FORM OF VOTING AGREEMENT
THIS VOTING AGREEMENT is entered into as of October __, 2002, by and
between Sapphire, a Delaware corporation ("Parent"), Sapphire Acquisition Corp.,
a California corporation and wholly-owned subsidiary of Parent ("Merger Sub"),
and each of the undersigned shareholders (each a "Shareholder" and collectively,
the "Shareholders") of Crystal, a California corporation (the "Company").
RECITALS
A. Parent, Merger Sub and the Company are entering into an
Agreement and Plan of Reorganization of even date herewith (the "Reorganization
Agreement") which provides (subject to the conditions set forth therein) among
other things, for the merger (the "Merger") of Merger Sub with and into the
Company pursuant to the terms and conditions of the Agreement of Merger (the
"Agreement of Merger") thereto, and the terms and conditions of the
Reorganization Agreement. Capitalized terms not otherwise defined herein shall
have the meanings given to them in the Reorganization Agreement. Certain
capitalized terms are defined in Section 5 herein.
B. In order to induce Parent and Merger Sub to enter into the
Reorganization Agreement, the Shareholders, solely in their individual
capacities as Shareholders of the Company, are entering into this Voting
Agreement.
AGREEMENT
The parties to this Voting Agreement, intending to be legally
bound, agree as follows:
SECTION 1. VOTING OF SHARES
1.1. Voting. Each Shareholder hereby agrees to appear, or
cause the holder of record of any Subject Securities on any applicable record
date (the "Record Holder") to appear, in person or by proxy, for the purpose of
obtaining a quorum at any annual or special meeting of stockholders of the
Company and at any adjournment thereof for the purpose of voting on each of the
Agreement of Merger and the Reorganization Agreement and the transactions
contemplated thereby (a "Meeting"). Each Shareholder agrees that, during the
period from the date of this Voting Agreement through the Expiration Date, at
any Meeting, however called, and in any action by written consent of the
shareholders of the Company, each Shareholder shall vote the Subject Securities
or cause the Subject Securities to be voted (to the extent such securities are
entitled to be voted) in such Shareholder's sole capacity as a shareholder of
the Company:
(a) in favor of the Merger and the adoption of the Agreement
of Merger, Reorganization Agreement and the transactions contemplated thereby
(including any amendments or modifications of the terms thereof approved by the
Board of Directors of the Company and by Parent) in connection with any meeting
of, or solicitation of consents from, the shareholders of the Company at which
or in connection with which the Merger, the Agreement of Merger or the
Reorganization Agreement are submitted for the consideration and vote of the
shareholders of the Company;
(b) against any action or agreement that would result in a
breach of any representation, warranty, covenant or obligation of the Company in
the Reorganization Agreement;
(c) against any action or agreement that would cause any
provision contained in Section 6 of the Reorganization Agreement to not be
satisfied;
(d) against approval or adoption of any extraordinary
corporate transaction (other than the Merger, Agreement of Merger, the
Reorganization Agreement or the transactions contemplated thereby) including,
without limitation, any transaction involving (i) the sale or transfer of all or
substantially all of the capital stock of the Company, whether by merger,
consolidation or other business combination, (ii) a sale or transfer of all or
substantially all of the assets of the Company or its subsidiaries, (iii) a
reorganization, recapitalization or liquidation of the Company or its
subsidiaries, or (iv) any amendment to the Company's governing instruments
creating any new class of securities of the Company or otherwise affecting the
rights of any class of security as currently in effect; and
(e) against the following actions (other than the Merger,
Agreement of Merger and the transactions contemplated by the Reorganization
Agreement): (i) any Company Acquisition Proposal; (ii) any change in a majority
of the members of the board of directors of the Company; or (iii) any other
action which is intended to, or could reasonably be expected to, impede,
interfere with, delay, postpone, discourage or adversely affect the consummation
of the Merger, the Agreement of Merger or any of the other transactions
contemplated by the Reorganization Agreement or this Voting Agreement.
To the extent inconsistent with any of the foregoing
provisions of this Section 1.1, each Shareholder revokes any and all previous
proxies with respect to Subject Securities owned beneficially and/or of record
by such Shareholder and such Shareholder agrees not to grant any proxy
inconsistent with any of the foregoing provisions of this Section 1.1 with
respect to any other voting interests in the Company owned or hereafter acquired
beneficially or of record by such Shareholder
1.2. Proxy; Further Assurances. Contemporaneously with the
execution of this Voting Agreement: (i) each Shareholder shall execute and
deliver to Parent a proxy in the form attached to this Voting Agreement as
Exhibit A, which shall be irrevocable to the fullest extent permitted by law,
with respect to the shares referred to therein (the "Proxy"); and (ii) each
Shareholder shall cause to be delivered to Parent an additional proxy (in the
form attached hereto as Exhibit A) executed on behalf of the record owner of any
outstanding shares of Company Common Stock that are Owned by such Shareholder,
if applicable, which proxy shall be irrevocable to the fullest extent permitted
by law, with respect to the shares referred to therein, and which shall also be
considered the "Proxy" for purposes of Section 2.2. The proxy granted herein is
intended to comply with the requirements of Section 705 of the California
Corporations Code applicable to irrevocable proxies.
SECTION 2. TRANSFER OF SUBJECT SECURITIES
2.1. Transferee of Subject Securities to Be Bound By this
Agreement. Each Shareholder agrees that, during the period from the date of this
Voting Agreement through the Expiration Date, such Shareholder shall not (i)
cause or permit any Transfer of any of the Subject Securities to be effected;
(ii) tender any of the Subject Securities to any Person or (ii) create or permit
to exist any Encumbrance with respect to any Subject Securities (other than
Encumbrances which do
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not affect, directly or indirectly, the right of the Shareholder or Parent to
vote the Subject Securities as provided herein ("Permitted Encumbrances")).
2.2. Transfer of Voting Rights. Each Shareholder agrees that,
during the period from the date of this Voting Agreement through the Expiration
Date, such Shareholder shall ensure that: (a) none of the Subject Securities are
deposited into a voting trust with voting instructions inconsistent with any of
the foregoing provisions of Section 1.1; and (b) other than the Proxy, no proxy
is granted, and no voting agreement or similar agreement is entered into, with
respect to any of the Subject Securities that is inconsistent with any of the
foregoing provisions of Section 1.1.
2.3. Stop-Transfer Instructions. Each Shareholder agrees and
consents to the entry of stop transfer instructions by the Company against the
transfer of any Subject Securities consistent with the terms of Section 2.1.
SECTION 3. Representations And Warranties Of ShareholderS
Each Shareholder hereby, severally and not jointly, represents
and warrants to Parent as follows:
3.1. Authorization, Etc. Such Shareholder has the legal
capacity and absolute and unrestricted right, power, authority and capacity to
execute and deliver this Voting Agreement and the Proxy and to perform its
obligations hereunder and thereunder. This Voting Agreement and the Proxy have
been duly executed and delivered by such Shareholder and constitute legal, valid
and binding obligations of such Shareholder, enforceable against such
Shareholder in accordance with their terms, subject to (i) laws of general
application relating to bankruptcy, insolvency and the relief of debtors, and
(ii) rules of law governing specific performance, injunctive relief and other
equitable remedies.
3.2. No Conflicts or Consents.
(a) The execution and delivery of this Voting Agreement and
the Proxy by such Shareholder do not, and the performance of this Voting
Agreement and the Proxy by such Shareholder will not: (i) conflict with or
violate any law, rule, regulation, order, decree or judgment applicable to such
Shareholder or by which it or any of its properties is or may be bound or
affected; or (ii) result in or constitute (with or without notice or lapse of
time) any breach of or default under, or give to any other Person (with or
without notice or lapse of time) any right of termination, amendment,
acceleration or cancellation of, or result (with or without notice or lapse of
time) in the creation of any Encumbrance or restriction (other than Permitted
Encumbrances) on any of the Subject Securities pursuant to, any contract to
which such Shareholder is a party or by which such Shareholder or any of his
affiliates or properties is or may be bound or affected.
(b) The execution and delivery of this Voting Agreement and
the Proxy by such Shareholder do not, and the performance of this Voting
Agreement and the Proxy by such Shareholder will not, require any consent or
approval of any Person.
3.3. Title To Securities. As of the date of this Voting
Agreement: (a) such Shareholder holds of record free and clear of any
Encumbrances or restrictions (other than Permitted Encumbrances) the number of
outstanding shares of Company Common Stock reflected on Schedule A as being
Owned by such Shareholder under the heading "Shares Held of Record"; (b)
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such Shareholder holds free and clear of any Encumbrances or restrictions (other
than Permitted Encumbrances) the options, warrants and other rights to acquire
shares of Company Common Stock reflected on Schedule A as being Owned by such
Shareholder under the heading "Options, Warrants and Other Rights"; (c) such
Shareholder Owns the additional securities of the Company reflected on Schedule
A as being Owned by such Shareholder under the heading "Additional Securities
Beneficially Owned"; and (d) such Shareholder does not directly or indirectly
Own any shares of Company Common Stock or other securities of the Company, or
any option, warrant or other right to acquire (by purchase, conversion or
otherwise) any shares of Company Common Stock or other securities of the
Company, other than the shares and options, warrants and other rights reflected
on Schedule A as being Owned by such Shareholder.
SECTION 4. MISCELLANEOUS
4.1. Survival of Representations, Warranties and Agreements.
All representations, warranties, covenants and agreements made by the
Shareholders in this Voting Agreement shall survive until the Expiration Date.
4.2. Expenses. All costs and expenses incurred in connection
with the transactions contemplated by this Voting Agreement shall be paid solely
by the party incurring such costs and expenses.
4.3. Notices. Any notice or other communication required or
permitted to be delivered to any party under this Voting Agreement shall be in
writing and shall be deemed properly delivered, given and received when actually
delivered (by hand, by registered mail, by courier or express delivery service
or by facsimile) to the address or facsimile telephone number set forth beneath
the name of such party below (or to such other address or facsimile telephone
number as such party shall have specified in a written notice given to the other
parties hereto); provided, however, that a written notice delivered via
facsimile shall be deemed delivered only if at the time of, or shortly after,
such facsimile transmission the party giving the notice confirms by telephone
the actual receipt by the other party of such facsimile transmission:
IF TO PARENT:
SafeNet, Inc.
8029 Corporate Drive
Baltimore, Maryland 21236
Facsimile No. _______________
Attention: _____________________
WITH COPIES TO (WHICH COPIES SHALL NOT CONSTITUTE NOTICE):
Venable, Baetjer and Howard, LLP
8010 Towers Crescent Drive
Suite 300
Vienna, Virginia 22182
Facsimile No. (703) 821-8949
Attention: Elizabeth R. Hughes, Esq.
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IF TO ANY SHAREHOLDER:
at the address set forth below such Shareholder's signature on the
signature page hereof
WITH A COPY TO (WHICH COPY SHALL NOT CONSTITUTE NOTICE):
CRYSTAL Corporation
3131 Jay Street
Santa Clara, California 95056-0952
Facsimile No.: (408) 855-6106
Attention: Robert B. Fougner
Morrison & Foerster LLP
755 Page Mill Road
Palo Alto, California 94304-1018
Facsimile No.: (650) 494-0792
Attention: Paul "Chip" Lion, III, Esq.
4.4. Waiver of Appraisal Rights. Each Shareholder hereby
irrevocably and unconditionally waives, and agrees to cause to be waived and to
prevent the exercise of, any rights of appraisal, any dissenters' rights
(including under Sections 1300 through 1309 of the California Corporations Code)
and any similar rights relating to the Merger or any related transaction that
such Shareholder or any other Person may have by virtue of the ownership of any
outstanding shares of Company Common Stock Owned by Shareholder.
4.5. No Solicitation. Each Shareholder agrees that, during the
period from the date of this Voting Agreement through the Expiration Date, such
Shareholder shall not, directly or indirectly, and such Shareholder shall ensure
that his Representatives (as defined in the Reorganization Agreement) do not,
directly or indirectly: (i) take any action to solicit, initiate, induce or seek
to facilitate the making, submission or announcement of any Company Acquisition
Proposal (as defined in the Reorganization Agreement) or take any action that
could reasonably be expected to lead to a Company Acquisition Proposal; (ii)
furnish any nonpublic information regarding any of the Acquired Corporations to
any Person (other than Parent or Merger Sub) in connection with or in response
to a Company Acquisition Proposal or an inquiry or indication of interest that
the Shareholder reasonably believes could be expected to lead to a Company
Acquisition Proposal, (iii) engage in discussions or negotiations with any
Person with respect to any Company Acquisition Proposal. Each Shareholder shall
immediately cease and discontinue, and such Shareholder shall ensure that his
Representatives immediately cease and discontinue, any existing discussions with
any Person (except Parent and Merger Sub) that relate to any Company Acquisition
Proposal.
4.6. Severability. If any provision of this Voting Agreement
or any part of any such provision is held under any circumstances to be invalid
or unenforceable in any jurisdiction, then (a) such provision or part thereof
shall, with respect to such circumstances and in such jurisdiction, be deemed
amended to conform to applicable laws so as to be valid and enforceable to the
fullest possible extent, (b) the invalidity or unenforceability of such
provision or part thereof under such circumstances and in such jurisdiction
shall not affect the validity or enforceability of such provision or part
thereof
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under any other circumstances or in any other jurisdiction, and (c) the
invalidity or unenforceability of such provision or part thereof shall not
affect the validity or enforceability of the remainder of such provision or the
validity or enforceability of any other provision of this Voting Agreement. Each
provision of this Voting Agreement is separable from every other provision of
this Voting Agreement, and each part of each provision of this Voting Agreement
is separable from every other part of such provision.
4.7. Entire Agreement. This Voting Agreement, the Proxy and
any other documents delivered by the parties in connection herewith constitute
the entire agreement between the parties with respect to the subject matter
hereof and thereof and supersede all prior agreements and understandings between
the parties with respect thereto. No addition to or modification of any
provision of this Voting Agreement shall be binding upon either party unless
made in writing and signed by both parties.
4.8. Assignment; Binding Effect. Except as provided herein,
neither this Voting Agreement nor any of the interests or obligations hereunder
may be assigned or delegated by any Shareholder or Parent without the prior
written consent of the non-assigning parties, which consent shall not be
unreasonably withheld, and any attempted or purported assignment or delegation
of any of such interests or obligations shall be void. Subject to the preceding
sentence, this Voting Agreement shall be binding upon, and inure to the benefit
of, the Shareholders and their respective heirs, estate, executors,
Representatives, successors and assigns (as the case may be), and shall be
binding upon, and inure to the benefit of, Parent and its successors and
assigns. Without limiting any of the restrictions set forth in Section 2 or
elsewhere in this Voting Agreement, this Voting Agreement shall be binding upon
any Person to whom any Subject Securities are Transferred. Nothing in this
Voting Agreement is intended to confer on any Person (other than Parent and its
successors and assigns) any rights or remedies of any nature. Each Shareholder
specifically agrees that the obligation of such Shareholder hereunder shall not
be terminated by operation of law, whether by death or incapacity of such
Shareholder or otherwise.
4.9. Specific Performance. The parties agree that irreparable
damage would occur in the event that any provision of this Voting Agreement or
the Proxy was, or is, not performed in accordance with its specific terms or
was, or is, otherwise breached. Each Shareholder agrees that, in the event of
any breach or threatened breach by such Shareholder of any covenant or
obligation contained in this Voting Agreement or in the Proxy, Parent and Merger
Sub shall be entitled (in addition to any other remedy that may be available to
it, including monetary damages) to seek (a) a decree or order of specific
performance to enforce the observance and performance of such covenant or
obligation, and (b) an injunction restraining such breach or threatened breach.
Each Shareholder further agrees that neither Parent nor any other Person shall
be required to obtain, furnish or post any bond or similar instrument in
connection with or as a condition to obtaining any remedy referred to in this
Section 4.9, and each Shareholder irrevocably waives any objection to the
imposition of such relief or any right he may have to require the obtaining,
furnishing or posting of any such bond or similar instrument.
4.10. Non-Exclusivity. The rights and remedies of Parent under
this Voting Agreement are not exclusive of or limited by any other rights or
remedies which it may have, whether at law, in equity, by contract or otherwise,
all of which shall be cumulative (and not alternative). Without limiting the
generality of the foregoing, the rights and remedies of Parent under this Voting
Agreement, and the obligations and liabilities of Shareholder under this Voting
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Agreement, are in addition to their respective rights, remedies, obligations and
liabilities under common law requirements and under all applicable statutes,
rules and regulations. Nothing in this Voting Agreement shall limit any of
Shareholder's obligations, or the rights or remedies of Parent, under any
agreement between Parent and Shareholder; and nothing in any such agreement
shall limit any of Shareholder's obligations, or any of the rights or remedies
of Parent, under this Voting Agreement.
4.11. Governing Law; Venue.
(a) This Voting Agreement and the Proxy shall be construed in
accordance with, and governed in all respects by, the laws of the State of
Delaware (without giving effect to principles of conflicts of laws).
(b) Any legal action or other legal proceeding
relating to this Voting Agreement or the Proxy or the enforcement of any
provision of this Voting Agreement or the Proxy may be brought or otherwise
commenced in any state or federal court located in the State of Maryland.
Shareholder and Parent each:
(i) expressly and irrevocably consents and submits to
the exclusive jurisdiction and venue of any state or federal court in the State
of Maryland and the applicable courts of appeals therefrom, in connection with
any such legal proceeding;
(ii) agree that if any action is commenced in a state
court, then subject to applicable law, no party shall object to the removal of
such action to any federal court located in the State of Maryland;
(iii) agrees that service of any process, summons,
notice or document by U.S. mail addressed to him at the address set forth in
Section 4.3 shall constitute effective service of such process, summons, notice
or document for purposes of any such legal proceeding;
(iv) agrees that each state and federal court located
in the State of Maryland, shall be deemed to be a convenient forum; and
(v) agrees not to assert (by way of motion, as a
defense or otherwise), in any such legal proceeding commenced in any state or
federal court located in the State of Maryland, any claim by either Shareholder
or Parent that it is not subject personally to the jurisdiction of such court,
that such legal proceeding has been brought in an inconvenient forum, that the
venue of such proceeding is improper or that this Voting Agreement or the
subject matter of this Voting Agreement may not be enforced in or by such court.
Nothing contained in this Section 4.11 shall be deemed to
limit or otherwise affect the right of either party to commence any legal
proceeding or otherwise proceed against the other party in any other forum or
jurisdiction.
(c) SHAREHOLDER IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL
IN CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS VOTING AGREEMENT OR THE
PROXY OR THE ENFORCEMENT OF ANY PROVISION OF THIS VOTING AGREEMENT OR THE PROXY.
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4.12. Counterparts. This Voting Agreement may be executed by
the parties in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.
4.13. Captions. The captions contained in this Voting
Agreement are for convenience of reference only, shall not be deemed to be a
part of this Voting Agreement and shall not be referred to in connection with
the construction or interpretation of this Voting Agreement.
4.14. Waiver. No failure on the part of Parent to exercise any
power, right, privilege or remedy under this Voting Agreement, and no delay on
the part of Parent in exercising any power, right, privilege or remedy under
this Voting Agreement, shall operate as a waiver of such power, right, privilege
or remedy; and no single or partial exercise of any such power, right, privilege
or remedy shall preclude any other or further exercise thereof or of any other
power, right, privilege or remedy. Parent shall not be deemed to have waived any
claim available to Parent arising out of this Voting Agreement, or any power,
right, privilege or remedy of Parent under this Voting Agreement, unless the
waiver of such claim, power, right, privilege or remedy is expressly set forth
in a written instrument duly executed and delivered on behalf of Parent; and any
such waiver shall not be applicable or have any effect except in the specific
instance in which it is given.
4.15. Construction.
(a) For purposes of this Voting Agreement, whenever the
context requires: the singular number shall include the plural, and vice versa;
the masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include masculine and feminine genders.
(b) The parties agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Voting Agreement.
(c) As used in this Voting Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this
Voting Agreement to "Schedules," "Sections" and "Exhibits" are intended to refer
to Schedules of this Voting Agreement, Sections of this Voting Agreement and
Exhibits to this Voting Agreement.
4.16. Shareholder Capacity. No person executing this Voting
Agreement who is a director or officer of the Company makes any agreement or
understanding herein in his capacity as such director or officer. Without
limiting the generality of the foregoing, Shareholder executes this Voting
Agreement solely in its capacity as the Owner of Subject Securities and nothing
herein shall limit, restrict or otherwise affect in any way any actions taken by
the Shareholder in its capacity as an officer or director of the Company, in
exercising the Company's rights under the Reorganization Agreement or in
exercising its fiduciary duties and responsibilities, it being agreed and
understood that this Voting Agreement shall apply to Shareholder solely in his
or her capacity as a shareholder of Company and shall not apply to his actions,
judgements or decisions as a director or officer of the Company, but provided
further, that no obligation of Shareholder to the Company as an officer or
director of the Company shall affect, impair or impede Shareholder's obligations
under this Voting
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Agreement, including Shareholder's obligation to vote the Subject Securities in
accordance with Section 1.2 hereof.
4.17. Amendment. This Agreement shall not be amended, altered
or modified except by an instrument in writing duly executed and delivered on
behalf of each of the parties hereto.
SECTION 5. CERTAIN DEFINITIONS
For purposes of this Voting Agreement:
(a) "Company Common Stock" shall mean the common stock, $.01
par value, of the Company.
(b) "Expiration Date" shall mean the date upon which the
Reorganization Agreement is terminated or upon the Effective Date.
(c) Each Shareholder shall be deemed to "Own" or to have
acquired "Ownership" of a security if such Shareholder is the: (i) record owner
of such security; or (ii) "beneficial owner" (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934) of such security; provided, however,
that each Shareholder shall not be deemed to Own a security solely because of
such Shareholder's status as an executive officer, director, partner or member
of a Person that owns such security.
(d) "Person" shall mean any (i) individual, (ii) corporation,
limited liability company, partnership or other entity, or (iii) Governmental
Body.
(e) "Subject Securities" with respect to each Shareholder
shall mean: (i) all securities of the Company (including all shares of Company
Common Stock and all options, warrants and other rights to acquire shares of
Company Common Stock) Owned by such Shareholder as of the date of this
Agreement; and (ii) all additional securities of the Company (including all
additional shares of Company Common Stock and all additional options, warrants
and other rights to acquire shares of Company Common Stock) of which such
Shareholder acquires Ownership during the period from the date of this Agreement
through the Expiration Date.
A Person shall be deemed to have effected a "Transfer" of a
security if such Person directly or indirectly: (i) sells, assigns, pledges,
mortgages, encumbers, grants an option with respect to, transfers or disposes of
such security or any interest in such security; (ii) enters into an agreement or
commitment contemplating the possible sale of, assignment of, pledge of,
mortgage of, encumbrance of, grant of an option with respect to, transfer of or
disposition of such security or any interest therein; or (iii) reduces such
Person's beneficial ownership interest in or risk relating to any such security.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, Parent, Merger Sub and each Shareholder
have caused this Voting Agreement to be executed as of the date first written
above.
PARENT:
-----------------------------------
By:
--------------------------------
[Name]
[Title]
MERGER SUB:
-----------------------------------
By:
--------------------------------
[Name]
[Title]
SHAREHOLDERS:
-----------------------------------
[NAME]
Address:
--------------------------
--------------------------
--------------------------
Facsimile:
--------------------------
-----------------------------------
[NAME]
Address:
--------------------------
--------------------------
--------------------------
Facsimile:
--------------------------
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-----------------------------------
[NAME]
Address:
--------------------------
--------------------------
--------------------------
Facsimile:
--------------------------
-----------------------------------
[NAME]
Address:
--------------------------
--------------------------
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Facsimile:
--------------------------
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SCHEDULE A
- ----------
- ------------ ---------------------- ---------------------- ---------------------
Options,
Shareholder Shares Held of Warrants and Additional Securities
Record Other Rights Beneficially Owned
- ------------ ---------------------- ---------------------- ---------------------
- ------------ ---------------------- ---------------------- ---------------------
- ------------ ---------------------- ---------------------- ---------------------
- ------------ ---------------------- ---------------------- ---------------------
- ------------ ---------------------- ---------------------- ---------------------
- ------------ ---------------------- ---------------------- ---------------------
- ------------ ---------------------- ---------------------- ---------------------
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IRREVOCABLE PROXY
The undersigned shareholder of Crystal, a California
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints Anthony A. Caputo or Bruce R. Thaw of Sapphire, a Delaware
corporation ("Parent"), and each of them, the attorneys and proxies of the
undersigned with full power of substitution and resubstitution, to the full
extent of the undersigned's rights with respect to (i) the outstanding shares of
Company Common Stock or other securities owned of record by the undersigned as
of the date of this proxy, which shares are specified on the final page of this
proxy, and (ii) any and all other shares of Company Common Stock or other
securities which the undersigned may acquire on or after the date hereof. (The
shares of the Company Common Stock or other securities referred to in clauses
"(i)" and "(ii)" of the immediately preceding sentence, except for shares which
are not Subject Securities (as defined in the Voting Agreement), are
collectively referred to in this proxy as the "Shares"). Upon the execution
hereof, all prior proxies given by the undersigned with respect to any of the
Shares are hereby revoked, and the undersigned agrees that no subsequent proxies
will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is
granted in connection with the Voting Agreement, dated as of the date hereof,
between Parent and the undersigned (the "Voting Agreement"), and is granted in
consideration of Parent entering into the Agreement and Plan of Reorganization,
dated as of the date hereof, among Parent, Sapphire Acquisition Corp., a
California corporation and a wholly owned subsidiary of Parent, and the Company
(the "Reorganization Agreement"). Capitalized terms used herein and not
otherwise defined shall have the meanings given to such terms in the
Reorganization Agreement. The proxy granted herein is executed in accordance
with and intended to comply with the requirements of Section 705 of the
California Corporations Code applicable to irrevocable proxies.
The attorneys and proxies named above will be empowered, and
may exercise this proxy, to vote the Shares at any meeting of the shareholders
of the Company, however called, and in any action by written consent of the
Shareholders of the Company:
(i) in favor of the Merger and the adoption of the Agreement
of Merger, Reorganization Agreement and the transactions contemplated thereby
(including any amendments or modifications of the terms thereof approved by the
Board of Directors of the Company) in connection with any meeting of, or
solicitation of consents from, the shareholders of the Company at which or in
connection with which the Merger, the Agreement of Merger or the Reorganization
Agreement are submitted for the consideration and vote of the shareholders of
the Company;
(ii) against any action or agreement that would result in a
breach of any representation, warranty, covenant or obligation of the Company in
the Reorganization Agreement;
(iii) against any action or agreement that would cause any
provision contained in Section 6 of the Reorganization Agreement to not be
satisfied;
(iv) against approval or adoption of any extraordinary
corporate transaction (other than the Merger, Agreement of Merger, the
Reorganization Agreement or the transactions contemplated thereby) including,
without limitation, any transaction involving (i) the sale or transfer of all or
substantially all of the capital stock of the Company, whether by merger,
consolidation or other business combination, (ii) a sale or transfer of all or
substantially all of the assets of the Company or
its subsidiaries, (iii) a reorganization, recapitalization or liquidation of the
Company or its subsidiaries, or (iv) any amendment to the Company's governing
instruments creating any new class of securities of the Company or otherwise
affecting the rights of any class of security as currently in effect; and
(v) against the following actions (other than the Merger,
Agreement of Merger and the transactions contemplated by the Reorganization
Agreement): (i) any Company Acquisition Proposal; (ii) any change in a majority
of the members of the board of directors of the Company; or (iii) any other
action which is intended to, or could reasonably be expected to, impede,
interfere with, delay, postpone, discourage or adversely affect the consummation
of the Merger, the Agreement of Merger or any of the other transactions
contemplated by the Reorganization Agreement or this Voting Agreement.
THE ATTORNEYS AND PROXIES NAMED ABOVE MAY NOT EXERCISE THIS
IRREVOCABLE PROXY ON ANY OTHER MATTER EXCEPT AS PROVIDED ABOVE. THE UNDERSIGNED
SHAREHOLDER MAY VOTE THE SHARES ON ALL OTHER MATTERS.
This proxy shall be binding upon the heirs, estate, executors,
personal representatives, successors and assigns of the undersigned (including
any transferee of any of the Shares).
If any provision of this proxy or any part of any such
provision is held under any circumstances to be invalid or unenforceable in any
jurisdiction, then (a) such provision or part thereof shall, with respect to
such circumstances and in such jurisdiction, be deemed amended to conform to
applicable laws so as to be valid and enforceable to the fullest possible
extent, (b) the invalidity or unenforceability of such provision or part thereof
under such circumstances and in such jurisdiction shall not affect the validity
or enforceability of such provision or part thereof under any other
circumstances or in any other jurisdiction, and (c) the invalidity or
unenforceability of such provision or part thereof shall not affect the validity
or enforceability of the remainder of such provision or the validity or
enforceability of any other provision of this proxy. Each provision of this
proxy is separable from every other provision of this proxy, and each part of
each provision of this proxy is separable from every other part of such
provision.
This proxy shall terminate upon the valid termination of the
Voting Agreement.
[next page is a signature page]
2
Dated: October __, 2002.
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[NAME]
Number of shares of common stock of
the Company owned of record or
beneficially as of the date of this
irrevocable proxy:
-----------------------------------