-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CXtZG6jcHCOdvj5pOzPYtGieUPn79yhdLLvXGuR7AS2qrJAMzr/WwioEuGxHPSSs KoCv2yhkw6FtdHOmkO00UA== 0000891618-96-002981.txt : 19961206 0000891618-96-002981.hdr.sgml : 19961206 ACCESSION NUMBER: 0000891618-96-002981 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960628 FILED AS OF DATE: 19961205 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: METRICOM INC / DE CENTRAL INDEX KEY: 0000884318 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 770294597 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-19903 FILM NUMBER: 96676164 BUSINESS ADDRESS: STREET 1: 980 UNIVERSITY AVENUE CITY: LOS GRATOS STATE: CA ZIP: 95030 BUSINESS PHONE: 4083998200 MAIL ADDRESS: STREET 1: 980 UNIVERSITY AVE CITY: LOS GATOS STATE: CA ZIP: 95030 10-Q/A 1 METRICOM FORM 10-Q/A FOR PERIOD ENDED 6/28/96 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A AMENDMENT NO.1 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 28, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO _________ COMMISSION FILE NUMBER 0-19903 METRICOM, INC. (A DELAWARE CORPORATION) I.R.S. EMPLOYER IDENTIFICATION #77-0294597 980 UNIVERSITY AVENUE LOS GATOS, CA 95030-2375 (408) 399-8200 INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO ___ THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AS OF AUGUST 2, 1996 WAS 13,461,824. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 TABLE OF CONTENTS
PAGE ---- PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K............................................ 3 Signature Page.......................................................................... 4 Exhibit Index........................................................................... 5
2 3 PART II. OTHER INFORMATION ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits: 10.27* Option Agreement and Agreement and Plan of Reorganization, dated as of February 7, 1996, among the Company, Overall Wireless Communications Corporation and the sole stockholder of Overall Wireless. 10.28* Loan and Security Agreement, dated as of February 7, 1996, among the Company, Overall Wireless Communications Corporation and the sole stockholder of Overall Wireless. 27.00 Financial Data Schedule. - --------------- * Confidential treatment has been requested for certain portions of this exhibit. The confidential portions have been marked with an asterisk and have been filed separately with the Commission. b. Reports on Form 8-K 1. Form 8-K filed on June 6, 1996, regarding a proposed private placement of up to $75 million principal amount of convertible subordinated notes. 2. Form 8-K filed on June 20, 1996, regarding the Company's plans to discontinue a proposed private placement of up to $75 million principal amount of convertible subordinated notes. 3 4 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. METRICOM, INC. (Registrant) /s/ WILLIAM D. SWAIN -------------------------------------- By: William D. Swain Chief Financial Officer, Secretary and Duly Authorized Officer Date: December 5, 1996 4 5 EXHIBIT INDEX 10.27* Option Agreement and Agreement and Plan of Reorganization, dated as of February 7, 1996, among the Company, Overall Wireless Communications Corporation and the Sole Stockholder of Overall Wireless. 10.28* Loan and Security Agreement, dated as of February 7, 1996, among the Company, Overall Wireless Communications Corporation and the sole stockholder of Overall Wireless. 27.00 Financial Data Schedule. * Confidential treatment has been requested for certain portions of this exhibit. The confidential portions have been marked with an asterisk and have been filed separately with the Commission. 5 EX-10.27 2 OPTION AGMT & AGREEMENT AND PLAN OF REORGANIZATION 1 EXHIBIT 10.27 OPTION AGREEMENT AND AGREEMENT AND PLAN OF REORGANIZATION THIS OPTION AGREEMENT AND AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made as of February 7, 1996 among METRICOM, INC., a Delaware corporation ("Metricom"), OVERALL WIRELESS COMMUNICATIONS CORPORATION, an Oklahoma corporation ("Overall Wireless"), and Jean Warren, the sole stockholder of Overall Wireless ("Stockholder"). RECITALS A. Overall Wireless is the holder of a Nationwide Commercial license issued by the Federal Communications Commission (the "FCC"), assigned the call sign WPCU 518, covering five 5-KHz channel pairs in the 220-222 MHz frequency band for a total of 50 KHz of spectrum (the "FCC License"). B. Metricom desires to purchase an option to acquire Overall Wireless, and Overall Wireless and Stockholder wish to sell such option to Metricom, on the terms and subject to the conditions contained in this Agreement. C. The parties intend to effect such acquisition upon exercise of such option through a merger (the "Merger") of Overall Wireless into a wholly-owned subsidiary of Metricom ("Sub") in accordance with this Agreement, the rules and regulations of the FCC and the laws of the State of Delaware and the State of Oklahoma, or such state law as will be applicable to Overall Wireless or its successor upon the date of the Merger (collectively, the "Applicable Laws"). Upon consummation of the Merger, Overall Wireless will merge into Sub, and Sub will remain a wholly-owned subsidiary of Metricom. D. It is intended that the Merger qualify as a tax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"). AGREEMENT The parties to this Agreement agree as follows: _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 2 1. PURCHASE AND SALE OF OPTION. 1.1 OPTION. (a) Metricom is hereby granted the option (the "Option") to acquire 100% ownership of all outstanding equity securities of Overall Wireless through the Merger, exercisable at any time after Forty Percent Completion (as defined in Section 5.1(b)(2)) is achieved but not later than January 1, 1997 (or such later date as may be determined pursuant to Section 1.4). (b) Metricom will exercise the Option by giving Overall Wireless and Stockholder written notice of its intent to exercise (the "Notice"). Within ten days after delivery of the Notice, Overall Wireless will deliver a revised Disclosure Schedule (as defined in Section 3) to Metricom. In the event such Disclosure Schedule contains exceptions to the representations and warranties contained in Section 3 of this Agreement that, in Metricom's reasonable judgment, represent material adverse differences from the state of Overall Wireless' business, financial condition, assets, liabilities, operations or prospects (or in any aspect or portion thereof) from Metricom's knowledge thereof upon Metricom's exercise of the Option, Metricom may rescind the Notice by delivering written notice to Overall Wireless and the Stockholder within ten days after delivery of the Disclosure Schedule. If the Option is exercised and such exercise is not rescinded, the parties will consummate the Merger within [*] after all of the conditions contained in Sections 6 and 7, including, without limitation, FCC approval of the Merger, have been fulfilled or waived, provided that this Agreement has not been terminated in accordance with the provisions of Section 8 hereof. 1.2 OPTION PURCHASE PRICE. As consideration for the Option, Metricom will deliver $700,000 in cash to Stockholder upon the execution of this Agreement. 1.3 FURTHER ASSURANCES. Except as otherwise provided for herein, (a) Stockholder will vote, if Metricom exercises and does not rescind its exercise of the Option, all of her voting securities of Overall Wireless in favor of the Merger, and against any proposal made in opposition to the Agreement or the transactions contemplated thereby; (b) Stockholder will not transfer, sell, exchange, pledge (other than pursuant to the Stock Pledge Agreement (as defined in Section 5.1(b)(3)), offer or otherwise dispose of or encumber any of her Overall Wireless securities, or make any offer or agreement relating thereto, except through the Merger; and (c) Overall Wireless will not permit any transfer or issuance of Overall Wireless securities. Promptly after the achievement of Forty Percent Completion and the adoption of the Proposed FCC Rule Changes (as defined below), the parties will complete and file with the FCC an application for assignment or transfer of control of the FCC License by or from Overall Wireless to Metricom. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 2. 3 1.4 OPTION EXTENSION/TERMINATION. (a) If on January 1, 1997 [*], Metricom may extend the Option exercise deadline to July 1, 1997 by delivering a written notice of extension and $500,000 in cash to Stockholder in exchange for such extension. Notwithstanding the foregoing, if Overall Wireless or Stockholder has committed any material Breach, the Option exercise deadline will automatically extend to the later of (1) July 1, 1997; and (2) such time as the Breach has been cured, without any payment or further action by Metricom. For the purposes of this Agreement, "Breach" means any inaccuracy in or breach of, or any failure to comply with or perform, a representation, warrant, covenant, obligation or other provision of this Agreement. (b) If on January 1, 1997 [*], then Metricom may either: (1) extend the Option term as set forth in Section 1.4(a); or (2) terminate the Option by delivering notice thereof to Overall Wireless and Stockholder, in which case Stockholder will immediately refund $350,000 of the Option purchase price to Metricom. (c) If the Option expires, other than through Metricom's exercise of its rights under Section 1.4(b)(2), this Agreement will terminate, subject to the provisions of Section 8.3. 2. MERGER. 2.1 MERGER OF OVERALL WIRELESS INTO SUB. On the terms and subject to the conditions contained in this Agreement, at the Effective Time (as defined in Section 2.3), Overall Wireless will be merged into Sub and the separate existence of Overall Wireless will cease. Sub will be the surviving corporation in the Merger (the "Surviving Corporation"). 2.2 EFFECT OF THE MERGER. The Merger will have the effects set forth in this Agreement and in the Applicable Laws. 2.3 CLOSING; EFFECTIVE TIME. The consummation of the Merger (the "Closing") will take place at the offices of Cooley Godward Castro Huddleson & Tatum, One Maritime Plaza, 20th Floor, San Francisco, California on the fifth calendar day following the date as of which each of the conditions set forth in Sections 6 and 7 has been fulfilled or waived or on such other date as may be jointly designated by Metricom and Overall Wireless (the "Closing Date"). As soon as practicable after the Closing, a properly executed certificate of merger in substantially the form attached hereto as EXHIBIT A-1 and conforming to the requirements of the Applicable Laws (the "Certificate of Merger") will be filed in accordance with the Applicable Laws, at which time the Merger will become effective (the "Effective Time"). _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 3. 4 2.4 CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS AND OFFICERS. Unless otherwise determined by Metricom prior to the Effective Time, (a) the Certificate of Incorporation of the Surviving Corporation will be amended and restated as of the Effective Time to conform to the Certificate of Incorporation of Sub; (b) the Bylaws of the Surviving Corporation will be the Bylaws of Sub as in effect immediately prior to the Effective Time; (c) the directors of the Surviving Corporation immediately after the Effective Time will be Robert P. Dilworth, William D. Swain and Gary M. Green; and (d) the officers of the Surviving Corporation will be Robert P. Dilworth (President and Chief Executive Officer), William D. Swain (Chief Financial Officer and Secretary) and Gary M. Green (Executive Vice President and Chief Operating Officer). 2.5 CONVERSION OF SHARES. (a) At the Effective Time, by virtue of the Merger and without any action on the part of any party to this Agreement, each outstanding share of Common Stock, $1.00 par value, of Overall Wireless ("Overall Wireless Common Stock") outstanding immediately prior to the Effective Time will be converted into the right to receive, subject to any decreases called for by Section 2.5(b), (1) cash in an amount equal to [*] divided by the number of shares of Overall Wireless Common Stock outstanding immediately prior to the Effective Time; and (2) that number of shares of Common Stock, $0.001 par value, of Metricom ("Metricom Common Stock") equal to the Conversion Number (as defined below). The "Conversion Number" will be determined by dividing [*] by the product of Metricom Average Price (as defined below) and the number of shares of Overall Wireless Common Stock outstanding immediately prior to the Effective Time, and then rounding the resulting quotient to three decimal places. The "Metricom Average Price" means [*]. (b) To the extent liabilities of Overall Wireless at the Effective Time exceed those incurred in constructing, maintaining and operating the system of base stations and associated mobile stations contemplated by Section 5.1 to the extent required to keep the FCC License valid and in good standing, then the cash amount set forth in clause (1) of Section 2.5(a) will be reduced by the amount of such liabilities. If the aggregate amount of such liabilities exceeds such cash amount, the [*] amount set forth in clause (2) of Section 2.5(a) will be reduced by the remaining amount of such liabilities. (c) The fraction of a share of Metricom Common Stock into which each outstanding share of Company Common Stock is to be converted pursuant to clause (2) of Section 2.5(a) (as such fraction may be adjusted in accordance with this Section 2.5(c)) is referred to as the "Exchange Ratio." If at any time prior to the Closing Date, the outstanding shares of Metricom Common Stock are changed into a different number or class of shares by reason of any stock dividend, subdivision, reclassification, recapitalization, split-up, combination or similar transaction, (1) the dollar amounts in the last clause of Section 2.5(a) will be _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 4. 5 appropriately adjusted, and (2) to the extent any such change occurs during the 15 consecutive days ending with the day immediately preceding the Closing Date, the Exchange Ratio will be appropriately adjusted. 2.6 CLOSING OF OVERALL WIRELESS' TRANSFER BOOKS. At the Effective Time, Stockholder and any other holders of certificates representing shares of Overall Wireless Common Stock will cease to have any rights as stockholders of Overall Wireless, and the stock transfer books of Overall Wireless will be closed with respect to all shares of Overall Wireless Common Stock outstanding immediately prior to the Effective Time. No further transfer of any such shares of Overall Wireless Common Stock will thereafter be made on such stock transfer books. If, after the Effective Time, a valid certificate previously representing any of such shares of Overall Wireless Common Stock (an "Overall Wireless Common Stock Certificate") is presented to Metricom, such Overall Wireless Common Stock Certificate will be canceled and exchanged as provided in Section 2.7. 2.7 EXCHANGE OF CERTIFICATES. (a) As soon as practicable after the Effective Time, Metricom will deliver to the holders of Overall Wireless Common Stock Certificates (1) a letter of transmittal in customary form and containing such provisions as Metricom may reasonably specify and (2) instructions for use in effecting the surrender of Overall Wireless Common Stock Certificates in exchange for certificates representing Metricom Common Stock. Upon surrender of a Overall Wireless Common Stock Certificate to Metricom for exchange, together with a duly executed letter of transmittal and such other documents as may be reasonably required by Metricom, the holder of such Overall Wireless Common Stock Certificate will be entitled to receive in exchange therefor cash and a certificate representing the number of whole shares of Metricom Common Stock that such holder has the right to receive pursuant to the provisions of this Section 2, and the Overall Wireless Common Stock Certificate so surrendered will be canceled. Until surrendered as contemplated by this Section 2.7, each Overall Wireless Common Stock Certificate will be deemed, from and after the Effective Time, to represent only the right to receive upon such surrender cash and a certificate representing shares of Metricom Common Stock (and cash in lieu of any fractional share of Metricom Common Stock) as contemplated by this Section 2. (b) No dividends or other distributions declared or made with respect to Metricom Common Stock with a record date after the Effective Time will be paid to the holder of any unsurrendered Overall Wireless Common Stock Certificate with respect to the shares of Metricom Common Stock represented thereby, and no cash payment in lieu of any fractional share will be paid to any such holder, until such holder surrenders such Overall Wireless Common Stock Certificate in accordance with this Section 2.7 (at which time such holder will _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 5. 6 be entitled to receive all such dividends and distributions and such cash payment) without interest. (c) No certificates or scrip for fractional shares of Metricom Common Stock will be issued, but in lieu thereof each holder of shares of Overall Wireless Common Stock who would otherwise be entitled to receive a certificate or scrip for a fraction of a share of Metricom Common Stock will receive from Metricom a cash amount equal to the product of the Metricom Average Price and the fraction of a share of Metricom Common Stock to which such holder would otherwise be entitled. 2.8 ADDITIONAL PAYMENT. (a) If the FCC License or the stock or other equity interest of its holder while under Metricom's control is sold for consideration attributable to the FCC License greater than the Acquisition Consideration (as defined below) in total consideration (valued as set forth in Section 2.8(b), "Appraised Value") at any time prior to December 31, 1999, Metricom will, upon the determination of the Appraised Value, pay to each person or entity who held Overall Wireless Common Stock immediately prior to the Effective Time cash (the "Additional Payment") in an amount equal to the product of: [*] As used in this Section 2.8, "Acquisition Consideration" means the sum of (A) [*], (B) any amount paid to extend the term of the Option pursuant to Section 1.4, (C) the difference between the amount paid to the holders of Overall Wireless Common Stock pursuant to Clause (1) of Section 2.5(a) and [*], and (D) interest at the annual rate of [*] on the sum of (A), (B) and (C) above from the Closing Date until the date of sale. (b) Metricom will give Stockholder notice of the disposition of the FCC License (the "Appraisal Notice") within 20 days after the closing of the transaction. The Appraisal Notice will describe the transaction in reasonable detail and set forth Metricom's estimate of the Appraised Value. The Appraised Value may be established by written agreement signed by Metricom and persons who held greater than 50% of the Overall Wireless Common Stock outstanding immediately prior to the Effective Time. If such agreement is not reached, then three independent third-party appraisers will be selected for the purpose of determining the Appraised Value. The first appraiser will be appointed by Metricom within 30 days after delivery of the Appraisal Notice. The second appraiser will be appointed by persons who held greater than 50% of the Overall Wireless Common Stock outstanding immediately prior to the Effective Time within 30 days after delivery of the Appraisal Notice. The third appraiser will be appointed by the first two appraisers within ten days after the first two appraisers have been appointed. If either side fails to appoint an independent third-party appraiser within the required period, then the Appraised Value will be determined solely by the independent third-party appraiser appointed by the other side. Within 30 days of their selection, the appraisers will each determine the fair market value of the consideration received by Metricom for the FCC License only. The Appraised Value will be the average of the two appraisals closest in dollar amount. All fees and expenses of the appraisers will be shared equally by Metricom and the former holders of Overall Wireless Common Stock entitled to a payment under Section 2.8(a). (c) If the tax basis of the FCC License, the stock of Sub or any other asset of Metricom or its subsidiaries increased as a result of the Additional Payment, the Applicable Percentage will be [*]. If not, the Applicable Percentage will be [*]. (d) This Section 2.8 will be of no force and effect if the FCC License is sold as part of a "business" (whether or not in subsidiary form) meeting the conditions for a "significant subsidiary" of Metricom within the meaning of Rule 1-02 of Regulation S-X under the Securities Act. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 6. 7 2.9 FEDERAL INCOME TAX CONSEQUENCES. For federal income tax purposes, the Merger is intended to constitute a tax-free reorganization within the meaning of Section 368(a) of the Code. Neither Overall Wireless nor Metricom will take a position inconsistent with this Section 2.9 on any tax return. 2.10 ACCOUNTING CONSEQUENCES. For accounting purposes, the Merger is intended to be treated as a "purchase." 2.11 FURTHER ACTION. If at any time after the Effective Time any further action is determined by Metricom to be necessary to carry out the purposes of this Agreement or to vest the Surviving Corporation with the full right, title and possession of and to all assets, property, rights, privileges, immunities, powers and franchises of Sub and Overall Wireless, the officers and directors of the Surviving Corporation will be fully authorized (in the name of Sub, in the name of Overall Wireless and otherwise) to take such action. 2.12 STRUCTURE OF MERGER. In the event Overall Wireless ceases to be a validly existing S Corporation (as defined in Section 3.1) prior to the Effective Time, Metricom may, at its option, restructure the acquisition into a merger of Sub into Overall Wireless. In such event, at the Effective Time, (a) Sub will be merged into Overall Wireless and the separate existence of Sub will cease; (b) Overall Wireless will be the Surviving Corporation; and (c) the Certificate of Merger will be in substantially the form attached hereto as EXHIBIT A-2. If the acquisition is restructured as set forth in this Section 2.12, the parties understand that the Merger will not be a tax-free reorganization within the meaning of Section 368(a) of the Code. 3. REPRESENTATIONS AND WARRANTIES OF OVERALL WIRELESS AND STOCKHOLDER. Except as set forth on the Schedule of Exceptions attached hereto as EXHIBIT B, Overall Wireless and Stockholder, jointly and severally, hereby represent and warrant to Metricom as follows: _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 7. 8 3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Overall Wireless is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation. Overall Wireless has all requisite corporate power and authority to own and operate its properties and assets, to execute and deliver this Agreement and the Certificate of Merger and to carry out the provisions of this Agreement and the Certificate of Merger and to carry on its business as presently conducted and as presently proposed to be conducted. Overall Wireless is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a Material Adverse Effect (as defined below) on Overall Wireless. Overall Wireless owns no equity securities of any other corporation, limited partnership or similar entity. Overall Wireless is not a participant in any joint venture, partnership or similar arrangement. Overall Wireless is and has been since inception a validly existing "subchapter S" corporation for federal income tax purposes and under analogous provisions, to the extent they exist, of the laws of each state in which Overall Wireless has qualified to do business or is required to qualify to do business (an "S Corporation"). As used in this Agreement, the term "Material Adverse Effect" means a material adverse effect on the affected party's business, financial condition, assets, liabilities or operations. 3.2 CAPITALIZATION; VOTING RIGHTS. The authorized capital stock of Overall Wireless consists of 50,000 shares of Common Stock, 100 shares of which are issued and outstanding. All issued and outstanding shares of Overall Wireless' Common Stock (a) have been duly authorized and validly issued to, and are currently owned beneficially and of record, subject to no mortgage, pledge, lien, encumbrance or charge, by Stockholder; (b) are fully paid and nonassessable; and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. Except as set forth in this Agreement, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from Overall Wireless or Stockholder of any of Overall Wireless' securities. 3.3 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the part of Overall Wireless, its officers, directors and stockholders necessary for the authorization of this Agreement and the Certificate of Merger, the performance of all obligations of Overall Wireless thereunder and the authorization of the Merger has been taken. This Agreement is a valid and binding obligation of Overall Wireless and Stockholder, enforceable in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors' rights; (b) as limited by general principles of equity that restrict the availability of equitable remedies; and (c) as the indemnification provisions of Sections 5.9 and 9 of this Agreement may be limited by applicable law. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 8. 9 3.4 FCC COMPLIANCE; LICENSE OWNERSHIP. The FCC License was originally issued to Stockholder on July 29, 1993, and was validly assigned to Overall Wireless on July 13, 1994. The Application (as defined in Section 5.1(a)) and all amendments thereto, and the application to assign the FCC License to Overall Wireless and all amendments thereto, complied in all respects with all applicable FCC rules and regulations. All applicable periods relating to FCC reconsideration of the issuance of the FCC License and assignment of the FCC License to Overall Wireless have expired. Overall Wireless currently holds the FCC License, subject to no mortgage, pledge, lien, encumbrance or charge. The FCC License has not been impaired by any act or omission of Stockholder or Overall Wireless or any of their employees, representatives or agents. The FCC has not imposed any conditions on Stockholder or Overall Wireless on the use of the FCC License that is not contained on the face thereof or in the FCC rules and regulations. There has been no actual or, to the best of Overall Wireless' and Stockholder's knowledge, threatened action by or before the FCC to revoke, cancel, rescind or modify the FCC License in any manner. Neither Stockholder nor Overall Wireless has received any notice of liability, forfeiture or complaint against the FCC License with respect to any actions taken by either of them under authority of, or in connection with, the FCC License. Stockholder and Overall Wireless have complied and are in compliance with all FCC rules and regulations governing the FCC License and ownership and operation of the facilities described in the FCC License. Stockholder and Overall Wireless have filed with the FCC all statements, reports and information required by applicable FCC rules and regulations. Stockholder and Overall Wireless know of no facts that could cause the FCC to deny its consent to the assignment of the FCC License to Metricom as contemplated in this Agreement. 3.5 FINANCIAL STATEMENTS. Overall Wireless has delivered to Metricom its unaudited balance sheet as at December 31, 1995 (the "Statement Date") and unaudited statement of income for the year then ended (collectively, the "Financial Statements"). The Financial Statements are complete and correct in all material respects, have been prepared in accordance with accounting principles applied on a consistent basis throughout the periods indicated and present fairly the financial condition and position and results of operations of Overall Wireless as of the Statement Date and for the year then ended. 3.6 LIABILITIES. Overall Wireless has no material liabilities and, to the best of Overall Wireless' and Stockholder's knowledge, no material contingent liabilities, not disclosed in the Financial Statements, except liabilities incurred in the ordinary course of business subsequent to the Statement Date that have not been, either in any case or in the aggregate, material. 3.7 AGREEMENTS; ACTION. Except for obligations relating to construction and operation of facilities for the FCC License or otherwise expressly contemplated by this Agreement: _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 9. 10 (a) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which Overall Wireless is a party or by which it is bound that may involve (1) obligations (contingent or otherwise) of, or payments to, Overall Wireless in excess of [*], (2) the license of any patent, copyright, trade secret or other proprietary right to or from Overall Wireless (other than licenses arising from the purchase of "off the shelf" or other standard products), (3) provisions restricting or affecting the activities described in Section 5.1(a), or (4) indemnification by Overall Wireless with respect to infringements of proprietary rights (other than indemnification obligations arising from purchase or sale agreements entered into in the ordinary course of business); (b) Overall Wireless has not (1) incurred any indebtedness for money borrowed or any other liabilities individually in excess of [*] or, in the case of indebtedness and/or liabilities individually less than [*], in excess of [*] in the aggregate, (2) made any loans or advances to any person, other than ordinary advances for travel expenses, or (3) sold, exchanged or otherwise disposed of any of its assets or rights; and (c) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities Overall Wireless has reason to believe are affiliated therewith) will be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. 3.8 CHANGES. Since the Statement Date, other than obligations relating to construction and operation of facilities for the FCC License or otherwise expressly contemplated by this Agreement, there has not been: (a) Any change in the assets, liabilities, financial condition or operations of Overall Wireless from that reflected in the Financial Statements that individually or in the aggregate has had or is expected to have a Material Adverse Effect; (b) Any material change in the contingent obligations of Overall Wireless by way of guaranty, endorsement, indemnity, warranty or otherwise; (c) Any damage, destruction or loss, whether or not covered by insurance, that has had or is expected to have a Material Adverse Effect; (d) Any waiver by Overall Wireless of a valuable right or of a material debt owed to it; (e) Any change in any agreement to which Overall Wireless is a party or by which it is bound that has had or is expected to have a Material Adverse Effect; or ______________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the commission. 10. 11 (f) Any other event or condition of any character that individually or in the aggregate has had or is expected to have a Material Adverse Effect. 3.9 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. Overall Wireless has good and marketable title to its properties and assets, including the properties and assets reflected in the balance sheet included in the Financial Statements, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those resulting from taxes that have not yet become delinquent, (b) purchase money liens and other minor liens and encumbrances that do not materially detract from the value of the property subject thereto or materially impair the operations of Overall Wireless and (c) those to which Metricom has consented in writing. All facilities, machinery, equipment, fixtures, vehicles and other properties owned, leased or used by Overall Wireless are in good operating condition and repair and are reasonably fit and usable for the purposes for which they are being used. 3.10 PATENTS AND TRADEMARKS. Overall Wireless does not own or possess any legal rights to any patents, trademarks, service marks, trade names, copyrights, trade secrets, information and other proprietary rights and processes, and none of such rights are necessary for the conduct of its business without any known infringement of the rights of others. There are no outstanding options, licenses or agreements of any kind relating to the foregoing, nor is Overall Wireless bound by or a party to any options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes of any other person or entity other than such licenses or agreements arising from the purchase of "off the shelf" or standard products. Overall Wireless has not received any communications alleging that Overall Wireless has violated, or by conducting its business would violate, any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity. 3.11 COMPLIANCE WITH OTHER INSTRUMENTS. Overall Wireless is not in violation or default of any term of its certificate of incorporation or bylaws, or of any provision of any mortgage, indenture, contract, agreement, instrument or contract to which it is party or by which it is bound or of any judgment, decree, order, writ or, to the best of Overall Wireless' or Stockholder's knowledge, any statute, rule or regulation applicable to Overall Wireless that would have a Material Adverse Effect. The execution, delivery, and performance of and compliance with this Agreement and the Certificate of Merger, and completion of the Merger, will not, with or without the passage of time or giving of notice, result in any such material violation, or be in conflict with or constitute a default under any such term, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of Overall Wireless or the suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to Overall Wireless, its business or operations or any of its assets or properties. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 11. 12 3.12 LITIGATION. There is no action, suit, proceeding or investigation pending or, to the best of Overall Wireless' or Stockholder's knowledge, currently threatened against Overall Wireless or Stockholder (a) that questions the validity of this Agreement or the Certificate of Merger, the right of Overall Wireless or Stockholder to enter into this Agreement or to consummate the transactions contemplated hereby, or (b) that might result, either individually or in the aggregate, in a Material Adverse Effect, or any change in the current equity ownership of Overall Wireless, nor is Overall Wireless or Stockholder aware that there is any basis for the foregoing. Overall Wireless is not a party or subject to the provisions of any adverse order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no action, suit, proceeding or investigation by Overall Wireless currently pending or that Overall Wireless intends to initiate. 3.13 TAX RETURNS AND PAYMENTS. Overall Wireless has timely filed all tax returns (federal, state and local) required to be filed by it. All taxes shown to be due and payable on such returns, any assessments imposed, and, to the best of Overall Wireless' and Stockholder's knowledge, all other taxes due and payable by Overall Wireless on or before the Closing have been paid or will be paid prior to the time they become delinquent. Neither Overall Wireless nor Stockholder has been advised (a) that any of Overall Wireless' returns, federal, state or other, have been or are being audited as of the date hereof, or (b) of any deficiency in assessment or proposed judgment to Overall Wireless' federal, state or other taxes. Neither Overall Wireless nor Stockholder has knowledge of any liability of any tax to be imposed upon Overall Wireless' properties or assets as of the date of this Agreement that is not adequately provided for. 3.14 [*] 3.15 COMPLIANCE WITH LAWS; PERMITS. To the best of Overall Wireless' and Stockholder's knowledge, Overall Wireless is not in violation of any applicable statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the conduct of its business or the ownership of its properties which violation would have a Material Adverse Effect. No governmental orders, permissions, consents, approvals or authorizations are required to be obtained and no registrations or declarations are required to be filed in connection with the execution and delivery of this Agreement and the Certificate of Merger and the completion of the Merger, except such as has been duly and validly obtained or filed, or with respect to any filings that must be made after the execution of this Agreement, as will be filed in a timely manner. Overall Wireless has all franchises, permits, licenses and any similar authority necessary for the conduct of its business as now being conducted by it, the lack of which could have a Material Adverse Effect and Overall Wireless and Stockholder believe that Overall Wireless can obtain, without undue burden or expense, any similar authority for the conduct of its business as planned to be conducted. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 12. 13 3.16 ENVIRONMENTAL AND SAFETY LAWS. To the best of Overall Wireless' and Stockholder's knowledge, Overall Wireless is not in violation of any applicable statute, law or regulation relating to the environment or occupational health and safety, and no material expenditures are or will be required in order to comply with any such existing statute, law or regulation. 3.17 INSURANCE. Overall Wireless has fire and casualty insurance policies with coverage customary for companies similarly situated to Overall Wireless. 3.18 OFFERING VALID. Assuming the accuracy of the representations and warranties of Metricom contained in Section 4, the offer, sale and issuance of the Option will be exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act") and will have been registered or qualified (or exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable state securities laws. 3.19 INVESTMENT REPRESENTATIONS. (a) Stockholder understands that she must bear the economic risk of this investment indefinitely unless the shares of Metricom Common Stock issued in the Merger (the "Metricom Shares") are registered pursuant to the Securities Act, or an exemption from registration is available. Stockholder also understands that there is no assurance that any exemption from registration under the Securities Act will be available and that, even if available, such exemption may not allow Stockholder to transfer all or any portion of the Metricom Shares under the circumstances or at the times Stockholder might propose. (b) Stockholder is acquiring the Metricom Shares for her own account for investment only, and not with a view towards their distribution. (c) By reason of her business or financial experience, Stockholder has the capacity to protect her own interests in connection with the transactions contemplated in this Agreement. (d) Stockholder is an accredited investor within the meaning of Regulation D under the Securities Act. (e) Stockholder has received and read Metricom's Annual Report on Form 10- K for the year ended December 31, 1994 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995, June 30, 1995 and September 30, 1995, each as filed with the Securities and Exchange Commission (the "SEC"). In addition, Stockholder has had an opportunity to review Metricom's press release dated January 30, 1996 with respect to its unaudited financial statements as of and for the year ended December 31, 1995 and discuss Metricom's business, _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 13. 14 management and financial affairs with directors, officers and management of Metricom. Stockholder has also had the opportunity to ask questions of and receive answers from, Metricom and its management regarding the terms and conditions of this investment. (f) The Metricom Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Stockholder has been advised or is aware of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions, including, among other things: the availability of certain current public information about Metricom, the resale occurring not less than two years after a party has purchased and paid for the security to be sold, the sale being through an unsolicited "broker's transaction" or in transactions directly with a market maker (as said term is defined under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) and the number of shares being sold during any three-month period not exceeding specified limitations. 3.20 FULL DISCLOSURE. This Agreement and the Exhibits hereto and all other documents delivered by Stockholder or Overall Wireless to Metricom or its representatives or agents in connection therewith or with the transactions contemplated hereby do not contain any untrue statement of a material fact nor omit to state a material fact necessary in order to make the statements contained herein or therein not misleading. To the best of Overall Wireless' and Stockholder's knowledge, there are no facts that have had or are expected to have, individually or in the aggregate, a Material Adverse Effect that have not been set forth in this Agreement or the Exhibits hereto. 4. REPRESENTATIONS AND WARRANTIES OF METRICOM. Metricom hereby represents and warrants to Overall Wireless and Stockholder as follows (such representations and warranties do not lessen or obviate the representations and warranties of Overall Wireless and Stockholder set forth in this Agreement): 4.1 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the part of Metricom and its officers, directors and stockholders necessary for the authorization of this Agreement, the performance of all obligations of Metricom hereunder and the completion of the Merger has been taken. All corporate action on the part of Sub and its officers, directors and stockholders necessary for the completion of the Merger will have been taken at or prior to the Effective Time. This Agreement is a valid and binding obligation of Metricom, enforceable in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors' rights; (b) as limited by general principles of equity that restrict the availability of equitable _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 14. 15 remedies; and (c) as the indemnification provisions of Sections 5.9 and 9 of this Agreement may be limited by applicable law. 4.2 INVESTMENT REPRESENTATIONS. (a) Metricom has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to Overall Wireless so that it is capable of evaluating the merits and risks of its investment in Overall Wireless and has the capacity to protect its own interests. Metricom must bear the economic risk of this investment indefinitely unless the Option or the shares of Overall Wireless Common Stock acquired in the Merger (the "Overall Wireless Shares") registered pursuant to the Securities Act, or an exemption from registration is available. Metricom understands that Overall Wireless has no present intention of registering the Option or the Overall Wireless Shares. Metricom also understands that there is no assurance that any exemption from registration under the Securities Act will be available and that, even if available, such exemption may not allow Metricom to transfer all or any portion of the Option or the Overall Wireless Shares under the circumstances or at the times Metricom might propose. (b) Metricom is acquiring the Option and will acquire the Overall Wireless Shares, if the Merger is consummated, for Metricom's own account for investment only, and not with a view towards their distribution. (c) By reason of its, or of its management's, business or financial experience, Metricom has the capacity to protect its own interests in connection with the transactions contemplated in this Agreement. (d) Metricom is an accredited investor within the meaning of Regulation D under the Securities Act. (e) Metricom has received and read the Financial Statements and has had an opportunity to discuss Overall Wireless' business, management and financial affairs with directors, officers and management of Overall Wireless. Metricom has also had the opportunity to ask questions of and receive answers from, Overall Wireless and its management regarding the terms and conditions of this investment. (f) The Option and the Overall Wireless Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Metricom has been advised or is aware of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions, including, among other things: the availability of certain current public information about Overall Wireless, the resale occurring _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 15. 16 not less than two years after a party has purchased and paid for the security to be sold, the sale being through an unsolicited "broker's transaction" or in transactions directly with a market maker (as said term is defined under the Exchange Act) and the number of shares being sold during any three-month period not exceeding specified limitations. 4.3 FULL DISCLOSURE. This Agreement and the Exhibits hereto and all other documents delivered by Metricom to Overall Wireless or Stockholder or their representatives and agents in connection therewith or the transactions contemplated hereby do not contain any untrue statement of a material fact nor omit to state a material fact necessary in order to make the statements contained herein or therein not misleading. To the best of Metricom's knowledge, there are no facts that have had or are expected to have, individually or in the aggregate, a material adverse effect on the business, financial condition, assets, liabilities, operations or prospects of Metricom that has not been set forth in this Agreement, the Exhibits hereto, or the documents delivered to Overall Wireless and Stockholder described in Section 3.19(e). 5. CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE TIME; ADDITIONAL AGREEMENTS. 5.1 SYSTEM CONSTRUCTION. (a) As quickly as practicable following the execution of this Agreement, Overall Wireless will construct base stations having a minimum of five assigned nationwide channel pairs and place these base stations, along with associated mobile stations, in operation in seven of the geographic areas specified by Stockholder in her application for the FCC License (the "Application") in accordance with the requirements of 47 C.F.R. Section 90.725, as modified by FCC order ("Ten Percent Completion"). (b) After Ten Percent Completion, Overall Wireless will construct [*] (together with Ten Percent Completion, "Forty Percent Completion"). In connection therewith, the parties will do the following: (1) Within five months following the date of this Agreement, Metricom will submit to Overall Wireless [*] (the "Forty Percent Completion Date"). (2) No later than 30 days following delivery of the Metricom Proposal, Overall Wireless will notify Metricom that the Metricom Proposal is acceptable or, alternatively, that the Metricom Proposal is not acceptable and the reason(s) therefor. (3) If the Metricom Proposal is not acceptable to Overall Wireless, the parties will negotiate in good faith changes to the Metricom Proposal so that it is acceptable to Overall Wireless. [*] (4) [*] Overall Wirelsss will be responsible for all expenses incurred pursuant to the budget set forth in the Plan [*]. All equipment and other materials will be purchased by and be the property of Overall Wireless. All site leases will be negotiated on behalf of and held in the name of Overall Wireless. [*] (5) [*] (c) In addition to the foregoing, Metricom will provide reasonable assistance to Overall Wireless, as requested by Overall Wireless from time to time, in achieving Ten Percent Completion and Forty Percent Completion. (d) Overall Wireless will at all times retain control over all construction, finances, personnel, equipment, policies, FCC compliance and day-to-day operations of Overall Wireless, the Overall Wireless system and the FCC License until such time, if any, as the FCC approves the Merger and Metricom acquires Overall Wireless pursuant thereto. 5.2 NEGOTIATION WITH OTHERS. During the period from the date of this Agreement through the earlier of the termination of the Option without exercise and the Effective Time (the "Pre-Closing Period"), Overall Wireless and Stockholder will not, directly or indirectly, without the prior written consent of Metricom, (a) solicit or encourage the initiation of any inquiry, proposal or offer from any person or entity (other than Metricom) relating to a possible Acquisition Transaction; (b) participate in any discussions or negotiations or enter into any agreement with, or provide any non-public information to, any person or entity (other than _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 16. 17 Metricom) relating to or in connection with a possible Acquisition Transaction; or (c) consider, entertain or accept any proposal or offer from any person or entity (other than Metricom) relating to a possible Acquisition Transaction. For the purposes of this Agreement, "Acquisition Transaction" means any transaction involving (a) the sale or other disposition of all or substantially all of Overall Wireless' business or assets, including the FCC License; (b) the issuance, sale or other disposition of (1) any capital stock of Overall Wireless, (2) any option, call, warrant or right (whether or not immediately exercisable) to acquire any capital stock of Overall Wireless, or (3) any security, instrument or obligation that is or may become convertible into or exchangeable for any capital stock of Overall Wireless; or (c) any merger, consolidation, business combination, share exchange, reorganization or similar transaction involving Overall Wireless. 5.3 CONFIDENTIALITY. Each party to this Agreement will ensure that (a) such party and its or her representatives and agents will keep strictly confidential the existence and terms of this Agreement and the Exhibits hereto; and (b) unless the prior written consent of the other party is first received, neither such party nor any of its or her representatives or agents will issue or disseminate any press release or other publicity or otherwise make any disclosure of any nature regarding such existence or terms, except to the extent that a party is required by law to make any such disclosure. Notwithstanding the foregoing, Metricom will be permitted to issue a press release (in substance reasonably acceptable to Overall Wireless) regarding this Agreement and the transactions contemplated hereby. 5.4 INFORMATION AND ACCESS. During the Pre-Closing period, Overall Wireless will, and will cause its representatives to provide Metricom and Metricom's representatives and agents, with (a) reasonable access to Overall Wireless' representatives and agents, personnel and assets and to all existing books, records, tax returns, work papers and other documents and information relating to Overall Wireless; and (b) such copies of the existing books, records, tax returns work papers and other documents and information relating to Overall Wireless and they may reasonably request. 5.5 CONDUCT OF BUSINESS OF OVERALL WIRELESS. (a) Except as provided in Section 5.5(b), during the Pre-Closing Period, (1) Overall Wireless will conduct its business in the ordinary and usual course consistent with past practice and (2) Overall Wireless will use all commercially reasonable efforts to maintain and preserve intact its business organization, to keep available the services of its officers and employees and to maintain satisfactory relations with lessors, suppliers, contractors, distributors, customers and others having business relationships with Overall Wireless. (b) During the Pre-Closing Period, Overall Wireless will not do any of the following without Metricom's prior written consent: _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 17. 18 (1) declare, set aside or pay any dividend or make any other distribution in respect of any capital stock; (2) split, combine or reclassify any capital stock of Overall Wireless or repurchase, redeem or otherwise acquire any capital stock of Overall Wireless; (3) issue, deliver, pledge, encumber, sell or transfer, or authorize or propose the issuance, delivery, pledge, encumbrance, sale or transfer of, any shares of capital stock of Overall Wireless or any securities convertible into, or rights, warrants or options to acquire, any such shares of capital stock or other convertible securities, or make any change in its equity capitalization or to the terms of any equity security of Overall Wireless that is currently outstanding; (4) amend the certificate of incorporation, bylaws or other organizational or charter documents of Overall Wireless; (5) acquire (by merging or consolidating with, by purchasing any material portion of the capital stock or assets of or by any other means) any business or any corporation, partnership, association or other business organization or division thereof; (6) sell, lease, pledge or otherwise dispose of or encumber any of its assets except in the ordinary course of business; (7) issue or sell any debt securities or guarantee, endorse or otherwise become responsible for any obligation of any other person except in the ordinary course of business; (8) except in the ordinary course of business, make any loan or advance to any other person, other than travel and similar advances to employees in the ordinary course of business consistent with past practice; (9) prepay any material claim, liability or obligation, or pay, discharge or satisfy any material unliquidated or contingent liability except in the ordinary course of business; (10) change in any material respect the accounting methods or practices followed by Overall Wireless (including any material change in any assumption underlying, or any method of calculating, any bad debt, contingency or other reserve), except as may be required by changes in generally accepted accounting principles except in the ordinary course of business; or _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 18. 19 (11) authorize or propose any of the foregoing, or enter into any contract, agreement, commitment or arrangement contemplating any of the foregoing. 5.6 SECURITIES LAW COMPLIANCE. Prior to the Effective Time, Metricom will make all required filings with state regulatory authorities and will use all commercially reasonable efforts to obtain all regulatory approvals needed to ensure that the Metricom Common Stock to be issued in the Merger will be qualified or exempt from qualification under the securities or "blue sky" law of every jurisdiction of the United States in which any registered stockholder of Overall Wireless has an address of record on the record date for determining the stockholders entitled to notice of and to vote on the Merger. 5.7 ADDITIONAL AGREEMENTS. Metricom and Overall Wireless will use all commercially reasonable efforts to take, or cause to be taken, all actions necessary to consummate the Merger and make effective the other transactions contemplated by this Agreement. Without limiting the generality of the foregoing, Metricom and Overall Wireless will use all commercially reasonable efforts to (a) achieve Forty Percent Completion, (b) effect the transactions contemplated by Section 5.12, (c) obtain the consent and approval of each governmental authority (including the FCC), lessor or other person whose consent or approval is required (by virtue of any contractual provision or legal requirement or otherwise) in order to permit the consummation of the Merger or in order to enable Metricom or the Surviving Corporation to conduct its business in the manner in which such business is currently being conducted or is proposed to be conducted, and (d) effect all registrations and filings necessary to consummate the Merger. 5.8 RESIGNATION OF OFFICERS AND DIRECTORS. Overall Wireless will obtain and deliver to Metricom prior to the Closing the resignation of each officer and director of Overall Wireless. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 19. 20 5.9 REGISTRATION RIGHTS. (a) [*], Metricom will file with the SEC a registration statement on Form S-1 or other appropriate form of registration statement for the general registration of securities under the Securities Act, including, without limitation, Form S-3 (or any successor form to Form S-3) for a public distribution of shares of Metricom Common Stock issued to Stockholder in the Merger pursuant to Section 2 hereof and will use all commercially reasonable efforts to cause such securities to be registered for the public distribution thereof [*]. (b) In the event Metricom at any time or from time to time decides to register any Metricom Common Stock, whether or not for its own account, on a form that would be suitable for a registration involving the Metricom Common Stock held by Stockholder [*], Metricom will: (1) promptly give Stockholder written notice thereof (which will include a list of the jurisdictions in which the Company intends to attempt to qualify such securities under the applicable blue sky or other state securities laws) and (2) include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, [*] the Metricom Common Stock specified in a written request delivered to Metricom by Stockholder within 20 days after delivery of such written notice from Metricom (1) If the registration of which Metricom gives notice is for a registered public offering involving an underwriting, the Company will so advise Stockholder as a part of the written notice given pursuant to this Section 5.9(b). [*] Metricom and Stockholder will (together with the other holders distributing their securities through such underwriting) enter into an underwriting agreement containing terms not inconsistent with this Agreement with the representative of the underwriters selected by Metricom for such offering (the "Underwriter's Representative"). Stockholders will have no right to participate in the selection of the underwriters for an offering pursuant to this Section 5.9(b). (2) In the event the Underwriter's Representative advises Metricom that market factors (including, without limitation, the aggregate number of shares of Metricom Common Stock requested to be registered, the general condition of the market, and the status of the persons proposing to sell securities pursuant to the registration) require a limitation of the number of shares to be underwritten, the Underwriter's _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 20. 21 Representative may exclude some or all of Stockholder's Metricom Common Stock from such registration and underwriting. [*] (3) [*] (c) Metricom will keep Stockholder advised of the initiation and completion of such registration. [*], Metricom will: (1) Prepare and file with the SEC registration statement as described in Section 5.9(a) or 5.9(b) above and thereafter use all commercially reasonably efforts to cause such registration statements to become effective; (2) Prepare and file with the SEC such amendments, including pre-effective and post-effective amendments, and supplements to such registration statements and the prospectuses used in connection with such registration statements as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act and applicable securities laws of such states as Stockholder may reasonably request with respect to the disposition of all securities covered by such registration statement; (3) Furnish to Stockholder, without charge, such numbers of the registration statement and all amendments thereto, copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as she may reasonably request in order to facilitate the disposition of the securities covered by such registration statement; (4) Use all commercially reasonable efforts to register and qualify the securities covered by such registration statements under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by Stockholder, provided that Metricom will 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; (5) Notify Stockholder at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statements, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing and promptly file all amendments necessary to eliminate such misstatement or omission; (6) Cause all such shares of Metricom Common Stock to be listed on each securities exchange or market system on which similar securities issued by Metricom are then listed; (7) Provide a transfer agent and registrar for all such shares of Metricom Common Stock not later than the effective date of such registration statement; and (8) Provide Stockholder with copies of any opinions of Metricom's counsel and "comfort" letters of Metricom's independent accountants delivered to the underwriters of the shares subject to such registration statement. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 21. 22 (d) (1) Metricom will indemnify, to the extent permitted by law, Stockholder against all Damages (as defined below) caused by any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to Metricom by Stockholder for use therein or by Stockholder's failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after Metricom has furnished such holder with a sufficient number of copies of the same. "Damages" means any loss, damage, injury, decline in value, lost opportunity, liability, claim, demand, settlement, judgment, award, fine, penalty, tax, fee (including any legal fee, expert fee, accounting fee or advisory fee), charge, cost (including any cost of investigation) or expense of any nature. (2) Stockholder will furnish to Metricom in writing such information as Metricom reasonably requests for use in connection with the registration statement or prospectus contemplated by this Section 5.9 and, to the extent permitted by law, will indemnify Metricom, its directors and officers and each person or entity who controls Metricom (within the meaning of the Securities Act) against all Damages resulting from any untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing solely by Stockholder. (e) For a period not to exceed [*] days, Metricom will not be obligated to prepare and file, or be prevented from delaying or abandoning, or by written notice to the Stockholder, may suspend the use of (and Stockholder hereby agrees not to use a registration statement during such period) a registration statement pursuant to this Agreement at any time when Metricom, in its good faith judgment, reasonably believes: (1) that the filing thereof at the time requested, or the offering of Metricom Common Stock pursuant thereto, would materially and adversely affect (A) a pending or scheduled public offering or private placement of Metricom's securities, (B) an acquisition, merger, consolidation or similar transaction by or of Metricom, (C) pre-existing and continuing negotiations, discussions or pending proposals with respect to any of the foregoing transactions, or (D) the financial condition of Metricom in view of the disclosure of any pending or threatened litigation, claim, assessment or governmental investigation that may be required thereby; and _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 22. 23 (2) that the failure to disclose an material information with respect to the foregoing would cause a violation of the Securities Act or the Exchange Act. (f) Until [*], Stockholder will not sell more than [*] of the aggregate number of shares of Metricom Common Stock acquired by Stockholder in the Merger during any three-month period following the Closing. In addition, in connection with an underwritten public offering in which Stockholder's shares are included, Stockholder will enter into any standard "lock-up" agreement required by Underwriter's Representative. (g) Stockholder, at Stockholder's request and expense, will have access, at reasonable times and on reasonable advance notice, to appropriate corporate information of Metricom for purposes of Stockholder's "due diligence" investigation in connection with any public offering hereunder. Stockholder will hold in confidence any nonpublic information Stockholder may obtain as a result of such investigation. 5.10 EXISTENCE OF SURVIVING CORPORATION. Metricom will preserve the corporate existence of the Surviving Corporation for at least two years after the Closing. 5.11 COVENANT NOT TO COMPETE OR SOLICIT. Until the earlier of (a) the termination of the Option without exercise, and (b) the later of (1) two years following the Closing, and (2) such date as Stockholder no longer owns any Metricom Common Stock issued in the Merger, Stockholder will not: (a) participate in the establishment or operation of any other subscriber-based wireless communications network substantially competing with Metricom; _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 23. 24 (b) approach, contact or solicit existing or future customers of Metricom, any of its subsidiaries or Overall Wireless as to business competitive with such companies' business as of the date hereof or at any time prior to the date this covenant terminates; or (c) encourage or solicit any employee of Metricom, any of its subsidiaries or Overall Wireless to leave the employ of such company for any reason or to devote less than all of any such employee's efforts to the affairs of such company. The foregoing covenants will be construed as a series of separate covenants, one for each nation, each state of the United States, and each county of each such state. Except for geographic coverage, each such separate covenant will be identical in terms to the covenants set forth above. If, in any judicial proceeding, a court refuses to enforce any of such separate covenants (or any part thereof), then such unenforceable covenant (or such part) will be eliminated from this Agreement to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced. In the event that any of the provisions of this Section 5.11 are deemed to exceed the time, geographic or scope limitations permitted by applicable law, then such provisions will be reformed to the maximum time, geographic or scope limitations, as the case may be, permitted by applicable laws. 5.12 FCC MATTERS. Overall Wireless and Stockholder will act in compliance with the applicable rules and regulations of the FCC, and will take whatever actions are necessary in order to ensure that the FCC License remains in full force and effect and in good standing through the Effective Time. In the event of any FCC action, or the filing or issuance by the FCC of any order, notice or complaint against Overall Wireless or Stockholder or any of their employees or affiliates, or if Stockholder, Overall Wireless or any of Overall Wireless' officers and directors learn of any threat of such an action, order, notice or complaint, Overall Wireless will promptly notify Metricom thereof in writing and take all reasonable measures to contest in good faith or seek removal, resolution or rescission of such action, order, notice of complaint. 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF METRICOM. The obligations of Metricom to effect the Merger (after exercise of the Option) and otherwise consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or prior to the Closing, of each of the following conditions: 6.1 REPRESENTATIONS AND WARRANTIES ACCURATE. (a) The representations and warranties of Overall Wireless and Stockholder contained in this Agreement will have been accurate in all material respects as of the date of this Agreement. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 24. 25 (b) The representations and warranties of Overall Wireless and Stockholder contained in this Agreement will have been accurate in all material respects as of the date the Option is exercised (giving effect only to an updated Disclosure Schedule delivered to Metricom in accordance with Section 1.1(b)). (c) The representations and warranties of Overall Wireless and Stockholder contained in this Agreement will be accurate in all respects as of the Closing Date as if made on and as of the Closing Date, except that any inaccuracies in such representations and warranties will be disregarded if the circumstances giving rise to all such inaccuracies (considered collectively) do not constitute, and would not reasonably be expected to result in, a Material Adverse Effect (it being understood that, for purposes of determining the accuracy of such representations and warranties, any update of or modification to the Disclosure Schedule made or purported to have been made after the date the Option is exercised will be disregarded). 6.2 COMPLIANCE WITH COVENANTS. Overall Wireless and Stockholder will have complied with and performed in all material respects each covenant contained in this Agreement and any other agreement between either of them and Metricom that is required to be performed by Overall Wireless or Stockholder on or prior to the Closing Date. 6.3 NO MATERIAL ADVERSE EFFECT. Since the date of this Agreement, Overall Wireless will not have suffered any Material Adverse Effect and there will not have occurred any change or development, or any combination of changes or developments, that would reasonably be expected to have a Material Adverse Effect on Overall Wireless. 6.4 ABSENCE OF RESTRAINT. No order to restrain, enjoin or otherwise prevent the consummation of the Merger or any of the other transactions contemplated by this Agreement will have been entered by any court or governmental authority, including the FCC. 6.5 NO GOVERNMENTAL LITIGATION. There will not be pending or threatened any Proceeding in which a governmental authority is or is threatened to become a party: (a) challenging or seeking to restrain or prohibit the consummation of the Merger; (b) relating to the Merger and seeking to obtain from Metricom or any of its subsidiaries any damages that may be material to Metricom; (c) seeking to prohibit or limit in any material respect Metricom's ability to vote, receive dividends with respect to or otherwise exercise ownership rights with respect to the stock of the Surviving Corporation; or (d) that would materially and adversely affect the right of Metricom, the Surviving Corporation or any subsidiary of Metricom to own the assets or operate the business of Overall Wireless. 6.6 NO OTHER LITIGATION. There will not be pending any proceeding in which there is a reasonable possibility of an outcome that would have a Material Adverse Effect on Metricom or (a) challenging or seeking to restrain or prohibit the consummation of the Merger or any of _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 25. 26 the other transactions contemplated hereby; (b) relating to the Merger and seeking to obtain from Metricom or any of its subsidiaries any damages that may be material to Metricom; (c) seeking to prohibit or limit in any material respect Metricom's ability to vote, receive dividends with respect to or otherwise exercise ownership rights with respect to the stock of the Surviving Corporation; or (d) that would affect adversely the right of Metricom, the Surviving Corporation or any subsidiary of Metricom to own the assets or operate the business of Overall Wireless. 6.7 REQUIRED CONSENTS AND APPROVALS. Metricom and Overall Wireless will have received all approvals, licenses, consents, assignments and authorizations of governmental authorities, including the FCC, and other persons as may be required (a) to permit the performance by Metricom, Overall Wireless and Stockholder of their respective obligations under this Agreement and the consummation of the Merger and (b) to permit Metricom and the Surviving Corporation to conduct their business and operations in the manner currently conducted. 6.8 [*] 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF OVERALL WIRELESS AND STOCKHOLDER. The obligations of Overall Wireless and Stockholder to effect the Merger are subject to the fulfillment, at or prior to the Closing, of each of the following conditions: 7.1 REPRESENTATIONS AND WARRANTIES ACCURATE. The representations and warranties of Metricom contained in this Agreement will have been accurate in all material respects as of the date of this Agreement and as of the Closing Date. 7.2 COMPLIANCE WITH COVENANTS. Metricom will have complied with and performed in all material respects each covenant contained in this Agreement and any other agreement between Metricom and Overall Wireless that is required to be performed by Metricom on or prior to the Closing Date. 7.3 EXERCISE OF OPTION. The Option will have been exercised, and such exercise will not have been rescinded, by Metricom. 8. TERMINATION OF AGREEMENT. 8.1 TERMINATION. This Agreement may be terminated prior to the Effective Time: (a) by mutual written consent of the respective Boards of Directors of Metricom and Overall Wireless; _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 26. 27 (b) by either Metricom or Overall Wireless if (1) a court of competent jurisdiction or Governmental Authority issues a final and nonappealable order, decree or ruling, or takes any other action, having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger or (2) the terminating party has not committed a material Breach and all of the conditions to Closing have not been satisfied or waived by [*]; (c) by Metricom if there has been a material Breach by Overall Wireless or Stockholder of any representation, warranty or covenant in this Agreement, which Breach has not been cured within [*] of the date on which written notice of such Breach was first delivered to Overall Wireless or Stockholder, as the case may be, or which Breach is not capable of being cured within [*]; (d) by Overall Wireless if (1) there has been a material Breach by Metricom of any representation, warranty or covenant in this Agreement, which Breach has not been cured within [*] of the date on which written notice of such Breach was first delivered to Metricom, or which Breach is not capable of being cured within [*] or (2) [*]; (e) by Metricom if Metricom reasonably determines that the satisfaction of any condition set forth in Section 6 has become impossible (other than as a result of any failure on the part of Metricom to comply with or perform any covenant or obligation of Metricom set forth in this Agreement or undertaken pursuant to the Plan); (f) by Overall Wireless if Overall Wireless reasonably determines that the satisfaction of any condition set forth in Section 7 has become impossible (other than as a result of any failure on the part of Overall Wireless to comply with or perform any covenant or obligation of Overall Wireless set forth in this Agreement); (g) By Metricom if (1) Metricom has not committed a material Breach of this Agreement or any other written agreement between Metricom and Overall Wireless or any obligation undertaken pursuant to the Plan, and (2) Metricom reasonably determines that there is substantial risk that Overall Wireless will lose the FCC License due to a failure to achieve Ten Percent Completion by [*] or Forty Percent Completion by the Forty Percent Completion Date [*] ; or (h) By Metricom in accordance with the terms of Section 1.4. 8.2 TERMINATION PROCEDURES. If Metricom wishes to terminate this Agreement pursuant to Section 8.1(c), Section 8.1(e), Section 8.1(f) or Section 8.1(g), Metricom will deliver to Overall Wireless and Stockholder a written notice stating that Metricom is terminating this Agreement and setting forth a brief description of the basis on which Metricom is terminating this Agreement. If Overall Wireless wishes to terminate this Agreement pursuant _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 27. 28 to Section 8.1(d), Overall Wireless will deliver to Metricom a written notice stating that Overall Wireless is terminating this Agreement and setting forth a brief description of the basis on which Overall Wireless is terminating this Agreement. 8.3 EFFECT OF TERMINATION. In the event of the termination of this Agreement as provided in Section 1.4 or 8.1, this Agreement will be of no further force or effect; provided, however, that (1) this Section 8.3 and Sections 5.3, 9 (excluding Section 9.1), 10.9 and 10.10 will survive the termination of this Agreement and will remain in full force and effect; and (2) the termination of this Agreement will not relieve any party from any liability for any Breach. 9. INDEMNIFICATION. 9.1 [*] (a) The representations, warranties, covenants and obligations of each party will [*] (b) The representations, warranties, covenants and obligations of each party, and the rights and remedies that may be exercised by the persons and entities entitled to be indemnified, will not be limited or otherwise affected by or as a result of any information (other than (1) with respect to Overall Wireless and Stockholder, the original Disclosure Schedule and the updated Disclosure Schedule, if any, delivered pursuant to Section 1.1(b), and (2) with respect to Metricom, publicly-available documents filed by Metricom with the Securities and Exchange Commission) furnished to, or any investigation made by or knowledge of, any of such persons or entities or any of their representatives or agents. 9.2 INDEMNIFICATION. (a) From and after the date of this Agreement, regardless of whether the Option is exercised, Stockholder will hold harmless and indemnify Metricom and each of its current and future affiliates (including Overall Wireless and Sub) and their respective representatives, agents, successors and assigns (the "Metricom Indemnitees") from and against, and will compensate and reimburse each of the Metricom Indemnitees for, any Damages that are directly or indirectly suffered or incurred by any of the Metricom Indemnitees or to which any of the Metricom Indemnitees may otherwise become subject at any time (regardless of whether or not such Damages relate to any third-party claim) and that arise directly or indirectly from or as a direct or indirect result of, or are directly or indirectly connected with (1) any Breach of any representation or warranty made by Overall Wireless or Stockholder in this Agreement (without giving effect to any update to the Disclosure Schedule other than one delivered pursuant to Section 1.1(b)); (2) any Breach of any representation, warranty, statement, information or provision contained in the Disclosure Schedule or in any other document delivered or otherwise ___________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 28. 29 made available to Metricom or any of its representatives or agents by or on behalf of Overall Wireless, Stockholder or any of their representatives and agents; (3) any Breach of any covenant or obligation of Overall Wireless or Stockholder; (4) U.S. Mobilcomm, Inc., et al. v. Jean Warren, et al., Case No. CIV-94-1582-M (United States District Court for the Western District of Oklahoma) and any related litigation; (5) any system operations prior to the Closing Date not contemplated by this Agreement or the Plan or previously agreed to in writing by Metricom; (6) the failure of Overall Wireless, as of or at any time prior to the Effective Time, to be a validly existing "subchapter S" corporation for federal income tax purposes and under analogous provisions, to the extent they exist, of the laws of each state in which Overall Wireless would be required to pay income tax on taxable income; or (7) any proceeding relating directly or indirectly to any Breach, alleged Breach, liability or matter of the type referred to in clause (1), (2), (3), (4), (5) or (6) above (including any proceeding commenced by any Metricom Indemnitee for the purpose of enforcing any of its rights under this Section 9). If there is any Breach of any representation, warranty or other provision relating to Overall Wireless or Overall Wireless' business, condition, assets, liabilities, operations or prospects (or any aspect or portion thereof) or if Overall Wireless suffers any Damages as a result of the litigation described above, then Metricom itself will be deemed, by virtue of its ownership of Overall Wireless, to have incurred Damages as a result of such Breach. (b) From and after the date of this Agreement, regardless of whether the Option is exercised, Metricom will hold harmless and indemnify Stockholder and each of her current and future affiliates and their respective representatives, agents, successors and assigns (the "Stockholder Indemnitees") from and against, and will compensate and reimburse each of the Stockholder Indemnitees for, any Damages that are directly or indirectly suffered or incurred by any of the Stockholder Indemnitees or to which any of the Stockholder Indemnitees may otherwise become subject at any time (regardless of whether or not such Damages relate to any third-party claim) and that arise directly or indirectly from or as a direct or indirect result of, or are directly or indirectly connected with (1) any Breach of any representation or warranty made by Metricom in this Agreement; (2) any Breach of any representation, warranty, statement, information or provision contained in any other document delivered or otherwise made available to Stockholder or any of her representatives or agents by or on behalf of Metricom or any of its representatives and agents; (3) any Breach of any covenant or obligation of Metricom; (4) any system operations after the Closing Date; or (5) any proceeding relating directly or indirectly to any Breach, alleged Breach, liability or matter of the type referred to in clause (1), (2), (3) or (4) above (including any proceeding commenced by any Stockholder Indemnitee for the purpose of enforcing any of its rights under this Section 9). 9.3 THRESHOLD. (a) Subject to Section 9.3(b), neither Stockholder nor Metricom will be required to make any indemnification payment pursuant to Section 9.2 for any Breach of any of its representations and warranties until such time as the total amount of all Damages (including the Damages arising from such Breach and all other Damages arising from any other Breaches of any representations or warranties) that have been directly or indirectly suffered or incurred by any one or more of the Metricom Indemnitees or the Stockholder Indemnitees, respectively, or to which any one or more of the Metricom Indemnitees or the Stockholder Indemnitees, respectively, has or have otherwise become subject, exceeds [*]. (b) The limitation on Stockholders' indemnification obligations that is set forth in Section 9.3(a) will not apply to (1) any Breach arising directly or indirectly from any circumstance of which Overall Wireless or Stockholder had knowledge on or prior to the Closing Date, [*]. The limitation on Metricom's indemnification obligations that is set forth in Section 9.3(a) will not apply to (1) any Breach arising directly or indirectly from any circumstance of which Metricom had knowledge on or prior to the Closing Date, [*]. 9.4 RIGHT TO REQUIRE CURE OF BREACH. Without limiting the generality of anything contained in Section 9.2, if there is any Breach of any representation or warranty made by _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 29. 30 Overall Wireless or Stockholder, the one hand, or Metricom, on the other hand, then Stockholder or Metricom, respectively, will be obligated to pay such amounts to Metricom or Stockholder, respectively, and take such other actions as Metricom or Stockholder, respectively, may in good faith request for the purpose of causing such Breach to be corrected, cured and eliminated in all respects (at no cost to Metricom or Stockholder, respectively). 9.5 NO CONTRIBUTION. Stockholder and Metricom each waives, and acknowledges and agrees that such party will not have and will not exercise or assert or attempt to exercise or assert, any right of contribution or right of indemnity or any other right or remedy against Overall Wireless in connection with any indemnification obligation or any other liability to which such party may become subject under this Agreement or otherwise in connection with any of the transactions contemplated hereby. 9.6 INTEREST. If a party is required to indemnify any other person or entity pursuant to this Section 9 with respect to any Damages representing out-of-pocket payments or losses, such party will also be required to pay such other person or entity interest on the amount of such Damages (for the period commencing as of the date on which such other person or entity first incurred or otherwise became subject to such Damages and ending on the date on which the applicable indemnification payment is made by Stockholder) at a floating rate one percentage point above the rate of interest publicly announced by Bank of America, N.T. & S.A. from time to time as its prime, base or reference rate, except to the extent the time value of money is already reflected in the amount of such Damages. 9.7 NONEXCLUSIVITY OF INDEMNIFICATION REMEDIES. The indemnification remedies and other remedies provided in this Section 9 will not be deemed to be exclusive. Accordingly, the exercise by any person or entity of any of its rights under this Section 9 will not be deemed to be an election of remedies and will not be deemed to prejudice, or to constitute or operate as a waiver of, any other right or remedy that such person or entity may be entitled to exercise. 9.8 EXERCISE OF REMEDIES BY METRICOM INDEMNITEES OTHER THAN METRICOM. No Metricom Indemnitee (other than Metricom or any successor thereto or assign thereof) will be permitted to assert any indemnification claim or exercise any other remedy under this Agreement unless Metricom (or any successor thereto or assign thereof) has consented to the assertion of such indemnification claim or the exercise of such other remedy. 10. MISCELLANEOUS. 10.1 GOVERNING LAW. This Agreement will be governed in all respects by the laws of the State of California as such laws are applied to agreements between California residents entered into and performed entirely in California. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 30. 31 10.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein, the provisions hereof will inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. 10.3 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and no party will be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein, therein or in any other written agreement entered into among the parties hereto. 10.4 SEVERABILITY. In case any provision of the Agreement is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. 10.5 AMENDMENT. This Agreement may be amended only by a writing executed by Metricom, Overall Wireless and Stockholder. 10.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by another party under the Agreements will impair any such right, power or remedy, nor will it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character on any party's part of any breach, default or noncompliance under this Agreement or any waiver on such party's part of any provisions or conditions of this Agreements must be in writing and will be effective only to the extent specifically set forth in such writing. All remedies under the Agreements or otherwise afforded to any party, will be cumulative and not alternative. 10.7 NOTICES. Any notice or other communication required or permitted to be delivered to any party under this Agreement will be in writing and will be deemed properly delivered, given and received when delivered (by hand, by certified mail with return receipt requested, by courier or express delivery service or by telecopier) to the address or telecopier number set forth beneath the name of such party below (or to such other address or telecopier number as such party shall have specified in a written notice given to the other parties hereto): _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 31. 32 if to Metricom: Metricom, Inc. 980 University Avenue Los Gatos, CA 95030 Attention: William D. Swain Telecopier: (408) 399-8274 with a copy to: Cooley Godward Castro Huddleson & Tatum One Maritime Plaza, 20th Floor San Francisco, CA 94111-3580 Attention: Kenneth L. Guernsey Telecopier: (415) 951-3699 if to Overall Wireless or Stockholder: Jean Warren [*] with a copy to: McAfee & Taft Tenth Floor, Two Leadership Square 211 N. Robinson Oklahoma City, OK 73102 Attention: Gary F. Fuller Facsimile: (405) 235-0439 and Lukas, McGowan, Nace and Gutierrez, Chartered 1111 Nineteenth Street, NW Suite 1200 Washington, DC 20036 Attention: Gerald S. McGowan and George L. Lyon, Jr. Facsimile: (202) 842-4485 10.8 EXPENSES. Except as provided in Section 10.9, Metricom will pay all costs and expenses that it or Sub incurs, and Stockholder will pay all costs and expenses that it or Overall Wireless incurs (either directly or through a capital contribution to Overall Wireless in an _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 32. 33 amount equal to any costs and expenses paid by Overall Wireless), with respect to the negotiation, execution, delivery and performance of this Agreement and the Exhibits hereto. 10.9 ATTORNEYS' FEES. In the event that any dispute among the parties to this Agreement should result in litigation, the prevailing party in such dispute will be entitled to recover from the losing party or parties all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which will include, without limitation, all fees, costs and expenses of appeals. 10.10 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. The rights and remedies of the parties hereto will be cumulative (and not alternative). In the event of any Breach or threatened Breach by any party of any covenant, obligation or other provision set forth in this Agreement, the other parties will be entitled (in addition to any other remedy that may be available to it) to (a) a decree or order of specific performance or mandamus to enforce the observance and performance of such covenant, obligation or other provision, and (b) an injunction restraining such Breach or threatened Breach. None of the parties, the Metricom Indemnitees or the Stockholder Indemnitees will be required to provide any bond or other security in connection with any such decree, order or injunction or in connection with any related action or proceeding. 10.11 TITLES AND SUBTITLES. The titles of the sections and subsections of the Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 10.12 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which will be an original, but all of which together will constitute one instrument. IN WITNESS WHEREOF, the parties hereby have executed this Agreement as of the date first above written. METRICOM, INC. OVERALL WIRELESS COMMUNICATIONS CORPORATION By: /s/ Gary M. Green By: /s/ Jean Warren -------------------------------------- --------------------------- Name: Gary M. Green Name: Jean Warren Title: Chief Operating Officer Title: President /s/ Jean Warren - ------------------------------------------ Jean Warren _______________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 33. EX-10.28 3 LOAN & SECURITY AGREEMENT 1 EXHIBIT 10.28 LOAN AND SECURITY AGREEMENT THIS LOAN AND SECURITY AGREEMENT (this "Loan Agreement") is made as of February 7, 1996 among METRICOM, INC. ("Lender"), OVERALL WIRELESS COMMUNICATIONS CORPORATION ("Borrower") and Jean Warren (with respect to Section 11.9 only). RECITALS Borrower wishes to obtain credit from Lender, and Lender desires to extend credit to Borrower. This Agreement sets forth the terms on which Lender will advance credit to Borrower, and Borrower will repay the amounts owing to Lender. AGREEMENT The parties to this Agreement agree as follows: 1. DEFINITIONS AND CONSTRUCTION. 1.1 DEFINITIONS. Unless otherwise defined herein, capitalized terms have the meanings given them in the Option Agreement (as defined below). As used in this Agreement, the following terms will have the following definitions: (a) "ACCOUNTS" means all presently existing and hereafter arising accounts, contract rights, and all other forms of obligations owing to Borrower arising out of the sale or lease of goods (including, without limitation, the licensing of software and other technology) or the rendering of services by Borrower, whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Borrower and Borrower's Books relating to any of the foregoing. (b) "BORROWER'S BOOKS" means all of Borrower's books and records including ledgers; records concerning Borrower's assets or liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment containing such information. (c) "CODE" means the California Uniform Commercial Code. (d) "COLLATERAL" means the property described on EXHIBIT A attached hereto. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 2 (e) "EQUIPMENT" means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which Borrower has any interest. (f) "GAAP" means generally accepted accounting principles as in effect from time to time. (g) "INSOLVENCY PROCEEDING" means any proceeding commenced by or against any person or entity under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief. (h) "INVENTORY" means all present and future inventory in which Borrower has any interest, including merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products intended for sale or lease or to be furnished under a contract of service, of every kind and description now or at any time hereafter owned by or in the custody or possession, actual or constructive, of Borrower, including such inventory as is temporarily out of its custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Borrower's Books relating to any of the foregoing. (i) "IRC" means the Internal Revenue Code of 1986, as amended, and the regulations thereunder. (j) "LIEN" means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance. (k) "LOAN DOCUMENTS" means, collectively, this Agreement, the Note, the Pledge Agreement and any other agreement entered into between Borrower and Lender in connection with this Agreement, all as amended or extended from time to time. (l) "MATERIAL ADVERSE EFFECT" means a material adverse effect on (1) the business operations or condition (financial or otherwise) of Borrower or (2) the ability of Borrower to repay the Obligations or otherwise perform its obligations under the Loan Documents. (m) "MATURITY DATE" means [*]. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 2. 3 (n) "NEGOTIABLE COLLATERAL" means all of Borrower's present and future letters of credit of which it is a beneficiary, notes, drafts, instruments, securities, documents of title, and chattel paper, and Borrower's Books relating to any of the foregoing. (o) "OBLIGATIONS" means all debt, principal, interest, Lender's costs and 1expenses in the enforcement of this Agreement, and other amounts owed to Lender by Borrower pursuant to this Agreement or any other Loan Document, whether absolute or contingent, due or to become due, now existing or hereafter arising, including any interest that accrues after the commencement of an Insolvency Proceeding. (p) "OPTION AGREEMENT" that certain Option Agreement and Agreement and Plan of Reorganization among Lender, Borrower and Jean Warren dated as of the date hereof. (q) "PERSON" means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency. (r) "PLEDGE AGREEMENT" means that certain Stock Pledge Agreement dated as of the date hereof between Jean Warren and Lender. (s) "RESPONSIBLE OFFICER" means each of the Chief Executive Officer, the Chief Financial Officer and the Controller of Borrower. 1.2 ACCOUNTING TERMS. All accounting terms not specifically defined herein will be construed in accordance with GAAP and all calculations made hereunder will be made in accordance with GAAP. When used herein, the term "financial statements" includes the notes and schedules thereto. 2. LOAN AND TERMS OF PAYMENT. 2.1 ADVANCES. (a) At any time from the date hereof through [*], Borrower may from time to time request advances (each a "Level One Advance" and collectively, the "Level One Advances") from Lender [*]. To evidence each Level One Advance, Borrower will deliver to Lender, at the time of each Level One Advance request, an invoice for the equipment to be purchased or other costs relating to construction, deployment and operation. The Level One Advances will be used only to purchase equipment for and pay construction, operation and other costs associated with achieving and maintaining Ten Percent Completion. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 3. 4 (b) At any time following Ten Percent Completion through the termination of the Option Agreement, Borrower may from time to time request advances (each a "Level Two Advance" and collectively, the "Level Two Advances") from Lender [*]. To evidence each Level Two Advance, Borrower will deliver to Lender, at the time of each Level Two Advance request, an invoice for the equipment to be purchased or other costs relating to construction, deployment and operation to be paid. The Level Two Advances will be used only to purchase equipment for and pay construction, operation and other costs associated with achieving and maintaining Forty Percent Completion. (c) All Advances will be payable in full in one installment of principal, plus all accrued interest, on the Maturity Date. (d) When Borrower desires to obtain an Advance, Borrower will notify Lender by facsimile transmission to be received no later than [*] before the day on which the Advance is to be made. Such notice will be substantially in the form of EXHIBIT B. The notice will be signed by a Responsible Officer and include a copy of the invoices described in this Section 2.1. If all applicable conditions set forth in Section 3 have been met, Lender will loan to Borrower, by check or wire transfer as Borrower may specify, cash in the amount requested by the Advance within ten days of receipt of such notice. (e) [*]. 2.2 INTEREST RATE, PAYMENT, AND CALCULATION. Except as set forth in this Section 2.2, any Advances will bear interest, on the outstanding principal balance, at a rate equal to [*] per annum. All Obligations will bear interest, from and after the occurrence of an Event of Default, at a rate [*]. Interest hereunder will be due and payable together with the principal on the Maturity Date. All interest chargeable under the Loan Documents will be computed on the basis of a 360-day year for the actual number of days elapsed. 3. CONDITIONS OF LOANS. 3.1 CONDITIONS PRECEDENT TO INITIAL LEVEL ONE ADVANCE. The obligation of Lender to make the initial Level One Advance is subject to the condition precedent that Lender will have received, in form and substance reasonably satisfactory to Lender, the following: (a) this Agreement and the Note; (b) the Pledge Agreement; _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 4. 5 (c) a governmental certificate as to the corporate standing of Borrower in its jurisdiction of incorporation; (d) a certificate of Borrower's Secretary with respect to Borrower's Certificate of Incorporation and Bylaws, and authorizing resolutions of Borrower's board of directors, and containing incumbency information and specimen signatures of Responsible Officers; (e) financing statements (Forms UCC-1); (f) insurance certificate; and (g) such other documents, and completion of such other matters, as Lender may reasonably deem necessary or appropriate. 3.2 CONDITIONS PRECEDENT TO INITIAL LEVEL TWO ADVANCE. The obligation of Lender to make the initial Level Two Advance is subject to the condition precedent that Borrower will have complied with the conditions precedent to all Level One Advances. 3.3 CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of Lender to make each Advance, including the initial Advance, is further subject to the following conditions: (a) timely receipt by Lender of the Payment/Advance Request Form as provided in Section 2.1; and (b) the representations and warranties of Borrower contained in Section 5 will be true and correct in all material respects on and as of the date of such Payment/Advance Request Form and on the effective date of each Advance as though made at and as of each such date, and no Event of Default will have occurred and be continuing, or would result from such Advance. The making of each Advance will be deemed to be a representation and warranty by Borrower on the date of such Advance as to the accuracy of the facts referred to in this Section 3.3(b). 4. CREATION OF SECURITY INTEREST. 4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants to Lender a continuing security interest in all presently existing and hereafter acquired or arising Collateral in order to secure prompt repayment of any and all Obligations and in order to secure prompt performance by Borrower of each of its covenants and duties under the Loan Documents. Such security interest constitutes a valid, first priority security interest in the presently existing Collateral, and will constitute a valid, first priority security interest in Collateral acquired after the date hereof. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 5. 6 4.2 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. Borrower will from time to time execute and deliver to Lender, at the request of Lender, all Negotiable Collateral, all financing statements and other documents that Lender may reasonably request, in form satisfactory to Lender, to perfect and continue perfected Lender's security interests in the Collateral and in order to fully consummate all of the transactions contemplated under the Loan Documents. 4.3 RIGHT TO INSPECT. Lender (through any of its officers, employees, or agents) will have the right, upon reasonable prior notice, from time to time during Borrower's usual business hours, to inspect Borrower's Books and to make copies thereof and to check, test, and appraise the Collateral in order to verify Borrower's financial condition or the amount, condition of, or any other matter relating to, the Collateral. 5. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender as follows: 5.1 INCORPORATION OF REPRESENTATIONS AND WARRANTIES. The representations and warranties of Borrower contained in Section 3 of the Option Agreement are hereby incorporated herein by reference. 5.2 FULL DISCLOSURE. No representation, warranty or other statement made by Borrower in any certificate or written statement furnished to Lender contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not misleading. 5.3 AUTHORIZATION; BINDING OBLIGATION. Borrower has all requisite corporate power and authority to execute and deliver this Agreement and to carry out the provisions of this Agreement. All corporate action on the part of Borrower, its officers, directors and stockholders necessary for the authorization of this Agreement and the performance of all obligations of Borrower hereunder. This Agreement is a valid and binding obligation of Borrower, enforceable in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors' rights; (b) general principles of equity that restrict the availability of equitable remedies; and (c) as the indemnification provisions of Section 9 of this Agreement may be limited by applicable law. 5.4 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery, and performance of and compliance with this Agreement will not, with or without the passage of time or giving of notice, result in any such material violation, or be in conflict with or constitute a default under any term of its certificate of incorporation or bylaws, or of any mortgage, indenture, _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 6. 7 contract, agreement or instrument to which it is a party or by which it is bound or of any judgment, decree, order, writ or, to the best of Borrower's knowledge, any statute, rule or regulation applicable to Borrower, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of Borrower or the suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to Borrower, its business or operations or any of its assets or properties. 5.5 LITIGATION. There is no action, suit, proceeding or investigation pending or, to the best of Borrower's knowledge, currently threatened against Borrower or Stockholder that questions the validity of this Agreement, the right of Borrower to enter into this Agreement or to consummate the transactions contemplated hereby. 5.6 COMPLIANCE WITH LAWS; PERMITS. No governmental orders, permissions, consents, approvals or authorizations are required to be obtained and no registrations or declarations are required to be filed in connection with the execution and delivery by Borrower of this Agreement except such as has been duly and validly obtained or filed, or with respect to any filings that must be made after the execution of this Agreement, as will be filed in a timely manner. Lender represents and warrants to Borrower as follows: 5.7 INCORPORATION OF REPRESENTATIONS AND WARRANTIES. The representations and warranties of Lender contained in Section 4 of the Option Agreement are hereby incorporated herein by reference. 5.8 FULL DISCLOSURE. No representation, warranty or other statement made by Lender in any certificate or written statement furnished to Borrower contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not misleading. 5.9 AUTHORIZATION; BINDING OBLIGATION. Lender has all requisite corporate power and authority to execute and deliver this Agreement and to carry out the provisions of this Agreement. All corporate action on the part of Lender, its officers, directors and stockholders necessary for the authorization of this Agreement and the performance of all obligations of Lender hereunder. This Agreement is a valid and binding obligation of Lender, enforceable in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors' rights; (b) general principles of equity that restrict the availability of equitable remedies; and (c) as the indemnification provisions of Section 9 of this Agreement may be limited by applicable law. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 7. 8 5.10 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery, and performance of and compliance with this Agreement will not, with or without the passage of time or giving of notice, result in any such material violation, or be in conflict with or constitute a default under any term of its certificate of incorporation or bylaws, or of any mortgage, indenture, contract, agreement or instrument to which it is a party or by which it is bound or of any judgment, decree, order, writ or, to the best of Lender's knowledge, any statute, rule or regulation applicable to Lender, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of Lender or the suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to Lender, its business or operations or any of its assets or properties. 5.11 LITIGATION. There is no action, suit, proceeding or investigation pending or, to the best of Lender's knowledge, currently threatened against Lender that questions the validity of this Agreement, the right of Lender to enter into this Agreement or to consummate the transactions contemplated hereby. 5.12 COMPLIANCE WITH LAWS; PERMITS. No governmental orders, permissions, consents, approvals or authorizations are required to be obtained and no registrations or declarations are required to be filed in connection with the execution and delivery by Lender of this Agreement except such as has been duly and validly obtained or filed, or with respect to any filings that must be made after the execution of this Agreement, as will be filed in a timely manner. 6. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that, until payment in full of all outstanding Obligations, and for so long as Lender may have any commitment to make an Advance hereunder, Borrower will do all of the following: 6.1 GOOD STANDING. Borrower will maintain its corporate existence and good standing in its jurisdiction of incorporation and maintain qualification in each jurisdiction in which the failure to so qualify could have a Material Adverse Effect. Borrower will maintain, to the extent consistent with prudent management of Borrower's business, in force all licenses, approvals and agreements, the loss of which could have a Material Adverse Effect. 6.2 GOVERNMENT COMPLIANCE. Borrower will comply with all statutes, laws, ordinances and government rules and regulations to which it is subject, noncompliance with which could have a Material Adverse Effect or a material adverse effect on the Collateral or the priority of Lender's Lien on the Collateral. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 8. 9 6.3 TAXES. Borrower will make due and timely payment or deposit of all material federal, state, and local taxes, assessments, or contributions required of it by law, and will execute and deliver to Lender, on demand, appropriate certificates attesting to the payment or deposit thereof; and Borrower will make timely payment or deposit of all material tax payments and withholding taxes required of it by applicable laws, including, but not limited to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request, furnish Lender with proof satisfactory to Lender indicating that Borrower has made such payments or deposits; provided that Borrower need not make any payment if the amount or validity of such payment is contested in good faith by appropriate proceedings and is reserved against (to the extent required by GAAP) by Borrower. 6.4 INSURANCE. (a) Borrower, at its expense, will maintain liability insurance and will keep the Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as described in the original Disclosure Schedule. (b) All such policies of insurance will be in such form, with such companies, and in such amounts as reasonably satisfactory to Lender. All such policies of property insurance will contain a lender's loss payable endorsement, in a form satisfactory to Lender, showing Lender as an additional loss payee thereof and all liability insurance policies will show the Lender as an additional insured, and will specify that the insurer must give at least 20 days' notice to Lender before canceling its policy for any reason. Borrower will deliver to Lender certified copies of such policies of insurance and evidence of the payments of all premiums therefor. All proceeds payable under any such policy will, at the option of Lender, be payable to Lender to be applied on account of the Obligations. 6.5 FURTHER ASSURANCES. At any time and from time to time Borrower will execute and deliver such further instruments and take such further action as may reasonably be requested by Lender to effect the purposes of this Agreement. 7. EVENTS OF DEFAULT. Any one or more of the following events will constitute an Event of Default by Borrower under this Agreement: 7.1 PAYMENT DEFAULT. If Borrower fails to pay, when due, any of the Obligations. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 9. 10 7.2 COVENANT DEFAULT. (a) If Borrower or Jean Warren commits a material Breach under the Option Agreement and as to any Breach that can be cured, has failed to cure such default within [*] after Borrower receives notice thereof or any officer of Borrower becomes aware thereof (provided that no Advances will be required to be made during such cure period), or (b) If Borrower or Jean Warren fails or neglects to perform, keep, or observe any other material term, provision, condition, covenant, or agreement contained in this Agreement, in any of the Loan Documents, or in any other present or future agreement between Borrower and Lender and as to any default under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure such default within [*] after Borrower receives notice thereof or any officer of Borrower becomes aware thereof (provided that no Advances will be required to be made during such cure period); 7.3 ATTACHMENT. If any material portion of Borrower's assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within [*], or if Borrower is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if a judgment or other claim becomes a lien or encumbrance upon any material portion of Borrower's assets, or if a notice of lien, levy, or assessment is filed of record with respect to any of Borrower's assets by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within [*] after Borrower receives notice thereof, provided that none of the foregoing will constitute an Event of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest by Borrower (provided that no Advances will be required to be made during such cure period); 7.4 INSOLVENCY. If an Insolvency Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced against Borrower and is not dismissed or stayed within [*] (provided that no Advances will be made prior to the dismissal of such Insolvency Proceeding); and 7.5 MISREPRESENTATIONS. If any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth herein or in any certificate delivered to Lender by any Responsible Officer pursuant to this Agreement or to induce Lender to enter into this Agreement or any other Loan Document, and as to a misrepresentation or misstatement that can be cured, Borrower fails to correct such misrepresentation or misstatement to Lender's satisfaction within [*] after Borrower receives notice thereof or any officer of _______________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 10. 11 Borrower becomes aware thereof (provided that no Advances will be required to be made during such cure period). 8. LENDER'S RIGHTS AND REMEDIES. 8.1 RIGHTS AND REMEDIES. Upon the occurrence and during the continuance of an Event of Default, Lender may, at its election, without notice of its election and without demand (but subject to FCC approval, if required), do any one or more of the following, all of which are authorized by Borrower: (a) Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable (provided that upon the occurrence of an Event of Default described in Section 7.4 all Obligations will become immediately due and payable without any action by Lender); (b) Cease advancing money or extending credit to or for the benefit of Borrower under this Agreement or under any other agreement between Borrower and Lender; (c) Settle or adjust disputes and claims directly with account debtors for amounts, upon terms and in whatever order that Lender reasonably considers advisable; (d) Without notice to or demand upon Borrower, make such payments and do such acts as Lender considers necessary or reasonable to protect its security interest in the Collateral. Borrower agrees to assemble the Collateral if Lender so requires, and to make the Collateral available to Lender as Lender may designate. Borrower authorizes Lender to enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Lender's determination appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith. With respect to any of Borrower's owned premises, Borrower hereby grants Lender a license to enter into possession of such premises and to occupy the same, without charge, for up to 120 days in order to exercise any of Lender's rights or remedies provided herein, at law, in equity, or otherwise; (e) Without notice to Borrower set off and apply to the Obligations any and all indebtedness at any time owing to or for the credit or the account of Borrower held by Lender; (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein) the Collateral. Lender is hereby granted a license or other right, solely pursuant to the provisions of this Section 8.1, to use, without charge, Borrower's labels, patents, copyrights, rights of use of any name, trade secrets, _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 11. 12 trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Lender's exercise of its rights under this Section 8.1, Borrower's rights under all licenses and all franchise agreements will inure to Lender's benefit; (g) Sell the Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including Borrower's premises) as Lender determines is commercially reasonable; (h) Lender may credit bid and purchase at any public sale; and (i) Any deficiency that exists after disposition of the Collateral as provided above will be paid immediately by Borrower. 8.2 POWER OF ATTORNEY. Effective only upon the occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably appoints Lender (and any of Lender's designated officers, or employees) as Borrower's true and lawful attorney to: (a) send requests for verification of Accounts or notify account debtors of Lender's security interest in the Accounts; (b) endorse Borrower's name on any checks or other forms of payment or security that may come into Lender's possession; (c) sign Borrower's name on any invoice or bill of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) make, settle, and adjust all claims under and decisions with respect to Borrower's policies of insurance; and (e) settle and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and upon terms which Lender determines to be reasonable; provided Lender may exercise such power of attorney to sign the name of Borrower on any of the documents described in Section 4.2 regardless of whether an Event of Default has occurred. The appointment of Lender as Borrower's attorney in fact, and each and every one of Lender's rights and powers, being coupled with an interest, is irrevocable until all of the Obligations have been fully repaid and performed and Lender's obligation to provide advances hereunder is terminated. 8.3 ACCOUNTS COLLECTION. Effective only upon the occurrence and during the continuance of an Event of Default, Lender may notify any Person owing funds to Borrower of Lender's security interest in such funds and verify the amount of such Account. Borrower will collect all amounts owing to Borrower for Lender, receive in trust all payments as Lender's trustee, and immediately deliver such payments to Lender in their original form as received from the account debtor, with proper endorsements for deposit. 8.4 LENDER'S LIABILITY FOR COLLATERAL. So long as Lender complies with reasonable business practices, Lender will not in any way or manner be liable or responsible for: (a) the _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 12. 13 safekeeping of the Collateral; (b) any loss or damage thereto occurring or arising in any manner or fashion from any cause; (c) any diminution in the value thereof; or (d) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other person whomsoever. All risk of loss, damage or destruction of the Collateral will be borne by Borrower. 8.5 REMEDIES CUMULATIVE. Lender's rights and remedies under this Agreement, the Loan Documents, and all other agreements will be cumulative. Lender will have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Lender of one right or remedy will be deemed an election, and no waiver by Lender of any Event of Default on Borrower's part will be deemed a continuing waiver. No delay by Lender will constitute a waiver, election, or acquiescence by it. No waiver by Lender will be effective unless made in a written document signed on behalf of Lender and then will be effective only in the specific instance and for the specific purpose for which it was given. 8.6 DEMAND; PROTEST. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees at any time held by Lender on which Borrower may in any way be liable. 9. INDEMNIFICATION. Borrower will defend, indemnify and hold harmless Lender and its officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Agreement; and (b) all losses or costs and expenses in any way suffered, incurred, or paid by Lender as a result of or in any way arising out of, following, or consequential to transactions between Lender and Borrower whether under this Agreement, or otherwise (including without limitation reasonable attorneys fees and expenses), except for losses caused by Lender's gross negligence or willful misconduct. 10. ADDITIONAL AGREEMENTS. 10.1 BREACH BY LENDER. In the event Lender fails to make any advance when due pursuant to this Agreement, and Lender fails to cure such breach within [*] business days after Borrower gives Lender notice thereof, Borrower will be entitled to [*]. The foregoing [*] will be suspended during any period during which there exists a good faith dispute concerning the compliance with the requirements of this Agreement of Borrower's request for the Advance in question. 10.2 TERMINATION OF OPTION AGREEMENT. (a) In the event Lender terminates the Option in accordance with Section 1.4(b)(2) of the Option Agreement, Borrower terminates the Option Agreement in accordance with Section 8.1(d) of the Option Agreement or the Option expires unexercised and in any such case there is no material Breach by Borrower or Jean Warren, Lender will promptly pay Borrower a _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 13. 14 termination fee equal to the greater of (1) $1,000,000 plus all Level One Advances then outstanding (including all accrued but unpaid interest with respect thereto) and (2) the amount of all principal and accrued but unpaid interest under this Agreement. (b) In the event either party terminates the Option Agreement pursuant to Section 8.1(b) of the Option Agreement, Lender will promptly pay Borrower a termination fee equal to (1) fifty percent (50%) of the aggregate amount of principal and accrued but unpaid interest then outstanding minus (2) $350,000. (c) Any such termination fee may be paid, at the discretion of Lender, in cash or through cancellation of any amount owed by Borrower or Jean Warren to Lender or through a combination thereof. 10.3 ADDITIONAL PAYMENT. In the event lender is required to make an Additional Payment, and any portion of the proceeds hereunder are used to fund operations, then, notwithstanding anything to the contrary contained in the Option Agreement, "Acquisition Consideration," for purposes of the Option Agreement, will mean the sum of (a) [*], and (e) interest at the annual rate of [*] on the sum of (a), (b), (c) and (d) above from the Closing Date until the date of sale. 11. MISCELLANEOUS. 11.1 GOVERNING LAW. This Agreement will be governed in all respects by the laws of the State of California as such laws are applied to agreements between California residents entered into and performed entirely in California. 11.2 SURVIVAL. The representations, warranties, covenants and agreements made herein will survive any investigation made by Borrower and the transactions contemplated hereby. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of Borrower pursuant hereto in connection with the transactions contemplated hereby will be deemed to be representations and warranties by Borrower hereunder solely as of the date of such certificate or instrument. 11.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein, the provisions hereof will inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. 11.4 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party will be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein. 11.5 SEVERABILITY. In case any provision of the Agreement is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 14. 15 11.6 AMENDMENT. This Agreement may be amended only by a writing executed by Borrower and Lender. 11.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement will impair any such right, power or remedy, nor will it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character on any party's part of any breach, default or noncompliance under this Agreement or any waiver on such party's part of any provisions or conditions of this Agreement must be in writing and will be effective only to the extent specifically set forth in such writing. All remedies under this Agreement or otherwise afforded to any party, will be cumulative and not alternative. 11.8 NOTICES. Any notice or other communication required or permitted to be delivered to any party under this Agreement will be in writing and will be deemed properly delivered, given and received when delivered (by hand, by certified mail with return receipt requested, by courier or express delivery service or by telecopier) to the address or telecopier number set forth beneath the name of such party below (or to such other address or telecopier number as such party shall have specified in a written notice given to the other parties hereto): if to Lender: Metricom, Inc. 980 University Avenue Los Gatos, CA 95030 Attention: William D. Swain Telecopier: (408) 399-8274 with a copy to: Cooley Godward Castro Huddleson & Tatum One Maritime Plaza, 20th Floor San Francisco, CA 94111-3580 Attention: Kenneth L. Guernsey Telecopier: (415) 951-3699 if to Borrower: Jean Warren [*] ________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 15. 16 with a copy to: McAfee & Taft Tenth Floor, Two Leadership Square 211 N. Robinson Oklahoma City, OK 73102 Attention: Gary F. Fuller Facsimile: (405) 235-0439 and Lukas, McGowan, Nace & Gutierrez, Chartered 1111 Nineteenth Street, NW Suite 1200 Washington, DC 20036 Attention: Gerald S. McGowan and George L. Lyon, Jr. Facsimile: (202) 842-4485 11.9 EXPENSES. Except as provided in Section 11.10, Lender will pay all costs and expenses that it incurs, and Jean Warren will pay all costs and expenses that Borrower incurs (either directly or through a capital contribution to Borrower in an amount equal to any costs and expenses paid by Borrower), with respect to the negotiation, execution, delivery and performance of this Agreement and the Exhibits hereto. 11.10 ATTORNEYS' FEES. In the event that any dispute among the parties to this Agreement should result in litigation, the prevailing party in such dispute will be entitled to recover from the losing party or parties all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which will include, without limitation, all fees, costs and expenses of appeals. 11.11 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. The rights and remedies of the parties hereto will be cumulative (and not alternative). In the event of any breach or threatened breach by any party of any covenant, obligation or other provision set forth in this Agreement, the other party will be entitled (in addition to any other remedy that may be available to it) to (a) a decree or order of specific performance or mand amus to enforce the observance and performance of such covenant, obligation or other provision, and (b) an injunction restraining such breach or threatened breach. Neither party will be required to provide any bond or other security in connection with any such decree, order or injunction or in connection with any related action or proceeding. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 16. 17 11.12 TITLES AND SUBTITLES. The titles of the sections and subsections of the Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 11.13 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which will be an original, but all of which together will constitute one instrument. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 17. 18 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. METRICOM, INC. OVERALL WIRELESS COMMUNICATIONS CORPORATION By: /s/ Gary M. Green By: /s/ Jean Warren --------------------------------- ---------------------------- Name: Gary M. Green Name: Jean Warren Title: Chief Operating Officer Title: President /s/ Jean Warren - ------------------------------------- Jean Warren ____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. 19 EXHIBIT A COLLATERAL The Collateral will consist of all right, title and interest of Borrower in and to the following: (a) All goods and equipment now owned or hereafter acquired, including, without limitation, all machinery, fixtures, vehicles (including motor vehicles and trailers), base stations and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located; (b) All inventory, now owned or hereafter acquired, including, without limitation, all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products including such inventory as is temporarily out of Borrower's custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Borrower's Books relating to any of the foregoing; (c) All contract rights and general intangibles now owned or hereafter acquired, including, without limitation, goodwill, trademarks, servicemarks, trade styles, trade names, patents, patent applications, leases, license agreements (including specifically, but without limitation, all FCC broadcast or other licenses, subject only to FCC approval of transfer), franchise agreements, blueprints, drawings, purchase orders, customer lists, route lists, infringements, claims, computer programs, computer discs, computer tapes, literature, reports, catalogs, design rights, income tax refunds, payments of insurance and rights to payment of any kind; (d) All now existing and hereafter arising accounts, contract rights, royalties, license rights and all other forms of obligations owing to Borrower arising out of the sale or lease of goods, the licensing of technology or the rendering of services by Borrower, whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Borrower and Borrower's Books relating to any of the foregoing; (e) All documents, cash, deposit accounts, securities, letters of credit, certificates of deposit, instruments and chattel paper now owned or hereafter acquired and Borrower's Books relating to the foregoing; (f) All copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work thereof, whether published or unpublished, now owned or hereafter acquired; all trades secret rights, including all rights to unpatented inventions, know-how, operating manuals, license rights and agreements and confidential information, now owned or hereafter acquired; all claims for damages by way of any past, present and future infringement of any of the forgoing; and (g) Any and all claims, rights and interests in any of the above and all substitutions for, additions and accessions to and proceeds thereof. _____________________ * Confidential treatment has been requested for portions of this document marked with an asterisk pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. These portions have been filed separately with the Commission. A-1. EX-27.0 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED BALANCE SHEET AND STATEMENT OF OPERATIONS CONTAINED IN THE COMPANY'S FORM 10-Q FOR THE QUARTER ENDED JUNE 28, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1996 JAN-01-1996 JUN-28-1996 6,080 29,011 2,454 0 3,811 42,856 21,854 4,210 73,744 6,205 0 0 0 13 65,833 73,744 3,718 4,257 1,946 8,853 12,467 0 0 (15,577) 0 (15,577) 0 0 0 (15,577) (1.17) (1.17)
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