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EXHIBIT 99.4
EXCHANGE AGENT AGREEMENT
THIS EXCHANGE AGENT AGREEMENT (the "Agreement"), entered into as of
this ---- day of ----------, 1998, by and between ZILOG, INC., a Delaware
corporation ("Zilog"), and BANKBOSTON, N.A., a national banking association
having its principal offices in Boston, Massachusetts (in its capacity as
Exchange Agent hereunder, the "Exchange Agent"),
W I T N E S S E T H:
WHEREAS, Zilog has entered into an Agreement and Plan of Merger, dated
as of July 20, 1997, by and between Zilog and TPG Partners II, L.P. ("TPG"), as
amended by Amendments Number One and Number Two to the Agreement and Plan of
Merger, dated as of November 18, 1997 and December 10, 1997, respectively, by
and among Zilog, TPG Zeus Acquisition Corporation ("Merger Sub") and TPG (the
"Merger Agreement," a copy of which is attached hereto as Exhibit A); and
WHEREAS, the Merger Agreement provides for, among other things, the
merger of Merger Sub with and into Zilog pursuant to which each issued and
outstanding share of the common stock, par value $0.01 per share, of Zilog (the
"Common Stock") (other than (a) shares of Common Stock held in Zilog's treasury
or owned by Zilog, any subsidiary of Zilog, TPG, Merger Sub or any other
subsidiary of TPG, which will be canceled (the "Excluded Shares"), and (b)
shares of Common Stock which are held by a stockholder of Zilog who has properly
exercised appraisal rights under Delaware law (the "Dissenting Shares")) will be
converted, at the election of the holder thereof, into either (i) the right to
receive $20.00 in cash (the "Cash Election Price") or (ii) the right to retain
one share of Common Stock (a "Non-Cash Election Share"), subject to the
limitation that exactly 375,000 shares of Common Stock (the "Non-Cash Election
Number") shall be retained by existing stockholders of Zilog (a "Non-Cash
Election"); and
WHEREAS, Zilog desires the Exchange Agent to act as its exchange agent
subject to the Merger Agreement, and the Exchange Agent has indicated its
willingness to do so:
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants and agreements of the parties hereto, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and subject to the conditions hereof, the parties hereto agree as
follows (capitalized terms not otherwise defined herein shall have the meanings
given to such terms in the Merger Agreement):
1. Appointment of Exchange Agent.
(a) Zilog hereby confirms the appointment of BankBoston, N.A. as
Exchange Agent, and BankBoston, N.A. hereby agrees to serve as such, under the
terms and conditions as set forth herein.
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(b) Compensation of Agent. The Exchange Agent shall be entitled to a
fee which shall be paid by Zilog on presentation of monthly invoices for all
services rendered by it hereunder as referenced in Exhibit B. The Exchange Agent
shall also be entitled to reimbursement from Zilog for all reasonable expenses
paid or incurred by it in the administration of its duties hereunder, including,
but not limited to, all reasonable services rendered in performing this Exchange
Agent Agreement.
2. Delivery of Merger Consideration by Zilog.
(a) Delivery of Certificates Representing Non-Cash Election Shares. As
soon as reasonably practicable after the Effective Time, Zilog shall deliver to
Boston EquiServe Shareholder Services, the transfer agent and registrar for the
Common Stock (the "Transfer Agent"), duly executed certificates representing
Common Stock to be countersigned and reissued as Non-Cash Election Shares.
(b) Delivery of Cash. From time to time, Zilog will deposit or cause to
be deposited with the Exchange Agent in a special account for the benefit of the
holders of Common Stock specified below (the "Zilog Account"), federal or other
immediately available funds in the aggregate amount of [$-----] from which the
Exchange Agent will pay holders surrendering shares of Common Stock the Cash
Election Price for each share of Common Stock surrendered, cash payments in lieu
of fractional Non-Cash Election Shares, if any, and any applicable tax that the
Exchange Agent is required to withhold. The Exchange Agent shall advise Zilog at
least 48 hours in advance each time additional funds are needed to make any such
payment or withholding. Upon such notification, Zilog will wire immediately
available funds to the Zilog Account in an amount equal to the funds needed to
make any such payment.
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3. Distribution of Merger Consideration by the Exchange Agent.
(a) Distribution of Non-Cash Election Forms. Attached hereto as Exhibit
C is a Non-Cash Election Form (the "Non-Cash Election Form") to be used by
holders of Common Stock making Non-Cash Elections. Zilog shall notify the
Exchange Agent of the date of mailing of proxy materials to holders of Common
Stock in connection with the Special Meeting of Stockholders to be held to
approve the Merger and the transactions contemplated by the Merger Agreement
(the "Special Meeting"). As soon as reasonably practicable thereafter, the
Exchange Agent shall address and mail and otherwise make available the Non-Cash
Election Form to each holder of Common Stock as of December 10, 1997, the record
date of the Special Meeting (the "Record Date").
(b) Distribution of Transmittal Letters. Attached hereto as Exhibit D
is a Letter of Transmittal (the "Transmittal Letter") to be used by holders of
Common Stock (other than
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holders who have made effective Non-Cash Elections with respect to all or a
portion of their shares of Common Stock) to surrender such shares (and the
certificates evidencing such shares) in exchange for the Cash Election Price for
each share of such holder's Common Stock for which an effective Non-Cash
Election has not been made. Zilog shall notify the Exchange Agent that the
Effective Time has occurred, and as soon as reasonably practicable thereafter,
the Exchange Agent shall address and mail and otherwise make available the
Transmittal Letter to each holder of Common Stock as of the Effective Time
(other than holders who have made effective Non-Cash Elections with respect to
all or a portion of their shares of Common Stock).
(c) Examination of Documents Submitted by Stockholders.
(i) Upon receipt thereof, the Exchange Agent shall examine the Non-Cash
Election Forms, Transmittal Letters, certificates representing shares of Common
Stock (the "Common Stock Certificates") and other documents delivered to the
Exchange Agent by or for holders of Common Stock in connection with such
Non-Cash Election Forms and/or Transmittal Letters to ascertain whether (A) such
Non-Cash Election Forms and/or the Transmittal Letters are duly executed and
properly completed in accordance with the instructions set forth therein
(including, in the case of Non-Cash Election Forms, whether such Forms have been
received by 5:00 p.m., New York city time, on January 23, 1998 (the "Election
Date")), (B) the Common Stock Certificates are in proper form for surrender, and
(C) any other required documents submitted to the Exchange Agent are in proper
form. In addition, the Exchange Agent shall examine surrendered Common Stock
Certificates to ascertain whether any stop transfer orders are in effect with
respect thereto.
(ii) If a Non-Cash Election Form, Transmittal Letter or other document
has been improperly executed or completed, or is otherwise not in proper form or
is subject to any other irregularity (including any irregularity relating to a
stop transfer order), the Exchange Agent shall take such action as the Exchange
Agent deems appropriate to notify the tendering stockholder of such irregularity
and to request that such irregularity be corrected; provided, that with respect
to any irregularity in or relating to a Non-Cash Election Form of which the
Exchange Agent becomes aware following the Election Date, or which has not been
corrected by the stockholder prior to or on the Election Date, the Exchange
Agent shall (A) notify the stockholder who submitted such Non-Cash Election Form
of such irregularity and that an effective Non-Cash Election has not been made
with respect to the shares of Common Stock delivered by such stockholder, (B)
provide such stockholder with a Transmittal Letter and (C) advise such
stockholder in such notice to complete and execute the Transmittal Letter in
order to receive the Cash Election Price for each share of Common Stock
originally submitted by such stockholder in connection with such ineffective
Non-Cash Election. If any such irregularity is not corrected within a reasonable
period of time after notification to the tendering stockholder of such
irregularity, the Exchange Agent shall notify Zilog and await further written
instructions from Zilog. Zilog reserves the right to waive any defect or
irregularity in the form of delivery of Common Stock Certificates and
accompanying Non-Cash Election Forms and/or Transmittal Letters.
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(d) Payment of the Merger Consideration. As soon as reasonably
practicable following the Effective Time of the Merger (the "Effective Time"),
subject to proration as set forth in the Merger Agreement:
(i) The Exchange Agent shall, with respect to each share of
issued and outstanding Common Stock with respect to which an effective
Non-Cash Election has been made and not withdrawn (each, an "Electing
Share") converted through election or proration into the right to
receive Non-Cash Election Shares pursuant to the Merger Agreement and
upon receipt of the Common Stock Certificates covering such Electing
Shares, together with a duly executed and completed Non-Cash Election
Form (or in the event that proration occurs, a duly executed and
completed Transmittal Letter) and any other required documents, arrange
for the issuance by the Transfer Agent and the delivery of stock
certificates in the name(s) of the person(s) entitled thereto
representing the whole number of Non-Cash Election Shares issuable with
respect to each Electing Share pursuant to the Merger Agreement (it
being understood that no certificates or scrip representing fractional
Non-Cash Election Shares shall be issued upon the surrender for
exchange of Common Stock Certificates).
(ii) The Exchange Agent shall, with respect to shares of
Common Stock (other than Electing Shares converted into the right to
receive Non-Cash Election Shares pursuant to the Merger Agreement),
upon receipt of Common Stock Certificates covering such shares,
together with a duly executed and completed Transmittal Letter and any
other required documents, make the cash payment of the Cash Election
Price with respect to each such share of Common Stock required pursuant
to the Merger Agreement. Each such cash payment shall be made with
funds withdrawn from the Zilog Account.
(iii) The Exchange Agent shall, with respect to any fractional
Non- Cash Election Share to which a holder of Common Stock is entitled
as a result of proration, make the cash payment in lieu of such
fractional share representing such holder's proportionate interest in
the Cash Election Price required pursuant to the Merger Agreement. Each
such cash payment shall be made with funds withdrawn from the Zilog
Account.
(iv) The Exchange Agent will execute and deliver to the
Transfer Agent, at least twice weekly, a written notice and
documentation indicating the certificates representing Non-Cash
Election Shares needed for issuance and setting forth the number of
shares to be represented by each such certificate and the name in which
each certificate should be issued.
(v) No interest shall be paid to holders of Common Stock on or
with respect to any amount payable upon delivery of Common Stock
Certificates in respect thereof. Insofar as required by any
governmental agency or authority, the Exchange Agent shall, in a timely
manner, provide all information and file all forms or returns with
regard to the payments made pursuant to this Agree-
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ment, including, without limitation, Forms 1099-B and other
information, forms and returns relating to income taxes.
(e) Follow-up Letters. No later than three (3) months after the
Effective Time, the Company will mail or cause to be mailed a follow-up letter
to all stockholders who did not theretofore surrender their Common Stock
Certificates (or supply an affidavit of loss and bond of indemnity in lieu
thereof) for exchange. The follow-up letter will be mailed with a Letter of
Transmittal and related documentation.
(f) Stockholder Search. No later than four (4) months after the
Effective Time, the Exchange Agent will endeavor to locate all stockholders who
failed to respond and who have not either surrendered their Common Stock
Certificates (or supplied an affidavit of loss and bond of indemnity in lieu
thereof) for exchange. The effort to locate such stockholders shall take the
form of matching known information about such holders with data maintained on at
least one commercially available database maintained for the purpose of locating
heirs, debtors and/or other persons of unknown address.
(g) Escheat. At the time prescribed by the laws of the several states
and the District of Columbia, but at no time earlier than such time, the
Exchange Agent shall escheat all Non-Cash Election Shares, accrued dividends on
such Non-Cash Election Shares, if any, cash payable in lieu of fractional
Non-Cash Election Shares, and any other related property which the Exchange
Agent is holding for stockholders who did not surrender their Common Stock
Certificates. Such escheatment shall be made to any and all states entitled to
the above-mentioned property in the manner set forth by the statutes of the
relevant states. The Exchange Agent may, at its sole discretion, escheat the
property either directly to the states or through an intermediary or
intermediaries designated by one or more of the states entitled to a portion of
the escheated property. Zilog agrees to cooperate with the Exchange Agent by
executing any agreement, release, indemnification or other document reasonably
necessary to effect the escheatment of the unclaimed assets described above.
(h) Additional Distribution Matters.
(i) Records. Unless otherwise required pursuant to this Agreement, all
Non-Cash Election Forms, Transmittal Letters, Common Stock Certificates and
related documentation shall be recorded by the Exchange Agent as to date and
time of receipt and shall be preserved and retained by the Exchange Agent,
subject to Section 5 hereof.
(ii) Cancellation of Common Stock Certificates. Upon delivering of
certificates representing Non-Cash Election Shares, the Cash Election Price for
each share of Common Stock or cash payments in lieu of fractional Non-Cash
Election Shares, if any (collectively, the "Merger Consideration"), in exchange
for each share of Common Stock, the Exchange Agent shall cancel or arrange for
the cancellation of all such shares of Common Stock and related Common Stock
Certificates, and such Common Stock Certificates shall be retained by the
Exchange Agent pending further instructions from Zilog and subject to Section 5
hereof.
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(iii) Lost, Stolen or Destroyed Certificates. After the Effective Date,
if any holder of Common Stock shall report to the Exchange Agent that its
failure to surrender Common Stock Certificates registered in its name is due to
the loss, misplacement or destruction of such Common Stock Certificates, the
Exchange Agent shall require such holder to furnish an appropriate affidavit of
loss and a bond of indemnity of a recognized surety company, which shall include
indemnification of the Exchange Agent, Zilog and the Transfer Agent, all in such
form as shall have been approved by counsel for Zilog. Upon receipt by the
Exchange Agent of the foregoing, the Exchange Agent shall be authorized to
transmit the Merger Consideration to such holder without surrender by it of
Common Stock Certificates.
(iv) Requests for Information. The Exchange Agent will refer all
requests for information to Corporate Investor Communications, Inc., 000
Xxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000-0000, (000) 000-0000 (the
"Information Agent"). The Exchange Agent will cooperate with the Information
Agent in providing information with respect to Non-Cash Election Forms,
Transmittal Letters, Common Stock Certificates, the surrender of shares of
Common Stock and payment of the Merger Consideration therefor.
(v) Dissenting Shares. As soon as reasonably practicable following the
Effective Time, Zilog shall notify the Exchange Agent of the names of holders of
Common Stock who have preserved, and the number of shares of Common Stock with
respect to which there have been preserved, statutory rights of dissenting
stockholders. If the Exchange Agent receives Common Stock Certificates owned by
any such holders, the Exchange Agent shall notify Zilog of the identity of each
such holder, the number of shares of Common Stock submitted by each such holder,
the number of such shares constituting Electing Shares and shall, as soon as
reasonably practicable after notification to Zilog upon receipt of Transmittal
Letters or Non-Cash Election Forms and any other necessary documentation with
respect to such shares, deliver to the holders thereof the Merger Consideration
in accordance with the Merger Agreement.
(vi) List of Stockholders. The Exchange Agent shall prepare and certify
as correct and complete (A) a list of holders of record of Non-Cash Election
Shares owned by each stockholder, (B) the certificate number of each
stockholder's Common Stock Certificates, including appropriate identification of
all Common Stock Certificates alleged to have been lost, stolen or destroyed,
all Common Stock Certificates the transfer of which is restricted and all
"stops" notations in effect with respect to such Common Stock Certificates, (C)
the number of shares of Common Stock with respect to which each holder has made
a Non-Cash Election, if any, and (D) the certificate numbers of all certificates
representing Non-Cash Election Shares issued to each holder, if any. One copy of
such list shall be delivered to Zilog as promptly as practicable after the
Effective Time.
(vii) Depository Trust Company. The Exchange Agent shall make
arrangements with respect to delivery of shares of Common Stock and Common Stock
Certificates by The Depository Trust Company in connection with the Merger in
accordance with customary procedures for such transfer not inconsistent with the
terms of this Agreement or custom and practice in the industry generally.
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4. Indemnification. The Exchange Agent shall be indemnified and held
harmless by Zilog from and against any and all reasonable expenses, including
reasonable counsel fees and disbursements, or losses suffered by the Exchange
Agent hereunder; provided, however, that the Exchange Agent shall not be
indemnified and held harmless with respect to such expenses or losses which
result from or arise out of the Exchange Agent's gross negligence, misconduct or
bad faith. Promptly after the receipt by the Exchange Agent of notice of any
demand or claim or the commencement of any action, suit, proceeding or
investigation, the Exchange Agent shall, if a claim in respect thereof is to be
made against Zilog, notify Zilog in writing. Zilog shall be entitled to
participate in the defense of any such claim or legal action or proceeding, and,
if it so elects at any time after receipt of such notice, it may assume the
defense of any suit brought to enforce any such claim or of any other legal
action or proceeding. In the event of such assumption, Zilog shall not be liable
for any fees and expenses of counsel thereafter incurred by the Exchange Agent.
In the event, however, that it is determined and expressed in the written
opinion of the Exchange Agent's counsel that having common counsel or counsel
selected by Zilog would present a conflict of interest or there are alternative
defenses available to the Exchange Agent which are incompatible with those of or
unavailable to Zilog, then the Exchange Agent may employ separate counsel to
represent and defend the Exchange Agent with respect to such claim. For the
purposes hereof, the term "expense or loss" means any amount paid or payable to
satisfy any claim, demand, action, suit or proceeding settled with the express
written consent of the Exchange Agent, and all reasonable costs and expenses,
including, but not limited to, reasonable counsel fees and disbursements, paid
or incurred in investigating or defending against any such claim, demand,
action, suit, proceeding or investigation.
5. Termination. Promptly following the date which is six months after
the Effective Time, upon request of Zilog, the Exchange Agent shall deliver to
Zilog all remaining cash in the Zilog Account (including interest thereon),
Common Stock Certificates, returned Non- Cash Election Forms and Transmittal
Letters and related documentation, stock lists and stock records of Zilog and
other instruments in its possession relating to the transactions described
herein, accompanied by an accounting for all payments and issuances of Non-Cash
Election Shares made by the Exchange Agent pursuant to this Agreement, and the
Exchange Agent's duties shall thereupon terminate. If any Common Stock
Certificates are surrendered to the Exchange Agent for payment after such
termination, the Exchange Agent shall promptly forward such Common Stock
Certificates, together with the related Transmittal Letters and any other
documents, to Zilog, or as Zilog may otherwise direct.
6. Concerning the Exchange Agent.
(a) In the event that the Exchange Agent should at any time be
confronted with inconsistent claims or demands by the parties hereto, the
Exchange Agent shall have the right to interplead said parties in any court of
competent jurisdiction and request that such court determine such respective
rights of the parties with respect to this Agreement and upon doing so, the
Exchange Agent automatically shall be released from any obligations or liability
as a consequence of any such claims or demands.
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(b) The Exchange Agent may execute any of its powers or
responsibilities hereunder and exercise any rights hereunder either directly or
by or through its agents or attorneys. The Exchange Agent shall not be
responsible for and shall not be under a duty to examine into or pass upon the
validity, binding effect, execution or sufficiency of this Agreement or of any
agreement amendatory or supplemental hereto.
(c) The Exchange Agent may act upon any instrument or other writing
believed by it in good faith to be genuine and to have been signed or presented
by the proper person and shall not be liable to any party hereto in connection
with the performance of its duties hereunder except for its own gross negligence
or willful misconduct. The Exchange Agent's duties shall be determined only with
reference to this Agreement and applicable laws and the Exchange Agent is not
charged with knowledge of or any duties or responsibilities in connection with
any other document or agreement. If in doubt as to its duties and
responsibilities hereunder, the Exchange Agent may consult with counsel of its
choice at its own expense and shall be protected in any action taken or omitted
in connection with the advice or opinion of such counsel.
(d) The Exchange Agent shall have the right at any time to resign
hereunder by giving written notice of its resignation to the parties hereto at
the addresses set forth herein or at such other address as the parties shall
provide, at least ten business days prior to the date specified for such
resignation to take effect; and upon the effective date of such resignation, all
cash and other payments and all other property then held by the Exchange Agent
hereunder shall be delivered by it to such successor agent or as otherwise shall
be designated in writing by the parties hereto.
7. Miscellaneous.
(a) Further Assurance. From time-to-time and after the date hereof,
Zilog shall deliver or cause to be delivered to the Exchange Agent such further
documents and instruments and shall do and cause to be done such further acts as
the Exchange Agent shall reasonably request (it being understood that the
Exchange Agent shall have no obligation to make any such request) to carry out
more effectively the provisions and purposes of this Exchange Agent Agreement,
to evidence compliance herewith or to assure itself that it is protected in
acting hereunder.
(b) Consents to Service of Process. Each of the parties hereto hereby
irrevocably consents to the jurisdiction of the courts of the Commonwealth of
Massachusetts and of any Federal Court located in such Commonwealth, each as
many have competent jurisdiction, in connection with any action, suit or other
proceeding arising out of or relating to this Agreement or any action taken or
omitted hereunder and waives personal service of any summons, complaint or other
process and agrees that the service thereof may be made by certified or
registered mail directed to such person at such person's address for purposes of
notice hereunder.
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(c) Counterparts. This Agreement may be executed in one or more
counterparts, each one of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
(d) Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts.
(e) Payments in U.S. Dollars. All amounts referred to herein are
expressed in U.S. Dollars and all payments by the Exchange Agent shall be made
in such currency.
(f) Assignment; Amendment; Successors and Assigns. This Agreement and
the rights and obligations hereunder may not be assigned by the Exchange Agent
without Zilog's prior written consent. This Agreement shall be binding upon and
inure to the benefit of each party's respective successors, heirs and permitted
assigns. No other person shall acquire or have any rights under or by virtue of
this Agreement. This Agreement may not be changed orally or modified, amended or
supplemented without an express written agreement executed by each of the
parties hereto. This Agreement is intended to be for the sole benefit of the
parties hereto, and their respective successors, heirs and permitted assigns,
and none of the provisions of this Agreement are intended to be nor shall they
be construed to be, for the benefit of any third person.
(g) Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
(h) Notices. All notices and other communications hereunder shall be
delivered to the respective parties at the following addresses:
If to Zilog:
Zilog, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attn: General Counsel
With a Copy to:
Pillsbury Madison & Sutro LLP
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxxx
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If to the Exchange Agent:
BankBoston, N.A.
Corporate Agency and Reorganization
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: -------------------
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers, hereunto duly authorized, as of the day
and year first above written.
ZILOG, INC.
By
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BANKBOSTON, N.A.
By
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