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EXHIBIT (c)(1)
CONFORMED COPY
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AGREEMENT OF MERGER
BY AND AMONG
LUCENT TECHNOLOGIES INC.,
SEATTLE ACQUISITION INC.,
AND
SPECTRAN CORPORATION
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Dated as of July 15, 1999
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TABLE OF CONTENTS
Page
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1. The Offer......................................................................... -2-
1.1. The Offer................................................................ -2-
1.2. Company Actions.......................................................... -4-
2. The Merger........................................................................ -4-
2.1. General.................................................................. -4-
2.2. Certificate of Incorporation............................................. -5-
2.3. By-Laws.................................................................. -5-
2.4. Directors and Officers................................................... -5-
2.5. Conversion of Securities................................................. -6-
2.6. Adjustment of the Merger Consideration................................... -6-
2.7. Dissenting Shares........................................................ -6-
2.8. Surrender of Shares; Stock Transfer Books................................ -7-
2.9. No Further Ownership Rights in Company Capital Stock..................... -9-
2.10. Return of Payment Fund................................................... -9-
2.11. Further Assurances....................................................... -9-
3. Representations and Warranties of the Company..................................... -9-
3.1. Organization............................................................. -10-
3.2. Subsidiaries............................................................. -10-
3.3. Capital Structure........................................................ -10-
3.4. Authority................................................................ -12-
3.5. No Conflict.............................................................. -12-
3.6. SEC Documents; Undisclosed Liabilities................................... -13-
3.7. Schedule 14D-9; Company Proxy Statement.................................. -14-
3.8. Absence of Certain Changes............................................... -14-
3.9. Properties............................................................... -16-
3.10. Leases................................................................... -16-
3.11. Contracts................................................................ -17-
3.12. Absence of Default....................................................... -18-
3.13. Litigation............................................................... -18-
3.14. Compliance with Law...................................................... -19-
3.15. Intellectual Property; Year 2000......................................... -19-
3.16. Taxes.................................................................... -20-
3.17. Benefit Plans............................................................ -21-
3.18. ERISA Compliance......................................................... -21-
3.19. Employment Matters....................................................... -23-
3.20. Environmental Laws....................................................... -24-
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3.21. Accounts Receivable; Inventory........................................... -24-
3.22. Customers and Suppliers.................................................. -24-
3.23. Voting Requirements...................................................... -25-
3.24. State Takeover Statutes.................................................. -25-
3.25. Brokers.................................................................. -25-
3.26. Opinion of Financial Advisor............................................. -26-
3.27. Complete Copies of Materials............................................. -26-
3.28. Disclosure............................................................... -26-
4. Representations and Warranties of Lucent and Acquisition.......................... -26-
4.1. Organization, Standing and Corporate Power............................... -26-
4.2. Authority................................................................ -26-
4.3. No Conflict.............................................................. -27-
4.4. Information Supplied..................................................... -27-
4.5. Brokers.................................................................. -28-
5. Conduct Pending Closing........................................................... -28-
5.1. Conduct of Business Pending Closing...................................... -28-
5.2. Prohibited Actions Pending Closing....................................... -38-
5.3. Other Actions............................................................ -30-
6. Additional Agreements............................................................. -31-
6.1. Access; Documents; Supplemental Information.............................. -31-
6.2. No Solicitation by the Company........................................... -32-
6.3. Preparation of the Company Proxy Statement;
Company Stockholders Meeting............................................. -34-
6.4. Reasonable Best Efforts.................................................. -35-
6.5. Stock Options; Warrants.................................................. -35-
6.6. Employee Benefit Plans; Existing Agreement............................... -36-
6.7. Indemnification.......................................................... -37-
6.8. Directors................................................................ -37-
6.9. Fees and Expenses........................................................ -38-
6.10. Public Announcements..................................................... -39-
6.11. Stockholder Litigation................................................... -39-
7. Conditions Precedent.............................................................. -39-
7.1. Conditions Precedent to Each Party's Obligation to Effect the Merger..... -39-
7.2. Conditions Precedent to Obligations of Acquisition and Lucent............ -40-
7.3. Conditions Precedent to the Company's Obligations........................ -41-
8. Non-Survival of Representation and Warranties..................................... -41-
8.1. Representations and Warranties........................................... -41-
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9. Contents of Agreement; Parties in Interest; etc................................... -41-
10. Assignment and Binding Effect..................................................... -42-
11. Termination....................................................................... -42-
12. Definitions....................................................................... -43-
13. Notices........................................................................... -45-
14. Amendment......................................................................... -46-
15. Extensions; Waiver................................................................ -47-
16. Governing Law..................................................................... -47-
17. No Benefit to Others.............................................................. -47-
18. Severability...................................................................... -47-
19. Section Headings.................................................................. -47-
20. Schedules and Exhibits............................................................ -48-
21. Counterparts...................................................................... -48-
Glossary of Defined Terms.................................................................. i
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AGREEMENT OF MERGER
AGREEMENT OF MERGER ("Agreement") dated as of July 15, 1999 by and
among LUCENT TECHNOLOGIES INC., a Delaware corporation ("Lucent"), SEATTLE
ACQUISITION INC., a Delaware corporation ("Acquisition"), and SPECTRAN
CORPORATION, a Delaware corporation (the "Company").
BACKGROUND
A. The Company is a Delaware corporation with its registered office
located at 9 East Lockerman Street, Dover, Delaware 19901 and has authorized
20,000,000 shares of common stock with voting rights, par value $.10 per share
(the "Company Voting Common Stock"), of which 7,040,930 shares of Company Voting
Common Stock are issued and outstanding, and 250,000 shares of common stock with
no voting rights, par value $.10 per share (the "Company Non-Voting Common
Stock" and together with the Company Voting Common Stock, the "Company Common
Stock"), of which no shares of Company Non-Voting Common Stock are issued and
outstanding. The Company is engaged principally in the design, development,
production, marketing, distribution, maintenance and support of multi-mode and
single-mode optical fiber for data communications and telecommunications
applications.
B. Lucent is a Delaware corporation with its registered office located
at 1013 Centre Road, Wilmington, Delaware.
C. Acquisition is a wholly-owned subsidiary of Lucent and was formed to
merge with and into the Company so that, as a result of the merger, the Company
will survive and become a wholly-owned subsidiary of Lucent. Acquisition is a
Delaware corporation with its registered office located at 1013 Centre Road,
Wilmington, Delaware and has authorized an aggregate of 1,000 shares of common
stock, no par value per share (the "Acquisition Common Stock").
D. In furtherance of the acquisition of the Company by Lucent on the
terms and subject to the conditions set forth in this Agreement, Lucent proposes
to cause Acquisition to make a tender offer (as it may be amended from time to
time as permitted under this Agreement, the "Offer") to purchase all the
outstanding shares of Company Common Stock (the "Shares"), at a purchase price
of $9.00 per Share (the "Offer Price"), net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in this
Agreement.
E. The Board of Directors of each of Lucent, Acquisition and the
Company has determined that the Offer, this Agreement and the merger of
Acquisition with and into the Company (the "Merger") in accordance with the
provisions of the Delaware General Corporation Law, as amended (the "DGCL"),
and, subject to the terms and conditions of this Agreement, is advisable and in
the best interests of Lucent, Acquisition and the Company and their respective
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stockholders. The Board of Directors of each of Lucent, Acquisition and the
Company have approved the Offer, this Agreement and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto intending to be legally bound do hereby agree
as follows:
1. The Offer.
1.1. The Offer. (a) Subject to the provisions of this
Agreement, as promptly as practicable but in no event later than five business
days after the date of the public announcement by Lucent and the Company of this
Agreement, Acquisition shall, and Lucent shall cause Acquisition to, commence
the Offer. The initial expiration date for the Offer shall be the 20th business
day following the commencement of the Offer. The obligation of Acquisition to
accept for payment, and pay for, any Shares tendered pursuant to the Offer shall
be subject only to the conditions set forth in Exhibit A (the "Offer
Conditions") (any of which may be waived in whole or in part by Acquisition in
its sole discretion; provided that, without the prior written consent of the
Company, Acquisition shall not waive the Minimum Condition (as defined in
Exhibit A)) and to the terms and conditions of this Agreement. Acquisition
expressly reserves the right to modify the terms of the Offer, except that,
without the consent of the Company, Acquisition shall not (i) reduce the number
of Shares subject to the Offer, (ii) reduce the Offer Price, (iii) amend or add
to the Offer Conditions any terms that are adverse to the holders of the Shares,
(iv) except as provided in the next sentence, extend the Offer, (v) change the
form of consideration payable in the Offer or (vi) amend any other term of the
Offer in any manner adverse to the holders of the Shares. Notwithstanding the
foregoing, Acquisition may, without the consent of the Company, (A) extend the
Offer, if at the scheduled or extended expiration date of the Offer any of the
Offer Conditions shall not be satisfied or waived, until such time as such
conditions are satisfied or waived, (B) extend the Offer for any period required
by any rule, regulation, interpretation or position of the Securities and
Exchange Commission (the "SEC") or the staff thereof applicable to the Offer or
any period required by applicable law and (C) extend the Offer on one or more
occasions for an aggregate period of not more than 10 business days beyond the
latest expiration date that would otherwise be permitted under clause (A) or (B)
of this sentence, if on such expiration date there shall not have been tendered
at least 90% of the outstanding Shares. Lucent and Acquisition agree that if all
the Offer Conditions are not satisfied on any scheduled expiration date of the
Offer then, provided that all such conditions are reasonably capable of being
satisfied, Acquisition shall extend the Offer from time to time until such
conditions are satisfied or waived; provided that Acquisition shall not be
required to extend the Offer beyond September 30, 1999. Subject to the terms and
conditions of the Offer and this Agreement, Acquisition shall, and Lucent shall
cause Acquisition to, accept for payment, and pay for, all Shares validly
tendered and not withdrawn pursuant to the Offer that Acquisition becomes
obligated to accept for payment and pay for, pursuant to the Offer as promptly
as practicable after the expiration of the Offer.
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(b) On the date of commencement of the Offer, Lucent and
Acquisition shall file with the SEC a Tender Offer Statement on Schedule 14D-1
(the "Schedule 14D-1") with respect to the Offer, which shall contain an offer
to purchase and a related letter of transmittal and summary advertisement (such
Schedule 14D-1 and the documents included therein pursuant to which the Offer
shall be made, together with any supplements or amendments thereto, the "Offer
Documents"). Lucent and Acquisition agree that the Offer Documents shall comply
as to form in all material respects with the Securities Exchange Act of 1934
(the "Exchange Act"), and the rules and regulations promulgated thereunder and
the Offer Documents, on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation or warranty is made by
Lucent or Acquisition with respect to information supplied by the Company or any
of its stockholders specifically for inclusion or incorporation by reference in
the Offer Documents. Each of Lucent, Acquisition and the Company agree promptly
to correct any information provided by it for use in the Offer Documents if and
to the extent that such information shall have become false or misleading in any
material respect, and Lucent and Acquisition further agree to take all steps
necessary to cause the Schedule 14D-1 as so corrected to be filed with the SEC
and the other Offer Documents as so corrected to be disseminated to the
Company's stockholders, in each case as and to the extent required by applicable
federal securities laws. The Company and its counsel shall be given reasonable
opportunity to review and comment upon the Offer Documents prior to their filing
with the SEC or dissemination to the stockholders of the Company. Lucent and
Acquisition agree to provide the Company and its counsel any comments Lucent,
Acquisition or their counsel may receive from the SEC or its staff with respect
to the Offer Documents promptly after the receipt of such comments.
(c) Lucent shall provide or cause to be provided to
Acquisition on a timely basis the funds necessary to accept for payment, and pay
for, any Shares that Acquisition becomes obligated to accept for payment, and
pay for, pursuant to the Offer.
1.2. Company Actions. (a) The Company hereby approves of and
consents to the Offer and represents that the Board of Directors of the Company,
at a meeting duly called and held, duly and unanimously adopted resolutions
approving this Agreement, the Offer and the Merger, determining, as of the date
of such resolutions, that the terms of the Offer and the Merger are fair to, and
in the best interests of, the Company's stockholders, recommending that the
Company's stockholders accept the Offer, tender their shares pursuant to the
Offer and approve this Agreement (if required) and approving the acquisition of
Shares by Acquisition pursuant to the Offer and the other transactions
contemplated by this Agreement. The Company has been advised by each of its
directors and executive officers who owns Shares (each of whom is listed in Item
1.2(a) of the Company Disclosure Schedule) that such person currently intends to
tender all Shares (other than Shares, if any, held by such person that, if
tendered, could cause such person to incur liability under the provisions of
Section 16(b) of the Exchange Act) owned by such person pursuant to the Offer.
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(b) On the date the Offer Documents are filed with the SEC,
the Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as supplemented
or amended from time to time, the "Schedule 14D-9") containing, subject to the
terms of this Agreement, the recommendation described in paragraph (a) and shall
mail the Schedule 14D-9 to the stockholders of the Company. The Schedule 14D-9
shall comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations promulgated thereunder and, on the
date filed with the SEC and on the date first published, sent or given to the
Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation or
warranty is made by the Company with respect to information supplied by Lucent
or Acquisition specifically for inclusion in the Schedule 14D-9. Each of the
Company, Lucent and Acquisition agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that such
information shall have become false or misleading in any material respect, and
the Company further agrees to take all steps necessary to amend or supplement
the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or supplemented
to be filed with the SEC and disseminated to the Company's stockholders, in each
case as and to the extent required by applicable federal securities laws. Lucent
and its counsel shall be given reasonable opportunity to review and comment upon
the Schedule 14D-9 prior to its filing with the SEC or dissemination to
stockholders of the Company. The Company agrees to provide Lucent and its
counsel any comments the Company or its counsel may receive from the SEC or its
staff with respect to the Schedule 14D-9 promptly after the receipt of such
comments.
(c) In connection with the Offer and the Merger, the Company
shall cause its transfer agent to furnish Acquisition promptly with mailing
labels containing the names and addresses of the record holders of Shares as of
a recent date and of those persons becoming record holders subsequent to such
date, together with copies of all lists of stockholders, security position
listings and computer files and all other information in the Company's
possession or control regarding the beneficial owners of Shares, and shall
furnish to Acquisition such information and assistance (including updated lists
of stockholders, security position listings and computer files) as Lucent may
reasonably request in communicating the Offer to the Company's stockholders.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Lucent and Acquisition and each of their agents shall
hold in confidence the information contained in any such labels, listings and
files, will use such information only in connection with the Offer and the
Merger and, if this Agreement shall be terminated, will deliver, and will use
their reasonable efforts to cause their agents to deliver, to the Company all
copies and any extracts or summaries from such information then in their
possession or control.
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2. The Merger.
2.1. General. (a) Upon the terms and subject to the conditions
of this Agreement and in accordance with the DGCL, at the Effective Time, (i)
Acquisition shall be merged with and into the Company, (ii) the separate
corporate existence of Acquisition shall cease and (iii) the Company shall be
the surviving corporation (the "Surviving Corporation") and shall succeed to and
assume all the rights and obligations of Acquisition in accordance with the
DGCL. At the election of Lucent, to the extent that any such action would not
cause a failure of a condition to the Offer or the Merger, any direct or
indirect wholly owned Subsidiary of Lucent may be substituted for and assume all
of the rights and obligations of Acquisition as a constituent corporation in the
Merger. In either such event, the parties agree to execute an appropriate
amendment to this Agreement in order to reflect the foregoing.
(b) The Merger shall become effective at the time of filing of
the certificate of merger with the Secretary of State of the State of Delaware
substantially in the form of Exhibit B attached hereto (the "Certificate of
Merger") in accordance with the provisions of Section 251 of the DGCL or such
later time as may be stated in the Certificate of Merger or such later date as
the parties may mutually agree (the "Effective Time"). Subject to the terms and
conditions of this Agreement, the Company and Acquisition shall duly execute and
file the Certificate of Merger with the Secretary of State of the State of
Delaware at the time of the Closing. The closing of the Merger (the "Closing")
shall take place at the offices of Sidley & Austin, 875 Third Avenue, New York,
N.Y. at 10:00 A.M., two business days after the date on which the last of the
conditions set forth in Article 7 shall have been satisfied or waived, or on
such other date, time and place as the parties may mutually agree (the "Closing
Date").
(c) At the Effective Time, the effect of the Merger shall be
as provided in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all the
property, rights, privileges, powers and franchises of the Company and
Acquisition shall vest in the Surviving Corporation, and all debts, liabilities,
obligations, restrictions, disabilities and duties of the Company and
Acquisition shall become the debts, liabilities, obligations, restrictions,
disabilities and duties of the Surviving Corporation.
2.2. Certificate of Incorporation. The certificate of
incorporation of Acquisition, as in effect immediately prior to the Effective
Time, shall be the certificate of incorporation of the Surviving Corporation
until thereafter amended as provided therein and by law except that Article I of
such certificate of incorporation shall be amended to read as follows:
"The name of the Corporation is: SpecTran Corporation."
2.3. By-Laws. The by-laws of Acquisition, as in effect
immediately prior to the Effective Time, shall be the by-laws of the Surviving
Corporation until thereafter amended as provided therein and by law.
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2.4. Directors and Officers. From and after the Effective
Time, (a) the directors of Acquisition immediately prior to the Effective Time
shall be the initial directors of the Surviving Corporation, each to hold office
in accordance with the certificate of incorporation and by-laws of the Surviving
Corporation, and (b) the officers of Acquisition immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation, in
each case, until their respective successors are duly elected or appointed and
qualified.
2.5. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Lucent, Acquisition,
the Company or the holders of any of the following securities:
(a) Each issued and outstanding share of common stock of
Acquisition shall be converted into one validly issued, fully paid and
nonassessable share of Common Stock, $.10 par value per share, of the Surviving
Corporation;
(b) Each Share that is owned or held in treasury by the
Company and each Share that is owned by Acquisition or Lucent shall
automatically be canceled and retired and shall cease to exist without any
conversion thereof and no payment or distribution shall be made with respect
thereto. Each Share that is owned by any Subsidiary of either the Company or
Lucent (other than Acquisition) shall remain outstanding without change; and
(c) Subject to the provisions of Section 2.6, each Share
issued and outstanding immediately prior to the Effective Time (other than
Shares to be canceled or to remain outstanding in accordance with Section 2.5(b)
and other than Dissenting Shares) shall be converted into the right to receive
from the Surviving Corporation in cash, without interest, the price per share
paid in the Offer (the "Merger Consideration"). As of the Effective Time, all
such Shares shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of record of a certificate
representing any such Shares shall cease to have any rights with respect thereto
other than the right to receive the Merger Consideration, without interest.
2.6. Adjustment of the Merger Consideration. In the event
that, subsequent to the date of this Agreement but prior to the Effective Time,
any stock split, combination, reclassification or stock dividend with respect to
the outstanding shares of Company Common Stock, any change or conversion of
outstanding shares of Company Common Stock into other securities or any other
dividend or distribution with respect to the outstanding shares of Company
Common Stock should occur, appropriate and proportionate adjustments shall be
made to the Merger Consideration, and thereafter all references to the Merger
Consideration shall be deemed to be to the Merger Consideration as so adjusted.
2.7. Dissenting Shares. (a) Notwithstanding any provision of
this Agreement to the contrary, shares of Company Common Stock that are
outstanding immediately prior to the Effective Time and which are held by
stockholders who shall not have voted in favor of the
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Merger or consented thereto in writing and who shall have demanded properly in
writing appraisal for such shares in accordance with Section 262 of the DGCL
(collectively, the "Dissenting Shares") shall not be converted into or represent
the right to receive the consideration set forth in Section 2.5(c). Such
stockholders shall instead be entitled to receive such consideration as is
determined to be due with respect to such Dissenting Shares in accordance with
the provisions of Section 262, except that all Dissenting Shares held by such
stockholders who shall have failed to perfect or who effectively shall have
withdrawn their demand for appraisal or lost their rights to appraisal of such
shares under Section 262, after the Effective Time, shall thereupon be deemed to
have been converted into and to have become exchangeable for, as of the
Effective Time, the right to receive the Merger Consideration in Section 2.5(c),
without any interest thereon, upon surrender, in the manner provided in Section
2.8, of the certificate or certificates that formerly evidenced by such
Dissenting Shares.
(b) The Company shall give Lucent (i) prompt notice of any
demands for appraisal of Shares received by the Company, withdrawals of such
demands, and any other instruments served pursuant to the DGCL and received by
the Company and (ii) the opportunity to participate in and direct all
negotiations and proceedings with respect to demands for appraisal under the
DGCL. The Company shall not, except with the prior written consent of Lucent,
make any payment with respect to any demands for appraisal or offer to settle or
settle any such demands.
2.8. Surrender of Shares; Stock Transfer Books.
(a) Prior to the Effective Time, Lucent shall designate The
Bank of New York, or another bank or trust company designated by Lucent, to act
as paying agent in the Merger (the "Paying Agent"), and, from time to time, on,
prior to or after the Effective Time, Lucent shall make available, or cause the
Surviving Corporation to make available, to the Paying Agent cash in the amounts
and at the times necessary for the prompt payment of the Merger Consideration
upon surrender of certificates representing outstanding shares of Company Common
Stock (the "Certificates") as part of the Merger pursuant to Section 2.5, and
such amounts as and when so made available shall hereinafter be referred to as
the "Payment Fund" (it being understood that any and all interest earned on
funds deposited with the Paying Agent pursuant to this Agreement shall be turned
over to Lucent).
(b) As soon as practicable after the Effective Time, Lucent
shall use its reasonable best efforts to cause the Paying Agent to send to each
Person who was, at the Effective Time, a holder of record of Certificates, a
letter of transmittal which (i) shall specify that delivery shall be effected
and risk of loss and title to such Certificates shall pass, only upon actual
delivery thereof to the Paying Agent and (ii) shall contain instructions for use
in effecting the surrender of the Certificates. Upon surrender to the Paying
Agent of Certificates for cancellation, together with such letter of transmittal
duly completed and validly executed in accordance with the instructions thereto
and such other documents as the Paying Agent may reasonably require, such holder
shall be entitled to receive in exchange therefor the applicable
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Merger Consideration, and the Certificates so surrendered shall then be
canceled. Such Merger Consideration shall be mailed as promptly as practicable
after the satisfaction by such holder of the foregoing. Subject to Section
2.8(c), until surrendered as contemplated by this Section 2.8(b), each
Certificate, from and after the Effective Time, shall be deemed to represent
only the right to receive, upon such surrender, the Merger Consideration. No
interest will be paid or will accrue on the cash payable upon the surrender of
any Certificate.
(c) If payment of any portion of the Merger Consideration is
to be made to any Person other than the registered holder of the Certificate
surrendered in exchange therefor, it shall be a condition to such payment that
such surrendered Certificate shall be properly endorsed and otherwise in proper
form for transfer and such Person either (i) shall pay to the Paying Agent any
transfer or other taxes required as a result of the payment of the Merger
Consideration to such Person or (ii) shall establish to the satisfaction of the
Surviving Corporation that such taxes have been paid or are not applicable.
Lucent, Acquisition or the Paying Agent, as the case may be, shall be entitled
to deduct and withhold from the Merger Consideration or Company Stock Option
Consideration otherwise payable pursuant to this Agreement to any holder of
shares of Company Common Stock or holder of Company Stock Options such amounts
as are required to be deducted and withheld with respect to the making of such
payment under the Code, or any provision of state, local or foreign tax law. To
the extent that amounts are so withheld by Lucent, Acquisition or the Paying
Agent, such withheld amounts shall be treated for all purposes of this Agreement
as having been paid to the holder of shares of Company Common Stock or holder of
Company Stock Options, in respect of which such deduction and withholding was
made by Lucent, Acquisition or the Paying Agent. All amounts in respect of taxes
received or withheld by Lucent, Acquisition or the Paying Agent shall be
disposed of by Lucent, Acquisition or the Paying Agent in accordance with the
Code or such state, local or foreign tax law, as applicable.
(d) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and subject to such other
conditions as the Board of Directors of the Surviving Corporation may impose,
the Paying Agent shall pay in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration deliverable in respect of such Certificate
as determined in accordance herewith. When authorizing such payment of the
Merger Consideration in exchange for such Certificate, the Board of Directors of
the Surviving Corporation (or any authorized officer thereof) may, in its
reasonable discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed Certificate to deliver to
the Surviving Corporation a bond in such sum as the Surviving Corporation may
reasonably require as indemnity against any claim that may be made against
Lucent, the Surviving Corporation or the Paying Agent with respect to the
Certificate alleged to have been lost, stolen or destroyed.
(e) At the close of business on the day on which the Effective
Time occurs, the stock transfer books of the Company shall be closed and
thereafter there shall be no further
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registration of transfers of shares of Company Common Stock on the records of
the Company. From and after the Effective Time, the holders of shares of Company
Common Stock outstanding immediately prior to the Effective Time shall cease to
have any rights with respect to such shares except as otherwise provided herein
or by applicable law.
(f) Neither Lucent nor the Company shall be liable to any
former holder of Company Capital Stock for any Merger Consideration which is
delivered to a public official pursuant to an official request under any
applicable abandoned property, escheat or similar law.
2.9. No Further Ownership Rights in Company Capital Stock. The
Merger Consideration shall be deemed to have been delivered (and paid) in full
satisfaction of all rights pertaining to the Company Common Stock previously
represented by such surrendered Certificates.
2.10. Return of Payment Fund. Any portion of the Payment Fund
which remains undistributed to the former holders of Company Common Stock for
six months after the Effective Time shall be delivered to Lucent, upon its
request, and any such former holders who have not theretofore surrendered to the
Paying Agent their Certificates in compliance herewith shall thereafter look
only to Lucent for payment of their claim for their portion of the Payment Fund.
Neither Lucent, Acquisition, the Paying Agent or the Company shall be liable to
any former holder of Company Common Stock for any portion of the Payment Fund
which is delivered to a public official pursuant to an official request under
any applicable abandoned property, escheat or similar law.
2.11. Further Assurances. If at any time after the Effective
Time the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets of
either the Company or Acquisition or (b) otherwise to carry out the purposes of
this Agreement, the Surviving Corporation and its proper officers and directors
or their designees shall be authorized to execute and deliver, in the name and
on behalf of either the Company or Acquisition, all such deeds, bills of sale,
assignments and assurances and do, in the name and on behalf of the Company or
Acquisition, all such other acts and things necessary, desirable or proper to
vest, perfect or confirm its right, title or interest in, to or under any of the
rights, privileges, powers, franchises, properties or assets of the Company or
Acquisition, as applicable, and otherwise to carry out the purposes of this
Agreement.
3. Representations and Warranties of the Company.
Except as set forth on the Disclosure Schedule delivered by
the Company to Lucent prior to the execution of this Agreement (the "Company
Disclosure Schedule") and making reference to the particular subsection of this
Agreement to which exception is being taken, the Company represents and warrants
to Lucent and Acquisition as follows:
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3.1. Organization. Each of the Company and its Subsidiaries is
a corporation or other legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
and has all requisite power and authority and all necessary governmental
approval to carry on its business as it has been and is now being conducted.
Except as set forth in Item 3.1 of the Company Disclosure Schedule, each of the
Company and its Subsidiaries is duly qualified or licensed as a foreign
corporation to do business and is in good standing (with respect to
jurisdictions which recognize such concept) in each jurisdiction where the
nature of its business or the ownership, leasing or operation of its properties
makes such qualification or licensing necessary, except where the failure to be
so qualified or licensed and in good standing, would not have a Material Adverse
Effect. The Company has made available to Lucent prior to the execution of this
Agreement complete and correct copies of its certificate of incorporation and
by-laws and the charter documents for each of its Subsidiaries in each case, as
amended to the date hereof.
3.2. Subsidiaries. Item 3.2 of the Company Disclosure Schedule
contains (i) the name and jurisdiction of incorporation of each Subsidiary of
the Company, (ii) the total number of shares of each class of capital stock of
(or other equity interests in) each Subsidiary authorized, the number of shares
(or other equity interests) outstanding and the number of shares (or other
equity interests) owned by the Company or any other Subsidiary of the Company
and (iii) a complete list of the directors and officers of the Company and each
Subsidiary. All the issued and outstanding capital stock of (or other equity
interests in) each Subsidiary have been duly and validly authorized and issued
and are fully paid, nonassessable and free of pre-emptive rights. None of the
outstanding capital stock of (or other equity interests in) any Subsidiary has
been issued in violation of the preemptive rights of any equity holder of such
Subsidiary. The capital stock of (or other equity interests in) each Subsidiary
were issued in compliance in all material respects with all applicable federal
and state securities laws and regulations, are owned free and clear of all Liens
(except as set forth in Item 3.2 of the Company Disclosure Schedule) and are
free of any restriction on the right to vote, sell or otherwise dispose of such
capital stock or other equity interest.
3.3. Capital Structure. (a) The authorized capital stock of
the Company consists of 20,000,000 shares of Company Voting Common Stock and
250,000 shares of Company Non-Voting Common Stock. At the close of business on
July 14, 1999, (i) 7,040,930 shares of Company Voting Common Stock were issued
and outstanding; (ii) no shares of Company Non-Voting Common Stock were issued
and outstanding; (iii) no shares of Company Common Stock were held by the
Company in its treasury; (iv) 150,000 shares of Company Common Stock were
reserved for issuance upon exercise of the Warrants; and (v) 1,411,836 shares of
Company Common Stock were reserved for issuance pursuant to the SpecTran
Corporation 1991 Incentive Stock Option Plan and the SpecTran Corporation
Incentive Stock Option Plan (collectively, the "Company Stock Plans") (of which
1,037,739 shares are subject to outstanding Company Stock Options as of July 14,
1999).
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(b) Except as set forth in paragraph (a), at the close of
business on July 14, 1999, no shares of capital stock or other voting securities
of the Company were issued, reserved for issuance or outstanding. There are no
outstanding stock appreciation rights ("SARs") or rights (other than outstanding
stock options or other rights to purchase or receive Company Common Stock
granted under the Company Stock Plans (collectively, "Company Stock Options"))
to receive shares of Company Common Stock on a deferred basis granted under the
Company Stock Plans or otherwise and no warrants to purchase shares of capital
stock of the Company at any time or upon the occurrence of any stated event. The
Company has delivered to Lucent a complete and correct list, as of June 30,
1999, of the number of shares of Company Common Stock subject to Company Stock
Options and the exercise prices thereof.
(c) As of the date of this Agreement, no bonds, debentures,
notes or other indebtedness of the Company having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which stockholders of the Company may vote are issued or
outstanding. All outstanding shares of capital stock of the Company are, and all
shares which may be issued upon the exercise of the Warrants will be, when
issued, duly authorized, validly issued, fully paid and nonassessable, not
subject to preemptive rights and were issued in compliance in all material
respects with all applicable federal and state securities laws.
(d) Except as set forth in this Section 3.3 and except for
changes since July 14, 1999 resulting from the issuance of shares of Company
Common Stock pursuant to Company Stock Options outstanding as of July 14, 1999,
there are not issued, reserved for issuance or outstanding (i) any shares of
capital stock or other voting securities of the Company, (ii) any securities of
the Company convertible into or exchangeable or exercisable for shares of
capital stock or voting securities of the Company, (iii) any warrants, calls,
options or other rights to acquire from the Company or any Subsidiary, and no
obligation of the Company or any Subsidiary to issue, any capital stock, voting
securities or securities convertible into or exchangeable or exercisable for
capital stock or voting securities of the Company. Except as set forth in this
Section 3.3, on the date hereof there are not any outstanding obligations of the
Company or any Subsidiary to repurchase, redeem or otherwise acquire any such
securities or to issue, deliver or sell, or cause to be issued, delivered or
sold, any such securities. The Company is not a party to any voting agreement
with respect to the voting of any such securities.
(e) There are no outstanding (i) securities of the Company or
any Subsidiary convertible into or exchangeable or exercisable for shares of
capital stock or other voting securities or ownership interests in any
Subsidiary, (ii) warrants, calls, options or other rights to acquire from the
Company or any Subsidiary, and no obligation of the Company or any Subsidiary to
issue, any capital stock, voting securities or other ownership interests in, or
any securities convertible into or exchangeable or exercisable for any capital
stock, voting securities or ownership interests in, any such Subsidiary or (iii)
obligations of the Company or any Subsidiary to repurchase, redeem or otherwise
acquire any such outstanding securities of such Subsidiaries or to issue,
deliver or sell, or cause to be issued, delivered or sold, any such
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securities. Except for the Company's ownership of the Subsidiaries, the Company
does not, directly or indirectly, have any ownership or other interest in, or
control of, any Person, nor is the Company or any Subsidiary controlled by or
under common control with any Person.
3.4. Authority. The Company has all requisite corporate power
and authority to enter into this Agreement and, subject to Company Stockholder
Approval, to consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of the Company, and
except, in the case of this Agreement, for (i) Company Stockholder Approval and
(ii) the filing and recordation of appropriate merger documents as required by
the DGCL, no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement and the transactions contemplated by this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by the effect of general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
3.5. No Conflict. (a) Except as set forth in Item 3.5 of the
Company Disclosure Schedule, the execution and delivery of this Agreement do
not, and the consummation of the transactions contemplated by this Agreement and
compliance with the provisions of this Agreement will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under, or result in the
creation of any Lien upon any of the properties or assets of the Company or any
of its Subsidiaries under, (i) the certificate of incorporation or by-laws of
the Company or the comparable organizational documents of any of its
Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise,
license or similar authorization applicable to the Company or any of its
Subsidiaries or their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in paragraph (b), any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to the Company or any of its Subsidiaries or their respective properties or
assets, other than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights, losses or Liens that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect on
the Company.
(b) No consent, approval, order or authorization of, action by
or in respect of, or registration, declaration or filing with, any federal,
state, local or foreign government, any court, administrative, regulatory or
other governmental agency, commission or authority or any non-governmental
self-regulatory agency, commission or authority (each a "Governmental Entity")
is required by or with respect to the Company or any of its Subsidiaries in
connection
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with the execution and delivery of this Agreement by the Company or the
consummation by the Company of the transactions contemplated by this Agreement,
except for (i) the filing of a premerger notification and report form by the
Company under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act") and any applicable filings and approvals under similar
foreign antitrust laws and regulations; (ii) the filing with the SEC and The
Nasdaq National Market ("Nasdaq") of (A) the Schedule 14D-9, (B) a proxy
statement relating to the Company Stockholders Meeting for the approval by the
stockholders of the Company of the Merger (such proxy statement, as amended or
supplemented from time to time, the "Company Proxy Statement"), and (C) such
reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act as may be
required in connection with this Agreement and the transactions contemplated by
this Agreement; (iii) the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do business;
and (iv) such consents, approvals, orders or authorizations which if not made or
obtained, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect on the Company.
3.6. SEC Documents; Undisclosed Liabilities. Except as set
forth in Item 3.6 of the Company Disclosure Schedule, the Company has filed with
the SEC since January 1, 1997 or, with respect to the Offer, will file with the
SEC all required registration statements, reports, schedules, forms, statements,
proxy or information statements and other documents (including exhibits and all
other information incorporated therein) (the "Company SEC Documents"). As of
their respective dates, the Company SEC Documents complied or, with respect to
those not yet filed, will comply in all material respects with the requirements
of the Securities Act of 1933 (the "Securities Act"), or the Exchange Act, as
the case may be, and, in each case, the rules and regulations of the SEC
promulgated thereunder and, except to the extent that information contained in
any Company SEC Document has been revised and superseded by a later filed
Company SEC Document, did not or, with respect to those not yet filed, will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the Company SEC
Documents comply as to form, as of their respective dates of filing with the
SEC, in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal recurring year-end audit adjustments). Except for liabilities (i)
reflected in such financial statements or in the notes thereto, (ii) incurred in
the ordinary course of business consistent with past practice since the date of
the most recent audited financial statements included in the Company SEC
Documents filed and publicly available prior to the date of this Agreement (as
amended to the date of this Agreement, the "Company Filed
-13-
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SEC Documents"), (iii) incurred in connection with this Agreement or the
transactions contemplated hereby, or (iv) disclosed in Item 3.6 of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries has any
liabilities or obligations of any nature which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect on the
Company.
3.7. Schedule 14D-9; Company Proxy Statement. None of the
information supplied or to be supplied by the Company specifically for inclusion
or incorporation by reference in (i) the Offer Documents, (ii) the Schedule
14D-9, (iii) the information to be filed by the Company in connection with the
Offer pursuant to Rule 14f-1 promulgated under the Exchange Act (the
"Information Statement") or (iv) the Company Proxy Statement, if any, will, in
the case of the Offer Documents, the Schedule 14D-9 and the Information
Statement, at the respective times the Offer Documents, the Schedule 14D-9 and
the Information Statement are filed with the SEC or first published, sent or
given to the Company's stockholders, or, in the case of the Company Proxy
Statement, if any, at the date the Company Proxy Statement is first mailed to
the Company's stockholders and at the time of the Stockholders Meeting, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Schedule 14D-9, the Information Statement and the Company Proxy
Statement, if any, will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
except that no representation or warranty is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by Lucent specifically for inclusion or incorporation by reference
therein.
3.8. Absence of Certain Changes. Except for liabilities
incurred in connection with this Agreement or the transactions contemplated
hereby and except as disclosed in the Company Filed SEC Documents, since
December 31, 1998, the Company and its Subsidiaries have conducted their
business only in the ordinary course, and there has not been:
(a) any event or occurrence which could reasonably be expected
to have a Material Adverse Effect on the Company;
(b) any declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or property) with respect to any
of the Company's capital stock;
(c) any split, combination or reclassification of any of the
Company's capital stock or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of or in substitution, for shares of
the Company's capital stock, except for issuances of Company Common Stock upon
the exercise of Company Stock Options under the Company Stock Plans, in each
case awarded prior to the date hereof in accordance with their present terms;
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(d) (i) Except as set forth in Item 3.8(d)(i) of the Company
Disclosure Schedule, any granting by the Company or any of its Subsidiaries to
any current or former director, executive officer or other key employee of the
Company or its Subsidiaries of any increase in compensation, bonus or other
benefits, except for normal increases in cash compensation in the ordinary
course of business consistent with past practice or as was required under any
employment agreements in effect as of the date of the most recent audited
financial statements included in the Company Filed SEC Documents, (ii) any
granting by the Company or any of its Subsidiaries to any such current or former
director, executive officer or key employee of any increase in severance or
termination pay, except in the ordinary course of business consistent with past
practice, (iii) except as set forth in Item 3.8(d)(iii) of the Company
Disclosure Schedule, any entry by the Company or any of its Subsidiaries into,
or any amendments of, any employment, deferred compensation, consulting,
severance, termination or indemnification agreement with any such current or
former director, executive officer or key employee, or (iv) any amendment to, or
modification of, any Company Stock Option;
(e) except insofar as may have been required by a change in
generally accepted accounting principles, any change in accounting methods,
principles or practices by the Company;
(f) any tax election that individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect on the Company or
any of its tax attributes or any settlement or compromise of any material income
tax liability;
(g) any impairment, damage, destruction, loss or claim,
whether or not covered by insurance, or condemnation or other taking which could
reasonably be expected to have a Material Adverse Effect on the Company;
(h) any issuance, delivery or agreement (conditionally or
unconditionally) to issue or deliver any bonds, notes or other debt securities,
or the incurrence of or agreement to incur any indebtedness for borrowed money,
other than in the ordinary course of business consistent with past practice or
the entry into any lease the obligations of which, in accordance with GAAP,
would be capitalized;
(i) any material amendment or termination of any agreement to
which the Company or any of its Subsidiaries is a party and is or should be set
forth on Item 3.11 of the Company Disclosure Schedule;
(j) except as set forth in Item 3.8(j) of the Company
Disclosure Schedule, any undertaking or commitment to undertake capital
expenditures exceeding $100,000 for any single project or related series of
projects;
(k) except as set forth in Item 3.8(k) of the Company
Disclosure Schedule, any sale, lease (as lessor), transfer or other disposition
of, mortgage, pledge, or imposition of any
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Lien on, any of the assets reflected on the Company's most recent audited
financial statement included in the Company Filed SEC Documents or any assets
acquired by the Company or any of its Subsidiaries after the date of such
audited financial statement, except for inventory and personal property sold or
otherwise disposed of for fair value in the ordinary course of its business
consistent with past practice and except for Permitted Liens;
(l) cancellation of any debts owed to or claims held by the
Company or any of its Subsidiaries (including the settlement of any claims or
litigation) other than in the ordinary course of its business consistent with
past practice;
(m) except as set forth in Item 3.8(m) of the Company
Disclosure Schedule, acceleration or delay in collection of accounts receivable
in advance of or beyond their regular due dates or the dates when the same would
have been collected in the ordinary course of its business consistent with past
practice;
(n) acceleration or delay in payment of any account payable or
other liability beyond or in advance of its due date or the date when such
liability would have been paid in the ordinary course of its business consistent
with past practice; and
(o) entry into or commitment to enter into any other material
transaction except in the ordinary course of business.
3.9. Properties. (a) Each of the Company and its Subsidiaries
has good and valid title to or a valid leasehold interest in all its properties
and assets reflected on the most recently audited balance sheet contained in the
Company Filed SEC Documents or acquired after the date thereof except for (i)
properties and assets sold or otherwise disposed of in the ordinary course of
business since the date of such balance sheet, (ii) properties and assets the
loss of which individually or in the aggregate could reasonably be expected to
have a Material Adverse Effect on the Company and (iii) properties and assets
sold in connection with the transaction referred to in Item 3.8(k) of the
Company Disclosure Schedule.
(b) Except as set forth in Item 3.9(b) of the Company
Disclosure Schedule, neither the Company nor any or its Subsidiaries owns any
real property.
3.10. Leases. Item 3.10 of the Company Disclosure Schedule
lists all outstanding leases, both capital and operating, or licenses, pursuant
to which the Company or any of its Subsidiaries has (i) obtained the right to
use or occupy any real or tangible personal property under arrangements where
the remaining obligation is more than $50,000, inclusive of any renewal rights
or (ii) granted to any other Person the right to use any material item of
machinery, equipment, furniture, vehicle or other personal property of the
Company or any of its Subsidiaries having an original cost of $50,000 or more.
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3.11. Contracts. Item 3.11 of the Company Disclosure Schedule
lists any of the following not otherwise listed on any other item of the Company
Disclosure Schedule:
(a) each written contract or commitment which creates an
obligation on the part of the Company or any of its Subsidiaries in excess of
$100,000;
(b) each written debt instrument, including, without
limitation, any loan agreement, line of credit, promissory note, security
agreement or other evidence of indebtedness, where the Company or any of its
Subsidiaries is a lender, borrower or guarantor, in a principal amount in excess
of $100,000;
(c) each written contract or commitment restricting the
Company or any of its Subsidiaries from engaging in any industry or in any line
of business in any location;
(d) each written contract or commitment in excess of $10,000
to which the Company or any of its Subsidiaries is a party for any charitable
contribution;
(e) each written joint venture or partnership agreement to
which the Company or any of its Subsidiaries is a party;
(f) each written agreement in excess of $25,000 to which the
Company or any of its Subsidiaries is a party with respect to any assignment,
discounting or reduction of any receivables of the Company or such Subsidiary;
(g) each written distributorship, sales agency, sales
representative, reseller or marketing agreement to which the Company or any of
its Subsidiaries is a party, and each sales representative agreement is
substantially identical to the form previously delivered to Lucent;
(h) each value added reseller, original equipment
manufacturing, technology transfer, source code license or other license or each
other agreement containing the right to sublicense software and/or technology,
in each case, to which the Company or any of its Subsidiaries is a party, other
than "off-the-shelf" software;
(i) each agreement, option or commitment or right with, or
held by, any third party to acquire any assets or properties, or any interest
therein, of the Company or any of its Subsidiaries, having a value in excess of
$100,000, except for contracts for the sale of inventory, machinery or equipment
in the ordinary course of business;
(j) each written employment contract entered into by the
Company or any of its Subsidiaries; and
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(k) each supply agreement to which the Company or any of its
Subsidiaries is a party that the Company or such Subsidiary could not readily
replace without a Material Adverse Effect on the Company.
There are (i) no oral contracts or commitments of the types
described in this Section 3.11 which create an obligation on the part of the
Company or any of its Subsidiaries in excess of $25,000, (ii) no contracts or
commitments between the Company or any of its Subsidiaries and any Affiliate
(other than a wholly-owned Subsidiary) and (iii) no contracts or commitments
which would create rights to any Person against Lucent or any of its Affiliates
(other than rights against the Company and its Subsidiaries as in effect on the
Closing Date).
3.12. Absence of Default. Except as set forth in Item 3.12 of
the Company Disclosure Schedule, each of the leases, contracts and other
agreements listed or required to be listed in Items 3.10 and 3.11 of the Company
Disclosure Schedule that create obligations on any Person in excess of $100,000
constitutes a valid and binding obligation of the parties thereto and is in full
force and effect and will continue in full force and effect after the Effective
Time, in each case, without breaching the terms thereof or resulting in the
forfeiture or impairment of any rights thereunder and without the consent,
approval or act of, or the making of any filing with, any other Person. Each of
the Company and its Subsidiaries has fulfilled and performed in all material
respects its obligations under each such lease, contract or other agreement to
which it is a party to the extent such obligations are required by the terms
thereof to have been fulfilled or performed through the date hereof (except for
any such lease, contract or other agreement which, by its terms, will expire
prior to the Effective Time) and neither the Company nor any such Subsidiary is,
and, neither the Company nor any such Subsidiary is alleged in writing to be, in
breach or default under, nor is there or is there alleged in writing to be any
basis for termination of, any such lease, contract or other agreement. To the
best knowledge of the Company, no other party to any such lease, contract or
other agreement has breached or defaulted thereunder. No event has occurred and
no condition or state of facts exists which, with the passage of time or the
giving of notice or both, would constitute such a default or breach by the
Company or, to the best knowledge of the Company, by any such other party. The
Company is not currently renegotiating any such lease, contract or other
agreement or paying liquidated damages in lieu of performance thereunder.
Complete and correct copies of each such lease, contract or other agreement and
any amendments thereto have heretofore been delivered to Lucent.
3.13. Litigation. Item 3.13 of the Disclosure Schedule sets
forth (i) any actions, suits, arbitrations, legal or administrative proceedings
or investigations pending or, to the best knowledge of the Company, threatened
against the Company or any of its Subsidiaries; (ii) any judgment, order, writ,
injunction or decree of any court, governmental agency or arbitration tribunal
as to which any of the assets, properties or business of the Company or any of
its Subsidiaries is subject; and (iii) any actions, suits, arbitrations or
proceedings as to which the Company or any such Subsidiary is the plaintiff or
the Company or any such Subsidiary is contemplating commencing legal action
against any other Person. None of the matters, if any,
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listed on Item 3.13 of the Disclosure Schedule could reasonably be expected to
have a Material Adverse Effect on the Company.
3.14. Compliance with Law.
(a) Each of the Company and its Subsidiaries has complied in
all material respects with, and is not in violation of, in any material respect,
any law, ordinance or governmental rule or regulation (collectively, "Laws") to
which it or its business is subject;
(b) Each of the Company and its Subsidiaries has obtained all
licenses, permits, certificates or other governmental authorizations
(collectively "Authorizations") necessary for the ownership or use of its assets
and properties or the conduct of its business other than Authorizations (i)
which are ministerial in nature and which the Company or such Subsidiary has no
reason to believe would not be issued in due course and (ii) which, the failure
of the Company or such Subsidiary to possess, would not subject the Company and
its Subsidiaries to penalties other than fines not to exceed $50,000 in the
aggregate ("Immaterial Authorizations"); and
(c) Neither the Company nor any of its Subsidiaries has
received notice of violation of, or knows of any violation of, any Laws to which
it or its business is subject or any Authorization necessary for the ownership
or use of its assets and properties or the conduct of its business (other than
Immaterial Authorizations).
3.15. Intellectual Property; Year 2000. (a) Except as set
forth in Item 3.15 of the Company Disclosure Schedule, the Company and its
Subsidiaries own, or are validly licensed or otherwise have the right to use,
all patents, patent rights, trademarks, trade secrets, trade names, service
marks, copyrights and other proprietary intellectual property rights and
computer programs (the "Intellectual Property Rights") which are material to the
conduct of the business of the Company and its Subsidiaries as presently
conducted.
(b) To the Company's best knowledge, neither the Company nor
any of its Subsidiaries has interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Intellectual Property Rights or other
proprietary information of any other Person. Neither the Company nor any of its
Subsidiaries has received any written charge, complaint, claim, demand or notice
alleging any such interference, infringement, misappropriation or violation
(including any claim that the Company or any such Subsidiary must license or
refrain from using any Intellectual Property Rights or other proprietary
information of any other Person) which has not been settled or otherwise fully
resolved. To the Company's best knowledge, no other Person has interfered with,
infringed upon, misappropriated or otherwise come into conflict with any
Intellectual Property Rights or other proprietary information of the Company or
any of its Subsidiaries.
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(c) Assuming that Lucent continues to operate the business of
the Company and its Subsidiaries as presently conducted and proposed to be
conducted by the Company then, to the Company's best knowledge, Lucent's use of
the Intellectual Property Rights or other proprietary information which is
material to the conduct of the business of the Company and its Subsidiaries,
taken as a whole, will not interfere with, infringe upon, misappropriate or
otherwise come into conflict with the Intellectual Property Rights or other
proprietary information of any other Person.
(d) Each employee, agent, consultant or contractor who has
materially contributed to or participated in the creation or development of any
copyrightable, patentable or trade secret material on behalf of the Company, any
of its Subsidiaries or any predecessor in interest thereto either: (i) is a
party to a "work-for-hire" agreement under which the Company or such Subsidiary
is deemed to be the original owner/author of all property rights therein; or
(ii) has executed an assignment or an agreement to assign in favor of the
Company, such Subsidiary or such predecessor in interest, as applicable all
right, title and interest in such material.
(e) The Company has taken all necessary steps reasonably to
assure that the year 2000 date change will not adversely affect its operations
or the systems and facilities that support the operations of the Company and its
Subsidiaries, except as could not reasonably be expected to have a Material
Adverse Effect on the Company.
3.16. Taxes. (a) Each of the Company and its Subsidiaries has
filed all material tax returns and reports required to be filed by it and all
such returns and reports are complete and correct in all material respects, or
requests for extensions to file such returns or reports have been timely filed,
granted and have not expired, except to the extent that such failures to file,
to be complete or correct or to have extensions granted that remain in effect
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. The Company and each of its Subsidiaries has paid (or
the Company has paid on its behalf) all Taxes shown as due on such returns, and
the most recent financial statements contained in the Company Filed SEC
Documents reflect an adequate reserve for all taxes payable by the Company and
its Subsidiaries for all taxable periods and portions thereof accrued through
the date of such financial statements.
(b) No deficiencies for any taxes have been proposed, asserted
or assessed against the Company or any of its Subsidiaries that are not
adequately reserved for, except for deficiencies that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect on
the Company.
(c) The Company Benefit Plans and other Company employee
compensation arrangements in effect as of the date of this Agreement have been
designed so that the disallowance of a material deduction under Section 162(m)
of the Code for employee remuneration will not apply to any amounts paid or
payable by the Company or any of its Subsidiaries under any such plan or
arrangement and, to the best knowledge of the Company, no
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fact or circumstance exists that could reasonably be expected to cause such
disallowance to apply to any such amounts.
(d) Neither the Company nor any of its Subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation" in
a distribution of stock qualifying for tax-free treatment under Section 355 of
the Code (x) in the two years prior to the date of this Agreement or (y) in a
distribution which could otherwise constitute part of a "plan" or "series of
related transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Merger.
(e) Neither the Company nor any of its Subsidiaries is a party
(other than as an investor) to any outstanding industrial development bond.
3.17. Benefit Plans. (a) Item 3.17 of the Company Disclosure
Schedule contains a list and brief description of all "employee pension benefit
plans" (as defined in Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) (sometimes referred to as "Pension Plans"),
"employee welfare benefit plans" (as defined in Section 3(1) of ERISA)
(sometimes referred to as "Welfare Plans") and all other Benefit Plans (together
with the Pension Plans and Welfare Plans, the "Company Benefit Plans")
maintained, or contributed to, by the Company, any of its Subsidiaries or any
Person that, together with the Company or any of its Subsidiaries, is treated as
a single employer under Section 414(b), (c), (m) or (o) of the Code (the
Company, such Subsidiaries and each such other Person, a "Commonly Controlled
Entity") for the benefit of any current or any former employees, officers or
directors of the Company. The Company has made available to Lucent true,
complete and correct copies of (i) each Company Benefit Plan (or, in the case of
any unwritten Company Benefit Plans, descriptions thereof), (ii) the most recent
annual report on Form 5500 filed with the Internal Revenue Service (the "IRS")
with respect to each Company Benefit Plan (if any such report was required),
(iii) the most recent summary plan description for each Company Benefit Plan for
which such summary plan description is required, (iv) each trust agreement and
group annuity contract relating to any Company Benefit Plan and (v) all
correspondence with the IRS or the United States Department of Labor relating to
any outstanding controversy or audit.
(b) Since the date of the most recent audited financial
statements included in the Company Filed SEC Documents, there has not been any
adoption or amendment in any material respect by the Company, any of its
Subsidiaries or any Commonly Controlled Entity of any Company Benefit Plans, or
any material change in any actuarial or other assumption used to calculate
funding obligations with respect to any Pension Plans of the Company, or any
change in the manner in which contributions to any Pension Plans of the Company
are made or the basis on which such contributions are determined.
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3.18. ERISA Compliance. (a) With respect to the Company
Benefit Plans, no event has occurred and, to the best knowledge of the Company,
there exists no condition or set of circumstances, in connection with which the
Company or any of its Subsidiaries could be subject to any liability under
ERISA, the Code or any other applicable law that individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect under
ERISA, the Code or any other applicable law.
(b) Each Benefit Plan has been administered in accordance with
its terms, except for any failures so to administer any Benefit Plan that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect on the Company. The Company, its Subsidiaries and all
the Company Benefit Plans are in compliance with the applicable provisions of
ERISA, the Code, all regulations promulgated thereunder, all other applicable
laws, regulations and other pronouncements, and the terms of all applicable
collective bargaining agreements, except for any failures to be in such
compliance that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect. Each Benefit Plan that is intended
to be qualified under Section 401(a) or 401(k) of the Code has received a
favorable determination letter from the IRS that it is so qualified and each
trust established in connection with any Company Benefit Plan that is intended
to be exempt from federal income taxation under Section 501(a) of the Code has
received a determination letter from the IRS that such trust is so exempt. To
the best knowledge of the Company, no fact or event has occurred since that date
of any determination letter from the IRS which could reasonably be expected to
affect adversely the qualified status of any such Benefit Plan or the exempt
status of any such trust. There are no pending or, to the best knowledge of the
Company, threatened lawsuits, claims, grievances, investigations or audits of
any Benefit Plan that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has engaged in a transaction with respect to any Company Benefit
Plan that, assuming the taxable period of such transaction expired as of the
date hereof, could subject it to a tax or penalty imposed by either Section 4975
of the Code or Section 502(i) of ERISA.
(c) Neither the Company nor any of its Subsidiaries has
incurred any liability under Title IV of ERISA (other than liability for
premiums to the Pension Benefit Guaranty Corporation arising in the ordinary
course). No Benefit Plan has incurred an "accumulated funding deficiency"
(within the meaning of Section 302 of ERISA or Section 412 of the Code) whether
or not waived. To the best knowledge of the Company, there are no facts or
circumstances that could reasonably be expected to materially change the funded
status of any Benefit Plan that is a "defined benefit" plan (as defined in
Section 3(35) of ERISA) since the date of the most recent actuarial report for
such plan. No notice of a "reportable event", within the meaning of Section 4043
of ERISA, for which the 30-day reporting requirement has not been waived has
been required to be filed within the 12-month period ending on the date hereof.
No Benefit Plan is a "multiemployer plan" within the meaning of Section 3(37) of
ERISA.
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(d) Under each Benefit Plan that is a "defined benefit" plan
(as defined in Section 3(35) of ERISA) as of the last day of the most recent
plan year ended prior to the date hereof, the actuarially determined present
value of all "benefit liabilities", within the meaning of Section 4001(a)(16) of
ERISA (as determined on the basis of the actuarial assumptions contained in such
plan's most recent actuarial valuation), did not exceed the then current value
of the assets of such plan.
(e) Except as set forth in Item 3.18(e) of the Company
Disclosure Schedule, no employee of the Company will be entitled to any
additional benefits or any acceleration of the time of payment or vesting of any
benefits under any Benefit Plan as a result of the transactions contemplated by
this Agreement. Except as set forth in Item 3.18(e) of the Company Disclosure
Schedule, no amount payable, or economic benefit provided, by the Company or its
Subsidiaries (including any acceleration of the time of payment or vesting of
any benefit) could be considered an "excess parachute payment" under Section
280G of the Code as a result of the transactions contemplated by this Agreement.
No Person is entitled to receive any additional payment from the Company or its
Subsidiaries or any other Person (a "Parachute Gross-Up Payment") in the event
that the excise tax of Section 4999 of the Code is imposed on such Person. The
Board of Directors of the Company or any of its Subsidiaries has not granted to
any Person any right to receive any Parachute Gross-Up Payment.
(f) Except as set forth in Item 3.18(f) of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries has any
liability or obligation under any "employee welfare benefit plans" (as defined
in Section 3(1) of ERISA) to provide life insurance or medical benefits after
termination of employment to any employee or dependent other than as required by
Part 6 of Title I of ERISA.
3.19. Employment Matters. (a) Each of the Company and its
Subsidiaries has complied in all material respects with all applicable laws,
rules and regulations respecting employment and employment practices, terms and
conditions of employment, wages and hours, and neither the Company nor any of
its Subsidiaries is liable for any arrears of wages or any taxes or penalties
for failure to comply with any such laws, rules or regulations; (b) the Company
believes that the Company's and its Subsidiaries' relations with their
respective employees is satisfactory; (c) there are no controversies pending or,
to the best knowledge of the Company, threatened between the Company or any of
its Subsidiaries and any of their respective employees, which controversies have
or could have a Material Adverse Effect on the Company; (d) neither the Company
nor any Subsidiary is a party to any collective bargaining agreement or other
labor union contract applicable to Persons employed by the Company or any such
Subsidiary, nor, to the best knowledge of the Company, are there any activities
or proceedings of any labor union to organize any such employees; (e) there are
no unfair labor practice complaints pending against the Company or any of its
Subsidiaries before the National Labor Relations Board or any current union
representation questions involving employees of the Company or any of its
Subsidiaries; (f) there is no strike, slowdown, work stoppage or lockout
existing, or, to the best knowledge of the Company, threatened, by or with
respect to any employees of the
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Company or any of its Subsidiaries; (g) except as set forth in Item 3.19(g) of
the Company Disclosure Schedule, no charges are pending before the Equal
Employment Opportunity Commission or any state, local or foreign agency
responsible for the prevention of unlawful employment practices with respect to
the Company or any of its Subsidiaries; (h) there are no claims pending against
the Company or any of its Subsidiaries before any workers' compensation board
which could reasonably be expected to have a Material Adverse Effect on the
Company; and (i) neither the Company nor any of its Subsidiaries has received
notice that any federal, state, local or foreign agency responsible for the
enforcement of labor or employment laws intends to conduct an investigation of
or relating to the Company or any of its Subsidiaries and, to the best knowledge
of the Company, no such investigation is in progress.
3.20. Environmental Laws. The Company has not received any
notice or claim (and is not aware of any facts that would form a reasonable
basis for any claim), or entered into any negotiations or agreements with any
other Person, and, to the best knowledge of the Company, neither the Company nor
any of its Subsidiaries is the subject of any investigation by any governmental
or regulatory authority, domestic or foreign, relating to any material or
potentially material liability or remedial action under any Environmental Laws.
There are no pending or, to the best knowledge of the Company, threatened,
actions, suits or proceedings against the Company, any of its Subsidiaries or
any of their respective properties, assets or operations asserting any such
material liability or seeking any material remedial action in connection with
any Environmental Laws.
3.21. Accounts Receivable; Inventory. (a) Except as set forth
in Item 3.21(a) of the Company Disclosure Schedule, all accounts receivable of
the Company and its Subsidiaries (i) have arisen from bona fide transactions by
the Company or its Subsidiaries in the ordinary course of its business and
represent and will represent bona fide claims against debtors for sales and
other charges and (ii) are not subject to discount except for normal cash and
immaterial trade discount. The amount carried for doubtful accounts and
allowances accrued on the books of the Company and its Subsidiaries is
sufficient to provide for any losses that may be sustained on realization of the
accounts receivable of the Company and its Subsidiaries.
(b) The inventories (and any reserves established with respect
thereto) of the Company and its Subsidiaries as of December 31, 1998 are
described in Item 3.21(b) of the Company Disclosure Schedule. All such
inventories (net of any such reserves) are properly reflected on the Company's
most recent audited financial statement included in the Company Filed SEC
Documents in accordance with GAAP and, to the best knowledge of the Company, are
of such quality as to be useable and saleable in the ordinary course of business
(subject, in the case of work-in-process inventory, to completion in the
ordinary course of business) and are reflected in the books and records of the
Company or its Subsidiaries at the lower of cost (based on a first-in-first-out
basis) or market value. Such inventories are located at the locations set forth
in Item 3.21(b) of the Company Disclosure Schedule.
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3.22. Customers and Suppliers. Neither the Company's nor any
of its Subsidiaries' customers which individually accounted for more than 5% of
the Company's or such Subsidiary's gross revenues during the 12-month period
preceding the date hereof has terminated any agreement with the Company or such
Subsidiary. Except as set forth in Item 3.22 of the Company Disclosure Schedule,
as of the date hereof, no material supplier of the Company or any of its
Subsidiaries has notified the Company in writing that it will stop, or decrease
the rate of, supplying materials, products or services to the Company or such
Subsidiary. Neither the Company nor any of its Subsidiaries has knowingly
breached, so as to provide a benefit to the Company or any of its Subsidiaries
that was not intended by the parties, any agreement with, or engaged in any
fraudulent conduct with respect to, any customer or supplier of the Company or
any of its Subsidiaries.
3.23. Voting Requirements. Pursuant to the provisions of the
DGCL, the certificate of incorporation of the Company, the by-laws of the
Company and any other applicable law, the affirmative vote of the holders of a
majority of the voting power of all outstanding shares of Company Common Stock
at the Company Stockholders Meeting to adopt this Agreement (the "Company
Stockholder Approval") is the only vote of the holders of any class or series of
the Company's capital stock necessary to approve and adopt the Merger, this
Agreement and the transactions contemplated by this Agreement. The Board of
Directors of the Company (at a meeting duly called and held) has (i) unanimously
approved the Offer, this Agreement and the transactions contemplated by this
Agreement, (ii) determined that the Offer and the Merger are fair to and in the
best interests of the Company's stockholders, (iii) resolved (subject to Section
6.2) to recommend this Agreement, the Offer and the Merger to such holders for
approval and adoption and (iv) directed (subject to Section 6.2) that this
Agreement be submitted to the Company's stockholders. The Company hereby agrees
to the inclusion in the Schedule 14D-9 and the Company Proxy Statement of the
recommendation of such Board of Directors.
3.24. State Takeover Statutes. The Board of Directors of the
Company (including the disinterested directors thereof) has unanimously approved
the Offer, this Agreement and the consummation of the Merger and the other
transactions contemplated by this Agreement and such approval is sufficient to
render inapplicable to the Offer, the Merger, this Agreement and the
transactions contemplated by this Agreement the provisions of Chapter 203 of the
DGCL. To the Company's knowledge, no other state takeover statute is applicable
to the Offer, the Merger, this Agreement or the transactions contemplated by
this Agreement and no provision of the certificates of incorporation, by-laws or
other governing instruments of the Company or any of its Subsidiaries would,
directly or indirectly, restrict or impair the ability of Lucent to vote, or
otherwise exercise the rights of a stockholder with respect to, shares of
capital stock or other equity interest of the Company and its Subsidiaries that
may be acquired or controlled by Lucent as contemplated by this Agreement.
3.25. Brokers. No broker, investment banker, financial advisor
or other Person, other than Lazard Freres & Co. LLC, the fees and expenses of
which will be paid by the
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Company, is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Company. The
Company has furnished to Lucent true and complete copies of all agreements under
which any such fees or expenses are payable and all indemnification and other
agreements related to the engagement of the Persons to whom such fees are
payable.
3.26. Opinion of Financial Advisor. The Company has received
the opinion of Lazard Freres & Co. LLC, dated the date of this Agreement, to the
effect that, as of such date, the consideration to be received in the Offer and
the Merger by the Company's stockholders is fair from a financial point of view
to the Company's stockholders (other than Lucent and its Affiliates), a signed
copy of which opinion has been or will promptly be delivered to Lucent.
3.27. Complete Copies of Materials. The Company has delivered
or made available to Lucent true and complete copies of each material document
related to the Company or its business in connection with their legal and
accounting review of the Company.
3.28. Disclosure. None of the representations or warranties of
the Company contained herein, none of the information contained in the Company
Disclosure Schedule, and none of the other information or documents furnished or
to be furnished to Lucent or Acquisition by the Company or any of its
Subsidiaries or pursuant to the terms of this Agreement, when taken as a whole,
contains, or at the Effective Time will contain, any untrue statement of a
material fact or omits, or at the Effective Time will omit, to state a material
fact required to be stated herein or therein necessary to make the statements
herein or therein, in light of the circumstances under which they were made, not
misleading in any material respect.
4. Representations and Warranties of Lucent and Acquisition.
Except as set forth on the Disclosure Schedule delivered by
Lucent to the Company prior to the execution of this Agreement (the "Lucent
Disclosure Schedule") and making reference to the particular subsection of this
Agreement to which exception is being taken, Lucent and Acquisition represent
and warrant to the Company as follows:
4.1. Organization, Standing and Corporate Power. Each of
Lucent and Acquisition is a corporation or other legal entity duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized and has the requisite corporate or other power, as the
case may be, and authority to carry on its business as now being conducted,
except for those jurisdictions where the failure to be so organized, existing or
in good standing individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect on Lucent. Each of Lucent and
Acquisition is duly qualified or licensed to do business and is in good standing
(with respect to jurisdictions which recognize such concept) in each
jurisdiction in which the nature of its business or the ownership, leasing or
operation of its properties makes such qualification or licensing necessary,
except for those jurisdictions where
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the failure to be so qualified or licensed or to be in good standing
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect on Lucent.
4.2. Authority. Each of Lucent and Acquisition has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Lucent and Acquisition and the consummation by
Lucent and Acquisition of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Lucent and
Acquisition. This Agreement has been duly executed and delivered by Lucent and
Acquisition and, constitutes the legal, valid and binding obligation of Lucent
and Acquisition, enforceable against each of them in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by the effect of general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
4.3. No Conflict. (a) The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated by this
Agreement and the compliance with the provisions of this Agreement will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of a benefit under, or
result in the creation of any Lien upon any of the properties or assets of
Lucent or Acquisition or any of Lucent's other Subsidiaries under, (i) the
charter documents of Lucent or Acquisition, (ii) any loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise, license or similar authorization applicable to Lucent or
Acquisition or any of Lucent's other Subsidiaries or their respective properties
or assets or (iii) subject to the governmental filings and other matters
referred to in Section 4.3(b), any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Lucent or any of its Subsidiaries or
their respective properties or assets, other than, in the case of paragraph (b),
any such conflicts, violations, defaults, rights, losses or Liens that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect on Lucent.
(b) No consent, approval, order or authorization of, action
by, or in respect of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Lucent or Acquisition in
connection with the execution and delivery of this Agreement by Lucent and
Acquisition or the consummation by Lucent and Acquisition of the transactions
contemplated by this Agreement, except for (i) the filing of a premerger
notification and report form by Lucent under the HSR Act and any applicable
filings and approvals under similar foreign antitrust laws and regulations; (ii)
the filing with the SEC of (A) the Offer Documents and (B) such reports under
Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated by this
Agreement; (iii) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware and appropriate documents with the relevant
authorities of other states in which Lucent is qualified to do business; and
(iv) such consents, approvals, orders or authorizations the failure
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of which to be made or obtained individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect on Lucent.
4.4. Information Supplied. None of the information supplied or
to be supplied by Lucent specifically for inclusion or incorporation by
reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
Information Statement or (iv) the Company Proxy Statement, if any, will, in the
case of the Offer Documents, the Schedule 14D-9 and the Information Statement,
at the respective times the Offer Documents, the Schedule 14D-9 and the
Information Statement are filed with the SEC or first published, sent or given
to the Company's stockholders, or, in the case of the Company Proxy Statement,
if any, at the date the Company Proxy Statement is first mailed to the Company's
stockholders and at the time of the Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Offer Documents
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by Lucent or Acquisition with respect to
statements made or incorporated by reference therein based on information
supplied by the Company specifically for inclusion or incorporation by reference
therein.
4.5. Brokers. No broker, investment banker, financial advisor
or other Person is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of Lucent.
5. Conduct Pending Closing.
5.1. Conduct of Business Pending Closing. From the date hereof
until the Closing, the Company shall (and shall cause each of its Subsidiaries
to):
(a) maintain its existence in good standing;
(b) maintain the general character of its business and
properties and conduct its business in the ordinary and usual manner consistent
with past practices, except as expressly permitted by this Agreement;
(c) maintain business and accounting records consistent with
past practices; and
(d) use its reasonable best efforts (i) to preserve its
business intact, (ii) to keep available to the Company the services of its
present officers and employees, and (iii) to preserve for the Company or such
Subsidiary the goodwill of its suppliers, customers and others having business
relations with the Company or such Subsidiary.
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5.2. Prohibited Actions Pending Closing. Unless otherwise
provided for herein or approved by Lucent in writing, from the date hereof until
the Closing, the Company shall not (and shall not permit any of its Subsidiaries
to):
(a) amend or otherwise change its certificate of incorporation
or by-laws;
(b) issue or sell or authorize for issuance or sale (other
than any issuance of Company Common Stock upon the exercise of any outstanding
option or warrant to purchase Company Common Stock which option or warrant was
issued prior to the date hereof in accordance with the terms of the relevant
stock option or warrant agreement), or grant any options or warrants or make
other agreements with respect to, any shares of its capital stock or any other
of its securities or warrants;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise with respect to any
of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(e) incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any Person, or make any
loans or advances, except (i) short-term borrowings (including borrowings under
the Company's existing line of credit with Fleet National Bank) incurred in the
ordinary course of business (or to refinance existing or maturing indebtedness)
and (ii) intercompany indebtedness between the Company and any of its
Subsidiaries or between Subsidiaries;
(f) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any corporation, partnership,
other business organization or any division thereof or any material amount of
assets; (ii) enter into any contract or agreement other than in the ordinary
course of business, consistent with past practice; (iii) authorize any capital
commitment which is in excess of $50,000 or capital expenditures which are, in
the aggregate, in excess of $100,000, except as contemplated in Item 3.8(j) of
the Company Disclosure Schedule; or (iv) enter into or amend any contract,
agreement, commitment or arrangement with respect to any matter set forth in
Section 5.2(e) or this Section 5.2(f);
(g) mortgage, pledge or subject to Lien, any of its assets or
properties or agree to do so except for Permitted Liens;
(h) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or assets
(including securitizations), other than sales or licenses of finished goods in
the ordinary course of business consistent with past practice;
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(i) assume, guarantee or otherwise become responsible for the
obligations of any other Person or agree to so do;
(j) enter into or agree to enter into any employment
agreement;
(k) except as set forth in Item 5.2(k) of the Company
Disclosure Schedule, take any action, other than in the ordinary course of
business and consistent with past practice, with respect to accounting policies
or procedures (including, without limitation, procedures with respect to the
payment of accounts payable and collection of accounts receivables);
(l) make any Tax election or settle or compromise any material
federal, state, local or foreign income Tax liability;
(m) settle or compromise any pending or threatened suit,
action or claim which is material or which relates to any of the transactions
contemplated by this Agreement;
(n) pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or otherwise),
other than the payment, discharge or satisfaction, in the ordinary course of
business and consistent with past practice, of liabilities reflected or reserved
against in the most recently audited balance sheet contained in the Company SEC
Documents or subsequently incurred in the ordinary course of business and
consistent with past practice;
(o) except in connection with the sale of the Company's
products in the ordinary course of business and consistent with past practice,
sell, assign, transfer, license, sublicense, pledge or otherwise encumber any of
the Intellectual Property Rights;
(p) except as required by law or contemplated hereby, enter
into, adopt or amend in any material respect or terminate any Company Benefit
Plan or any other agreement, plan or policy involving the Company or its
Subsidiaries, and one or more of its directors, officers or employees, or
materially change any actuarial or other assumption used to calculate funding
obligations with respect to any pension plan, or change the manner in which
contributions to any pension plan are made or the basis on which such
contributions are determined;
(q) except for normal increases in the ordinary course of
business consistent with past practice that, in the aggregate, do not materially
increase benefits or compensation expenses of the Company or its Subsidiaries,
or as contemplated hereby or by the terms of any employment agreement in
existence on the date hereof, increase the cash compensation of any director,
executive officer or other key employee or pay any benefit or amount not
required by a plan or arrangement as in effect on the date of this Agreement to
any such Person; or
(r) announce an intention, commit or agree to do any of the
foregoing.
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5.3. Other Actions. The Company shall not take any action that
would reasonably be expected to result in (i) any of the representations and
warranties of the Company set forth in this Agreement that are qualified as to
materiality becoming untrue, (ii) any of such representations and warranties
that are not so qualified becoming untrue in any material respect or (iii) any
of the Offer Conditions not being satisfied.
6. Additional Agreements.
6.1. Access; Documents; Supplemental Information. (a) From and
after the date hereof until the Closing, the Company shall afford, shall cause
its Subsidiaries to afford and, with respect to clause (ii) below, shall use its
reasonable best efforts to cause the independent certified public accountants
for the Company to afford, (i) to the officers, independent certified public
accountants, counsel and other representatives of Acquisition and Lucent, upon
reasonable advance notice, free and full access at all reasonable times to the
properties, books and records including tax returns filed and those in the
process of being prepared by the Company or any of its Subsidiaries and the
right to consult with the officers, employees, accountants, counsel and other
representatives of the Company or any of its Subsidiaries in order that
Acquisition and Lucent may have full opportunity to make such investigations as
they shall reasonably desire to make of the operations, properties, business,
financial condition and prospects of the Company and its Subsidiaries, (ii) to
the independent certified public accountants of Acquisition and Lucent, upon
reasonable advance notice, free and full access at all reasonable times to the
work papers and other records of the accountants relating to the Company and its
Subsidiaries, and (iii) to Acquisition and Lucent and their representatives,
such additional financial and operating data and other information as to the
properties, operations, business, financial condition and prospects of the
Company and its Subsidiaries as Acquisition and Lucent shall from time to time
reasonably require.
(b) From the date of this Agreement through and including the
Closing, Acquisition, Lucent and the Company agree to furnish to each other
copies of any notices, documents, requests, court papers, or other materials
received from any governmental agency or any other third party with respect to
the transactions contemplated by this Agreement, except where it is obvious from
such notice, document, request, court paper or other material that the other
party was already furnished with a copy thereof.
(c) Except as required by law, the Company and Lucent shall
not, and shall not permit any of their respective Subsidiaries to, voluntarily
take any action that would, or that could reasonably be expected to, result in
(i) any of the representations and warranties of such party set forth in this
Agreement that are qualified as to materiality becoming untrue at the Effective
Time, (ii) any of such representations and warranties that are not so qualified
becoming untrue in any material respect at the Effective Time, or (iii) any of
the conditions to the Merger set forth in Article 7 not being satisfied.
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(d) The Company shall give prompt notice to Lucent, and Lucent
shall give prompt notice to the Company, of (a) the occurrence, or
non-occurrence, of any event which would be likely to cause (i) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect or (ii) any covenant, condition or agreement
contained in this Agreement not to be complied with or satisfied; and (b) any
failure of the Company, Lucent or Acquisition, as the case may be, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided that the delivery of any notice pursuant to
this Section 6.1(d) shall not limit or otherwise affect the remedies available
to the party receiving such notice.
(e) The Company shall notify Lucent of any filing made by the
Company with the SEC under the Exchange Act, including, without limitation, any
Form 10-Q, 8-K or 10-K, not later than five business days after the date of such
filing.
6.2. No Solicitation by the Company. (a) The Company shall
not, nor shall it permit any of its Subsidiaries to, nor shall it authorize or
permit any of its directors, officers or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
or any of its Subsidiaries to, directly or indirectly through another Person,
(i) solicit, initiate or encourage (including by way of furnishing information),
or take any other action designed to facilitate, any inquiries or the making of
any proposal which constitutes a Takeover Proposal (as defined below) or (ii)
participate in any discussions or negotiations regarding any Takeover Proposal;
provided, that if, at any time prior to the date of the Company Stockholders
Meeting (the "Applicable Period"), the Board of Directors of the Company
determines in good faith, after consultation with outside counsel, that it is
legally advisable to do so in order to comply with its fiduciary duties to the
Company's stockholders under applicable law, the Company may, in response to a
Superior Proposal (as defined below) which was not solicited by it or which did
not otherwise result from a breach of this Section 6.2, and subject to providing
prior written notice of its decision to take such action to Lucent (a "Section
6.2 Notice") and complying with Section 6.2(c), (A) furnish information with
respect to the Company and its Subsidiaries to any Person making a Superior
Proposal pursuant to a customary confidentiality agreement (as determined by the
Company after consultation with its outside counsel) and (B) participate in
discussions or negotiations regarding such Superior Proposal. For purposes of
this Agreement, a "Takeover Proposal" means any inquiry, proposal or offer from
any Person (i) relating to any direct or indirect acquisition or purchase of (A)
a business that constitutes 15% or more of the net revenues, net income or the
assets of the Company and its Subsidiaries, taken as a whole, (B) 20% or more of
any class of equity securities of the Company or (C) any material equity
interest in any Subsidiary of the Company (i.e., in excess of 20% of the
outstanding capital stock of such Subsidiary), (ii) relating to any tender offer
or exchange offer that if consummated would result in any Person beneficially
owning 20% or more of any class of equity securities of the Company or any
material equity interest in any of its Subsidiaries, or (iii) relating to any
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of its
Subsidiaries, other than the transactions contemplated by this Agreement.
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(b) Except as expressly permitted by this Section 6.2, neither
the Board of Directors of the Company nor any committee thereof shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Lucent, the approval or recommendation by such Board of Directors or
such committee of the Offer, the Merger or this Agreement, (ii) approve or
recommend, or propose publicly to approve or recommend, any Takeover Proposal,
or (iii) cause the Company to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement (each, an
"Acquisition Agreement") related to any Takeover Proposal, other than any such
agreement entered into concurrently with a termination pursuant to the next
sentence in order to facilitate such action. Notwithstanding the foregoing,
during the Applicable Period, in response to a Superior Proposal which was not
solicited by the Company and which did not otherwise result from a breach of
Section 6.2(a), the Board of Directors of the Company may (subject to this and
the following sentences) terminate this Agreement (and concurrently with or
after such termination, if it so chooses, cause the Company to enter into any
Acquisition Agreement with respect to any Superior Proposal), but only at a time
that is during the Applicable Period and is after the third business day
following Lucent's receipt of written notice advising Lucent that the Board of
Directors of the Company is prepared to accept a Superior Proposal, specifying
the material terms and conditions of such Superior Proposal and identifying the
Person making such Superior Proposal. For purposes of this Agreement, a
"Superior Proposal" means any proposal made by a third party to acquire,
directly or indirectly, including pursuant to a tender offer, exchange offer,
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction, for consideration consisting of cash and/or
securities, more than 50% of the combined voting power of the shares of Company
Common Stock then outstanding or all or substantially all the assets of the
Company and otherwise on terms which the Board of Directors of the Company
determines in its good faith judgment (based on the advice of a financial
advisor of nationally recognized reputation) to be more favorable to the
Company's stockholders than the Merger and for which financing, to the extent
required, is then committed or which, in the good faith judgment of the Board of
Directors of the Company, is reasonably capable of being obtained by such third
party.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 6.2, the Company shall promptly advise
Lucent orally and in writing of any Takeover Proposal or any request for
information by any Person which the Company reasonably believes is in connection
with the preparation of a Takeover Proposal, the material terms and conditions
of such Takeover Proposal or the information requested by any such Person and
the identity of the Person making such Takeover Proposal or request for
information. The Company will promptly inform Lucent of any change in the status
and material terms and conditions (including amendments or proposed amendments)
of any such Takeover Proposal or request for information.
(d) Nothing contained in this Section 6.2 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to the Company's stockholders if, in the good faith judgment of
the Board of Directors of the Company, after
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consultation with outside counsel, failure so to disclose would be inconsistent
with its obligations under applicable law; provided, that, except as expressly
permitted by this Section 6.2, neither the Company nor its Board of Directors
nor any committee thereof shall withdraw or modify, or propose publicly to
withdraw or modify, its position with respect to the Offer, this Agreement or
the Merger or approve or recommend, or propose publicly to approve or recommend,
a Takeover Proposal.
6.3. Preparation of the Company Proxy Statement; Company
Stockholders Meeting. (a) If the Company Stockholder Approval is required by
law, the Company shall, as soon as practicable following the expiration of the
Offer, prepare and file with the SEC a preliminary Company Proxy Statement and
shall use its reasonable best efforts to respond to any comments of the SEC or
its staff and to cause the Company Proxy Statement to be mailed to the Company's
stockholders as promptly as practicable after responding to all such comments to
the satisfaction of the staff. No filing of, or amendment or supplement to, the
Company Proxy Statement will be made by the Company without providing Lucent the
opportunity to review and comment thereon. The Company shall notify Lucent
promptly of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Company
Proxy Statement or for additional information and will supply Lucent with copies
of all correspondence between the Company or any of its representatives, on the
one hand, and the SEC or its staff, on the other hand, with respect to the
Company Proxy Statement or the Merger. If at any time prior to the Company
Stockholders Meeting there shall occur any event or information that should be
set forth in an amendment or supplement to the Company Proxy Statement, so that
the Company Proxy Statement would not include any misstatement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, the
Company shall notify Lucent and shall promptly prepare and mail to its
stockholders and file with the SEC an appropriate amendment or supplement
describing such information. The Company shall not mail any Company Proxy
Statement or any amendment or supplement thereto, to which Lucent reasonably
objects.
(b) If the Company Stockholder Approval is required by law,
the Company shall, as soon as practicable following the expiration of the Offer,
duly call, give notice of, convene and hold a meeting of its stockholders (the
"Company Stockholders Meeting") for the purpose of obtaining the Company
Stockholder Approval and shall, through its Board of Directors, recommend to its
stockholders the approval and adoption of the Offer, this Agreement, the Merger
and the other transactions contemplated hereby. Without limiting the generality
of the foregoing but subject to its rights to terminate this Agreement pursuant
to Section 6.2(b), the Company agrees that its obligations pursuant to the first
sentence of this Section 6.3(b) shall not be affected by the commencement,
public proposal, public disclosure or communication to the Company of any
Takeover Proposal. Notwithstanding the foregoing, if Acquisition or any other
Subsidiary of Lucent shall acquire at least 90% of the outstanding Shares, the
parties shall take all necessary and appropriate action to cause the Merger to
become effective as soon as
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practicable after the expiration of the Offer without a Stockholders Meeting in
accordance with Section 253 of the DGCL.
(c) Lucent agrees to cause all Shares purchased pursuant to
the Offer and all other Shares owned by Lucent or any Subsidiary of Lucent to be
voted in favor of the Merger, this Agreement and the transactions contemplated
hereby.
6.4. Reasonable Best Efforts. (a) Upon the terms and subject
to the conditions set forth in this Agreement, each of the parties agrees to use
its reasonable best efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Offer, the Merger and
the other transactions contemplated by this Agreement, including (i) the taking
of all reasonable acts necessary to cause the Offer Conditions to be satisfied,
(ii) the obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings and the taking of all steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (iii) the obtaining of all necessary consents, approvals or
waivers from third parties, (iv) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated by this Agreement, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed, and (v) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement.
(b) In connection with and without limiting the foregoing, the
Company and its Board of Directors shall (i) take all action necessary to ensure
that no state takeover statute or similar statute or regulation is or becomes
applicable to the Offer, the Merger, this Agreement or any of the other
transactions contemplated by this Agreement and (ii) if any state takeover
statute or similar statute or regulation becomes applicable to the Offer, the
Merger, this Agreement or any other transaction contemplated by this Agreement,
take all action necessary to ensure that the Offer, the Merger, this Agreement
and the other transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated by the Offer and this
Agreement and otherwise to minimize the effect of such statute or regulation on
the Offer, the Merger or this Agreement and the other transactions contemplated
by this Agreement.
6.5. Stock Options; Warrants. (a) The Board of Directors of
the Company (or, if appropriate, any committee administering the Company Stock
Plans) shall adopt such resolutions and take such other actions as may be
required to terminate the Company Stock Plans as of the Effective Time and each
then outstanding Company Stock Option granted under the Company Stock Plans,
whether vested or unvested, shall be cancelled and converted into a right of the
holder thereof to receive in respect of such Company Stock Option an amount in
cash, without interest (the "Company Stock Option Consideration"), equal to the
product of (i) the
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number of shares of Company Common Stock represented by such Company Stock
Option immediately prior to such cancellation and conversion multiplied by (ii)
the excess, if any, by which the Offer Price exceeds the exercise price per
share with respect to such Company Stock Option (such payment to be net of all
applicable federal, state, local or foreign taxes).
(b) Prior to the Effective Time, the Company shall (i) obtain
all necessary consents from, and provide (in a form acceptable to Lucent) any
required notices to, holders of Company Stock Options and (ii) amend the terms
of the Company Stock Plans, in each case, as is necessary to give effect to the
provisions of Section 6.5(a).
(c) Prior to the Effective Time, the Company shall take all
actions to receive from each holder of an outstanding warrant (each, a
"Warrant") to purchase shares of Company Common Stock an agreement that, as of
the Effective Time, such Warrant shall be converted into a right of such holder
to receive from the Paying Agent the consideration set forth in the next
sentence at the same time that each such holder is entitled to receive payment
for shares of Company Common Stock from the Surviving Corporation in connection
with the Merger. Each holder of a Warrant shall be entitled to receive from the
Paying Agent in respect of the shares of Company Common Stock to be issued upon
the exercise of such Warrant, an amount in cash, without interest (the "Warrant
Consideration"), equal to the product of (i) the number of shares of Company
Common Stock subject to such Warrant immediately prior to the Effective Time and
(ii) the excess, if any, by which the Offer Price exceeds the exercise price per
share that was applicable with respect to such Warrant.
6.6. Employee Benefit Plans; Existing Agreement. (a) As soon
as practicable after the Effective Time (the "Benefits Date"), Lucent shall
provide, or cause to be provided, employee benefit plans, programs and
arrangements to employees of the Company that are the same as those made
generally available to non-represented employees of Lucent who are hired by
Lucent after December 31, 1998. From the Effective Time to the Benefits Date
(which the parties acknowledge may occur on different dates with respect to
different plans, programs or arrangements of the Company) (the "Continuation
Period"), Lucent shall provide, or cause to be provided, the employee benefit
plans, programs and arrangements of the Company provided to employees of the
Company as of the date hereof.
(b) With respect to each benefit plan, program practice,
policy or arrangement maintained by Lucent (the "Lucent Plans") in which
employees of the Company subsequently participate, for purposes of determining
vesting and entitlement to benefits, including for severance benefits and
vacation entitlement (but not for accrual of pension benefits), service with the
Company (or predecessor employers to the extent the Company provides past
service credit) shall be treated as service with Lucent; provided, that such
service shall not be recognized to the extent that such recognition would result
in a duplication of benefits. Such service also shall apply for purposes of
satisfying any waiting periods, evidence of insurability requirements, or the
application of any pre-existing condition limitations. Each Lucent Plan shall
waive pre-existing condition limitations to the same extent waived under the
applicable Company Benefit Plan.
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Company Employees shall be given credit for amounts paid under a corresponding
benefit plan during the same period for purposes of applying deductibles,
copayments and out- of-pocket maximums as though such amounts had been paid in
accordance with the terms and conditions of the Lucent Plan.
(c) Prior to the Effective Time, the Company shall take all
necessary actions or agreements to terminate the retirement plan for employees
of the Company in accordance with its terms. The effective date of such
termination shall in no event be later than the Effective Time. Prior to such
termination, the Company shall file with respect thereto a determination letter
application on Form 5310 with the IRS. In connection with such termination, the
assets of such plan (including any excess assets), net of expenses, shall be
allocated among participants based on the accrued benefit obligation.
(d) Prior to the Effective Time, the Company shall terminate
its supplemental retirement agreements. In connection therewith, accrued
benefits shall be paid to each participant in such plan in accordance with the
procedures described in Section 10.2 of each such supplemental retirement
agreement.
(e) Prior to the Effective Time, the Company shall terminate
its retirement plan for outside directors in accordance with the terms of such
plan. In connection therewith, accrued benefits shall be paid to each
participant in such plan in accordance with the procedures described in Section
16 of such plan.
6.7. Indemnification. (a) From and after the consummation of
the Offer, Lucent shall, or shall cause the Surviving Corporation to, fulfill
and honor in all respects the obligations of the Company to indemnify each
Person who is or was a director or officer (an "Indemnified Party") of the
Company or any of its Subsidiaries pursuant to any indemnification provision of
the Company's certificate of incorporation or by-laws as each is in effect on
the date hereof.
(b) For a period of six years after the consummation of the
Offer, Lucent shall cause to be maintained in effect the current officers' and
directors' liability insurance maintained by the Company with respect to the
Indemnified Parties; provided that Lucent may elect either (i) to require the
Company to obtain prior to the Effective Time coverage of the type contemplated
by Section 10 of the Company's existing directors, officers and corporate
liability insurance policy or (ii) to substitute therefor policies of at least
the same coverage and amounts (containing terms and conditions which are no less
advantageous to the Indemnified Parties than such existing insurance) covering
acts or omissions occurring prior to the Effective Time. The current annual
premium paid by the Company for its existing coverage is set forth in Item
6.7(b) of the Company Disclosure Schedule.
(c) This Section 6.7 shall survive the closing of all the
transactions contemplated hereby, is intended to benefit the Indemnified Parties
and their respective heirs and
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personal representative (each of which shall be entitled to enforce this Section
6.7 against Lucent and the Surviving Corporation, as the case may be, as a
third-party beneficiary of this Agreement), and shall be binding on all
successors and assigns of Lucent and the Surviving Corporation.
6.8. Directors. Promptly upon the acceptance for payment of,
and payment for, Shares by Acquisition pursuant to the Offer, Acquisition shall
be entitled to designate such number of directors on the Board of Directors of
the Company as will give Acquisition, subject to compliance with Section 14(f)
of the Exchange Act, representation on the Company's Board of Directors equal to
the product of (i) the total number of directors on the Company's Board of
Directors and (ii) the percentage that the number of Shares purchased by
Acquisition in the Offer bears to the number of Shares outstanding, and the
Company shall, at such time, cause Acquisition's designees to be so elected by
its existing Board of Directors; provided, that in the event that Acquisition's
designees are elected to the Board of Directors of the Company, until the
Effective Time such Board of Directors shall have at least two directors who are
directors of the Company on the date of this Agreement and who are not officers
of the Company or any of its Subsidiaries (the "Independent Directors") and;
provided further that, in such event, if the number of Independent Directors
shall be reduced below two for any reason whatsoever, the remaining Independent
Director shall designate a person to fill such vacancy who shall be deemed to be
an Independent Director for purposes of this Agreement or, if no Independent
Directors then remain, the other directors of the Company on the date hereof
shall designate two persons to fill such vacancies who shall not be officers or
affiliates of the Company or any of its Subsidiaries, or officers or affiliates
of Lucent or any of its Subsidiaries, and such persons shall be deemed to be
Independent Directors for purposes of this Agreement. Subject to applicable law,
the Company shall take all action requested by Lucent necessary to effect any
such election, including mailing to its stockholders the Information Statement
containing the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder, and the Company agrees to make such mailing
with the mailing of the Schedule 14D-9 (provided that Acquisition shall have
provided to the Company on a timely basis all information required to be
included in the Information Statement with respect to Acquisition's designees).
In connection with the foregoing, the Company will promptly, at the option of
Lucent, either increase the size of the Company's Board of Directors and/or
obtain the resignation of such number of its current directors as is necessary
to enable Acquisition's designees to be elected or appointed to, and to
constitute a majority of the Company's Board of Directors as provided above.
6.9. Fees and Expenses; Termination Fee. (a) Except as
provided in this Section 6.9, all fees and expenses incurred in connection with
the Offer, the Merger, this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such fees or expenses, whether or
not the Offer or the Merger is consummated, except that each of Lucent and the
Company shall bear and pay one-half of (i) the costs and expenses incurred in
connection with the filing, printing and mailing of the Company Proxy Statement
(including SEC filing fees) and (ii) the filing fees for the pre-merger
notification and report forms under the HSR Act.
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(b) In the event that (i) a bona fide Superior Proposal shall
have been made directly to the stockholders of the Company generally or shall
have otherwise become publicly known or any Person shall have publicly announced
an intention (whether or not conditional) to make a Superior Proposal and
thereafter this Agreement is terminated by any of Lucent, Acquisition or the
Company pursuant to Section 11(b)(i), or (ii) this Agreement is terminated (A)
by Lucent or Acquisition pursuant to Section 11(g), (B) by the Company pursuant
to Section 11(d) or (C) by Lucent pursuant to Section 11(c), then the Company
shall promptly, but in no event later than the date of such termination, pay
Lucent a fee equal to $2,000,000 (the "Termination Fee"), payable by wire
transfer of same day funds; provided, that no Termination Fee shall be payable
to Lucent pursuant to clause (i) of this Section 6.9(b) unless within twelve
(12) months of such termination the Company or any of its Subsidiaries enters
into any definitive agreement with respect to, or consummates, any Superior
Proposal. The Company acknowledges that the agreements contained in this Section
6.9(b) are an integral part of the transactions contemplated by this Agreement
and that, without these agreements, Lucent would not enter into this Agreement.
Accordingly, if the Company fails promptly to pay the amount due pursuant to
this Section 6.9(b), and, in order to obtain such payment, Lucent commences a
suit which results in a final, non-appealable judgment against the Company for
the fee set forth in this Section 6.9(b), the Company shall pay to Lucent its
costs and expenses (including attorneys' fees and expenses) in connection with
such suit, together with interest on the amount of the fee at the prime rate of
Citibank, N.A. in effect on the date such payment was required to be made.
6.10. Public Announcements. Lucent and the Company will
consult with each other before issuing, and provide each other the opportunity
to review, comment upon and concur with, any press release or other public
statements with respect to the transactions contemplated by this Agreement,
including the Merger, and shall not issue any such press release or make any
such public statement prior to such consultation, except as either party may
determine is required by applicable law (including Rule 14d-9 promulgated under
the Exchange Act), court process or by obligations pursuant to any listing
agreement with any national securities exchange or national trading system or as
contemplated or provided elsewhere herein. The parties agree that the initial
press release to be issued with respect to the transactions contemplated by this
Agreement shall be in the form heretofore agreed to by the parties.
6.11. Stockholder Litigation. The Company agrees that it shall
not settle any litigation commenced after the date hereof against the Company or
any of its directors by any stockholder of the Company relating to the Offer,
the Merger or this Agreement without the prior written consent of Lucent, which
consent shall not be unreasonably withheld. The Company shall give Lucent the
opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and/or its directors relating to the transactions
contemplated by this Agreement. In addition, the Company shall not voluntarily
cooperate with any third party that may hereafter seek to restrain or prohibit
or otherwise oppose the Offer, the Merger or the transactions contemplated by
this Agreement and shall cooperate with Lucent and Acquisition to
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resist any such effort to restrain or prohibit or otherwise oppose the Offer,
the Merger or the transactions contemplated by this Agreement.
7. Conditions Precedent.
7.1. Conditions Precedent to Each Party's Obligation to Effect
the Merger. The respective obligations of each party hereto to effect the Merger
shall be subject to the fulfillment or satisfaction, prior to or on the Closing
Date of the following conditions:
(a) Stockholder Approval. If required by applicable law, the
Company Stockholder Approval shall have been obtained.
(b) No Litigation. No judgment, order, decree, statute, law,
ordinance, rule or regulation, entered, enacted, promulgated, enforced or issued
by any court or other Governmental Entity of competent jurisdiction or other
legal restraint or prohibition (collectively, "Restraints") shall be in effect,
and there shall not be pending any suit, action or proceeding by any
Governmental Entity (i) preventing the consummation of the Merger or (ii) which
otherwise is reasonably likely to have a Material Adverse Effect on the Company
or Lucent, as applicable, arising out of this Agreement or the transactions
contemplated hereby; provided, that each of the parties shall have used its
reasonable best efforts to prevent the entry of any such Restraints and to
appeal as promptly as possible any such Restraints that may be entered.
(c) Purchases of Shares. Acquisition shall have previously
accepted for payment and paid for Shares pursuant to the Offer.
7.2. Conditions Precedent to Obligations of Acquisition and
Lucent. All obligations of Acquisition and Lucent under this Agreement are
subject to the fulfillment or satisfaction, prior to or on the Closing Date, of
each of the following conditions precedent:
(a) Performance of Obligations. The Company shall have
performed and complied in all material respects with all agreements and
conditions contained in this Agreement that are required to be performed or
complied with by it prior to or at the Closing.
(b) Representations and Warranties. Each of the Company's
representations and warranties contained in Section 3 of this Agreement to the
extent it is qualified by Material Adverse Effect shall be true and correct and
each of the Company's representations and warranties to the extent it is not so
qualified by Material Adverse Effect, shall be true and correct in all material
respects, in each case, on and as of the Closing with the same effect as though
such representations and warranties were made on and as of the Closing, except
for changes permitted by this Agreement and except to the extent that such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties shall be as of such earlier date.
Lucent and Acquisition shall have received a certificate dated the Closing
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Date and signed by the Chairman, President or a Vice-President of the Company,
certifying that, the conditions specified in clauses (a) and (b) of this Section
7.2 have been satisfied.
(c) No Material Adverse Change. No event or events shall have
occurred that could reasonably be expected to have a Material Adverse Effect on
the Company, and Lucent shall have received a certificate signed on behalf of
the Company by its Chief Executive Officer and Chief Financial Officer to such
effect.
(d) Consents. The Company shall have received all necessary
consents or waivers, in form and substance satisfactory to Lucent and
Acquisition, from the other parties to each contract, lease or agreement to
which the Company is a party, except where the failure to receive such consent
would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect on the Company.
7.3. Conditions Precedent to the Company's Obligations. All
obligations of the Company under this Agreement are subject to the fulfillment
or satisfaction, prior to or on the Closing Date, of each of the following
conditions precedent:
(a) Performance of Obligations. Acquisition and Lucent shall
have performed and complied in all material respects with all agreements and
conditions contained in this Agreement that are required to be performed or
complied with by them prior to or at the Closing.
(b) Representations and Warranties. Each of the
representations and warranties of Acquisition and Lucent contained in Section 4
of this Agreement to the extent it is qualified by Material Adverse Effect shall
be true and correct and each of the representations and warranties of
Acquisition and Lucent to the extent it is not so qualified by Material Adverse
Effect shall be true and correct in all material respects, in each case, on and
as of the Closing with the same effect as though such representations and
warranties were made on and as of the Closing except for changes permitted by
this Agreement and except to the extent that such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties shall be as of such earlier date. The Company shall have received
certificates dated the Closing Date and signed by the President or a
Vice-President of Acquisition and an authorized signatory of Lucent, certifying
that the conditions specified in clauses (a) and (b) of this Section 7.3 have
been satisfied.
8. Non-Survival of Representation and Warranties.
8.1. Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time or, in the case of
the Company, shall survive the acceptance of payment for, Shares by Acquisition
pursuant to the Offer. This Section shall not limit any covenant or agreement by
the parties which contemplates performance after the Effective Time.
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9. Contents of Agreement; Parties in Interest; etc.
This Agreement and the agreements referred to or contemplated
herein and the letter agreement dated June 18, 1999, concerning confidentiality
(the "Confidentiality Agreement") set forth the entire understanding of the
parties hereto with respect to the transactions contemplated hereby, and, except
as set forth in this Agreement, such other agreements and the Exhibits hereto
and the Confidentiality Agreement, there are no representations or warranties,
express or implied, made by any party to this Agreement with respect to the
subject matter of this Agreement and the Confidentiality Agreement. Except for
the matters set forth in the Confidentiality Agreement, any and all previous
agreements and understandings between or among the parties regarding the subject
matter hereof, whether written or oral, are superseded by this Agreement and the
agreements referred to or contemplated herein.
10. Assignment and Binding Effect.
This Agreement may not be assigned by either party hereto
without the prior written consent of the other party; provided, that Acquisition
may assign its rights and obligations under this Agreement to any directly or
indirectly wholly-owned Subsidiary of Lucent, upon written notice to the Company
if the assignee shall assume the obligations of Acquisition hereunder and Lucent
shall remain liable for its obligations hereunder. All the terms and provisions
of this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto.
11. Termination.
This Agreement may be terminated, and the Merger may be
abandoned at any time prior to the Effective Time whether before or after the
approval and adoption of this Agreement and the transactions contemplated hereby
by the stockholders of the Company or the stockholder of Acquisition (provided
that if the Shares are purchased pursuant to the Offer, neither Lucent nor
Acquisition may in any event terminate this Agreement):
(a) by the agreement of each of the Board of Directors of
Lucent, Acquisition and the Company;
(b) by Lucent, Acquisition or the Company if (i) Acquisition
shall not have accepted for payment any Shares pursuant to the Offer prior to
December 31, 1999; provided that the right to terminate this Agreement under
this Section 11(b)(i) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or resulted
in, the failure of Acquisition to accept for payment any Shares on or before
such date; or (ii) any court of competent jurisdiction in the United States or
other United States governmental authority shall have issued an order, decree,
ruling or taken any other action restraining, enjoining or otherwise prohibiting
the acceptance for payment of, or payment for, Shares pursuant to the Offer or
the Merger and such order, decree, ruling or other action shall have become
final and nonappealable;
(c) by Lucent, if the Company or any of its directors or
officers shall participate in discussions or negotiations in breach (other than
an immaterial breach) of Section 6.2;
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(d) by the Company in accordance with Section 6.2(b); provided
that, in order for the termination of this Agreement pursuant to this paragraph
(d) to be deemed effective, the Company shall have complied with all provisions
of Section 6.2, including the notice provisions therein, and with applicable
requirements, including the payment of the Termination Fee;
(e) by the Company, in the event Lucent or Acquisition
materially breaches its obligations under this Agreement, unless such breach is
cured within 15 days after notice to Lucent by the Company;
(f) by Lucent or Acquisition, in the event the Company
materially breaches its obligations under this Agreement unless such breach is
cured within 15 days after notice to Company by Lucent or Acquisition; or
(g) by Lucent or Acquisition prior to the purchase of Shares
pursuant to the Offer in the event of a breach or failure to perform by the
Company of any representation, warranty, covenant or other agreement contained
in this Agreement which (i) would give rise to the failure of a condition set
forth in paragraph (d) or (e) of Exhibit A and (ii) cannot be cured, or has not
been cured within 15 days after the Company receives written notice from Lucent
of such breach or failure to perform.
12. Definitions.
As used in this Agreement the terms set forth below shall have
the following meanings:
(a) "Affiliate" of a Person means any other Person who
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, such Person. As used in this
definition, "control" means the possession of the power, directly or indirectly,
to direct or cause the direction of the management and policies of a Person
whether through the ownership of voting securities, by contract or otherwise.
(b) "Benefit Plan" shall mean any bonus, pension, profit
sharing, deferred compensation, incentive compensation, stock ownership, stock
purchase, stock option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical or other material plan,
arrangement or understanding (whether or not legally binding) providing material
benefits to any current or former employee, officer or director of the Company.
(c) "best knowledge" of any Person which is not an individual
means, with respect to any specific matter, the knowledge, after due inquiry, of
such Person's executive officers and any other officer or persons having primary
responsibility for such matter.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) "Environmental Laws" shall mean all applicable federal,
state, local or foreign laws, rules and regulations, orders, decrees, judgments,
permits, filings and licenses
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relating (i) to protection and clean-up of the environment and activities or
conditions related thereto, including those relating to the generation,
handling, disposal, transportation or release of Hazardous Substances and (ii)
the health or safety of employees in the workplace environment, all as amended
from time to time, and shall also include any common law theory based on
nuisance, trespass, negligence or other tortious conduct.
(f) "GAAP" shall mean generally accepted accounting
principles.
(g) "Hazardous Substances" shall mean any and all hazardous
and toxic substances, wastes or materials, any pollutants, contaminants, or
dangerous materials (including, but not limited to, polychlorinated biphenyls,
PCBs, friable asbestos, volatile and semi-volatile organic compounds, oil,
petroleum products and fractions, and any materials which include hazardous
constituents or become hazardous, toxic, or dangerous when their composition or
state is changed), or any other similar substances or materials which are
included under or regulated by any Environmental Laws.
(h) "Liens" shall mean any mortgage, pledge, lien, security
interest, conditional or installment sale agreement, encumbrance, charge or
other claims of third parties of any kind.
(i) "Material Adverse Effect" on a Person shall mean (unless
otherwise specified) any condition or event that: (i) has a material adverse
effect on the assets, business, financial condition, operations or prospects of
such Person and its Subsidiaries, taken as a whole, other than any condition or
event (A) relating to the economy in general, (B) relating to the industries in
which such party operates in general, (C) arising out of or resulting from
actions contemplated by the parties in connection with, or which is attributable
to, the announcement of this Agreement and the transactions contemplated hereby
(including loss of personnel, customers or suppliers or the delay or
cancellation of orders for products) or (D) in the case of the Company,
litigation brought or threatened against the Company or any member of its Board
of Directors in respect of this Agreement; (ii) materially impairs the ability
of such Person to perform its obligations under this Agreement; or (iii)
prevents or materially delays the consummation of transactions contemplated
under this Agreement.
(j) "Permitted Liens" shall mean (i) Liens for taxes,
assessments, or similar charges, incurred in the ordinary course of business
that are not yet due and payable or are being contested in good faith; (ii)
pledges or deposits made in the ordinary course of business; (iii) Liens of
mechanics, materialmen, warehousemen or other like Liens securing obligations
incurred in the ordinary course of business that are not yet due and payable or
are being contested in good faith; and (iv) similar Liens and encumbrances which
are incurred in the ordinary course of business and which do not in the
aggregate materially detract from the value of such assets or properties or
materially impair the use thereof in the operation of such business.
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(k) "Person" shall mean any individual, corporation,
partnership, limited partnership, limited liability company, trust, association
or entity or government agency or authority.
(l) "reasonable best efforts" shall mean prompt, substantial
and persistent efforts as a prudent Person desirous of achieving a result would
use in similar circumstances; provided that the Company, Lucent or Acquisition,
as applicable, shall be required to expend only such resources as are
commercially reasonable in the applicable circumstances.
(m) "Subsidiary" of a Person shall mean any corporation,
partnership, joint venture or other entity in which such Person (i) owns,
directly or indirectly, 50% or more of the outstanding voting securities or
equity interests or (ii) is a general partner.
(n) "Tax" (and, with correlative meaning, "Taxes" and
"Taxable") shall include all (i) federal, state, local or foreign net income,
gross income, gross receipts, windfall profit, severance, property, production,
sales, use, license, excise, franchise, employment, payroll, withholding,
alternative or add-on minimum, ad valorem, value-added, transfer, stamp, or
environmental tax, or any other tax, custom, duty, governmental fee or other
like assessment or charge of any kind whatsoever, together with any interest or
penalty, addition to tax or additional amount imposed by any governmental
authority, (ii) liability for the payment of any amounts described in (i) as a
result of being a member of an affiliated, consolidated, combined or unitary
group and (iii) liability for the payment of any amounts as a result of being
party to any tax sharing agreement or as a result of any express or implied
obligation to indemnify any other Person with respect to the payment of any
amounts of the type described in clause (i) or (ii).
(o) "Tax Return" shall mean any return, report or similar
statement required to be filed with respect to any Tax (including any attached
schedules), including, without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax.
13. Notices.
Any notice, request, demand, waiver, consent, approval, or
other communication which is required or permitted to be given to any party
hereunder shall be in writing and shall be deemed given only if delivered to the
party personally or sent to the party by facsimile transmission (promptly
followed by a hard-copy delivered in accordance with this Section 13) or by
registered or certified mail (return receipt requested), with postage and
registration or certification fees thereon prepaid, addressed to the party at
its address set forth below:
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If to Acquisition or Lucent:
Lucent Technologies Inc.
2000 Northeast Expressway
Norcross, Georgia 30071
Att: President, NPG
Telephone No: separately supplied
Facsimile No: separately supplied
with copies to:
Lucent Technologies Inc.
600 Mountain Avenue
Room 6A 311
Murray Hill, NJ 07974
Att: Pamela F. Craven
Vice President-Law
Telephone No: separately supplied
Facsimile No: separately supplied
If to the Company:
SpecTran Corporation
50 Hall Road
Sturbridge, MA 01566
Att: President
Telephone No: separately supplied
Facsimile No: separately supplied
with a copy to:
Nordlicht & Hand
645 Fifth Avenue
New York, New York 10022
Att: Ira S. Nordlicht, Esq.
Telephone No: separately supplied
Facsimile No: separately supplied
or to such other address or Person as any party may have specified in a notice
duly given to the other party as provided herein. Such notice, request, demand,
waiver, consent, approval or other
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communication will be deemed to have been given as of the date so delivered,
telegraphed or mailed.
14. Amendment.
This Agreement may be amended, modified or supplemented at any
time before or after obtaining the Company Stockholder Approval, provided that
(i) after any such approval, there shall not be made any amendment that by Law
requires further approval by the stockholders of the Company or the approval of
the stockholders of Lucent without the further approval of such stockholders and
(ii) after the purchase of the Shares pursuant to the Offer, there shall not be
made any amendment which decreases the Merger Consideration. Any amendment,
modification or revision of this Agreement and any waiver of compliance or
consent with respect hereto shall be effective only by a written instrument
executed by each of the parties hereto. Following the election or appointment of
Acquisition's designees pursuant to Section 6.8 and prior to the Effective Time,
the affirmative vote of a majority of the Independent Directors then in office
shall be required by the Company to (i) amend or terminate this Agreement by the
Company, (ii) exercise or waive any of the Company's rights or remedies under
this Agreement, (iii) extend the time for performance of Lucent and
Acquisition's respective obligations under this Agreement or (iv) take any
action to amend or otherwise modify the Company's certificate of incorporation
or by-laws (or similar governing instruments of the Company's Subsidiaries) in
violation of Section 6.7.
15. Extensions; Waiver.
At any time prior to the Effective Time, a party may (a)
extend the time for the performance of any of the obligations or other acts of
the other parties, (b) waive any inaccuracies in the representations and
warranties of the other parties contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) subject to the proviso of Section
14, waive compliance by the other party with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
shall not constitute a waiver of such rights.
16. Governing Law.
This Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the State of Delaware as applied to
contracts made and fully performed in such state.
17. No Benefit to Others.
The representations, warranties, covenants and agreements
contained in this Agreement are for the sole benefit of the parties hereto, and
their respective successors and assigns, and they shall not be construed as
conferring, and are not intended to confer, any rights on any other Person.
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18. Severability.
If any term or other provision of this Agreement is determined
to be invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other terms and provisions of the Agreement shall remain in
full force and effect. Upon such determination, the parties hereto shall
negotiate in good faith to modify this Agreement so as to give effect to the
original intent of the parties to the fullest extent permitted by applicable
law.
19. Section Headings.
All section headings are for convenience only and shall in no
way modify or restrict any of the terms or provisions hereof.
20. Schedules and Exhibits.
All Schedules and Exhibits referred to herein are intended to
be and hereby are specifically made a part of this Agreement.
21. Counterparts.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and the Company, Acquisition and
Lucent may become a party hereto by executing a counterpart hereof. This
Agreement and any counterpart so executed shall be deemed to be one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound hereby, have duly executed this Agreement as of the date first
above written.
LUCENT TECHNOLOGIES INC.
By: /s/ William R. Spivey
________________________________
Name: William R. Spivey
Title: Group President,
Networks Products Group
SEATTLE ACQUISITION INC.
By: /s/ William R. Spivey
________________________________
Name: William R. Spivey
Title: President
SPECTRAN CORPORATION
By: /s/ Charles B. Harrison
________________________________
Name: Charles B. Harrison
Title: President, Chief Executive
Officer and Chairman of
the Board of Directors
54
EXHIBIT A
Conditions of the Offer:
Notwithstanding any other term of the Offer or this Agreement,
Acquisition shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act (relating to Acquisition's obligation to pay for or return tendered
Shares after the termination or withdrawal of the Offer), to pay for any Shares
tendered pursuant to the Offer unless (i) there shall have been validly tendered
and not withdrawn prior to the expiration of the Offer such number of Shares
that would constitute at least a majority of the outstanding Shares (determined
on a fully diluted basis for all outstanding stock options and any other rights
to acquire Shares on the date of purchase) (the "Minimum Condition") and (ii)
any waiting period under the HSR Act applicable to the purchase of Shares
pursuant to the Offer shall have expired or been terminated. Furthermore,
Acquisition shall not be required to accept for payment or, subject as
aforesaid, to pay for any Shares not theretofore accepted for payment or paid
for, and may, in accordance with Section 11, terminate this Agreement or amend
the Offer with the consent of the Company, if, upon the scheduled expiration
date of the Offer (as extended, if required, pursuant to the second to the last
sentence of Section 1.1(a)), any of the following conditions exists and is
continuing and does not result principally from the breach by Lucent or
Acquisition of any of their obligations under this Agreement:
(a) there shall be instituted or pending by any Governmental
Entity any suit, action or proceeding (i) challenging the acquisition by Lucent
or Acquisition of any Shares under the Offer, seeking to restrain or prohibit
the making or consummation of the Offer or the Merger or the performance of any
of the other transactions contemplated by this Agreement or seeking to obtain
from the Company, Lucent or Acquisition any damages that are material in
relation to the Company and its Subsidiaries taken as a whole, (ii) seeking to
prohibit or materially limit the ownership or operation by the Company, Lucent
or any of Lucent's Subsidiaries of all or a portion of the business or assets of
the Company or Lucent and its Subsidiaries, taken as a whole, or to compel the
Company or Lucent and its Subsidiaries to dispose of or hold separate all or a
portion of the business or assets of the Company or Lucent and their
Subsidiaries, taken as a whole, in each case as a direct result of the Offer or
any of the other transactions contemplated by this Agreement or (iii) seeking to
impose material limitations on the ability of Lucent or Acquisition to acquire
or hold, or exercise full rights of ownership of, any Shares to be accepted for
payment pursuant to the Offer including, without limitation, the right to vote
such Shares on all matters properly presented to the stockholders of the
Company; (iv) seeking to prohibit Lucent or any of its Subsidiaries from
effectively controlling in any material respect any material portion of the
business or operations of the Company; (v) that could reasonably be expected to
require the divestiture by Lucent or Acquisition of Shares, in the case of any
of the foregoing in clauses (ii), (iii) or (iv), which could reasonably be
expected, individually or in the aggregate, to have a material adverse effect on
the businesses of the Company and its Subsidiaries; or (vi) that could
reasonably be expected to result in a Material Adverse Effect on the Company or
Lucent;
55
(b) there shall be any statute, rule, regulation, judgment,
order or injunction enacted, entered, enforced, promulgated or deemed applicable
to the Offer or the Merger, by any Governmental Entity or court, other than the
application to the Offer or the Merger of applicable waiting periods under the
HSR Act, that would result in any of the consequences referred to in clauses (i)
through (vi) of paragraph (a) above;
(c) there shall have occurred any events or changes which have
had or which could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company;
(d) any of the representations and warranties of the Company
set forth in this Agreement that are qualified as to materiality shall not be
true and correct or any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in each case at
the date of this Agreement and at the scheduled or extended expiration of the
Offer;
(e) the Company shall have failed to perform in any material
respect any material obligation or to comply in any material respect with any
material agreement or material covenant of the Company to be performed or
complied with by it under this Agreement, which failure to perform or comply
cannot be cured, or has not been cured within 15 days after the Company receives
written notice from Lucent of such breach or failure to perform;
(f) this Agreement shall have been terminated in accordance
with its terms;
(g) any consent (other than the filing of the Certificate of
Merger or Company Stockholder Approval if required by the DGCL) required to be
filed, occurred or been obtained by the Company or any of its Subsidiaries in
connection with the execution and delivery of this Agreement, the Offer and the
consummation of the transactions contemplated by this Agreement shall not have
been filed or obtained or shall not have occurred, except where the failure to
obtain such consent could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company;
(h) the Company's Board of Directors (i) shall have withdrawn,
or modified or changed in a manner adverse to Lucent or Acquisition (including
by amendment of the Schedule 14D-9) its recommendation of the Offer, the Merger
Agreement or the Merger, (ii) shall have recommended a Superior Proposal, (iii)
shall have adopted any resolution to effect any of the foregoing or (iv) upon
request of Lucent or Acquisition, shall fail to reaffirm its approval of
recommendation of the Offer, the Merger Agreement or the Merger; or
(i) any Person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act), other than Lucent, Acquisition or their
Affiliates or any group of which any of them is a member, shall have acquired or
announced its intention to acquire beneficial ownership
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(as determined pursuant to Rule 13d-3 promulgated under the Exchange Act) of 20%
or more of the Shares.
and, in the good faith judgment of Lucent or Acquisition, in its sole
discretion, make it inadvisable to proceed with such acceptance of Shares for
payment or the payment therefor;
The foregoing conditions are for the sole benefit of Lucent
and Acquisition and (except for the Minimum Condition), subject to the terms of
this Agreement, may be waived by Lucent and Acquisition in whole or in part at
any time and from time to time in their sole discretion. The failure by Lucent
or Acquisition at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right, the waiver of any such right with respect to
particular facts and circumstances shall not be deemed a waiver with respect to
any other facts and circumstances and each such right shall be deemed an ongoing
right that may be asserted at any time and from time to time. Terms used but not
defined herein shall have the meanings assigned to such terms in the Agreement
to which this Exhibit A is a part.
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GLOSSARY OF DEFINED TERMS
Defined Term Location of Definition
- ------------ ----------------------
Acquisition........................................... Preamble
Acquisition Agreement................................. Section 6.2(b)
Acquisition Common Stock ............................. Recitals
Affiliate............................................. Section 12(a)
Agreement............................................. Preamble
Applicable Period..................................... Section 6.2(a)
Authorizations........................................ Section 3.14(b)
Benefit Plan.......................................... Section 12(b)
Benefits Date ........................................ Section 6.6
best knowledge........................................ Section 12(c)
Certificate of Merger................................. Section 2.1(b)
Certificates.......................................... Section 2.8(a)
Closing............................................... Section 2.1(b)
Closing Date.......................................... Section 2.1(b)
Code.................................................. Section 12(d)
Commonly Controlled Entity............................ Section 3.17(a)
Company............................................... Preamble
Company Benefit Plans................................. Section 3.17(a)
Company Common Stock.................................. Recitals
Company Disclosure Schedule........................... Section 3
Company Filed SEC Documents........................... Section 3.6
Company Non-Voting Common Stock....................... Recitals
Company Proxy Statement............................... Section 3.5(b)
Company SEC Documents................................. Section 3.6
Company Stockholder Approval.......................... Section 3.23
Company Stockholders Meeting.......................... Section 6.3(b)
Company Stock Options................................. Section 3.3(b)
Company Stock Option Consideration.................... Section 6.5(a)
Company Stock Plans................................... Section 3.3(a)
Confidentiality Agreement............................. Section 9
Continuation Period................................... Section 6.6(a)
DGCL.................................................. Recitals
Dissenting Shares..................................... Section 2.7(a)
Effective Time........................................ Section 2.1(b)
Environmental Laws.................................... Section 12(e)
ERISA................................................. Section 3.17(a)
Exchange Act.......................................... Section 1.1(b)
GAAP.................................................. Section 12(f)
Governmental Entity................................... Section 3.5(b)
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Hazardous Substances.................................. Section 12(g)
HSR Act............................................... Section 3.5(b)
Immaterial Authorizations............................. Section 3.14(b)
Indemnified Party..................................... Section 6.7(a)
Information Statement................................. Section 3.7
Intellectual Property Rights.......................... Section 3.15(a)
IRS................................................... Section 3.17(a)
Laws.................................................. Section 3.14(a)
Liens................................................. Section 12(h)
Lucent................................................ Preamble
Lucent Disclosure Schedule............................ Section 4
Lucent Plans.......................................... Section 6.6(b)
Material Adverse Effect............................... Section 12(i)
Merger................................................ Recitals
Merger Consideration.................................. Section 2.5(c)
Minimum Condition..................................... Exhibit A
Nasdaq................................................ Section 3.5(b)
Offer................................................. Recitals
Offer Conditions...................................... Section 1.1(a)
Offer Documents....................................... Section 1.1(b)
Offer Price........................................... Recitals
Parachute Gross-Up Payment............................ Section 3.18(e)
Paying Agent.......................................... Section 2.8(a)
Pension Plans......................................... Section 3.17(a)
Permitted Liens....................................... Section 12(j)
Person................................................ Section 12(k)
reasonable best efforts............................... Section 12(l)
Restraints............................................ Section 7.1(b)
SARs.................................................. Section 3.3(b)
Schedule 14D-1........................................ Section 1.1(b)
Schedule 14D-9........................................ Section 1.2(b)
SEC................................................... Section 1.1(a)
Section 6.2 Notice.................................... Section 6.2(a)
Shares................................................ Recitals
Securities Act........................................ Section 3.6
Subsidiary............................................ Section 12(m)
Superior Proposal..................................... Section 6.2(b)
Surviving Corporation................................. Section 2.1(a)
Takeover Proposal..................................... Section 6.2(a)
Tax................................................... Section 12(n)
Tax Return............................................ Section 12(o)
Termination Fee....................................... Section 6.9(b)
Warrant............................................... Section 6.5(c)
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Warrant Consideration................................. Section 6.5(c)
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