Exhibit (c)(1)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of January 21, 1997 (the
"Agreement"), by and among NORAND CORPORATION, a Delaware corporation (the
"Company"), WAI ACQUISITION CORP., a Delaware corporation (the "Purchaser"),
and WESTERN ATLAS INC., a Delaware corporation ("Parent"). The Company and
the Purchaser are hereinafter sometimes collectively referred to as the
"Constituent Corporations."
RECITALS
WHEREAS, the Boards of Directors of Parent, the Purchaser and the
Company have each approved the acquisition of the Company by Parent upon the
terms and subject to the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, the Boards of Directors
of Parent, the Purchaser and the Company have each approved the merger of the
Purchaser with and into the Company in accordance with the terms of this
Agreement and the General Corporation Law of the State of Delaware (the
"DGCL") and with any other applicable law; and
WHEREAS, the Board of Directors of the Company (the "Board") has, in
light of and subject to the terms and conditions set forth herein, (i)
determined that the consideration to be paid for each Share in the Offer and
the Merger (as hereinafter defined) is fair to the stockholders of the
Company, and the Offer and the Merger are otherwise in the best interests of
the Company and its stockholders, and (ii) resolved to approve and adopt this
Agreement and the transactions contemplated hereby and to recommend
acceptance of the Offer and approval and adoption by the stockholders of the
Company of this Agreement and the Merger.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions contained
herein, the parties hereto agree as follows:
ARTICLE I
THE OFFER
Section 1.01. The Offer. (a) Provided that this Agreement shall not
have been terminated in accordance with
Article IX hereof and none of the events set forth in Annex I hereto shall
have occurred, as promptly as practicable (but in no event later than five
business days from the date hereof) Purchaser shall commence (within the
meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended
(including the rules and regulations promulgated thereunder, the "Exchange
Act")) an offer to purchase all outstanding shares of Common Stock, par value
$0.01 per share (the "Shares"), of the Company, at a price of $33.50 per
Share net to the seller in cash (the "Offer") and, subject to the conditions
of the Offer, shall use reasonable best efforts to consummate the Offer. The
obligation of the Purchaser to consummate the Offer and to accept for payment
and to pay for any Shares tendered pursuant thereto shall be subject to only
those conditions set forth in Annex I hereto, including the condition that a
number of Shares representing at least a majority of the number of Shares
outstanding on a fully diluted basis (assuming the exercise of all
outstanding Options and Warrants) be validly tendered and not withdrawn at
the expiration of the Offer (the "Minimum Condition").
(b) Without the prior written consent of the Company, the Purchaser
shall not decrease the price per Share or change the form of consideration
payable in the Offer, decrease the number of Shares sought, impose additional
conditions to the Offer or amend any other term of the Offer in any manner
adverse to the holders of Shares. Without the prior written consent of the
Company, the Purchaser will not waive the Minimum Condition if, as a result,
the Purchaser would acquire less than a majority of the Shares actually
outstanding. Upon the terms and subject to the conditions of the Offer, the
Purchaser will accept for payment and purchase, as soon as permitted under
the terms of the Offer, all Shares validly tendered and not withdrawn prior
to the expiration of the Offer.
(c) Each of Parent and the Purchaser, on the one hand, and the
Company, on the other hand, agrees promptly to correct any information
provided by it for use in the documents filed by Parent and the Purchaser
with the Securities and Exchange Commission (the "SEC") in connection with
the Offer (the "Offer Documents") if and to the extent that it shall have
become false or misleading in any material respect, and Parent and the
Purchaser further agree to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and to be disseminated to
stockholders of the Company, in each case as and to the extent required by
applicable federal securities laws.
(d) Parent and the Purchaser agree that, without the prior written
consent of the Company, the Purchaser shall not
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terminate or withdraw the Offer or extend the expiration date of the Offer
unless at the expiration date of the Offer the conditions to the Offer
described in Annex I hereto shall not have been satisfied or earlier waived;
provided that, if the number of Shares that have been validly tendered and
not withdrawn prior to the initial expiration date of the Offer represent
less than 90% of the Shares on a fully diluted basis, the Purchaser shall
have the right, in its sole discretion, to extend the Offer for up to a
maximum of 10 additional business days, notwithstanding the prior
satisfaction of such conditions, so long as the Purchaser waives all
conditions to the Offer other than the Minimum Condition and the conditions
set forth in paragraphs (a)(i) or (f) of Annex I hereto. If at the
expiration date of the Offer, the conditions to the Offer described in Annex
I hereto shall not have been satisfied or earlier waived but, in the
reasonable belief of Parent, may be satisfied prior to September 30, 1997,
the Purchaser shall extend the expiration date of the Offer for an additional
period or periods of time until the earlier of (i) the date such conditions
are satisfied or earlier waived and the Purchaser becomes obligated to accept
for payment and pay for Shares tendered pursuant to the Offer or (ii) this
Agreement is terminated in accordance with its terms; provided that this
sentence shall not be applicable in the event the conditions set forth in
paragraph (d)(ii) of Annex I hereto shall not have been satisfied or earlier
waived at the expiration date of the Offer.
Section 1.02. Company Actions. (a) The Company hereby approves of
and consents to the Offer and represents that (i) the Board, by vote of all
directors at a meeting duly called and held, has, in light of and subject to
the terms and conditions set forth herein, unanimously (x) determined that
the consideration to be paid in each of the Offer and the Merger is fair to
the stockholders of the Company and the Offer and the Merger are otherwise in
the best interests of the Company and its stockholders and (y) approved and
adopted this Agreement and the transactions contemplated hereby, including
the Offer and the Merger, and resolved to recommend acceptance of the Offer
and approval and adoption of this Agreement and the Merger and the other
transactions contemplated hereby by the stockholders of the Company and (ii)
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, the Company's financial
advisors, have rendered to the Board their opinion that the consideration to
be received by the stockholders of the Company pursuant to the Offer and the
Merger is fair to such stockholders from a financial point of view.
(b) The Company hereby agrees promptly to prepare and, after review
by the Purchaser, to file with the SEC and to
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mail to its stockholders, a Solicitation/Recommendation Statement on Schedule
14D-9 with respect to the Offer (together with any amendments or supplements
thereto, the "Schedule 14D-9") containing the recommendation described in
Section 1.02(a) hereof and to disseminate the Schedule 14D-9 as required by
Rule 14d-9 promulgated under the Exchange Act; provided, however, that,
subject to the provisions of Article IX, such recommendation may be
withdrawn, modified or amended only to the extent that the Board deems it
necessary to do so in the exercise of its fiduciary obligations after being
so advised by outside counsel. Each of the Company, on the one hand, and
Parent and the Purchaser, on the other hand, agree promptly to correct any
information provided by either of them for use in the Schedule 14D-9 if and
to the extent that it shall have become false or misleading in any material
respect, and the Company further agrees to take all steps necessary to cause
the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to the stockholders of the Company, in each case as and to the
extent required by applicable federal securities laws.
(c) In connection with the Offer, the Company will furnish the
Purchaser with such information (which subject to applicable law, shall be
held in confidence) and assistance as the Purchaser or its agents or
representatives may reasonably request in connection with the preparation of
the Offer and communicating the Offer to the record and beneficial holders of
the Shares.
Section 1.03. Directors. (a) Subject to compliance with applicable
law, promptly upon the payment by the Purchaser for Shares purchased pursuant
to the Offer representing not less than a majority of the outstanding Shares
on a fully diluted basis, and from time to time thereafter, the Company
shall, upon request of Parent, promptly take all actions necessary to cause a
majority of the directors of the Company to consist of Parent's designees,
including by accepting the resignations of those incumbent directors
designated by the Company or increasing the size of the Board and causing
Parent's designees to be elected.
(b) The Company's obligations to appoint Parent's designees to the
Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
thereunder, if applicable. The Company shall promptly take all actions
required pursuant to such Section and Rule in order to fulfill its
obligations under this Section 1.03 and shall include in the Schedule 14D-9
such information with respect to the Company and its officers and directors
as is required under such Section and Rule in order to fulfill its
obligations under this Section 1.03. Parent
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will supply any information with respect to itself and its officers,
directors and affiliates required by such Section and Rule to the Company.
(c) Following the election or appointment of Parent's designees
pursuant to this Section 1.03 and prior to the Effective Time (as hereinafter
defined), any amendment or termination of this Agreement by the Company, any
extension by the Company of the time for the performance of any of the
obligations or other acts of Parent or the Purchaser, waiver of any of the
Company's rights hereunder or any other action by the Company concerning this
Agreement or any of the transactions contemplated hereby, will require the
concurrence of a majority of the directors of the Company then in office who
were not designated by Parent.
ARTICLE II
THE MERGER
Section 2.01. The Merger. (a) In accordance with the provisions of
this Agreement and the DGCL, at the Effective Time, the Purchaser shall be
merged with and into the Company (the "Merger"), and the Company shall be the
surviving corporation (hereinafter sometimes called the "Surviving
Corporation") and shall continue its corporate existence under the laws of
the State of Delaware. At the Effective Time the separate existence of the
Purchaser shall cease.
(b) The name of the Surviving Corporation shall be "Norand
Corporation."
(c) The Merger shall have the effects on the Company and the
Purchaser as Constituent Corporations of the Merger as provided under the
DGCL.
Section 2.02. Effective Time. The Merger shall become effective at
the time of filing of, or at such later time specified in, a certificate of
merger (the "Certificate of Merger") (or, if applicable, a certificate of
ownership and merger), in the form required by and executed in accordance
with the DGCL, filed with the Secretary of State of the State of Delaware
(the "Delaware Secretary of State") in accordance with the provisions of
Section 251 of the DGCL (or in the event Section 3.04 hereof is applicable,
Section 253 of the DGCL). The date and time when the Merger shall become
effective is herein referred to as the "Effective Time."
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Section 2.03. Certificate of Incorporation and By-Laws of Surviving
Corporation. The Certificate of Incorporation and By-Laws of the Purchaser
shall be the Certificate of Incorporation and By-Laws of the Surviving
Corporation until thereafter amended as provided by law.
Section 2.04. Directors and Officers of Surviving Corporation. (a)
Subject to applicable law, the directors of the Purchaser immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation and shall hold office until their respective successors are duly
elected and qualified, or their earlier death, resignation or removal.
(b) The officers of the Company immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation and shall
hold office until their respective successors are duly elected and qualified,
or their earlier death, resignation or removal.
Section 2.05. Further Assurances. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that
any deeds, bills of sale, assignments, assurances or any other actions or
things are necessary or desirable to vest, perfect or confirm of record or
otherwise in the Surviving Corporation its right, title or interest in, to or
under any of the rights, properties or assets of either of the Constituent
Corporations acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger or otherwise to carry out this
Agreement, the officers of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of each of the Constituent
Corporations or otherwise, all such deeds, bills of sale, assignments and
assurances and to take and do, in the name and on behalf of each of the
Constituent Corporations or otherwise, all such other actions and things as
may be necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and under such rights, properties or assets in the
Surviving Corporation or otherwise to carry out this Agreement.
ARTICLE III
CONVERSION OF SHARES
Section 3.01. Effect on Shares and the Purchaser's Capital Stock.
(a) As of the Effective Time, by virtue of the Merger and without any action
on the part of the holders thereof, each Share issued and outstanding
immediately prior to the
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Effective Time (other than any Shares held by Parent, the Purchaser or any
subsidiary of Parent or the Purchaser, in the treasury of the Company or by
any subsidiary of the Company, which Shares, by virtue of the Merger and
without any action on the part of the holder thereof, shall be cancelled and
retired and shall cease to exist with no payment being made with respect
thereto, and other than any Dissenting Shares (as hereinafter defined)) shall
be converted into the right to receive $33.50 in cash or any higher price per
Share paid in the Offer (the "Merger Price"), payable to the holder thereof,
without interest thereon, as set forth in Section 4.02 hereof.
(b) As of the Effective Time, by virtue of the Merger and without
any action on the part of the holders thereof, each share of capital stock of
the Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into and become one fully paid and nonassessable share of
Common Stock, par value $0.01 per share, of the Surviving Corporation.
Section 3.02. Company Option Plans. (a) Prior to the consummation
of the Offer, the Company and Parent shall take all actions necessary to
provide that, at the Effective Time, each outstanding option to purchase
Shares (the "Options") granted under any of the Company's 1989 Stock Option
Plan, the Company's Long-Term Performance Program or the Company's 1994 Stock
Option Plan for Non-Employee Directors (collectively, the "Option Plans")
shall, by virtue of the Merger and without any further action on the part of
the Company or the holder of such Option, be assumed by Parent in such manner
that Parent (a) is a corporation (or a parent or a subsidiary corporation of
such corporation) "assuming a stock option in a transaction to which Section
424(a) applied" within the meaning of Section 424 of the Internal Revenue
Code of 1986, as amended (the "Code"); or (b) to the extent that Section 424
of the Code does not apply to any such Options, would be such a corporation
(or a parent or a subsidiary corporation of such corporation) were Section
424 applicable to such Option. At the Effective Time, (i) all references in
the Option Plans to the Company shall be deemed to refer to Parent and (ii)
Parent shall issue to each holder of an Option a document evidencing the
assumption of such option by Parent in accordance herewith. Each Option
assumed by Parent (as assumed, the "Parent Options") shall be exercisable
upon the same terms and conditions including, without limitation, vesting, as
under the applicable Option Plan and the applicable option agreement issued
thereunder, except that (x) each such Option shall be exercisable for the
number of shares of Common Stock, par value $1.00 per share, of Parent
("Parent Common Stock") (rounded to the nearest whole share) obtained by
multiplying the number of Shares
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subject to such Option immediately prior to the Effective Time by $33.50 and
dividing the result by the average of the closing prices for the Parent
Common Stock reported on the New York Stock Exchange Consolidated Tape for
the 10 consecutive trading days immediately prior to the Effective Time; and
(y) the option price per share of Parent Common Stock shall be an amount
equal to the aggregate exercise price of such Option prior to adjustment
divided by the number of shares of Parent Common Stock subject to such Option
after adjustment (the option price per share, as so determined, being rounded
upward to the nearest full cent). The date of grant of each Parent Option
shall be the date on which the corresponding Option was granted. No payment
shall be made for fractional interests. Parent shall take all corporate
actions necessary to reserve for issuance such number of shares of Parent
Common Stock as will be necessary to satisfy exercises in full of all Options
after the Effective Time.
(b) Except as provided herein or as otherwise agreed to by the
parties and to the extent permitted by the Option Plans, (i) the Option Plans
shall terminate as of the Effective Time and the provisions in any other
plan, program or arrangement, providing for the issuance or grant of any
interest in respect of the capital stock of the Company or any of its
subsidiaries shall be deleted as of the Effective Time and (ii) the Company
shall use all reasonable efforts to ensure that following the Effective Time
no holder of Options or any participant in the Option Plans or any other
plans, programs or arrangements shall have any right thereunder to acquire
any equity securities of the Company, the Surviving Corporation or any
subsidiary thereof.
Section 3.03. Stockholders' Meeting. (a) If required by applicable
law in order to consummate the Merger, the Company, acting through the Board,
shall, in accordance with applicable law:
(i) duly call, give notice of, convene and hold a special meeting
of its stockholders (the "Special Meeting") as soon as practicable
following the purchase of and payment for Shares by the Purchaser
pursuant to the Offer for the purpose of considering and adopting this
Agreement and such other matters as may be necessary to consummate the
transactions contemplated herein;
(ii) prepare and file with the SEC a preliminary proxy statement
relating to the matters to be considered at the Special Meeting pursuant
to this Agreement and use its reasonable best efforts (x) to obtain and
furnish the information required to be included by the SEC in the
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Proxy Statement (as hereinafter defined) and, after consultation with
Parent, to respond promptly to any comments made by the SEC with respect
to the preliminary proxy statement and to cause a definitive proxy
statement (the "Proxy Statement") to be mailed to its stockholders and
(y) to obtain the necessary approvals of the Merger, this Agreement and
such other matters as may be necessary to consummate the transactions
contemplated hereby by its stockholders; and
(iii) subject to the fiduciary obligations of the Board under
applicable law as advised by outside counsel, include in the Proxy
Statement the recommendation of the Board that stockholders of the
Company vote in favor of the approval of the Merger, the adoption of this
Agreement and such other matters as may be necessary to consummate the
transactions contemplated hereby.
(b) Parent agrees that it will vote, or cause to be voted, all of
the Shares then owned by it, the Purchaser or any of its other subsidiaries
in favor of the approval and adoption of this Agreement and such other
matters as may be necessary to consummate the transactions contemplated
hereby.
Section 3.04. Merger Without Meeting of Stockholders.
Notwithstanding Section 3.03 hereof, in the event that Parent, the Purchaser
or any other subsidiary of Parent shall acquire at least 90% of the
outstanding Shares pursuant to the Offer or otherwise, the parties hereto
agree, at the request of Parent or the Purchaser, to take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after the acceptance for payment and purchase of Shares by the
Purchaser pursuant to the Offer without a meeting of stockholders of the
Company in accordance with Section 253 of the DGCL.
Section 3.05. Consummation of the Merger. As soon as practicable
after the satisfaction or waiver of the conditions set forth in Article VIII
hereof, the Surviving Corporation shall execute in the manner required by the
DGCL and file with the Delaware Secretary of State the Certificate of Merger
(or, in the event Section 3.04 hereof is applicable, the Purchaser shall
execute in the manner required by the DGCL and file with the Delaware
Secretary of State a certificate of ownership and merger), and the parties
shall take such other and further actions as may be required by law to make
the Merger effective as promptly as is practicable.
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ARTICLE IV
DISSENTING SHARES; PAYMENT FOR SHARES
Section 4.01. Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Shares outstanding immediately prior to the
Effective Time and held by a holder who has not voted in favor of the Merger
or consented thereto in writing and who has demanded appraisal for such
Shares in accordance with Section 262 of the DGCL, if such Section 262
provides for appraisal rights for such Shares in the Merger ("Dissenting
Shares"), shall not be converted into the right to receive the Merger Price,
as provided in Section 3.01 hereof, unless and until such holder fails to
perfect or withdraws or otherwise loses his right to appraisal and payment
under the DGCL. If, after the Effective Time, any such holder fails to
perfect or withdraws or loses his right to appraisal, such Dissenting Shares
shall thereupon be treated as if they had been converted as of the Effective
Time into the right to receive the Merger Price to which such holder is
entitled, without interest or dividends thereon. The Company shall give
Parent prompt notice of any demands received by the Company for appraisal of
Shares and Parent shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with
the prior written consent of Parent, make any payment with respect to, or
settle or offer to settle, any such demands.
Section 4.02. Payment for Shares. (a) From and after the Effective
Time, a bank or trust company to be designated by Parent shall act as paying
agent (the "Paying Agent") in effecting the payment of the Merger Price for
certificates (the "Certificates") formerly representing Shares and entitled
to payment of the Merger Price pursuant to Section 3.01 hereof. At the
Effective Time, Parent or the Purchaser shall pursuant to irrevocable
instructions deposit, or cause to be deposited, in trust with the Paying
Agent the aggregate Merger Price to which holders of Shares shall be entitled
at the Effective Time pursuant to Section 3.01 hereof.
(b) The Merger Price shall be invested by the Paying Agent as
directed by Parent, provided such investments shall be limited to direct
obligations of the United States of America, obligations for which the full
faith and credit of the United States of America is pledged to provide for
the payment of principal and interest, commercial paper rated of the highest
quality by Xxxxx'x Investors Service, Inc. or Standard & Poor's Corporation
or certificates of deposit issued by a commercial bank having at least
$10,000,000,000 in assets.
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(c) As soon as practicable after the Effective Time, the Paying
Agent shall mail to each record holder of Certificates that immediately prior
to the Effective Time represented Shares (other than Certificates
representing Shares held by Parent or the Purchaser, any subsidiary of Parent
or the Purchaser, in the treasury of the Company or by any subsidiary of the
Company) a form of letter of transmittal which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon proper delivery of the Certificates to the Paying Agent and
instructions for use in surrendering such Certificates and receiving the
Merger Price therefor. Upon the surrender of each such Certificate, the
Paying Agent shall pay the holder of such Certificate the Merger Price
multiplied by the number of Shares, as appropriate, formerly represented by
such Certificate, in consideration therefor, and such Certificate shall
forthwith be cancelled. Until so surrendered, each such Certificate (other
than Certificates representing Dissenting Shares and Certificates
representing Shares held by Parent or the Purchaser, any subsidiary of Parent
or the Purchaser, in the treasury of the Company or by any subsidiary of the
Company) shall represent solely the right to receive the aggregate Merger
Price relating thereto. No interest shall be paid or accrued on the Merger
Price.
(d) Promptly following the date which is one year after the
Effective Time, the Paying Agent shall deliver to Parent all cash,
Certificates and other documents in its possession relating to the
transactions described in this Agreement, and the Paying Agent's duties shall
terminate. Thereafter, each holder of a Certificate formerly representing a
Share (other than Certificates representing Dissenting Shares and
Certificates representing Shares held by Parent or the Purchaser, any
subsidiary of Parent or the Purchaser, in the treasury of the Company or by
any subsidiary of the Company) may surrender such Certificate to Parent and
(subject to applicable abandoned property, escheat and similar laws) receive
in consideration therefor the aggregate Merger Price relating thereto,
without any interest or dividends thereon.
(e) The Merger Price shall be net to each holder of Certificates in
cash, subject to reduction only for any applicable federal back-up
withholding or stock transfer taxes payable by such holder.
(f) If payment of cash in respect of any Certificate is to be made
to a person other than the person in whose name such Certificate is
registered, it shall be a condition to such payment that the Certificate so
surrendered shall be properly endorsed or shall be otherwise in proper form
for transfer and that the person requesting such payment shall have paid any
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transfer and other taxes required by reason of such payment in a name other
than that of the registered holder of the Certificate surrendered or shall
have established to the satisfaction of Parent or the Paying Agent that such
tax either has been paid or is not payable.
(g) After the Effective Time, there shall be no transfers on the
stock transfer books of the Surviving Corporation of any Shares which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates formerly representing Shares (other than Certificates
representing Shares held by Parent or the Purchaser, any subsidiary of Parent
or the Purchaser, in the treasury of the Company or by any subsidiary of the
Company) are presented to the Surviving Corporation or the Paying Agent, they
shall be surrendered and cancelled in return for the payment of the aggregate
Merger Price relating thereto, without interest, as provided in this Article
IV, subject to applicable law in the case of Dissenting Shares.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the Purchaser as
follows:
Section 5.01. Organization. The Company and each of its Significant
Subsidiaries (as defined below) is a corporation duly organized, validly
existing and in good standing under the laws of their respective
jurisdictions of incorporation and the Company and each of its Significant
Subsidiaries has all requisite corporate power and authority to own, lease
and operate their respective properties and to carry on their respective
businesses as now being conducted. The Company and each of its subsidiaries
is duly qualified or licensed and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary,
except in such jurisdictions where the failure to be so duly qualified or
licensed and in good standing would not, individually or in the aggregate,
have a material adverse effect on the business, operations, assets, financial
condition or results of operations of the Company and its subsidiaries taken
as a whole (a "Company Material Adverse Effect"). The Company owns directly
all of the outstanding capital stock of each of its Significant Subsidiaries.
As used in this Agreement a
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"Significant Subsidiary" means a corporation which is a "significant
subsidiary" within the meaning of Rule 1-02(v) of Regulation S-X.
Section 5.02. Capitalization. The authorized capital stock of the
Company consists of 15,000,000 Shares and 15,000,000 shares of preferred
stock, par value $0.01 per share ("Company Preferred Stock"). As of January
17, 1997, there were 7,842,905 Shares and no shares of Company Preferred
Stock issued and outstanding, and there are no Shares or shares of Company
Preferred Stock held in the Company's treasury. As of the date hereof, there
were outstanding options to purchase 1,252,347 Shares under the Option Plans
at a weighted average exercise price of $20.409163. As of the date hereof, a
total of 250,000 Shares are subject to issuance upon exercise of Series A
Warrants at an exercise price of $21.15 per Share and a total of 300,000
Shares are subject to issuance upon exercise of Series B Warrants at an
exercise price of $21.15 per Share and a total of 27,079 Shares are subject
to issuance upon the exercise of warrants granted to two consultants to the
Company at a weighted average exercise price of $17.394006 per Share
(collectively, with the Series A Warrants and Series B Warrants, the
"Warrants"). Except for Options under the Option Plans and Warrants, there
were not as of the date hereof, and at all times thereafter through the
Effective Time there will not be, any existing options, warrants, calls,
subscriptions, or other rights or other agreements or commitments obligating
the Company or any of its subsidiaries to issue, transfer or sell any shares
of capital stock of the Company or any of its subsidiaries or any other
securities convertible into or evidencing the right to subscribe for any such
shares. All issued and outstanding Shares are duly authorized and validly
issued, fully paid, non-assessable and free of preemptive rights with respect
thereto. Schedule 5.02 lists each outstanding Option or Warrant, its
exercise price, expiration date and vesting or exercisability schedule.
Section 5.03. Authority. The Company has full corporate power and
authority to execute and deliver this Agreement and, subject to the approval
of its stockholders, if required, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized
and approved by the Board, and other than the approval by its stockholders,
if required, no other corporate proceedings are necessary to authorize this
Agreement or the consummation of the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the Company
and, assuming this Agreement constitutes a legal, valid and binding agreement
of the other parties hereto, it
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constitutes a legal, valid and binding agreement of the Company, enforceable
against it in accordance with its terms.
Section 5.04. No Violations; Consents and Approvals. (a) Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby nor compliance by the Company with any of
the provisions hereof will (i) violate any provision of its certificate of
incorporation or by-laws, (ii) except as set forth in Schedule 5.04(a)(ii),
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default, or give rise to any right of
termination, cancellation or acceleration or any right which becomes
effective upon the occurrence of a merger, consolidation or change in control
or ownership, under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture or other instrument of indebtedness for money
borrowed to which the Company or any of its subsidiaries is a party, or by
which the Company or any of its subsidiaries or any of their respective
properties is bound, or (iii) except as set forth in Schedule 5.04(a)(iii),
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default, or give rise to any right of
termination, cancellation or acceleration or any right (including any right
to receive any payment) which becomes effective upon the occurrence of a
merger, consolidation or change in control or ownership, under, any of the
terms, conditions or provisions of any license, franchise, permit or
agreement to which the Company or any of its subsidiaries is a party, or by
which the Company or any of its subsidiaries or any of their respective
properties is bound, or (iv) violate any statute, rule, regulation, order or
decree of any public body or authority by which the Company or any of its
subsidiaries or any of their respective properties is bound, excluding from
the foregoing clauses (iii) and (iv) violations, breaches, defaults or rights
under the laws of any jurisdiction outside the United States or which, either
individually or in the aggregate, would not have a Company Material Adverse
Effect or materially impair the Company's ability to consummate the
transactions contemplated hereby or for which the Company has received or,
prior to the consummation of the Offer, shall have received appropriate
consents or waivers.
(b) No filing or registration with, notification to, or
authorization, consent or approval of, any governmental entity is required in
connection with the execution and delivery of this Agreement by the Company,
or the consummation by the Company of the transactions contemplated hereby,
except (i) expiration of the waiting period under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (ii) in
connection, or in compliance, with the provisions of
-14-
the Exchange Act, (iii) the filing of the Certificate of Merger with the
Delaware Secretary of State, (iv) such filings and consents as may be
required under any environmental law pertaining to any notification,
disclosure or required approval triggered by the Merger or the transactions
contemplated by this Agreement, (v) filing with, and approval of, the
National Association of Securities Dealers, Inc. and the SEC with respect to
the delisting and deregistration of the Shares, (vi) such consents,
approvals, orders, authorizations, notifications, registrations, declarations
and filings as may be required under the corporation, takeover or blue sky
laws of various states, (vii) compliance with any applicable requirements of
any laws or regulations relating to the regulation of monopolies or
competition in Germany and (viii) such other consents, approvals, orders,
authorizations, notifications, registrations, declarations and filings not
obtained prior to the consummation of the Offer the failure of which to be
obtained or made would not, individually or in the aggregate, have a Company
Material Adverse Effect, or materially impair the Company's ability to
perform its obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby.
Section 5.05. SEC Documents; Financial Statements. (a) The Company
has made available to Parent and the Purchaser copies of each registration
statement, report, proxy statement, information statement or schedule filed
with the SEC by the Company since January 1, 1994 (the "SEC Documents"). As
of their respective dates, as amended or supplemented by subsequent SEC
Documents prior to the date hereof, the Company's SEC Documents complied in
all material respects with the applicable requirements of the Securities Act
of 1933, as amended, and the Exchange Act, as the case may be, none of such
SEC Documents, as amended or supplemented by subsequent SEC Documents prior
to the date hereof, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(b) Neither the Company nor any of its subsidiaries, nor any of
their respective assets, businesses, 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 as of the date of this
Agreement that has not been filed as an exhibit to an SEC Document filed
prior to the date of this Agreement.
-15-
(c) As of their respective dates, the consolidated financial
statements included in the Company's SEC Documents, as amended or
supplemented by subsequent SEC Documents prior to the date hereof, complied
as to form in all material respects with then applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, were prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except
as may be indicated therein or in the notes thereto) and fairly presented the
Company's consolidated financial position and that of its consolidated
subsidiaries as at the dates thereof and the consolidated results of their
operations and statements of cash flows for the periods then ended (subject,
in the case of unaudited statements, to the lack of footnotes thereto, to
normal year-end audit adjustments and to any other adjustments described
therein).
Section 5.06. Absence of Certain Changes; No Undisclosed
Liabilities. (a) Since November 30, 1996, except as disclosed in the SEC
Documents prior to the date hereof, the Company has not (i) incurred any
liability, whether or not accrued, contingent or otherwise, or suffered any
event or occurrence which, individually or in the aggregate, could reasonably
be expected to have a Company Material Adverse Effect, (ii) made any changes
in accounting methods, principles or practices, (iii) declared, set aside or
paid any dividend or other distribution with respect to its capital stock,
(iv) issued, or agreed to issue, any capital stock except pursuant to
outstanding Options or Warrants or (v) materially revalued any of its assets,
including but not limited to materially writing down its inventory or
accounts receivable. Since November 30, 1996 to the date of this Agreement,
each of the Company and its subsidiaries has conducted its operations
according to its ordinary course of business consistent with past practice,
subject to the transactions contemplated by this Agreement.
(b) Except as and to the extent disclosed by the Company in the SEC
Documents, as of November 30, 1996, neither the Company nor any of its
subsidiaries had any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, that would be required by generally
accepted accounting principles to be reflected on a consolidated balance
sheet of the Company and its subsidiaries (including the notes thereto) or
which could reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect.
(c) Since August 31, 1996, except as disclosed on Schedule 5.06(c),
the Company has not made any changes to any
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employee benefit plan or program or any agreement or arrangement providing
compensation or benefits to any of its officers or directors.
Section 5.07. Litigation. Except as disclosed by the Company in the
SEC documents, there is no suit, claim, action, proceeding or investigation
pending or, to the knowledge of the Company, threatened against the Company
or any of its subsidiaries or any of their respective properties or assets
before any court or governmental entity which, individually or in the
aggregate, could reasonably be expected to have a Company Material Adverse
Effect or could reasonably be expected to prevent or delay the consummation
of the transactions contemplated by this Agreement. Except as disclosed by
the Company in the SEC Documents, neither the Company nor any of its
subsidiaries is subject to any outstanding order, writ, injunction or decree
which, insofar as can be reasonably foreseen, individually or in the
aggregate, in the future could reasonably be expected to have a Company
Material Adverse Effect or could reasonably be expected to prevent or delay
the consummation of the transactions contemplated hereby.
Section 5.08. Compliance with Applicable Law. (a) Except as
disclosed by the Company in the SEC Documents, the Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all governmental entities necessary for the lawful conduct of
their respective businesses (the "Company Permits"), except for failures to
hold such permits, licenses, variances, exemptions, orders and approvals
which could not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect. Except as disclosed by the Company
in the SEC Documents, the Company and its subsidiaries are in compliance with
the terms of the Company Permits, except where the failure so to comply would
not have a Company Material Adverse Effect. Except as disclosed by the
Company in the SEC Documents, the businesses of the Company and its
subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any governmental entity except for violations or possible
violations which individually or in the aggregate do not, and, insofar as
reasonably can be foreseen, in the future could not, have a Company Material
Adverse Effect. Except as disclosed by the Company in the SEC Documents, no
investigation or review by any governmental entity with respect to the
Company or any of its subsidiaries is pending or, to the best knowledge of
the Company, threatened nor, to the best knowledge of the Company, has any
governmental entity indicated an intention to conduct the same, other than,
in each case, those which the Company reasonably believes could not have a
Company Material Adverse Effect.
-17-
(b) To the best knowledge of the Company, except as set forth on
Schedule 5.08(b), all proceedings or investigations concerning the practices
of the Company's Italian subsidiary have been concluded, and all penalties,
fines or other payments required to be made by the Company or any of its
subsidiaries in connection therewith have been reflected in the Company's
financial statements included in the SEC Documents or otherwise disclosed in
the SEC Documents. To the Company's knowledge, no employee of the Company or
any of its subsidiaries is the subject of any continuing proceeding or
investigation by any domestic or foreign governmental entity relating to
these matters.
Section 5.09. Taxes. Each of the Company and its subsidiaries has
filed, or caused to be filed, all federal, state, local and foreign income
and other material tax returns required to be filed by it, has paid or
withheld, or caused to be paid or withheld, all taxes of any nature
whatsoever, with any related penalties, interest and liabilities (any of the
foregoing being referred to herein as a "Tax"), that are shown on such tax
returns as due and payable, or otherwise required to be paid, other than such
Taxes as are being contested in good faith and for which adequate reserves
have been established and other than such Taxes for which adequate reserves
have been established and reflected in the November 30, 1996 financial
statements and in the books and records of the Company, and other than where
the failure to so file, pay or withhold would not have a Company Material
Adverse Effect. Adequate reserves have been established in the November 30,
1996 financial statements and in the books and records of the Company for
deferred Taxes applicable to all differences between book and taxable income.
There are no material claims or assessments pending against the Company or
its subsidiaries for any alleged deficiency in any Tax, and the Company does
not know of any threatened Tax claims or assessments against the Company or
any of its subsidiaries which if upheld could have a Company Material Adverse
Effect. Neither the Company nor any of its subsidiaries has made an election
to be treated as a "consenting corporation" under Section 341(f) of the Code.
There is no material deferred inter-company gain within the meaning of the
Treasury Regulations promulgated under Section 1502 of the Code. Except as
set forth on Schedule 5.09, there are no waivers or extensions of any
applicable statutes of limitations to assess any United States federal state
or local Taxes. All returns filed with respect to Taxes are true and correct
in all material respects. Except as set forth on Schedule 5.09, there are no
outstanding requests for any extension of time within which to file any
return or within which to pay any United States federal, state or local Taxes
shown to be due on any return. To the best knowledge of the Company's
Director
-18-
of Corporate Taxes, there are no (i) outstanding requests for any extension
of time within which to file any return or within which to pay any foreign
Taxes shown to be due on any return or (ii) waivers or extensions of any
applicable statutes of limitations to assess any foreign Taxes.
Section 5.10. Certain Employee Plans. Each "employee benefit
plan," as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), maintained by the Company or any of its
subsidiaries or under which they have any liability, contingent or otherwise
(the "Plans"), complies in all material respects with all applicable
requirements of ERISA (to the extent required to so comply) and the Code and
other applicable laws, and no "reportable event" (as such term is defined in
ERISA) or termination has occurred with respect to any Plan under
circumstances which present a risk of liability to any governmental entity or
other person which could reasonably be expected to have a Company Material
Adverse Effect. None of the Plans is a multiemployer plan, as such term is
defined in ERISA, and none of the Plans is subject to Title IV of ERISA.
Neither the Company and its subsidiaries, nor any of their respective
directors, officers, employees or agents has, with respect to any Plan,
engaged in any "prohibited transaction", as such term is defined in Section
4975 of the Code or Section 406 of ERISA, nor has any Plan engaged in any
such prohibited transaction which could result in any taxes or penalties or
prohibited transactions under Section 4975 of the Code or under Section
502(i) of ERISA, which in the aggregate could have a Company Material Adverse
Effect. Except as set forth on Schedule 5.10, no Plan provides benefits,
including, without limitation, death or medical benefits (whether or not
insured), with respect to current or former employees of the Company or its
subsidiaries or any Company ERISA Affiliate beyond their retirement or other
termination of service, other than (A) coverage mandated by applicable law,
(B) death benefits or retirement benefits under any "employee pension plan"
(as such term is defined in Section 3(2) of ERISA), (C) deferred compensation
benefits accrued as liabilities on the books of the Company, its subsidiaries
or the Company ERISA Affiliates or (D) benefits the full cost of which is
borne by the current or former employee (or his beneficiary). Copies of all
of the Company's Plans covering United States employees of the Company and
any related trusts and summary plan descriptions have been made available to
the Purchaser. Except as specifically contemplated by this Agreement or as
set forth on Schedule 5.10, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
result in, cause the accelerated vesting or delivery of, or increase the
amount or
-19-
value of, any payment or benefit to any employee or former employee of the
Company or any of its subsidiaries. "Company ERISA Affiliate" means any trade
or business which would together with the Company be deemed a "single
employer" within the meaning of Section 4001 of ERISA.
Section 5.11. Patents, Trade Names, Trademarks, Service Marks,
Copyrights and Chip Registrations. (a) Set forth on Schedule 5.11(a) is a
list and description of all material patents, patent applications, trade
names, trademark registrations and trademark applications, service xxxx
registrations and service xxxx applications, copyright registrations and
copyright registration applications, both domestic and foreign, which are
owned by the Company or any of its subsidiaries. The assets described on
Schedule 5.11(a), all patent disclosures, common law trademarks and service
marks, certification marks and their registrations and applications, chip
registrations and their applications, and all "Software" (as defined in
Section 5.14(a)), trade secrets, know-how, industrial property, technology or
other proprietary rights which are owned or used by the Company or any of its
subsidiaries are referred to as the "Intellectual Property." Except as
otherwise indicated on Schedule 5.11(a), the Company and its subsidiaries own
all right, title and interest in and to the Intellectual Property validly and
beneficially, free and clear of all material liens or encumbrances of title,
with the sole and exclusive right to use the same, subject to those licenses
listed on Schedule 5.11(b). None of the Intellectual Property is the subject
of any material claim or challenge asserted by any third party, except as
specifically identified on Schedule 5.11(a).
(b) Set forth on Schedule 5.11(b) is a list and description of (i)
all material licenses, assignments and other transfers of Intellectual
Property granted to others by the Company or any of its subsidiaries, and
(ii) all material licenses, assignments and other transfers of material
patents, trade names, trademarks, service marks, copyrights, chip
registrations, Software, trade secrets, know-how, technology or other
proprietary rights granted to the Company or any of its subsidiaries by
others. Except as set forth in Schedule 5.04(a)(iii), none of the licenses
described above is subject to termination or cancellation or material change
in its terms or provisions as a result of this Agreement or the transactions
provided for in this Agreement.
(c) To the knowledge of Company without making inquiry of any third
party, no person or entity is infringing, or has misappropriated, in any
material respect, any Intellectual Property.
-20-
(d) The Company has paid all material maintenance, renewal or
similar fees required by the applicable governmental agencies to maintain the
Intellectual Property.
Section 5.12. Patent, Trade Name, Trademark, Service Xxxx,
Copyright or Chip Registration Indemnification and Infringement. Except as
set forth on Schedule 5.12, neither the Company nor any of its subsidiaries
has given or granted any significant indemnification for, and there are no
pending written or, to the best knowledge of the Company, oral claims or
demands against the Company for, patent, trade name, trademark, service xxxx,
copyright, chip registration or Software infringement. To the knowledge of
the Company, the present conduct of the business of the Company and its
subsidiaries does not infringe in any material respect, any material patents,
trade names, trademarks, service marks, copyrights, chip registrations or
other proprietary rights of others.
Section 5.13. Confidential Information or Trade Secrets. Except as
set forth on Schedule 5.13, there are no material claims or demands of any
person pertaining to, or any material proceedings which are pending or, to
the Company's knowledge, threatened, which challenge the rights of the
Company or any of its subsidiaries in respect of any material proprietary or
confidential information or trade secrets used in the conduct of its
business, and, to the Company's knowledge without making inquiry of any third
party, no methods, processes, procedures, apparatus or equipment used by the
Company or any of its subsidiaries use or include any material proprietary or
confidential information or trade secrets misappropriated from any person or
entity. To the Company's knowledge without making inquiry of any third
party, neither the Company nor any of its subsidiaries has any material
proprietary or confidential information or trade secrets owned or claimed by
third parties not rightfully in its possession, and the Company and its
subsidiaries have complied in all material respects with all material
agreements, understandings and licenses governing the use of such proprietary
or confidential information or trade secrets.
Section 5.14. Software. (a) For purposes of this Agreement,
"Software" shall mean any material computer program or any part of such
computer program, whether in source code, object code or in any other form,
whether recorded on tape or on any other media, and all material
modifications, enhancements or corrections made to such program, and all
material documentation relating to such program, including any flow charts,
designs, instructions, job control procedures and manuals relating to such
program in printed or machine readable
-21-
form. All Software that is included in the Intellectual Property or under
development for use by the Company and its subsidiaries is referred to as the
"Company Software". To the knowledge of the Company, the Company Software is
not subject to any material defect in programming and operation.
(b) The Company is not aware of any material breach by any third
parties of any material confidentiality agreement in favor of the Company or
any of its subsidiaries relating to such Software. Except as disclosed in
the licenses listed on Schedule 5.11(b) or as otherwise disclosed on Schedule
5.11(a), neither the Company nor any of its subsidiaries has conveyed or
granted to any third parties any other material rights to Company Software,
nor is it obligated to grant or convey any material rights to license,
market, incorporate in other Software, sell or otherwise use any such
Software, and to the knowledge of the Company without making inquiry of any
third party, no third party has unauthorized access to the documentation,
source code or similar material for such Software.
Section 5.15. Information. None of the Schedule 14D-9, the Proxy
Statement, if any, or any other document filed or to be filed by or on behalf
of the Company with the SEC or any other governmental entity in connection
with the transactions contemplated by this Agreement contained when filed or
will, at the respective times filed with the SEC or other governmental entity
and, in addition, in the case of the Proxy Statement, if any, at the date it
or any amendment or supplement is mailed to stockholders and at the time of
any Special Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances
under which they were made, not misleading; provided that the foregoing shall
not apply to information supplied by Parent or the Purchaser specifically for
inclusion or incorporation by reference in any such document. The Schedule
14D-9 and the Proxy Statement, if any, will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and
regulations thereunder. None of the information supplied by the Company
specifically for inclusion or incorporation by reference in the Offer
Documents or in any other document filed or to be filed by or on behalf of
Parent or the Purchaser with the SEC or any other governmental entity in
connection with the transactions contemplated by this Agreement contains any
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
-22-
Section 5.16. Delaware Section 203. The Board has taken all
appropriate and necessary action such that the provisions of Section 203 of
the DGCL will not apply to any of the transactions contemplated by this
Agreement.
Section 5.17. Broker's Fees; Transaction Expenses. (a) Except for
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, neither the Company nor
any of its subsidiaries or any of its directors or officers has incurred any
liability for any broker's fees, commissions, or financial advisory or
finder's fees in connection with any of the transactions contemplated by this
Agreement, and neither the Company nor any of its subsidiaries or any of its
directors or officers has employed any other broker, finder or financial
advisor in connection with any of the transactions contemplated by this
Agreement.
(b) Schedule 5.17(b) lists all financial advisory, legal,
accounting, consulting and similar fees for services that will be payable by
the Company in connection with the negotiation and execution of this
Agreement and the consummation of the Offer and the Merger.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND
THE PURCHASER
Parent and the Purchaser represent and warrant to the Company as
follows:
Section 6.01. Organization. Each of Parent and the Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of Delaware and each of Parent and the Purchaser has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Purchaser is an indirect
wholly owned subsidiary of Parent.
Section 6.02. Authority. Each of Parent and the Purchaser has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized and approved by the Board of
Directors of each of Parent and the Purchaser and by Parent (or another
wholly owned subsidiary of Parent) as the sole stockholder of the Purchaser
and no other corporate proceedings are necessary to authorize this Agreement
or the consummation of the transactions contemplated hereby. This Agreement
has
-23-
been duly and validly executed and delivered by each of Parent and the
Purchaser and, assuming this Agreement constitutes a legal, valid and binding
agreement of the Company, it constitutes a legal, valid and binding agreement
of each of Parent and the Purchaser, enforceable against them in accordance
with its terms.
Section 6.03. No Violations; Consents and Approvals. (a) Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby nor compliance by Parent or the Purchaser
with any of the provisions hereof will (i) violate any provision of their
respective certificates of incorporation or by-laws, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default, or give rise to any right of termination,
cancellation or acceleration or any right which becomes effective upon the
occurrence of a merger, under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture or other instrument of indebtedness for
money borrowed to which Parent or the Purchaser is a party, or by which
Parent or the Purchaser or any of their respective properties is bound, (iii)
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default, or give rise to any right of
termination, cancellation or acceleration or any right which becomes
effective upon the occurrence of a merger, under, any of the terms,
conditions or provisions of any license, franchise, permit or agreement to
which Parent or the Purchaser is a party, or by which Parent or the Purchaser
or any of their respective properties is bound, or (iv) violate any statute,
rule, regulation, order or decree of any public body or authority by which
Parent or the Purchaser or any of its respective properties is bound,
excluding from the foregoing clauses (ii), (iii) and (iv) violations,
breaches, defaults or rights which, either individually or in the aggregate,
would not have a material adverse effect on Parent's or the Purchaser's
ability to perform their respective obligations pursuant to this Agreement or
consummate the Offer and the Merger (a "Parent Material Adverse Effect") or
for which Parent or the Purchaser has received appropriate consents or
waivers.
(b) No filing or registration with, notification to, or
authorization, consent or approval of, any governmental entity is required by
Parent or the Purchaser in connection with the execution and delivery of this
Agreement, or the consummation by Parent or the Purchaser of the transactions
contemplated hereby, except (i) expiration of the waiting period under the
HSR Act, (ii) in connection, or in compliance, with the provisions of the
Exchange Act, (iii) the filing of the Certificate of Merger with the Delaware
Secretary of State, (iv)
-24-
such filings and consents as may be required under any environmental law
pertaining to any notification, disclosure or required approval triggered by
the Merger or the transactions contemplated by this Agreement, (v) such
consents, approvals, orders, authorizations, notifications, approvals,
registrations, declarations and filings as may be required under the
corporation, takeover or blue sky laws of various states
[or non-U.S. change-in-control laws or regulations] and (vi) such other
consents, orders, authorizations, registrations, declarations and filings not
obtained prior to the Effective Time the failure of which to be obtained or
made would not, individually or in the aggregate, have a Parent Material
Adverse Effect.
Section 6.04. Information. Neither the Offer Documents nor any
other document filed or to be filed by or on behalf of Parent or the
Purchaser with the SEC or any other governmental entity in connection with
the transactions contemplated by this Agreement contained when filed or will,
at the respective times filed with the SEC or other governmental entity,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading; provided that the foregoing shall not apply to
information supplied by the Company specifically for inclusion or
incorporation by reference in any such document. None of the information
supplied by Parent or the Purchaser specifically for inclusion or
incorporation by reference in the Schedule 14D-9, the Proxy Statement, if
any, or any other document filed or to be filed by or on behalf of the
Company with the SEC or any other governmental entity in connection with the
transactions contemplated by this Agreement contains any untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
Section 6.05. Financing. Parent currently has in effect and will
have at the time of acceptance for payment and purchase of Shares under the
Offer and at the Effective Time, lines of credit and sufficient unused
borrowing capacity thereunder to provide the funds necessary to consummate
the Offer and the Merger and the transactions contemplated thereby and to pay
related fees and expenses.
-25-
ARTICLE VII
COVENANTS
Section 7.01. Conduct of Business of the Company. Except as
contemplated by this Agreement or as expressly agreed to in writing by
Parent, during the period from the date of this Agreement to the Effective
Time, each of the Company and its subsidiaries will conduct its operations
according to its ordinary course of business consistent with past practice,
and will use all commercially reasonable efforts to preserve intact its
business organization, to keep available the services of its employees and to
maintain satisfactory relationships with suppliers, distributors, customers
and others having business relationships with it and will take no action
which would materially adversely affect the ability of the parties to
consummate the transactions contemplated by this Agreement or be inconsistent
with such transactions. Without limiting the generality of the foregoing
restriction, neither the Company nor any of its subsidiaries shall, without
the written consent of Parent (which consent will not be unreasonably
withheld) (i) amend any employee benefit plans or change the compensation or
benefits due to any employee (other than normal merit increases in accordance
with past practice), (ii) hire any officer at the vice president level or
higher, (iii) enter into any license of intellectual property, whether as
licensee or licensor, (iv) incur indebtedness for borrowed money in any
amount over $1,000,000, (v) enter into any lease having a term in excess of
one year, (vi) incur any capital expenditure in excess of $100,000, (vii)
sell or otherwise dispose of any capital assets for consideration in excess
of $100,000 or any real property, (viii) permit the creation of any lien on
any of its, except in the ordinary course of business or in connection with
its contemplated refinancing or (ix) enter into any sales contract or
purchase order or related group of contracts or orders calling for aggregate
payments in excess of $500,000 or having a term in excess of one year.
Section 7.02. Acquisitions and Divestitures. Prior to the Effective
Time, the Company shall keep Parent advised of the status of all discussions
and negotiations concerning possible acquisitions and divestitures of any
corporations or businesses, and the Company agrees that without the prior
written consent of Parent it shall not make, or agree to make, any such
acquisition or divestiture.
Section 7.03. No Solicitation. (a) The Company agrees that, prior
to the Effective Time, it shall not, and shall not authorize or permit any of
its subsidiaries or any of its or its subsidiaries' directors, officers,
employees, agents
-26-
or representatives (including financial advisors), directly or indirectly, to
solicit, initiate, facilitate or encourage (including by way of furnishing or
disclosing non-public information) any inquiries or the making of any
proposal with respect to any merger, consolidation or other business
combination involving the Company or its subsidiaries or acquisition of any
kind of all or substantially all of the assets or capital stock of the
Company and its subsidiaries taken as a whole (an "Acquisition Transaction")
or negotiate or explore with any person (other than Parent or the Purchaser)
any Acquisition Transaction or enter into any agreement, arrangement or
understanding requiring it to abandon, terminate or fail to consummate the
Merger or any other transactions contemplated by this Agreement; provided
that the Company may, in response to an unsolicited written proposal with
respect to an Acquisition Transaction from a third party that the Board
believes to be capable of obtaining financing for such proposal, (i) furnish
or disclose non-public information to such third party and (ii) negotiate,
explore or otherwise communicate with such third party, in each case only if
the Board determines in good faith by a majority vote, after consultation
with its legal and financial advisors, and after receipt of the advice of
outside legal counsel of the Company that failing to take such action would
constitute a breach of the fiduciary duties of the Board, that failing to
take such action would constitute a breach of the Board's fiduciary duties.
(b) The Company shall as promptly as practicable advise Parent in
writing of the receipt of any inquiries or proposals relating to an
Acquisition Transaction and any actions taken pursuant to Section 7.03(a).
Section 7.04. Access to Information. From the date of this
Agreement until the Effective Time, the Company will give Parent and its
authorized representatives (including counsel, environmental and other
consultants, accountants and auditors) full access during normal business
hours, subject to applicable law, to all facilities, personnel and operations
and to all books and records of the Company and its subsidiaries, will permit
Parent to make such inspections as it may reasonably require and will cause
its employees and those of its subsidiaries to furnish Parent with such
financial and operating data and other information with respect to its
business and properties as Parent may from time to time reasonably request.
The Company shall use its best efforts to make available to Parent and its
authorized representatives the Company's accountants to facilitate Parent's
investigation. Other than as required by applicable law, Parent agrees that
any information
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furnished to it, its subsidiaries or its authorized representatives pursuant
to this Section 7.04 will be subject to the confidentiality provisions of the
letter agreement dated February 16, 1996 between Parent and the Company.
Section 7.05. Best Efforts; Other Actions. Subject to the terms and
conditions herein provided and applicable law, each of the Company, Parent
and the Purchaser shall use its reasonable best efforts promptly to take, or
cause to be taken, all other actions and do, or cause to be done, all other
things necessary, proper or appropriate under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement, including, without limitation, (i) the obtaining of all necessary
consents, approvals or waivers under its material contracts and (ii) the
lifting of any legal bar to the Merger; provided, however, that the foregoing
shall not require Parent, the Purchaser or any other affiliate of Parent to
agree to any action or restriction which, if imposed by a governmental
entity, would constitute a condition described in paragraph (a) of Annex I to
this Agreement.
Section 7.06. Public Announcements. Before issuing any press
release or otherwise making any public statements with respect to this
Agreement, the Offer or the Merger, Parent, the Purchaser and the Company
will consult with each other as to its form and substance and shall not issue
any such press release or make any such public statement prior to such
consultation, except as may be required by law; provided, however, that
neither Parent nor the Company shall be required to consult with the other
concerning any portion of such a press release or public statement that
relates to matters other than the transactions contemplated by this Agreement.
Section 7.07. Notification of Certain Matters. Each of the Company
and Parent shall give prompt notice to the other party of (i) the occurrence,
or non-occurrence, of any event the occurrence, or non-occurrence, of which
would be likely to cause either (A) any representation or warranty contained
in this Agreement to be untrue or inaccurate in any material respect at any
time from the date hereof to the acceptance for payment of Shares pursuant to
the Offer, (B) any condition set forth in Annex I to be unsatisfied in any
material respect at any time from the date hereof to the date the Purchaser
purchases Shares pursuant to the Offer or (C) any condition set forth in
Article VIII hereof to be unsatisfied in any material respect at any time
from the date hereof to the Effective Time, and (ii) any material failure of
the Company or Parent, as the
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case may be, or any officer, director, employee or agent thereof, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 7.07 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
Section 7.08. Indemnification. (a) From and after the Effective
Time, Parent shall indemnify, defend and hold harmless the present and former
officers, directors, employees and agents of the Company and its subsidiaries
against all losses, claims, damages, expenses or liabilities arising out of
actions or omissions or alleged actions or omissions occurring at or prior to
the Effective Time, including without limitation the transactions
contemplated by this Agreement, to the same extent and on the same terms and
conditions (including with respect to advancement of expenses) provided for
in the Company's Certificate of Incorporation and By-Laws and agreements in
effect at the date hereof (to the extent consistent with applicable law).
(b) For a period of five years after the Effective Time, Parent
shall cause to be maintained in effect the current policies of directors' and
officers' liability insurance maintained by the Company (provided that Parent
may substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are no less advantageous) with respect
to claims arising from facts or events which occurred before the Effective
Time; provided, however, that Parent shall not be obligated to make annual
premium payments for such insurance to the extent such premiums exceed 150%
of the premiums paid as of the date hereof by the Company for such insurance
(the "Maximum Premium"). If the amount of the annual premiums necessary to
maintain or procure such insurance coverage exceeds the Maximum Premium,
Parent shall maintain the most advantageous policies of directors' and
officers' insurance obtainable for an annual premium equal to the Maximum
Premium.
(c) The provisions of this Section 7.08 are intended to be for the
benefit of, and shall be enforceable by each indemnified party hereunder, his
or her heirs and his or her representatives.
Section 7.09. Expenses. Except as set forth in Section 9.05(b)
hereof, Parent and the Company shall bear their respective expenses incurred
in connection with this Agreement, the Offer and the Merger, including,
without limitation, the preparation, execution and performance of this
Agreement and the transactions contemplated hereby, and all fees and expenses
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of investment bankers, finders, brokers, agents, representatives, counsel and
accountants.
Section 7.10. State Takeover Laws. The Company shall, upon the
request of Parent or the Purchaser, take all reasonable steps to assist in
any challenge by Parent or the Purchaser to the validity or applicability to
the transactions contemplated by this Agreement, including the Offer and the
Merger, of any state takeover law.
Section 7.11. Employee Benefits. Following the Effective Time,
Purchaser shall cause the Company to honor in accordance with their terms the
employment contracts set forth on Schedule 7.11, as in effect on the date
hereof. Until the first anniversary of the Effective Time, Parent shall
provide or cause the Company to provide to individuals who are employed by
the Company or any of its subsidiaries as of the Effective Time employee
benefits that are in the aggregate no less favorable than those generally
provided to employees of the Company on the date hereof, other than the
Company's Employee Stock Purchase Plan. Parent will make its employee stock
purchase plan available to employees of the Company as promptly as
practicable following the Effective Time.
Section 7.12. Warrants. Prior to the Effective Time, the Company
shall use its reasonable best efforts to cause the Consulting Agreement
between the Company and Xxxxxx X. Xxxxxx ("Xxxxxx") dated February 12, 1996,
as amended (the "Xxxxxx Agreement"), and the Consulting Agreement between the
Company and Xxx Xxxx ("Xxxx") dated January 16, 1996, as amended (the "Alix
Agreement"), to be amended to provide that each of the Warrants to purchase
Shares granted to Xxxxxx pursuant to the Xxxxxx Agreement and each of the
Warrants to purchase Shares granted to Alix pursuant to the Alix Agreement
shall, at the Effective Time, be cancelled and each of Xxxxxx and Xxxx,
respectively, shall be entitled to receive from the Company in lieu thereof
an immediate cash payment from the Company equal to the Merger Price
multiplied by the number of Shares for which their respective Warrants are
exercisable, minus the aggregate exercise price of such Warrants.
Section 7.13. Credit Commitment. Parent shall use its reasonable
best efforts to assist the Company in obtaining from The Bank of New York
Financial Corporation ("BONYFC") a written commitment to the Company
extending through at least May 31, 1997 to lend up to $75 million to the
Company on commercially reasonable terms that are no less favorable to the
Company than the terms of the latest written proposal made by BONYFC to the
Company as of the date hereof; provided, however, that the foregoing shall
not obligate Parent to incur any fees
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or expenses payable to BONYFC or to guarantee, directly or indirectly, any
obligations or indebtedness of the Company. If, notwithstanding the
foregoing, BONYFC does not extend such written commitment to the Company on
or before March 15, 1997, then, at the Company's option, Parent shall
purchase from the Company, and the Company shall sell to Parent, shares of a
newly created series of preferred stock of the Company having the terms set
forth in Annex II hereto for an aggregate purchase price of $25,000,000
payable to the Company by wire transfer in immediately available funds with
the closing of such purchase and sale to take place no later than March 31,
1997.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF PARENT,
THE PURCHASER AND THE COMPANY
The respective obligations of each party to effect the Merger shall
be subject to the satisfaction or, if permissible, waiver at or prior to the
Effective Time of each of the following conditions:
Section 8.01. Purchase of Shares. The Purchaser shall have accepted
for payment and paid for Shares pursuant to the Offer in accordance with the
terms thereof.
Section 8.02. Stockholder Approval. The vote of the stockholders of
the Company necessary to consummate the transactions contemplated by this
Agreement shall have been obtained, if required by applicable law.
Section 8.03. No Legal Impediments. No statute, rule, regulation,
judgment, writ, decree, order or injunction shall have been promulgated,
enacted, entered, enforced or deemed applicable to this Agreement or the
Merger, and no other action shall have been taken, by any domestic, foreign
or supranational government or governmental, administrative or regulatory
authority or agency or by any court or tribunal, domestic, foreign or
supranational, that has the effect of making illegal or directly or
indirectly restraining, prohibiting or restricting the consummation of the
Merger.
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ARTICLE IX
TERMINATION AND ABANDONMENT
Section 9.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time:
(a) by mutual consent of the Boards of Directors of Parent and the
Company;
(b) by either Parent or the Company if, without fault of such
terminating party, the purchase of Shares pursuant to the Offer shall not
have occurred on or before September 30, 1997, which date may be extended
by mutual written consent of the parties hereto;
(c) by Parent or the Company if the Offer expires or is terminated
or withdrawn pursuant to its terms without any Shares being purchased
thereunder; or
(d) by either Parent or the Company if any court of competent
jurisdiction in the United States or other governmental body in the
United States shall have issued an order (other than a temporary
restraining order), decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the purchase of Shares
pursuant to the Offer or the Merger, and such order, decree, ruling or
other action shall have become final and nonappealable; provided that the
party seeking to terminate this Agreement shall have used its reasonable
best efforts, subject to Section 7.05, to remove or lift such order,
decree or ruling.
Section 9.02. Termination by Parent. This Agreement may be
terminated and the Offer and the Merger may be abandoned by action of the
Board of Directors of Parent, at any time prior to the purchase of Shares
pursuant to the Offer, if (a) the Board shall withdraw, modify or change its
recommendation or approval in respect of this Agreement or the Offer in a
manner adverse to Parent, (b) the Board shall have recommended any proposal
other than by Parent or the Purchaser in respect of an Acquisition
Transaction, or (c) a proposal for an Acquisition Transaction other than by
Parent or the Purchaser shall be publicly disclosed and at the scheduled
expiration of the Offer the Minimum Condition shall not have been satisfied.
Section 9.03. Termination by the Company. This Agreement may be
terminated and the Merger may be abandoned by action of the Board, at any
time prior to the Effective Time, (a) if there shall be a material breach of
any of Parent's or
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the Purchaser's representations, warranties or covenants hereunder, which
breach shall not be cured within ten days of notice thereof, or (b) provided
the Company is not in breach of any obligation under this Agreement, to allow
the Company to enter into an agreement in respect of an Acquisition
Transaction which the Board determines is more favorable to the Company's
stockholders from a financial point of view than the transactions
contemplated hereby (provided that such termination shall not be effective
unless and until the Company shall have paid to Parent the fee described in
Section 9.05(b) hereof).
Section 9.04. Procedure for Termination. In the event of
termination and abandonment of the Merger and the Offer by Parent or the
Merger by the Company pursuant to this Article IX, written notice thereof
shall forthwith be given to the other.
Section 9.05. Effect of Termination and Abandonment. (a) In the
event of termination of this Agreement and abandonment of the Merger pursuant
to this Article IX, no party hereto (or any of its directors or officers)
shall have any liability or further obligation to any other party to this
Agreement, except as provided in this Section 9.05 and except that nothing
herein shall relieve any party from liability for any breach of this
Agreement.
(b) If (i) Parent shall have terminated this Agreement pursuant to
clause (a) or (b) of Section 9.02 hereof or (ii) the Company shall have
terminated this Agreement pursuant to Section 9.03(b) hereof, then in any
such case the Company shall promptly, but in no event later than two days
after the date of such termination or event, pay Parent in the manner set
forth in the last sentence of this paragraph a termination fee of $9,000,000.
If Parent shall have terminated this Agreement pursuant to clause (c) of
Section 9.02 hereof and, within one year after such termination, the Company
shall have entered into a definitive agreement providing for an Acquisition
Transaction, the Company shall promptly, but in no event later than two days
after the date of such definitive agreement, pay Parent in the manner set
forth in the last sentence of this paragraph a termination fee of $9,000,000.
Any termination fee payable under this paragraph shall be paid by the
issuance to Parent of shares of preferred stock of the Company having the
terms set forth in Annex III.
(c) Upon termination of this Agreement, Parent will return to the
Company all copies in Parent's possession of all non-public information
supplied to Parent by the Company.
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ARTICLE X
DEFINITIONS
Section 10.01. Terms Defined in the Agreement. The following terms
used herein shall have the meanings ascribed in the indicated sections.
Acquisition Transaction ......................................... 7.03(a)
Agreement........................................................ Preamble
Alix............................................................. 7.12
Alix Agreement .................................................. 7.12
Board ........................................................... Recitals
BONYFC........................................................... 7.13
Certificate of Merger ........................................... 2.02
Certificates .................................................... 4.02(a)
Code............................................................. 3.02(a)
Company ......................................................... Preamble
Company ERISA Affiliate.......................................... 5.10
Company Material Adverse Effect ................................. 5.01
Company Permits ................................................. 5.08
Company Preferred Stock.......................................... 5.02
Company Software................................................. 5.14(a)
Constituent Corporations......................................... Preamble
Delaware Secretary of State ..................................... 2.02
DGCL ............................................................ Recitals
Dissenting Shares ............................................... 4.01
Effective Time .................................................. 2.02
ERISA ........................................................... 5.10
Exchange Act..................................................... 1.01(a)
Intellectual Property ........................................... 5.11(a)
Maximum Premium ................................................. 7.08(b)
HSR Act ......................................................... 5.04(b)
Merger .......................................................... 2.01(a)
Merger Price .................................................... 3.01
Minimum Condition ............................................... 1.01(a)
Offer ........................................................... 1.01(a)
Offer Documents ................................................. 1.01(c)
Option Plans .................................................... 3.02(a)
Options ......................................................... 3.02(a)
Parent .......................................................... Preamble
Parent Common Stock ............................................. 3.02(a)
Parent Material Adverse Effect .................................. 6.03(a)
Parent Options .................................................. 3.02(a)
Paying Agent .................................................... 4.02(a)
Person .......................................................... 11.09
Plans ........................................................... 5.10
Proxy Statement ................................................. 3.03(a)(ii)
Purchaser ....................................................... Preamble
Xxxxxx .......................................................... 7.12
Xxxxxx Agreement ................................................ 7.12
Schedule 14D-9 .................................................. 1.02(b)
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SEC ............................................................. 1.01(c)
SEC Documents ................................................... 5.05(a)
Shares .......................................................... 1.01(a)
Significant Subsidiary .......................................... 5.01
Software ........................................................ 5.14(a)
Special Meeting ................................................. 3.03(a)(i)
Subsidiary ...................................................... 11.09
Surviving Corporation ........................................... 2.01(a)
Tax ............................................................. 5.09
Warrants ........................................................ 5.02
ARTICLE XI
MISCELLANEOUS
Section 11.01. Amendment and Modification. At any time prior to the
Effective Time, subject to applicable law and the provisions of Section
1.03(c) hereof, this Agreement may be amended, modified or supplemented only
by written agreement (referring specifically to this Agreement) of Parent,
the Purchaser and the Company with respect to any of the terms contained
herein; provided, however, that after any approval and adoption of this
Agreement by the stockholders of the Company, no such amendment, modification
or supplementation shall be made which reduces the Merger Price or the form
of consideration therefor or which in any way materially adversely affects
the rights of such stockholders, without the further approval of such
stockholders.
Section 11.02. Waiver. At any time prior to the Effective Time,
Parent and the Purchaser, on the one hand, and the Company, on the other
hand, may (i) extend the time for the performance of any of the obligations
or other acts of the other, (ii) waive any inaccuracies in the
representations and warranties of the other contained herein or in any
documents delivered pursuant hereto and (iii) waive compliance by the other
with any of the agreements or conditions contained herein which may legally
be waived. 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.
Section 11.03. Survivability; Investigations. The respective
representations and warranties of Parent, the Purchaser and the Company
contained herein or in any certificates or other documents delivered prior to
or as of the Effective Time shall not be deemed waived or otherwise affected
by any investigation made by any party hereto and shall not survive the
Merger. The covenants and agreements of the Surviving Corporation and Parent
and the Purchaser, including those contained in Section 7.08 hereof, shall
survive the Effective Time without limitation.
-35-
Section 11.04. Notices. All notices and other communications
hereunder shall be in writing and shall be delivered personally or by
next-day courier or telecopied with confirmation of receipt, to the parties
at the addresses specified below (or at such other address for a party as
shall be specified by like notice; provided that notices of a change of
address shall be effective only upon receipt thereof). Any such notice shall
be effective upon receipt, if personally delivered or telecopied, or one day
after delivery to a courier for next-day delivery.
(a) if to the Company, to
Norand Corporation
000 Xxxxxx Xxxxxx X.X.
Xxxxx Xxxxxx, Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
with a copy to:
Xxxxx Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxx
(b) if to Parent or the Purchaser, to
Western Atlas Inc.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: General Counsel
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Section 11.05. Assignment; Third-Party Beneficiaries. This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights,
interests or obligations
-36-
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties. This Agreement is not intended to
confer any rights or remedies hereunder upon any other person except the
parties hereto and, with respect to Section 7.08, the present and former
officers, directors, employees and agents of the Company.
Section 11.06. Governing Law. This Agreement shall be governed by
the laws of the State of Delaware (regardless of the laws that might
otherwise govern under applicable Delaware principles of conflicts of law) as
to all matters, including but not limited to matters of validity,
construction, effect, performance and remedies.
Section 11.07. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 11.08. 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 only apply as to such party in the specific
jurisdiction where such judgment shall be made.
Section 11.09. Interpretation. The article and section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not in any way affect the
meaning or interpretation of this Agreement. As used in this Agreement, (i)
the term "person" shall mean and include an individual, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof; and (ii) the term
"subsidiary" of any specified corporation shall mean any corporation of which
a majority of the outstanding securities having ordinary voting power to
elect a majority of the board of directors are directly or indirectly owned
by such specified corporation or any other person of which a majority of the
equity interests therein are, directly or indirectly, owned by such specified
corporation.
Section 11.10. Guarantee. Parent hereby guarantees the due
performance by the Purchaser of all of the Purchaser's obligations incurred
in connection with the Offer and the Merger.
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Section 11.11. Confidentiality Agreement. The letter agreement
dated February 16, 1996 between Parent and the Company is hereby amended by
deleting the eighth paragraph thereof.
Section 11.12. Entire Agreement. This Agreement, including the
schedules, annexes and exhibits hereto and the documents and instruments
referred to herein and therein, embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter
contained herein and therein and supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
There are no representations, promises, warranties, covenants, or
undertakings in respect of such subject matter, other than those expressly
set forth or referred to herein and therein.
IN WITNESS WHEREOF, Parent, the Purchaser and the Company have
caused this Agreement to be signed by their respective duly authorized
officers as of the date first above written.
WESTERN ATLAS INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
and Chief Financial
Officer
WAI ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxx
---------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NORAND CORPORATION
By: /s/ N. Xxxxxx Xxxxxx
---------------------
Name: N. Xxxxxx Xxxxxx
Title: Chairman, President and
Chief Executive Officer
-38-
ANNEX I
Conditions to the Offer. Notwithstanding any other provision of the
Offer, the Purchaser shall not be required to accept for payment or, subject
to any applicable rules and regulations of the SEC, including Rule 14e-1(c)
promulgated under the Exchange Act (relating to the Purchaser's obligation to
pay for or return tendered Shares promptly after termination or withdrawal of
the Offer), pay for, and may delay the acceptance for payment of any tendered
Shares and amend or terminate the Offer as to any Shares not then paid for if
(i) there shall not be validly tendered and not withdrawn prior to the
expiration of the Offer a number of Shares which represents at least a
majority of the number of Shares outstanding on a fully diluted basis
(assuming the exercise of all outstanding Options and Warrants) or (ii) any
applicable waiting period under the HSR Act or other applicable laws or
regulations shall not have expired or been terminated prior to the expiration
of the Offer or (iii) at any time after the date of this Merger Agreement and
before the time of payment for any such Shares (whether or not any Shares
have theretofore been accepted for payment or paid for pursuant to the
Offer), any of the following conditions exists:
(a) there shall be in effect an injunction or other order, decree,
judgment or ruling by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission or a statute, rule,
regulation, executive order or other action shall have been promulgated,
enacted, taken or threatened by a governmental authority or a governmental,
regulatory or administrative agency or commission which in any such case (i)
restrains or prohibits the making or consummation of the Offer or the
consummation of the Merger, (ii) prohibits or restricts the ownership or
operation by Parent or the Purchaser (or any of their respective affiliates
or subsidiaries) of any portion of its or the Company's business or assets
which is material to the business of all such entities taken as a whole, or
compels Parent or the Purchaser (or any of their respective affiliates or
subsidiaries) to dispose of or hold separate any portion of its or the
Company's business or assets which is material to the business of all such
entities taken as a whole, (iii) imposes material limitations on the ability
of the Purchaser effectively to acquire or to hold or to exercise full rights
of ownership of the Shares, including, without limitation, the right to vote
the Shares purchased by the Purchaser on all matters properly presented to
the stockholders of the Company, (iv) imposes any material limitations on the
ability of Parent or the Purchaser or any of their respective affiliates or
subsidiaries effectively to control in any material respect the business and
operations of the Company
and its subsidiaries, or (v) which otherwise would materially adversely
affect the Company and its subsidiaries taken as a whole; or
(b) there shall be pending any litigation or other proceeding
brought by any governmental entity or agency that seeks to impose any of the
effects referred to in paragraph (a) above or seeks material damages from the
Company or Parent in connection with the Offer or the Merger; or
(c) this Agreement shall have been terminated by the Company, Parent
or the Purchaser in accordance with its terms; or
(d)(i) any of the representations and warranties of the Company set
forth in this Agreement that are qualified as to materiality shall not be
true and correct, or any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, when made,
or as of the Expiration Date (as defined in the Offer Documents) as if made
as of such date, or (ii) as of the Expiration Date the Company shall not in
all material respects have performed its obligations and agreements and
complied with its covenants to be performed and complied with by it under
this Agreement; or
(e) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on any national securities
exchange or the over-the-counter market, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory), (iii) the commencement of a war, armed
hostilities or other international or national calamity directly involving
the United States, (iv) from the date of this Merger Agreement through the
date of termination or expiration of the Offer, a decline of at least 25% in
the Standard & Poor's 500 Index, or (v) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or
(f) Parent, the Purchaser and the Company shall have agreed that the
Purchaser shall amend the Offer to terminate the Offer or postpone the
payment for Shares pursuant thereto.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser and may be asserted by Parent or the Purchaser regardless of the
circumstances (including any action or inaction by Parent or the Purchaser)
giving rise to any such conditions and may be waived by Parent or the
Purchaser in whole or in part at any time and from time to time, in each
-2-
case, in the good faith judgment of Parent and the Purchaser and subject to
the terms of this Agreement. The failure by Parent or the Purchaser at any
time to exercise any of the foregoing rights shall not be deemed a waiver of
any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time.
-3-
ANNEX II
Term Sheet for Series A
Convertible Preferred Stock
Issuer: Norand Corporation (the "Company")
Liquidation
Preference: $25,000,000
Conversion: After the first anniversary of issue date, convertible
at the option of holder into common stock of the
Company at the rate of 1 share of common stock for each
$23.00 of liquidation preference, subject to
antidilution provisions substantially identical to
those in the Company's Series A and Series B Warrants.
Dividend: 6-1/2% per annum of liquidation preference amount
payable at the option of the Company in shares of
Series A Convertible Preferred Stock or cash.
Mandatory Redemption: Upon request of holder on earlier to occur of (i)
consummation of a transaction resulting in a change in
control of the Company and (ii) tenth anniversary of
date of issue.
Optional Redemption: At the option of the Company (i) during first year of
issuance at 110% of liquidation preference and (ii)
after first year from issuance at 100% of liquidation
preference as long as the Company's common stock has
traded in excess of $25.30 for any 10 consecutive
trading days.
Default: If the Company defaults on its mandatory redemption
obligation, the dividend rate will increase by 25 basis
points, and will thereafter increase by an additional
25 basis points for each 91-day period the default
continues, up to a maximum dividend rate of
10-1/2%. During continuance of the default, the
holder will be entitled to appoint one member of the
Company's board of directors.
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ANNEX III
Term Sheet for Series B
Convertible Preferred Stock
Issuer: Norand Corporation (the "Company")
Liquidation
Preference: $9,000,000
Conversion: After the expiration of six months from issue date,
convertible at the option of holder into common stock
of the Company at the rate of 1 share of common stock
for each $23.00 of liquidation preference, subject to
antidilution provisions substantially identical to
those in the Company's Series A and Series B Warrants.
Dividend: 6% per annum of liquidation preference amount payable
semi-annually and at the option of the Company in
shares of Series B Convertible Preferred Stock or cash.
Mandatory Redemption: Upon request of holder on earlier to occur of (i)
consummation of a transaction resulting in a change in
control of the Company and (ii) third anniversary of
date of issue.
Optional Redemption: At the option of the Company (i) during first year of
issuance at 110% of liquidation preference and (ii)
after first year from issuance at 100% of liquidation
preference so long as Target's common stock has traded
in excess of $25.30 for any 10 consecutive trading
days.
Default: If the Company defaults on its mandatory redemption
obligation, the dividend rate will increase by 25 basis
points, and will thereafter increase by an additional
25 basis points for each 91-day period the default
contin-
ues, up to a maximum dividend rate of 10%. During
continuance of the default, the holder will be
entitled to appoint one member of the Company's board
of directors.
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