<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 7, 1996
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CISCO SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
CALIFORNIA 3679 77-0059951
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
170 WEST TASMAN DRIVE
SAN JOSE, CALIFORNIA 95134
(408) 526-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
LARRY R. CARTER
VICE PRESIDENT, FINANCE AND ADMINISTRATION AND CHIEF FINANCIAL OFFICER
CISCO SYSTEMS, INC.
170 WEST TASMAN DRIVE
SAN JOSE, CALIFORNIA 95134
(408) 526-4000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
EDWARD M. LEONARD, ESQ. LARRY SONSINI, ESQ.
MICHAEL J. CASEY, ESQ. WILSON, SONSINI, GOODRICH & ROSATI
JEFFREY P. HIGGINS, ESQ. 650 PAGE MILL ROAD
CRAIG E. WALKER, ESQ. PALO ALTO, CALIFORNIA 94304
BROBECK, PHLEGER & HARRISON LLP (415) 493-9300
TWO EMBARCADERO PLACE
2200 GENG ROAD
PALO ALTO, CALIFORNIA 94303
(415) 424-0160
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC: At the
effective time of the merger of a wholly-owned subsidiary of the Registrant with
and into Stratacom, Inc., which shall occur as soon as practicable after the
effective date of this Registration Statement and the satisfaction of all
conditions to closing of such merger.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE(1)(2)
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Common Stock, no par
value................. 78,688,366 $54.8125 $4,313,106,061 $1,487,277.95
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the registration
fee, based on the average of the high and low prices for the Common Stock as
reported on the Nasdaq National Market on May 31, 1996 in accordance with
Rule 457 under the Securities Act of 1933, as amended.
(2) Of this amount, $728,349.98 was paid in connection with the filing of the
Preliminary Proxy material of StrataCom, Inc. on April 29, 1996. In
accordance with Rule 0-11(a)(2) under the Securities Exchange Act of 1934
and Section 6(b) under the Securities Act of 1933, the balance of the filing
fee is being submitted herewith.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 317 of the California Corporations Code authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit indemnification (including
reimbursement of expenses incurred) under certain circumstances for liabilities
arising under the Securities Act. The Registrant's Restated Articles of
Incorporation, as amended and Amended By-laws provide for indemnification of its
directors, officers, employees and other agents to the maximum extent permitted
by the California Corporations Code. In addition, the Company has entered into
Indemnification Agreements with each of its directors and officers.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following exhibits are filed herewith or incorporated by reference
herein:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- --------- -------------------------------------------------------------------------------
<S> <C> <C>
2.1 -- Agreement and Plan of Reorganization by and among the Registrant, Jet
Acquisition Corporation, and StrataCom, Inc., dated as of April 21, 1996
(attached as Appendix A to the Proxy Statement/Prospectus contained in this
Registration Statement).
4.1 -- Registrant's Restated Articles of Incorporation as currently in effect
(incorporated by reference to the Registrant's registration statements (File
No. 33-32778)).
4.2 -- Registrant's Bylaws, as currently in effect (incorporated by reference to the
Registrant's registration statements (File No. 33-32778)).
4.3 -- Form of Specimen Certificate for Registrant's Common Stock (incorporated by
reference to Exhibit 28.01 of Registrant's Registration Statement on Form S-1
(File No. 33-32778)).
5.1 -- Opinion of Brobeck, Phleger & Harrison LLP regarding the legality of the
securities being issued.
8.1 -- Opinion of Brobeck, Phleger & Harrison LLP regarding certain tax matters.
8.2 -- Opinion of Wilson, Sonsini, Goodrich & Rosati regarding certain tax matters.
23.1 -- Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1 and Exhibit
8.1).
23.2 -- Consent of Coopers Lybrand L.L.P. with respect to Registrant's financial
statements.
23.3 -- Consent of Arthur Andersen LLP with respect to StrataCom's financial
statements.
23.4 -- Consent of Montgomery Securities.
23.5 -- Consent of Wilson, Sonsini, Goodrich & Rosati (included in Exhibit 8.2).
24.1 -- Power of Attorney (see page II-3).
99.1 -- Form of proxy to be used in soliciting StrataCom's stockholders for its special
meeting.
99.2 -- Form of Employment Agreement
</TABLE>
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect
in the prospectus any facts or events arising after the effective date of this
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement; and (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in this Registration Statement;
II-1
<PAGE> 3
(2) that, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof;
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering;
(4) that, for purposes of deterring any liability under the Securities Act,
each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
a bona fide offering thereof;
(5) that, prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this Registration
Statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act, such reoffering prospectus will
contain the information called for by the applicable registration form with
respect to reofferings by person who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form;
(6) that every prospectus (i) that is filed pursuant to paragraph (5)
immediately preceding, or (ii) that purports to meet the requirements of Section
10(a)(3) of the Securities Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to this
Registration Statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof;
(7) to respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of Form S-4,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of
this Registration Statement through the date of responding to the request; and
(8) to supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in this Registration Statement when it
became effective.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 20 above, or
otherwise, the Registrant has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-2
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 1 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of San Jose, State of California, on this 7th day of June, 1996.
CISCO SYSTEMS, INC.
By: /s/ John T. Chambers
----------------------------------------
John T. Chambers, President
and Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints John T. Chambers and Larry R. Carter and
each of them acting individually, as such person's true and lawful
attorneys-in-fact and agents, each with full power of substitution, for such
person, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as such person might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his or her substitutes, may do or cause to be done by
virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------------------- --------------
<C> <S> <C>
/s/ John T. President and Chief Executive Officer June 7, 1996
Chambers (Principal Executive Officer) and Director
- ---------------------------------------------
John T. Chambers
/s/ Larry R. Vice President, Finance and Administration, June 7, 1996
Carter Chief Financial Officer and Secretary
- --------------------------------------------- (Principal Financial and Accounting
Larry R. Carter Officer)
/s/ John P. Chairman of the Board and Director June 7, 1996
Morgridge
- ---------------------------------------------
John P. Morgridge
/s/ Donald T. Vice Chairman of the Board and Director June 7, 1996
Valentine
- ---------------------------------------------
Donald T. Valentine
/s/ Dr. Michael S. Director June 7, 1996
Frankel
- ---------------------------------------------
Dr. Michael S. Frankel
/s/ Dr. James F. Director June 7, 1996
Gibbons
- ---------------------------------------------
Dr. James F. Gibbons
/s/ Robert L. Director June 7, 1996
Puette
- ---------------------------------------------
Robert L. Puette
/s/ Masayoshi Director June 7, 1996
Son
- ---------------------------------------------
Masayoshi Son
/s/ Steve M. Director June 7, 1996
West
- ---------------------------------------------
Steve M. West
</TABLE>
II-3
<PAGE> 1
[BROBECK, PLEGER & HARRISON LLP LETTERHEAD]
Exhibit 8.1
June 4, 1996
Cisco Systems, Inc.
170 West Tasman Drive
San Jose, CA 95134
Ladies and Gentlemen:
This opinion is being delivered to you pursuant to Section 6.1(e) of
the Agreement and Plan of Reorganization (the "Agreement") among Cisco Systems,
Inc., a California corporation ("Cisco"), its wholly owned subsidiary, Jet
Acquisition Corporation, Delaware corporation ("Sub"), and StrataCom, Inc., a
Delaware corporation ("StrataCom"), dated April 21, 1996. Pursuant to the
Agreement, Sub will merge with and into StrataCom (the "Merger"), and StrataCom
will become a wholly owned subsidiary of Cisco.
Except as otherwise provided, capitalized terms referred to herein have
the meanings set forth in the Agreement. All section references, unless
otherwise indicated, are to the Internal Revenue Code of 1986, as amended (the
"Code").
We have acted as legal counsel to Cisco and Sub in connection with the
Merger. As such, and for the purpose of rendering this opinion, we have
examined (or will examine on or prior to the Effective Date) and are relying
(or will rely) upon (without any independent investigation or review thereof)
the truth and accuracy, at all relevant times, of the statements, covenants,
representations and warranties contained in the following documents (including
all schedules and exhibits thereto):
1. The Agreement;
2. Representations made to us by Cisco and Sub in a letter
reproduced as Exhibit A hereto;
3. Representations made to us by StrataCom in a letter reproduced
as Exhibit B hereto;
4. Representations made by certain shareholders of StrataCom in
"Affiliates Agreements";
<PAGE> 2
[BROBECK, PHLEGER & HARRISON LLP LETTERHEAD]
Cisco Systems, Inc. June 4, 1996
Page 2
5. The Registration Statement;
6. An opinion of Wilson Sonsini Goodrich & Rosati substantially
identical in form and substance to this opinion (the "Wilson Sonsini Tax
Opinion"); and
7. Such other instruments and documents related to the formation,
organization and operation of Cisco, StrataCom and Sub or to the consummation
of the Merger and the transactions contemplated thereby as we have deemed
necessary or appropriate.
In connection with rendering this opinion, we have assumed or obtained
representations (and are relying thereon, without any independent investigation
or review thereof) that:
1. Original documents (including signatures) are authentic,
documents submitted to us as copies conform to the original documents, and
there has been (or will be by the Effective Time) due execution and delivery of
all documents where due execution and delivery are prerequisites to
effectiveness thereof;
2. The Merger will be consummated in accordance with the Agreement
and will be effective under the laws of the State of Delaware;
3. The shareholders of StrataCom do not, and will not on or before
the Effective Date, have an existing plan or intent to dispose of an amount of
Cisco Common Stock to be received in the Merger (or to dispose of StrataCom
capital stock in anticipation of the Merger) such that the shareholders of
StrataCom will not receive and retain a meaningful continuing equity ownership
in Cisco that is sufficient to satisfy the continuity of interest requirement
as specified in Treasury Regulations Section 1.368-1(b) and as interpreted in
certain Internal Revenue Service rulings and federal judicial decisions;
4. After the Merger, StrataCom will hold "substantially all" of
its and Sub's properties within the meaning of Section 368(a)(2)(E)(i) of the
Code and the regulations promulgated thereunder;
5. To the extent any expenses relating to the Merger (or the "plan
of reorganization" within the meaning of Treasury Regulations Section
1.368-1(c) with respect to the Merger) are funded directly or indirectly by a
party other than the incurring party, such expenses will be within the
guidelines established in Revenue Ruling 73-54, 1973-1 C.B. 187;
<PAGE> 3
[BROBECK, PHLEGER & HARRISON LLP LETTERHEAD]
Cisco Systems, Inc. June 4, 1996
Page 3
6. No StrataCom Shareholder guaranteed any StrataCom indebtedness
outstanding during the period immediately prior to the Merger, and at all
relevant times, including as of the Effective Time, (i) no outstanding
indebtedness of StrataCom, Cisco or Sub has or will represent equity for tax
purposes; and (ii) no outstanding equity of StrataCom, Cisco or Sub has or will
represent indebtedness for tax purposes; and
7. The Wilson Sonsini Tax Opinion has been delivered and not
withdrawn.
Based on our examination of the foregoing items and subject to the
assumptions, exceptions, limitations and qualifications set forth herein, we
are of the opinion that, for federal income tax purposes, the Merger will be a
"reorganization" as defined in Section 368(a) of the Code.
In addition to the assumptions set forth above, this opinion is subject
to the exceptions, limitations and qualifications set forth below.
1. This opinion represents and is based upon our best judgment
regarding the application of federal income tax laws arising under the Code,
existing judicial decisions, administrative regulations and published rulings
and procedures. Our opinion is not binding upon the Internal Revenue Service or
the courts, and there is no assurance that the Internal Revenue Service will
not successfully assert a contrary position. Furthermore, no assurance can be
given that future legislative, judicial or administrative changes, on either a
prospective or retroactive basis, would not adversely affect the accuracy of
the conclusions stated herein. Nevertheless, we undertake no responsibility to
advise you of any new developments in the application or interpretation of the
federal income tax laws.
2. This opinion addresses only the classification of the Merger as
a reorganization under Section 368(a) of the Code, and does not address any
other federal, state, local or foreign tax consequences that may result from
the Merger or any other transaction (including any transaction undertaken in
connection with the Merger). In particular, we express no opinion regarding (i)
whether and the extent to which any StrataCom shareholder who has provided or
will provide services to StrataCom, Cisco or Sub will have compensation income
under any provision of the Code; (ii) the effects of such compensation income,
including but not limited to the effect upon the basis and holding period of
the Cisco stock received by any such shareholder in the Merger; (iii) the
potential application of the "golden parachute" provisions (Sections 280G,
3121(v)(2) and 4999) of the Code, the alternative minimum tax provisions
(Sections 55, 56 and 57) of the Code or Sections 305, 306, 357, 424, and 708,
or the regulations promulgated thereunder; (iv) other than that the Merger will
be a reorganization within the meaning
<PAGE> 4
[Brobeck, Phleger & Harrison LLP Letterhead]
Cisco Systems, Inc. June 4, 1996
Page 4
of Code Section 368 and the consequences that follow directly and solely from
such characterization, the corporate level tax consequences of the Merger to
Cisco, Sub or StrataCom, including without limitation the survival and/or
availability, after the Merger, of any of the federal income tax attributes or
elections of StrataCom, after application of any provision of any Code, as well
as the regulations promulgated thereunder and judicial interpretations thereof;
(v) the basis of any equity interest in StrataCom acquired by Cisco in the
Merger; (vi) the tax consequences of any transaction in which StrataCom stock
or a right to acquire StrataCom stock was received; (vii) the tax consequences
of the Merger to holders of options or warrants for StrataCom stock; or (viii)
the tax consequences that may be relevant to particular classes of StrataCom
stockholders such as dealers in securities, corporate shareholders subject to
the alternative minimum tax, foreign persons, and holders of shares acquired
upon exercise of stock options or in other compensatory transactions.
3. No opinion is expressed as to any transaction other than the
Merger as described in the Agreement or to any transaction whatsoever,
including the Merger, if all the transactions described in the Agreement are
not consummated in accordance with the terms of such Agreement and without
waiver or breach of any material provision thereof or if all of the
representations, warranties, statements and assumptions upon which we relied
are not true and accurate at all relevant times. In the event any one of the
statements, representations, warranties or assumptions upon which we have
relied to issue this opinion is incorrect, our opinion might be adversely
affected and may not be relied upon.
4. This opinion has been delivered to you for the purpose of
satisfying the conditions set forth in Section 6.1(e) of the Agreement. We
hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and further consent to all references to us in the Registration
Statement.
Very truly yours,
s/s Brobeck, Phleger & Harrison LLP
BROBECK, PHLEGER & HARRISON LLP
Enclosures
<PAGE> 5
Exhibit A
June 6, 1996
Brobeck, Phleger & Harrison LLP Wilson Sonsini Goodrich & Rosati
Two Embarcadero Place 650 Page Mill Road
2200 Geng Road Palo Alto, CA 94303-1050
Palo Alto, California 94306
Re: Merger pursuant to the Agreement and Plan of
Reorganization (the "Agreement") dated April 21,
1996, among Jet Acquisition Corporation, a Delaware
corporation ("Sub"), Cisco Systems, Inc., a
California corporation ("Cisco"), and StrataCom,
Inc., a Delaware corporation ("StrataCom")
Gentlemen:
This letter is supplied to you in connection with your
rendering of opinions pursuant to Section 6.1(e) of the Agreement regarding
certain federal income tax consequences of the Merger. Unless otherwise
indicated, capitalized terms not defined herein have the meanings set forth in
the Agreement.
A. REPRESENTATIONS
After consulting with their counsel and auditors regarding the meaning
of and factual support for the following representations, the undersigned hereby
certify and represent that the following facts are now true and will continue to
be true as of the Effective Date of the Merger:
1. Pursuant to the Merger, Sub will merge with and into
StrataCom, and StrataCom will acquire all of the assets and liabilities of Sub.
At least ninety percent (90%) of the fair market value of the net assets and at
least seventy percent (70%) of the fair market value of the gross assets held by
StrataCom immediately prior
<PAGE> 6
Brobeck, Phleger & Harrison LLP June 6, 1996
Wilson Sonsini Goodrich & Rosati Page 2
to the Merger will continue to be held by StrataCom immediately after the
Merger. For the purpose of determining the percentage of StrataCom's net and
gross assets held by it immediately following the Merger, the following assets
will be treated as property held by StrataCom immediately prior but not
subsequent to the Merger: (i) assets disposed of by StrataCom prior to or
subsequent to the Merger and in contemplation thereof (including without
limitation any asset disposed of by StrataCom, other than in the ordinary course
of business, pursuant to a plan or intent existing during the period ending on
the Effective Date and beginning with the commencement of negotiations (whether
formal or informal) with Cisco regarding the Merger (the "Pre-Merger Period")),
(ii) assets used by StrataCom to pay other expenses or liabilities incurred in
connection with the Merger, and (iii) assets used to make distribution,
redemption or other payments in respect of StrataCom capital stock or rights to
acquire such stock (including payments treated as such for tax purposes) that
are made in contemplation of the Merger or related thereto;
2. Cisco is participating in the Merger for good and valid
business reasons and not for tax purposes;
3. Prior to the Merger, Cisco will be in "Control" of Sub. As
used herein, "Control" of a corporation shall consist of ownership of stock
possessing at least eighty percent (80%) of the total combined voting power of
all classes of stock entitled to vote and at least eighty percent (80%) of the
total number of shares of all other classes of stock of the corporation. For
purposes of determining Control, a person shall not be considered to own voting
stock if rights to vote such stock (or to restrict or otherwise control the
voting of such stock) are held by a third party (including a voting trust) other
than an agent of such person;
4. In the Merger, all shares of StrataCom capital stock will
be exchanged solely for voting stock of Cisco, except to the extent of cash paid
in lieu of fractional shares in accordance with the terms of the Merger
Agreement;
5. Cisco has no plan or intention to cause StrataCom to issue
addi- tional shares of stock after the Merger that would result in Cisco losing
Control of StrataCom;
6. Cisco has no plan or intention to reacquire any of its
stock issued pursuant to the Merger;
7. Except for transfers described in both Section 368(a)(2)(C)
of the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury
Regulation Section 1.368-2(j)(4), Cisco has no current plan or intention to (i)
liquidate StrataCom;
<PAGE> 7
Brobeck, Phleger & Harrison LLP June 6, 1996
Wilson Sonsini Goodrich & Rosati Page 3
(ii) merge StrataCom with or into another corporation including Cisco or its
affiliates; (iii) sell, distribute or otherwise dispose of the capital stock of
StrataCom; or (iv) cause StrataCom to sell or otherwise dispose of any of its
assets (or any assets acquired from Sub) except for dispositions made in the
ordinary course of business or payment of expenses incurred by StrataCom
pursuant to the Merger (including payments made with respect to fractional
shares); provided, however, that nothing herein shall be understood to impose
any limitation on the right of Cisco to transfer assets or engage in any other
transaction which Cisco may determine to be necessary, appropriate or desirable
in the exercise of its business judgment after the Merger in response to the
circumstances then existing (as opposed to a plan or intention arising prior to
the Merger); and provided further that nothing herein shall be understood to
impose any limitation on Cisco to merge StrataCom into itself pursuant to a
ruling received from the Internal Revenue Service that the Merger and such
subsequent merger will, if considered part of an integrated transaction,
constitute a reorganization described in Section 368(a)(1)(A) of the Code;
8. In the Merger, Sub will have no liabilities assumed by
StrataCom and will not transfer to StrataCom any assets subject to liabilities;
9. Cisco intends that, following the Merger, the historic
business of StrataCom will be continued;
10. Neither Cisco nor any current or former subsidiary of
Cisco owns, or has owned during the past five (5) years, directly or indirectly,
any shares of StrataCom capital stock, or the right to acquire or vote any such
shares (except such rights as are granted in the Agreement);
11. Cisco is not an investment company within the meaning of
Sections 368(a)(2)(F)(iii) and (iv) of the Code;
12. No shareholder of StrataCom is acting as agent for Cisco
in connection with the Merger or approval thereof, and Cisco will not reimburse
any StrataCom shareholder for StrataCom capital stock such shareholder may have
purchased or for other obligations such shareholder may have incurred;
13. Neither Cisco nor Sub is under the jurisdiction of a court
in a Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the
Code;
14. Cisco has no knowledge of any plan or intention on the
part of StrataCom's shareholders (a "Plan") to engage in a sale, exchange,
transfer, distribution, pledge, disposition or any other transaction which
results in a reduction in the risk of
<PAGE> 8
Brobeck, Phleger & Harrison LLP June 6, 1996
Wilson Sonsini Goodrich & Rosati Page 4
ownership or a direct or indirect disposition (a "Sale") of shares of Cisco
Common Stock to be issued to such shareholders in the Merger, which shares would
have an aggregate fair market value, as of the Effective Date of the Merger, in
excess of fifty percent (50%) of the aggregate fair market value, immediately
prior to the Merger, of all outstanding shares of StrataCom capital stock. For
purposes of this paragraph, shares of StrataCom capital stock (or the portion
thereof) (i) with respect to which a StrataCom shareholder receives
consideration in the Merger other than Cisco Common Stock (including, without
limitation, cash received in lieu of fractional shares of Cisco Common Stock)
and/or (ii) with respect to which a Sale occurs prior to and in contemplation of
the Merger shall be considered shares of outstanding StrataCom capital stock
exchanged for Cisco Common Stock in the Merger and then disposed of pursuant to
a Plan;
15. The payment of cash in lieu of fractional shares of Cisco
is solely for the purpose of avoiding the expense and inconvenience to Cisco of
issuing fractional shares and does not represent separately bargained-for
consideration. The total cash consideration that will be paid in the Merger to
StrataCom shareholders in lieu of fractional shares of Cisco Common Stock will
not exceed one percent (1%) of the total consideration that will be issued in
the Merger to StrataCom shareholders in exchange for their shares of StrataCom
capital stock. The fractional share interests of each Strata-Com shareholder
will be aggregated and no StrataCom shareholder will receive cash in an amount
greater than the value of one full share of Cisco Common Stock;
16. Except with respect to payments of cash to StrataCom
shareholders in lieu of fractional shares of Cisco Common Stock, one hundred
percent (100%) of the StrataCom capital stock outstanding immediately prior to
the Merger will be exchanged solely for Cisco Common Stock. Thus, except as set
forth in the preceding sentence, Sub and Cisco intend that no consideration be
paid or received (directly or indirectly, actually or constructively) for
StrataCom capital stock other than Cisco Common Stock;
17. At the Effective Time of the Merger, the fair market value
of the Cisco Common Stock received by each StrataCom shareholder will be
approximately equal to the fair market value of the StrataCom capital stock
surrendered in exchange therefor, and the aggregate consideration received by
StrataCom shareholders in exchange for their StrataCom capital stock will be
approximately equal to the fair market value of all of the outstanding shares of
StrataCom capital stock immediately prior to the Merger;
18. No shares of Sub have been or will be used as
consideration or issued to shareholders of StrataCom pursuant to the Merger;
<PAGE> 9
Brobeck, Phleger & Harrison LLP June 6, 1996
Wilson Sonsini Goodrich & Rosati Page 5
19. Except as otherwise specifically provided in the
Agreement, Sub, Cisco, StrataCom and the shareholders of StrataCom will each pay
separately its or their own expenses in connection with the Merger;
20. There is no intercorporate indebtedness existing between
Cisco and StrataCom or between Sub and StrataCom that was issued, acquired or
will be settled at a discount as a result of the Merger, and Cisco will assume
no liabilities of StrataCom or any StrataCom shareholder in connection with the
Merger;
21. The terms of the Agreement and all other agreements
entered into in connection therewith are the product of arm's-length
negotiations;
22. None of the compensation received by any
shareholder-employees of StrataCom will be separate consideration for, or
allocable to, any of their shares of StrataCom capital stock; none of the shares
of Cisco Common Stock received by any shareholder-employees of StrataCom will be
separate consideration for, or allocable to, any employment agreement or any
covenants not to compete; and the compensation paid to any shareholder-employees
of StrataCom will be for services actually rendered and will be commensurate
with amounts paid to third parties bargaining at arm's length for similar
services;
23. No "poison pill" or similar rights will be associated with
the Cisco Common Stock on or prior to the date of the Merger;
24. With respect to each instance, if any, in which shares of
StrataCom capital stock have been purchased by a shareholder of Cisco (a
"Shareholder") during the Pre-Merger Period (a "Stock Purchase"): (i) the Stock
Purchase was made by such Shareholder on its own behalf and with its own funds
and not as a representative, or for the benefit, of Cisco; (ii) the purchase
price paid by such Shareholder pursuant to the Stock Purchase was the product of
arm's-length negotiations, was funded by such Shareholder's own assets, and was
not advanced, and will not be reimbursed, either directly or indirectly, by
Cisco; (iii) at no time was such Shareholder or any other party required or
obligated to surrender to Cisco the StrataCom capital stock acquired in the
Stock Purchase, and neither such Shareholder nor any other party will be
required to surrender to Cisco the Cisco Common Stock for which such shares of
StrataCom capital stock will be exchanged in the Merger; and (iv) the Stock
Purchase was not a formal or informal condition to consummation of the Merger
and was entered into solely to satisfy the separate interests of such
Shareholder and the seller;
25. Each of the representations made by Cisco and Sub in the
Agreement and any other documents associated therewith is true and accurate;
and
<PAGE> 10
Brobeck, Phleger & Harrison LLP June 6, 1996
Wilson Sonsini Goodrich & Rosati Page 6
26. Cisco and Sub are authorized to make all of the
representations set forth herein.
B. RELIANCE BY YOU IN RENDERING OPINIONS; LIMITATIONS ON YOUR
OPINIONS
1. The undersigned recognize that (i) your opinions will be
based on the representations set forth herein and on the statements contained in
the Agreement and the documents related thereto and (ii) your opinions will be
subject to certain limitations and qualifications including that they may not be
relied upon if any such representations are not accurate in all material
respects.
2. The undersigned recognize that your opinions will not
address any tax consequences of the Merger or any action taken in connection
therewith except as expressly set forth in such opinions.
Very truly yours,
CISCO SYSTEMS, INC., a California
corporation
By s/s Larry R. Carter
-------------------------------
Title CFO and Secretary
----------------------------
JET ACQUISITION CORPORATION,
a Delaware corporation
By s/s Larry R. Carter
-------------------------------
Title CFO and Secretary
----------------------------
<PAGE> 11
Exhibit B
May 28, 1996
Brobeck, Phleger & Harrison LLP Wilson Sonsini Goodrich & Rosati
Two Embarcadero Place 650 Page Mill Road
2200 Geng Road Palo Alto, CA 94303-1050
Palo Alto, California 94306
Re: Merger pursuant to the Agreement and Plan of Reorganization
(the "Agreement") dated April 21, 1996, among Jet Acquisition
Corporation, a Delaware corporation ("Sub"), Cisco Systems,
Inc., a California corporation ("Cisco"), and StrataCom,
Inc., a Delaware corporation ("StrataCom")
Gentlemen:
This letter is supplied to you in connection with your rendering
of opinions pursuant to Section 6.1(e) of the Agreement regarding certain
federal income tax consequences of the Merger. Unless otherwise indicated,
capitalized terms not defined herein have the meanings set forth in the
Agreement.
A. Representations
After consulting with its counsel and auditors regarding the
meaning of and factual support for the following representations, the
undersigned hereby certifies and represents that the following facts are now
true and will continue to be true through the Effective Date of the Merger:
1. Pursuant to the Merger, Sub will merge with and into
StrataCom, and StrataCom will acquire all of the assets and liabilities of Sub.
At least ninety percent (90%) of the fair market value of the net assets and at
least seventy percent (70%) of the fair market value of the gross assets held by
StrataCom immediately prior to the Merger will continue to be held by StrataCom
immediately after the Merger. For the purpose of determining the percentage of
StrataCom's net and gross assets held by it immediately following the Merger,
the following assets will be treated as property held by StrataCom
<PAGE> 12
Brobeck, Phleger & Harrison LLP May 28, 1996
Wilson Sonsini Goodrich & Rosati Page 2
immediately prior to but not subsequent to the Merger: (i) assets disposed of by
StrataCom prior to or subsequent to the Merger and in contemplation thereof
(including without limitation, any asset disposed of by StrataCom, other than
the ordinary course of business, pursuant to a plan or intent existing during
the period ending on the Effective Date of the Merger and beginning with the
commencement of negotiations (whether formal or informal) with Cisco regarding
the Merger (the "Pre-Merger Period")), (ii) assets used by StrataCom to pay
other expenses or liabilities incurred in connection with the Merger and (iii)
assets used to make distribution, redemption or other payments in respect of
StrataCom capital stock or rights to acquire such stock (including payments
treated as such for tax purposes) that are made in contemplation of the Merger
or related thereto;
2. StrataCom has made no transfer of any of its assets
(including any distribution of assets with respect to, or in redemption of,
stock) in contemplation of the Merger or during the Pre-Merger Period other than
(i) in the ordinary course of business and (ii) payments for expenses incurred
in connection with the Merger;
3. StrataCom is participating in the Merger for good and valid
business reasons and not for tax purposes;
4. At the time of the Merger, except as specified in, or
disclosed in the Agreement or in a schedule or exhibit to, the Agreement,
StrataCom will have no outstanding warrants, options or convertible securities
nor any other type of right outstanding pursuant to which any person could
acquire shares of StrataCom capital stock or any other equity interest in
StrataCom;
5. In the Merger, shares of StrataCom capital stock representing
"Control" of StrataCom will be exchanged solely for voting stock of Cisco; at
the time of the Merger, there will exist no rights to acquire StrataCom capital
stock or to vote (or restrict or otherwise control the vote of) StrataCom
capital stock which, if exercised, could affect Cisco's acquisition and
retention of Control of StrataCom. For purposes of this paragraph, shares of
StrataCom capital stock exchanged in the Merger for cash and other property
(including, without limitation, cash paid to StrataCom stockholders in lieu of
fractional shares of Cisco Common Stock) will be treated as StrataCom capital
stock outstanding on the date of the Merger but not exchanged for voting stock
of Cisco. As used herein, "Control" of a corporation shall consist of ownership
of stock possessing at least eighty percent (80%) of the total combined voting
power of all classes of stock entitled to vote and at least eighty percent (80%)
of the total number of shares of all other classes of stock of the corporation.
For purposes of determining Control, a person shall not be considered to own
voting stock if rights to vote such stock (or to restrict or
<PAGE> 13
Brobeck, Phleger & Harrison LLP May 28, 1996
Wilson Sonsini Goodrich & Rosati Page 3
otherwise control the voting of such stock) are held by a third party (including
a voting trust) other than an agent of such person;
6. StrataCom has no obligation, understanding, agreement or
intention to issue additional shares of stock after the Merger that would result
in Cisco losing Control of StrataCom;
7. The liabilities of StrataCom have been incurred by StrataCom
in the ordinary course of its business;
8. The fair market value of StrataCom's assets will, on the
Effective Date, exceed the aggregate liabilities of StrataCom;
9. Other than shares of StrataCom capital stock or options to
acquire StrataCom capital stock issued as compensation to present or former
service providers (including, without limitation, employees and directors) of
StrataCom in the ordinary course of business, no issuances of StrataCom capital
stock or rights to acquire StrataCom capital stock have occurred or will occur
during the Pre-Merger Period other than pursuant to options, warrants or
agreements, outstanding prior to the Pre-Merger Period or as otherwise
specifically identified in the Agreement;
10. Case or other property paid to employees of StrataCom during
the Pre-Merger Period has been or will be in the ordinary course of business or
pursuant to agreements entered into prior to the Pre-Merger Period;
11. StrataCom is not and will not be on the Effective Date an
"investment company" within the meaning of Section 368(a)(2)(F)(iii) and (iv) of
the Code;
12. StrataCom is not under the jurisdiction of a court in a Title
11 or similar case within the meaning of Section 368(a)(3)(A) of the Code;
13. StrataCom has on knowledge of any plan or intention on the
part of StrataCom's stockholders (a "Plan") to engage in a sale, exchange,
transfer, distribution, pledge, disposition or any other transaction which
results in a reduction in the risk of ownership or a direct or indirect
disposition (a "Sale") of shares of Cisco Common Stock to be issued to such
stockholders in the Merger, which shares would have an aggregate fair market
value, as of the Effective Date of the Merger, in excess of fifty percent (50%)
of the aggregate fair market value, immediately prior to the Merger, of all
outstanding shares of StrataCom
<PAGE> 14
Brobeck, Phleger & Harrison LLP May 28, 1996
Wilson Sonsini Goodrich & Rosati Page 4
capital stock. For purposes of this paragraph, shares of StrataCom capital stock
(or the portion thereof) (i) with respect to which a StrataCom stockholder
receives consideration in the Merger other than Cisco Common Stock (including,
without limitation, cash received in lieu of fractional shares of Cisco Common
Stock) and/or (ii) with respect to which a Sale occurs prior to and in
contemplation of the Merger shall be considered shares of outstanding StrataCom
capital stock exchanged for Cisco Common Stock in the Merger and then disposed
of pursuant to a Plan;
14. The payment of cash in lieu of fractional shares of Cisco is
solely for the purpose of avoiding the expense and inconvenience to Cisco of
issuing fractional shares and does not represent separately bargained-for
consideration. The total cash consideration that will be paid in the Merger to
StrataCom stockholders in lieu of fractional shares of Cisco Common Stock will
not exceed one percent (1%) of the total consideration that will be issued in
the Merger to StrataCom stockholders in exchange for their shares of StrataCom
capital stock. The fractional share interests of each StrataCom stockholder will
be aggregated, and on StrataCom stockholder will receive cash to any amount
greater than the value of one full share of Cisco Common Stock;
15. Except with respect to payments of cash to StrataCom
stockholders in lieu of fractional shares of Cisco Common Stock, one hundred
percent (100%) of the StrataCom capital stock outstanding immediately prior to
the Merger will be exchanged solely for Cisco Common Stock. Thus, except as set
forth in the preceding sentence, StrataCom intends that no consideration be paid
or received (directly or indirectly, actually or constructively) for StrataCom
capital stock other than Cisco Common Stock;
16. At the Effective Date of the Merger, the fair market value of
the Cisco Common Stock received by each StrataCom stockholder will be
approximately equal to the fair market value of the StrataCom capital stock
surrendered in exchange therefor, and the aggregate consideration received by
StrataCom stockholders in exchange for their StrataCom capital stock will be
approximately equal to the fair market value of all of the outstanding shares of
StrataCom capital stock immediately prior to the Merger;
17. No shares of Sub have been or will be used as consideration
or issued to stockholders of StrataCom pursuant to the Merger;
18. Except as otherwise specifically provided in the Agreement,
Sub, Cisco, StrataCom and stockholders of StrataCom will each pay separately its
or their own expenses in connection with the Merger;
19. There is no intercorporate indebtedness existing between
Cisco and StrataCom or between Sub and StrataCom that was issued, acquired or
will be settled at a
<PAGE> 15
Brobeck, Phleger & Harrison LLP May 28, 1996
Wilson Sonsini Goodrich & Rosati Page 5
discount as a result of the Merger, and Cisco will assume no liabilities of
StrataCom or any StrataCom stockholder in connection with the Merger;
20. The terms of the Agreement and all other agreements entered
into in connection therewith are the product of arm's-length negotiations;
21. None of the compensation received by any stockholder-
employees of StrataCom will be separate consideration for, or allocable to, any
of their shares of StrataCom capital stock; none of the shares of Cisco Common
Stock received by any stockholder-employees of StrataCom will be separate
consideration for, or allocable to, any employment agreement or any covenants
not to compete; and the compensation paid to any stockholder-employees of
StrataCom will be for services actually rendered and will be commensurate with
amounts paid to third parties bargaining at arm's length for similar services;
22. No direct or indirect subsidiary of StrataCom owns any shares
of StrataCom capital stock;
23. No "poison pill" or similar rights will be associated with
shares of StrataCom capital stock on or prior to the date of the Merger;
24. With respect to each instance, if any, in which shares of
StrataCom capital stock have been purchased by a stockholder of Cisco (a
"Stockholder") during the Pre-Merger Period (a "Stock Purchase"); (i) to the
best knowledge of StrataCom, (A) the Stock Purchase was made by such Stockholder
on its own behalf and with its own funds, rather than as a representative, or
for the benefit, of Cisco (B) the Stock Purchase was entered into solely to
satisfy the separate interests of such Stockholder and the seller and (C) the
purchase price paid by such Stockholder pursuant to the Stock Purchase was the
product of arm's length negotiations and (ii) the Stock Purchase was not a
formal or informal condition to consummation of the Merger;
25. Each of the representations made by StrataCom in the
Agreement and any other documents associated therewith is true and accurate; and
26. StrataCom is authorized to make all of the representations
set forth herein.
<PAGE> 16
Brobeck, Phleger & Harrison LLP May 28, 1996
Wilson Sonsini Goodrich & Rosati Page 6
B. RELIANCE BY YOU IN RENDERING OPINIONS;
LIMITATIONS ON YOUR OPINIONS
1. The undersigned recognizes that (i) your opinions will be
based on the representations set forth herein and on the statements contained in
the Agreement and documents related thereto and (ii) your opinions will be
subject to certain limitations and qualifications including that they may not be
relied upon if any such representations are not accurate in all material
respects.
2. Notwithstanding anything herein to the contrary, the
undersigned makes no representations regarding any actions or conduct of
StrataCom pursuant to Cisco's exercise of control over StrataCom after the
Merger.
3. The undersigned recognizes that your opinions will not
address any tax consequences of the Merger or any action taken in connection
therewith except as expressly set forth in such opinions.
Very truly yours,
STRATACOM, INC., a Delaware corporation
By: /s/ Dave Vellequette
-----------------------------------
Title: Controller
-------------------------------
<PAGE> 1
EXHIBIT 8.2
[WILSON, SONSINI, GOODRICH & ROSATI LETTERHEAD]
June 4, 1996
StrataCom, Inc.
1400 Parkmoor Avenue
San Jose, California 95126
Ladies and Gentlemen:
This opinion is delivered to you pursuant to Section 6.1(e) of the
Agreement and Plan of Reorganization (the "Agreement") among Cisco Systems,
Inc., a California corporation ("Cisco"), its wholly owned subsidiary, Jet
Acquisition Corporation, Delaware corporation ("Sub"), and StrataCom, Inc., a
Delaware corporation ("StrataCom"), dated April 21, 1996. Pursuant to the
Agreement, Sub will merge with and into StrataCom (the "Merger"), and StrataCom
will become a wholly owned subsidiary of Cisco.
Except as otherwise provided, capitalized terms referred to herein have
the meanings set forth in the Agreement. All section references, unless
otherwise indicated, are to the Internal Revenue Code of 1986, as amended (the
"Code").
We have acted as legal counsel to StrataCom in connection with the
Merger. As such, and for the purpose of rendering this opinion, we have
examined (or will examine on or prior to the Effective Date) and are relying
(or will rely) upon (without any independent investigation or review thereof)
the truth and accuracy, at all relevant times, of the statements,
covenants, representations and warranties contained in the following documents
(including all schedules and exhibits thereto):
1. The Agreement;
2. Representations made to us by Cisco and Sub in a letter reproduced
as Exhibit A hereto;
3. Representations made to us by StrataCom in a letter reproduced as
Exhibit B hereto;
4. Representations made by certain shareholders of StrataCom in
"Affiliates Agreements."
5. The Registration Statement;
<PAGE> 2
[WILSON SONSINI GOODRICH & ROSATI LETTERHEAD]
WILSON SONSINI GOODRICH & ROSATI
StrataCom, Inc.
June 4, 1996
Page 2
6. An opinion of Brobeck, Phleger & Harrison substantially
identical in form and substance to this opinion (the "BP&H Tax Opinion"); and
7. Such other instruments and documents related to the formation,
organization and operation of Cisco, StrataCom and Sub or to the consummation
of the Merger and the transactions contemplated thereby as we have deemed
necessary or appropriate;
In connection with rendering this opinion, we have assumed or obtained
representations (and are relying thereon, without any independent investigation
or review thereof) that:
1. Original documents (including signatures) are authentic,
documents submitted to us as copies conform to the original documents, and
there has been (or will be by the Effective Time) due execution and delivery of
all documents where due execution and delivery are prerequisites to
effectiveness thereof,
2. The Merger will be consummated in accordance with the Agreement
and will be effective under the laws of the State of Delaware;
3. The shareholders of StrataCom do not, and will not on or before
the Effective Date, have an existing plan or intent to dispose of an amount of
Cisco Common Stock to be received in the Merger (or to dispose of StrataCom
capital stock in anticipation of the Merger) such that the shareholders of
StrataCom will not receive and retain a meaningful continuing equity ownership
in Cisco that is sufficient to satisfy the continuity of interest requirement
as specified in Treasury Regulation Section 1.368-1(b) and as interpreted in
certain Internal Revenue Service rulings and federal judicial decisions;
4. After the Merger, StrataCom will hold "substantially all" of
its and Sub's properties within the meaning of Section 368(a)(2)(E)(i) of the
Code and the regulations promulgated thereunder;
5. To the extent any expenses relating to the Merger (or the "plan
of reorganization" within the meaning of Treasury Regulations Section
1.368-1(c) with respect to the Merger) are funded directly or indirectly by a
part other than the incurring party, such expenses will be within the
guidelines established in Revenue Ruling 73-54,1973-1 C.B. 187;
6. No StrataCom shareholder guaranteed any StrataCom indebtedness
outstanding during the period immediately prior to the Merger, and at all
relevant times, including as of the Effective Time, (i) no outstanding
indebtedness of StrataCom, Cisco or Sub has or will represent equity for tax
purposes; and (ii) no outstanding equity of StrataCom, Cisco or Sub has or will
represent indebtedness for tax purposes, and
<PAGE> 3
[WILSON SONSINI GOODRICH & ROSATI LETTERHEAD]
StrataCom, Inc.
June 4, 1996
Page 3
7. The BP&H Tax Opinion has been delivered and not withdrawn.
Based on our examination of the foregoing items and subject to the
assumptions, exceptions, limitations and qualifications set forth herein, we
are of the opinion that, for federal income tax purposes, the Merger will be a
"reorganization" as defined in Section 368(a) of the Code.
In addition to the assumptions set forth above, this opinion is subject
to the exceptions, limitations and qualifications set forth below.
1. This opinion represents and is based upon our best judgment
regarding the application of federal income tax laws arising under the Code,
existing judicial decisions, administrative regulations and published rulings
and procedures. Our opinion is not binding upon the Internal Revenue Service or
the courts, and there is no assurance that the Internal Revenue Service will
not successfully assert a contrary position. Furthermore, no assurance can be
given that future legislative, judicial or administrative changes, on either a
prospective or retroactive basis, would not adversely affect the accuracy of
the conclusions stated herein. Nevertheless, we undertake no responsibility to
advise you of any new developments in the application or interpretation of the
federal income tax laws.
2. This opinion addresses only the classification of the Merger as a
reorganization under Section 368(a) of the Code, and does not address any
other federal, state, local or foreign tax consequences that may result from
the Merger or any other transaction (including any transaction undertaken in
connection with the Merger). In particular, we express no opinion regarding (i)
whether and the extent to which any StrataCom shareholder who has provided or
will provide services to StrataCom, Cisco or Sub will have compensation income
under any provision of the Code; (ii) if the effects of such compensation
income, including but not limited to the effect upon the basis and holding
period of Cisco stock received by any such shareholder in the Merger, (iii) the
potential application of the "golden parachute" provisions (Sections 280G,
3121(v)(2) and 4999) of the Code, the alternative minimum tax provisions
(Sections 55, 56 and 57) of the Code or Sections 305, 306, 357, 424 and 708, or
the regulations promulgated thereunder; (iv) other than that the Merger will be
a reorganization within the meaning of the Code Section 368 and the
consequences that follow directly and solely from such characterization, the
corporate level tax consequences of the Merger to Cisco, Sub or StrataCom,
including without limitation the survival and/or availability, after the Merger
of any of the federal income tax attributes or elections of StrataCom, after
application of any of provision of the Code, as well as the regulations
promulgated thereunder and judicial interpretations thereof; (v) the basis of
any equity interest in StrataCom acquired by Cisco in the Merger; (vi) the tax
consequences of any transaction in which StrataCom stock or a right to acquire
StrataCom stock was received; (vii) the tax consequences of the Merger to
holders of options or warrants for StrataCom; or (viii) the tax consequences
that may be relevant to particular classes of StrataCom stockholders
<PAGE> 4
[WILSON, SONSINI, GOODRICH & ROSATI LETTERHEAD]
StrataCom, Inc.
June 4, 1996
Page 4
such as dealers in securities, corporate shareholders subject to the alternative
minimum tax, foreign persons, and holders of shares acquired upon exercise of
stock options or in other compensatory transactions.
3. No opinion is expressed as to any transaction other than the
Merger as described in the Agreement or to any transaction whatsoever,
including the Merger, if all the transactions described in the Agreement are
not consummated in accordance with the terms of such Agreement and without
waiver or breach of any material provision thereof if all of the
representations, warranties, statements and assumptions upon which we relied
are not true and accurate at all relevant times. In the event any one of the
statements, representations, warranties or assumptions upon which we have
relied to issue this opinion is incorrect, our opinion might be adversely
affected and may not be relied upon.
4. This opinion has been delivered to you for the purpose of
satisfying the conditions set forth in Section 6.1(e) of the Agreement. We
hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and further consent to all references to us in the Registration
Statement.
Very truly yours,
/s/ Wilson, Sonsini, Goodrich & Rosati
--------------------------------------
Wilson, Sonsini, Goodrich & Rosati
Enclosures
<PAGE> 5
Exhibit A
May 28, 1996
Brobeck, Phleger & Harrison LLP Wilson Sonsini Goodrich & Rosati
Two Embarcadero Place 650 Page Mill Road
2200 Geng Road Palo Alto, CA 94303-1050
Palo Alto, California 94306
Re: Merger pursuant to the Agreement and Plan of Reorganization
(the "Agreement") dated April 21, 1996, among Jet Acquisition
Corporation, a Delaware corporation ("Sub"), Cisco Systems,
Inc., a California corporation ("Cisco"), and StrataCom,
Inc., a Delaware corporation ("StrataCom")
Gentlemen:
This letter is supplied to you in connection with your rendering
of opinions pursuant to Section 6.1(e) of the Agreement regarding certain
federal income tax consequences of the Merger. Unless otherwise indicated,
capitalized terms not defined herein have the meanings set forth in the
Agreement.
A. Representations
After consulting with its counsel and auditors regarding the
meaning of and factual support for the following representations, the
undersigned hereby certifies and represents that the following facts are now
true and will continue to be true through the Effective Date of the Merger:
1. Pursuant to the Merger, Sub will merge with and into
StrataCom, and StrataCom will acquire all of the assets and liabilities of Sub.
At least ninety percent (90%) of the fair market value of the net assets and at
least seventy percent (70%) of the fair market value of the gross assets held by
StrataCom immediately prior to the Merger will continue to be held by StrataCom
<PAGE> 6
Brobeck, Phleger & Harrison, LLP May 28, 1996
Wilson Sonsini Goodrich & Rosati Page 2
immediately after the Merger. For the purpose of determining the percentage of
StrataCom's net and gross assets held by it immediately following the Merger,
the following assets will be treated as property held by StrataCom immediately
prior to but not subsequent to the Merger: (i) assets disposed of by StrataCom
prior to or subsequent to the Merger and in contemplation thereof (including
without limitation, any asset disposed of by StrataCom, other than the ordinary
course of business, pursuant to a plan or intent existing during the period
ending on the Effective Date of the Merger and beginning with the commencement
of negotiations (whether formal or informal) with Cisco regarding the Merger
(the "Pre-Merger Period")), (ii) assets used by StrataCom to pay other expenses
or liabilities incurred in connection with the Merger and (iii) assets used to
make distribution, redemption or other payments in respect of StrataCom capital
stock or rights to acquire such stock (including payments treated as such for
tax purposes) that are made in contemplation of the Merger or related thereto;
2. StrataCom has made no transfer of any of its assets
(including any distribution of assets with respect to, or in redemption of,
stock) in contemplation of the Merger or during the Pre-Merger Period other than
(i) in the ordinary course of business and (ii) payments for expenses incurred
in connection with the Merger;
3. StrataCom is participating in the Merger for good and valid
business reasons and not for tax purposes;
4. At the time of the Merger, except as specified in, or
disclosed in the Agreement or in a schedule or exhibit to, the Agreement,
StrataCom will have no outstanding warrants, options or convertible securities
nor any other type of right outstanding pursuant to which any person could
acquire shares of StrataCom capital stock or any other equity interest in
StrataCom;
5. In the Merger, shares of StrataCom capital stock representing
"Control" of StrataCom will be exchanged solely for voting stock of Cisco; at
the time of the Merger, there will exist no rights to acquire StrataCom capital
stock or to vote (or restrict or otherwise control the vote of) StrataCom
capital stock which, if exercised, could affect Cisco's acquisition and
retention of Control of StrataCom. For purposes of this paragraph, shares of
StrataCom capital stock exchanged in the Merger for cash and other property
(including, without limitation, cash paid to StrataCom stockholders in lieu of
fractional shares of Cisco Common Stock) will be treated as StrataCom capital
stock outstanding on the date of the Merger but not exchanged for voting stock
of Cisco. As used herein, "Control" of a corporation shall consist of ownership
of stock possessing at least eighty percent (80%) of the total combined voting
power of all classes of stock entitled to vote and at least eighty percent (80%)
of the total number of shares of all other classes of stock of the corporation.
For purposes of determining Control, a person shall not be considered to own
voting stock if rights to vote such stock (or to restrict or
<PAGE> 7
Brobeck, Phleger & Harrison, LLP May 28, 1996
Wilson Sonsini Goodrich & Rosati Page 3
otherwise control the voting of such stock) are held by a third party (including
a voting trust) other than an agent of such person;
6. StrataCom has no obligation, understanding, agreement or
intention to issue additional shares of stock after the Merger that would result
in Cisco losing Control of StrataCom;
7. The liabilities of StrataCom have been incurred by StrataCom
in the ordinary course of its business;
8. The fair market value of StrataCom's assets will, on the
Effective Date, exceed the aggregate liabilities of StrataCom;
9. Other than shares of StrataCom capital stock or options to
acquire StrataCom capital stock issued as compensation to present or former
service providers (including, without limitation, employees and directors) of
StrataCom in the ordinary course of business, no issuances of StrataCom capital
stock or rights to acquire StrataCom capital stock have occurred or will occur
during the Pre-Merger Period other than pursuant to options, warrants or
agreements, outstanding prior to the Pre-Merger Period or as otherwise
specifically identified in the Agreement;
10. Case or other property paid to employees of StrataCom during
the Pre-Merger Period has been or will be in the ordinary course of business or
pursuant to agreements entered into prior to the Pre-Merger Period;
11. StrataCom is not and will not be on the Effective Date an
"investment company" within the meaning of Section 368(a)(2)(F)(iii) and (iv) of
the Code;
12. StrataCom is not under the jurisdiction of a court in a Title
11 or similar case within the meaning of Section 368(a)(3)(A) of the Code;
13. StrataCom has on knowledge of any plan or intention on the
part of StrataCom's stockholders (a "Plan") to engage in a sale, exchange,
transfer, distribution, pledge, disposition or any other transaction which
results in a reduction in the risk of ownership or a direct or indirect
disposition (a "Sale") of shares of Cisco Common Stock to be issued to such
stockholders in the Merger, which shares would have an aggregate fair market
value, as of the Effective Date of the Merger, in excess of fifty percent (50%)
of the aggregate fair market value, immediately prior to the Merger, of all
outstanding shares of StrataCom capital stock. For purposes of this paragraph,
shares of StrataCom
<PAGE> 8
Brobeck, Phleger & Harrison, LLP May 28, 1996
Wilson Sonsini Goodrich & Rosati Page 4
capital stock (or the portion thereof) (i) with respect to which a StrataCom
stockholder receives consideration in the Merger other than Cisco Common Stock
(including, without limitation, cash received in lieu of fractional shares of
Cisco Common Stock) and/or (ii) with respect to which a Sale occurs prior to and
in contemplation of the Merger shall be considered shares of outstanding
StrataCom capital stock exchanged for Cisco Common Stock in the Merger and then
disposed of pursuant to a Plan;
14. The payment of cash in lieu of fractional shares of Cisco is
solely for the purpose of avoiding the expense and inconvenience to Cisco of
issuing fractional shares and does not represent separately bargained-for
consideration. The total cash consideration that will be paid in the Merger to
StrataCom stockholders in lieu of fractional shares of Cisco Common Stock will
not exceed one percent (1%) of the total consideration that will be issued in
the Merger to StrataCom stockholders in exchange for their shares of StrataCom
capital stock. The fractional share interests of each StrataCom stockholder will
be aggregated, and on StrataCom stockholder will receive cash to any amount
greater than the value of one full share of Cisco Common Stock;
15. Except with respect to payments of cash to StrataCom
stockholders in lieu of fractional shares of Cisco Common Stock, one hundred
percent (100%) of the StrataCom capital stock outstanding immediately prior to
the Merger will be exchanged solely for Cisco Common Stock. Thus, except as set
forth in the preceding sentence, StrataCom intends that no consideration be paid
or received (directly or indirectly, actually or constructively) for StrataCom
capital stock other than Cisco Common Stock;
16. At the Effective Date of the Merger, the fair market value of
the Cisco Common Stock received by each StrataCom stockholder will be
approximately equal to the fair market value of the StrataCom capital stock
surrendered in exchange therefor, and the aggregate consideration received by
StrataCom stockholders in exchange for their StrataCom capital stock will be
approximately equal to the fair market value of all of the outstanding shares of
StrataCom capital stock immediately prior to the Merger;
17. No shares of Sub have been or will be used as consideration
or issued to stockholders of StrataCom pursuant to the Merger;
18. Except as otherwise specifically provided in the Agreement,
Sub, Cisco, StrataCom and stockholders of StrataCom will each pay separately its
or their own expenses in connection with the Merger;
19. There is no intercorporate indebtedness existing between
Cisco and StrataCom or between Sub and StrataCom that was issued, acquired or
will be settled at a
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Brobeck, Phleger & Harrison, LLP May 28, 1996
Wilson Sonsini Goodrich & Rosati Page 5
discount as a result of the Merger, and Cisco will assume no liabilities of
StrataCom or any StrataCom stockholder in connection with the Merger;
20. The terms of the Agreement and all other agreements entered
into in connection therewith are the product of arm's-length negotiations;
21. None of the compensation received by any stockholder-
employees of StrataCom will be separate consideration for, or allocable to, any
of their shares of StrataCom capital stock; none of the shares of Cisco Common
Stock received by any stockholder-employees of StrataCom will be separate
consideration for, or allocable to, any employment agreement or any covenants
not to compete; and the compensation paid to any stockholder-employees of
StrataCom will be for services actually rendered and will be commensurate with
amounts paid to third parties bargaining at arm's length for similar services;
22. No direct or indirect subsidiary of StrataCom owns any shares
of StrataCom capital stock;
23. No "poison pill" or similar rights will be associated with
shares of StrataCom capital stock on or prior to the date of the Merger;
24. With respect to each instance, if any, in which shares of
StrataCom capital stock have been purchased by a stockholder of Cisco (a
"Stockholder") during the Pre-Merger Period (a "Stock Purchase"); (i) to the
best knowledge of StrataCom, (A) the Stock Purchase was made by such Stockholder
on its own behalf and with its own funds, rather than as a representative, or
for the benefit, of Cisco (B) the Stock Purchase was entered into solely to
satisfy the separate interests of such Stockholder and the seller and (C) the
purchase price paid by such Stockholder pursuant to the Stock Purchase was the
product of arm's length negotiations and (ii) the Stock Purchase was not a
formal or informal condition to consummation of the Merger;
25. Each of the representations made by StrataCom in the
Agreement and any other documents associated therewith is true and accurate; and
26. StrataCom is authorized to make all of the representations
set forth herein.
<PAGE> 10
Brobeck, Phleger & Harrison, LLP May 28, 1996
Wilson Sonsini Goodrich & Rosati Page 6
B. RELIANCE BY YOU IN RENDERING OPINIONS;
LIMITATIONS ON YOUR OPINIONS
1. The undersigned recognizes that (i) your opinions will be
based on the representations set forth herein and on the statements contained in
the Agreement and documents related thereto and (ii) your opinions will be
subject to certain limitations and qualifications including that they may not be
relied upon if any such representations are not accurate in all material
respects.
2. Notwithstanding anything herein to the contrary, the
undersigned makes no representations regarding any actions or conduct of
StrataCom pursuant to Cisco's exercise of control over StrataCom after the
Merger.
3. The undersigned recognizes that your opinions will not
address any tax consequences of the Merger or any action taken in connection
therewith except as expressly set forth in such opinions.
Very truly yours,
STRATACOM, INC., a Delaware corporation
By: s/s Dave Vellequette
-----------------------------------
Title: Controller
--------------------------------
<PAGE> 11
Exhibit A
June 6, 1996
Brobeck, Phleger & Harrison LLP Wilson Sonsini Goodrich & Rosati
Two Embarcadero Place 650 Page Mill Road
2200 Geng Road Palo Alto, CA 94303-1050
Palo Alto, California 94306
Re: Merger pursuant to the Agreement and Plan of
Reorganization (the "Agreement") dated April 21,
1996, among Jet Acquisition Corporation, a Delaware
corporation ("Sub"), Cisco Systems, Inc., a
California corporation ("Cisco"), and StrataCom,
Inc., a Delaware corporation ("StrataCom")
Gentlemen:
This letter is supplied to you in connection with your
rendering of opinions pursuant to Section 6.1(e) of the Agreement regarding
certain federal income tax consequences of the Merger. Unless otherwise
indicated, capitalized terms not defined herein have the meanings set forth in
the Agreement.
A. REPRESENTATIONS
After consulting with their counsel and auditors regarding the meaning
of and factual support for the following representations, the undersigned hereby
certify and represent that the following facts are now true and will continue to
be true as of the Effective Date of the Merger:
1. Pursuant to the Merger, Sub will merge with and into
StrataCom, and StrataCom will acquire all of the assets and liabilities of Sub.
At least ninety percent (90%) of the fair market value of the net assets and at
least seventy percent (70%) of the fair market value of the gross assets held by
StrataCom immediately prior
<PAGE> 12
Brobeck, Phleger & Harrison LLP June 6, 1996
Wilson Sonsini Goodrich & Rosati Page 2
to the Merger will continue to be held by StrataCom immediately after the
Merger. For the purpose of determining the percentage of StrataCom's net and
gross assets held by it immediately following the Merger, the following assets
will be treated as property held by StrataCom immediately prior but not
subsequent to the Merger: (i) assets disposed of by StrataCom prior to or
subsequent to the Merger and in contemplation thereof (including without
limitation any asset disposed of by StrataCom, other than in the ordinary course
of business, pursuant to a plan or intent existing during the period ending on
the Effective Date and beginning with the commencement of negotiations (whether
formal or informal) with Cisco regarding the Merger (the "Pre-Merger Period")),
(ii) assets used by StrataCom to pay other expenses or liabilities incurred in
connection with the Merger, and (iii) assets used to make distribution,
redemption or other payments in respect of StrataCom capital stock or rights to
acquire such stock (including payments treated as such for tax purposes) that
are made in contemplation of the Merger or related thereto;
2. Cisco is participating in the Merger for good and valid
business reasons and not for tax purposes;
3. Prior to the Merger, Cisco will be in "Control" of Sub. As
used herein, "Control" of a corporation shall consist of ownership of stock
possessing at least eighty percent (80%) of the total combined voting power of
all classes of stock entitled to vote and at least eighty percent (80%) of the
total number of shares of all other classes of stock of the corporation. For
purposes of determining Control, a person shall not be considered to own voting
stock if rights to vote such stock (or to restrict or otherwise control the
voting of such stock) are held by a third party (including a voting trust) other
than an agent of such person;
4. In the Merger, all shares of StrataCom capital stock will
be exchanged solely for voting stock of Cisco, except to the extent of cash paid
in lieu of fractional shares in accordance with the terms of the Merger
Agreement;
5. Cisco has no plan or intention to cause StrataCom to issue
addi- tional shares of stock after the Merger that would result in Cisco losing
Control of StrataCom;
6. Cisco has no plan or intention to reacquire any of its
stock issued pursuant to the Merger;
7. Except for transfers described in both Section 368(a)(2)(C)
of the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury
Regulation Section 1.368-2(j)(4), Cisco has no current plan or intention to (i)
liquidate StrataCom;
<PAGE> 13
Brobeck, Phleger & Harrison LLP June 6, 1996
Wilson Sonsini Goodrich & Rosati Page 3
(ii) merge StrataCom with or into another corporation including Cisco or its
affiliates; (iii) sell, distribute or otherwise dispose of the capital stock of
StrataCom; or (iv) cause StrataCom to sell or otherwise dispose of any of its
assets (or any assets acquired from Sub) except for dispositions made in the
ordinary course of business or payment of expenses incurred by StrataCom
pursuant to the Merger (including payments made with respect to fractional
shares); provided, however, that nothing herein shall be understood to impose
any limitation on the right of Cisco to transfer assets or engage in any other
transaction which Cisco may determine to be necessary, appropriate or desirable
in the exercise of its business judgment after the Merger in response to the
circumstances then existing (as opposed to a plan or intention arising prior to
the Merger); and provided further that nothing herein shall be understood to
impose any limitation on Cisco to merge StrataCom into itself pursuant to a
ruling received from the Internal Revenue Service that the Merger and such
subsequent merger will, if considered part of an integrated transaction,
constitute a reorganization described in Section 368(a)(1)(A) of the Code;
8. In the Merger, Sub will have no liabilities assumed by
StrataCom and will not transfer to StrataCom any assets subject to liabilities;
9. Cisco intends that, following the Merger, the historic
business of StrataCom will be continued;
10. Neither Cisco nor any current or former subsidiary of
Cisco owns, or has owned during the past five (5) years, directly or indirectly,
any shares of StrataCom capital stock, or the right to acquire or vote any such
shares (except such rights as are granted in the Agreement);
11. Cisco is not an investment company within the meaning of
Sections 368(a)(2)(F)(iii) and (iv) of the Code;
12. No shareholder of StrataCom is acting as agent for Cisco
in connection with the Merger or approval thereof, and Cisco will not reimburse
any StrataCom shareholder for StrataCom capital stock such shareholder may have
purchased or for other obligations such shareholder may have incurred;
13. Neither Cisco nor Sub is under the jurisdiction of a court
in a Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the
Code;
14. Cisco has no knowledge of any plan or intention on the
part of StrataCom's shareholders (a "Plan") to engage in a sale, exchange,
transfer, distribution, pledge, disposition or any other transaction which
results in a reduction in the risk of
<PAGE> 14
Brobeck, Phleger & Harrison LLP June 6, 1996
Wilson Sonsini Goodrich & Rosati Page 4
ownership or a direct or indirect disposition (a "Sale") of shares of Cisco
Common Stock to be issued to such shareholders in the Merger, which shares would
have an aggregate fair market value, as of the Effective Date of the Merger, in
excess of fifty percent (50%) of the aggregate fair market value, immediately
prior to the Merger, of all outstanding shares of StrataCom capital stock. For
purposes of this paragraph, shares of StrataCom capital stock (or the portion
thereof) (i) with respect to which a StrataCom shareholder receives
consideration in the Merger other than Cisco Common Stock (including, without
limitation, cash received in lieu of fractional shares of Cisco Common Stock)
and/or (ii) with respect to which a Sale occurs prior to and in contemplation of
the Merger shall be considered shares of outstanding StrataCom capital stock
exchanged for Cisco Common Stock in the Merger and then disposed of pursuant to
a Plan;
15. The payment of cash in lieu of fractional shares of Cisco
is solely for the purpose of avoiding the expense and inconvenience to Cisco of
issuing fractional shares and does not represent separately bargained-for
consideration. The total cash consideration that will be paid in the Merger to
StrataCom shareholders in lieu of fractional shares of Cisco Common Stock will
not exceed one percent (1%) of the total consideration that will be issued in
the Merger to StrataCom shareholders in exchange for their shares of StrataCom
capital stock. The fractional share interests of each Strata-Com shareholder
will be aggregated and no StrataCom shareholder will receive cash in an amount
greater than the value of one full share of Cisco Common Stock;
16. Except with respect to payments of cash to StrataCom
shareholders in lieu of fractional shares of Cisco Common Stock, one hundred
percent (100%) of the StrataCom capital stock outstanding immediately prior to
the Merger will be exchanged solely for Cisco Common Stock. Thus, except as set
forth in the preceding sentence, Sub and Cisco intend that no consideration be
paid or received (directly or indirectly, actually or constructively) for
StrataCom capital stock other than Cisco Common Stock;
17. At the Effective Time of the Merger, the fair market value
of the Cisco Common Stock received by each StrataCom shareholder will be
approximately equal to the fair market value of the StrataCom capital stock
surrendered in exchange therefor, and the aggregate consideration received by
StrataCom shareholders in exchange for their StrataCom capital stock will be
approximately equal to the fair market value of all of the outstanding shares of
StrataCom capital stock immediately prior to the Merger;
18. No shares of Sub have been or will be used as
consideration or issued to shareholders of StrataCom pursuant to the Merger;
<PAGE> 15
Brobeck, Phleger & Harrison LLP June 6, 1996
Wilson Sonsini Goodrich & Rosati Page 5
19. Except as otherwise specifically provided in the
Agreement, Sub, Cisco, StrataCom and the shareholders of StrataCom will each pay
separately its or their own expenses in connection with the Merger;
20. There is no intercorporate indebtedness existing between
Cisco and StrataCom or between Sub and StrataCom that was issued, acquired or
will be settled at a discount as a result of the Merger, and Cisco will assume
no liabilities of StrataCom or any StrataCom shareholder in connection with the
Merger;
21. The terms of the Agreement and all other agreements
entered into in connection therewith are the product of arm's-length
negotiations;
22. None of the compensation received by any
shareholder-employees of StrataCom will be separate consideration for, or
allocable to, any of their shares of StrataCom capital stock; none of the shares
of Cisco Common Stock received by any shareholder-employees of StrataCom will be
separate consideration for, or allocable to, any employment agreement or any
covenants not to compete; and the compensation paid to any shareholder-employees
of StrataCom will be for services actually rendered and will be commensurate
with amounts paid to third parties bargaining at arm's length for similar
services;
23. No "poison pill" or similar rights will be associated with
the Cisco Common Stock on or prior to the date of the Merger;
24. With respect to each instance, if any, in which shares of
StrataCom capital stock have been purchased by a shareholder of Cisco (a
"Shareholder") during the Pre-Merger Period (a "Stock Purchase"): (i) the Stock
Purchase was made by such Shareholder on its own behalf and with its own funds
and not as a representative, or for the benefit, of Cisco; (ii) the purchase
price paid by such Shareholder pursuant to the Stock Purchase was the product of
arm's-length negotiations, was funded by such Shareholder's own assets, and was
not advanced, and will not be reimbursed, either directly or indirectly, by
Cisco; (iii) at no time was such Shareholder or any other party required or
obligated to surrender to Cisco the StrataCom capital stock acquired in the
Stock Purchase, and neither such Shareholder nor any other party will be
required to surrender to Cisco the Cisco Common Stock for which such shares of
StrataCom capital stock will be exchanged in the Merger; and (iv) the Stock
Purchase was not a formal or informal condition to consummation of the Merger
and was entered into solely to satisfy the separate interests of such
Shareholder and the seller;
25. Each of the representations made by Cisco and Sub in the
Agreement and any other documents associated therewith is true and accurate;
and
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Brobeck, Phleger & Harrison LLP June 6, 1996
Wilson Sonsini Goodrich & Rosati Page 6
26. Cisco and Sub are authorized to make all of the
representations set forth herein.
B. RELIANCE BY YOU IN RENDERING OPINIONS; LIMITATIONS ON YOUR
OPINIONS
1. The undersigned recognize that (i) your opinions will be
based on the representations set forth herein and on the statements contained in
the Agreement and the documents related thereto and (ii) your opinions will be
subject to certain limitations and qualifications including that they may not be
relied upon if any such representations are not accurate in all material
respects.
2. The undersigned recognize that your opinions will not
address any tax consequences of the Merger or any action taken in connection
therewith except as expressly set forth in such opinions.
Very truly yours,
CISCO SYSTEMS, INC., a California
corporation
By s/s Larry R. Carter
-------------------------------
Title CFO and Secretary
----------------------------
JET ACQUISITION CORPORATION,
a Delaware corporation
By s/s Larry R. Carter
-------------------------------
Title CFO and Secretary
----------------------------
<PAGE> 1
Exhibit 23.4
[MONTGOMERY SECURITIES LETTERHEAD]
Members of the Board of Directors
StrataCom, Inc.
1400 Parkmoor Avenue
San Jose, CA 95126
Gentlemen:
We hereby consent to the inclusion of our opinion letter dated April
21, 1996 to the Board of Directors of StrataCom, Inc. (the "Company") regarding
the acquisition of StrataCom, Inc. by Cisco Systems, Inc., in StrataCom, Inc.
and Cisco Systems, Inc.'s Joint Proxy Statement/Prospectus on Form S-4 (the
"Registration Statement") and to the references therein to our firm and to our
opinion. In giving the foregoing consent, we do not admit (i) that we come
within the category of persons whose consent is required under Section 7 of the
Securities Act of the 1933, as amended (the "Securities Act"), or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder,
and (ii) that we are experts with respect to any part of the Registration
Statement within the meaning of the term "experts" as used in the Securities
Act and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
Very truly yours,
/s/ Montgomery Securities
-----------------------------------
MONTGOMERY SECURITIES
