UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 7, 2017
Xcerra Corporation
(Exact name of registrant as specified in its charter)
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Massachusetts
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000-10761
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04-2594045
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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825 University Avenue
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02062
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Norwood, Massachusetts
(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code: (781) 461-1000
N/A
(Former name or
former address, if changed since last report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
April 7, 2017, Xcerra Corporation, a Massachusetts corporation (Xcerra or the Company), entered into an Agreement and Plan of Merger (the Merger Agreement) with Unic Capital Management Co., Ltd., a Chinese
company (Parent), and China Integrated Circuit Industry Investment Fund Co., Ltd., a Chinese company (Sponsor), providing for the merger of a wholly owned subsidiary of Parent (Merger Sub) with and into Xcerra
(the Merger), with Xcerra surviving the Merger as a wholly owned subsidiary of Parent (the Surviving Corporation). The Merger Agreement was unanimously approved by Xcerras Board of Directors (the Board).
Pursuant to the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger (the Effective
Time), each share of Xcerras common stock, par value $0.05 per share (the Company Common Stock), that is outstanding immediately prior to the Effective Time (excluding any shares owned by Xcerra, Parent or Merger Sub or any
direct or indirect wholly owned subsidiary of Parent or Merger Sub (which will be cancelled) and any shares with respect to which appraisal rights have been properly exercised under Massachusetts law) will be cancelled and automatically converted
into the right to receive $10.25 in cash, without interest (the Merger Consideration).
Immediately prior to the Effective
Time, each Company restricted stock unit that is outstanding and either (A) vests at the Effective Time or (B) is held by a non-employee member of the Board (each a Vested RSU) shall be cancelled and terminated as of the
Effective Time and the holder thereof shall receive an amount in cash (without interest) equal to the product obtained by multiplying (x) the aggregate number of shares of Company Common Stock represented by such Company restricted stock unit
immediately prior to the Effective Time by (y) the Merger Consideration (the Restricted Stock Unit Consideration). The Company shall pay each holder of a Vested RSU the Restricted Stock Unit Consideration on either (i) the
first regulatory scheduled payroll date after the closing of the Merger or (ii) if such payroll date is scheduled for payment prior to the fifth business day after the closing of the Merger, the second regularly scheduled payroll date after the
closing of the Merger.
Each Company restricted stock unit that is outstanding and unvested as of the Effective Time and not described in
the immediately preceding sentence (each, an Unvested RSU) shall be converted into the right to receive an amount in cash (without interest) equal to the product obtained by multiplying (x) the aggregate number of shares of Company
Common stock represented by such Unvested RSU immediately prior to the Effective Time by (y) the Merger Consideration (the Unvested RSU Consideration). The Unvested RSU Consideration will be subject to the same vesting terms and
conditions applicable to the Unvested RSU immediately prior to the Effective Time, including the same vesting restrictions and continued service requirements, and payment of the Unvested RSU Consideration shall be made on the vesting dates
applicable to the Unvested RSU immediately prior to the Effective Time.
Effective immediately prior to the Effective Time, the
performance-based vesting of each Company restricted stock unit that remains outstanding as of immediately prior to the Effective Time (each, a Performance-Based RSU) shall be accelerated in full with all performance conditions being
deemed achieved at 100% and each such Performance-Based RSU shall be converted into the right to receive an amount in cash equal to the product obtained by multiplying (x) the aggregate number of shares of Company Common Stock represented by
such Performance-Based RSU immediately prior to the Effective Time by (y) the Merger Consideration (the Performance-Based RSU Consideration). The Performance-Based RSU Consideration will be subject to the same time-based vesting
terms and conditions applicable to the Performance-Based RSU immediately prior to the Effective Time and shall be paid on the time-based vesting dates applicable to such Performance-Based RSU immediately prior to the Effective Time.
Concurrently with the execution of the Merger Agreement, Parent has delivered to the Company (i) an equity commitment letter (the
Equity Commitment Letter) issued to Parent by Sponsor, pursuant to which, subject to the conditions contained in the Equity Commitment Letter, Sponsor commits to subscribe for equity securities of Parent with an aggregate purchase price
of RMB1.5 billion (equivalent to approximately $217 million based on the prevailing exchange rate as of April 7, 2017) and (ii) a debt commitment letter (the Debt Commitment Letter) issued to Parent by Sino IC Leasing Co., Ltd.
(Lender) pursuant to which Lender has committed to loan to Parent the lesser of (A) RMB2.76 billion (equivalent to approximately $400 million based on the prevailing exchange rate as of April 7, 2017) and (B) the
difference of (1) the RMB equivalent of the aggregate payment obligations of Parent under the Merger Agreement
less
(2) RMB1.5 billion. The obligations of Sponsor and Lender to provide the financing under the Equity Commitment
Letter and Debt Commitment Letter, respectively, are subject to the satisfaction or waiver at the closing of the Merger of each of the conditions set forth in Section 7.1 and Section 7.2 of the Merger Agreement.
The closing of the Merger is subject to the adoption of the Merger Agreement by the affirmative
vote of holders of two-thirds of the outstanding shares of Company Common Stock (the Company Stockholder Approval). The obligations of the parties to consummate the Merger are also subject to the satisfaction (or waiver, if applicable)
of various customary conditions, including (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) filings and approvals with or by certain
governmental authorities, including governmental authorities in the Peoples Republic of China (PRC) and Taiwan, (iii) review and clearance by the Committee on Foreign Investment in the United States, (iv) the absence of
certain governmental orders prohibiting the Merger, (v) the accuracy of the representations and warranties of each party contained in the Merger Agreement (subject to certain materiality qualifications) and (vi) each partys
compliance with or performance of the covenants and agreements in the Merger Agreement in all material respects.
The Company has made
customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants (i) to carry on its business in the ordinary course consistent with past practice during the period between the execution of the
Merger Agreement and the closing of the Merger, (ii) not to engage in specified types of transactions or take certain actions during the interim period unless consented to in writing by Parent, (iii) to convene and hold a meeting of its
stockholders for the purpose of obtaining the Company Stockholder Approval and (iv) subject to certain exceptions, not to withhold or withdraw (or qualify or modify in a manner adverse to Parent) the recommendation of the Board that the
Companys stockholders adopt the Merger Agreement. The Company is also subject to customary restrictions on its ability to solicit alternative acquisition proposals from third parties and to provide non-public information to, and participate in
discussions and engage in negotiations with, third parties regarding alternative acquisition proposals, with customary exceptions for alternative acquisition proposals that the Board determines either constitute or would reasonably be expected to
lead to a Superior Proposal;
provided
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however
, that the Merger Agreement contains a go-shop provision that allows the Company and its representatives to solicit alternative acquisition proposals and share non-public information with
third parties for the purpose of soliciting alternative acquisition proposals, in each case, during the 35-day period commencing upon execution of the Merger Agreement and ending on May 12, 2017 (the Go-Shop Period) and subject to
compliance with certain qualifications and notice and information rights of Parent.
The Merger Agreement contains certain termination
rights for the Company and Parent. Upon termination of the Merger Agreement under specified circumstances, including in connection with the Companys entry into a definitive agreement providing for the consummation of a Superior Proposal as
permitted under the Merger Agreement, the Company will be required to pay Parent a termination fee of $22.8 million (the Company Termination Fee);
provided
, that the Company Termination Fee payable by the Company for termination
of the Merger Agreement to enter into a definitive agreement with respect to an acquisition proposal received during the Go-Shop Period shall be $14.25 million.
The Merger Agreement also provides that, upon termination of the Merger Agreement under specified circumstances, Parent will be required to
pay the Company a termination fee of $22.8 million (the Parent Termination Fee). The Parent Termination Fee will become payable from Parent to the Company if the Merger Agreement is terminated by the Company in the event that
(i) Parent breaches its representations and warranties or covenants such that the applicable closing condition regarding representations and warranties or performance of covenants would not be satisfied (subject to specified cure rights),
(ii) all of Parents conditions to closing are satisfied or waived and Parent has failed to consummate the Merger, (iii) the Merger is not consummated by the Termination Date (as defined in the Merger Agreement) and, at such time, all
conditions to the Merger have been satisfied other than those resulting from any failure to obtain certain required approvals from governmental authorities in the PRC or (iv) any governmental authority in the PRC shall have enacted, issued or
promulgated any law or order making the Merger illegal or otherwise preventing the consummation of the Merger;
provided
, that the Parent Termination Fee payable by Parent as a result of termination of the Merger Agreement under the
circumstances described in clauses (iii) and (iv) is equal to $14.25 million. Pursuant to the Merger Agreement, on or before April 12, 2017, Parent shall deliver to the Company a letter of guarantee (the Letter of
Guarantee) from the Bank of Beijing Co., Ltd. (the Bank of Beijing) in favor of Test Solutions (Suzhou) Co., Ltd., a wholly owned subsidiary of the Company (Test Solutions), pursuant to which, upon the termination of
the Merger Agreement in circumstances requiring the payment of the Parent Termination Fee, and upon delivery of written instructions to the Bank of Beijing in accordance with the terms of the Letter of Guarantee, the Bank of Beijing will pay to Test
Solutions RMB98,315,025 (equivalent to approximately $14.25 million based on the prevailing exchange rate as of April 7, 2017) in satisfaction, or partial satisfaction, as applicable, of the Parent Termination Fee.
The foregoing description of the Merger Agreement does not purport to be complete and is
qualified in its entirety by the full text of the Merger Agreement, a copy of which is filed hereto as Exhibit 2.1 and is incorporated into this report by reference in its entirety. The Merger Agreement has been attached as an exhibit to provide
investors with information regarding its terms. It is not intended to provide any other factual information about the Company or Parent or any of their respective subsidiaries or affiliates. In particular, the assertions embodied in the
representations and warranties contained in the Merger Agreement were made solely for the benefit of the parties to the Merger Agreement, were made only for purposes of the Merger Agreement, and are qualified by information in a confidential
disclosure letter provided by the Company to Parent in connection with the signing of the Merger Agreement. This confidential disclosure letter contains information that modifies, qualifies and creates exceptions to the representations and
warranties set forth in the Merger Agreement. Moreover, certain representations and warranties in the Merger Agreement were used for the purposes of allocating risk between the Company and Parent rather than establishing matters of fact.
Accordingly, the representations and warranties in the Merger Agreement should not be relied on as a characterization of the actual state of facts about the Company or Parent or any of their respective subsidiaries.
Item 5.03 Amendments to Article of Incorporation or Bylaws; Change in Fiscal Year
At a meeting of the Board held on April 7, 2017, the Board approved and adopted, effective as of such date, an amendment (the
Amendment) to the By-Laws of the Company (the Bylaws) to add a new Article IX thereto that provides for a state or federal court in the Commonwealth of Massachusetts to be the sole and exclusive forum (unless the Company
consents to the selection of an alternative forum) for certain types of litigation involving the Company and its directors, officers and employees, which litigation, if the Company were subject to actions, claims or proceedings relating thereto in
other or multiple jurisdictions, may be, among other things, needlessly duplicative, costly or time consuming, or otherwise detrimental to the Company and its affairs.
The foregoing is only a summary of the principal features of the Amendment and is qualified in its entirety by reference to the Amendment,
which is included as Exhibit 3.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
Item 8.01 Other Events.
On April 10, 2017, Xcerra and Parent issued a press release announcing their entry into the Merger Agreement. A copy of the press release
is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
On April 10, 2017, Xcerra delivered a presentation to
Xcerras employees. A copy of the presentation is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
On
April 9, 2017, Xcerra delivered a presentation to certain members of Xcerras sales team. A copy of the presentation is attached hereto as Exhibit 99.3 and is incorporated herein by reference.
On April 10, 2017, Xcerra delivered an Employee Frequently Asked Questions document to Xcerras employees. A copy of the
document is attached hereto as Exhibit 99.4 and is incorporated herein by reference.
On April 10, 2017, a representative of Xcerra
sent an email to Xcerras employees announcing the Merger Agreement. A copy of the email is attached hereto as Exhibit 99.5 and is incorporated herein by reference.
On April 10, 2017, a representative of Xcerra sent an email to Xcerras customers announcing the Merger Agreement. A copy of the
email is attached hereto as Exhibit 99.6 and is incorporated herein by reference.
On April 10, 2017, a representative of Xcerra sent
an email to Xcerras representatives announcing the Merger Agreement. A copy of the email is attached hereto as Exhibit 99.7 and is incorporated herein by reference.
On April 10, 2017, a representative of Xcerra sent an email to Xcerras vendors announcing the Merger Agreement. A copy of the email
is attached hereto as Exhibit 99.8 and is incorporated herein by reference.
On April 10, 2017, Xcerra delivered a Communications
Messaging Framework to certain of its managers. A copy of the Communications Messaging Framework is attached hereto as Exhibit 99.9 and is incorporated herein by reference.
Forward Looking Statements
Certain statements contained in this filing may be considered forward-looking statements within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995, including statements regarding the proposed transaction involving Xcerra Corporation (Xcerra) and Unic Capital Management Co., Ltd. (Parent) and the ability to consummate the transaction.
Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as may, will, should, would,
expect, anticipate, plan, likely, believe, estimate, project, intend, and other similar expressions among others. Statements that are not historical
facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those
contained in any forward-looking statement as a result of various factors, including, without limitation: the risk that the conditions to the closing of the transaction are not satisfied, including the failure to timely or at all obtain stockholder
approval for the transaction or the failure to timely or at all obtain any required regulatory clearances, including under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR) or from the Committee on Foreign Investment in the United
States (CFIUS); uncertainties as to the timing of the consummation of the transaction and the ability of each of Xcerra and Parent to consummate the transaction, including as a result of the failure of Parent to obtain or provide on a timely basis
or at all the necessary financing; risks that the transaction disrupts the current plans and operations of Xcerra; the ability of Xcerra to retain and hire key personnel; competitive responses to the transaction; unexpected costs, charges or
expenses resulting from the transaction; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction; and legislative, regulatory, political and economic developments. The
foregoing review of important factors that could cause actual events to differ from expectations should not be construed as exhaustive and should be read in conjunction with statements that are included herein and elsewhere, including the risk
factors included in Xcerras most recent Annual Report on Form 10-K, and Xcerras more recent Quarterly Report on Form 10-Q and Current Reports on Form 8-K filed with the U.S. Securities and Exchange Commission (the SEC).
Xcerra can give no assurance that the conditions to the transaction will be satisfied. Except as required by applicable law, Xcerra undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking
statements, whether as a result of new information, future events or otherwise.
Participants in the Solicitation
Xcerra and its directors and executive officers and certain of its other members of management and employees may be deemed to be participants
in the solicitation of proxies in connection with the proposed transaction. Information about Xcerras directors and executive officers is included in Xcerras Annual Report on Form 10-K for the year ended July 31, 2016, filed with
the SEC on September 16, 2016, and the proxy statement for Xcerras 2016 annual meeting of stockholders, filed with the SEC on October 28, 2016. Additional information regarding these persons and their interests in the transaction
will be included in the proxy statement relating to the transaction when it is filed with the SEC. These documents can be obtained free of charge from the sources indicated below.
Additional Information and Where to Find It
This filing is being made in respect of the proposed transaction involving Xcerra and Parent. Xcerra intends to file with the SEC a proxy
statement in connection with the proposed transaction as well as other documents regarding the proposed transaction. The definitive proxy statement will be sent or given to the stockholders of Xcerra and will contain important information about the
proposed transaction and related matters. XCERRAS SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement and other relevant materials (when they become available), and any other documents filed by Xcerra with the SEC, may be obtained free of charge at the
SECs website, at www.sec.gov. In addition, security holders of Xcerra will be able to obtain free copies of the proxy statement from Xcerra by contacting Investor Relations by mail at Attn: Investor Relations, 825 University Avenue, Norwood,
Massachusetts 02062.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No.
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Description
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2.1*
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Agreement and Plan of Merger, dated as of April 7, 2017, by and among Unic Capital Management Co., Ltd., China Integrated Circuit Industry Investment Fund Co., Ltd. and Xcerra Corporation
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3.1
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Amendment to the By-Laws of Xcerra Corporation, dated April 7, 2017
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99.1
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Joint Press Release of Unic Capital Management Co., Ltd. and Xcerra Corporation, dated April 10, 2017
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99.2
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Presentation delivered to Xcerras employees, dated as of April 10, 2017
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99.3
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Presentation delivered to Xcerras sales team, dated as of April 9, 2017
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99.4
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Employee Frequently Asked Questions, dated as of April 10, 2017
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99.5
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Email to Xcerra employees, dated as of April 10, 2017
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99.6
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Email to Xcerra customers, dated as of April 10, 2017
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99.7
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Email to Xcerra representatives, dated as of April 10, 2017
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99.8
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Email to Xcerra vendors, dated as of April 10, 2017
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99.9
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Communications Messaging Framework, dated as of April 10, 2017
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Certain schedules and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K promulgated by the SEC. Xcerra agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, hereunto duly authorized.
Date: April 10, 2017
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Xcerra Corporation
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By:
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/s/ David G. Tacelli
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Name:
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David G. Tacelli
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Title:
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President and Chief Executive Officer
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EXHIBIT INDEX
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Exhibit No.
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Description
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2.1*
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Agreement and Plan of Merger, dated as of April 7, 2017, by and among Unic Capital Management Co., Ltd., China Integrated Circuit Industry Investment Fund Co., Ltd. and Xcerra Corporation
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3.1
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Amendment to the By-Laws of Xcerra Corporation, dated April 7, 2017
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99.1
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Joint Press Release of Unic Capital Management Co., Ltd. and Xcerra Corporation, dated April 10, 2017
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99.2
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Presentation delivered to Xcerras employees, dated as of April 10, 2017
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99.3
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Presentation delivered to Xcerras sales team, dated as of April 9, 2017
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99.4
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Employee Frequently Asked Questions, dated as of April 10, 2017
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99.5
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Email to Xcerra employees, dated as of April 10, 2017
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99.6
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Email to Xcerra customers, dated as of April 10, 2017
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99.7
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Email to Xcerra representatives, dated as of April 10, 2017
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99.8
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Email to Xcerra vendors, dated as of April 10, 2017
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99.9
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Communications Messaging Framework, dated as of April 10, 2017
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Certain schedules and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K promulgated by the SEC. Xcerra agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
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