<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 14, 1998
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GIGA-TRONICS INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)
CALIFORNIA 94-2656341
(State of Incorporation) (I.R.S. Employer Identification No.)
4650 NORRIS CANYON ROAD
SAN RAMON, CALIFORNIA 94583
(510) 328-4650
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
----------
GEORGE H. BRUNS, JR.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
GIGA-TRONICS INCORPORATED
4650 NORRIS CANYON ROAD, SAN RAMON, CALIFORNIA 94583
(510) 328-4650
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
COPY TO:
WILLIAM L. HUDSON, ESQ.
GIBSON, DUNN & CRUTCHER LLP
ONE MONTGOMERY STREET, TELESIS TOWER
SAN FRANCISCO, CALIFORNIA 94104
(415) 393-8200
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Shares to be Registered Amount to be Offering Price Per Aggregate Registration
Registered Security Offering Price Fee(1)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value per share 936,989 $6.625 $6,207,552.12 $1,831.23
=============================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act of 1933, as amended, on the basis
of the average of the high and low selling prices per share of Common
Stock of Giga-tronics Incorporated on April 9, 1998, as reported on the
Nasdaq National Market.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PROSPECTUS SUBJECT TO COMPLETION
April 14, 1998
GIGA-TRONICS INCORPORATED
936,989 SHARES
COMMON STOCK
---------------
All of the 936,989 shares (the "Common Shares") of Giga-tronics
Incorporated ("Giga-tronics" or the "Company") common stock, no par value per
share (the "Common Stock"), offered hereby are being sold by the holders of the
Common Shares named herein under "Selling Shareholders" (the "Selling
Shareholders"). The outstanding Common Stock of the Company is quoted on the
Nasdaq National Market under the symbol "GIGA." On April 9, 1998, the last
reported sale price of the Common Stock on the Nasdaq National Market was $6.50
per share.
The Company will not receive any of the proceeds from the sale of the
Common Shares. Any or all of such Common Shares covered by this Prospectus may
be sold, from time to time, at market prices prevailing on Nasdaq at the time of
sale by means of ordinary brokerage transactions or otherwise under other terms.
See "Plan of Distribution."
The Common Shares offered hereby were originally issued by the
Company in connection with its acquisitions of Viking Semiconductor Equipment,
Inc. ("Viking") and Ultracision, Inc. ("Ultracision"). Common Shares were issued
to former Viking shareholders pursuant to an Agreement and Plan of
Reorganization (the "Viking Merger Agreement"), pursuant to which Giga-tronics
acquired all of the outstanding capital stock of Viking and Viking became a
wholly-owned subsidiary of the Company. Additional Common Shares were issued by
the Company pursuant to an Agreement and Plan of Reorganization (the
"Ultracision Merger Agreement"), pursuant to which the Company acquired all of
the outstanding capital stock of Ultracision and Ultracision became a
wholly-owned subsidiary of the Company. The Common Shares represent
approximately 21.7% of the Company's outstanding Common Stock as of the date of
this Prospectus. See "Selling Shareholders."
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
COMMON STOCK OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
--------------------
The date of this Prospectus is __________ ___, 1998
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy and information statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy and information statements and other information can be inspected
and copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, DC 20549 and at
its regional offices at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661 and 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of
such materials can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, DC 20549, and its public
reference facilities in New York, New York and Chicago, Illinois on payment of
prescribed charges. In addition, the Company is required to file electronic
versions of these documents with the Commission through the Commission's
Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system. The
Commission maintains a World Wide Web site at http://www.sec.gov that contains
reports, proxy and information statements and other information regarding
registrants that file electronically via EDGAR with the Commission. The
Company's Common Stock is quoted on the Nasdaq National Market, and such
reports, proxy and information statements and other information concerning the
Company can also be inspected at the offices of The Nasdaq Stock Market, Inc.,
1735 K Street, N.W., Washington, DC 20006.
The Company has filed with the Commission a registration statement on
Form S-3 (the "Registration Statement") under the Securities Act, with respect
to the shares of Common Stock offered hereby. This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which have been omitted in accordance with the rules and regulations of the
Commission, and the exhibits relating thereto, which have been filed with the
Commission. Copies of the Registration Statement and the exhibits are on file at
the offices of the Commission and may be obtained upon payment of the fees
prescribed by the Commission, or examined without charge at the public reference
facilities of the Commission described above.
No person is authorized in connection with the offering made hereby
to give any information or to make any representation not contained or
incorporated by reference in this Prospectus, and any information or
representation not contained or incorporated herein must not be relied upon as
having been authorized by the Company, the Selling Shareholders set forth under
"Selling Shareholders" or any underwriter. This Prospectus relates solely to the
Common Stock offered hereby and it may not be used or relied on in connection
with any other offer or sale of securities of the Company. This Prospectus does
not constitute an offer to sell or a solicitation of any offer to buy by any
person in any jurisdiction in which it is unlawful for such person to make such
an offer or solicitation. Neither the delivery of this Prospectus at any time
nor any sale made hereunder shall under any circumstance imply that the
information herein is correct as of any date subsequent to the date hereof.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously or simultaneously filed with the
Commission by the Company are incorporated herein by reference and made a part
hereof:
(a) The Registrant's Annual Report on Form 10-K for the
fiscal year ended March 29, 1997;
(b) The Registrant's Quarterly Reports on Form 10-Q for
the fiscal quarters ended June 28, 1997, September 27,
1997 and December 27, 1997;
(c) The Registrant's Current Report on Form 8-K dated
December 2, 1997 (as amended by the Form 8-K/A filed
with the Commission on February 17, 1998); and
(d) The Registrant's Registration Statement No. 0-12719 on
Form 8-A filed with the Commission on July 27, 1984,
in which there is described the terms, rights and
provisions applicable to the Registrant's outstanding
Common Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act") after the date of this Registration Statement
and prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of such
documents.
Any statement contained herein or in a document incorporated or
deemed to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which is deemed to be
incorporated by reference herein modifies or supersedes such prior statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the documents that have been incorporated by reference in this
Prospectus, other than exhibits to such documents. Such documents may be
obtained by writing to Giga-tronics Incorporated, 4650 Norris Canyon Road, San
Ramon, California 94583, Attention: Corporate Secretary, or by calling (510)
328-4650.
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<PAGE> 5
THE COMPANY
Giga-tronics designs, manufactures, and markets microwave and radio
frequency signal generation and power measurement instruments, switching devices
and semiconductor inspection equipment. These products are used in the
development, test and maintenance of wireless communications products and
systems, electronic defense systems, automatic testing systems (ATE) and testing
and manufacturing of semiconductor devices. Giga-tronics has approximately 230
employees and operates out of facilities located in San Ramon, California,
Fremont, California, and Santa Clara, California. Giga-tronics receives a
mixture of commercial and government-related orders from both domestic and
international customers.
Giga-tronics was incorporated in 1980, and its principal executive
offices are located at 4650 Norris Canyon Road, San Ramon, California 94583,
telephone number: (510) 328-4650.
MATERIAL CHANGE
On December 24, 1997, Giga-tronics announced that it had reached
agreement to acquire Microsource, Inc. ("Microsource") and on March 23, 1998,
Giga-tronics announced the restructured terms of the acquisition. In connection
with the acquisition, the Company will pay to the Microsource shareholders
$1,500,000 plus contingent payments based on the future earnings of Microsource
for the next two years. Microsource will become a wholly-owned subsidiary of
Giga-tronics. The acquisition will be accounted for using the purchase method of
accounting and is subject to approval by Microsource's shareholders and other
conditions.
Microsource develops and manufactures a broad line of YIG tuned
oscillators, filters and microwave synthesizers.
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<PAGE> 6
RISK FACTORS
Statements made in this Prospectus and in documents incorporated
herein by reference, including statements as to operating results and financial
performance, are forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act. The Company's actual
results could differ materially from those anticipated in such forward-looking
statements as a result of certain factors, including those set forth below,
which shareholders should carefully review. All forward-looking statements in
this Prospectus are based on information available to the Company on the date
hereof and assumptions which the Company believes are reasonable, and the
Company assumes no obligation to update any such forward-looking statements. The
following risk factors should be considered carefully by prospective investors
in evaluating the Company, its business and an investment in the Common Shares.
RAPID TECHNOLOGICAL CHANGE; DEPENDENCE ON NEW PRODUCTS AND PROCESSES
The market for electronics equipment is characterized by rapidly
changing technology and evolving industry standards. Giga-tronics believes that
its future success will depend in part upon its ability to develop and
commercialize its existing products and to develop new products and applications
and in part to develop, manufacture and successfully introduce new products and
product lines with improved capabilities and to continue to enhance existing
products. There can be no assurance that Giga-tronics will successfully complete
the development of current or future products or that such products will achieve
market acceptance.
COMPETITION
Giga-tronics is engaged in a highly competitive field. Competition
from numerous existing companies and potential new entrants is intense and
expected to increase. Many of these companies have substantially greater
research and development, manufacturing, marketing, financial, technological,
personnel and managerial resources than Giga-tronics. There can be no assurance
that any products developed by these competitors will not gain greater market
acceptance than any developed by Giga-tronics. Accordingly, Giga-tronics will be
required to continue to devote substantial resources and efforts to marketing
and research and development activities.
In addition, Giga-tronics expects to continue to make significant
investments in research and development. There can be no assurance that future
technologies, processes or product developments will not render Giga-tronics's
current product offerings obsolete or that Giga-tronics will be able to develop
and introduce new products or enhancements to existing products which satisfy
customer needs in a timely manner or achieve market acceptance. The failure to
do so could adversely affect Giga-tronics's business.
DECLINING DEFENSE-INDUSTRY SALES
Giga-tronics views the defense industry (both domestic and
international) as a major source of sales revenues. Defense industry sales
(including direct sales to the United States and government agencies) accounted
for 28%, 32%, and 28% of Giga-tronics's net revenues in the fiscal years 1997,
1996 and 1995, respectively. In the past several years, sales to the defense
industry in general, and direct sales to the United States and foreign
government agencies in particular, have declined. Giga-tronics believes that
this softening of product orders, and resulting decline in defense sales
revenues, is indicative of the world-wide decline in governmental defense
spending. Any further decline in defense orders as a consequence of the
foregoing circumstance, or otherwise, could have a material adverse effect on
the business, operating results, financial condition and cash flows of
Giga-tronics.
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<PAGE> 7
POTENTIAL VOLATILITY OF COMMON STOCK PRICE
The market price of the Common Stock could be subject to significant
fluctuations in response to variations in quarterly operating results,
shortfalls in revenues or earnings from levels expected by securities analysts
and other factors such as announcements of technological innovations or new
products by Giga-tronics or by competitors, government regulations or
developments in patent or other proprietary rights. In addition, the Nasdaq
National Market and other stock markets have experienced significant price
fluctuations in recent months. These fluctuations often have been unrelated to
the operating performance of the specific companies whose stocks are traded.
Broad market fluctuations, as well as general foreign and domestic economic
conditions, may adversely affect the market price of the Common Stock.
LIMITED LIQUIDITY FOR SHAREHOLDERS AND POTENTIAL ADVERSE IMPACT ON
GIGA-TRONICS STOCK PRICE
Giga-tronics stock has historically traded on thin volume on Nasdaq.
Giga-tronics shareholders may not be able to sell a significant volume of stock
if they wish to increase their liquidity. In addition, their effort to sell
significant volume of their stock could result in a depression of the
Giga-tronics share price. In any circumstance, such shareholdings will be
subject to the vagaries of the marketplace.
GIGA-TRONICS REVENUES COULD DECREASE DUE TO DECLINING ORDER INTAKE
Current softness in the market for Giga-tronics products has resulted
in a substantial decline in backlog. If this trend cannot be reversed in the
near term, shipments in the current year could fall short of plan with a
concurrent decline in earnings.
UNCERTAIN IMPACT OF RECENT AND FUTURE ACQUISITIONS; DIFFICULTIES AND COST
OF INTEGRATION
During fiscal years 1997 and 1998, Giga-tronics acquired all of its
current subsidiaries, including ASCOR, Inc. ("ASCOR"), Viking, and Ultracision;
and its acquisition of Microsource scheduled to close in the first quarter of
fiscal year 1999. Giga-tronics has acquired these companies with the expectation
that the acquisitions would result in long-term strategic benefits. The
realization of the benefits sought from these acquisitions depends on the
ability of Giga-tronics to effectively utilize the joint product development
capabilities, sales and marketing capabilities, administrative organizations and
facilities of these companies. There can be no assurance that these benefits
will be achieved or that the activities of Giga-tronics will be integrated in a
coordinated, timely and efficient manner. The combination of these entities also
will require the dedication of management resources, which will detract such
persons' attention from the day-to-day business of Giga-tronics. There can be no
assurance that the integration will be completed without disrupting
Giga-tronics's businesses. The inability of Giga-tronics to effectively utilize
resources and to achieve integration in a timely and coordinated fashion could
result in a material adverse effect on Giga-tronics's financial condition,
operating results and cash flows.
Prior to the acquisition of Viking and Ultracision, Giga-tronics had
no experience in the semiconductor manufacturing equipment industry. As a
result, integration of the companies may be difficult. The difficulties may be
increased by the necessity of coordinating geographically separate organizations
and addressing possible differences in corporate cultures and management
philosophies. Finally, expenditures related to the development of new products
by these subsidiaries have, and may in the future, impact the financial results
of Giga-tronics. The future success of Giga-tronics may depend on its ability to
steadily incorporate advancements in semiconductor technologies into its new
products. The impact of these new subsidiaries on the operations of
Giga-tronics remains uncertain.
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<PAGE> 8
As part of its business strategy, Giga-tronics intends to broaden its
product lines and expand its markets, in part through the acquisition of other
business entities. Any such future acquisitions would be accompanied by the
risks commonly encountered with acquisitions of other business entities. Such
risks include, among other things, the difficulty of assimilating the operations
and personnel of the acquired companies, the potential disruption of
Giga-tronics' business, the inability of Giga-tronics' management to maximize
the financial and strategic position of Giga-tronics by the successful
incorporation of acquired technology and rights into Giga-tronics' service
offerings, the maintenance of uniform standards, controls, procedures and
policies, the potential loss of key employees of acquired companies, and the
impairment of relationships with employees and customers as a result of changes
in management. No assurances can be given that any acquisition by Giga-tronics
will or will not occur, that if an acquisition does occur that it will not
materially and adversely affect Giga-tronics or that any such acquisition will
be successful in enhancing Giga-tronics's business. Giga-tronics currently
contemplates that future acquisitions may involve the issuance of additional
shares of Giga-tronics Common Stock. Any such issuances may result in dilution
to all shareholders of Giga-tronics. There can be no assurance that the
announcement of the future acquisitions will not result in a downturn of the
price of Giga-tronics Common Stock.
DEPENDENCE UPON KEY PERSONNEL
Giga-tronics's future success is highly dependent on certain key
management and technical personnel. The loss of any one of these key personnel
could have a material adverse impact on Giga-tronics's results of operation. In
addition, since competent management personnel and personnel capable of
performing the foregoing functions are in great demand, there can be no
assurance that Giga-tronics will be able to attract and retain such personnel on
a timely basis and on terms acceptable to it. It is anticipated that
Giga-tronics's success will depend in large part upon attracting and retaining
highly-skilled managerial and other employees.
DEPENDENCE UPON KEY SUPPLIERS
Certain of the components and subassemblies included in the products
of Giga-tronics are obtained from a single supplier or a limited group of
suppliers. Each of these suppliers has sold products to Giga-tronics during the
last several years, and Giga-tronics has no reason to expect that they will not
continue to renew these contracts in the future. Giga-tronics believes that
alternative sources could be obtained and qualified to supply these products.
Nevertheless, a prolonged inability to obtain certain components could have an
adverse effect on operating results and could result for the period during which
such alternative sources are sought.
INTERNATIONAL OPERATIONS AND EXPANSION
International sales accounted for 28.3%, 31.7% and 27.8% of
Giga-tronics's net revenues in the fiscal years 1997, 1996 and 1995,
respectively. Giga-tronics anticipates that international sales will continue to
account for a significant portion of net sales. Additionally, Giga-tronics
intends to continue expansion of international operations. As a result, a
significant portion of Giga-tronics's sales and operations will be subject to
certain risks normally associated with international operations, including
tariffs and other barriers, difficulties in staffing and managing foreign
subsidiary and branch operations, potentially adverse tax consequences and the
possibility of difficulties in accounts receivable collection.
In addition to the uncertainty as to Giga-tronics's ability to expand
its international presence, there are certain risks inherent in doing business
on an international level, such as unexpected changes in regulatory
requirements, political instability, fluctuations in currency exchange rates,
and seasonal reductions in business activity, any of which could adversely
impact the success of international operations. Sales of products by
Giga-tronics are denominated principally in U.S. dollars. Accordingly, any
increase in the value of the U.S. dollar as compared to currencies in the
companies' principal
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<PAGE> 9
overseas markets would increase the foreign currency-denominated cost of the
companies' products, which may negatively affect the companies' sales in those
markets. In addition, effective patent, copyright, trademark and trade secret
protection may be limited or unavailable under the laws of certain foreign
jurisdictions. There can be no assurance that one or more of such factors will
not have a material adverse effect on Giga-tronics's international operations
and, consequently, on the business, operating results, financial condition and
cash flows of Giga-tronics.
YEAR 2000 COMPLIANCE
Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field, rendering them
unable to distinguish 21st century dates from 20th century dates. As a result,
many companies' software and computer systems may need to be upgraded or
replaced to comply with such "Year 2000" requirements. Although the Company
believes that its systems are Year 2000 compliant, the Company's suppliers
and/or customers may have software or systems which are not Year 2000 compliant.
The purchasing patterns of the Company's customers may be affected by Year 2000
issues and such purchasers may expend significant resources to correct their
current systems for Year 2000 compliance. These expenditures may result in
reduced funds available to purchase the Company's products. Failure of the
systems of such third parties to operate properly may have and adverse effect on
the Company's business, results of operations and financial condition.
DIVIDENDS UNLIKELY
Giga-tronics has never paid cash dividends on its capital stock and
does not anticipate paying any cash dividends for the foreseeable future.
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<PAGE> 10
USE OF PROCEEDS
The Company will not receive any of the proceeds of the Common Shares
offered hereunder by the Selling Shareholders.
SELLING SHAREHOLDERS
Of the Common Shares offered hereby, 419,997 shares were issued to
former Viking shareholders pursuant to the Viking Merger Agreement, pursuant to
which Giga-tronics acquired all of the outstanding capital stock of Viking and
Viking became a wholly-owned subsidiary of the Company. In addition, 516,992
shares were issued by the Company pursuant to the Ultracision Merger Agreement,
pursuant to which the Company acquired all of the outstanding capital stock of
Ultracision and Ultracision became a wholly-owned subsidiary of the Company. The
Company may from time to time supplement or amend this Prospectus, as required,
to provide other information with respect to the Selling Shareholders.
The following table sets forth certain information regarding
ownership of the Company's Common Stock by the Selling Shareholders as of March
28, 1998, including their names, their positions with the Company where
applicable, and the number of Shares of Common Stock owned by them and offered
pursuant to this Prospectus. Because the Selling Shareholders may offer all or
part of the Common Stock which they hold pursuant to the offering contemplated
by this Prospectus and because their offering is not being underwritten on a
firm commitment basis, no estimate can be given as to the amount of the Common
Stock that will be held by the Selling Shareholders upon termination of this
offering.
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<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK NUMBER OF SHARES
SELLING SHAREHOLDER BENEFICIALLY OWNED PERCENTAGE OF CLASS OFFERED HEREBY(1)
------------------- ------------------------ ------------------- -----------------
<S> <C> <C> <C> <C>
Gordon & Margaret Hampton(1) 170,719 3.9% 170,719
Ronald Hayes & Lois Hayes 15,032 * 15,032
Trust(1)
Leonard & Carol Brown(1) 48,612 1.1% 48,612
Leroy & Celia Staufenbiel(1) 3,758 * 3,758
Kalathil & Mary Pappachan(1) 25,457 * 25,457
Edward & Janis Martinelli(1) 12,342 * 12,342
Dan Markowitz(1) 26,307 * 26,307
Vicko Matulovic (1)(2) 176,809 4.1% 176,809
James P. Davidson & 9,395 * 9,395
Jean K. Davidson, Trustee of the
Davidson Family Trust(1)
Norman Doyle(1) 5,261 * 5,261
Nancy Tressel(1) 22,549 * 22,549
Reuben Baltazar(1) 751 * 751
Curt M. Berggren 153,773 3.6% 153,773
Kenyon M. King 153,773 3.6% 153,773
Martin E. Suorea 20,636 * 20,636
Richard Greenan 20,636 * 20,636
Roland S. DeAngelo 20,636 * 20,636
Gail Inlow 6,197 * 6,197
Carl Berggren 20,696 * 20,696
David Berkstresser 2,060 * 2,060
Mark Meder 8,257 * 8,257
Susan Kiesling 4,121 * 4,121
William Kiesling 4,121 * 4,121
William Ted Stein 4,121 * 4,121
Gary K. Stein 1,030 * 1,030
</TABLE>
* Less than 1%.
- ----------------------
(1) Of the shares offered hereby, Common Shares issued pursuant to the
Ultracision Merger Agreement may not be transferred until such time as the
Company has publicly released a report including the combined financial results
of Giga-tronics and Ultracision for a period of at least thirty (30) days of
combined operations of Giga-tronics and Ultracision within the meaning of the
Commission's Accounting Series Release No. 130, as amended.
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<PAGE> 12
(2) Includes 61,284 Common Shares held by the Matulovic Family Trust,
30,065 Common Shares held by the Matulovic Qtip Trust and 84,709 Common Shares
held by the Matulovic By-Pass Trust.
Gordon Hampton is the President of Ultracision and Curt Berggren is
the President of Viking. In addition, certain of the Selling Shareholders are
employees of the Ultracision or Viking subsidiaries, respectively, of
Giga-tronics.
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PLAN OF DISTRIBUTION
The Company will not receive any of the proceeds from the sale by the
Selling Shareholders of the Common Shares offered hereby. The Company intends to
maintain the effectiveness of the registration statement until the earliest of
(a) date upon which all of the Common Shares have been disposed of in accordance
with the registration statement or Rule 144 under the Securities Act, (b) the
date upon which the Common Shares may be sold in the public market in a three
month period without registration under the Securities Act pursuant to Rule 144
or (c) the twelve month anniversary of the effective date of the registration
statement.
The Common Shares offered hereby may be sold from time to time by the
Selling Shareholders, or by pledgees, donees, transferees or other successors in
interest. Such sales may be made on one or more exchanges or in the
over-the-counter market, or otherwise at prices and at terms then prevailing or
at prices related to the then current market price, or in negotiated
transactions. The Common Shares may be sold by one or more of the following: (a)
a block trade in which the broker or dealer so engaged will attempt to sell the
Common Shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchases by a broker or dealer as
principal and resale by such broker or dealer for its account pursuant to this
Prospectus; (c) an exchange distribution in accordance with the rules of such
exchange; and (d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers. In effecting sales, brokers or dealers engaged by
the Selling Shareholders may arrange for other brokers or dealers to
participate. Brokers or dealers will receive commissions or discounts from the
Selling Shareholders in amounts to be negotiated prior to the sale. In addition,
any securities covered by this Prospectus which qualify for sale pursuant to
Rule 144 may be sold under Rule 144 rather than pursuant to this Prospectus.
The Selling Shareholders and any such underwriters, dealers or agents
which participate in the distribution of the Common Shares may be deemed to be
underwriters within the meaning of the Securities Act, and any profit on the
sale of the Common Shares by them and any discounts, commissions or concessions
received by them may be deemed to be underwriting discounts and commissions
under the Securities Act. The Common Shares may be sold from time to time in one
or more transactions at a fixed offering price, which may be changed, or at
varying prices determined at the time of sale or at negotiated prices. Such
prices will be determined by the Selling Shareholders or by an agreement between
the Selling Shareholders and any such underwriters or dealers. Brokers or
dealers acting in connection with the sale of Common Shares contemplated by this
Prospectus may receive fees or commissions in connection therewith.
At the time a particular offer of Common Shares is made, to the
extent required, a supplement to this Prospectus (each, a "Prospectus
Supplement") will be distributed which will identify and set forth the aggregate
number of Common Shares being offered and the terms of the offering, including
the name or names of any underwriters, dealers or agents, the purchase price
paid by any underwriter for Common Shares purchased from the Selling
Shareholders, any discounts, commissions and other items constituting
compensation from the Selling Shareholders and/or the Company and any discounts,
commissions or concessions allowed or reallowed or paid to dealers, including
the proposed selling price to the public. Such Prospectus Supplement and, if
necessary, a post-effective amendment to the Registration Statement of which
this Prospectus is a part, will be filed with the Commission to reflect the
disclosure of additional information with respect to the distribution of the
Common Shares.
The Company has advised the Selling Shareholders that the
anti-manipulation rules under the Exchange Act may apply to sales of Common
Shares in the market and to the activities of the Selling Shareholders and their
affiliates. The Selling Shareholders have advised the Company that during such
time as the Selling Shareholders may be engaged in the attempt to sell the
Common Shares registered hereunder, they will (i) not engage in any
stabilization activity in connection with any of the Company's securities, (ii)
not bid for or purchase any of the Company's securities or rights to acquire the
Company's
12
<PAGE> 14
securities other than as permitted under the Exchange Act; (iii) not effect any
sale or distribution of the Common Shares until after the Prospectus shall have
been appropriately amended or supplemented, if required, to set forth the terms
thereof; and (iv) effect all sales of Common Shares in broker's transactions
through broker-dealers acting as agents, in transactions directly with market
makers or in privately negotiated transactions where no broker or other third
party (other than the purchaser) is involved.
In order to comply with certain states' securities laws, if
applicable, the Common Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states the Common Shares
may not be sold unless it has been registered or qualified for sale in such
state, or unless an exemption from registration or qualification is available.
No director, officer or agent of the Company is expected to be
involved in soliciting offers to purchase the Common Shares offered hereby, and
no such person will be compensated by the Company for the sale of any Common
Shares.
The Company will pay all of the expenses incident to the offering and
sale of the Common Shares, other than commissions, discounts and fees of
underwriters, dealers or agents.
The Company has agreed to indemnify certain of the Selling
Shareholders who were former shareholders of Ultracision and certain other
persons against certain liabilities, including liabilities arising under the
Securities Act.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Common
Shares offered hereby will be passed upon for the Company by Gibson, Dunn &
Crutcher LLP, San Francisco, California.
EXPERTS
The financial statements and schedules of Giga-tronics Incorporated
as of March 29, 1997, and March 30, 1996 and for the years ended March 29, 1997,
March 30, 1996, and March 25, 1995 have been incorporated by reference herein
and in the registration statement in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
13
<PAGE> 15
==============================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS OR IN ANY PROSPECTUS SUPPLEMENT. IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, ANY UNDERWRITER OR THEIR RESPECTIVE AFFILIATES. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE
MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH HEREIN OR
THEREIN OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS
PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL
OR SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION.
------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 3
THE COMPANY 4
MATERIAL CHANGE 4
RISK FACTORS 5
USE OF PROCEEDS 9
SELLING SHAREHOLDERS 9
PLAN OF DISTRIBUTION 12
LEGAL MATTERS 13
EXPERTS 13
</TABLE>
=======================================================================
=======================================================================
GIGA-TRONICS
INCORPORATED
------------
936,989 SHARES
------------
COMMON STOCK
------------
____________
PROSPECTUS
____________
_______, 1998
=======================================================================
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF DISTRIBUTION
<TABLE>
<S> <C>
Registration fee...................................................................$ 1,881
Blue Sky fees and expenses.........................................................$ 0
Legal fees and expenses*...........................................................$165,000
Printing expenses*.................................................................$ 7,000
Accounting fees and expenses*......................................................$200,000
Miscellaneous*.....................................................................$297,000
--------
Total expenses*..........................................................$670,881
========
</TABLE>
- --------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 204 and 317 of the California General Corporation Law and
the Registrant's Bylaws contain provisions authorizing the indemnification of
corporate directors and officers against certain liabilities and expenses
incurred in connection with proceedings involving such persons in their
capacities as directors and officers, including proceedings under the Securities
Act or the Exchange Act.
Article V of the Registrant's Bylaws requires the Registrant to
indemnify all directors and officers to the fullest extent permitted by
California law and also provides for the advancement of expenses to officers and
directors in connection with their defense of civil or criminal proceedings upon
the written undertaking of the director or officer to repay the advance in the
event it is ultimately determined that such individual is not entitled to
indemnification under the California General Corporation Law.
In addition, the Registrant has entered into supplemental
indemnification agreements with its directors which broaden the scope of
indemnity beyond that expressly provided by the Bylaws and the California
General Corporation Law. These supplemental contracts are permissible under
California General Corporation Law and have been approved by the Registrant's
shareholders. The agreements provide the directors with indemnification to the
fullest possible extent permitted by law against all expenses (including
attorney fees), judgments, fines and settlement amounts incurred or paid by them
in any action or proceeding (including any action by or in the right of the
Registrant) by reason of their service either as a director, officer, employee
or agent of the Registrant or, at the Registrant's request, as a director,
officer, agent or employee of another company, partnership, joint venture, trust
or other enterprise. However, no indemnity will be provided to any director with
respect to conduct which is adjudged to be knowingly fraudulent, deliberately
dishonest or to constitute willful misconduct.
For the undertaking with respect to indemnification, see Item 17
herein.
<PAGE> 17
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Title of Exhibit
----------------
<S> <C>
2.1 Agreement and Plan of Reorganization date as of June 6, 1997 among
Giga-tronics Incorporated, GTV Acquisition Corp. and Viking
Semiconductor Equipment, Inc.
2.2 Agreement and Plan of Reorganization dated as of December 2, 1997 among
Giga-tronics, Incorporated, Giga Acquisition Corp. and Ultracision, Inc.
(incorporated by reference to the Company's Current Report on Form 8-K
dated December 2, 1997).
4.1 Registration Rights Agreement, dated as of December 22, 1997 among the
Company and the shareholders of Ultracision, Inc.
5.1 Opinion of Gibson, Dunn & Crutcher LLP regarding legality of securities
being registered.
23.1 Consent of Independent Auditors.
23.2 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.1).
24.1 Power of Attorney (included as part of signature page filed herewith).
</TABLE>
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and persons
controlling the Registrant pursuant to the provisions set forth in Item 15
above, or otherwise, the Registrant has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof)
2
<PAGE> 18
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) If the Registrant is a foreign private issuer, to file
a post-effective amendment to the registration statement to include
any financial statements required by Rule 3-19 of this chapter at the
start of any delayed offering or throughout a continuous offering.
Financial statements and information otherwise required by Section
10(a)(3) of the Act need not be furnished, provided, that the
Registrant includes in the prospectus, by means of a post-effective
amendment, financial statements required pursuant to this paragraph
(a)(4) and other information necessary to ensure that all other
information in the prospectus is at least as current as the date of
those financial statements. Notwithstanding the foregoing, with
respect to registration statements on Form F-3, a post-effective
amendment need not be filed to include financial statements and
information required by Section 10(a)(3) of the Act or Rule 3-19 of
this chapter if such financial statements and information are
contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in the Form F-3.
3
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Company certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Ramon, State of California, on this 10th day
of March, 1998.
GIGA-TRONICS INCORPORATED
By: /s/ George H. Bruns, Jr.
-------------------------------------
George H. Bruns, Jr.
Chairman and Chief Executive Officer
and Director
<PAGE> 20
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Giga-tronics Incorporated, a
California corporation, do hereby constitute and appoint George H. Bruns, Jr.
and Mark H. Cosmez, II, and each of them, the lawful attorneys-in-fact and
agents with full power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, and either one
of them, determine may be necessary or advisable or required to enable said
corporation to comply with the Securities Act of 1933, as amended, and any rules
or regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
that all said attorneys and agents, or either of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power
of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ George H. Bruns, Jr. Chairman and Chief Executive March 10, 1998
- ------------------------ Officer and Director
George H. Bruns, Jr. (Principal Executive Officer)
/s/ Mark H. Cosmez, II Vice President of Finance/ March 10, 1998
- ------------------------ Chief Financial Officer
Mark H. Cosmez, II (Principal Financial Officer and Principal
Accounting Officer)
/s/ James A. Cole Director March 10, 1998
- ------------------------
James A. Cole
/s/ Edward D. Sherman Director March 10, 1998
- ------------------------
Edward D. Sherman
/s/ Robert C. Wilson Director March 10, 1998
- ------------------------
Robert C. Wilson
</TABLE>
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<S> <C>
2.1 Agreement and Plan of Reorganization date as of June 6, 1997
among Giga-tronics Incorporated, GTV Acquisition Corp. and Viking
Semiconductor Equipment, Inc.
2.2 Agreement and Plan of Reorganization dated as of December 2, 1997
among Giga-tronics, Incorporated, Giga Acquisition Corp. and
Ultracision, Inc. (incorporated by reference to the Company's
Current Report on Form 8-K dated December 2, 1997).
4.1 Registration Rights Agreement, dated as of December 22, 1997
among the Company and the shareholders of Ultracision, Inc.
5.1 Opinion of Gibson, Dunn & Crutcher LLP regarding legality of
securities being registered.
23.1 Consent of Independent Auditors.
23.2 Consent of Gibson, Dunn & Crutcher LLP (to be included in the
opinion filed as Exhibit 5.1).
24.1 Power of Attorney (included as part of signature page filed
herewith).
</TABLE>
<PAGE> 1
EXHIBIT 2.1
Agreement and Plan of Reorganization date as of June 6, 1997 among Giga-tronics
Incorporated, GTV Acquisition Corp. and Viking Semiconductor Equipment, Inc.
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is
entered into as of the 6th day of June, 1997, by and among Giga-tronics
Incorporated, a California corporation ("Giga-tronics"), GTV Acquisition Corp.,
a California corporation and a wholly owned subsidiary of Giga-tronics ("Merger
Sub"), and Viking Semiconductor Equipment, Inc., a California corporation
("Viking").
RECITALS
A. The Boards of Directors of Giga-tronics, Merger Sub and Viking
have each determined to engage in the transactions contemplated hereby, pursuant
to which (i) Merger Sub will merge (the "Merger") with and into Viking, (ii)
each share of common stock, no par value, of Viking ("Viking Common Stock") and
any other shares of Viking stock which shall have previously been converted into
Viking Common Stock (except for shares of Viking stock as to which dissenters'
rights, if available, shall have been perfected) shall be converted into the
right to receive a fraction of a share of common stock, no par value, of
Giga-tronics ("Giga-tronics Common Stock"), in the manner and amount herein
described, and (iii) the capital stock of Merger Sub shall be converted into
shares of Viking Common Stock, all upon the terms and subject to the conditions
set forth herein.
B. The Board of Directors of Viking has approved, and has
resolved to recommend that the shareholders of Viking approve, the Merger and
this Agreement.
C. The respective Boards of Directors of Giga-tronics and Merger
Sub have approved the Merger and this Agreement. Giga-tronics, as the sole
shareholder of Merger Sub, has approved the Merger and this Agreement.
D. The parties intend for the transactions contemplated by this
Agreement to qualify as a tax-free reorganization in accordance with the
provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and to be accounted for as a pooling of interests transaction.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, the
parties agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01 THE MERGER.
(a) Subject to the terms and conditions hereof, and in
accordance with the General Corporation Law of California, Merger Sub will be
merged with and into Viking (the "Merger"), as soon as practicable following the
satisfaction or waiver of the conditions set forth in Article VIII hereof.
Following the Merger, Viking shall continue as the surviving corporation (the
"Surviving Corporation"), and the separate corporate existence of Merger Sub
shall cease.
1
<PAGE> 2
(b) Concurrent with the Closing (as defined in subsection (d)
below), Giga-tronics, and Viking and Merger Sub shall file an agreement of
merger in the form attached hereto as Exhibit 1.01 (the "Agreement of Merger")
in the Office of the Secretary of State of the State of California in accordance
with California Law. The Merger shall become effective at such time as the
Agreement of Merger is duly filed in the Office of the Secretary of State of the
State of California (the date of such filing being hereinafter referred to as
the "Effective Date" and the time of such filing being hereinafter referred to
as the "Effective Time").
(c) From and after the Effective Time, the Surviving
Corporation shall possess all the rights, privileges, powers and franchises and
be subject to all of the restrictions, disabilities and duties of Viking and
Merger Sub, all as provided under California Law.
(d) The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on June 27, 1997 at the offices of
Brobeck Phleger & Harrison LLP, One Market Plaza, San Francisco, CA 94105, or at
such other date and place as Giga-tronics and Viking may agree. The date of the
Closing determined pursuant to this Section 1.01(d) is referred to as the
"Closing Date."
SECTION 1.02 CONVERSION OF SHARES.
(a) At the Effective Time:
(i) Subject to Section 1.05 hereof, at the Effective
Time each issued and outstanding share of Viking Common Stock issued and
outstanding immediately prior to the Effective Time (other than
Dissenting Viking Shares (as defined in Section 1.04 hereof))(the
"Viking Shares") shall automatically, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into
a right to receive the number of shares of Giga-tronics Common Stock as
is determined pursuant to this Section 1.02. A maximum total of 420,000
shares of Giga-tronics Common Stock (the "Merger Consideration") will be
issued in the Merger, including shares that would have been issued to
holders of Dissenting Viking Shares and fractional shares that would
have been issuable but for Section 1.05 below.
(ii) The Agreement of Merger to be filed shall contain
the final exchange ratio (the "Exchange Ratio") for Viking Shares into
Giga-tronics Common Stock and shall be equal to 420,000 divided by the
fully diluted number of Viking Shares outstanding at the Effective Time
(the "Viking Outstanding Equivalent Number"). The Viking Outstanding
Equivalent Number shall be equal to the sum of (1) the number of Viking
Shares outstanding at the Effective time; plus (2) the total number of
Viking Shares which would be issuable on the exercise of any Viking
warrants or options or other securities convertible into, or exercisable
for, Viking Shares (collectively "Viking Options"). All Viking Shares
shall be exchangeable into Giga-tronics Common Stock at the same
Exchange Ratio.
(b) If between the date of this Agreement and the Effective
Time, the number of outstanding Viking Shares or shares of Giga-tronics Common
Stock shall have been changed into a different number of shares or a different
class, by reason of any stock dividend, subdivision, reclassification,
recapitalization, split-up, combination, exchange of shares or the like, the
Exchange Ratio shall be correspondingly adjusted.
SECTION 1.03 EXCHANGE OF CERTIFICATES.
(a) Giga-tronics (or such third party as Giga-tronics shall
appoint) shall act as Exchange Agent (the "Exchange Agent") for delivery of the
Merger Consideration to the Viking shareholders and, if applicable, the cash to
which holders of Viking shares shall be entitled pursuant to Section 1.05
hereof.
(b) As soon as practicable after the Effective Time, the
Exchange Agent shall mail to each holder of record (other than Giga-tronics or
Merger Sub or any other subsidiary of Giga-tronics) of a certificate or
certificates which immediately prior to the Effective Time represented issued
and outstanding Viking Shares
2
<PAGE> 3
(individually a "Certificate" and collectively the "Certificates"), a letter of
transmittal for return to the Exchange Agent which shall specify that delivery
shall be effected, and risk of loss and the title to the Certificates shall
pass, only upon receipt of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Exchange
Agent, together with and in accordance with such letter of transmittal, the
holder of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration that such holder is entitled to receive pursuant to Section
1.02(a) hereof. Upon such surrender the Exchange Agent shall promptly deliver
such Merger Consideration.
(c) Until surrendered, each Certificate shall be deemed for
all purposes to evidence only the right to receive the Merger Consideration into
which Viking Shares formerly represented thereby shall have been converted
pursuant to Section 1.02(a) hereof. No dividends or other distribution declared
after the Effective Time with respect to Giga-tronics Common Stock shall be paid
to the holders of any unsurrendered Certificate until the holder thereof
surrenders such Certificate.
(d) After the Effective Time there shall be no transfers on
the stock transfer books of either Viking (the stock transfer books of which
shall be closed) or the Surviving Corporation of Viking Shares which were
outstanding immediately prior to the Effective Time. If after the Effective Time
Certificates are presented for transfer to the Exchange Agent, together and in
accordance with the letter of transmittal from the Exchange Agent, they shall be
cancelled and exchanged for the Merger Consideration.
SECTION 1.04 DISSENTING SHARES. Viking Shares that have not been
voted for approval of this Agreement and with respect to which a demand for
payment and appraisal shall have been properly made in accordance with Chapter
13 of the General Corporation Law of California ("Dissenting Viking Shares")
shall not be converted into the right to receive the Merger Consideration at or
after the Effective Time but shall be converted into the right to receive such
consideration as may be determined to be due with respect to such Dissenting
Viking Shares pursuant to the law of the State of California. If a holder of
Dissenting Viking Shares ("Dissenting Shareholder"), shall withdraw his or her
demand for such payment and appraisal or shall become ineligible for such
payment and appraisal, then, as of the Effective Time of the occurrence of such
event of withdrawal or ineligibility, whichever last occurs, such holder's
Dissenting Viking Shares shall cease to be Dissenting Viking Shares and shall be
converted into the right to receive, and shall be exchangeable for, the Merger
Consideration into which such Dissenting Viking Shares would have been converted
pursuant to Section 1.02(a) hereof. Viking shall give Giga-tronics prompt notice
of any demand received by Viking from a holder of Dissenting Viking Shares for
appraisal of Viking Shares, and Giga-tronics shall have the right to participate
in all negotiations and proceedings with respect to such demand. Viking agrees
that, except with the prior written consent of Giga-tronics, or as required
under the General Corporation Law of California, it will not voluntarily make
any payment with respect to, or settle or offer to settle, any such demand for
appraisal. Each Dissenting Shareholder who, pursuant to the provisions of
Chapter 13 of the General Corporation Law of California, becomes entitled to
payment of the value of shares of Viking stock shall receive payment therefor
(but only after the value therefor shall have been agreed upon or finally
determined pursuant to such provisions). Any Merger Consideration which would
have been issuable with respect to Dissenting Viking Shares shall be retained by
Giga-tronics.
SECTION 1.05 FRACTIONAL SHARES. Notwithstanding any other provision
of this Agreement to the contrary, no fractional shares of Giga-tronics Common
Stock shall be issued in connection with the Merger. All shares of Giga-tronics
Common Stock to which a holder of Viking Shares is entitled immediately prior to
the Effective Time shall be aggregated. If a fractional share results from such
aggregation, in lieu of any such fractional share, each holder of Viking Shares
who would otherwise have been entitled to receive a fraction of a share of
Giga-tronics Common Stock upon surrender of Certificates for exchange pursuant
to Section 1.03 shall be entitled to receive from the Exchange Agent a cash
payment equal to such fraction multiplied by the closing sale price per share of
Giga-tronics Common Stock on the last business day on which Giga-tronics Common
Stock is traded on the NASD, prior to the Effective Time.
3
<PAGE> 4
SECTION 1.06 VIKING OPTIONS. Giga-tronics will not assume any Viking
Options. At the Effective Time, any outstanding Viking Options shall be deemed
exercised for such number of shares of Giga-tronics Common Stock as would be
exchanged in the Merger for the Viking Shares which would have been issued had
such Viking Options been exercised in full and such Viking Shares been
outstanding immediately prior to the Effective Time, subject to the following
provisions of this Section 1.06. Such deemed exercise of Viking Options shall be
on a "net exercise" basis. The full number of shares issuable on exercise of
such Viking Option (including such number of shares as are deemed surrendered in
the net exercise) shall be added to the Viking Outstanding Equivalent Number as
described in Section 1.02 above. The value of the Viking Shares issuable on the
exercise of any Viking Option for purposes of determining the number of Viking
Shares to be surrendered in the deemed net exercise shall be equal to the number
of Viking Shares issuable on exercise of such Viking Option, multiplied by the
Exchange Ratio, multiplied by the average closing price of a share of
Giga-tronics Stock on such stock exchange as Giga-tronics Stock is then traded
for the five (5) business days immediately preceding the Closing Date. Shares of
Giga-tronics Common Stock which would otherwise be issuable in respect of the
Viking Shares deemed surrendered upon such net exercise shall be retained by
Giga-tronics.
SECTION 1.07 NO REGISTRATION OF GIGA-TRONICS COMMON STOCK. The
parties acknowledge and agree that the Giga-tronics Common Stock to be issued
pursuant to the Merger will be issued pursuant to a transaction not involving a
public offering and therefore will be characterized as "restricted securities"
under federal securities laws. The parties further acknowledge and agree that
pursuant to the Securities Act of 1933, as amended (the "Securities Act") the
Giga-tronics Common Stock so issued may be resold without registration under the
Securities Act only in certain limited circumstances. It is understood that the
Certificates issued pursuant to the Merger will bear the following legend:
"These securities have not been registered under the
Securities Act of 1993, as amended. They may not be sold,
offered for sale, pledged or hypothecated in the absence of a
registration statement in effect with respect to the
securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not
required or unless sold pursuant to Rule 144 of such Act."
Giga-tronics shall be under no obligation to effect a
registration statement with respect to Giga-tronics Common Stock received in the
Merger.
ARTICLE II
THE SURVIVING CORPORATION
SECTION 2.01 ARTICLES OF INCORPORATION. The Articles of
Incorporation of the Surviving Corporation shall be amended at the Effective
Time to conform to the Articles of Incorporation of Merger Sub, as in effect
immediately prior to the Effective Time.
SECTION 2.02 BYLAWS. The Bylaws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Bylaws of the Surviving
Corporation, until thereafter amended in accordance with applicable law.
SECTION 2.03 DIRECTORS AND OFFICERS. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, the directors of Merger Sub at the Effective Time shall
become the initial directors of the Surviving Corporation, and the officers of
Viking at the Effective Time shall become the initial officers of the Surviving
Corporation.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF VIKING
Except as disclosed in a document referring specifically to this
Agreement (the "Viking Disclosure Schedule") which is delivered by Viking to
Giga-tronics no less than five days prior to the execution of this Agreement
(which shall contain appropriate and reasonably detailed references to each
representation and warranty to which any item there disclosed pertains), Viking
represents and warrants to Giga-tronics as set forth below:
SECTION 3.01 CORPORATE EXISTENCE AND POWER. Viking is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of California, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals (collectively, "Governmental
Authorizations") required to carry on its business as now conducted. Viking is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the character of the property owned or leased by it
or the nature of its activities makes such qualification necessary. Viking has
delivered to Giga-tronics true and complete copies of Viking's Articles of
Incorporation and Bylaws as currently in effect.
SECTION 3.02 CORPORATE AUTHORIZATION. The execution, delivery and
performance by Viking of this Agreement, the Viking and Giga-tronics Affiliates
Agreements (as defined in Sections 5.09 and 6.08 respectively, hereof) and the
consummation by Viking of the transactions contemplated hereby and thereby are
within Viking's corporate powers and have been duly authorized by all necessary
corporate action, except for the approval by Viking's shareholders in connection
with the consummation of the Merger. The Viking and Giga-tronics Affiliates
Agreement are collectively referred to herein as the "Viking Ancillary
Agreements." This Agreement and the Viking Ancillary Agreements constitute, or
upon execution will constitute, valid and binding agreements of Viking,
enforceable against Viking in accordance with their respective terms.
SECTION 3.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Viking of this Agreement, the Viking Ancillary Agreements and the
Agreement of Merger and the consummation of the Merger by Viking require no
action by or in respect of, or filing with, any governmental body, agency,
official or authority other than:
(a) the filing of the Agreement of Merger in accordance with
California Law;
(b) compliance with any applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act");
(c) compliance with any applicable requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder;
(d) compliance with any applicable foreign or state securities
or "blue sky" laws; and
(e) such other filings or registrations with, or
authorizations, consents or approvals of, governmental bodies, agencies,
officials or authorities, the failure of which to make or obtain would not
materially adversely affect the ability of Viking, Giga-tronics or Merger Sub to
consummate the transactions contemplated hereby and operate their businesses as
heretofore operated.
SECTION 3.04 NON-CONTRAVENTION. The execution, delivery and
performance by Viking of this Agreement, the Viking Ancillary Agreements and the
Certificate of Merger and the consummation by Viking of the transactions
contemplated hereby and thereby do not and will not:
(a) contravene or conflict with the Articles of Incorporation
or Bylaws of Viking;
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(b) assuming compliance with the matters referred to in
Section 3.03 and assuming the requisite approval of Viking's shareholders of the
Merger, contravene or conflict with or constitute a violation of any provision
of any law, regulation, judgment, injunction, order or decree binding upon or
applicable to Viking;
(c) conflict with or result in a breach or violation of, or
constitute a default under, or result in the termination or cancellation of, or
right to accelerate, any agreement, contract or other instrument binding upon
Viking or any license, franchise, permit or other similar authorization held by
Viking; or
(d) result in the creation or imposition of any Lien (as
defined below) on any asset of Viking.
For purposes of this Agreement, the term "Lien" means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or encumbrance of
any kind in respect of such asset.
SECTION 3.05 CAPITALIZATION. The authorized capital stock of Viking
consists of 100,000 shares of Viking Common Stock. As of the date hereof, there
are 27,313 shares of Viking Common Stock outstanding. All outstanding Viking
Common Shares have been duly authorized and validly issued and are fully paid
and nonassessable and free from any preemptive rights. Except as set forth in
this Section and as otherwise contemplated by this Agreement, there are
outstanding (i) no shares of capital stock or other voting securities of Viking,
(ii) no securities of Viking convertible into or exchangeable for shares of
capital stock or voting securities of Viking and (iii) no options or other
rights to acquire from Viking, and no obligation of Viking to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or other voting securities of Viking (the items in clauses (i),
(ii) and (iii) being referred to collectively as the "Viking Securities"). There
are no outstanding obligations of Viking to repurchase, redeem or otherwise
acquire any Viking Securities.
SECTION 3.06 SUBSIDIARIES AND INVESTMENTS. Viking does not own,
directly or indirectly, any outstanding capital stock or equity interest in any
corporation, partnership, joint venture or other entity.
SECTION 3.07 FINANCIAL STATEMENTS. Viking has delivered to Purchaser
copies (initialled by Viking's Secretary and identified with a reference to this
Section of this Agreement) of financial statements (hereinafter collectively
called the "Financial Statements"), all of which are complete and correct, have
been prepared in accordance with generally accepted accounting principles
consistently applied and maintained throughout the periods indicated and fairly
present the financial condition of Viking as at their respective dates and the
results of its operations for the periods covered thereby, as follows: balance
sheets of Viking as at March 31, 1997 and May 31, 1996 and May 31, 1995 and the
related statements of earnings for the years then ended. The balance sheet of
Viking as at March 31, 1997 (the "Viking Balance Sheet Date") is referred to
herein as the "Viking Balance Sheet."
Such statements of earnings do not contain any items of special or nonrecurring
income or any other income not earned in the ordinary course of business except
as expressly specified therein, and such interim financial statements include
all adjustments, which consist only of normal recurring accruals, necessary for
such fair presentation.
SECTION 3.08 ABSENCE OF CHANGES OR EVENTS. Since the Viking Balance
Sheet Date Viking has conducted its business only in the ordinary course
consistent with its prior practices and has not:
(a) incurred any obligation or liability, absolute, accrued,
contingent or otherwise, whether due or to become due, except current
liabilities for trade or business obligations incurred in connection with the
purchase of goods or services in the ordinary course of business and consistent
with its prior practice, none of which liabilities, in any case or in the
aggregate, materially and adversely affects the business, liabilities or
financial condition of Viking;
(b) discharged or satisfied any lien, charge or encumbrance
other than those then required to be discharged or satisfied, or paid any
obligation or liability, absolute, accrued, contingent or otherwise, whether due
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or to become due, other than current liabilities shown on the Balance Sheet and
current liabilities incurred since the Balance Sheet Date in the ordinary course
of business and consistent with its prior practice;
(c) declared or made any payment of dividends or other
distribution to its shareholders or upon or in respect of any shares of its
capital stock, or purchased, retired or redeemed, or obligated itself to
purchase, retire or redeem, any of its shares of capital stock or other
securities;
(d) mortgaged, pledged or subjected to lien, charge, security
interest or any other encumbrance or restriction any of its property, business
or assets, tangible or intangible;
(e) sold, transferred, leased to others or otherwise disposed
of any of its assets, except for inventory sold in the ordinary course of
business, or cancelled or compromised any debt or claim, or waived or released
any right of substantial value;
(f) received any notice of termination of any contract, lease
or other agreement or suffered any damage, destruction or loss (whether or not
covered by insurance) which in any case or in the aggregate, has had a
materially adverse effect on the assets, operations or prospects of Viking;
(g) encountered any labor union organizing activity, had any
actual or threatened employee strikes, work stoppages, slow-downs or lock-outs,
or had any material change in its relations with its employees, agents,
customers or suppliers or with any governmental authorities or self-regulatory
organizations;
(h) transferred or granted any rights under, or entered into
any settlement regarding the breach or infringement of, any United States or
foreign license, patent, copyright, trademark, trade name, invention or similar
rights, or modified any existing rights with respect thereto;
(i) made any change in the rate of compensation, commission,
bonus or other direct or indirect remuneration payable, or paid or agreed or
orally promised to pay, conditionally or otherwise, any bonus, extra
compensation, pension or severance or vacation pay, to any shareholder,
director, officer, employee, salesman, distributor or agent of Viking;
(j) issued or sold any shares of its capital stock or other
securities, or issued, granted or sold any options, rights or warrants with
respect thereto, or acquired any capital stock or other securities of any
corporation or any interest in any business enterprise, or otherwise made any
loan or advance to or investment in any person, firm or corporation;
(k) made any capital expenditures or capital additions or
betterments in excess of an aggregate of $50,000;
(l) changed its banking or safe deposit arrangements;
(m) instituted, settled or agreed to settle any litigation,
action or proceeding before any court or governmental body relating to Viking or
its property;
(n) failed to replenish its inventories and supplies in a
normal and customary manner consistent with its prior practice and prudent
business practices prevailing in the industry, or made any purchase commitment
in excess of the normal, ordinary and usual requirements of its business or at
any price in excess of the then current market price or upon terms and
conditions more onerous than those usual and customary in the industry, or made
any change in its selling, pricing, advertising or personnel practices
inconsistent with its prior practice and prudent business practices prevailing
in the industry;
(o) suffered any change, event or condition which, in any case
or in the aggregate, has had or may have a materially adverse effect on Viking's
condition (financial or otherwise), properties, assets, liabilities,
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operations or prospects, including, without limitation, any change in Viking's
revenues, costs, backlog or relations with its employees, agents, customers, or
suppliers;
(p) entered into any transaction, contract or commitment other
than in the ordinary course of business or paid or agreed to pay any legal,
accounting, brokerage, finder's fee, taxes or other expenses in connection with,
or incurred any severance pay obligations by reason of, this Agreement or the
transactions contemplated hereby; or
(q) entered into any agreement or made any commitment to take
any of the types of action described in subparagraphs (a) through (p) above.
SECTION 3.09 NO UNDISCLOSED LIABILITIES. There are no liabilities of
Viking or any of its Subsidiaries, including contingent liabilities, of the type
required to be reflected in financial statements (including the notes thereto)
under generally accepted accounting principles that are material to Viking,
other than:
(a) liabilities disclosed or provided for in the Viking
Balance Sheet (including the notes thereto);
(b) liabilities incurred in the ordinary course of business
consistent with past practice since the Viking Balance Sheet Date and which do
not exceed $50,000 in the aggregate;
(c) liabilities incurred other than in the ordinary course of
business and which do not exceed $25,000 in the aggregate; and
(d) liabilities under this Agreement.
SECTION 3.10 LITIGATION. There is no action, suit, proceeding, claim
or investigation pending or, to the best of Viking's knowledge, overtly
threatened, against Viking or any of its assets or against or involving any of
its officers, directors or employees in connection with the business or affairs
of Viking, including, without limitation, any claims for indemnification arising
under any agreement to which Viking is a party, which could, individually or in
the aggregate, have a Material Adverse Effect on Viking or which in any manner
challenges or seeks to prevent, enjoin, alter or materially delay any of the
transactions contemplated hereby. Viking is not subject to or in default with
respect to any writ, order, judgment, injunction or decree, which would have a
Material Adverse Effect on Viking.
SECTION 3.11 TAXES.
(a) For purposes of this Agreement, "Tax" or "Taxes" means any
and all taxes, fees, levies, duties, tariffs, imposts, and other charges of any
kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any governmental or
taxing authority including, without limitation: taxes or other charges on or
with respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation, or net worth; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer, value
added, or gains taxes; license, registration and documentation fees; and
customs' duties, tariffs, and similar charges.
(b) Except as described in Schedule 3.11 of the Viking
Disclosure Schedule, (i) Viking has filed all federal, state, local and foreign
tax returns and reports required to be filed by it and has paid and discharged
all Taxes shown as due thereon and has paid all of such other Taxes as are due,
other than (a) such filings, payments or other occurrences that would not have a
Material Adverse Effect; (ii) neither the IRS nor any other taxing authority or
agency, domestic or foreign, is now asserting or, to the best knowledge of
Viking after due inquiry, threatening to assert against Viking any deficiency or
claim for additional Taxes or interest thereon or penalties in connection
therewith; (iii) Viking has not granted any waiver of any statute of limitations
with respect to, or any extension of a period for the assessment of, any
federal, state, county, municipal or foreign income Tax; (iv) the accruals and
reserves for Taxes
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reflected in the Viking Balance Sheet and the most recent quarterly financial
statements are adequate to cover all Taxes accruable through the date thereof
(including interest and penalties, if any, thereon) in accordance with generally
accepted accounting principals; (v) Viking has not made an election under
Section 341(f) of the Code; (vi) Viking has withheld or collected and paid over
to the appropriate governmental authorities or is properly holding for such
payment all Taxes required by law to be withheld or collected, except for such
failures to have so withheld or collected and paid over or to be so holding for
payment which would not have a Material Adverse Effect and (vii) there are no
material liens for Taxes upon the assets of Viking, other than liens for Taxes
that are being contested in good faith by appropriate proceedings.
(c) Viking is not party to or bound by, nor has any obligation
under any Tax sharing, Tax indemnity or Tax allocation or similar agreement.
SECTION 3.12 INSURANCE. Viking maintains the policies of fire,
liability, use and occupancy and other forms of insurance covering its
properties and businesses set forth in the Viking Disclosure Schedule. Such
policies are in full force and effect.
SECTION 3.13 EMPLOYEE BENEFIT PLANS; ERISA. Schedule 3.13 of the
Viking Disclosure Schedule lists (i) all the employee benefit plans, programs
and arrangements maintained for the benefit of any current or former employee,
officer or director of Viking (the "Plans") and (ii) all contracts and
agreements relating to employment that provide for annual compensation in excess
of $75,000 and all severance agreements, with any of the directors, officers or
employees of Viking (other than, in each case, any such contract or agreement
that is terminable by Viking at will without penalty or other adverse
consequence) (the "Employment Contracts"). Giga-tronics has been furnished with
a copy of each Plan, any summary plan descriptions, annual reports, actuarial
reports, registration statements or other securities law filings and
determination letters produced or filed with respect thereto, and each
Employment Contract. Except as set forth in Section 3.13 of the Viking
Disclosure Schedule: (i) none of the Plans is a multiemployer plan within the
meaning of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"); (ii) none of the Plans promises or provides retiree medical or life
insurance benefits to any person; (iii) each Plan intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter from
the Internal Revenue Service (the "IRS") that it is so qualified and nothing has
occurred since the date of such letter to affect the qualified status of such
Plan; (iv) none of the Plans promises or provides severance benefits or benefits
contingent upon a change in ownership or control, within the meaning of Section
280G of the Code; (v) each Plan has been operated in all material respects in
accordance with its terms and the requirements of applicable law; (vi) no Plan
is or has been covered by Title IV of ERISA or Section 412 of the Code; (vii)
Viking has not incurred any direct or indirect liability under, arising out of
or by operation of Title IV of ERISA in connection with the termination of, or
withdrawal from, any Plan or other retirement plan or arrangement, and no fact
or event exists that could give rise to any such liability; and (viii) Viking
has not incurred any liability under, and has complied in all respects with, the
Worker Adjustment Retraining Notification Act, and no fact or event exists that
could give rise to liability under such act.
SECTION 3.14 MATERIAL AGREEMENTS.
(a) The Viking Disclosure Schedule includes a complete and
accurate list of all contracts, agreements, leases and instruments to which
Viking is a party or by which it or its properties or assets are bound which
individually involve payments or receipts in excess of $50,000, inclusive of
contracts entered into with customers and suppliers in the ordinary course of
business, or that pertain to employment or severance benefits for any officer,
director or employee of Viking, whether written or oral (each a "Material Viking
Agreement").
(b) Neither Viking nor, to the knowledge of Viking, any other
party is in default under any Material Viking Agreement and no event has
occurred which (after notice or lapse of time or both) would become a breach or
default under, or would permit modification, cancellation, acceleration or
termination of any Material Viking Agreement or result in the creation of any
security interest upon, or any person obtaining any right to acquire, any
properties, assets or rights of Viking.
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(c) Each Material Viking Agreement is in full force and effect
and is valid and legally binding, there are, to the knowledge of Viking, no
unresolved disputes involving or with respect to any Material Viking Agreement,
and no party to a Material Viking Agreement has advised Viking that it intends
either to terminate a Material Viking Agreement or to refuse to renew a Material
Viking Agreement upon the expiration of the term thereof.
(d) Viking is not in violation of, or in default with respect
to, any term of its Certificate of Incorporation or any material term of its
Bylaws.
SECTION 3.15 REAL PROPERTY; LEASES.
(a) The Viking Disclosure Schedule includes a correct and
complete list of all items of real property, including leased property, and any
material buildings, structures and improvements located thereon or therein,
which are owned or leased by Viking.
(b) To Viking's knowledge, with respect to any real property
of Viking, including any leased property, and any material buildings, structures
and improvements located thereon or therein, such buildings, fixtures and
improvements, and the present use thereof, are not the subject of any official
complaint or notice of violation of any applicable zoning ordinance, building
code or environmental laws, and such premises are not affected or threatened by
any condemnation or eminent domain proceeding.
(c) All leases of real property and all material leases of
personal property by Viking are in full force and effect and, to Viking's
knowledge, there exists no default on the part of Viking which would interfere
with the use made and proposed to be made of such real and personal property,
and, except for leases of personal property terminated in the ordinary course of
business, upon consummation of the Merger, will continue to entitle Viking to
the use and possession of the real or personal property purported to be covered
thereby for the terms specified in such leases and for the purposes for which
such real or personal property is now used.
SECTION 3.16 TITLE TO ASSETS. Viking has good, marketable and
insurable title to all the properties and assets it owns or uses in its business
or purports to own, including, without limitation, those reflected in its books
and records and in the Balance Sheet (except inventory sold after the Balance
Sheet Date in the ordinary course of business). None of such properties and
assets are subject to any mortgage, pledge, lien, charge, security interest,
encumbrance, restriction, lease, license, easement, liability or adverse claim
of any nature whatsoever, except (i) mortgages or security interests shown on
the Balance Sheet as securing specific liabilities or obligations or (ii) those
imperfections of title and encumbrances, if any, which, individually or in the
aggregate, (A) are not substantial in character, amount or extent and do not
materially detract from the value of the properties subject thereto, (B) do not
interfere with either the present and continued use of such property or the
conduct of Viking's normal operations and (C) have arisen only in the ordinary
course of business. All of the properties and assets owned, leased or used by
Viking are in good operating condition and repair, are suitable for the purposes
used, are adequate and sufficient for all current operations of Viking and are
directly related to the business of Viking.
SECTION 3.17 ENVIRONMENTAL MATTERS.
(a) For purposes of this Agreement, the following terms shall
have the following meanings: (i) "Hazardous Substances" means (A) those
substances defined in or regulated under the following United States federal
statutes and their state or foreign counterparts, as each may be amended from
time to time, and all regulations thereunder: the Hazardous Materials
Transportation Act, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the Clean
Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act; (B) petroleum
and petroleum products including crude oil and any fractions thereof; (C)
natural gas, synthetic gas, and any mixtures thereof; (D) radon; (E) asbestos;
(F) any other pollutant or contaminant; and (G) any substance with respect to
which a federal, state or local agency requires environmental investigation,
monitoring, reporting or remediation; and (ii) "Environmental Laws" means any
United States or foreign, federal, state or local law relating to (A) releases
or threatened releases of Hazardous Substances or materials containing Hazardous
Substances; (B) the
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manufacture, handling, transport, use, treatment, storage or disposal of
Hazardous Substances or materials containing Hazardous Substances; or (C)
otherwise relating to pollution of the environment or the protection of human
health.
(b) Except as would not have a Material Adverse Effect: (i)
Viking has not violated and is not in violation of any Environmental law; (ii)
there has been no contamination, disposal, spilling, dumping, incineration,
discharge, storage, treatment or handling of any Hazardous Substance, on or from
any of the properties owned or leased by Viking (including, without limitation,
soils and surface and ground waters); (iii) Viking is not liable for any
off-site contamination; (iv) Viking is not liable under any Environmental Law;
(v) Viking has all permits, licenses and other authorizations required under any
Environmental Law ("Environmental Permits"); (vi) Viking has been and is in
compliance with its Environmental Permits; and (vii) there are no pending, or,
to the best knowledge of Viking after due inquiry, threatened claims against
Viking relating to any Environmental Law or Hazardous Substance.
SECTION 3.18 INTELLECTUAL PROPERTY. No claim is pending or, to the
knowledge of Viking, threatened to the effect that the present or past
operations of Viking infringes upon or conflicts with the rights of others with
respect to any intellectual property (including, without limitation, licenses,
patents, patent rights, patent applications, trademarks, trademark applications,
trade names, copyrights, drawings, trade secrets, know-how and computer
software) necessary to permit Viking to conduct its business as now operated
(the "Viking Intellectual Property"), except as disclosed in the Viking
Disclosure Schedule, no claim is pending or, to the best knowledge of Viking,
threatened to the effect that any of the Viking Intellectual Property is invalid
or unenforceable. Viking has provided Giga-tronics with a list of all licenses,
patents, patent rights, patent applications, trademarks, trademark applications,
trade names, copyrights and service marks of Viking and each of its
subsidiaries. Except as set forth in the Viking Disclosure Schedule, no
contract, agreement or understanding between Viking or any of its subsidiaries
and any other party exists which would impede or prevent the continued use by
Viking and its subsidiaries of the entire right, title and interest of Viking
and its subsidiaries in and to the Viking Intellectual Property.
SECTION 3.19 NO GUARANTIES. None of the obligations or liabilities
of Viking is guaranteed by, or subject to a similar contingent liability of, any
other person, firm or corporation, nor has Viking guaranteed, or otherwise
become contingently liable for, the obligations or liabilities of any other
person, firm or corporation.
SECTION 3.20 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither Viking
nor any officer, employee or agent of Viking, nor any other person acting on its
behalf, has, directly or indirectly, within the past five years given or agreed
to give any gift or similar benefit to any customer, supplier, governmental
employee or other person who is or may be in a position to help or hinder the
business of Viking (or assist Viking in connection with any actual or proposed
transaction) which (a) might subject Viking to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, (b) if not given in
the past, might have had an adverse effect on the assets, business or operations
of Viking as reflected in the Financial Statements or (c) if not continued in
the future, might adversely affect Viking's assets, business, operations or
prospects or which might subject Viking to suit or penalty in any private or
governmental litigation or proceeding.
SECTION 3.21 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS. Viking had
complied with all existing laws, rules, regulations, ordinances, orders,
judgments and decrees now applicable to its business, properties or operations
as presently conducted. Neither the ownership nor use of Viking's properties nor
the conduct of its business conflicts with the rights of any other person, firm
or corporation or violates, or with or without the giving of notice or the
passage of time, or both, will violate, conflict with or result in a default,
right to accelerate or loss of rights under, any terms or provisions of its
certificate of incorporation or by-laws as presently in effect, or any lien,
encumbrance, mortgage, deed of trust, lease, license, agreement, understanding,
law, ordinance, rule or regulation, or any order, judgment or decree to which
Viking is a party or by which it may be bound or affected. Neither Viking nor
any Shareholder is aware of any proposed laws, rules, regulations, ordinances,
orders, judgments, decrees, governmental takings, condemnations or other
proceedings which would be applicable to its business, operations or properties
and which might adversely affect its properties, assets, liabilities, operations
or prospects, either before or after the Closing.
SECTION 3.22 DISCLOSURE DOCUMENTS. None of the information supplied
or to be supplied by Viking for inclusion in the information materials relating
to the solicitation of the approval of Viking's shareholders of the Merger
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(the "Information Materials") at the time of mailing of the Information
Materials to shareholders of Viking, and at the time of the meeting of Viking
shareholders to be held in connection with the Merger or action by written
consent of shareholders approving the Merger, contain any untrue statement of a
material fact or omits or will omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.
SECTION 3.23 TAX MATTERS. Neither Viking nor any of its affiliates
has taken or agreed to take any action that would prevent the Merger from being
effected as a pooling of interests or would prevent the Merger from constituting
a transaction qualifying under Section 368(a) of the Code. Neither Viking nor
any of its affiliates or agents is aware of any agreement, plan or other
circumstances that would prevent the Merger from qualifying under Section 368(a)
of the Code and to their best knowledge after due inquiry, the Merger will so
qualify.
SECTION 3.24 ACCOUNTING MATTERS. Schedule 3.24 of the Viking
Disclosure Schedule sets forth all persons who, as of the date of this
Agreement, may be deemed to be affiliates of Viking under Rule 145 of the
Securities Act or otherwise under applicable SEC accounting releases with
respect to pooling-of-interests accounting treatment. Prior to the date hereof,
Viking has advised such persons of the resale restrictions imposed by applicable
securities laws and required to cause the Merger to qualify for
pooling-of-interests accounting treatment.
SECTION 3.25 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no
agreement (non-compete or otherwise), commitment, judgment, injunction order or
decree to which Viking is a party or otherwise binding upon Viking which has or
could reasonably be expected to have the effect of prohibiting or impairing any
business practice of Viking, any acquisition of property by Viking or the
conduct of business by Viking. Without limiting the foregoing, Viking has not
entered into any agreement under which Viking is restricted from selling,
licensing or otherwise distributing any of its products.
SECTION 3.26 INTERESTED PARTY TRANSACTIONS. No officer, director or
stockholder of Viking (nor any ancestor, sibling, descendant or spouse of any
such person, or any trust, partnership or corporation in which any of such
persons has or has had an interest) has or has had, directly or indirectly, (i)
an economic interest in any entity which furnished or sold, or furnishes or
sells, services or products that Viking furnishes or sells or proposes to
furnish or sell, or (ii) an economic interest in any entity that purchases from,
or sells or furnishes to, Viking any goods or services; provided that ownership
of no more than one percent (1%) of the outstanding voting stock of a publicly
traded corporation shall not be deemed an "economic interest in any entity" for
purposes of this Section 3.26.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GIGA-TRONICS
Except as disclosed in a document referring specifically to this
Agreement (the "Giga-tronics Disclosure Schedule) which is delivered by
Giga-tronics to Viking concurrently with the execution of this Agreement or as
disclosed in public filings made by Giga-tronics with the SEC prior to the date
hereof, Giga-tronics represents and warrants to Viking as set forth below:
SECTION 4.01 CORPORATE EXISTENCE AND POWER. Giga-tronics and Merger
Sub are corporations duly incorporated, validly existing and in good standing
under the laws of the State of California. Each of Giga-tronics and Merger Sub
has all corporate powers and all material Governmental Authorizations required
to carry on its business as now conducted. Giga-tronics is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary. Giga-tronics has delivered to
Viking true and complete copies of Giga-tronics's Articles of Incorporation and
Bylaws and Merger Sub's Articles of Incorporation and Bylaws, each as currently
in effect.
SECTION 4.02 CORPORATE AUTHORIZATION. The execution, delivery and
performance by Giga-tronics and Merger Sub of this Agreement, the Viking and the
Giga-tronics Affiliates Agreements and the consummation by Giga-
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tronics and Merger Sub of the transactions contemplated hereby and thereby are
within the corporate powers of Giga-tronics and Merger Sub and have been duly
authorized by all necessary corporate action. The Viking and Giga-tronics
Affiliates Agreements are collectively referred to herein as the "Giga-tronics
Ancillary Agreements." This Agreement and the Giga-tronics Ancillary Agreements
constitute, or upon execution will constitute, valid and binding agreements of
Giga-tronics and Merger Sub, enforceable in each case against each in accordance
with their respective terms.
SECTION 4.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Giga-tronics and Merger Sub of this Agreement and the
Giga-tronics Ancillary Agreements and the consummation of the Merger by
Giga-tronics and Merger Sub, require no action by or in respect of, or filing
with, any governmental body, agency, official or authority other than:
(a) the filing of an agreement of merger in accordance with
California Law;
(b) compliance with any applicable requirements of the HSR
Act;
(c) compliance with any applicable requirements of the
Exchange Act, and the rules and regulations promulgated thereunder;
(d) compliance with any applicable requirements of the
Securities Act and the rules and regulations promulgated thereunder;
(e) compliance with any applicable foreign or state securities
or "blue sky" laws; and
(f) such other filings or registrations with, or
authorizations, consents or approvals of, governmental bodies, agencies,
officials or authorities, the failure of which to make or obtain would not
materially adversely affect the ability of Viking, Giga-tronics or Merger Sub to
consummate the transactions contemplated hereby and operate their businesses as
heretofore operated.
SECTION 4.04 NON-CONTRAVENTION. The execution, delivery and
performance by Giga-tronics and Merger Sub of this Agreement and the
Giga-tronics Ancillary Agreements and the consummation by Giga-tronics and
Merger Sub of the transactions contemplated hereby and thereby do not and will
not:
(a) contravene or conflict with the respective Articles of
Incorporation or Bylaws of Giga-tronics or Merger Sub;
(b) assuming compliance with the matters referred to in
Section 4.03, contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to Giga-tronics, Merger Sub or any Subsidiary of
Giga-tronics;
(c) conflict with or result in a breach or violation of, or
constitute a default under, or result in the termination or cancellation of, or
right to accelerate, any agreement, contract or other instrument binding upon
Giga-tronics or Merger Sub or any such Subsidiary or any material license,
franchise, permit or other similar authorization held by Giga-tronics, Merger
Sub or any such Subsidiary; or
(d) result in the creation or imposition of any Lien on any
asset of Giga-tronics, Merger Sub or any Subsidiary of Giga-tronics.
SECTION 4.05 CAPITALIZATION OF GIGA-TRONICS.
(a) The authorized capital stock of Giga-tronics consists of
40,000,000 shares of Giga-tronics Common Stock and 1,000,000 shares of preferred
stock. As of the date hereof, there were outstanding:
(i) 3,379,199 shares of Giga-tronics Common Stock; and
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(ii) employee and director stock options to purchase an
aggregate of 262,500 shares of Giga-tronics Common Stock.
Giga-tronics has authorized the issuance of employee rights to purchase 400,000
shares of Giga-tronics Common Stock under Giga-tronics' 1990 Restated Stock
Option Plan. In addition, Giga-tronics has authorized the issuance of up to
130,000 shares of Giga-tronics Common Stock under Giga-tronics' Employee Stock
Purchase Plan, which is subject to approval of the shareholders of Giga-tronics
at the next annual meeting of Giga-tronics, and pursuant to which no shares have
yet been issued. All outstanding shares of Giga-tronics Common Stock have been
duly authorized and validly issued and are fully paid and nonassessable and free
from any preemptive rights. Except as set forth in this Section and as otherwise
contemplated by this Agreement, there are outstanding (i) no shares of capital
stock or other voting securities of Giga-tronics, (ii) no securities of
Giga-tronics convertible into or exchangeable for shares of capital stock or
voting securities of Giga-tronics and (iii) no options or other rights to
acquire from Giga-tronics, and no obligation of Giga-tronics to issue, any
capital stock, voting securities or securities convertible into or exchangeable
for capital stock or other voting securities of Giga-tronics (the items in
clauses (i), (ii) and (iii) being referred to collectively as the "Giga-tronics
Securities"). There are no outstanding obligations of Giga-tronics or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Giga-tronics
Securities. No holder of Giga-tronics Securities has, as of the date hereof, any
contractual right to include any such securities in any registration statement
proposed to be filed by Giga-tronics under the Securities Act.
(b) All shares of Giga-tronics Common Stock issued in the
Merger shall, upon issuance, be fully paid, validly issued and nonassessable.
Giga-tronics has reserved sufficient shares of Giga-tronics Common Stock for
issuance in the Merger based on the number of Viking Shares outstanding on the
date hereof.
SECTION 4.06 CAPITALIZATION OF MERGER SUB; SUBSIDIARIES. The
authorized capital stock of Merger Sub consists of 1,000 shares of common stock,
no par value, all of which are outstanding. All the issued and outstanding
capital stock of Merger Sub is owned by Giga-tronics. Merger Sub has not
conducted any business prior to the date hereof and has no assets, liabilities
or obligations of any nature other than those incident to its formation and
pursuant to this Agreement. Giga-tronics does not own, directly or indirectly,
any outstanding capital stock or equity interest in any corporation,
partnership, joint venture or other entity other than Merger Sub.
SECTION 4.07 SEC FILINGS.
(a) Giga-tronics has since March 27, 1993 filed all proxy
statements, schedules and reports required to be filed by it with the SEC
pursuant to the Exchange Act.
(b) Giga-tronics has delivered to Viking:
(i) its annual reports on Form 10-K for its fiscal
years ended March 26, 1994, March 25, 1995, and March 30, 1996;
(ii) its quarterly report on Form 10-Q for its fiscal
quarter ending June 29, September 28 and December 28, 1996;
(iii) its proxy or information statements relating to
meetings of, or actions taken without a meeting by, the shareholders of
Giga-tronics held since March 26, 1994; and
(iv) all of its other reports, statements, schedules
and registration statements filed with the SEC since March 26, 1994.
(c) As of its filing date, no such report or statement filed
pursuant to the Exchange Act contained any untrue statement of a material fact
or omitted to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading.
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(d) No such registration statement, as amended or
supplemented, if applicable, filed pursuant to the Securities Act, as of the
date such statement or amendment became effective, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading.
SECTION 4.08 FINANCIAL STATEMENTS. The audited financial statements
Giga-tronics included in its annual reports on Form 10-K and the unaudited
financial statements of Giga-tronics included in its quarterly reports on Form
10-Q referred to in Section 4.07 present fairly, in conformity with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated in the notes thereto), the consolidated financial position of
Giga-tronics as of the dates thereof and its results of operations,
shareholders' equity and cash flows for the periods then ended (subject to
normal year-end adjustments in the case of any interim financial statements).
For purposes of this Agreement, "Giga-tronics Balance Sheet" means the balance
sheet of Giga-tronics as of December 28, 1996, and the notes thereto, contained
in Giga-tronics's quarterly report on Form 10-Q filed for its fiscal quarter
then ended, and "Giga-tronics Balance Sheet Date" means December 28, 1996.
SECTION 4.09 DISCLOSURE DOCUMENTS. None of the information supplied
or to be supplied by Giga-tronics or Merger Sub for inclusion in the Information
Materials will, at the time of mailing of the Information Materials to
shareholders of Viking and at the time of any meeting of such shareholders to be
held in connection with the Merger or solicitation of written consent approving
the Merger, contain any untrue statement of a material fact or omits or will
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading.
SECTION 4.10 ABSENCE OF CERTAIN CHANGES. Since the Giga-tronics
Balance Sheet Date Giga-tronics and its Subsidiaries have in all material
respects conducted their business in the ordinary course and there has not been:
(a) any Material Adverse Change with respect to Giga-tronics;
(b) any declaration, setting aside or payment of any dividend
or other distribution in respect of any shares of capital stock of Giga-tronics;
(c) any repurchase, redemption or other acquisition by
Giga-tronics or any of its Subsidiaries of any outstanding shares of capital
stock or other securities of, or other ownership interests in, Giga-tronics or
any such Subsidiary;
(d) any amendment of any material term of any outstanding
Giga-tronics Securities or any Giga-tronics Subsidiary Securities;
(e) any damage, destruction or other casualty loss (whether or
not covered by insurance) materially and adversely affecting the business,
assets, liabilities, earnings or prospects of Giga-tronics or any of its
Subsidiaries;
(f) any new (or amendment to or alteration of any existing)
bonus, incentive compensation, severance, stock option, stock appreciation
right, pension, matching gift, profit-sharing, employee stock ownership,
retirement, pension group insurance, death benefit, or other fringe benefit
plan, arrangement or trust agreement adopted or implemented by Giga-tronics
which would result in a material increase in cost to Giga-tronics;
(g) the entering into of any agreement by Giga-tronics or any
person on behalf of Giga-tronics to take any of the foregoing actions.
SECTION 4.11 LITIGATION. There is no action, suit, proceeding, claim
or investigation pending or, to the best of Giga-tronics's knowledge, overtly
threatened, against Giga-tronics or any of its assets or against or involving
any of its officers, directors or employees in connection with the business or
affairs of Giga-tronics, including, without limitation,
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any claims for indemnification arising under any agreement to which Giga-tronics
is a party, which could, individually or in the aggregate, have a Material
Adverse Effect on Giga-tronics or which in any manner challenges or seeks to
prevent, enjoin, alter or materially delay any of the transactions contemplated
hereby. Giga-tronics is not subject to or in default with respect to any writ,
order, judgment, injunction or decree, which would have a Material Adverse
Effect on Giga-tronics.
SECTION 4.12 ADVISOR'S FEES. Except for an investment banking firm
which may be selected by Giga-tronics (the "Giga-tronics Financial Advisor")
following the date hereof to render a fairness opinion in connection with the
transactions contemplated by the terms of this Agreement, whose fees will be
disclosed in writing to Viking and whose fees will be paid by Giga-tronics,
there is no investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of Giga-tronics or any of its
Subsidiaries who is entitled to any fee or commission from Giga-tronics or any
of its affiliates upon consummation of the transactions contemplated by this
Agreement.
ARTICLE V
COVENANTS OF VIKING
Viking agrees that:
SECTION 5.01 CONDUCT OF VIKING. From the date hereof until the
Effective Time, Viking shall in all material respects conduct its business in
the ordinary course. Without limiting the generality of the foregoing, from the
date hereof until the Effective Time, except as contemplated hereby or
previously disclosed by Viking to Giga-tronics in writing, without the prior
written consent of Giga-tronics:
(a) Viking will not adopt or propose any change in its
Articles of Incorporation or Bylaws;
(b) Viking will not enter into or amend any employment
agreements, oral or written or increase the compensation payable or to become
payable by it to any of its officers, directors, or consultants over the amount
payable as of March 31, 1997, or increase the compensation payable to any other
employees (other than (A) increases in the ordinary course of business which are
not in the aggregate material to Viking, or (B) pursuant to plans disclosed in
Viking Disclosure Schedule), or adopt or amend any employee benefit plan or
arrangement (oral or written);
(c) Viking will not issue any Viking Securities;
(d) Viking will not pay any dividend or make any other
distribution to holders of its capital stock nor will Viking redeem or otherwise
acquire any Viking Securities;
(e) Viking will not, directly or indirectly, merge or
consolidate with another entity or dispose of or acquire any material properties
or assets except in the ordinary course of business;
(f) Viking will not incur any additional indebtedness for
borrowed money in excess of $50,000 in the aggregate, except pursuant to
existing arrangements which have been disclosed to Giga-tronics prior to the
date hereof;
(g) Viking will not amend or change the period of
exercisability or accelerate the exercisability of any outstanding options or
warrants to acquire shares of capital stock, or accelerate, amend or change the
vesting period of any outstanding restricted stock;
(h) Viking will not, except in the ordinary course of business
consistent with past practices, sell, license or otherwise transfer to any
person any Viking intellectual property rights; and
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(i) Viking will not agree or commit to do any of the
foregoing.
SECTION 5.02 SHAREHOLDERS' MEETING; PROXY MATERIAL. Viking shall
cause a meeting of its shareholders to be duly called and held as soon as
reasonably practicable or shall seek the written consent of its shareholders
following the approval by Giga-tronics of the Information Materials to be
distributed to the Viking shareholders for the purpose of voting on (or in the
case of a written consent, consenting to) the approval and adoption of this
Agreement and the Merger. The Board of Directors of Viking shall, subject to
their fiduciary duties, recommend approval and adoption of this Agreement and
the Merger by Viking's shareholders. In connection with such meeting or seeking
of written consent, Viking:
(a) will use all reasonable efforts to obtain the necessary
approvals by its shareholders of this Agreement and the transactions
contemplated hereby; and
(b) will otherwise comply with all legal requirements
applicable to such meeting.
SECTION 5.03 ACCESS TO FINANCIAL AND OPERATION INFORMATION. From the
date hereof until the Effective Time, Viking will give Giga-tronics, its
counsel, financial advisors, auditors and other authorized representatives
reasonable access during normal business hours to the offices, properties, books
and records of Viking, will furnish to Giga-tronics, its counsel, financial
advisors, auditors and other authorized representatives such financial and
operating data as such persons may reasonably request and will instruct Viking's
employees, counsel and financial advisors to cooperate with Giga-tronics in its
investigation of the business of Viking and in the planning for the combination
of the businesses of Viking and Giga-tronics following the consummation of the
Merger; provided that no investigation pursuant to this Section shall affect any
representation or warranty given by Viking to Giga-tronics hereunder. In
addition, Viking will cooperate in arranging joint meetings among
representatives of Viking and Giga-tronics and persons with whom Viking
maintains business relationships. All requests for information made pursuant to
this Section shall be directed to the Controller of Viking or such person as may
be designated by him. All information obtained pursuant to this Section 5.03
shall be governed by any confidentiality agreements currently in effect between
Giga-tronics and Viking as well as the terms of Section 5.08 of this Agreement.
SECTION 5.04 OTHER OFFERS. From the date hereof until the earlier of
the Effective Date or the termination of this Agreement in accordance with the
terms hereof, Viking and the officers, directors, employees or other agents of
Viking will not, directly or indirectly, (i) take any action to solicit,
initiate or encourage the making of any Acquisition Proposal (as hereinafter
defined); or (ii) engage in negotiations with, or disclose any nonpublic
information relating to Viking or afford access to the properties, books or
records of Viking to, any person or entity that informs the Board of Directors
that it is considering making, or has made, an Acquisition Proposal. Until this
Agreement shall be terminated in accordance with the terms hereof, Viking will
not enter into any agreement to merge or consolidate with, or sell a substantial
portion of its assets to, any person or entity. Viking will promptly notify
Giga-tronics after receipt of any Acquisition Proposal or any request for
nonpublic information relating to Viking in connection with an Acquisition
Proposal or for access to the properties, books or records of Viking by any
person or entity that informs the Board of Directors that it is considering
making, or has made, an Acquisition Proposal. The term "Acquisition Proposal"
shall mean (i) any merger, consolidation, tender offer or other similar
transaction or related transactions pursuant to which the holders of the voting
securities of Viking prior to the transaction hold following the consummation of
such transaction less than 80% of the voting securities of the surviving entity,
(ii) a sale of a material portion of the assets of Viking, or (iii) any equity
or convertible debt transaction or related transactions in which any person or
group of affiliated persons other than current security holders of Viking
acquire securities of Viking representing more than 20% of the aggregate voting
power of Viking's outstanding securities, other than in each case the
transactions contemplated by this Agreement. For purposes of the foregoing
definition, one person shall be deemed to be affiliated with a second person if
such first person controls, is controlled by or is under common control with the
second person, and control, for purposes hereof, shall be deemed to exist only
in the event there exists ownership of or the right to vote, in either case
directly or indirectly, securities representing more than 50% of the aggregate
voting power of an entity's outstanding securities.
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SECTION 5.05 MAINTENANCE OF BUSINESS. Viking will use its best
efforts to carry on its business, keep available the services of its officers
and employees and preserve its relationships with those of its customers,
suppliers, licensors and others having business relationships with it that are
material to its business in substantially the same manner as it has prior to the
date hereof. If Viking becomes aware of a material deterioration or facts which
are likely to result in a material deterioration in the relationship with any
material customer, supplier, licensor or others having business relationships
with it, it will promptly bring such information to the attention of the
Giga-tronics in writing.
SECTION 5.06 COMPLIANCE WITH OBLIGATIONS. Prior to the Effective
Date, Viking shall comply with (i) all applicable federal, state, local and
foreign laws, rules and regulations, (ii) all material agreements and
obligations, including its Articles of Incorporation and Bylaws, by which it,
its properties or its assets may be bound, and (iii) all decrees, orders, writs,
injunctions, judgments, statutes, rules and regulations applicable to Viking and
its properties or assets.
SECTION 5.07 NOTICES OF CERTAIN EVENTS. Viking shall, upon obtaining
knowledge of any of the following, promptly notify Giga-tronics of:
(a) any notice or other communication from any person alleging
that the consent of such person is or may be required in connection with the
Merger;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the Merger; and
(c) any actions, suits, claims, investigations or other
judicial proceedings commenced or threatened against Viking which, if pending on
the date of this Agreement, would have been required to have been disclosed
pursuant to Sections 3.10 or 3.20 or which relate to the consummation of the
Merger.
SECTION 5.08 CONFIDENTIALITY. Viking agrees that for a period of
three years following any termination of this Agreement Viking shall not (a)
disclose to any person, association, firm, corporation or other entity in any
manner, directly or indirectly, any confidential information or data relevant to
the operations of Giga-tronics whether of a technical or commercial nature, nor
(b) use, or permit or assist, by acquiescence or otherwise, any person,
association, firm, corporation or other entity to use, directly or indirectly,
any such information or data in any manner which reasonably would be deemed to
be competitive with the operations of Giga-tronics excepting only use of (i)
information in the public domain at the time of disclosure to Viking (ii)
information subsequently coming into the public domain by means other than
disclosure by Viking or any of its agents (iii) information Viking can establish
and document was in its possession or was known to it prior to its disclosure to
Viking by Giga-tronics; (iv) information disclosed to Viking by a third party
not in violation of any obligation of confidentiality or nondisclosure known to
Viking or of which Viking should reasonably have known; or (v) information which
was independently developed by Viking or which is generally known in Viking's
industry.
SECTION 5.09 COMPLIANCE WITH THE SECURITIES ACT. Viking shall prior
to 15 days after signing but in any event prior to mailing of the Information
Materials cause each person who is an "affiliate," as that term is used in
paragraphs (c) and (d) of Rule 145 under the Securities Act, of Viking to
deliver to Giga-tronics an Affiliates Agreement in substantially the form
attached hereto as Exhibit 5.09 (an "Viking Affiliates Agreement").
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ARTICLE VI
COVENANTS OF GIGA-TRONICS AND MERGER SUB
Giga-tronics and Merger Sub agree that:
SECTION 6.01 CONDUCT OF GIGA-TRONICS. From the date hereof until the
Effective Time, Giga-tronics and its Subsidiaries shall in all material respects
conduct their business in the ordinary course. Without limiting the generality
of the foregoing, from the date hereof until the Effective Time, except as
contemplated hereby or previously disclosed by Giga-tronics to Viking in
writing, without the prior written consent of Viking:
(a) Giga-tronics will not adopt or propose any changes in its
Certificate of Incorporation or Bylaws (other than those contemplated by the
Giga-tronics Reincorporation);
(b) Giga-tronics will not pay any dividend or make any other
distribution to holders of its capital stock nor will Giga-tronics or any of its
Subsidiaries redeem or otherwise acquire any Giga-tronics Securities;
(c) Giga-tronics shall take no extraordinary actions affecting
its capital structure (e.g., declaration of stock dividends or stock splits);
(d) Giga-tronics will not except, in the ordinary course of
business consistent with past practices, sell, license or otherwise transfer to
any person any Giga-tronics intellectual property rights or any intellectual
property rights of any of its Subsidiaries; and
(e) Giga-tronics will not, and will not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing.
SECTION 6.02 COMPLIANCE WITH SECURITIES LAWS. Giga-tronics shall
take any action required to be taken under foreign or state securities or "blue
sky" laws in connection with the issuance of Giga-tronics Common Stock in the
Merger.
SECTION 6.03 MAINTENANCE OF BUSINESS. Giga-tronics will use its best
efforts to carry on its business, keep available the services of its officers
and employees and preserve its relationships with those of its customers,
suppliers, licensors and other persons having business relationships with it
that are material to its business in substantially the same manner as it has
prior to the date hereof. If Giga-tronics becomes aware of a material
deterioration or facts which are likely to result in a material deterioration in
the relationship with any customer, supplier, licensor or others having business
relationships with it, it will promptly bring such information to the attention
of Viking in writing.
SECTION 6.04 COMPLIANCE WITH OBLIGATIONS. Prior to the Effective
Date, Giga-tronics and its Subsidiaries shall each comply with (i) all
applicable federal, state, local and foreign laws, rules and regulations, (ii)
all material agreements and obligations, including its respective certificate or
articles of incorporation and bylaws, by which it, its properties or its assets
may be bound, and (iii) all decrees, orders, writs, injunctions, judgments,
statutes, rules and regulations applicable to Giga-tronics and its Subsidiaries
and their respective properties or assets.
SECTION 6.05 NOTICES OF CERTAIN EVENTS. Giga-tronics shall, upon
obtaining knowledge of any of the following, promptly notify Viking of:
(a) any notice or other communication from any person alleging
that the consent of such person is or may be required in connection with the
Merger;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the Merger; and
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(c) any actions, suits, claims, investigations or other
judicial proceedings commenced or threatened against Giga-tronics or any of its
Subsidiaries which, if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to Section 4.11 or which relate to the
consummation of the Merger.
SECTION 6.06 CONFIDENTIALITY. Giga-tronics agrees that for a period
of three years following any termination of this Agreement Giga-tronics shall
not (a) disclose to any person, association, firm, corporation or other entity
in any manner, directly or indirectly, any confidential information or data
relevant to the operations of Viking, whether of a technical or commercial
nature, nor (b) use, or permit or assist, by acquiescence or otherwise, any
person, association, firm, corporation or other entity to use, directly or
indirectly, any such information or data in any manner which reasonably would be
deemed to be competitive with the operations of Viking excepting only use of (i)
information in the public domain at the time of disclosure to Giga-tronics (ii)
information subsequently coming into the public domain by means other than
disclosure by Giga-tronics or any of its agents (iii) information Giga-tronics
can establish and document was in its possession or was known to it prior to its
disclosure to Giga-tronics by Viking; (iv) information disclosed to Giga-tronics
by a third party not in violation of any obligation of confidentiality or
nondisclosure known to Giga-tronics or of which Giga-tronics should reasonably
have known; or (v) information which was independently developed by Giga-tronics
or which is generally known in Viking's industry.
SECTION 6.07 OBLIGATIONS OF MERGER SUB. Giga-tronics will take all
action necessary to cause Merger Sub to perform its obligations under this
Agreement and to consummate the Merger on the terms and conditions set forth in
this Agreement. Merger Sub will not issue any shares of its capital stock, any
securities convertible into or exchangeable for its capital stock, or any
option, warrant or other right to acquire its capital stock to any Person other
than Giga-tronics or a wholly owned Subsidiary of Giga-tronics. Merger Sub shall
not incur any indebtedness or liabilities of any kind except pursuant to this
Agreement.
SECTION 6.08 COMPLIANCE WITH THE SECURITIES ACT. Giga-tronics shall
use its best efforts to cause each person who is an "affiliate," as that term is
used in paragraphs (c) and (d) of Rule 145 under the Securities Act, of
Giga-tronics to enter on or prior to the Effective Date an Affiliates Agreement
in substantially the form attached hereto as Exhibit 6.08 (a "Giga-tronics
Affiliates Agreement").
ARTICLE VII
OTHER COVENANTS OF THE PARTIES
The Parties agree that:
SECTION 7.01 ADVICE OF CHANGES. Each party will promptly advise each
other party in writing (i) of any event known to its executive officers
occurring subsequent to the date of this Agreement that would render any
representation or warranty of such party contained in this Agreement, if made on
or as of the date of such event or the Effective Date, untrue, inaccurate or
misleading in any material respect (other than an event so affecting a
representation or warranty which is expressly limited to a state of facts
existing at a time prior to the occurrence of such event) and (ii) of any
Material Adverse Change in the business condition of the party and its
Subsidiaries, taken as a whole.
SECTION 7.02 REGULATORY APPROVALS. Prior to the Effective Time, each
party shall execute and file, or join in the execution and filing of, any
application or other document that may be necessary in order to obtain the
authorization, approval or consent of any governmental body, federal, state,
local or foreign, which may be reasonably required, or that the other company
may reasonably request, in connection with the consummation of the Merger. Each
party shall use its reasonable best efforts to obtain all such authorizations,
approvals and consents.
SECTION 7.03 ACTIONS CONTRARY TO STATED INTENT. No party hereto
shall, from or after the date hereof and either before or after the Effective
Time, take any action that would prevent the Merger from qualifying as a
reorganization under Section 368 of the Code.
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SECTION 7.04 CERTAIN FILINGS. The Parties shall cooperate with one
another:
(a) in connection with the preparation of the Information
Materials;
(b) in connection with the preparation of any filing required
by the HSR Act;
(c) in determining whether any action by or in respect of, or
filing with, any governmental body, agency or official, or authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement; and
(d) in seeking any such actions, consents, approvals or
waivers or making any such filings, furnishing information required in
connection therewith and seeking timely to obtain any such actions, consents,
approvals or waivers.
SECTION 7.05 COMMUNICATIONS. Between the date hereof and the
Effective Time, no party will furnish any written communication to its
shareholders or to the public generally if the subject matter thereof relates to
the transactions contemplated by this Agreement without the prior approval of
Viking and Giga-tronics as to the content thereof, which approval shall not be
unreasonably withheld; provided that the foregoing shall not be deemed to
prohibit any disclosure required by any applicable law or by any competent
governmental authority.
SECTION 7.06 SATISFACTION OF CONDITIONS PRECEDENT. The parties will
use their reasonable best efforts to satisfy or cause to be satisfied all the
conditions precedent that are set forth in Article VIII, as applicable to each
of them, and to cause the transactions contemplated by this Agreement to be
consummated, and, without limiting the generality of the foregoing, to obtain
all consents and authorizations of third parties and to make all filings with,
and give all notices to, third parties that may be necessary or reasonably
required on its part in order to effect the transactions contemplated hereby.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01 CONDITIONS TO OBLIGATIONS OF GIGA-TRONICS AND MERGER
SUB. The obligations of Giga-tronics and Merger Sub hereunder are subject to the
fulfillment or satisfaction, on and as of the Effective Date, of each of the
following conditions (any one or more of which may be waived by Giga-tronics,
but only in a writing signed by Giga-tronics):
(a) Accuracy of Representations and Warranties. The
representations and warranties of Viking contained in Article III shall be true
and accurate in all material respects on and as of the Effective Date with the
same force and effect as if they had been made on the Effective Date (except to
the extent a representation or warranty speaks only as of an earlier date) and
Viking shall have provided Giga-tronics with a certificate executed by the
President and the Chief Financial Officer of Viking, dated as of the Effective
Date, to such effect; provided, however, that any inaccuracy of a representation
or warranty, on the date hereof or on the Effective Date, shall not result in
the non-satisfaction of this Section 8.01(a) unless any such inaccuracy or
inaccuracies, either (i) individually or in the aggregate, represent a Material
Adverse Effect on Viking or (ii) are willful and intentional misrepresentations
of a material matter that constitute common law fraud. For purposes of this
Agreement, a "Material Adverse Effect," with respect to any person or entity,
means a material adverse effect on the financial condition, business,
liabilities (including contingent liabilities) or results of operations of such
person or entity and its subsidiaries, taken as a whole; and "Material Adverse
Change" shall mean a change or a development involving a prospective change
which would have a Material Adverse Effect.
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<PAGE> 22
(b) Covenants. Viking shall have performed and complied with
all of its covenants contained in Articles V and VII in all material respects on
or before the Effective Date, and Giga-tronics shall receive a certificate to
such effect signed by Viking's President and Chief Financial Officer.
(c) No Material Adverse Change. There shall have been no
Material Adverse Change in Viking since the Viking Balance Sheet Date.
(d) Affiliates Agreements. Giga-tronics shall have received
from each person or entity who may be deemed pursuant to Section 5.09 to be an
affiliate of Viking a duly executed Affiliates Agreement, and such Affiliates
Agreements shall remain in full force and effect.
(e) Satisfactory Completion of Due Diligence Review.
Giga-tronics shall have completed its due diligence review of the business,
operations and financial condition of Viking by May 25, 1997 and such review
shall not have revealed any facts or circumstances which in the reasonable
judgment of Giga-tronics could have a Material Adverse Effect on Viking. If such
due diligence review shall reveal facts or circumstances which in the reasonable
judgement of Giga-tronics could have a Material Adverse Effect on Viking,
Giga-tronics shall promptly notify Viking of its determination or shall be
deemed to have waived compliance with this condition.
(f) Pooling of Interests Matters. In the sole discretion of
Giga-tronics, the Merger shall qualify for accounting treatment as a pooling of
interests in accordance with Accounting Principles Board Release No. 16. In
determining whether the Merger so qualifies Giga-tronics may consider the impact
on such qualification of Viking Shares which are voted against the Merger or
which have abstained from voting with respect to the Merger.
SECTION 8.02 CONDITIONS TO OBLIGATIONS OF VIKING. Viking's
obligations hereunder are subject to the fulfillment or satisfaction, on and as
of the Effective Date, of each of the following conditions (any one or more of
which may be waived by Viking, but only in a writing signed by Viking):
(a) Accuracy of Representations and Warranties. The
representations and warranties of Giga-tronics set forth in Article IV shall be
true and accurate in all material respects on and as of the Effective Date with
the same force and effect as if they had been made on the Effective Date (except
to the extent a representation or warranty speaks only as of an earlier date and
except for changes contemplated by this Agreement) and Giga-tronics shall have
provided Viking with a certificate executed by the President and the Chief
Financial Officer of Giga-tronics, dated as of the Effective Date, to such
effect; provided, however, that any inaccuracy of a representation or warranty,
on the date hereof or on the Effective Date, shall not result in the
non-satisfaction of this Section 8.02(a) unless any such inaccuracy or
inaccuracies, either (i) individually or in the aggregate, represent a Material
Adverse Effect on Giga-tronics or (ii) are willful and intentional
misrepresentations that constitute common law fraud of a material matter.
(b) Covenants. Giga-tronics shall have performed and complied
with all of its covenants contained in Articles VI and VII in all material
respects on or before the Effective Date, and Viking shall receive a certificate
to such effect signed by Giga-tronics's President and Chief Financial Officer.
(c) No Material Adverse Change. There shall have been no
Material Adverse Change in Giga-tronics since the Giga-tronics Balance Sheet
Date.
SECTION 8.03 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of Viking and Giga-tronics hereunder are subject to the fulfillment,
on and as of the Effective Date, of each of the following conditions (any one or
more of which may be waived by such parties, but only in a writing signed by
such parties):
(a) Shareholder Approval. Viking's shareholders shall have
duly approved this Agreement, the Merger Agreement and the Merger, all in
accordance with applicable laws and regulatory requirements.
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(b) Tax-Free Reorganization. Each of Viking and Giga-tronics
shall have received a written opinion from Brobeck, Phleger & Harrison LLP
("Brobeck") to the effect that the Merger will constitute a reorganization
within the meaning of Section 368 of the Code, which opinions shall be
substantially identical in form and substance. In preparing Viking and the
Giga-tronics tax opinions, Brobeck may rely on (and to the extent reasonably
required, the parties and Viking's shareholders shall make) reasonable
representations related thereto.
(c) Illegality or Legal Constraint. No statute, rule,
regulation, executive order, decree, injunction or restraining order shall have
been enacted, promulgated or enforced (and not repealed, superseded or otherwise
made inapplicable) by any court or governmental authority which prohibits the
consummation of the Merger (each party agreeing to use its reasonable best
efforts to have any such order, decree or injunction lifted).
(d) Consents. All written consents, assignments, waivers or
authorizations ("Consents"), other than Governmental Authorizations, that are
required as a result of the Merger for the continuation in full force and effect
of any material contracts or leases of Viking or Giga-tronics shall have been
obtained, other than those Consents the failure of which to obtain would not
have a Material Adverse Effect on Viking or Giga-tronics.
(e) Governmental Authorizations. There shall have been
obtained any and all Governmental Authorizations, permits, approvals and
consents of securities or "blue sky" commissions of any jurisdiction and of any
other governmental body or agency, that may reasonably be deemed necessary so
that the consummation of the Merger will be in compliance with applicable laws,
the failure to comply with which would have a Material Adverse Effect on
Giga-tronics, Viking or the Surviving Corporation or would be reasonably likely
to subject any of Giga-tronics, Merger Sub, Viking or any of their respective
directors or officers to substantial penalties or criminal liability.
(f) HSR Act. The waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated.
ARTICLE IX
TERMINATION OF AGREEMENT
SECTION 9.01 TERMINATION. This Agreement may be terminated at any
time prior to the Effective Time whether before or after the approval by the
shareholders of Viking or Giga-tronics:
(a) by mutual consent of the Boards of Directors of
Giga-tronics, Merger Sub and Viking;
(b) by either Giga-tronics and Merger Sub or Viking, if the
requisite approval of the shareholders of Viking shall not be obtained
by August 1, 1997;
(c) by Giga-tronics, if it is not in material breach of its
obligations under this Agreement and if the Board of Directors of Viking
shall have:
(i) withdrawn its recommendation of the Merger, or
(ii) recommended or approved any acceptance by
shareholders of any Acquisition Proposal (other than an Acquisition
Proposal made by Giga-tronics or an affiliate of Giga-tronics); or
(d) by either Giga-tronics and Merger Sub or Viking,
respectively, (A) if there has been a breach of any representation and
warranty such that Section 8.01(a) or 8.02(a), respectively, cannot be
satisfied or (B) if there has been the willful breach on the part of
Viking or Giga-tronics and Merger Sub, respectively, of any covenant or
agreement contained in this Agreement such that Sections 8.01(b) or
8.02(b)
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cannot be satisfied, and in both case (A) and case (B) such breach
has not been promptly cured after notice to the breaching party; or
(e) by Giga-tronics, if the conditions contained in Section
8.01(f) are not satisfied; or
(f) by Giga-tronics, if Viking shall have issued any Viking
Securities between the date of this Agreement and the Closing Date
without the prior consent of Giga-tronics; or
(g) by either Giga-tronics and Merger Sub or Viking,
respectively, at any time after August 1, 1997, unless the delay is
caused by the failure of the terminating party to fulfill its
obligations hereunder.
SECTION 9.02 EFFECT OF TERMINATION. In the event of termination of
this Agreement as provided above, this Agreement shall forthwith become void,
and there shall be no liability on the part of either Giga-tronics, Merger Sub
or Viking, except that each of the agreements contained or referred to in
Sections 5.08, 6.06 and 11.02 shall survive the termination hereof; provided,
however, that each party shall be entitled to any remedies at law or in equity
in the event of a breach of this Agreement by the other party.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 FURTHER ASSURANCES. Each party agrees to cooperate
fully with the other parties and to execute such further instruments, documents
and agreements and to give such further written assurances as may be reasonably
requested by any other party to better evidence and reflect the transactions
described herein and contemplated hereby and to carry into effect the intents
and purposes of this Agreement.
SECTION 10.02 FEES AND EXPENSES. Whether or not the Merger is
consummated, each party shall pay all fees and expenses incurred by such party,
including counsel fees and fees of accountants and investment bankers contracted
by such party, and any other expenses specifically identifiable to such party in
connection with the transactions contemplated hereby. Any other costs and
expenses not specifically identified as applicable to either Viking or
Giga-tronics shall be shared equally.
SECTION 10.03 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made herein, and in any instrument delivered
pursuant hereto, shall be deemed to be conditions to the Merger and shall not
survive the Merger.
SECTION 10.04 NOTICES. Any notice or communication required or
permitted by this Agreement shall be deemed sufficiently given if in writing
and, if delivered personally, when it is delivered or, if delivered in another
manner, the earlier of when it is actually received by the party to whom it is
directed or when the period set forth below expires (whether or not it is
actually received):
(a) if deposited with the U.S. Postal Service, postage
prepaid, and addressed to the party to receive it as set forth below, 48 hours
after such deposit as registered or certified mail; or
(b) if accepted by Federal Express or a similar delivery
service in general usage for delivery to the address of the party to receive it
as set forth next below, 24 hours after the delivery time promised by the
delivery service.
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Giga-tronics and Merger Sub:
Giga-tronics Incorporated
4650 Norris Canyon Road
San Ramon, CA 94583
Attention: George H. Bruns, Jr.
Chief Executive Officer
Facsimile: (510) 328-4700
With copy to:
Brobeck, Phleger & Harrison LLP
Spear Street Tower
One Market Plaza
San Francisco, CA 94105
Attention: William L. Hudson, Esq.
Facsimile: (415) 442-1010
Viking:
Viking Semiconductor Equipment, Inc.
44249 Old Warm Springs Blvd.
Fremont, CA 94538
Attention: Curt M. Berggren
President
Facsimile: (510) 657-5969
With copy to:
Thomas N. White, Jr.
Attorney at Law
3333 Bowers Avenue, Suite 130
Santa Clara, CA 95054
Facsimile: (408) 983-1077
Such communications shall be effective when they are received
by the addressee thereof. Any party may change its address for such
communications by giving notice thereof to the other parties in conformity with
this Section.
SECTION 10.05 GOVERNING LAWS. The laws of the State of California
(irrespective of its choice of law principles) shall govern all issues
concerning the Merger and all other issues concerning the validity of this
Agreement, the construction of its terms, and the interpretation and enforcement
of the rights and duties of the parties.
SECTION 10.06 BINDING UPON SUCCESSORS AND ASSIGNS; ASSIGNMENT. This
Agreement and the provisions hereof shall be binding upon each of the parties,
their permitted successors and assigns. This Agreement may not be assigned by
any party without the prior consent of the other.
SECTION 10.07 SEVERABILITY. If any provision of this Agreement, or
the application thereof, shall for any reason or to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances shall continue in full force and effect and in
no way be affected, impaired or invalidated.
SECTION 10.08 ENTIRE AGREEMENT. This Agreement and the other
agreements and instruments referenced herein constitute the entire understanding
and agreement of the parties with respect to the subject matter
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hereof and supersede all prior and contemporaneous agreements or understandings,
inducements or conditions, express or implied, written or oral, between the
parties with respect hereto other than the Confidentiality Agreement.
SECTION 10.09 OTHER REMEDIES. Except as otherwise provided herein,
any and all remedies herein expressly conferred upon a party shall be deemed
cumulative with and not exclusive of any other remedy conferred hereby or by law
on such party, and the exercise of any one remedy shall not preclude the
exercise of any other.
SECTION 10.10 AMENDMENT AND WAIVERS. Any term or provision of this
Agreement may be amended, and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively
or prospectively) only by a writing signed by the party to be bound thereby. The
waiver by a party of any breach hereof or default in the performance hereof
shall not be deemed to constitute a waiver of any other default or any
succeeding breach or default. At any time before or after approval of this
Agreement and the Merger by the shareholders of Viking and prior to the
Effective Time, this Agreement may be amended or supplemented by Viking or
Giga-tronics with respect to any of the terms contained in this Agreement,
except that following approval by the shareholders of Viking there shall be no
amendment or change to the provisions hereof with respect to the Exchange Ratio
without further approval by the shareholders of Viking, and no other amendment
shall be made which by law requires further approval by such shareholders
without such further approval.
SECTION 10.11 NO WAIVER. The failure of any party to enforce any of
the provisions hereof shall not be construed to be a waiver of the right of such
party thereafter to enforce such provisions.
SECTION 10.12 CONSTRUCTION OF AGREEMENT; KNOWLEDGE. A reference to an
Article, Section or an Exhibit shall mean an Article of, a Section in, or
Exhibit to, this Agreement unless otherwise explicitly set forth. The titles and
headings herein are for reference purposes only and shall not in any manner
limit the construction of this Agreement which shall be considered as a whole.
The words "include," "includes" and "including" when used herein shall be deemed
in each case to be followed by the words "without limitation." For purposes of
this Agreement, "knowledge" of any party shall mean the knowledge of the
executive officers of such party after such officers shall have made inquiry
that is customary and appropriate under the circumstances to which reference is
made.
SECTION 10.13 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original as against any party
whose signature appears thereon and all of which together shall constitute one
and the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the paries reflected hereon as signatories.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
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GIGA-TRONICS INCORPORATED
By: /s/ George H. Bruns, Jr.
---------------------------------
Name: George H. Bruns, Jr.
Title: Chief Executive Officer
GTV ACQUISITION CORP.
By: /s/ George H. Bruns, Jr.
---------------------------------
Name: George H. Bruns, Jr.
Title: President
VIKING SEMICONDUCTOR EQUIPMENT, INC.
By: /s/ Curt M. Berggren
---------------------------------
Name: Curt M. Berggren
Title: President
27
<PAGE> 1
EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of December 2, 1997 (the "EFFECTIVE Date"), by and between
GIGA-TRONICS INCORPORATED, a California corporation ("GIGA-TRONICS") and the
persons listed on Exhibit A hereby (collectively, the "SHAREHOLDERS" and each
individually a "SHAREHOLDER") who immediately prior to the Effective Time of the
Merger (as defined below) are all of the shareholders of Ultracision, Inc., a
California corporation ("ULTRACISION").
R E C I T A L S
A. Ultracision, Giga-tronics and Giga Acquisition Corp. ("SUB") have
entered into an Agreement and Plan of Reorganization (the "PLAN") dated as of
December 2, 1997, pursuant to which Sub will merge with and into Ultracision
with Ultracision to be the surviving corporation of the Merger (the "MERGER").
B. As a condition precedent to the consummation of the Merger,
Section 1.07 of the Plan provides that the Shareholders shall be granted certain
registration rights with respect to the shares of Giga-tronics' Common Stock
that are issued to the Shareholders in the Merger (the "MERGER SHARES"), subject
to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
1. REGISTRATION RIGHTS.
1.1 Definitions. For purposes of this Section 1:
(a) Registration. The terms "REGISTER,"
"REGISTERED," and "REGISTRATION" refer to a registration effected by preparing
and filing a registration statement in compliance with the Securities Act of
1933, as amended (the "1933 ACT"), and the declaration or ordering of
effectiveness of such registration statement.
(b) Registrable Securities. The term "REGISTRABLE
SECURITIES" means: (1) all of the Merger Shares, and (2) any shares of Common
Stock of Giga-tronics issued as a dividend or other distribution with respect
to, or in exchange for or in replacement of, the Merger Shares; excluding in all
cases, however, (i) any Registrable Securities sold by a person in a transaction
in which rights under this Section 1 are not assigned in accordance with Section
2 of this Agreement, (ii) any Registrable Securities sold in a public offering
pursuant to a registration statement filed with the SEC or sold to the public
pursuant to Rule 144 promulgated under the 1933 Act ("RULE 144"); or (iii) any
Registrable Securities which may be sold in the public market in a three-month
period without registration under the 1933 Act pursuant to Rule 144.
(c) Prospectus. The term "PROSPECTUS" shall mean
the prospectus included in any Registration Statement filed pursuant to the
provisions hereof (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the 1933
Act), as amended or supplemented by any prospectus supplement (including,
without limitation, any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement), and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
(d) Holder. For purposes of this Agreement, the
term "HOLDER" means any person owning of record Registrable Securities.
<PAGE> 2
(e) SEC. The term "SEC" or "COMMISSION" means the
U.S. Securities and Exchange Commission.
1.2 Registration.
(a) Initial Registration. Giga-tronics shall use
its best efforts to prepare and file with the SEC within ninety (90) days
following the Closing (as defined in the Plan), and use its best efforts to have
declared effective as soon as practicable thereafter, a registration statement
(a "REGISTRATION STATEMENT") providing for the resale by the Holders of all of
the Registrable Securities then owned by the Holders. Giga-tronics shall use its
best efforts to keep the Registration Statement continuously effective, pursuant
to the rules, regulations or instructions under the 1933 Act applicable to the
registration statement used by Giga-tronics for such Registration Statement, for
such period (the "EFFECTIVENESS PERIOD") ending on the date that is twelve (12)
months after the date of the Closing or such shorter period ending when the
Registrable Securities cease to meet the definition of Registrable Securities
pursuant to Section 1.1(b).
(b) Suspension. If Giga-tronics shall determine
pursuant to the good faith judgment of the Board of Directors of Giga-tronics,
that it would be seriously detrimental to Giga-tronics and its shareholders for
resales of Registrable Securities to be made pursuant to the Registration
Statement, due to (A) the existence of a material development or potential
material development with respect to or involving Giga-tronics which
Giga-tronics would be obligated to disclose in the Prospectus contained in the
Registration Statement, which disclosure would in the good faith judgment of the
Board of Directors of Giga-tronics be premature or otherwise inadvisable at such
time and would have a material adverse affect upon Giga-tronics and its
shareholders, or (B) the occurrence of any event that makes any statement made
in such Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect in the light of the circumstances under which they were made or
which requires the making of any changes in the Registration Statement or
Prospectus so that it will not contain any untrue statement of a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, then Giga-tronics shall deliver a certificate in writing
to the Holders to the effect of the foregoing and, upon receipt of such
certificate, the use of the Registration Statement and Prospectus will be
deferred or suspended and will not recommence until (1) such Holder's receipt
from Giga-tronics of copies of the supplemented or amended Prospectus, or (2)
such Holders are advised in writing by Giga-tronics that the Prospectus may be
used. Giga-tronics will use its best efforts to ensure that the use of the
Registration Statement and Prospectus may be resumed, as soon as practicable
and, in the case of a pending development or event referred to in (A) above, as
soon, in the judgment of Giga-tronics, as disclosure of the material information
relating to such pending development would not have a material adverse effect on
Giga-tronics. Notwithstanding the foregoing or any other provision of this
Agreement, the period during which Giga-tronics shall be required to maintain
the effectiveness of the Registration Statement shall be extended by one (1) day
for each full or partial day during which the use of such Registration Statement
or Prospectus is deferred or suspended by Giga-tronics in accordance with this
Section 1.2(b).
(c) Expenses. All reasonable expenses, other than
underwriting discounts and brokers commissions, incurred in connection with the
Registration Statement shall be borne by Giga-tronics.
1.3 Obligations of Giga-tronics. Giga-tronics shall, as
expeditiously as reasonably possible:
(a) Prepare promptly and file with the SEC the
Registration Statement as provided in Section 1.2(a), which Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading and cause such Registration Statement to become effective
as soon as practicable.
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<PAGE> 3
(b) Prepare promptly and file with the SEC such
amendments and supplements to such Registration Statement and the Prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the 1933 Act with respect to the disposition of
all securities covered by such registration statement.
(c) Furnish to Holders such number of copies of a
Prospectus, including a preliminary Prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as reasonably requested
in order to facilitate the disposition of the Registrable Securities owned by it
that are included in such registration.
(d) Use its best efforts to register and qualify
the securities covered by such Registration Statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by Holders, provided that Giga-tronics shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) Notify Holders promptly (i) of any request by
the SEC or any other federal or state governmental authority during the period
of effectiveness of the Registration Statement for amendments or supplements to
such Registration Statement or related prospectus or for additional information,
(ii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose, (iii) of the
receipt by Giga-tronics of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (iv) of the happening of any event which makes any
statement made in the Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or which requires the making of any changes in the Registration
Statement or Prospectus so that it will not contain any untrue statement of a
material fact required to be stated therein or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (v) of Giga-tronics' determination that a post-effective
amendment to the Registration Statement would be appropriate.
1.4 Furnish Information. It shall be a condition
precedent to the obligations of Giga-tronics to take any action pursuant to
Section 1.2 that each Holder shall furnish to Giga-tronics such information
regarding Holder, the Registrable Securities held by Holder, and the intended
method of disposition of such securities as shall be required to timely effect
the registration of Holder's Registrable Securities.
1.5 Indemnification
(a) By Giga-tronics. To the extent permitted by
law, Giga-tronics will indemnify and hold harmless each of the Holders, officers
and directors, employees and agents of a Holder or underwriter (as defined in
the 1933 Act) and each person, if any, who controls a Holder within the meaning
of the 1933 Act or the Securities Exchange Act of 1934 (the "1934 ACT"), against
any losses, claims, damages, or liabilities (joint or several) to which they or
any of them may become subject under the 1933 Act, the 1934 Act or other federal
or state law, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "VIOLATION"):
(i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement, including any preliminary prospectus or final
prospectus contained therein or in any amendments or
supplements thereto;
(ii) the omission or alleged omission to state in
the Registration Statement, including any preliminary
prospectus or final prospectus contained therein or in any
amendments or supplements thereto, a material fact required
to be stated therein, or necessary to make the statements
therein not misleading; or
(iii) any violation or alleged violation by
Giga-tronics of the 1933 Act, the 1934 Act, any federal or
state securities law or any rule or regulation promulgated
under
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the 1933 Act, the 1934 Act or any federal or state
securities law in connection with the offering covered by
such Registration Statement.
Giga-tronics will reimburse each Holder, such officer, director, employee or
agent, underwriter or controlling person for any legal or other expenses
reasonably incurred by them, as incurred, in connection with investigating or
defending any such loss, claim, damage, liability or action; provided however,
that the indemnity agreement contained in this subsection 1.5(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of Giga-tronics (which
consent shall not be unreasonably withheld), nor shall Giga-tronics be liable in
any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by Holder, or by such, officer,
director, employee, agent, underwriter or controlling person of any Holder.
(b) By Holders. To the extent permitted by law,
each Holder will indemnify and hold harmless Giga-tronics, each of its
directors, each of its officers who have signed the Registration Statement, each
person, if any, who controls Giga-tronics within the meaning of the 1933 Act,
any other employee or agent of Giga-tronics, against any losses, claims, damages
or liabilities (joint or several) to which Giga-tronics or any such director,
officer, or controlling person, employee or agent may become subject under the
1933 Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such Registration Statement; and such Holder will reimburse any legal or
other expenses reasonably incurred by Giga-tronics or any such director,
officer, or controlling person, employee or agent in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
1.5(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of such Holder, which consent shall not be unreasonably withheld; and provided
further, that the total amounts payable in indemnity by Holder under this
Section 1.5(b) in respect of any Violation shall not exceed the net proceeds
received by Holder in the registered offering out of which such Violation
arises.
(c) Notice. Promptly after receipt by an
indemnified party under this Section 1.5 of notice of the commencement of any
action (including any governmental action), such indemnified party will, if a
claim for indemnification in respect thereof is to be made against any
indemnifying party under this Section 1.5, deliver to the indemnifying party a
written notice of the commencement of such an action and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party shall have the right to retain its
own counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflict of
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall (to the
extent of such prejudice) relieve such indemnifying party of any liability to
the indemnified party under this Section 1.5, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 1.5.
(d) Defect Eliminated in Final Prospectus. The
foregoing indemnity agreements of Giga-tronics and such Holders are subject to
the condition that, insofar as they relate to any Violation made in a
preliminary prospectus but eliminated or remedied in the amended prospectus on
file with the SEC at the time the Registration Statement becomes effective or in
the amended prospectus filed with the SEC pursuant to SEC Rule 424(b) (the
"FINAL PROSPECTUS"), such indemnity agreements shall not inure to the benefit of
any person if a copy of the Final Prospectus was furnished to the indemnified
party and was not furnished to the person asserting the loss, liability, claim
or damage at or prior to the time such action is required by the 1933 Act.
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<PAGE> 5
(e) Contribution. In order to provide for just
and equitable contribution to joint liability under the 1933 Act in any case in
which either (i) Holder (and/or any officer, director, employee, agent,
underwriter or controlling person who may be indemnified under Section 1.5(a)),
makes a claim for indemnification pursuant to this Section 1.5 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 1.5 provides for indemnification in
such case, or (ii) contribution under the 1933 Act may be required on the part
of such Holder (and/or any officer, director, employee, agent, underwriter or
controlling person who may be indemnified under Section 1.5 (a)) in
circumstances for which indemnification is provided under this Section 1.5;
then, and in each such case, Giga-tronics and such Holder (and/or such other
person) will contribute to the aggregate losses, claims, damages or liabilities
to which they may be subject (after contribution from others) in proportion to
their relative fault as determined by a court of competent jurisdiction;
provided however, that in no event, except in instances of fraud by the Holder
in which case there is no limitation, (i) shall any Holder be responsible for
more than the portion represented by the percentage that the public offering
price of its Registrable Securities offered by and sold under the Registration
Statement bears to the public offering price of all securities offered by and
sold under such Registration Statement or (ii) shall a Holder be required to
contribute any amount in excess of the public offering price of all such
securities offered and sold by such Holder pursuant to such Registration
Statement; and in any event, no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
(f) Survival. The obligations of Giga-tronics and
such Holder under this Section 1.5 shall survive the completion of any offering
of Registrable Securities in a registration statement, and otherwise.
1.6 "Market Stand-Off" Agreement. Each Holder hereby agrees
that it shall not, to the extent requested in writing by Giga-tronics or the
managing underwriter(s) of securities of Giga-tronics and in connection with an
underwritten public offering of securities of Giga-tronics with gross proceeds
to Giga-tronics of at least Ten Million Dollars ($10,000,000), sell or otherwise
transfer or dispose of any Registrable Securities or any shares of capital stock
of Giga-tronics then owned by such Holder (other than to donees or partners of
the Holder who agree to be similarly bound) for up to ninety (90) days following
the effective date of the Registration Statement for such underwritten offering;
provided, however, that such agreement shall not apply:
(a) to a Holder who beneficially owns less than
one and one-half percent (11/2%) of the outstanding Common Stock of
Giga-tronics; and
(b) unless all officers, directors and key
employees of Giga-tronics then holding Common Stock of Giga-tronics and
shareholders beneficially owning at least one and one-half percent (1 1/2%) of
Giga-tronics Common Stock enter into substantially similar agreements of at
least the same time duration.
In order to enforce the foregoing covenant, Giga-tronics
shall have the right to place restrictive legends on the certificates
representing the shares subject to this Section and to impose stop transfer
instructions with respect to the shares of stock of each Holder (and the shares
or securities of every other person subject to the foregoing restriction).
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<PAGE> 6
2. ASSIGNMENT.
2.1 Assignment. Notwithstanding anything herein to the
contrary, the registration rights of a Holder under Section 1 hereof may be
assigned only to a party who acquires from Holder at least Twenty Thousand
(20,000) shares of Common Stock that constitute the original number of
Registrable Securities (as such number may be adjusted to reflect subdivisions,
combinations and stock dividends of Giga-tronics' Common Stock) or as a
distribution made by a Holder which is a partnership to the limited partners of
such Holder of Registrable Securities; provided, however that no party may be
assigned any of the foregoing rights until Giga-tronics is given written notice
by the assigning party at the time of such assignment stating the name and
address of the assignee and identifying the securities of Giga-tronics as to
which the rights in question are being assigned; provided, further that any such
assignee shall receive such assigned rights subject to all the terms and
conditions of this Agreement, including without limitation the provisions of
this Section 2.
3. GENERAL PROVISIONS.
3.1 Notices. Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered or if deposited in the U.S. mail by
registered or certified mail, return receipt requested, postage prepaid, as
follows:
(a) if to Giga-tronics, at:
Giga-tronics Incorporated
4650 Norris Canyon Road
San Ramon, CA 94583
Attention: George H. Bruns, Jr.
Chief Executive Officer
Facsimile: 510/328-4700
with a copy to:
Gibson, Dunn & Crutcher LLP
Pacific Telesis Tower
One Montgomery Street
San Francisco, CA 94104
Attention: William L. Hudson, Esq.
Facsimile: 415/986-5309
(b) If to Holders:
To the address set forth on Exhibit A hereto
with a copy to:
Hopkins & Carley, a Law Corporation
Eighth Floor, 10 Almaden Boulevard
San Jose, CA 95113
Attention: Anthony J. McCarthy, Esq.
Facsimile: 408/998-4790
Any party hereto (and such party's permitted assigns) may by notice so given
provide and change its address for future notices hereunder. Notice shall
conclusively be deemed to have been given when personally delivered or when
deposited in the mail in the manner set forth above.
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3.2 Entire Agreement. This Agreement and the Plan
constitute and contains the entire agreement and understanding of the parties
with respect to the subject matter hereof and supersede any and all prior
negotiations, correspondence, agreements, understandings, duties or obligations
between the parties respecting the subject matter hereof.
3.3 Amendment of Rights. Any provision of this Agreement
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of Giga-tronics and Holders of a majority of all Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this Section 3.3 shall be binding upon each Holder, each permitted successor or
assignee of such Holder and Giga-tronics.
3.4 Governing Law. This Agreement shall be governed by and
construed exclusively in accordance with the laws of the State of California,
excluding that body of law relating to conflict of laws.
3.5 Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, then such
provision(s) shall be excluded from this Agreement and the balance of this
Agreement shall be interpreted as if such provision(s) were so excluded and
shall be enforceable in accordance with its terms.
3.6 Third Parties. Nothing in this Agreement, express or
implied, is intended to confer upon any person, other than the parties hereto
and their successors and assigns, any rights or remedies under or by reason of
this Agreement.
3.7 Successors And Assigns. Subject to the provisions of
Section 2.1, the provisions of this Agreement shall inure to the benefit of, and
shall be binding upon, the successors and permitted assigns of the parties
hereto.
3.8 Captions. The captions to sections of this Agreement
have been inserted for identification and reference purposes only and shall not
be used to construe or interpret this Agreement.
3.9 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.10 Costs And Attorneys' Fees. In the event that any
action, suit or other proceeding is instituted concerning or arising out of this
Agreement or any transaction contemplated hereunder, the prevailing party shall
recover all of such party's costs and attorneys' fees incurred in each such
action, suit or other proceeding, including any and all appeals or petitions
therefrom.
[REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date and year first above written.
GIGA-TRONICS INCORPORATED SHAREHOLDERS
By: /s/ George H. Bruns, Jr. /s/ Ultracision shareholders
Title: Chief Executive Officer
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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<PAGE> 1
EXHIBIT 5.1
[Gibson, Dunn & Crutcher LLP Letterhead]
April 14, 1998 C35517-00002
Giga-tronics Incorporated
4650 Norris Canyon Road
San Ramon, CA 94583
Re: Registration Statement on Form S-3 of Giga-tronics Incorporated
Ladies and Gentlemen:
We refer to the registration statement on Form S-3 ("Registration
Statement"), under the Securities Act of 1933, as amended (the "Securities Act")
filed by Giga-tronics Incorporated, a California corporation (the "Company"),
with respect to the proposed offering by certain shareholders of the Company of
up to 936,989 shares (the "Shares") of the Company's common stock, no par value
per share (the "Common Stock").
We have examined the originals or certified copies of such corporate
records, certificates of officers of the Company and/or public officials and
such other documents and have made such other factual and legal investigations
as we have deemed relevant and necessary as the basis for the opinions set forth
below. In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as conformed or
photostatic copies and the authenticity of the originals of such copies.
Based on our examination mentioned above, subject to the assumptions
stated above and relying on the statements of fact contained in the documents
that we have examined, we are of the opinion that the issuance by the Company of
the Shares has been duly authorized for issuance and the Shares have been duly
and validly issued, and are fully paid and non-assessable shares.
This opinion is limited to California and United States federal law.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act or the General Rules and Regulations of the Securities and
Exchange Commission.
Very truly yours,
/s/ GIBSON, DUNN & CRUTCHER LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Giga-tronics Incorporated
We consent to incorporation by reference herein of our report dated April 18,
1997, except as to Note 11, which is as of June 6, 1997, relating to the
consolidated balance sheets of Giga-tronics Incorporated and subsidiaries as of
March 29, 1997, and March 30, 1996, and the related consolidated statements of
operations, shareholders' equity, and cash flows for the years ended March 29,
1997, March 30, 1996, and March 25, 1995, and of our report dated June 9, 1997,
relating to the financial statement schedule, which reports appear or are
incorporated by reference in the March 29, 1997, annual report on Form 10-K of
Giga-tronics Incorporated.
/s/ KPMG PEAT MARWICK
Mountain View, California
April 8, 1998
