EXHIBIT 99.2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT is made and entered into as of June 22, 1999
(the "Agreement") by and between Newbridge Networks Corporation, a Canadian
corporation ("Newbridge"), and Stanford Telecommunications, Inc., a Delaware
corporation ("Stel"), with respect to the following facts:
A. Concurrently with the execution and delivery of this Agreement,
Newbridge, Stel and Stel Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of Newbridge ("Merger Sub"), are entering into an Agreement and
Plan of Merger (the "Merger Agreement"), which provides that, among other
things, upon the terms and subject to the conditions thereof, Newbridge and Stel
will to enter into a business combination transaction (the "Merger").
B. As a condition and inducement to Newbridge's willingness to enter into
the Merger Agreement, Newbridge has requested that Stel agree, and Stel has so
agreed, to grant to Newbridge an option to acquire shares of Stel's Common
Stock, par value $.01 per share ("Stel Shares"), upon the terms and subject to
the conditions set forth herein.
C. Capitalized terms used and not otherwise defined herein that are
defined in the Merger Agreement shall have the respective meanings ascribed
thereto in the Merger Agreement.
The parties agree as follows:
1. Grant of Option.
Stel hereby grants to Newbridge an irrevocable option (the "Option") to
acquire up to the number of Stel Shares which equals 19.9% of the issued and
outstanding Stel Shares (the "Option Shares") as of the first date, if any, upon
which an Exercise Event (as defined in Section 2(a) below) shall occur (provided
that the Option Shares shall not upon timely issuance constitute more than 19.9%
of the then issued and outstanding Stel Shares) at a purchase price of U.S.
$35.00 per share (the "Exercise Price"), payable in cash. All references in this
Agreement to Option Shares issued to Newbridge shall be deemed to include the
associated Stel Rights.
2. Exercise of Option; Maximum Proceeds.
(a) The Option may be exercised by Newbridge, in whole or in part, at
any time or from time to time only: (i) upon the occurrence of a Triggering
Event, as defined in the Merger Agreement, or (ii) upon the public announcement
of an Acquisition Proposal, as defined in the Merger Agreement (any of the
events specified in clauses (i) or (ii) of this sentence being referred to
herein as an "Exercise Event").
(b) In the event Newbridge wishes to exercise the Option, Newbridge
shall deliver to Stel a written notice (each an "Exercise Notice") specifying
the total number of Option Shares it wishes to acquire and a closing date and
time prior to the expiration of the Option for the purchase of such Option
Shares (a "Closing"). The Exercise Notice may be withdrawn by Newbridge at any
time prior to a Closing. Unless an Exercise Notice is withdrawn, the Closing
shall occur on the specified date at the principal offices of Stel.
(c) The Option shall expire upon the earliest of (i) the Effective
Time, (ii) the termination of the Merger Agreement pursuant to any of Section
8.1(a), 8.1(c), 8.1(f), 8.1(g) or 8.1(h) thereof, (iii) the termination of the
Merger Agreement pursuant to either Section 8.1(b) or 8.1(d) thereof, if prior
thereto no Exercise Event shall have occurred, or (iv) 18 months following the
termination of the Merger Agreement under any other circumstances; provided,
however, that if the Option cannot be exercised by reason of any applicable
statute, rule, regulation or government order, or because any applicable waiting
period related to issuance of the Option Shares under the HSR Act shall not have
expired or been terminated, then the Option shall not expire until the tenth
business day after such impediment to exercise shall have been removed or shall
have become final and not subject to appeal.
(d) If Newbridge receives an amount pursuant to Section 8.3(b)(i) or
(ii) of the Merger Agreement which, when aggregated with proceeds received by
Newbridge in connection with any sales or other dispositions of Option Shares
and any dividends received by Newbridge declared on Option Shares, is equal to
more than the sum of (i) $25,000,000 plus (ii) the Exercise Price multiplied by
the number of Stel Shares purchased by Newbridge pursuant to the Option, then
all proceeds to Newbridge in excess of such sum shall be remitted by Newbridge
to Stel.
3. Conditions to Closing.
The obligation of Stel to issue Option Shares to Newbridge hereunder is
subject to the conditions that (a) all filings and declarations required to be
made, all authorizations, consents, orders and approvals required to be
obtained, and all waiting periods required to expire or be terminated, pursuant
to a requirement of any Government Entity or applicable law (including, without
limitation the HSR Act) shall have been made or obtained or shall have expired
or been terminated, in each case in connection with the exercise of the Option
hereunder; and (b) no preliminary or permanent injunction or other order by any
court of competent jurisdiction prohibiting or otherwise restraining such
issuance shall be in effect. It is understood and agreed that at any time during
which the Option is exercisable, the parties will use their respective
reasonable efforts to satisfy all conditions to Closing, so that a Closing may
take place as promptly as practicable, and in any event, prior to consummation
of a tender or exchange offer for shares of Stel capital stock.
4. Closing.
At each Closing, (a) Stel shall deliver to Newbridge a single certificate
in definitive form representing the number of Stel Shares designated by
Newbridge in its Exercise Notice, such certificate to be registered in the name
of Newbridge and to bear the legend set forth in Section 10 hereof, against
delivery of (b) payment by Newbridge to Stel of the aggregate purchase price for
the Stel Shares so designated and being purchased by wire transfer or delivery
of a certified check or bank check.
5. Representations and Warranties of Stel.
Stel represents and warrants to Newbridge that:
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(a) Stel is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has full corporate
power and authority to execute and deliver this Agreement and to carry out its
obligations hereunder;
(b) the execution and delivery of this Agreement by Stel and
consummation by Stel of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of Stel, and no
other corporate proceedings on the part of Stel are necessary to authorize this
Agreement or any of the transactions contemplated hereby;
(c) this Agreement has been duly and validly executed and delivered
by Stel, constitutes a legal, valid and binding obligation of Stel and, assuming
this Agreement constitutes a legal, valid and binding obligation of Newbridge,
is enforceable against Stel in accordance with its terms, except as
enforceability may be limited by bankruptcy and other laws affecting the rights
and remedies of creditors generally and general principles of equity;
(d) except for any filings required under the HSR Act, Stel has taken
all necessary corporate and other action to authorize and reserve for issuance
and to permit it to issue upon exercise of the Option, and at all times from the
date hereof until the termination of the Option will have reserved for issuance,
a sufficient number of unissued Stel Shares for Newbridge to exercise the Option
in full and will take all necessary corporate or other action to authorize and
reserve for issuance all additional Stel Shares or other securities which may be
issuable pursuant to Section 9 upon exercise of the Option, all of which, upon
their issuance and delivery in accordance with the terms of this Agreement, will
be validly issued, fully paid and nonassessable;
(e) upon delivery of the Stel Shares and any other securities to
Newbridge upon exercise of the Option, Newbridge will acquire such Stel Shares
or other securities free and clear of all material claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever, excluding
those imposed by Newbridge;
(f) the execution and delivery of this Agreement by Stel do not, and
the performance of this Agreement by Stel will not, (i) conflict with the
certificate of incorporation or bylaws of Stel, (ii) violate any order
applicable to Stel or any of its Subsidiaries or by which they or any of their
property is bound or affected, or (iii) result in any breach of or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give rise to any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the property or assets of Stel or any of its Subsidiaries
pursuant to, any contract or agreement to which Stel or any of its Subsidiaries
is a party or by which Stel or any of its Subsidiaries or any of their property
is bound or affected;
(g) the execution and delivery of this Agreement by Stel does not,
and the performance of this Agreement by Stel will not, require any consent,
approval, authorization or permit of, or filing with, or notification to, any
Government Entity, except pursuant to the HSR Act; and
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(h) the board of directors of Stel has resolved to render the rights
issued under the Stel Rights Plan inapplicable to this Agreement and the
transactions contemplated hereby.
6. Certain Rights.
(a) At the request of and upon notice by Newbridge (the "Put
Notice"), if at any time during the period during which the Option is
exercisable pursuant to Section 2, Stel executes with a Third Party an agreement
providing for an Acquisition Transaction or an Acquisition Transaction has been
consummated (the "Purchase Period"):
(i) Stel (or any successor entity thereof) shall purchase from
Newbridge the Option, to the extent not previously exercised, at a price equal
to the difference between the "Market/Tender Offer Price" for Stel Shares as of
the date Newbridge gives notice of its intent to exercise its rights under this
Section 6(a) and the Exercise Price, multiplied by the number of Stel Shares
purchasable pursuant to the Option. For purposes of this Agreement,
"Market/Tender Offer Price" means the higher of (A) the highest price per share
offered as of such date pursuant to any Acquisition Proposal which was made
prior to such date and not terminated or withdrawn as of such date and (B) the
highest closing sale price of Stel Shares on the Nasdaq National Market
("Nasdaq") during the twenty (20) trading days ending on the trading day
immediately preceding such date. For purposes of determining the highest price
offered pursuant to any Acquisition Proposal which involves consideration other
than cash, the value of such consideration shall be equal to the higher of (x)
if securities of the proponent of the same class as such consideration are
traded on any national securities exchange or by any registered securities
association, a value based on the closing sale price for such securities on
their principal trading market on such date and (y) the value ascribed to such
consideration by the proponent of such Acquisition Proposal, or if no such value
is ascribed, a value determined in good faith by the board of directors of Stel.
(ii) Stel (or any successor entity thereof) shall purchase the
Option Shares, if any, acquired by Newbridge at a price equal to (A) the
Exercise Price paid by Newbridge for such Stel Shares plus (B) (1) the
difference between the Market/Tender Offer Price and such Exercise Price
multiplied by (2) the number of Stel Shares so purchased.
(iii) Notwithstanding subparagraphs (i) and (ii) above, pursuant
to this Section 6(a), Stel shall not be required to pay Newbridge in excess of
an aggregate of (A) $25,000,000 plus (B) the Exercise Price paid by Newbridge
for Stel Shares acquired pursuant to the exercise of the Option minus (C) any
amounts paid or to be paid to Newbridge by Stel pursuant to Section 8.3(b)(i) or
(ii) of the Merger Agreement.
(b) In the event Newbridge exercises its rights under Section 6(a),
Stel shall, within ten business days after Newbridge delivers notice pursuant to
Section 6(a), pay the required amount to Newbridge in immediately available
funds. Newbridge shall thereupon surrender to Stel the Option and the
certificates evidencing the Stel Shares purchased by Newbridge pursuant thereto,
and shall represent and warrant that such shares are then free and clear of all
claims, liens, charges, encumbrances and security interests of any kind or
nature whatsoever, other than those imposed by Stel.
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(c) If Newbridge shall have acquired Option Shares pursuant to
exercise of the Option and neither (i) any Acquisition Transaction with respect
to Stel shall have been consummated at any time after the date of this Agreement
and prior to 18 months after the termination of the Merger Agreement nor (ii)
shall Stel have entered into an agreement with respect to such an Acquisition
Transaction, which agreement remains in effect at the end of such 18 months,
then, at any time after the earlier of (A) 18 months after the termination of
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the Merger Agreement and (B) the day prior to the effectiveness of a
registration statement filed by Stel pursuant to Section 7 below, and prior to
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the date 24 months following the termination of Merger Agreement, Stel may
require Newbridge, upon delivery to Newbridge of written notice, to sell to Stel
any Stel Shares held by Newbridge as of the day that is ten business days after
the date of such notice ("Call Shares"), up to a number of Call Shares equal to
the number of Option Shares acquired by Newbridge in connection with such
Exercise Date. The per share purchase price for such sale (the "Stel Call
Price") shall be equal to the Exercise Price less any dividends paid on the Call
Shares to be purchased. The closing of any sale of Call Shares shall take place
at the principal offices of Stel at a time and on a date designated by Stel in
the aforementioned notice to Newbridge, which date shall be no more than 20 and
no less than 12 business days from the date of such notice. The Stel Call Price
shall be paid in immediately available funds.
7. Registration Rights.
(a) Following the termination of the Merger Agreement, Newbridge and
its permitted assigns or successors (a "Holder") may by written notice (a
"Registration Notice") to Stel (the "Registrant") request the Registrant to
register under the Securities Act all or any part of the shares of Registrant
acquired by such Holder pursuant to this Agreement (the "Registrable
Securities"), in order to permit the sale or other disposition of such shares
pursuant to a Permitted Offering (as defined below); provided, however that any
such Registration Notice must relate to a number of shares equal to at least 1%
of the outstanding shares of Common Stock of the Registrant on a fully diluted
basis and that any rights to require registration hereunder shall terminate with
respect to any shares that may be sold pursuant to Rule 144(k) under the
Securities Act. For purposes of this Agreement, a "Permitted Offering" means a
bona fide firm commitment underwritten public offering in which the Holder and
the underwriters shall effect as wide a distribution of such Registrable
Securities as is reasonably practicable and shall use all reasonable efforts to
prevent any person or group from purchasing through such offering shares
representing more than 1% of the outstanding shares of Common Stock of the
Registrant on a fully diluted basis. The Registration Notice shall include a
certificate executed by the Holder and its proposed managing underwriter, which
underwriter shall be an investment banking firm of nationally recognized
standing (the "Manager"), stating that (i) the Holder and the Manager have a
good faith intention to commence a Permitted Offering, and (ii) the Manager in
good faith believes that, based on the then prevailing market conditions, it
will be able to sell the Registrable Securities at a per share price equal to at
least 80% of the per share average of the closing sale prices of the
Registrant's Common Stock on Nasdaq for the 20 trading days immediately
preceding the date of the Registration Notice. The Registrant shall thereupon
have the option, exercisable by written notice delivered to the Holder within 10
business days after the receipt of the Registration Notice, irrevocably to agree
to purchase all or any part of the Registrable Securities for cash at a price
(the "Option Price") equal to the product of (i) the number of Registrable
Securities so purchased and (ii) the per share average of the closing sale
prices of the Registrant's Common Stock on Nasdaq for the 20 trading days
immediately
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preceding the date of the Registration Notice. Any such purchase of Registrable
Securities by the Registrant hereunder shall take place at a closing to be held
at the principal executive offices of the Registrant or its counsel at any
reasonable date and time designated by the Registrant in such notice within 10
business days after delivery of such notice. The payment for the shares to be
purchased shall be made by delivery at the time of such closing of the Option
Price in immediately available funds.
(b) If the Registrant does not elect to exercise its option to
purchase pursuant to Section 7(a) with respect to all Registrable Securities,
the Registrant shall use all reasonable efforts to effect, as promptly as
practicable, the registration under the Securities Act of the unpurchased
Registrable Securities requested to be registered in the Registration Notice;
provided, however, that (i) the Holder shall not be entitled to more than an
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aggregate of two effective registration statements hereunder and (ii) the
Registrant will not be required to file any such registration statement during
any period of time (not to exceed 40 days after a Registration Notice in the
case of clause (A) below or 90 days after a Registration Notice in the case of
clauses (B) and (C) below) when: (A) the Registrant is in possession of material
non-public information which it reasonably believes would be detrimental to be
disclosed at such time and, in the written opinion of counsel to the Registrant,
such information would have to be disclosed if a registration statement were
filed at that time; (B) the Registrant is required under the Securities Act to
include audited financial statements for any period in such registration
statement and such financial statements are not yet available for inclusion in
such registration statement; or (C) the Registrant determines, in its reasonable
judgment, that such registration would interfere with any financing, acquisition
or other material transaction involving such Registrant. If consummation of the
sale of any Registrable Securities pursuant to a registration hereunder does not
occur within 180 days after the filing with the SEC of the initial registration
statement therefor, the provisions of this Section 7 shall again be applicable
to any proposed registration, it being understood that the Holder shall not be
entitled to more than an aggregate of two effective registration statements
hereunder. The Registrant shall use all reasonable efforts to cause any
Registrable Securities registered pursuant to this Section 7 to be qualified for
sale under the securities or blue sky laws of such jurisdictions as the Holder
may reasonably request, and shall continue such registration or qualification in
effect in such jurisdictions; provided, however, that the Registrant shall not
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be required to qualify to do business in, or consent to general service of
process in, any jurisdiction by reason of this provision.
(c) The registration rights set forth in this Section 7 are subject
to the condition that the Holder shall provide the Registrant with such
information with respect to such Holder's Registrable Securities, the plan for
distribution thereof, and such other information with respect to the Holder as,
in the reasonable judgment of counsel for the Registrant, is necessary to enable
the Registrant to include in a registration statement all material facts
required to be disclosed with respect to a registration thereunder.
(d) A registration effected under this Section 7 shall be effected at
the Registrant's expense, except for underwriting discounts and commissions and
the fees and expenses of counsel to the Holder, and the Registrant shall provide
to the underwriters such documentation (including certificates, opinions of
counsel and "comfort" letters from auditors) as are customary in connection with
underwritten public offerings and as such underwriters may reasonably require.
In connection with any registration, the Holder and the Registrant agree to
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enter into an underwriting agreement reasonably acceptable to each such party,
in form and substance customary for transactions of this type with the
underwriters participating in such offering.
8. Indemnification.
(a) The Registrant will indemnify the Holder, each of its directors
and officers and each person who controls the Holder within the meaning of
Section 15 of the Securities Act, and each underwriter of the Registrant's
securities, with respect to any registration, qualification or compliance which
has been effected pursuant to this Agreement, against all expenses, claims,
losses, damages or liabilities (or actions in respect thereof), including any of
the foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereto, incident to
any such registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or any violation by the Registrant of any
rule or regulation promulgated under the Securities Act applicable to the
Registrant in connection with any such registration, qualification or
compliance. The Registrant will reimburse the Holder and each of its directors
and officers and each person who controls the Holder within the meaning of
Section 15 of the Securities Act, and each underwriter for any legal or any
other expenses reasonably incurred in connection with investigating, preparing
or defending any such claim, loss, damage, liability or action, provided that
the Registrant will not be liable in any such case only to the extent that any
such claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to the
Registrant by such Holder or director or officer or controlling person or
underwriter seeking indemnification.
(b) The Holder will indemnify the Registrant, each of its directors
and officers and each underwriter of the Registrant's securities covered by such
registration statement and each person who controls the Registrant within the
meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages and liabilities (or actions in respect thereof), including any
of the foregoing incurred in settlement of any litigation, commenced or
threatened, arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or any amendment or supplement
thereto, incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, or any
violation by the Holder of any rule or regulation promulgated under the
Securities Act applicable to the Holder in connection with any such
registration, qualification or compliance. The Holder will reimburse the
Registrant and each of its directors and officers and each person who controls
the Registrant within the meaning of Section 15 of the Securities Act, and each
underwriter for any legal or any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that any such claim, loss, damage, liability or expense arises out of or is
based on any untrue
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statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Registrant by
such Holder or director or officer or controlling person or underwriter for use
therein, provided that in no event shall any indemnity under this Section 8(b)
exceed the gross proceeds of the offering received by the Holder.
(c) Each party entitled to indemnification under this Section 8 (an
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom. Counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and the
Indemnified Party may participate in such defense at such party's expense;
provided, however, that the Indemnifying Party shall pay such expense if
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representation of the Indemnified Party by counsel retained by the Indemnifying
Party would be inappropriate due to actual or potential differing interests
between the Indemnified Party and any other party represented by such counsel in
such proceeding. The failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Section 8(c) unless the failure to give such notice is materially prejudicial to
an Indemnifying Party's ability to defend such action. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include the claimant's or plaintiff's unconditional
release of Indemnified Party from all liability in respect to such claim or
litigation. No Indemnifying Party shall be required to indemnify any Indemnified
Party with respect to any settlement entered into without such Indemnifying
Party's prior consent (which shall not be unreasonably withheld).
(d) If the indemnification provided for in this Section 8 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any expenses, claims, losses, damages and liabilities referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such any expenses, claims, losses, damages and
liabilities in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party on the one hand and of the Indemnified Party on the
other in connection with the statements or omissions that resulted in such any
expenses, claims, losses, damages and liabilities as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by reference to, among other things,
whether the untrue (or alleged untrue statement) of a material fact or the
omission (or alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission.
9. Adjustment Upon Changes in Capitalization: Rights Plans.
(a) If any change shall occur in the Stel Shares by reason of stock
dividends, stock splits, reverse stock splits, mergers (other than the Merger),
recapitalizations, combinations, exchanges of shares and the like, then (i) the
type and number of shares or
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securities subject to the Option, and (ii) the Exercise Price shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction so that Newbridge shall receive, upon exercise of the Option,
the number and class of shares or other securities or property that Newbridge
would have received in respect of the Stel Shares if the Option had been
exercised immediately prior to such change or the record date therefor, as
applicable.
(b) Prior to such time as the Option is terminated, and at any time
after the Option is exercised (in whole or in part), (i) Stel shall not take any
action to reverse or amend the resolution referred to in Section 5(h) of this
Agreement and (ii) Stel shall not amend, (nor permit the amendment of) its
Rights Agreement nor adopt (nor permit the adoption of) a new stockholders
rights plan that contains provisions for the distribution or exercise of rights
thereunder as a result of Newbridge, or any affiliate or transferee, being the
beneficial owner of Stel Shares by virtue of the Option being exercisable or
having been exercised or as a result of beneficially owning shares issuable in
respect of the Option Shares.
10. Restrictive Legend.
Each certificate representing Option Shares issued to Newbridge hereunder
shall include a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD
ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
Certificates representing shares sold in a registered public offering
pursuant to Section 7 shall not be required to bear the legend set forth in
Section 10.
11. Listing and HSR Filing.
Stel, upon the request of Newbridge, shall promptly file an application to
list the Stel Shares to be acquired upon exercise of the Option on Nasdaq and
shall use all reasonable efforts to obtain approval of such listing as soon as
practicable. Promptly after a request by Newbridge, Stel shall file Notification
and Report Forms under the HSR Act with the FTC and the Antitrust Division. Stel
shall use all reasonable efforts to respond as promptly as practicable to any
inquiries received from the FTC or the Antitrust Division for additional
information or documentation.
12. Assignment; Binding Effect.
Neither this Agreement nor the Option created hereunder nor any right,
interest or obligation hereunder shall be assigned by either party without the
prior written consent of the other. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement is not intended to confer any rights or
remedies upon any Person other than the parties hereto. Any shares sold by a
party in compliance with the provisions of Section 7 hereof shall, upon
consummation of such sale, be
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free of the restrictions imposed with respect to such shares by this Agreement
and any transferee of such shares shall not be entitled the rights of the
transferor under this Agreement.
13. Specific Performance.
Each of the parties hereto recognizes and acknowledges that a breach by it
of any covenants or agreements contained in this Agreement will cause the other
party to sustain damages for which it would not have an adequate remedy at law
for money, damages. Therefore, in the event of any such breach, the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
14. Entire Agreement.
This Agreement and the Merger Agreement, including the exhibits thereto and
the documents and instruments referred to therein, embody the entire agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no representations, promises, warranties, covenants,
or undertakings, other than those expressly set forth or referred to herein and
therein.
15. Further Assurances.
Each party will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in order to
consummate the transactions contemplated hereby.
16. Severability.
If any term, provision, covenant, or restriction of this Agreement is held
by a court of competent jurisdiction or a federal or state regulatory agency to
be invalid, void, or unenforceable, the other terms, provisions, covenants, and
restrictions of this Agreement shall remain in full force and effect and shall
not be affected, impaired, or invalidated. If for any reason such court or
regulatory agency determines that the Option does not permit Newbridge to
acquire, or does not require Stel to repurchase, the full number of Option
Shares provided herein (as adjusted pursuant to Section 9), it is the express
intention of Stel to allow Newbridge to acquire, or to require Stel to
repurchase, such lesser number of shares as may be permissible without any
amendment or modification hereof.
17. Notices.
All notices and other communications hereunder shall be in writing and
shall be delivered personally by overnight courier or similar means or sent by
facsimile with written confirmation of receipt, to the parties at the addresses
specified below (or at such other address for a party as shall be specified by
like notice). Any such notice shall be effective upon receipt, if personally
delivered or on the next business day following transmittal if sent by confirmed
facsimile. Notices, including oral notices, shall be delivered as follows:
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if to Stel, to: Stanford Telecommunications, Inc.
1221 Crossman Avenue, P.O. Box 3733
Sunnyvale, California
Telephone: (408) 735-0818
Facsimile: (408) 745-2410
Attention: Gary Wolf
with a copy to: Thelen Reid & Priest LLP
333 West San Carlos, 17th Floor
San Jose, CA 95110-2701
Telephone:(408) 292-5800
Facsimile:(408) 287-8040
Attention: Jay L. Margulies
if to Newbridge, to: Newbridge Networks Corporation
600 March Road, P.O. Box 136000
Kanata, Ontario, Canada K2K 2E6
Telephone:(613) 591-3600
Facsimile:(613) 599-3672
Attention: Peter Nadeau
with a copy to: Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301
Telephone: (650) 324-7000
Facsimile: (650) 324-0638
Attention: Stephen C. Ferruolo
(Matter #21969-0009)
18. Governing Law.
This Agreement shall be governed by the laws of the State of Delaware
without reference to principles of conflicts of laws.
19. Counterparts.
This Agreement may be executed in two counterparts, each of which shall be
deemed to be an original, but both of which together shall constitute one and
the same instrument.
20. Expenses.
Except as otherwise expressly provided herein or in the Merger Agreement,
all costs, and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
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21. Amendments; Waiver.
Subject to applicable law, this Agreement may be amended, modified or
supplemented only by written agreement of the parties. The terms and conditions
hereof may be waived only by an instrument in writing signed by the party
granting such waiver, but such waiver or failure to insist upon strict
compliance with a term or condition shall not operate as a waiver or estoppel
with respect to, any subsequent or other failure.
22. Rules of Construction.
Each party to this Agreement has been represented by counsel during the
preparation and execution of this Agreement, and therefore waives any rule of
construction that would construe ambiguities against the party drafting the
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective duly authorized officers as of the date first above
written.
NEWBRIDGE NETWORKS CORPORATION
By: /s/ Alan G. Lutz
----------------------------------------
Name: Alan G. Lutz
--------------------------------------
Title: President and Chief Operating Officer
-------------------------------------
By: /s/ Peter Nadeau
----------------------------------------
Name: Peter Nadeau
--------------------------------------
Title: Vice President and General Counsel
-------------------------------------
STANFORD TELECOMMUNICATIONS, INC.
By: /s/ Val P. Peline
----------------------------------------
Name: Val P. Peline
--------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
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