity
\nsecurity, partnership interest or similar ownership interest of any class of any
\nof its subsidiaries.<\/p>\n
3.4 Authority.<\/p>\n
(a) Western Multiplex has all requisite corporate power and
\nauthority to enter into this Agreement and to consummate the transactions
\ncontemplated hereby. The execution and delivery of this Agreement and the
\nconsummation of the transactions contemplated hereby have been duly authorized
\nby all necessary corporate action on the part of Western Multiplex, subject only
\nto the approval of the Share Issuance by Western Multiplex’s stockholders and
\nthe filing and recordation of the Certificate of Merger pursuant to Delaware
\nLaw. This Agreement has been duly executed and delivered by Western Multiplex
\nand, assuming the due authorization, execution and delivery by Proxim and Merger
\nSub, constitutes the valid and binding obligation of Western Multiplex,
\nenforceable in accordance with its terms, except as enforceability may be
\nlimited by bankruptcy and other similar laws and general principles of equity.
\nThe execution and delivery of this Agreement by Western Multiplex does not, and
\nthe performance of this Agreement by Western<\/p>\n
-24-<\/p>\n
Multiplex will not, (i) conflict with or violate the Certificate of
\nIncorporation or bylaws of Western Multiplex or the equivalent organizational
\ndocuments of any of its subsidiaries, (ii) subject to obtaining the approval of
\nthe Share Issuance by Western Multiplex’s stockholders as contemplated in
\nSection 5.2 (the “WESTERN MULTIPLEX STOCKHOLDER APPROVAL”) and compliance with
\nthe requirements set forth in Section 3.4(b) below, conflict with or violate any
\nLegal Requirement applicable to Western Multiplex or any of its subsidiaries or
\nby which its or any of their respective properties is bound or affected, or
\n(iii) result in any breach of or constitute a default (or an event that with
\nnotice or lapse of time or both would become a default) under, or impair Western
\nMultiplex’s rights or alter the rights or obligations of Western Multiplex or
\nany third party under, or give to others any rights of termination, amendment,
\nacceleration or cancellation of, or result in the creation of a lien or
\nencumbrance on any of the properties, including any leased real property, or
\nassets of Western Multiplex or any of its subsidiaries pursuant to, any Western
\nMultiplex Contract (as defined in Section 3.16), except as individually or in
\nthe aggregate would not be reasonably expected to have a Material Adverse
\nEffect. The Western Multiplex Disclosure Letter list all material consents,
\nwaivers and approvals under any of Western Multiplex’s or any of its
\nsubsidiaries’ agreements, contracts, licenses or leases required to be obtained
\nin connection with the consummation of the transactions contemplated hereby.<\/p>\n
(b) No consent, approval, order or authorization of, or
\nregistration, declaration or filing with any Governmental Entity is required by
\nor with respect to Western Multiplex in connection with the execution and
\ndelivery of this Agreement or the consummation of the transactions contemplated
\nhereby, except for (i) the Necessary Consents and (ii) such other consents,
\nauthorizations, filings, approvals and registrations which, if not obtained or
\nmade, would not be material to Western Multiplex or Proxim or have a material
\nadverse effect on the ability of the parties to consummate the Merger.<\/p>\n
3.5 SEC Filings; Western Multiplex Financial Statements.<\/p>\n
(a) Western Multiplex has filed all forms, reports and documents
\nrequired to be filed by Western Multiplex with the SEC since August 4, 2000, and
\nhas made available to Proxim such forms, reports and documents in the form filed
\nwith the SEC. All such required forms, reports and documents (including those
\nthat Western Multiplex may file subsequent to the date hereof) are referred to
\nherein as the “WESTERN MULTIPLEX SEC REPORTS.” As of their respective dates, the
\nWestern Multiplex SEC Reports (i) were prepared in accordance with the
\nrequirements of the Securities Act or the Exchange Act, as the case may be, and
\nthe rules and regulations of the SEC thereunder applicable to such Western
\nMultiplex SEC Reports, and (ii) did not at the time they were filed (or if
\namended or superseded by a filing before the date of this Agreement, then on the
\ndate of such filing) contain any untrue statement of a material fact or omit to
\nstate a material fact required to be stated therein or necessary in order to
\nmake the statements therein, in the light of the circumstances under which they
\nwere made, not misleading. None of Western Multiplex’s subsidiaries is required
\nto file any forms, reports or other documents with the SEC.<\/p>\n
(b) Each of the consolidated financial statements (including, in
\neach case, any related notes thereto) contained in the Western Multiplex SEC
\nReports (the “WESTERN MULTIPLEX<\/p>\n
-25-<\/p>\n
FINANCIALS”), including any Western Multiplex SEC Reports filed after the date
\nhereof until the Closing, (i) complied as to form in all material respects with
\nthe published rules and regulations of the SEC with respect thereto, (ii) was
\nprepared in accordance with GAAP applied on a consistent basis throughout the
\nperiods involved (except as may be indicated in the notes thereto or, in the
\ncase of unaudited interim financial statements, as may be permitted by the SEC
\non Form 10-Q under the Exchange Act) and (iii) fairly presented the consolidated
\nfinancial position of Western Multiplex and its subsidiaries at the respective
\ndates thereof and the consolidated results of its operations and cash flows for
\nthe periods indicated, except that the unaudited interim financial statements
\nwere or are subject to normal and recurring year-end adjustments which were not,
\nor are not expected to be, material in amount. The balance sheet of Western
\nMultiplex contained in the Western Multiplex SEC Reports as of September 28,
\n2001 is hereinafter referred to as the “WESTERN MULTIPLEX BALANCE SHEET.” Except
\nas disclosed in the Western Multiplex Financials, neither Western Multiplex nor
\nany of its subsidiaries has any liabilities (absolute, accrued, contingent or
\notherwise) of a nature required to be disclosed on a balance sheet or in the
\nrelated notes to the consolidated financial statements prepared in accordance
\nwith GAAP which are, individually or in the aggregate, material to the business,
\nresults of operations or financial condition of Western Multiplex and its
\nsubsidiaries taken as a whole, except liabilities incurred since the date of the
\nWestern Multiplex Balance Sheet in the ordinary course of business consistent
\nwith past practices.<\/p>\n
(c) Western Multiplex has heretofore furnished to Proxim a
\ncomplete and correct copy of any amendments or modifications that have not yet
\nbeen filed with the SEC but that are required to be filed, to agreements,
\ndocuments or other instruments that previously had been filed by Western
\nMultiplex with the SEC pursuant to the Securities Act or the Exchange Act.<\/p>\n
3.6 Absence of Certain Changes or Events. Since the date of the Western
\nMultiplex Balance Sheet, there has not been: (i) any Material Adverse Effect on
\nWestern Multiplex, (ii) any change by Western Multiplex in its accounting
\nmethods, principles or practices, except as required by concurrent changes in
\nGAAP, or (iii) any revaluation by Western Multiplex of any of its assets,
\nincluding, without limitation, writing down the value of capitalized inventory
\nor writing off notes or accounts receivable other than in the ordinary course of
\nbusiness.<\/p>\n
3.7 Taxes.<\/p>\n
(a) Western Multiplex and each of its subsidiaries have timely
\nfiled all Returns relating to Taxes required to be filed by Western Multiplex
\nand each of its subsidiaries with any Tax authority, except such Returns that
\nare not material to Western Multiplex. Such Returns are true and correct in all
\nmaterial respects and have been completed in accordance with applicable law.
\nWestern Multiplex and each of its subsidiaries have paid all Taxes shown to be
\ndue on such Returns.<\/p>\n
(b) Western Multiplex and each of its subsidiaries as of the
\nEffective Time will have withheld with respect to its employees (and timely paid
\nover to the appropriate Taxing authority) all federal and state income taxes,
\nTaxes pursuant to the FICA and FUTA, and other Taxes required to be withheld,
\nexcept such Taxes that are not material to Western Multiplex.<\/p>\n
-26-<\/p>\n
(c) Neither Western Multiplex nor any of its subsidiaries has
\nbeen delinquent in the payment of any material Tax nor is there any material Tax
\ndeficiency or adjustment outstanding, proposed or assessed against Western
\nMultiplex or any of its subsidiaries, nor has Western Multiplex or any of its
\nsubsidiaries executed any unexpired waiver of any statute of limitations on or
\nextending the period for the assessment or collection of any material Tax.<\/p>\n
(d) No audit or other examination of any material Return of
\nWestern Multiplex or any of its subsidiaries by any Tax authority is presently
\nin progress, nor has Western Multiplex or any of its subsidiaries been notified
\nin writing of any request for such an audit or other examination.<\/p>\n
(e) As of September 28, 2001, neither Western Multiplex nor any
\nof its subsidiaries has any liability for any material unpaid Taxes that has not
\nbeen accrued for or reserved on the Western Multiplex Balance Sheet in
\naccordance with GAAP, whether asserted or unasserted, contingent or otherwise.
\nSince September 28, 2001, neither Western Multiplex nor any of its subsidiaries
\nhas incurred any liability for any material Taxes other than in the ordinary
\ncourse of business.<\/p>\n
(f) There is no contract, agreement, plan or arrangement to
\nwhich Western Multiplex or any of its subsidiaries is a party as of the date of
\nthis Agreement, including but not limited to the provisions of this Agreement,
\ncovering any employee or former employee of Western Multiplex or any of its
\nsubsidiaries that, individually or collectively, would reasonably be expected to
\ngive rise to the payment of any amount in excess of $250,000 that would not be
\ndeductible pursuant to Sections 280G, 404 or 162(m) of the Code. There is no
\ncontract, agreement, plan or arrangement to which Western Multiplex is a party
\nor by which it is bound to compensate any individual for excise taxes paid
\npursuant to Section 4999 of the Code.<\/p>\n
(g) Neither Western Multiplex nor any of its subsidiaries (a) is
\nparty to or has any obligation under any Tax sharing, indemnity or allocation
\nagreement or arrangement (b) has ever been a member of an affiliated group
\n(within the meaning of Code Section 1504(a)) filing a consolidated federal
\nincome Tax Return (other than a group the common parent of which was Western
\nMultiplex) or (c) has any liability for the Taxes of any person (other than
\nWestern Multiplex or any of its subsidiaries) under Treas. Reg. Section 1.1502-6
\n(or any similar provision of state, local or foreign law), as a transferee or
\nsuccessor, by contract, or otherwise.<\/p>\n
(h) Neither Western Multiplex nor any of its subsidiaries has
\nconstituted either a “distributing corporation” or a “controlled corporation” in
\na distribution of stock intended to qualify for tax-free treatment under Section
\n355 of the Code (x) in the two years prior to the date of this Agreement or (y)
\nin a distribution which could otherwise constitute part of a “plan” or “series
\nof related transactions” (within the meaning of Section 355(e) of the Code) in
\nconjunction with the Merger.<\/p>\n
3.8 Western Multiplex Intellectual Property. For the purposes of this
\nAgreement, the following terms have the following definitions:<\/p>\n
-27-<\/p>\n
“WESTERN MULTIPLEX INTELLECTUAL PROPERTY” shall mean any Intellectual
\nProperty that is owned or used by Western Multiplex in the conduct of its
\nbusiness, as currently conducted and currently proposed to be conducted.<\/p>\n
“WESTERN MULTIPLEX REGISTERED INTELLECTUAL PROPERTY” means all of the
\nRegistered Intellectual Property owned by, or filed in the name of, Western
\nMultiplex or any of its subsidiaries.<\/p>\n
(a) Except with respect to Western Multiplex Registered
\nIntellectual Property that Western Multiplex intentionally abandoned and\/or is
\nno longer used by or intended to be used by Western Multiplex which exception
\nshall include, without limitation, Western Multiplex Registered Intellectual
\nProperty acquired in its acquisitions of Ubiquity Communications, Schedule
\n3.8(a) lists all Registered Intellectual Property owned by, filed in the name
\nof, or applied for, by Western Multiplex (the “WESTERN MULTIPLEX REGISTERED
\nINTELLECTUAL PROPERTY RIGHTS”) and lists any proceedings or actions before any
\ncourt, tribunal (including the United States Patent and Trademark Office or
\nequivalent authority anywhere in the world) related to any of Western Multiplex
\nRegistered Intellectual Property Rights.<\/p>\n
(b) During the five (5)-year period immediately prior to the
\ndate hereof and, to the knowledge of Western Multiplex after reasonable inquiry,
\nduring any time prior to the five (5)-year period immediately preceding the date
\nhereof, no Western Multiplex Intellectual Property or product or service that is
\nowned by Western Multiplex or any of its subsidiaries is currently or was
\nsubject to any order, judgment, or decree brought against it that restricted in
\nany manner the use, transfer, or licensing thereof by Western Multiplex or any
\nof its subsidiaries in a manner that would reasonably be expected to have a
\nMaterial Adverse Effect or that limits the ownership, the validity, use or
\nenforceability of any Western Multiplex Intellectual Property that is owned by
\nWestern Multiplex in a manner that would reasonably be expected to have a
\nMaterial Adverse Effect.<\/p>\n
(c) Except with respect to Western Multiplex Registered
\nIntellectual Property that Western Multiplex intentionally abandoned and\/or is
\nno longer used by or intended to be used by Western Multiplex which exception
\nshall include, without limitation, Western Multiplex Registered Intellectual
\nProperty acquired in its acquisitions of Ubiquity Communications, each material
\nitem of Western Multiplex Registered Intellectual Property is valid and
\nsubsisting and, except as set forth in Schedule 3.8(c), all necessary
\nregistration, maintenance and renewal fees currently due in connection with such
\nWestern Multiplex Registered Intellectual Property have been made and all
\nnecessary documents, recordations and certificates in connection with such
\nWestern Multiplex Registered Intellectual Property have been filed with the PTO
\nor United States Copyright Office and other equivalent authorities in foreign
\njurisdictions, as the case may be, for the purposes of maintaining such Western
\nMultiplex Registered Intellectual Property. There are no actions that must be
\ntaken by Western Multiplex within ninety (90) days of the Closing Date,
\nincluding the payment of any registration, maintenance or renewal fees or the
\nfiling of any responses to PTO office actions, documents, applications or
\ncertificates for the purposes of obtaining, maintaining, perfecting or
\npreserving or renewing any Registered Intellectual Property Rights.<\/p>\n
(d) Other than inbound “shrink-wrap” and similar publicly
\navailable commercial binary code end-user licenses, Section 3.8(d) of the
\nWestern Multiplex Schedules lists all material<\/p>\n
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contracts, licenses and agreements to which Western Multiplex and any of its
\nsubsidiaries is a party with respect to any material Western Multiplex
\nIntellectual Property (“WESTERN MULTIPLEX MATERIAL IP CONTRACTS”).<\/p>\n
(e) Western Multiplex owns and has good and exclusive title to,
\nor has license (sufficient for the conduct of its business as currently
\nconducted and as proposed to be conducted) to use each material item of Western
\nMultiplex Intellectual Property, free and clear of any lien or encumbrance;
\nprovided, however, that claims of infringement or misappropriation of Western
\nMultiplex Intellectual Property shall not be deemed liens or encumbrances for
\nthe purpose of this Section 3.8(e).<\/p>\n
(f) With respect to material Western Multiplex Intellectual
\nProperty owned by Western Multiplex that has been developed or created by a
\nthird party for Western Multiplex or any of its subsidiaries, Western Multiplex
\nhas a written agreement with such third party with respect thereto, whereby
\nWestern Multiplex has obtained ownership of all such material Western Multiplex
\nIntellectual Property as between Western Multiplex and the third party, and is
\nthe exclusive owner of all of that third party’s rights in such material Western
\nMultiplex Intellectual Property.<\/p>\n
(g) In the five (5) years prior to the date hereof, neither
\nWestern Multiplex nor any of its subsidiaries (i) has transferred ownership of
\nany Intellectual Property that was material Western Multiplex Intellectual
\nProperty to any third party, or (ii) granted any exclusive license with respect
\nto any Intellectual Property that is or was material Western Multiplex
\nIntellectual Property owned by Western Multiplex, to any third party.<\/p>\n
(h) To the knowledge of Western Multiplex after reasonable
\ninquiry, all Western Multiplex Material IP Contracts are in full force and
\neffect. Except as set forth in Schedule 3.8(h), to the knowledge of Western
\nMultiplex after reasonable inquiry, the consummation of the transactions
\ncontemplated by this Agreement will neither violate nor result in the breach,
\nmodification, cancellation, termination or suspension of any Western Multiplex
\nMaterial IP Contract. Western Multiplex and each of its subsidiaries is in
\nmaterial compliance with, and has not materially breached any term of any
\nWestern Multiplex Material IP Contract and, to the knowledge of Western
\nMultiplex after reasonable inquiry, all other parties to such Western Multiplex
\nMaterial IP Contracts are in compliance with, and have not materially breached
\nany term of such Western Multiplex Material IP Contracts.<\/p>\n
(i) Following the Closing Date, the Surviving Corporation will
\nbe permitted to exercise all of Western Multiplex’s and each of its
\nsubsidiaries’ rights under such Western Multiplex Material IP Contracts (a) to
\nthe same extent Western Multiplex and its subsidiaries would have been able to
\nhad the transactions contemplated by this Agreement not occurred, and (b)
\nwithout the payment of any additional amounts or consideration other than the
\nsame amount of ongoing fees, royalties or payments which Western Multiplex or
\nits subsidiaries would otherwise be required to pay.<\/p>\n
(j) To the knowledge of Western Multiplex after reasonable
\ninquiry, the products, services and the operation of the business of Western
\nMultiplex and its subsidiaries as such business<\/p>\n
-29-<\/p>\n
currently is conducted, including Western Multiplex’s and its subsidiaries’
\ndesign, development, manufacture, marketing and sale of the products or services
\nof Western Multiplex and its subsidiaries (including products currently under
\ndevelopment) has not and does not infringe, misappropriate or otherwise violate
\nthe Intellectual Property of any third party or, to the knowledge of Western
\nMultiplex after reasonable inquiry, constitute unfair competition or trade
\npractices under the laws of any jurisdiction.<\/p>\n
(k) Neither Western Multiplex nor any of its subsidiaries has
\nreceived notice from any third party alleging that the operation of the business
\nof Western Multiplex or any of its subsidiaries or any act, product or service
\nof Western Multiplex or any of its subsidiaries, infringes, misappropriates or
\notherwise violates the Intellectual Property of any third party or constitutes
\nunfair competition or trade practices under the laws of any jurisdiction in a
\nmanner that would reasonably be expected to have a Material Adverse Effect.<\/p>\n
(l) Western Multiplex and each of its subsidiaries has taken
\nreasonable steps to protect Western Multiplex’s and its subsidiaries’ rights in
\nall confidential information and trade secrets of Western Multiplex, and of
\nthird parties provided to Western Multiplex or any of its subsidiaries, and,
\nwithout limiting the foregoing, each of Western Multiplex and its subsidiaries
\nhas and enforces a practice requiring each employee to execute a proprietary
\ninformation\/confidentiality agreement substantially in the form provided to
\nProxim. All employees who worked for Western Multiplex since November 1, 1999
\nhave (i) executed invention assignment agreements sufficient to irrevocably
\ntransfer all rights in any Intellectual Property developed by such employees to
\nWestern Multiplex; and (ii) executed proprietary\/confidential information
\nagreements pursuant to which they agreed to maintain as confidential all Western
\nMultiplex proprietary information. Except as set forth in Schedule 3.8(l), all
\nemployees who are listed as inventors on any Patents (including applications and
\nprovisionals) that are Western Multiplex Registered Intellectual Property have
\nsigned invention assignment agreements sufficient to irrevocably transfer all
\nsuch employee’s rights in any such Western Multiplex Patents to Western
\nMultiplex. Western Multiplex has no knowledge or notice of any adverse claim of
\nownership of any Western Multiplex Intellectual Property that is owned by
\nWestern Multiplex by any past employee of Western Multiplex and, to the
\nknowledge of Western Multiplex, there is no valid basis for any such claim.<\/p>\n
(m) After the Western Multiplex Spin-Out, Western Multiplex
\nowned or had a right to use all Intellectual Property that, at the time of the
\nWestern Multiplex Spin-Out, was used in and\/or necessary to the conduct of the
\nbusiness of Western Multiplex as it was conducted at the time of the Western
\nMultiplex Spin-Out and, to the Knowledge of Western Multiplex, at the time of
\nthe Western Multiplex Spin-Out, was material to the business of Western
\nMultiplex as it was planned or contemplated to be conducted. For the purpose of
\nthis Section 3.8(m), “WESTERN MULTIPLEX SPIN-OUT” means the spin-out of Western
\nMultiplex from Glenayre Corporation pursuant to the Acquisition Agreement by and
\namong GTI Acquisition Corp., Glenayre Technologies, Inc., Western Multiplex, a
\nCalifornia Corporation and Western Multiplex, a Delaware Corporation.<\/p>\n
-30-<\/p>\n
3.9 Compliance; Permits; Restrictions.<\/p>\n
(a) Neither Western Multiplex nor any of its subsidiaries nor
\nthe conduct of their respective businesses is, in any material respect, in
\nconflict with, or in default or violation of, (i) any Legal Requirement
\napplicable to Western Multiplex or any of its subsidiaries or by which its or
\nany of their respective businesses or properties is bound or affected, or (ii)
\nany material note, bond, mortgage, indenture, contract, agreement, lease,
\nlicense, permit, franchise or other instrument or obligation to which Western
\nMultiplex or any of its subsidiaries is a party or by which Western Multiplex or
\nany of its subsidiaries or its or any of their respective businesses or
\nproperties is bound or affected. No investigation or review by any Governmental
\nEntity is pending or, to the Knowledge of Western Multiplex, threatened against
\nWestern Multiplex or its subsidiaries, nor has any Governmental Entity indicated
\nto Western Multiplex an intention to conduct the same. There is no material
\nagreement, judgment, injunction, order or decree binding upon Western Multiplex
\nor any of its subsidiaries which has or could reasonably be expected to have the
\neffect of prohibiting or materially impairing any business practice of Western
\nMultiplex or any of its subsidiaries, any acquisition of material property by
\nWestern Multiplex or any of its subsidiaries or the conduct of business by
\nWestern Multiplex as currently conducted.<\/p>\n
(b) Western Multiplex and its subsidiaries hold all permits,
\nlicenses, variances, exemptions, orders and approvals from governmental
\nauthorities that are material to the operation of the business of Western
\nMultiplex (collectively, the “WESTERN MULTIPLEX PERMITS”). Western Multiplex and
\nits subsidiaries are in compliance in all material respects with the terms of
\nthe Western Multiplex Permits.<\/p>\n
3.10 Litigation. Except as set forth in Schedule 3.10, as of the date of
\nthis Agreement, there is no Action pending, or as to which Western Multiplex
\nor any of its subsidiaries has received any notice of assertion nor,to Western
\nMultiplex’s Knowledge, is there a threatened Action against Western
\nMultiplex or any of its subsidiaries that reasonably would be likely to be
\nmaterial to Western Multiplex or any of its subsidiaries, or which in any
\nmanner challenges or seeks to prevent, enjoin, alter or delay any of the
\ntransactions contemplated by this Agreement.<\/p>\n
3.11 Brokers’ and Finders’ Fees. Except for fees payable to Credit
\nSuisse First Boston pursuant to an engagement letter dated December 18, 2001,
\nWestern Multiplex has not incurred, nor will it incur, directly or indirectly,
\nany liability for brokerage or finders’ fees or agents’ commissions or any
\nsimilar charges in connection with this Agreement or any transaction
\ncontemplated hereby.<\/p>\n
3.12 Employee Benefit Plans.<\/p>\n
(a) The employee compensation, severance, termination pay,
\ndeferred compensation, stock or stock-related awards, incentive, fringe or
\nbenefit plans, programs, policies, commitments or other arrangements (whether or
\nnot set forth in a written document and including, without limitation, all
\n“employee benefit plans” within the meaning of Section 3(3) of ERISA) covering
\nany active employee, former employee, director or consultant of Western
\nMultiplex, any subsidiary of Western Multiplex or any trade or business (whether
\nor not incorporated) that is an<\/p>\n
-31-<\/p>\n
Affiliate, or with respect to which Western Multiplex has or may in the future
\nhave liability, are referred to herein as the “WESTERN MULTIPLEX PLANS.” Western
\nMultiplex Schedule 3.12(a) contains a complete and accurate list of each of the
\nWestern Multiplex Plans. Western Multiplex has provided to Proxim: (i) correct
\nand complete copies of all documents embodying each Western Multiplex Plan
\nincluding (without limitation) all amendments thereto, all related trust
\ndocuments, and all material written agreements and contracts relating to each
\nsuch Western Multiplex Plan; (ii) the three (3) most recent annual reports (Form
\nSeries 5500 and all schedules and financial statements attached thereto), if
\nany, required under ERISA or the Code in connection with each Western Multiplex
\nPlan; (iii) the most recent summary plan description together with the
\nsummary(ies) of material modifications thereto, if any, required under ERISA
\nwith respect to each Western Multiplex Plan; (iv) all IRS determination,
\nopinion, notification and advisory letters; (v) all material correspondence to
\nor from any governmental agency relating to any Western Multiplex Plan; (vi) all
\nCOBRA forms and related notices and (vii) all discrimination tests for each
\nWestern Multiplex Plan for the most recent three (3) plan years.<\/p>\n
(b) Each Western Multiplex Plan has been maintained and
\nadministered in all material respects in compliance with its terms and with the
\nrequirements prescribed by any and all statutes, orders, rules and regulations
\n(foreign or domestic), including ERISA and the Code, that are applicable to such
\nWestern Multiplex Plans. No suit, action or other litigation (excluding claims
\nfor benefits incurred in the ordinary course of Western Multiplex Plan
\nactivities) has been brought, or to the Knowledge of Western Multiplex is
\nthreatened, against or with respect to any such Western Multiplex Plan. There
\nare no audits, inquiries or proceedings pending or, to the Knowledge of Western
\nMultiplex, threatened by the IRS or the DOL with respect to any Western
\nMultiplex Plans. All contributions, reserves or premium payments required to be
\nmade or accrued as of the date hereof to the Western Multiplex Plans have been
\ntimely made or accrued. Section 3.12(b) of the Western Multiplex Disclosure
\nLetter includes a listing of the accrued vacation liability of Western Multiplex
\nas of September 28, 2001. Any Western Multiplex Plan intended to be qualified
\nunder Section 401(a) of the Code and each trust intended to qualify under
\nSection 501(a) of the Code (i) has either obtained a favorable determination,
\nnotification, advisory and\/or opinion letter, as applicable, as to its qualified
\nstatus from the IRS or still has a remaining period of time under applicable
\nTreasury Regulations or IRS pronouncements in which to apply for such letter and
\nto make any amendments necessary to obtain a favorable determination, and (ii)
\nincorporates or has been amended to incorporate all provisions required to
\ncomply with the Tax Reform Act of 1986 and subsequent legislation. Western
\nMultiplex does not have any plan or commitment to establish any new Western
\nMultiplex Plan, to modify any Western Multiplex Plan (except to the extent
\nrequired by law or to conform any such Western Multiplex Plan to the
\nrequirements of any applicable law, in each case as previously disclosed to
\nProxim in writing, or as required by this Agreement), or to enter into any new
\nWestern Multiplex Plan. Each Western Multiplex Plan can be amended, terminated
\nor otherwise discontinued after the Effective Time in accordance with its terms,
\nwithout liability to Proxim, Western Multiplex or any of its Affiliates (other
\nthan ordinary administration expenses).<\/p>\n
(c) Neither Western Multiplex, any of its subsidiaries, nor any
\nof their Affiliates has at any time ever maintained, established, sponsored,
\nparticipated in, or contributed to any plan subject to Title IV of ERISA or
\nSection 412 of the Code and at no time has Western Multiplex<\/p>\n
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contributed to or been requested to contribute to any “multiemployer plan,” as
\nsuch term is defined in ERISA. Neither Western Multiplex nor any Affiliate has
\nat any time ever maintained, established, sponsored, participated in or
\ncontributed to any multiple employer plan, or to any plan described in Section
\n413 of the Code. Neither Western Multiplex, any of its subsidiaries, nor any
\nofficer or director of Western Multiplex or any of its subsidiaries is subject
\nto any liability or penalty under Section 4975 through 4980B of the Code or
\nTitle I of ERISA. No “prohibited transaction,” within the meaning of Section
\n4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise exempt
\nunder Section 4975 of the Code or Section 408 of ERISA, has occurred with
\nrespect to any Western Multiplex Plan.<\/p>\n
(d) Neither Western Multiplex, any of its subsidiaries, nor any
\nof their Affiliates has, before the Effective Time and in any material respect,
\nviolated any of the health continuation requirements of the Consolidated Omnibus
\nBudget Reconciliation Act of 1985, as amended, the requirements of the Family
\nMedical Leave Act of 1993, as amended, or any similar provisions of state law
\napplicable to Western Multiplex employees. None of the Western Multiplex Plans
\npromises or provides retiree medical or other retiree welfare benefits to any
\nperson except as required by applicable law, and neither Western Multiplex nor
\nany of its subsidiaries has represented, promised or contracted (whether in oral
\nor written form) to provide such retiree benefits to any employee, former
\nemployee, director, consultant or other person, except to the extent required by
\nstatute.<\/p>\n
(e) Neither Western Multiplex nor any of its subsidiaries is
\nbound by or subject to (and none of its respective assets or properties is bound
\nby or subject to) any arrangement with any labor union. No employee of Western
\nMultiplex or any of its subsidiaries is represented by any labor union or
\ncovered by any collective bargaining agreement and, to the Knowledge of Western
\nMultiplex, no campaign to establish such representation is in progress. There is
\nno pending or, to the Knowledge of Western Multiplex, threatened labor dispute
\ninvolving Western Multiplex or any of its subsidiaries and any group of its
\nemployees nor has Western Multiplex or any of its subsidiaries experienced any
\nlabor interruptions over the past three (3) years, and Western Multiplex and its
\nsubsidiaries consider their relationships with their employees to be good.
\nWestern Multiplex (i) is in compliance in all material respects with all
\napplicable material foreign, federal, state and local laws, rules and
\nregulations respecting employment, employment practices, terms and conditions of
\nemployment and wages and hours, in each case, with respect to its current or
\nformer employees; (ii) has withheld and reported all amounts required by law or
\nby agreement to be withheld and reported with respect to wages, salaries and
\nother payments to its current or former employees; (iii) is not liable for any
\narrears of wages or any taxes or any penalty for failure to comply with any of
\nthe foregoing; and (iv) is not liable for any payment to any trust or other fund
\ngoverned by or maintained by or on behalf of any governmental authority, with
\nrespect to unemployment compensation benefits, social security or other benefits
\nor obligations for its current and former employees (other than routine payments
\nto be made in the normal course of business and consistent with past practice).
\nThere are no pending, threatened or reasonably anticipated claims or actions
\nagainst Western Multiplex under any worker’s compensation policy or long-term
\ndisability policy.<\/p>\n
-33-<\/p>\n
(f) Neither the execution and delivery of this Agreement nor the
\nconsummation of the transactions contemplated hereby will (either alone or upon
\nthe occurrence of any additional or subsequent events) (i) result in any payment
\n(including severance, unemployment compensation, golden parachute, forgiveness
\nof indebtedness, bonus or otherwise) becoming due to any stockholder, director
\nor employee of Western Multiplex or any of its subsidiaries under any Western
\nMultiplex Plan or otherwise, (ii) materially increase any benefits otherwise
\npayable under any Western Multiplex Plan, or (iii) result in the acceleration of
\nthe time of payment or vesting of any such benefits.<\/p>\n
(g) No payment or benefit which will or may be made by Western
\nMultiplex or its Affiliates with respect to any employee or any other
\n“disqualified individual” (as defined in Code Section 280G and the regulations
\nthereunder) will be characterized as a “parachute payment,” within the meaning
\nof Code Section 280G(B)(2).<\/p>\n
3.13 Absence of Liens and Encumbrances. Western Multiplex and each of
\nits subsidiaries has good and valid title to, or, in the case of leased
\nproperties, including the Western Multiplex Leases, valid leasehold interests
\nin, all of its tangible properties and assets, real, personal and mixed, used in
\nits business, free and clear of any liens or encumbrances except as reflected in
\nthe Western Multiplex Financials and except for liens for taxes not yet due and
\npayable and such imperfections of title and encumbrances, if any, which would
\nnot be material to Western Multiplex.<\/p>\n
3.14 Environmental Matters.<\/p>\n
(a) Hazardous Material. Except as reasonably would not be likely
\nto result in a material liability to Western Multiplex, no underground storage
\ntanks and no Hazardous Materials are present as a result of the actions of
\nWestern Multiplex, of its subsidiaries or any affiliate of Western Multiplex, or
\nto the Knowledge of Western Multiplex, as a result of any actions of any third
\nparty, or otherwise, in, on or under any property, including the land and the
\nimprovements, ground water and surface water thereof, that Western Multiplex or
\nany of its subsidiaries has at any time owned, operated, occupied or leased.<\/p>\n
(b) Hazardous Materials Activities. Except as reasonably would
\nnot be likely to result in a material liability to Western Multiplex (in any
\nindividual case or in the aggregate), (i) neither Western Multiplex nor any of
\nits subsidiaries has transported, stored, used, manufactured, disposed of,
\nreleased or exposed its employees or others to Hazardous Materials in violation
\nof any law in effect on or before the Closing Date, and (ii) neither Western
\nMultiplex nor any of its subsidiaries has engaged in Hazardous Materials
\nActivities in violation of any law, rule, regulation, treaty or statute
\npromulgated by any Governmental Entity in effect on or prior to or as of the
\nClosing Date to prohibit, regulate or control Hazardous Materials or any
\nHazardous Material Activity or in a manner that would be likely to result in
\nmaterial liability to Western Multiplex.<\/p>\n
(c) Permits. Except as reasonably would not be likely to result
\nin a material liability to Western Multiplex, Western Multiplex and its
\nsubsidiaries currently hold all environmental approvals, permits, licenses,
\nclearances and consents (the “WESTERN MULTIPLEX ENVIRONMENTAL PERMITS”)
\nnecessary for the conduct of Western Multiplex’s and its subsidiaries’<\/p>\n
-34-<\/p>\n
Hazardous Material Activities and other businesses of Western Multiplex and its
\nsubsidiaries as such activities and businesses are currently being conducted.<\/p>\n
(d) Environmental Liabilities. No action, proceeding, revocation
\nproceeding, amendment procedure, writ, injunction or claim is pending, or to
\nWestern Multiplex’s Knowledge, threatened concerning any Western Multiplex
\nEnvironmental Permit, Hazardous Material or any Hazardous Materials Activity of
\nWestern Multiplex or any of its subsidiaries.<\/p>\n
3.15 Labor Matters. (i) There are no controversies pending or, to the
\nKnowledge of each of Western Multiplex and its respective subsidiaries,
\nthreatened, between Western Multiplex or any of its subsidiaries and any of
\ntheir respective employees or former employees; (ii) as of the date of this
\nAgreement, neither Western Multiplex nor any of its subsidiaries is a party to
\nany collective bargaining agreement or other labor union contract applicable to
\npersons employed by Western Multiplex or its subsidiaries nor does Western
\nMultiplex or its subsidiaries know of any activities or proceedings of any labor
\nunion to organize any such employees; and (iii) as of the date of this
\nAgreement, neither Western Multiplex nor any of its subsidiaries has any
\nKnowledge of any strikes, slowdowns, work stoppages or lockouts, or threats
\nthereof, by or with respect to any employees of Western Multiplex or any of its
\nsubsidiaries.<\/p>\n
3.16 Agreements, Contracts and Commitments. The following agreements,
\ncontracts or commitments with respect to which Western Multiplex or one of its
\nsubsidiaries is a party or is bound are referred to herein as the “WESTERN
\nMULTIPLEX CONTRACTS”:<\/p>\n
(a) any employment or consulting agreement, contract or
\ncommitment with any officer or director or higher level employee or member of
\nWestern Multiplex’s Board of Directors, other than those that are terminable by
\nWestern Multiplex or any of its subsidiaries on no more than thirty (30) days’
\nnotice without liability or financial obligation to Western Multiplex;<\/p>\n
(b) any agreement or plan, including, without limitation, any
\nstock option plan, stock appreciation right plan or stock purchase plan, any of
\nthe benefits of which will be increased, or the vesting of benefits of which
\nwill be accelerated, by the occurrence of any of the transactions contemplated
\nby this Agreement or the value of any of the benefits of which will be
\ncalculated on the basis of any of the transactions contemplated by this
\nAgreement;<\/p>\n
(c) any agreement of indemnification or any guaranty other than
\nany agreement of indemnification entered into in connection with the sale or
\nlicense of software products in the ordinary course of business;<\/p>\n
(d) any agreement, contract or commitment containing any
\ncovenant limiting in any respect the right of Western Multiplex or any of its
\nsubsidiaries to engage in any line of business or to compete with any person or
\ngranting any exclusive distribution rights;<\/p>\n
(e) any agreement, contract or commitment currently in force
\nrelating to the disposition or acquisition by Western Multiplex or any of its
\nsubsidiaries after the date of this Agreement of assets in excess of $250,000
\nnot in the ordinary course of business or pursuant to<\/p>\n
-35-<\/p>\n
which Western Multiplex has any material ownership interest in any corporation,
\npartnership, joint venture or other business enterprise other than Western
\nMultiplex’s subsidiaries;<\/p>\n
(f) any dealer, distributor, joint marketing or development
\nagreement currently in force under which Western Multiplex or any of its
\nsubsidiaries have continuing material obligations to jointly market any product,
\ntechnology or service and which may not be canceled without penalty upon notice
\nof ninety (90) days or less, or any material agreement pursuant to which Western
\nMultiplex or any of its subsidiaries have continuing material obligations to
\njointly develop any intellectual property that will not be owned, in whole or in
\npart, by Western Multiplex or any of its subsidiaries and which may not be
\ncanceled without penalty upon notice of ninety (90) days or less;<\/p>\n
(g) any material agreement, contract or commitment currently in
\nforce to license any third party to manufacture or reproduce any Western
\nMultiplex product or service or any material agreement, contract or commitment
\ncurrently in force to sell or distribute any Western Multiplex products or
\nservice, including any Western Multiplex Material IP Contract, except agreements
\nwith distributors or sales representative in the normal course of business
\ncancelable without penalty upon notice of ninety (90) days or less and
\nsubstantially in the form previously provided to Proxim;<\/p>\n
(h) any mortgages, indentures, guarantees, loans or credit
\nagreements, security agreements or other agreements or instruments relating to
\nthe borrowing of money or extension of credit;<\/p>\n
(i) any settlement agreement; provided that a Western Multiplex
\nContract shall not include any settlement agreement entered into more than five
\n(5) years before the date of this Agreement; or<\/p>\n
(j) any other agreement, contract or commitment (i) in
\nconnection with or pursuant to which Western Multiplex and its subsidiaries will
\nspend or receive (or are expected to spend or receive), in the aggregate, more
\nthan $250,000 during the current calendar year or during the next calendar year,
\n(ii) the termination, expiration or loss of the counterparty’s performance of
\nwhich could reasonably be expected to have a Material Adverse Effect on Western
\nMultiplex or (iii) that is a material contract (as defined in Item 601(b)(10) of
\nRegulation S-K of the SEC rules).<\/p>\n
Neither Western Multiplex nor any of its subsidiaries, nor to Western
\nMultiplex’s Knowledge any other party to a Western Multiplex Contract is in
\nmaterial breach, violation or default under, and neither Western Multiplex nor
\nany of its subsidiaries has received written notice that it has materially
\nbreached, violated or defaulted under, any of the terms or conditions of any of
\nthe Western Multiplex Contracts in such a manner as would permit any other party
\nto cancel or terminate any such Western Multiplex Contract, or would permit any
\nother party to seek material damages or other remedies (for any or all of such
\nbreaches, violations or defaults, in the aggregate).<\/p>\n
3.17 Title to Western Multiplex Properties. Western Multiplex owns no
\nreal property nor has it ever owned any real property. All current Western
\nMultiplex leases, subleases or other occupancy contracts or agreements and each
\namendment or other modification thereto (the<\/p>\n
-36-<\/p>\n
“WESTERN MULTIPLEX LEASES”) are in full force and effect and are valid and
\nenforceable. Western Multiplex is not in breach of or in default under any of
\nsuch current Western Multiplex Leases and no event or condition has occurred
\nwhich could (with the giving of notice or the passage of time or both)
\nconstitute a breach of or default by Western Multiplex under any such current
\nWestern Multiplex Lease. To Western Multiplex’s Knowledge, no other party to any
\nsuch current Western Multiplex Lease is in breach of or in default under any
\nsuch current Western Multiplex Leases and no event or condition has occurred
\nwhich could (with the giving of notice or the passage of time or both)
\nconstitute a breach of or default by Western Multiplex under any such current
\nWestern Multiplex Lease. No party other than Western Multiplex has the right to
\noccupy any Western Multiplex real property currently leased or otherwise
\noccupied by Western Multiplex.<\/p>\n
3.18 Statements; Joint Proxy Statement\/Prospectus. None of the
\ninformation supplied or to be supplied by Western Multiplex for inclusion or
\nincorporation by reference in (i) the Registration Statement will at the time it
\nbecomes effective under the Securities Act, contain any untrue statement of a
\nmaterial fact or omit to state any material fact required to be stated therein
\nor necessary in order to make the statements therein not misleading and (ii) the
\nJoint Proxy Statement\/Prospectus shall not, on the date the Joint Proxy
\nStatement\/Prospectus is first mailed to Western Multiplex’s stockholders and
\nProxim’s stockholders, at the time of the Western Multiplex Stockholders’
\nMeeting or the Proxim Stockholders’ Meeting and at the Effective Time, contain
\nany untrue statement of a material fact or omit to state any material fact
\nrequired to be stated therein or necessary in order to make the statements
\ntherein, in light of the circumstances under which they are made, not false or
\nmisleading, or omit to state any material fact necessary to correct any
\nstatement in any earlier communication with respect to the solicitation of
\nproxies for the Western Multiplex Stockholders’ Meeting or the Proxim
\nStockholders’ Meeting which has become false or misleading. The Joint Proxy
\nStatement\/Prospectus will comply as to form in all material respects with the
\nprovisions of the Exchange Act and the rules and regulations thereunder. If at
\nany time before the Effective Time, any event relating to Western Multiplex or
\nany of its affiliates, officers or directors should be discovered by Western
\nMultiplex which should be set forth in an amendment to the Registration
\nStatement or a supplement to the Joint Proxy Statement\/Prospectus, Western
\nMultiplex shall promptly inform Proxim. Notwithstanding the foregoing, Western
\nMultiplex makes no representation or warranty with respect to any information
\nsupplied by Proxim that is contained in any of the foregoing documents.<\/p>\n
3.19 Board Approval. The Board of Directors of Western Multiplex (i) has
\ndetermined that the Merger is advisable, consistent with and in furtherance of
\nthe long-term business strategy of Western Multiplex and fair to, and in the
\nbest interests of, Western Multiplex and its stockholders, (ii) has approved
\nthis Agreement, the Merger and the other transactions contemplated by this
\nAgreement and (iii) has approved and determined to recommend that the
\nstockholders of Western Multiplex vote to approve the Share Issuance
\n(collectively, the “WESTERN MULTIPLEX BOARD RECOMMENDATION,” and each of the
\nWestern Multiplex Board Recommendation and the Proxim Board Recommendation are
\nhereinafter referred to, as applicable, a “BOARD RECOMMENDATION”).<\/p>\n
3.20 Opinion of Financial Advisor. The Board of Directors of Western
\nMultiplex has received an opinion from Credit Suisse First Boston Corporation
\ndated the date of this Agreement, to<\/p>\n
-37-<\/p>\n
the effect that, as of such date, the Exchange Ratio is fair, from a financial
\npoint of view to Western Multiplex, a signed copy of which opinion will be
\ndelivered to Proxim solely for informational purposes as promptly as practicable
\nafter receipt thereof by Western Multiplex.<\/p>\n
3.21 Vote Required. The affirmative vote of the holders of a majority of
\nthe shares of Western Multiplex Common Stock entitled to vote, present in person
\nor proxy, on the Share Issuance is the only vote of the holders of any class or
\nseries of Western Multiplex’s capital stock necessary to approve this Agreement
\nand the transactions contemplated hereby.<\/p>\n
3.22 State Takeover Statutes. The Board of Directors of Western
\nMultiplex has approved this Agreement and the Western Multiplex Voting Agreement
\nand the Merger and the other transactions contemplated hereby and thereby, and
\nsuch approval is sufficient to render inapplicable to the Merger and the other
\ntransactions contemplated hereby and thereby the restrictions contained in
\nSection 203 of the Delaware Law, to the extent, if any, such restrictions would
\notherwise be applicable to the Merger and the other transactions contemplated by
\nthis Agreement and the Western Multiplex Voting Agreement. No other state
\ntakeover statute or similar statute or regulation applies or purports to apply
\nto the Merger, this Agreement, the Western Multiplex Voting Agreement or the
\ntransactions contemplated hereby and thereby.<\/p>\n
ARTICLE IV
\n CONDUCT PRIOR TO THE EFFECTIVE TIME<\/p>\n
4.1 Conduct of Business by Proxim. During the period from the date of
\nthis Agreement and continuing until the earlier of the termination of this
\nAgreement pursuant to its terms or the Effective Time, Proxim (which for the
\npurposes of this Article IV shall include Proxim and each of its subsidiaries)
\nagrees, except (i) as specifically provided in this Agreement or Article IV of
\nthe Proxim Disclosure Letter or (ii) to the extent that Western Multiplex shall
\notherwise consent in writing (the provision of a response to any request for
\nsuch a consent not be unreasonably delayed), to carry on its business diligently
\nand in accordance with good commercial practice and to carry on its business in
\nthe usual, regular and ordinary course, in substantially the same manner as
\nheretofore conducted and in compliance with all applicable laws and regulations,
\nto pay its debts and taxes when due subject to good faith disputes over such
\ndebts or taxes, to pay or perform other material obligations when due, and use
\nits commercially reasonable efforts consistent with past practices and policies
\nto preserve intact its present business organization, keep available the
\nservices of its present officers and employees and preserve its relationships
\nwith customers, suppliers, distributors, licensors, licensees and others with
\nwhich it has business dealings. In addition, except (x) as specifically provided
\nin this Agreement or Article IV of the Proxim Disclosure Letter or (y) to the
\nextent that Western Multiplex shall otherwise consent in writing (the provision
\nof a response to any request for such a consent not be unreasonably delayed),
\nProxim shall not do any of the following and shall prevent its subsidiaries from
\ndoing any of the following:<\/p>\n
(a) Accelerate, amend, modify or waive any stock repurchase
\nrights; accelerate, amend or modify the period of exercisability or other
\nmaterial terms of options, warrants or restricted stock; reprice or exchange
\noptions or warrants granted under any employee, consultant or<\/p>\n
-38-<\/p>\n
director stock plans or otherwise; or authorize cash payments in exchange for
\nany options, warrants or restricted stock granted under any of such plans or
\notherwise;<\/p>\n
(b) Enter into any material partnership arrangements, joint
\ndevelopment agreements or strategic alliances;<\/p>\n
(c) Grant any severance or termination pay (cash, equity or
\notherwise) to any officer or employee except pursuant to written agreements
\noutstanding, or policies existing, on the date hereof and as previously
\ndisclosed in the Proxim Schedule, or adopt any new severance plan or amend or
\nmodify or alter in any manner any severance plan, agreement or arrangement
\nexisting on the date hereof;<\/p>\n
(d) Cancel, terminate, extend, amend or modify in any material
\nrespect any intellectual property contract other than with respect to
\nintellectual property contracts which are not Proxim Material IP Contracts in
\nthe ordinary course of business, or in connection with the intellectual property
\nlitigation (or threatened litigation) described in the Proxim Disclosure Letter
\nor settlement of such litigation; provided, however, that any such action or
\nsettlement in connection with the disclosed intellectual property litigation (or
\nthreatened litigation) includes a general release in favor of Proxim (or its
\nsuccessor) and does not require a material royalty or lump sum payment by Proxim
\nor material post-Closing obligation of Proxim (or its successor);<\/p>\n
(e) Declare, set aside or pay any dividends on or make any other
\ndistributions (whether in cash, stock, equity securities or property) in respect
\nof any capital stock or split, combine or reclassify any capital stock or issue
\nor authorize the issuance of any other securities in respect of, in lieu of or
\nin substitution for any capital stock;<\/p>\n
(f) Purchase, redeem or otherwise acquire, directly or
\nindirectly, any shares of capital stock of Proxim or its subsidiaries, except
\nrepurchases of unvested shares at cost in connection with the termination of the
\nemployment relationship with any employee pursuant to stock option or purchase
\nagreements in effect on the date hereof;<\/p>\n
(g) Issue, deliver, sell, authorize, pledge or otherwise
\nencumber or propose any of the foregoing with respect to any shares of capital
\nstock or any securities convertible into shares of capital stock, or
\nsubscriptions, rights, warrants or options to acquire any shares of capital
\nstock or any securities convertible into shares of capital stock, or enter into
\nother agreements or commitments of any character obligating it to issue any such
\nshares or convertible securities, other than (i) the issuance, delivery and\/or
\nsale of shares of Proxim Common Stock pursuant to the exercise of stock options
\ntherefor outstanding as of the date of this Agreement and (ii) shares of Proxim
\nCommon Stock issuable to participants in Proxim’s 1993 Employee Stock Purchase
\nPlan (the “PROXIM PURCHASE PLAN”) consistent with the terms thereof;<\/p>\n
(h) Cause, permit or propose any amendments to any charter
\ndocument or bylaw of Proxim (or similar governing instruments of any
\nsubsidiaries);<\/p>\n
-39-<\/p>\n
(i) Acquire or agree to acquire by merging or consolidating
\nwith, or by purchasing any equity interest in or a material portion of the
\nassets of, or by any other manner, any business or any corporation, partnership,
\nassociation or other business organization or division thereof, or otherwise
\nacquire or agree to acquire any assets that are material, individually or in the
\naggregate, to the business of Proxim, other than in the ordinary course of
\nbusiness consistent with past practice;<\/p>\n
(j) Sell, lease, license, encumber or otherwise dispose of, in
\nwhole or in part, any properties (including Intellectual Property) or assets
\nexcept sales of inventory in the ordinary course of business consistent with
\npast practice, and except for the sale, lease or disposition (other than through
\nlicensing, except for immaterial, non-exclusive licenses in the ordinary course
\nof business) of property or assets that are not material, individually or in the
\naggregate, to the business of Proxim;<\/p>\n
(k) Incur any indebtedness for borrowed money or guarantee any
\nsuch indebtedness of another person, issue or sell any debt securities or
\noptions, warrants, calls or other rights to acquire any debt securities of
\nProxim, enter into any “keep well” or other agreement to maintain any financial
\nstatement condition or enter into any arrangement having the economic effect of
\nany of the foregoing other than (i) in connection with the financing of ordinary
\ncourse trade payables consistent with past practice or (ii) pursuant to existing
\ncredit facilities in the ordinary course of business;<\/p>\n
(l) Adopt or amend any employee benefit plan or employee stock
\npurchase or employee stock option plan, or enter into any employment contract or
\ncollective bargaining agreement (other than offer letters and letter agreements
\nentered into in the ordinary course of business consistent with past practice
\nwith employees who are terminable “at will”), pay any special bonus or special
\nremuneration (cash, equity or otherwise) to any director or employee, or
\nincrease the salaries or wage rates or fringe benefits (including rights to
\nseverance or indemnification) of its directors, officers, employees or
\nconsultants;<\/p>\n
(m) Make any individual or series of related payments outside of
\nthe ordinary course of business in excess of $250,000;<\/p>\n
(n) Except in the ordinary course of business consistent with
\npast practice, modify, amend or terminate any material contract or agreement to
\nwhich Proxim or any of its subsidiaries is a party, or waive, delay the exercise
\nof, release or assign any material rights or claims thereunder, in any case
\nwhich would be material to Proxim;<\/p>\n
(o) Materially modify any material contract, agreement or
\nobligation relating to the distribution, sale, license or marketing by third
\nparties of Proxim’s products or products licensed by Proxim;<\/p>\n
(p) Revalue any of its assets or, except as required by GAAP,
\nadopt or change any accounting methods, principles or practices;<\/p>\n
-40-<\/p>\n
(q) Enter into any closing agreement in respect of material
\nTaxes, settle any claim or assessment in respect of any material Taxes, or
\nconsent to any extension or waiver of the limitation period applicable to any
\nclaim or assessment in respect of any material Taxes;<\/p>\n
(r) Incur or enter into any agreement or commitment in excess of
\n$500,000 individually;<\/p>\n
(s) Hire any employee with an annual compensation level in
\nexcess of $75,000;<\/p>\n
(t) Pay, discharge or satisfy any claim, liability or obligation
\n(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
\nthe payment, discharge or satisfaction of non-material amounts in the ordinary
\ncourse of business;<\/p>\n
(u) Modify or amend in any manner that is adverse to Proxim, or
\nterminate, any material agreement or any confidentiality agreement entered into
\nby Proxim or any subsidiary in the ordinary course of business, or release or
\nwaive any material rights for claims, or modify or amend in any manner adverse
\nto Proxim, any confidentiality, standstill or similar agreements to which Proxim
\nor any of its subsidiaries is a party;<\/p>\n
(v) Make or change any material Tax election, change any method
\nof accounting with respect to any material Tax or file any material amended Tax
\nReturn;<\/p>\n
(w) Settle, compromise, commence or otherwise conduct or
\nprosecute in any manner not previously disclosed to Western Multiplex, any
\nmaterial Action, arbitration, investigation, audit, controversy or similar
\ndispute or proceeding, except in connection with the intellectual property
\nlitigation (or threatened litigation) described in the Proxim Disclosure Letter
\nor Proxim SEC Documents; provided, however, that any such action or settlement
\nin connection with the disclosed intellectual property litigation (or threatened
\nlitigation) include a general release in favor of Proxim (or its successor) and
\ndoes not require a material royalty or lump sum payment by Proxim or material
\npost-Closing obligation of Proxim (or its successor) to any third party; or<\/p>\n
(x) Redeem the Proxim Rights or amend, waive any rights under or
\notherwise modify or terminate the Proxim Rights Plan in connection with an
\nAcquisition Proposal; or<\/p>\n
(y) Agree in writing or otherwise to take any of the actions
\ndescribed in Section 4.1(a) through (x) above.<\/p>\n
4.2 Conduct of Business by Western Multiplex. During the period from the
\ndate of this Agreement and continuing until the earlier of the termination of
\nthis Agreement pursuant to its terms or the Effective Time, Western Multiplex
\n(which for the purposes of this Article IV shall include Western Multiplex and
\neach of its subsidiaries) agrees, except (i) as specifically provided in this
\nAgreement or Article IV of the Western Multiplex Disclosure Letter or (ii) to
\nthe extent that Proxim shall otherwise consent in writing (the provision of a
\nresponse to any request for such consent not to be unreasonably delayed), to
\ncarry on its business diligently and in accordance with good commercial practice
\nand to carry on its business in the usual, regular and ordinary course, in<\/p>\n
-41-<\/p>\n
substantially the same manner as heretofore conducted and in compliance with all
\napplicable laws and regulations, to pay its debts and taxes when due subject to
\ngood faith disputes over such debts or taxes, to pay or perform other material
\nobligations when due, and use its commercially reasonable efforts consistent
\nwith past practices and policies to preserve intact its present business
\norganization, keep available the services of its present officers and employees
\nand preserve its relationships with customers, suppliers, distributors,
\nlicensors, licensees and others with which it has business dealings. In
\naddition, except (x) as specifically provided in this Agreement or Article IV of
\nthe Western Multiplex Disclosure Letter or (y) to the extent that Proxim shall
\notherwise consent in writing (the provision of a response to any request for
\nsuch consent not to be unreasonably delayed), Western Multiplex shall not do any
\nof the following and shall prevent its subsidiaries from doing any of the
\nfollowing:<\/p>\n
(a) Accelerate, amend, modify or waive any stock repurchase
\nrights; accelerate, amend or modify the period of exercisability or other
\nmaterial terms of options, warrants or restricted stock; reprice or exchange
\noptions or warrants granted under any employee, consultant or director stock
\nplans or otherwise; or authorize cash payments in exchange for any options,
\nwarrants or restricted stock granted under any of such plans or otherwise;<\/p>\n
(b) Enter into any material partnership arrangements, joint
\ndevelopment agreements or strategic alliances;<\/p>\n
(c) Grant any severance or termination pay (cash, equity or
\notherwise) to any officer or employee except pursuant to written agreements
\noutstanding, or policies existing, on the date hereof and as previously
\ndisclosed in the Western Multiplex Disclosure Letter, or adopt any new severance
\nplan or amend or modify or alter in any manner any severance plan, agreement or
\narrangement existing on the date hereof;<\/p>\n
(d) Cancel, terminate, extend, amend or modify in any material
\nrespect any intellectual property contract other than with respect to
\nintellectual property contracts which are not Western Multiplex Material IP
\nContracts, in the ordinary course of business;<\/p>\n
(e) Declare, set aside or pay any dividends on or make any other
\ndistributions (whether with cash, stock, equity securities or property) in
\nrespect of any capital stock or split, combine or reclassify any capital stock
\nor issue or authorize the issuance of any other securities in respect of, in
\nlieu of or in substitution for any capital stock;<\/p>\n
(f) Purchase, redeem or otherwise acquire, directly or
\nindirectly, any shares of capital stock of Western Multiplex or its
\nsubsidiaries, except repurchases of unvested shares at cost in connection with
\nthe termination of the employment relationship with any employee pursuant to
\nstock option or purchase agreements in effect on the date hereof;<\/p>\n
(g) Issue, deliver, sell, authorize, pledge or otherwise
\nencumber or propose any of the foregoing with respect to any shares of capital
\nstock or any securities convertible into shares of capital stock, or
\nsubscriptions, rights, warrants or options to acquire any shares of capital
\nstock or any securities convertible into shares of capital stock, or enter into
\nother agreements or commitments<\/p>\n
-42-<\/p>\n
of any character obligating it to issue any such shares or convertible
\nsecurities, other than (i) the issuance, delivery and\/or sale of shares of
\nWestern Multiplex Common Stock pursuant to the exercise of stock options
\ntherefor outstanding as of the date of this Agreement and (ii) shares of Western
\nMultiplex Common Stock issuable to participants in Western Multiplex’s Employee
\nStock Purchase Plan consistent with the terms thereof;<\/p>\n
(h) Cause, permit or propose any amendments to the Certificate
\nof Incorporation or Bylaws of Western Multiplex;<\/p>\n
(i) Acquire or agree to acquire by merging or consolidating
\nwith, or by purchasing any equity interest in or a material portion of the
\nassets of, or by any other manner, any business or any corporation, partnership,
\nassociation or other business organization or division thereof, or otherwise
\nacquire or agree to acquire any assets that are material, individually or in the
\naggregate, to the business of Western Multiplex, other than in the ordinary
\ncourse of business consistent with past practice;<\/p>\n
(j) Sell, lease, license, encumber or otherwise dispose of any
\nproperties (including Intellectual Property) or assets except sales of inventory
\nin the ordinary course of business consistent with past practice, except for the
\nsale, lease or disposition (other than through licensing, except for immaterial,
\nnon-exclusive licenses in the ordinary course of business) of property or assets
\nthat are not material, individually or in the aggregate, to the business of
\nWestern Multiplex;<\/p>\n
(k) Incur any indebtedness for borrowed money or guarantee any
\nsuch indebtedness of another person, issue or sell any debt securities or
\noptions, warrants, calls or other rights to acquire any debt securities of
\nWestern Multiplex, enter into any “keep well” or other agreement to maintain any
\nfinancial statement condition or enter into any arrangement having the economic
\neffect of any of the foregoing other than (i) in connection with the financing
\nof ordinary course trade payables consistent with past practice or (ii) pursuant
\nto existing credit facilities in the ordinary course of business;<\/p>\n
(l) Adopt or amend any employee benefit plan or employee stock
\npurchase or employee stock option plan, or enter into any employment contract or
\ncollective bargaining agreement (other than offer letters and letter agreements
\nentered into in the ordinary course of business consistent with past practice
\nwith employees who are terminable “at will”), pay any special bonus or special
\nremuneration to any director or employee, or increase the salaries or wage rates
\nor fringe benefits (including rights to severance or indemnification) of its
\ndirectors, officers, employees or consultants;<\/p>\n
(m) Make any individual or series of related payments outside of
\nthe ordinary course of business in excess of $250,000;<\/p>\n
(n) Except in the ordinary course of business consistent with
\npast practice, modify, amend or terminate any material contract or agreement to
\nwhich Western Multiplex or any of its subsidiaries is a party or waive, delay
\nthe exercise of, release or assign any material rights or claims thereunder, in
\nany case which would be material to Western Multiplex;<\/p>\n
-43-<\/p>\n
(o) Materially modify any material contract, agreement or
\nobligation relating to the distribution, sale, license or marketing by third
\nparties of Western Multiplex’s products or products licensed by Western
\nMultiplex;<\/p>\n
(p) Revalue any of its assets or, except as required by GAAP,
\nadopt or change any accounting methods, principles or practices;<\/p>\n
(q) Enter into any closing agreement in respect of any material
\nTaxes, settle any claim or assessment in respect of any material Taxes, or
\nconsent to any extension or waiver of the limitation period applicable to any
\nclaim or assessment in respect of any material Taxes;<\/p>\n
(r) Incur or enter into any agreement or commitment in excess of
\n$500,000;<\/p>\n
(s) Hire any employee with an annual compensation level in
\nexcess of $75,000;<\/p>\n
(t) Pay, discharge or satisfy any claim, liability or obligation
\n(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
\nthe payment, discharge or satisfaction in non-material amounts in the ordinary
\ncourse of business;<\/p>\n
(u) Modify or amend in any manner that is adverse to Western
\nMultiplex, or terminate, any material agreement or any confidentiality agreement
\nentered into by Western Multiplex or any subsidiary in the ordinary course of
\nbusiness, or release or waive any material rights for claims, or modify or amend
\nin any manner adverse to Western Multiplex, any confidentiality, standstill or
\nsimilar agreements to which Western Multiplex or any of its subsidiaries is a
\nparty;<\/p>\n
(v) Make or change any material Tax election, change any method
\nof accounting with respect to any material Tax or file any material amended Tax
\nReturn;<\/p>\n
(w) Settle, compromise, commence or otherwise conduct or
\nprosecute in any manner not previously disclosed to Proxim, any material Action,
\narbitration, investigation, audit, controversy or similar dispute or proceeding;
\nor<\/p>\n
(x) Agree in writing or otherwise to take any of the actions
\ndescribed in Section 4.1(a) through (w) above.<\/p>\n
ARTICLE V
\n ADDITIONAL AGREEMENTS<\/p>\n
5.1 Prospectus\/Proxy Statement; Registration Statement. As promptly as
\npracticable after the execution of this Agreement, Western Multiplex and Proxim
\nwill prepare and file with the SEC the Prospectus\/Proxy Statement, and Western
\nMultiplex will prepare and file with the SEC the Registration Statement in which
\nthe Prospectus\/Proxy Statement is to be included as a prospectus. Western
\nMultiplex and Proxim will provide each other with any information which may be
\nrequired in order to effectuate the preparation and filing of the
\nProspectus\/Proxy Statement and the<\/p>\n
-44-<\/p>\n
Registration Statement pursuant to this Section 5.1. Each of Western Multiplex
\nand Proxim will respond to any comments from the SEC, will use all reasonable
\nefforts to cause the Registration Statement to be declared effective under the
\nSecurities Act as promptly as practicable after such filing and to keep the
\nRegistration Statement effective as long as is necessary to consummate the
\nMerger and the transactions contemplated hereby. Each of Western Multiplex and
\nProxim will notify the other promptly upon the receipt of any comments from the
\nSEC or its staff in connection with the filing of, or amendments or supplements
\nto, the Registration Statement and\/or the Prospectus\/Proxy Statement. Whenever
\nany event occurs which is required to be set forth in an amendment or supplement
\nto the Prospectus\/Proxy Statement, the Registration Statement, Western Multiplex
\nor Proxim, as the case may be, will promptly inform the other of such occurrence
\nand cooperate in filing with the SEC or its staff, and\/or mailing to
\nstockholders of Western Multiplex and\/or Proxim, such amendment or supplement.
\nEach of Western Multiplex and Proxim shall cooperate and provide the other with
\na reasonable opportunity to review and comment on any amendment or supplement to
\nthe Registration Statement and Prospect\/Proxy Statement prior to filing such
\nwith the SEC, and will provide each other with a copy of all such filings made
\nwith the SEC. Each of Western Multiplex and Proxim will cause the
\nProspectus\/Proxy Statement to be mailed to its respective stockholders at the
\nearliest practicable time after the Registration Statement is declared effective
\nby the SEC.<\/p>\n
5.2 Meetings of Stockholders; Board Recommendation.<\/p>\n
(a) Meeting of Stockholders. Promptly after the date hereof,
\neach of Western Multiplex and Proxim will take all action necessary or advisable
\nin accordance with Delaware Law and its respective Certificate of Incorporation
\nand Bylaws to call, hold and convene the Proxim Stockholders’ Meeting and the
\nWestern Multiplex Stockholders’ Meeting to consider, in the case of Western
\nMultiplex, the Share Issuance, and in the case of Proxim, adoption of this
\nAgreement, respectively (each, a “STOCKHOLDERS’ MEETING”), to be held as
\npromptly as practicable. Subject to Sections 5.3(d) and 7.1, Western Multiplex
\nand Proxim will use their reasonable best efforts to solicit from the
\nstockholders of Proxim and Western Multiplex proxies in favor of, in the case of
\nWestern Multiplex, the Share Issuance, and, in the case of Proxim, the adoption
\nof this Agreement, and will take all other action necessary or advisable to
\nsecure the vote or consent of their respective stockholders required by the
\nrules of National Association of Securities Dealers, Inc. or Delaware Law to
\nobtain such approvals, including, without limitation, engaging one or more
\nnationally recognized proxy solicitation firms and information agents to assist
\nin such solicitation. Notwithstanding anything to the contrary contained in this
\nAgreement, Western Multiplex or Proxim, as the case may be, may adjourn or
\npostpone its Stockholders’ Meeting to the extent necessary to ensure that any
\nnecessary supplement or amendment to the Prospectus\/Proxy Statement is provided
\nto its respective stockholders in advance of the vote to be taken at such
\nmeeting or, if as of the time for which the Stockholders’ Meeting is originally
\nscheduled (as set forth in the Prospectus\/Proxy Statement) there are
\ninsufficient shares of common stock of Western Multiplex or Proxim, as the case
\nmay be, represented (either in person or by proxy) to constitute a quorum
\nnecessary to conduct the business of such Stockholders’ Meeting. Each of Western
\nMultiplex and Proxim shall ensure that its respective Stockholders’ Meeting is
\ncalled, noticed, convened, held and conducted, and that all proxies solicited by
\nits in connection with the Stockholders’ Meeting are<\/p>\n
-45-<\/p>\n
solicited in compliance with Delaware Law, its Certificate of Incorporation and
\nBylaws, the rules of the Nasdaq and all other applicable Legal Requirements.
\nSubject to Section 7.1(f) ,(g), (j) and (k), the obligation of Western Multiplex
\nor Proxim, as the case may be, to call, give notice of, convene and hold its
\nStockholders’ Meeting in accordance with this Section 5.2(a) shall not be
\nlimited to or otherwise affected by the commencement, disclosure, announcement
\nor submission to it of any Acquisition Proposal (as defined in Section 5.3(h))
\nwith respect to it, or by any withdrawal, amendment or modification of the
\nrecommendation of its Board of Directors with respect to the Merger and\/or this
\nAgreement.<\/p>\n
(b) Board Recommendation. Except to the extent expressly
\npermitted by Section 5.3(d): (i) the Board of Directors of each of Western
\nMultiplex and Proxim shall make the applicable Board Recommendation to their
\nstockholders, (ii) the Prospectus\/Proxy Statement shall include a statement to
\nthe effect that the Board of Directors of each of Western Multiplex and Proxim
\nhas made the applicable Board Recommendation and (iii) neither the Board of
\nDirectors of Western Multiplex or Proxim nor any committee thereof shall
\nwithdraw, amend or modify, or propose or resolve to withdraw, amend or modify in
\na manner adverse to the other party, the applicable Board Recommendation.<\/p>\n
5.3 Acquisition Proposals.<\/p>\n
(a) No Solicitation. Each of Western Multiplex and Proxim agrees
\nthat neither it nor any of its subsidiaries nor any of the officers, directors
\nand representatives (including any investment banker, attorney or accountant
\nretained by it or any of its subsidiaries) of it or its subsidiaries shall, and
\nthat it shall use its reasonable best efforts to cause its and its subsidiaries’
\nemployees and other agents not to (and shall not authorize any of them to)
\ndirectly or indirectly, (i) solicit, initiate, encourage, knowingly facilitate
\nor induce any inquiry with respect to, or the making, submission or announcement
\nof, any Acquisition Proposal with respect to itself, (ii) participate in any
\ndiscussions or negotiations regarding, or furnish to any Person any nonpublic
\ninformation with respect to, or take any other action to facilitate any
\ninquiries or the making of any proposal that constitutes or may reasonably be
\nexpected to lead to, any Acquisition Proposal with respect to itself, (iii)
\nengage in discussions with any Person with respect to any Acquisition Proposal
\nwith respect to itself, except as to the existence of the terms contained in
\nthis Section 5.3(a), (iv) approve, endorse or recommend any Acquisition Proposal
\nwith respect to itself (except to the extent specifically permitted pursuant to
\nSection 5.3(d)) or (v) enter into any letter of intent or similar document or
\nany contract, agreement or commitment contemplating or otherwise relating to any
\nAcquisition Proposal or transaction contemplated thereby with respect to itself.
\nEach of Western Multiplex and Proxim and their respective subsidiaries, and any
\nof the officers, directors and representatives (including any investment banker,
\nattorney or accountant retained by it or any of its subsidiaries) shall, and
\nshall use its reasonable best efforts to cause its and its subsidiaries’
\nemployees and other agents to, immediately cease any and all existing
\nactivities, discussions or negotiations with any third parties conducted
\nheretofore with respect to any Acquisition Proposal with respect to itself.<\/p>\n
-46-<\/p>\n
(b) Notification of Unsolicited Acquisition Proposals.<\/p>\n
(i) As promptly as practicable (but in any event within
\none business day) after receipt of any Acquisition Proposal or any request for
\nnonpublic information or inquiry which it reasonably believes could lead to an
\nAcquisition Proposal, Western Multiplex or Proxim, as the case may be, shall
\nprovide the other party hereto with written notice of the material terms and
\nconditions of such Acquisition Proposal, request or inquiry, and the identity of
\nthe Person or group making any such Acquisition Proposal, request or inquiry and
\na copy of all written materials provided in connection with such Acquisition
\nProposal, request or inquiry. The recipient of the Acquisition Proposal, request
\nor inquiry shall keep the other party hereto informed as promptly as practicable
\nin all material respects of the status and details (including all amendments or
\nproposed amendments) of any such Acquisition Proposal, request or inquiry and
\nany discussions or negotiations it is having with the party making the
\nAcquisition Proposal, request or inquiry, and shall promptly provide to the
\nother party hereto a copy of all written and electronic materials subsequently
\nprovided in connection with such Acquisition Proposal, request or inquiry.<\/p>\n
(ii) Western Multiplex or Proxim, as the case may be,
\nshall provide the other party hereto with forty-eight (48) hours prior notice
\n(or such lesser prior notice as is provided to the members of its Board of
\nDirectors) of any meeting of its Board of Directors at which its Board of
\nDirectors is reasonably expected to consider any Acquisition Proposal.<\/p>\n
(c) Superior Offers. Notwithstanding anything to the contrary
\ncontained in Section 5.3(a), in the event that Western Multiplex or Proxim, as
\nthe case may be, receives an unsolicited, bona fide written Acquisition Proposal
\nwith respect to itself from a third party that its Board of Directors has in
\ngood faith concluded (following consultation with its outside legal counsel and
\nits financial advisor) is a Superior Offer (as defined in Section 5.3(h)), it
\nmay then take the following actions (but only if and to the extent that its
\nBoard of Directors concludes in good faith, following consultation with its
\noutside legal counsel, that its fiduciary obligations under applicable law
\nrequire it to do so):<\/p>\n
(i) Furnish nonpublic information to the third party
\nmaking such Acquisition Proposal, provided that (i) (A) concurrently with
\nfurnishing any such nonpublic information to such party, its gives the other
\nparty hereto written notice of its intention to furnish nonpublic information
\nand (B) it receives from the third party an executed confidentiality agreement,
\nthe terms of which are at least as restrictive as the terms contained in the
\nConfidentiality Agreement (as defined in Section 5.4), and (ii)
\ncontemporaneously with furnishing any such nonpublic information to such third
\nparty, it furnishes such nonpublic information to the other party hereto (to the
\nextent such nonpublic information has not been previously so furnished); and<\/p>\n
(ii) Engage in negotiations with the third party with
\nrespect to the Acquisition Proposal, provided that three (3) business days prior
\nto entering into negotiations with such third party, it gives the other party
\nhereto written notice of the its intention to enter into negotiations with such
\nthird party.<\/p>\n
-47-<\/p>\n
(d) Changes of Recommendation. Notwithstanding anything to the
\ncontrary contained in this Agreement, in response to the receipt of a Superior
\nOffer, the Board of Directors of Western Multiplex or Proxim, as the case may
\nbe, may withhold, withdraw, amend or modify its recommendation in favor of the
\nMerger, and, in the case of a Superior Offer that is a tender or exchange offer
\nmade directly to its stockholders, may recommend that its stockholders accept
\nthe tender or exchange offer (any of the foregoing actions, whether by a Board
\nof Directors or a committee thereof, a “CHANGE OF RECOMMENDATION”), if all of
\nthe following conditions in clauses (i) through (v) are met:<\/p>\n
(i) A Superior Offer with respect to it has been made
\nand has not been withdrawn;<\/p>\n
(ii) Its Stockholders’ Meeting has not occurred or the
\nrequisite vote of its stockholders to adopt this Agreement or to approve the
\nShare Issuance, as the case may be, has not been obtained;<\/p>\n
(iii) It shall have (A) provided to the other party
\nhereto written notice which shall state expressly (1) that it has received a
\nSuperior Offer, (2) the material terms and conditions of any Superior Offer it
\nhas received and the identity of the Person or group making the Superior Offer,
\n(3) that it intends to effect a Change of Recommendation and the manner in which
\nit intends to do so (B) provided to the other party hereto a copy of all written
\nand electronic materials delivered to the Person or group making any Superior
\nOffer it has received, and (C) made available to the other party hereto all
\nmaterials and information made available to the Person or group making any
\nSuperior Offer it has received;<\/p>\n
(iv) Its Board of Directors has concluded in good faith,
\nafter consultation with its outside legal counsel, that, in light of such
\nSuperior Offer, the Change of Recommendation is required in order for the Board
\nof Directors to comply with its fiduciary obligations to its stockholders under
\napplicable law; and<\/p>\n
(v) It shall not have breached any of the provisions set
\nforth in Section 5.2 or this Section 5.3 in connection with each Superior Offer.<\/p>\n
(e) Termination following Receipt of a Superior Offer and a
\nChange of Recommendation. If a Superior Offer has been received by Proxim or
\nWestern Multiplex, as the case may be, then subject to Section 5.3(d) and, with
\nrespect to Proxim, Section 7.1(j), or, with respect to Western Multiplex,
\nSection 7.1(k), Proxim or Western Multiplex, as the case may be, may terminate
\nthis Agreement pursuant to Section 7.1(j) or 7.1(k), respectively (and
\nconcurrently with or after such termination, if it so chooses, the Board of
\nDirectors of Proxim or Western Multiplex, as the case may be, may cause Proxim
\nor Western Multiplex to enter into any letter of intent, agreement in principle,
\nacquisition agreement or other similar agreement, but only after the third
\nbusiness day following receipt by Western Multiplex or Proxim, as the case may
\nbe, of written notice advising Western Multiplex or Proxim, as the case may be,
\nthat Proxim or Western Multiplex is prepared to accept a Superior Offer.<\/p>\n
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(f) Continuing Obligation to Call, Hold and Convene
\nStockholders’ Meeting; No Other Vote. Subject to Section 7.1, nothing contained
\nin this Agreement shall limit the obligation of Western Multiplex or Proxim to
\ncall, hold and convene its respective Stockholders’ Meeting (regardless of
\nwhether its Board of Directors has effected a Change of Recommendation) in
\naccordance with Section 5.2. Neither Western Multiplex nor Proxim shall submit
\nto the vote of its respective stockholders any Acquisition Proposal, or propose
\nto do so.<\/p>\n
(g) Compliance with Tender Offer Rules. Nothing contained in
\nthis Agreement shall prohibit either party or its respective Board of Directors
\nfrom taking and disclosing to its stockholders a position contemplated by Rules
\n14d-9 and 14e-2(a) promulgated under the Exchange Act; provided that the content
\nof any such disclosure thereunder shall be subject to the terms of Section
\n5.3(c) of this Agreement. Without limiting the foregoing proviso, neither party
\nshall effect a Change of Recommendation unless specifically permitted pursuant
\nto the terms of Section 5.3(d).<\/p>\n
(h) Certain Definitions. For purposes of this Agreement, the
\nfollowing terms shall have the following meanings:<\/p>\n
(i) “ACQUISITION PROPOSAL,” with respect to a party,
\nshall mean any offer or proposal with respect to, or a transaction to effect, a
\nmerger, reorganization, share exchange, consolidation, business combination,
\nrecapitalization, liquidation, dissolution or similar transaction involving it
\nor any of its material subsidiaries, or any purchase or sale of 15% or more of
\nthe consolidated assets (including without limitation stock of its subsidiaries)
\nof such party and its subsidiaries, taken as a whole, or any purchase or sale
\nof, or tender or exchange offer for, the equity securities of such party that,
\nif consummated, would result in any Person (or the stockholders of such Person)
\nbeneficially owning or acquiring securities representing 15% or more of the
\ntotal voting power of such party (or of the surviving parent entity in such
\ntransaction) or any of its material subsidiaries.<\/p>\n
(ii) “SUPERIOR OFFER,” with respect to a party, shall
\nmean an unsolicited, bona fide written Acquisition Proposal made by a third
\nparty on terms that the Board of Directors of such party has in good faith
\nconcluded (after consultation with its outside legal counsel and its financial
\nadvisor), taking into account, among other things, all legal, financial,
\nregulatory and other aspects of the offer and the Person making the offer, to be
\nmore favorable, from a financial point of view, to such party’s stockholders (in
\ntheir capacities as stockholders) than the terms of the Merger and is reasonably
\ncapable of being consummated, it being understood and agreed that the inclusion
\nof a due diligence condition in an Acquisition Proposal shall not in and of
\nitself preclude such Acquisition Proposal from being a Superior Offer for the
\npurposes of Section 5.3(c) hereof. For the purposes of this definition, the term
\n“Acquisition Proposal” shall have the meaning assigned to such term in Section
\n5.3(h)(i), except that references to “15%” therein shall be deemed to be
\nreferences to “40%”.<\/p>\n
-49-<\/p>\n
5.4 Confidentiality; Access to Information; No Modification of
\nRepresentations, Warranties or Covenants.<\/p>\n
(a) Confidentiality. The parties acknowledge that Proxim and
\nWestern Multiplex have previously executed a confidentiality agreement dated May
\n21, 2001 (the “CONFIDENTIALITY AGREEMENT”), which Confidentiality Agreement will
\ncontinue in full force and effect in accordance with its terms.<\/p>\n
(b) Access to Information. Each of Proxim and Western Multiplex
\nwill afford the other and the other’s accountants, counsel and other
\nrepresentatives reasonable access during normal business hours to its
\nproperties, books, records and personnel during the period prior to the
\nEffective Time to obtain all information concerning its business, including the
\nstatus of product development efforts, properties, results of operations and
\npersonnel, as such other party may reasonably request; provided, however, that
\nany party may restrict the foregoing access to the extent that any law, treaty,
\nrule or regulation of any Governmental Entity applicable to such party requires
\nsuch party or its subsidiaries to restrict or prohibit access to any such
\nproperties or information. Any information provided pursuant to this Section
\n5.4(b) shall be subject to the Confidentiality Agreement.<\/p>\n
(c) No Modification of Representations and Warranties or
\nCovenants. No information or knowledge obtained in any investigation or
\nnotification pursuant to this Section 5.4, Section 5.6 or Section 5.7 shall
\naffect or be deemed to modify any representation or warranty contained herein,
\nthe covenants or agreements of the parties hereto or the conditions to the
\nobligations of the parties hereto under this Agreement.<\/p>\n
5.5 Public Disclosure. Without limiting any other provision of this
\nAgreement, Western Multiplex and Proxim will consult with each other and agree,
\nbefore issuing any press release or otherwise making any public statement with
\nrespect to the Merger, this Agreement or any Acquisition Proposal and will not
\nissue any such press release or make any such public statement prior to such
\nconsultation and agreement, except as may be required by law or any listing
\nagreement with the Nasdaq or any other applicable national securities exchange
\n(in which case Western Multiplex and Proxim will first consult with the other
\nparty to the extent reasonably practicable). The parties have agreed to the text
\nof the joint press release announcing the signing of this Agreement.<\/p>\n
5.6 Regulatory Filings; Reasonable Efforts.<\/p>\n
(a) Regulatory Filings. Each of Western Multiplex and Proxim
\nshall coordinate and cooperate with one another and shall each use all
\nreasonable efforts to comply with, and shall each refrain from taking any action
\nthat would impede compliance with, all Legal Requirements, and as promptly as
\npracticable after the date hereof, each of Western Multiplex and Proxim shall
\nmake all filings reasonably determined by the parties to be required by any
\nGovernmental Entity in connection with the Merger and the transactions
\ncontemplated hereby, including, without limitation, (i) Notification and Report
\nForms with the United States Federal Trade Commission (the “FTC”) and the
\nAntitrust Division of the United States Department of Justice (“DOJ”) as
\nrequired by the <\/p>\n
-50-<\/p>\n
HSR Act, (ii) any other comparable filing that will materially impair the
\nability of the parties to close, (iii) other comparable pre-merger filings
\npursuant to the merger notification or control laws of any applicable
\njurisdiction, as agreed by the parties hereto and (iv) any filings required
\nunder the Securities Act, the Exchange Act, any applicable state or securities
\nor “blue sky” laws and the securities laws of any foreign country, or any other
\nLegal Requirement relating to the Merger. Each of Western Multiplex and Proxim
\nwill cause all documents that it is responsible for filing with any Governmental
\nEntity under this Section 5.4(a) to comply in all material respects with all
\napplicable Legal Requirements.<\/p>\n
(b) Exchange of Information. Western Multiplex and Proxim each
\nshall promptly supply the other with any information that may be required in
\norder to effectuate any filings or application pursuant to Section 5.6(a).
\nExcept where prohibited by applicable Legal Requirements, and subject to the
\nConfidentiality Agreement, each of Proxim and Western Multiplex shall consult
\nwith the other prior to taking a position with respect to any such filing, shall
\nconsider in good faith the views of one another in connection with any analyses,
\nappearances, presentations, memoranda, briefs, Proxim papers, arguments,
\nopinions and proposals before making or submitting any of the foregoing to any
\nGovernmental Entity by or on behalf of any party hereto in connection with any
\ninvestigations or proceedings in connection with this Agreement or the
\ntransactions contemplated hereby (including under any antitrust or fair trade
\nLegal Requirement), coordinate with the other in preparing and exchanging such
\ninformation and promptly provide the other with copies of all filings,
\npresentations or submissions (and a summary of any oral presentations) made by
\nsuch party with any Governmental Entity in connection with this Agreement or the
\ntransactions contemplated hereby, provided that with respect to any such filing,
\npresentation or submission, each of Western Multiplex and Proxim need not supply
\nthe other with copies (or in case of oral presentations, a summary) to the
\nextent that any law, treaty, rule or regulation of any Governmental Entity
\napplicable to such party requires such party or its subsidiaries to restrict or
\nprohibit access to any such properties or information.<\/p>\n
(c) Notification. Each of Western Multiplex and Proxim will
\nnotify the other promptly upon the receipt of (i) any comments from any
\nofficials of any Governmental Entity in connection with any filings made
\npursuant hereto and (ii) any request by any officials of any Governmental Entity
\nfor amendments or supplements to any filings made pursuant to, or information
\nprovided to comply in all material respects with, any Legal Requirements.
\nWhenever any event occurs that is required to be set forth in an amendment or
\nsupplement to any filing made pursuant to Section 5.6(a), Western Multiplex or
\nProxim, as the case may be, will promptly inform the other of such occurrence
\nand cooperate in filing with the applicable Governmental Entity such amendment
\nor supplement.<\/p>\n
(d) Reasonable Best Efforts. Subject to the express provisions of
\nSection 5.2 and Section 5.3 hereof and upon the terms and subject to the
\nconditions set forth herein, each of the parties agrees to use reasonable best
\nefforts to take, or cause to be taken, all actions, and to do, or cause to be
\ndone, and to assist and cooperate with the other parties in doing, all things
\nnecessary, proper or advisable to consummate and make effective, in the most
\nexpeditious manner practicable, the Merger and the other transactions
\ncontemplated by this Agreement, including using reasonable<\/p>\n
-51-<\/p>\n
best efforts to accomplish the following: (i) the taking of all reasonable acts
\nnecessary to cause the conditions precedent set forth in Article VI to be
\nsatisfied, (ii) the obtaining of all necessary actions or nonactions, waivers,
\nconsents, approvals, orders and authorizations from Governmental Entities and
\nthe making of all necessary registrations, declarations and filings (including
\nregistrations, declarations and filings with Governmental Entities, if any) and
\nthe taking of such reasonable steps as may be necessary to avoid any suit,
\nclaim, action, investigation or proceeding by any Governmental Entity, (iii) the
\nobtaining of all necessary consents, approvals or waivers from third parties,
\nincluding all Necessary Consents, (iv) the defending of any suits, claims,
\nactions, investigations or proceedings, whether judicial or administrative,
\nchallenging this Agreement or the consummation of the transactions contemplated
\nhereby, including seeking to have any stay or temporary restraining order
\nentered by any court or other Governmental Entity vacated or reversed and (v)
\nthe execution or delivery of any additional instruments necessary to consummate
\nthe transactions contemplated by, and to fully carry out the purposes of, this
\nAgreement. In connection with and without limiting the foregoing, Proxim and its
\nBoard of Directors shall, if any takeover statute or similar Legal Requirement
\nis or becomes applicable to the Merger, this Agreement or any of the
\ntransactions contemplated by this Agreement, use all reasonable efforts to
\nensure that the Merger and the other transactions contemplated by this Agreement
\nmay be consummated as promptly as practicable on the terms contemplated by this
\nAgreement and otherwise to minimize the effect of such Legal Requirement on the
\nMerger, this Agreement and the transactions contemplated hereby.<\/p>\n
(e) Limitation on Divestiture. Notwithstanding anything in this
\nAgreement to the contrary, nothing contained in this Agreement shall be deemed
\nto require Western Multiplex or Proxim or any subsidiary or affiliate thereof to
\nagree to any divestiture by itself or any of its affiliates of shares of capital
\nstock or of any business, assets or property, or the imposition of any material
\nlimitation on the ability of any of them to conduct their businesses or to own
\nor exercise control of such assets, properties and stock. Proxim shall not take
\nor agree to take any action identified in the immediately preceding sentence
\nwithout the prior written consent of Western Multiplex.<\/p>\n
5.7 Notification of Certain Matters.<\/p>\n
(a) By Proxim. Proxim shall give prompt notice to Western
\nMultiplex when and if Proxim becomes aware that any representation or warranty
\nmade by it contained in this Agreement has become untrue or inaccurate, or that
\nit has failed to comply with or satisfy any covenant, condition or agreement to
\nbe complied with or satisfied by it under this Agreement, in each case such that
\nthe conditions set forth in Section 6.3(a) or 6.3(b) would not be satisfied.<\/p>\n
(b) By Western Multiplex. Western Multiplex shall give prompt
\nnotice to Proxim when and if Western Multiplex becomes aware that any
\nrepresentation or warranty made by it contained in this Agreement has become
\nuntrue or inaccurate, or that it has failed to comply with or satisfy any
\ncovenant, condition or agreement to be complied with or satisfied by it under
\nthis Agreement, in each case, such that the conditions set forth in Section
\n6.2(a) or 6.2(b) would not be satisfied.<\/p>\n
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5.8 Third-Party Consents. As soon as practicable following the date
\nhereof, Western Multiplex and Proxim will each use commercially reasonable
\nefforts to obtain any material consents, waivers and approvals under any of its
\nor its subsidiaries’ respective Contracts required to be obtained in connection
\nwith the consummation of the transactions contemplated hereby.<\/p>\n
5.9 Stock Options and Employee Benefits.<\/p>\n
(a) Assumption of Stock Options. The parties hereto shall take
\nall requisite action so that, at the Effective Time, each then outstanding
\nProxim Option, whether or not exercisable at the Effective Time and regardless
\nof the respective exercise prices thereof, will be assumed by Western Multiplex.
\nEach Proxim Option so assumed by Western Multiplex under this Agreement will
\ncontinue to have, and be subject to, the same terms and conditions set forth in
\nthe applicable Proxim Stock Option Plan (and any applicable stock option
\nagreement for such Proxim Option) immediately prior to the Effective Time
\n(including any repurchase rights or vesting provisions), except that (i) each
\nProxim Option will be exercisable (or will become exercisable in accordance with
\nits terms) for that number of whole shares of Western Multiplex Common Stock
\nequal to the product of the number of shares of Proxim Common Stock that were
\nissuable upon exercise of such Proxim Option immediately prior to the Effective
\nTime multiplied by the Exchange Ratio, rounded down to the nearest whole number
\nof shares of Western Multiplex Common Stock and (ii) the per share exercise
\nprice for the shares of Western Multiplex Common Stock issuable upon exercise of
\nsuch assumed Proxim Option will be equal to the quotient determined by dividing
\nthe exercise price per share of Proxim Common Stock at which such Proxim Option
\nwas exercisable immediately prior to the Effective Time by the Exchange Ratio,
\nrounded up to the nearest whole cent. Each assumed Proxim Option shall be vested
\nimmediately following the Effective Time as to the same percentage of the total
\nnumber of shares subject thereto as it was vested as to immediately prior to the
\nEffective Time. As soon as reasonably practicable following the Closing Date,
\nWestern Multiplex will issue to each person who holds an assumed Proxim Option a
\ndocument evidencing the foregoing assumption of such Proxim Option by Western
\nMultiplex.<\/p>\n
(b) Incentive Stock Options. It is intended that Proxim Options
\nassumed by Western Multiplex shall qualify following the Effective Time as
\nincentive stock options as defined in Section 422 of the Code to the extent
\nProxim Options qualified as incentive stock options immediately prior to the
\nEffective Time and the provisions of this Section 5.9 shall be applied
\nconsistent with such intent.<\/p>\n
(c) Proxim Purchase Plan. The parties hereto shall take all
\nrequisite action so that, as of the Effective Time, the Proxim Purchase Plan
\nshall be terminated. The rights of participants in the Proxim Purchase Plan with
\nrespect to any offering period then underway under the Proxim Purchase Plan
\nshall be determined by treating the last business day prior to the Effective
\nTime as the last day of such offering period and by making such other pro-rata
\nadjustments as may be necessary to reflect the shortened offering period but
\notherwise treating such shortened offering period as a fully effective and
\ncompleted offering period for all purposes under the Proxim Purchase Plan. Prior
\nto the effective time, Proxim shall take all actions (including, if appropriate,
\namending the terms of the Proxim Purchase Plan) that are necessary to give
\neffect to the transactions <\/p>\n
-53-<\/p>\n
contemplated by this Section 5.9(c). Western Multiplex shall permit Proxim
\nemployees to participate in the Western Multiplex Purchase Plan no later than
\nthe later of ten (10) days and the beginning of the first complete pay period
\nfollowing the Closing Date, and Western Multiplex shall take all actions
\n(including, if appropriate, amending the terms of the Western Multiplex
\nCorporation Employee Stock Purchase Plan (the “WESTERN MULTIPLEX PURCHASE PLAN”)
\nas necessary to effectuate the participation of Proxim employees in the Western
\nMultiplex Purchase Plan.<\/p>\n
(d) Change of Control Severance Agreements. Each of Proxim and
\nWestern Multiplex acknowledge that the consummation of the Merger shall
\nconstitute a “Change of Control” with respect to Proxim, as defined in and with
\nrespect to the Change of Control Severance Agreements between Proxim and each of
\nDavid C. King, Keith E. Glover, Kevin J. Negus, Kurt F. Bauer, Bradley A. Kolb,
\nRussell R. Reynolds and David Koberstein dated as of June 18, 1998, June 18,
\n1998, October 5, 1998, October 18, 1999, October 15, 2001, October 15, 2001, and
\nJanuary 15, 2002, respectively.<\/p>\n
5.10 Form S-8. Western Multiplex agrees to file a registration statement
\non Form S-8 for the shares of Western Multiplex Common Stock issuable with
\nrespect to assumed Proxim Options to the extent Form S-8 is available as soon as
\nis reasonably practicable after the Effective Time and shall maintain the
\neffectiveness of such registration statement thereafter for so long as any of
\nsuch options or other rights remain outstanding.<\/p>\n
5.11 Indemnification.<\/p>\n
(a) Indemnity. From and after the Effective Time, Western
\nMultiplex will, and will cause the Surviving Corporation to, fulfill and honor
\nin all respects the obligations of Proxim pursuant to any indemnification
\nagreements between Proxim and its directors and officers immediately prior to
\nthe Effective Time (the “INDEMNIFIED PARTIES”), subject to applicable law. The
\nCertificate of Incorporation and Bylaws of the Surviving Corporation will
\ncontain provisions with respect to exculpation and indemnification that are at
\nleast as favorable to the Indemnified Parties as those contained in the
\nCertificate of Incorporation and Bylaws of the Company as in effect on the date
\nhereof, which provisions will not be amended, repealed or otherwise modified for
\na period of six years from the Effective Time in any manner that would adversely
\naffect the rights thereunder of individuals who, immediately prior to the
\nEffective Time, were directors, officers, employees or agents of Proxim, unless
\nsuch modification is required by law.<\/p>\n
(b) Insurance. For a period of six years after the Effective
\nTime, the Surviving Corporation will cause to be maintained in directors’ and
\nofficers’ liability insurance maintained by Proxim covering those persons who
\nare currently covered by Proxim’s directors’ and officers’ liability insurance
\npolicy on terms comparable to those applicable to the current directors and
\nofficers of Proxim for a period of six (6) years; provided, however, that in no
\nevent will the Surviving Corporation be required to expend in excess of two
\nhundred percent (200%) of the annual premium currently paid by Proxim for such
\ncoverage (and to the extent annual premium would exceed two hundred percent
\n(200%) of the annual premium currently paid by Proxim for such coverage, the
\nSurviving Corporation shall maintain the maximum amount of coverage as is
\navailable for such two hundred percent (200%) of such annual premium).<\/p>\n
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(c) Third-Party Beneficiaries. This Section 5.11 is intended to
\nbe for the benefit of, and shall be enforceable by the Indemnified Parties and
\ntheir heirs and personal representatives and shall be binding on the Surviving
\nCorporation and its successors and assigns. In the event the Surviving
\nCorporation or its successor or assign (i) consolidates with or merges into any
\nother Person and shall not be the continuing or surviving corporation or entity
\nin such consolidation or merger or (ii) transfers all or substantially all of
\nits properties and assets to any Person, then, and in each case, proper
\nprovision shall be made so that the successor and assign of the Surviving
\nCorporation honor the indemnification obligations set forth in this Section
\n5.11.<\/p>\n
5.12 Board of Directors and Executive Officers of Western Multiplex;
\nName Change.<\/p>\n
(a) Board of Directors. The Board of Directors of Western
\nMultiplex will take all actions necessary such that effective as of the
\nEffective Time, three (3) directors of Proxim reasonably acceptable to Western
\nMultiplex, including David C. King, shall become members of the Board of
\nDirectors of Western Multiplex (the “PROXIM DESIGNATED DIRECTORS”) and that
\nthree (3) directors of Western Multiplex including Jonathan N. Zakin, shall
\nremain on the Board of Directors of Western Multiplex (the “WESTERN MULTIPLEX
\nDESIGNATED DIRECTORS”) and that a seventh director reasonably acceptable to each
\nof the Proxim Designated Directors and the Western Multiplex Designated
\nDirectors shall become a member of the Board of Directors of Western Multiplex.
\nThe Board of Directors of Western Multiplex will take all actions necessary to
\nensure that each of the three classes of directors of the Board of Directors of
\nWestern Multiplex consists of one of the Proxim Designated Directors and one of
\nthe Western Multiplex Designated Directors.<\/p>\n
(b) Executive Officers. The Board of Directors of Western
\nMultiplex will take all actions necessary such that effective as of the
\nEffective Time, Jonathan N. Zakin shall be Chairman of the Board and Chief
\nExecutive Officer, David C. King shall be President and Chief Operating Officer,
\nKeith E. Glover shall be Executive Vice President and Chief Financial Officer
\nand Amir Zoufonoun shall be Executive Vice President, Technology and Co-Chief
\nTechnology Officer, each to hold office from and after the Effective Time until
\ntheir respective successors are duly appointed and qualified in the manner
\nprovided in the bylaws of Western Multiplex or as otherwise provided by law or
\ntheir earlier resignation or removal.<\/p>\n
(c) Name Change. Immediately following the Effective Time,
\nWestern Multiplex shall change its corporate name to “Proxim.”<\/p>\n
5.13 Nasdaq Listing. Prior to the Effective Time, Western Multiplex
\nagrees to use commercially reasonable efforts to authorize for listing on Nasdaq
\nNational Market the shares of Western Multiplex Common Stock issuable, and those
\nrequired to be reserved for issuance, in connection with the Merger, subject to
\nofficial notice of issuance.<\/p>\n
5.14 Proxim Affiliates; Restrictive Legend. Proxim will use all
\nreasonable efforts to deliver or cause to be delivered to Western Multiplex, as
\npromptly as practicable on or following the date hereof (but in any event within
\nten (10) days), from each person who may reasonably be deemed to be an affiliate
\nof Proxim for purposes of Rule 145 promulgated under the Securities Act (a
\n“PROXIM AFFILIATE”) an executed affiliate agreement in the form attached hereto
\nas Exhibit D (the <\/p>\n
-55-<\/p>\n
“PROXIM AFFILIATE AGREEMENT”), each of which will be in full force and effect as
\nof the Effective Time. Western Multiplex will be entitled to place appropriate
\nlegends on the certificates evidencing any Western Multiplex Common Stock to be
\nreceived by a Proxim Affiliate pursuant to the terms of this Agreement and to
\nissue appropriate stop transfer instructions to the transfer agent for the
\nWestern Multiplex Common Stock, consistent with the terms of the Proxim
\nAffiliate Agreement.<\/p>\n
5.15 Treatment as Reorganization. Neither Western Multiplex nor Proxim
\nwill, nor will they permit any of their respective subsidiaries to, take any
\naction prior to or following the Closing that would reasonably be expected to
\ncause the Merger to fail to qualify as a reorganization with the meaning of
\nSection 368(a) of the Code.<\/p>\n
5.16 Section 16 Matters. Prior to the Effective Time, the Board of
\nDirectors of each of Western Multiplex and Proxim shall adopt a resolution
\nconsistent with the interpretative guidance of the SEC so that (i) the
\nassumption of Proxim Options held by Proxim Insiders (as defined below) pursuant
\nto this Agreement, and (ii) the receipt by Proxim Insiders of Western Multiplex
\nCommon Stock in exchange for Proxim Common Stock pursuant to the Merger, shall
\nbe an exempt transaction for purposes of Section 16 of the Exchange Act by any
\nofficer or director of Proxim who may become a covered person for purposes of
\nSection 16 of the Exchange Act (a “PROXIM INSIDER”).<\/p>\n
5.17 Assumption of Agreements. Prior to the Effective Time, in order to
\nfacilitate the assignment to Western Multiplex of (a) the Siemens to Proxim
\nTechnology License Agreement entered into as of September 21, 2000 by and
\nbetween Proxim and Siemens Aktiengesellschaft (“SIEMENS”) (the “SIEMENS
\nTECHNOLOGY LICENSE AGREEMENT”) and (b) the Original Equipment Manufacturer
\nVolume Sales Agreement entered into as of July 23, 2001 by and between Proxim
\nand Atheros Communications Inc. (“ATHEROS”) (the “ATHEROS OEM AGREEMENT”),
\nWestern Multiplex agrees to accept in writing, in form and substance reasonably
\nsatisfactory to Siemens or Atheros, as the case may be, Proxim’s rights and
\nobligations under (A) the following agreements entered into by and between
\nProxim and Siemens: the Siemens Technology License Agreement; the Proxim to
\nSiemens Technology License and Manufacturing Rights Agreement entered into as of
\nSeptember 21, 2000; the Asset Purchase Agreement entered into as of September
\n27, 2000; and the Amended and Restated Development Agreement entered into as of
\nSeptember 23, 2000 and (B) the Atheros OEM Agreement; provided, however, that
\nnothing herein shall be deemed an admission or acknowledgement by Proxim or
\nWestern Multiplex that any such consent is required in connection with or as a
\nresult of the Merger or execution of this Agreement under the Siemens Technology
\nLicense Agreement or the Atheros OEM Agreement.<\/p>\n
5.18 Bylaws of Proxim. Prior to the Effective Time, the Board of
\nDirectors of Proxim shall take all actions necessary so that, at the Effective
\nTime, the Bylaws of Proxim shall be amended in their entirety to be identical to
\nthe Bylaws of Merger Sub as in effect immediately prior to the Effective Time
\nuntil thereafter amended in accordance with Delaware Law as provided by in such
\nBylaws.<\/p>\n
5.19 Directors and Officers of the Surviving Corporation. Prior to the
\nEffective Time, the Board of Directors of Proxim shall take all actions
\nnecessary so that, at the Effective Time, (i) the initial board of directors of
\nthe Surviving Corporation shall be the directors of Merger Sub <\/p>\n
-56-<\/p>\n
immediately prior to the Effective Time, until their respective successors are
\nduly elected or appointed and qualified and (ii) the initial officers of the
\nSurviving Corporation shall be the officers of Proxim immediately prior to the
\nEffective Time, until their respective successors are duly appointed.<\/p>\n
ARTICLE VI
\n CONDITIONS TO THE MERGER<\/p>\n
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
\nrespective obligations of each party to this Agreement to effect the Merger
\nshall be subject to the satisfaction at or prior to the Closing Date of the
\nfollowing conditions, any of which may be waived in writing by both of Proxim
\nand Western Multiplex:<\/p>\n
(a) Stockholder Approval. Each of the Proxim Stockholder Approval
\nand the Western Multiplex Stockholder Approval shall have been obtained.<\/p>\n
(b) No Order. No Governmental Entity shall have enacted, issued,
\npromulgated, enforced or entered any statute, rule, regulation, executive order,
\ndecree, injunction or other order (whether temporary, preliminary or permanent)
\nwhich is in effect and which has the effect of making the Merger illegal or
\notherwise prohibiting consummation of the Merger.<\/p>\n
(c) Registration Statement Effective; Prospectus\/Proxy Statement.
\nThe SEC shall have declared the Registration Statement effective. No stop order
\nsuspending the effectiveness of the Registration Statement or any part thereof
\nshall have been issued and no proceeding for that purpose, and no similar
\nproceeding in respect of the Prospectus\/Proxy Statement, shall have been
\ninitiated or threatened in writing by the SEC.<\/p>\n
(d) HSR Act. The waiting period (and any extension thereof) under
\nthe HSR Act relating to the transactions contemplated hereby will have expired
\nor terminated early. Satisfaction of all other material foreign antitrust
\nrequirements reasonably determined to apply prior to the Closing in connection
\nwith the transaction contemplated hereby shall have been obtained.<\/p>\n
(e) No Governmental Restriction. There shall not be any pending
\nor threatened suit or action asserted by any Governmental Authority (i)
\nchallenging or seeking to restrain or prohibit the consummation of the Merger or
\nany of the other transactions contemplated by this Agreement or (ii) seeking to
\nimpose on Western Multiplex or Proxim or any subsidiary or affiliate thereof any
\ndivestiture of shares of capital stock or of any business, assets or property,
\nor the imposition of any material limitation on the ability of any of them to
\nconduct their businesses or to own or exercise control of such assets,
\nproperties and stock.<\/p>\n
(f) Tax Opinions. Western Multiplex and Proxim shall each have
\nreceived written opinions from their respective counsel (Simpson Thacher & Bartlett and Wilson Sonsini Goodrich & Rosati, Professional Corporation,
\nrespectively), in form and substance reasonably satisfactory to them, to the
\neffect that the Merger will constitute a reorganization within the meaning of
\nSection 368(a) of the Code and such opinions shall not have been withdrawn. The
\nparties to this <\/p>\n
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Agreement agree to make such reasonable representations as requested by such
\ncounsel for the purpose of rendering such opinions.<\/p>\n
(g) Nasdaq Listing. The shares of Western Multiplex Common Stock
\nto be issued in the Merger shall have been authorized for listing on the Nasdaq,
\nsubject to official notice of issuance.<\/p>\n
6.2 Additional Conditions to Obligations of Proxim. The obligation of
\nProxim to consummate and effect the Merger shall be subject to the satisfaction
\nat or prior to the Closing Date of each of the following conditions, any of
\nwhich may be waived, in writing, exclusively by Proxim:<\/p>\n
(a) Representations and Warranties. The representations and
\nwarranties of Western Multiplex set forth in this Agreement (i) that are
\nqualified as to Material Adverse Effect shall be true and correct as of the date
\nof this Agreement and as of immediately prior to the Effective Time (except to
\nthe extent such representations and warranties shall refer to a specific date,
\nin which case such representations and warranties shall have been so true and
\ncorrect as of such date) with the same force and effect as if then made, (ii)
\ncontained in Section 3.2 shall be true and correct in all material respects as
\nof the date of this Agreement and as of immediately prior to the Effective Time,
\nand (iii) the other representations and warranties of Western Multiplex set
\nforth in this Agreement that are not qualified as to Material Adverse Effect
\nshall be true and correct in all respects the date of this Agreement and
\nimmediately prior to the Effective Time (except to the extent such
\nrepresentations and warranties shall have been made as of an earlier date, in
\nwhich case such representations and warranties shall have been true and correct
\nin all respects as of such earlier date) with the same force and effect as if
\nthen made, except that this clause (iii) shall be deemed to be satisfied so long
\nas any failures of such representations and warranties to be true and correct
\n(without giving effect to any limitation as to “materiality” set forth therein),
\ntaken together, have not had a Material Adverse Effect on Western Multiplex; and
\nProxim shall have received a certificate of the Chief Executive Officer and the
\nChief Financial Officer of Western Multiplex to such effect.<\/p>\n
(b) Agreements and Covenants. Western Multiplex shall have
\nperformed or complied in all material respects with all agreements and covenants
\nrequired by this Agreement to be performed or complied with by it on or prior to
\nthe Closing Date, and Proxim shall have received a certificate to such effect
\nsigned on behalf of Western Multiplex by the President and the Chief Financial
\nOfficer of Western Multiplex.<\/p>\n
(c) Employment Agreement. The Employment Agreement by and between
\nWestern Multiplex and David C. King shall not have been revoked or otherwise
\nterminated by Western Multiplex as of the Effective Time.<\/p>\n
6.3 Additional Conditions to the Obligations of Western Multiplex. The
\nobligations of Western Multiplex to consummate and effect the Merger shall be
\nsubject to the satisfaction at or prior to the Closing Date of each of the
\nfollowing conditions, any of which may be waived, in writing, exclusively by
\nWestern Multiplex:<\/p>\n
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(a) Representations and Warranties. The representations and
\nwarranties of Proxim set forth in this Agreement (i) that are qualified as to
\nMaterial Adverse Effect shall be true and correct as of the date of this
\nAgreement and as of immediately prior to the Effective Time (except to the
\nextent such representations and warranties shall refer to a specific date, in
\nwhich case such representations and warranties shall have been so true and
\ncorrect as of such date) with the same force and effect as if then made, (ii)
\ncontained in Section 2.2 shall be true and correct in all material respects as
\nof the date of this Agreement and as of immediately prior to the Effective Time,
\nand (iii) the other representations and warranties of Proxim set forth in this
\nAgreement that are not qualified as to Material Adverse Effect shall be true and
\ncorrect in all respects as of the date of this Agreement and immediately prior
\nto the Effective Time (except to the extent such representations and warranties
\nshall have been made as of an earlier date, in which case such representations
\nand warranties shall have been true and correct in all respects as of such
\nearlier date) with the same force and effect as if then made, except that this
\nclause (iii) shall be deemed to be satisfied so long as any failures of such
\nrepresentations and warranties to be true and correct (without giving any effect
\nto any limitation as to “materiality” set forth therein), taken together, have
\nnot had a Material Adverse Effect on Proxim; and Western Multiplex shall have
\nreceived a certificate of the Chief Executive Officer and Chief Financial
\nOfficer of Proxim to such effect.<\/p>\n
(b) Agreements and Covenants. Proxim shall have performed or
\ncomplied in all material respects with all agreements and covenants required by
\nthis Agreement to be performed or complied with by it at or prior to the Closing
\nDate, and Western Multiplex shall have received a certificate to such effect
\nsigned on behalf of Proxim by the President and the Chief Financial Officer of
\nProxim.<\/p>\n
ARTICLE VII
\n TERMINATION, AMENDMENT AND WAIVER<\/p>\n
7.1 Termination. This Agreement may be terminated at any time prior to
\nthe Effective Time, by action taken or authorized by the Board of Directors of
\nthe terminating party or parties, and except as provided below, whether before
\nor after the requisite approvals of the stockholders of Proxim or Western
\nMultiplex:<\/p>\n
(a) by mutual written consent duly authorized by the Boards of
\nDirectors of Western Multiplex and Proxim;<\/p>\n
(b) by either Proxim or Western Multiplex if the Merger shall not
\nhave been consummated by July 31, 2002 (the “END DATE”); provided, however, that
\nthe right to terminate this Agreement under this Section 7.1(b) shall not be
\navailable to any party whose action or failure to act has been a principal cause
\nof the failure of the Merger to occur on or before such date and such action or
\nfailure to act constitutes a breach of this Agreement;<\/p>\n
(c) by either Proxim or Western Multiplex if a Governmental
\nEntity shall have issued an order, decree or ruling or taken any other action
\n(including the failure to have taken an action), in any case having the effect
\nof permanently restraining, enjoining or otherwise prohibiting the Merger, which
\norder, decree, ruling or other action is final and nonappealable;<\/p>\n
-59-<\/p>\n
(d) by either Proxim or Western Multiplex if the required
\napproval of the stockholders of Western Multiplex contemplated by this Agreement
\nshall not have been obtained by reason of the failure to obtain the required
\nvote at a meeting of Western Multiplex stockholders duly convened therefor or at
\nany adjournment or postponement thereof; provided, however, that the right to
\nterminate this Agreement under this Section 7.1(d) shall not be available to
\nWestern Multiplex where the failure to obtain Western Multiplex stockholder
\napproval shall have been caused by the action or failure to act of Western
\nMultiplex and such action or failure to act constitutes a material breach by
\nWestern Multiplex of this Agreement;<\/p>\n
(e) by either Proxim or Western Multiplex if the required
\napproval of the stockholders of Proxim contemplated by this Agreement shall not
\nhave been obtained by reason of the failure to obtain the required vote at a
\nmeeting of the Proxim stockholders duly convened therefor or at any adjournment
\nor postponement thereof; provided, however, that the right to terminate this
\nAgreement under this Section 7.1(e) shall not be available to Proxim where the
\nfailure to obtain Proxim stockholder approval shall have been caused by the
\naction or failure to act of Proxim and such action or failure to act constitutes
\na material breach by Proxim of this Agreement;<\/p>\n
(f) by Western Multiplex at any time prior to the adoption of
\nthis Agreement by the required vote of the stockholders of Proxim if a
\nTriggering Event (as defined below in this Section 7.1) with respect to Proxim
\nshall have occurred.<\/p>\n
(g) by Proxim at any time prior to the approval of Share Issuance
\nby the required vote of the stockholders of Western Multiplex if a Triggering
\nEvent with respect to Western Multiplex shall have occurred.<\/p>\n
(h) by Proxim, upon a breach of any representation, warranty,
\ncovenant or agreement on the part of Western Multiplex set forth in this
\nAgreement, or if any representation or warranty of Western Multiplex shall have
\nbecome untrue, in either case such that the conditions set forth in Section
\n6.2(a) or Section 6.2(b) would not be satisfied as of the time of such breach or
\nas of the time such representation or warranty shall have become untrue,
\nprovided that if such inaccuracy in Western Multiplex’s representations and
\nwarranties or breach by Western Multiplex is curable by Western Multiplex prior
\nto the End Date through the exercise of reasonable best efforts, then Proxim may
\nnot terminate this Agreement under this Section 7.1(h) prior to the End Date,
\nprovided that Western Multiplex continues to exercise its reasonable best
\nefforts to cure such inaccuracy or breach (it being understood that Proxim may
\nnot terminate this Agreement pursuant to this paragraph (h) if such breach by
\nWestern Multiplex is cured); and<\/p>\n
(i) by Western Multiplex, upon a breach of any representation,
\nwarranty, covenant or agreement on the part of Proxim set forth in this
\nAgreement, or if any representation or warranty of Proxim shall have become
\nuntrue, in either case such that the conditions set forth in Section 6.3(a) or
\nSection 6.3(b) would not be satisfied as of the time of such breach or as of the
\ntime such representation or warranty shall have become untrue, provided, that if
\nsuch inaccuracy in Proxim’s representations and warranties or breach by Proxim
\nis curable by Proxim prior to the End Date through the exercise of reasonable
\nbest efforts, then Western Multiplex may not terminate this Agreement under this
\nSection 7.1(i) prior to the End Date, provided that Proxim continues to <\/p>\n
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exercise its reasonable best efforts to cure such inaccuracy or breach (it being
\nunderstood that Western Multiplex may not terminate this Agreement pursuant to
\nthis paragraph (i) if such breach by Proxim is cured);<\/p>\n
(j) by Proxim in accordance with Section 5.3(e) at any time prior
\nto the adoption of this Agreement by the required vote of the stockholders of
\nProxim, provided that Proxim has complied with the provisions of Section 5.3 in
\nconnection with the receipt of the applicable Superior Offer; and provided
\nfurther that any such termination will not be effective unless the Proxim
\nTermination Fee pursuant to Section 7.3(b)(i) shall have been paid concurrently
\nwith or prior to such termination; or<\/p>\n
(k) by Western Multiplex in accordance with Section 5.3(e) of
\nthis Agreement at any time prior to the approval of the Share Issuance by the
\nrequired vote of the stockholders of Western Multiplex, provided that Western
\nMultiplex has complied with the provisions of Section 5.3 in connection with the
\nreceipt of the applicable Superior Offer; provided further that any such
\ntermination will not be effective unless the Western Multiplex Termination Fee
\npursuant to Section 7.3(b)(ii) shall have been paid concurrently with or prior
\nto such termination.<\/p>\n
For the purposes of this Agreement, a “TRIGGERING EVENT,” with respect
\nto a party hereto, shall be deemed to have occurred if: (i) its Board of
\nDirectors or any committee thereof shall for any reason have withdrawn or shall
\nhave amended or modified in a manner adverse to the other party hereto its
\napplicable Board Recommendation, or shall have resolved to do any of the same
\n(ii) its Board of Directors fails to reaffirm (publicly, if so requested) its
\napplicable Board Recommendation within ten (10) business days after the other
\nparty hereto requests in writing that such recommendation be reaffirmed after
\nthe public announcement of an Acquisition Proposal, (iii) its Board of Directors
\nor any committee thereof shall have approved or recommended any Acquisition
\nProposal, or shall have resolved to do any of the same, (iv) its Board of
\nDirectors shall have failed to call, hold and convene its Stockholders’ Meeting
\nin the manner contemplated by Section 5.2(a), (v) a tender or exchange offer
\nrelating to its securities shall have been commenced by a Person unaffiliated
\nwith the other party hereto and it shall not have sent to its securityholders
\npursuant to Rule 14e-2 promulgated under the Securities Act, within ten (10)
\nbusiness days after such tender or exchange offer is first published, sent or
\ngiven, a statement disclosing that the Board of Directors of such party
\nrecommends rejection of such tender or exchange offer or (vi) with respect to
\nProxim only, its Board of Directors shall have amended or resolved to amend the
\nProxim Rights Agreement in a manner so as to render it inapplicable to any
\nAcquisition Proposal (other than the Merger).<\/p>\n
7.2 Notice of Termination; Effect of Termination. Any termination of
\nthis Agreement under Section 7.1 above will be effective immediately upon the
\ndelivery of a valid written notice of the terminating party to the other party
\nhereto. In the event of the termination of this Agreement as provided in Section
\n7.1, this Agreement shall be of no further force or effect, except (i) as set
\nforth in Section 5.4(a), this Section 7.2, Section 7.3 and Article VIII, each of
\nwhich shall survive the termination of this Agreement and (ii) nothing herein
\nshall relieve any party from liability for fraud in connection with, or any
\nwillful breach of, this Agreement. No termination of this Agreement shall <\/p>\n
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affect the obligations of the parties contained in the Confidentiality
\nAgreement, all of which obligations shall survive termination of this Agreement
\nin accordance with their terms.<\/p>\n
7.3 Fees and Expenses.<\/p>\n
(a) General. Except as set forth in this Section 7.3, all fees
\nand expenses incurred in connection with this Agreement and the transactions
\ncontemplated hereby shall be paid by the party incurring such expenses whether
\nor not the Merger is consummated; provided, however, that Western Multiplex and
\nProxim shall share equally (i) all fees and expenses, other than attorneys’ and
\naccountants’ fees and expenses, incurred in relation to the printing and filing
\n(with the SEC) of the Prospectus\/Proxy Statement (including any preliminary
\nmaterials related thereto) and the Registration Statement (including financial
\nstatements and exhibits) and any amendments or supplements thereto and (ii) the
\nfiling fee for the Notification and Report Forms filed with the FTC and DOJ
\nunder the HSR Act or any other filing fee required by a Governmental Entity
\npursuant to Section 5.6(a).<\/p>\n
(b) Payments.<\/p>\n
(i) Payment by Proxim. In the event that this
\nAgreement is terminated by Western Multiplex or Proxim, as applicable, pursuant
\nto Sections 7.1(b), (e), (f) or (j), or pursuant to Section 7.1(i) as the result
\nof a breach of covenant by Proxim subsequent to the receipt of an Acquisition
\nProposal with respect to Proxim, Proxim shall promptly, but in no event later
\nthan two (2) days after the date of such termination, pay Western Multiplex a
\nfee equal to Nine Million Five Hundred Thousand dollars ($9,500,000) in
\nimmediately available funds (the “PROXIM TERMINATION FEE”); provided, that in
\nthe case of termination under Section 7.1(b), 7.1(e) or 7.1(i) (as a result of a
\nbreach of a covenant by Proxim subsequent to the receipt of an Acquisition
\nProposal with respect to Proxim), (A) such payment shall be made only if
\nfollowing the date hereof and prior to the termination of this Agreement, there
\nhas been public disclosure of an Acquisition Proposal with respect to Proxim and
\n(1) within nine (9) months following the termination of this Agreement an
\nAcquisition (as defined in Section 7.3(b)(vi)) of Proxim is consummated or (2)
\nwithin nine (9) months following the termination of this Agreement Proxim enters
\ninto an agreement providing for an Acquisition of Proxim and such Acquisition of
\nProxim is subsequently consummated and (B) such payment shall be made prior to
\nand as a condition of the consummation of such Acquisition of Proxim.<\/p>\n
(ii) Payment by Western Multiplex. In the event that
\nthis Agreement is terminated by Western Multiplex or Proxim, as applicable,
\npursuant to Sections 7.1(b), (d), (g) or (k), or pursuant to Section 7.1(h) upon
\nthe breach of a covenant by Western Multiplex subsequent to the receipt of an
\nAcquisition Proposal with respect to Western Multiplex, Western Multiplex shall
\npromptly, but in no event later than two (2) days after the date of such
\ntermination, pay Proxim a fee equal to Nine Million Five Hundred Thousand
\ndollars ($9,500,000) in immediately available funds (the “WESTERN MULTIPLEX
\nTERMINATION FEE”); provided, that in the case of termination under Section
\n7.1(b), 7.1(d) or 7.1(h) (as a result of a breach of a covenant by Western
\nMultiplex subsequent to the receipt of an Acquisition Proposal with respect to
\nWestern Multiplex), (A) such payment shall be made only if following the date
\nhereof and prior to the termination of this <\/p>\n
-62-<\/p>\n
Agreement, there has been public disclosure of an Acquisition Proposal with
\nrespect to Western Multiplex and (1) within nine (9) months following the
\ntermination of this Agreement an Acquisition of Western Multiplex is consummated
\nor (2) within nine (9) months following the termination of this Agreement
\nWestern Multiplex enters into an agreement providing for an Acquisition of
\nWestern Multiplex and such Acquisition of Western Multiplex is subsequently
\nconsummated and (B) such payment shall be made prior to and as a condition of
\nthe consummation of such Acquisition of Western Multiplex.<\/p>\n
(iii) Expense Reimbursement by Proxim. In the event
\nthat this Agreement is terminated by Proxim or Western Multiplex, as applicable,
\npursuant to Section 7.1(e) in circumstances in which the Proxim Termination Fee
\nis not and could not be payable to Western Multiplex pursuant to clause (i)
\nabove, Proxim shall promptly, but in no event later than two (2) days after
\nreceipt of a demand for reimbursement of certain reasonable actual, documented
\nfees and expenses incurred by Western Multiplex in connection with this
\nAgreement and the transactions contemplated hereby, reimburse Western Multiplex
\nfor such fees and expenses, up to a maximum of $1,500,000 in immediately
\navailable funds.<\/p>\n
(iv) Expense Reimbursement by Western Multiplex. In
\nthe event this Agreement is terminated by Proxim or Western Multiplex, as
\napplicable, pursuant to Section 7.1(d) in circumstances in which the Western
\nMultiplex Termination Fee is not and could not be payable to Proxim pursuant to
\nclause (ii) above, Western Multiplex shall promptly, but in no event later than
\ntwo (2) days after receipt of a demand for reimbursement of certain reasonable
\nactual, documented fees and expenses incurred by Proxim in connection with this
\nAgreement and the transactions contemplated hereby, reimburse Proxim for such
\nfees and expenses, up to a maximum of $1,500,000 in immediately available funds.<\/p>\n
(v) Interest and Costs; Other Remedies. Each of
\nWestern Multiplex and Proxim acknowledges that the agreements contained in this
\nSection 7.3(b) are an integral part of the transactions contemplated by this
\nAgreement, and that, without these agreements, the other party hereto would not
\nenter into this Agreement; accordingly, if Western Multiplex or Proxim, as the
\ncase may be, fails to pay in a timely manner the amounts due pursuant to this
\nSection 7.3(b), and, in order to obtain such payment, the other party hereto
\nmakes a claim that results in a judgment against the party failing to pay for
\nthe amounts set forth in this Section 7.3(b), the party so failing to pay shall
\npay to the other party its reasonable costs and expenses (including reasonable
\nattorneys’ fees and expenses) in connection with such suit, together with
\ninterest on the amounts set forth in this Section 7.3(b) at the prime rate of
\nCitibank, N.A. in effect on the date such payment was required to be made.
\nPayment of the fees described in this Section 7.3(b) shall not be in lieu of
\ndamages incurred in the event of breach of this Agreement.<\/p>\n
(vi) Certain Definitions. For the purposes of this
\nSection 7.3(b) only, “ACQUISITION,” with respect to a party hereto, shall mean,
\nother than the transactions contemplated by this Agreement, an Acquisition
\nProposal, provided, that for the purpose of this definition, the term
\n“Acquisition Proposal” shall have the meaning assigned to such term in Section
\n5.3(h)(i), except that references to “15%” therein shall be deemed to be
\nreferences to “40%.”<\/p>\n
-63-<\/p>\n
7.4 Amendment. Subject to applicable law, this Agreement may be amended
\nby the parties hereto, by action taken or authorized by their respective Boards
\nof Directors, at any time before or after approval of the matters presented in
\nconnection with the Merger by the stockholders of Western Multiplex and Proxim,
\nprovided, after any such approval, no amendment shall be made which by law or in
\naccordance with the rules of any relevant stock exchange requires further
\napproval by such stockholders without such further stockholder approval. This
\nAgreement may be not amended except by execution of an instrument in writing
\nsigned on behalf of each of Western Multiplex and Proxim.<\/p>\n
7.5 Extension; Waiver. At any time prior to the Effective Time either
\nparty hereto, by action taken or authorized by their respective Board of
\nDirectors, may, to the extent legally allowed, (i) extend the time for the
\nperformance of any of the obligations or other acts of the other parties hereto,
\n(ii) waive any inaccuracies in the representations and warranties made to such
\nparty contained herein or in any document delivered pursuant hereto and (iii)
\nwaive compliance with any of the agreements or conditions for the benefit of
\nsuch party contained herein. Any agreement on the part of a party hereto to any
\nsuch extension or waiver shall be valid only if set forth in an instrument in
\nwriting signed on behalf of such party. Delay in exercising any right under this
\nAgreement shall not constitute a waiver of such right.<\/p>\n
ARTICLE VIII
\n GENERAL PROVISIONS<\/p>\n
8.1 Non-Survival of Representations and Warranties. The representations
\nand warranties of Proxim and Western Multiplex contained in this Agreement, or
\nany instrument delivered pursuant to this Agreement, shall terminate at the
\nEffective Time, and only the covenants that by their terms survive the Effective
\nTime and this Article VIII shall survive the Effective Time.<\/p>\n
8.2 Notices. All notices and other communications hereunder shall be in
\nwriting and shall be deemed duly given (i) on the date of delivery if delivered
\npersonally, (ii) on the date of confirmation of receipt (or, the first business
\nday following such receipt if the date is not a business day) of transmission by
\ntelecopy or telefacsimile or (iii) on the date of confirmation of receipt (or,
\nthe first business day following such receipt if the date is not a business day)
\nif delivered by a nationally recognized courier service. All notices hereunder
\nshall be delivered as set forth below, or pursuant to such other instructions as
\nmay be designated in writing by the party to receive such notice:<\/p>\n
(a) if to Western Multiplex or Merger Sub, to:<\/p>\n
Western Multiplex Corporation
\n 1196 Borregas Avenue
\n Sunnyvale, CA 94089
\n Attention: Chief Executive Officer
\n Fax No.: (408) 542-5300<\/p>\n
-64-<\/p>\n
with copies to:<\/p>\n
Simpson Thacher & Bartlett
\n 10 Universal City Plaza, Suite 1850
\n Los Angeles, California 91608
\n Attention: Daniel Clivner
\n Fax No.: (818) 755-7009<\/p>\n
(b) if to Proxim, to:<\/p>\n
Proxim, Inc.
\n 510 DeGuigne Drive
\n Sunnyvale, CA 94085
\n Attention: Chief Executive Officer
\n Fax No.: (408) 731-3670<\/p>\n
with a copy to:<\/p>\n
Wilson Sonsini Goodrich & Rosati, Professional Corporation
\n 650 Page Mill Road
\n Palo Alto, California 94304-1050
\n Attention: Robert G. Day
\n Fax No.: (650) 493-6811<\/p>\n
and<\/p>\n
Wilson Sonsini Goodrich & Rosati, Professional Corporation
\n One Market
\n Spear Tower, Suite 3300
\n San Francisco, CA 94105
\n Attention: Steve L. Camahort
\n Fax: (415) 947-2099<\/p>\n
8.3 Interpretation; Knowledge.<\/p>\n
(a) When a reference is made in this Agreement to Exhibits, such
\nreference shall be to an Exhibit to this Agreement unless otherwise indicated.
\nWhen a reference is made in this Agreement to Sections, such reference shall be
\nto a section of this Agreement unless otherwise indicated. For purposes of this
\nAgreement, the words “INCLUDE,” “INCLUDES” and “INCLUDING,” when used herein,
\nshall be deemed in each case to be followed by the words “without limitation.”
\nThe table of contents and headings contained in this Agreement are for reference
\npurposes only and shall not affect in any way the meaning or interpretation of
\nthis Agreement. When reference is made herein to “THE BUSINESS OF” an entity,
\nsuch reference shall be deemed to include the business of all such entity and
\nits subsidiaries, taken as a whole. An exception or disclosure made in the
\nProxim Disclosure Letter with regard to a representation of Proxim, or in the
\nWestern Multiplex Disclosure <\/p>\n
-65-<\/p>\n
Letter with regard to a representation of Western Multiplex, shall be deemed
\nmade with respect to any other representation by such party to which such
\nexception or disclosure is reasonably apparent.<\/p>\n
(b) For purposes of this Agreement, the term “KNOWLEDGE” means,
\nwith respect to a party hereto, with respect to any matter in question, the
\nactual knowledge of the Chief Executive Officer, Chief Financial Officer or
\nChief Operating Officer of such party.<\/p>\n
(c) For purposes of this Agreement, the term “MATERIAL ADVERSE
\nEFFECT,” when used in connection with an entity, means any fact, change, event,
\ndevelopment, circumstance or effect (any such item, an “EFFECT”), individually
\nor when taken together with all other Effects that have occurred prior to the
\ndate of determination of the occurrence of the Material Adverse Effect, that is
\nor could reasonably be expected to be materially adverse to the business, assets
\n(including intangible assets), capitalization, condition (financial or
\notherwise) or results of operations of such entity taken as a whole with its
\nsubsidiaries; provided, however, that in no event shall any of the following,
\nalone or in combination, be deemed to constitute a Material Adverse Effect on
\nany entity: any Effect resulting from (A) general economic conditions or
\nconditions generally affecting the wireless telecommunication industry, except
\nin either case to the extent such party is materially disproportionately
\naffected thereby, (B) the announcement or pendency of the Merger or (C) a change
\nin the stock price or trading volume of such entity (or any failure of such
\nentity to meet published revenue or earnings projections, provided that clause
\n(C) shall not exclude any underlying Effect which may have caused such change in
\nstock price or trading volume or failure to meet published revenue or earnings
\nprojections.<\/p>\n
(d) For purposes of this Agreement, the term “PERSON” shall mean
\nany individual, corporation (including any non-profit corporation), general
\npartnership, limited partnership, limited liability partnership, joint venture,
\nestate, trust, company (including any limited liability company or joint stock
\ncompany), firm or other enterprise, association, organization, entity or
\nGovernmental Entity.<\/p>\n
8.4 Counterparts. This Agreement may be executed in one or more
\ncounterparts, all of which shall be considered one and the same agreement and
\nshall become effective when one or more counterparts have been signed by each of
\nthe parties and delivered to the other party, it being understood that all
\nparties need not sign the same counterpart.<\/p>\n
8.5 Entire Agreement; Third-Party Beneficiaries. This Agreement and the
\ndocuments and instruments and other agreements among the parties hereto as
\ncontemplated by or referred to herein, including the Proxim Disclosure Letter
\nand the Western Multiplex Disclosure Letter, (i) constitute the entire agreement
\namong the parties with respect to the subject matter hereof and supersede all
\nprior agreements and understandings, both written and oral, among the parties
\nwith respect to the subject matter hereof, it being understood that the
\nConfidentiality Agreement shall continue in full force and effect until the
\nClosing and shall survive any termination of this Agreement and (ii) are not
\nintended to confer upon any other Person any rights or remedies hereunder,
\nexcept as specifically provided in Section 5.11 following the Effective Time.<\/p>\n
-66-<\/p>\n
8.6 Severability. In the event that any provision of this Agreement or
\nthe application thereof, becomes or is declared by a court of competent
\njurisdiction to be illegal, void or unenforceable, the remainder of this
\nAgreement will continue in full force and effect and the application of such
\nprovision to other persons or circumstances will be interpreted so as reasonably
\nto effect the intent of the parties hereto. The parties further agree to replace
\nsuch void or unenforceable provision of this Agreement with a valid and
\nenforceable provision that will achieve, to the greatest extent possible, the
\neconomic, business and other purposes of such void or unenforceable provision.<\/p>\n
8.7 Other Remedies; Specific Performance. Except as otherwise provided
\nherein, any and all remedies herein expressly conferred upon a party will be
\ndeemed cumulative with and not exclusive of any other remedy conferred hereby,
\nor by law or equity upon such party, and the exercise by a party of any one
\nremedy will not preclude the exercise of any other remedy. The parties hereto
\nagree that irreparable damage would occur in the event that any of the
\nprovisions of this Agreement were not performed in accordance with their
\nspecific terms or were otherwise breached. It is accordingly agreed that the
\nparties shall be entitled to seek an injunction or injunctions to prevent
\nbreaches of this Agreement and to enforce specifically the terms and provisions
\nhereof in any court of the United States or any state having jurisdiction, this
\nbeing in addition to any other remedy to which they are entitled at law or in
\nequity.<\/p>\n
8.8 Governing Law. This Agreement shall be governed by and construed in
\naccordance with the laws of the State of New York, regardless of the laws that
\nmight otherwise govern under applicable principles of conflicts of law thereof.<\/p>\n
8.9 Rules of Construction. The parties hereto agree that they have been
\nrepresented by counsel during the negotiation and execution of this Agreement
\nand, therefore, waive the application of any law, regulation, holding or rule of
\nconstruction providing that ambiguities in an agreement or other document will
\nbe construed against the party drafting such agreement or document.<\/p>\n
8.10 Assignment. No party may assign either this Agreement or any of its
\nrights, interests, or obligations hereunder without the prior written approval
\nof the other parties. Any purported assignment in violation of this Section 8.10
\nshall be void. Subject to the preceding sentence, this Agreement shall be
\nbinding upon and shall inure to the benefit of the parties hereto and their
\nrespective successors and permitted assigns.<\/p>\n
8.11 Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL
\nRIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
\nON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
\nTHE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
\nENFORCEMENT HEREOF.<\/p>\n
-67-<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
\nexecuted by their duly authorized respective officers as of the date first
\nwritten above.<\/p>\n
WESTERN MULTIPLEX CORPORATION<\/p>\n
By: \/s\/ JONATHAN ZAKIN
\n ———————————–<\/p>\n
Name: Jonathan Zakin
\n ———————————<\/p>\n
Title: Chairman & CEO
\n ——————————–<\/p>\n
PROXIM, INC.<\/p>\n
By: \/s\/ DAVID C. KING
\n ———————————–<\/p>\n
Name: David C. King
\n ———————————<\/p>\n
Title: Chairman, President & CEO
\n ——————————–<\/p>\n
WALNUT-PINE MERGER CORP.<\/p>\n
By: \/s\/ JONATHAN ZAKIN
\n ———————————–<\/p>\n
Name: Jonathan Zakin
\n ———————————<\/p>\n
Title: Chairman & CEO
\n ——————————–<\/p>\n
****MERGER AGREEMENT****<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8596,9318],"corporate_contracts_industries":[9516,9509],"corporate_contracts_types":[9622,9626],"class_list":["post-43220","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-proxim-inc","corporate_contracts_companies-western-multiplex-corp","corporate_contracts_industries-telecommunications__equipment","corporate_contracts_industries-technology__networking","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43220","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43220"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43220"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43220"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43220"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}