Exhibit 2.3
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT, dated as of October 20, 1999 (this
"AGREEMENT"), is made and entered into among Zhone Technologies, Inc., a
Delaware corporation ("PARENT"), Zhone Acquisition Corp., a Texas corporation
and wholly owned subsidiary of Parent ("MERGER SUB"), and Xxxxxxx X. Xxx, Xxxxx
X. Xxxxxxxx and Xxxxxxxx X. Xxxxxxxx (each, a "STOCKHOLDER" and, collectively,
the "STOCKHOLDERS").
RECITALS
WHEREAS, Parent, Merger Sub and Premisys Communications, Inc., a Delaware
corporation (the "COMPANY"), propose to enter into an Agreement and Plan of
Merger, dated as of the date hereof (the "MERGER AGREEMENT"), pursuant to which
the Company will merge with and into Merger Sub (the "MERGER") on the terms and
subject to the conditions set forth in the Merger Agreement. Except as otherwise
defined herein, terms used herein with initial capital letters have the
respective meanings ascribed thereto in the Merger Agreement;
WHEREAS, pursuant to the Merger Agreement, Merger Sub will commence a
tender offer (the "OFFER") to acquire all of the outstanding shares of common
stock, par value $0.01 per share, of the Company ("COMPANY COMMON STOCK"), at a
price of $10.00 per share in cash (the "PRICE PER SHARE") upon the terms and
subject to the conditions set forth in the Merger Agreement;
WHEREAS, as of the date hereof, each Stockholder beneficially owns and is
entitled to dispose of (or to direct the disposition of) and to vote (or to
direct the voting of) the number of shares of Company Common Stock set forth
opposite such Stockholder's name on SCHEDULE A hereto (such shares, together
with any other shares of Company Common Stock the beneficial ownership of which
is acquired by such Stockholder during the period from and including the date
hereof through and including the date on which this Agreement is terminated
pursuant to Section 5.2 hereof, are collectively referred to herein as such
Stockholder's "SUBJECT SHARES"); and
WHEREAS, as a condition and inducement to their willingness to enter into
the Merger Agreement, Parent and Merger Sub have requested that each Stockholder
agree, and each Stockholder has agreed, to enter into this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties and covenants contained in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
TENDER OF SHARES
1.1 AGREEMENT TO TENDER SHARES. Each Stockholder shall cause to be
validly tendered (and not withdrawn) pursuant to and in accordance with the
terms of the Offer (provided that if the Offer is amended in any manner set
forth in Section 1.1(b) of the Merger Agreement as requiring the consent of the
Company, the Stockholders shall not be obligated to tender hereunder unless the
amendment is made with their prior written approval which shall not be
unreasonably withheld), not later than the tenth business day after commencement
of the Offer pursuant to Section 1.1 of the Merger Agreement and Rule 14d-2
under the Exchange Act, all of such Stockholder's Subject Shares. Each
Stockholder hereby acknowledges that Merger Sub's obligation to accept for
payment and pay for shares of Company Common Stock (including such Stockholder's
Subject Shares) pursuant to the Offer is subject to the terms and conditions of
the Offer set forth in the Merger Agreement. For all of the Subject Shares
validly tendered in the Offer and not withdrawn, the Stockholders will be
entitled to receive the same Price Per Share received by the other stockholders
of the Company in the Offer.
ARTICLE II
VOTING OF SHARES
2.1 AGREEMENT TO VOTE SHARES. At any meeting of the stockholders of the
Company called to consider and vote upon the adoption of the Merger Agreement
(and at any and all postponements and adjournments thereof), and in connection
with any action to be taken in respect of the adoption of the Merger Agreement
by written consent of stockholders of the Company, each Stockholder shall vote
or cause to be voted (including by written consent, if applicable) all of such
Stockholder's Subject Shares in favor of the adoption of the Merger Agreement
and in favor of any other matter necessary for the consummation of the
transactions contemplated by the Merger Agreement and considered and voted upon
at any such meeting or made the subject of any such written consent, as
applicable. At any meeting of the stockholders of the Company called to consider
and vote upon any Adverse Proposal (as hereinafter defined) (and at any and all
postponements and adjournments thereof), and in connection with any action to be
taken in respect of any Adverse Proposal by written consent of stockholders of
the Company, each Stockholder shall vote or cause to be voted (including by
written consent, if applicable) all of such Stockholder's Subject Shares against
such Adverse Proposal. For purposes of this Agreement, the term "ADVERSE
PROPOSAL" means any (a) Alternative Transaction, (b) proposal or action that
would reasonably be expected to result in a breach of any covenant,
representation or warranty of the Company set forth in the Merger Agreement, or
(c) proposal or action that is intended or would reasonably be expected to
impede, interfere with, delay or materially and adversely affect the Merger or
any of the other transactions contemplated by the Merger Agreement or this
Agreement.
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2.2 IRREVOCABLY PROXY.
(a) GRANT OF PROXY. EACH STOCKHOLDER HEREBY APPOINTS PARENT AND
ANY DESIGNEE OF PARENT, EACH OF THEM INDIVIDUALLY, SUCH STOCKHOLDER'S PROXY AND
ATTORNEY-IN-FACT PURSUANT TO THE PROVISIONS OF SECTION 212 OF THE DELAWARE
GENERAL CORPORATION LAW, WITH FULL POWER OF SUBSTITUTION AND RESUBSTITUTION, TO
VOTE OR ACT BY WRITTEN CONSENT WITH RESPECT TO SUCH STOCKHOLDER'S SUBJECT SHARES
IN ACCORDANCE WITH SECTION 2.1 HEREOF. THIS PROXY IS GIVEN TO SECURE THE
PERFORMANCE OF THE DUTIES OF SUCH STOCKHOLDER UNDER THIS AGREEMENT. EACH
STOCKHOLDER AFFIRMS THAT THIS PROXY IS COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE. EACH STOCKHOLDER SHALL TAKE SUCH FURTHER ACTION OR EXECUTE SUCH
OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY.
(b) OTHER PROXIES REVOKED. Each Stockholder represents that any
proxies heretofore given in respect of such Stockholder's Subject Shares are not
irrevocable, and that all such proxies are hereby revoked.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS. Each Stockholder,
severally and not jointly, represents and warrants to Parent as follows:
(a) OWNERSHIP. Such Stockholder is the sole record and beneficial
owner of the number of shares of Company Common Stock set forth opposite such
Stockholder's name on SCHEDULE A hereto and has full and unrestricted power to
dispose of and to vote such shares. Such shares are now, and at all times during
the term hereof will be, held by such Stockholder, or by a nominee or custodian
for the benefit of such Stockholder, free and clear of all Liens and proxies,
except for any Liens or proxies arising hereunder and restrictions set forth
under applicable securities laws. The transfer by such Stockholder of its
Subject Shares to Merger Sub pursuant to the Offer shall pass to and
unconditionally vest in Merger Sub good and valid title to such Subject Shares,
free and clear of all Liens other than restrictions set forth under applicable
securities laws. Except as set forth in SCHEDULE A hereto, such Stockholder does
not beneficially own any securities of the Company on the date hereof other than
such Subject Shares.
(b) POWER AND AUTHORITY; EXECUTION AND DELIVERY. Such Stockholder
has all requisite power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. In the case of each Stockholder
that is not a natural person, the execution and delivery of this Agreement by
such Stockholder and the consummation by such Stockholder of the transactions
contemplated hereby have been duly authorized by all necessary action, if any,
on the part of such Stockholder. This Agreement has been duly executed and
delivered by such Stockholder and, assuming that this Agreement constitutes the
valid and binding obligation of the other parties hereto, constitutes a valid
and binding obligation of such Stockholder,
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enforceable against such Stockholder in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally
and to general principles of equity.
(c) NO CONFLICTS. The execution and delivery of this Agreement do
not, and, subject to compliance with the HSR Act and appropriate filings under
securities laws (which each Stockholder agrees to make promptly), to the extent
applicable, the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, conflict with, result in a
breach or violation of or default (with or without notice or lapse of time or
both) under, or give rise to a material obligation, a right of termination,
cancellation, or acceleration of any obligation or a loss of a material benefit
under, or require notice to or the consent of any Person under any agreement,
instrument, undertaking, law, rule, regulation, judgment, order, injunction,
decree, determination or award binding on such Stockholder, other than any such
conflicts, breaches, violations, defaults, obligations, rights or losses that
individually or in the aggregate would not (i) impair the ability of such
Stockholder to perform such Stockholder's obligations under this Agreement or
(ii) prevent or delay the consummation of any of the transactions contemplated
hereby.
(d) LITIGATION. There is no action, suit, investigation, complaint
or other proceeding pending against such Stockholder or, to the knowledge of
such Stockholder, threatened against such Stockholder or any other Person that
restricts in any material respect or prohibits (or, if successful, would
restrict or prohibit) the exercise by any party or beneficiary of its rights
under this Agreement or the performance by any party of its obligations under
this Agreement.
3.2 REPRESENTATIONS AND WARRANTIES OF PARENT. Each of Parent and Merger
Sub hereby represents and warrants, jointly and severally, to each Stockholder
that:
(a) POWER AND AUTHORITY; EXECUTION AND DELIVERY. Each of Parent
and Merger Sub has all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Parent and Merger Sub and the
consummation by Parent and Merger Sub of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Parent and Merger Sub. This Agreement has been duly executed and delivered by
Parent and Merger Sub and, assuming that this Agreement constitutes the valid
and binding obligation of each Stockholder, constitutes a valid and binding
obligation of Parent and Merger Sub, enforceable against Parent and Merger Sub
in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles of equity.
(b) NO CONFLICTS. The execution and delivery of this Agreement do
not, and, subject to compliance with the HSR Act and appropriate filings under
securities laws (which Parent and Merger Sub agree to make promptly), to the
extent applicable, the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, conflict with, result in a
breach or violation of or default (with or without notice or lapse of time or
both)
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under, or give rise to a material obligation, right of termination,
cancellation, or acceleration of any obligation or a loss of a material benefit
under, or require notice to or the consent of any Person under any agreement,
instrument, undertaking, law, rule, regulation, judgment, order, injunction,
decree, determination or award binding on Parent or Merger Sub, other than any
such conflicts, breaches, violations, defaults, obligations, rights or losses
that individually or in the aggregate would not (i) impair the ability of Parent
or Merger Sub to perform its obligations under this Agreement or (ii) prevent or
delay the consummation of any of the transactions contemplated hereby.
(c) LITIGATION. There is no action, suit, investigation, complaint
or other proceeding pending against Parent or any of its affiliates or, to the
knowledge of Parent, threatened against it or any other Person (including its
affiliates) that restricts in any material respect or prohibits (or, if
successful, would restrict or prohibit) the exercise by any party or beneficiary
of its rights under this Agreement or the performance by any party of its
obligations under this Agreement.
ARTICLE IV
CERTAIN COVENANTS
4.1 COVENANTS OF STOCKHOLDERS.
(a) RESTRICTION ON TRANSFER OF SUBJECT SHARES; PROXIES AND
NONINTERFERENCE. No Stockholder shall, directly or indirectly: (i) except
pursuant to the terms of this Agreement, offer for sale, sell, transfer, tender,
pledge, encumber, assign or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to or consent to the
offer for sale, transfer, tender, pledge, encumbrance, assignment or other
disposition of, any or all of such Stockholder's Subject Shares; (ii) except
pursuant to the terms of this Agreement, grant any proxies or powers of
attorney, deposit any of such Stockholder's Subject Shares into a voting trust
or enter into a voting agreement with respect to any of such Stockholder's
Subject Shares; or (iii) take any action that would reasonably be expected to
make any representation or warranty contained herein untrue or incorrect or have
the effect of impairing the ability of such Stockholder to perform such
Stockholder's obligations under this Agreement or preventing or delaying the
consummation of any of the transactions contemplated hereby.
(b) NO SOLICITATION. Subject to Section 5.12, no Stockholder shall
take, or authorize or permit any of its officers, directors, employees, agents
or representatives (including any investment banker, financial advisor, attorney
or accountant) to take, any action that the Company would be prohibited from
taking under the first sentence of Section 5.4(a) of the Merger Agreement.
(c) WAIVER OF APPRAISAL RIGHTS. Each Stockholder hereby waives any
rights of appraisal or rights to dissent from the Merger that such Stockholder
may have.
(d) NONEXERCISE OF RIGHTS OF FIRST REFUSAL. No Stockholder shall
exercise any purchase right or right of first refusal that it may have with
respect to any shares of Company
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Common Stock of any other Person in connection with any tender by such other
Person of such shares of Company Common Stock pursuant to the Offer.
(e) COOPERATION. Each Stockholder shall cooperate fully with
Parent and the Company in connection with their respective best efforts to
fulfill the conditions to the Merger set forth in Article VI of the Merger
Agreement.
ARTICLE V
MISCELLANEOUS
5.1 FEES AND EXPENSES. Each party hereto shall pay its own expenses
incident to preparing for, entering into and carrying out this Agreement and the
consummation of the transactions contemplated hereby.
5.2 AMENDMENT; TERMINATION. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto. This
Agreement shall terminate immediately upon the earlier of (a) the Effective Time
and (b) the termination of the Merger Agreement in accordance with its terms. In
addition, this Agreement may be terminated at any time by mutual written consent
of Parent and Stockholders representing a majority of the Subject Shares subject
to this Agreement. In the event of termination of this Agreement pursuant to
this Section 5.2, this Agreement shall become null and void and of no effect
with no liability on the part of any party hereto and all proxies granted hereby
shall be automatically revoked; provided, however, that no such termination
shall relieve any party hereto from any liability for any breach of this
Agreement occurring prior to such termination, and provided further that the
representations and warranties set forth in Sections 3.1 and 3.2 and covenants
set forth in Section 4.1 shall survive the termination of this Agreement.
5.3 EXTENSION; WAIVER. Any agreement on the part of a party to waive any
provision of this Agreement, or to extend the time for any performance
hereunder, 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 a
waiver of such rights.
5.4 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This Agreement
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement, and is not intended to confer upon any Person
other than the parties any rights or remedies.
5.5 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflict of laws thereof.
5.6 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, or sent by overnight courier (providing proof of
delivery), in the case of the Stockholders, to the addresses
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set forth on SCHEDULE A hereto with a copy (which shall not constitute notice)
to Fenwick & West LLP, Xxx Xxxx Xxxx Xxxxxx, Xxxx Xxxx, XX 00000, Attention:
Xxxxx X. Xxxxx, Esq., Telecopy: (000) 000-0000, or, in the case of Parent, to
the address set forth below (or, in each case, at such other address as shall be
specified by like notice):
Zhone Technologies, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Telecopy: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxxxx
000 "X" Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
5.7 ASSIGNMENT. Neither this Agreement nor any of the rights, interests,
or obligations under this Agreement may be assigned or delegated, in whole or in
part, by operation of law or otherwise, by any Stockholder without the prior
written consent of Parent, and any such assignment or delegation that is not
consented to shall be null and void. This Agreement, together with any rights,
interests, or obligations of Parent hereunder, may be assigned or delegated, in
whole or in part, by Parent without the consent of or any action by any
Stockholder upon notice by Parent to each Stockholder affected thereby as herein
provided. Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of, and be enforceable by, the parties and their
respective successors and assigns (including without limitation any Person to
whom any Subject Shares are sold, transferred or assigned).
5.8 FURTHER ASSURANCES. Each Stockholder shall execute and deliver such
other documents and instruments and take such further actions as may be
necessary or appropriate or as may be reasonably requested by Parent in order to
ensure that Parent receives the full benefit of this Agreement.
5.9 ENFORCEMENT. Irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement in the
Court of Chancery in and for New Castle County in the State of Delaware (or, if
such court lacks subject matter jurisdiction, any appropriate state or federal
court in New Castle County in the State of Delaware), this being in addition to
any other remedy to which they are entitled at law or in equity. Each of the
parties hereto (a) shall submit itself to the personal jurisdiction of the Court
of Chancery in and for New Castle County in the State of Delaware (or, if such
court lacks subject matter jurisdiction, any appropriate state or federal court
in New
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Castle County in the State of Delaware) in the event any dispute arises out of
this Agreement or any of the transactions contemplated hereby, (b) shall not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court, and (c) shall not bring any action relating to
this Agreement or any of the transactions contemplated hereby in any court other
than the Court of Chancery in and for New Castle County in the State of Delaware
(or, if such court lacks subject matter jurisdiction, any appropriate state or
federal court in New Castle County in the State of Delaware).
5.10 SEVERABILITY. Whenever possible, each provision or portion of any
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
5.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same instrument and
shall become effective when one or more counterparts have been signed by each
party and delivered to the other parties.
5.12 STOCKHOLDER CAPACITY. By executing this Agreement, no Person
(including any officer, director, employee, partner, principal, agent or
affiliate of such Person) who is or becomes during the term hereof a director,
officer, agent or financial advisor of the Company makes any agreement or
understanding in his or her capacity as such officer, director, agent or
financial advisor. Each Stockholder signs solely in his or her capacity as the
record holder and beneficial owner, respectively, of the number of Subject
Shares set forth opposite his or her name on SCHEDULE A hereto, respectively,
and nothing herein shall limit or affect any actions taken by a Stockholder in
his or her capacity as an officer, director, agent or financial advisor of the
Company.
[signature page follows]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be signed as of the day and year first written above.
ZHONE TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
--------------------------------------
Title: Chairman and Chief Executive Officer
--------------------------------------
ZHONE ACQUISITION CORP.,
a Texas corporation
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
--------------------------------------
Title: Chairman and Chief Executive Officer
--------------------------------------
STOCKHOLDERS:
/s/ Xxxxxxx X. Xxx
---------------------------------------
XXXXXXX X. XXX
/s/ Xxxxx X. Xxxxxxxx
---------------------------------------
XXXXX X. XXXXXXXX
/s/ Xxxxxxxx X. Xxxxxxxx
---------------------------------------
XXXXXXXX X. XXXXXXXX
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SCHEDULE A
OPTIONS EXERCISABLE *OPTIONS EXERCISABLE
WITHIN 60 DAYS AFTER WITHIN 60 DAYS AFTER
OCTOBER 20, 1999 WITH OCTOBER 20, 1999 WITH
TOTAL NUMBER OF SHARES OF COMPANY EXERCISE PRICES LESS EXERCISE PRICES EXCEEDING
NAME AND ADDRESS OF STOCKHOLDER COMMON STOCK OWNED THAN $10.00 PER SHARE $10.00 PER SHARE
------------------------------- --------------------------------- --------------------- -------------------------
Xxxxxxx X. Xxx 398,997 273,855 60,000
c/o Terawave Communications, Inc.
00000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Xxxxx X. Xxxxxxxx 231,267 31,000 none
c/o Terawave Communications, Inc.
00000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Xxxxxxxx X. Xxxxxxxx none 183,750 none
Premisys Communications, Inc.
00000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
* This option will not be exercised in connection with this agreement.
A-1
