Exhibit 1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made and
entered into this 13th day of November, 1996, by and among
LANXIDE CORPORATION ("Lanxide"), a corporation organized and
existing under the laws of the State of Delaware, with its
principal executive office located at 0000 Xxxxxxx Xxxx, X.X. Xxx
0000, Xxxxxx, Xxxxxxxx 00000; COMMODORE ENVIRONMENTAL SERVICES,
INC. ("Commodore"), a corporation organized and existing under
the laws of the State of Delaware, with its principal executive
office located at 000 Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx
Xxxx 00000; and COES ACQUISITION CORP. (the "Merger Subsidiary"),
a corporation organized and existing under the laws of the State
of Delaware and a wholly-owned subsidiary of Commodore, with its
principal executive office located at 000 Xxxx 00xx Xxxxxx, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx 00000.
R E C I T A L S:
A. The Board of Directors of each of Lanxide and Commodore
are of the opinion that the business combination transactions
described herein are in the best interest of the respective
parties and their respective stockholders.
B. This Agreement contemplates that Commodore shall become
the parent entity of Lanxide pursuant to the transactions
described below.
C. At the Effective Time (as hereinafter defined), (i) the
Merger Subsidiary shall be merged with and into Lanxide so that
Lanxide will be the surviving corporation of such merger, (ii)
the outstanding shares of capital stock of Lanxide shall be
exchanged for or converted into shares of capital stock of
Commodore and (iii) the outstanding shares of capital stock of
the Merger Subsidiary shall be converted into shares of capital
stock of Lanxide. As a result, stockholders of Lanxide shall
become stockholders of Commodore, and Lanxide and its
subsidiaries shall conduct their respective businesses and
operations as direct and indirect wholly-owned subsidiaries of
Commodore.
D. Special Committees, comprised of independent directors
of each of Lanxide and Commodore, have recommended the approval
and adoption by their respective Boards of Directors of this
Agreement. This Agreement has been approved and adopted by the
Boards of Directors of each of the parties hereto and by the
Board of Directors of Commodore as the sole stockholder of the
Merger Subsidiary.
E. The transactions described in this Agreement are
subject to the approval of the stockholders of Lanxide, the
stockholders of Commodore, and the satisfaction of certain other
conditions described in this Agreement.
F. For federal income tax purposes, it is intended that
the transactions contemplated hereby shall constitute a
reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, and that Lanxide, Commodore and Merger
Subsidiary each will be a party to the reorganization within the
meaning of Section 368(b) of the Internal Revenue Code.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth
herein, the Parties agree as follows:
ARTICLE ONE
DEFINITIONS
In addition to other terms defined in this Agreement, and
except as otherwise provided herein, the capitalized terms set
forth below (in their singular and plural forms as applicable)
shall have the following meanings:
1.1 "Affiliate" shall mean, with respect to any Person, any
other Person in control of, controlled by, or under common
control with, the first Person.
1.2 "Cleanup" shall mean all actions required to: (a)
cleanup, remove, treat or remediate Hazardous Materials in the
indoor or outdoor environment; (b) prevent the Release of
Hazardous Materials so that they do not migrate, endanger or
threaten to endanger public health or welfare in the indoor or
outdoor environment; (c) perform pre-remedial studies and
investigations and post-remedial monitoring and care; or (d)
respond to any government requests for information or documents
in any way relating to cleanup, removal, treatment or remediation
or potential cleanup, removal, treatment or remediation of
Hazardous Materials in the indoor or outdoor environment.
1.3 "Commodore" shall mean Commodore Environmental
Services, Inc., a Delaware corporation, the name of which
corporation shall be changed to "CoLanx, Inc.," on or immediately
following the Effective Time of the Merger, pursuant to the
Restated Commodore Charter.
1.4 "Commodore Capital Stock" shall mean, collectively,
the Commodore Common Stock, Commodore Series AA Preferred Stock,
Commodore Series B Preferred Stock, Commodore Series C Preferred
Stock, and Commodore Series D Preferred Stock.
1.5 "Commodore Common Stock" shall mean the shares of
common stock, $.01 par value per share, which per share par value
shall be reduced to $.0001 per share pursuant to the Restated
Commodore Charter.
1.6 "Commodore Common Stock Equivalents" shall mean the
collective reference to shares of Commodore Common Stock which
are potentially issuable as at the Effective Time of the Merger
upon (a) the exercise of all outstanding Commodore Warrants and
Commodore Stock Options or (b) the conversion of all outstanding
Commodore Convertible Notes, and all shares of outstanding
Commodore Capital Stock which, by their terms, are convertible
into shares of Commodore Common Stock; provided, that Commodore
Common Stock Equivalents shall not include: (i) shares of
Commodore Common Stock issued in connection with the Commodore
Public Offering; and (ii) a maximum of 20,000,000 shares of
Commodore Common Stock which shall be issued and are potentially
issuable to the Senior Executive Officers under the 1997
Commodore Stock Option Plan upon exercise of 1997 Stock Options.
1.7 "Commodore Companies" shall mean, collectively,
Commodore and all Commodore Subsidiaries.
1.8 "Commodore Convertible Notes" shall mean the 8.5%
convertible notes of Commodore due 1998 in $4,000,000 aggregate
principal amount.
1.9 "Commodore Disclosure Schedule" shall mean the
schedules furnished by Commodore to Lanxide relating to certain
of the representations and warranties of Commodore contained in
this Agreement, which disclosure schedules shall identify and
make reference to the specific sections in this Agreement to
which each disclosure contained therein relates.
1.10 "Commodore Fairness Opinion" shall mean the written
opinion of Xxxxxxxx Xxxxxxxx & Co. Incorporated, or such other
nationally recognized investment bank as the Special Committee of
the Board of Directors of Commodore shall select to render its
opinion, as to the fairness to Commodore of the exchange ratio in
the Merger from a financial point of view.
1.11 "Commodore Financial Statements" shall mean (i) the
audited consolidated balance sheets (including related notes and
schedules) of Commodore as of December 31, 1995 and December 31,
1994, and the related audited statements of income, changes in
stockholders' equity and changes in financial position or cash
flows (including related notes and schedules, if any) for the
three fiscal years ended December 31, 1995; and (ii) the
unaudited consolidated balance sheets (including related notes
and schedules) of Commodore as of June 30, 1996 and the related
unaudited statements of income, changes in stockholders' equity
and changes in financial position or cash flows (including
related notes and schedules, if any) for the six months ended
June 30, 1996 and June 30, 1995, respectively, as filed by
Commodore in SEC Documents.
1.12 "Commodore Preferred Stock" shall mean the collective
reference to the Commodore Series AA Preferred Stock, Commodore
Series B Preferred Stock, Commodore Series C Preferred Stock and
Commodore Series D Preferred Stock.
1.13 "Commodore Public Offering" shall mean the public
offering, pursuant to the Commodore Public Offering Registration
Statement which shall have been declared effective by the SEC
under the 1933 Act, of shares of Commodore Common Stock, all upon
such terms and conditions as the Board of Directors of Commodore
may determine.
1.14 "Commodore Public Offering Registration Statement"
shall mean the Registration Statement on Form S-1, or other
appropriate form, as filed by Commodore with, and as declared
effective by, the SEC under the 1933 Act in connection with the
Commodore Public Offering and related transactions contemplated
by this Agreement.
1.15 "Commodore Reverse Stock Split" shall mean the reverse
split of (a) all outstanding shares of Commodore Common Stock,
and (b) all shares of Commodore Common Stock issuable under
Commodore Common Stock Equivalents, which are issued and
outstanding immediately prior to the Effective Time of the
Merger, as effected pursuant to the Restated Commodore Charter.
1.16 "Commodore Series AA Preferred Stock" shall mean shares
of 10% callable non-convertible shares of Series AA Preferred
Stock, $.01 par value per share, of Commodore. The terms,
designations, preferences, limitations, privileges, and relative
rights of the Commodore Series AA Preferred Stock shall be as set
forth in the Restated Commodore Charter.
1.17 "Commodore Series B Preferred Stock" shall mean the
shares of 8% cumulative convertible shares of Series B Preferred
Stock, par value $.01 per share, of Commodore. The terms,
designations, preferences, limitations, privileges, and relative
rights of the Commodore Series B Preferred Stock shall be as set
forth in the Restated Commodore Charter.
1.18 "Commodore Series C Preferred Stock" shall mean the
shares of non-dividend paying shares of Series C Convertible
Preferred Stock, $.01 par value per share, of Commodore. The
terms, designations, preferences, limitations, privileges, and
relative rights of the Commodore Series C Preferred Stock shall
be as set forth in the Restated Commodore Charter.
1.19 "Commodore Series D Preferred Stock" shall mean the
shares of 7% cumulative redeemable shares of Series D Preferred
Stock, $.01 par value per share and $10 per share liquidation
value, of Commodore which shall be issued at the Effective Time
of the Merger in exchange for shares of Lanxide Series E
Preferred Stock. The terms, designations, preferences,
limitations, privileges, and relative rights of the Commodore
Series D Preferred Stock shall be as set forth in the Restated
Commodore Charter.
1.20 "Commodore Stock Options" shall mean the options to
purchase shares of Commodore Common Stock outstanding at the date
of this Merger Agreement; provided that, unless the context
clearly indicates otherwise, the term Commodore Stock Options
shall not include 1997 Commodore Stock Options.
1.21 "Commodore Subsidiaries" shall mean the subsidiaries of
Commodore, which shall include Commodore Applied Technologies,
Inc., a Delaware corporation ("CAT"), Commodore Refrigerant
Technologies, Inc., a Delaware corporation ("CRT"), Commodore
Separation Technologies, Inc., a Delaware corporation ("CST"),
and the other Commodore Subsidiaries described in Section 6.3 of
this Agreement and any other corporation, limited liability
company, general or limited partnership, limited liability
partnership or other organization acquired as a Subsidiary of
Commodore in the future and owned by Commodore at the Effective
Time.
1.22 "Commodore Warrants" shall mean warrants to purchase
shares of Commodore Common Stock.
1.23 "Common Stock Exchange Ratio" shall mean nineteen and
one-tenth (19.1) shares, representing the number of shares of
Commodore Common Stock into which each full share of Lanxide
Common Stock shall be converted at the Effective Time of the
Merger, before giving effect to the Commodore Reverse Stock
Split.
1.24 "Common Stock Exchange Ratio Reciprocal" shall mean the
quotient resulting from dividing (a) one, by (b) the Common Stock
Exchange Ratio then in effect.
1.25 "Delaware Certificate of Merger" shall mean the
Certificate of Merger to be executed by the Surviving
Corporation, and filed with the Secretary of State of the State
of Delaware relating to the merger of the Merger Subsidiary with
and into Lanxide, all as contemplated by Section 2.1. of this
Agreement.
1.26 "Effective Time" shall have the meaning ascribed to
such term in Section 2.3 of this Agreement.
1.27 "Environmental Claim" shall mean any claim, action,
cause of action, investigation or notice (written or oral) by any
person or entity alleging potential liability (including, without
limitation, potential liability for investigatory costs, Cleanup
costs, governmental response costs, natural resources damages,
property damages, personal injuries, or penalties) arising out
of, based on or resulting from (a) the presence, or Release into
the indoor or outdoor environment, of any Hazardous Materials at
any location, whether or not owned or operated by Lanxide or any
of its Subsidiaries, as the case may be, or (b) circumstances
forming the basis of any violation, or alleged violation, of any
Environmental Law.
1.28 "Environmental Laws" shall mean all federal, state,
local and foreign laws and regulations relating to pollution or
protection of human health or the environment, including without
limitation, laws relating to Releases or threatened Releases of
Hazardous Materials into the indoor or outdoor environment
(including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, Release, disposal, transport or handling of
Hazardous Materials and all laws and regulations with regard to
recordkeeping, notification, disclosure and reporting
requirements respecting Hazardous Materials, and all laws
relating to endangered or threatened species of fish, wildlife
and plants and the management or use of natural resources.
1.29 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.30 "Exhibits" shall mean the Exhibits marked Exhibits "1"
through "6", inclusive, copies of which are attached to this
Agreement. Such Exhibits are hereby incorporated by reference
herein and made part hereof, and may be referred to in this
Agreement and any other related instrument or document without
being attached hereto.
1.31 "GAAP" shall mean generally accepted accounting
principles consistently applied.
1.32 "Hazardous Materials" means "hazardous substance" (as
defined by the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended), "hazardous waste"
(as defined by the Resource Conservation and Recovery Act, as
amended), pesticides, petroleum, crude oil or any fraction
thereof, radioactive material, and any pollutant, oil,
contaminant, or hazardous, extremely hazardous, dangerous or
toxic chemical, material, or waste and any other substance within
the meaning of any Environmental Law or which could pose a hazard
to the environment or the health and safety of any person.
1.33 "Internal Revenue Code" shall mean the Internal Revenue
Code of 1986, as amended.
1.34 "Joint Proxy Statement" shall mean the joint proxy
statement/prospectus used by Lanxide and Commodore to solicit the
approval of their respective stockholders of the transactions
contemplated by this Agreement.
1.35 "Lanxide" shall mean Lanxide Corporation, a Delaware
corporation.
1.36 "Lanxide Capital Stock" shall mean the collective
reference to the Lanxide Common Stock, the Lanxide Series A
Preferred Stock, and the Lanxide Series E Preferred Stock.
1.37 "Lanxide Common Stock" shall mean the shares of common
stock, par value $.01 per share, of Lanxide.
1.38 "Lanxide Common Stock Equivalents" shall mean the
collective reference to shares of Lanxide Common Stock which are
issuable immediately prior to the Effective Time of the Merger
upon (a) the exercise of all outstanding Lanxide Warrants and
Lanxide Stock Options, (b) the conversion of all shares of
outstanding Lanxide Preferred Stock which, by their terms, are
convertible into shares of Lanxide Common Stock, or (c) shares of
Lanxide Common Stock issuable pursuant to Lanxide's Deferred
Compensation Plans.
1.39 "Lanxide Companies" shall mean, collectively, Lanxide
and all Lanxide Subsidiaries.
1.40 "Lanxide Deferred Compensation Plans" shall mean
the collective reference to the Lanxide Corporation Deferred
Compensation Plan and the individual Deferred Compensation Plan
for Xxxxxx Xxxxxx.
1.41 "Lanxide Disclosure Schedule" shall mean the schedules
furnished by Lanxide to Commodore relating to certain of the
representations and warranties of Lanxide contained in this
Agreement, which disclosure schedules shall identify and make
reference to the specific sections in this Agreement to which
each disclosure contained therein relates.
1.42 "Lanxide Fairness Opinion" shall mean the written
opinion of Pennsylvania Merchant Group Ltd. ("PMG"), or such
other nationally recognized investment bank as the Special
Committee of the Board of Directors of Lanxide shall select to
render its opinion, as to the fairness to stockholders of Lanxide
of the Merger from a financial point of view.
1.43 "Lanxide Financial Statements" shall mean (i) the
audited consolidated balance sheets (including related notes and
schedules) of Lanxide as of September 30, 1995 and September 30,
1994, and the related audited statements of income, changes in
stockholders' equity and changes in financial position or cash
flows (including related notes and schedules, if any) for the
three fiscal years ended September 30, 1995 and (ii) the
unaudited consolidated balance sheets (including related notes
and schedules) of Lanxide as of June 30, 1996 and June 30, 1995
and the related unaudited statements of income, changes in
stockholders' equity and changes in financial position or cash
flows (including related notes and schedules, if any) for the
nine months ended June 30, 1996 and June 30, 1995, respectively,
as filed by Lanxide in SEC Documents.
1.44 "Lanxide Preferred Stock" shall mean the collective
reference to the Lanxide Series A Preferred Stock and Lanxide
Series E Preferred Stock.
1.45 "Lanxide Series A Preferred Stock" shall mean the
shares of Series A Convertible Preferred Stock, par value $.01
per share and liquidation value $80 per share, of Lanxide.
1.46 "Lanxide Series E Preferred Stock" shall mean the
shares of 7% cumulative redeemable shares of Series E Preferred
Stock, par value $.01 per share and $10 per share liquidation
value, of Lanxide.
1.47 "Lanxide Stock Options" shall mean the options issued
by any of the Lanxide Companies to purchase shares of Lanxide
Common Stock which are outstanding as at the Effective Time of
the Merger, including such options set forth in Section 5.2(a) of
the Lanxide Disclosure Schedule.
1.48 "Lanxide Subsidiaries" shall mean the Subsidiaries of
Lanxide and the other Lanxide Subsidiaries described in Section
5.3 of this Agreement and any other corporation, limited
liability company, general or limited partnership, limited
liability partnership or other organization acquired as a
Subsidiary of Lanxide in the future and owned by Lanxide at the
Effective Time of the Merger.
1.49 "Lanxide Unit Warrants" shall mean the warrants to
purchase shares of Lanxide Common Stock, comprising a portion of
the Units issued by Lanxide and currently traded on the OTC
Bulletin Board, which warrants expire on November 14, 1996.
1.50 "Lanxide Warrants" shall mean the warrants to
purchase shares of Lanxide Common Stock which are outstanding as
at the Effective Time of the Merger.
1.51 "Material Adverse Change" or "Material Adverse Effect"
shall mean, when used with respect to Commodore or Lanxide, as
the case may be, any change or effect that is or would reasonably
be expected (so far as can be foreseen at the time) to be
materially adverse to the business, properties, assets,
liabilities, condition (financial or otherwise), or results of
operations of Commodore and its Subsidiaries taken as a whole, or
Lanxide and its Subsidiaries taken as a whole.
1.52 "Merger" shall mean the merger of the Merger Subsidiary
with and into Lanxide.
1.53 "Merger Subsidiary" shall mean COES Acquisition Corp.,
a Delaware corporation.
1.54 "Merger Registration Statement" shall mean the
Registration Statement on Form S-4, or other appropriate form, as
filed by Commodore with, and as declared effective by, the SEC
under the 1933 Act in connection with the Merger and related
transactions contemplated by this Agreement.
1.55 "Nasdaq" shall mean the Nasdaq National Market, or if
shares of Commodore Common Stock are not listed for trading on
the Nasdaq National Market, the Nasdaq SmallCap Market.
1.56 "1933 Act" shall mean the Securities Act of 1933, as
amended.
1.57 "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
1.58 "Party" shall mean the individual reference to either
Commodore, Lanxide or Merger Subsidiary, and "Parties" shall mean
the collective reference to all of Commodore, Lanxide and Merger
Subsidiary.
1.59 "Pension Plans" shall mean any employee pension benefit
plan as such term is defined in Section 3(2) of ERISA which is
maintained by the referenced Party.
1.60 "Person" shall mean any individual, corporation,
limited liability company, partnership, association, trust, joint
venture, agency or government instrumentality, or any subdivision
thereof.
1.61 "Preferred Stock Exchange Ratio" shall mean seven and
one hundred four hundredths (7.104) shares representing the
number of shares of Commodore Common Stock into which each full
share of Lanxide Series A Preferred Stock shall be converted at
the Effective Time of the Merger, before giving effect to the
Commodore Reverse Stock Split, (which ratio was derived by
multiplying (a) the fraction of a share of Lanxide Common Stock
into which the Lanxide Series A Preferred Stock is convertible by
its terms by (b) the Common Stock Exchange Ratio).
1.62 "Registration Statements" shall mean the collective
reference to the Merger Registration Statement and Commodore
Public Offering Registration Statement.
1.63 "Regulatory Authorities" shall mean, collectively, the
SEC and any other government agency or instrumentality regulating
or having jurisdiction over the respective businesses of
Commodore or Lanxide.
1.64 "Release" means any release, spill, emission,
discharge, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or
outdoor environment (including, without limitation, ambient air,
surface water, groundwater and surface or subsurface strata) or
into or out of any property of any Hazardous Materials, including
the movement of Hazardous Materials through or in the air, soil,
surface water, groundwater or property.
1.65 "Restated Commodore Charter" shall mean the Amended and
Restated Certificate of Incorporation of Commodore, substantially
in the form of Exhibit 1 annexed hereto and made a part hereof,
pursuant to which, inter alia: (a) Commodore shall effect the
Commodore Reverse Stock Split; (b) the par value per share of all
authorized and outstanding shares of Commodore Common Stock shall
be reduced from $.01 to $.0001; and (c) the corporate name of
Commodore shall be changed to "CoLanx, Inc."
1.66 "SEC" shall mean the United States Securities and
Exchange Commission.
1.67 "SEC Documents" shall mean all reports and registration
statements filed, or required to be filed, by a Party or one of
its Subsidiaries pursuant to the Securities Laws.
1.68 "Securities Laws" shall mean the 1933 Act, the 1934
Act, the Investment Company Act of 1940, as amended, the
Investment Advisors Act of 1940, as amended, the Trust Indenture
Act of 1939, as amended, and the rules and regulations of the SEC
promulgated thereunder.
1.69 "Senior Executive Officers" shall mean the collective
reference to Messrs. Xxxx X. Xxxxxxxxx, Xxxxxx X. Xxxxxx, Xxxx X.
Xxxxxxx and/or such other senior executive officers as shall be
determined by the Board of Directors of Commodore and the
Compensation Committee of the Board of Directors of Commodore.
1.70 "Significant Subsidiary" shall mean any present or
future consolidated Subsidiary of the Party in question, the
assets of which constitute ten percent (10%) or more of the
consolidated assets of such Party as reflected on such Party's
consolidated statement of condition prepared in accordance with
GAAP.
1.71 "Stockholders' Meetings" shall mean the meetings of the
stockholders of Commodore and Lanxide to be held pursuant to
Section 4.6 and Section 4.7, respectively, of this Agreement,
including any adjournment or adjournments thereof.
1.72 "Subsidiary" shall mean any Person of which the Person
in question owns or controls 50% or more of the outstanding
equity interests, either directly or through one or more Persons,
the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of
such entity.
1.73 "Surviving Corporation" shall mean Lanxide, as the
surviving corporation of the Merger of the Merger Subsidiary with
and into Lanxide, as contemplated hereby.
1.74 "1997 Commodore Stock Option Plan" shall mean a stock
option plan of Commodore, substantially in the form of Exhibit 6
annexed hereto, pursuant to which Commodore shall authorize for
issuance thereunder, as qualified and non-qualified stock
options, an aggregate of 20,000,000 shares of Commodore Common
Stock (before giving effect to the Commodore Reverse Stock
Split), to be issued, within the limits specified in such 1997
Commodore Stock Option Plan, on such terms and conditions as
determined by the Board of Directors of Commodore.
1.75 "1997 Commodore Stock Options" shall mean the options
to purchase shares of Commodore Common Stock issued under the
1997 Commodore Stock Option Plan.
ARTICLE TWO
THE MERGER
2.1 Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time of the Merger, the Merger
Subsidiary shall be merged with and into Lanxide and the separate
existence of Merger Subsidiary shall thereupon cease, all in
accordance with the provisions of and with the effect provided in
Section 251 of the General Corporation Law of the State of
Delaware (the "DGCL"). Lanxide shall be the Surviving
Corporation resulting from the Merger and shall become a wholly-
owned subsidiary of Commodore and shall continue to be governed
by the laws of the State of Delaware. The Merger shall be
consummated pursuant to the terms of this Agreement, which has
been approved and adopted by the Board of Directors of each of
Commodore, Lanxide and the Merger Subsidiary. Lanxide, as the
surviving corporation of the Merger, is hereinafter sometimes
referred to as the "Surviving Corporation" and Lanxide and the
Merger Subsidiary are sometimes hereinafter collectively referred
to as the "Constituent Corporations." In accordance with the
DGCL, all of the rights, privileges, powers, immunities, purposes
and franchises of the Constituent Corporations shall vest in the
Surviving Corporation and all of the debts, liabilities,
obligations and duties of the Constituent Corporations shall
become the debts, liabilities, obligations and duties of the
Surviving Corporation.
2.2 Closing. Subject to the terms and conditions of this
Agreement, the closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at 10:00 a.m., local
time, as soon as practicable after all of the conditions set
forth in Article IX of this Agreement are satisfied or waived or
on such other date and at such other time as may be mutually
agreed upon by the Parties (the date and time the Closing
actually occurs being referred to herein as the "Closing Date").
2.3 Effective Time.
(a) The Merger and other transactions contemplated by
this Agreement shall become effective on the date and at the time
that the Delaware Certificate of Merger is accepted for filing by
the Secretary of State of the State of Delaware. The time at
which the Merger shall become effective is referred to herein as
the "Effective Time." Unless otherwise mutually agreed upon in
writing by the chief executive officer or chief financial officer
of Lanxide and the chief executive officer or chief financial
officer of Commodore, the Parties shall cause the Effective Time
to occur as promptly as practicable upon satisfaction of the
conditions set forth in Article Nine of this Agreement.
2.4 Certificate of Incorporation and By-laws of Lanxide.
From and after the Effective Time:
(a) the Certificate of Incorporation of Lanxide in
effect immediately prior to the Effective Time shall be
amended and restated in its entirety as set forth on Exhibit
2 annexed hereto and made a part hereof, and as so amended
and restated shall be the Certificate of Incorporation of
the Surviving Corporation; and
(b) the By-laws of Lanxide in effect immediately prior
to the Effective Time, a copy of which is attached hereto as
Exhibit 3 and made a part hereof, shall be the Bylaws of the
Surviving Corporation until thereafter amended in accordance
with applicable law.
ARTICLE THREE
CONVERSION AND EXCHANGE OF SECURITIES;
EFFECT OF MERGER ON COMMODORE AND LANXIDE STOCK OPTION PLANS
3.1 Conversion and Exchange of Securities. At the
Effective Time, by virtue of the Merger and without any action on
the part of any Party hereto or the holder of any of the
following Securities:
(a) Conversion of Lanxide Common Stock. Subject to
Sections 3.2, 3.6 and 3.7(g) hereof, each full share of Lanxide
Common Stock shall be converted into and become that number of
validly issued, fully paid and nonassessable shares of Commodore
Common Stock as shall be equal to the Common Stock Exchange
Ratio. All shares of Lanxide Common Stock, when so converted,
shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder of
a certificate representing prior to the Effective Time any such
shares shall cease to have any rights with respect thereto,
except the right to receive certificates representing the shares
of Commodore Common Stock into which such shares of Lanxide
Common Stock have been converted (and any dividends or other
distributions payable pursuant to Section 3.7(h) hereof, and any
cash in lieu of a fractional share payable pursuant to Section
3.7(g) hereof) with respect thereto upon the surrender of such
certificate in accordance with Section 3.7, without interest.
(b) Conversion of Lanxide Series A Preferred Stock.
Subject to Sections 3.2, 3.6 and 3.7(g) hereof, each full share
of Lanxide Series A Preferred Stock shall be converted into and
become that number of validly issued, fully paid and
nonassessable shares of Commodore Common Stock as shall be equal
to the Preferred Stock Exchange Ratio. All shares of Lanxide
Series A Preferred Stock, when so converted, shall no longer be
outstanding and shall automatically be canceled and retired and
shall cease to exist, and each holder of a certificate
representing prior to the Effective Time any such shares shall
cease to have any rights with respect thereto, except the right
to receive certificates representing the shares of Commodore
Common Stock into which such shares of Lanxide Series A Preferred
Stock have been converted (and any dividends or other
distributions payable pursuant to Section 3.7(h) hereof, and any
cash in lieu of a fractional share payable pursuant to Section
3.7(g) hereof) with respect thereto upon the surrender of such
certificate in accordance with Section 3.7, without interest.
(c) Conversion of Lanxide Series E Preferred Stock.
Subject to Sections 3.2, 3.6 and 3.7(g) hereof, each full share
of Lanxide Series E Preferred Stock shall be converted into and
become one (1) validly issued, fully paid and nonassessable share
of Commodore Series D Preferred Stock. All shares of Lanxide
Series E Preferred Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist,
and each holder of a certificate representing prior to the
Effective Time any such shares shall cease to have any rights
with respect thereto, except the right to receive certificates
representing the shares of Commodore D Preferred Stock into which
such shares of Lanxide Series E Preferred Stock have been
converted (and any dividends or other distributions payable
pursuant to Section 3.7(h) hereof and any cash in lieu of a
fractional share payable pursuant to and Section 3.7(g) hereof)
with respect thereto upon the surrender of such certificate in
accordance with Section 3.7, without interest.
3.2 Treasury Stock. At the Effective Time and without any
action on the part of the Parties or the holders of any
securities, all shares of Lanxide Capital Stock which are held in
treasury immediately prior to the Effective Time of the Merger,
shall be canceled and retired and shall cease to exist, and no
capital stock of Commodore or other consideration shall be
delivered or deliverable in exchange therefor.
3.3 Merger Subsidiary Stock. At the Effective Time and
without any action on the part of the Parties or the holders of
any securities, each share of common stock of Merger Subsidiary
issued and outstanding immediately prior to the Effective Time of
the Merger shall be converted into one share of the common stock
of the Surviving Corporation, and each certificate evidencing
ownership of shares of Merger Subsidiary common stock shall from
and after the Effective Time of the Merger evidence ownership of
the same number of shares of common stock of the Surviving
Corporation.
3.4 Commodore Stock. The Surviving Corporation shall,
immediately following the Effective Time of the Merger, return to
Commodore, without payment of any consideration therefor, any
shares of Commodore Common Stock held by it immediately prior to
the Effective Time, whereupon such shares shall be canceled and
retired by Commodore and resume the status of authorized and
unissued shares.
3.5 Transfer Books. At the Effective Time of the Merger,
the stock transfer books of Lanxide shall be closed and no
further transfer of shares of Lanxide Capital Stock shall
thereafter be made. If, after the Effective Time, certificates
evidencing prior to the Effective Time any shares of the Lanxide
Capital Stock are presented to Lanxide they shall be canceled and
exchanged as provided in Section 3.1 hereof.
3.6 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, at the Effective Time, shares of
Lanxide Capital Stock which are issued and outstanding
immediately prior to the Effective Time and which are held by any
stockholder of Lanxide who: (a) is entitled to appraisal rights
pursuant to Section 262 of the DGCL and (b) on a timely basis,
makes and perfects a demand for appraisal of such shares in
accordance with all the requirements and provisions of Section
262 of the DGCL, and who does not effectively withdraw or lose
the right to such appraisal (collectively, "Dissenting Shares"),
shall not be converted as described in Section 3.1, but shall
from and after the Effective Time, represent only the right to
receive such consideration as may be determined to be due to such
stockholder with respect to such Dissenting Shares pursuant to
Section 262 of the DGCL.
3.7 Exchange of Certificates.
(a) Appointment of Exchange Agent. On or before the
Closing Date, Commodore shall enter into an agreement approved by
Lanxide (the "Exchange Agent Agreement") with The Bank of New
York or another exchange agent jointly selected by Commodore and
Lanxide (the "Exchange Agent"), authorizing such Exchange Agent
to act as exchange agent hereunder.
(b) Exchange Fund. As soon as reasonably practicable
after the Effective Time, Commodore shall deposit with the
Exchange Agent, in trust for the holders of certificates which
immediately prior to the Effective Time represented Lanxide
Capital Stock converted in the Merger ("Former Certificates"),
certificates ("Commodore Certificates") representing the shares
of Commodore Capital Stock issuable pursuant to Section 3.1 and
funds necessary to pay for any dividends or distributions with
respect thereto and any cash necessary to pay for fractional
shares (collectively, the "Exchange Fund"). The Exchange Fund
shall not be used for any other purpose.
(c) Letter of Transmittal. As soon as reasonably
practicable after the Effective Time, the Exchange Agent shall
mail to each holder of record of a Former Certificate(s): (i) a
notice of the effectiveness of the Merger, and (ii) a letter of
transmittal (which shall state that delivery shall be effected,
and risk of loss and title to the Former Certificates shall pass,
only upon delivery of the Former Certificates to the Exchange
Agent) with instructions for use in effecting the surrender and
exchange of the Former Certificates. Such notice, letter of
transmittal and instructions shall contain such provisions and be
in such form as Commodore and Lanxide may jointly specify.
(d) Exchange Procedure. Promptly following the
surrender, in accordance with such instructions, of a Former
Certificate to the Exchange Agent (or such other agent or agents
as may be appointed by the Exchange Agent or Commodore pursuant
to the Exchange Agent Agreement), together with such letter of
transmittal (duly executed) and any other documents required by
such instructions or letter of transmittal, the Exchange Agent
shall, subject to Section 3.7(e), cause to be distributed to the
person in whose name such Former Certificate shall have been
issued a Commodore Certificate registered in the name of such
person representing the number of whole shares of the applicable
Commodore Capital Stock, as the case may be, into which the
shares previously represented by the surrendered Former
Certificate shall have been converted at the Effective Time
pursuant to Section 3.1 and payment (which shall be made by
check) of any cash payable in lieu of a fractional share pursuant
to Section 3.7(g). Each Former Certificate so surrendered shall
forthwith be canceled.
(e) Unregistered Transfers of Commodore or Lanxide
Stock. In the event of a transfer of ownership of Lanxide
Capital Stock which is not registered in the transfer records of
Lanxide, a Commodore Certificate representing the proper number
of whole shares of the applicable Commodore Capital Stock may be
issued (and cash in lieu of a fractional share may be paid) to
the transferee if the Former Certificate representing such
Lanxide Capital Stock surrendered to the Exchange Agent in
accordance with Section 3.7(h) is properly endorsed for transfer
or is accompanied by appropriate and properly endorsed stock
powers (in each case with appropriate signature guarantees) and
is otherwise in proper form to effect such transfer, if the
person requesting such transfer pays to the Exchange Agent any
transfer or other taxes payable by reason of such transfer or
establishes to the satisfaction of the Exchange Agent that such
taxes have been paid or are not required to be paid.
(f) Lost, Stolen or Destroyed Certificates. In the
event any Former Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the
person claiming such Former Certificate to be lost, stolen or
destroyed satisfactory to Commodore and complying with any other
reasonable requirements imposed by Commodore, Commodore will
cause to be delivered to such person in respect of such lost,
stolen or destroyed Former Certificate the applicable shares of
Commodore Capital Stock and other property deliverable in respect
thereof as determined in accordance with this Article Three.
Commodore may, in its discretion, require the owner of such lost,
stolen or destroyed Former Certificate to give Commodore a bond
in such sum as it may direct as indemnity against any claim that
may be made against Commodore or the Surviving Corporation with
respect to the Former Certificate alleged to have been lost,
stolen or destroyed.
(g) No Fractional Shares of Commodore Capital Stock.
No certificates or scrip representing fractional shares of
Commodore Capital Stock shall be issued upon the surrender for
exchange of Former Certificates, no stock split or dividend with
respect to shares of Commodore Capital Stock shall relate to any
fractional share interest, and no such fractional share interest
will entitle the owner thereof to vote as, or to any other rights
of, a stockholder of Commodore. In lieu of such fractional
shares, any holder of Lanxide Capital Stock who would otherwise
be entitled to a fractional share of Commodore Capital Stock
(after taking into account all shares of Lanxide Capital Stock
owned by such holder), will, upon surrender of his Former
Certificate(s) to the Exchange Agent in accordance with Section
3.7(h), be entitled to receive an amount of cash in the amount
equal to such holders pro rata interest in the net amount
received upon the Exchange Agent's sale in the open market
reasonably promptly after the Effective Time, on behalf of such
holders, of the aggregate shares of the Commodore Common Stock
represented by all such fractional shares after subtracting all
costs of such sale.
(h) No Dividends Before Surrender of Certificates. No
dividends or other distributions declared or made with respect to
Commodore Capital Stock shall be paid to the holder of any
unsurrendered Former Certificate with respect to the shares of
Commodore Capital Stock represented thereby, until the holder of
record of such Former Certificate shall surrender such Former
Certificate as provided herein. Subject to the effect of
applicable laws, following surrender of any such Former
Certificate, there shall be paid to the record holder of the
certificates representing whole shares of the applicable
Commodore Capital Stock issued in exchange therefor, without
interest, (i) at the time of such surrender or as promptly as
practicable thereafter, the amount of dividends or other
distributions, if any, theretofore payable by Commodore with
respect to such whole shares of Commodore Capital Stock the
payment date for which was on or prior to such surrender, and
(ii) at the appropriate payment date, the amount of dividends or
other distributions, if any, with a record date prior to such
surrender and with a payment date subsequent to such surrender
payable with respect to such whole shares of Commodore Capital
Stock. In no event shall the person entitled to receive such
dividends or other distributions be entitled to receive interest
on such dividend or other distribution.
(i) Transfer Taxes; Withholding. If any Commodore
Certificate or cash in lieu of any fractional shares is to be
paid to or issued in a name other than that in which the Former
Certificate surrendered in exchange therefor is registered, it
shall be a condition of such exchange that the Former Certificate
so surrendered shall be properly endorsed and otherwise in proper
form for transfer and that the Person requesting such exchange
shall pay to the Exchange Agent any transfer or other taxes
required by reason of the issuance of such Commodore Certificate
and the distribution of such cash payment in a name other than
that of the registered holder of the Former Certificate so
surrendered, or shall establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not applicable.
Commodore or the Exchange Agent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to
this Agreement to any holder of Commodore Capital Stock or
Lanxide Capital Stock such amounts as Commodore or the Exchange
Agent are required to deduct and withhold under the Internal
Revenue Code, or any provision of state, local or foreign tax
law, with respect to the making of such payment. To the extent
that amounts are so withheld by Commodore or the Exchange Agent,
such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of Commodore Capital
Stock or Lanxide Capital Stock in respect of whom such deduction
and withholding was made by Commodore or the Exchange Agent.
(j) No Further Ownership Rights in Lanxide Capital
Stock. All shares of Commodore Capital Stock issued and all
cash in lieu of fractional shares paid upon the surrender for
exchange of shares of Lanxide Capital Stock in accordance with
the terms hereof shall be deemed to have been issued and paid in
full satisfaction of all rights pertaining to such shares of
Lanxide Capital Stock (provided, however, that after the
Effective Time Commodore shall, on behalf of Lanxide, pay as
provided in Section 3.7(h) any dividends or make any other
distributions (in Commodore Capital Stock in the case of stock
dividends) with a record date prior to the Effective Time which
may have been declared by Commodore or Lanxide on such shares of
Lanxide Capital Stock prior to the date hereof or which may be
declared after the date hereof in accordance with the terms of
this Agreement and which remain unpaid at the Effective Time).
Subject to this Section 3.7(j), if, after the Effective Time,
former Certificates are presented to Commodore or Surviving
Corporation, as applicable, for any reason, they shall be
canceled and exchanged as provided in this Article Three.
(k) Abandoned Property Laws. Payment or delivery of
any shares of Commodore Capital Stock, any cash in lieu of
fractional shares of Commodore Capital Stock and any dividends or
distributions with respect to Commodore Capital Stock shall be
subject to applicable abandoned property, escheat and similar
laws, and neither Commodore nor the Surviving Corporation shall
be liable to any holder of shares of Commodore Capital Stock or
Lanxide Capital Stock for any such shares, for any dividends or
distributions with respect thereto or for any cash in lieu of
fractional shares which may be delivered to any public official
pursuant to any abandoned property, escheat or similar law.
3.8 Lanxide Stock Options, Lanxide Warrants, Deferred
Compensation Plans and Benefit Plans.
(a) Lanxide Stock Options. At the Effective Time of
the Merger, each outstanding Lanxide Stock Option issued by
Lanxide pursuant to any Lanxide Stock Option Plan in effect as at
the Effective Time of the Merger, or otherwise issued by any of
the Lanxide Companies, whether vested or unvested, shall be
assumed by Commodore. Thereafter, each Lanxide Stock Option
shall be deemed to constitute an option to purchase, on the same
terms and conditions as were applicable under such Lanxide Stock
Option, that number of shares of Commodore Stock which shall be
equal to the product derived by multiplying (i) the number of
shares of Lanxide Common Stock that were subject to such Lanxide
Stock Option immediately prior to the Effective Time, by (ii) the
Common Stock Exchange Ratio, at an exercise price per share of
Commodore Common Stock which shall be equal to the product
derived by multiplying (x) the exercise price per share of
Lanxide Common Stock subject to such Lanxide Stock Option
immediately prior to the Effective Time, by (y) the Common Stock
Exchange Ratio Reciprocal, in each case, in accordance with and
subject to the applicable anti-dilution provisions of each of the
Lanxide Stock Options; provided, however, that all Lanxide Stock
Options held by senior officers of Lanxide and by Messrs.
Xxxxxxxx Xxxxxx and R. Xxxxxxx Xxxx shall become fully vested at
the Effective Time and shall not expire as a result of such
individual's failure to remain an employee or consultant of
Lanxide. The assumption hereinabove provided for shall be
accomplished in a manner that shall, in all respects, comply with
the requirements of the Internal Revenue Code with respect to
each Lanxide Stock Option that is an incentive stock option (as
defined in Section 422(b) of the Internal Revenue Code) including
any requirement that the assumption of such Lanxide Stock Option
by Commodore shall not give to the holder any additional benefits
that he did not have prior to such assumption, and Commodore may
make any changes that it deems necessary or desirable with
respect to such assumption in order to satisfy the requirements
of the Internal Revenue Code.
(b) Lanxide Warrants. At the Effective Time of the
Merger, each outstanding Lanxide Warrant issued by Lanxide shall
be assumed by Commodore. Thereafter, each Lanxide Warrant shall
be deemed to entitle the holder thereof to purchase, on the same
terms and conditions as were applicable under such Lanxide
Warrant, that number of validly issued, fully paid and
nonassessable shares of Commodore Common Stock which shall be
equal to the product derived by multiplying (i) the number of
full shares of Lanxide Common Stock purchasable upon exercise of
each of the Lanxide Warrants outstanding immediately prior to the
Effective Time, by (ii) the Common Stock Exchange Ratio, at an
exercise price per share of Commodore Common Stock which shall be
equal to the product derived by multiplying (x) the applicable
per share exercise price(s) set forth in each of the Lanxide
Warrants outstanding immediately prior to the Effective Time of
the Merger, by (y) the Common Stock Exchange Ratio Reciprocal; in
each case in accordance with and subject to the applicable anti-
dilution provisions of each of the Lanxide Warrants; provided,
however, that Lanxide Warrants held by Senior Executive Officers
and by Messrs. Xxxxxx and Xxxx shall become fully vested at the
Effective Time and shall not expire as a result of the failure of
such individual to remain an employee of or consultant to
Lanxide.
(c) Lanxide Deferred Compensation Plans. At the
Effective Time of the Merger, the obligation of Lanxide to issue
each share of Lanxide Common Stock issuable by Lanxide pursuant
to any Lanxide Deferred Compensation Plan shall be assumed by
Commodore. Thereafter, each right to purchase each share of
Lanxide Common Stock issuable under any Lanxide Deferred
Compensation Plan shall be deemed to entitle the holder thereof
to purchase, on the same terms and conditions as were applicable
under such Lanxide Deferred Compensation Plan, that number of
validly issued, fully paid and nonassessable shares of Commodore
Common Stock which shall be equal to the product derived by
multiplying (i) the number of full shares of Lanxide Common Stock
purchasable under such Lanxide Deferred Compensation Plan
immediately prior to the Effective Time, by (ii) the Common Stock
Exchange Ratio, at an exercise price per share of Commodore
Common Stock which shall be equal to the product derived by
multiplying (x) the applicable per share exercise price(s) set
forth in the applicable Lanxide Deferred Compensation Plan in
effect immediately prior to the Effective Time of the Merger, by
(y) the Common Stock Exchange Ratio Reciprocal.
(d) Intentionally left blank.
(e) Actions by Commodore. Commodore shall take all
corporate action necessary to reserve for issuance a sufficient
number of shares of Commodore Common Stock for delivery upon
exercise of Commodore Stock Options, Lanxide Stock Options,
Lanxide Warrants and Lanxide Deferred Compensation Plans assumed
by it pursuant to this Section 3.9 and the Assumption Agreements.
As soon as practicable after the Effective Time, Commodore shall
file a registration statement on Form S-1 or Form S-8 (which may
be filed as a post-effective amendment to the Merger Registration
Statement), or any successor forms, or another appropriate form
with respect to the issuance of shares of Commodore Common Stock
upon exercise of such Commodore Stock Options, Lanxide Stock
Options, Lanxide Warrants and Lanxide Deferred Compensation
Plans, and shall use its best efforts to maintain the
effectiveness of such registration statement or registration
statements for so long as such Commodore Stock Options, Lanxide
Stock Options, Lanxide Warrants and Lanxide Deferred Compensation
Plans remain outstanding.
(f) No Effect on Other Employee Benefit Plans. The
Merger shall have no effect on the terms and conditions of any
other employee benefit plans and arrangements of any of the
Lanxide Companies, all of which shall remain in full force and
effect (and subject to amendment and termination) following the
Effective Time of the Merger in accordance with their respective
terms.
3.9 Adjustment of the Exchange Ratio.
In the event of any stock split, combination,
reclassification or stock dividend with respect to Commodore
Common Stock, any change or conversion of Commodore Common Stock
into other securities; or if a record date with respect to any of
the foregoing should occur, prior to the Effective Time,
appropriate and proportionate adjustments shall be made to the
Common Stock Exchange Ratio and the Preferred Stock Exchange
Ratio, and thereafter all references in this Agreement to the
Common Stock Exchange Ratio and the Preferred Stock Exchange
Ratio shall be deemed to be to the Common Stock Exchange Ratio
and the Preferred Stock Exchange Ratio as so adjusted.
ARTICLE FOUR
STRUCTURE OF COMMODORE AND RELATED MATTERS
4.1 Commodore Capital Stock.
The terms, designations, preferences, limitations,
privileges, and relative rights of each of Commodore Series AA
Preferred Stock, Commodore Series B Preferred Stock, Commodore
Series C Preferred Stock and Commodore Series D Preferred Stock
shall be as set forth in the Restated Commodore Charter attached
hereto as Exhibit 1.
4.2 Board of Directors.
(a) From and after the Effective Time, Commodore shall
take all necessary action so that the Board of Directors of
Commodore and of the Surviving Corporation shall consist of the
following seven (7) persons: Bentley X. Xxxx ("Xxxx"), Xxxx X.
Xxxxxxxxx ("Xxxxxxxxx"), Xxxx X. Xxxxxxx ("Xxxxxxx"), J.
Xxxxxxxxx Xxx Xxxxxxx, Xx. ("Van Vranken"), Xxxxxxx X. Xxxxxxx
("Xxxxxxx"), Xxxxxxx X. Xxxxx ("Xxxxx") and Xxxxx X. Xxxxxxxx
("Xxxxxxxx"). Such persons shall continue to serve as members of
the Board of Directors of Commodore and Lanxide until the annual
meeting of stockholders of Commodore immediately following the
Effective Time of the Merger, or until their successors shall be
duly elected or appointed and qualify in the manner provided in
their respective By-laws, or as otherwise provided by applicable
law.
(b) The respective Boards of Directors of the
Commodore Subsidiaries and the Lanxide Subsidiaries shall be such
persons as the Board of Directors of Commodore and the Surviving
Corporation shall respectively determine, with such persons to
hold such positions until their successors shall have been duly
elected or appointed and qualify in the manner provided in the
By-laws of the respective Subsidiaries, or as otherwise provided
by applicable law; provided, that the Board of Directors of CAT
shall consist of Messrs. Xxxx, Hannesson, Adelman, Xxxxx and
Xxxxxxxx, until the next annual meeting of stockholders of CAT or
until the successors to such persons shall have been duly elected
or appointed and qualify in the manner provided in the By-laws of
CAT, or as otherwise provided by applicable law.
(c) If prior to the Effective Time any of the
individuals named in Section 4.2(a) hereof resigns, retires, or
otherwise ceases to serve as a director of the Surviving
Corporation or Commodore, as the case may be, or otherwise
becomes unable or unwilling to serve as a director of Commodore
or the Surviving Corporation, his replacement shall be chosen by
a majority of the remaining members on the Board of Directors of
Commodore.
(d) Unless otherwise determined by the Board of
Directors of Commodore, following the Effective Time, meetings of
the Board of Directors of Commodore shall be held in New York and
Delaware on a rotating basis designed to cause approximately one-
half of such meetings to be held in New York and one-half of such
meetings to be held in Delaware during each year.
4.3 Management. The principal executive officers of each
of Commodore and the Surviving Corporation upon the Effective
Time of the Merger shall be those persons set forth on Exhibit 5
annexed hereto.
4.4 Headquarters of Commodore and Subsidiaries. Following
the Effective Time, unless otherwise determined by the Board of
Directors of Commodore, the principal corporate offices of
Commodore shall be located in New York, New York, the principal
corporate offices of the Surviving Corporation and the Lanxide
Subsidiaries shall be located in Newark, Delaware, the principal
corporate offices of CAT shall be located in Houston, Texas, the
principal corporate offices of CST shall be located in Atlanta,
Georgia, and the principal corporate offices of CRT shall be
located in New York, New York.
4.5 Indemnification; Directors and Officers' Insurance.
(a) For six years after the Effective Time, Commodore
shall, and shall cause the Surviving Corporation to, indemnify,
defend and hold harmless any person who is now, or has been at
any time prior to the date hereof, or who becomes prior to the
Effective Time, a director, officer, employee or agent (an
"Indemnified Person") of any of the Commodore Companies or the
Lanxide Companies against all losses, claims, damages,
liabilities, costs and expenses (including attorneys' fees and
expenses), judgments, fines, losses and amounts paid in
settlement in connection with any actual or threatened action,
suit, claim, proceeding or investigation (each, a "Claim") to the
extent that any such Claim is based on, or arises out of: (i) the
fact that such Indemnified Person is or was a director, officer,
employee or agent of one or more of the Commodore Companies or
the Lanxide Companies or is or was serving at the request of one
or more of the Commodore Companies or the Lanxide Companies as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise; or (ii)
this Agreement or any of the transactions contemplated hereby, in
each case to the extent that any such Claim pertains to any
matter or fact arising, existing or occurring prior to or at the
Effective Time, regardless of whether such Claim is asserted or
claimed prior to, at or after the Effective Time, to the full
extent permitted under the DGCL, the certificates of
incorporation or by-laws of Commodore or the Surviving
Corporation or any indemnification agreement in effect at the
date hereof or as of the Effective Time, including provisions
relating to advancement of expenses incurred in the defense of
any such Claim; provided, however, that neither Commodore nor the
Surviving Corporation shall be required to indemnify any
Indemnified Person in connection with any proceeding (or portion
thereof) involving any Claim initiated by such Indemnified Person
unless the initiation of such proceeding (or portion thereof) was
authorized by the Board of Directors of Commodore or the
Surviving Corporation, or unless such proceeding is brought to
enforce rights under this Section 4.5. Without limiting the
generality of the preceding sentence, in the event any
Indemnified Person becomes involved in any Claim, after the
Effective Time, Commodore shall, and/or shall cause the Surviving
Corporation to, periodically advance to such Indemnified Person
its legal and other expenses (including the cost of any
investigation and preparation incurred in connection therewith),
subject to the providing by such Indemnified Person of an
undertaking to reimburse all amounts so advanced in the event of
a final non-appealable determination by a court of competent
jurisdiction that such Indemnified Person is not entitled
thereto.
(b) Commodore and Lanxide agree that all rights to
indemnification or liabilities, and all limitations with respect
thereto, existing in favor of any Indemnified Person, as provided
in the certificates of incorporation or by-laws of any of the
Commodore Companies or Lanxide Companies and any indemnification
agreement in effect at the date hereof or as of the Effective
Time, shall survive the Merger and shall continue in full force
and effect, without any amendment thereto, for a period of six
years from the Effective Time to the extent such rights,
liabilities and limitations are consistent with the DGCL;
provided, however, that in the event any Claim is asserted or
made within such six-year period, all such rights, liabilities
and limitations in respect of any such Claim shall continue until
disposition thereof; provided, further, that any determination
required to be made with respect to whether an Indemnified
Person's conduct complies with the standards set forth under the
DGCL, the certificate of incorporation or by-laws of any of the
Commodore Companies or Lanxide Companies or any such agreement,
as the case may be, shall be made by independent legal counsel
selected by such Indemnified Person and reasonably acceptable to
Commodore; and, provided, further, that nothing in this Section
4.5 shall impair any rights or obligations of any current or
former director or officer of any of the Commodore Companies or
Lanxide Companies.
(c) Commodore or the Surviving Corporation shall
maintain Lanxide's and Commodore's existing directors' and
officers' liability insurance policy ("D&O Insurance") for a
period of not less than six years after the Effective Date;
provided, however, that Commodore may substitute therefor
policies of substantially similar coverage and amounts containing
terms no less advantageous to such former directors or officers;
provided, further, that if the existing D&O Insurance expires or
is canceled during such period, Commodore and the Surviving
Corporation shall use their best efforts to obtain substantially
similar D&O Insurance; and, provided, further, that neither
Commodore nor the Surviving Corporation shall be required to pay
an annual premium for D&O Insurance in excess of 150% of the last
annual premium paid prior to the Effective Time, but in such case
shall purchase as much coverage as possible for such amount.
(d) The provisions of this Section 4.5 are intended to
be for the benefit of, and shall be enforceable by, each
Indemnified Person, his or her heirs and his or her personal
representatives.
4.6 Commodore Stockholder Meeting. Subject to the
fiduciary duties of the Board of Directors of Commodore (the
"Commodore Board") under applicable law (as determined by the
Commodore Board in good faith after consultation with and based
upon advice of counsel), the Commodore Board will take all action
necessary in accordance with applicable law and Commodore's
Certificate of Incorporation and By-laws to duly call and hold,
as promptly as practicable on a date to be mutually agreed upon
by Commodore and Lanxide, a meeting of Commodore's stockholders
(the "Commodore Stockholders Meeting") for the purpose of
considering and voting upon this Agreement, the Merger, the
Restated Commodore Charter and related transactions contemplated
hereby (collectively, the "Commodore Merger Proposal"). The
Commodore Board will, subject to its fiduciary duties under
applicable law (as determined by the Commodore Board in good
faith after consultation with and based upon advice of counsel),
recommend that Commodore's stockholders vote in favor of approval
and adoption of the Commodore Merger Proposal, and Commodore will
use its best efforts to solicit from its stockholders proxies in
favor of approval and adoption of the Commodore Merger Proposal.
Subject to their fiduciary duties under applicable law (as
determined by the Commodore Board in good faith after
consultation with and based upon advice of counsel), the
Commodore Board will not withdraw its recommendation that the
stockholders of Commodore vote in favor of the approval and
adoption of the Commodore Merger Proposal (except as contemplated
by Sections 9.2(f) or 10.1(e) of this Agreement).
4.7 Lanxide Stockholder Meeting. Subject to the fiduciary
duties of the Board of Directors of Lanxide (the "Lanxide Board")
under applicable law (as determined by the Lanxide Board in good
faith after consultation with and based upon advice of counsel),
the Lanxide Board will take all action necessary in accordance
with applicable law and Lanxide's Certificate of Incorporation
and By-laws to duly call and hold, as promptly as practicable on
a date to be mutually agreed upon by Lanxide and Commodore, a
meeting of Lanxide's stockholders (the "Lanxide Stockholders'
Meeting") for the purpose of considering and voting upon this
Agreement and the Merger and related transactions contemplated
hereby (collectively, the "Lanxide Merger Proposal"). The
Lanxide Board will, subject to their fiduciary duties under
applicable law (as determined by the Lanxide Board in good faith
after consultation with and based upon advice of counsel),
recommend that Lanxide's stockholders vote in favor of approval
and adoption of the Lanxide Merger Proposal, and Lanxide will use
its best efforts to solicit from its stockholders proxies in
favor of approval and adoption of the Lanxide Merger Proposal.
Subject to their fiduciary duties under applicable law (as
determined by the Lanxide Board in good faith after consultation
with and based upon advise of counsel), the Lanxide Board will
not withdraw its recommendation that the stockholders of Lanxide
vote in favor of the approval and adoption of the Lanxide Merger
Proposal (except as contemplated by Sections 9.3(f) or 10.1(e) of
this Agreement).
4.8 Joint Proxy Statement and Registration Statement.
Commodore and Lanxide shall promptly prepare and file with the
SEC the Merger Registration Statement containing therein the
preliminary Joint Proxy Statement as soon as reasonably
practicable, and shall use their respective best efforts to (i)
have the Merger Registration Statement declared effective and the
Joint Proxy Statement cleared as soon as practicable, (ii)
promptly respond to the comments of the SEC thereon and (iii)
cause Commodore to take any reasonable actions required to be
taken under applicable state securities or "blue sky" laws in
connection with the issuance of the securities of Commodore to be
covered by the Merger Registration Statement. As soon as
practicable after the SEC clears the Merger Registration
Statement and related Joint Proxy Statement (as the same may be
amended from time to time in response to comments received from
the SEC), Commodore will request acceleration of the effective
date of the Merger Registration Statement so that the same may be
declared effective by the SEC under the 1933 Act, and Commodore
and Lanxide shall each cause to be mailed to their respective
stockholders of record the definitive Joint Proxy Statement in
the form cleared for mailing to stockholders by the SEC. There
shall have been registered under the 1933 Act pursuant to the
Merger Registration Statement: (i) all shares of Commodore Common
Stock being issued to stockholders of Lanxide in the Merger in
exchange for outstanding shares of Lanxide Common Stock and
Lanxide Series A Preferred Stock, and (ii) all shares of
Commodore Common Stock potentially issuable upon (A) exercise of
Lanxide Warrants and Lanxide Stock Options, and (B) issuable
pursuant to the Lanxide Deferred Compensation Plans, as
applicable. Each of Commodore and Lanxide shall notify the other
promptly of the receipt of any comments of the SEC and of any
request by the SEC for amendments or supplements to the Joint
Proxy Statement or the Merger Registration Statement or for
additional information and shall supply one another with copies
of all correspondence with the SEC with respect to any of the
foregoing filings. If at any time prior to the Commodore
Stockholders Meeting or the Lanxide Stockholders' Meeting any
event should occur relating to Commodore or any of its
Subsidiaries or any of their respective officers, directors or
affiliates which should be described in an amendment of, or
supplement to, the Joint Proxy Statement or the Merger
Registration Statement, Commodore shall promptly inform Lanxide.
If at any time prior to the Lanxide Stockholders' Meeting or the
Commodore Stockholders Meeting any event should occur relating to
Lanxide or any of its Subsidiaries or any of their respective
officers, directors or affiliates which should be described in an
amendment of, or supplement to, the Joint Proxy Statement or the
Merger Registration Statement, Lanxide shall promptly inform
Commodore. Whenever any event occurs which should be described in
an amendment of, or a supplement to, the Joint Proxy Statement or
the Merger Registration Statement, Commodore and Lanxide shall,
upon learning of such event, cooperate with each other to
promptly prepare, file and clear with the SEC and (if required by
applicable law) mail such amendment or supplement to the
stockholders of Commodore and Lanxide.
4.9 Letters from Accountants. Commodore will use its best
efforts to cause to be delivered to Lanxide and Commodore a
"comfort letter" of Xxxxxx + Co., Commodore's independent
auditors, dated a date within two business days before the date
on which the Merger Registration Statement becomes effective and
addressed to Lanxide and Commodore, in form reasonably
satisfactory to Lanxide and Commodore in connection with the
procedures undertaken by them with respect to the financial
statements and other financial information of Commodore and its
Subsidiaries contained in the Merger Registration Statement.
Lanxide will use its best efforts to cause to be delivered to
Commodore a "comfort letter" of Price Waterhouse, LLP, Lanxide's
independent auditors, dated a date within two business days
before the date on which the Merger Registration Statement
becomes effective and addressed to Commodore, in form reasonably
satisfactory to Commodore and in connection with the procedures
undertaken by them with respect to the financial statements and
other financial information of Lanxide and its Subsidiaries
contained in the Merger Registration Statement.
4.10 State Takeover Statutes. Lanxide will, upon the
request of Commodore, take all reasonable steps to (i) exempt the
Merger from the requirements of any applicable state takeover law
and (ii) assist in any challenge by Commodore to the validity or
applicability to the Merger of any state takeover law.
4.11 Listing on Nasdaq. Commodore shall use its reasonable
best efforts to cause: (a) the shares of Commodore Common Stock
issued and outstanding immediately prior to the Effective Time;
(b) the shares of Commodore Common Stock issued in connection
with the Commodore Public Offering Registration Statement and (c)
the shares of Commodore Common Stock issued to Lanxide
stockholders at the Effective Time of the Merger to be included
for listing on Nasdaq on the Effective Date of the Merger or as
soon thereafter as is practicable; and shall further use its
reasonable best efforts to cause all additional Commodore Common
Stock Equivalents potentially issuable following the Effective
Time of the Merger upon (i) exercise of Lanxide Warrants and
Lanxide Stock Options, and (ii) issuable pursuant to the Lanxide
Deferred Compensation Plans, to be included for listing on the
Nasdaq upon issuance thereof. If Commodore is unable to effect
such listing on the Nasdaq National Market, such shares of
Commodore Common Stock and Common Stock Equivalents may be listed
on the Nasdaq SmallCap Market.
4.12 Certificate of Incorporation and By-laws of Commodore.
At the Effective Time of the Merger (i) the Certificate of
Incorporation of Commodore in effect immediately prior to the
Effective Time shall be amended and restated pursuant to the
Restated Commodore Charter in the form and content set forth as
Exhibit 1; and (ii) the By-laws of Commodore in effect
immediately prior to the Effective Time shall read in their
entirety as set forth in Exhibit 4 until thereafter amended as in
accordance with applicable law.
ARTICLE FIVE
REPRESENTATIONS AND WARRANTIES OF LANXIDE
Lanxide hereby represents and warrants to Commodore as
follows:
5.1 Organization, Standing, and Authority. Lanxide is a
corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, and is duly
qualified to do business, and in good standing in each
jurisdiction where its ownership or leasing of property or the
conduct of its business requires it to be so qualified, other
than those in which the failure to be duly qualified would not
reasonably be expected to have a Material Adverse Effect on
Lanxide, and has corporate power and authority to carry on its
business as now conducted and to own, lease, and operate its
assets, properties, and business, and to execute and deliver this
Agreement and perform the respective terms of this Agreement.
Lanxide has in effect all federal, state, local, and foreign
governmental authorizations necessary for it to own or lease its
properties and assets and to carry on its business as is now
being conducted, other than those the absence of which, either
individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Lanxide.
5.2 Capital Stock.
(a) As of the date hereof, the authorized capital
stock of Lanxide consists of (i) 25,000,000 shares of Lanxide
Common Stock, of which as of the date hereof, 1,325,592 shares
are issued and outstanding, and (ii) 15,000,000 shares of Lanxide
Preferred Stock, $.01 par value, of which 1,109,161 shares of
Lanxide Series A Preferred Stock and 26,100 shares of Lanxide
Series E Preferred Stock are issued and outstanding. All of the
issued and outstanding shares of Lanxide Capital Stock are
validly issued, fully paid and nonassessable. None of the
outstanding shares of Lanxide Capital Stock has been issued in
violation of any preemptive rights of the current or past
stockholders of Lanxide. As of the date hereof, Lanxide has
reserved (i) 412,549 shares of Lanxide Common Stock for issuance
upon conversion of the outstanding shares of Lanxide Series A
Preferred Stock, (ii) an aggregate of 140,263 shares of Lanxide
Common Stock issuable upon exercise of outstanding Lanxide
Warrants, (iii) an aggregate of 331,281 shares of Lanxide Common
Stock issuable upon exercise of outstanding options for Lanxide
Common Stock granted by any of the Lanxide Companies, including
those set forth on Section 5.2(a) of the Lanxide Disclosure
Schedule, pursuant to which options covering not more than
307,048 shares of Lanxide Common Stock were outstanding as of the
date hereof, (iv) a maximum aggregate of 59,481 shares of Lanxide
Common Stock issuable pursuant to the Lanxide Deferred
Compensation Plans and (v) an aggregate of 55,583 shares of
Lanxide Common Stock issuable upon exercise of the Lanxide Unit
Warrants.
(b) Except as set forth in Section 5.2(a) of this
Agreement, on Section 5.2(a) of the Lanxide Disclosure Schedule
or Section 5.2(b) of Lanxide Disclose Schedule, there are no
shares of capital stock or other equity securities of Lanxide
outstanding and no outstanding options, warrants, scrip, rights
to subscribe to, calls, or commitments of any character
whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of the capital stock of Lanxide or
contracts, commitments, understandings, or arrangements by which
Lanxide is or may be bound to issue additional shares of its
capital stock or options, warrants, or rights to purchase or
acquire any additional shares of its capital stock. There are no
contracts, commitments, understandings, or arrangements by which
Lanxide or any of its Subsidiaries is or may be bound to transfer
any shares of the capital stock of any Lanxide Subsidiary, except
for a transfer to Lanxide or any wholly-owned Lanxide Subsidiary,
and, except as disclosed on the Lanxide Disclosure Schedule,
there are no agreements, understandings, or commitments relating
to the rights of Lanxide to vote or to dispose of such shares.
5.3 Lanxide Subsidiaries. Section 5.3 of the Lanxide
Disclosure Schedule lists all of the Lanxide Subsidiaries in
existence as of the date of this Agreement. Except as set forth
on Section 5.3(a) of the Lanxide Disclosure Schedule, no equity
securities of any of the Lanxide Subsidiaries are or may become
required to be issued (other than to Lanxide) by reason of any
options, warrants, scrip, rights to subscribe to, calls, or
commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares
of the capital stock of any Lanxide Subsidiary, and there are no
contracts, commitments, understandings, or arrangements by which
any Lanxide Subsidiary is bound to issue (other than to Lanxide)
additional shares of its capital stock or options, warrants, or
rights to purchase or acquire any additional shares of its
capital stock. Except as provided in the Lanxide Disclosure
Schedule, all of the shares of capital stock of each Lanxide
Subsidiary held by Lanxide or another wholly-owned Lanxide
Subsidiary are fully paid and nonassessable and are owned by
Lanxide or any Lanxide Subsidiary free and clear of any claim,
lien, or encumbrance. Each Lanxide Subsidiary is duly organized,
validly existing, and in good standing under the laws of the
jurisdiction in which it is incorporated or organized; has the
corporate power and authority necessary for it to own or lease
its properties and assets and to carry on its business as it is
now being conducted; and has all federal, state, local, and
foreign governmental authorization necessary for it to own or
lease its properties and assets and to carry on its business as
it is now being conducted, except for such governmental
authorizations the absence of which, either individually or in
the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Lanxide.
5.4 Authority.
(a) Lanxide has all requisite power and authority to
execute and deliver this Agreement and, subject to the approval
of Lanxide's stockholders with respect to the Merger and the
related transactions, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein, including
the Merger, have been duly and validly authorized by all
necessary corporate action in respect thereof on the part of
Lanxide, subject, with respect to this Agreement, to the approval
of the stockholders of Lanxide. This Agreement, subject to any
requisite stockholder approval hereof, has been duly executed and
delivered by Lanxide and constitutes a legal, valid, and binding
obligation of Lanxide, enforceable against Lanxide in accordance
with its terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws, now or hereafter in effect, affecting the
enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court
before which any proceeding may be brought). The preparation of
the joint Proxy Statement to be filed with the SEC has been duly
authorized by the Board of Directors of Lanxide.
(b) Prior to the execution and delivery of this
Agreement, the Board of Directors of Lanxide (at a meeting duly
called and held) has (i) approved this Agreement and the Merger
and the other transactions contemplated hereby, (ii) determined
that the transactions contemplated hereby are fair to and in the
best interests of the holders of Lanxide capital stock and (iii)
except as may be required to comply with its fiduciary duties
under applicable law as advised by counsel, determined to
recommend this Agreement, the Merger and the other transactions
contemplated hereby to Lanxide's stockholders for approval and
adoption at the Lanxide Stockholders' Meeting. The affirmative
vote of the holders of a majority of the outstanding shares of
Lanxide Common Stock are the only votes of the holders of any
class or series of Lanxide's capital stock necessary to approve
the Merger.
5.5 Consents and Approvals; No Violations. Except as set
forth on Section 5.5 of the Lanxide Disclosure Schedule, the
execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, result in any
violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to the loss of
a material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the
properties or assets of Lanxide or any of its Subsidiaries under:
(i) any provision of the Certificate of Incorporation or By-laws
of Lanxide or the comparable charter or organization documents or
by-laws of any of its Subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease, agreement,
instrument, permit, concession, franchise or license applicable
to Lanxide or any of its Subsidiaries or (iii) any judgment,
order, decree, statute, law, ordinance, rule or regulation
applicable to Lanxide or any of its Subsidiaries or any of their
respective properties or assets, other than, in the case of
clauses (ii) and (iii), any such violations, defaults, rights,
liens, security interests, charges or encumbrances that,
individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Lanxide and would
not materially impair the ability of Lanxide to perform its
obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby. No filing or registration with,
or authorization, consent or approval of, any domestic (federal
and state), foreign (including provincial) or supranational
court, commission, governmental body, regulatory agency,
authority or tribunal (a "Governmental Entity") is required by or
with respect to Lanxide or any of its Subsidiaries in connection
with the execution and delivery of this Agreement by Lanxide or
is necessary for the consummation of the Merger and the other
transactions contemplated by this Agreement, except: (i) in
connection, or in compliance, with the provisions of the
Securities Laws and any state securities or "blue sky" laws; (ii)
for the filing of the Delaware Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which
Lanxide or any of its Subsidiaries is qualified to do business;
and (iii) for such other consents, orders, authorizations,
registrations, declarations and filings the failure of which to
obtain or make would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on
Lanxide and would not materially impair the ability of Lanxide to
perform its obligations hereunder or prevent the consummation of
any of the transactions contemplated hereby.
5.6 [INTENTIONALLY OMITTED]
5.7 Tax Matters.
(a) All federal, state, local, and foreign tax returns
required to be filed by or on behalf of any of the Lanxide
Companies have been timely filed, or requests for extensions have
been timely filed and granted and have not expired, for periods
ending on or before September 30, 1995 and all returns filed are
complete and accurate to the best information and belief of
Lanxide, except to the extent that any failure to be correct and
complete would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on Lanxide. All
taxes shown on filed returns have been timely paid and Lanxide
and each of its Subsidiaries have complied with all rules and
regulations relating to the withholding of such taxes, except to
the extent that any failure to comply with such rules and
regulations would not, individually or in the aggregate,
reasonably be expected to have Material Adverse Effect on
Lanxide. As of the date of this Agreement, there is no audit,
examination, deficiency, or refund litigation or matter in
controversy with respect to any taxes that would reasonably be
expected to have a Material Adverse Effect on Lanxide, except as
reserved against in the Lanxide Financial Statements. All taxes,
interest, additions, and penalties due with respect to completed
and settled examinations or concluded litigation have been paid.
(b) None of the Lanxide Companies has executed an
extension or waiver of any statute of limitations on the
assessment or collection of any tax due that is currently in
effect.
(c) Adequate provision for any federal, state, local,
or foreign taxes due or to become due for any of the Lanxide
Companies for the period or periods through and including June
30, 1996, has been made and will be reflected on the June 30,
1996 unaudited Lanxide financial statements included in the
Lanxide Financial Statements.
(d) Deferred taxes of the Lanxide Companies have been
provided for in accordance with GAAP.
5.8 Lanxide Joint Ventures. The Lanxide Disclosure
Schedule annexed hereto lists all of the active and inactive
joint ventures among Lanxide or a Lanxide Subsidiary and any
third person, firm or corporation (individually, a "Lanxide Joint
Venture" and, collectively, "Lanxide Joint Ventures") as of the
date of this Agreement. The principal terms and conditions of
each Lanxide Joint Venture are disclosed on Section 5.8 of the
Lanxide Disclosure Schedule (which Schedule may make reference
to, or incorporate therein, the disclosures contained in specific
documents previously filed by Lanxide with the SEC).
5.9 Properties. Except as disclosed or reserved
against in the Lanxide Financial Statements, the Lanxide
Companies have good, valid and, in the case of real property,
marketable title to, or a valid leasehold interest in, free and
clear of all material liens, encumbrances, charges, defaults, or
equities of whatever character, all of the material properties
and assets, tangible or intangible, reflected in the Lanxide
Financial Statements as being owned by the Lanxide Companies as
of the date hereof, except for such title or interest the failure
of which would not have, individually or in the aggregate, a
Material Adverse Effect on Lanxide. To the best knowledge of
Lanxide's management, all buildings, and all fixtures, equipment,
and other property and assets held under leases or subleases by
any of the Lanxide Companies, are held under valid instruments
which are in full force and effect (except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or other laws affecting the enforcement of creditors'
rights generally and except that the availability of the
equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any
proceedings may be brought) and each of the Lanxide Companies has
complied with the terms of all such leases or subleases to which
it is a party and under which it is in occupancy, except for
failure to comply or be in full force and effect which would not
reasonably be expected to, individually or in the aggregate, have
a Material Adverse Effect on Lanxide. To the best knowledge of
Lanxide's management, the policies of fire, theft, liability, and
other insurance maintained with respect to the assets or
businesses of the Lanxide Companies provide adequate coverage
against loss, and the fidelity bonds in effect as to which any of
the Lanxide Companies is a named insured are believed to be
sufficient.
5.10 Compliance with Laws. To the best knowledge of
Lanxide's management, each of the Lanxide Companies:
(a) is in compliance with all laws, regulations,
reporting and licensing requirements, and orders applicable to
its business or employees conducting its business, the breach or
violation of which would reasonably be likely, individually or in
the aggregate, to have a Material Adverse Effect on Lanxide; and
(b) has received no notification or communication from
any agency or department of federal, state or local government or
the Regulatory Authorities or the staff thereof (i) asserting
that any of the Lanxide Companies is not in compliance with any
of the statutes, regulations, or ordinances which such
governmental authority or Regulatory Authority enforces, which as
a result of such noncompliance, would reasonably be likely,
individually or in the aggregate, to result in a Material Adverse
Effect on Lanxide, (ii) threatening to revoke any license,
franchise, permit, or governmental authorization which would
reasonably be likely, individually or in the aggregate, to have a
Material Adverse Effect on Lanxide; or (iii) requiring any of the
Lanxide Companies to enter into a cease and desist order,
agreement, or memorandum of understanding.
5.11 Employee Benefit Plans.
(a) Lanxide has made available for inspection to
Commodore prior to the execution of this Agreement, complete and
correct copies of all pension, retirement, profit-sharing,
deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, or other incentive plan, any
other written employee program, arrangement, or agreement, any
medical, vision, dental, or other health plan, any life insurance
plan, or any other employee benefit plan or fringe benefit plan,
including, without limitation, any "employee benefit plan" as
that term is defined in Section 3(3) of ERISA, currently adopted,
maintained by, sponsored in whole or in part by, or contributed
to by any of the Lanxide Companies or affiliate thereof for the
benefit of their employees, retirees, dependents, spouses,
directors, independents, spouses, directors, independent
contractors, or other beneficiaries that are eligible to
participate, whether arrived at through collective bargaining or
otherwise (collectively, the "Lanxide Benefit Plans"), and has
delivered to Commodore prior to the execution of this Agreement a
summary of such Lanxide Benefit Plans. Any of the Lanxide
Benefit Plans which is an "employee pension benefit plan," as
that term is defined in Section 3(2) of ERISA, is referred to
herein as an "ERISA Plan." No Lanxide Benefit Plan is or has
been a multiemployer plan within the meaning of Section 3(37) of
ERISA.
(b) All Lanxide Benefit Plans are in compliance with
the applicable terms of ERISA and the Internal Revenue Code, and
any other applicable laws, rules, and regulations except in
instances in which such non-compliance would not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect on Lanxide.
(c) No Lanxide ERISA Plan is a defined benefit pension
plan.
5.12 No Existing Violation; Default.
(a) Neither Lanxide nor any of its Subsidiaries is in
violation of (i) its charter or other organizational documents or
by-laws, (ii) any applicable law, ordinance or administrative or
governmental rule or regulation or (iii) any order, decree or
judgment of any governmental entity having jurisdiction over
Lanxide or any of its Subsidiaries, except for any violations
that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Lanxide. The
properties, assets and operations of Lanxide and its Subsidiaries
are in compliance in all material respects with all applicable
federal, state, local and foreign laws, rules and regulations,
orders, decrees, judgments, permits and licenses relating to
public and worker health and safety and the protection of the
environment (collectively, "Worker Safety Laws"). With respect
to such properties, assets and operations, including any
previously owned, leased or operated properties, assets or
operations, to the knowledge of Lanxide management, there are no
past or current events, conditions, circumstances, activities,
practices, incidents, actions or plans of Lanxide or any of its
Subsidiaries that may interfere with or prevent compliance or
continued compliance in all material respects with applicable
Worker Safety Laws, other than any such interference or
prevention as would not, individually or in the aggregate with
any such other interference or prevention, reasonably be expected
to have a Material Adverse Effect on Lanxide.
(b) There is no existing event of default or event
that, but for the giving of notice or lapse of time, or both,
would constitute an event of default under any loan or credit
agreement, note, bond, mortgage, indenture or guarantee of
indebtedness for borrowed money and there is no existing event of
default or event that, but for the giving of notice or lapse of
time, or both, would constitute an event of default under any
lease, other agreement or instrument to which Lanxide or any of
its Subsidiaries is a party or by which Lanxide or any such
Subsidiary or any of their respective properties, assets or
business[es] is bound which would, individually or in the
aggregate, reasonably be likely to have a Material Adverse Effect
on Lanxide.
5.13 Material Contracts. Except as reflected in the Lanxide
Financial Statements, none of the Lanxide Companies, nor any of
their respective assets, business, or operations is as of the
date of this Agreement a party to, or is bound or affected by, or
receives benefits under, any contract or agreement or amendment
thereto that in each case would be required to be filed as an
exhibit to a Form 10-K that has not been timely filed as an
exhibit in an SEC Document previously filed by Lanxide with the
SEC and identified to Commodore.
5.14 Material Contract Defaults. None of the Lanxide
Companies is in default, nor to the best knowledge of Lanxide is
any other party in material default, in any respect under any
contract, agreement, commitment, arrangement, lease, insurance
policy, or other instrument to which such Lanxide Company is a
party or by which its respective assets, business, or operations
may be bound or affected or under which it or its respective
assets, business, or operations receives benefits, except for
such breaches and defaults which would not be expected to have,
individually or in the aggregate, a Material Adverse Effect on
Lanxide, and there has not occurred any event that with the lapse
of time or the giving of notice, or both, would constitute such a
breach or default. Neither Lanxide nor any of its Subsidiaries
is a party to or bound by any non-competition agreement or any
other agreement or obligation which purports to limit in any
material respect the manner in which, or the localities in which,
Lanxide or any such Subsidiary is entitled to conduct all or any
material portion of the business of Lanxide and its Subsidiaries
taken as a whole.
5.15 Legal Proceedings. Except as set forth on Section 5.15
of the Lanxide Disclosure Schedule, there are no actions, suits,
or proceedings instituted or pending, or to the best knowledge of
Lanxide's management, threatened (or unasserted but considered
probable of assertion any of which if asserted would have at
least a reasonable probability of an unfavorable outcome) against
any of the Lanxide Companies, or against any property, asset,
interest, or right of any of them, that are reasonably expected
to have either individually or in the aggregate, a Material
Adverse Effect on Lanxide or that are reasonably expected to
materially threaten or materially impede the consummation of the
transactions contemplated by this Agreement. None of the Lanxide
Companies is a party to any agreement or instrument or is subject
to any charter or other corporate restriction or any judgment,
order, writ, injunction, decree, rule, regulation, code or
ordinance that threatens or might impede the consummation of the
transactions contemplated by this Agreement.
5.16 Absence of Certain Changes or Events. Since June 30,
1996, except as disclosed on the Lanxide Disclosure Schedule, in
the Lanxide Financial Statements or in an SEC Document identified
to Commodore, (i) neither Lanxide nor any of its Subsidiaries has
entered into any material oral or written agreement or other
transaction, that is not in the ordinary course of business or
that would reasonably be expected to result in a Material Adverse
Effect on Lanxide; (ii) neither Lanxide nor any of its
Subsidiaries has sustained any loss or interference with its
business or properties from fire, flood, windstorm, accident or
other calamity (whether or not covered by insurance) that has had
or that would reasonably be expected to have a Material Adverse
Effect on Lanxide; (iii) there has been no material change in the
indebtedness of Lanxide and its Subsidiaries, no change in the
outstanding shares of capital stock of Lanxide except for the
issuance of shares of Lanxide Common Stock pursuant to the
Lanxide Stock Options and Lanxide Warrants and no dividend or
distribution of any kind declared, paid or made by Lanxide on any
class of its capital stock except for dividends required to be
paid on currently outstanding shares of the Lanxide Preferred
Stock; and (iv) there has been no event causing a Material
Adverse Effect on Lanxide, nor any development that would,
individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect on Lanxide; and during the
period from September 30, 1995 through the date of this
Agreement, neither Lanxide nor any of its Subsidiaries has taken
any action that, if taken during the period from the date of this
Agreement through the Effective Time, would constitute a breach
of Section 7.1 or 7.2 hereof.
5.17 Intellectual Property. Lanxide and its Subsidiaries
own or have a valid license to use all inventions, patents,
trademarks, service marks, trade names, copyrights, trade
secrets, software, mailing lists and other intellectual property
rights (collectively, the "Lanxide Intellectual Property")
necessary to carry on their respective businesses as currently
conducted; and neither Lanxide nor any such Subsidiary has
received any notice of infringement of or conflict with, and, to
Lanxide's knowledge, there are no infringements of or conflicts
with, the rights of others with respect to the use of any of the
Lanxide Intellectual Property that, in either such case, has had
or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Lanxide or result in
material adverse publicity for Lanxide.
5.18 Labor Matters. Except as disclosed on Section 5.18 of
the Lanxide Disclosure Schedule, neither Lanxide nor any of its
Subsidiaries has any labor contracts, collective bargaining
agreements or material employment or consulting agreements with
any persons employed by or otherwise performing services
primarily for Lanxide or any of its Subsidiaries (the "Lanxide
Business Personnel") or any representative of any Lanxide
Business Personnel. Except as set forth on the Lanxide Disclosure
Schedule, neither Lanxide nor any of its Subsidiaries has engaged
in any unfair labor practice with respect to Lanxide Business
Personnel, and there is no unfair labor practice complaint
pending against Lanxide or any of its Subsidiaries with respect
to Lanxide Business Personnel which, in either such case, would
reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on Lanxide. Except as set forth on the
Lanxide Disclosure Schedule, there is no material labor strike,
dispute, slowdown or stoppage pending or, to the knowledge of
Lanxide, threatened against Lanxide or any of its Subsidiaries,
and neither Lanxide nor any of its Subsidiaries has experienced
any material primary work stoppage or other material labor
difficulty involving its employees during the last three years,
except for any of the foregoing which would not have a Material
Adverse Effect on Lanxide.
5.19 SEC Filings. Lanxide has filed all documents required
to be filed prior to the date hereof by it and its Subsidiaries
with the SEC (the "Lanxide SEC Documents"). As of their
respective dates, or if amended as of the date of the last such
amendment, the Lanxide SEC Documents complied, and all documents
required to be filed by Lanxide or any of its Subsidiaries with
the SEC after the date hereof and prior to the Effective Time
(the "Subsequent Lanxide SEC Documents") will comply, in all
material respects with the requirements of the 1933 Act or the
1934 Act, as the case may be, and the applicable rules and
regulations promulgated thereunder and none of the Lanxide SEC
Documents contained, and the Subsequent
Lanxide SEC Documents will not contain, any untrue statement of a
material fact or omitted, or will omit, to state any material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, or are to be made, not misleading. The
consolidated financial statements of Lanxide included in the
Lanxide SEC documents are in accordance with the books and
records of the Lanxide Companies and fairly present, and those to
be included in the Subsequent Lanxide SEC Documents will be in
accordance with the books and records of the Lanxide Companies
and will fairly present, the consolidated financial position of
Lanxide and its consolidated Subsidiaries, as at the respective
dates thereof and the consolidated results of their operations
and their consolidated cash flows for the respective periods then
ended (subject, in the case of the unaudited statements, to
normal year-end audit adjustments and to any other adjustments
described therein) in conformity with GAAP (except, in the case
of the unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved
(except as may be indicated therein or in the notes thereto).
Since September 30, 1994, Lanxide has not made any change in the
accounting practices or policies applied in the preparation of
its financial statements, except as may be required by GAAP.
5.20 Environmental Matters.
(a) Lanxide and its Subsidiaries are in compliance in
all material respects with all applicable Environmental Laws
(which compliance includes, but is not limited to, the possession
by Lanxide and its Subsidiaries of all permits and other
governmental authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions
thereof), except for failures to comply which would not
reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect on Lanxide. Neither Lanxide nor any of
its Subsidiaries has received any written communication, whether
from a governmental authority, citizens group, employee or
otherwise, that alleges that Lanxide or any of its Subsidiaries
is not in such compliance, and there are no past or present
actions, activities, circumstances conditions, events or
incidents that may prevent or interfere with such compliance in
the future.
(b) No transfers of permits or other governmental
authorizations under Environmental Laws, and no additional
permits or other governmental authorizations under Environmental
Laws, will be required to permit the Surviving Corporation and
its Subsidiaries to conduct their respective businesses in full
compliance with all applicable Environmental Laws immediately
following the Closing Date, as conducted by Lanxide and its
Subsidiaries immediately prior to the Closing Date.
(c) There is no Environmental Claim pending or, to the
knowledge of Lanxide, threatened against Lanxide or any of its
Subsidiaries or, to the knowledge of Lanxide, against any Person
whose liability for any Environmental Claim Lanxide or any of its
Subsidiaries has or may have retained or assumed either
contractually or by operation of law which would reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect on Lanxide.
(d) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including,
without limitation, the Release, emission, discharge, presence or
disposal of any Hazardous Material, which could form the basis of
any Environmental Claim against Lanxide or any of its
Subsidiaries, or to the knowledge of Lanxide, against any Person
whose liability for any Environmental Claim Lanxide or any of its
Subsidiaries has or may have retained or assumed either
contractually or by operation of law which would reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect on Lanxide.
(e) Neither Lanxide nor any of its Subsidiaries has
placed, stored, deposited, discharged, buried, dumped or disposed
of Hazardous Materials or any other wastes produced by, or
resulting from, any business, commercial or industrial
activities, operations or processes, on, beneath or adjacent to
any property currently owned, operated or leased by Lanxide or
any of its Subsidiaries, except for inventories of such
substances to be used, and wastes generated therefrom, in the
ordinary course of business of Lanxide and its Subsidiaries
(which inventories and wastes, if any, were and are stored or
disposed of in accordance with applicable Environmental Laws and
in a manner such that there has been no Release of any such
substances into the indoor or outdoor environment), except where
Lanxide and its Subsidiaries have failed to comply with
Environmental Laws applicable to the above matters or have failed
to store such inventories and wastes in a manner described above
and such failures would not be reasonably expected, individually
or in the aggregate, to have a Material Adverse Effect on
Lanxide.
(f) Lanxide has made available for inspection to
Commodore, complete and correct copies and results of any
reports, studies, analyses, tests or monitoring possessed or
initiated by Lanxide or any of its Subsidiaries pertaining to
Hazardous Materials in, on, beneath or adjacent to any property
currently or formerly owned, operated or leased by Lanxide or any
of its Subsidiaries, or regarding Lanxide's or any of its
Subsidiaries' compliance with applicable Environmental Laws.
ARTICLE SIX
REPRESENTATIONS AND WARRANTIES OF COMMODORE
Commodore hereby represents and warrants to Lanxide as
follows:
6.1 Organization, Standing, and Authority. Commodore is a
corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, and is duly
qualified to do business, and in good standing in each
jurisdiction where its ownership or leasing of property or the
conduct of its business requires it to be so qualified other than
those in which the failure to be duly qualified would not
reasonably be expected to have a Material Adverse Effect on
Commodore, and has corporate power and authority to carry on its
business as now conducted and to own, lease, and operate its
assets, properties, and business, and to execute and deliver this
Agreement and perform the respective terms of this Agreement.
Commodore has in effect all federal, state, local, and foreign
governmental authorizations necessary for it to own or lease its
properties and assets and to carry on its business as is now
being conducted, other than those the absence of which, either
individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Commodore.
6.2 Capital Stock.
(a) As of the date hereof, the authorized capital
stock of Commodore consists of (i) 100,000,000 shares of
Commodore Common Stock, of which as of the date hereof,
57,924,368 shares are issued and outstanding, and (ii) 10,000,000
shares of Commodore Preferred Stock, par value $.01 per share, of
which 3,000,000 shares of Commodore Series AA Preferred Stock,
1,534,709 shares of Commodore Series B Preferred Stock, and
106,458.33 shares of Commodore Series C Preferred Stock are
issued and outstanding. All of the issued and outstanding shares
of Commodore Capital Stock are validly issued, fully paid and
nonassessable. None of the outstanding shares of Commodore
Capital Stock has been issued in violation of any preemptive
rights of the current or past stockholders of Commodore. As of
September 30, 1996, Commodore has reserved (i) 4,000,000 shares
of Commodore Common Stock for issuance upon conversion of the
outstanding Commodore Convertible Notes, (ii) 511,570 shares of
Commodore Common Stock for issuance upon possible conversion of
the outstanding shares of Commodore Series B Preferred Stock,
(iii) a maximum of 2,129,167 shares of Commodore Common Stock for
issuance upon possible conversion of outstanding shares of
Commodore Series C Preferred Stock, (iv) an aggregate of
17,945,653 shares of Commodore Common Stock issuable upon
exercise of outstanding Commodore Warrants, and (v) an aggregate
of 3,135,000 shares of Commodore Common Stock issuable upon
exercise of outstanding Commodore Stock Options were outstanding
as of September 30, 1996. In addition to the foregoing,
Commodore has pledged as collateral to secure payment of the
outstanding Commodore Convertible Notes an aggregate of 8,000,000
additional shares of Commodore Common Stock, which shares shall
be returned to Commodore for cancellation upon either prepayment
of such notes or conversion thereof into shares of Commodore
Common Stock at a conversion price of $1.00 per share (subject to
reduction as a result of the Commodore Reverse Stock Split), all
as contemplated by Section 7.9 hereof.
(b) It is anticipated that on or about November 13,
1996, the Board of Directors of Commodore shall adopt the 1997
Commodore Stock Option Plan and shall grant (subject to
ratification by the requisite majority of Commodore stockholders
at the Commodore stockholders meeting called to approve the
Merger) to the following Senior Executive Officers, the number of
1997 Commodore Stock Options listed below opposite their
respective names, all of which shall be exercisable at the
closing price of Commodore Common Stock on the date the Commodore
Board of Directors shall authorize the 1997 Commodore Stock
Option Plan and grant such 1997 Commodore Stock Options:
Xxxx X. Xxxxxxxxx - 3,450,000 1997 Commodore Stock Options,
of which 950,000 shares shall vest upon grant, and 2,500,000
shall vest over a five year period based upon Xx.
Xxxxxxxxx'x continued full-time employment with Commodore,
at the rate of 20% per annum;
Xxxxxx X. Xxxxxx - 2,000,000 1997 Commodore Stock Options,
of which 200,000 shares shall vest upon grant, and 1,800,000
shall vest over a five year period based upon Xx. Xxxxxx'x
continued full-time employment with Commodore, at the rate
of 20% per annum. In addition, Xx. Xxxxxx will receive an
aggregate of 375,000 shares of Commodore Common Stock upon
execution of his employment agreement with Commodore;
Xxxx X. Xxxxxxx - Subject to consummation of the Merger, Xx.
Xxxxxxx shall receive an aggregate of 1,500,000 1997
Commodore Stock Options, which shall vest over a five year
period based upon Xx. Xxxxxxx'x continued full-time
employment with Commodore, at the rate of 20% per annum; and
(c) Except as set forth in Section 6.2(a) and Section
6.2(b) of this Agreement or on the Commodore Disclosure Schedule,
there are no shares of capital stock or other equity securities
of Commodore outstanding and no outstanding options, warrants,
scrip, rights to subscribe to, calls, or commitments of any
character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock
of Commodore or contracts, commitments, understandings, or
arrangements by which Commodore is or may be bound to issue
additional shares of its capital stock or options, warrants, or
rights to purchase or acquire any additional shares of its
capital stock. There are no contracts, commitments,
understandings, or arrangements by which Commodore or any of its
Subsidiaries is or may be bound to transfer any shares of the
capital stock of any Commodore Subsidiary, except for a transfer
to Commodore or any wholly-owned Commodore Subsidiary, and,
except as disclosed on the Commodore Disclosure Schedule, there
are no agreements, understandings, or commitments relating to the
rights of Commodore to vote or to dispose of such shares.
6.3 Commodore Subsidiaries. The Commodore Disclosure
Schedule annexed hereto lists all of the Commodore Subsidiaries
in existence as of the date of this Agreement. No equity
securities of any of the Commodore Subsidiaries are or may become
required to be issued (other than to Commodore) by reason of any
options, warrants, scrip, rights to subscribe to, calls, or
commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares
of the capital stock of any Commodore Subsidiary, and there are
no contracts, commitments, understandings, or arrangements by
which any Commodore Subsidiary is bound to issue (other than to
Commodore) additional shares of its capital stock or options,
warrants, or rights to purchase or acquire any additional shares
of its capital stock. Except as provided in the Commodore
Disclosure Schedule, all of the shares of capital stock of each
Commodore Subsidiary held by Commodore or another wholly-owned
Commodore Subsidiary are fully paid and nonassessable and are
owned by Commodore or any Commodore Subsidiary free and clear of
any claim, lien, or encumbrance. Except as provided in the
Commodore Disclosure Schedule, each Commodore Subsidiary is duly
organized, validly existing, and in good standing under the laws
of the jurisdiction in which it is incorporated or organized; has
the corporate power and authority necessary for it to own or
lease its properties and assets and to carry on its business as
it is now being conducted; and has all federal, state, local, and
foreign governmental authorization necessary for it to own or
lease its properties and assets and to carry on its business as
it is now being conducted, except for such governmental
authorizations the absence of which, either individually or in
the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Commodore
6.4 Authority.
(a) Commodore has all requisite power and authority to
execute and deliver this Agreement and, subject to the approval
of Commodore's stockholders with respect to the Merger and the
related transactions, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein, including
the Merger, have been duly and validly authorized by all
necessary corporate action in respect thereof on the part of
Commodore, subject, with respect to this Agreement, to the
approval of the stockholders of Commodore. This Agreement,
subject to any requisite stockholder approval hereof, has been
duly executed and delivered by Commodore and constitutes a legal,
valid, and binding obligation of Commodore, enforceable against
Commodore in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws, now or
hereafter in effect, affecting the enforcement of creditors'
rights generally and except that the availability of the
equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any
proceeding may be brought). The preparation of the Joint Proxy
Statement and the Merger Registration Statement to be filed with
the SEC has been duly authorized by the Board of Directors of
Commodore.
(b) Prior to the execution and delivery of this
Agreement, the Board of Directors of Commodore (at a meeting duly
called and held) has (i) approved this Agreement and the Merger
and the other transactions contemplated hereby, (ii) determined
that the transactions contemplated hereby are fair to and in the
best interests of the holders of Commodore capital stock and
(iii) except as may be required to comply with its fiduciary
duties under applicable law as advised by counsel, determined to
recommend this Agreement, the Merger and the other transactions
contemplated hereby to Commodore's stockholders for approval and
adoption at the Commodore Stockholders' Meeting. The affirmative
vote of the holders of a majority of the outstanding shares of
Commodore Common Stock are the only votes of the holders of any
class or series of Commodore's capital stock necessary to approve
the Merger.
(c) The Board of Directors of each of Commodore and
the Merger Subsidiary has approved this Agreement and the Merger
for purposes of Section 203(a)(1) of the DGCL.
6.5 Consents and Approvals; No Violations. The execution
and delivery of this Agreement do not, and the consummation of
the transactions contemplated hereby and compliance with the
provisions hereof will not, result in any violation of, or
default (with or without notice or lapse of time, or both) under,
or give rise to a right of termination, cancellation or
acceleration of any obligation or to the loss of a material
benefit under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or
assets of Commodore or any of its Subsidiaries under: (i) any
provision of the Certificate of Incorporation or By-laws of
Commodore or the comparable charter or organization documents or
by-laws of any of its Subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease, agreement,
instrument, permit, concession, franchise or license applicable
to Commodore or any of its Subsidiaries or (iii) any judgment,
order, decree, statute, law, ordinance, rule or regulation
applicable to Commodore or any of its Subsidiaries or any of
their respective properties or assets, other than, in the case of
clauses (ii) and (iii), any such violations, defaults, rights,
liens, security interests, charges or encumbrances that,
individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Commodore and would
not materially impair the ability of Commodore to perform its
obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby. No filing or registration with,
or authorization, consent or approval of, any domestic (federal
and state), foreign (including provincial) or supranational
court, commission, governmental body, regulatory agency,
authority or tribunal (a "Governmental Entity") is required by or
with respect to Commodore or any of its Subsidiaries in
connection with the execution and delivery of this Agreement by
Commodore or is necessary for the consummation of the Merger and
the other transactions contemplated by this Agreement, except:
(i) in connection, or in compliance, with the provisions of the
Securities Laws and any state securities or "blue sky" laws; (ii)
for the filing of the Delaware Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which
Commodore or any of its Subsidiaries is qualified to do business;
and (iii) for such other consents, orders, authorizations,
registrations, declarations and filings the failure of which to
obtain or make would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on
Commodore and would not materially impair the ability of
Commodore to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby.
6.6 [INTENTIONALLY OMITTED]
6.7 Tax Matters.
(a) All federal, state, local, and foreign tax returns
required to be filed by or on behalf of any of the Commodore
Companies have been timely filed, or requests for extensions have
been timely filed and granted and have not expired, for periods
ending on or before December 31, 1995 and all returns filed are
complete and accurate to the best information and belief of
Commodore, except to the extent that any failure to be correct
and complete would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on
Commodore. All taxes shown on filed returns have been timely
paid and Commodore and each of its Subsidiaries have complied
with all rules and regulations relating to the withholding of
such taxes, except to the extent that any failure to comply with
such rules and regulations would not, individually or in the
aggregate, reasonably be expected to have Material Adverse Effect
on Commodore. As of the date of this Agreement, there is no
audit, examination, deficiency, or refund litigation or matter in
controversy with respect to any taxes that would reasonably be
expected to have a Material Adverse Effect on Commodore, except
as reserved against in the Commodore Financial Statements or as
disclosed in the Commodore Disclosure Schedule. All taxes,
interest, additions, and penalties due with respect to completed
and settled examinations or concluded litigation have been paid.
(b) Except as disclosed on the Commodore Disclosure
Schedule, none of the Commodore Companies has executed an
extension or waiver of any statute of limitations on the
assessment or collection of any tax due that is currently in
effect.
(c) Adequate provision for any federal, state, local,
or foreign taxes due or to become due for any of Commodore
Companies for the period or periods through and including June
30, 1996, has been made and will be reflected on the June 30,
1996 unaudited Commodore financial statements included in the
Commodore Financial Statements. To the extent that Commodore
shall, prior to the Effective Time, be required to file with the
SEC unaudited financial statements as at September 30, 1996 and
for the nine months then ended, adequate provision for any
federal, state, local, or foreign taxes due or to become due for
any of Commodore Companies for the period or periods through and
including September 30, 1996, will have been made.
(d) Deferred taxes of the Commodore Companies have
been provided for in accordance with GAAP.
6.8 Commodore Joint Ventures. The Commodore Disclosure
Schedule annexed hereto lists all of the active and inactive
joint ventures and joint working arrangements among Commodore, a
Commodore Subsidiary (including CAT) and any third person, firm
or corporation (individually, a "Commodore Joint Venture" and,
collectively, "Commodore Joint Ventures") as of the date of this
Agreement. The principal terms and conditions of each Commodore
Joint Venture is disclosed on the Commodore Disclosure Schedule
(which Schedule may make reference to, or incorporate therein,
the disclosures contained in specific documents previously filed
by Commodore or CAT with the SEC).
6.9 Properties. Except as disclosed or reserved
against in the Commodore Financial Statements, the Commodore
Companies have good, valid and, in the case of real property,
marketable title to, or a valid leasehold interest in, free and
clear of all material liens, encumbrances, charges, defaults, or
equities of whatever character all of the material properties and
assets, tangible or intangible, reflected in the Commodore
Financial Statements as being owned by the Commodore Companies as
of the date hereof, except for such title or interest the failure
of which would not have, individually or in the aggregate, a
Material Adverse Effect on Commodore. To the knowledge of
Commodore's management, all buildings, and all fixtures,
equipment, and other property and assets held under leases or
subleases by any of the Commodore Companies, are held under valid
instruments which are in full force and effect (except as
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other laws affecting
the enforcement of creditors' rights generally and except that
the availability of the equitable remedy of specific performance
or injunctive relief is subject to the discretion of the court
before which any proceedings may be brought) and each of the
Commodore Companies has complied with the terms of all such
leases or subleases to which it is a party and under which it is
in occupancy, except for failure to comply or be in full force
and effect which would not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect
on Commodore. To the best knowledge of Commodore's management,
the policies of fire, theft, liability, and other insurance
maintained with respect to the assets or businesses of the
Commodore Companies provide adequate coverage against loss, and
the fidelity bonds in effect as to which any of the Commodore
Companies is a named insured are believed to be sufficient.
6.10 Compliance with Laws. To the best knowledge of
Commodore's management, each of the Commodore Companies:
(a) is in compliance with all laws, regulations,
reporting and licensing requirements, and orders applicable to
its business or employees conducting its business, the breach or
violation of which would reasonably be likely, individually or in
the aggregate, to have a Material Adverse Effect on Commodore;
and
(b) has received no notification or communication from
any agency or department of federal, state or local government or
the Regulatory Authorities or the staff thereof (i) asserting
that any of the Commodore Companies is not in compliance with any
of the statutes, regulations, or ordinances which such
governmental authority or Regulatory Authority enforces, which as
a result of such noncompliance, would reasonably be likely,
individually or in the aggregate, to result in a Material Adverse
Effect on Commodore, (ii) threatening to revoke any license,
franchise, permit, or governmental authorization which would
reasonably be likely, individually or in the aggregate, to have a
Material Adverse Effect on Commodore, or (iii) requiring any of
the Commodore Companies to enter into a cease and desist order,
agreement, or memorandum of understanding.
6.11 Employee Benefit Plans.
(a) Commodore has made available for inspection to
Lanxide prior to the execution of this Agreement copies of all
pension, retirement, profit-sharing, deferred compensation, stock
option, employee stock ownership, severance pay, vacation, bonus,
or other incentive plan, any other material written employee
program, arrangement, or agreement, any medical, vision, dental,
or other health plan, any life insurance plan, or any other
employee benefit plan or fringe benefit plan, including, without
limitation, any "employee benefit plan" as that term is defined
in Section 3(3) of ERISA, currently adopted, maintained by,
sponsored in whole or in part by, or contributed to by any of the
Commodore Companies or affiliate thereof for the benefit or
employees, retirees, dependents, spouses, directors,
independents, spouses, directors, independent contractors, or
other beneficiaries that are eligible to participate, whether
arrived at through collective bargaining or otherwise
(collectively, the "Commodore Benefit Plans"), and has delivered
to Lanxide prior to the execution of this Agreement a summary of
such Commodore Benefit Plans. Any of the Commodore Benefit Plans
which is an "employee pension benefit plan," as that term is
defined in Section 3(2) of ERISA, is referred to herein as an
"ERISA Plan." No Commodore Benefit Plan is or has been a
multiemployer plan within the meaning of Section 3(37) of ERISA.
(b) All Commodore Benefit Plans are in compliance with
the applicable terms of ERISA and the Internal Revenue Code, and
any other applicable laws, rules, and regulations except for
instances in which such non-compliance would not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect on Commodore.
(c) No Commodore ERISA Plan is a defined benefit
pension plan.
6.12 No Existing Violation; Default.
(a) Neither Commodore nor any of its Subsidiaries is
in violation of (i) its charter or other organizational documents
or by-laws, (ii) any applicable law, ordinance or administrative
or governmental rule or regulation or (iii) any order, decree or
judgment of any governmental entity having jurisdiction over
Commodore or any of its Subsidiaries, except for any violations
that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Commodore. The
properties, assets and operations of Commodore and its
Subsidiaries are in compliance in all material respects with all
applicable federal, state, local and foreign Worker Safety Laws.
With respect to such properties, assets and operations, including
any previously owned, leased or operated properties, assets or
operations, to the knowledge of the Commodore management, there
are no past or current events, conditions, circumstances,
activities, practices, incidents, actions or plans of Commodore
or any of its Subsidiaries that may interfere with or prevent
compliance or continued compliance in all material respects with
applicable Worker Safety Laws, other than any such interference
or prevention as would not, individually or in the aggregate with
any such other interference or prevention, reasonably be expected
to have a Material Adverse Effect on Commodore.
(b) There is no existing event of default or event
that, but for the giving of notice or lapse of time, or both,
would constitute an event of default under any loan or credit
agreement, note, bond, mortgage, indenture or guarantee of
indebtedness for borrowed money and there is no existing event of
default or event that, but for the giving of notice or lapse of
time, or both, would constitute an event of default under any
lease, other agreement or instrument to which Commodore or any of
its Subsidiaries is a party or by which Commodore or any such
Subsidiary or any of their respective properties, assets or
business[es] is bound which would, individually or in the
aggregate, reasonably be likely to have a Material Adverse Effect
on Commodore.
6.13 Material Contracts. Except as disclosed on the
Commodore Disclosure Schedule, or otherwise reflected in the
Commodore Financial Statements, none of the Commodore Companies,
nor any of their respective assets, business, or operations is as
of the date of this Agreement a party to, or is bound or affected
by, or receives benefits under, any contract or agreement or
amendment thereto that in each case would be required to be filed
as an exhibit to a Form 10-K that has not been timely filed as an
exhibit in an SEC Document previously filed by Commodore with the
SEC and identified to Lanxide.
6.14 Material Contract Defaults. None of the Commodore
Companies is in default, nor to the best knowledge of Commodore
is any other party in material default, in any respect under any
contract, agreement, commitment, arrangement, lease, insurance
policy, or other instrument to which such Commodore is a party or
by which its respective assets, business, or operations may be
bound or affected or under which it or its respective assets,
business, or operations receives benefits, except for such
breaches and defaults which would not be expected to have,
individually, or in the aggregate, a Material Adverse Effect on
Commodore, and there has not occurred any event that with the
lapse of time or the giving of notice, or, both would constitute
such a breach or default. Neither Commodore nor any of its
Subsidiaries is a party to or bound by any non-competition
agreement or any other agreement or obligation which purports to
limit in any material respect the manner in which, or the
localities in which, Commodore or any such Subsidiary is entitled
to conduct all or any material portion of the business of
Commodore and its Subsidiaries taken as a whole.
6.15 Legal Proceedings. There are no actions, suits, or
proceedings instituted or pending or, to the best knowledge of
Commodore's management, threatened (or unasserted but considered
probable of assertion any of which if asserted would have at
least a reasonable probability of an unfavorable outcome) against
any of the Commodore Companies, or against any property, asset,
interest, or right of any of them, that are reasonably expected
to have either individually or in the aggregate a Material
Adverse Effect on Commodore or that are reasonably expected to
materially threaten or materially impede the consummation of the
transactions contemplated by this Agreement. None of the
Commodore Companies is a party to any agreement or instrument or
is subject to any charter or other corporate restriction or any
judgment, order, writ, injunction, decree, rule, regulation, code
or ordinance that threatens or might impede the consummation of
the transactions contemplated by this Agreement.
6.16 Absence of Certain Changes or Events. Since June 30,
1996, except as disclosed on the Commodore Disclosure Schedule,
in the Commodore Financial Statements or in an SEC Document
identified to Lanxide, (i) neither Commodore nor any of its
Subsidiaries has entered into any material oral or written
agreement or other transaction, that is not in the ordinary
course of business or that would reasonably be expected to result
in a Material Adverse Effect on Commodore; (ii) neither Commodore
nor any of its Subsidiaries has sustained any loss or
interference with its business or properties from fire, flood,
windstorm, accident or other calamity (whether or not covered by
insurance) that has had or that would reasonably be expected to
have a Material Adverse Effect on Commodore; (iii) there has been
no material change in the indebtedness of Commodore and its
Subsidiaries, no change in the outstanding shares of capital
stock of Commodore except for the issuance of shares of Commodore
Common Stock pursuant to the Commodore Stock Options and
Commodore Warrants and no dividend or distribution of any kind
declared, paid or made by Commodore on any class of its capital
stock except for dividends required to be paid on currently
outstanding shares of the Commodore Preferred Stock; and (iv)
there has been no event causing a Material Adverse Effect on
Commodore, nor any development that would, individually or in the
aggregate, reasonably be expected to result in a Material Adverse
Effect on Commodore; and during the period from December 31, 1995
through the date of this Agreement, neither Commodore nor any of
its Subsidiaries has taken any action that, if taken during the
period from the date of this Agreement through the Effective
Time, would constitute a breach of Section 7.1 or 7.2 hereof.
6.17 Intellectual Property. Except as set forth in the
Commodore Disclosure Schedule, Commodore and its Subsidiaries own
or have a valid license to use all inventions, patents,
trademarks, service marks, trade names, copyrights, trade
secrets, software, mailing lists and other intellectual property
rights (collectively, the "Commodore Intellectual Property")
necessary to carry on their respective businesses as currently
conducted; and neither Commodore nor any such Subsidiary has
received any notice of infringement of or conflict with, and, to
Commodore's knowledge, there are no infringements of or conflicts
with, the rights of others with respect to the use of any of the
Commodore Intellectual Property that, in either such case, has
had or would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on Commodore or result
in material adverse publicity for Lanxide.
6.18 Labor Matters. Except as disclosed on the Commodore
Disclosure Schedule, neither Commodore nor any of its
Subsidiaries has any labor contracts, collective bargaining
agreements or material employment or consulting agreements with
any persons employed by or otherwise performing services
primarily for Commodore or any of its Subsidiaries (the
"Commodore Business Personnel") or any representative of any
Commodore Business Personnel. Except as set forth on the
Commodore Disclosure Schedule, neither Commodore nor any of its
Subsidiaries has engaged in any unfair labor practice with
respect to Commodore Business Personnel, and there is no unfair
labor practice complaint pending against Commodore or any of its
Subsidiaries with respect to Commodore Business Personnel which,
in either such case, would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on
Commodore. Except as set forth on the Commodore Disclosure
Schedule, there is no material labor strike, dispute, slowdown or
stoppage pending or, to the knowledge of Commodore, threatened
against Commodore or any of its Subsidiaries, and neither
Commodore nor any of its Subsidiaries has experienced any
material primary work stoppage or other material labor difficulty
involving its employees during the last three years, except for
any of the foregoing which would not have a Material Adverse
Effect on Commodore.
6.19 SEC Filings. Commodore has filed all documents
required to be filed prior to the date hereof by it and its
Subsidiaries with the SEC (the "Commodore SEC Documents"). As of
their respective dates, or if amended as of the date of the last
such amendment, the Commodore SEC Documents complied, and all
documents required to be filed by Commodore or any of its
Subsidiaries with the SEC after the date hereof and prior to the
Effective Time (the "Subsequent Commodore SEC Documents") will
comply, in all material respects with the requirements of the
1933 Act or the 1934 Act, as the case may be, and the applicable
rules and regulations promulgated thereunder and none of the
Commodore SEC Documents contained, and the Subsequent Commodore
SEC Documents will not contain, any untrue statement of a
material fact or omitted, or will omit, to state any material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, or are to be made, not misleading. The
consolidated financial statements of Commodore included in the
Commodore SEC Documents are in accordance with the books and
records of the Commodore Companies and fairly present, and those
to be included in the Subsequent Commodore SEC Documents will be
in accordance with the books and records of the Commodore
Companies and will fairly present, the consolidated financial
position of Commodore and its consolidated Subsidiaries, as at
the respective dates thereof and the consolidated results of
their operations and their consolidated cash flows for the
respective periods then ended (subject, in the case of the
unaudited statements, to normal year-end audit adjustments and to
any other adjustments described therein) in conformity with GAAP
(except, in the case of the unaudited statements, as permitted by
Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the
notes thereto). Since December 31, 1994, Commodore has not made
any change in the accounting practices or policies applied in the
preparation of its financial statements, except as may be
required by GAAP.
6.20 Environmental Matters.
(a) Commodore and its Subsidiaries are in compliance
in all material respects with all applicable Environmental Laws
(which compliance includes, but is not limited to, the possession
by Commodore and its Subsidiaries of all permits and other
governmental authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions
thereof), except for failures to comply which would not
reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect on Commodore. Neither Commodore nor
any of its Subsidiaries has received any written communication,
whether from a governmental authority, citizens group, employee
or otherwise, that alleges that Commodore or any of its
Subsidiaries is not in such compliance, and there are no past or
present actions, activities, circumstances conditions, events or
incidents that may prevent or interfere with such compliance in
the future.
(b) No transfers of permits or other governmental
authorizations under Environmental Laws, and no additional
permits or other governmental authorizations under Environmental
Laws, will be required to permit Commodore and its Subsidiaries
to conduct its business in full compliance with all applicable
Environmental Laws immediately following the Closing Date, as
conducted by Commodore and its Subsidiaries immediately prior to
the Closing Date.
(c) There is no Environmental Claim pending or, to the
knowledge of Commodore, threatened against Commodore or any of
its Subsidiaries or, to the knowledge of the Commodore, against
any Person whose liability for any Environmental Claim Commodore
or any of its Subsidiaries has or may have retained or assumed
either contractually or by operation of law which would
reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect on Commodore.
(d) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including,
without limitation, the Release, emission, discharge, presence or
disposal of any Hazardous Material which could form the basis of
any Environmental Claim against Commodore or any of its
Subsidiaries, or, to the knowledge of Commodore, against any
Person whose liability for any Environmental Claim Commodore or
any of its Subsidiaries has or may have retained or assumed
either contractually or by operation of law which would
reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect on Commodore.
(e) Neither Commodore nor any of its Subsidiaries has
placed, stored, deposited, discharged, buried, dumped or disposed
of Hazardous Materials or any other wastes produced by, or
resulting from, any business, commercial or industrial
activities, operations or processes, on, beneath or adjacent to
any property currently owned, operated or leased by Commodore or
any of its Subsidiaries, except for inventories of such
substances to be used, and wastes generated therefrom, in the
ordinary course of business of Commodore and its Subsidiaries
(which inventories and wastes, if any, were and are stored or
disposed of in accordance with applicable Environmental Laws and
in a manner such that there has been no Release of any such
substances into the indoor or outdoor environment), except where
Commodore and its Subsidiaries have failed to comply with
Environmental Laws applicable to the above matters or have failed
to store such inventories and wastes in a manner described above
and such failures would not be reasonably expected, individually
or in the aggregate, to have a Material Adverse Effect on
Commodore.
(f) Commodore has made available for inspection to
Lanxide, complete and correct copies and results of any reports,
studies, analyses, tests or monitoring possessed or initiated by
Commodore or any of its Subsidiaries pertaining to Hazardous
Materials in, on, beneath or adjacent to any property currently
or formerly owned, operated or leased by Commodore or any of its
Subsidiaries, or regarding Commodore's or any of its
Subsidiaries' compliance with applicable Environmental Laws.
ARTICLE SEVEN
COVENANTS AND AGREEMENTS
Each Party hereby covenants and agrees with the other Party
as follows:
7.1 Conduct of Business - Negative Covenants. From the
date of this Agreement until the earlier of the Effective Time or
until the termination of this Agreement, each Party covenants and
agrees that it will not do or agree or commit to do, and shall
not permit any of its Subsidiaries to do or to commit to do, any
of the following without the prior written consent of the chief
executive officer or chief financial officer of the other Party,
which consent shall not be unreasonably delayed or withheld:
(a) except as set forth on the Lanxide Disclosure
Schedule or the Commodore Disclosure Schedule, as the case may
be, or as expressly contemplated by this Agreement, amend its
certificates of incorporation or bylaws; or
(b) except as expressly permitted in this Agreement or
(i) as to Commodore, in accordance with the specific terms of
Commodore Capital Stock, Commodore Warrants, Commodore
Convertible Notes or Commodore Stock Options, or (ii) as to
Lanxide, in accordance with the specific terms of Lanxide Capital
Stock, Lanxide Warrants, Lanxide Stock Options or Lanxide
Deferred Compensation Plans, repurchase, redeem, or otherwise
acquire or exchange, directly or indirectly, any shares of its
capital stock or any securities convertible into any shares of
its capital stock; or
(c) except as expressly contemplated by this Agreement
or as disclosed in Disclosure Schedules hereto, acquire, or agree
to acquire, any business or any corporation, partnership, limited
liability company, association, firm, or organization or division
thereof, or otherwise acquire or agree to acquire any assets
other than in connection with (i) internal reorganizations or
consolidations involving existing Subsidiaries or (ii) the
creation of new Subsidiaries organized to conduct or continue
activities otherwise permitted by this Agreement; or
(d) except as disclosed in the Disclosure Schedules
hereto, sell or otherwise dispose of, or agree to sell, lease or
otherwise dispose of: (i) any shares of capital stock of any
Subsidiary of such Party (unless any such shares of stock are
sold or otherwise transferred to such Party or any of its wholly-
owned Subsidiaries); (ii) any Subsidiary of such Party; (iii) any
substantial part of the assets of such Party or any Subsidiary of
such Party; or (iv) any asset other than in the ordinary course
of business for reasonable and adequate consideration; provided,
however, such covenant in this subparagraph (e) shall not be
applicable to the sale of shares or assets sold after the date of
this Agreement in transactions not otherwise prohibited by this
Agreement resulting in a gain or loss in each sale not in excess
of $10,000; or
(e) except as disclosed in the Disclosure Schedules or
as contemplated hereby, incur, directly or indirectly, any
additional debt obligation or other obligation for borrowed
money, other than (i) the replacement of existing short-term debt
with other short-term debt in the same or lesser aggregate
principal amount or (ii) indebtedness of any Lanxide Company to
another Lanxide Company or of any Commodore Company to another
Commodore Company, not in excess of an aggregate of $25,000 for
such Party and its Subsidiaries on a consolidated basis; or
(f) grant any general increase in compensation or
benefits to its employees or to its officers, except in
accordance with past practice or as required by law; pay any
bonus except in accordance with past practice or the provisions
of any applicable program or plan adopted by the Board of
Directors of such Party prior to the date of this Agreement;
enter into any severance agreements with its officers or the
officers of any Subsidiary except as previously disclosed; grant
any material increase in fees or other increases in compensation
or other benefits to any of its directors except as in accordance
with past practice; or effect any change in retirement benefits
for any class of its employees or officers (unless such change is
required by applicable law) that would materially increase the
retirement benefit liabilities of such Party and its Subsidiaries
on a consolidated basis; or
(g) except as disclosed on the Commodore Disclosure
Schedule or the Lanxide Disclosure Schedule, as the case may be,
amend any existing employment contract between such Party or any
Subsidiary thereof and any person having a salary thereunder in
excess of $100,000 per year (unless such amendment is required by
law) to increase the compensation or benefits payable thereunder
or enter into any new employment contract with any person having
a salary thereunder in excess of $100,000 that such Party or its
applicable Subsidiary does not have the unconditional right to
terminate without liability (other than liability for services
already rendered) at any time on or after the Effective Time; or
(h) adopt any new employee benefit plan of such Party
or any Subsidiary thereof or make any material change in or to
any existing employee benefit plans of such Party or any
Subsidiary thereof other than (A) as previously approved by the
other Parties, or (B) any such change that is required by law or
that, in the opinion of counsel, is necessary or advisable to
maintain the tax qualified status of any such plan; or
(i) (A) declare, set aside or pay any dividends on, or
make any other actual, constructive or deemed distributions in
respect of, any of its capital stock, or otherwise make any
payments to its stockholders in their capacity as such (other
than dividends required to be paid on the outstanding shares of
Lanxide Preferred Stock or the Commodore Preferred Stock); (B)
split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock; or
(C) purchase, redeem or otherwise acquire any shares of its
capital stock or those of any Subsidiary or any other securities
thereof or purchase, redeem or otherwise acquire or extend the
expiration of or otherwise amend, any rights, warrants or options
to acquire any such shares or other securities; or
(j) except to the extent set forth in Section 6.2 (b)
hereof, issue, deliver, sell, pledge, dispose of or otherwise
encumber any shares of its capital stock, any other voting
securities or equity equivalent or any securities convertible
into, or any rights, warrants or options to acquire, any such
shares, voting securities, equity equivalent or convertible
securities, other than (A) the issuance of Commodore Common Stock
to be issued in connection with the Merger and Commodore Public
Offering, all as contemplated hereby, (B) the issuance of shares
of Lanxide Common Stock or Commodore Common Stock upon the
exercise of currently outstanding Lanxide Stock Options, Lanxide
Warrants, Lanxide Deferred Compensation Plans, Commodore Stock
Options or Commodore Warrants, as the case may be, and (C) the
issuance of stock options to employees of Lanxide or Commodore or
any of its Subsidiaries in the ordinary course of business and
consistent with past practice.
7.2 Conduct of Business-Affirmative Covenants. Unless the
prior written consent of Lanxide or Commodore, respectively,
shall have been obtained by the other Party, and except as
otherwise contemplated herein, each Party shall and shall cause
its Subsidiaries: to operate its business in accordance with the
ordinary course of its business as currently conducted and, to
the extent consistent herewith, use its reasonable best efforts
to preserve intact its business organizations and assets,
maintain its rights and franchises, keep available services of
its current officers and employees and preserve its relationships
with customers, suppliers and others having business dealings
with it, all to the end that its goodwill and ongoing business
shall be unimpaired at the Effective Time, and to take no action
which would (i) adversely affect the ability of any of them to
obtain any necessary approvals of governmental authorities
required for the transactions contemplated hereby without
imposition of a condition or restriction that would have a
Material Adverse Effect on either Commodore or Lanxide or (ii)
adversely affect the ability of such Party to perform its
covenants and agreements under this Agreement.
7.3 Adverse Changes in Condition. Lanxide and Commodore
each agrees to give written notice promptly to the other Party
concerning any material adverse change in such Party's condition
or that of any of the Subsidiaries of such Party from the date of
this Agreement until the Effective Time that might adversely
affect the consummation of the transactions contemplated hereby
or upon becoming aware of the occurrence or impending occurrence
of any event or circumstance which would cause or constitute a
material breach of any of the representations, warranties, or
covenants of such Party contained herein. Each Party shall use
its best efforts to prevent or promptly to remedy the same.
7.4 Investigation and Confidentiality. Prior to the
Effective Time, Lanxide and Commodore each will keep the other
Party advised of all material developments relevant to its
business and to the consummation of the Merger and may make or
cause to be made such investigation, if any, of the business and
properties of the other Party and its Subsidiaries and of their
respective financial and legal condition as Lanxide or Commodore
reasonably deems necessary or advisable to familiarize itself and
its advisers with such business, properties, and other matters,
provided that such investigation shall be reasonably related to
the transactions contemplated hereby and shall not interfere
unnecessarily with normal operations. Lanxide and Commodore each
agrees to furnish the other Party and the other Party's advisers
with such financial and operating data and other information with
respect to its businesses, properties, and employees as Lanxide
or Commodore shall from time to time reasonably request.
Commodore shall deliver to Lanxide any Subsequent Commodore SEC
Document promptly upon the filing thereof with the SEC, and
Lanxide shall deliver to Commodore any Subsequent Lanxide SEC
Document promptly upon the filing thereof with the SEC. No
investigation by one Party shall affect the representations and
warranties of the other Party, and until the Effective Time each
such representation and warranty shall survive any such
investigation. Each Party shall, and shall cause its directors,
officers, employees, advisers and agents to, maintain the
confidentiality of all confidential information furnished to it
by the other Party concerning such other Party's business,
operations, and financial condition and shall not use such
information for any purpose except in furtherance of the
transactions contemplated by this Agreement. If this Agreement
is terminated prior to the Effective Time, each Party shall
promptly return all documents and copies thereof, and all work
papers containing confidential information received from the
other Party.
7.5 Agreement of Affiliates. Each of Lanxide and Commodore
shall deliver to the other Party a letter identifying all persons
whom it reasonably believes is an "affiliate" of such Party for
purposes of Rule 145 under the Securities Act of 1933, as
amended. Each of Lanxide and Commodore shall use its best
efforts to cause each person who is identified as an "affiliate"
in the letter referred to above to deliver to Commodore not later
than the effective date of the Registration Statement relating to
the Commodore Public Offering, a written agreement, in form and
content reasonably satisfactory to counsel to Lanxide and
Commodore, to the effect that such person is an "affiliate" of
Lanxide or Commodore (as the case may be) and that such person
shall not sell, pledge, transfer, or otherwise dispose of the
shares of Commodore Capital Stock held by such person except as
contemplated by this Agreement and will not sell, pledge,
transfer, or otherwise dispose of the shares of Commodore Capital
Stock to be received by such person upon consummation of the
Merger except in compliance with applicable provisions of the
1933 Act and the rules and regulations thereunder. Commodore
shall not be required to maintain the effectiveness of the
Registration Statement under the 1933 Act for the purposes of
resale of Commodore Capital Stock by such affiliates.
7.6 Certain Actions. Except with respect to this Agreement
and the transactions contemplated hereby, neither Lanxide nor
Commodore shall solicit or encourage or take any other action to
facilitate (including by way of furnishing any information that
it is not legally obligated to furnish) any inquiry or proposal
relating to the merger or consolidation of such Party or any of
its Significant Subsidiaries with any entity or the acquisition
of such Party or any of its Significant Subsidiaries or all or
substantially all of their assets or properties or capital stock
by any person or entity. Neither Lanxide nor Commodore shall
negotiate with respect to any such proposal except in compliance
with its legal obligations, nor shall it reach any agreement or
understanding (formal or informal, written or otherwise) with
respect to any such proposal. Notwithstanding the foregoing,
either Party may take any of the actions prohibited pursuant to
this Section 7.6, if and to the extent that it is required to do
so in order to reasonably comply with fiduciary obligations of
its Board of Directors under applicable law as determined by such
Board of Directors in good faith after consultation and based
upon advice of counsel. Each of Lanxide and Commodore shall
promptly notify the other Party orally and in writing in the
event it receives any such inquiry or proposal.
7.7 Agreement as to Efforts to Consummate. Subject to the
terms and conditions of this Agreement, each of Lanxide and
Commodore agrees to use all reasonable efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, all
things necessary, proper, or advisable under applicable laws and
regulations to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including, without limitation,
using reasonable efforts to lift or rescind any injunction or
restraining order or other order adversely affecting the ability
of the Parties to consummate the transactions contemplated
herein. Each of Lanxide and Commodore shall use, and shall cause
each of the Lanxide Subsidiaries or Commodore Subsidiaries, as
the case may be, to use, its best efforts to obtain consents of
all third parties and governmental bodies necessary or desirable
for the consummation of the transactions contemplated by this Agreement.
7.8 Supplements to Disclosure Schedules. Each of Lanxide
and Commodore shall promptly supplement or amend their respective
Disclosure Schedules with respect to any matter hereafter arising
or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or otherwise
disclosed in its respective Disclosure Schedule (the "Updated
Information"). No such supplement or amendment of the Commodore
Disclosure Schedule or the Lanxide Disclosure Schedule, as the
case may be, to include the Updated Information shall affect the
ability of Lanxide or Commodore, respectively, to rely on the
conditions to Merger set forth in Article Nine hereof.
7.9 Prepayment or Conversion of Commodore Convertible
Notes. On or prior to the Effective Time, Commodore shall notify
all holders of Commodore Convertible Notes that it will prepay in
full all outstanding Commodore Convertible Notes on a date which
shall be not more than sixty (60) days following the date of such
notice, unless converted into shares of Commodore Common Stock
(after giving effect to the Commodore Reverse Stock Split) in
accordance with the terms thereof, prior to the date fixed for
prepayment. In such connection, Commodore shall reserve, from
the net proceeds of the Commodore Public Offering, sufficient
funds to effect such prepayment, and at the time of such
prepayment and/or conversion of the Commodore Convertible Notes,
as the case may be, all shares of Commodore Common Stock pledged
to secure payment of such Commodore Convertible Notes shall be
returned to Commodore for cancellation.
ARTICLE EIGHT
ADDITIONAL AGREEMENTS
8.1 Press Releases. Prior to the Effective Time of the
Merger, Lanxide and Commodore shall consult with each other as to
the form and substance of any press release or other public
disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, however, that nothing
in this Section 8.1 shall be deemed to prohibit any Party from
making any disclosure which its counsel deems necessary or
advisable in order to satisfy such Party's disclosure obligations
imposed by law.
8.2 Merger Subsidiary. Prior to the Effective Time, the
outstanding capital stock of the Merger Subsidiary shall consist
of one hundred (100) shares of common stock, all of which shares
shall be owned by Commodore. Prior to the Effective Time, the
Merger Subsidiary shall not (i) conduct any business operations
whatsoever or (ii) enter into any contract or agreement of any
kind (other than this Agreement and the Exhibits hereto, as
applicable), acquire any assets or incur any liability, except as
may be specifically contemplated by this Agreement or as the
Parties may otherwise agree. In the event this Agreement is
terminated prior to the Effective Time, the Merger Subsidiary
shall be dissolved.
ARTICLE NINE
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Lanxide's and Commodore's Obligation to
Effect the Merger. The respective obligations of Lanxide, on the
one hand, and Commodore, on the other hand, to consummate the
Merger are subject to the satisfaction of the following
conditions, unless waived by Lanxide or Commodore, as the case
may be, pursuant to Section 11.5 of this Agreement:
(a) Stockholders' Approvals. The holders of a majority
of the outstanding shares of each of Lanxide Common Stock and
Commodore Common Stock shall have approved this Agreement, the
Merger, and the consummation of the transactions contemplated
hereby, as and to the extent required by law and by the
provisions of any governing instruments or this Agreement, and
each Party shall have furnished to the other certified copies of
resolutions duly adopted by such Party's stockholders evidencing
the same.
(b) Consents and Approvals. All approvals and
authorizations of, filings and registrations with, and
notifications to, all Regulatory Authorities required for
consummation of the Merger and for the preventing of any
termination of any right, privilege, license, or agreement of
either Party or any of its respective Subsidiaries which, if not
obtained or made, would have a Material Adverse Effect on Lanxide
or Commodore, as the case may be, shall have been obtained or
made and shall be in full force and effect and all waiting
periods required by law shall have expired. Any approval
obtained from any Regulatory Authority which is necessary to
consummate the transactions contemplated hereby shall not be
conditioned or restricted in a manner which in the reasonable
judgment of the Board of Directors of either Party materially
adversely impacts the economic or business assumptions of the
transactions contemplated by this Agreement so as to render
inadvisable the consummation of the Merger. To the extent that
any lease, license, loan or financing agreement or other contract
or agreement to which any Party or any of its Subsidiaries, as
the case may be, is a party requires the consent of or waiver
from the other party thereto as a result of the transactions
contemplated by this Agreement, such consent or waiver shall have
been obtained, unless the failure to obtain such consent or
waiver would not have a Material Adverse Effect on anticipated
business, prospects or financial condition of such Party
following the Merger.
(c) Legal Proceedings. No Governmental Entity having
jurisdiction over Commodore or Lanxide, or any of their
respective Subsidiaries, shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary
or permanent) which is then in effect and has the effect of
making the Merger or any other transaction contemplated by this
Agreement illegal. There shall not have been instituted or be
pending any suit, action or proceeding by any Governmental Entity
as a result of this Agreement or any of the transactions
contemplated hereby which questions the validity or legality of
the transactions contemplated by this Agreement.
(d) Dissenting Shares. Holders of Dissenting Shares
representing five percent (5%) or more of the outstanding shares
of Lanxide Common Stock and Lanxide Series A Preferred Stock,
taken together as a class (each share of Lanxide Series A
Preferred Stock constituting for this purpose the equivalent of
0.371947 share of Commodore Common Stock) shall not have elected,
on a timely basis, to exercise any rights of appraisal under
applicable provisions of the DGCL.
(e) Tax Opinion of Counsel. Each of Lanxide and
Commodore shall have received from Messrs. Greenberg, Traurig,
Hoffman, Lipoff, Xxxxx & Xxxxxxx, counsel to Commodore, an
opinion, dated as of the Effective Time of the Merger, and in
form and substance reasonable satisfactory to the Parties, to the
effect that the Merger will constitute a reorganization within
the meaning of section 368(a) of the Code, and that Lanxide,
Commodore and Merger Subsidiary each will be a party to the
reorganization within the meaning of section 368(b) of the Code,
which opinion shall not have been withdrawn prior to the
Effective Time.
(f) Registration Statement. The Merger Registration
Statement shall have been declared effective under the 1933 Act
and no stop orders suspending the effectiveness of such Merger
Registration Statement shall be in effect and no proceedings for
such purpose shall be pending before or threatened by the SEC.
(g) Closing of Transactions under Commodore Public
Offering Registration Statement. The closing of the sale of the
securities being offered by Commodore pursuant to Commodore
Public Offering Registration Statement shall be consummated
simultaneous with or immediately following the Effective Time of
the Merger.
(h) Conditions Relating to Commodore Public Offering.
The gross proceeds of the Commodore Public Offering shall not be
less than $50.0 million, and the aggregate "market value"
(defined as the product of (i) the per share offering price of
shares of Commodore Common Stock sold in the Commodore Public
Offering, and (ii) the aggregate number of shares of Commodore
Common Stock and Commodore Common Stock Equivalents (including
for this purpose Lanxide Common Stock Equivalents assumed by
Commodore pursuant to Section 3.9) outstanding immediately
following the Effective Time, after giving effect to the
Commodore Reverse Stock Split but before giving effect to the
issuance of additional Commodore Common Stock in the Commodore
Public Offering) of all outstanding shares of Commodore Common
Stock and Commodore Common Stock Equivalents shall be not less
than $175.0 million.
9.2 Conditions to Obligations of Commodore to Effect the
Merger. The obligations of Commodore to consummate the Merger
are subject to the satisfaction of the following conditions,
unless waived by Commodore, pursuant to Section 11.5 of this
Agreement:
(a) Representations and Warranties. The
representations and warranties of Lanxide set forth or referred
to in this Agreement shall be true and correct as of the date of
this Agreement and as of the Effective Time with the same effect
as though all such representations and warranties had been made
on and as of the Effective Time, except (i) for any such
representations and warranties made as of a specified date, which
shall be true and correct in all material respects as of such
date, (ii) for breaches of representations or warranties which,
in the aggregate, would not be reasonably likely to have a
Material Adverse Effect on Lanxide or (iii) as expressly
contemplated by this Agreement or the Lanxide Disclosure
Schedule.
(b) Performance of Agreements and Covenants. Each and
all of the agreements and covenants of Lanxide to be performed
and complied with pursuant to this Agreement and the other
agreements contemplated hereby prior to the Effective Time shall
have been duly performed and complied with in all material
respects.
(c) Certificates. Lanxide shall have delivered to
Commodore a certificate dated as of the Effective Time and signed
on its behalf by its chief executive officer and its chief
financial officer, to the effect that (i) the conditions to its
obligations set forth in Section 9.2 (a) and 9.2 (b) of this
Agreement have been satisfied and (ii) that there has been no
Material Adverse Change in the consolidated financial condition
of Lanxide from that reflected on the June 30, 1996 financial
statements of Lanxide, all in such reasonable detail as Commodore
shall request.
(d) Opinions of Counsel. Lanxide shall have delivered
to Commodore an opinion, dated as of the Effective Time of the
Merger, of Skadden, Arps, Slate, Xxxxxxx & Xxxx, counsel to
Lanxide, as to such matters as Commodore may reasonably request
with respect to this Agreement and the transactions contemplated
by this Agreement.
(e) Commodore Fairness Opinion. On or before the date
of the mailing of the Joint Proxy Statement to its stockholders,
Commodore shall have received the Commodore Fairness Opinion to
the effect that, in the opinion of the investment banking firm
engaged by Commodore, as of the date of such opinion, the
Exchange Ratio is fair to Commodore from a financial point of
view.
(f) No Withdrawal or Modification of Fairness Opinion
and Special Committee Recommendation. On or before the Effective
Time, the Special Committee of the Board of Directors of
Commodore (the "Commodore Special Committee") shall have received
confirmation from Xxxxxxxx Wertheim & Co. Incorporated (or such
other financial advisor as shall have rendered the Commodore
Fairness Opinion), as financial advisor to the Commodore Special
Committee indicating that the terms of the Commodore Public
Offering and the pending public offering of equity securities by
Commodore Separation Technologies, Inc., or another Commodore
Subsidiary (the "Subsidiary Offering"), as finally determined, do
not require such financial advisor to withdraw or modify in any
material respect, the conclusions contained in the Commodore
Fairness Opinion previously delivered, and the Commodore Special
Committee shall not have determined that the terms of the
Commodore Public Offering and the Subsidiary Offering require the
Commodore Special Committee to withdraw its favorable
recommendation to the Board of Directors of Commodore as to the
terms of the Merger contemplated hereby.
9.3 Conditions to Obligations of Lanxide to Effect the
Merger. The obligations of Lanxide to consummate the Merger are
subject to the satisfaction of the following conditions, unless
waived by Lanxide, pursuant to Section 11.5 of this Agreement:
(a) Representations and Warranties. The
representations and warranties of Commodore set forth or referred
to in this Agreement shall be true and correct as of the date of
this Agreement and as of the Effective Time with the same effect
as though all such representations and warranties had been made
on and as of the Effective Time, except (i) for any such
representations and warranties made as of a specified date, which
shall be true and correct in all material respects as of such
date, (ii) for breaches of representations or warranties which,
in the aggregate, would not be reasonably likely to have a
Material Adverse Effect on Commodore or (iii) as expressly
contemplated by this Agreement or any Disclosure Schedule.
(b) Performance of Agreements and Covenants. Each and
all of the agreements and covenants of Commodore to be performed
and complied with pursuant to this Agreement and the other
agreements contemplated hereby prior to the Effective Time shall
have been duly performed and complied with in all material
respects.
(c) Certificates. Commodore shall have delivered to
Lanxide a certificate dated as of the Effective Time and signed
on its behalf by its chief executive officer and its chief
financial officer, to the effect that (i) the conditions to its
obligations set forth in Section 9.3 of this Agreement have been
satisfied and (ii) that there has been no Material Adverse Change
in the consolidated financial condition of Commodore from that
reflected on the June 30, 1996 financial statements of Commodore,
all in such reasonable detail as Lanxide shall request.
(d) Opinions of Counsel. Commodore shall have
delivered to Lanxide and Commodore an opinion, dated as of the
Effective Time of the Merger, of Greenberg, Traurig, Hoffman,
Lipoff, Xxxxx & Xxxxxxx, counsel to Commodore, as to such matters
as Lanxide and Commodore may reasonably request with respect to
this Agreement and the transactions contemplated by this
Agreement.
(e) Lanxide Fairness Opinions. On or before the date
of the mailing of the Joint Proxy Statements to its stockholders,
Lanxide shall have received the Lanxide Fairness Opinion, to the
effect that in the opinion of the investment banking firm engaged
by Lanxide the Common Stock Exchange Ratio, the Preferred Stock
Exchange Ratio and the other terms of the Merger are fair to the
respective stockholders of Lanxide from a financial point of
view.
(f) No Withdrawal or Modification of Fairness Opinion
and Special Committee Recommendation. On or before the Effective
Time, the Special Committee of the Board of Directors of Lanxide
(the "Lanxide Special Committee") shall have received
confirmation from Pennsylvania Merchant Group, Ltd. (or such
other financial advisor as shall have rendered the Lanxide
Fairness Opinion), as financial advisor to the Lanxide Special
Committee, indicating that the terms of the Commodore Public
Offering and the Subsidiary Offering, as finally determined, do
not require such financial advisor to withdraw or modify in any
material respect, the conclusions contained in the Lanxide
Fairness Opinion previously delivered, and the Lanxide Special
Committee shall not have determined that the terms of the
Commodore Public Offering and the Subsidiary Offering require the
Lanxide Special Committee to withdraw its favorable
recommendation to the Board of Directors of Lanxide as to the
terms of the Merger contemplated hereby.
ARTICLE TEN
TERMINATION
10.1 Termination. Notwithstanding any other provision of
this Agreement, and notwithstanding the approval of this
Agreement and the Merger by the stockholders of Lanxide and
Commodore or both, this Agreement may be terminated and the
Merger abandoned at any time prior to the Effective Time:
(a) by mutual consent of each of Lanxide and
Commodore; or
(b) by either Lanxide or Commodore in the event of a
material breach by the other Party of any representation,
warranty, covenant, or agreement contained herein which cannot be
or has not been cured within thirty (30) days after the giving of
written notice to the breaching Party of such breach and which
represents or is likely to cause a Material Adverse Effect on
Lanxide or Commodore, as the case may be; or
(c) by either Lanxide or Commodore in the event that
the Merger shall not have been consummated on or before March 31,
1997; provided that neither Party shall be entitled to terminate
this Agreement pursuant to this Section 10.1(c) if the failure to
satisfy a condition precedent is a result of such party's own
action; or
(d) by either Lanxide or Commodore in the event (i)
any approval of any governmental or other Regulatory Authority
required for consummation of the Merger and the other
transactions contemplated hereby shall have been denied by final
non-appealable action of such authority or if any action taken by
such authority is not appealed within the time limit for appeal,
(ii) any Party is prohibited by an order or injunction (other
than an order or injunction on a temporary or preliminary basis)
of a court of competent jurisdiction from consummating the Merger
and all appeals from such order or injunction have been finally
exhausted, or (iii) if the stockholders of Lanxide or Commodore
fail to vote their approval of the Merger and the transactions
contemplated hereby as required by the DGCL or the provisions
hereof at the Stockholders' Meetings; or
(e) by either Lanxide or Commodore in the event that
either Special Committee or either Board of Directors withdraws
its approval of the transactions contemplated hereby in the
exercise of its fiduciary duties.
10.2 Effect of Termination. In the event of the termination
and abandonment of this Agreement, pursuant to Section 10.1 of
this Agreement, this Agreement shall become void and have no
effect, except that (i) the provisions of Sections 7.4, 11.1 and
11.2 of this Agreement shall survive any such termination and
abandonment, and (ii) a termination pursuant to Sections of this
Agreement shall not relieve the breaching Party from liability
for an uncured intentional and willful breach of a
representation, warranty, covenant or agreement giving rise to
such termination.
10.3 Survival of Representations and Warranties. The
respective representations and warranties of the Parties shall
not survive the Effective Time of the Merger.
ARTICLE ELEVEN
MISCELLANEOUS
11.1 Expenses.
(a) Except as provided in Section 11.1(b) of this
Agreement, each of the Parties shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with the
preparation and negotiation of this Agreement and the Exhibits
and the Disclosure Schedules annexed hereto, and, except as
provided in Section 11.1(b) below, the related closing documents
and instruments required to be delivered at the Effective Time of
the Merger (collectively, the "Merger Expenses"). Included in
such Merger Expenses are the fees and expenses of each Party's
financial or other consultants, investment bankers, accountants,
and legal counsel.
(b) Notwithstanding the provisions of Section 11.1(a)
above, Commodore shall bear and pay all expenses relating to the
registration and sale of securities and other compliance with
applicable Securities Laws in connection with the Merger and
Commodore Public Offering (the "Securities Expenses"). Such
Securities Expenses shall include, but not be limited to:
(i) the legal fees, accounting fees, printing
costs and related expenses incurred in connection with
the preparation, filing and printing of the Merger
Registration Statement and related Joint Proxy
Statement, and Commodore Public Offering Registration
Statement,
(ii) all listing, filing, or registration fees,
including state securities laws filings or registration
fees in connection with the Registration Statements,
and
(iii) all other costs and expenses incurred by
Commodore or Lanxide prior to the effective date(s) of
the Registration Statements, in respect of the
registration of securities contemplated hereunder.
(c) Final settlement with respect to payment of fees
and expenses by the Parties pursuant to Section 11.1 of this
Agreement shall be made within ten (10) days of the termination
of this Agreement or immediately at the Effective Time of the
Merger.
11.2 Brokers and Finders. Except for investment bankers
engaged to render the Lanxide Fairness Opinion and the Commodore
Fairness Opinion and to act as underwriter(s) of securities in
connection with Commodore Public Offering, each of the Parties
represents and warrants that neither it nor any of its officers,
directors, employees, affiliates, or Subsidiaries has employed
any broker or finder or incurred any liability for any financial
advisory fees, investment bankers' fees, brokerage fees,
commissions, or finders' fees in connection with this Agreement
or the transactions contemplated hereby. In the event of a claim
by any broker or finder based upon his or its representing or
being retained by or allegedly representing or being retained by
either Lanxide or Commodore, Lanxide or Commodore, as the case
may be, agrees to indemnify and hold the other Party harmless for
and from any such claim.
11.3 Entire Agreement. Except as otherwise expressly
provided herein, this Agreement and the Exhibits and Schedules
hereto contain the entire agreement between the Parties with
respect to the transactions contemplated hereunder and
thereunder, and such agreements supersede all prior arrangements
or understandings with respect thereto, written or oral. The
terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the Parties and their respective
successors. Nothing in this Agreement expressed or implied, is
intended to confer upon any party, other than the Parties, or
their respective successors, any rights, remedies, obligations,
or liabilities under or by reason of this Agreement.
11.4 Amendments. To the extent permitted by law, this
Agreement may be amended, modified or supplemented only by a
subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties and
the respective Special Committees of Commodore and Lanxide;
provided, however, that the provisions of this Agreement relating
to the manner or basis in which shares of Lanxide Capital Stock
will be exchanged for Commodore Capital Stock shall not be
amended after the Stockholders' Meetings without the requisite
approval, if any, of the holders of the issued and outstanding
shares of Lanxide Capital Stock and Commodore Capital Stock
entitled to vote thereon.
11.5 Waivers. Prior to or at the Effective Time, Lanxide
acting through its Board of Directors or chief executive officer
or other authorized officer upon the approval of its Special
Committee, shall have the right to waive any default in the
performance of any term of this Agreement by Commodore, to waive
or extend the time for the compliance or fulfillment by Commodore
of any and all of its obligations under this Agreement, and to
waive any or all of the conditions precedent to the obligations
of Lanxide under this Agreement, except any condition which, if
not satisfied, would result in the violation of any law or
applicable governmental regulation. Prior to or at the Effective
Time, Commodore, acting through its Board of Directors or chief
executive officer or other authorized officer upon the approval
of its Special Committee, shall have the right to waive any
default in the performance of any term of this Agreement by
Lanxide, to waive or extend the time for the compliance or
fulfillment by Lanxide of any and all of its obligations under
this Agreement, and to waive any or all of the conditions
precedent to the obligations of Commodore under this Agreement,
except any condition which, if not satisfied, would result in the
violation of any law or applicable government regulation. Any
such extension or waiver shall be valid only if set forth in an
instrument in writing specifically referring to this Agreement
and signed on behalf of such party.
11.6 No Assignment. None of the Parties may assign any of
its rights or obligations under this Agreement to any other
Person and this Agreement shall not be assigned by operation of
law or otherwise.
11.7 Specific Enforceability. The Parties recognize and
hereby acknowledge that it is impossible to measure in money the
damages that would result to a Party by reason of the failure of
any of the Parties to perform any of the obligations imposed on
it by this Agreement. Accordingly, if any Party should institute
an action or proceeding seeking specific enforcement of the
provisions hereof, each Party against which such action or
proceeding is brought hereby waives the claim or defense that the
Party instituting such action or proceeding has an adequate
remedy at law and hereby agrees not to assert in any such action
or proceeding the claim or defense that such a remedy at law
exists.
11.8 Severability. In case any one or more of the
provisions contained in this Agreement should be invalid, illegal
or unenforceable in any respect against a Party hereto, the
validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired
thereby and such invalidity, illegality or unenforceability shall
apply only as to such Party in the specific jurisdiction where
such judgment shall be made.
11.9 Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and
sufficient if delivered by hand, by facsimile transmission, or by
registered or certified mail, postage prepaid to the persons at
the addresses set forth below (or at such other address as may be
provided hereunder), and shall be deemed to have been delivered
as of the date so delivered:
Lanxide: Lanxide Corporation
0000 Xxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxxx, President
and Chief Executive Officer
fax. no. 000-000-0000
-and-
S. Xxxxxxxxx Xxx Xxxxxxx
Xxxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
fax. no. (000) 000-0000
Copy to Counsel: Skadden, Arps, Slate, Xxxxxxx & Xxxx
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
fax. no. 000-000-0000
-and-
Lamb & Bouchand, P.C.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxx, Esq.
fax. no. 000-000-0000
Commodore: Commodore Environmental Services, Inc.
000 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxx, President
and Chief Executive Officer
fax. no. 000-000-0000
Copy to Counsel: Greenberg, Traurig, Hoffman, Lipoff,
Xxxxx & Xxxxxxx
000 Xxxx 00xx Xxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
fax. no. 000-000-0000
Copy to Special
Committee: Special Committee of the Board of
Directors
of Commodore Environmental Services, Inc.
c/o Xxxxxx, Xxxxxxxx & Company, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxx
fax no. 000-000-0000
Copy to Counsel: Patterson, Belknap, Xxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
fax no. 000-000-0000
COES Acquisition: COES Acquisition Corp.
000 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: President
fax. no. 000-000-0000
Copy to Counsel: Greenberg, Traurig, Hoffman, Lipoff,
Xxxxx & Xxxxxxx
000 Xxxx 00xx Xxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
fax. no. 000-000-0000
11.10 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Delaware, without regard to the conflict of laws rules thereof.
11.11 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original but all of which shall constitute one and the same
instrument.
11.12 Captions. The captions contained in this Agreement
are for reference purposes only and are not part of this
Agreement.
IN WITNESS WHEREOF, each of the Parties has cause this
Agreement to be executed on its behalf, and its corporate seal to
be hereunto affixed and attested to, by officers thereunto duly
authorized all as of the day and year first above written.
COMMODORE ENVIRONMENTAL
SERVICES, INC.
[Seal]
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------
Attest: Xxxx X. Xxxxxxxxx,
President and Chief
/s/ Xxxxx Xxxxx Executive Officer
---------------------
LANXIDE CORPORATION
[Seal]
By: /s/ Xxxx X. Xxxxxxx,
--------------------------
Attest: Xxxx X. Xxxxxxx,
President and Chief
/s/ J. Xxxxxxx Xxxx Executive Officer
---------------------
COES ACQUISITION CORP.
[Seal]
By: /s/ Bentley X. Xxxx,
--------------------------
Attest: Bentley X. Xxxx,
Chairman of the Board of
Directors
/s/ Xxxxx Xxxxx
---------------------
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
COMMODORE ENVIRONMENTAL SERVICES, INC.
LANXIDE CORPORATION
AND
COES ACQUISITION CORP.
NOVEMBER 13, 1996
