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