Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
dated as of
April 2, 2006
by and among
LUCENT TECHNOLOGIES INC.
ALCATEL
and
AURA MERGER SUB, INC.
TABLE OF CONTENTS
Page
ARTICLE I THE MERGER
Section 1.01 The Merger.............................................................................1
Section 1.02 Conversion of Shares...................................................................2
Section 1.03 Surrender and Payment..................................................................3
Section 1.04 Stock Options and Other Stock-Based Awards.............................................5
Section 1.05 Adjustments............................................................................7
Section 1.06 Fractional Shares......................................................................7
Section 1.07 Withholding Rights.....................................................................8
Section 1.08 Lost Certificates......................................................................8
Section 1.09 Shares Held by Lucent Affiliates.......................................................8
ARTICLE II CERTAIN GOVERNANCE MATTERS
Section 2.01 Corporate Name and Executive Offices...................................................9
Section 2.02 Alcatel Board of Directors and Management..............................................9
Section 2.03 Articles of Association and By-laws of Alcatel.........................................9
Section 2.04 Board Rules of Alcatel................................................................10
Section 2.05 Certificate of Incorporation of the Surviving Corporation.............................10
Section 2.06 By-laws of the Surviving Corporation..................................................10
Section 2.07 Directors and Officers of the Surviving Corporation...................................10
Section 2.08 Governance of Xxxx Laboratories and Certain Government Contracts......................10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF LUCENT
Section 3.01 Corporate Existence and Power.........................................................10
Section 3.02 Corporate Authorization...............................................................11
Section 3.03 Governmental Authorization............................................................12
Section 3.04 Non-Contravention.....................................................................12
Section 3.05 Capitalization of Lucent..............................................................13
Section 3.06 Subsidiaries..........................................................................13
Section 3.07 SEC Filings...........................................................................15
Section 3.08 Financial Statements..................................................................16
Section 3.09 Disclosure Documents..................................................................16
Section 3.10 Absence of Certain Changes............................................................17
Section 3.11 No Undisclosed Material Liabilities...................................................17
Section 3.12 Investigation; Litigation.............................................................17
Section 3.13 Taxes.................................................................................17
Section 3.14 Employee Benefit Plan; Employment and Labor Matters...................................19
Section 3.15 Compliance with Laws..................................................................20
Section 3.16 Environmental Matters.................................................................21
Section 3.17 Intellectual Property.................................................................22
Section 3.18 Vendor Financing......................................................................24
Section 3.19 Takeover Statutes.....................................................................24
Section 3.20 Finders' or Advisors' Fees............................................................24
Section 3.21 Opinions of Financial Advisors..........................................................
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF ALCATEL
Section 4.01 Corporate Organization................................................................25
Section 4.02 Corporate Authorization...............................................................25
Section 4.03 Governmental Authorization............................................................26
Section 4.04 Non-Contravention.....................................................................26
Section 4.05 Capitalization of Alcatel.............................................................27
Section 4.06 Subsidiaries..........................................................................27
Section 4.07 SEC Filings...........................................................................28
Section 4.08 Financial Statements..................................................................29
Section 4.09 Disclosure Documents..................................................................29
Section 4.10 Absence of Certain Changes............................................................30
Section 4.11 No Undisclosed Material Liabilities...................................................31
Section 4.12 Investigation; Litigation.............................................................31
Section 4.13 Taxes.................................................................................31
Section 4.14 Employee Benefit Plans; Employment and Labor Matters..................................32
Section 4.15 Compliance with Laws..................................................................33
Section 4.16 Environmental Matters.................................................................34
Section 4.17 Intellectual Property.................................................................35
Section 4.18 Vendor Financing......................................................................36
Section 4.19 Finders' or Advisors' Fees............................................................36
Section 4.20 Opinion of Financial Advisor..........................................................36
Section 4.21 Takeover Statutes.....................................................................36
ARTICLE V COVENANTS OF LUCENT
Section 5.01 Conduct of Lucent.....................................................................36
Section 5.02 Lucent Stockholder Meeting; Proxy Material............................................39
Section 5.03 Other Offers..........................................................................40
Section 5.04 Shareholder Rights Plan...............................................................41
ARTICLE VI COVENANTS OF ALCATEL
Section 6.01 Conduct of Alcatel....................................................................41
Section 6.02 Obligations of Merger Subsidiary......................................................44
Section 6.03 Director and Officer Liability........................................................44
Section 6.04 Alcatel Shareholder Meeting; Form F-4.................................................45
Section 6.05 Stock Exchange Listing................................................................46
Section 6.06 Employee Benefits.....................................................................46
Section 6.07 Other Offers..........................................................................47
Section 6.08 Business in Sanctioned Countries......................................................49
ARTICLE VII COVENANTS OF ALCATEL AND LUCENT
Section 7.01 Reasonable Best Efforts...............................................................49
Section 7.02 Preparation of Proxy Statement/Prospectus; Form F-4, Form F-6.........................51
Section 7.03 Access to Information; Compliance Program; Transition Committee.......................52
Section 7.04 Tax Treatment...........................................................................
Section 7.05 Public Announcements..................................................................54
Section 7.06 Further Assurances....................................................................54
Section 7.07 Notices of Certain Events.............................................................54
Section 7.08 Payment of Dividends..................................................................55
ARTICLE VIII CONDITIONS TO THE MERGER
Section 8.01 Conditions to the Obligations of Each Party...........................................55
Section 8.02 Conditions to the Obligations of Alcatel and Merger Subsidiary..........................
Section 8.03 Conditions to the Obligations of Lucent...............................................57
ARTICLE IX TERMINATION
Section 9.01 Termination...........................................................................58
Section 9.02 Effect of Termination.................................................................60
ARTICLE X MISCELLANEOUS
Section 10.01 Notices...............................................................................60
Section 10.02 Non-Survival of Representations and Warranties........................................61
Section 10.03 Amendments; No Waivers................................................................61
Section 10.04 Expenses..............................................................................61
Section 10.05 Successors and Assigns................................................................64
Section 10.06 Governing Law.........................................................................64
Section 10.07 Jurisdiction..........................................................................64
Section 10.08 Waiver of Jury Trial..................................................................65
Section 10.09 Counterparts; Effectiveness...........................................................65
Section 10.10 Entire Agreement; No Third Party Beneficiaries........................................65
Section 10.11 Interpretation..........................................................................
Section 10.12 Severability..........................................................................66
INDEX
1933 Act............................................7
ADS.................................................3
Affected Employees.................................46
Agreement...........................................1
Alcatel.............................................1
Alcatel Acquisition Proposal.......................48
Alcatel Balance Sheet..............................29
Alcatel Balance Sheet Date.........................29
Alcatel CEO.........................................9
Alcatel Change in Recommendation...................45
Alcatel Circular...................................29
Alcatel Disclosure Letter..........................26
Alcatel Employee Plan..............................32
Alcatel Initial Fee................................63
Alcatel Necessary Corporate Documents..............45
Alcatel Ordinary Share..............................3
Alcatel SEC Documents..............................28
Alcatel Securities.................................27
Alcatel Shareholder Approval.......................25
Alcatel Shareholder Meeting........................45
Alcatel Stock Option Plans.........................27
Alcatel Subsidiary Securities......................28
Alcatel Superior Proposal..........................48
Alcatel Termination Fee............................63
Alcatel Vendor Financing...........................35
AMF................................................12
Appropriate Assets.................................10
Book-Entry Shares...................................4
Certificates........................................3
CFIUS..............................................55
Cleanup............................................21
Closing.............................................2
Closing Date........................................2
Code................................................1
Common Shares Trust.................................8
Confidentiality Agreement..........................52
Delaware Law........................................1
Depository..........................................3
Detriment..........................................56
EC Merger Regulation...............................12
Effective Time......................................2
End Date...........................................58
Environmental Claim................................22
Environmental Laws.................................22
ERISA..............................................19
Excess Shares.......................................7
Exchange Act.......................................12
Exchange Agent......................................3
Exchange Ratio......................................2
Exon-Xxxxxx Act....................................12
Filed Alcatel SEC Documents........................24
Filed Lucent SEC Documents.........................10
Form F-4...........................................29
Form F-6...........................................29
Hazardous Materials................................22
HSR Act............................................12
IFRS...............................................29
Indemnitees........................................44
Intellectual Property..............................22
Lien...............................................12
Lucent..............................................1
Lucent Acquisition Proposal........................40
Lucent Balance Sheet...............................16
Lucent Balance Sheet Date..........................16
Lucent CEO..........................................9
Lucent Change in Recommendation....................39
Lucent Convertible Debt.............................7
Lucent Disclosure Letter............................6
Lucent Employee Plan...............................19
Lucent Initial Fee.................................62
Lucent Proxy Statement.............................16
Lucent SEC Documents...............................15
Lucent Securities..................................13
Lucent Stock Option.................................5
Lucent Stock Option Plans...........................5
Lucent Stock-Based Account..........................6
Lucent Stockholder Approval........................11
Lucent Stockholder Meeting.........................38
Lucent Subsidiary Securities.......................14
Lucent Superior Proposal...........................40
Lucent Termination Fee.............................62
Lucent Vendor Financing............................24
Lucent Warrants.....................................6
Major Pension Plans................................57
Material Adverse Effect............................11
Merger..............................................1
Merger Consideration................................3
Merger Subsidiary...................................1
Multiemployer Plans................................19
New Alcatel By-Laws.................................9
NYSE................................................7
Person..............................................3
Plan Asset Measurement Date........................57
Plan Assets........................................57
Qualifying Amendment...............................51
Release............................................22
Rule 145............................................8
Xxxxxxxx-Xxxxx Act.................................15
SEC.................................................7
Shares..............................................2
Subsidiary..........................................3
Surviving Corporation...............................1
Tax Returns........................................19
Taxes..............................................18
Trade Secrets......................................23
Transition Committee...............................52
US GAAP............................................15
Warrant Agreement...................................6
EXHIBITS
Exhibit A - Amended and Restated Articles of Association and By-laws of
Alcatel (statuts)
Exhibit B - Amended and Restated Board Rules of Alcatel (Reglements
interieurs)
Exhibit C - Certificate of Incorporation and Bylaws of Surviving Company
Exhibit D - Form of Affiliate Letter
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of April 2,
2006, by and among Lucent Technologies, Inc., a Delaware corporation
("Lucent"), Alcatel, a societe anonyme organized under the laws of the
Republic of France ("Alcatel"), and Aura Merger Sub, Inc., a Delaware
corporation and a direct wholly owned subsidiary of Alcatel ("Merger
Subsidiary").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the respective Boards of Directors of Merger Subsidiary and
Lucent have approved this Agreement, and deem it advisable and in the best
interests of their respective stockholders to consummate the merger of Merger
Subsidiary with and into Lucent on the terms and conditions set forth herein,
and the Board of Directors of Lucent has determined to recommend the Merger to
the stockholders of Lucent;
WHEREAS, the Board of Directors of Alcatel has approved this
Agreement, and deems it in the best interest of Alcatel to consummate the
merger of Merger Subsidiary with and into Lucent on the terms and conditions
set forth herein and has determined to recommend the Merger to the
shareholders of Alcatel; and
WHEREAS, for United States federal income tax purposes, it is
intended that the Merger qualify (i) as a reorganization under the provisions
of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the rules and regulations promulgated thereunder and (ii) for an
exception to the general rule of Section 367(a)(1) of the Code, and that this
Agreement be, and is hereby adopted as, a plan of reorganization for purposes
of Section 368 of the Code.
NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements set forth herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE I
THE MERGER
----------
Section 1.01 The Merger. (a) At the Effective Time (as defined in
Section 1.01(b)), upon the terms and subject to the conditions set forth in
this Agreement, Merger Subsidiary shall be merged (the "Merger") with and into
Lucent in accordance with the General Corporation Law of the State of Delaware
("Delaware Law"), whereupon the separate existence of Merger Subsidiary shall
cease, and Lucent shall be the surviving corporation in the Merger (the
"Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, Lucent and Merger
Subsidiary will file a certificate of merger with the Secretary of State of
the State of Delaware and make all other filings or recordings required by
Delaware Law in connection with the Merger. The Merger shall become effective
at such time as the certificate of merger is duly filed with the Secretary of
State of the State of Delaware or at such later time as is specified in the
certificate of merger (the "Effective Time").
(c) From and after the Effective Time, the Surviving
Corporation shall possess all the rights, privileges, powers and franchises
and be subject to all of the restrictions, obligations and duties of Lucent
and Merger Subsidiary, all as provided under Section 259 of Delaware Law.
(d) The closing of the Merger (the "Closing") shall take place
at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Four Times Square,
Xxx Xxxx, XX 00000, as soon as practicable, but in any event within three
business days after the day on which the last to be fulfilled or waived of the
conditions set forth in Article VIII (other than those conditions that by
their nature are to be fulfilled by actions taken at the Closing, but subject
to the fulfillment or waiver of such conditions) shall be fulfilled or waived
in accordance with this Agreement or at such other place and time or on such
other date as Lucent and Alcatel may agree in writing (the "Closing Date").
Section 1.02 Conversion of Shares. (a) At the Effective Time, by
virtue of the Merger and without any action on the part of any party hereto or
of any holder of capital stock thereof:
(i) each share of Common Stock, par value $0.01 per share,
of Lucent (the "Shares") held by Lucent as treasury stock or held by
Alcatel or Merger Subsidiary immediately prior to the Effective Time
shall be canceled, and no payment shall be made with respect thereto;
(ii) each share of common stock of Merger Subsidiary
outstanding immediately prior to the Effective Time shall be
converted into and become one share of common stock of the Surviving
Corporation with the same rights, powers and privileges as the shares
so converted and shall constitute the only outstanding shares of
capital stock of the Surviving Corporation; and
(iii) each Share outstanding immediately prior to the
Effective Time shall, except as otherwise provided in Section
1.02(a)(i), be converted into the right to receive 0.1952 (the
"Exchange Ratio") of an ADS (as defined below).
(b) All ADSs issued as provided in this Section 1.02 shall be
of the same class and shall have the same terms as the currently outstanding
ADSs. The Alcatel Ordinary Shares underlying the ADSs that are issued in
connection with the Merger shall be of the same class and shall have the same
terms as the currently outstanding Alcatel Ordinary Shares with all rights
attached or accrued to them to any distribution occurring after the Closing
Date (including without limitation, interim dividends or distributions out of
retained earnings or issuance or merger premium). Alcatel or Lucent shall,
following the Closing, except as provided in Section 1.03(c), pay all stamp
duties, if any, imposed in connection with the issuance or creation of the
ADSs (and the underlying Alcatel Ordinary Shares) in connection with the
Merger.
(c) From and after the Effective Time, each holder of a
certificate representing any Shares shall cease to have any rights with
respect thereto, except, in the case of holders of Shares converted in
accordance with Section 1.02(a)(iii), the right to receive the Merger
Consideration (as defined below) and any dividends payable pursuant to Section
1.03(f), in each case without interest thereon. From and after the Effective
Time, all certificates representing the common stock of Merger Subsidiary
shall be deemed for all purposes to represent the number of shares of common
stock of the Surviving Corporation into which they were converted in
accordance with Section 1.02(a)(ii).
(d) The ADSs to be received as consideration pursuant to the
Merger by each holder of Shares (together with cash in lieu of fractional ADSs
as specified below) is referred to herein as the "Merger Consideration."
(e) In accordance with Section 262 of Delaware Law, no
appraisal rights shall be available to the holders of Shares in connection
with the Merger.
(f) For purposes of this Agreement:
"ADS" means an American Depository Share of Alcatel representing one
(1) Alcatel Ordinary Share.
"Alcatel Ordinary Share" means an ordinary share, nominal value
(euro)2.00 per share, of Alcatel.
"Subsidiary" when used with respect to any Person means any other
Person, whether incorporated or unincorporated, of which (i) more than fifty
percent of the capital securities or other ownership interests or (ii)
securities or other interests having by their terms ordinary voting power to
elect more than fifty percent of the board of directors (or comparable
governing body or person), is directly owned or controlled by such first
Person or by any one or more of its Subsidiaries.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or any agency or
instrumentality thereof.
Section 1.03 Surrender and Payment. (a) Prior to the Effective Time,
Alcatel shall appoint The Bank of New York or an agent mutually agreed by
Alcatel and Lucent (the "Exchange Agent"), pursuant to an agreement in form
and substance reasonably acceptable to Alcatel and Lucent for the purpose of
exchanging certificates representing Shares (the "Certificates") for the
Merger Consideration and any dividends payable pursuant to Section 1.03(f). At
the Effective Time, Alcatel shall: (i) deposit, or cause to be deposited, with
Societe Generale, as custodian and agent of The Bank of New York, as
depositary for the ADSs, or any successor depositary thereto (the
"Depository"), a number of Alcatel Ordinary Shares equal to the aggregate
number of ADSs to be issued as Merger Consideration; and (ii) deposit, or
cause to be deposited, with the Exchange Agent the receipts representing such
aggregate number of ADSs, in each of cases (i) and (ii), for the benefit of
the holders of Shares which are converted into the right to receive ADSs
pursuant to Section 1.02(a)(iii) of this Agreement. To the extent required,
Alcatel shall cause the Exchange Agent to requisition from the Depository,
from time to time, such number of ADSs as are issuable in respect of Shares to
be properly delivered to the Exchange Agent. Promptly after the Effective
Time, Alcatel will send, or will cause the Exchange Agent to send, to each
holder of record at the Effective Time of Shares a letter of transmittal for
use in such exchange (which shall specify that the delivery shall be effected,
and risk of loss and title shall pass, only upon proper delivery of the
Certificates to the Exchange Agent) in such form as Lucent and Alcatel may
reasonably agree, for use in effecting delivery of Shares to the Exchange
Agent. Following the Effective Time, Alcatel agrees to make available to the
Exchange Agent, from time to time as needed, cash in U.S. dollars sufficient
to pay any dividends and other distributions pursuant to Section 1.03(f). At
and after the Effective Time, Alcatel will take all actions necessary to cause
the delivery of Alcatel Ordinary Shares or ADSs, as applicable upon the
exercise or conversion at or after the Effective Time of any option referred
to in Section 1.04, any Lucent Warrant, any Lucent Stock-Based Account or
Lucent Convertible Debt.
(b) Each holder of Shares that have been converted into a right
to receive the Merger Consideration, upon surrender to the Exchange Agent of a
Certificate representing Shares (or effective affidavits of loss in lieu
thereof in accordance with the procedures set forth in Section 1.08) or
non-certificated Shares represented by book-entry ("Book-Entry Shares"),
together with a properly completed letter of transmittal, will be entitled to
receive the Merger Consideration in respect of such Shares (including cash
payable in lieu of fractional shares pursuant to Section 1.06), and any
dividends payable pursuant to Section 1.03(f). Until a Certificate is so
surrendered, such Certificate shall, after the Effective Time, only represent
the right to receive such Merger Consideration and any dividends payable
pursuant to Section 1.03(f) (in each case without interest thereon).
(c) If any portion of the Merger Consideration is to be paid to
a Person other than the Person in whose name the Certificate is registered, it
shall be a condition to such payment that the Certificate so surrendered shall
be properly endorsed or otherwise be in proper form for transfer and that the
Person requesting such payment shall pay to the Exchange Agent any transfer or
other taxes required as a result of such payment to a Person other than the
registered holder of such Certificate or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
(d) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time,
Certificates or Book-Entry Shares are presented to Alcatel or the Surviving
Corporation, they shall be canceled and exchanged for the Merger
Consideration, and any dividends payable pursuant to Section 1.03(f), in
accordance with the provisions of this Article I. In no event shall any
interest be payable with respect to the Merger Consideration or any such
dividends.
(e) Any portion of the Merger Consideration, or dividends
payable pursuant to Section 1.03(f), made available to the Exchange Agent
pursuant to Section 1.03(a) that remains unclaimed by the holders of Shares
twelve (12) months after the Effective Time shall be returned to Alcatel, upon
demand, and any such holder who has not exchanged his Shares for Merger
Consideration in accordance with this Section prior to that time shall
thereafter look only to Alcatel for payment of the Merger Consideration in
respect of his Shares. Notwithstanding the foregoing, Alcatel shall not be
liable to any holder of Shares for any amount paid to a public official
pursuant to applicable abandoned property, escheat or similar laws. Any
amounts remaining unclaimed by holders of Shares three years after the
Effective Time (or such earlier date immediately prior to such time as such
amounts would otherwise escheat to or become the property of any governmental
entity) shall, to the extent permitted by applicable law, become the property
of Alcatel free and clear of any Liens (as defined in Section 3.04), claims or
interest of any Person previously entitled thereto.
(f) No dividends or other distributions with respect to ADSs
(or the underlying Alcatel Ordinary Shares) issued in the Merger shall be paid
to the holder of any unsurrendered Certificates or Book-Entry Shares until
such Certificates or Book-Entry Shares are surrendered as provided in this
Section 1.03. Subject to applicable law, following such surrender, there shall
be paid, without interest, to the record holder of the ADSs issued in exchange
for such Certificates or Book-Entry Shares (i) at the time of such surrender,
all dividends and other distributions payable in respect of such ADSs with a
record date after the Effective Time and a payment date on or prior to the
date of such surrender and which were not previously paid, and (ii) at the
appropriate payment date, the dividends or other distributions payable with
respect to such ADSs with a record date after the Effective Time but with a
payment date subsequent to such surrender. For purposes of dividends or other
distributions in respect of ADSs, all ADSs to be issued pursuant to the Merger
(excluding ADSs (and underlying Alcatel Ordinary Shares) issuable upon
exercise of options which are issued pursuant to Section 1.04 unless such
options are actually exercised prior to the Effective Time, or upon exercise
of Lucent Warrants, Lucent Stock-Based Awards or Lucent Convertible Debt)
shall be entitled to dividends pursuant to the immediately preceding sentence
as if such ADSs were issued and outstanding as of the Effective Time.
Section 1.04 Stock Options and Other Stock-Based Awards. (a) Except
as otherwise mutually agreed by Alcatel and Lucent, at the Effective Time,
each outstanding option to purchase Shares (a "Lucent Stock Option") granted
under Lucent's compensation or benefit plans or agreements pursuant to which
Shares may be issued (collectively, the "Lucent Stock Option Plans")
(excluding any option granted under the Lucent 2001 Employee Stock Purchase
Plan (the "ESPP")), whether vested or not vested, shall be converted into a
right to acquire, on the same terms and conditions as were applicable under
such Lucent Stock Option prior to the Effective Time, the number (rounded down
to the nearest whole number) of Alcatel Ordinary Shares determined by
multiplying (x) the number of Shares subject to such Lucent Stock Option
immediately prior to the Effective Time by (y) the Exchange Ratio, at an
exercise price per Alcatel Ordinary Shares expressed in Euros equal to the
product of (A) the quotient of (x) the U.S. dollar exercise price per Share
otherwise purchasable pursuant to such Lucent Stock Option, divided by (y) the
Exchange Ratio, multiplied by (B) the Euro Exchange Rate, rounding the
resulting exercise price up to the nearest euro cent. The "Euro Exchange Rate"
shall equal the Noon Buying Rate for euros as announced by the Federal Reserve
Bank of New York for the Closing Date, which for the avoidance of doubt shall
be computed as euros per one U.S. dollar. In addition, prior to the Effective
Time (but effective as of the Effective Time), Lucent will make any amendments
to the terms of Lucent Stock Option Plans that are necessary to give effect to
the transactions contemplated by this Section. Lucent has identified in
Section 1.04(a) of the separate disclosure letter delivered by Lucent to
Alcatel dated as of the date of this Agreement (the "Lucent Disclosure
Letter") each of the Lucent Stock Option Plans. Lucent has not taken, and
shall not take, any action causing any option holder to have the right to
receive a "change in control cash-out" described in Section 11(b) of the
Lucent 2003 Long Term Incentive Program, Section 10(b) of the Lucent 2000
Stock Option Plan or any similar provision of any other Lucent Stock Option
Plan. The rights to exercise for Alcatel Ordinary Shares into which the Lucent
Stock Options will be converted will have exercise features (including without
limitation net cashless exercise features) comparable to those provided
generally to holders of Alcatel stock options employed in the same
jurisdiction.
(b) At the Effective Time, each award ("Lucent Stock-Based
Account") that has been established under any employee incentive or benefit
plan, program or arrangement or under any non-employee director plan
maintained by Lucent on or prior to the date of this Agreement which provides
for equity-based awards shall be amended or converted into an award with
respect to Alcatel Ordinary Shares for individuals domiciled outside the
United States and denominated in ADSs with respect to individuals domiciled in
the United States, with the number of ADSs or Alcatel Ordinary Shares in each
case determined by multiplying (x) the number of Shares subject to such Lucent
Stock-Based Account immediately prior to the Effective Time by (y) the
Exchange Ratio. The other terms and conditions of Lucent Stock-Based Accounts,
and the plans or agreements under which they were established, shall continue
to apply in accordance with their terms and conditions. Lucent represents that
all employee incentive or benefit plans, programs or arrangements and
non-employee director plans under which any Lucent Stock-Based Accounts have
been established are disclosed in Section 1.04(c) of the Lucent Disclosure
Letter.
(c) Pursuant to Section 11(c)(2) of the ESPP, Lucent shall make
reasonable efforts to provide that no later than the earlier of (x) the
Closing Date and (y) the final date of the first six-month ESPP cycle to
commence following the date hereof (such earlier date, the "ESPP Termination
Date"), all then-outstanding Options (as defined in the ESPP) shall be
exercised, and that no Options shall be granted on or following the ESPP
Termination Date.
(d) Alcatel shall take all corporate action necessary to, and
shall, make available for issuance or delivery such number of Alcatel Ordinary
Shares and ADSs that may be issued or delivered on and after the Effective
Time (i) pursuant to the terms set forth in this Section 1.04, (ii) in respect
of the warrants of Lucent ("Lucent Warrants") outstanding as of immediately
prior to the Effective Time issued pursuant to the warrant agreement, dated as
of December 10, 2004 (the "Warrant Agreement"), between Lucent and The Bank of
New York, as warrant agent, (iii) in respect of the debentures, notes and
securities outstanding as of immediately prior to the Effective Time issued
pursuant to (1) the Indenture, dated as of March 19, 2002, by and between
Lucent and The Bank of New York, as trustee, for the 7.75% Convertible
Subordinated Debentures of Lucent, due 2017, (2) the Indenture, dated as of
June 4, 2003, by and between Lucent and The Bank of New York, as trustee, as
supplemented by the First Supplemental Denture, dated as of June 4, 2003, by
and between Lucent and The Bank of New York, as trustee, for the 2 3/4% Series
A Convertible Senior Debentures due 2023 and for the 2 3/4% Series B
Convertible Senior Debentures of Lucent due 2025 and (3) the Indenture, dated
as of November 24, 2003, by and between Lucent and The Bank of New York, as
Trustee, for the 8.00% Convertible Subordinated Debentures of Lucent Due 2031
(collectively, the "Lucent Convertible Debt").
(e) At the Effective Time, Alcatel shall file with the
Securities and Exchange Commission (the "SEC") a registration statement on an
appropriate form or a post-effective amendment to a previously filed
registration statement under the Securities Act of 1933, as amended (the "1933
Act"), with respect to the ADSs (and, if required, the underlying Alcatel
Ordinary Shares), subject to options and other equity-based awards issued
pursuant to this Section 1.04, and subject to Lucent Warrants, Lucent
Stock-Based Accounts and Lucent Convertible Debt, and for purposes of
satisfying 401(k) plan obligations, and shall use its reasonable best efforts
to maintain the current status of the prospectus contained therein, as well as
comply with any applicable state securities or "blue sky" laws, for so long as
such options or other equity-based awards, Lucent Warrants, Lucent Stock-Based
Accounts or Lucent Convertible Debt remain outstanding.
(f) The parties will make good faith efforts to make any
equitable adjustments necessary to ensure that the conversions of Lucent Stock
Options and Lucent Stock-Based Accounts contemplated by this Section 1.04
comply with Section 409A of the Code.
Section 1.05 Adjustments. If at any time during the period between
the date of this Agreement and the Effective Time, any change in the
outstanding shares of capital stock of Alcatel or Lucent shall occur by reason
of any reclassification, recapitalization, stock split or combination,
exchange or readjustment of shares, or any stock dividend thereon with a
record date during such period, the Merger Consideration shall be
appropriately adjusted to provide the holders of Shares the same economic
effect as contemplated by this Agreement. Nothing in this Section 1.05 shall
be construed to permit Alcatel to take any action that is otherwise prohibited
or restricted by any other provision of this Agreement. Prior to the Effective
Time, Alcatel shall not take any action, including amending the deposit
agreement between Alcatel and Depositary that would cause each ADS to
represent more or less than one Alcatel Ordinary Share.
Section 1.06 Fractional Shares. (a) No fractional ADSs shall be
issued in the Merger, but in lieu thereof each holder of Shares otherwise
entitled to a fractional ADS will be entitled to receive, from the Exchange
Agent in accordance with the provisions of this Section 1.06, a cash payment
in lieu of such fractional ADS representing such holder's proportionate
interest, if any, in the proceeds from the sale by the Exchange Agent in one
or more transactions of the number of ADSs delivered to the Exchange Agent by
Alcatel pursuant to Section 1.03(a) over the aggregate number of whole ADSs to
be distributed to the holders of Certificates pursuant to Section 1.03(b)
(such excess being herein called the "Excess Shares"). The parties acknowledge
that payment of cash consideration in lieu of issuing fractional ADSs was not
separately bargained for consideration but merely represents a mechanical
rounding off for purposes of simplifying the corporate and accounting problems
that would otherwise be caused by the issuance of fractional ADSs. As soon as
practicable after the Effective Time, the Exchange Agent, as agent for the
holders of the Certificates and Book-Entry Shares shall sell the Excess Shares
at then-prevailing prices on the New York Stock Exchange (the "NYSE") in the
manner provided in the following paragraph.
(b) The sale of the Excess Shares by the Exchange Agent, as
agent for the holders that would otherwise receive fractional ADSs, shall be
executed on the NYSE through one or more member organizations of the NYSE and
shall be executed in round lots to the extent practicable. The compensation
payable to the Exchange Agent and the expenses incurred by the Exchange Agent,
in each case, in connection with such sale or sales of the Excess Shares, and
all related commissions, transfer taxes and other out-of-pocket transaction
costs, will be paid by the Surviving Corporation out of its own funds and will
not be paid directly or indirectly by Alcatel. Until the proceeds of such sale
or sales have been distributed to the holders of Shares, the Exchange Agent
shall hold such proceeds in trust for the holders of Shares (the "Common
Shares Trust"). The Exchange Agent shall determine the portion of the Common
Shares Trust to which each holder of Shares shall be entitled, if any, by
multiplying the amount of the aggregate proceeds comprising the Common Shares
Trust by a fraction, the numerator of which is the amount of the fractional
ADS interest to which such holder of Shares would otherwise be entitled and
the denominator of which is the aggregate amount of fractional ADS interests
to which all holders of Shares would otherwise be entitled.
(c) As soon as practicable after the determination of the
amount of cash, if any, to be paid to holders of Shares in lieu of any
fractional ADSs, the Exchange Agent shall make available such amounts to such
holders of Shares (without interest thereon).
Section 1.07 Withholding Rights. Each of the Surviving Corporation
and Alcatel shall be entitled to deduct and withhold from the consideration
otherwise payable to any Person pursuant to this Article I such amounts as it
is required to deduct and withhold with respect to the making of such payment
under any provision of federal, state, local or foreign tax law. To the extent
that amounts are so withheld by the Surviving Corporation or Alcatel, as the
case may be, such withheld amounts shall be treated for all purposes under
this Agreement and otherwise as having been paid to the holder of the Shares
in respect of which such deduction and withholding was made by the Surviving
Corporation or Alcatel, as the case may be.
Section 1.08 Lost Certificates. 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, if
required by the Surviving Corporation, the posting by such Person of a bond,
in such reasonable amount as the Surviving Corporation may direct, as
indemnity against any claim that may be made against it with respect to such
Certificate, the Exchange Agent will issue in exchange for such lost, stolen
or destroyed Certificate the Merger Consideration to be paid in respect of the
Shares represented by such Certificate as contemplated by this Article.
Section 1.09 Shares Held by Lucent Affiliates. Anything to the
contrary herein notwithstanding, any ADSs and, upon exchange therefor, the
underlying Alcatel Ordinary Shares (and, in either case, any receipts,
certificates or evidences of Book-Entry Shares therefor) issued to
"affiliates" (as such term is used in Rule 145 promulgated under the 1933 Act
("Rule 145")) of Lucent pursuant to Section 1.03, shall be subject to the
restrictions described in Rule 145.
ARTICLE II
CERTAIN GOVERNANCE MATTERS
--------------------------
Section 2.01 Corporate Name and Executive Offices. (a) Promptly
following the Effective Time, Alcatel's name shall be changed to a name
mutually agreed by the parties prior to the Effective Time, which name shall
not be solely "Alcatel" or "Lucent." In connection with the name change,
Alcatel and Lucent shall mutually agree on a stock trading symbol prior to the
Effective Time.
(b) As of and after the Merger, (i) the executive offices of
Alcatel shall be located in Paris, France, and (ii) the offices of the
business of Lucent currently known as "Xxxx Laboratories" (which shall be the
Global Research and Development headquarters of Alcatel) and the U.S.
operating headquarters of Alcatel shall be located in the State of New Jersey,
USA.
Section 2.02 Alcatel Board of Directors and Management. (a) At the
meeting of Alcatel's shareholders to obtain the Alcatel Shareholder Approval
(as defined in Section 4.02(a)), Alcatel's Board of Directors shall nominate
fourteen (14) individuals for election to the Board of Directors of Alcatel
effective as of, and conditioned upon, the occurrence of the Effective Time.
Such nominees (the "Board Designees") shall be comprised of: (i) five persons
designated by Alcatel from Alcatel's current Board of Directors, (ii) five
persons designated by Lucent from Lucent's current Board of Directors, (iii)
the Chief Executive Officer of Alcatel as of the date of this Agreement (the
"Alcatel CEO") and the Chief Executive Officer of Lucent as of the date of
this Agreement (the "Lucent CEO"), and (iv) two persons who qualify as
independent directors of Alcatel's Board of Directors mutually agreed upon by
Alcatel and Lucent, consistent with Schedule 2.02(a) of the Lucent Disclosure
Letter. Each nominee elected to the Board of Directors in such meeting of
Alcatel's shareholders shall be elected for a term of four years.
(b) Alcatel's Board of Directors shall cause the Lucent CEO to
be appointed as Chief Executive Officer of Alcatel, and cause the Alcatel CEO
to be appointed as the non-executive Chairman of the Board of Directors of
Alcatel, in each case, effective as of the Effective Time. In the event that
the Lucent CEO is unwilling or unable to serve as the Chief Executive Officer
of Alcatel as of the Effective Time, the Board of Directors of Alcatel
(constituted pursuant to Section 2.02(a)) shall appoint a Chief Executive
Officer of Alcatel in accordance with the articles of association and by-laws
(statuts) of Alcatel as in effect as of the Effective Time. In the event that
the Alcatel CEO is unwilling or unable to serve as the non-executive Chairman
of the Board of Directors of Alcatel as of the Effective Time, the Board of
Directors of Alcatel (constituted pursuant to Section 2.02(a)) shall appoint a
non-executive Chairman of the Board of Directors of Alcatel in accordance with
the articles of association and by-laws (statuts) of Alcatel as in effect as
of the Effective Time.
Section 2.03 Articles of Association and By-laws of Alcatel. The
articles of association and by-laws of Alcatel (statuts) in effect immediately
prior to the Effective Time shall be amended so that as of the Effective Time,
the articles of association and by-laws of Alcatel (statuts) shall read in
their entirety as set forth in Exhibit A hereto (the "New Alcatel By-Laws").
Section 2.04 Board Rules of Alcatel. The Board Rules (Reglements
interieurs) of Alcatel in effect immediately prior to the Effective Time shall
be amended and restated in their entirety to read as set forth in Exhibit B
hereto, effective as of the Effective Time.
Section 2.05 Certificate of Incorporation of the Surviving
Corporation. Subject to Section 6.03, the certificate of incorporation of
Lucent in effect immediately prior to the Effective Time, as amended and
restated in its entirety to read as set forth in Exhibit C hereto, shall be
the certificate of incorporation of the Surviving Corporation until amended in
accordance with applicable law.
Section 2.06 By-laws of the Surviving Corporation. Subject to Section
6.03, the by-laws of Merger Subsidiary in effect immediately prior to the
Effective Time, as set forth in Exhibit C hereto, shall be the by-laws of the
Surviving Corporation until amended in accordance with applicable law.
Section 2.07 Directors and Officers of the Surviving Corporation.
From and after the Effective Time, until successors are duly elected or
appointed and qualified in accordance with applicable law, the directors and
officers of the Surviving Corporation shall be mutually selected by Alcatel
and Lucent.
Section 2.08 Governance of Xxxx Laboratories and Certain Government
Contracts. Alcatel, Lucent, the entity holding certain appropriate assets
(including certain government contracts consistent with Section 2.08 of the
Lucent Disclosure Letter), (the "Appropriate Assets") and any intermediate
entities shall enter into the appropriate form of agreement, effective as of
the Effective Time and mutually acceptable to the parties acting in accordance
with Section 7.01, with respect to the Appropriate Assets, pursuant to which
the sole equityholder of the entity holding the Appropriate Assets shall
provide three special directors (which special directors shall be citizens and
residents of the United States eligible to obtain personnel security clearance
from the U.S. Department of Defense) with certain governance rights over the
entity holding the Appropriate Assets to ensure the independence of such
entity from its parent entities and to protect the confidentiality of
classified information.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF LUCENT
----------------------------------------
Except as set forth in any Lucent SEC Document (as defined in Section
3.07(a)), filed and publicly available prior to the date of this Agreement
(the "Filed Lucent SEC Documents"), excluding any disclosure in such Filed
Lucent SEC Document set forth in any risk factor section and in any section
relating to forward-looking statements, and except as set forth in the Lucent
Disclosure Letter (subject to Section 10.11(b)), Lucent represents and
warrants to Alcatel that:
Section 3.01 Corporate Existence and Power. Lucent is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware. Lucent has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except for those the absence of which would not,
individually or in the aggregate, have a Material Adverse Effect (as defined
below) on Lucent. Lucent is duly qualified to do business and is in good
standing in each jurisdiction (to the extent such concepts exist in such
jurisdictions) where the character of the property owned, operated or leased
by it or the nature of its activities makes such qualification necessary,
except for those jurisdictions where the failure to be so qualified or be in
good standing would not, individually or in the aggregate, have a Material
Adverse Effect on Lucent. For purposes of this Agreement, a "Material Adverse
Effect" with respect to any Person means any events, facts, changes or
circumstances which are, have resulted in, or would reasonably be expected to
result in, a material adverse effect on the financial condition, business, or
annual results of operations of such Person and its Subsidiaries, taken as a
whole, except to the extent arising or resulting from, or caused by any of the
following, in which case, they shall be excluded from consideration: (i) any
changes or developments in United States, European or global economic,
regulatory or political conditions in general (including the outbreak or
escalation of hostilities or acts of war or terrorism), or generally affecting
the financial or securities markets in the United States, Europe or elsewhere
in the world, (ii) any changes or developments involving the communications
systems, software and products industries in general and not materially
disproportionately affecting such Person (and its Subsidiaries) relative to
other participants in such industries generally, (iii) any changes in
applicable law, US GAAP (as herein defined), IFRS (as herein defined) or other
accounting standards, (iv) any changes or developments directly resulting from
the execution, delivery, existence of, or compliance with, this Agreement or
announcement of the transactions contemplated hereby (provided that the
exception in this clause (iv) shall not apply to the representations and
warranties contained in Section 3.04 or 4.04 to the extent that the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby would result in a breach or inaccuracy of the
representations and warranties set forth in Section 3.04 or 4.04). Lucent has
heretofore made available to Alcatel true and complete copies of Lucent's
certificate of incorporation and by-laws as currently in effect.
Section 3.02 Corporate Authorization. (a) The execution, delivery and
performance by Lucent of this Agreement and the consummation by Lucent of the
transactions contemplated hereby are within Lucent's corporate powers and,
except for the Lucent Stockholder Approval (as defined below), have been duly
authorized by all necessary corporate action. This Agreement has been duly and
validly executed and delivered by Lucent and, assuming that this Agreement
constitutes the valid and binding agreement of each of Alcatel and Merger
Subsidiary, constitutes a valid and binding agreement of Lucent enforceable
against Lucent in accordance with its terms.
(b) Lucent's Board of Directors, at a meeting duly called and
held, has (i) determined that this Agreement and the transactions contemplated
hereby (including the Merger) are advisable and in the best interests of
Lucent's stockholders, (ii) duly and validly approved and adopted this
Agreement and the transactions contemplated hereby (including the Merger) and
(iii) resolved (subject to Section 5.02) to recommend to its stockholders the
adoption of this Agreement.
(c) The affirmative vote of the holders of a majority of the
Shares outstanding on the record date (the "Lucent Stockholder Approval") set
for the Lucent Stockholder Meeting (as defined in Section 5.02) to adopt this
Agreement is the only vote of the holders of any class or series of Lucent's
capital stock necessary under applicable law to approve and adopt this
Agreement, the Merger and the other transactions contemplated hereby.
Section 3.03 Governmental Authorization. The execution, delivery and
performance by Lucent of this Agreement and the consummation of the
transactions contemplated hereby (including the Merger) by Lucent require no
action by or in respect of, or filing with, any governmental body, agency,
official or authority other than (a) the filing of a certificate of merger in
accordance with Delaware Law, (b) compliance with any applicable requirements
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (c) compliance with any applicable requirements of Council
Regulation (EC) No. 139/2004 of the Council of the European Union (the "EC
Merger Regulation"), (d) compliance with any applicable requirements of any
other foreign antitrust laws or regulations, (e) compliance with any
applicable requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder (the "Exchange Act"), (f)
compliance with any applicable requirements of the 1933 Act, (g) compliance
with French securities regulatory requirements, including of the Autorite des
Marches Financiers (the "AMF"), (h) compliance with any applicable
requirements of the Exon-Xxxxxx Amendment to the Defense Protection Act of
1998 (the "Exon-Xxxxxx Act") and (i) other actions or filings which if not
taken or made would not, individually or in the aggregate, have a Material
Adverse Effect on Lucent.
Section 3.04 Non-Contravention. Except as set forth on Section 3.04
of the Lucent Disclosure Letter, the execution, delivery and performance by
Lucent of this Agreement and the consummation by Lucent of the transactions
contemplated hereby do not and will not (a) assuming receipt of the Lucent
Stockholder Approval, contravene or conflict with the certificate of
incorporation or by-laws or equivalent organizational documents of Lucent or
any of its Subsidiaries, (b) assuming compliance with the matters referred to
in Section 3.03, contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or decree
binding upon or applicable to Lucent or any of its Subsidiaries, (c)
constitute a violation of or default under or give rise to any right of
termination, cancellation or acceleration of any right or obligation of Lucent
or any of its Subsidiaries or to a loss of any benefit to which Lucent or any
of its Subsidiaries is entitled under any provision of any agreement, contract
or other instrument binding upon Lucent or any of its Subsidiaries or any
license, franchise, permit or other similar authorization held by Lucent or
any of its Subsidiaries, or (d) result in the creation or imposition of any
Lien on any asset of Lucent or any of its Subsidiaries, except for such
contraventions, conflicts or violations referred to in clause (b) or
violations, defaults, rights of termination, cancellation or acceleration, or
losses or Liens referred to in clause (c) or (d) that would not, individually
or in the aggregate, have a Material Adverse Effect on Lucent. For purposes of
this Agreement, the term "Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind
in respect of such asset other than any such mortgage, lien, pledge, charge,
security interest or encumbrance, (i) for Taxes (as defined in Section 3.13)
not yet due or being contested in good faith (and for which adequate accruals
or reserves have been established on the Alcatel Balance Sheet (as defined in
Section 4.08) or Lucent Balance Sheet (as defined in Section 3.08), as the
case may be) or (ii) which is a carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like lien arising in the ordinary course
of business. Except as disclosed in Section 3.04 of the Lucent Disclosure
Letter, neither Lucent nor any Subsidiary of Lucent is a party to any
agreement that expressly limits the ability of Lucent or any Subsidiary of
Lucent, or would limit Alcatel or any Subsidiary of Alcatel after the
Effective Time, to compete in or conduct any line of business or compete with
any Person or in any geographic area or during any period of time, in each
case, if such limitation is or is reasonably likely to be material to Lucent
and its Subsidiaries, taken as a whole, or, following the Effective Time, to
Alcatel and its Subsidiaries, taken as a whole.
Section 3.05 Capitalization of Lucent. The authorized capital stock
of Lucent consists of 10,000,000,000 Shares and 250,000,000 shares of
preferred stock, par value $1.00 per share (of which 25,000,000 shares are
designated as Series A Junior Participating Preferred Stock). As of the close
of business on February 28, 2006, (i) there were 4,470,843,920 Shares issued
and outstanding, and (ii) there were no shares of preferred stock of Lucent
issued and outstanding. As of the close of business on February 28, 2006, (i)
there were 375,904,163 Shares issuable assuming that all options outstanding
as of such date issued under the Lucent Stock Option Plans were exercisable as
of such date (of which options to purchase an aggregate of 282,901,542 Shares
were exercisable as of such date), (ii) there were Lucent Stock-Based Accounts
with respect to (a) 25,172,796 full stock units for employees and (b) 236,232
non-employee director Shares (including deferred Share grants to non-employee
directors); (iii) there were 816,454,426 Shares issuable assuming the
conversion of all of the outstanding Lucent Convertible Debt as of such date
and (iv) there were 199,372,885 Shares issuable assuming that all of the
Lucent Warrants outstanding as of such date were converted into Shares as of
such date. All outstanding Shares have been duly authorized and validly issued
and are fully paid and nonassessable. Except as set forth in this Section 3.05
and except for changes since the close of business on February 28, 2006
resulting from the exercise of employee stock options outstanding on such date
or options or other stock-based awards granted as permitted by Section 5.01,
there are outstanding (a) no shares of capital stock or other voting
securities of Lucent, (b) no securities of Lucent convertible into or
exchangeable for shares of capital stock or voting securities of Lucent, and
(c) no options, warrants or other rights to acquire from Lucent, and no
preemptive or similar rights, subscription or other rights, convertible
securities, agreements, arrangements or commitments of any character, relating
to the capital stock of Lucent, obligating Lucent to issue, transfer or sell,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of Lucent or obligating
Lucent to grant, extend or enter into any such option, warrant, subscription
or other right, convertible security, agreement, arrangement or commitment
(the items in clauses (a), (b) and (c) being referred to in this Agreement
collectively as the "Lucent Securities"). There are no outstanding obligations
of Lucent or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any Lucent Securities.
Section 3.06 Subsidiaries. (a) Each Subsidiary of Lucent is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, (to the extent such concepts exist in such
jurisdictions), has all powers and all governmental licenses, authorizations,
permits, consents and approvals required to carry on its business as now
conducted, except for those licenses, authorizations, consents and approvals
the absence of which would not, individually or in the aggregate, have a
Material Adverse Effect on Lucent. Each Subsidiary of Lucent is duly qualified
to do business and is in good standing in each jurisdiction (to the extent
such concepts exist in such jurisdictions) where the character of the property
owned, operated or leased by it or the nature of its activities makes such
qualification necessary, except for those jurisdictions where failure to be so
qualified or in good standing would not, individually or in the aggregate,
have a Material Adverse Effect on Lucent.
(b) Except for Liens in respect of the Collateral Agreements as
provided therein and except as set forth on Section 3.06(b) of the Lucent
Disclosure Letter, all of the outstanding capital stock of, or other ownership
interests in, each Subsidiary of Lucent are owned by Lucent, directly or
indirectly, free and clear of any material Lien and free of any other material
limitation or restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other ownership interests).
Except as set forth on Section 3.06(b) of the Lucent Disclosure Letter, there
are no outstanding (i) securities convertible into or exchangeable for shares
of capital stock or other voting securities or ownership interests in any
Subsidiary of Lucent or (ii) options, warrants, preemptive or similar rights,
subscriptions or other rights, convertible securities, agreements,
arrangements or commitments of any character, relating to the capital stock of
any Subsidiary of Lucent, obligating Lucent or any of its Subsidiaries to
issue, transfer or sell, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable for
any capital stock, voting securities or ownership interests in, any Subsidiary
of Lucent or obligating Lucent or any Subsidiary of Lucent to grant, extend or
enter into any such option, warrant, subscription or other right, convertible
security, agreement, arrangement or commitment (the items in clauses (i) and
(ii) of this sentence being referred to in this Agreement collectively as the
"Lucent Subsidiary Securities"). Except as set forth on Section 3.06(b) of the
Lucent Disclosure Letter, there are no outstanding obligations of Lucent or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any
outstanding Lucent Subsidiary Securities. No non-wholly owned Subsidiary of
Lucent owns any Shares.
For purposes of this Agreement, the term "Collateral Agreements"
means (i) the Amended and Restated Letter of Credit Issuance and Reimbursement
Agreement among Lucent Technologies Inc. and several banks and other parties
thereto and JPMorgan Chase Bank, N.A., as administrative agent, dated as of
October 1, 2004, as amended; (ii) the Amended and Restated External Sharing
Debt Agreement among Lucent Technologies Inc., several banks and other parties
thereto and JPMorgan Chase Bank, N.A., as administrative agent, dated as of
October 1, 2004, as amended; (iii) the First Amendment, dated as of April 8,
2005, to the (a) the Amended and Re-stated Letter of Credit Issuance and
Reimbursement Agreement, dated as of October 1, 2004, among Lucent
Technologies Inc., the several banks and other financial institutions or
entities from time to time parties thereto and JPMorgan Chase Bank, N.A., as
Administrative Agent and (b) the Amended and Restated External Sharing Debt
Agreement, dated as of October 1, 2004, among Lucent Technologies Inc., the
several banks and other financial institutions or entities from time to time
parties thereto and JPMorgan Chase Bank, N.A., as Administrative Agent; (iv)
the Amended and Restated Guarantee and Collateral Agreement made by Lucent
Technologies Inc. and certain of its subsidiaries in favor of JPMorgan Chase
Bank, N.A., as collateral agent, dated as of October 1, 2004 ("Guarantee and
Collateral Agreement"), and (v) the Amended and Restated Collateral Sharing
Agreement made by Lucent Technologies Inc. and certain of its subsidiaries in
favor of JPMorgan Chase Bank, N.A., as collateral agent, dated October 1,
2004; and (vi) the Amended and Restated Cash Collateral Agreement Dated as of
October 1, 2004.
Section 3.07 SEC Filings. (a) Lucent has made available to Alcatel
(i) its annual reports on Form 10-K for its fiscal years ended September 30,
2003, 2004 and 2005, (ii) its quarterly reports on Form 10-Q for its fiscal
quarters ended after September 30, 2005, (iii) its proxy or information
statements relating to meetings of, or actions taken without a meeting by, the
stockholders of Lucent held since September 30, 2004, and (iv) all of its
other reports, statements, schedules and registration statements filed with
the SEC since September 30, 2005 (the documents referred to in this Section
3.07(a) being referred to in this Agreement collectively as the "Lucent SEC
Documents").
(b) As of its filing date or, if amended prior to the date of
this Agreement, as of the date of the last such amendment prior to the date of
this Agreement, each Lucent SEC Document complied as to form in all material
respects with the applicable requirements of the Exchange Act, the 1933 Act
and the Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act").
(c) As of its filing date, or, if amended prior to the date of
this Agreement, as of the date of the last such amendment prior to the date of
this Agreement, each Lucent SEC Document filed pursuant to the Exchange Act
did not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
(d) Each registration statement constituting a Lucent SEC
Document, as amended or supplemented, if applicable, filed with the SEC by
Lucent pursuant to the 1933 Act as of the date such statement or amendment
became effective did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
(e) Lucent has established and maintains a system of
"disclosure controls and procedures" and "internal control over financial
reporting" (as such terms are defined in paragraphs (e) and (f), respectively,
of Rule 13a-15 under the Exchange Act) sufficient to provide reasonable
assurance (i) that transactions are recorded as necessary to permit
preparation of financial statements in conformity with United States generally
accepted accounting principles ("US GAAP"), consistently applied, (ii) that
transactions are executed only in accordance with the authorization of
management and (iii) regarding prevention or timely detection of the
unauthorized acquisition, use or disposition of Lucent's assets. As of
September 30, 2005, (x) there were no "material weaknesses" (as defined by the
Public Company Accounting Oversight Board) and (y) there was no series of
multiple "significant deficiencies" (as defined by the Public Company
Accounting Oversight Board) that was reasonably likely to collectively
represent a "material weakness" in the design or operation of Lucent's
internal controls. Since September 30, 2005, neither Lucent nor any of its
Subsidiaries nor, to Lucent's knowledge, Lucent's independent auditors, have
identified or been made aware of (A) any material weakness in the system of
internal controls utilized by Lucent and its Subsidiaries, (B) any fraud,
whether or not material, that involves Lucent's management or other employees
who have a role in the preparation of financial statements or the internal
controls utilized by Lucent and its Subsidiaries or (C) any material claim or
allegation regarding any of the foregoing.
(f) The "disclosure controls and procedures" (as defined in
Rules 13a-15(e) and 15d-15(e) of the Exchange Act) utilized by Lucent are
reasonably designed to ensure that all information (both financial and
non-financial) required to be disclosed by Lucent in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC,
and that all such information required to be disclosed is accumulated and
communicated to Lucent's management as appropriate to allow timely decisions
regarding required disclosure and to enable the Chief Executive Officer and
Chief Financial Officer of Lucent to make the certifications required under
the Exchange Act with respect to such reports.
Section 3.08 Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of Lucent
(including any related notes and schedules) included in its annual reports on
Form 10-K and the quarterly reports on Form 10-Q, in each case referred to in
Section 3.07, fairly present in all material respects, in conformity with US
GAAP, applied on a consistent basis (except as may be indicated in the notes
thereto), the consolidated financial position of Lucent and its consolidated
Subsidiaries as of the dates thereof and their consolidated results of
operations and changes in financial position for the periods then ended
(subject, in the case of any unaudited interim financial statements, to normal
year-end audit adjustments and to any other adjustments described therein,
including the notes thereto). For purposes of this Agreement, "Lucent Balance
Sheet" means the consolidated balance sheet of Lucent as of December 31, 2005
set forth in Lucent's Quarterly Report on Form 10-Q for the fiscal quarter
ended December 31, 2005 and "Lucent Balance Sheet Date" means December 31,
2005.
Section 3.09 Disclosure Documents. (a) Subject to the last sentence
of this Section 3.09(a), neither the proxy statement of Lucent (the "Lucent
Proxy Statement") to be filed with the SEC in connection with the Merger, nor
any amendment or supplement thereto, will, at the date on which the Lucent
Proxy Statement or any such amendment or supplement is first mailed to
stockholders of Lucent or at the time such stockholders vote on the adoption
of this Agreement, contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Lucent Proxy Statement will, when filed, comply as to form in all material
respects with the requirements of the Exchange Act. Notwithstanding the
foregoing, no representation or warranty is made by Lucent in this Section
3.09(a) with respect to statements made or incorporated by reference therein
based on information supplied by or on behalf of Alcatel or Merger Subsidiary
for inclusion or incorporation by reference in Lucent Proxy Statement.
(b) None of the information supplied or to be supplied by or on
behalf of Lucent for inclusion or incorporation by reference in the Alcatel
Circular (as defined in Section 4.09) or in the Form F-4 (as defined in
Section 4.09) or any amendment or supplement thereto will, at the date on
which the Alcatel Circular or any such supplement or amendment thereto is
first mailed to the shareholders of Alcatel or at the time such shareholders
vote on the matters constituting the Alcatel Shareholder Approval (as defined
in Section 4.02) or at the time the Form F-4 or any such amendment or
supplement becomes effective under the 1933 Act, as the case may be, contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Section 3.10 Absence of Certain Changes. (a) Except as set forth on
Section 3.10 of the Lucent Disclosure Letter, from the Lucent Balance Sheet
Date to the date of this Agreement, Lucent and its Subsidiaries have conducted
their business in the ordinary course consistent with past practice and there
has not been:
(i) any event, occurrence, change or development of a state
of circumstances or facts which has had, individually or in the
aggregate, a Material Adverse Effect on Lucent; or
(ii) any action taken by Lucent or any Subsidiary of Lucent
that, if taken on or after the date of this Agreement, would conflict
with or constitute a violation of Section 5.01 (other than clauses
(c) or (g) of Section 5.01).
(b) Since the date of this Agreement, there shall not have been
any event, occurrence, change or development of a state of circumstances or
facts which has had, individually or in the aggregate, a Material Adverse
Effect on Lucent.
Section 3.11 No Undisclosed Material Liabilities. There are no
material liabilities of Lucent or any Subsidiary of Lucent of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, other than:
(a) liabilities disclosed or provided for in Lucent Balance
Sheet or in the notes thereto;
(b) liabilities incurred in the ordinary course of business
since the Lucent Balance Sheet Date which would not, individually or in the
aggregate, have a Material Adverse Effect on Lucent;
(c) liabilities disclosed in the Filed Lucent SEC Documents or
set forth on Section 3.11(c) of the Lucent Disclosure Letter; and
(d) liabilities arising, or expressly permitted to be incurred,
under this Agreement (including Section 5.01).
Section 3.12 Investigation; Litigation. Except as set forth on
Section 3.12 of the Lucent Disclosure Letter, as of the date of this
Agreement, (a) there is no investigation or review pending or, to the
knowledge of Lucent, threatened by any governmental body, agency or official
with respect to Lucent or any of its Subsidiaries; and (b) there is no action,
suit, claim, investigation or proceeding pending against or, to the knowledge
of Lucent, threatened against or affecting Lucent or any of its Subsidiaries
or any of their respective properties or assets before any court or arbitrator
or any governmental body, agency or official, in each of cases (a) and (b)
which would, individually or in the aggregate, have a Material Adverse Effect
on Lucent.
Section 3.13 Taxes. (a) Except as set forth in the Lucent SEC
Documents (including the notes thereto) or as otherwise set forth on Section
3.13 of the Lucent Disclosure Letter or as would not, individually or in the
aggregate, have a Material Adverse Effect on Lucent: (i) all Tax Returns
required to be filed with any taxing authority by, or with respect to, Lucent
and its Subsidiaries (and any affiliated or unitary group of which any such
Person was a member) have been filed in accordance with all applicable laws
and, as of the time of filing, such Tax Returns correctly reflected the facts
regarding the income, business, assets, operations, activities and the status
of Lucent and its Subsidiaries; (ii) Lucent and its Subsidiaries (and any
affiliated or unitary group of which any such Person was a member) have timely
and duly paid all Taxes required to be paid by any of them; (iii) Lucent and
its Subsidiaries (and any affiliated or unitary group of which any such Person
was a member) have timely withheld and paid over to the proper taxing
authorities all Taxes and other amounts required to be so withheld and paid
over; (iv) Lucent and its Subsidiaries have made provision for all Taxes
payable by Lucent and its Subsidiaries for which no Tax Return has yet been
filed; (v) the charges, accruals and reserves for Taxes with respect to Lucent
and its Subsidiaries reflected on the Lucent Balance Sheet are adequate under
US GAAP to cover the Tax liabilities accruing through the date thereof; (vi)
there is no action, suit, proceeding, audit or claim now proposed in writing
or pending against or with respect to Lucent or any of its Subsidiaries in
respect of any Tax where there is a reasonable possibility of an adverse
determination; (vii) neither Lucent nor any of its Subsidiaries is liable for
any Tax imposed on any entity other than such Person, except as the result of
the application of Treas. Reg. ss. 1.1502-6 (and any comparable provision of
the tax laws of any state, local or foreign jurisdiction) to the affiliated
group of which Lucent is the common parent; (viii) neither Lucent nor any of
its Subsidiaries is a party to, is bound by or has any obligation under any
tax sharing or similar agreement or arrangement; (ix) Lucent is not and has
not been, a United States Real Property Holding Corporation within the meaning
of Section 897(c)(2) of the Code during the applicable period set forth in
Section 897(c)(1)(A)(ii) of the Code; and (x) there are no liens for Taxes
upon any asset of Lucent or any of its Subsidiaries except for liens for Taxes
not yet due.
(b) Except as disclosed in Section 3.13(b) of the Lucent
Disclosure Letter, and except as to matters the substance and maximum
potential liability for Taxes in respect of which both have been (1)
previously disclosed to Alcatel and (2) fully and independently reserved for
on the Lucent Balance Sheet, neither Lucent nor any of its Subsidiaries has
participated in any material "listed transaction" within the meaning of
Treasury Regulation Section 1.6011-4 for any taxable year as to which the
statute of limitations has not expired.
(c) Neither Lucent nor any of its Subsidiaries has taken or
agreed to take any action or knows of any fact, agreement, plan or other
circumstance that is reasonably likely to (i) prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the
Code or (ii) cause the stockholders of Lucent to recognize gain pursuant to
Section 367(a)(1) of the Code other than any such stockholder that would be a
"five-percent transferee shareholder" of Alcatel (within the meaning of United
States Treasury Regulations Section 1.367(a)-3(c)(5)(ii)) following the Merger
that does not enter into a five-year gain recognition agreement in the form
provided in Treasury Regulation Section 1.367(a)-8(b).
For purposes of this Agreement, "Taxes" shall mean any and all taxes,
charges, fees, levies or other assessments, including, without limitation, all
net income, gross income, gross receipts, excise, stamp, real or personal
property, ad valorem, withholding, social security (or similar), unemployment,
occupation, use, service, service use, license, net worth, payroll, franchise,
severance, transfer, recording, employment, premium, windfall profits,
environmental (including taxes under Section 59A of the Code), customs duties,
capital stock, profits, disability, sales, registration, value added,
alternative or add-on minimum, estimated or other taxes, assessments or
charges imposed by any federal, state, local or foreign governmental entity
and any interest, penalties, or additions to tax attributable thereto. For
purposes of this Agreement, "Tax Returns" shall mean any return, report, form
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.
Section 3.14 Employee Benefit Plan; Employment and Labor Matters. (a)
For purposes of this Agreement, "Lucent Employee Plan" shall mean each
material "employee benefit plan," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), each material
employment, severance or similar contract, plan, arrangement or policy
applicable to any director, former director, employee or former employee of
Lucent or any of its Subsidiaries and each material plan or arrangement,
providing for compensation, bonuses, profit-sharing, stock option or other
stock related rights or other forms of incentive or deferred compensation,
vacation benefits, insurance coverage (including any self-insured
arrangements), health or medical benefits, disability benefits, workers'
compensation, supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits (including compensation, pension,
health, medical or life insurance benefits) which is maintained, administered
or contributed to by Lucent or any of its Subsidiaries and covers any employee
or director or former employee or director of Lucent or any of its
Subsidiaries, or under which Lucent or any of its Subsidiaries has any
liability, other than statutorily mandated plans or "multiemployer plans," as
defined in Section 3(37) of ERISA ("Multiemployer Plans"). Except as set forth
on Section 3.14(a) of the Lucent Disclosure Letter, neither Lucent nor any of
its Subsidiaries contributes to a Multiemployer Plan in the United States.
(b) Except as set forth on Section 3.14(b) of the Lucent
Disclosure Letter, each Lucent Employee Plan has been maintained in compliance
with its terms and with the requirements prescribed by any and all statutes,
orders, rules and regulations (including but not limited to ERISA and the
Code) which are applicable to such plan, except where failure to so comply
would not, individually or in the aggregate, have a Material Adverse Effect on
Lucent.
(c) Neither Lucent nor any affiliate of Lucent has incurred a
material liability under Title IV of ERISA that has not been satisfied in
full, and no condition exists that presents a material risk to Lucent or any
affiliate of Lucent of incurring any such liability other than liability for
premiums due the Pension Benefit Guaranty Corporation (which premiums have
been paid when due).
(d) Except as set forth on Section 3.14(d) of the Lucent
Disclosure Letter, with respect to each Lucent Employee Plan which is intended
to be qualified under Section 401(a) of the Code either the Internal Revenue
Service has issued a favorable determination letter that has not been revoked,
or an application for a favorable determination letter was timely submitted to
the Internal Revenue Service for which no final action has been taken by the
Internal Revenue Service.
(e) Except as set forth on Section 3.14(e) of the Lucent
Disclosure Letter, and except for liabilities that are statutorily mandated,
or that would not, on an individual basis, exceed $500,000, no director or
officer or other employee of Lucent or any of its Subsidiaries will become
entitled to any retirement, severance or similar benefit or enhanced or
accelerated benefit (including enhanced eligibility for severance benefits,
eligibility for enhanced severance benefits, any acceleration of vesting or
lapse of repurchase rights or obligations with respect to any employee stock
option or other benefit under any stock option plan or compensation plan or
arrangement of Lucent) as a result of the transactions contemplated hereby
(either alone or as a result of a termination of employment benefit which is a
"change of control" benefit).
(f) Section 3.14(f) of the Lucent Disclosure Letter lists each
material United States collective bargaining agreement to which Lucent or any
of its Subsidiaries is a party or which is otherwise applicable to any of
their respective employees. The consummation of the transactions contemplated
by this Agreement will not give rise to any obligation to pay any amounts
under, or permit any union or similar labor organization to open negotiations
with respect to the terms of, any such United States collective bargaining
agreement.
(g) Except for such matters which would not have, individually
or in the aggregate, a Material Adverse Effect on Lucent, or as set forth on
Section 3.14(g) of the Lucent Disclosure Letter, (i) as of the date of this
Agreement, (1) there are no strikes or lockouts with respect to any employees
of Lucent or any of its Subsidiaries, (2) to the knowledge of Lucent, there is
no union organizing effort pending or threatened against Lucent or any of its
Subsidiaries, (3) there is no unfair labor practice, labor dispute (other than
routine individual grievances) or labor arbitration proceeding pending or, to
the knowledge of Lucent, threatened against Lucent or any of its Subsidiaries,
and (4) there is no slowdown, or work stoppage in effect or, to the knowledge
of Lucent, threatened with respect to any employees of Lucent or any of its
Subsidiaries and (ii) Lucent and its Subsidiaries are in compliance with all
applicable laws respecting employment, employment practices, labor,
occupational safety and health and wages and hours, including all civil rights
and anti-discrimination laws, rules and regulations and laws concerning unfair
labor practices.
Section 3.15 Compliance with Laws. (a) Since January 1, 2003, Lucent
and its Subsidiaries have conducted their respective businesses in compliance
with all applicable laws, statutes, ordinances, rules, judgments, orders,
decrees or regulations, except for any violations that, individually or in the
aggregate, would not have a Material Adverse Effect on Lucent. No personal
loan or other extension of credit by Lucent or any of its Subsidiaries to any
of their respective executive officers or directors has been made or modified
(other than as permitted by Section 13 of the Exchange Act and Section 402 of
the Xxxxxxxx-Xxxxx Act) since July 31, 2002. This Section 3.15 does not relate
to Taxes, which are the subject of Section 3.13, to environmental matters,
which are the subject of Section 3.16, or to matters relating to Intellectual
Property, which are the subject of Section 3.17.
(b) Except as set forth on Section 3.15(b) of the Lucent
Disclosure Letter, from January 1, 2003 to the date of this Agreement and to
the best of their knowledge, information and belief, Lucent and its
Subsidiaries, and their respective officers, directors, employees and agents
have not corruptly made, promised, offered, or authorized any payment or
transfer of anything of value, directly or indirectly, to any government
official, employee or agent for the purpose of (i) influencing such government
official, employee or agent to take any action or decision or to omit to take
any action, in his or her official capacity, (ii) inducing such government
official, employee or agent to use his or her influence with a government or
instrumentality to affect any act or decision of the government or
instrumentality, or (iii) securing any improper advantage.
(c) From January 1, 2003 to the date of this Agreement and to
the best of their knowledge, information and belief, Lucent and its
Subsidiaries have not caused any of their respective consultants, joint
venture partners and/or representatives (including resellers), in connection
with its relationship with Lucent or any of its Subsidiaries, to corruptly
make, promise, offer, or authorize any payment or transfer of anything of
value, directly or indirectly, to any government official, employee or agent
for the purpose of (i) influencing such government official, employee or agent
to take any action or decision or to omit to take any action, in his or her
official capacity, (ii) inducing such government official, employee or agent
to use his or her influence with a government or instrumentality to affect any
act or decision of the government or instrumentality, or (iii) securing any
improper advantage.
Section 3.16 Environmental Matters.
(a) Except as set forth on Section 3.16 of the Lucent
Disclosure Letter:
(i) Lucent is in compliance with all applicable
Environmental Laws (which compliance includes the possession by
Lucent of all permits and other governmental authorizations required
under applicable Environmental Laws, and compliance with the terms
and conditions thereof), except where failure to be in compliance
would not, individually or in the aggregate, have a Material Adverse
Effect on Lucent;
(ii) there is no Environmental Claim pending or threatened
against Lucent or, to the best knowledge of Lucent, against any
Person whose liability for any Environmental Claim Lucent has or may
have retained or assumed either contractually or by operation of law,
except for any such Environmental Claims which would not,
individually or in the aggregate, have a Material Adverse Effect on
Lucent;
(iii) there are no past or present actions, activities,
circumstances, conditions, events or incidents, including the Release
or presence of any Hazardous Material, which could form the basis of
any Environmental Claim against Lucent or, to the best knowledge of
Lucent, against any Person whose liability for any Environmental
Claim Lucent has or may have retained or assumed either contractually
or by operation of law which would, individually or in the aggregate,
have a Material Adverse Effect on Lucent; and
(iv) there is no Cleanup of Hazardous Materials being
conducted or planned at any property currently or formerly owned or
operated by Lucent, except for such Cleanups which would not,
individually or in the aggregate have a Material Adverse Effect on
Lucent.
(b) For purposes of this Agreement:
(i) "Cleanup" means all actions required to: (A) cleanup,
remove, treat or remediate Hazardous Materials in the indoor or
outdoor environment; (B) prevent the Release of Hazardous Materials
so that they do not migrate, endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment; (C) perform
pre-remedial studies and investigations and post-remedial monitoring
and care; or (D) respond to any government requests for information
or documents in any way relating to cleanup, removal, treatment or
remediation or potential cleanup, removal, treatment or remediation
of Hazardous Materials in the indoor or outdoor environment.
(ii) "Environmental Claim" means any claim, action, cause
of action, investigation or notice (written or oral) by any Person
alleging potential liability (including potential liability for
investigatory costs, Cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries, or
penalties) arising out of, based on or resulting from (a) the
presence or Release of any Hazardous Materials at any location,
whether or not owned or operated by Lucent or Alcatel, or (b)
circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law.
(iii) "Environmental Laws" means all federal, state, local
and foreign laws and regulations relating to pollution or protection
of human health or the environment, including laws relating to
Releases or threatened Releases of Hazardous Materials or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, Release, disposal, transport or handling of
Hazardous Materials and all laws and regulations with regard to
recordkeeping, notification, disclosure and reporting requirements
respecting Hazardous Materials.
(iv) "Hazardous Materials" means all substances defined as
Hazardous Substances, Oils, Pollutants or Contaminants in the
National Oil and Hazardous Substances Pollution Contingency Plan, 40
C.F.R. ss. 300.5, or defined as such by, or regulated as such under,
any Environmental Law.
(v) "Release" means any release, spill, emission,
discharge, leaking, pumping, injection, deposit, disposal, dispersal,
leaching or migration into the indoor or outdoor environment
(including ambient air, surface water, groundwater and surface or
subsurface strata) or into or out of any property, including the
movement of Hazardous Materials through or in the air, soil, surface
water, groundwater or property.
Section 3.17 Intellectual Property.
(a) For purposes of this Agreement, the term "Intellectual
Property" means all registered and unregistered service marks, trademarks,
trade names, corporate names, trade dress, Internet domain names, identifying
symbols, logos, emblems, signs or insignia, including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith; all inventions (whether patentable or unpatentable and whether or
not reduced to practice), and all U.S. and foreign patents, patent
applications, and patent disclosures (and all rights related thereto,
including all reissues, divisions, continuations, continuations-in-part,
substitutions, extensions, or renewals of any of the foregoing); all
copyrights, and all applications, registrations, and renewals in connection
therewith; all computer programs, including any and all software
implementations of algorithms, models and methodologies whether in source code
or object code form, databases and compilations, including any and all data
and collections of data, all documentation, including user manuals and
training materials, related to any of the foregoing and the content and
information contained on any web site; all confidential information,
technology, know-how, inventions, processes, formulae, algorithms, models and
methodologies (such confidential items, collectively "Trade Secrets"); and any
licenses to use any of the foregoing.
(b) Except as set forth on Section 3.17(b) of the Lucent
Disclosure Letter or as would not, individually or in the aggregate, have a
Material Adverse Effect on Lucent:
(i) Lucent, or one of its Subsidiaries, owns or possesses
adequate licenses or other legal rights to use, sell or license all
Intellectual Property used in the present conduct of the businesses
of Lucent and its Subsidiaries, free and clear of all Liens other
than Liens in respect of the Collateral Agreements;
(ii) no claims or, to the knowledge of Lucent, threat of
claims have been asserted by any Person related to the use of any
Intellectual Property in the conduct of the businesses of Lucent and
its Subsidiaries;
(iii) no settlement agreements, consents, judgments,
orders, forbearance to xxx or similar obligations limit or restrict
Lucent's or any Subsidiary's rights in and to any Intellectual
Property, other than the granting of a license or a covenant not to
xxx;
(iv) it is the policy of Lucent and its Subsidiaries to
not knowingly infringe any valid Intellectual Property right of any
Person, and Lucent and its Subsidiaries have, to Lucent and its
Subsidiaries' knowledge, abided by their policy of not knowingly
infringing any valid Intellectual Property right of any Person;
(v) to the knowledge of Lucent, no third party is
infringing or otherwise violating any Intellectual Property owned by
Lucent or its Subsidiaries;
(vi) Lucent and its Subsidiaries take reasonable measures
to protect the confidentiality of their Trade Secrets. To the
knowledge of Lucent, no Trade Secret of Lucent or its Subsidiaries
has been disclosed or authorized to be disclosed to any third party
other than pursuant to a written nondisclosure agreement that
adequately protects Lucent's and its Subsidiaries' proprietary
interests in and to such Trade Secrets;
(vii) the consummation of the transactions as specified
herein will not result in the loss or impairment of Lucent's and its
Subsidiaries' rights to own or use any of the Intellectual Property
nor will such consummation require the consent of any third party in
respect of any such Intellectual Property; and
(viii) Lucent and its Subsidiaries have conducted their
respective businesses in compliance with all applicable laws,
statutes, ordinances and regulations relating to, or in respect of,
Intellectual Property.
Section 3.18 Vendor Financing. Section 3.18 of the Lucent Disclosure
Letter contains a true, complete and accurate list, as of the date of this
Agreement, of (i) all financing arrangements (including loans, deferred
payment arrangements in excess of one year and equity-linked arrangements) to
customers (including distributors to customers) or vendors of Lucent or any of
its Subsidiaries which have been provided by Lucent and/or any of its
Subsidiaries or are guaranteed (including by guarantee to an institution
providing such loan), secured or supported in any respect by Lucent and/or any
of its Subsidiaries (collectively, "Lucent Vendor Financing") with an
aggregate principal amount of financing or available commitment greater than
$25,000,000 and (ii) all contracts, agreements, commitments and other
arrangements relating to Lucent Vendor Financing with an aggregate principal
amount of financing or available commitment greater than $25,000,000.
Section 3.19 Takeover Statutes. The Board of Directors of Lucent has
taken the necessary action to make inapplicable to this Agreement, the Merger
and the other transactions contemplated hereby Section 203 of the Delaware Law
and any other applicable antitakeover or similar statute or regulation.
Section 3.20 Finders' or Advisors' Fees. Except for X.X. Xxxxxx
Securities Inc. and Xxxxxx Xxxxxxx & Co., there is no investment banker,
broker, finder or other intermediary which has been retained by or is
authorized to act on behalf of Lucent or any of its Subsidiaries who might be
entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.
Section 3.21 Opinions of Financial Advisors. Lucent has received the
opinion of each of X.X. Xxxxxx Securities Inc. and Xxxxxx Xxxxxxx & Co. to the
effect that, as of the date of this Agreement, the Exchange Ratio is fair,
from a financial point of view, to the holders of Shares (other than Alcatel
or any of its Subsidiaries or affiliates).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ALCATEL
-----------------------------------------
Except as set forth in any Alcatel SEC Document (as defined in
Section 4.07(a)), filed and publicly available prior to the date of this
Agreement (the "Filed Alcatel SEC Documents"), excluding any disclosure in
such Filed Alcatel SEC Document set forth in any risk factor section and in
any section relating to forward-looking statements, and except as set forth in
the Alcatel Disclosure Letter (subject to Section 10.11(b)), Alcatel
represents and warrants to Lucent that:
Section 4.01 Corporate Organization. Alcatel is a societe anonyme
duly organized, validly existing and in good standing under the laws of the
Republic of France. Alcatel has all powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted, except for those the absence of which would not, individually
or in the aggregate, have a Material Adverse Effect on Alcatel. Merger
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware. Merger Subsidiary has all
corporate powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted, except for those
the absence of which would not, individually or in the aggregate, have a
Material Adverse Effect on Merger Subsidiary. Alcatel is duly qualified to do
business and is in good standing in each jurisdiction (to the extent such
concepts exist in such jurisdictions) where the character of the property
owned, operated or leased by it or the nature of its activities makes such
qualification necessary, except for those jurisdictions where the failure to
be so qualified or be in good standing would not, individually or in the
aggregate, have a Material Adverse Effect on Alcatel. Since the date of its
incorporation, Merger Subsidiary has not engaged in any activities other than
in connection with or as contemplated by this Agreement. Alcatel has made
available to Lucent true and complete copies of Alcatel's articles of
association and by-laws as currently in effect and Merger Subsidiary's
certificate of incorporation and by-laws as currently in effect.
Section 4.02 Corporate Authorization. (a) The execution, delivery and
performance by Alcatel and Merger Subsidiary of this Agreement and the
consummation by Alcatel and Merger Subsidiary of the transactions contemplated
hereby are within the powers of Alcatel and Merger Subsidiary and have been
duly authorized by all necessary corporate or other action, except for the
affirmative vote of the holders representing more than 50% (in the case of
clause (iv) below) or two-thirds (in the case of clauses (i)-(iii) below), as
applicable, of the voting rights attached to the Alcatel Ordinary Shares cast
at the Alcatel Shareholder Meeting (as defined in Section 6.04), authorizing
and approving: (i) the issuance of Alcatel Ordinary Shares in connection with
the Merger pursuant to L225-148 of the French Commercial Code, (ii) the
issuance of ADSs and Alcatel Ordinary Shares for delivery upon the exercise or
settlement of Lucent Stock Options or instruments, and upon exercise or
conversion of Lucent Warrants, Lucent Convertible Debt and Lucent Stock-Based
Accounts, (iii) the adoption of the New Alcatel By-Laws, and (iv) the election
of the members of the Board of Directors contemplated by Section 2.02(a)
(collectively, the "Alcatel Shareholder Approval"). This Agreement has been
duly and validly executed and delivered by each of Alcatel and Merger
Subsidiary and, assuming that this Agreement constitutes the valid and binding
agreement of Lucent, constitutes a valid and binding agreement of each of
Alcatel and Merger Subsidiary enforceable against such party in accordance
with its terms. The ADSs and the underlying Alcatel Ordinary Shares issued
pursuant to the Merger, when issued in accordance with the terms of this
Agreement, will be duly authorized, validly issued and fully paid (and, with
respect to the ADSs nonassessable), and not subject to preemptive rights.
(b) Alcatel's Board of Directors, at a meeting duly called and
held, has (i) determined that this Agreement and the transactions contemplated
hereby (including the Merger) are in the best interests of Alcatel, (ii) duly
and validly approved and adopted this Agreement and the transactions
contemplated hereby (including the Merger), and (iii) resolved (subject to
Section 6.04) to recommend to its shareholders the approval of the matters
constituting the Alcatel Shareholder Approval.
(c) The Alcatel Shareholder Approval is the only vote of the
holders of any class or series of Alcatel's capital stock necessary under
applicable law to approve and adopt the matters constituting the Alcatel
Shareholder Approval.
Section 4.03 Governmental Authorization. The execution, delivery and
performance by Alcatel and Merger Subsidiary of this Agreement and the
consummation by Alcatel and Merger Subsidiary of the transactions contemplated
hereby (including the Merger) require no action by or in respect of, or filing
with, any governmental body, agency, official or authority other than (a) the
filing of a certificate of merger in accordance with Delaware Law, (b)
compliance with any applicable requirements of the HSR Act, (c) compliance
with any applicable requirements of the EC Merger Regulation, (d) compliance
with any applicable requirements of any other foreign antitrust laws or
regulations, (e) compliance with any applicable requirements of the Exchange
Act, (f) compliance with any applicable requirements of the 1933 Act, (g)
compliance with French securities regulatory requirements, including those of
the AMF, (h) compliance with any applicable requirements of the Exon-Xxxxxx
Act and (i) other actions or filings which if not taken or made would not,
individually or in the aggregate, have a Material Adverse Effect on Alcatel.
Section 4.04 Non-Contravention. Except as set forth on Section 4.04
of the separate disclosure letter delivered by Alcatel to Lucent dated as of
the date of this Agreement (the "Alcatel Disclosure Letter"), the execution,
delivery and performance by Alcatel and Merger Subsidiary of this Agreement
and the consummation by Alcatel and Merger Subsidiary of the transactions
contemplated hereby do not and will not (a) assuming receipt of Alcatel
Shareholder Approval, contravene or conflict with or constitute a violation of
the articles of association and by-laws of Alcatel or the certificate of
incorporation or by-laws or equivalent organizational documents of any of its
Subsidiaries (including Merger Subsidiary), (b) assuming compliance with the
matters referred to in Section 4.03, contravene or conflict with or constitute
a violation of any provision of any law, regulation, judgment, injunction,
order or decree binding upon or applicable to Alcatel or any of its
Subsidiaries, (c) constitute a violation of or default under or give rise to
any right of termination, cancellation or acceleration of any right or
obligation of Alcatel or any of its Subsidiaries or to a loss of any benefit
to which Alcatel or any of its Subsidiaries is entitled under any provision of
any agreement, contract or other instrument binding upon Alcatel or any of its
Subsidiaries or any license, franchise, permit or other similar authorization
held by Alcatel or any of its Subsidiaries or (d) result in the creation or
imposition of any Lien on any asset of Alcatel or any of its Subsidiaries,
except for such contraventions, conflicts or violations referred to in clause
(b) or violations, defaults, rights of termination, cancellation or
acceleration, or losses or Liens referred to in clause (c) or (d) that would
not, individually or in the aggregate, have a Material Adverse Effect on
Alcatel. Except as disclosed in Section 4.04 of the Alcatel Disclosure Letter,
neither Alcatel nor any Subsidiary of Alcatel is a party to any agreement that
expressly limits the ability of Alcatel or any Subsidiary of Alcatel to
compete in or conduct any line of business or compete with any Person or in
any geographic area or during any period of time, in each case, if such
limitation is or is reasonably likely to be material to Alcatel and its
Subsidiaries, taken as a whole.
Section 4.05 Capitalization of Alcatel. As of February 24, 2006, the
issued capital stock of Alcatel consists of 1,429,278,636 shares with a
nominal value of (euro)2 per share, all of which are Alcatel Ordinary Shares.
As of the close of business on February 24, 2006, (i) there were 143,700,120
ADSs representing an aggregate of 143,700,120 Alcatel Ordinary Shares issued
and outstanding, (ii) there were 115,539,007 Alcatel Ordinary Shares that
could be issued pursuant to Alcatel's stock option incentive plans and share
subscription options set forth on Section 4.05 of the Alcatel Disclosure
Letter (collectively, the "Alcatel Stock Option Plans"), (iii) there were
2,719,130 Alcatel Ordinary Shares that could be issued upon redemption of
bonds issued by a subsidiary of Alcatel and redeemable for Alcatel Ordinary
Shares, and (iv) there were 63,192,019 Alcatel Ordinary Shares that could be
issued upon conversion of convertible bonds issued by Alcatel. All outstanding
shares of capital stock of Alcatel have been duly authorized and validly
issued and are fully paid. Except as set forth in this Section 4.05 and except
for changes since the close of business on February 24, 2006, resulting from
the exercise of employee stock options outstanding on such date or options or
other stock-based awards granted thereafter and except for the shares to be
issued in connection with the Merger, there are outstanding (a) no shares of
capital stock or other voting securities of Alcatel, (b) no securities of
Alcatel convertible into or exchangeable for shares of capital stock or voting
securities of Alcatel, and (c) no options, warrants or other rights to acquire
from Alcatel, and no preemptive or similar rights, subscription or other
rights, convertible securities, agreements, arrangements, or commitments of
any character, relating to the capital stock of Alcatel, obligating Alcatel to
issue, transfer or sell any capital stock, voting security or securities
convertible into or exchangeable for capital stock or voting securities of
Alcatel or obligating Alcatel to grant, extend or enter into any such option,
warrant, subscription or other right, convertible security, agreement,
arrangement or commitment (the items in clauses (a), (b) and (c) being
referred to collectively as the "Alcatel Securities"). There are no
outstanding obligations of Alcatel or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any Alcatel Securities.
Section 4.06 Subsidiaries. (a) Each Subsidiary of Alcatel is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization (to the extent such concepts exist in such
jurisdictions), has all powers and all governmental licenses, authorizations,
permits, consents and approvals required to carry on its business as now
conducted, except for those licenses, authorizations, consents and approvals
the absence of which would not, individually or in the aggregate, have a
Material Adverse Effect on Alcatel. Each Subsidiary of Alcatel is duly
qualified to do business and is in good standing in each jurisdiction (to the
extent such concepts exist in such jurisdictions) where the character of the
property owned, operated or leased by it or the nature of its activities makes
such qualification necessary, except for those jurisdictions where failure to
be so qualified or in good standing would not, individually or in the
aggregate, have a Material Adverse Effect on Alcatel.
(b) Except as set forth on Section 4.06(b) of the Alcatel
Disclosure Letter, all of the outstanding capital stock of, or other ownership
interests in, each Subsidiary of Alcatel are owned by Alcatel, directly or
indirectly, free and clear of any material Lien and free of any other material
limitation or restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other ownership interests).
There are no outstanding (i) securities convertible into or exchangeable for
shares of capital stock or other voting securities or ownership interests in
any Subsidiary of Alcatel, and (ii) options, warrants, preemptive or similar
rights, subscriptions or other rights, convertible securities, agreements,
arrangements or commitments of any character, relating to the capital stock of
any Subsidiary of Alcatel, obligating Alcatel or any of its Subsidiaries to
issue, transfer or sell, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable for
any capital stock, voting securities or ownership interests in, any Subsidiary
of Alcatel or obligating Alcatel or any Subsidiary of Alcatel to grant, extend
or enter into any such option, warrant, subscription or other right,
convertible security, agreement, arrangement or commitment (the items in
clauses (i) and (ii) of this sentence being referred to in this Agreement
collectively as the "Alcatel Subsidiary Securities"). There are no outstanding
obligations of Alcatel or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any outstanding Alcatel Subsidiary Securities.
Section 4.07 SEC Filings. (a) Alcatel has made available to Lucent
(i) its annual reports on Form 20-F for its fiscal years ended December 31,
2003, 2004 and 2005, (ii) its proxy or information statements relating to
meetings, of, or actions taken without a meeting by, the shareholders of
Alcatel held since December 31, 2004, and (iii) all of its other reports,
statements, schedules and registration statements filed with the SEC since
December 31, 2005 (the documents referred to in this Section 4.07(a) being
referred to in this Agreement collectively as the "Alcatel SEC Documents").
(b) As of its filing date or, if amended prior to the date of
this Agreement, as of the date of the last such amendment prior to the date of
this Agreement, each Alcatel SEC Document complied as to form in all material
respects with the applicable requirements of the Exchange Act, the 1933 Act
and the Xxxxxxxx-Xxxxx Act.
(c) As of its filing date, or, if amended prior to the date of
this Agreement, as of the date of the last such amendment prior to the date of
this Agreement, each Alcatel SEC Document filed pursuant to the Exchange Act,
did not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
(d) Each registration statement constituting an Alcatel SEC
Document, as amended or supplemented, if applicable, filed with the SEC by
Alcatel pursuant to the 1933 Act as of the date such statement or amendment
became effective did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
(e) Alcatel has taken all steps necessary to establish a system
of "disclosure controls and procedures" and "internal control over financial
reporting" (as such terms are defined in paragraphs (e) and (f), respectively,
of Rule 13a-15 under the Exchange Act). Since December 31, 2005 to the date
hereof, Alcatel's independent auditors have not notified Alcatel or any of its
Subsidiaries of (A) any material weakness in the system of internal controls
utilized by Alcatel and its Subsidiaries, (B) any fraud, whether or not
material, that involves Alcatel's management or other employees who have a
role in the preparation of financial statements or the internal controls
utilized by Alcatel and its Subsidiaries or (C) any material claim or
allegation regarding any of the foregoing. The report of the Chairman of the
Board of Directors of Alcatel dated March 30, 2006, given pursuant to Article
L.225-37 of the French Commercial Code, accurately describes the design and
operation of Alcatel's system of internal control over financial reporting for
the period covered thereby.
(f) The "disclosure controls and procedures" (as defined in
Rules 13a-15(e) and 15d-15(e) of the Exchange Act) utilized by Alcatel are
reasonably designed to ensure that all information (both financial and
non-financial) required to be disclosed by Alcatel in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC,
and that all such information required to be disclosed is accumulated and
communicated to Alcatel's management as appropriate to allow timely decisions
regarding required disclosure and to enable the Chief Executive Officer and
Chief Financial Officer of Alcatel to make the certifications required under
the Exchange Act with respect to such reports.
Section 4.08 Financial Statements. The audited consolidated financial
statements of Alcatel (including any related notes and schedules) included in
its annual reports on Form 20-F for Alcatel's fiscal years ended December 31,
2003 and 2004 as referred to in Section 4.07(a)(i) fairly present in all
material respects, in conformity with generally accepted accounting principles
in France applied on a consistent basis (except as may be indicated in the
notes thereto), the consolidated financial position of Alcatel and its
consolidated Subsidiaries as of the dates thereof and their consolidated
results of operations and changes in financial position for the periods then
ended, and such audited consolidated financial statements are reconciled to US
GAAP as required by and in accordance with the requirements of the Exchange
Act. The audited consolidated financial statements of Alcatel (including any
notes and schedules) included in the annual report on Form 20-F for Alcatel's
fiscal year ended December 31, 2005 fairly present in all material respects,
in conformity with International Financial Reporting Standards ("IFRS")
(except as may be indicated in the notes thereto), the consolidated financial
position of Alcatel and its consolidated Subsidiaries as of the date thereof
and their consolidated results of operations and changes in financial position
for the period then ended, and such audited consolidated financial statements
are reconciled to US GAAP as required by and in accordance with the
requirements of the Exchange Act. For purposes of this Agreement, "Alcatel
Balance Sheet" means the consolidated balance sheet of Alcatel as of December
31, 2005 set forth in Alcatel's annual report on Form 20-F for Alcatel's
fiscal year ended December 31, 2005, and "Alcatel Balance Sheet Date" means
December 31, 2005.
Section 4.09 Disclosure Documents. (a) Subject to the last sentence
of Section 4.09(b), the Registration Statement on Form F-4 of Alcatel (the
"Form F-4")and the Registration Statement on Form F-6 of Alcatel (the "Form
F-6") to be filed under the 1933 Act relating to the issuance of ADSs in the
Merger and the issuance of Alcatel Ordinary Shares underlying such ADSs that
may be required to be filed with the SEC, and any amendments or supplements
thereto, will, when filed, subject to the last sentence of Section 4.09(b)),
comply as to form in all material respects with the applicable requirements of
the Exchange Act and the 1933 Act. The circular of Alcatel ("Alcatel
Circular") to be delivered to, or put at the disposal of, Alcatel's
shareholders in connection with obtaining the Alcatel Shareholder Approval at
the Alcatel Shareholder Meeting will, when provided to Alcatel's shareholders,
subject to the last sentence of Section 4.09(b), comply as to form and
substance in all material respects with the applicable requirements of French
securities regulations.
(b) None of the Alcatel Circular or any amendment or supplement
thereto, will, at the date on which the Alcatel Circular or any amendment or
supplement thereto is first mailed to shareholders of Alcatel or at the time
such shareholders vote on the matters constituting the Alcatel Shareholder
Approval, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Neither the Form
F-4, the Form F-6 nor any amendment or supplement thereto will at the time it
becomes effective under the 1933 Act or at the time of the Alcatel Shareholder
Meeting contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. Notwithstanding the foregoing, no
representation or warranty is made by Alcatel in this Section 4.09 with
respect to statements made or incorporated by reference therein based on
information supplied by or on behalf of Lucent for inclusion or incorporation
by reference in the Alcatel Circular, the Form F-4 or the Form F-6.
(c) None of the information supplied or to be supplied by or on
behalf of Alcatel for inclusion or incorporation by reference in the Lucent
Proxy Statement or any amendment or supplement thereto will, at the date on
which the Lucent Proxy Statement or any amendment or supplement thereto is
first mailed to stockholders of Lucent or at the time such stockholders vote
on the adoption of this Agreement, contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Section 4.10 Absence of Certain Changes. (a) From the Alcatel Balance
Sheet Date to the date of this Agreement, Alcatel and its Subsidiaries have
conducted their business in the ordinary course consistent with past practice
and there has not been:
(i) any event, occurrence, change or development of a
state of circumstances or facts which has had, individually or in the
aggregate, a Material Adverse Effect on Alcatel; or
(ii) any action taken by Alcatel or any Subsidiary that,
if taken on or after the date of this Agreement, would conflict with
or constitute a violation of Section 6.01 (other than clauses (c) or
(g) of Section 6.01).
(b) Since the date of this Agreement, there shall not have been any event,
occurrence, change or development of a state of circumstances or facts which
has had, individually or in the aggregate, a Material Adverse Effect on
Alcatel.
Section 4.11 No Undisclosed Material Liabilities. There are no
material liabilities of Alcatel or any Subsidiary of Alcatel of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, other than:
(a) liabilities disclosed or provided for in the Alcatel
Balance Sheet or in the notes thereto;
(b) liabilities incurred in the ordinary course of business
since the Alcatel Balance Sheet Date which would not, individually or in the
aggregate, have a Material Adverse Effect on Alcatel;
(c) liabilities disclosed in the Filed Alcatel SEC Documents or
set forth on Section 4.11(c) of the Alcatel Disclosure Letter; and
(d) liabilities arising, or expressly permitted to be incurred,
under this Agreement (including Section 6.01).
Section 4.12 Investigation; Litigation. Except as set forth on
Section 4.12 of the Alcatel Disclosure Letter, as of the date of this
Agreement (a) there is no investigation or review pending or, to the knowledge
of Alcatel, threatened by any governmental body, agency or official with
respect to Alcatel or any of its Subsidiaries; and (b) there is no action,
suit, claim, investigation or proceeding pending against or, to the knowledge
of Alcatel, threatened against or affecting Alcatel or any of its Subsidiaries
or any of their respective properties or assets before any court or arbitrator
or any governmental body, agency or official, in each of cases (a) and (b),
which would, individually or in the aggregate, have a Material Adverse Effect
on Alcatel.
Section 4.13 Taxes. (a) Except as set forth in the Alcatel SEC
Documents (including the notes thereto) or as otherwise set forth on Section
4.13 of the Alcatel Disclosure Letter or as would not, individually or in the
aggregate, have a Material Adverse Effect on Alcatel, (i) all Tax Returns
required to be filed with any taxing authority by, or with respect to, Alcatel
and its Subsidiaries (and any affiliated or unitary group of which any such
Person was a member) have been filed in accordance with all applicable laws
and, as of the time of filing, such Tax Returns correctly reflected the facts
regarding the income, business, assets, operations, activities and the status
of Alcatel and its Subsidiaries; (ii) Alcatel and its Subsidiaries (and any
affiliated or unitary group of which any such Person was a member) have timely
and duly paid all Taxes required to be paid by any of them; (iii) Alcatel and
its Subsidiaries (and any affiliated or unitary group of which any such Person
was a member) have timely withheld and paid over to the proper taxing
authorities all Taxes and other amounts required to be so withheld and paid
over; (iv) Alcatel and its Subsidiaries have made provision for all Taxes
payable by Alcatel and its Subsidiaries for which no Tax Return has yet been
filed; (v) the charges, accruals and reserves for Taxes with respect to
Alcatel and its Subsidiaries reflected on the Alcatel Balance Sheet are
adequate under IFRS to cover the Tax liabilities accruing through the date
thereof; (vi) there is no action, suit, proceeding, audit or claim now
proposed in writing or pending against or with respect to Alcatel or any of
its Subsidiaries in respect of any Tax where there is a reasonable possibility
of an adverse determination; (vii) neither Alcatel nor any of its Subsidiaries
is liable for any Tax imposed on any entity other than such Person, except as
the result of the application of Treas. Reg. ss. 1.1502-6 (and any comparable
provision of the tax laws of any state, local or foreign jurisdiction) to the
group of which Alcatel is the common parent; (viii) neither Alcatel nor any of
its Subsidiaries is a party to, is bound by or has any obligation under any
tax sharing or similar agreement or arrangement; and (ix) there are no liens
for Taxes upon any asset of Alcatel or any of its Subsidiaries except for
liens for Taxes not yet due.
(b) Except as disclosed in Section 4.13(b) of the Alcatel
Disclosure Letter, and except as to matters the substance and maximum
potential liability for Taxes in respect of which both have been (1)
previously disclosed to Lucent and (2) fully and independently reserved for on
the Alcatel Balance Sheet, neither Alcatel nor any of its Subsidiaries has
participated in any material "listed transaction" within the meaning of
Treasury Regulation Section 1.6011-4 for any taxable year as to which the
statute of limitations has not expired.
(c) Neither Alcatel nor any of its Subsidiaries has taken or
agreed to take any action or knows of any fact, agreement, plan or other
circumstance that is reasonably likely to (i) prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the
Code or (ii) cause the stockholders of Lucent to recognize gain pursuant to
Section 367(a)(1) of the Code, other than any such stockholder that would be a
"five-percent transferee shareholder" of Alcatel (within the meaning of United
States Treasury Regulations Section 1.367(a)-3(c)(5)(ii)) following the Merger
that does not enter into a five-year gain recognition agreement in the form
provided in Treasury Regulation Section 1.367(a) - 8(b).
Section 4.14 Employee Benefit Plans; Employment and Labor Matters.
(a) For purposes of this Agreement, "Alcatel Employee Plan" shall mean each
material "employee benefit plan," as defined in Section 3(3) of ERISA, each
material employment, severance or similar contract, plan, arrangement or
policy applicable to any director, former director, employee or former
employee of Alcatel or any of its Subsidiaries and each material plan or
arrangement, providing for compensation, bonuses, profit-sharing, stock option
or other stock related rights or other forms of incentive or deferred
compensation, vacation benefits, insurance coverage (including any
self-insured arrangements), health or medical benefits, disability benefits,
workers' compensation, supplemental unemployment benefits, severance benefits
and post-employment or retirement benefits (including compensation, pension,
health, medical or life insurance benefits) which is maintained, administered
or contributed to by Alcatel or any of its Subsidiaries and covers any
employee or director or former employee or director of Alcatel or any of its
Subsidiaries, or under which Alcatel or any of its Subsidiaries has any
liability, other than statutorily mandated plans or Multiemployer Plans.
Neither Alcatel nor any of its Subsidiaries contributes to a Multiemployer
Plan in the United States.
(b) Each Alcatel Employee Plan has been maintained in
compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations (including but not limited to ERISA
and the Code) which are applicable to such plan, except where failure to so
comply would not, individually or in the aggregate, have a Material Adverse
Effect on Alcatel.
(c) Neither Alcatel nor any affiliate of Alcatel has incurred a
material liability under Title IV of ERISA that has not been satisfied in
full, and no condition exists that presents a material risk to Alcatel or any
affiliate of Alcatel of incurring any such liability other than liability for
premiums due the Pension Benefit Guaranty Corporation (which premiums have
been paid when due).
(d) Each Alcatel Employee Plan which is intended to be
qualified under Section 401(a) of the Code either the Internal Revenue Service
has issued a favorable determination letter that has not been revoked, or an
application for a favorable determination letter was timely submitted to the
Internal Revenue Service for which no final action has been taken by the
Internal Revenue Service.
(e) Except for liabilities that are statutorily mandated, or
that would not, on an individual basis, exceed $500,000, no director or
officer or other employee of Alcatel or any of its Subsidiaries will become
entitled to any retirement, severance or similar benefit or enhanced or
accelerated benefit (including enhanced eligibility for severance benefits,
eligibility for enhanced severance benefits, any acceleration of vesting or
lapse of repurchase rights or obligations with respect to any employee stock
option or other benefit under any stock option plan or compensation plan or
arrangement of Alcatel) as a result of the transactions contemplated hereby
(either alone or as a result of a termination of employment benefit which is a
"change of control" benefit).
(f) Section 4.14(f) of the Alcatel Disclosure Letter lists each
material United States collective bargaining agreement to which Alcatel or any
of its Subsidiaries is a party or which is otherwise applicable to any of
their respective employees. The consummation of the transactions contemplated
by this Agreement will not give rise to any obligation to pay any amounts
under, or permit any union or similar labor organization to open negotiations
with respect to the terms of, any such United States collective bargaining
agreement.
(g) Except for such matters which would not have, individually
or in the aggregate, a Material Adverse Effect on Alcatel, (i) as of the date
of this Agreement, (1) there are no strikes or lockouts with respect to any
employees of Alcatel or any of its Subsidiaries, (2) to the knowledge of
Alcatel, there is no union organizing effort pending or threatened against
Alcatel or any of its Subsidiaries, (3) there is no unfair labor practice,
labor dispute (other than routine individual grievances) or labor arbitration
proceeding pending or, to the knowledge of Alcatel, threatened against Alcatel
or any of its Subsidiaries, and (4) there is no slowdown, or work stoppage in
effect or, to the knowledge of Alcatel, threatened with respect to any
employees of Alcatel or any of its Subsidiaries and (ii) Alcatel and its
Subsidiaries are in compliance with all applicable laws respecting employment,
employment practices, labor, occupational safety and health and wages and
hours, including all civil rights and anti-discrimination laws, rules and
regulations and laws concerning unfair labor practices.
Section 4.15 Compliance with Laws. (a) Since January 1, 2003, Alcatel
and its Subsidiaries have conducted their respective businesses in compliance
with all applicable laws, statutes, ordinances, rules, judgments, orders,
decrees or regulations, except for any violations that, individually or in the
aggregate, would not have a Material Adverse Effect on Alcatel. No personal
loan or other extension of credit by Alcatel or any of its Subsidiaries to any
of their respective executive officers or directors has been made or modified
(other than as permitted by Section 13 of the Exchange Act and Section 402 of
the Xxxxxxxx-Xxxxx Act) since July 31, 2002. This Section 4.15 does not relate
to Taxes, which are the subject of Section 4.13, to environmental matters,
which are the subject of Section 4.16, or to matters relating to Intellectual
Property, which are the subject of Section 4.17.
(b) Except as set forth on Section 3.15(b) of the Alcatel
Disclosure Letter, from January 1, 2003 to the date of this Agreement and to
the best of their knowledge, information and belief, Alcatel and its
Subsidiaries, and their respective officers, directors, employees and agents
have not corruptly made, promised, offered, or authorized any payment or
transfer of anything of value, directly or indirectly, to any government
official, employee or agent for the purpose of (i) influencing such government
official, employee or agent to take any action or decision or to omit to take
any action, in his or her official capacity, (ii) inducing such government
official, employee or agent to use his or her influence with a government or
instrumentality to affect any act or decision of the government or
instrumentality, or (iii) securing any improper advantage.
(c) From January 1, 2003 to the date of this Agreement and to
the best of their knowledge, information and belief, Alcatel and its
Subsidiaries have not caused any of their respective consultants, joint
venture partners and/or representatives (including resellers), in connection
with its relationship with Alcatel or any of its Subsidiaries, to corruptly
make, promise, offer, or authorize any payment or transfer of anything of
value, directly or indirectly, to any government official, employee or agent
for the purpose of (i) influencing such government official, employee or agent
to take any action or decision or to omit to take any action, in his or her
official capacity, (ii) inducing such government official, employee or agent
to use his or her influence with a government or instrumentality to affect any
act or decision of the government or instrumentality, or (iii) securing any
improper advantage.
Section 4.16 Environmental Matters. (i) Alcatel is in compliance with
all applicable Environmental Laws (which compliance includes the possession by
Alcatel of all permits and other governmental authorizations required under
applicable Environmental Laws, and compliance with the terms and conditions
thereof), except where failure to be in compliance would not, individually or
in the aggregate, have a Material Adverse Effect on Alcatel;
(ii) there is no Environmental Claim pending or threatened
against Alcatel or, to the best knowledge of Alcatel, against any
Person whose liability for any Environmental Claim Alcatel has or may
have retained or assumed either contractually or by operation of law,
except for any such Environmental Claims which would not,
individually or in the aggregate, have a Material Adverse Effect on
Alcatel;
(iii) there are no past or present actions, activities,
circumstances, conditions, events or incidents, including the Release
or presence of any Hazardous Material which could form the basis of
any Environmental Claim against Alcatel, or to the best knowledge of
Alcatel, against any Person whose liability for any Environmental
Claim Alcatel has or may have retained or assumed either
contractually or by operation of law which would, individually or in
the aggregate, have a Material Adverse Effect on Alcatel; and
(iv) there is no Cleanup of Hazardous Materials being
conducted or planned at any property currently or formerly owned or
operated by Alcatel, except for such Cleanups which would not,
individually or in the aggregate have a Material Adverse Effect on
Alcatel.
Section 4.17 Intellectual Property. Except as set forth on Section
4.17 of the Alcatel Disclosure Letter or as would not, individually or in the
aggregate, have a Material Adverse Effect on Alcatel:
(i) Alcatel, or one of its Subsidiaries, owns or possesses
adequate licenses or other legal rights to use, sell or license all
Intellectual Property used in the present conduct of the businesses
of Alcatel and its Subsidiaries, free and clear of all Liens;
(ii) no claims or, to the knowledge of Alcatel, threat of
claims have been asserted by any Person related to the use of any
Intellectual Property in the conduct of the businesses of Alcatel and
its Subsidiaries;
(iii) no settlement agreements, consents, judgments,
orders, forbearance to xxx or similar obligations limit or restrict
Alcatel's or any Subsidiary's rights in and to any Intellectual
Property other than the granting of a license or a covenant not to
xxx;
(iv) it is the policy of Alcatel and its Subsidiaries to
not knowingly infringe any valid Intellectual Property right of any
Person, and Alcatel and its Subsidiaries have, to Alcatel and its
Subsidiaries' knowledge, abided by their policy of not knowingly
infringing any valid Intellectual Property right of any Person;
(v) to the knowledge of Alcatel, no third party is
infringing or otherwise violating any Intellectual Property owned by
Alcatel or its Subsidiaries;
(vi) Alcatel and its Subsidiaries take reasonable measures
to protect the confidentiality of their Trade Secrets. To the
knowledge of Alcatel, no Trade Secret of Alcatel or its Subsidiaries
has been disclosed or authorized to be disclosed to any third party
other than pursuant to a written nondisclosure agreement that
adequately protects Alcatel's and its Subsidiaries' proprietary
interests in and to such Trade Secrets;
(vii) the consummation of the transactions as specified
herein will not result in the loss or impairment of Alcatel's and its
Subsidiaries' rights to own or use any of the Intellectual Property
nor will such consummation require the consent of any third party in
respect of any such Intellectual Property; and
(viii) Alcatel and its Subsidiaries have conducted their
respective businesses in compliance with all applicable laws,
statutes, ordinances and regulations relating to, or in respect of,
Intellectual Property.
Section 4.18 Vendor Financing. Section 4.18 of the Alcatel Disclosure
Letter contains a true, complete and accurate list, as of the date of this
Agreement, of (i) all financing arrangements (including loans, deferred
payment arrangements in excess of one year and equity-linked arrangements) to
customers (including distributors to customers) or vendors of Alcatel or any
of its Subsidiaries which have been provided by Alcatel or any of its
Subsidiaries or are guaranteed (including by guarantee to an institution
providing such loan), secured or supported in any respect by Alcatel or any of
its Subsidiaries (collectively, "Alcatel Vendor Financing") with an aggregate
principal amount of financing or available commitment greater than $25,000,000
and (ii) all contracts, agreements, commitments and other arrangements
relating to Alcatel Vendor Financing with an aggregate principal amount of
financing or available commitment greater than $25,000,000.
Section 4.19 Finders' or Advisors' Fees. Except for Xxxxxxx, Sachs &
Co., whose fees will be paid by Alcatel, there is no investment banker,
broker, finder or other intermediary which has been retained by or is
authorized to act on behalf of Alcatel or any of its Subsidiaries who might be
entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.
Section 4.20 Opinion of Financial Advisor. Alcatel has received the
opinion of Xxxxxxx Xxxxx & Co. to the effect that, as of the date of this
Agreement, the Exchange Ratio is fair, from a financial point of view, to
Alcatel.
Section 4.21 Takeover Statutes. The Board of Directors of Alcatel has
taken the necessary action, if any, to make inapplicable to this Agreement,
the Merger and the other transactions contemplated hereby any applicable
antitakeover or similar statute or regulation under French law or any other
applicable antitakeover law.
ARTICLE V
COVENANTS OF LUCENT
-------------------
Lucent agrees that:
Section 5.01 Conduct of Lucent. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement
pursuant to Section 9.01, Lucent and its Subsidiaries shall conduct their
respective businesses in the ordinary course consistent with past practice and
shall use their respective reasonable best efforts to preserve intact their
respective business organizations and relationships with third parties
(including employees and those Persons having business dealings with them).
Without limiting the generality of the foregoing, except (i) as set forth on
Section 5.01 of the Lucent Disclosure Letter, (ii) with the prior written
consent of Alcatel (which consent shall not be unreasonably withheld, delayed
or conditioned), (iii) as may be required by applicable law or (iv) as
expressly contemplated by this Agreement, from the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement
pursuant to Section 9.01:
(a) Lucent will not, and will not permit any of its
Subsidiaries to, adopt or propose any change in its certificate of
incorporation or by-laws (or comparable organizational documents) or otherwise
take any action to exempt any person or entity (other than Alcatel) from any
applicable antitakeover law, provided that the organizational documents of
Subsidiaries may be changed in a way that is not material;
(b) Lucent will not, and will not permit any Subsidiary of
Lucent to, adopt, enter into or effect any plan or agreement of complete or
partial liquidation, dissolution, merger (excluding acquisitions permitted
under Section 5.01(i)), consolidation, spin-off, restructuring,
recapitalization or other material reorganization of Lucent or any of its
Subsidiaries (other than any such action between its wholly owned
Subsidiaries);
(c) Lucent will not, and will not permit any Subsidiary of
Lucent to, issue, sell, transfer, pledge, dispose of or encumber any shares of
capital stock of any class or series of Lucent or its Subsidiaries, or issue,
sell or transfer securities convertible into or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, any shares of
capital stock of any class or series of Lucent or its Subsidiaries, or
materially amend the terms of any outstanding capital stock other than upon
issuance of Shares upon exercise or settlement of Lucent Stock Options or
Lucent Stock-Based Accounts, Lucent Convertible Debt or Lucent Warrants, and
in cases other than those in connection with employee benefit and compensation
matters to the extent permitted by Section 5.01 of the Lucent Disclosure
Letter;
(d) (i) Lucent will not, and will not permit any Subsidiary of
Lucent to, split, combine, subdivide or reclassify any of its outstanding
shares of capital stock, and (ii) Lucent will not declare, set aside or pay
any dividend or other distribution payable in cash, stock or property with
respect to its capital stock;
(e) Lucent will not, and will not permit any Subsidiary of
Lucent to, redeem, purchase or otherwise acquire directly or indirectly any of
Lucent's capital stock, except for repurchases, redemptions or acquisitions
(i) required by the terms of its capital stock or any securities outstanding
on the date of this Agreement, or (ii) required by or in connection with the
respective terms, as of the date of this Agreement, of any Lucent Stock Option
Plan or any dividend reinvestment plan as in effect on the date of this
Agreement in the ordinary course of the operations of such plan consistent
with past practice and only to the extent consistent with Section 7.04;
(f) Lucent will not amend the terms (including the terms
relating to accelerating the vesting or lapse of repurchase rights or
obligations) of any outstanding options to purchase Shares;
(g) Lucent will not, and will not permit any Subsidiary of
Lucent to, make or commit to make any capital expenditure, other than capital
expenditures set forth on Section 5.01 of the Lucent Disclosure Letter;
(h) Lucent will not, and will not permit any Subsidiary of
Lucent to, increase the compensation or benefits of any current or former
director, officer or employee, except for increases in the ordinary course of
business consistent with past practice or as required under applicable law or
any existing agreement or commitment;
(i) except for (1) acquisitions of assets in the ordinary
course of business consistent with past practices, (2) acquisitions pursuant
to existing contracts or commitments as set forth on Section 5.01(i) of the
Lucent Disclosure Letter, and (3) acquisitions not in excess of $500,000,000
in the aggregate, Lucent will not, and will not permit any of its Subsidiaries
to, acquire assets or stock (or similar ownership interests) of any other
Person;
(j) Lucent will not, and will not permit any of its
Subsidiaries to, sell, transfer, lease, license, pledge, encumber or otherwise
dispose of any material (as determined with respect to Lucent and its
Subsidiaries taken as a whole) assets or stock, other than (i) inventory,
receivables and vendor financing loans in the ordinary course of business
consistent with past practice and (ii) pursuant to existing contracts or
commitments;
(k) except for any such change which is required in order to
remain in compliance with US GAAP or applicable law, Lucent will not, and will
not permit any Subsidiary of Lucent to, change any method of financial
accounting or accounting practice used by it;
(l) Lucent will not, and will not permit any Subsidiary of
Lucent to, enter into any material joint venture, partnership or other similar
arrangement or materially amend or modify in an adverse manner the terms of
(or waive any material rights under) any existing material joint venture,
partnership or other similar arrangement (other than any such action between
its wholly owned Subsidiaries);
(m) Except as set forth in Section 5.01 of the Lucent
Disclosure Letter, Lucent will not, and will not permit any of its
Subsidiaries to, incur material indebtedness, other than (1) pursuant to the
credit facilities of Lucent existing on the date of this Agreement, or (2) to
refinance, extend or renew the maturity of any existing indebtedness in an
amount not to exceed such existing indebtedness, provided that such
refinancing or extension is at prevailing market interest rates and otherwise
on terms not materially less favorable in aggregate than the existing
indebtedness being so refinanced or extended;
(n) Lucent will not, and will not permit any of its
Subsidiaries to, enter into or commit to provide any Lucent Vendor Financing
not in effect as of the date of this Agreement other than in accordance with
Section 5.01 of the Lucent Disclosure Letter;
(o) other than with respect to the settlement, payment,
discharge or compromise in the ordinary course of business of litigation
arising in the ordinary course of Lucent's and its Subsidiaries' business, or
settlements providing solely for the payment of money damages that are (i)
subject to reserves existing as of the date of this Agreement in accordance
with US GAAP, (ii) covered by existing insurance policies or (iii) otherwise
less than $50,000,000 in the aggregate, Lucent will not, and will not permit
any of its Subsidiaries to, settle, pay, discharge or compromise any material
claim (including arbitration) or litigation;
(p) Lucent will not, and will not permit any of its
Subsidiaries to, (i) enter into, modify or amend any "material contract" ( as
such term is defined in Item 601(b)(10) of Regulation S-K of the SEC), other
than in the ordinary course of business, or (ii) enter into any contract or
agreement which expressly limits the ability of Lucent or any Subsidiary of
Lucent, or would limit Alcatel or any Subsidiary of Alcatel after the
Effective Time, to compete in or conduct any line of business or compete with
any Person or in any geographic area or during any period of time, in each
case, if such limitation is or is reasonably likely to be material to Lucent
and its Subsidiaries, taken as a whole, or, following the Effective Time, to
Alcatel and its Subsidiaries, taken as a whole;
(q) Lucent will not, and will not permit any of its
subsidiaries to, enter into any new line of business material to it and its
Subsidiaries, taken as a whole;
(r) Lucent will not, and will not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing.
Section 5.02 Lucent Stockholder Meeting; Proxy Material(a) . Lucent
shall take, in accordance with applicable law and its certificate of
incorporation and bylaws, all action necessary to convene a meeting of its
stockholders (the "Lucent Stockholder Meeting") on a date mutually agreed
between Lucent and Alcatel, which date shall be as promptly as practicable and
in no event later than sixty (60) calendar days after the Form F-4 is declared
effective by the SEC for the purpose of voting on the approval and adoption of
this Agreement and the Merger and shall use its reasonable best efforts to
cause the Lucent Stockholder Meeting to be held on the same day as the Alcatel
Shareholder Meeting. Except as provided in the next sentence, the Board of
Directors of Lucent shall recommend adoption of this Agreement by Lucent's
stockholders. The Board of Directors of Lucent shall be permitted to (i) not
recommend to Lucent's stockholders that they give the Lucent Stockholder
Approval, (ii) withdraw or modify in a manner adverse to Alcatel its
recommendation to Lucent's stockholders that they give the Lucent Stockholder
Approval or (iii) recommend any Lucent Superior Proposal (as defined in
Section 5.03) other than the Merger and the transactions contemplated by this
Agreement (each, a "Lucent Change in Recommendation"), but only if (1) the
Board of Directors of Lucent by a majority vote determines, in its good faith
judgment and after consultation with outside legal counsel, that the failure
of the Board of Directors to effect such Lucent Change in Recommendation would
be reasonably likely to result in a breach of the directors' fiduciary
obligations to the Lucent stockholders under applicable law and (2) in the
case of 5.02(iii) only, the Board of Directors of Lucent has complied with its
obligations under Section 5.03. In connection with the Lucent Stockholder
Meeting, Lucent will use its reasonable best efforts, subject to the
immediately preceding sentence, to obtain the Lucent Stockholder Approval and
will otherwise comply with all legal requirements applicable to the Lucent
Stockholder Meeting. The parties agree that (in accordance with Section 146 of
Delaware Law) this Agreement shall be submitted for adoption by Lucent's
stockholders at the Lucent Stockholder Meeting regardless of whether or not
there is a Lucent Change in Recommendation. Lucent agrees that (i) except in
order to obtain a quorum or as otherwise advisable under applicable law, it
shall not adjourn, postpone or cancel (or propose to adjourn, postpone or
cancel) the Lucent Stockholder Meeting and (ii) it shall use its reasonable
best efforts to obtain the requisite quorum and other approvals of Lucent's
stockholders necessary to obtain the Lucent Stockholder Approval.
Section 5.03 Other Offers. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement pursuant to
Section 9.01, Lucent and its Subsidiaries will not, and Lucent will not permit
any of the officers, directors, employees, investment bankers, consultants,
representatives and other agents of Lucent and its Subsidiaries to (and shall
instruct such Persons not to), directly or indirectly, take any action to (a)
solicit, initiate or knowingly encourage or facilitate the making of any
Lucent Acquisition Proposal or any inquiry with respect thereto or engage in
discussions or negotiations or enter into any agreement, arrangement or
understanding with respect to a Lucent Acquisition Proposal, (b) disclose or
provide any non-public information relating to Lucent or any Subsidiary of
Lucent to any Person with respect thereto, (c) afford access to the
properties, books or records of Lucent or any Subsidiary of Lucent to, any
Person that has made, or to Lucent's knowledge, is considering making, any
Lucent Acquisition Proposal, (d) approve or recommend, or propose to approve
or recommend, or execute or enter into any letter of intent, agreement in
principle, merger agreement, option agreement, acquisition agreement or other
agreement relating to a Lucent Acquisition Proposal, or (e) propose publicly
or agree to any of the foregoing relating to a Lucent Acquisition Proposal;
provided that nothing contained in this Section 5.03 shall prevent Lucent,
prior to the receipt of Lucent Stockholder Approval, from furnishing
non-public information to, or entering into discussions or negotiations with,
any Person in connection with an unsolicited bona fide written Lucent
Acquisition Proposal received from such Person prior to the receipt of Lucent
Stockholder Approval, so long as prior to furnishing non-public information
to, or entering into discussions or negotiations with, such Person, (i) the
Board of Directors of Lucent by a majority vote determines in its good faith
judgment that such Lucent Acquisition Proposal is reasonably expected to lead
to a Lucent Superior Proposal (after consulting with its financial advisors),
taking into account any revisions to the terms of the Merger or this Agreement
proposed by Alcatel after being notified pursuant to this Section 5.03, (ii)
Lucent is not then in breach of its obligations under this Section 5.03 and
(iii) Lucent enters into, and receives from such Person, an executed
confidentiality agreement on terms no less favorable to Lucent than those
contained in the Confidentiality Agreement (as defined in Section 7.03).
Nothing contained in this Agreement shall prevent the Board of Directors of
Lucent from complying with Rule 14d-9 and Rule 14e-2 under the Exchange Act
with regard to a Lucent Acquisition Proposal; provided that Lucent shall not
make any disclosure or take any action that amounts to a Lucent Change in
Recommendation other than in compliance with Section 5.02. Lucent further
agrees that it shall (a) promptly (and in no event later than 24 hours after
receipt of any Lucent Acquisition Proposal) notify (which notice shall be
provided orally and in writing and shall identify the Person making such
Lucent Acquisition Proposal and set forth the material terms thereof) Alcatel
after receipt of any Lucent Acquisition Proposal, or any request for
non-public information relating to Lucent or any Subsidiary of Lucent or for
access to the properties, books or records of Lucent or any Subsidiary of
Lucent by any Person that has made, or to Lucent's knowledge intends to make,
a Lucent Acquisition Proposal, and (b) keep Alcatel informed of the status and
material terms of any such Lucent Acquisition Proposal or request (including
any material amendments or proposed material amendments). Lucent and its
Subsidiaries will, and Lucent will cause the officers, directors, employees,
investment bankers, consultants and other agents of Lucent and its
Subsidiaries to, immediately cease and cause to be terminated all discussions
and negotiations, if any, that have taken place prior to the date of this
Agreement with any parties with respect to any Lucent Acquisition Proposal.
For purposes of this Agreement, "Lucent Acquisition Proposal" means
any offer or proposal for, or any indication of interest in, any (i) direct or
indirect acquisition or purchase of a business or assets that constitute 20%
or more of the net revenues, net income or the assets of Lucent and its
Subsidiaries, taken as a whole, (ii) direct or indirect acquisition or
purchase of (A) 20% or more of any class of equity securities of Lucent or (B)
50% or more of any class of equity securities of any of Lucent's Subsidiaries
whose business constitutes 20% or more of the net revenues, net income or
assets of Lucent and its Subsidiaries, taken as a whole, (iii) tender offer or
exchange offer that, if consummated, would result in any person beneficially
owning (A) 20% or more of any class of equity securities of Lucent or (B) 50%
or more of any class of equity securities of any of Lucent's Subsidiaries
whose business constitutes 20% or more the net revenues, net income or assets
of Lucent and its Subsidiaries, taken as a whole, or (iv) merger,
consolidation, spin-off, business combination, recapitalization, liquidation,
dissolution or similar transaction involving Lucent or any of its Subsidiaries
whose business constitutes 20% or more of the net revenues, net income or
assets of Lucent and its Subsidiaries, taken as a whole, pursuant to which the
stockholders of Lucent or such Subsidiary, as applicable, immediately prior to
such transaction (other than the counterparty in such transaction) would own
less than 80% of any class of equity securities of the resultant entity(ies),
in each case other than the transactions contemplated by this Agreement or
expressly permitted by Section 5.01 (including the items set forth in Section
5.01 of the Lucent Disclosure Letter). For purposes of this Agreement, "Lucent
Superior Proposal" means any bona fide Lucent Acquisition Proposal for or in
respect of at least a majority of the outstanding Shares or all or
substantially all of Lucent's and its Subsidiaries' assets, taken as a whole,
on terms that the Board of Directors of Lucent determines in its good faith
judgment (after consultation with outside legal counsel and a financial
advisor of recognized reputation) and taking into account all of the terms and
conditions of such Lucent Acquisition Proposal, including any break-up fees,
expense reimbursement provisions and conditions to consummation, as well as
any revisions to the terms of the Merger or this Agreement proposed by Alcatel
after being notified pursuant to this Section 5.03) are more favorable to
Lucent's stockholders than the Merger (after taking into account any such
revised terms).
Section 5.04 Shareholder Rights Plan. Lucent agrees that, in the
event any Person commences a tender offer or exchange offer under the U.S.
federal securities laws that constitutes a Lucent Acquisition Proposal, Lucent
shall, promptly but not later than the tenth business day following the
commencement of such offer, adopt a shareholder rights plan in customary form,
unless the Board of Directors of Lucent by a majority vote determines, in its
good faith judgment and after consultation with outside legal counsel, that
the adoption of such rights plan would be reasonably likely to result in a
breach of the directors' fiduciary obligations to the Lucent stockholders
under applicable law.
ARTICLE VI
COVENANTS OF ALCATEL
--------------------
Alcatel agrees that:
Section 6.01 Conduct of Alcatel. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement
pursuant to Section 9.01, Alcatel and its Subsidiaries shall conduct their
respective businesses in the ordinary course consistent with past practice and
shall use their respective reasonable best efforts to preserve intact their
respective business organizations and relationships with third parties
(including employees and those Persons having business dealings with them).
Without limiting the generality of the foregoing, except (i) as set forth on
Section 6.01 of the Alcatel Disclosure Letter, (ii) with the prior written
consent of Lucent (which consent shall not be unreasonably withheld, delayed
or conditioned), (iii) as may be required by applicable law or (iv) as
expressly contemplated by this Agreement, from the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement
pursuant to Section 9.01:
(a) Alcatel will not, and will not permit any of its
Subsidiaries to, adopt or propose any change in its certificate of
incorporation or by-laws (or comparable organizational documents) or otherwise
take any action to exempt any person or entity (other than Lucent) from any
applicable antitakeover law, provided that the organizational documents of
Subsidiaries may be changed in a way that is not material;
(b) Alcatel will not, and will not permit any Subsidiary of
Alcatel to, adopt, enter into or effect any plan or agreement of complete or
partial liquidation, dissolution, merger (excluding acquisitions permitted
under Section 6.01(i)), consolidation, spin-off, restructuring,
recapitalization or other material reorganization of Alcatel or any of its
Subsidiaries (other than any such action between its wholly owned
Subsidiaries);
(c) Alcatel will not, and will not permit any Subsidiary of
Alcatel to, issue, sell, transfer, pledge, dispose of or encumber any shares
of capital stock of any class or series of Alcatel or its Subsidiaries, or
issue, sell or transfer securities convertible into or exchangeable for, or
options, warrants, calls, commitments or rights of any kind to acquire, any
shares of capital stock of any class or series of Alcatel or its Subsidiaries,
other than upon issuance of Shares upon exercise or settlement of Alcatel
Stock Options or materially amend the terms of any outstanding capital stock;
(d) (i) Alcatel will not, and will not permit any Subsidiary of
Alcatel to, split, combine, subdivide or reclassify any of its outstanding
shares of capital stock, and (ii) Alcatel will not declare, set aside or pay
any dividend or other distribution payable in cash, stock or property with
respect to its capital stock other than the regular annual dividend approved
by the Alcatel stockholders at the annual general meeting of Alcatel;
(e) Alcatel will not, and will not permit any Subsidiary of
Alcatel to, redeem, purchase or otherwise acquire directly or indirectly any
of Alcatel's capital stock, except for repurchases, redemptions or
acquisitions (i) required by the terms of its capital stock or any securities
outstanding on the date of this Agreement, or (ii) required by or in
connection with the respective terms, as of the date of this Agreement, of any
stock option plan of Alcatel or its Subsidiaries or any dividend reinvestment
plan as in effect on the date of this Agreement in the ordinary course of the
operations of such plan consistent with past practice and only to the extent
consistent with Section 7.04;
(f) Alcatel will not amend the terms (including the terms
relating to accelerating the vesting or lapse of repurchase rights or
obligations) of any outstanding options to purchase ADSs or Alcatel Ordinary
Shares;
(g) Alcatel will not, and will not permit any Subsidiary of
Alcatel to, make or commit to make any capital expenditure, other than capital
expenditures set forth on Section 6.01 of the Alcatel Disclosure Letter;
(h) Alcatel will not, and will not permit any Subsidiary of
Alcatel to, increase the compensation or benefits of any current or former
director, officer or employee, except for increases in the ordinary course of
business consistent with past practice or as required under applicable law or
any existing agreement or commitment;
(i) except for (1) acquisitions of assets in the ordinary
course of business consistent with past practices (2) acquisitions pursuant to
existing contracts or commitments as set forth on Section 6.01(i) of the
Alcatel Disclosure Letter and (3) acquisitions not in excess of $500,000,000
in the aggregate, of which no individual acquisition shall exceed
$300,000,000, Alcatel will not, and will not permit any of its Subsidiaries
to, acquire assets or stock (or similar ownership interests) of any other
Person;
(j) Alcatel will not, and will not permit any of its
Subsidiaries to, sell, transfer, lease, license, pledge, encumber or otherwise
dispose of any material (as determined with respect to Alcatel and its
Subsidiaries taken as a whole) assets or stock, other than (i) inventory,
receivables and vendor financing loans in the ordinary course of business
consistent with past practice and (ii) pursuant to existing contracts or
commitments;
(k) except for any such change which is required in order to
remain in compliance with IFRS or applicable law, Alcatel will not, and will
not permit any Subsidiary of Alcatel to, change any method of financial
accounting or accounting practice used by it;
(l) Alcatel will not, and will not permit any Subsidiary of
Alcatel to, enter into any material joint venture, partnership or other
similar arrangement or materially amend or modify in an adverse manner the
terms of (or waive any material rights under) any existing material joint
venture, partnership or other similar arrangement (other than any such action
between its wholly owned Subsidiaries);
(m) Except as set forth in Section 6.01 of the Alcatel
Disclosure Letter, Alcatel will not, and will not permit any of its
Subsidiaries to, incur material indebtedness, other than (1) pursuant to the
credit facilities of Alcatel existing on the date of this Agreement, or (2) to
refinance, extend or renew the maturity of any existing indebtedness in an
amount not to exceed such existing indebtedness, provided that such
refinancing or extension is at prevailing market interest rates and otherwise
on terms not materially less favorable in aggregate than the existing
indebtedness being so refinanced or extended;
(n) Alcatel will not, and will not permit any of its
Subsidiaries to, enter into or commit to provide any Alcatel Vendor Financing
not in effect as of the date of this Agreement other than in accordance with
Section 6.01 of the Alcatel Disclosure Letter;
(o) other than with respect to the settlement, payment,
discharge or compromise in the ordinary course of business of litigation
arising in the ordinary course of Alcatel's and its Subsidiaries' business, or
settlements providing solely for the payment of money damages that are (i)
subject to reserves existing as of the date of this Agreement in accordance
with IFRS, (ii) covered by existing insurance policies or (iii) otherwise less
than $50,000,000 in the aggregate, Alcatel will not, and will not permit any
of its Subsidiaries to, settle, pay, discharge or compromise any material
claim (including arbitration) or litigation;
(p) Alcatel will not, and will not permit any of its
Subsidiaries to, (i) enter into, modify or amend any "material contract" ( as
such term is defined in Item 601(b)(10) of Regulation S-K of the SEC), other
than in the ordinary course of business, or (ii) enter into any contract or
agreement which expressly limits the ability of Alcatel or any Subsidiary of
Alcatel, or would limit Lucent or any Subsidiary of Lucent after the Effective
Time, to compete in or conduct any line of business or compete with any Person
or in any geographic area or during any period of time, in each case, if such
limitation is or is reasonably likely to be material to Alcatel and its
Subsidiaries, taken as a whole, or, following the Effective Time, to Lucent
and its Subsidiaries, taken as a whole;
(q) Alcatel will not, and will not permit any of its
Subsidiaries to, enter into any new line of business material to it and its
Subsidiaries, taken as a whole;
(r) Alcatel will not, and will not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing.
Section 6.02 Obligations of Merger Subsidiary. Alcatel will take all
action necessary to cause Merger Subsidiary to perform its obligations under
this Agreement and to consummate the Merger on the terms and conditions set
forth in this Agreement.
Section 6.03 Director and Officer Liability. (a) For a period of six
(6) years from the Effective Time, Alcatel shall maintain in effect the
exculpation, indemnification and advancement of expenses provisions of any
certificate of incorporation and by-laws or similar organization documents of
Lucent and its Subsidiaries in effect immediately prior to the Effective Time
and with respect to acts or omissions prior to the Effective Time or in any
indemnification agreements of Lucent or its Subsidiaries with any of their
respective directors, officers or employees in effect immediately prior to the
Effective Time and with respect to acts or omissions prior to the Effective
Time, and shall not amend, repeal or otherwise modify any such provisions or
the exculpation, indemnification or advancement of expenses provisions of the
Surviving Corporation's certificate of incorporation and by-laws in any manner
that would adversely affect the rights thereunder of any individuals who at
the Effective Time were current or former directors, officers or employees of
Lucent or any of its Subsidiaries.
(b) For a period of six years after the Effective Time, Alcatel
shall, and shall cause the Surviving Corporation to, indemnify and hold
harmless the individuals who on or prior to the Effective Time were officers,
directors and employees of Lucent or its Subsidiaries or were serving at the
request of Lucent as an officer, director or employee of any other
corporation, partnership or joint venture, trust, employee benefit plan or
other enterprise (collectively, the "Indemnitees") with respect to all acts or
omissions by them in their capacities as such or taken at the request of
Lucent or any of its Subsidiaries at any time prior to the Effective Time to
the extent provided under Lucent's certificate of incorporation and by-laws in
effect on the date of this Agreement (including with respect to the
advancement of expenses). Alcatel shall, and shall cause the Surviving
Corporation to, honor all indemnification agreements with the Indemnitees
(including under Lucent's by-laws) in effect as of the date of this Agreement
in accordance with the terms thereof. Lucent represents that it has made
available to Alcatel all such indemnification agreements prior to the date of
this Agreement.
(c) For six years after the Effective Time, Alcatel shall
procure the provision of officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the Effective Time covering
each such Person currently covered by Lucent's officers' and directors'
liability insurance policy on terms with respect to coverage and in amounts no
less than those of the policy in effect on the date of this Agreement;
provided, that if the aggregate annual premiums for such insurance at any time
during such period shall exceed 250% of the per annum rate of premium paid by
Lucent and its Subsidiaries as of the date of this Agreement for such
insurance, then Alcatel shall, or shall cause its Subsidiaries to, provide
only such coverage as shall then be available at an annual premium equal to
250% of such rate.
(d) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other Person
and is not the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially all
its properties and assets to any Person, then, and in each such case, Alcatel
shall cause proper provision to be made so that the successors and assigns of
the Surviving Corporation assume the obligations set forth in this Section
6.03.
(e) The provisions of this Section 6.03 are intended to be for
the benefit of, and will be enforceable by, each indemnified party, his or her
heirs and his or her representatives. Alcatel shall pay all reasonable
expenses, including reasonable attorneys' fees, that may be incurred by any
Indemnitee in enforcing the indemnity and other obligations provided in this
Section 6.03, provided that such indemnitee is successful in enforcing any
such enforcement claim.
Section 6.04 Alcatel Shareholder Meeting; Form F-4. Alcatel shall
take in accordance with applicable law and its articles of association and
by-laws, all action necessary to convene an extraordinary meeting of its
shareholders (the "Alcatel Shareholder Meeting") on a date mutually agreed
between Lucent and Alcatel, which date shall be as promptly as practicable and
in no event later than sixty (60) calendar days after the Form F-4 is declared
effective by the SEC for the purpose of approving the matters constituting the
Alcatel Shareholder Approval and shall use its reasonable best efforts to
cause the Alcatel Shareholder Meeting to be held on the same day as the Lucent
Stockholder Meeting. The resolutions proposed at the Alcatel Shareholder
Meeting, together with all other corporate documents provided by applicable
law (including expert reports, if required) (the "Alcatel Necessary Corporate
Documents"), shall be sufficient for the valid approval of the issuance of the
Alcatel Ordinary Shares in accordance with this Agreement. Except as provided
in the next sentence, the Board of Directors of Alcatel shall recommend
approval of the matters constituting the Alcatel Shareholder Approval. The
Board of Directors of Alcatel shall be permitted to (i) not recommend to
Alcatel's shareholders that they give the Alcatel Shareholder Approval, (ii)
withdraw or modify in a manner adverse to Lucent its recommendation to
Alcatel's shareholders that they give the Alcatel Shareholder Approval or
(iii) recommend any Alcatel Superior Proposal (as defined in Section 6.07)
other than the Merger and the transactions contemplated by this Agreement
(each, a "Alcatel Change in Recommendation"), but only if (1) the Board of
Directors of Alcatel by a majority vote determines, in its good faith judgment
and after consultation with outside legal counsel, that the failure of the
Board of Directors to effect such Alcatel Change in Recommendation would be
reasonably likely to result in a breach of the directors' fiduciary
obligations to Alcatel or the Alcatel shareholders under applicable law and
(2) in the case of 6.02(iii) only, the Board of Directors of Alcatel has
complied with its obligations under Section 6.07. In connection with the
Alcatel Shareholder Meeting, Alcatel will use its reasonable best efforts,
subject to the immediately preceding sentence, to obtain the Alcatel
Shareholder Approval and will otherwise comply with all legal requirements
applicable to the Alcatel Shareholder Meeting. Alcatel shall promptly take any
action required to be taken under foreign or state securities or Blue Sky laws
in connection with the issuance of ADSs in connection with the Merger. The
parties agree that the Alcatel Shareholder Meeting to obtain the Alcatel
Shareholder Approval shall be duly called and held regardless of whether or
not there is an Alcatel Change in Recommendation. Alcatel agrees that (i)
except in order to obtain a quorum or as otherwise advisable under applicable
law, it shall not adjourn, postpone or cancel (or propose to adjourn, postpone
or cancel) the Alcatel Shareholder Meeting and (ii) it shall use its
reasonable best efforts to obtain the requisite quorum and other approvals of
Alcatel's shareholders necessary to obtain the Alcatel Shareholder Approval.
Section 6.05 Stock Exchange Listing. Alcatel shall use its reasonable
best efforts to (a) cause the ADSs (and, if required, the underlying shares of
Alcatel Ordinary Shares) to be issued in connection with the Merger and made
available for issuance pursuant to Section 1.04 to be listed on the NYSE,
subject to official notice of issuance and (b) obtain the approval (visa) of
the AMF on the prospectus relating to the Alcatel Ordinary Shares and the
approval of Euronext Paris SA to the listing of the Alcatel Ordinary Shares,
in each case to be issued on the Effective Date (so that the listing of the
Alcatel Ordinary Shares takes place at the Effective Time, or as soon as
practicable thereafter) as part of the transactions contemplated by this
Agreement or made available for issuance pursuant to Section 1.04 subject to
official notice of issuance.
Section 6.06 Employee Benefits. (a) At least through December 31,
2007, Alcatel shall provide or cause to be provided to individuals who are
employed as of the Effective Time by Lucent and its Subsidiaries or by Alcatel
and its Subsidiaries and who remain employed by Alcatel or any Subsidiary of
Alcatel (collectively, the "Affected Employees") (i) base salary no less
favorable than the base salary provided the applicable Affected Employee
immediately prior to the Effective Time and (ii) aggregate employee benefits
(including, but not limited to, retirement and health and welfare plans, but
excluding any equity-based programs) that are no less favorable than those
provided to the applicable group of Affected Employees immediately prior to
the Effective Time (including, but not limited to, retirement and health and
welfare plans, but excluding any equity-based programs). It is the intention
of the parties that (x) the compensation and employee benefits provided to
Affected Employees following the Closing Date be within industry-competitive
ranges and that similar compensation and employee benefit programs be provided
to similarly situated Affected Employees notwithstanding whether such
employees were historical employees of Alcatel and its Subsidiaries or Lucent
and its Subsidiaries. Following the Effective Time, Alcatel shall maintain or
cause to be maintained in effect pursuant to their terms (including any
provision on amendment and termination) all severance plans, programs, and
policies of Lucent and its Subsidiaries and of Alcatel and its Subsidiaries
that are in effect as of the Effective Time, provided, that, in no event shall
any amendments to, or terminations of, any such plans, policies, and programs
that are adverse to covered employees be made prior to the second anniversary
of the Effective Time. Notwithstanding the foregoing, the provisions of this
Section 6.06(a) shall not apply with respect to Affected Employees whose
employment is governed by a collective bargaining or similar agreement.
(b) From and after the Effective Time, Alcatel shall, and shall
cause its Subsidiaries to, recognize service with Alcatel and Lucent and their
respective Subsidiaries prior to the Effective Time (to the same extent
recognized under the corresponding Alcatel Employee Plan or Lucent Employee
Plan, as applicable) for all purposes (including, without limitation,
eligibility to participate, vesting, benefit accrual, eligibility to commence
benefits, and severance) under any benefit plans of Alcatel or its
Subsidiaries in which the applicable Affected Employee participates; provided,
however, that such credit need not be provided for purposes of benefit accrual
under defined benefit plans and that the foregoing shall not result in any
duplication of benefits. Alcatel will, or will cause the Surviving Corporation
to, (i) waive all limitations as to preexisting conditions, exclusions and
waiting periods with respect to participation and coverage requirements
applicable to the Affected Employees under any welfare benefit plans that such
employees may be eligible to participate in after the Effective Time, other
than limitations or waiting periods that are already in effect with respect to
such employees and that have not been satisfied as of the Effective Time under
any welfare plan maintained for the Affected Employees immediately prior to
the Effective Time, and (ii) provide each Affected Employee with credit for
any copayments and deductibles paid in the applicable plan year prior to the
Effective Time in satisfying any applicable deductible or out-of-pocket
requirements under any welfare plans that such employees are eligible to
participate in after the Effective Time.
(c) From and after the Effective Time, Alcatel and its
Subsidiaries shall honor in accordance with their terms all Lucent Employee
Plans and Alcatel Employee Plans. Subject to Section 6.06(a), no provision of
this Section 6.06 shall be construed as a limitation on the right of Alcatel
and its Subsidiaries to amend or terminate any specific Lucent Employee Plan
or Alcatel Employee Plan which Lucent or Alcatel would otherwise have under
the terms of such Lucent Employee Plan or Alcatel Employee Plan.
(d) Without limiting the generality of Section 10.10, no
provision of this Section 6.06 shall be construed to create a right in any
employee or beneficiary of such employee under a Lucent Employee Plan or
Alcatel Employee Plan.
Section 6.07 Other Offers. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement pursuant to
Section 9.01, Alcatel and its Subsidiaries will not, and Alcatel will not
permit any of the officers, directors, employees, investment bankers,
consultants, representatives and other agents of Alcatel and its Subsidiaries
to (and shall instruct such Persons not to), directly or indirectly, take any
action to (a) solicit, initiate or knowingly encourage or facilitate the
making of any Alcatel Acquisition Proposal or any inquiry with respect thereto
or engage in discussions or negotiations or enter into any agreement,
arrangement or understanding with respect to an Alcatel Acquisition Proposal,
(b) disclose or provide any non-public information relating to Alcatel or any
Subsidiary of Alcatel to any Person with respect thereto, (c) afford access to
the properties, books or records of Alcatel or any Subsidiary of Alcatel to,
any Person that has made, or to Alcatel's knowledge, is considering making,
any Alcatel Acquisition Proposal, (d) approve or recommend, or propose to
approve or recommend, or execute or enter into any letter of intent, agreement
in principle, merger agreement, option agreement, acquisition agreement or
other agreement relating to an Alcatel Acquisition Proposal or (e) propose
publicly or agree to any of the foregoing relating to an Alcatel Acquisition
Proposal; provided that nothing contained in this Section 6.07 shall prevent
Alcatel, prior to the receipt of the Alcatel Shareholder Approval, from
furnishing non-public information to, or entering into discussions or
negotiations with, any Person in connection with an unsolicited bona fide
written Alcatel Acquisition Proposal received from such Person prior to
Alcatel Shareholder Approval, so long as prior to furnishing non-public
information to, or entering into discussions or negotiations with, such
Person, (i) the Board of Directors of Alcatel by a majority vote determines in
its good faith judgment that such Alcatel Acquisition Proposal is reasonably
expected to lead to an Alcatel Superior Proposal (after consulting with its
financial advisors), taking into account any revisions to the terms of the
Merger or this Agreement proposed by Lucent after being notified pursuant to
this Section 6.07, (ii) Alcatel is not then in breach of its obligations under
this Section 6.07 and (iii) Alcatel enters into, and receives from such
Person, an executed confidentiality agreement on terms no less favorable to
Alcatel than those contained in the Confidentiality Agreement (as defined in
Section 7.03). Nothing contained in this Agreement shall prevent the Board of
Directors of Alcatel from complying with Rule 14d-9 and Rule 14e-2 under the
Exchange Act (or any non-United States equivalent) with regard to an Alcatel
Acquisition Proposal; provided that Alcatel shall not make any disclosure or
take any action that amounts to an Alcatel Change in Recommendation other than
in compliance with Section 6.04. Alcatel further agrees that it shall (a)
promptly (and in no event later than 24 hours after receipt of any Alcatel
Acquisition Proposal) notify (which notice shall be provided orally and in
writing and shall identify the Person making such Alcatel Acquisition Proposal
and set forth the material terms thereof) Lucent after receipt of any Alcatel
Acquisition Proposal, or any request for non-public information relating to
Alcatel or any Subsidiary of Alcatel or for access to the properties, books or
records of Alcatel or any Subsidiary of Alcatel by any Person that has made,
or to Alcatel's knowledge intends to make an Alcatel Acquisition Proposal, and
(b) keep Lucent informed of the status and material terms of any such Alcatel
Acquisition Proposal or request (including any material amendments or proposed
material amendments). Alcatel and its Subsidiaries will, and Alcatel will
cause the officers, directors, employees, investment bankers, consultants and
other agents of Alcatel and its Subsidiaries to, immediately cease and cause
to be terminated all discussions and negotiations, if any, that have taken
place prior to the date of this Agreement with any parties with respect to any
Alcatel Acquisition Proposal.
For purposes of this Agreement, "Alcatel Acquisition Proposal" means
any offer or proposal for, or any indication of interest in, any (i) direct or
indirect acquisition or purchase of a business or assets that constitute 20%
or more of the net revenues, net income or the assets of Alcatel and its
Subsidiaries, taken as a whole, (ii) direct or indirect acquisition or
purchase of (A) 20% or more of any class of equity securities of Alcatel or
(B) 50% or more of any class of equity securities of any of Alcatel's
Subsidiaries whose business constitutes 20% or more of the net revenues, net
income or assets of Alcatel and its Subsidiaries, taken as a whole, (iii)
tender offer or exchange offer that, if consummated, would result in any
person beneficially owning (A) 20% or more of any class of equity securities
of Alcatel or (B) 50% or more of any class of equity securities of any of
Alcatel's Subsidiaries whose business constitutes 20% or more the net
revenues, net income or assets of Alcatel and its Subsidiaries, taken as a
whole, or (iv) merger, consolidation, spin-off, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Alcatel or any of its Subsidiaries whose business constitutes 20% or more of
the net revenues, net income or assets of Alcatel and its Subsidiaries, taken
as a whole, pursuant to which the shareholders of Alcatel or such Subsidiary,
as applicable, immediately prior to such transaction (other than the
counterparty in such transaction) would own less than 80% of any class of
equity securities of the resultant entity(ies), in each case other than the
transactions contemplated by this Agreement or expressly permitted by Section
6.01 (including the items set forth in Section 6.01 of the Alcatel Disclosure
Letter). For purposes of this Agreement, "Alcatel Superior Proposal" means any
bona fide Alcatel Acquisition Proposal for or in respect of at least a
majority of the outstanding Alcatel Ordinary Shares or all or substantially
all of Alcatel's and its Subsidiaries' assets, taken as a whole, on terms that
the Board of Directors of Alcatel determines in its good faith judgment (after
consultation with outside legal counsel and a financial advisor of recognized
reputation) and taking into account all of the terms and conditions of such
Alcatel Acquisition Proposal, including any break-up fees, expense
reimbursement provisions and conditions to consummation, as well as any
revisions to the terms of the Merger or this Agreement proposed by Lucent
after being notified pursuant to this Section 6.07), are more favorable to
Alcatel's shareholders than the Merger (after taking into account any such
revised terms).
Section 6.08 Business in Sanctioned Countries. Alcatel covenants and
agrees to take all such actions as may be necessary to ensure that from and
after the Effective Time, the operations and governance of Alcatel and its
Subsidiaries will comply with and be permissible under applicable United
States laws relating to the transaction of business involving Sanction-Subject
Persons. The term "Sanction-Subject Persons" means any country, entity or
individual that is designated as a target of United States economic sanctions
implemented by the United States Department of the Treasury's Office of
Foreign Assets Control under 31 CFR Chapter V.
ARTICLE VII
COVENANTS OF ALCATEL AND LUCENT
-------------------------------
The parties hereto agree that:
Section 7.01 Reasonable Best Efforts. Subject to the terms and
conditions set forth in this Agreement and applicable law, Lucent and Alcatel
shall each cooperate with the other and shall use (and shall cause their
respective Subsidiaries to use) their respective reasonable best efforts to
promptly (i) take or cause to be taken all actions, and do or cause to be done
all things, necessary, proper or advisable under this Agreement and applicable
laws (including under HSR Act, EC Merger Regulation, other competition laws
and the Exon-Xxxxxx Act) to consummate and make effective the Merger and the
other transactions contemplated by this Agreement as soon as practicable,
including, preparing and filing as promptly as practicable (or any specific
time as the parties mutually agree) all documentation to effect all necessary
filings, notices, petitions, statements, registrations, submissions of
information, applications and other documents, (ii) obtain all approvals,
consents, registrations, permits, authorizations and other confirmations
required to be obtained from any third party necessary, proper or advisable
under this Agreement and applicable laws (including under HSR Act, EC Merger
Regulation, other competition laws and the Exon-Xxxxxx Act) to consummate the
Merger and the other transactions contemplated by this Agreement, (iii) defend
any lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions
contemplated by this Agreement and (iv) execute and deliver any additional
instruments necessary to consummate the transactions contemplated by this
Agreement. Subject to the terms and conditions set forth in this Agreement and
applicable law, Alcatel and Lucent will (1) promptly notify the other party of
any communication to that party from any governmental authority in respect of
any filing, investigation or inquiry concerning this Agreement or Merger; (2)
if practicable, permit the other party the opportunity to review in advance
all the information relating to Lucent and its Subsidiaries or Alcatel and its
Subsidiaries, as the case may be, that appears in any filing made with, or
written materials submitted to, any third party and/or any governmental
authority in connection with the Merger and the other transactions
contemplated by this Agreement and incorporate the other party's reasonable
comments; (3) not participate in any substantive meeting or discussion with
any governmental authority in respect of any filing, investigation, or inquiry
concerning this Agreement or the Merger unless it consults with the other
party in advance, and, to the extent permitted by such governmental authority,
gives the other party the opportunity to attend; (4) furnish the other party
with copies of all correspondences, filings, and written communications
between them and their Subsidiaries and representatives, on the one hand, and
any governmental authority or its respective staff, on the other hand, with
respect to this Agreement and the Merger, except that any materials concerning
valuation of the transaction or internal financial information may be
redacted; and (5) use reasonable best efforts to offer to take, or cause to be
taken, all other actions and do, or cause to be done, all other things
necessary, proper or advisable to consummate and make effective the
transactions contemplated hereby, including taking all such further action as
reasonably may be necessary to resolve such objections, if any, as the United
States Federal Trade Commission, the Antitrust Division of the United States
Department of Justice, state antitrust enforcement authorities or competition
authorities of any other nation or other jurisdiction or any other person may
assert under Regulatory Law (as hereinafter defined) with respect to the
transactions contemplated hereby, and to avoid or eliminate each and every
impediment under any law that may be asserted by any governmental entity or
authority with respect to the Merger so as to enable the Closing to occur as
soon as expeditiously possible. The parties agree that, subject to the last
sentence of this Section 7.01, the use of "reasonable best efforts" shall
include proposing, negotiating, committing to and effecting, by consent
decree, hold separate order or otherwise, (x) the sale, divestiture or
disposition of such assets or businesses of either party or its Subsidiaries
or affiliates and (y) restrictions, or actions that after the Closing Date
would limit Alcatel's or its Subsidiaries' (including the Surviving
Corporation's) or affiliates' freedom of action with respect to, or its
ability to retain, one or more of its or its Subsidiaries' (including the
Surviving Corporation's) businesses, product lines or assets, in each case as
may be required in order to avoid the entry of, or to effect the dissolution
of, any injunction, temporary restraining order or other order in any suit or
proceeding that would otherwise have the effect of preventing or materially
delaying the Closing. For purposes of this Agreement, "Regulatory Law" means
the Xxxxxxx Act of 1890, the Xxxxxxx Antitrust Act of 1914, the HSR Act, the
Federal Trade Commission Act of 1914 and all other federal, state or foreign
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines and other laws, including any antitrust, competition or trade
regulation laws that are designed or intended to (i) prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint
of trade or lessening competition through merger or acquisition or (ii)
protect the national security or the national economy of any nation.
Notwithstanding anything else contained herein, the provisions of this Section
7.01 shall not be construed to (i) require either party to undertake any
efforts, or to take or consent to any action if such efforts, action or
consent would be reasonably likely to result in a Detriment or (ii) take or
consent to any action inconsistent with Article II hereof. The parties
acknowledge that, without limitation, (i) any requirement to divest a
significant portion of the assets of Xxxx Laboratories other than the assets
referred to in Section 2.08 of the Lucent Disclosure Letter, (ii) any material
loss of control over Lucent that would materially affect Alcatel's ability to
manage Lucent's business or (iii) any material loss of control over the
business of Alcatel in the United States that would materially affect
Alcatel's ability to manage its business in the United States, shall be deemed
a Detriment.
Section 7.02 Preparation of Proxy Statement/Prospectus; Form F-4,
Form F-6. (a) Lucent and Alcatel shall cooperate with one another (a) in
connection with the preparation of the Lucent Proxy Statement, the Alcatel
Circular, the Alcatel Necessary Corporate Documents, the Form F-4 and the Form
F-6, (b) in determining whether any action by or in respect of, or filing
with, any governmental body, agency or official, or authority is required, or
any consents, approvals or waivers are required to be obtained from parties to
any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement and (c) in seeking any such
actions, consents, approvals or waivers or making any such filings, furnishing
information required in connection therewith or with the Lucent Proxy
Statement, the Alcatel Circular, the Form F-4 and the Form F-6 and seeking
timely to obtain any such actions, consents, approvals or waivers. The Lucent
Proxy Statement will be included as part of the Form F-4. Each of Lucent and
Alcatel shall use reasonable best efforts to have the Lucent Proxy Statement
cleared by the SEC and the Form F-4 and Form F-6 declared effective by the SEC
as promptly as practicable and to keep the Form F-4 and Form F-6 effective as
long as is necessary to consummate the Merger and the transactions
contemplated by this Agreement. Lucent and Alcatel shall, as promptly as
practicable after receipt thereof, provide the other party copies of any
written comments and advise the other party of any oral comments with respect
to the Lucent Proxy Statement, the Alcatel Circular, the Alcatel Necessary
Corporate Documents, the Form F-4 and the Form F-6 received by any
governmental body or authority. The parties shall cooperate and provide the
other with a reasonable opportunity to review and comment on any amendment or
supplement to the Lucent Proxy Statement, the Alcatel Circular, the Alcatel
Necessary Corporate Documents, the Form F-4 or the Form F-6 prior to filing
such documents with any governmental body or authority, and will provide each
other with a copy of all such filings made with any governmental body or
authority.
(b) Except as otherwise set forth in this Agreement, no
amendment or supplement (including by incorporation by reference) to the
Lucent Proxy Statement, the Alcatel Circular, the Alcatel Necessary Corporate
Documents, the Form F-4 or the Form F-6 shall be made without the approval of
both Lucent and Alcatel, which approval shall not be unreasonably withheld or
delayed; provided that Lucent, in connection with a Lucent Change in
Recommendation, and Alcatel, in connection with an Alcatel Change in
Recommendation, may amend or supplement the Lucent Proxy Statement, the
Alcatel Circular, the Alcatel Necessary Corporate Documents, the Form F-4 or
the Form F-6 (including by incorporation by reference) pursuant to a
Qualifying Amendment to effect such a change, and in such event, the right of
approval set forth in this Section 7.02(b) shall apply only with respect to
information relating to the other party or its business, financial condition
or results of operations, and shall be subject to the right of each party to
have its Board of Directors' deliberations and conclusions to be accurately
described. A "Qualifying Amendment" means an amendment or supplement to the
Lucent Proxy Statement, Form F-4 or the Alcatel Necessary Corporate Documents
(including by incorporation by reference) to the extent that it contains (i) a
Lucent Change in Recommendation or an Alcatel Change in Recommendation (as the
case may be), (ii) a statement of the reasons of the Board of Directors of
Lucent or Alcatel (as the case may be) for making such Lucent Change in
Recommendation or Alcatel Change in Recommendation (as the case may be) and
(iii) additional information reasonably related to the foregoing.
(c) Lucent will advise Alcatel, and Alcatel will advise Lucent,
promptly after it receives notice thereof, of the times when the Form F-4 and
Form F-6 have become effective, when the Alcatel Circular obtains the "visa"
of the AMF, the issuance of any stop order, the suspension of the
qualification of the ADSs or Alcatel Ordinary Shares issuable in connection
with the Merger for offering or sale in any jurisdiction or any request by any
governmental body or authority for amendment of the Lucent Proxy Statement,
the Alcatel Circular, the Alcatel Necessary Corporate Documents, the Form F-4
or the Form F-6.
(d) Alcatel shall file the opinion described in Section 8.03(d)
with the SEC on a post-effective amendment to the Form F-4, unless requested
otherwise by Lucent prior to the Effective Time.
Section 7.03 Access to Information; Compliance Program; Transition
Committee.
(a) From the date of this Agreement until the earlier of the
Effective Time or termination of this Agreement pursuant to Section 9.01, to
the extent permitted by applicable law, Lucent and Alcatel will give the other
party, its counsel, financial advisors, auditors and other authorized
representatives reasonable access to the offices, properties, books and
records of such party and its Subsidiaries, furnish to the other party, its
counsel, financial advisors, auditors and other authorized representatives
such financial and operating data and other information as such Persons may
reasonably request and will instruct its own employees, counsel and financial
advisors to cooperate with the other party in its investigation of the
business of Lucent or Alcatel, as the case may be; provided that no
investigation of the other party's business shall affect any representation or
warranty given by either party hereunder, and no party shall be required to
afford such access if it would cause a significant risk, in the reasonable
judgment of the disclosing party, of a loss of privilege to the disclosing
party. Lucent agrees to comply with the provisions of Section 7.03(a) of the
Lucent Disclosure Letter with respect to access to certain information. All
information obtained by Alcatel or Lucent pursuant to this Section shall be
kept confidential in accordance with, and shall otherwise be subject to the
terms of, the Confidentiality Agreement dated February 9, 2006 between Alcatel
and Lucent (the "Confidentiality Agreement"), which Confidentiality Agreement
will continue in full force and effect in accordance with its terms.
(b) The parties will work together in order to develop a
mutually acceptable compliance program, in general based on the current
compliance program of Lucent, to address the combined company's compliance
following the Effective Time with its obligations under the Foreign Corrupt
Practices Act, OECD rules and other relevant laws. This policy will include:
(i) key policies and procedures; (ii) training, education and communication;
(iii) approval system for gifts, expenses and similar items; and (iv)
auditing, monitoring and reporting.
(c) From the date of this Agreement until the earlier of the
Effective Time and the termination of this Agreement pursuant to Section 9.01,
and subject to applicable law, Lucent and Alcatel will cooperate with each
other in implementing the plan and procedures set forth in Section 7.03(c) of
the Alcatel Disclosure Letter. In connection with this obligation, Lucent and
Alcatel shall each as promptly as practicable after the execution of this
Agreement designate certain of their respective employees as coordinators for
this purpose.
(d) Alcatel and Lucent shall create a special transition
committee (the "Transition Committee") that shall be co-chaired by the Chief
Executive Officer of Alcatel and the Chief Executive Officer of Lucent and
shall be composed of such chief executive officers and an even number of
designees, half of whom shall be designated by each of Alcatel and Lucent.
After the date of this Agreement and prior to the Effective Time, the
Transition Committee shall examine various alternatives regarding the manner
in which to best organize and manage the business of Alcatel and its
Subsidiaries (including Lucent) after the Effective Time, subject to
applicable law.
Section 7.04 Tax Treatment. (a) Each of Alcatel and Lucent will use
its reasonable best efforts, and each agrees to cooperate with the other and
provide the other with such documentation, information and materials as may be
reasonably necessary, proper or advisable to (i) cause the Merger to qualify
as a reorganization within the meaning of Section 368(a) of the Code and to
obtain the opinion of counsel referred to in Section 8.03(d), (ii) avoid gain
recognition to the stockholders of Lucent pursuant to Section 367(a)(1) of the
Code and (iii) enable the parties to obtain, prior to the Closing Date, any
rulings from the IRS relating to the Merger, including any rulings under
Section 367 of the Code that are referred to in Section 8.03(d) of this
Agreement. If Lucent notifies Alcatel that Lucent desires to seek a ruling
from the IRS relating to the Merger, then the parties shall jointly submit the
request for such a ruling and work together in good faith in the preparation
of such request. Alcatel shall not make any submission or representation to
the IRS in connection with the Merger, including in connection with a ruling
request, without the approval of Lucent. Neither Alcatel nor Lucent will take
or fail to take (and, following the Merger, Alcatel will cause Lucent not to
take or fail to take) any action which action (or failure to act) would
reasonably be expected to (i) cause the Merger to fail to qualify as a
reorganization within the meaning of Section 368(a) of the Code or (ii) cause
stockholders of Lucent to recognize gain pursuant to Section 367(a)(1) of the
Code, other than any such stockholder that would be a "five-percent transferee
shareholder" of Alcatel (within the meaning of US Treasury Regulation Section
1.367(a)-3(c) (5)(ii)) following the Merger that does not enter into a
five-year gain recognition agreement in the form provided in Treasury
Regulation Section 1.367 (a)-8(b). With respect to the Merger, Alcatel will
(and following the Merger will cause Lucent to) file all required information
with its Tax Returns and maintain all records required for Tax purposes,
including, without limitation, the reporting requirements contained in United
States Treasury Regulation Section 1.367(a)-3(c)(6).
(b) Alcatel shall use its reasonable best efforts to provide to
Wachtell, Lipton, Xxxxx & Xxxx a certificate substantially in the form
attached hereto as Section 7.04(b) to the Alcatel Disclosure Letter. Lucent
shall use its reasonable best efforts to provide to Wachtell, Lipton, Xxxxx &
Xxxx a certificate substantially in the form attached hereto as Section
7.04(b) to the Lucent Disclosure Letter.
(c) Alcatel will make arrangements with each five-percent
transferee shareholder, as defined in Treasury Regulation Section
1.367(a)-3(c)(5)(ii), if any, to ensure that such shareholder will be informed
of any disposition of any property that would require the recognition of gain
under such person's gain recognition agreement entered into under Treasury
Regulation Section 1.367(a)-8.
Section 7.05 Public Announcements. Alcatel and Lucent will consult
with each other and provide each other with the opportunity to review and
comment upon any press release or any public statement with respect to this
Agreement or the transactions contemplated hereby prior to the issuance of
such press release or the making of such public statement unless otherwise
required by applicable law or any listing agreement with any national
securities exchange. Alcatel and Lucent agree to issue a joint press release
announcing the execution of this Agreement.
Section 7.06 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of Lucent or Merger Subsidiary,
any deeds, bills of sale, assignments or assurances and to take and do, in the
name and on behalf of Lucent or Merger Subsidiary, any other actions and
things to vest, perfect or confirm of record or otherwise in the Surviving
Corporation any and all right, title and interest in, to and under any of the
rights, properties or assets of Lucent acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with, the Merger.
Section 7.07 Notices of Certain Events. (a) Each of Lucent and
Alcatel shall promptly notify the other party of:
(i) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement; and
(ii) any notice or other communication from any
governmental or regulatory agency or authority in connection with the
transactions contemplated by this Agreement.
(b) Lucent and Alcatel shall promptly notify the other party of any
actions, suits, claims, investigations or proceedings commenced or,
to the best of its knowledge, threatened against, relating to or
involving or otherwise affecting such party or any of its
Subsidiaries which relate to the consummation of the transactions
contemplated by this Agreement.
(c) Prior to the Effective Time, Lucent shall cause to be delivered to
Alcatel a letter identifying, to the best of Lucent's knowledge, all
Persons who are, at the time of the Lucent Stockholder Meeting,
"affiliates" of Lucent for purposes of Rule 145 under the 1933 Act.
Lucent shall furnish such information and documents as Alcatel may
reasonably request for the purpose of reviewing such list. Lucent
shall use its reasonable best efforts to cause each Person who is so
identified as an affiliate to deliver to Alcatel on or prior to the
Effective Time a letter agreement substantially in the form of
Exhibit D to this Agreement.
Section 7.08 Payment of Dividends. From the date of this Agreement
until the earlier of the Effective Time and the termination of this Agreement
pursuant to Section 9.01, Alcatel and Lucent will coordinate with each other
regarding the declaration of dividends in respect of the shares of Alcatel
Ordinary Shares and the Shares and the record dates and payment dates relating
thereto, it being the intention of the parties that holders of Shares will not
receive two dividends, or fail to receive one dividend, for any single
calendar quarter with respect to their Shares and the shares of Alcatel
Ordinary Shares any holder of Shares receives in exchange therefor in
connection with the Merger.
ARTICLE VIII
CONDITIONS TO THE MERGER
------------------------
Section 8.01 Conditions to the Obligations of Each Party. The
obligations of Lucent, Alcatel and Merger Subsidiary to consummate the Merger
are subject to the satisfaction (or, to the extent legally permissible,
waiver) of the following conditions:
(a) the Lucent Stockholder Approval shall have been obtained in
accordance with Delaware Law;
(b) the Alcatel Shareholder Approval shall have been obtained
in accordance with applicable French law;
(c) any waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act shall have expired or been
terminated;
(d) the European Commission shall have issued a decision under
Article 6(1)(b) or 8(1) or 8(2) of the EC Merger Regulation (or shall be
deemed to have done so under Article 10(6) thereof), declaring the
transactions contemplated hereby compatible with EC Common Market;
(e) the parties shall (i) have received all required
governmental antitrust and/or competition approvals and consents (excluding
those specified in foregoing paragraphs (c) and (d)), and (ii) have made all
requisite filings, notices or notifications, other than, in the case of each
of clauses (i) and (ii), those the absence of which would not result in a
Material Adverse Effect on Lucent or Alcatel;
(f) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit or enjoin the
consummation of the Merger;
(g) the Form F-4 shall have been declared effective by the SEC
under the 1933 Act, and no stop order suspending the effectiveness of the Form
F-4 shall be in effect and no proceedings for such purpose shall be pending
before or threatened by the SEC; and the approval (visa) of the registration
statement by the AMF relating to the Alcatel Ordinary Shares to be issued on
the Effective Date as part of the transactions contemplated by this Agreement
shall have been obtained;
(h) ADSs (and, if required, the underlying shares of Alcatel
Ordinary Shares) to be issued in the Merger shall have been approved for
listing on the NYSE, subject to official notice of issuance and the AMF and
the Euronext Paris SA shall have approved the listing of the Alcatel Ordinary
Shares to be issued on the Effective Date as part of the transactions
contemplated by this Agreement;
(i) at or prior to the Effective Time, the Committee on Foreign
Investment in the United States ("CFIUS") shall have notified Alcatel in
writing that it has determined not to investigate the transactions
contemplated by this Agreement (including the Merger) pursuant to the powers
vested in it by the Exon-Xxxxxx Act or, in the event that CFIUS has undertaken
such an investigation, CFIUS has terminated such investigation or the
President of the United States has determined not to take any action that
would result in a Detriment;
(j) there shall not be instituted or pending any action,
litigation or proceeding by any governmental authority (whether domestic,
foreign or supranational) before any court or governmental authority or
agency, domestic, foreign or supranational, (i) seeking to prohibit,
materially restrain or otherwise materially interfere with the Merger or the
ownership or operation by Alcatel or any Subsidiary of Alcatel of all or any
material portion of the business or assets of Lucent or any of its
Subsidiaries or of Alcatel or any of its Subsidiaries or to compel Alcatel or
any Subsidiary of Alcatel to dispose of or hold separate all or any material
portion of the business or assets of Lucent or any of its Subsidiaries or of
Alcatel or any of its Subsidiaries, or (ii) seeking divestiture of any Shares
(or shares of stock of the Surviving Corporation) or seeking to impose or
confirm limitations on the ability of Alcatel or any Subsidiary of Alcatel
effectively to exercise full rights of ownership of the Shares (or shares of
stock of the Surviving Corporation) including the right to vote any Shares (or
shares of stock of the Surviving Corporation) on any matters properly
presented to stockholders, in the case of clause (i) or clause (ii) which
would reasonably be expected to materially adversely affect the financial
condition, business or annual results of operations of Lucent and its
Subsidiaries taken as a whole or Alcatel and its Subsidiaries taken as a whole
(any such matter described in clauses (i) or (ii) of this Agreement being
referred to in this Agreement as a "Detriment");
(k) there shall not be any statute, rule, regulation,
injunction, order or decree or decision, enacted, enforced, promulgated,
entered, issued or deemed applicable to the Merger and the other transactions
contemplated hereby (or in the case of any statute, rule or regulation,
awaiting signature or reasonably expected to become law), by any court,
government or governmental authority or agency or legislative body, domestic,
foreign or supranational, that is reasonably likely, directly or indirectly,
to result in a Detriment;
Section 8.02 Conditions to the Obligations of Alcatel and Merger
Subsidiary. The obligations of Alcatel and Merger Subsidiary to consummate the
Merger are subject to the satisfaction (or, to the extent legally permissible,
waiver) of the following further conditions:
(a) Lucent shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Effective Time;
(b) (i) the representations and warranties of Lucent contained
in this Agreement that are qualified by a "Material Adverse Effect"
qualification shall be true in all respects as so qualified when made and at
and as of the Effective Time as if made at and as of such time (provided that
the accuracy of representations and warranties that by their terms speak as of
a specified date will be determined as of such date); (ii) the representations
and warranties of Lucent contained in this Agreement that are not qualified by
a "Material Adverse Effect" qualification (other than the representations and
warranties of Lucent contained in the second sentence of Section 3.05) shall
be true in all respects when made and at and as of the Effective Time as if
made at and as of such time (provided that the accuracy of representations and
warranties that by their terms speak as of a specified date will be determined
as of such date), except for failure to be so true and correct which would
not, individually or in the aggregate, have a Material Adverse Effect on
Lucent, and (iii) the representation and warranty of Lucent contained in the
second sentence of Section 3.05 shall be in true in all material respects as
of the date specified in such representation and warranty;
(c) Alcatel shall have received a certificate of Lucent, signed
by a senior executive officer of Lucent, certifying to the effect that the
conditions set forth in Sections 8.02(a) and 8.02(b) have been satisfied; and
(d) The fair market value of the Plan Assets as of the Plan
Asset Measurement Date shall not be less than the Plan Asset Target. For
purposes of this Section 8.02(d): (i) "Plan Assets" shall mean assets held
under the Major Pension Plans, less the amount of all contributions to such
plans following September 30, 2005; (ii) "Major Pension Plans" shall mean
those pension plans maintained by Lucent or any of its Subsidiaries and
reflected in "major plans" under the column headed "pension benefits September
30, 2005" on page 61 of Lucent's annual report on Form 10-K for its fiscal
year ended September 30, 2005; (iii) "Plan Asset Measurement Date" shall mean
the last day of the month last ending prior to the Closing Date and (iv) "Plan
Asset Target" shall mean $28,600,000,000 if the Plan Measurement Date is on or
prior to September 30, 2006, reduced by $200,000,000 as of the first day of
each calendar month thereafter through December 2006, but in no event less
that $28,000,000,000.
Section 8.03 Conditions to the Obligations of Lucent. The obligation
of Lucent to consummate the Merger is subject to the satisfaction (or, to the
extent legally permissible, waiver) of the following further conditions:
(a) Alcatel shall have performed in all material respects all
of its obligations hereunder required to be performed by it at or prior to the
Effective Time;
(b) (i) the representations and warranties of Alcatel contained
in this Agreement that are qualified by a "Material Adverse Effect"
qualification shall be true in all respects as so qualified when made and at
and as of the Effective Time as if made at and as of such time (provided that
the accuracy of representations and warranties that by their terms speak as of
a specified date will be determined as of such date); (ii) the representations
and warranties of Alcatel contained in this Agreement that are not qualified
by a "Material Adverse Effect" qualification (other than the representations
and warranties of Lucent contained in the first sentence of Section 4.05)
shall be true in all respects when made and at and as of the Effective Time as
if made at and as of such time (provided that the accuracy of representations
and warranties that by their terms speak as of a specified date will be
determined as of such date), except for failure to be so true and correct
which would not, individually or in the aggregate, have a Material Adverse
Effect on Alcatel, and (iii) the representation and warranty of Alcatel
contained in the first sentence of Section 4.05 shall be in true in all
material respects as of the date specified in such representation and
warranty;
(c) Lucent shall have received a certificate of Alcatel, signed
by a senior executive officer of Alcatel, certifying to the effect that the
conditions set forth in Sections 8.03(a) and 8.03(b) have been satisfied; and
(d) Lucent shall have received an opinion of Wachtell, Lipton,
Xxxxx & Xxxx in form and substance reasonably satisfactory to Lucent, on the
basis of certain facts, representations and assumptions set forth or referred
to in such opinion, dated the Effective Time, to the effect that (i) the
Merger will be treated for United States federal income tax purposes as a
reorganization qualifying under the provisions of Section 368(a) of the Code
and that each of Alcatel, Merger Subsidiary and Lucent will be a party to the
reorganization within the meaning of Section 368(b) of the Code and (ii) each
transfer of Shares to Alcatel by a stockholder of Lucent pursuant to the
Merger will not be subject to Section 367(a)(1) of the Code. In rendering such
opinion, such counsel shall be entitled to rely upon (among other things) (x)
and require certain representations of officers of Alcatel and Lucent
reasonably requested by counsel, including without limitation those contained
in certificates substantially in the form attached as Section 7.04(b) of the
Alcatel Disclosure Letter and Lucent Disclosure Letter, respectively, and (y)
any rulings received by the parties from the IRS with respect to the Merger
(and any representations of Alcatel or Lucent made in connection therewith),
including any ruling received by the parties to the effect that the Merger
will not be subject to section 367(a)(1) of the Code (and any representations
of Alcatel or Lucent made in connection therewith). The opinion may assume
that all applicable reporting requirements have been satisfied and that any
stockholder who is a "five-percent transferee shareholder" with respect to
Alcatel within the meaning of United States Treasury Regulations Section
1.367(a)-3(c)(5)(ii) will in a timely and effective manner file the agreement
described in United States Treasury Regulations Section
1.367(a)-3(c)(1)(iii)(B). After receipt of Lucent Stockholder Approval, Lucent
shall not waive receipt of a tax opinion from Wachtell, Lipton, Xxxxx & Xxxx
as a condition to closing unless further approval of the shareholders of
Lucent is obtained with appropriate disclosure.
ARTICLE IX
TERMINATION
-----------
Section 9.01 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of the Merger and this Agreement by the
stockholders of Lucent or any approval of the matters constituting the Alcatel
Shareholder Approval by the shareholders of Alcatel):
(a) by mutual written consent of Lucent and Alcatel;
(b) by either Lucent or Alcatel,
(i) if the Effective Time shall not have occurred on or
before December 31, 2006 (the "End Date"); provided that if (x) the
Effective Time has not occurred by December 31, 2006 solely by reason
of non-satisfaction of one or more of the conditions set forth in
Sections 8.01(c), 8.01(d), 8.01(e) or 8.01(h) and (y) all other
conditions in Article VIII have been satisfied or (to the extent
legally permissible) waived or are then capable of being satisfied,
the End Date will be extended one or more times up to and including
March 31, 2007; provided further that the right to terminate this
Agreement under this Section 9.01(b)(i) shall not be available to any
party whose failure to fulfill in any material respect any obligation
under this Agreement has caused or resulted in the failure of the
Effective Time to occur on or before December 31, 2006, in the case
of a failure prior to that date, or March 31, 2007, in the case of
any such failure after December 31, 2006;
(ii) if the Lucent Stockholder Approval shall not have
been obtained by reason of the failure to obtain the required vote at
the Lucent Stockholder Meeting or any adjournment thereof;
(iii) if the Alcatel Shareholder Approval shall not have
been obtained by reason of the failure to obtain the required vote at
the Alcatel Shareholder Meeting or any adjournment thereof;
(iv) if there shall be any law or regulation that makes
consummation of the Merger illegal or otherwise prohibited or if any
judgment, injunction, order or decree enjoining Alcatel or Lucent
from consummating the Merger is entered and such judgment,
injunction, order or decree shall become final and nonappealable;
(c) by Alcatel, if (i) there is a Lucent Change in
Recommendation or (ii) the Lucent Stockholder Meeting shall not have been
called and held as required by Section 5.02;
(d) by Lucent, if (i) there is an Alcatel Change in
Recommendation or (ii) the Alcatel Shareholder Meeting shall not have been
called and held as required by Section 6.04.
(e) by Lucent, if Alcatel shall have breached or failed to
perform in any material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement, which breach or
failure to perform (A) would give rise to the failure of a condition set forth
in Section 8.01 or 8.03, and (B) is incapable of being cured by Alcatel or is
not cured by Alcatel within 60 days following receipt of written notice from
Lucent of such breach or failure to perform;
(f) by Alcatel, if Lucent shall have breached or failed to
perform in any material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement, which breach or
failure to perform (A) would give rise to the failure of a condition set forth
in Section 8.01 or 8.02, and (B) is incapable of being cured by Lucent or is
not cured by Lucent within 60 days following receipt of written notice from
Alcatel of such breach or failure to perform;
The party desiring to terminate this Agreement pursuant to clause
(b), (c) or (d) of this Section 9.01 shall give written notice of such
termination to the other party in accordance with Section 10.01, specifying
the provision of this Agreement pursuant to which such termination is
effected.
Section 9.02 Effect of Termination. If this Agreement is terminated
pursuant to Section 9.01, this Agreement shall become void and of no effect
with no liability on the part of any party hereto, except that (a) the
agreements contained in this Section 9.02, in Article X, in the last sentence
of Section 7.03, and in the Confidentiality Agreement shall survive the
termination of this Agreement and (b) no such termination shall relieve any
party of any liability or damages resulting from any willful material breach
by that party of this Agreement.
ARTICLE X
MISCELLANEOUS
-------------
Section 10.01 Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile or similar
writing) and shall be given,
if to Alcatel or Merger Subsidiary, to:
Alcatel
00, xxx Xx Xxxxxx
00000 Xxxxx, Xxxxxx
Facsimile No.: x00 0 00 00 00 00
Attn: Xxxxxx Xxxxxx-Xxxxxxx
General Counsel
with a copy to:
Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
if to Lucent, to:
Lucent Technologies, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Facsimile No.: (000) 000 0000
Attn: Xxxxxxx Xxxxxxxxx, Xx., Esq.
Senior Vice President, General Counsel and
Corporate Secretary
with a copy to:
Xxxxx X. Xxxx
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective (i) if given by facsimile,
when such facsimile is transmitted to the facsimile number specified in this
Section and the appropriate facsimile confirmation is received or (ii) if
given by any other means, when delivered at the address specified in this
Section.
Section 10.02 Non-Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate or
other writing delivered pursuant hereto shall not survive the Effective Time
or the termination of this Agreement.
Section 10.03 Amendments; No Waivers. (a) Any provision of this
Agreement (including the Exhibits hereto and the Lucent Disclosure Letter and
the Alcatel Disclosure Letter) may be amended or waived prior to the Effective
Time if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by Lucent, Alcatel and Merger Subsidiary, or in the
case of a waiver, by the party against whom the waiver is to be effective;
provided that after the adoption of this Agreement by the stockholders of
Lucent, no such amendment or waiver shall, without the further approval of
such stockholders, alter or change (i) the amount or kind of consideration to
be received in exchange for any shares of capital stock of Lucent, (ii) any
term of the articles of association and by-laws of Alcatel or (iii) any of the
terms or conditions of this Agreement if such alteration or change would
adversely affect the holders of any shares of capital stock of Lucent.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights
or remedies provided by law.
Section 10.04 Expenses. (a) Except as otherwise specified in this
Section 10.04 or agreed in writing by the parties, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
by this Agreement shall be paid by the party incurring such cost or expense;
provided that all liability for transfer taxes (other than transfer taxes to
be paid by Alcatel in connection with the issuance and creation of ADSs and
the underlying Alcatel Ordinary Shares in the Merger, as provided in Section
1.02(b)) incurred by Lucent or Lucent's stockholders in connection with the
transactions contemplated hereby shall be paid by the Surviving Corporation
out of its own funds and will not be paid, directly or indirectly, by Alcatel.
(b) If
(i) (A) either Lucent or Alcatel terminates this Agreement
pursuant to Section 9.01(b)(ii) or if Alcatel terminates this
Agreement pursuant to Section 9.01(c)(ii) and (B) prior to the Lucent
Stockholder Meeting (in the case of a termination pursuant to Section
9.01(b)(ii)) or the date of termination (in the case of a termination
pursuant to Section 9.01(c)(ii)), a Lucent Acquisition Proposal was
made known to Lucent or was made known directly to the stockholders
of Lucent or otherwise became publicly known or any third party has
publicly announced an intention (whether or not conditional) to make
a Lucent Acquisition Proposal; or
(ii) Alcatel terminates this Agreement pursuant to Section
9.01(c)(i),
then in any case described in clause (i) or (ii), Lucent shall pay to
Alcatel by wire transfer of immediately available funds an amount
equal to $250,000,000 (the "Lucent Initial Fee"). The Lucent Initial
Fee shall be paid immediately upon termination of this Agreement.
Receipt by Alcatel of the Lucent Initial Fee shall constitute
conclusive evidence that this Agreement has been validly terminated
and, upon receipt of the Lucent Initial Fee, Lucent shall be fully
released and discharged from any liability or obligation resulting
from or under this Agreement, except as otherwise provided in
Sections 9.02(b) and 10.04(c).
(c) If:
(i) (A) either Lucent or Alcatel terminates this Agreement
pursuant to Section 9.01(b)(ii), (B) prior to the Lucent Stockholder
Meeting, a Lucent Acquisition Proposal was made known to Lucent or
was made known directly to the stockholders of Lucent or otherwise
became publicly known or any third party has publicly announced an
intention (whether or not conditional) to make a Lucent Acquisition
Proposal, and (C) Lucent enters into an agreement with respect to, or
consummates, any Lucent Acquisition Proposal with any Person within
twelve months after such termination of this Agreement; or
(ii) (A) if Alcatel terminates this Agreement pursuant to
Section 9.01(c) and (B) Lucent enters into an agreement with respect
to, or consummates, any Lucent Acquisition Proposal with any Person
within twelve months after such termination of this Agreement;
then in any case described in clause (i) or (ii), Lucent shall pay to Alcatel
by wire transfer of immediately available funds an amount equal to
$500,000,000 (the "Lucent Termination Fee") no later than the time of Lucent's
entering into an agreement with respect to any Lucent Acquisition Proposal
with any Person or, if there is no such agreement, upon consummation of such
Lucent Acquisition Proposal, and shall be offset by any amounts previously
paid to Alcatel pursuant to Section 10.04(b). Acceptance by Alcatel of the
Lucent Termination Fee shall constitute conclusive evidence that this
Agreement has been validly terminated and, upon acceptance of the Lucent
Termination Fee, Lucent shall be fully released and discharged from any
liability or obligation resulting from or under this Agreement, except as
otherwise provided in Section 9.02(b). Lucent acknowledges that the agreements
contained in Sections 10.04(b) and (c) are an integral part of the
transactions contemplated by this Agreement and that, without these
agreements, Alcatel would not enter into this Agreement; accordingly, if
Lucent fails to pay when due the amounts due pursuant to Sections 10.04(b) and
(c) Alcatel shall be entitled to interest on the amounts set forth in Sections
10.04(b) and (c) at the prime rate of Citibank, N.A. in effect on the date
such payment was required to be made.
(d) If
(i) (A) either Lucent or Alcatel terminates this Agreement
pursuant to Section 9.01(b)(iii) or if Lucent terminates this
Agreement pursuant to Section 9.01(d)(ii) and (B) prior to the
Alcatel Shareholder Meeting (in the case of a termination pursuant to
Section 9.01(b)(iii)) or the date of termination (in the case of a
termination pursuant to Section 9.01(d)(ii)), an Alcatel Acquisition
Proposal was made known to Alcatel or was made known directly to the
shareholders of Alcatel or otherwise became publicly known or any
third party has publicly announced an intention (whether or not
conditional) to make an Alcatel Acquisition Proposal; or
(ii) Lucent terminates this Agreement pursuant to Section
9.01(d)(i);
then in any case described in clause (i) or (ii), Alcatel shall pay
to Lucent by wire transfer of immediately available funds an amount
equal to $250,000,000 (the "Alcatel Initial Fee"). The Alcatel
Initial Fee shall be paid immediately upon termination of this
Agreement. Acceptance by Lucent of the Alcatel Initial Fee shall
constitute conclusive evidence that this Agreement has been validly
terminated and, upon acceptance of the Alcatel Initial Fee, Alcatel
and Merger Subsidiary shall be fully released and discharged from any
liability or obligation resulting from or under this Agreement except
as otherwise provided in Sections 9.02(b) and 10.04(e).
(e) If:
(i) (A) either Lucent or Alcatel terminates this Agreement
pursuant to Section 9.01(b)(iii), (B) prior to the Alcatel
Shareholder Meeting, an Alcatel Acquisition Proposal was made known
to Alcatel or was made known directly to the shareholders of Alcatel
or otherwise became publicly known or any third party has publicly
announced an intention (whether or not conditional) to make an
Alcatel Acquisition Proposal, and (C) Alcatel enters into an
agreement with respect to, or consummates, any Alcatel Acquisition
Proposal with any Person within twelve months after such termination
of this Agreement; or
(ii) (A) if Lucent terminates this Agreement pursuant to
Section 9.01(d) and (B) Alcatel enters into an agreement with respect
to, or consummates, any Alcatel Acquisition Proposal with any Person
within twelve months after such termination of this Agreement;
then in any case described in clause (i) or (ii), Alcatel shall pay to Lucent
by wire transfer of immediately available funds an amount equal to
$500,000,000 (the "Alcatel Termination Fee"), which shall be paid no later
than the time of Alcatel's entering into an agreement with respect to any
Alcatel Acquisition Proposal with any Person or, if there is no such
agreement, upon consummation of such Alcatel Acquisition Proposal, and shall
be offset by any amounts previously paid to Lucent pursuant to Section
10.04(d). Acceptance by Lucent of the Alcatel Termination Fee shall constitute
conclusive evidence that this Agreement has been validly terminated and, upon
acceptance of the Alcatel Termination Fee, Alcatel and Merger Subsidiary shall
be fully released and discharged from any liability or obligation resulting
from or under this Agreement, except as otherwise provided in Section 9.02(b).
Alcatel acknowledges that the agreements contained in Sections 10.04(d) and
(e) 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 Alcatel fails to pay when due the amounts due
pursuant to this Section 10.04(d) and (e), Lucent shall be entitled to
interest on the amounts set forth in this Section 10.04(d) and (e) at the
prime rate of Citibank, N.A. in effect on the date such payment was required
to be made.
Section 10.05 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that no party may
assign, delegate or otherwise transfer any of its rights or obligations under
this Agreement without the consent of the other parties hereto.
Section 10.06 Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware, without
regard to principles of conflicts of law.
Section 10.07 Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in any federal or state court located in the State of Delaware, and
each of the parties hereby consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 10.01
shall be deemed effective service of process on such party.
Section 10.08 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 10.09 Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts (including by facsimile), each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement shall become effective
when each party hereto shall have received (by telecopy or otherwise)
counterparts of this Agreement signed by all of the other parties hereto.
Section 10.10 Entire Agreement; No Third Party Beneficiaries. This
Agreement (including the Exhibits hereto and the Lucent Disclosure Letter and
the Alcatel Disclosure Letter) and the Confidentiality Agreement constitute
the entire agreement between the parties with respect to the subject matter of
this Agreement and supersede all prior agreements and understandings, both
oral and written, between the parties with respect to the subject matter of
this Agreement and thereof. Except for the provisions of Section 1.02 (which
shall be for the benefit of the holders of Shares as of immediately prior to
the Effective Time) and Section 6.03 (which shall be for the benefit of the
Indemnitees), no provision of this Agreement or any other agreement
contemplated hereby is intended to confer on any Person other than the parties
hereto any rights or remedies.
Section 10.11 Interpretation. (a) When a reference is made in this
Agreement to an Article, a Section, Exhibit or Schedule, such reference shall
be to an Article of, a Section of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include", "includes" or "including" are used in this Agreement,
they shall be deemed to be followed by the words "without limitation". The
words "hereof", "herein" and "hereunder" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement. All terms defined in
this Agreement shall have the defined meanings when used in any certificate or
other document made or delivered pursuant thereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any statute defined
or referred to herein means such statute as from time to time amended,
modified or supplemented, including by succession of comparable successor
statutes and references to all attachments thereto and instruments
incorporated therein. References to a Person are also to its permitted
successors and assigns. Each of the parties has participated in the drafting
and negotiation of this Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement must be construed as if it is drafted by
all of the parties, and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of authorship of any of the provisions of
this Agreement.
(b) Any matter disclosed in the Alcatel Disclosure Letter or
the Lucent Disclosure Letter, as the case may be, in respect of any
representation or covenant made by such party shall be deemed to be disclosed
for purposes of the other representations and covenants made by such party to
the extent that such disclosure (in light of its form and substance) would
reasonably be expected to be pertinent to such other representation(s) and
covenant(s).
Section 10.12 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such a determination, the parties shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
LUCENT TECHNOLOGIES, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------------------
Xxxxxxxx X. Xxxxx
Chairman and Chief Executive Officer
ALCATEL
By: /s/ Xxxxx Xxxxxxx
-------------------------------------------------
Xxxxx Xxxxxxx
Chairman and Chief Executive Officer
AURA MERGER SUB, INC.
By: /s/ Xxxx-Xxxxxx Beaufret
-------------------------------------------------
Xxxx-Xxxxxx Beaufret
President
[signature page]
