EXHIBIT 99.1
CONTINGENT VALUE RIGHTS AGREEMENT
THIS CONTINGENT VALUE RIGHTS AGREEMENT, dated as of ______________, 1999,
between Newbridge Networks Corporation, a Canadian corporation ("Newbridge"),
and ___________________, as Rights Agent (the "Rights Agent"), in favor of each
person who acquires from time to time Contingent Value Rights (the "CVRs") to
receive, in accordance with the terms hereof, shares (the "CVR Shares") of
Newbridge's common stock ("Newbridge Common Stock"). The CVR Shares are issuable
pursuant to a registration statement on Form S-4 (No. 333-_________) (the
"Registration Statement") filed by Newbridge with the Securities and Exchange
Commission (the "Commission").
1. Appointment of Rights Agent. Newbridge hereby appoints the Rights
Agent to act as agent for Newbridge in accordance with the instructions set
forth herein, and the Rights Agent hereby accepts such appointment, upon the
terms and conditions hereinafter set forth.
2. Certain Definitions. Capitalized terms used herein without definition
shall have the meanings given them in the Agreement and Plan of Merger, dated
June 22, 1999, by and among Newbridge, Saturn Acquisition Corp. and Saturn
Corporation (the "Merger Agreement"). For purposes of this Agreement, and in
addition to the terms defined elsewhere in this Agreement, the following terms
shall have the following meanings:
2.1 "Common Stock" means (i) the Newbridge Common Stock or (ii) any
other class of stock resulting from successive changes of reclassification of
such shares consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value. Unless the context requires
otherwise, all references to Common Stock and CVR Shares in this Agreement and
in the CVR Certificates (as defined herein) shall, in the event of an adjustment
pursuant to Section 13 hereof, be deemed to refer also to any other securities
or property then issuable upon maturity of the CVRs as a result of such
adjustment.
2.2 "Fair Market Value" with respect to any security shall mean the
closing sales price of such security on the day in question on the principal
national securities exchange on which such security is listed or admitted to
trading or, if not listed or traded on any such exchange, the closing price of
such security on the Nasdaq National Market or, if not listed or traded on any
exchange or the Nasdaq National Market, the average of the closing bid and ask
prices per share on the National Association of Securities Dealers, Inc.
Automated Quotation System ("Nasdaq") on the day in question or, if such
quotations are not available, the fair market value on the day in question as
reasonably determined by the Board of Directors of Newbridge or any duly
authorized committee of such Board after consultation with its legal and
financial advisors.
2.3 "Issuance Date" means the Effective Time as defined in the Merger
Agreement.
3. Form of CVR Certificate.
3.1 The CVRs shall be evidenced by certificates (the "CVR
Certificates") substantially in the form attached hereto as Exhibit A. The CVR
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Certificates may have such letters, numbers or other marks of identification or
designation and such legends, summaries or endorsements printed, lithographed or
engraved thereon as Newbridge may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto. Newbridge will use its
reasonable efforts to advise the Rights Agent of any material change in any such
rule or regulation of which it becomes aware.
3.2 The CVR Certificates shall be executed on behalf of Newbridge by
the manual or facsimile signature of the present or any future President or Vice
President of Newbridge, under its corporate seal, affixed or in facsimile,
attested by the manual or facsimile signature of the present or any future
Secretary or Assistant Secretary of Newbridge. CVR Certificates shall be dated
as of the date of the initial issuance thereof.
4. Registration and Countersignature.
4.1 The Rights Agent shall maintain books for the registration of the
CVR Certificates. The CVR Certificates shall be countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. The CVR
Certificates shall be so countersigned, however, by the Rights Agent and shall
be delivered by the Rights Agent, notwithstanding that the persons whose manual
or facsimile signatures appear thereon as proper officers of Newbridge shall
have ceased to be such officers at the time of such countersigned or delivery.
4.2 Prior to due presentment for registration of the CVR
Certificates, Newbridge and the Rights Agent may deem and treat the registered
holder thereof as the absolute owner of the CVR Certificates (notwithstanding
any notation of ownership or other writing thereof made by anyone other than
Newbridge or the Rights Agent) for the purpose of payment of CVR Shares upon
maturity of the CVRs and for all other purposes, and neither Newbridge nor the
Rights Agent shall be affected by any notice to the contrary.
5. Maturity and Payment of CVRs.
5.1 The CVRs will mature at the close of business on the Maturity Date
(as defined herein) without any further action by the holders of CVRs. For
purposes of this Agreement, "Maturity Date" means the earlier to occur of (a)
the date on which
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Saturn completes the Non-core Asset Sale; and (b) May 31, 2000. On or as soon as
practicable after the Maturity Date, but in no event later than (i) ten business
days after the Maturity Date or (ii) if an independent expert in business
valuation is appointed under Section 6.1 or 6.2 hereof, ten business days after
receipt of the appraisal from such expert, Newbridge shall deliver a notice to
the Rights Agent setting forth the number of shares of Common Stock, if any, or
other consideration issuable per CVR pursuant to this Agreement.
5.2 As soon as practicable after receipt of the notice referred to in
Section 5.2 hereof, the Rights Agent shall cause to be delivered to each record
holder of CVRs stock certificates representing that number of CVR Shares due to
each such holder as determined pursuant to Section 6 hereof and/or such other
consideration (including payment of cash in lieu of fractional shares) as such
holder may be entitled under this Agreement. Any CVR Shares or other securities
issued upon payment in respect of CVRs shall be deemed to have been issued as of
the close of business on the Maturity Date, and the CVRs shall be deemed to have
been canceled at such time; provided, however, that if the Maturity Date is a
date on which the stock transfer books of Newbridge are closed, any such CVR
Shares shall be deemed to have been issued to the holders of CVRs on the next
business day on which the stock transfer books of Newbridge are open.
6. CVR Shares Issuable Upon Maturity of CVRs.
6.1 The number of CVR Shares issuable per CVR upon maturity of the
CVRs shall be a fraction of a share of Common Stock (the "Contingent Value
Ratio") as is determined by using the following formula:
[B+C-D+E]
--------- divided by v
N
where,
"B" equals [the lesser of (A) the gross proceeds from the Non-core
Asset Sale before deduction of any state and federal taxes payable on such
proceeds (the "Non-core Asset Sale Proceeds") and (B) $173,000,000], minus
$102,000,000;
"C" equals 50% of the greater of (A) the Non-core Asset Sale Proceeds
minus $173,000,000 and (B) 0;
"D" equals 50% of any state or federal income taxes payable on the
Non-core Asset Sale Proceeds, based on the applicable rates, determined in
good faith by Newbridge;
"E" equals $625,000;
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"N" equals the number of CVRs issued and outstanding on the Maturity
Date plus the number of CVRs issuable upon exercise of Saturn Options
assumed by Newbridge pursuant to Section 2.2(a) of the Merger Agreement;
and
"V" equals the greater of (a) the average closing price per share of
Newbridge Common Stock as reported on the New York Stock Exchange Composite
Tape on the ten trading days ending on the fifth trading day immediately
preceding the Saturn Special Meeting and (b) $24.00, unless the Newbridge
Adjustment Option is exercised pursuant to Section 2.1(a) of the Merger
Agreement, in which case "V" equals $30.00 divided by the Exchange Ratio.
6.2 In the event that consideration received from the Non-core Asset
Sale is not cash or is affected by some contingency, Newbridge shall appoint an
independent expert in business valuation to calculate the net present value of
such consideration, and such amount shall be included in the calculation of the
Non-core Asset Sale Proceeds.
6.3 In the event that the Maturity Date is the date set forth in
clause (b) of Section 5.1, Newbridge shall be required to include in the
calculation of the Non-core Asset Sale Proceeds an amount equal to (a) the sales
price for such assets specified in a binding contract to sell such assets in
effect on the Maturity Date or (b) the fair cash value of the most recent bona
fide offer to purchase such assets as determined by an independent expert in
business valuation familiar with Saturn's Non-Core Asset business. If clauses
(a) or (b) do not apply, then the amount included in the Non-core Asset Sale
Proceeds shall be equal to those amounts received from the Non-core Asset Sale
on or prior to the Maturity Date. The number of CVR Shares issuable per CVR
pursuant to this Section 6 is subject to adjustment as hereinafter set forth in
this Agreement.
7. Fractional Shares. No fractional shares of Common Stock shall be
issued to any holder of CVRs in respect of the CVRs. Instead of any fractional
shares of Common Stock that would otherwise be issuable to any such holder,
Newbridge will pay to such holder a cash adjustment in respect of such
fractional interest in an amount equal to the product of (a) such fractional
interest multiplied by (b) the Newbridge Fractional Share Value.
8. Payment of Taxes. Newbridge will pay all documentary stamp taxes
attributable to the original issuance of the CVRs and the CVR Shares; provided,
however, that Newbridge shall not be required to (a) pay any tax which may be
payable in respect of the issuance or delivery of certificates for CVR Shares in
a name other than that of the registered holder of the CVR Certificates as of
the Maturity Date or (b) issue or deliver any certificate for CVR Shares upon
the Maturity Date until any such tax required to be paid under clause (a) shall
have been paid, all such tax being payable by the holder of such CVR at the time
of surrender.
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9. Mutilated or Missing Certificates. In case any CVR Certificate shall
be mutilated, lost, stolen or destroyed, Newbridge may in its discretion issue,
and the Rights Agent may countersign and deliver in exchange and substitution
for an upon cancellation of the mutilated CVR Certificate, or in lieu of a
substitution for the lost, stolen or destroyed CVR Certificate, a new CVR
Certificate of like tenor and evidencing the number of CVRs evidenced by the CVR
Certificate so mutilated, lost, stolen or destroyed, but only upon receipt of
evidence satisfactory to the Rights Agent of such mutilation, loss, theft or
destruction of such CVR Certificate and indemnity, if requested, also
satisfactory to it. Applicants for such substitute CVR Certificate shall also
comply with such other reasonable regulations and pay such other reasonable
charges as Newbridge or the Rights Agent may prescribe. Any such new CVR
Certificate shall constitute an original contractual obligation of Newbridge,
whether or not the allegedly mutilated, lost, stolen or destroyed CVR
Certificate shall be at any time enforceable by anyone.
10. Reservation of CVR Shares; Stock Certificates. Newbridge shall at all
times reserve for issuance and delivery upon maturity of the CVRs such number of
CVR Shares or other shares of capital stock of Newbridge from time to time
issuable upon maturity of the CVRs. All such shares shall be duly authorized
and, when issued, shall be validly issued, fully paid and nonassessable, free
and clear of all liens, security interests, charges and other encumbrances or
restrictions on sale and free and clear of all preemptive rights. The Rights
Agent is hereby irrevocably authorized to requisition a reasonable time prior to
the Maturity Date, as applicable, from Newbridge's transfer agent stock
certificates issuable upon maturity of the CVRs. Newbridge will supply such
transfer agent with duly executed stock certificates for such purpose. Newbridge
shall keep a copy of this Agreement on file with its transfer agent and with
every transfer agent for any shares of Common Stock.
11. Transfer and Registration of CVRs and CVR Shares.
11.1 The CVRs, and any interest therein, shall in no circumstances be
sold, assigned or otherwise transferred other than by will or pursuant to the
laws of descent and distribution.
11.2 The CVRs and CVR Shares have been registered pursuant to the
Registration Statement under the Securities Act of 1933, as amended (the "Act").
Newbridge covenants and agrees:
(a) to prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective
through the Maturity Date and to use its commercially reasonable efforts to keep
such Registration Statement effective during such period;
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(b) as expeditiously as possible, to use its commercially reasonable
efforts to register or qualify the CVRs and the CVR Shares to be delivered upon
the Maturity Date under the securities or Blue Sky laws of each jurisdiction in
which such registration or qualification is necessary; and
(c) to pay all expenses incurred by Newbridge in complying with this
Section 11.2, including, without limitation, (i) all registration and filing
fees, (ii) all printing expenses, (iii) all fees and disbursements of counsel
and independent public accountants for Newbridge, (iv) all Blue Sky fees and
expenses (including fees and expenses of counsel in connection with any Blue Sky
surveys), and (v) the entire expense of any special audits incident to or
required by any such registration.
12. Rights of CVR Certificate Holder. The holder of any CVR Certificate or
CVR shall not, by virtue thereof, be entitled to any rights of a stockholder of
Newbridge, either at law or in equity, and the rights of the holder are limited
to those expressed in this Agreement.
13. Antidilution Provisions. The number of CVR Shares issuable upon the
maturity of the CVRs pursuant to Section 5 hereof is subject to change or
adjustment as follows:
13.1 Stock Dividends, Stock Splits and Combinations of Stock. If at
any time after the Issuance Date and before 5:00 p.m., [______ time], on the
Maturity Date, (a) Newbridge shall fix a record date for the issuance of any
stock dividend payable in shares of Common Stock, (b) the number of shares of
Common Stock shall have been increased by a subdivision or split-up of shares of
Common Stock or (c) the number of shares of Common Stock shall have been
decreased by a combination of the outstanding shares of Common Stock, then the
number of CVR Shares issuable pursuant to Section 6 hereof shall be multiplied
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such dividend, subdivision, split-up or
combination and the denominator of which is the number of shares of Common Stock
outstanding immediately prior to such dividend, subdivision, split-up or
combination. The time of occurrence of an event giving rise to an adjustment
made pursuant to this Section 13.1 shall, in the case of a subdivision, split-up
or combination, be the effective date thereof and shall, in the case of
dividend, be the record date thereof.
13.2 Consolidation, Merger, etc. If at any time after the Issuance
Date and before 5:00 p.m., [______ time], on the Maturity Date any capital
reorganization of Newbridge, or any reclassification of the Common Stock, or any
consolidation of Newbridge with or merger of Newbridge with or into any other
corporation or person or any sale, lease or other transfer of all or
substantially all of the assets of Newbridge to any other person, including any
individual, corporation, partnership, joint venture, trust or group thereof (a
"Transaction"), shall be effected in such a way that the holders of the Common
Stock shall be entitled to receive solely voting stock of Newbridge with respect
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to or in exchange for Common Stock, then each holder of a CVR shall have the
right to receive on or after the Maturity Date (as provided in Section 5 hereof)
the Equivalent Payment (as defined below). For purposes of this Agreement,
"Equivalent Payment" means the number of shares of voting stock of Newbridge
that would have been payable in the Transaction in respect of the number of
shares of Common Stock that would have been payable upon maturity of the CVRs
held by such holder had the Transaction not occurred, calculated by equating the
Fair Market Value of the Common Stock with the Fair Market Value of the
consideration payable in the Transaction in respect of the Common Stock. If,
instead of or in addition to voting stock of Newbridge, the consideration in
such transaction would consist of cash, securities or other assets, then prior
to such transaction Newbridge shall appoint in independent expert in valuation
to determine the number of shares of Common Stock represented, in such expert's
best judgment, by the CVRs, and each holder of a CVR shall be issued that number
of shares of Common Stock represented by such holder's CVR.
13.3 Readjustments, etc. If an adjustment is made under Section 13.1
or 13.2 above, and the event to which the adjustment relates does not occur,
then any adjustments in the number of CVR Shares issuable upon maturity of the
CVRs that were made in accordance with such Section shall be adjusted back to
the number of CVR Shares that were issuable immediately prior to the effective
date or the record date of such event, as the case may be.
13.4 Preservation of Purchase Rights upon Merger, Consolidation, etc.
Newbridge shall not effect any reorganization, reclassification, consolidation,
merger, or sale under Section 13.2 hereof unless prior to or simultaneously with
the consummation thereof the successor corporation or person (if other than
Newbridge) resulting from such reorganization, reclassification, consolidation
or merger or the person (if other than Newbridge) purchasing such assets shall
assume by written instrument, executed and mailed or delivered to the Rights
Agent, the obligation to deliver to such holder such shares of stock, cash,
securities or assets as, in accordance with Section 13.2 hereof, such holder may
be entitled to receive, and containing the express assumption of such person or
the due and punctual performance and observance by Newbridge and of all
liabilities and obligations of Newbridge hereunder. Such written agreement shall
provide for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 13 and shall provide
that such adjustments that similarly apply the successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or leases.
14. Officer's Certificate. Whenever the number of CVR Shares that
may be issued upon the Maturity Date is adjusted as required by the provisions
of this Agreement, Newbridge will forthwith file in the custody of its Secretary
or an Assistant Secretary at its principal office and with the Rights Agent an
officer's certificate showing the adjusted number of CVR Shares that may be
issued upon maturity of the CVRs,
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determined as herein provided, setting forth in reasonable detail the facts
requiring such adjustment and the manner of computing such adjustment. Each such
officer's certificate shall be made available at all reasonable times for
inspection by each holder of CVRs. Newbridge shall, forthwith after each such
adjustment, cause a copy of such certificate to be mailed to the holder. The
Rights Agent shall be entitled to rely conclusively on the contents of
certificates furnished pursuant to this Section 14 and shall not be required to
make any independent inquiry as to facts not established through such
certificates.
15. Listing on NYSE. Newbridge will use its commercially reasonable
efforts to list on the NYSE the shares of the Common Stock issuable in respect
of the CVRs, and will use its commercially reasonable efforts to maintain such
listing or approval so long as any other shares of Common Stock are so listed or
approved; and Newbridge shall use its commercially reasonable efforts to so list
on each national securities exchange or obtain approval for quotation on the
Nasdaq National Market, or such other over-the-counter quotation system, and
shall use its commercially reasonable efforts to maintain such listing or
approval of, any other shares of capital stock of Newbridge issuable in respect
of the CVRs if and so long as the shares of capital stock of the same class are
listed on such national securities exchange or are traded on the Nasdaq National
Market or such over-the-counter quotation system. Any such listing or quotation
will be at Newbridge's expense.
16. Availability of Information. Newbridge will comply with all applicable
periodic public information reporting requirements of the Commission to which it
may from time to time be subject.
17. Merger, Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent, shall be the successor to the
Rights Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 19 hereof. In case at the time such successor to the
Rights Agent shall succeed to the agency created by this Agreement, and in case
at that time any of the CVRs shall have been countersigned but not delivered,
any such successor to the Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such CVRs so countersigned; and in case at
that time any of the CVRs shall not have been countersigned, any successor to
the Rights Agent may countersign such CVRs either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such CVRs shall have the full force and effect provided in the CVRs and in this
Agreement.
In the case at any time the name of the Rights Agent shall be changed and
at such time any of the CVRs shall have been countersigned but not delivered,
the Rights Agent
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may adopt the countersignature under its prior name and deliver CVRs so
countersigned; and in case at that time any of the CVRs shall not have been
countersigned, the Rights Agent may countersign such CVRs either in its prior
name or in its changed name; and in all such cases such CVRs shall have the full
force and effect provided in the CVRs and in this Agreement.
18. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which Newbridge and the holders of the CVRs, by their acceptance
thereof, shall be bound:
18.1 The statements contained herein and in the CVR Certificate shall be
taken as statements of Newbridge, and the Rights Agent assumes no responsibility
for the correctness of any of the same except such as describe the Rights Agent
or actions taken or to be taken by it. The Rights Agent assumes no
responsibility with respect to the delivery of CVRs except as herein otherwise
provided.
18.2 The Rights Agent shall not be responsible for any failure of
Newbridge to comply with any of the covenants contained in this Agreement or in
the CVRs to be complied with by Newbridge.
18.3 The Rights Agent may consult at any time with counsel satisfactory to
it (who may be counsel for Newbridge), and the Rights Agent shall incur no
liability or responsibility to Newbridge or to any holder of any CVR in respect
of any action taken, suffered or omitted by it hereunder in good faith and in
accordance with the opinion or the advice of such counsel, provided the Rights
Agent shall have exercised reasonable care in the selection and continued
employment of such counsel.
18.4 The Rights Agent shall incur no liability or responsibility to
Newbridge or to any holder of any CVR for any action taken in reliance on any
notice, resolution, waiver, consent, order, certificate or other paper, document
or instrument believed by it to be genuine and to have been signed, sent or
presented by the party or parties.
18.5 Newbridge agrees (a) to pay to the Rights Agent reasonable
compensation for all services rendered by the Rights Agent in the execution of
this Agreement, (b) to reimburse the Rights Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Rights Agent in the execution of this Agreement (other than taxes measured by
the Rights Agent's net income), and (c) upon request, to advance to the Rights
Agent funds to pay cash in lieu of fractional shares of Common Stock issuable
upon maturity of the CVRs.
18.6 The Rights Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to involve
expense unless
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Newbridge shall furnish the Rights Agent with reasonable security and indemnity
for any costs and expenses which may be incurred. All rights of action under
this Agreement or under any of the CVRs may be enforced by the Rights Agent
without the possession of any of the CVRs or the production thereof at any trial
or other proceeding relative thereto, and any such action, suit or proceeding
instituted by the Rights Agent shall be brought in its name as Rights Agent, and
any recovery of judgment shall be for the ratable benefit of the registered
holders of the CVRs, as their respective rights or interests may appear.
18.7 The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the CVRs or other securities
of Newbridge or become pecuniarily interested in any transaction in which
Newbridge may be interested, or contract with or lend money to or otherwise act
as fully and freely as though it were not the Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other capacity
for Newbridge or for any other legal entity.
18.8 The Rights Agent shall act hereunder solely as agent, and its duties
shall be determined solely by the provisions hereof. The Rights Agent shall not
be liable for anything which it may do or refrain from doing in connection with
this Agreement except for its own gross negligence or bad faith.
19. Change of Rights Agent. The Rights Agent may resign and be discharged
from its duties under this Agreement by giving to Newbridge notice in writing,
and to the holders of the CVRs notice in writing and sent by first-class mail,
postage prepaid, to each registered holder of a CVR at such holder's address
appearing in the register maintained by the Rights Agent with respect to the
CVRs, specifying a date when such resignation shall take effect, which notice
shall be sent at least two weeks prior to the date so specified. If the Rights
Agent shall resign or otherwise become incapable of acting, Newbridge shall
appoint a successor to the Rights Agent. If Newbridge shall fail to make such
appointment within a period of 30 days after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the registered holder of a CVR (who shall, with such notice, submit his CVR
for inspection by Newbridge), then the registered holder of any CVR may apply to
any court of competent jurisdiction for the appointment of a successor of the
Rights Agent. After appointment the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the former
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Failure to give
any notice provided for in this Section 19, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
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20. Identity of Transfer Agent. Forthwith upon the appointment after the
date hereof of any transfer agent for the Common Stock, or of any subsequent
transfer agent for shares of the Common Stock, Newbridge will file with the
Rights Agent a statement setting forth the name and address of such transfer
agent, unless the Rights Agent is such transfer agent.
21. Successors. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement is not intended to confer any rights or remedies upon
any Person other than the parties hereto.
22. Termination. This Agreement shall terminate at 5:00 p.m., [______
time], on the Maturity Date or on such later date on which all of the
obligations of the Rights Agent have been fulfilled hereunder.
23. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
24. Interpretation. The Section headings contained in this Agreement are
solely for the purpose of reference and shall not in any way affect the meaning
or interpretation of this Agreement.
25. Amendments. This Agreement may be amended by the written consent of
Newbridge and the affirmative vote or the written consent of holders holding not
less than one-half in interest of the CVRs. Notwithstanding the foregoing,
Newbridge and the Rights Agent may from time to time supplement or amend this
Agreement, without the approval of any holder of CVRs, in order to cure any
ambiguity or to correct or supplement any provision contained in this Agreement
which may be defective or inconsistent with any other provision in this
Agreement, or to make any other provisions in regard to matters or questions
arising under this Agreement which Newbridge and the Rights Agent may deem
necessary or desirable and which shall not be inconsistent with the provisions
of the CVRs and which shall not materially adversely affect the interests of the
holders of CVRs.
26. Notices. All notices and other communications hereunder shall be in
writing and shall be delivered personally by overnight courier or similar means
or sent by facsimile with written confirmation of receipt, to the parties at the
addresses specified below (or at such other address for a party as shall be
specified by like notice. Any such notice shall be effective upon receipt, if
personally delivered or on the next business day following transmittal if sent
by confirmed facsimile. Notices shall be delivered as follows:
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if to Rights Agent, to: ____________________________________
____________________________________
Telephone:__________________________
Facsimile:__________________________
if to Newbridge, to: Newbridge Networks Corporation
600 March Road, P.O. Box 13600
Kanata, Ontario, Canada K2K 2E6
Telephone: (613) 591-7300
Facsimile: (613) 599-3672
Attention: Peter Nadeau
with a copy to: Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301
Telephone: (650) 324-7000
Facsimile: (650) 324-0638
Attention: Stephen C. Ferruolo
(Matter #21969-0009)
27. Benefits of This Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation, other than Newbridge, the Rights
Agent and the registered holders of the CVRs, any legal or equitable right,
remedy or claim under this Agreement; and this Agreement shall be for the sole
and exclusive benefit of Newbridge, the Rights Agent and the registered holders
of CVRs.
28. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without reference to
principles of conflicts laws.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the first date written above.
NEWBRIDGE NETWORKS CORPORATION
By __________________________________
Title _______________________________
By __________________________________
Title _______________________________
[RIGHTS AGENT]
By __________________________________
Title _______________________________
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Exhibit A to
Contingent Value
Rights Agreement
[FORM OF CVR CERTIFICATE]
VOID AFTER 5:00 P.M., [________ TIME], ON MAY 31, 2000
CVR No.________
______CVRs
NEWBRIDGE NETWORKS CORPORATION
CONTINGENT VALUE RIGHTS TO RECEIVE SHARES OF COMMON STOCK
THIS CERTIFIES THAT, FOR VALUE RECEIVED, _______________, or its permitted
assigns, is the registered holder of the number of Contingent Value Rights
("CVRs") set forth above. Each CVR entitles the holder thereof to receive from
Newbridge Networks Corporation, a Canadian corporation ("Newbridge"), subject to
the terms and conditions set forth hereinafter and in the Continent Value Rights
Agreement, dated __________, 1999, between Newbridge and [Rights Agent] ("CVR
Agreement"), to shares (the "CVR Shares") of Newbridge's common stock (the
"Common Stock"). The number of CVR shares issuable per CVR on the Maturity Date
(as defined in the CVR Agreement) shall be equal to the Contingent Value Ratio
(as defined in the CVR Agreement).
The number of CVR Shares are subject to change or adjustment upon the
occurrence of certain events set forth in the CVR Agreement, including the
issuance of any stock dividend payable in shares of Common Stock, any increase
in the number of shares of Common Stock by a subdivision or split-up of shares
of Common Stock or any decrease in the number of shares of Common Stock by a
combination of the outstanding shares of Common Stock. The time of occurrence of
an event giving rise to such an adjustment shall, in the case of a subdivision,
split-up or combination, be the effective date thereof and shall, in the case of
a dividend, be the record date thereof. Furthermore, unless otherwise earlier
terminated pursuant to the terms of the CVR Agreement, the type and amount of
consideration payable upon maturity of the CVRs is subject to adjustment upon
the occurrence of any capital reorganization, reclassification of the Common
Stock, any consolidation of Newbridge with or merger of Newbridge with or into
any other corporation or person or any sale, lease or other transfer of all or
substantially all of the assets of Newbridge to any other corporation or person.
REFERENCE IS MADE TO THE PROVISIONS OF THIS CVR CERTIFICATE SET FORTH ON
THE REVERSE SIDE HEREOF, AND SUCH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH
ON THE FRONT OF THIS CERTIFICATE.
This CVR Certificate shall be governed by and construed in accordance with
the laws of the State of Delaware.
IN WITNESS WHEREOF, Newbridge has caused this CVR Certificate to be
executed by its duly authorized officer.
Dated: _____________________ NEWBRIDGE NETWORKS CORPORATION
By ______________________________
Title ___________________________
Countersigned:
[RIGHTS AGENT] By ______________________________
Title ___________________________
as Rights Agent
By ___________________________
Title _______________________
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[REVERSE SIDE]
The CVR Certificate is subject to all of the terms, provisions and
conditions of the Contingent Value Rights Agreement, dated as of ______________,
1999 (the "CVR Agreement"), between Newbridge Networks Corporation and the
Rights Agent, to all of which terms, provisions and conditions the registered
holder of the CVR consents by acceptance hereof. The CVR Agreement and certain
definitions included in the Agreement and Plan of Merger, dated June 22, 1999
(the "Merger Agreement"), by and among Newbridge, Saturn Acquisition Corp. and
Saturn Corporation are incorporated herein by reference and made part hereof and
reference is made to the CVR Agreement and the Merger Agreement for a full
description of the rights, limitations of rights, obligations, duties and
immunities of the Rights Agent, Newbridge and the holders of the CVR
Certificates. Copies of the CVR Agreement and the Merger Agreement are available
for inspection at the principal office of the Rights Agent or may be obtained
upon written request addressed to the Rights Agent at its principal office at
[__________________________].
Newbridge shall not be required upon maturity of the CVRs evidenced by this
CVR Certificate to issue fractional shares, but shall make adjustment therefor
in cash as provided in the CVR Agreement.
Newbridge has filed and caused to become effective a registration statement
under the Securities Act of 1933, as amended, covering the CVRs and CVR Shares
and has agreed to use commercially reasonable efforts to maintain the
effectiveness of such registration statement through the Maturity Date and to
register or qualify the CVRs and the CVR Shares to be delivered upon maturity of
the CVRs under the laws of each jurisdiction in which such registration or
qualification is necessary.
This CVR Certificate is not transferable or assignable other than by will
or pursuant to the laws of descent and distribution.
The holder of this CVR Certificate shall not, by virtue hereof, be entitled
to any of the rights of a stockholder in Newbridge, either at law or in equity,
and the rights of the holder are limited to those expressed in the CVR
Agreement.
Every holder of this CVR Certificate, by accepting the same, consents and
agrees with Newbridge, the Rights Agent and with every other holder of a CVR
Certificate that Newbridge and the Rights Agent may deem and treat the person in
whose name this CVR Certificate is registered as the absolute owner hereof
(notwithstanding any notation of ownership or other writing hereon made by
anyone other than Newbridge or the Rights Agent) for all purposes whatsoever and
neither Newbridge nor the Rights Agent shall be affected by any notice to the
contrary.
This CVR Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM as tenants in common
TEN ENT as tenants by the entireties
JT TEN as joint tenants with right of survivorship and not as
tenants in common
COM PROP as community property
UNIF GIFT MIN _____________ Custodian ___________
ACT (Cust) (Minor)
under Uniform Gifts to Minors Act
__________________________________
(State)
Additional abbreviations may also be used though not in the above list.
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