<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
GEOSCIENCE CORPORATION
(Name of Subject Company)
SERCEL ACQUISITION CORP.
AND
COMPAGNIE GENERALE DE GEOPHYSIQUE
(Bidders)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
373636109
(CUSIP Number of Class of Securities)
------------------------------
THIERRY LE ROUX
COMPAGNIE GENERALE DE GEOPHYSIQUE
1, RUE LEON MIGAUX
91341 MASSY, FRANCE
33(1)64-47-30-00
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
------------------------------
COPY TO:
JERE R. THOMSON, ESQ.
JONES, DAY, REAVIS & POGUE
599 LEXINGTON AVENUE
NEW YORK, NY 10022
(212) 326-3939
------------------------
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
<S> <C>
$73,170,369 $14,634
</TABLE>
* Estimated for purposes of calculating the filing fee only. Such amount was
derived by multiplying $6.71, the amount offered for each share of common
stock, par value $.01 per share (the "Shares"), of the Company by the sum of
(i) 9,985,350, representing all of the Shares that were issued and
outstanding as of October 28, 1999 and (ii) 919,325, representing all of the
Shares reserved for issuance upon the exercise of all outstanding options to
purchase Shares.
** 1/50th of 1% of the value of the transaction.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
<TABLE>
<S> <C> <C> <C>
Amount Previously Paid: Not Applicable Filing Party: Not Applicable
Form or Registration No.: Not Applicable Date Filed: Not Applicable
</TABLE>
Page 1 of 6 Pages
(Exhibit Index is located on Page 6)
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<PAGE>
This Tender Offer Statement on Schedule 14D-1 is filed by Compagnie Generale
de Geophysique ("Parent"), Sercel, Inc. ("Sercel"), CGG Americas, Inc. ("CGG
Americas"), Sercel Holding S.A. ("Sercel Holding") and Sercel Acquisition Corp.,
a direct, wholly owned subsidiary of Sercel and an indirect, wholly owned
subsidiary of Parent ("Purchaser"), relating to the offer by Purchaser to
purchase all outstanding shares of common stock, par value $.01 per share (the
"Shares"), of GeoScience Corporation (the "Company") at a purchase price of
$6.71 per Share, net to the seller in cash, without interest, on the terms and
subject to the conditions set forth in the Offer To Purchase, dated October 29,
1999 (the "Offer To Purchase"), and in the related Letter of Transmittal and any
amendments or supplements thereto, copies of which are attached hereto as
Exhibits (a)(1) and (a)(2), respectively (which collectively constitute the
"Offer").
The item numbers and responses thereto below are in accordance with the
requirements of Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY
(a) The name of the subject company is GeoScience Corporation. The address
of its principal executive offices is 10500 Westoffice Drive, Suite 200,
Houston, Texas. The telephone number of the Company at such location is
(713) 780-1881.
(b) The information set forth on the cover page and under "Introduction" in
the Offer To Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of the Shares;
Dividends on the Shares") of the Offer To Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(d), (g) This Statement is filed by Parent, Sercel, CGG Americas, Sercel
Holding and Purchaser. The information set forth on the cover page, under
"Introduction," in Section 9 ("Certain Information Concerning the Parent, the
Purchaser and the Purchaser's Stockholders") and in Schedule I of the Offer To
Purchase is incorporated herein by reference.
(e)-(f) None of Parent, Sercel, CGG Americas, Sercel Holding, Purchaser or,
to the knowledge of Parent, Sercel, CGG Americas, Sercel Holding and Purchaser,
any of the persons listed in Schedule I of the Offer To Purchase has, during the
last five years, been (i) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) a party to a civil proceeding of a
judicial or administrative body of a competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
(a)-(b) The information set forth under "Introduction" and in Section 8
("Certain Information Concerning the Company"), Section 9 ("Certain Information
Concerning the Parent, the Purchaser and the Purchaser's Stockholders"),
Section 11 ("Background of the Offer") and Section 12 ("Purpose of the Offer and
the Merger; Plans for the Company; The Merger Agreement; The Shareholder
Agreement; Other Matters") of the Offer To Purchase is incorporated herein by
reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a)-(b) The information set forth in Section 10 ("Source and Amount of
Funds") of the Offer To Purchase is incorporated herein by reference.
(c) Not applicable.
Page 2 of 6 Pages
<PAGE>
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER
(a)-(e) The information set forth under "Introduction" and in Section 12
("Purpose of the Offer and the Merger; Plans for the Company; The Merger
Agreement; The Shareholder Agreement; Other Matters") and in Section 13
("Dividends and Distributions") of the Offer To Purchase is incorporated herein
by reference.
(f)-(g) The information set forth in Section 7 ("Effect of the Offer on the
Market for Shares, Stock Exchange Listing and Exchange Act Registration and
Qualification of Shares as Margin Securities") of the Offer To Purchase is
incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
(a)-(b) The information set forth under "Introduction" and in Section 9
("Certain Information Concerning the Parent, the Purchaser and the Purchaser's
Stockholders") of the Offer To Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT
COMPANY'S SECURITIES
The information set forth under "Introduction" and in Section 9 ("Certain
Information Concerning the Parent, the Purchaser and the Purchaser's
Stockholders") and Section 12 ("Purpose of the Offer and the Merger; Plans for
the Company; The Merger Agreement; The Shareholder Agreement; Other Matters") of
the Offer To Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
The information set forth under "Introduction" and in Section 16 ("Fees and
Expenses") of the Offer To Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS
The information set forth in Section 9 ("Certain Information Concerning the
Parent, the Purchaser and the Purchaser's Stockholders") of the Offer To
Purchase is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION
(a) The information set forth under "Introduction" and in Section 9
("Certain Information Concerning the Parent, the Purchaser and the Purchaser's
Stockholders") and Section 12 ("Purpose of the Offer and the Merger; Plans for
the Company; The Merger Agreement; The Shareholder Agreement; Other Matters") of
the Offer To Purchase is incorporated herein by reference.
(b)-(c) The information set forth under "Introduction" and in Section 14
("Certain Conditions of the Offer") and Section 15 ("Certain Legal Matters and
Regulatory Approvals") of the Offer To Purchase is incorporated herein by
reference.
(d) The information set forth in Section 7 ("Effect of the Offer on the
Market for Shares, Stock Exchange Listing and Exchange Act Registration and
Qualification of Shares as Margin Securities") of the Offer To Purchase is
incorporated herein by reference.
(e) To the knowledge of Parent, Purchaser, Sercel, CGG Americas and Sercel
Holding, no legal proceedings relating to the Offer and the Merger required to
be disclosed in Item 10(e) of Schedule 14D-1 are pending or have been
instituted.
(f) The information set forth in the Offer To Purchase and the Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively, is incorporated herein by reference.
Page 3 of 6 Pages
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<S> <C>
(a)(1) Offer To Purchase, dated October 29, 1999
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
(a)(5) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
(a)(7) Summary Advertisement, dated October 29, 1999
(a)(8) Text of Joint Press Release of Compagnie Generale de
Geophysique and GeoScience Corporation, dated October 26,
1999
(b) Not applicable
(c)(1) Agreement and Plan of Merger, dated October 23, 1999, among
GeoScience Corporation, Sercel Acquisition Corp. and
Compagnie Generale de Geophysique
(c)(2) Shareholder Agreement, dated October 23, 1999, among Sercel
Acquisition Corp., Compagnie Generale de Geophysique and
Tech-Sym Corporation
(d) Not applicable
(e) Not applicable
(f) Not applicable
</TABLE>
Page 4 of 6 Pages
<PAGE>
SIGNATURES
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
<TABLE>
<S> <C> <C>
Dated: October 29, 1999 SERCEL ACQUISITION CORP.
By: /s/ THIERRY LE ROUX
-----------------------------------------
Thierry Le Roux
President
COMPAGNIE GENERALE DE GEOPHYSIQUE
By: /s/ ROBERT BRUNCK
-----------------------------------------
Robert Brunck
Chairman and Chief Executive Officer
SERCEL, INC.
By: /s/ GEORGE WOOD
-----------------------------------------
George Wood
Executive Vice President
CGG AMERICAS, INC.
By: /s/ THIERRY LE ROUX
-----------------------------------------
Thierry Le Roux
Executive Vice President
SERCEL HOLDING S.A.
By: /s/ ROBERT BRUNCK
-----------------------------------------
Robert Brunck
Chairman and Chief Executive Officer
</TABLE>
Page 5 of 6 Pages
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- ------------------------------------------------------------
<S> <C>
(a)(1) Offer To Purchase, dated October 29, 1999
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
(a)(5) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
(a)(7) Summary Advertisement, dated October 29, 1999
(a)(8) Text of Joint Press Release of Compagnie Generale de
Geophysique and GeoScience Corporation, dated October 26,
1999
(b) Not applicable
(c)(1) Agreement and Plan of Merger, dated October 23, 1999, among
GeoScience Corporation, Sercel Acquisition Corp. and
Compagnie Generale de Geophysique
(c)(2) Shareholder Agreement, dated October 23, 1999, among Sercel
Acquisition Corp., Compagnie Generale de Geophysique and
Tech-Sym Corporation
(d) Not applicable
(e) Not applicable
(f) Not applicable
</TABLE>
Page 6 of 6 Pages
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
GEOSCIENCE CORPORATION
AT
$6.71 NET PER SHARE
BY
SERCEL ACQUISITION CORP.
A DIRECT, WHOLLY OWNED SUBSIDIARY OF
SERCEL, INC.
AND AN INDIRECT, WHOLLY OWNED SUBSIDIARY OF
COMPAGNIE GENERALE DE GEOPHYSIQUE
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, DECEMBER 10, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date at least 70% of the
outstanding shares of common stock, par value $.01 per share (the "Shares"), of
GeoScience Corporation, a Nevada corporation (the "Company"), on a fully diluted
basis on the date of purchase. Tech-Sym Corporation, the holder of 73% of the
outstanding Shares on a fully diluted basis, has agreed to tender its Shares
within five business days of the commencement of the Offer pursuant to the
Shareholder Agreement described herein. The Offer is also conditioned on the
receipt by Compagnie Generale de Geophysique, a French societe anonyme (the
"Parent"), of financing sufficient to consummate the Offer and the Merger, as
well as certain other conditions contained in this Offer To Purchase. The Parent
has received a financing commitment in an amount sufficient to consummate the
Offer and the Merger on the terms described herein, which commitment is subject
to certain conditions set forth in Section 10 of this Offer To Purchase. See the
Introduction and Sections 1, 12, 14 and 15 of this Offer To Purchase.
THE COMPANY, THE PARENT AND SERCEL ACQUISITION CORP. (THE "PURCHASER") HAVE
ENTERED INTO A DEFINITIVE AGREEMENT PROVIDING FOR THE ACQUISITION OF THE COMPANY
BY THE PARENT PURSUANT TO THE OFFER AND A FOLLOW-UP MERGER. THE BOARD OF
DIRECTORS OF THE COMPANY (WITH ONE DIRECTOR DISSENTING) HAS DETERMINED THAT THE
OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS,
HAS APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER AND RECOMMENDS THAT
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
------------------------
Any Stockholder desiring to tender all or a portion of its Shares should
(a) complete and sign the Letter(s) of Transmittal (or a manually signed
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, (b) mail or deliver the Letter(s) of Transmittal and any other
required documents to the Depositary, and (c) either deliver the certificates
representing those Shares ("Certificates") to the Depositary along with the
Letter(s) of Transmittal or tender those Shares pursuant to the procedures for
book-entry transfer set forth in Section 3 hereof. A Stockholder whose Shares
are held in "street name" or otherwise through a broker, bank or other nominee
must contact the broker, bank or other nominee who holds the Shares for the
Stockholder if the Stockholder desires to tender such Shares.
Any Stockholder who desires to tender Shares and whose Certificate(s) are
not immediately available or who cannot comply with the procedures for
book-entry transfer on a timely basis must tender those Shares by following the
procedures for guaranteed delivery set forth in Section 3 hereof.
QUESTIONS AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION
AGENT AT ITS ADDRESS AND TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS
OFFER TO PURCHASE. Requests for additional copies of this Offer To Purchase, the
Letter of Transmittal and other related materials may be directed to the
Information Agent or to brokers, dealers, commercial banks or trust companies.
------------------------
October 29, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Introduction.......................................................... 1
SECTION
1. Terms of the Offer.......................................... 3
2. Acceptance for Payment and Payment for Shares............... 4
3. Procedure for Tendering Shares.............................. 5
4. Withdrawal Rights........................................... 8
5. Certain U.S. Federal Income Tax Consequences of the Offer
and the Merger.............................................. 9
6. Price Range of the Shares; Dividends on the Shares.......... 10
7. Effect of the Offer on the Market for Shares, Stock Exchange
Listing and Exchange Act Registration and Qualification of
Shares as Margin Securities................................. 11
8. Certain Information Concerning the Company.................. 12
9. Certain Information Concerning the Parent, the Purchaser and
the Purchaser's Stockholders................................ 14
10. Source and Amount of Funds.................................. 16
11. Background of the Offer..................................... 17
12. Purpose of the Offer and the Merger; Plans for the Company;
The Merger Agreement; The Shareholder Agreement; Other
Matters..................................................... 20
13. Dividends and Distributions................................. 29
14. Certain Conditions of the Offer............................. 29
15. Certain Legal Matters and Regulatory Approvals.............. 31
16. Fees and Expenses........................................... 33
17. Miscellaneous............................................... 33
Schedule I--Directors and Executive Officers of the Parent and the
Purchaser........................................................... I-1
</TABLE>
<PAGE>
To the Holders of Shares of Common Stock of
GeoScience Corporation
INTRODUCTION
Sercel Acquisition Corp. (the "Purchaser"), a newly formed direct, wholly
owned subsidiary of Sercel, Inc. ("Sercel") and an indirect, wholly owned
subsidiary of Compagnie Generale de Geophysique, a French societe anonyme (the
"Parent"), hereby offers to purchase all outstanding shares of common stock, par
value $.01 per share (the "Shares"), of GeoScience Corporation, a Nevada
corporation (the "Company"), at a purchase price of $6.71 per Share, net to the
seller in cash, without interest (the "Per Share Amount"), on the terms and
subject to the conditions set forth in this Offer To Purchase and in the related
Letter of Transmittal (which, together with any amendments or supplements to
either, collectively constitute the "Offer"). Tendering Stockholders who have
Shares registered in their own name and who tender directly to the Depositary
will not be obligated to pay brokerage fees or commissions or, except as set
forth in Instruction 6 to the Letter of Transmittal, transfer taxes on the
purchase of Shares pursuant to the Offer. Stockholders who hold their Shares in
"street name" or otherwise through a broker, bank or other nominee should
consult with such institution as to whether there are any fees applicable to a
tender of Shares. The Purchaser will pay all charges and expenses of Continental
Stock Transfer & Trust Company, as the depositary (the "Depositary"), and
MacKenzie Partners, Inc., as the information agent (the "Information Agent"), in
connection with the Offer. See Section 16.
THE COMPANY, THE PARENT AND THE PURCHASER HAVE ENTERED INTO AN AGREEMENT AND
PLAN OF MERGER, DATED AS OF OCTOBER 23, 1999 (THE "MERGER AGREEMENT"), PROVIDING
FOR THE ACQUISITION OF THE COMPANY BY THE PARENT, PURSUANT TO THE OFFER AND THE
MERGER (AS DEFINED BELOW). THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY
BOARD") (WITH ONE DIRECTOR DISSENTING) HAS DETERMINED THAT THE OFFER AND THE
MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS, HAS APPROVED
THE MERGER AGREEMENT, THE OFFER AND THE MERGER AND RECOMMENDS THAT STOCKHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
Morgan Keegan & Company, Inc., the Company's financial advisor (the "Company
Financial Advisor"), has delivered to the Company Board its opinion, dated
October 22, 1999 (the "Company Financial Advisor's Opinion"), to the effect
that, as of that date and based on and subject to certain matters stated in the
opinion, the $6.71 per Share cash consideration to be received in the Offer and
the Merger by the Stockholders, and the other financial terms of the Merger
Agreement, are fair, from a financial point of view, to the Stockholders. A copy
of the Company Financial Advisor's Opinion is contained in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
filed with the Securities and Exchange Commission (the "Commission") in
connection with the Offer, a copy of which is being furnished to Stockholders
concurrently with this Offer To Purchase. Stockholders are urged to read the
Company Financial Advisor's Opinion in its entirety for a description of the
assumptions made, matters considered and limitations of the review undertaken by
the Company Financial Advisor.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE AT LEAST 70% OF THE
SHARES OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE
"MINIMUM CONDITION"). FOR PURPOSES OF THE MINIMUM CONDITION, THE PHRASE "ON A
FULLY DILUTED BASIS" MEANS THE NUMBER OF SHARES OUTSTANDING, TOGETHER WITH THE
NUMBER OF SHARES THE COMPANY IS THEN REQUIRED TO ISSUE PURSUANT TO OBLIGATIONS
OUTSTANDING AT THAT DATE UNDER EMPLOYEE STOCK OPTIONS, BENEFIT PLANS OR OTHER
RIGHTS TO PURCHASE OR ACQUIRE SHARES, ASSUMING THE ABSENCE OF ANY VESTING
REQUIREMENTS OR CONDITIONS. BY VIRTUE OF THE PARENT'S RIGHTS UNDER THE
SHAREHOLDER AGREEMENT, THE MINIMUM CONDITION WILL BE CAPABLE OF BEING SATISFIED
IRRESPECTIVE OF WHETHER OR NOT OTHER STOCKHOLDERS TENDER THEIR SHARES IN THE
OFFER.
THE OFFER IS ALSO SUBJECT TO VARIOUS CONDITIONS RELATING TO THE PARENT'S
RECEIPT OF FINANCING SUFFICIENT TO CONSUMMATE THE OFFER AND THE MERGER. THESE
CONDITIONS INCLUDE THE CONSUMMATION OF A RIGHTS OFFERING BY THE PARENT OF ITS
ORDINARY SHARES RESULTING IN THE RECEIPT BY THE PARENT OF AT LEAST FRF
300,000,000 (APPROXIMATELY 46 MILLION EUROS AS OF THE DATE OF THE MERGER
AGREEMENT) IN GROSS AGGREGATE PROCEEDS, THE CLOSING OF A PRIVATE PLACEMENT OF
THE PARENT'S ORDINARY SHARES TO A U.S. INSTITUTIONAL INVESTOR RESULTING IN
<PAGE>
GROSS AGGREGATE PROCEEDS TO THE PARENT SUFFICIENT TO CONSUMMATE THE OFFER AND
THE MERGER AND THE APPROVAL BY THE PARENT'S STOCKHOLDERS OF THE SHARE CAPITAL
INCREASE NECESSARY TO CLOSE THAT PRIVATE PLACEMENT (COLLECTIVELY, THE "FINANCING
CONDITIONS"). SEE SECTION 10. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER
CUSTOMARY CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTIONS 1, 12, 14
AND 15.
Pursuant to a Shareholder Agreement, dated as of October 23, 1999 (the
"Shareholder Agreement"), Tech-Sym Corporation, the Company's majority
stockholder (the "Majority Stockholder"), has (a) agreed to tender to the
Purchaser in the Offer all Shares beneficially owned by the Majority
Stockholder, which represented as of the date of the Shareholder Agreement 73%
of the outstanding Shares on a fully diluted basis, (b) granted to the Parent an
irrevocable proxy to vote the Majority Stockholder's Shares in favor of the
Merger and against proposals adverse to or conflicting with the transactions
contemplated by the Merger Agreement, and (c) granted to the Purchaser an option
to purchase the Shares beneficially owned by it at the Per Share Amount under
certain circumstances. The option is exercisable in whole or in part if, among
other things, the Merger Agreement becomes terminable under circumstances that
could entitle the Purchaser to termination fees under the Merger Agreement
(regardless of whether the Merger Agreement is actually terminated). See
Section 12.
The Merger Agreement provides, among other things, for the commencement of
the Offer by the Purchaser and further provides that after the purchase of
Shares pursuant to the Offer, subject to the satisfaction or waiver of certain
conditions, either (a) if more than 90% of the Shares are purchased pursuant to
the Offer, at the option of the Parent or the Purchaser, the Company will be
merged into the Purchaser, or (b) if less than 90% of the Shares are purchased
pursuant to the Offer, the Purchaser will be merged into the Company (in either
case, the "Merger"). In the Merger, each Share issued and outstanding
immediately prior to the effective time of the Merger (the "Effective Time")
will be converted at the Effective Time into the right to receive the Per Share
Amount (or any greater amount paid for Shares pursuant to the Offer), in cash
payable to the holder thereof, without interest, prorated for fractional Shares
and less any required withholding taxes (the "Merger Consideration"). Following
the Merger, the Company will become an indirect, wholly owned subsidiary of the
Parent.
The completion of the Merger is subject to the satisfaction or waiver of a
number of conditions, including, if required, the approval of the Merger
Agreement by the requisite vote or consent of the Stockholders. The Company's
By-Laws and the Nevada Revised Statutes ("Nevada Law") require the affirmative
vote of holders of at least a majority of the outstanding Shares to approve the
Merger. As a result, if the Minimum Condition and the other conditions to the
Offer are satisfied and the Offer is consummated, the Purchaser will own a
sufficient number of Shares to ensure that the Merger Agreement will be
approved, regardless of the vote of any other Stockholder. Under Nevada Law, if
after consummation of the Offer the Purchaser owns at least 90% of the Shares
then outstanding, the Purchaser will be able to cause a merger of the Company
into the Purchaser to occur without a vote of Stockholders. If, however, after
consummation of the Offer, the Purchaser owns less than 90% of then-outstanding
Shares, a vote of the Stockholders will be required under Nevada Law to approve
the Merger Agreement, and a significantly longer period of time may be required
to effect the Merger. The Majority Stockholder has granted the Parent its proxy
to vote all the Shares beneficially owned by the Majority Stockholder in favor
of the Merger, and against any alternative transaction. Accordingly, if the
Purchaser acquires more than a majority of the outstanding Shares pursuant to
the Offer or if the Parent exercises its rights under the Shareholder Agreement,
the Merger Agreement will be approved regardless of the vote of any other
Stockholder. See Section 12.
No dissenters' or appraisal rights are available under Nevada Law in
connection with the Offer or the Merger unless the Shares are no longer quoted
on Nasdaq at the time of the Merger, as described in Section 12.
The Merger Agreement and the Shareholder Agreement are more fully described
in Section 12. The sources of financing for the Offer and the Merger and the
conditions to such financing are more fully
2
<PAGE>
described in Section 10. Certain federal income tax consequences of the sale of
Shares pursuant to the Offer and the conversion of Shares into the Merger
Consideration pursuant to the Merger are described in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER
On the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will accept for payment (and thereby purchase) all
Shares that are validly tendered and not withdrawn in accordance with Section 4
prior to the Expiration Date. As used in the Offer, the term "Expiration Date"
means 12:00 midnight, New York City time, on Friday, December 10, 1999, unless
and until the Purchaser, in accordance with the terms of the Offer and the
Merger Agreement, extends the period of time during which the Offer is open, in
which event the term "Expiration Date" means the latest time and date on which
the Offer, as so extended, expires.
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition and the Financing Conditions. The Offer is also subject to
certain other customary conditions set forth in Section 14, including the
expiration or termination of all waiting periods imposed by the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended, and the regulations
thereunder (the "HSR Act"), and the receipt of all required approvals, if any,
under the antitrust laws of the European Union and any member country thereof
(collectively, the "Antitrust Approvals"). The Purchaser may, without the
consent of the Company, extend the Expiration Date of the Offer in the event
that any Offer Condition is not satisfied or waived at the time that the
Expiration Date would otherwise occur, but not beyond February 15, 2000 (the
"Outside Date"), provided, however, that the Outside Date may be extended,
without the consent of the Company, to March 31, 2000 in the event that the
closing has not occurred by February 15, 2000 because at least 90% of the Shares
have not been validly tendered in the Offer or the Parent has failed to obtain
the Antitrust Approvals. Subject to applicable legal requirements, the Purchaser
may amend the Offer or waive any Offer Condition (other than the Minimum
Condition) in its sole discretion. However, the Purchaser may not (a) decrease
or change the form of the Per Share Amount, (b) decrease the number of Shares
sought in the Offer, (c) amend or waive the Minimum Condition, or (d) impose
conditions on the Offer other than the Offer conditions set forth in Section 14
(the "Offer Conditions") without the prior written consent of the Company.
Assuming the prior satisfaction or waiver of the Offer Conditions, all Shares
validly tendered and not withdrawn pursuant to the Offer will be accepted for
payment and paid for as soon as practicable after the Expiration Date. Subject
to the terms of the Merger Agreement and the rights of tendering Stockholders to
withdraw their Shares, the Purchaser will retain all tendered Shares until the
Expiration Date.
Subject to the applicable regulations of the Commission and the terms of the
Merger Agreement as described in the next paragraph, the Purchaser also
expressly reserves the right, in its sole discretion, to (a) delay payment for
the Shares pending receipt of any regulatory or governmental approvals specified
in Section 15, (b) terminate the Offer if any Offer Condition referred to in
Section 14 has not been satisfied prior to the Expiration Date or upon the
occurrence of any event specified in Section 14, (c) waive any Offer Condition
(except the Minimum Condition), and (d) except as set forth in the Merger
Agreement, otherwise amend the Offer in any respect, in any such case by giving
oral or written notice of such termination, waiver or amendment to the
Depositary. The Purchaser may exercise such rights even if the Purchaser has
previously accepted Shares for payment.
The rights reserved by the Purchaser in the immediately preceding paragraph
are in addition to the Purchaser's rights described in Section 14. The Purchaser
may also extend the Offer in connection with an increase in the consideration to
be paid pursuant to the Offer so as to comply with applicable rules and
3
<PAGE>
regulations of the Commission. Any extension, termination or amendment of the
Offer will be followed as promptly as practicable by public announcement
thereof, and such announcement in the case of an extension will be made no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. Without limiting the manner in which the
Purchaser may choose to make any public announcement, subject to applicable law
(including Rules 14d-4(c) and 14d-6(d) under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), which require that material changes be
promptly disseminated to holders of Shares), the Purchaser will have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to the Dow Jones News Service.
If the Purchaser makes a material change in the terms of the Offer, or if it
waives a material condition to the Offer, the Purchaser will extend the Offer
and disseminate additional tender offer materials to the extent required by
Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period
during which an offer must remain open following material changes in the terms
of the offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
materiality of the changes. The staff of the Commission has stated that an offer
should remain open for a minimum of five business days from the date the
material change is first published, sent or given to stockholders and, if
material changes are made with respect to information that approaches the
significance of price and the percentage of securities sought, a period of up to
ten business days may be required to allow for adequate dissemination and
investor response. The requirement to extend the Offer will not apply to the
extent that the number of business days remaining between the occurrence of the
change and then-scheduled Expiration Date equals or exceeds the minimum
extension period that would be required because of such amendment. For purposes
of the Offer, a "business day" means any day other than a Saturday, Sunday or a
federal holiday and consists of the time period from 12:01 a.m. through 12:00
midnight, New York City time.
The Company has provided the Purchaser with mailing labels containing the
names and addresses of all record holders of the Shares and security position
listings for the purpose of disseminating the Offer to the Stockholders. This
Offer To Purchase, the related Letter of Transmittal and other relevant
materials will be mailed to record holders of Shares and will be furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the Company's stockholder list
or, if applicable, who are listed as participants in a clearing agency's
security position listing for subsequent transmittal to beneficial owners of
Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will, as soon as practicable after the Expiration
Date, accept for payment (and thereby purchase) and pay for Shares that are
validly tendered and not properly withdrawn prior to the Expiration Date.
Subject to the applicable rules of the Commission and the terms of the Merger
Agreement, the Purchaser expressly reserves the right to delay acceptance for
payment of, or payment for, the Shares in order to comply, in whole or in part,
with any other applicable law, government regulation or condition contained
therein. See Sections 1, 14 and 15.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (a) certificates for the
Shares (or a timely Book-Entry Confirmation (as defined in Section 3) with
respect to the Shares), (b) the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed with any required
signature guarantees (or, in the case of a book-entry transfer of Shares, an
Agent's Message), and (c) all other documents required by the Letter of
Transmittal. See Section 3.
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<PAGE>
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility (as defined in Section 3) to and received by the Depositary
and forming part of a Book-Entry Confirmation, which states that (a) the
Book-Entry Transfer Facility has received an express acknowledgment from the
participant in the Book-Entry Transfer Facility tendering the Shares that are
the subject of such Book-Entry Confirmation, (b) such participant has received
and agrees to be bound by the terms of the Letter of Transmittal, and (c) the
Purchaser may enforce such agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment (and thereby purchased) tendered Shares if, as and when the Purchaser
gives oral or written notice to the Depositary of the Purchaser's acceptance of
such Shares for payment. In all cases, payment for Shares purchased pursuant to
the Offer will be made by deposit of the purchase price with the Depositary,
which will act as agent for the tendering Stockholders for the purpose of
receiving payment from the Purchaser and transmitting payment to the tendering
Stockholders whose Shares have been accepted for payment. If, for any reason,
acceptance for payment of any Shares tendered pursuant to the Offer is delayed,
or the Purchaser is unable to accept for payment Shares tendered pursuant to the
Offer, then, without prejudice to the Purchaser's rights described in
Section 14, the Depositary may, nevertheless, on behalf of the Purchaser, retain
the tendered Shares, and such Shares may not be withdrawn, except to the extent
that the tendering Stockholders are entitled to withdrawal rights as described
in Section 4 and as otherwise required by Rule 14e-1(c) under the Exchange Act.
UNDER NO CIRCUMSTANCES WILL INTEREST ACCRUE ON THE CONSIDERATION TO BE PAID
FOR THE SHARES BY THE PURCHASER, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT.
If any tendered Shares are not purchased for any reason or if Certificates
are submitted for more Shares than are tendered, Certificates for the Shares not
purchased or tendered will be returned pursuant to the instructions of the
tendering Stockholder without expense to the tendering Stockholder (or, in the
case of Shares delivered by book-entry transfer into the Depositary's account at
a Book-Entry Transfer Facility pursuant to the procedures set forth in
Section 3, the Shares will be credited to an account maintained at the
appropriate Book-Entry Transfer Facility) as promptly as practicable following
the expiration, termination or withdrawal of the Offer.
The Purchaser reserves the right, subject to the provisions of the Merger
Agreement, to assign, in whole or from time to time in part, to one or more of
the Parent's subsidiaries or affiliates the right to purchase all or any portion
of the Shares tendered pursuant to the Offer, but no such assignment will
relieve the Parent or the Purchaser of its obligations under the Offer or
prejudice the rights of tendering Stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
If, prior to the Expiration Date, the Purchaser increases the consideration
to be paid per Share pursuant to the Offer, the Purchaser will pay the increased
consideration for all Shares purchased pursuant to the Offer, whether or not the
Shares were tendered prior to the increase in consideration.
3. PROCEDURE FOR TENDERING SHARES
VALID TENDERS. For Shares to be validly tendered pursuant to the Offer,
either (a) the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed, with any required signature guarantees
(or, in the case of a book-entry transfer of Shares, an Agent's Message), and
any other documents required by the Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth on the back cover of this Offer
To Purchase prior to the Expiration Date and either (x) Certificates
representing tendered Shares must be received by the Depositary at any one of
those addresses prior to the Expiration Date or (y) the Shares must be delivered
pursuant to the procedures for book-entry transfer set forth below and a
Book-Entry Confirmation must be received by the Depositary prior to the
Expiration Date, or (b) the tendering Stockholder must comply with the
guaranteed delivery
5
<PAGE>
procedures set forth below. If Certificates for Shares are forwarded separately
to the Depositary, a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) must accompany each such delivery. No alternative,
conditional or contingent tenders will be accepted.
THE METHOD OF DELIVERY OF CERTIFICATES FOR SHARES, THE LETTER OF TRANSMITTAL
AND ANY OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS MADE BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date of
this Offer To Purchase. Any financial institution that is a participant in the
Book-Entry Transfer Facility system may make book-entry delivery of Shares by
causing the Book-Entry Transfer Facility to transfer the Shares into the
Depositary's account at the Book-Entry Transfer Facility in accordance with the
Book-Entry Transfer Facility's procedures for such transfer. Although delivery
of the Shares may be effected through book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility, the Letter of Transmittal (or a
manually signed facsimile thereof), properly completed and duly executed with
any required signature guarantees, or an Agent's Message, and any other required
documents must, in any case, be transmitted to, and received by, the Depositary
at one of its addresses set forth on the back cover of this Offer To Purchase
prior to the Expiration Date, or the tendering Stockholder must comply with the
guaranteed delivery procedures described below. The confirmation of a book-entry
transfer of Shares into the Depositary's account at the Book-Entry Transfer
Facility as described above is referred to as a "Book-Entry Confirmation."
DELIVERY OF THE LETTER OF TRANSMITTAL OR OTHER DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY OF THE LETTER OF TRANSMITTAL OR
SUCH OTHER DOCUMENTS TO THE DEPOSITARY.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal if (a) the Letter of Transmittal is signed by the registered holder
of Shares tendered therewith (which term, for purposes of this Section, includes
any participant in the Book-Entry Transfer Facility system whose name appears on
a security position listing as the owner of the Shares) and such registered
holder has not completed either the box entitled "Special Delivery Instructions"
or the box entitled "Special Payment Instructions" on the Letter of Transmittal
or (b) such Shares are tendered for the account of a financial institution
(including most commercial banks, savings and loans associations and brokerage
houses) that is a participant in the Security Transfer Agents Medallion Program,
the New York Stock Exchange Medallion Signature Guarantee Program or the Stock
Exchange Medallion Program (an "Eligible Institution"). In all other cases, all
signatures on the Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 1 of the Letter of Transmittal.
If the Certificates representing Shares are registered in the name of a
person other than the signer of the Letter of Transmittal or if payment is to be
made or if Certificates for Shares not tendered or not accepted for payment are
to be returned to a person other than the registered holder of the Certificates
surrendered, then the Certificates representing the tendered Shares must be
endorsed or accompanied by appropriate stock powers, in each case signed exactly
as the name or names of the registered holder or owners appears on the
Certificates, with the signatures on the Certificates or stock powers guaranteed
by an Eligible Institution as described above and as provided in the Letter of
Transmittal. See Instructions 1 and 5 of the Letter of Transmittal.
GUARANTEED DELIVERY. If a Stockholder wishes to tender Shares pursuant to
the Offer and the Stockholder's Certificates are not immediately available or
the procedures for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to be received by the
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<PAGE>
Depositary prior to the Expiration Date, the Shares may nevertheless be tendered
if all the following guaranteed delivery procedures are complied with:
(a) The tender is made by or through an Eligible Institution;
(b) A properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser with this
Offer To Purchase, is received by the Depositary as provided below prior to
the Expiration Date; and
(c) The Certificates for all tendered Shares in proper form for transfer
or a Book-Entry Confirmation with respect to all tendered Shares, together
with a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof) and any required signature guarantees
(or, in the case of a book-entry transfer of Shares, an Agent's Message) in
connection with a book-entry transfer of Shares, and any other documents
required by the Letter of Transmittal, are received by the Depositary within
three Nasdaq trading days after the date of execution of the Notice of
Guaranteed Delivery. A "Nasdaq trading day" is any day on which The Nasdaq
Stock Market, Inc.'s ("Nasdaq") Nasdaq National Market is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mailed to the Depositary and must include an
endorsement by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery and a representation that the Stockholder on whose behalf
the tender is being made is deemed to own the Shares being tendered within the
meaning of Rule 14e-4 under the Exchange Act.
Notwithstanding any other provision of this Offer To Purchase, payment for
Shares accepted for payment pursuant to the Offer in all cases will be made only
after timely receipt by the Depositary of Certificates for (or Book-Entry
Confirmation with respect to) the Shares, the Letters of Transmittal (or a
manually signed facsimile thereof), properly completed and duly executed with
all required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and all other documents required by the Letter of Transmittal.
Accordingly, payment may not be made to all tendering Stockholders at the same
time, and will depend upon when Share certificates are received by the
Depositary or Book-Entry Confirmations of such Shares are received into the
Depositary's account at the Book-Entry Transfer Facility.
BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT BACKUP FEDERAL INCOME TAX
WITHHOLDING OF 31% OF THE PAYMENTS MADE TO STOCKHOLDERS WITH RESPECT TO THE
PURCHASE PRICE OF SHARES PURCHASED PURSUANT TO THE OFFER OR THE CONVERSION OF
SHARES IN THE MERGER, A STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH ITS CORRECT
TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT IT IS NOT SUBJECT TO BACKUP
FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN
THE LETTER OF TRANSMITTAL. SEE SECTION 5 BELOW AND INSTRUCTION 10 OF THE LETTER
OF TRANSMITTAL.
DETERMINATION OF VALIDITY. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares pursuant to any of the procedures described above will
be determined by the Purchaser in its sole discretion, which determination will
be final and binding on all parties. The Purchaser reserves the absolute right
to reject any or all tenders of Shares determined not to be in proper form or
the acceptance of or payment for which may, in the opinion of counsel, be
unlawful and reserves the absolute right to waive any defect or irregularity in
any tender of Shares.
The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter(s) of Transmittal and the instructions thereto) will be
final and binding on all parties. No tender of Shares will be deemed to have
been validly made until all defects and irregularities have been cured or
waived. None of the Purchaser, the Parent, the Depositary, the Information Agent
or any other person will be under any
7
<PAGE>
duty to give notification of any defects or irregularities in tenders or incur
any liability for failure to give any such notification.
APPOINTMENT AS PROXY. By executing the Letter of Transmittal, a tendering
Stockholder irrevocably appoints designees of the Purchaser as its
attorneys-in-fact and proxies, with full power of substitution and
resubstitution, in the manner set forth in the Letter of Transmittal, to the
full extent of the Stockholder's rights with respect to the Shares tendered by
the Stockholder and purchased by the Purchaser and with respect to any and all
other Shares or other securities issued or issuable in respect of those Shares,
on or after the date of the Offer. All such powers of attorney and proxies will
be considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, the Purchaser accepts the
Shares for payment. Upon acceptance for payment, all prior powers of attorney
and proxies given by the Stockholder with respect to the Shares (and any other
Shares or other securities so issued in respect of such purchased Shares) will
be revoked, without further action, and no subsequent powers of attorney and
proxies may be given (and, if given, will not be deemed effective) by the
Stockholder. The designees of the Purchaser will be empowered to exercise all
voting and other rights of the Stockholder with respect to such Shares (and any
other Shares or securities so issued in respect of such purchased Shares) as
they in their sole discretion may deem proper, including without limitation in
respect of any annual or special meeting of the Stockholders, or any adjournment
or postponement of any such meeting.
The Purchaser reserves the absolute right to require that, in order for
Shares to be validly tendered, immediately upon the Purchaser's acceptance for
payment of the Shares, the Purchaser must be able to exercise full voting and
other rights with respect to the Shares, including voting at any meeting of
Stockholders then scheduled.
The Purchaser's acceptance for payment of Shares tendered pursuant to any of
the procedures described above will constitute a binding agreement between the
tendering Stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer are irrevocable, except as
otherwise provided in this Section 4. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless already
accepted for payment by the Purchaser as provided in this Offer To Purchase, may
also be withdrawn at any time after December 28, 1999.
If the Purchaser extends the Offer, is delayed in its purchase of or payment
for Shares, or is unable to purchase or pay for Shares for any reason then,
without prejudice to the rights of the Purchaser, tendered Shares may be
retained by the Depositary on behalf of the Purchaser and may not be withdrawn,
except to the extent that tendering Stockholders are entitled to withdrawal
rights as set forth in this Section 4.
The reservation by the Purchaser of the right to delay the acceptance or
purchase of or payment for Shares is subject to the terms of the Merger
Agreement and provisions of Rule 14e-1(c) under the Exchange Act, which requires
the Purchaser to pay the consideration offered or to return Shares deposited by
or on behalf of Stockholders promptly after the termination or withdrawal of the
Offer.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer To Purchase. Any
such notice of withdrawal must specify the name of the persons who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder, if different from that of the person who tendered the Shares.
If Certificates representing Shares have been delivered or otherwise identified
to the Depositary then, prior to the release of the Certificates, the tendering
Stockholder must also submit the serial numbers shown on the particular
Certificates representing the Shares to be withdrawn, and the signature on the
notice of withdrawal must be guaranteed by an Eligible
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<PAGE>
Institution (except in the case of Shares tendered for the account of an
Eligible Institution). If Shares have been tendered pursuant to the procedure
for book-entry transfer set forth in Section 3, the notice of withdrawal must
specify the name and number of the account at the applicable Book-Entry Transfer
Facility to be credited with the withdrawn Shares.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination will be final and binding on all parties. No
withdrawal of Shares will be deemed to have been made properly until all defects
and irregularities have been cured or waived. None of the Parent, the Purchaser,
the Depositary, the Information Agent or any other person will be under any duty
to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failing to give such notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be tendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section 3 above.
5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER AND THE MERGER
INTRODUCTION. The following is a summary of the material federal income tax
consequences of the Offer and the Merger to Stockholders whose Shares are
purchased pursuant to the Offer or whose Shares are converted into the right to
receive the Merger Consideration in the Merger. This discussion is based upon
the provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
the final, temporary and proposed Treasury Regulations thereunder (the "Treasury
Regulations"), and published rulings and court decisions, all in effect as of
the date hereof, all of which are subject to change, possibly retroactively.
Retroactive legislative, administrative and judicial decisions, which may occur,
could affect the accuracy of any statements and conclusions set forth below.
This discussion is directed solely at Stockholders who hold their Shares as
"capital assets" within the meaning of Section 1221 of the Code, who are United
States Persons (as defined below) and who use the U.S. dollar as their
functional currency. It is not directed at holders of options or other rights to
acquire Shares, apart from any consequences to them with respect to actual
Shares held. This discussion does not address all aspects of federal income
taxation that may be relevant to a particular Stockholder in light of such
Stockholder's personal investment circumstances, or to those Stockholders
subject to special treatment under the federal income tax laws (for example,
life insurance companies, tax-exempt organizations, foreign corporations,
nonresident alien individuals, banks, financial institutions, regulated
investment companies, brokers and dealers in securities, and holders who hold
their Shares as part of a hedge or straddle) or to Stockholders who acquired
their Shares through the exercise of employee stock options or other
compensation arrangements. In addition, this discussion does not address any
aspect of foreign, state or local income taxation or any other form of taxation
that may be applicable to a Stockholder.
For purposes of this discussion, the term "United States Person" means the
beneficial owner of Shares who is (a) a citizen or resident of the United
States, (b) a corporation or partnership created or organized in the United
States or under the laws of the United States or of any state, (c) an estate,
the income of which is subject to United States federal income taxation
regardless of its source, or (d) a trust, if a court within the United States is
able to exercise primary supervision over the administration of such trust and
one or more United States persons have the authority to control all substantial
decisions of such trust.
CONSEQUENCES OF THE OFFER AND THE MERGER TO STOCKHOLDERS. The receipt of
the Per Share Amount and the Merger Consideration will be a taxable transaction
for federal income tax purposes (and also may be a taxable transaction under
applicable state, local and other income tax laws). In general, for federal
income tax purposes, a Stockholder will recognize gain or loss equal to the
difference between its adjusted tax basis in the Shares sold pursuant to the
Offer or converted to cash in the Merger and the amount of cash received
therefor. Such gain or loss will be capital gain or loss and will be long-term
gain or loss if, on the date of sale (or, if applicable, the date of the
Merger), the Shares were held for more than one year. In the
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case of a non-corporate Stockholder who holds the Shares long-term (longer than
one year), the maximum marginal United States federal income tax rate applicable
to such gain will be lower than the maximum marginal United States federal
income tax applicable to ordinary income. Limitations on the deductibility of
capital losses by both individual and corporate Stockholders may apply,
depending on a Stockholder's particular circumstances.
BACKUP TAX WITHHOLDING. A Stockholder may be subject, under certain
circumstances, to "backup withholding" for federal income tax purposes at a 31%
rate with respect to payments made in connection with the Offer or the Merger.
Backup withholding generally applies if the Stockholder (a) fails to furnish his
social security number or other taxpayer identification number ("TIN") in the
manner required by the Code or (b) furnishes an incorrect TIN. Backup
withholding is not an additional tax but merely an advance payment, which may be
refunded to the extent it results in an overpayment of tax. Certain persons
generally are exempt from backup withholding, including corporations and
financial institutions. Certain penalties apply for failure to furnish correct
information and for failure to include the reportable payments in income. Each
Stockholder should consult with its own tax advisor as to its qualifications for
exemption from withholding and the procedure for obtaining such exemption.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION PURPOSES ONLY. STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS TO
DETERMINE THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE OFFER
AND THE MERGER TO THEM IN VIEW OF THEIR OWN PARTICULAR CIRCUMSTANCES.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
According to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998 (the "Company Form 10-K"), the Shares are traded on the
Nasdaq National Market under the symbol "GSCI." The following table sets forth,
for the periods indicated, the reported high and low closing sale prices for the
Shares on the Nasdaq National Market as reported in the Company Form 10-K with
respect to calendar years 1997 and 1998, and as reported thereafter by published
financial sources with respect to calendar year 1999.
<TABLE>
<CAPTION>
HIGH LOW
--------------- --------
<S> <C> <C>
1997
First Quarter............................................... $ 15.00 $11.00
Second Quarter.............................................. 13.75 9.00
Third Quarter............................................... 14.63 9.63
Fourth Quarter.............................................. 13.50 9.38
1998
First Quarter............................................... $ 12.50 $10.00
Second Quarter.............................................. 14.50 10.25
Third Quarter............................................... 13.88 8.50
Fourth Quarter.............................................. 11.00 8.25
1999
First Quarter............................................... $ 16.75 $ 5.09
Second Quarter.............................................. 8.00 4.94
Third Quarter............................................... 7.94 5.31
Fourth Quarter (through October 28, 1999)................... 7.25 6.00
</TABLE>
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On October 25, 1999, the last full trading day before the public
announcement of the Merger Agreement, the last reported sale price on the Nasdaq
National Market was $6.00 per Share. On October 28, 1999, the last full trading
day before the commencement of the Offer, the last reported sale price on the
Nasdaq National Market was $6.53 per Share.
The Company has never paid any dividends. The Company has agreed in the
Merger Agreement that, prior to the Effective Time, it will not declare, set
aside or pay any dividends on, or make any other distributions in respect of,
the Shares.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, STOCK EXCHANGE LISTING AND
EXCHANGE ACT REGISTRATION AND QUALIFICATION OF SHARES AS MARGIN SECURITIES
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and may reduce the number of holders
of Shares, which could adversely affect the liquidity and market value of the
remaining Shares held by Stockholders other than the Purchaser. The Purchaser
cannot predict whether the reduction in the number of Shares that might
otherwise trade publicly would have an adverse or beneficial effect on the
market price for or marketability of the Shares or whether it would cause future
market prices to be greater or less than the Per Share Amount.
NASDAQ QUOTATION. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued inclusion
in Nasdaq. According to Nasdaq's published guidelines, the Shares would not be
eligible to be included for quotation if, among other things, the number of
publicly held Shares falls below 750,000, the number of holders of Shares falls
below 400 or the aggregate market value of such publicly held Shares falls below
$5,000,000. If these standards are not met, the Shares might continue to be
quoted on The Nasdaq SmallCap Market, Inc., but if the number of holders of the
Shares falls below 300, or if the number of publicly held Shares falls below
500,000, or if the aggregate market value of such publicly held Shares falls
below $1,000,000 or there are not at least two registered and active market
makers (one of which may be a market maker entering a stability bid), Nasdaq
rules provide that the Shares would no longer qualify for inclusion in Nasdaq
and Nasdaq would cease to provide any quotations. Shares held directly or
indirectly by an officer or director of the Company or by a beneficial owner of
more than 10% of the Shares will ordinarily not be considered as being publicly
held for purposes of these standards. In the event the Shares are no longer
eligible for Nasdaq quotation, quotations might still be available from other
sources. The extent of the public market for the Shares and the availability of
such quotations would, however, depend upon the number of holders of such Shares
remaining at such time, the interest in maintaining a market in such Shares on
the part of securities firms, the possible termination of registration of such
Shares under the Exchange Act as described below and other factors.
The Purchaser has been advised by the Company that, as of October 28, 1999,
there were 30 holders of record of the Shares. The Company has advised the
Purchaser that it believes that the number of beneficial owners of the Shares as
of October 28, 1999 is approximately 900.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application of the
Company to the Commission if the Shares are not listed on a national securities
exchange and there are fewer than 300 record holders of the Shares. The
termination of registration of the Shares under the Exchange Act would
substantially reduce the information required to be furnished by the Company to
holders of Shares and to the Commission and would make certain provisions of the
Exchange Act, such as the short-swing profit recovery provisions of
Section 16(b), and the requirement of furnishing a proxy statement in connection
with Stockholders' meetings pursuant to Section 14(a), no longer applicable to
the Shares. Furthermore, if the Shares are no longer registered under the
Exchange Act, the requirements of Rule 13e-3 under the Exchange Act with respect
to "going private" transactions would no longer be applicable to the Company. In
addition, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of such
securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as
amended (the "Securities Act"). The Purchaser believes that the purchase of the
Shares pursuant
11
<PAGE>
to the Offer may result in the Shares becoming eligible for termination of
registration under the Exchange Act, and it is the intention of the Purchaser to
cause the Company to make an application for termination of registration of the
Shares as soon as possible after successful completion of the Offer if the
Shares are then eligible for such termination.
If registration of the Shares is not terminated prior to the Merger, then
following the consummation of the Merger, the Shares will no longer be eligible
for Nasdaq quotation and the registration of the Shares under the Exchange Act
will be terminated.
MARGIN REGULATIONS. The Shares are currently "margin securities," as such
term is defined under the rules of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), which has the effect, among other things,
of allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, following the Offer, it is possible that the Shares might no
longer constitute "margin securities" for purposes of the margin regulations of
the Federal Reserve Board, in which event such Shares could no longer be used as
collateral for loans made by brokers.
If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be "margin securities" or be eligible for reporting by
Nasdaq. The Purchaser intends to seek to cause the Company to terminate the
registration of the Shares under the Exchange Act as soon after consummation of
the Offer as the requirements for termination of the registration of the Shares
are met.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
GENERAL INFORMATION. The Company is a Nevada corporation with its principal
executive offices located at 10500 Westoffice Drive, Suite 200, Houston, Texas
77042-5326. The Company was formed in 1996. The Company became a publicly traded
company as a result of an initial public offering, and the Shares began trading
on Nasdaq on May 17, 1996. The following description of the Company's business
has been derived in part from the Company Form 10-K and is qualified in its
entirety by reference to the Company Form 10-K. Such report may be obtained from
the offices of the Commission in the manner set forth under "Available
Information" below.
The Company's strategy focuses on the development of technologically
advanced products to facilitate the process of, and to decrease the time
involved in, acquiring seismic data needed by the oil and gas exploration and
production industry. Additionally, the Company seeks to acquire product lines,
technology and businesses that complement internal product development.
The Company's primary products are seismic data acquisition systems and
related products that are designed for use primarily in marine environments, as
well as products for use in land and transition zone environments. These systems
collect acoustic energy produced by air guns, dynamite or other sound sources
that is reflected from underground or subsea geological formations. The acoustic
energy is collected by remote sensors in the water, on the ocean floor, or on
land and converted to digital signals that are transmitted to a central
recording unit or a portable recording unit. The recording unit simultaneously
records the digital signals transmitted from multiple remote sensors.
The Company provides repair and maintenance services related to the products
it sells and on similar products manufactured by others. The Company also leases
its equipment under operating leases with terms generally up to three years.
Additionally, the Company provides specialized computer workstation services to
oil, gas and energy companies.
HISTORICAL FINANCIAL INFORMATION. Certain selected consolidated financial
information for the Company excerpted from the Company Form 10-K and the
Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30,
1999 (the "Company Form 10-Q") is set forth below. More comprehensive financial
information is included in such reports (including management's discussion and
analysis of financial condition and results of operations) and other documents
filed by the Company with the Commission, and the following summary is qualified
in its entirety by reference to such reports and other documents and all of the
financial information (including any related notes) contained therein. Such
12
<PAGE>
reports and other documents should be available for inspection and copies should
be obtainable in the manner set forth below under "Available Information."
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(In thousands, except per Share amounts)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
------------------------------------------------------- YEAR ENDED DECEMBER 31,
(UNAUDITED) --------------------------
INCOME STATEMENT DATA 1999 1998 1998
- --------------------- -------------------------- -------------------------- --------------------------
<S> <C> <C> <C>
Operating revenues............... 57,717 66,512 122,933
Net income (loss)................ (17,170) 9,577 7,509
Diluted earnings (loss) per
Share.......................... (1.72) .96 .75
Weighted average Shares
outstanding, diluted........... 9,985 10,012 10,008
Dividends per Share.............. -- -- --
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
INCOME STATEMENT DATA 1997 1996
- --------------------- -------------------------- --------------------------
<S> <C> <C>
Operating revenues............... 94,451 90,896
Net income (loss)................ 850 3,667
Diluted earnings (loss) per
Share.......................... .08 .39
Weighted average Shares
outstanding, diluted........... 10,109 9,451
Dividends per Share.............. -- --
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31, DECEMBER 31,
BALANCE SHEET DATA 1999 (UNAUDITED) 1998 1997
- ------------------ ---------------- ------------ ------------
<S> <C> <C> <C>
Total current assets................................. 68,050 107,199 102,586
Total assets......................................... 120,412 150,850 148,190
Total current liabilities............................ 52,381 65,067 65,868
Long-term debt....................................... 5,455 5,413 9,445
Total shareholders investment........................ 61,874 79,590 71,767
</TABLE>
On October 29, 1999, the Company announced operating revenues for the nine
month period ended September 30, 1999 of $68.8 million (unaudited) and a net
loss for such period of $19.9 million (unaudited) or $1.99 per diluted Share
(unaudited). This compares to operating revenues of $91.2 million (unaudited)
and net income of $6.9 million (unaudited), or $0.69 per diluted Share
(unaudited), for the corresponding nine month period in 1998.
CERTAIN FORWARD-LOOKING INFORMATION. During the course of discussions among
the Parent, the Purchaser and the Company that led to the execution of the
Merger Agreement, the Company provided the Parent with certain business and
financial information that was not publicly available, including the Company's
internal business plan for fiscal years 1999 and 2000 for its principal
subsidiary, Syntron, Inc. The Company's business plan for the year 1999 projects
net revenue of Syntron, Inc. of between $90.2 and $95 million and a net
operating loss of between $26.5 and $31 million. The Company's consolidated
results are not expected to differ materially from Syntron, Inc.'s results. The
Company's business plan for the year 2000 projects net revenue of the Company of
between $60 and $113 million and net operating income between $0 and
$12 million. The actual results will depend largely on the conditions of the
marine seismic industry and the success of the Company's new solid streamer
cable product line. The foregoing forecasts make certain assumptions regarding
the Company's revenues, variable and fixed costs, expenses, including interest
expense, growth rates and certain other future conditions affecting the
Company's results of operations. Under the Merger Agreement, the Company is
under no obligation to update the forecast. These forecasts should be read
together with the financial statements of the Company referred to herein.
THE COMPANY FORECASTS WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE OR
COMPLIANCE WITH PUBLISHED GUIDELINES OF THE COMMISSION OR THE GUIDELINES
ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING
FINANCIAL FORECASTS, AND ARE INCLUDED IN THIS OFFER TO PURCHASE ONLY BECAUSE
THEY WERE PROVIDED TO THE PARENT. NONE OF THE PARENT, THE PURCHASER OR ANY OF
THEIR REPRESENTATIVES ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY OF THESE
FORECASTS. WHILE PRESENTED WITH NUMERICAL SPECIFICITY, THESE FORECASTS ARE BASED
UPON A VARIETY OF ASSUMPTIONS (NOT ALL OF WHICH WERE STATED THEREIN AND NOT ALL
OF WHICH WERE PROVIDED TO THE PARENT OR THE PURCHASER) RELATING TO THE
BUSINESSES OF THE COMPANY, WHICH MAY NOT BE REALIZED AND ARE SUBJECT TO
SIGNIFICANT FINANCIAL, MARKET, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND
CONTINGENCIES WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY, MANY OF
WHICH ARE BEYOND THE CONTROL OF THE COMPANY AND THE PARENT. THERE CAN BE NO
ASSURANCE THAT THESE FORECASTS WILL BE REALIZED, AND ACTUAL RESULTS MAY VARY
MATERIALLY FROM THOSE SHOWN. THE INCLUSION OF THE FORECASTS SET FORTH ABOVE
SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE PARENT, THE PURCHASER OR ANY
OF THEIR RESPECTIVE AFFILIATES OR
13
<PAGE>
REPRESENTATIVES OR BY THE COMPANY OR ANY OF ITS AFFILIATES OR REPRESENTATIVES
THAT THE FORECASTED RESULTS WILL BE ACHIEVED.
AVAILABLE INFORMATION. The Company is subject to the informational filing
requirements of the Exchange Act. In accordance with the Exchange Act, the
Company files periodic reports, proxy statements and other information with the
Commission relating to its business, financial condition and other matters. The
Company is required to disclose in such proxy statements certain information, as
of particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of Shares and
any material interest of those persons in transactions with the Company. Such
reports, proxy statements and other information may be inspected at the
Commission's office at 450 Fifth Street, N.W., Washington, D.C. 20549, and also
should be available for inspection and copying at the regional offices of the
Commission located at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and 7 World Trade Center, Suite 1300, New York, New
York 10048. Copies may be obtained upon payment of the Commission's prescribed
fees by writing to its principal office at 450 Fifth Street, N.W., Washington,
D.C. 20549, or through the Commission's website (http://www.sec.gov).
Although neither the Parent nor the Purchaser believes, as of the date of
this Offer To Purchase, that statements contained herein based upon such
documents are untrue in any material respect, none of the Parent, the Purchaser
or the Information Agent assumes any responsibility for the accuracy or
completeness of the information concerning the Company, furnished by the Company
or contained in the documents and records referred to herein or for any failure
by the Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to the
Parent and the Purchaser.
9. CERTAIN INFORMATION CONCERNING THE PARENT, THE PURCHASER AND THE PURCHASER'S
STOCKHOLDERS
The Parent is a French societe anonyme, with its principal executive offices
located at 1, rue Leon Migaux, 91341 Massy, France. The Parent, through its
wholly and partially owned companies, is both a leading integrated international
provider of geophysical services and software products, and a leading
manufacturer of geophysical equipment. Its principal clients are oil and gas
companies that use seismic imaging to aid in exploration and development of
reserves.
For the year ended December 31, 1998, the Parent realized consolidated
revenues of $731.4 million and a net loss of $43.4 million. Its aggregate market
capitalization as of December 31, 1998 (number of outstanding shares times
market price as of December 31, 1998) was approximately $295.8 million
(converted into U.S. dollars based on the Noon Buying Rate of December 31,
1998). The Parent's ordinary shares are listed on the monthly settlement market
of the Premier Marche of the Paris Bourse, and the Parent's American Depositary
Shares are listed on the New York Stock Exchange under the symbol "GGY". The
name, age, business address, citizenship, present principal occupation and
employment history for the past five years of each of the executive officers and
directors of the Parent and the Purchaser are set forth on Schedule I.
The Purchaser, a Nevada corporation, was organized to acquire all of the
Shares pursuant to the Offer and the Merger and has not conducted any unrelated
activities since its organization. All of the outstanding capital stock of the
Purchaser is owned directly by Sercel, Inc. and indirectly by the Parent. The
principal executive offices of the Purchaser are part of the principal executive
offices of Sercel, Inc. Sercel, Inc. is an Oklahoma corporation with its
principal executive offices located at 17155 Park Row, Houston, Texas 77084.
Sercel, Inc. is owned 100% by CGG Americas, Inc.
CGG Americas, Inc. ("CGG Americas") is a Texas corporation, with its
principal executive offices located at 16430 Park Ten Place, Houston, Texas
77084 and is owned 40% by Sercel Holding S.A. and 60% by the Parent. Sercel
Holding S.A. is a French limited liability company registered in the Registrar
of Commerce of Nantes, with its principal executive offices located at 16, rue
de Bel-Air, 44470 Carquefou, Loire Atlantique and is wholly owned by the Parent.
14
<PAGE>
HISTORICAL FINANCIAL INFORMATION
The Parent is subject to the informational filing requirements of a foreign
private issuer under the Exchange Act. Certain selected consolidated financial
information for the Parent that is excerpted from the Parent's Annual Report on
Form 20-F for the fiscal year ended December 31, 1998 (the "Parent 20-F") is set
forth below. More comprehensive financial information relating to the Parent is
included in the Parent 20-F. The Parent 20-F, as well as all reports and other
documents filed with the Commission by the Parent since the date of the Parent
20-F, if any, are incorporated herein by reference. Such reports and other
documents should be available for inspection and copies should be obtainable
from the offices of the Commission in the same manner as set forth under the
caption "Available Information" in Section 8 above.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(In millions)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------
1998 1998 1997 1996 1995 1994
--------- ---------- ---------- ---------- --------- ---------
USD(1) FRF FRF FRF FRF FRF
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
- ---------------------------------
Operating revenues............... 731.4 4,086.6 4,593.3 3,073.8 2,528.9 2,504.5
Net income (loss)................ (43.4) (242.7) 153.3 2.4 (119.8) (274.8)
Weighted average number of shares
outstanding.................... 5.1 5.1 4.6 3.5 3.1 3.1
Weighted average number of ADS's
outstanding.................... 25.3 25.3 23.0 -- -- --
Dividends per share.............. -- -- -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1998 1997 1996
------------ ------------ ------------ ------------
USD(1) FRF FRF FRF
<S> <C> <C> <C> <C>
BALANCE SHEET DATA
- --------------------------------------------
Property, plant, vessels and equipment...... 169.1 944.8 773.3 689.5
Working capital (2)......................... 83.4 466.2 657.9 326.2
Long term debt and bank overdrafts.......... 125.7 702.4 821.8 687.3
Cash and cash equivalents................... 35.3 197.0 603.3 212.0
Shareholder's equity........................ 196.0 1,095.1 1,349.2 644.1
Total assets................................ 596.9 3,335.2 3,666.1 2,619.7
</TABLE>
- ------------------------
(1) US dollar amounts have been translated solely for the convenience of the
reader at an exchange rate of FRF 5.587 to US $1.00, the Noon Buying Rate in
New York City on December 31, 1998.
(2) Consists of trade accounts and notes receivable, inventories and work-in
progress and other current assets less trade accounts and notes payable,
accrued payroll costs, income tax payable, advance billings to customers and
other current liabilities.
Except as set forth elsewhere in this Offer To Purchase or Schedule I
hereto, (a) neither the Parent nor the Purchaser nor, to the knowledge of the
Parent or the Purchaser, any of the persons listed in Schedule I hereto or any
associate or majority-owned subsidiary of the Parent or the Purchaser or any of
the persons so listed, beneficially owns or has a right to acquire any Shares or
any other equity securities of the Company, has effected any transaction in the
Shares or any other equity securities of the Company during the past 60 days, or
has any contract, arrangement, understanding or relationship with any other
person with respect to any securities of the Company (including any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any such securities, joint ventures, loan or option
15
<PAGE>
arrangements, puts or calls, guarantees of loans, guarantees against loss or the
giving or withholding of proxies, consents or authorizations), (b) there have
been no transactions which would require reporting under the rules and
regulations of the Commission between the Parent or the Purchaser or any of
their respective subsidiaries or, to the knowledge of the Parent or the
Purchaser, any of the persons listed in Schedule I hereto, on the one hand, and
the Company or any of its executive officers, directors or affiliates, on the
other hand, and (c) there have been no contacts, negotiations or transactions
between the Parent or the Purchaser or any of their respective subsidiaries or,
to the knowledge of the Parent or the Purchaser, any of the persons listed in
Schedule I hereto, on the one hand, and the Company or its subsidiaries or
affiliates, on the other hand, concerning a merger, consolidation or
acquisition, a tender offer or other acquisition of securities, an election of
directors or a sale or other transfer of a material amount of assets. One of the
directors of the Parent, Pierre Jacquard, in his capacity as the Chairman of
Institut Francais du Petrole ("IFP"), has negotiated and executed an agreement
with, among others, the Company's primary subsidiary, Syntron, Inc., to develop
and market a seismic data acquisition system. This agreement between IFP and the
Company, among others, was executed in March 1990 and remains in effect. In
addition, the Parent and the Company conduct business with each other in the
ordinary course.
10. SOURCE AND AMOUNT OF FUNDS
Based on information furnished to the Parent and the Purchaser, the total
number of Shares outstanding as of October 28, 1999 was 9,985,350. Based
thereon, the total amount payable in respect of the Shares and the Options
pursuant to the Offer and the Merger and to pay the Purchaser's and the Parent's
related fees and expenses is approximately $74 million. The funds required to
purchase the Shares tendered pursuant to the Offer will be provided to the
Purchaser in the form of capital contributions or advances made by the Parent.
Concurrently with the execution of the Merger Agreement, the Parent and
Beacon Group Energy Investment Fund II, L.P. ("Beacon") entered into a
subscription agreement (the "Subscription Agreement") pursuant to which, subject
to the satisfaction of the conditions stated therein (including certain
necessary approvals), the Parent will issue and Beacon, or an affiliate or
affiliates of Beacon, will purchase shares of the Parent having an aggregate
value of the Euro equivalent of at least $87 million (the "Beacon Financing").
The proceeds of the Beacon Financing will be used by the Parent primarily to
finance or cause to be financed the Offer, the Merger and the transactions
contemplated by the Merger Agreement and any good and valid corporate purpose of
the Parent. The Parent also intends to commence during November 1999 a rights
offering to the Parent's existing stockholders (the "Rights Offering"). The
Offer is conditioned upon, among other things, the Parent having funds available
to it from the Beacon Financing sufficient to consummate the Offer and the
Merger and the Parent having received aggregate gross proceeds of at least FRF
300 million (approximately 46 million Euros as of the date of the Merger
Agreement) in the Rights Offering. See Section 14.
THE SUBSCRIPTION AGREEMENT. Pursuant to the Subscription Agreement, the
Parent has agreed to issue and Beacon has agreed to purchase a number of the
Parent's ordinary shares determined by dividing the Euro equivalent of
$87 million by the average 20-trading day market price of the Parent's ordinary
shares immediately prior to the date of the Subscription Agreement, adjusted to
take into account the dilution resulting from the Rights Offering. The
obligation of Beacon to purchase the shares is conditioned upon, among other
things, the (a) accuracy at the closing date of the Subscription Agreement of
the representations and warranties made by the Parent in the Subscription
Agreement, (b) performance by the Parent on or prior to the closing date of all
obligations and compliance with all covenants contained in the Subscription
Agreement, (c) consummation by the Parent of the Rights Offering and the receipt
of gross proceeds therefrom of at least 75 million Euros, (d) absence of any
order, law, rule or regulation prohibiting or restricting the subscription of
shares by Beacon or any proceeding before any governmental authority of similar
effect, (e) completion of all necessary actions to register the shares on the
Paris Bourse (other than actions that, by their terms, must occur after the
closing), (f) approval by the Parent's
16
<PAGE>
stockholders of the capital increase necessitated by the Subscription Agreement
and waiver of the stockholders' preemptive rights, (g) expiration of the Offer
and satisfaction or waiver of all conditions thereto, except the condition
relating to the Parent having sufficient funds to consummate the Offer,
(h) payment of a financial advisory fee to Beacon by the Parent, (i) election of
Beacon's two nominees to the Parent's Board of Directors, (j) absence of any
order enjoining or restraining the transactions, and (k) absence of any
amendment or waiver of the material terms of the Parent's syndicated credit
facility or bridge loan facility.
In addition, the Parent has agreed that, among other things, it (a) will
not, without the prior written consent of Beacon, raise the Per Share Amount in
the Offer and the Merger, (b) will use its best efforts to obtain gross proceeds
of at least 90 million Euros, before payment of underwriters fees and
commission, under the Rights Offering, (c) will, except as consented to in
writing by Beacon, conduct its business in the ordinary course and not enter
into certain extraordinary transactions during the period from October 23, 1999
through the closing of the transactions contemplated by the Subscription
Agreement, and (d) will use the proceeds from the sale of these shares primarily
to fund the Offer and the Merger and any good and valid corporate purpose of the
Parent. The Subscription Agreement provides that if Beacon breaches the
Subscription Agreement and as a result the Parent cannot consummate the Offer
and becomes obligated to pay a termination fee under the Merger Agreement,
Beacon will pay such termination fee (not to exceed $1.5 million) as liquidated
damages.
THE RIGHTS OFFERING. Prior to the Expiration Date, the Parent intends to
offer the current holders of its shares the right to purchase additional shares
and the current holders of its American Depositary Shares (each an "ADS") (each
ADS represents one-fifth of one share) the right to purchase additional ADSs
(collectively, the "Rights"). The Parent's stockholders will be able to trade
their share rights on the Paris BOURSE if they choose not to exercise them. If
fully subscribed, the Parent expects to realize gross proceeds of between
75 million to 90 million Euros pursuant to the Rights Offering. The ADS rights
will be exercisable for a certain time period during November, 1999 and the
share rights will be exercisable and tradable for a certain time period during
November, 1999. In both cases the Rights will terminate prior to the Expiration
Date. If the Rights are not exercised during the applicable time period, the
ADSs and shares underlying the Rights will be offered for sale to investors in
an underwritten offering. The Parent's principal stockholders (which as of
September 15, 1999 collectively owned approximately 25.45% of the outstanding
shares) have indicated their intention to participate in the Rights Offering. As
of the date of this Offer To Purchase, the Commission had not declared the
registration statement, pursuant to which these securities will be registered
for sale in the United States, effective and the Parent makes no representation
that the Commission will declare the registration statement effective or that
the Commission will do so in time for the Offer to be completed. The Offer is
conditioned upon, among other things, the Parent receiving at least FRF
300 million (approximately 46 million Euros as of the date of the Merger
Agreement) in the Rights Offering.
11. BACKGROUND OF THE OFFER
From time to time, representatives of the Parent and the Company conducted
discussions in the ordinary course of business and in respect of possible
transactions.
In 1995 and again in 1997, representatives of the Parent discussed with the
managements of the Company and the Majority Stockholder the possibility of a
strategic alliance between Sercel and the Company's subsidiary Syntron, Inc. The
purposes of the alliance would have been to develop jointly a new marine seismic
data acquisition system and to cooperatively market both marine and land seismic
acquisition systems. In order to facilitate the purposes of the alliance, the
Parent expressed interest in exchanging shares of the Parent or Sercel for
shares in the Company or purchasing from the Company newly issued shares. On
both occasions, those discussions terminated, largely because of the inability
of the parties to agree on the relative value of the companies, the structure
for the transaction, or the control of the companies.
17
<PAGE>
In July, 1998, Mr. Yves Lesage, the Chairman and Chief Executive Officer of
the Parent, contacted Wendell W. Gamel, Chairman of the Board of the Majority
Stockholder, and J. Michael Camp, who had just been elected as the President and
Chief Executive Officer of the Majority Stockholder. In Paris, France, on
July 23, 1998 Messrs. Lesage, Camp and Richard F. Miles, President of the
Company, exchanged ideas about the possible combination of Sercel and Syntron,
Inc. However, subsequent discussions terminated when the seismic exploration
industry suffered a sharp decline in August, 1998 due to the fall in global
crude oil prices.
In December, 1998, the Board of Directors of the Company and the Majority
Stockholder received an unsolicited offer from Core Laboratories, N.V. to
acquire the Company. During the following weeks, representatives of the Company
negotiated with representatives of Core Laboratories and on January 18, 1999,
Core Laboratories, the Company and the Majority Stockholder executed a
definitive merger agreement providing for the acquisition of the Company by Core
Laboratories. Under the terms of the merger agreement, the Company's
Stockholders would have received in the merger 0.6788 of a Core Laboratories
common share and $2.46 in cash for each Share owned by them at the time of the
merger (which implied a price of $17.90 per Share based on the closing price of
Core Laboratories's common shares on January 15, 1999).
The Majority Stockholder, the Company and Core Laboratories subsequently
terminated the proposed merger in March 1999. The Company reported that the
continuing malaise among marine oilfield service contractors, resulting in
possible reduced orders at Syntron, caused Core Laboratories to reassess the
proposed transaction. As part of the termination, Core Laboratories paid the
Company a $3.0 million termination fee through the cancellation of an equal
amount of working capital advances previously made by Core Laboratories to the
Company.
In June, 1999, representatives of Beacon held discussions with the Company's
management and the Majority Stockholder regarding a management-led buyout of the
Company to be financed by Beacon. From time to time during this period, Beacon
had a number of conversations with the Parent discussing various strategic
transactions involving the Parent, including a possible acquisition of the
Company. Those discussions resulted in the Company and Beacon entering into an
exclusivity agreement on September 22, 1999 that contemplated a possible
transaction involving (a) an acquisition of the Company for $75 million, $65
million of which would be payable in cash and $10 million of the consideration
payable to the Majority Stockholder in the form of a subordinated promissory
note, (b) the forgiveness of all Company intercompany payables to the Majority
Stockholder (approximately $5.8 million), and (c) the release of the Majority
Stockholder from all guarantees of the Company's current or future liabilities
(the "Beacon Exclusivity Arrangement"). Pursuant to the Beacon Exclusivity
Arrangement, the Company agreed to pay Beacon $350,000 and reimburse it for its
out-of-pocket expenses if the Company entered into another transaction during
the 45-day exclusivity period.
On September 28 and September 29, 1999, the Parent's management met with
Beacon to discuss their interest in the Parent acquiring the Company, utilizing
cash to be invested in the Parent by Beacon. At such time, the Parent was
preparing to launch the Rights Offering described above. After informally
consulting the members of the Parent's Board of Directors, the Parent's
management advised Beacon of its willingness to consider such an acquisition
substantially in accordance with the Beacon Exclusivity Arrangement.
A Beacon representative telephoned Mr. Camp on October 2, 1999 to advise him
that the Parent was interested in acquiring the Company, utilizing cash to be
invested in the Parent by Beacon. Mr. Camp was also advised that a condition to
Beacon's funding of the acquisition would be a successful share capital increase
by the Parent. After preliminary discussions, on October 4, 1999, Mr. Camp met
with a representative of Beacon and Thierry Le Roux, Senior Executive Vice
President of the Parent, to establish a schedule for due diligence and the
process by which a definitive agreement could be negotiated. The following day,
a meeting was held at Syntron, Inc., a subsidiary of the Company, with the
executive staffs of
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the Company and the Parent to begin the due diligence investigation process
which continued for more than two weeks.
Between October 6 and October 15, 1999, numerous meetings and discussions
were held between representatives of the Company, the Parent, Beacon and their
respective legal and financial advisors concerning various business and legal
issues with respect to the proposed transaction and the operations of the
Company.
On October 18, 1999, Mr. Camp and Mr. J. Rankin Tippins, the Vice President,
Secretary and General Counsel of the Company and the Majority Stockholder, met a
representative of Beacon and Mr. Le Roux, Jean-Maurice Dalongeville, Chief
Financial Officer of Sercel S.A., Pascal Rouiller, Chief Operating Officer of
Sercel, S.A., Valerie Fery, an in-house attorney at the Parent, and Mr. George
Wood, Executive Vice President of the Parent's subsidiary, Sercel, Inc., at the
offices of Sercel to finalize all business issues regarding the form of the
proposed acquisition. In addition to the value of the Company, the issues
discussed included the Majority Stockholder's willingness to indemnify the
Parent for various matters relating to the Company, the Parent's willingness to
pay cash in lieu of a subordinated note, the implications of an election under
Section 338(h)(10) of the Internal Revenue Code to treat the transaction as an
asset sale, and the circumstances under which either the Parent or the Company
would be entitled to terminate the transaction and the consequences of any such
termination. The Majority Stockholder required that the Parent would make an
offer for all shares of the Company on terms and conditions no less favorable
than those that might be agreed for its majority interest. A telephone
conference with representatives of the Majority Stockholder and the Parent
occurred to address remaining identified issues. During the negotiations that
followed, Mr. Camp agreed by telephone with Beacon and the Parent that the
purchase price would be reduced to $67 million since the Company had paid its
debts to the Majority Stockholder since the last published financial statement
and the $10 million subordinated note to the Majority Stockholder was
eliminated. The Majority Stockholder valued the transaction at approximately
$102 million when debt to be assumed or paid by the Parent was considered. At
the conclusion of such discussions, the parties agreed to recommend to their
respective Board of Directors an all cash offer for all Shares at the Per Share
Amount, or an aggregate of $67 million, and on the other terms and conditions
described herein.
On October 20, 1999, the Company Board received at a meeting of the Company
Board presentations from the Company's management and legal and financial
advisors regarding the Parent's offer and the proposed forms of Merger Agreement
and Shareholder Agreement. All of the members of the Company Board are
affiliated with the Majority Stockholder.
On October 22, 1999, the Parent's Board of Directors met to consider the
proposed acquisition of the Company and the Beacon Financing therefor and
received presentations from the Parent's management. After discussion, the
Parent's Board of Directors authorized the Parent to proceed with both
transactions, subject to the approval of the Beacon Financing by the Parent's
stockholders.
On October 22, 1999, the respective Boards of Directors of the Company and
the Majority Stockholder each met again to consider and approve the proposed
transaction. At its meeting, the Company Board considered the Company Financial
Advisor's Opinion that, as of that date and subject to the matters described by
it and set forth in the Opinion, the consideration to be received by the
Stockholders of the Company pursuant to the Merger Agreement was fair from a
financial point of view to the Stockholders of the Company. Following the
discussion, five members of the Company Board voted in favor of the transactions
contemplated by the Merger Agreement and one member voted against.
On October 23, 1999, Mr. Camp, representatives of the Parent and
representatives of Beacon and the parties' respective legal advisors met and
signed the definitive agreements. On October 26, 1999, the Parent and the
Company jointly announced that they had entered into the Merger Agreement. The
Offer was formally commenced on the date of this Offer To Purchase.
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For additional information regarding the background of the Offer and the
Merger, see "Item 4. The Solicitation or Recommendation--Reasons for the
Recommendation; Background of the Merger and Offer" in the Company's
Schedule 14D-9 being furnished to Stockholders contemporaneously with this Offer
To Purchase.
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY; THE MERGER
AGREEMENT; THE SHAREHOLDER AGREEMENT; OTHER MATTERS
PURPOSE OF THE OFFER AND THE MERGER. The purpose of the Offer and the
Merger is to enable the Purchaser to acquire the entire equity interest in the
Company. The Offer is intended to increase the likelihood that the Merger will
be completed promptly.
The Company represented to the Parent and the Purchaser in the Merger
Agreement that (a) the Company Board (at a meeting duly called and held on
October 22, 1999) (1) determined that the Merger Agreement, the Offer and the
Merger are in the best interests of the Stockholders, (2) approved the Merger
Agreement and the transactions contemplated thereby, including the Offer and the
Merger, (3) took all other action necessary to render the limitations on control
share acquisitions and business combinations contained in Sections 78.378
through 78.3793 and Sections 78.411 through 78.444 of Nevada Law (or any similar
provision) inapplicable to the transactions, including the Offer, the Merger
Agreement, the Shareholder Agreement and the Merger, and (4) resolved to
recommend acceptance of the Offer and approval of the Merger by the Stockholders
and adoption of the Merger Agreement by the Stockholders and (b) the Company
Financial Advisor delivered to the Company Board its opinion as investment
bankers that the consideration to be received by the Stockholders pursuant to
the Offer and the Merger is fair to the Stockholders from a financial point of
view.
PLANS FOR THE COMPANY. Following consummation of the Merger, the Parent
presently intends to operate the Company as an indirect subsidiary under the
name "Syntron Corporation." However, the Parent will conduct a further review of
the Company and its subsidiaries and their respective assets, businesses,
corporate structure, capitalization, operations, properties, policies,
management and personnel. In particular, the Parent will consider how the
businesses of the Company and its Subsidiaries might be integrated with the
businesses of the Parent, CGG Americas, Sercel, its subsidiaries and other
Parent subsidiaries. After such review, the Parent will determine what actions
or changes, if any, would be desirable in light of the circumstances which then
exist, and reserves the right to effect actions or changes that are not
otherwise described in this Offer To Purchase. The Parent's decisions could be
affected by information hereafter obtained, changes in general economic or
market conditions or in the business of the Company or its subsidiaries, actions
by the Company or its subsidiaries and other factors.
Except as otherwise described in this Offer To Purchase or described in the
immediately preceding paragraph, the Purchaser, the Parent and the directors and
executive officers of the Purchaser and the Parent listed on Schedule I have no
current plans or proposals that would result in (a) an extraordinary corporate
transaction, such as a merger, reorganization, liquidation or sale or transfer
of a material amount of assets involving the Company or any of its subsidiaries,
(b) a sale or transfer of a material amount of the assets of the Company or any
of its subsidiaries, (c) any material change in the present Company Board or
management of the Company, (d) any material change in the present capitalization
or dividend policy of the Company, (e) any material change in the Company's
corporate structure or business, (f) causing a class of securities of the
Company to be delisted from a national securities exchange or to cease to be
authorized to be quoted in an interdealer quotation system of a registered
national securities association, or (g) a class of equity securities of the
Company becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Exchange Act.
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THE MERGER AGREEMENT
The summary of the material terms of the Merger Agreement that follows is
qualified in its entirety by reference to the complete text of the Merger
Agreement, a copy of which has been filed with the Commission as an exhibit to
the Schedule 14D-1 and is incorporated herein by reference. This summary may not
contain all the information that is important to you. Accordingly, the Merger
Agreement should be read in its entirety for a more complete description of the
matters summarized below. The Merger Agreement may be examined and copies
obtained from the offices of the Commission in the same manner set forth in
Section 8 above. Defined terms used below and not defined have the respective
meanings assigned to those terms in the Merger Agreement.
THE OFFER. The Merger Agreement contemplates the commencement of the Offer
and prescribes conditions to the consummation of the Offer. For a description of
the Offer Conditions, see Section 14. Assuming the prior satisfaction or waiver
of the Offer Conditions, the Parent will cause the Purchaser to accept for
payment, and pay for, in accordance with the terms of the Offer, all Shares
validly tendered and not withdrawn pursuant to the Offer as soon as practicable
after the Expiration Date or any extension thereof.
THE MERGER. The Merger Agreement provides that, on the terms and subject to
the conditions of the Merger Agreement and Nevada Law, at the Effective Time,
the Purchaser will be merged with and into the Company. In the event the
Purchaser acquires at least 90% of the Shares in the Offer, the Parent may elect
at its sole discretion instead to merge the Company into the Purchaser, which
would not require the approval of the Company's Stockholders under Nevada Law.
In either case, the directors and officers of the Purchaser immediately prior to
the Effective Time will be the directors and officers of the Surviving
Corporation, in each case until their successors are elected or appointed and
qualified or until their earlier death, resignation or removal.
CONVERSION OF SHARES. At the Effective Time, by virtue of the Merger and
without any action on the part of any Stockholder, each Share (except Shares
held in the Company treasury and Shares owned by the Parent or any of its
Subsidiaries, which will be canceled and no consideration will be paid with
respect thereto) issued and outstanding immediately before the Effective Time
will be converted into the right to receive the Per Share Amount, or such higher
per share amount as is paid in the Offer. At the Effective Time, each share of
common stock of the Purchaser will be converted into one share of common stock
of the Surviving Corporation. As a result of the Merger, the Company will become
an indirect, wholly owned subsidiary of the Parent.
STOCK OPTION PLANS AND OPTIONS. The Merger Agreement provides that the
Company will use its reasonable best efforts to provide that, at the Effective
Time, each holder of a then-outstanding option to purchase Shares under any of
the Company's stock option plans, whether or not then exercisable, will, in
settlement thereof, receive from the Company for each Share subject to such
Option an amount (subject to any applicable withholding tax) in cash equal to
the difference between the Merger Consideration and the per Share exercise price
of such Option to the extent such difference is a positive number (the "Option
Consideration"). All Options will be terminated as of the Effective Time and
thereafter represent only the right to receive the Option Consideration. No
Option Consideration will be paid with respect to any Option unless, at or prior
to the time of such payment, such Option is canceled and the holder of such
Option has executed and delivered a release of any and all rights the holder had
or may have had in respect of such Option. The Company has agreed to use its
reasonable best efforts to assure that following the Effective Time no holder of
Options shall have the right to acquire equity securities of the Company, the
Surviving Corporation or any subsidiary and to terminate all Options and rights
to do so.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Pursuant to the Merger
Agreement, the Company has made representations and warranties about, among
other things, (a) the organization, corporate powers and qualifications of the
Company and each of its Subsidiaries, (b) the corporate power and authority to
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enter into the Merger Agreement and to consummate the transactions contemplated
by the Merger Agreement, (c) the capitalization of the Company, (d) the
Company's Subsidiaries, (e) interests in other companies, (f) the absence of any
conflicts, breaches or defaults triggered by the Merger Agreement and the
transactions contemplated by the Merger Agreement, (g) its compliance with Laws,
(h) the accuracy of the Company's documents filed with the Commission, (i) the
Company's financial statements and financial condition, (j) the absence of
certain litigation, (k) the absence of certain changes to the Company's
business, (l) Taxes, (m) Intellectual Property and real property,
(n) millennium compliance, (o) material contracts of the Company,
(p) compliance with Environmental Laws, (q) Company Benefit Plans and ERISA
compliance, and (r) brokerage or finders fees. Certain of the representations
and warranties of the Company will survive the Effective Time and may serve as
the basis of a claim for indemnification by the Parent from the Majority
Stockholder, subject to the terms, conditions and limitations set forth in the
Shareholder Agreement. See "The Shareholder Agreement-Rights to
Indemnification."
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE PURCHASER. Pursuant to
the Merger Agreement, the Parent and the Purchaser have made representations and
warranties about, among other things, (a) the organization, corporate powers and
qualifications of the Parent and the Purchaser, (b) the corporate power and
authority to execute and deliver the Merger Agreement and to consummate the
transactions contemplated by the Merger Agreement, (c) the absence of any
conflicts, breaches or defaults triggered by the Merger Agreement and the
transactions contemplated by the Merger Agreement, (d) the absence of brokerage
or finders fees, (e) the accuracy of documents filed by the Parent with the
Commission, (f) the Parent's financial statements, and (g) the financing of the
Offer and the Merger. None of the representations and warranties of the Parent
or the Purchaser will survive the Effective Time.
CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The completion
of the Merger depends upon the satisfaction of a number of customary conditions,
including completion of the Offer in accordance with the terms of the Merger
Agreement, approval of the Merger by the Company's Stockholders in the manner
required by Nevada Law, and the absence of any legal restraint preventing
consummation of the Merger.
COVENANTS. The Merger Agreement requires the Company and its Subsidiaries,
from the date of the Merger Agreement until the Effective Time, to operate their
respective businesses in the ordinary course and to use their reasonable efforts
to preserve intact their business organizations, to keep available the services
of their present officers and other key employees and to preserve their
relationships with all key customers, suppliers and other Persons having
business dealings with them. The Merger Agreement restricts the Company from
entering into certain types of transactions outside the ordinary course of
business without the consent of the Parent, including, among others, paying
dividends, making changes in its capital structure, redeeming its capital stock,
issuing additional shares of capital stock or rights to acquire its capital
stock, amending its organizational documents, making material dispositions of
assets, incurring certain additional indebtedness, amending its employee benefit
or compensation plans, permitting liens on its property or assets and entering
into or amending certain material contracts.
EMPLOYEE BENEFITS. The Merger Agreement provides that, for a one year
period from the Effective Time, the Surviving Corporation will provide benefits
to the employees of the Company and its Subsidiaries that are not materially
less favorable in the aggregate than those currently provided by the Company
(other than those related to the equity securities of the Company). Participants
will be credited with their service with the Company in determining their right
to participate and vesting under any successor employee plans.
DIRECTORS. Promptly upon the purchase of Shares pursuant to the Offer, the
Parent will be entitled to designate such number of directors, rounded up to the
next whole number, as will give the Parent representation on the Company Board
(including committees of the Company Board) that is proportionate to its
ownership interest in the Company, subject to compliance with Section 14(f) of
the Exchange Act. Notwithstanding the foregoing, at all times prior to the
Effective Time, the Company Board will include at least two directors of the
Company who are currently directors of the Company (the
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"Continuing Directors"). After the appointment of the Parent's designees to the
Company Board, all decisions on behalf of the Company with respect to the Merger
Agreement or any amendment of the Articles of Incorporation or By-laws of the
Company must be approved by a majority of the Continuing Directors.
AGREEMENT TO DEFEND AND INDEMNIFY. The Surviving Corporation will assume
all obligations to indemnify the current or former directors or officers of the
Company and its Subsidiaries for acts or omissions occurring at or prior to the
Effective Time. The Company and the Surviving Corporation, as applicable, have
agreed to maintain in effect for not less than six years after the Offer
Completion Date policies of directors' and officers' liability insurance
equivalent in all material respects to those maintained by or on behalf of the
Company and its Subsidiaries on the date of the Merger Agreement, with annual
premiums not to exceed 150% of the annual premium currently paid by the Company
and its Subsidiaries for such insurance.
DIVIDENDS AND DISTRIBUTIONS. If between the date of the Merger Agreement
and the Effective Time the outstanding Shares have been changed into a different
number of shares or a different class, by reason of any stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares, the amount payable in the Offer will be correspondingly adjusted on a
per-share basis to reflect such stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares. The Merger Agreement
provides that the Company and its Subsidiaries will not without the prior
written consent of the Parent (a) declare, set aside or pay any dividends on, or
make any other distributions in respect of, any of its capital 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, (c) issue, deliver, sell, pledge
or otherwise encumber any shares of its capital stock, any other voting
securities or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities, or (d) redeem, purchase or otherwise acquire any shares of capital
stock of the Company or any of its Subsidiaries or any other securities thereof
or any rights, warrants or options to acquire any such shares or other
securities.
NO SOLICITATION. The Merger Agreement requires the Company, its affiliates
and their respective representatives to cease any existing discussions or
negotiations immediately with any parties with respect to any Company Takeover
Proposal. In addition, the Company has agreed not to, and to not permit its
Subsidiaries to, solicit, initiate, encourage (including, without limitation, by
way of furnishing information), participate in any discussions or negotiations,
or take any other action designed or reasonably likely to facilitate, any
inquiries or the making of any proposal which constitutes or reasonably may give
rise to any Company Takeover Proposal, other than if the failure to do so would
result in a breach of the Company Board's fiduciary duties to the Stockholders
under applicable Law. If the Company Board receives a Company Takeover Proposal
that it did not solicit and that did not result from the breach of any of the
provisions in the Merger Agreement by the Company and that it determines in good
faith is a Superior Proposal, the Company Board may furnish information and
participate in negotiations regarding such Superior Proposal. If the Company
Board determines that the failure to accept such Superior Proposal would result
in a breach of its fiduciary obligations under applicable Law, the Company Board
may withdraw or modify its recommendation or approval of the Offer, the Merger
or the Merger Agreement, terminate the Merger Agreement and/or approve or
recommend a Superior Proposal. The Company, however, must provide the Parent
with at least five business days' notice of its intention to terminate the
Merger Agreement and information regarding the terms of any Superior Proposal to
enable the Parent the opportunity to modify its proposal so that such
alternative proposal would no longer be a Superior Proposal. The taking of
certain actions in connection with a Company Takeover Proposal will result in
the payment by the Company of a $1.5 million termination fee under certain
circumstances. See "--Termination Fees."
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TERMINATION. The Merger Agreement may be terminated at any time whether or
not the Company Stockholder Approval or the Parent Stockholder Approval has been
obtained, by the mutual consent of the Parent and the Company, or by action of
the Board of Directors of either party under the following circumstances:
- The Merger is not completed by February 15, 2000 (the "Outside Date"),
other than due to the breach of the terminating party, provided that the
Outside Date will be extended to March 31, 2000 if the Merger has not
occurred by February 15, 2000 because (a) any applicable Antitrust
Approvals or waiting periods under the HSR Act or the antitrust laws of
the European Union or any member country thereof have not been obtained or
have not expired, as the case may be, or (b) at least 90% of the Voting
Securities were not validly tendered (and not withdrawn) in the Offer; or
- A court or other Governmental Entity enjoins, restrains or otherwise
prohibits the Offer, the Merger or any of the other transactions
contemplated by the Merger Agreement pursuant to a final, nonappealable
order; or
- The Offer is not consummated due to the failure of any of the Offer
Conditions (See Section 14); or
- The other party is in material breach of its representations and
warranties contained in the Merger Agreement and such party has not cured
such breach within 15 days after written notice of such breach and such
breach could reasonably be expected to have a material adverse effect on
the business, assets, financial condition or results of operations of the
breaching party; or
- The other party is in material breach of its covenants under the Merger
Agreement and such party has not cured such breach within 15 days after
written notice of such breach.
In addition, the Company may terminate the Merger Agreement as described above
under "No Solicitation" and the Parent may terminate the Merger Agreement if:
- The Company Board authorizes or causes the Company to enter into an
agreement with respect to a Company Takeover Proposal; or
- The Company Board changes in a manner adverse to the Parent, withdraws or
fails to reconfirm its recommendation of the Merger; or
- The Company approves or recommends a Company Takeover Proposal; or
- The Company Board resolves to withdraw or modify its recommendation or
approve or recommend a Company Takeover Proposal; or
- The Company or any of its officers, directors, employees, representatives
or agents materially breaches the "No Solicitation" covenant; or
- The Parent's stockholders shall not have approved the reserved capital
increase necessary to consummate the Beacon Financing (the "Parent
Stockholder Approval").
TERMINATION FEES. The Company is required to pay the Parent a termination
fee of $1.5 million in any of the following circumstances set forth in items 1
through 5 below:
1. The Company terminates the Merger Agreement as described under "No
Solicitation" above; or
2. The Parent terminates the Merger Agreement because the Company Board
accepts, or enters into, an agreement with respect to a Company Takeover
Proposal or the Company Board changes in a manner adverse to the Parent,
withdraws or fails to reconfirm its recommendation of the Offer or the
Merger or approves or recommends a Company Takeover Proposal; or
3. The Parent terminates the Merger Agreement because the Company violates
the "No Solicitation" provisions described above; or
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4. The Parent terminates the Merger Agreement because the Merger has not
occurred prior to the Outside Date or the Offer has not been consummated
as a result of the failure of any of the Offer Conditions and each of the
following clauses (a), (b) and (c) shall be true:
(a) At the time of such termination:
- The Minimum Condition has not been satisfied; and
- The Parent Stockholder Approval and the approval of the Parent's Board
of Directors of the capital increase necessary to consummate the Rights
Offering have been obtained; and
- The Company is in breach of its representations, warranties or
covenants under the Merger Agreement or there shall have occurred a
material adverse change in the Company or the Company's senior lender
shall have failed to extend the termination date of its loans to the
Company to the Offer Completion Date so as to result in any such case
in a failure of one of the Offer Conditions; and
- The Parent and the Purchaser are not in breach of their
representations, warranties or covenants under the Merger Agreement so
as to give the Company a right to terminate the Merger Agreement; and
(b) Prior to such termination, a Company Takeover Proposal or an intention
to make a Company Takeover Proposal shall have been publicly disclosed;
and
(c) Prior to such termination or within six months after such termination,
the Company or any Subsidiary shall have entered into a Company
Acquisition Agreement or closed a Company Takeover Proposal; or
5. The Parent terminates the Merger Agreement because the Company is in
material breach of any of its representations, warranties or covenants
and at the time of the termination (a) a Company Takeover Proposal or an
intention to make a Company Takeover Proposal had been publicly disclosed
and (b) prior to or within six months from the termination a Company
Acquisition Agreement is entered into or a Company Takeover Proposal is
closed.
The Parent is required to pay the Company a termination fee of $1.5 million
if all of the following have occurred:
- The Merger Agreement is terminated either (a) by the Parent or the Company
because the Offer has not been consummated prior to the Outside Date or
(b) by the Parent because the Parent Stockholder Approval was not
obtained; and
- At the time of such termination any Financing Condition shall not have
been satisfied; and
- At the time of such termination the Parent is not entitled to terminate
the Merger Agreement due to a material breach by the Company of its
representations, warranties or covenants under the Merger Agreement or
under circumstances relating to a Company Takeover Proposal or a change in
the recommendation of the Company Board (in each case, as described under
"--Termination" above).
AMENDMENT. The Merger Agreement may be amended by the Company, the Parent
and the Purchaser, by action taken by their respective Boards of Directors (or
similar governing bodies), at any time before or after approval by the
Stockholders of matters presented in connection with the Merger. Notwithstanding
the foregoing, after any such Stockholder approval, no amendment may be made
which by Law requires the further approval of the Stockholders without obtaining
such further approval.
WAIVER. Subject to the limitations set forth in the Merger Agreement, at
any time prior to the Effective Time, any party to the Merger Agreement may
(a) extend the time for the performance of any of the obligations or other acts
of the other parties, (b) waive any inaccuracies in the representations and
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warranties or in any document delivered under the Merger Agreement, and
(c) waive compliance with any of the agreements or conditions.
THE SHAREHOLDER AGREEMENT
The following is a summary of the material terms of the Shareholder
Agreement and is qualified in its entirety by reference to the complete text of
the Shareholder Agreement, a copy of which is filed with the Commission as an
exhibit to the Schedule 14D-1 and is incorporated herein by reference. This
summary may not contain all the information that is important to you.
Accordingly, the Shareholder Agreement should be read in its entirety for a more
complete description of the matters summarized below. The Shareholder Agreement
may be examined, and copies obtained from the offices of the Commission in the
same manner as set forth in Section 8 above. Defined terms used below and not
defined have the respective meanings assigned to those terms in the Shareholder
Agreement.
In connection with the execution of the Merger Agreement, the Majority
Stockholder, the Purchaser and the Parent have entered into the Shareholder
Agreement. The Majority Stockholder beneficially owns 80.1% of the currently
outstanding Shares and 73.3% of the Shares calculated on a fully diluted basis
as of the date hereof. All of the Shares beneficially owned by the Majority
Stockholder, including any Shares acquired by the Majority Stockholder and its
affiliates after the date of the Shareholder Agreement (collectively, the "Offer
Shares"), are subject to the terms of the Shareholder Agreement.
SALE OF SHARES. The Majority Stockholder has agreed to tender, pursuant to
and in accordance with the terms of the Offer, all of the Offer Shares not later
than the fifth Business Day after commencement of the Offer, and to not withdraw
such Shares. In the event that, notwithstanding the foregoing sentence, any
Offer Shares are for any reason withdrawn from the Offer or are not purchased
pursuant to the Offer, such Offer Shares will remain subject to the terms of the
Shareholder Agreement.
PROXY. The Majority Stockholder has granted the Parent, the Purchaser or
any nominee thereof, an irrevocable proxy to vote all the Shares the Majority
Stockholder beneficially owns at the time of such vote, (a) in favor of the
approval and adoption of the Merger Agreement and approval of the Merger and the
other transactions contemplated thereby and (b) against (1) any Company Takeover
Proposal, (2) any action or agreement that would result in a breach in any
respect of any covenant, agreement, representation or warranty of the Company
under the Merger Agreement, and (3) certain material transactions or other
actions that could reasonably be expected to impede, interfere with, delay,
postpone or adversely affect the Merger and the other transactions contemplated
by the Shareholder Agreement and the Merger Agreement.
THE PARENT OPTION. The Majority Stockholder has granted the Parent an
irrevocable option to purchase for cash any or all of the Shares beneficially
owned by the Majority Stockholder at the Per Share Amount (the "Parent Option").
Subject to the closing conditions set forth above, the Parent Option may be
exercised by the Parent, in whole or in part, if (a) the Majority Stockholder
has not validly tendered, or has withdrawn, the Majority Stockholder's Shares
prior to the Expiration Date or (b) the Merger Agreement becomes terminable
under circumstances that could entitle the Parent to termination fees
(regardless of whether the Merger Agreement is actually terminated). The Parent
Option terminates upon termination of the Merger Agreement; however, if such
termination arose under circumstances that could entitle the Parent to receive
the Company Termination Fee, the Parent Option will not terminate until
180 days after such termination of the Merger Agreement. The 180-day period
referred to above will be extended in order to obtain any required Regulatory or
Antitrust Approvals that, if not obtained, would have the effect of making the
purchase of the Majority Stockholder's Shares illegal.
The obligation of the Majority Stockholder to sell the Shares to the Parent
or the Parent's nominee is subject to the conditions that (a) all waiting
periods for the Antitrust Approvals have expired or have been terminated,
(b) all Regulatory Approvals have been obtained or made, the failure of which to
have
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obtained or made would have the effect of making the purchase of Shares by the
Parent or the Parent's nominee illegal, and (c) no preliminary or permanent
injunction or other order by any court of competent jurisdiction prohibiting or
otherwise restraining such sale or acquisition is in effect.
SHARE TRANSACTIONS. During the term of the Shareholder Agreement, the
Majority Stockholder has agreed not to take certain actions that could frustrate
the performance by the Majority Stockholder of its obligations under the
Shareholder Agreement, including, among others, accepting any tender or exchange
offer for the Shares (other than the Offer) or otherwise selling, transferring,
pledging, assigning, hypothecating or otherwise disposing of, or encumbering
with any Lien, any of the Shares, or depositing the Shares into a voting trust,
entering into a voting agreement or arrangement with respect to the Shares, or
granting any proxy or power of attorney with respect to the Shares, except
pursuant to the Shareholder Agreement.
NO SOLICITATION. The Majority Stockholder has agreed not to solicit,
participate in any negotiations or discussions regarding, initiate or encourage
submission of proposals or offers from any Person relating to, or that could
reasonably be expected to lead to, any Company Takeover Proposal. The Majority
Stockholder has agreed to advise the Parent immediately in writing of the
receipt of request for information or any inquiries or proposals relating to any
Company Takeover Proposal.
RELATED TRANSACTIONS. The Parent has agreed that, within five business days
after a majority of the Company Board is comprised of the Parent's designees, it
shall (a) deliver to the Majority Stockholder releases from the guarantees given
by the Majority Stockholder to lenders under two of the Company's bank credit
facilities and (b) pay, or cause to be paid, all amounts owed by the Company to
the Majority Stockholder for loans made, if any, by the Majority Stockholder to
the Company after the date of the Shareholder Agreement and all amounts owed by
the Company to the Majority Stockholder pursuant to the terms of the Corporate
Services Agreement and the Tax Allocation Agreement entered into between the
Majority Stockholder and the Company in May 1996.
TAX ELECTION. The Majority Stockholder and the Purchaser have agreed to
join in a timely election pursuant to Section 338(h)(10) of the Internal Revenue
Code (and under any comparable provision of any state or local law) ("338(h)(10)
Election") with respect to the Shares and each target affiliate, as such term is
defined in Section 338(h)(6) of the Internal Revenue Code, of the Company
("Target Affiliate"), the effect of which will be that the purchase of the
Shares by the Purchaser will be treated as a sale of assets by the Company and
each Target Affiliate for federal income tax purposes and for applicable state
and local tax purposes. Any tax liability arising with respect to the 338(h)(10)
Election will be the responsibility of the Majority Stockholder.
RIGHTS TO INDEMNIFICATION. The Majority Stockholder has agreed to indemnify
the Parent, the Purchaser and their respective affiliates for (i) breach of any
representation, warranty or covenant of the Majority Stockholder in the
Shareholder Agreement, (ii) breach of any covenant of the Company in the Merger
Agreement, (iii) breach by the Company of its representations and warranties in
the Merger Agreement as to organization, authority and good standing;
authorization and effectiveness of the Merger Agreement; the Company's capital
structure; the Company's Subsidiaries and other interests; the Company's
Commission filings and financial statements; litigation; required approvals; and
brokers and finders fees, and (iv) subject to individual exceptions, claims by
Persons who are not employees of the Company or any of its Subsidiaries
resulting from the termination of their Options as of the Effective Time. The
Majority Stockholder's obligation to indemnify the Parent, the Purchaser and
their respective affiliates for breaches of the Company's representations and
warranties under the Merger Agreement applies only with respect to claims
asserted prior to April 30, 2001. The Majority Stockholder has no such liability
unless the aggregate damages of the Parent and its affiliates resulting from a
breach of such representations and warranties exceeds $500,000. The Majority
Stockholder's aggregate liability for breaches of the Company's representations
and warranties is limited to $10 million.
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The Parent and the Purchaser have agreed to indemnify the Majority
Stockholder and its respective affiliates for damages resulting from the breach
of any representation, warranty or covenant of the Parent or the Purchaser
contained in the Merger Agreement or the Shareholder Agreement. Parent and
Purchaser have also agreed to indemnify, reimburse and hold harmless the
Majority Stockholder and its affiliates from and against all damages asserted
against or incurred by the Majority Stockholder and its affiliates, and for all
payments made or required to be made by the Majority Stockholder and its
affiliates, in respect of any of the guarantees issued by the Majority
Stockholder with respect to indebtedness of the Company to the extent such
damages or payments arise out of (1) the change in control of the Company due to
the consummation of the Offer or the Merger or (2) events occurring after a
majority of the Company Board is comprised of the Parent's designees (other than
damages arising from a Company breach prior to such change in the Company
Board).
OTHER MATTERS
EFFECTS OF INABILITY TO CONSUMMATE THE MERGER. If the Parent controls more
than a majority of the outstanding Shares following the consummation of the
Offer, but the Merger is not consummated, the other Stockholders will lack
sufficient voting power to elect directors or to cause other actions to be taken
which require majority approval. If for any reason following completion of the
Offer, the Merger is not consummated, the Parent and the Purchaser reserve the
right, subject to any applicable legal restrictions, to acquire additional
Shares through private purchases, market transactions, tender or exchange offers
or otherwise on terms and at prices that may be more or less favorable than
those of the Offer or, subject to any applicable legal restrictions, to dispose
of any or all Shares acquired by the Parent and the Purchaser.
STATUTORY REQUIREMENTS. In general, under Nevada Law a merger of two Nevada
corporations requires the adoption and approval by the board of directors of
each of the two constituent corporations and by the affirmative vote of the
holders of at least a majority of all the outstanding shares of stock of each
constituent corporation entitled to vote on such merger. According to the
Company's Articles of Incorporation, the Shares are the only securities of the
Company which entitle the holders thereof to voting rights.
Nevada Law also provides that if a parent company owns at least 90% of each
class of stock of a subsidiary, the parent company can effect a short-form
merger in which that subsidiary merges into the parent company without the
action of the other stockholders of the subsidiary. Accordingly, if, as a result
of the Offer or otherwise, the Purchaser acquires or controls the voting power
of at least 90% of the Shares, the Purchaser could, and intends to, subject to
tax consequences of such election, effect a merger of the Company into the
Purchaser without prior notice to, or any action by, any other Stockholder.
DISSENTERS' RIGHTS. No dissenters' or appraisal rights are available in
connection with the Offer or the Merger under Nevada Law unless the Shares are
no longer quoted on Nasdaq at the time of the Merger. In such case, Stockholders
would be entitled to dissent from the Merger and demand fair value of the Shares
subject to compliance with Nevada Law.
GOING PRIVATE TRANSACTIONS. The Commission has adopted Rule 13e-3 under the
Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer in
which the Purchaser seeks to acquire the remaining Shares not held by it.
However, the Purchaser believes that Rule 13e-3 will be inapplicable because it
is anticipated that (a) the Shares will be deregistered under the Exchange Act
prior to the Merger or other business combination or (b) the Merger or other
business combination will be consummated within one year after the purchase of
the Shares pursuant to the Offer and the amount paid per Share in the Merger or
other business combination is at least equal to the amount paid per Share in the
Offer. If applicable, Rule 13e-3 would require, among other things, that certain
financial information regarding the Company and certain information regarding
the fairness of the Merger
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and the consideration offered to minority Stockholders be filed with the
Commission and disclosed to minority Stockholders prior to consummation of the
Merger.
13. DIVIDENDS AND DISTRIBUTIONS
If between the date of the Merger Agreement and the Effective Time, the
outstanding Shares have been changed into a different number of shares or a
different class, by reason of any stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares, the amount payable
in the Offer will be correspondingly adjusted on a per-share basis to reflect
such stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares.
The Merger Agreement provides that the Company and its Subsidiaries will not
without the prior written consent of the Parent (a) declare, set aside or pay
any dividends on, or make any other distributions in respect of, any of its
capital 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, (c) issue, deliver, sell,
pledge or otherwise encumber any shares of its capital stock, any other voting
securities or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities, or (d) redeem, purchase or otherwise acquire any shares of capital
stock of the Company or any of its Subsidiaries or any other securities thereof
or any rights, warrants or options to acquire any such shares or other
securities.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, the Purchaser will not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) under the Exchange Act
(relating to the Purchaser's obligation to pay for or return tendered Shares
promptly after expiration or termination of the Offer), to pay for any Shares,
and (subject to any such rules or regulations) may postpone the acceptance for
payment or payment for any Shares tendered, and, subject to the terms of the
Merger Agreement, may amend or terminate the Offer (whether or not any Shares
have theretofore been purchased or paid for pursuant to the Offer) (a) unless
the following conditions have been satisfied: (1) the Minimum Condition and
(2) the Regulatory Approvals and the Antitrust Approvals or (b) if at any time
on or after the date of the Merger Agreement and before the Expiration Date
(whether or not any Shares have theretofore been accepted for payment or paid
for pursuant to the Offer), any of the following shall have occurred:
(1) Any Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order which is in effect and which
(i) restricts, prevents or prohibits consummation of the transactions
contemplated by any of the Merger Agreement, including the Offer or the
Merger, (ii) prohibits, limits or otherwise adversely affects the
ownership or operation by the Parent or any of its subsidiaries of all or
any material portion of the business or assets of the Company and its
subsidiaries or compels the Company, the Parent or any of their
subsidiaries to dispose of or hold separate all or any material portion
of the business or assets of the Company and its subsidiaries,
(iii) imposes material limitations on the ability of the Parent, the
Purchaser or any other Subsidiary of the Parent to exercise effectively
full rights of ownership of any Shares, including, without limitation,
the right to vote any Shares acquired by the Purchaser pursuant to the
Offer or otherwise on all matters properly presented to the Stockholders,
including, without limitation, the approval and adoption of the Merger
Agreement and the transactions contemplated thereby, or (iv) in
connection with the Offer or the Merger or the transactions contemplated
by the Merger Agreement, affects the Purchaser, the Company or any of
their respective affiliates in a manner which, in the sole judgment of
the Purchaser, may have or be likely to have a Company Material Adverse
Effect (as defined in the Merger Agreement) or a material adverse effect
on the Purchaser or any of its affiliates or otherwise makes consummation
of the Offer or the Merger or
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the consummation of the transactions contemplated by the Merger Agreement
unduly burdensome; or
(2) There shall be instituted or pending any action or proceeding
before any United States or foreign court or Governmental Entity by any
United States or foreign Governmental Entity seeking any order, decree or
injunction having any effect set forth in paragraph (1) above; or
(3) The representations and warranties of the Company contained in
this Agreement (i) that are qualified by materiality or Company Material
Adverse Effect shall not be so true and correct as of the Expiration Date
(as the same may be extended from time to time) and (ii) that are not
qualified by materiality or Company Material Adverse Effect shall not be
true and correct in all material respects as of the Expiration Date (as
the same may be extended from time to time), in each case as though made
anew on and as of such date (except for representations and warranties
made as of a specified date, which shall be so true and correct as of the
specified date); or
(4) The Company shall not have performed or complied in all material
respects with its covenants under the Merger Agreement and such failure
continues until the later of (i) 15 calendar days after actual receipt by
it of written notice from the Parent setting forth in reasonable detail
the nature of such failure or (ii) the Expiration Date; or
(5) There shall have occurred any material adverse change, or any
development that is reasonably likely to result in a material adverse
change, in the business, financial condition, results of operations or
prospects of the Company and its subsidiaries, taken as a whole, other
than any such material adverse effect resulting from (i) factors
generally affecting the marine seismic industry, the oil field services
industry or the United States economy, (ii) the exercise or threatened
exercise by Petroleum Geophysical Services ("PGS") of the option to
acquire a non-exclusive right to use certain intellectual property of the
Company as described in the After Sales Support Agreement, dated as of
January 4, 1995, between PGS and Syntron, Inc., a copy of which has been
provided by the Company to the Purchaser, or (iii) any failure by the
Company to meet any specific financial projections or any change in the
financial projections provided to the Purchaser or the Parent, or any of
their representatives or advisors, whether provided before or after the
date of the Merger Agreement, provided, however, that this clause (iii)
shall not exclude any material adverse effect resulting from any change,
effect, event or condition that has had or could reasonably be expected
to have a material adverse effect on the business, assets, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole; or
(6) The Merger Agreement shall have been terminated in accordance
with its terms; or
(7) The Company Board shall have (i) withdrawn or materially modified
or changed its recommendation of the Offer, the Merger or the Merger
Agreement (including by amendment of Schedule 14D-9) in a manner adverse
to the Purchaser or the Parent or failed to reconfirm its approval or
recommendation within five Business Days after a written request to do
so, (ii) approved or recommended, or proposed publicly to approve or
recommend, any Company Takeover Proposal, (iii) authorized or caused the
Company to enter into a Company Acquisition Agreement, or (iv) resolved
or publicly disclosed any intention to do any of the foregoing; or
(8) There shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the NYSE or the Paris
BOURSE, (ii) a decline of at least 20% in either the Dow Jones Average of
Industrial Stocks, the Standard & Poor's 500 Index or CAC-40 index from
the date of the Merger Agreement, (iii) the declaration of a banking
moratorium or any limitation or suspension of payments in respect of the
extension of credit by banks or other lending institutions in the United
States, (iv) any commencement of war, armed hostilities or other
international or national calamity directly involving the United States
or having a
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significant adverse effect on the functionality of financial markets in
the United States, or (v) in the case of any of the foregoing, existing
at the time of commencement of the Offer, a material acceleration or
worsening thereof; or
(9) The Parent Financing Approvals shall not have been obtained; or
(10) The Parent shall not have consummated the rights offering for
its ordinary shares in the United States and Europe with gross aggregate
proceeds of at least FRF 300,000,000 (approximately 46 million Euros as
of the date of the Merger Agreement) to the Parent; or
(11) At the time of the consummation of the Offer, the Parent shall
not have funds available to it from the Financing sufficient to
consummate the Offer and the Merger on the terms contemplated by the
Merger Agreement (the conditions referred to in paragraphs (9), (10) and
(11) are referred to herein collectively as the "Financing Conditions");
or
(12) The "Termination Date" under each of the Loan Agreement, dated
as of December 6, 1996 (as amended), between the Company and Wells Fargo
Bank (Texas), National Association, as agent, and the Loan Agreement,
dated as of December 6, 1996 (as amended), between Syntron, Inc. and
Wells Fargo Bank (Texas), National Association, as agent, shall not have
been extended to the Offer Completion Date.
The foregoing conditions are for the sole benefit of the Purchaser and its
Affiliates and may be asserted by the Purchaser, or the Parent on behalf of the
Purchaser, regardless of the circumstances (including, without limitation, any
action or inaction by the Purchaser or any of its Affiliates other than a
material breach by the Purchaser or the Parent of the Merger Agreement) giving
rise to any such condition or may be waived by the Purchaser, in whole or in
part, from time to time in its sole discretion, except as otherwise provided in
the Merger Agreement. The failure by the Purchaser at any time to exercise any
of the foregoing rights will not be deemed a waiver of any such right and each
such right will be deemed an ongoing right and may be asserted at any time and
from time to time. Any good faith determination by the Purchaser concerning any
of the events described herein will be final and binding.
The Purchaser acknowledges that the Commission believes that (a) if the
Purchaser is delayed in accepting the Shares it must either extend the Offer or
terminate the Offer and promptly return the Shares and (b) the circumstances in
which a delay in payment are permitted are limited and do not include
unsatisfied conditions of the Offer, except with respect to most required
regulatory approvals.
15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS
Except as described in this Offer To Purchase, based on a review of publicly
available filings made by the Company with the Commission and other publicly
available information concerning the Company, but without any independent
investigation, neither the Purchaser nor the Parent is aware of any license or
regulatory permit that appears to be material to the business of the Company and
its subsidiaries, taken as a whole, that might be adversely affected by the
Purchaser's acquisition of Shares as contemplated in this Offer To Purchase or
of any approval or other action by any governmental authority that would be
required for the acquisition or ownership of the Shares by the Purchaser as
contemplated in this Offer To Purchase. Should any approval or other action be
required, the Purchaser and the Parent presently contemplate that approval or
other action will be sought, except as described below under "State Takeover
Laws." There can be no assurance, however, that that approval or other action,
if needed, would be obtained or would be obtained without substantial conditions
or that failure to obtain any such approval or other action might not result in
consequences adverse to the Company's business or that certain parts of the
Company's business might not have to be disposed of if such approvals were not
obtained or other actions were not taken or in order to obtain any such approval
or other action. If certain types of adverse action are taken with respect to
the matters discussed below, the Purchaser could decline to accept for payment
or pay for any Shares tendered. See Section 14 above for certain conditions to
the Offer.
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STATE TAKEOVER LAWS. A number of states throughout the United States
(including Nevada where the Company is incorporated) have enacted takeover
statutes that purport, in varying degrees, to be applicable to attempts to
acquire securities of corporations that are incorporated or have assets,
stockholders, executive offices or places of business in those states. To the
extent that certain provisions of certain of these state takeover statutes
purport to apply to the Offer or the Merger, the Parent and the Purchaser
believe that such laws conflict with federal law and constitute an
unconstitutional burden on interstate commerce. In EDGAR V. MITE CORP., the
Supreme Court of the United States invalidated on constitutional grounds the
Illinois Business Takeover Act, which, as a matter of state securities law, made
certain corporate acquisitions more difficult. In CTS CORP. V. DYNAMICS CORP. OF
AMERICA, however, the Supreme Court of the United States held that a state may,
as a matter of corporate law and, in particular, those laws concerning corporate
governance, constitutionally disqualify a potential acquiror from voting on the
affairs of a target corporation without prior approval of the remaining
shareholders, provided that the laws were applicable only under certain
conditions. Subsequently, in TLX ACQUISITION CORP. V. TELEX CORP., a federal
district court in Oklahoma ruled that the Oklahoma statutes were
unconstitutional insofar as they apply to corporations incorporated outside
Oklahoma in that they would subject such corporations to inconsistent
regulations. Similarly, in TYSON FOODS, INC. V. MCREYNOLDS, a Federal district
court in Tennessee ruled that four Tennessee takeover statutes were
unconstitutional as applied to corporations incorporated outside Tennessee. This
decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a Federal district court in Florida held, in GRAND
METROPOLITAN PLC V. BUTTERWORTH, that the provisions of the Florida Affiliated
Transactions Act and Florida Control Share Acquisition Act were unconstitutional
as applied to corporations incorporated outside of Florida.
The Purchaser has not attempted to comply with any state takeover statutes
in connection with the Offer or the Merger although, pursuant to the Merger
Agreement, the Company has represented that the Company Board has taken
appropriate action to render Sections 78.378 through 78.3793 inclusive, and
Sections 78.411 through 78.444 inclusive of Nevada Law inapplicable to the
Offer, the Merger, the Merger Agreement and the transactions contemplated by the
Merger Agreement. The Purchaser reserves the right to challenge the validity or
applicability of any state law allegedly applicable to the Offer or the Merger,
and nothing in this Offer To Purchase nor any action taken in connection
herewith is intended as a waiver of that right. In the event that it is asserted
that one or more state takeover statutes apply to the Offer or the Merger, and
it is not determined by an appropriate court that such statute or statutes do
not apply or are invalid as applied to the Offer or the Merger, as applicable,
the Purchaser may be required to file certain documents with, or receive
approvals from, the relevant state authorities, and the Purchaser might be
unable to accept for payment or purchase Shares tendered pursuant to the Offer
or be delayed in continuing or consummating the Offer. In that case, the
Purchaser may not be obligated to accept for purchase, or pay for, any Shares
tendered. See Section 14.
ANTITRUST. Under the provisions of the HSR Act applicable to the Offer, the
purchase of Shares under the Offer may be consummated following the expiration
of a 15-calendar-day waiting period following the filing by the Purchaser of a
Notification and Report Form with respect to the Offer, unless the Purchaser
receives a request for additional information or documentary material from the
Antitrust Division of the United States Department of Justice (the "Antitrust
Division") or the Federal Trade Commission (the "FTC") or unless early
termination of the waiting period is granted. Such filing is expected to be made
as soon as practicable after the date of this Offer To Purchase. If, however,
within the initial 15-day waiting period, either the Antitrust Division or the
FTC requests additional information or documentary material from the Purchaser
concerning the Offer, the waiting period will be extended and would expire
11:59 p.m., New York City time, on the tenth calendar day after the date of
substantial compliance by the Purchaser with such request. Only one extension of
the waiting period pursuant to a request for additional information is
authorized by the HSR Act. Thereafter, the waiting period may be extended only
by court order or with the consent of the Purchaser. In practice, complying with
a request for additional information or documentary material can take a
significant amount of time. In addition, if the Antitrust Division or the FTC
raises substantive issues in connection with a proposed transaction, the parties
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frequently engage in negotiations with the relevant governmental agency
concerning possible means of addressing those issues and may agree to delay
consummation of the transaction while the negotiations continue. The Offer is
conditioned on, among other things, the expiration of all HSR waiting periods.
See Section 14.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions, such as the Purchaser's proposed acquisition
of the Company. At any time before or after the Purchaser's purchase of Shares
pursuant to the Offer, the Antitrust Division or the FTC could take such action
under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the consummation of the Merger or seeking the divestiture of Shares
acquired by the Purchaser or the divestiture of substantial assets of the Parent
or its subsidiaries, or the Company or its subsidiaries. Private parties may
also bring legal action under the antitrust laws under certain circumstances.
While the Parent and the Purchaser believe that the Offer and the Merger do not
involve a violation of antitrust laws, there can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if such a
challenge is made, of the result of that challenge. See Section 14 for certain
conditions to the Offer, including conditions with respect to litigation.
FOREIGN APPROVALS. The Parent is a foreign corporation and conducts
business in a number of foreign countries and jurisdictions. In connection with
the acquisition of the Shares pursuant to the Offer or the Merger, the laws of
certain of those foreign countries and jurisdictions may require the filing of
information with, or the obtaining of the approval or consent of, governmental
authorities in such countries and jurisdictions. The governments in such
countries and jurisdictions might attempt to impose additional conditions on the
Parent's operations conducted in such countries and jurisdictions as a result of
the acquisition of the Shares pursuant to the Offer or the Merger. If such
approvals or consents are found to be required, the parties intend to make the
appropriate filings and applications. In the event such a filing or application
is made for the requisite foreign approvals or consents, there can be no
assurance that such approvals or consents will be granted and, if such approvals
or consents are received, there can be no assurance as to the date of such
approvals or consents.
16. FEES AND EXPENSES
MacKenzie Partners, Inc. has been retained by the Purchaser as Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telex, telegraph and personal interview and may
request brokers, dealers and other nominee stockholders to forward material
relating to the Offer to beneficial owners of Shares. The Purchaser will pay the
Information Agent customary compensation for such services in addition to
reimbursing the Information Agent for reasonable out-of-pocket expenses in
connection therewith.
In addition, Continental Stock Transfer & Trust Company has been retained as
the Depositary. The Purchaser will pay the Depositary customary compensation for
its services in connection with the Offer, will reimburse the Depositary for its
reasonable out-of-pocket expenses in connection therewith and will indemnify the
Depositary against certain liabilities and expenses in connection therewith,
including certain liabilities under the federal securities laws.
Except as set forth above, neither the Parent nor the Purchaser will pay any
fees or commissions to any broker dealer or other person for soliciting tenders
of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies and other nominees will, upon request, be reimbursed by the Parent or
the Purchaser for customary clerical and mailing expenses incurred by them in
forwarding offering materials to their customers.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) Stockholders residing in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in
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compliance with the securities, blue sky or other laws of the jurisdiction.
However, the Purchaser may, in its discretion, take such action as it may deem
necessary to make the Offer in any jurisdiction and extend the Offer to
Stockholders in that jurisdiction. In any jurisdiction where the securities,
blue sky or other laws require the Offer to be made by a licensed broker or
dealer, the Offer will be deemed to be made on behalf of the Purchaser by one or
more registered brokers or dealers that are licensed under the laws of the
jurisdiction.
The Purchaser has filed with the Commission the Schedule 14D-1 pursuant to
Rule 14d-1 under the Exchange Act containing certain additional information with
respect to the Offer. The Schedule 14D-1 and any amendments to the
Schedule 14D-1, including exhibits, may be examined and copies may be obtained
from the principal office of the Commission in the manner set forth in
Section 8 above (except that they will not be available at the regional offices
of the Commission).
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PARENT OR THE PURCHASER NOT CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, THE
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Neither the delivery of this Offer To Purchase nor any purchase pursuant to
the Offer will under any circumstances create any implication that there has
been no change in the affairs of the Parent, the Purchaser, the Company or any
of their respective subsidiaries since the date as of which information is
furnished or the date of this Offer To Purchase.
SERCEL ACQUISITION CORP.
October 29, 1999
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE PARENT AND THE PURCHASER
A. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARENT
The following table sets forth the name, age, present principal occupation
or employment and material occupations, positions, offices or employment for the
past five years of each director and executive officer of the Parent. Unless
otherwise indicated below, (1) each individual has held his or her positions for
more than the past five years, (2) the business address of each person is 1, rue
Leon Migaux, 91341 Massy, France, and (3) each individual is a citizen of the
Republic of France.
DIRECTORS:
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND FIVE-YEAR EMPLOYMENT BUSINESS ADDRESS IF OTHER
NAME AND AGE HISTORY THAN AS SET FORTH ABOVE
- ------------ ----------------------------------- -----------------------------
<S> <C> <C>
Robert Brunck, 50............ Chairman and Chief Executive
Officer of the Parent
(1999-Present); Vice Chairman and
President of the Parent
(1998-1999); President and Chief
Operating Officer of the Parent
(1995-1998); Vice President of
Administration and Development of
the Parent (1991-1995).
ISIS (represented by Jacques Executive Vice President of ISIS, a 4, Avenue de Bous-Preau
Burger), 61................ subsidiary of Institut Francais du BP 314, 92506
Petrole (IFP), an agency of the Rueil-Malmaison
French government (1996-Present). France
Director for drilling and
production of IFP (1993-1996).
Jean Dunand, 59.............. Financial and legal director of 4, Avenue de Bous-Preau
ISIS (1999-Present); Deputy General BP 314, 92506
Manager of the Upstream division of Rueil-Malmaison
Total Fina, S.A. (1994-1999) France
Robert Castaigne, 53......... Chief Financial Officer of Total
Fina, S.A. (1994-Present).
Pierre Jacquard, 64.......... President and Chief Executive 4, Avenue de Bous-Preau
Officer of ISIS (1999-Present); BP 314, 92506
Chairman and President of IFP Rueil-Malmaison
(1995-Present); General Manager of France
IFP (prior to 1995).
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND FIVE-YEAR EMPLOYMENT BUSINESS ADDRESS IF OTHER
NAME AND AGE HISTORY THAN AS SET FORTH ABOVE
- ------------ ----------------------------------- -----------------------------
<S> <C> <C>
Christian Marbach, 62........ Advisor to the General Management
of Suez-Lyonnais des Eaux
(1996-Present); Chairman and Chief
Executive Officer of Coflexip Stena
Offshore (1995-1996); Chairman and
Chief Executive Officer of Coflexip
S.A.A. (1991-1995).
Jean-Pierre Marchand, 61..... Retired; Finance and International
Senior Executive Vice President of
Societe Generale S.A. (1997-1999);
Executive Vice President of Societe
Generale S.A. (1992-1997).
Roland Ruscher, 56........... Deputy Vice President of the
Exploration and Reservoir Division
of Total Fina, S.A. (1996-Present);
Executive President of the
Reservoir Engineering Division of
Total Fina, S.A. (1993 to 1996).
Bernard Yoncourt, 59......... Senior Executive Vice President of
ABN AMRO France (1997-Present);
President of UECIC (1996-1997);
General Secretary of Pinault
Printemps Redoute (1995-1996).
Yves Lesage, 62.............. Retired; Chairman of the Parent 54B Rue Alexandre Guilmant
(1995-1999); Chairman of SOGERAP 92190 Mendon
(1994-1995). France
</TABLE>
EXECUTIVE OFFICERS:
The following table sets forth the names of the current executive officers
of the Parent who serve as members of the Parent's Comite Executif and as
Secretary of the Comite Executif.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND FIVE-YEAR
NAME AND AGE EMPLOYMENT HISTORY
- ------------ --------------------------------------------------------
<S> <C>
Robert Brunck, 50............................ Chairman and Chief Executive Officer of the Parent
(1999-Present); Vice Chairman and President of the
Parent (1998-1999); President and Chief Operating
Officer of the Parent (1995-1998); Vice President of
Administration and Development of the Parent
(1991-1995).
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND FIVE-YEAR
NAME AND AGE EMPLOYMENT HISTORY
- ------------ --------------------------------------------------------
<S> <C>
Christian Lerat, 62.......................... Executive Vice President of the Parent (1996-Present);
Vice President of the Parent's Data Processing Product
line (1995-1996); Data Processing Product Manager
(1986-1995).
Gerard Chambovet, 46......................... Senior Executive Vice President of the Parent's
Geophysical Services (1998-Present); Executive Vice
President Acquisition Product line (1995-1998); Manager
of the Parent's data processing center in France and
Europe (1987-1995).
Thierry Le Roux, 45.......................... Senior Executive Vice President of the Parent's
Geophysical Equipment (1998-Present); Executive Vice
President of the Parent's Geophysical Equipment
(1995-1998); Business Development Manager (1992-1995).
Michel Ponthus, 53........................... Senior Executive Vice President, Administration &
Finance of the Parent (1998-Present); Group Chief
Financial Officer of the Parent (1995-1998);
Administrative and Financial Vice President of Petitjean
Industries (1990-1995).
Jean-Francois Marquaire, 39.................. Executive Vice President in charge of the Americas
1998-Present); the Parent's Executive Vice President of
Human Resources and Legal Affairs (1995-1998); General
Counsel (1990-1995).
Eric Deliac, 43.............................. Executive Vice President of Research/ Development and
Geoscience (1998-Present); Executive Vice President of
the Parent's Geoscience (1997-1998); Senior Executive
Vice President of Research and Development of Elf
Exploration and Production (1993-1997).
The Secretary of the Executive Committee (Comite Executif):
Christophe Pettenati-Auziere, 47............. Vice President, Offshore and Investors Relations
(1999-Present); Vice President of Business Development
and Investor Relations (1998-1999); Vice President of
Seismic Acquisition (1996-1998); Executive Vice
President International Operations of Coflexip
(1990-1996).
</TABLE>
I-3
<PAGE>
B. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER
The directors of the Purchaser are Thierry Le Roux and George Wood and the
executive officers of the Purchaser are Mr. Le Roux, President, and Mr. Wood,
Secretary and Treasurer. Mr. Le Roux is also an executive officer of the Parent.
Mr. Le Roux is a citizen of the Republic of France and Mr. Wood is a citizen of
the United States. Information concerning the present principal occupation or
employment and material occupation, positions, offices or employment for the
past five years of Mr. Le Roux is set forth above and of Mr. Wood is set forth
below.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND FIVE-YEAR
NAME AND AGE EMPLOYMENT HISTORY
- ------------ --------------------------------------------------------
<S> <C>
George Wood, 50.............................. Executive Vice President of Sercel, Inc. (1998-Present);
Vice President for Manufacturing and Product
Development, Tulsa, of Sercel, Inc. (1997-1998); Western
Geophysical, various positions (1994-1999).
</TABLE>
I-4
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal, properly
completed and duly signed, will be accepted. The Letter of Transmittal,
certificates for Shares and any other required documents should be sent or
delivered by each Stockholder or his broker, dealer, commercial bank, trust
company or other nominee to the Depositary at one of the addresses set forth
below:
THE DEPOSITARY FOR THE OFFER IS:
Continental Stock Transfer & Trust Company
Two Broadway, 19th Floor
Reorganization Department
New York, New York 10004
BY FACSIMILE TRANSMISSION:
(For Eligible Institutions only)
(212) 616-7610
For Information (call collect):
(212) 509-4000 x535
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone number listed below. Additional copies of
this Offer To Purchase, the Letter of Transmittal and other tender offer
materials may be obtained from the Information Agent as set forth below and will
be furnished promptly at the Purchaser's expense. You may also contact your
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
156 Fifth Avenue
New York, New York 10010
Phone: (212) 929-5500 (call collect)
or call toll free: (800) 322-2885
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
GEOSCIENCE CORPORATION
AT
$6.71 NET PER SHARE
BY
SERCEL ACQUISITION CORP.
A DIRECT, WHOLLY OWNED SUBSIDIARY
OF
SERCEL, INC.
AND
AN INDIRECT, WHOLLY OWNED SUBSIDIARY
OF
COMPAGNIE GENERALE DE GEOPHYSIQUE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, DECEMBER 10, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE DEPOSITARY FOR THE OFFER IS:
Continental Stock Transfer & Trust Company
- --------------------------------------------------------------------------------
Two Broadway, 19th Floor
Reorganization Department
New York, New York 10004
BY FACSIMILE TRANSMISSION:
(For Eligible Institutions only)
(212) 616-7610
FOR INFORMATION (CALL COLLECT):
(212) 509-4000 x 535
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE
DEPOSITARY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE
THEREFOR PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders of the Company
("Stockholders") either if certificates for Shares (as defined in the Offer To
Purchase, dated October 29, 1999 (the "Offer To Purchase")) are to be forwarded
herewith or, unless an Agent's Message (as defined in the Offer To Purchase) is
utilized, if tenders of Shares are to be made by book-entry transfer to an
account maintained by Continental Stock Transfer & Trust Company (the
"Depositary") at The Depository Trust Company ("DTC") (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in Section 3 of the Offer To
Purchase. Stockholders who tender Shares by book-entry transfer are referred to
herein as "Book-Entry Stockholders."
Stockholders whose certificates for such Shares (the "Share Certificates")
are not immediately available or who cannot deliver their Share Certificates and
all other required documents to the Depositary on or prior to the Expiration
Date (as defined in the Offer To Purchase) or who cannot complete the procedures
for book-entry transfer on a timely basis, must tender their Shares according to
the guaranteed delivery procedures set forth in Section 3 of the Offer To
Purchase. See Instruction 2.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY
DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE AND REVERSE BACK COVER. PLEASE
READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
<PAGE>
- --------------------------------------------------------------------------------
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
Account Number: ____________________________________________________________
Transaction Code Number:
----------------------------------------------------------------------------
/ / CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s): ___________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution that Guaranteed Delivery:
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXSHARE CERTIFICATE(S) AND SHARE(S) TENDERED
APPEAR(S) ON SHARE CERTIFI(ATTACH)ADDITIONAL LIST, IF NECESSARY)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NUMBER(S)*
SHARES OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
TOTAL SHARES
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, it will be assumed that all Shares represented
by Share Certificates delivered to the Depositary are being tendered. See
Instruction 4.
/ / Check here if Certificates have been lost or mutilated. See Instruction 11.
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Sercel Acquisition Corp. (the
"Purchaser"), a direct, wholly owned subsidiary of Sercel, Inc. and an indirect,
wholly owned subsidiary of Compagnie Generale de Geophysique (the "Parent"), the
above-described shares of common stock, par value $.01 per share (the "Shares"),
of GeoScience Corporation (the "Company") pursuant to the Purchaser's offer to
purchase all outstanding Shares at a price of $6.71 per Share, net to the seller
in cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer To Purchase, dated October 29, 1999, receipt of which is
hereby acknowledged, and in this Letter of Transmittal (which, together with the
Offer To Purchase, constitute the "Offer"). The undersigned understands that the
Purchaser reserves the right to transfer or assign, in whole or from time to
time in part, to one or more of the subsidiaries or affiliates of the Parent the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer, the undersigned hereby sells, assigns, and transfers
to, or upon the order of, the Purchaser all right, title and interest in and to
all of the Shares that are being tendered hereby and any and all dividends on
the Shares (including, without limitation, the issuance of additional Shares
pursuant to a stock dividend or stock split, the issuance of other securities,
the issuance of rights for the purchase of any securities, or any cash
dividends) that are declared or paid by the Company on or after the date of the
Offer To Purchase and are payable or distributable to Stockholders of record on
a date prior to the transfer into the name of the Purchaser or its nominees or
transferees on the Company's stock transfer records of the Shares purchased
pursuant to the Offer (collectively "Distributions"), and constitutes and
irrevocably appoints the Depositary the true and lawful agent, attorney-in-fact
and proxy of the undersigned to the full extent of the undersigned's rights with
respect to such Shares (and Distributions) with full power of substitution (such
power of attorney and proxy being deemed to be an irrevocable power coupled with
an interest), to (a) deliver Share Certificates (and Distributions), or transfer
ownership of such Shares on the account books maintained by the Book-Entry
Transfer Facility, together in either such case with all accompanying evidences
of transfer and authenticity, to or upon the order of the Purchaser upon receipt
by the Depositary, as the undersigned's agent, of the purchase price,
(b) present such Shares (and Distributions) for transfer on the books of the
Company, and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares (and Distributions), all in accordance with
the terms of the Offer.
The undersigned hereby irrevocably appoints designees of the Purchaser, each
of them individually, the attorneys-in-fact and proxies of the undersigned, each
with full power of substitution, to vote in such manner as each such attorney
and proxy or his or her substitute shall, in his or her sole discretion, deem
proper, and otherwise act (including pursuant to written consent) with respect
to all of the Shares (and Distributions) tendered hereby which have been
accepted for payment by the Purchaser prior to the time of such vote or action
which the undersigned is entitled to vote at any meeting of Stockholders
(whether annual or special and whether or not an adjourned meeting), or by
written consent in lieu of such meeting, or otherwise. This power of attorney
and proxy is coupled with an interest in the Company and in the Shares and is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by the Purchaser in accordance with the
terms of the Offer. Such acceptance for payment shall revoke, without further
action, any other power of attorney or proxy granted by the undersigned at any
time with respect to such Shares (and Distributions) and no subsequent powers of
attorney or proxies will be given (and if given will be deemed not to be
effective) with respect thereto by the undersigned. The undersigned understands
that the Purchaser reserves the right to require that, in order for Shares to be
deemed validly tendered, immediately upon the Purchaser's acceptance for payment
of such Shares, the Purchaser is able to exercise full voting rights with
respect to such Shares (and Distributions), including voting at any meeting of
Stockholders.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and Distributions) and that when the same are accepted for payment by
the Purchaser, the Purchaser will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and the same will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares tendered hereby (and
Distributions). In addition, the undersigned shall promptly remit and transfer
to the Depositary for the account of the Purchaser any and all other
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer and, pending such remittance or
appropriate assurance thereof, the Purchaser shall be entitled to all rights and
privileges as the owner of such Distributions and may withhold the entire
purchase price or deduct from the purchase price of Shares tendered hereby the
amount or value thereof, as determined by the Purchaser in its sole discretion.
3
<PAGE>
All authority herein conferred or herein agreed to be conferred shall not be
affected by, and shall survive, the death or incapacity of the undersigned and
any obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, legal representatives, successors and assigns of the
undersigned. Tenders of Shares pursuant to the Offer are irrevocable, except
that Shares tendered pursuant to the Offer may be withdrawn at any time on or
prior to the Expiration Date.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer To Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
The undersigned recognizes that, under certain circumstances set forth in
the Offer To Purchase, the Purchaser may not be required to accept for payment
any of the Shares tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
Certificates not tendered or accepted for payment in the name(s) of the
undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price and/or return any
Share Certificates not tendered or accepted for payment (and accompanying
documents as appropriate) to the undersigned at the address shown below the
undersigned's signature. In the event that both the "Special Delivery
Instructions" and the "Special Payment Instructions" are completed, please issue
the check for the purchase price and/or return any Share Certificates not
tendered or accepted for payment in the name(s) of, and deliver said check
and/or return said Share Certificates to, the person or persons so indicated.
Stockholders tendering Shares by book-entry transfer may request that any Shares
not accepted for payment be returned by crediting such account maintained at the
Book-Entry Transfer Facility. The undersigned recognizes that the Purchaser has
no obligation pursuant to the "Special Payment Instructions" to transfer any
Shares from the name of the registered holder thereof if the Purchaser does not
accept for payment any of such Shares.
4
<PAGE>
- ------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates not tendered or not purchased
and/or the check for the purchase price of Shares purchased are to be issued
in the name of someone other than the undersigned, or if Shares tendered by
book-entry transfer which are not purchased are to be returned by credit to
an account maintained at the Book-Entry Transfer Facility other than that
designated on the front cover.
Issue check and/or Share Certificate(s) to:
Name
------------------------------------------
(PLEASE TYPE OR PRINT)
Address
----------------------------------------
------------------------------------------------
------------------------------------------------
(INCLUDE ZIP CODE)
-------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9)
/ / Credit unpurchased Shares tendered by book-entry transfer to the
Book-Entry Transfer Facility
------------------------------------------------
(ACCOUNT NUMBER)
- ------------------------------------------------------------
- ------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 2, 4, 5 AND 6)
To be completed ONLY if Share Certificates not tendered or not purchased
and/or the check for the purchase price of Shares purchased are to be sent
to someone other than the undersigned, or to the undersigned at an address
other than that shown on the front cover.
Mail check and/or Share Certificate(s) to:
Name
------------------------------------------
(PLEASE TYPE OR PRINT)
Address
----------------------------------------
------------------------------------------------
------------------------------------------------
(INCLUDE ZIP CODE)
-------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9)
- -----------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
IMPORTANT--SIGN HERE
STOCKHOLDER SIGN HERE AND COMPLETE
SUBSTITUTE FORM W-9
________________________________________________________________________________
________________________________________________________________________________
SIGNATURES(S) OF HOLDERS(S)
Dated: ,
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the necessary information.
See Instruction 5.)
Name(s): _______________________________________________________________________
________________________________________________________________________________
(PLEASE PRINT)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ________________________________________________
Tax Identification or Social Security No.: _____________________________________
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: __________________________________________________________
Name (Please print): ___________________________________________________________
Title: _________________________________________________________________________
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ________________________________________________
Dated:
- --------------------------------------------------------------------------------
6
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (1) if this Letter of Transmittal is signed by the
registered holder(s) of the Shares tendered herewith (which term, for purposes
of this document, includes any participant in the Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares),
unless such holder(s) has completed either the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on the inside
front cover hereof or (2) if such Shares are tendered for the account of a firm
that is a bank, broker, dealer, credit union, savings association or other
entity which is a member in good standing of the Securities Transfer Agents
Medallion Program (an "Eligible Institution"). In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5. If the Share Certificates are registered in the
name of a person other than the signer of this Letter of Transmittal or if
payment is to be made or Share Certificates not tendered or not accepted for
payment are to be returned to a person other than the registered holder of the
Share Certificates tendered, then the tendered Share Certificates must be
endorsed or accompanied by duly executed stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
Share Certificates, with the signatures on the Share Certificates or stock
powers guaranteed by an Eligible Institution as provided in this Letter of
Transmittal. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or, unless an Agent's Message is utilized, if tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth in
Section 3 of the Offer To Purchase. Share Certificates, or timely confirmation
of a book-entry transfer (a "Book-Entry Confirmation") of such Shares into the
Depositary's account at the Book-Entry Transfer Facility, as well as this Letter
of Transmittal (or a facsimile hereof), properly completed and duly executed,
with any required signature guarantees, or an Agent's Message in the case of a
book-entry delivery, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth herein prior to the Expiration Date. Stockholders whose Share Certificates
are not immediately available or who cannot deliver their Share Certificates and
all other required documents to the Depositary prior to the Expiration Date or
who cannot complete the procedures for delivery by book-entry transfer on a
timely basis may tender their Shares by properly completing and duly executing a
Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set
forth in Section 3 of the Offer To Purchase. Pursuant to such procedure:
(1) such tender must be made by or through an Eligible Institution; (2) a
properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by the Purchaser, must be received by
the Depositary on or prior to the Expiration Date; and (3) the Share
Certificates (or a Book-Entry Confirmation) representing all tendered Shares, in
proper form for transfer together with a properly completed and duly executed
Letter of Transmittal (or a facsimile hereof), with any required signature
guarantees (or in the case of a book-entry delivery, an Agent's Message) and any
other documents required by this Letter of Transmittal, must be received by the
Depositary within three Nasdaq trading days after the date of execution of such
Notice of Guaranteed Delivery. A "Nasdaq trading day" is any day on which The
Nasdaq Stock Market, Inc.'s Nasdaq National Market is open for business. If
Share Certificates are forwarded separately to the Depositary, a properly
completed and duly executed Letter of Transmittal (or facsimile hereof) must
accompany each such delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted. The Per
Share Amount will be prorated for fractional Shares. All tendering Stockholders,
by execution of this Letter of Transmittal or facsimile hereof, waive any right
to receive any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and any other required
information should be listed on a separate schedule attached hereto and
separately signed on each page thereof in the same manner as this Letter of
Transmittal is signed.
7
<PAGE>
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares evidenced by any certificate submitted
are to be tendered, fill in the number of Shares that are to be tendered in the
box entitled "Number of Shares Tendered." In such case, new certificate(s) for
the remainder of the Shares that were evidenced by your old certificate(s) will
be sent to you, unless otherwise provided in the appropriate box marked "Special
Payment Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Shares
represented by Share Certificates delivered to the Depositary will be deemed to
have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the Share Certificate(s) without alteration, enlargement
or any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several Share
Certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of Share
Certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of Share Certificates or
separate stock powers are required unless payment is to be made to or Share
Certificates for Shares not tendered or purchased are to be issued in the name
of a person other than the registered owner(s). Signatures on such Share
Certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Shares listed, the Share Certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner(s) appear(s) on the Share
Certificates. Signatures on such Share Certificates or stock powers must be
guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if Share
Certificates for Shares not tendered or purchased are to be registered in the
name of, any person other than the registered holder(s), or if tendered Share
Certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder(s) or such person) payable on account
of the transfer to such person will be deducted from the purchase price received
by such holder(s) pursuant to this Offer (i.e., such purchase price will be
reduced) unless satisfactory evidence of the payment of such taxes or exemption
therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES LISTED IN THIS
LETTER OF TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of, and/or Share Certificates for unpurchased Shares are to be issued
in the name of, a person other than the signer of this Letter of Transmittal or
if a check is to be sent and/or such Share Certificates are to be returned to
someone other than the signer of this Letter of Transmittal or to an address
other than that shown on the front cover hereof, the appropriate boxes on this
Letter of Transmittal should be completed. Stockholders tendering Shares by
book-entry transfer (i.e., Book-Entry Stockholders) may request that Shares not
purchased be credited to such account maintained at the Book-Entry Transfer
Facility as such Book-Entry Stockholder may designate herein. If no such
instructions are given, such Shares not purchased will be returned by crediting
the account at the Book-Entry Transfer Facility designated above. See
Instruction 1.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance may
be directed to the Information Agent at its address set forth below. Requests
for additional copies of the Offer To Purchase and this Letter of Transmittal
may be directed to the Information Agent or to brokers, dealers, commercial
banks or trust companies. Such materials will be furnished at the Purchaser's
expense.
8
<PAGE>
9. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by the
Purchaser (subject to certain limitations in the Merger Agreement (as defined in
the Offer To Purchase)), in whole or in part, at any time or from time to time,
in the Purchaser's sole discretion.
10. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a Stockholder whose tendered Shares are accepted for payment is
required to provide the Depositary with such Stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary is
not provided with the correct TIN or an adequate basis for exemption, the
Internal Revenue Service may subject the Stockholder or other payee to a $50
penalty, and the gross proceeds of any payments that are made to such
Stockholder or other payee with respect to Shares purchased pursuant to the
Offer may be subject to 31% backup withholding. If withholding results in an
overpayment of taxes, a refund may be obtained.
Certain Stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such Stockholder must submit a complete Form W-8, "Certificate of
Foreign Status" signed under penalties of perjury, attesting to that
individual's exempt status. A Form W-8 can be obtained from the Depositary. See
the enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the Stockholder or other payee. Backup withholding is not
an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
To prevent backup withholding on payments that are made to a Stockholder
with respect to Shares purchased pursuant to the Offer, the Stockholder is
required to notify the Depositary of such Stockholder's correct TIN by
completing a Substitute Form W-9 certifying (a) that the TIN provided on
Substitute Form W-9 is correct (or that such Stockholder is awaiting a TIN) and
(b) that (1) such Stockholder is exempt from backup withholding or (2) such
Stockholder has not been notified by the Internal Revenue Service that such
Stockholder is subject to backup withholding as a result of a failure to report
all interest or dividends or (3) the Internal Revenue Service has notified such
Stockholder that such Stockholder is no longer subject to backup withholding.
Exempt Stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. To prevent possible erroneous backup withholding, an exempt
Stockholder must enter its correct TIN in Part 1 of Substitute Form W-9, write
"Exempt" in Part 2 of such form, and sign and date the form. See the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" (the "W-9 Guidelines") for additional instructions.
If you do not have a TIN, consult the W-9 Guidelines for instructions on
applying for a TIN, write "Applied For" in the space for the TIN in Part 1 of
the Substitute Form W-9, and sign and date the Substitute Form W-9 and the
Certificate of Awaiting Taxpayer Identification Number set forth herein. If you
do not provide your TIN to the Depositary within 60 days, backup withholding
will begin and continue until you furnish your TIN to the Depositary. NOTE:
WRITING "APPLIED FOR" ON THE FORM MEANS THAT YOU HAVE ALREADY APPLIED FOR A TIN
OR THAT YOU INTEND TO APPLY FOR ONE IN THE NEAR FUTURE.
Each Stockholder is required to give the Depositary the TIN of the record
owner of the Shares or of the last transferee appearing on the transfers
attached to, or endorsed on, the Shares. If the Shares are in more than one name
or are not in the name of the actual owner, consult the enclosed W-9 Guidelines
for additional guidance on which number to report.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Share Certificates have
been lost, destroyed or stolen, the Stockholder should promptly notify the
Depositary. The Stockholder will then be instructed as to the steps that must be
taken in order to replace the Share Certificate(s). This Letter of Transmittal
and related documents cannot be processed until the procedures for replacing
lost or destroyed Share Certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE COPY HEREOF) OR AN AGENT'S
MESSAGE TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF
BOOK-ENTRY TRANSFER OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE
OF GUARANTEED DELIVERY AND ALL OTHER REQUIRED DOCUMENTS MUST BE
RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE.
9
<PAGE>
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS OF SHARES
(SEE INSTRUCTION 10)
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
PAYOR'S NAME: CONTINENTAL STOCK TRANSFER & TRUST COMPANY
- ----------------------------------------------------------------------------------------------------
SUBSTITUTE PART I--PLEASE PROVIDE YOUR TIN TIN
FORM W-9 IN THE BOX AT RIGHT AND CERTIFY (SOCIAL SECURITY NUMBER OR
BY SIGNING AND DATING BELOW. EMPLOYER IDENTIFICATION NUMBER)
------------------------------------------------------------------
DEPARTMENT OF PART 2--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING (SEE
THE TREASURY INSTRUCTIONS)
INTERNAL
REVENUE SERVICE
------------------------------------------------------------------
PAYOR'S REQUEST FOR PART 3--CERTIFICATIONS--UNDER PENALTIES OF PERJURY, I CERTIFY
TAXPAYER'S IDENTIFICATION THAT: (1) The number shown on this form is my correct Taxpayer
NUMBER ("TIN") Identification Number (or I am waiting for a number to be issued
AND CERTIFICATION to me) and (2) I am not subject to backup withholding either
because: (a) I am exempt from backup withholding, or (b) I have
not been notified by the Internal Revenue Service (the "IRS") that
I am subject to backup withholding as a result of failure to
report all interest or dividends, or (c) the IRS has notified me
that I am no longer subject to backup withholding.
SIGNATURE DATE
- ----------------------------------------------------------------------------------------------------
</TABLE>
You must cross out item (2) above if you have been notified by the IRS that you
are subject to backup
withholding because of underreporting interest or dividends on your tax return.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR"
IN PART 1 OF SUBSTITUTE FORM W-9.
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I understand
that if I do not provide a taxpayer identification number to the payor within
60 days, 31% of all reportable payments made to me will be withheld.
SIGNATURE _________________________________________________________________ DATE
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
10
<PAGE>
MANUALLY SIGNED FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY
COMPLETED AND DULY EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, SHARE
CERTIFICATES AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY
EACH STOCKHOLDER OR HIS/HER BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR
OTHER NOMINEE TO THE DEPOSITARY AT ITS ADDRESS SET FORTH BELOW:
THE DEPOSITARY FOR THE OFFER IS:
Continental Stock Transfer & Trust Company
Two Broadway, 19th Floor
Reorganization Department
New York, New York 10004
BY FACSIMILE TRANSMISSION:
(For Eligible Institutions only)
(212) 509-616-7610
FOR INFORMATION (CALL COLLECT):
(212) 509-4000 x 535
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number listed below. Additional copies of the
Offer To Purchase, the Letter of Transmittal and other tender offer materials
may be obtained from the Information Agent as set forth below, and will be
furnished promptly at the Purchaser's expense. You may also contact your broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
156 FIFTH AVENUE
NEW YORK, NEW YORK 10010
PHONE: (212) 929-5500 (CALL COLLECT)
OR CALL TOLL FREE: (800) 322-2885
11
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
GEOSCIENCE CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Offer (as defined below) if certificates
representing shares of common stock, par value $.01 per share (the "Shares"), of
GeoScience Corporation (the "Company") are not immediately available or time
will not permit all required documents to reach Continental Stock Transfer &
Trust Company (the "Depositary") on or prior to the Expiration Date (as defined
in the Offer To Purchase), or the procedures for delivery by book-entry transfer
cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be
delivered by hand or sent by facsimile transmission or mailed to the Depositary.
See Section 3 of the Offer To Purchase.
THE DEPOSITARY FOR THE OFFER IS:
Continental Stock Transfer & Trust Company
Two Broadway, 19th Floor
Reorganization Department
New York, New York 10004
By Facsimile Transmission:
(For Eligible Institutions Only)
(212) 616-7610
For Information (call collect):
(212) 509-4000 x 535
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Sercel Acquisition Corp., a Nevada
corporation and a direct, wholly owned subsidiary of Sercel, Inc. and an
indirect, wholly owned subsidiary of Compagnie Generale de Geophysique, upon the
terms and subject to the conditions set forth in the Offer To Purchase, dated
October 29, 1999 (the "Offer To Purchase"), and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"), receipt of each of which is hereby
acknowledged, the number of Shares indicated below pursuant to the guaranteed
delivery procedures set forth in Section 3 of the Offer To Purchase.
Number of Shares: ______________________________________________________________
Certificate No(s). (if available): _____________________________________________
If Share(s) will be tendered by book-entry transfer, check the box. / /
Account Number: ________________________________________________________________
Date: ____________ Area Code and Telephone Number(s): _________________________
Name(s) of Record Holder(s): ___________________________________________________
(PLEASE PRINT)
Signature(s): __________________________________________________________________
Address(es): ___________________________________________________________________
(ZIP CODE)
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(Not to Be Used for Signature Guarantee)
The undersigned, a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program, hereby guarantees to deliver to
the Depositary at its address set forth above, either the certificates
representing all tendered Shares, in proper form for transfer, a Book-Entry
Confirmation (as defined in the Offer To Purchase), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or, in the case of book-entry delivery of
Shares, an Agent's Message (as defined in the Offer To Purchase), and any other
documents required by the Letter of Transmittal within three Nasdaq trading days
after the date of execution of this Notice of Guaranteed Delivery. A "Nasdaq
trading day" is any day on which The Nasdaq Stock Market, Inc.'s Nasdaq National
Market is open for business.
<TABLE>
<S> <C>
Name of Firm:
AUTHORIZED SIGNATURE
Address: Name:
TYPE OR PRINT
ZIP CODE Title:
Area Code and Telephone No.: Dated: ,
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
GEOSCIENCE CORPORATION
AT
$6.71 NET PER SHARE
BY
SERCEL ACQUISITION CORP.
A DIRECT, WHOLLY OWNED SUBSIDIARY
OF
SERCEL, INC.
AND
AN INDIRECT, WHOLLY OWNED SUBSIDIARY
OF
COMPAGNIE GENERALE DE GEOPHYSIQUE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, DECEMBER 10, 1999, UNLESS THE OFFER IS EXTENDED.
October 29, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Sercel Acquisition Corp. (the "Purchaser"), a
direct, wholly owned subsidiary of Sercel, Inc. and an indirect, wholly owned
subsidiary of Compagnie Generale de Geophysique (the "Parent"), to act as
Information Agent in connection with the Purchaser's offer to purchase all
outstanding shares of common stock, par value $.01 per share (the "Shares"), of
GeoScience Corporation (the "Company") at a purchase price of $6.71 per Share,
net to the seller in cash, without interest, on the terms and subject to the
conditions set forth in the Purchaser's Offer To Purchase, dated October 29,
1999, and the related Letter of Transmittal (which, together with any amendments
or supplements thereto, collectively constitute the "Offer"), enclosed herewith.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares in your name or in the name of your nominee.
Enclosed herewith for your information and for forwarding to your clients
are copies of the following documents:
1. Offer To Purchase, dated October 29, 1999.
2. Letter of Transmittal to tender Shares for your use and for the information
of your clients, together with Guidelines of the Internal Revenue Service
for Certification of Taxpayer Identification Number on Substitute Form W-9,
which provides information relating to backup federal income tax
withholding. Manually signed facsimile copies of the Letter of Transmittal
may be used to tender Shares.
3. A letter to holders of Shares ("Stockholders") from J. Michael Camp, Chief
Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9.
4. Notice of Guaranteed Delivery for Shares to be used to accept the Offer if
neither of the two procedures for tendering Shares set forth in the Offer To
Purchase can be completed on a timely basis.
5. A form of letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer.
6. A return envelope addressed to Continental Stock Transfer & Trust Company
(the "Depositary").
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, DECEMBER 10, 1999,
UNLESS THE OFFER IS EXTENDED.
<PAGE>
Please note the following:
1. The tender price is $6.71 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer To Purchase.
2. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in the
Offer To Purchase) that number of Shares that, together with any Shares to
be acquired by the Parent pursuant to the Shareholder Agreement (as defined
in the Offer To Purchase) and any Shares then owned by the Parent or any of
its subsidiaries, constitutes at least 70% of the Shares outstanding on a
fully diluted basis on the date of purchase. The Offer is also conditioned
on the Parent satisfying the Financing Conditions (as defined in the Offer
to Purchase). In addition, the Offer is subject to other conditions set
forth in the Offer To Purchase. See the Introduction and Sections 1, 12, 14
and 15 of the Offer To Purchase.
3. The Offer is being made for all of the outstanding Shares.
4. Tendering Stockholders will not be obligated to pay brokerage fees or
commissions to the Depositary or the Information Agent or, except as set
forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the
purchase of Shares by the Purchaser pursuant to the Offer. However, federal
income tax backup withholding at a rate of 31% may be required, unless an
exemption is provided or unless the required tax identification information
is provided. See Instruction 10 of the Letter of Transmittal.
5. The Offer and withdrawal rights will expire at 12:00 midnight, New York City
time, on Friday, December 10, 1999, unless the Offer is extended.
6. The Board of Directors of the Company has determined that the Offer and the
Merger (as such terms are defined in the Offer To Purchase) are fair to and
in the best interests of the Stockholders, approved the Offer and the Merger
and recommends that Stockholders accept the Offer and tender their Shares
pursuant to the Offer.
7. Notwithstanding any other provision of the Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by the Depositary of (a) certificates for Shares (the
"Certificates") or a timely Book-Entry Confirmation (as defined in the Offer
To Purchase) with respect to such Shares pursuant to the procedures set
forth in Section 3 of the Offer To Purchase, (b) the Letter of Transmittal
(or a manually signed facsimile thereof), properly completed and duly
executed with any required signature guarantees (or, in the case of
book-entry transfers, an Agent's Message), and (c) any other documents
required by the Letter of Transmittal. Accordingly, payment may not be made
to all tendering Stockholders at the same time depending upon when
Certificates for or confirmations of book-entry transfer of such Shares are
actually received by the Depositary.
In order to take advantage of the Offer, (a) a duly executed and properly
completed Letter of Transmittal (or a manually signed facsimile thereof) and any
required signature guarantees (or, in the case of book-entry transfers, an
Agent's Message) and any other required documents should be sent to the
Depositary and (b) either Certificates representing the tendered Shares or a
timely Book-Entry Confirmation (as defined in the Offer To Purchase) should be
delivered to the Depositary in accordance with the instructions set forth in the
Letter of Transmittal and the Offer To Purchase.
If Stockholders wish to tender their Shares, but it is impracticable for
them to forward the Certificates for such Shares or other required documents or
complete the procedures for book-entry transfer prior to the Expiration Date, a
tender may be effected by following the guaranteed delivery procedures specified
in Section 3 of the Offer To Purchase.
Neither the Purchaser nor the Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent and the
Depositary, as described in the Offer To Purchase) for soliciting tenders of
Shares pursuant to the Offer. The Purchaser will, however, upon
2
<PAGE>
request, reimburse you for customary mailing and handling expenses incurred by
you in forwarding any of the enclosed materials to your clients. The Purchaser
will pay or cause to be paid any stock transfer taxes payable on the transfer of
the Shares to it, except as otherwise provided in Instruction 6 of the Letter of
Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
MacKenzie Partners, Inc., the Information Agent, at its address and telephone
number set forth on the back cover of the Offer To Purchase. Additional copies
of the enclosed materials may be obtained from the Information Agent or from
brokers, dealers, commercial banks or trust companies.
Very truly yours,
MacKenzie Partners, Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF THE PURCHASER, THE PARENT, THE COMPANY, THE
INFORMATION AGENT, THE DEPOSITARY OR ANY AFFILIATE OF ANY OF THEM OR AUTHORIZE
YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF
ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED
HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
GEOSCIENCE CORPORATION
AT
$6.71 NET PER SHARE
BY
SERCEL ACQUISITION CORP.
A DIRECT, WHOLLY OWNED SUBSIDIARY
OF
SERCEL, INC.
AND
AN INDIRECT, WHOLLY OWNED SUBSIDIARY
OF
COMPAGNIE GENERALE DE GEOPHYSIQUE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK, CITY
TIME, ON FRIDAY, DECEMBER 10, 1999, UNLESS THE OFFER IS EXTENDED.
October 29, 1999
To Our Clients:
Enclosed for your consideration are the Offer To Purchase, dated
October 29, 1999 (the "Offer To Purchase"), and the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer") and other materials relating to the offer
by Sercel Acquisition Corp. (the "Purchaser"), a direct, wholly owned subsidiary
of Sercel, Inc. and an indirect, wholly owned subsidiary of Compagnie Generale
de Geophysique (the "Parent"), to purchase all outstanding shares of common
stock, par value $.01 per share (the "Shares"), of GeoScience Corporation (the
"Company") at a purchase price of $6.71 per Share, net to the seller in cash,
without interest, on the terms and subject to the conditions set forth in the
Offer To Purchase and the related Letter of Transmittal enclosed herewith.
Holders of Shares ("Stockholders") whose certificates for such Shares (the
"Certificates") are not immediately available or who cannot deliver their
Certificates and all other required documents to Continental Stock Transfer &
Trust Company (the "Depositary") or complete the procedures for book-entry
transfer on or prior to the Expiration Date (as defined in the Offer To
Purchase) must tender their Shares according to the guaranteed delivery
procedures set forth in Section 3 of the Offer To Purchase.
We are (or our nominee is) the holder of record of Shares held by us for
your account. A tender of such Shares can be made only by us as the holder of
record and pursuant to your instructions. The Letter of Transmittal accompanying
this letter is furnished to you for your information only and cannot be used by
you to tender Shares held by us for your account.
Accordingly, we request instructions as to whether you wish to have us
tender any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The tender price is $6.71 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer.
2. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date that number of
Shares that, together with any Shares to be acquired by the Parent pursuant
to the Shareholder Agreement (as defined in the Offer To Purchase) and any
Shares then owned by the Parent or any of its subsidiaries, constitutes at
least 70% of the Shares outstanding on a fully diluted basis on the date of
purchase. The Offer is also conditioned on the Parent satisfying the
Financing Conditions (as defined in the Offer to Purchase). In addition, the
<PAGE>
Offer is subject to other conditions set forth in the Offer To Purchase. See
the Introduction and Sections 1, 12, 14 and 15 of the Offer To Purchase.
3. The Offer is being made for all outstanding Shares.
4. Tendering Stockholders will not be obligated to pay brokerage fees or
commissions to the Depositary or the Information Agent or, except as set
forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the
purchase of Shares by the Purchaser pursuant to the Offer. However, federal
income tax backup withholding at a rate of 31% may be required, unless an
exemption is provided or unless the required taxpayer identification
information is provided. See Instruction 10 of the Letter of Transmittal.
5. The Offer and withdrawal rights will expire at 12:00 midnight, New York City
time, on Friday, December 10, 1999, unless the Offer is extended.
6. The Board of Directors of the Company has unanimously determined that the
Offer and the Merger (as such terms are defined in the Offer To Purchase)
are in the best interests of the Stockholders, approved the Offer and the
Merger and unanimously recommends that Stockholders accept the Offer and
tender their Shares pursuant to the Offer.
7. Notwithstanding any other provision of the Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by the Depositary of (a) Certificates for Shares or a
timely Book-Entry Confirmation (as defined in the Offer To Purchase) with
respect to such Shares pursuant to the procedures set forth in Section 3 of
the Offer To Purchase, (b) the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed with any required
signature guarantees (or, in the case of book-entry transfers, an Agent's
Message (as defined in the Offer To Purchase)), and (c) any other documents
required by the Letter of Transmittal. Accordingly, payment may not be made
to all tendering Stockholders at the same time depending upon when
Certificates for or confirmations of book-entry transfer of such Shares are
actually received by the Depositary.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth on the back page of this letter. Please
forward your instructions to us in ample time to permit us to submit a tender on
your behalf prior to the Expiration Date. An envelope to return your
instructions to us is enclosed. IF YOU AUTHORIZE THE TENDER OF YOUR SHARES, ALL
SUCH SHARES WILL BE TENDERED UNLESS OTHERWISE SPECIFIED ON THE INSTRUCTION FORM
SET FORTH BELOW.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) Stockholders residing in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Purchaser by one or more registered brokers
or dealers licensed under the laws of such jurisdictions.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
GEOSCIENCE CORPORATION
AT
$6.71 NET PER SHARE
BY
SERCEL ACQUISITION CORP.
A DIRECT, WHOLLY OWNED SUBSIDIARY
OF
SERCEL, INC.
AND
AN INDIRECT, WHOLLY OWNED SUBSIDIARY
OF
COMPAGNIE GENERALE DE GEOPHYSIQUE
The undersigned acknowledge(s) receipt of your letter, the enclosed Offer To
Purchase, dated October 29, 1999, and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") in connection with the offer by Sercel Acquisition Corp. (the
"Purchaser"), a direct, wholly owned subsidiary of Sercel, Inc. and an indirect,
wholly owned subsidiary of Compagnie Generale de Geophysique, to purchase all
outstanding shares of common stock ("Shares") of GeoScience Corporation at a
purchase price of $6.71 per Share, net to the seller in cash, without interest
thereon, on the terms and subject to the conditions set forth in the Offer To
Purchase.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or, if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to be Tendered:* ____________Shares
Date: ____________, ____
SIGN HERE
Signature(s): __________________________________________________________________
Print Name(s): _________________________________________________________________
Print Address(es): _____________________________________________________________
Area Code and Telephone Number(s): _____________________________________________
Taxpayer Identification or Social Security Number(s): __________________________
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
THIS FORM MUST BE RETURNED TO THE BROKERAGE FIRM MAINTAINING YOUR ACCOUNT.
3
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.
The taxpayer identification number for an individual is the individual's Social
Security number. Social Security numbers have nine digits separated by two
hyphens: E.G., 000-00-0000. The taxpayer identification number for an entity is
the entity's Employer Identification Number. Employer Identification Numbers
have nine digits separated by only one hyphen: e.g., 00-0000000. The table below
will help determine the number to give the payer.
<TABLE>
<CAPTION>
- ------------------------------------------------ --------------------------------------------------
<S> <C> <C> <C>
GIVE THE NAME AND
GIVE THE NAME AND EMPLOYER
SOCIAL SECURITY IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF-- FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------ --------------------------------------------------
1. Individual The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, the
first individual on
the account(1)
3. Husband and wife (joint The actual owner of
account) the account or, if
joint funds, either
person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor or
a guardian or committee incompetent
for a designated ward, person(3)
minor or incompetent
person
7. a. The usual revocable The
savings trust grantor-trustee(1)
(grantor is also
trustee)
b. So-called trust The actual owner(1)
account that is not a
legal or valid trust
under state law
8. Sole proprietorship The owner(4)
9. A valid trust, estate The legal entity (Do
or pension trust not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated in
the account
title.)(5)
10. Corporate The corporation
11. Association, club, The organization
religious, charitable,
educational or other
tax-exempt
organization
12. Partnership The partnership
13. A broker or registered The broker or
nominee nominee
14. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
state or local
government, school
district or prison)
that receives
agriculture program
payments
</TABLE>
- ------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
Note:IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL BE
CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE.
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service (the "IRS") and
apply for a number.
To complete the Substitute Form W-9, if you do not have a taxpayer
identification number, write "Applied For" in the space for the taxpayer
identification number in Part 1, sign and date the Form, and give it to the
requester. If the requester does not receive your taxpayer identification number
within 60 days, backup withholding, if applicable, will begin and will continue
until you furnish your taxpayer identification number to the requester.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in
(1) through (13) and a person registered under the Investment Advisers Act of
1940 who regularly acts as a broker are exempt. Payments subject to reporting
under sections 6041 and 6041A are generally exempt from backup withholding only
if made to payees described in items (1) through (7), except that a corporation
that provides medical and health care services or bills and collects payments
for such services is not exempt from backup withholding or information
reporting. Only payees described in items (2) through (6) are exempt from backup
withholding for barter exchange transactions, patronage dividends, and payments
by certain fishing boat operators.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an individual
retirement plan ("IRA"), or a custodial account under 403(b)(7), if the
account satisfies the requirements of section 401(f)(2).
(3) The United States or any of its agencies or instrumentalities.
(4) A State, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(6) An international organization or any of its agencies or
instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States, the District of Columbia or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in
section 4947.
Payments of dividends and patronage dividends generally not subject to backup
withholding also include the following:
- - Payments to nonresident aliens subject to withholding under section 1441.
- - Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident partner.
- - Payments of patronage dividends not paid in money.
- - Payments made by certain foreign organizations.
- - Payments made to a nominee.
Payments of interest generally not subject to backup withholding include the
following:
- - Payments of interest on obligations issued by individuals.
Note: YOU MAY BE SUBJECT TO BACKUP WITHHOLDING IF THIS INTEREST IS $600 OR
MORE AND IS PAID IN THE COURSE OF THE PAYER'S TRADE OR BUSINESS AND YOU HAVE
NOT PROVIDED YOUR CORRECT TAXPAYER IDENTIFICATION NUMBER TO THE PAYER.
- - Payments of tax-exempt interest (including exempt interest dividends under
section 852).
- - Payments described in section 6049(b)(5) to nonresident aliens.
- - Payments on tax-free covenant bonds under section 1451.
- - Payments made by certain foreign organizations.
- - Mortgage interest paid by you.
Payments that are not subject to information reporting are also not subject to
backup withholding. For details see sections 6041, 6041A(a), 6042, 6044, 6045,
6049, 6050A and 6050N, and the regulations under such sections.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. ENTER YOUR TAXPAYER IDENTIFICATION NUMBER. WRITE "EXEMPT" ON
THE FACE OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
PRIVACY ACT NOTICE
Section 6109 requires you to give your correct taxpayer identification number to
persons who must file information returns with the IRS to report interest,
dividends and certain other income paid to you, mortgage interest you paid, the
acquisition or abandonment of secured property, cancellation of debt or
contributions you made to an IRA. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. You must provide
your taxpayer identification number whether or not you are qualified to file a
tax return. Payers must generally withhold 31% of taxable interest, dividend and
certain other payments to a payee who does not furnish a taxpayer identification
number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. If you make
a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER
TO SELL SHARES. THE OFFER IS MADE SOLELY BY THE OFFER TO PURCHASE, DATED
OCTOBER 29, 1999, AND THE RELATED LETTER OF TRANSMITTAL, AND ANY AMENDMENTS
OR SUPPLEMENTS THERETO, AND IS BEING MADE TO ALL HOLDERS OF SHARES. THE
OFFER, HOWEVER, IS NOT BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM
OR ON BEHALF OF) HOLDERS OF SHARES RESIDING IN ANY JURISDICTION IN
WHICH THE MAKING OF THE OFFER OR ACCEPTANCE THEREOF WOULD NOT BE IN
COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. IN ANY JURISDICTION
WHERE THE SECURITIES, BLUE SKY OR OTHER LAWS REQUIRE THE OFFER TO
BE MADE BY A LICENSED BROKER OR DEALER, THE OFFER SHALL BE
DEEMED TO BE MADE ON BEHALF OF SERCEL ACQUISITION CORP. BY
ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER
THE LAWS OF SUCH JURISDICTIONS.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
GEOSCIENCE CORPORATION
at
$6.71 Net Per Share
by
SERCEL ACQUISITION CORP.
a direct, wholly owned subsidiary
of
SERCEL, INC.
and
an indirect, wholly owned subsidiary
of
COMPAGNIE GENERALE DE GEOPHYSIQUE
Sercel Acquisition Corp. (the "Purchaser"), a direct, wholly owned
subsidiary of Sercel, Inc. and an indirect, wholly owned subsidiary of Compagnie
Generale de Geophysique, a French societe anonyme (the "Parent"), is offering to
purchase all outstanding shares of common stock, par value $.01 per share (the
"Shares"), of GeoScience Corporation, a Nevada corporation (the "Company"), at a
purchase price of $6.71 per Share, net to the seller in cash, without interest
(the "Per Share Amount"), on the terms and subject to the conditions set forth
in the Offer To Purchase, dated October 29, 1999 (the "Offer To Purchase"), and
in the related Letter of Transmittal (which together constitute the "Offer").
Tendering Stockholders who have Shares registered in their name and who tender
directly will not be charged brokerage fees or commissions or, subject to
Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of
Shares pursuant to the Offer. Following the Offer, the Purchaser intends to
effect the Merger described below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, DECEMBER 10, 1999, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED ON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF SHARES
THAT (TOGETHER WITH ANY SHARES THEN OWNED BY PARENT OR ANY OF ITS SUBSIDIARIES)
CONSTITUTES 70% OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE
OF PURCHASE (THE "MINIMUM CONDITION"). TECH-SYM CORPORATION, THE HOLDER OF 73%
OF THE OUTSTANDING SHARES ON A FULLY DILUTED BASIS (THE "MAJORITY STOCKHOLDER"),
HAS AGREED TO TENDER ITS SHARES IN THE OFFER PURSUANT TO A SHAREHOLDER AGREEMENT
DESCRIBED HEREIN. THE OFFER IS ALSO SUBJECT TO (A) THE RECEIPT OF FINANCING BY
THE
<PAGE>
PARENT SUFFICIENT TO CONSUMMATE THE OFFER AND THE MERGER, (B) THE EXPIRATION OR
TERMINATION OF ANY APPLICABLE WAITING PERIODS IMPOSED BY THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE RECEIPT OF ANY REQUIRED
ANTITRUST APPROVALS FROM THE EUROPEAN UNION OR ANY MEMBER COUNTRY THEREOF, AND
(C) CERTAIN OTHER CONDITIONS SET FORTH IN THE OFFER TO PURCHASE. SEE THE
INTRODUCTION AND SECTIONS 1, 12, 14 AND 15 OF THE OFFER TO PURCHASE. THE PARENT
HAS RECEIVED A FINANCING COMMITMENT IN AN AMOUNT SUFFICIENT TO CONSUMMATE THE
OFFER AND THE MERGER ON THE TERMS DESCRIBED HEREIN, WHICH COMMITMENT IS SUBJECT
TO CERTAIN CONDITIONS SET FORTH IN SECTION 10 OF THE OFFER TO PURCHASE.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of October 23, 1999 (the "Merger Agreement"), among the Parent, the Purchaser
and the Company. The Merger Agreement provides that, among other things, the
Purchaser will make the Offer and that following the purchase of Shares pursuant
to the Offer, subject to the satisfaction or waiver of certain conditions set
forth in the Merger Agreement and in accordance with the relevant provisions of
the Nevada Revised Statutes (the "Nevada Law"), either, (a) if more than 90% of
the Shares are purchased pursuant to the Offer, at the option of the Parent or
the Purchaser, the Company will be merged into the Purchaser or (b) if less than
90% of the Shares are purchased pursuant to the Offer, the Purchaser will be
merged into the Company (in either case the "Merger"). Following consummation of
the Merger, the surviving corporation will be an indirect, wholly owned
subsidiary of the Parent. At the effective time of the Merger (the "Effective
Time"), each Share (excluding Shares owned by the Company or any subsidiary of
the Company or by the Parent or any subsidiary of the Parent) issued and
outstanding immediately prior to the Effective Time will be converted into the
right to receive cash in an amount equal to the price per Share paid pursuant to
the Offer, without interest (and less any required withholding taxes). The
Merger Agreement is more fully described in Section 12 of the Offer to Purchase.
No dissenters' or appraisal rights are available under Nevada Law in connection
with the Offer or the Merger, unless the Shares are no longer quoted on Nasdaq
at the time of the Merger. In such case, Stockholders would be entitled to
dissent from the Merger and demand fair value of the Shares in compliance with
Nevada Law.
Simultaneously with the execution and delivery of the Merger Agreement, the
Parent, the Purchaser and the Majority Stockholder entered into a Shareholder
Agreement pursuant to which the Majority Stockholder has agreed, subject to the
terms thereof, to tender all of the shares it beneficially owns (currently
representing 73% of the outstanding shares on a fully diluted basis) to the
Purchaser in the Offer and to vote such Shares in favor of the Merger. The
Majority Stockholder has also granted the Purchaser a proxy to vote all of its
Shares in favor of the Merger and an option to purchase its Shares at the Per
Share Amount.
THE BOARD OF DIRECTORS OF THE COMPANY (WITH ONE DIRECTOR DISSENTING) HAS
DETERMINED THAT EACH OF THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT,
INCLUDING THE OFFER AND THE MERGER, IS IN THE BEST INTERESTS OF THE
STOCKHOLDERS, HAS APPROVED THE OFFER AND ADOPTED THE MERGER AGREEMENT AND
RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT
TO THE OFFER.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not withdrawn as, if
and when the Purchaser gives oral or written notice to Continental Stock
Transfer & Trust Company (the Depositary) of its acceptance of such Shares for
payment pursuant to the Offer. In all cases, on the terms and subject to the
conditions of the Offer, payment for Shares purchased pursuant to the Offer will
be made by deposit of the purchase price therefor with the Depositary, which
will act as agent for tendering Stockholders for the purpose of receiving
payment from the Purchaser and transmitting payment to validly tendering
Stockholders. Payment for Shares accepted for payment pursuant to the Offer will
be made only after timely receipt by the Depositary of (a) certificates for such
Shares (or a confirmation of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility (as defined in the
Offer to Purchase)), (b) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) or, in the case of book-entry transfer, an
Agent's Message (as defined in the Offer to Purchase), and (c) any other
documents required by the Letter of Transmittal.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions set forth in the Merger Agreement, including, if required,
the approval of the Merger by the requisite vote of the
<PAGE>
Stockholders of the Company and any antitrust approvals. The Stockholder vote
necessary to approve the Merger is the affirmative vote of the holders of a
majority of the issued and outstanding Shares, voting as a single class, at the
Company Stockholders' meeting. If the Minimum Condition is satisfied and the
Purchaser purchases Shares pursuant to the Offer or if the Parent exercises its
rights under the Shareholder Agreement, the Purchaser will be able to effect the
Merger without the affirmative vote of any other Stockholder. If the Purchaser
acquires at least 90% of the outstanding Shares pursuant to the Offer or
otherwise, the Purchaser will be able to effect the Merger pursuant to the
"short-form" merger provisions of Nevada Law, without prior notice to, or any
action by, any other Stockholder. In that event, the Purchaser intends to effect
the Merger as promptly as practicable following the purchase of Shares in the
Offer.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE TO BE
PAID FOR THE SHARES PURSUANT TO THE OFFER, REGARDLESS OF ANY EXTENSION OF THE
OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. NO INTEREST WILL BE PAID ON THE
CONSIDERATION TO BE PAID IN THE MERGER TO STOCKHOLDERS WHO FAIL TO TENDER THEIR
SHARES PURSUANT TO THE OFFER, REGARDLESS OF ANY DELAY IN EFFECTING THE MERGER OR
MAKING SUCH PAYMENT.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Friday, December 10, 1999, unless and until the Purchaser (in accordance with
the terms of the Merger Agreement) shall have extended the period of time during
which the Offer is open, in which event the term "Expiration Date" means the
latest time and date at which the Offer, as so extended by the Purchaser, shall
expire.
Subject to the terms of the Merger Agreement and the applicable rules and
regulations of the Securities and Exchange Commission, the Purchaser may, under
certain circumstances, (a) extend the period of time during which the Offer is
open and thereby delay acceptance for payment of and the payment for any Shares,
by giving oral or written notice of such extension to the Depositary and
(b) amend the Offer in any other respect by giving oral or written notice of
such amendment to the Depositary. Any extension, delay, waiver, amendment or
termination of the Offer will be followed as promptly as practicable by a public
announcement thereof, the announcement in the case of an extension to be issued
no later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. During any such extension, all Shares
previously tendered and not properly withdrawn will remain subject to the Offer,
subject to the right of a tendering Stockholder to withdraw such Stockholder's
Shares.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn at any time after December 28, 1999, unless
theretofore paid for by the Purchaser. For a withdrawal to be effective, a
written, telegraphic, telex or facsimile transmission notice of withdrawal must
be timely received by the Depositary at its address set forth in the Offer to
Purchase and must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holders of the Shares, if different from the person who tendered the Shares. If
the Shares to be withdrawn have been delivered to the Depositary, a signed
notice of withdrawal with (except in the case of Shares tendered by an Eligible
Institution (as defined in the Offer to Purchase)) signatures guaranteed by an
Eligible Institution must be submitted prior to the release of such Shares. In
addition, such notice must specify, in the case of Shares tendered by delivery
of certificates, the name of the registered holder (if different from that of
the tendering Stockholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares.
The information required to be disclosed by paragraph (e)(1)(vii) of
Rule 14d-6 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended, is contained in the Offer to Purchase and is
incorporated herein by reference.
The Company has provided the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
Stockholders. The Offer to Purchase and the related Letter of Transmittal will
be mailed to record holders of Shares and will be furnished to brokers, banks
and similar persons whose names, or the names of whose nominees, appear on the
stockholder list or, if
<PAGE>
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial Stockholders.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance and copies of the Offer to Purchase,
the related Letter of Transmittal and other tender offer materials may be
directed to the Information Agent as set forth below, and copies will be
furnished promptly at the Purchaser's expense. The Purchaser will not pay any
fees or commissions to any broker or dealer or any other person (other than the
Depositary and the Information Agent) for soliciting tenders of Shares pursuant
to the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
MacKenzie Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or CALL TOLL FREE: (800) 322-2885
October 29, 1999
<PAGE>
EXHIBIT 99(a)(8)
PRESS RELEASE
PARIS, Oct. 26 /PRNewswire/ -- Compagnie Generale de Geophysique (Paris RM:
12016) (NYSE: GGY - NEWS) today announced the signature of a definitive
agreement concerning the acquisition of all GeoScience Corporation shares
(Nasdaq: GSCI - NEWS), 80% of which are owned by Tech-Sym Corporation (NYSE:
TSY - NEWS). Tech-Sym signed a definitive agreement with a commitment to
tender all such shares into the tender offer related to the merger of
GeoScience and Sercel (100% owned by CGG). According to the terms of the
agreement, CGG will offer 6.71 US$ for each GeoScience share, for a total
transaction value of 67 MUS$.
GeoScience Corporation, based in Houston, Singapore and the United Kingdom,
employs 360 people, and is, through its subsidiary Syntron, a leader in the
area of marine seismic data acquisition equipment (in both surface and seabed
environments).
Based in Nantes (France), and present in the United States through its
subsidiary Sercel Inc (Houston), Sercel is one of the leading manufacturers
of land seismic data acquisition equipment.
Sercel and GeoScience-Syntron, owing to the complementary nature of their
products, will be one of the world's largest producers of seismic measurement
equipment, with a complete range of state-of-the-art products.
The company resulting from this merger will be headed by Thierry Le Roux,
presently President of Sercel.
The acquisition of GeoScience shares by the CGG Group will be funded by The
Beacon Group Energy Investment Fund II, L.P, a 945 MUS$ private investment
fund based in New York which will subscribe to a private capital increase of
CGG which will occur after the public offering due to take place in November,
as announced by CGG on September 9, 1999.
The Beacon Group Energy Investment Fund II, L.P. is an affiliate of The
Beacon Group LLC, a private investment and advisory partnership founded in
1993. With over 2 billion US dollars under management, The Beacon Group LLC,
is a leader in private equity and strategic advisory services.
These transactions overall remain subject to the usual closing conditions,
including approval by the shareholders. Final closing of the operation is
scheduled for December 1999.
Simultaneously, Compagnie Generale de Geophysique today announced the
signature of an agreement in principle concerning the sale of its Airborne
Geophysics activities (Geoterrex, Dighem, Geomag) to Fugro (NL) for an amount
valued at 28 million Canadian dollars.
Geoterrex, Dighem and Geomag, located in Paris, Ottawa, Toronto, Sydney and
Rio, with a workforce of 150 employees, operate a total of 8 aircraft
dedicated to airborne geophysical acquisition, based on electromagnetic or
magnetic measurements, with particular focus on the mining industry.
President Brunck declared: "Our agreements with Tech-Sym on the one hand and
Fugro on the other, represent a further step in the redeployment and
restructuring process in which we have engaged CGG. The first creates a world
leader in the domain of geophysical equipment manufacturing, essential to our
development, the second allows us to focus even more on our core activities
by divesting at fair value a business line, which, although undoubtedly
promising, had become less strategic for the Group. We are indeed reinforced
Page 1
<PAGE>
by these two transactions. I am glad to welcome the Beacon group as a new CGG
shareholder, enabling us to conclude a major strategic acquisition while
strengthening our equity. We remain strongly focused on our coming rights
offering, which represents a key element in our restructuring process, and
which will positively conclude an otherwise difficult year 1999 for the
entire industry."
Revenues of the Compagnie Generale de Geophysique for the third quarter of
1999 amounted to FrF 819 million versus FrF 742 million for the second
quarter and 883 MF for the first quarter.
The information included herein contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. These forward-looking statements
reflect numerous assumptions and involve a number of risks and uncertainties
as disclosed by the Company from time to time in its filings with the
Securities and Exchange Commission. Actual results may vary materially.
The information contained herein does not constitute an offer of securities
for sale in the United States. Securities may not be offered or sold in the
United States unless they are registered under applicable law or exempt from
registration. Any public offering of securities to be made in the United
States will be made by means of a prospectus and will contain detailed
information about Compagnie Generale de Geophysique and its management, as
well as financial statements. Compagnie Generale de Geophysique intends to
register for sale in the United States a portion of the offering of the
securities mentioned herein.
Contact: Christophe PETTENATI-AUZIERE +33-1-64-47-36-75
Email: [email protected]
Web site: www.cgg.com
Data provided by EDGAR Online, Inc. (http://www.FreeEDGAR.com)
GEOSCIENCE CORP ? 8-K ? Current Report Date Filed: 10/28/1999
Data provided by EDGAR Online, Inc. (http://www.FreeEDGAR.com)
Copyright 1999 EDGAR Online, Inc. (ver 1.01/2.003) Page 68
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of October 23,
1999, by and among Geoscience Corporation, a Nevada corporation (the "Company"),
Compagnie Generale de Geophysique, a French societe anonyme ("Parent"), and
Sercel Acquisition Corp., a Nevada corporation and a direct wholly owned
subsidiary of Sercel Inc., an Oklahoma corporation ("Sercel"), and an indirect
wholly owned subsidiary of Parent ("Purchaser").
RECITALS
A. The Board of Directors of the Company has determined that it is in the
best interests of the Company and its Stockholders for Purchaser to acquire the
Company on the terms and subject to the conditions set forth herein (the
"Acquisition").
B. As a first step in the Acquisition, the Company, Parent and Purchaser
each desire that Parent cause Purchaser to commence a cash tender offer (the
"Offer") to purchase all of the Company's issued and outstanding shares (the
"Shares") of common stock, $.01 par value per share (the "Common Stock"), for
$6.71 per Share (the "Per Share Amount"), on the terms and subject to the
conditions set forth in this Agreement.
C. To complete the Acquisition, each of the Boards of Directors (or
similar governing bodies) of the Company, Parent, Sercel (on its behalf and as
the sole stockholder of Purchaser) and Purchaser has approved this Agreement and
the merger of Purchaser with and into the Company (the "Merger"), wherein any
issued and outstanding Shares not tendered and purchased by Purchaser pursuant
to the Offer (other than Shares described in Section 2.6(b) and any Dissenting
Shares) will be converted into the right to receive the Per Share Amount, on the
terms and subject to the conditions of this Agreement and in accordance with the
Nevada Revised Statutes (the "NRS").
D. The Board of Directors of the Company (the "Company Board") (i) has
unanimously resolved to recommend that the holders of the Shares
("Stockholders") accept the Offer and the Merger and approve this Agreement and
(ii) has determined that
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the consideration to be paid for each Share in the Offer and the Merger is fair
to and in the best interests of the Stockholders.
E. The parties desire to make certain representations, warranties and
covenants in connection with the Offer and the Merger and also to prescribe
various conditions to the Offer and the Merger.
F. In order to induce Parent and Purchaser to enter into this Agreement,
concurrently with the execution and delivery hereof, Parent, Purchaser and
Tech-Sym Corporation, a Nevada corporation (the "Majority Stockholder"), are
entering into a Shareholder Agreement, dated as of the date hereof (the
"Shareholder Agreement"), pursuant to which the Majority Stockholder has agreed,
among other things, to tender its Shares in accordance with the terms of the
Offer and to vote its Shares in favor of the Merger and other matters necessary
to consummate the transactions contemplated by this Agreement.
NOW THEREFORE, in consideration of the representations, warranties and
covenants contained in this Agreement, the parties agree as follows:
I. THE TENDER OFFER
1.1. The Offer. (a) Subject to the last sentence of this Section 1.1(a),
as promptly as practicable (but in any event not later than five Business Days
after the public announcement of the execution and delivery of this Agreement),
Parent will cause Purchaser to commence (within the meaning of Rule 14d-2 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), the Offer
whereby Purchaser will offer to purchase for cash all of the Shares at the Per
Share Amount, net to the seller in cash, without interest (subject to reduction
for any stock transfer taxes payable by the seller, if payment is to be made to
a Person other than the Person in whose name the certificate for such Shares is
registered, or any applicable federal back-up withholding), provided, however,
that Parent may designate another direct or indirect subsidiary of Parent as the
bidder thereunder (within the meaning of Rule 14d-1(c) under the Exchange Act,
in which case references herein to Purchaser will be deemed to apply to such
subsidiary, as applicable). The obligation of Parent to cause Purchaser to
consummate the Offer and to accept for payment and to pay for Shares validly
tendered in the Offer and not validly withdrawn in accordance therewith
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will be subject to, and only to, those conditions set forth in Annex A hereto
(the "Offer Conditions").
(b) Without the prior written consent of the Company, Purchaser will not,
and Parent will not cause Purchaser to, (i) decrease or change the form of the
Per Share Amount, (ii) decrease the number of Shares sought in the Offer, (iii)
amend or waive the Minimum Condition (as defined in Annex A hereto) or impose
conditions other than the Offer Conditions on the Offer, or (iv) extend the
expiration date of the Offer (the "Expiration Date") except (A) as required by
Law, (B) that, in the event that any Offer Condition is not satisfied or waived
at the time that the Expiration Date would otherwise occur, Purchaser may, in
its sole discretion, without the consent of the Company, extend the Expiration
Date for such period as it may determine to be appropriate (but not beyond the
Outside Date), or amend any term of the Offer in any manner not materially
adverse to the Stockholders, and (C) that, in the event that at least 90% of the
Voting Securities, calculated on a fully diluted basis, have not been validly
tendered and not withdrawn, Purchaser may, in its sole discretion, without the
consent of the Company, extend the Expiration Date for an aggregate of ten
additional Business Days to permit such condition to be satisfied; provided,
however, that (x) subject to applicable legal requirements, Parent may cause
Purchaser to waive any Offer Condition, other than the Minimum Condition, in
Parent's sole discretion and (y) the Offer may be extended in connection with an
increase in the consideration to be paid pursuant to the Offer so as to comply
with applicable rules and regulations of the Securities and Exchange Commission
(the "SEC"). Except as set forth above and subject to applicable legal
requirements, Purchaser may amend the Offer or waive any Offer Condition in its
sole discretion. Assuming the prior satisfaction or waiver of the Offer
Conditions, Parent will cause Purchaser to accept for payment, and pay for, in
accordance with the terms of the Offer, all Shares validly tendered and not
withdrawn pursuant to the Offer as soon as practicable after the Expiration Date
or any extension thereof.
1.2. Offer Documents. (a) As soon as practicable on the date of
commencement of the Offer, Parent and Purchaser will file or cause to be filed
with the SEC a tender offer statement on Schedule 14D-1 ("Schedule 14D-1") which
will contain an offer to purchase and related letter of transmittal and other
ancillary Offer documents and instruments pursuant to which the Offer will be
made (collectively with any supplements or amendments thereto, the "Offer
Documents") and which Parent and Purchaser represent,
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warrant and covenant will comply in all material respects with the Exchange Act
and other applicable Laws and will contain (or will be amended in a timely
manner so as to contain) all information which is required to be included
therein in accordance with the Exchange Act and the rules and regulations
thereunder and other applicable Laws; provided, however, that (i) no
representation, warranty or covenant is hereby made or will be made by Parent or
Purchaser with respect to information supplied by the Company in writing
expressly for inclusion in, or information derived from the Company's public SEC
filings which is incorporated by reference or included in, the Offer Documents
(such supplied, derived, incorporated or included information, the "Company SEC
Information") and (ii) no representation, warranty or covenant is made or will
be made herein by the Company with respect to information contained in the Offer
Documents other than the Company SEC Information.
(b) Parent, Purchaser and the Company will each promptly correct, and the
Company agrees to notify Purchaser promptly as to, any information provided by
them for use in the Offer Documents if and to the extent that it becomes false
or misleading in any material respect and Parent and Purchaser will jointly and
severally take all lawful action necessary to cause the Offer Documents as so
corrected to be filed promptly with the SEC and to be disseminated to the
Stockholders, in each case as and to the extent required by applicable Law. In
conducting the Offer, Parent and Purchaser will comply in all material respects
with the provisions of the Exchange Act and other applicable Laws. Parent and
Purchaser will afford the Company and its counsel a reasonable opportunity to
review and comment on the Offer Documents and any amendments thereto prior to
the filing thereof with the SEC.
1.3. Company Actions. The Company hereby approves of and consents to the
Offer and represents that (a) the Company Board (at a meeting duly called and
held) has (i) determined that this Agreement, the Offer and the Merger are fair
to and in the best interests of the Company and its Stockholders, (ii) approved
this Agreement and the transactions contemplated hereby, including the Offer and
the Merger, (iii) taken all other action necessary to render the limitations on
control share acquisitions and business combinations contained in Sections
78.378 through 78.3793 and 78.411 through 78.444 of the NRS (or any similar
provision) inapplicable to the transactions contemplated hereby, including the
Offer and the Merger, and (iv) resolved to recommend acceptance of the Offer and
approval of the Merger by the
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Stockholders and adoption of this Agreement by the Stockholders and (b) Morgan
Keegan & Company, Inc. (the "Company Financial Adviser") has delivered to the
Company Board the opinion described in Section 3.20. The Company will use its
reasonable best efforts to cause the Company Financial Adviser to permit the
inclusion of the written opinion referred to in Section 3.20 in Schedule 14D-9
and the Proxy Statement and a reference to such opinion in the Offer Documents.
The Company hereby consents to the inclusion in the Offer Documents of the
recommendation referred to in this Section 1.3; provided, however, that the
Company Board may withdraw, modify or change such recommendation to the extent,
and only to the extent and on the conditions, specified in Section 5.2(b). The
Company will file with the SEC simultaneously with the filing by Parent and
Purchaser of the Schedule 14D-1, a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments and supplements thereto, "Schedule
14D-9") containing such recommendations of the Company Board in favor of the
Offer and the Merger. The Company covenants to Parent and Purchaser that
Schedule 14D-9 will comply in all material respects with the Exchange Act and
any other applicable Laws and will contain (or will be amended in a timely
manner so as to contain) all information that is required to be included therein
in accordance with the Exchange Act and the rules and regulations thereunder and
other applicable Laws; provided, however, that (A) no representation, warranty
or covenant is made or will be made herein by the Company with respect to
information supplied by Parent or Purchaser expressly for inclusion in, or
information derived from Parent's public SEC filings which is incorporated or
included in, Schedule 14D-9 (the "Parent SEC Information"), and (B) no
representation, warranty or covenant is made or will be made herein by Parent or
Purchaser with respect to information contained in Schedule 14D-9 other than the
Parent SEC Information (which Parent SEC Information will include the
information furnished by Parent as contemplated by the next sentence). The
Company will include in Schedule 14D-9 information furnished by Parent in
writing concerning Parent's Designees as required by Section 14(f) of the
Exchange Act and Rule 14f-1 thereunder and will use its reasonable best efforts
to have Schedule 14D-9 available for inclusion in the initial mailing (and any
subsequent mailing) of the Offer Documents to the Stockholders. Each of the
Company and Parent will promptly correct any information provided by it for use
in Schedule 14D-9 if and to the extent that it becomes false or misleading in
any material respect and the Company will further take all lawful action
necessary to cause Schedule 14D-9 as so corrected to be filed promptly with the
SEC and disseminated to the Stockholders,
5
<PAGE>
in each case as and to the extent required by applicable Law. Parent and its
counsel will be given a reasonable opportunity to review Schedule 14D-9 and any
amendments thereto prior to the filing thereof with the SEC. In connection with
the Offer, the Company will promptly furnish Parent with mailing labels,
security position listings and all available listings or computer files
containing the names and addresses of the record Stockholders as of the latest
practicable date and thereafter, until the expiration of the Offer, of those
persons becoming Stockholders subsequent to such latest practicable date, and
will furnish Parent such information and assistance (including updated lists of
Stockholders, mailing labels and lists of security positions) as Parent or its
agents may reasonably request in communicating the Offer to the record and
beneficial Stockholders. Subject to the requirements of applicable Law, and
except for such actions as are necessary to disseminate the Offer Documents and
any other documents necessary to consummate the Offer and the Merger, Parent and
Purchaser will, and will instruct each of their respective Affiliates,
associates, partners, employees, directors, officers, agents, and advisors to,
hold in confidence the information contained in such labels, lists and files,
will use such information only in connection with the Offer and the Merger, and,
if this Agreement is terminated in accordance with its terms, will deliver
promptly to the Company (or destroy and certify to the Company the destruction
of) all copies of such information (and any copies, compilations or extracts
thereof or based thereon) then in their possession or under their control.
1.4. Actions by Parent and Purchaser. Subject to the provisions of this
Agreement, Parent shall provide or cause to be provided to Purchaser all of the
funds necessary to purchase any shares of Common Stock that Purchaser becomes
obligated to purchase pursuant to the Offer at such time as such funds are
necessary.
1.5. Directors. (a) Promptly upon the purchase of Shares pursuant to the
Offer, and from time to time thereafter, (i) Parent will be entitled to
designate such number of directors ("Parent's Designees"), rounded up to the
next whole number, as will give Parent, subject to compliance with Section 14(f)
of the Exchange Act, representation on the Company Board equal to the product of
(A) the number of directors on the Company Board (giving effect to any increase
in the number of directors pursuant to this Section 1.5) and (B) the percentage
that such
6
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number of Shares so purchased bears to the aggregate number of Shares
outstanding (such number being, the "Board Percentage"); provided, however, that
if the number of Shares purchased pursuant to the Offer equals or exceeds a
majority of the outstanding Shares, the Board Percentage will in all events be a
majority of the members of the Company Board, and (ii) the Company will, upon
request by Parent, promptly satisfy the Board Percentage by (A) increasing the
size of the Company Board or (B) using its reasonable best efforts to secure the
resignations of such number of directors as is necessary to enable Parent's
Designees to be elected to the Company Board, or both, and will use its
reasonable best efforts to cause Parent's Designees promptly to be so elected,
subject in all instances to compliance with Section 14(f) of the Exchange Act
and Rule 14f-1 promulgated thereunder. On or before November 12, 1999, the
Parent shall provide to the Company the names of its designees for election to
the Company Board and all other information relating to such designees necessary
for the Company to comply with Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder. At the request of Parent, the Company will use its
reasonable efforts to cause such individuals designated by the Parent to
constitute the same Board Percentage of (i) each committee of the Company Board,
(ii) the board of directors of any Subsidiary (as defined below) of the Company,
and (iii) the committee of the board of directors of any Subsidiary of the
Company. At the request of Parent, the Company will take, at its expense, all
lawful action necessary to effect any such election. Parent will supply to the
Company in writing and be solely responsible for any information with respect to
itself, Parent's Designees and Parent's officers, directors and Affiliates
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder to be included in Schedule 14D-9. Notwithstanding the foregoing, at
all times prior to the Effective Time, the Company Board will include at least
two Continuing Directors as defined in Section 1.5(b) below. The Company hereby
represents that it has received the written resignations of the members of the
Company Board for the purpose of satisfying its obligations under this Section
1.5(a).
(b) Notwithstanding any other provision hereof, of the articles of
incorporation or bylaws of the Company or of applicable Law to the contrary,
following the election or appointment of Parent's Designees pursuant to this
Section 1.5 and prior to the Effective Time, any amendment or termination of
this Agreement by the Company or amendment of the articles of incorporation or
bylaws of the Company, extension by the Company
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<PAGE>
for the performance or waiver of the obligations or other acts of Parent or
Purchaser hereunder or waiver by the Company of any of the Company's rights
hereunder will require the affirmative vote of the majority of the Continuing
Directors. For purposes of this Agreement, the term the "Continuing Directors"
means at any time (i) those directors of the Company who are directors on the
date hereof and who voted to approve this Agreement and (ii) such additional
directors of the Company who are not affiliated with Parent, Purchaser or any of
their respective Affiliates and who are designated as "Continuing Directors" for
purposes of this Agreement by a majority of the Continuing Directors in office
at the time of such designation.
II. THE MERGER
2.1. The Merger. (a) On the terms and subject to the conditions of this
Agreement, at the Effective Time, Purchaser will be merged with and into the
Company in accordance with the applicable provisions of the NRS, and the
separate corporate existence of Purchaser will thereupon cease. The Company will
be the surviving corporation in the Merger (as such, the "Surviving
Corporation") in accordance with the NRS.
(b) The Merger will have the effects specified in Section 92A.250 of the
NRS. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the properties, rights, privileges, powers and franchises
of the Company and Purchaser shall vest in the Surviving Corporation and all
debts, liabilities and duties of the Company and Purchaser shall become the
debts, liabilities and duties of the Surviving Corporation.
2.2. The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") will take place at the offices of Jones, Day, Reavis &
Pogue, 599 Lexington Avenue, New York, New York, at 10:00 a.m., local time, on
the second Business Day after the date on which the last of the conditions
(excluding conditions that by their terms cannot be satisfied until the Closing
Date) set forth in Article VI is satisfied or waived in accordance herewith, or
at such other place, time or date as the parties may agree. The date on which
the Closing occurs is hereinafter referred to as the "Closing Date."
2.3. Effective Time. On the Closing Date or as soon as practicable
following the date on which the last of the conditions set forth in Article VI
is satisfied or waived in
8
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accordance herewith, the Surviving Corporation will cause articles of merger to
be filed with the Secretary of State of the State of Nevada as provided in
Section 92A.200 of the NRS. Upon completion of such filing or at such subsequent
date or time as Parent and the Company agree and specify in the articles of
merger, the Merger will become effective in accordance with the NRS. The time
and date on which the Merger becomes effective is herein referred to as the
"Effective Time." Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges, immunities,
powers and franchises of the Company will vest in the Surviving Corporation, and
all debts, liabilities and duties of the Company will become the debts
liabilities and duties of the Surviving Corporation.
2.4. Articles of Incorporation and Bylaws of the Surviving Corporation.
(a) The articles of incorporation of the Surviving Corporation to be in effect
from and after the Effective Time until amended in accordance with their terms
and those of the NRS will be the articles of incorporation of Purchaser in
effect immediately prior to the Effective Time.
(b) The bylaws of the Surviving Corporation to be in effect from and after
the Effective Time until amended in accordance with their terms, the articles of
incorporation of the Surviving Corporation and the NRS will be the bylaws of
Purchaser in effect immediately prior to the Effective Time.
2.5. Directors and Officers of the Surviving Corporation. (a) The members
of the initial Board of Directors of the Surviving Corporation will be the
members of the Board of Directors of Purchaser immediately prior to the
Effective Time. All of the members of the Board of Directors of the Surviving
Corporation will serve until their successors are duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the articles of incorporation and the bylaws of the Surviving Corporation.
(b) The officers of the Surviving Corporation will consist of the officers
of the Purchaser immediately prior to the Effective Time. Such Persons will
continue as officers of the Surviving Corporation until their successors have
been duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the articles of incorporation and the
bylaws of the Surviving Corporation.
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2.6. Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of Parent, Purchaser, the Company or
the holder of any of the following securities:
(a) Conversion of Shares. Each Share issued and outstanding immediately
prior to the Effective Time (other than any Shares to be canceled pursuant to
Section 2.6(b) and any Dissenting Shares) and any Shares issuable upon exercise
of any option, conversion or other right to acquire Shares existing immediately
prior to the Effective Time (collectively, "Rights") will, by virtue of the
Merger and without any action on the part of the holder thereof, be canceled and
extinguished and be converted into the right to receive the Per Share Amount, or
such higher per Share amount as is paid in the Offer, in cash payable to the
holder thereof, without interest (the "Merger Consideration"), prorated for
fractional shares, in accordance with Section 2.7. All such Shares, when so
converted, will no longer be outstanding and will automatically be canceled and
retired and will cease to exist, and each holder of a certificate formerly
representing any such Share will cease to have any rights with respect thereto,
except the right to receive the Merger Consideration therefor upon the surrender
of such certificate in accordance with Section 2.7. Any payment made pursuant to
this Section 2.6(a) and Section 2.7 will be made net of applicable withholding
taxes to the extent such withholding is required by Law. Notwithstanding the
foregoing, if between the date of this Agreement and the Effective Time the
outstanding Shares shall have been changed into a different number of shares or
a different class, by reason of any stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares,
the Merger Consideration will be correspondingly adjusted on a per-share basis
to reflect such stock dividend, subdivision, reclassification, recapitalization,
split, combination or exchange of shares.
(b) Cancellation of Treasury Shares and Parent-Owned Shares. Each Share
held in the treasury of the Company and each Share owned by Parent, Purchaser or
any other direct or indirect wholly owned subsidiary of Parent immediately
before the Effective Time (other than shares in trust accounts, managed
accounts, custodial accounts and the like that are beneficially owned by third
parties) will be automatically canceled and retired and will cease to exist and
no payment or other consideration will be made with respect thereto.
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(c) Common Stock of Purchaser. Each share of common stock, par value $0.01
per share, of Purchaser issued and outstanding immediately before the Effective
Time will be converted into and become one validly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation, which, in accordance with this Agreement, will constitute all of
the issued and outstanding shares of capital stock of the Surviving Corporation
immediately after the Effective Time.
2.7. Surrender of Shares; Stock Transfer Books. (a) Prior to the Effective
Time, Purchaser will designate a bank or trust company selected by it and
reasonably acceptable to the Company to act as agent for the Stockholders in
connection with the Merger (the "Exchange Agent") to receive the funds necessary
to make the payments contemplated by Section 2.6. When and as needed, Parent
shall take all steps necessary to cause the Surviving Corporation, Purchaser or
the Company to make available to the Exchange Agent for the benefit of
Stockholders the aggregate consideration to which such holders will be entitled
as and when such amounts are needed pursuant to Section 2.6(a).
(b) Each holder of a certificate or certificates representing any Shares
canceled upon the Merger pursuant to Section 2.6(a) (the "Certificates") may
thereafter surrender such Certificate or Certificates to the Exchange Agent, as
agent for such holder, to effect the surrender of such Certificate or
Certificates on such holder's behalf for a period ending six months after the
Effective Time. Parent agrees that promptly after the Effective Time it will
cause the distribution to Stockholders of record as of the Effective Time of
appropriate materials to facilitate such surrender. Upon the surrender of
Certificates for cancellation, together with such materials, Parent will cause
the Exchange Agent to pay the holder of such Certificates in exchange therefor
cash in an amount equal to the Merger Consideration multiplied by the number of
Shares represented by such Certificate. Until so surrendered, each such
Certificate (other than certificates representing Shares to be canceled pursuant
to Section 2.6(b) and any Dissenting Shares) will represent solely the right to
receive the aggregate Merger Consideration relating thereto.
(c) If payment of cash in respect of canceled Shares is to be made to a
Person other than the Person in whose name a surrendered Certificate or
instrument is registered, it will be a condition to such payment that the
Certificate or instrument so
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surrendered shall be properly endorsed or shall be otherwise in proper form for
transfer and that the Person requesting such payment shall have paid any
transfer and other taxes required by reason of such payment in a name other than
that of the registered holder of the Certificate or instrument surrendered or
shall have established to the satisfaction of the Surviving Corporation or the
Exchange Agent that such tax either has been paid or is not payable.
(d) At the Effective Time, the stock transfer books of the Company will be
closed and there will not be any further registration of transfers of Shares
outstanding prior to the Effective Time or otherwise issuable pursuant to Rights
on the records of the Company. If, after the Effective Time, Certificates are
presented to the Surviving Corporation, they will be canceled and exchanged for
the Merger Consideration as provided in Section 2.6(a). No interest will accrue
or be paid on any cash payable upon the surrender of a Certificate or
Certificates which immediately before the Effective Time represented outstanding
Shares or Shares issuable upon exercise of Rights.
(e) Promptly following the date that is six months after the Effective
Time, the Exchange Agent will deliver to the Surviving Corporation all cash,
certificates and other documents in its possession relating to the transactions
contemplated hereby, and the Exchange Agent's duties will terminate. Thereafter,
each holder of a Certificate (other than Certificates representing Shares to be
canceled pursuant to Section 2.6(b) and any Dissenting Shares) may surrender
such Certificate to the Surviving Corporation and (subject to applicable
abandoned property, escheat and similar Laws) receive in consideration thereof
the aggregate Merger Consideration relating thereto, without any interest or
dividends thereon.
(f) The Merger Consideration will be net to the holder of Shares in cash,
subject to reduction only for any applicable federal back-up withholding or, as
set forth in Section 2.7(c), stock transfer taxes payable by such holder.
(g) In the event any Certificate has been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the Person claiming such Certificate
to be lost, stolen or destroyed, the Exchange Agent will issue in exchange for
such lost, stolen or destroyed Certificate the Merger Consideration deliverable
in respect thereof as determined in accordance with Section 2.6;
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provided, that the Person to whom the Merger Consideration is paid shall, as a
condition precedent to the payment thereof, give the Surviving Corporation a
bond in such sum as the Surviving Corporation may direct or otherwise indemnify
the Surviving Corporation in a manner satisfactory to it against any claim that
may be made against the Surviving Corporation with respect to the Certificate
claimed to have been lost, stolen or destroyed.
(h) None of the Parent, Purchaser, the Company, the Surviving Corporation,
the Exchange Agent or any other person shall be liable to any former holder of
shares of Common Stock for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws.
2.8. Stock Plans. (a) Without limiting the generality or effect of Section
2.6 or 2.7 and notwithstanding the provisions hereof applicable to the Rights,
the Company will use its reasonable best efforts (which include satisfying the
requirements of Rule 16b-3(e) promulgated under Section 16 of the Exchange Act,
without incurring any liability in connection therewith) to provide that, at the
Effective Time, each holder of a then-outstanding option to purchase Shares
under any of the Company's stock option plans described in Section 3.3 (the
"Stock Option Plans"), whether or not then exercisable (the "Options"), will, in
settlement thereof, receive from the Company for each Share subject to such
Option an amount (subject to any applicable withholding tax) in cash equal to
the difference between the Merger Consideration and the per Share exercise price
of such Option to the extent such difference is a positive number (such amount
being hereinafter referred to as, the "Option Consideration") and that all
Options will be terminated and thereafter represent only the right to receive
the Option Consideration; provided, however, that with respect to any Person
subject to Section 16(a) of the Exchange Act, any such amount will be paid as
soon as practicable after the first date payment can be made without liability
to such Person under Section 16(b) of the Exchange Act. Notwithstanding anything
herein stated, no Option Consideration will be paid with respect to any Option
unless, at or prior to the time of such payment, such Option is canceled and the
holder of such Option has executed and delivered a release of any and all rights
the holder had or may have had in respect of such Option. The Company will
cooperate with Parent in developing and taking any actions reasonably designed
to minimize the exercise of Options by the holders thereof prior to the Offer
Completion Date.
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(b) Without limiting the generality or effect of Sections 2.6 or 2.7
and notwithstanding the provisions hereof applicable to Rights, prior to the
Effective Time, the Company will use its reasonable best efforts to obtain all
necessary consents or releases from holders of Options under the Stock Option
Plans and take all such other lawful action as may be necessary to give effect
to the transactions contemplated by this Section 2.8. Except as otherwise agreed
to by the parties, (i) the Stock Option Plans will terminate as of the Effective
Time and the provisions in any other plan, program or arrangement providing for
the issuance or grant of any other interest in respect of the capital stock of
the Company or any Subsidiary thereof will be canceled as of the Effective Time
and (ii) the Company shall use its best efforts to assure that following the
Effective Time no participant in the Stock Option Plans or other plans, programs
or arrangements shall have any right thereunder to acquire any equity securities
of the Company, the Surviving Corporation or any Subsidiary thereof and to
terminate all such plans and any Options or other Rights thereunder.
2.9 Dissenting Shares. (a) Notwithstanding any provision of this Agreement
to the contrary, any Shares held by a holder who has not voted such Shares in
favor of this Agreement and who has properly exercised dissenters' rights with
respect to such Shares in accordance with the NRS (including Section 92A.380
thereof) and as of the Effective Time has neither effectively withdrawn nor lost
its right to exercise such dissenters' rights ("Dissenting Shares"), will not be
converted into or represent a right to receive the Merger Consideration pursuant
to Section 2.6(a), but the holder thereof will be entitled to only such rights
as are granted by the NRS.
(b) Notwithstanding the provisions of Section 2.9(a), if any Stockholder
who demands dissenters' rights with respect to its Shares under the NRS
effectively withdraws or loses (through failure to perfect or otherwise) its
dissenters' rights, then as of the Effective Time or the occurrence of such
event, whichever later occurs, such holder's Shares will automatically be
converted into and represent only the right to receive the Merger Consideration
as provided in Section 2.6(a), without interest thereon, upon surrender of the
Certificate or Certificates formerly representing such Shares.
(c) The Company will give Parent (i) prompt notice of any written intent
to demand payment of the fair value of any Shares, withdrawals of such demands
and any other instruments served
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pursuant to the NRS received by the Company and (ii) the opportunity to direct
all negotiations and proceedings with respect to dissenters' rights under the
NRS. The Company may not voluntarily make any payment with respect to any
exercise of dissenters' rights and may not, except with the prior written
consent of Parent, settle or offer to settle any such dissenters' rights.
2.10. Short Form Merger. Notwithstanding anything else in this Agreement
to the contrary, at Parent's sole election, in the event that Purchaser shall
acquire Shares, including Shares accepted for purchase pursuant to the Offer, in
a number sufficient to consummate a merger of the Company into Purchaser
pursuant to Section 92A.180 of the NRS, the parties hereto agree, at the request
of Parent or Purchaser, to take all necessary and appropriate action to cause
the merger of the Company with and into the Purchaser to become effective as
soon as practicable after such acquisition, without approval of the Company's
stockholders, in accordance with the terms of Section 92A.180 of the NRS. In
such event, this Agreement shall be automatically amended, without any further
action of any party hereto, to provide for the foregoing change and all
references in this Agreement to the "Merger" shall refer to the merger of the
Company with and into the Purchaser and the "Surviving Corporation" shall refer
to the Purchaser as the surviving corporation in such Merger.
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each of Parent and
Purchaser, except as set forth in the letter, dated the date hereof, from the
Company to Parent (the "Company Disclosure Letter"), as follows:
3.1. Existence; Good Standing; Corporate Authority. The Company is a
corporation duly incorporated and validly existing under the laws of the State
of Nevada. The Company is duly licensed or qualified to do business as a foreign
corporation and is in good standing under the laws of any other state of the
United States or any other country in which the character of the properties
owned or leased by it or in which the transaction of its business makes such
qualification necessary, except where the failure to be so qualified or to be in
good standing could not reasonably be expected to have a Company Material
Adverse Effect. The Company has all requisite corporate power and authority to
own, operate and lease its properties and carry on its business
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as now conducted. The copies of the Company's articles of incorporation and
Bylaws previously made available to Parent are true, correct and complete. As
used in this Agreement, (a) the term "Company Material Adverse Effect" means any
change, effect, event or condition that has had or could reasonably be expected
to (i) have a material adverse effect on the business, assets, results of
operations or financial condition of the Company and its Subsidiaries, taken as
a whole, or (ii) prevent or materially delay the Company's ability to consummate
the transactions contemplated hereby, and (b) the term "Subsidiary" when used
with respect to any party, means any corporation or other organization, whether
incorporated or unincorporated, of which such party directly or indirectly owns
or controls more than 50% of the securities or other interests having by their
terms ordinary voting power to elect a majority of the board of directors or
others performing similar functions.
3.2. Authorization, Validity and Effect of Agreement. The Company has the
requisite corporate power and authority to execute and deliver this Agreement
and all agreements and documents contemplated hereby and thereby to be executed
and delivered by it. Subject only to the approval of this Agreement, the Merger
and the transactions contemplated hereby by the holders of a majority of the
outstanding Shares, this Agreement, the Offer, the Merger and the consummation
by the Company of the transactions contemplated hereby and thereby have been
duly authorized by all requisite corporate action. This Agreement constitutes,
and all agreements and documents contemplated hereby to be executed and
delivered by the Company (when executed and delivered pursuant hereto) will
constitute, the valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except that (i)
the enforceability hereof may be subject to applicable bankruptcy, insolvency or
other similar laws now or hereinafter in effect affecting creditors' rights
generally and (ii) the availability of the remedy of specific performance or
injunctive or other forms of equitable relief may be subject to equitable
defenses and would be subject to the discretion of the court before which any
proceeding therefor may be brought.
3.3. Capitalization. The authorized capital stock of the Company consists
of 35,000,000 Shares and 5,000,000 shares of preferred stock. As of the close of
business on the last Business Day immediately preceding the date hereof (the
"Measurement Date"), (a) 9,985,350 Shares were issued and outstanding (not
treating any treasury shares as outstanding),
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each of which was duly authorized, validly issued, fully paid and nonassessable
and issued free of any preemptive rights, (b) no shares of preferred stock of
the Company had been designated or issued, (c) 1,500,000 Shares were reserved
for issuance under the Stock Option Plans, and (d) options to purchase 1,285,200
Shares in the aggregate had been granted under the Stock Option Plans as more
particularly described in Section 3.3 of the Company Disclosure Letter
(including the holders thereof, the expiration date, the exercise prices thereof
and the dates of grant). Since the Measurement Date, no additional shares of
capital stock of the Company have been issued and no other options, warrants or
other rights to acquire shares of the Company's capital stock (collectively, the
"Rights to Acquire") have been granted. Except as described in the second
preceding sentence, the Company has no outstanding bonds, debentures, notes or
other securities or obligations the holders of which have the right to vote or
which are convertible into or exercisable for securities having the right to
vote on any matter on which any shareholder of the Company has a right to vote.
Except as set forth in Section 3.3 of the Company Disclosure Letter, there are
not at the date of this Agreement any existing options, warrants, calls,
subscriptions, convertible securities or other Rights to Acquire which obligate
the Company or any of its Subsidiaries to issue, exchange, transfer or sell any
shares of capital stock of the Company or any of its Subsidiaries other than
Shares issuable under the Stock Option Plans or awards granted pursuant thereto.
There are no outstanding contractual obligations of the Company or any of its
Subsidiaries (a) to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its Subsidiaries, or (b) to vote or to
dispose of any shares of the capital stock of any of its Subsidiaries.
3.4. Subsidiaries. Section 3.4 of the Company Disclosure Letter lists all
of the Subsidiaries of the Company. Each of the Company's Subsidiaries is a
corporation, partnership or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has the corporate, partnership or similar power
and authority to own its properties and to carry on its business as it is now
being conducted, and is duly qualified to do business and is in good standing in
each jurisdiction in which the ownership of its property or the conduct of its
business requires such qualification, except for jurisdictions in which such
failure to be so qualified or to be in good standing could not reasonably be
expected to have a Company Material Adverse Effect. The Company owns, directly
or indirectly, all of the outstanding
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shares of capital stock (or other ownership interests having by their terms
ordinary voting power to elect a majority of directors or others performing
similar functions with respect to such Subsidiary) of each of the Company's
Subsidiaries, free and clear of all liens, pledges, security interests, claims
or other encumbrances (collectively, "Liens"), except as set forth in Section
3.4 of the Company Disclosure Letter. Each of the outstanding shares of capital
stock (or such other ownership interests) of each of the Company's Subsidiaries
is duly authorized, validly issued, fully paid and nonassessable. Section 3.4 of
the Company Disclosure Letter sets forth the following information for each
Subsidiary of the Company: (i) its jurisdiction of incorporation or
organization, (ii) its authorized capital stock or share capital, and (iii) the
number of issued and outstanding shares of capital stock, share capital or other
equity interests.
3.5. Other Interests. Except for interests in the Company's Subsidiaries,
neither the Company nor any of the Company's Subsidiaries owns, directly or
indirectly, any interest or investment (whether equity or debt) in any domestic
or foreign corporation, company, partnership, joint venture, business, trust or
entity, other than (a) non-controlling investments in the ordinary course of
business and corporate partnering, development, cooperative marketing and
similar undertakings and arrangements entered into in the ordinary course of
business and (b) other investments of less than $1.0 million in the aggregate.
3.6. No Conflict; Required Filings and Consents. (a) Except as set forth
in Section 3.6 of the Company Disclosure Letter, the execution and delivery of
this Agreement by the Company do not, and the consummation by the Company of the
transactions contemplated hereby and thereby will not, (i) conflict with or
violate the articles of incorporation or bylaws or equivalent organizational
documents of the Company or any of its Subsidiaries, (ii) subject the Company to
making any filings and obtaining any approvals other than those identified in
Section 3.6(b)(i), or conflict with or violate any domestic or foreign statute,
rule, regulation or other legal requirement ("Law") or order, judgment or decree
("Order") applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, result
in the loss of a material benefit under, or give to others any right of purchase
or sale,
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or any right of termination, amendment, acceleration, increased payments or
cancellation of, or result in the creation of a Lien on any property or asset of
the Company or any of its Subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries or any property or
asset of the Company or any of its Subsidiaries is bound or affected, except, in
the case of clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults, events, losses, rights, payments, cancellations,
encumbrances or other occurrences that, individually or in the aggregate, could
not be reasonably expected to have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement and the consummation by the Company of the
transactions contemplated hereby and thereby will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic or foreign, including, without
limitation, any quasi-governmental, supranational, statutory, environmental
entity and any stock exchange, court or arbitral body (each a "Governmental
Entity"), except (i) for (A) applicable requirements, if any, of the Exchange
Act, (B) the applicable pre-merger notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, if any, and
the rules and regulations thereunder (the "HSR Act") and any other required
filings with or approvals of foreign competition Law authorities, and (C) the
filing of articles of merger pursuant to the NRS and (ii) where the failure to
obtain any such consent, approval, authorization or permit, or to make any such
filing or notification, could not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect.
3.7. Compliance with Laws. Except as set forth in Section 3.7 of the
Company Disclosure Letter, neither the Company nor any of its Subsidiaries is in
conflict with, or in default or violation of, (a) any Law or Order applicable to
the Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected (provided that no
representation or warranty is made in this Section 3.7 with respect to
Environmental Laws) or (b) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company
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or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any property or asset of the Company or any of its Subsidiaries
is bound or affected, except in each case for such conflicts, defaults or
violations that could not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. The Company and its
Subsidiaries have obtained all licenses, permits and other authorizations and
have taken all actions required by applicable Law or government regulations in
connection with their business as now conducted, except where the failure to
obtain any such item or to take any such action could not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect.
3.8. SEC Documents. (a) The Company has filed all forms, reports and
documents required to be filed by it with the SEC since June 30, 1996
(collectively, the "Company Reports"). As of their respective dates, the Company
Reports and any such reports, forms and other documents filed by the Company
with the SEC after the date of this Agreement and until the Offer Completion
Date (i) complied, or will comply, in all material respects with the applicable
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
the Exchange Act and the rules and regulations thereunder and (ii) did not, and
will not, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. The representation in clause (ii) of the preceding sentence does not
apply to any misstatement or omission in any Company Report filed prior to the
date of this Agreement which was superseded by a subsequent Company Report filed
prior to the date of this Agreement. No Subsidiary of the Company is required to
file any report, form or other document with the SEC.
(b) Except as set forth in Section 3.8(b) of the Company Disclosure
Letter, each of the financial statements included in or incorporated by
reference into the Company Reports (including the related notes and schedules)
presents fairly, in all material respects, the consolidated financial position
of the Company and its Subsidiaries as of its date and, to the extent
applicable, the results of operations, retained earnings or cash flows, as the
case may be, of the Company and its Subsidiaries for the periods set forth
therein (subject, in the case of unaudited statements, to normal recurring
year-end audit adjustments, none of which will be material in kind or amount),
in each case in
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accordance with United States generally accepted accounting principles
consistently applied ("GAAP") during the periods involved, except as may be
noted therein.
(c) Neither the Company nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
that would be required to be reflected on, or reserved against in, a
consolidated balance sheet of the Company or described or referred to in the
notes thereto, prepared in accordance with GAAP, except for (i) liabilities or
obligations that were so reserved on, or reflected in (including the notes to),
the consolidated balance sheet of the Company as of June 30, 1999, (ii)
liabilities or obligations arising in the ordinary course of business (including
trade indebtedness) since June 30, 1999, and (iii) liabilities or obligations
which could not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
(d) Set forth in Section 3.8(d) of the Company Disclosure Letter is a
listing of all of the Company's and its Subsidiaries' indebtedness for borrowed
money outstanding as of September 30, 1999, setting forth in each case the
principal amount thereof. Except as set forth in Section 3.8(d) of the Company
Disclosure Letter, no defaults have occurred and are continuing under the
agreements and instruments governing the terms of such indebtedness and there
has been no material change in the amount of the Company's and its Subsidiaries'
indebtedness for borrowed money since September 30, 1999.
3.9. Litigation. Except as disclosed in Section 3.9 of the Company
Disclosure Letter, there are no actions, suits or proceedings pending, publicly
announced or, to the Knowledge of the Company, threatened against or affecting
the Company or any of its Subsidiaries and there are no Orders of any
Governmental Entity outstanding against the Company or any of its Subsidiaries
(i) involving an amount in excess of $100,000 or (ii) that, individually or in
the aggregate, are reasonably likely to have a Company Material Adverse Effect.
3.10. Absence of Certain Changes. Except as described in the Company
Reports filed and publicly available prior to the date hereof (the "Company
Filed Reports") or disclosed in Section 3.10 of the Company Disclosure Letter,
since June 30, 1999, the Company and its Subsidiaries have conducted their
respective businesses in the ordinary course consistent with past practice and
there has not been (a) any Company Material Adverse Effect
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other than any Company Material Adverse Effect resulting from (i) factors
generally affecting the marine seismic industry, the oil field services industry
or the United States economy, (ii) the exercise by Petroleum Geophysical
Services ("PGS") of the option to acquire a non-exclusive right to use certain
intellectual property of the Company as described in the After Sales Support
Agreement, dated as of January 4, 1995, between PGS and Syntron, Inc., a copy of
which has been provided by the Company to the Purchaser, or (iii) any failure by
the Company to meet any specific financial projections provided to the Purchaser
or the Parent, or any of their representatives or advisors, whether provided
before or after the date of this Agreement, provided, however, that this clause
(iii) shall not exclude any material adverse effect resulting from any change,
effect, event or condition that has had or could reasonably be expected to have
a material adverse effect on the business, assets, financial condition or
results of operations of the Company and its Subsidiaries, taken as a whole, (b)
any declaration, setting aside or payment of any dividend or other distribution
with respect to its capital stock, (c) any split, combination or
reclassification of any of the Company's capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for any shares of the Company's capital stock, (d) any
granting by the Company or any of its Subsidiaries to any director, executive
officer or other "key employee" of the Company or any of its Subsidiaries of any
increase in compensation, (e) any granting by the Company or any of its
Subsidiaries to any such director, executive officer or key employee of any
increase in severance or termination pay, (f) any entry by the Company or any of
its Subsidiaries into any employment, severance or termination agreement with
any such director, executive officer or key employee, (g) except insofar as may
be required by a change in GAAP, any change in accounting methods, principles or
practices by the Company, (h) any revaluation by the Company of its Subsidiaries
of any of their respective assets, including, without limitation, writing down
the value of inventory or writing off notes or accounts receivable other than in
the ordinary course of business, (i) any entry by the Company or any of its
Subsidiaries into any commitment or transaction material to the Company and its
Subsidiaries, taken as a whole, (j) any damage, destruction or loss (whether or
not covered by insurance) materially adversely affecting the properties or
business of the Company and its Subsidiaries, taken as a whole, (k) any increase
in indebtedness for borrowed money other than an increase as a result of
borrowings under existing credit facilities or
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indebtedness incurred in the ordinary course of business, or (l) any granting of
a security interest in or lien on any material property or assets of the Company
and its Subsidiaries, taken as whole. For purposes of this Agreement, "key
employee" means any employee whose current salary and targeted bonus exceeds
$50,000 per annum.
3.11. Taxes. (a) Except as could not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, (i) the
Company has timely filed with the appropriate Governmental Entities all Tax
Returns required to be filed by or with respect to the Company and its
Subsidiaries, (ii) all Taxes shown to be due on such Tax Returns, all Taxes
required to be paid on an estimated or installment basis, and all Taxes required
to be withheld with respect to the Company and its Subsidiaries have been timely
paid or, if applicable, withheld and paid to the appropriate taxing authority in
the manner provided by Law, (iii) the reserve for Taxes set forth on the
consolidated balance sheet of the Company and its Subsidiaries as of June 30,
1999 is adequate for the payment of all Taxes incurred through such date and no
Taxes have been incurred after June 30, 1999 which were not incurred in the
ordinary course of business, (iv) except as disclosed in Section 3.11 of the
Company Disclosure Letter, no Federal, state, local or foreign audits,
administrative proceedings or court proceedings are pending with regard to any
Taxes or Tax Returns of the Company or any of its Subsidiaries and there are no
outstanding deficiencies or assessments asserted or proposed, (v) there are no
outstanding agreements, consents or waivers extending the statutory period of
limitations applicable to the assessment of any Taxes or deficiencies against
the Company or any of its Subsidiaries and (vi) except as set forth on Section
3.14(c) of the Company Disclosure Letter, neither the Company nor any of its
Subsidiaries is a party to any agreement providing for the allocation or sharing
of Taxes.
(b) The Company has not filed a consent to the application of Section
341(f) of the Internal Revenue Code of 1986, as amended (the "Code").
(c) The Company is not and has not been a United States real property
holding company (as defined in Section 897(c)(2) of the Code) during the
applicable period specified in Section 897(c)(1)(ii) of the Code.
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(d) No indebtedness of the Company is "corporate acquisition indebtedness"
within the meaning of Section 279(b) of the Code.
(e) The Company is, and will be immediately prior to the Offer Completion
Date, a member of the "selling consolidated group" of which the Majority
Stockholder is the common parent within the meaning of Section 338(h)(10).
Except as described in the immediately preceding sentence, the Company has not
been a member of an affiliated group filing consolidated or combined Tax
Returns.
(f) For purposes of this Agreement, (i) "Taxes" means all taxes, charges,
fees, levies or other assessments imposed by any United States Federal, state,
or local taxing authority or by any non-U.S. taxing authority, including, but
not limited to, income, gross receipts, excise, property, sales, use, transfer,
payroll, license, ad valorem, value added, withholding, social security,
national insurance (or other similar contributions or payments), franchise,
estimated, severance, stamp, and other taxes (including any interest, fines,
penalties or additions attributable to or imposed on or with respect to any such
taxes, charges, fees, levies or other assessments), and (ii) "Tax Return" means
any return, report, information return or other document (including any related
or supporting information and, where applicable, profit and loss accounts and
balance sheets) with respect to Taxes.
3.12. Property. (a) Section 3.12(a) of the Company Disclosure Letter
contains a true and complete list of all (i) material patents and patent
applications in the name of the Company or any of its Subsidiaries, (ii)
material trademark and service mark registrations and applications in the name
of the Company or any of its Subsidiaries solely or jointly with any other
parties, (iii) copyright registrations and applications for works, (iv) Internet
domain names used or held for use in connection with the business of the
Company, and (v) all material licenses related to the foregoing.
(b) Except as set forth in Section 3.12(b) of the Company Disclosure
Letter, (i) the Company and its Subsidiaries own or, to the Knowledge of the
Company, have the valid right to use, license, and otherwise exploit, all
intellectual property used by it in connection with its business, including,
without limitation, (A) trademarks and service marks (registered or
unregistered) and trade names, and all goodwill associated
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therewith, (B) patents, patentable inventions, discoveries, improvements, ideas,
know-how, processes and Computer Software, (C) trade secrets and the right to
limit the use or disclosure thereof, (D) copyrights in all works, including
software programs and mask works, and (E) domain names (collectively
"Intellectual Property"), except where the failure to own or have the valid
right to use the Intellectual Property could not reasonably be expected to have
a Company Material Adverse Effect, (ii) all grants, registrations and
applications for Intellectual Property that are used in and are material to the
conduct of the businesses of the Company and its Subsidiaries as currently
conducted (A) are valid, subsisting, in proper form and have been duly
maintained, including the submission of all necessary filings and fees in
accordance with the legal and administrative requirements of the appropriate
jurisdictions, and (B) have not lapsed, expired or been abandoned, (iii) to the
Knowledge of the Company, (A) there are no material conflicts with or
infringements of any Intellectual Property by any third party, and (B) the
conduct of the businesses of the Company and its Subsidiaries as currently
conducted does not conflict with or infringe any proprietary right of any third
party, (iv) there is no claim, suit, action or proceeding pending or, to the
Knowledge of the Company, threatened against the Company or any of its
Subsidiaries (A) alleging any such conflict or infringement with any third
party's proprietary rights or (B) challenging the ownership, use, validity or
enforceability of the Intellectual Property, except for claims, suits, actions,
proceedings or challenges which could not reasonably be expected to have a
Company Material Adverse Effect, (v) to the Knowledge of the Company, no former
or present employees, officers or directors of the Company or any of its
Subsidiaries hold or are asserting any right, title or interest directly or
indirectly, in whole or in part, in or to any Intellectual Property, and (vi) to
the Knowledge of the Company, none of the rights of the Company or any of its
Subsidiaries to any Intellectual Property under co-ownership arrangements or
through license from third parties will be affected by virtue of the
consummation of the Offer, the Merger or any other transaction contemplated by
this Agreement. For purposes of this Agreement, the term "Computer Software"
means (A) any and all computer programs and applications consisting of sets of
statements and instructions to be used directly or indirectly in computer
software or firmware whether in source code or object code form, (B) databases
and compilations, including, without limitation, any and all data and
collections of data, whether machine readable or otherwise, (C) all versions of
the foregoing including, without limitation, all
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screen displays and designs thereof, and all component modules of source code or
object code or natural language code therefor, and whether recorded on any
paper, magnetic media or other electronic or non-electronic device, (D) all
descriptions, flowcharts and other work product used to design, plan, organize
and develop any of the foregoing, and (E) all documentation, including, without
limitation, all technical and user manuals and training materials, relating to
the foregoing.
(c) The Company Filed Reports set forth all of the material real property
owned in fee by the Company or any of its Subsidiaries (the "Owned Real
Property"). The Company or one of its Subsidiaries has good and valid title to
(and quiet enjoyment of) each parcel of Owned Real Property and to each other
asset reflected in the latest consolidated balance sheet of the Company included
in the Company Filed Reports (other than as disclosed in the Company Filed
Reports or in Section 3.12(c) of the Company Disclosure Letter, or any such
other assets disposed of in the ordinary course of business or which,
individually or in the aggregate, are not material to the Company, free and
clear of all Liens except (i) those specified in Section 3.12(c) of the Company
Disclosure Letter or reflected or reserved against in the latest consolidated
balance sheet of the Company included in the Company Filed Reports, (ii) taxes
and general and special assessments not in default and payable without penalty
and interest or the validity of which are being contested in good faith by
appropriate actions, (iii) Liens that constitute a statutory landlord lien or a
carrier, warehouseman, mechanic, supplier, materialman, repairman or similar
Lien arising in the ordinary course of business, (iv) rights of third parties
under leases of real property and tangible personal property, (v) all easements,
covenants, ordinances, zoning regulations, restrictions and other encumbrances
which do not destroy marketability of title, materially detract from the value
or materially interfere with the present use of any Owned Real Property, and
(vi) other Liens that individually or in the aggregate could not reasonably be
expected to have a Company Material Adverse Effect (collectively, "Permitted
Liens").
(d) Except in each case where the failure could not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect:
(i) the Company or one of its Subsidiaries has a valid leasehold interest in
each parcel of real property or facility under which the Company or any of its
Subsidiaries uses or occupies, or has the right to use or occupy, now or in the
future (the "Leased Real Property"), free and clear
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of all Liens, except Permitted Liens, (ii) each lease for Leased Real Property
is in full force and effect, other than any such lease which has expired in
accordance with its terms without any liability of any party thereto, (iii) all
rent and other sums and charges due and payable by the Company or its
Subsidiaries as tenants thereunder are current in all material respects, (iv) no
termination event or condition or uncured default of a material nature on the
part of the Company or any such Subsidiary or, to the Knowledge of the Company,
the landlord exists under any lease for Leased Real Property, and (v) the
Company or one of its Subsidiaries is in actual possession of each Leased Real
Property and is entitled to quiet enjoyment thereof in accordance with the terms
of the applicable lease.
3.13. Millennium Compliance. The disclosures set forth in the Company
Filed Reports concerning potential computer hardware and software problems
associated with the Year 2000 are true, correct and complete in all material
respects and comply in all material respects with the requirements of the SEC
with respect to such disclosures.
3.14. Contracts. (a) There have been made available to Parent true,
correct and complete copies of all of the following contracts to which Company
or any of its Subsidiaries is a party or by which any of them is bound
(collectively, the "Material Contracts"): (i) contracts with any current officer
or director of the Company or any of its Subsidiaries; (ii) contracts (A) for
the sale of any of the material assets of the Company or any of its
Subsidiaries, other than contracts entered into in the ordinary course of
business, or (B) for the grant to any person of any preferential rights to
purchase any of its material assets; (iii) contracts which restrict the Company
or any of its Subsidiaries from competing in any line of business or with any
person in any geographical area in any material manner or which restrict any
other person from competing with the Company or any of its Subsidiaries in any
line of business or in any geographical area in any material manner; (iv)
contracts that have a "change of control" provision or that require the consent
of or notice to any third party prior to consummation of the transactions
contemplated by this Agreement; (v) indentures, credit agreements, security
agreements, mortgages, guarantees, promissory notes, letters of credit, hedging
obligations, capitalized lease obligations, take or pay contracts and other
contracts relating to the borrowing of money; (vi) contracts between the Company
or any of its Subsidiaries, on the one hand, and the Majority Stockholder and
any of its Affiliates (other
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than the Company and its Subsidiaries), on the other hand; (vii) agreements
involving the purchase of goods or services involving annual payments in excess
of $500,000 or agreements involving the sale of goods or services involving
annual payments in excess of $2,500,000; (viii) all joint venture agreements,
and (ix) all other agreements, contracts or instruments that are material to the
Company and its Subsidiaries taken as a whole.
(b) All of the Material Contracts are in full force and effect and are the
legal, valid and binding obligations of the Company and/or its Subsidiaries,
enforceable against them in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws
affecting creditors' rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity). Except as set forth in Section 3.14 of the Company Disclosure Letter,
neither the Company nor any of its Subsidiaries is in breach or default in any
material respect under any Material Contract nor, to the Knowledge of the
Company, is any other party to any Material Contract in breach or default
thereunder in any material respect, except for such breaches or defaults that
have not had and could not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
(c) Except as described in Section 3.14(c) of the Company Disclosure
Letter, there are no contracts, arrangements, understandings, or other legally
enforceable obligations between the Company and its Subsidiaries, on the one
hand, and the Majority Stockholder and any of its Affiliates (other than the
Company and its Subsidiaries), on the other hand, or amounts accrued thereunder
as of the date hereof.
(d) Neither the Company nor any of its Subsidiaries has any obligation to
Core Laboratories N.V. pursuant to that certain Agreement and Plan of Merger
dated January 18, 1999.
3.15. Environmental Matters. (a) Except as disclosed in the Company Filed
Reports, as specified in Section 3.15 of the Company Disclosure Letter or as
could not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect: (i) neither the Company nor any of its current
or former Subsidiaries has violated or is in violation of any Environmental Law;
(ii) none of the currently or formerly Owned Real Property or Leased Real
Property (including, without limitation, soils and surface and ground waters)
are contaminated
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with any Hazardous Substance in levels or in quantities which require
investigation or remediation under Environmental Laws; (iii) neither the Company
nor any of its current or former Subsidiaries is liable for any off-site
contamination; (iv) neither the Company nor any of its current or former
Subsidiaries has any liability or remediation obligation under any Environmental
Law; (v) no assets of the Company or any of its current or former Subsidiaries
are subject to pending or, to the Knowledge of the Company, threatened Liens
under any Environmental Law; (vi) the Company and its Subsidiaries have all
material Permits required under any Environmental Law ("Environmental Permits");
(vii) the Company and its Subsidiaries are in compliance with their respective
Environmental Permits in all material respects; and (viii) neither the Company
nor any of its current or former Subsidiaries has received any claim, notice or
request for information concerning any material violation or alleged violation
of, or any liability or alleged liability under, any Environmental Law.
(b) For purposes of this Agreement, the term (i) "Environmental Laws"
means any national, federal, state or local Law (whether domestic or foreign)
relating to: (A) releases or threatened releases of Hazardous Substances or
materials containing Hazardous Substances; (B) the manufacture, handling,
transport, use, treatment, storage or disposal of Hazardous Substances or
materials containing Hazardous Substances; or (C) pollution of the environment
or the protection of human health, and (ii) "Hazardous Substances" means: (A)
those materials, pollutants and/or substances defined in or regulated under the
following federal statutes and their state counterparts, as each may be amended
from time to time, and all regulations thereunder: the Hazardous Materials
Transportation Act, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the Clean
Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide and Rodenticide Act, the Toxic Substances Act and the
Clean Air Act; (B) petroleum and petroleum products including crude oil and any
fractions thereof; (C) natural gas, synthetic gas and any mixtures thereof; (D)
radon; (E) any other contaminant; and (F) any materials, pollutants and/or
substance with respect to which any Governmental Entity requires environmental
investigation, monitoring, reporting or remediation.
3.16 Company Benefit Plans; ERISA Compliance. (a) Except as disclosed in
the Company Filed Reports or disclosed in Section
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3.16(a) of the Company Disclosure Letter, there are no United States bonus,
pension, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, fringe benefit,
retirement, vacation, disability, death benefit, hospitalization, medical, life,
severance or other plan, agreement, arrangement, policies or understanding, or
change of control agreement whether formal or informal, oral or written, legally
binding or not providing benefits to any current or former employee, officer,
director, shareholder, consultant or independent contractor of the Company or
any of its Subsidiaries or to which the Company or any of its Subsidiaries
contributes or is or was obligated to contribute (collectively, the "Company
Benefit Plans", which will include each "employee benefit plan" (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), whether or not subject to ERISA), or Foreign Plans. For
purposes of this Agreement, (i) the term "Foreign Plan" will refer to each plan,
agreement, arrangement or understanding that is subject to or governed by the
Laws of any jurisdiction other than the United States, and which would have been
treated as a Company Benefit Plan had it been a United States plan, agreement,
arrangement or understanding, and (ii) the term "employee" will be considered to
include individuals rendering personal services to the Company or any of its
Subsidiaries as independent contractors. Section 3.16(a) of the Company
Disclosure Letter contains a true and complete list of all agreements or plans
providing for termination or severance pay to any officer, director or employee
of the Company.
(b) Except as set forth on Section 3.16(b) of the Company Disclosure
Letter, each Company Benefit Plan and Foreign Plan has been administered in
accordance with its terms, all applicable Laws, including ERISA and the Code,
except for any failures to administer any Company Benefit Plan or Foreign Plan
that could not, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect. Each Company Benefit Plans and Foreign Plan
is in compliance with all applicable Laws, including the applicable provisions
of ERISA, and the Code, except for any failures to be in such compliance that
could not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect. Each Company Benefit Plan that is intended to
be qualified under Section 401(a) or 401(k) of the Code is so qualified and each
trust established in connection with any Company Benefit Plan that is intended
to be exempt from federal income taxation under Section 501(a) of the Code is so
exempt. No fact or event has occurred which is
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reasonably likely to affect adversely the qualified status of any such Company
Benefit Plan or the exempt status of any such trust, except for any occurrence
that could not, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect, and all contributions to, and payments from,
each Company Benefit Plan and Foreign Plan that are required to be made in
accordance with such Plans and applicable Laws (including ERISA and the Code)
have been timely made, other than any failures that could not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect. Each Company Benefit Plan intended to meet the requirements of Section
501(c)(9) of the Code meets such requirements in all material respects and
provides no disqualified benefits (as defined in Section 4976(b) of the Code).
(c) The Internal Revenue Service (the "IRS") has issued favorable
determination letters with respect to the qualification of each qualified
Company Benefit Plan and related trust, and the IRS has not taken any action to
revoke any such letter and nothing has occurred, whether by action or failure to
act, that could reasonably be expected to cause the loss of such qualification.
The qualified Company Benefit Plans and trusts are set forth in Section 3.16(c)
of the Company Disclosure Letter.
(d) There are no leased employees within the meaning of Section 414(n) of
the Code who perform services for the Company or any of its Subsidiaries.
(e) No Company Benefit Plan is or at any time was (i) subject to Title IV
of ERISA; (ii) subject to the minimum funding standards of Section 302 of ERISA
or Section 412 of the Code; (iii) a "multiemployer plan" within the meaning of
Section 3(37) or 4001(a)(13) of ERISA or Section 414(f) of the Code; or (iv) a
"multiple employer plan" within the meaning of Section 413(c) of the Code.
(f) No Company Benefit Plan or Foreign Plan provides medical benefits
(whether or not insured) with respect to current or former employees, officers
or directors after retirement or other termination of service, except as
required by applicable Law.
(g) Except as set forth on Section 3.16(g) of the Company Disclosure
Letter, the consummation of the transactions contemplated by this Agreement will
not, either alone or in
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combination with another event, (i) entitle any current or former employee,
officer or director of the Company to severance pay, unemployment compensation
or any other payment or (ii) accelerate the time of payment or vesting, or
increase the amount of compensation due any such employee, officer or director.
(h) Neither the Company nor any of its Subsidiaries is a party to any
agreement, contract or arrangement (including this Agreement) that could result,
separately or in the aggregate, in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code. No Company Benefit
Plan provides for the reimbursement of excise taxes under Section 4999 of the
Code or any income taxes under the Code.
(i) With respect to each Company Benefit Plan and Foreign Plan, the
Company has delivered or made available to Parent a true and complete copy of:
(A) each writing constituting a part of such Company Benefit Plan or Foreign
Plan, including, without limitation, all Company Benefit Plan and Foreign Plan
documents and trust agreements; (B) the most recent Annual Report (Form 5500
Series) and accompanying schedule, if any; (C) the most recent annual financial
report, if any; (D) the most recent actuarial report, if any; and (E) the most
recent determination letter from the IRS, if any. Except as specifically
provided in the foregoing documents delivered or made available to Parent, there
are no amendments to any Company Benefit Plan or Foreign Plan that have been
adopted or approved nor has the Company or any of its Subsidiaries undertaken to
make any such amendments or to adopt or approve any new Company Benefit Plan or
Foreign Plan.
(j) Except as set forth on Section 3.16(j) of the Company Disclosure
Letter, there are no pending or, to the Knowledge of the Company, threatened
claims (other than claims for benefits in the ordinary course), lawsuits or
arbitrations that have been asserted or instituted, or to the Company's
Knowledge, no set of circumstances exists that may reasonably give rise to a
claim or lawsuit, against the Company Benefit Plans or Foreign Plans, any
fiduciaries thereof with respect to their duties to the Company Benefit Plans or
Foreign Plans or the assets of any of the trusts under any of the Company
Benefit Plans or Foreign Plans that could reasonably be expected to result in
any liability of the Company or any of its Subsidiaries, other than any
liability that could not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
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(k) With respect to each Foreign Plan: (A) all amounts required to be
reserved under each Foreign Plan have been so reserved in accordance with
reasonable accounting practices prevailing in the country where such Foreign
Plan is established; (B) each Foreign Plan required to be registered with a
Governmental Entity has been registered and maintained in good standing with the
appropriate Governmental Entities; and (C) the fair market value of the assets
of each funded Foreign Plan that is a defined pension plan (or termination
indemnity plan), and the liability of each insurer for each Foreign Plan that is
a defined benefit pension plan (or termination indemnity plan) and is funded
through insurance or the book reserve established for each Foreign Plan that is
a defined benefit pension plan (or termination indemnity plan) that utilizes
book reserves, together with any accrued contributions, is sufficient to procure
or provide for the liability for accrued benefits with respect to those current
and former employees of the Company and any of its Subsidiaries that participate
in such Foreign Plan according to the reasonable actuarial or other applicable
assumptions and valuations most recently used to determine employer
contributions to or the funded status or book reserve of such Foreign Plans.
(l) With respect to each Company Benefit Plan, there have been no
prohibited transactions or breaches of any of the duties imposed on
"fiduciaries" (within the meaning of Section 3(21) of ERISA) by ERISA with
respect to the Company Benefit Plans that could reasonably be expected to result
in any liability or excise tax under ERISA or the Code, other than any liability
or Tax that could not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect.
(m) All trusts providing funding for Company Benefit Plans that are
intended to comply with Section 501(c)(9) of the Code are exempt from federal
income taxation and, together with any other welfare benefit funds (as defined
in Section 419(e)(1) of the Code) maintained in connection with any of the
Company Benefit Plans, have been operated and administered in compliance with
all applicable requirements such that neither the Company or any of its
Subsidiaries, any Company Benefit Plan nor such trust or fund is subject to any
taxes, penalties or other liabilities imposed as a consequence of failure to
comply with such requirements, other than any liability or Tax that could not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
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(n) All contributions, transfers, and payments in respect of any Company
Benefit Plan, other than transfers incident to an incentive stock option plan
within the meaning of Section 422 of the Code, have been or are fully deductible
under the Code.
(o) With respect to any insurance policy that provides funding for
benefits under any Company Benefit Plan, to the Knowledge of the Company, no
insurance company issuing any such policy is in receivership, conservatorship,
liquidation or similar proceeding and, to the Knowledge of the Company, no such
proceedings with respect to any insurer are imminent.
3.17. State Takeover Statutes. The Company Board has approved the Offer,
the Merger, this Agreement and the transactions contemplated hereby and such
approval is sufficient to render inapplicable to the Offer, the Merger, this
Agreement, the Shareholder Agreement and the transactions contemplated hereby
and thereby, the limitations on control share acquisitions and business
combinations contained in Sections 78.378 through 78.3793 inclusive and Sections
78.411 through 78.444 inclusive of the NRS (or any similar provision). Neither
Chapter 92A of the NRS nor any other "fair price," "merger moratorium," "control
share acquisition" or other anti-takeover statute or similar statute or
regulation applies or purports to apply to the Offer, the Merger, this
Agreement, the Shareholder Agreement or any of the transactions contemplated
hereby or thereby.
3.18. Voting Requirements. The affirmative vote of the holders of a
majority of the issued and outstanding Shares, voting as a single class, at the
Company Stockholders Meeting to adopt this Agreement and approve the Merger
("Company Stockholder Approval") is the only vote of the holders of any class or
series of the Company's capital stock necessary to approve and/or adopt this
Agreement and the transactions contemplated hereby and to approve the Merger.
3.19. No Brokers. The Company has not entered into any contract,
arrangement or understanding with any Person or firm which may result in the
obligation of the Company or Parent to pay any investment banker's or finder's
fees, brokerage or agent's commissions or other like payments in connection with
the negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby, except that the Company has retained the
Company Financial Adviser as its financial advisor, the arrangements with which
have been disclosed to Parent prior to the date hereof. The Company or, if the
Effective Time
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occurs, the Surviving Corporation, will pay all amounts owed pursuant to the
foregoing arrangements.
3.20. Opinion of Company Financial Adviser. The Company has received the
opinion of the Company Financial Adviser to the effect that, as of the date
hereof, the consideration to be received by the Stockholders in the Offer and
the Merger is fair to the Stockholders from a financial point of view.
3.21. Proxy Statement; Offer Documents. The proxy statement to be sent to
the Stockholders in connection with a meeting of the Stockholders to consider
the Merger (the "Company Stockholders Meeting") or the information statement to
be sent to the Stockholders, as appropriate (such proxy statement or information
statement, as amended or supplemented, is herein referred to as the "Proxy
Statement"), at the date mailed to the Stockholders and at the time of the
Company Stockholders Meeting (i) will comply in all material respects with the
applicable requirements of the Exchange Act and the rules and regulations
thereunder and (ii) will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Neither the Schedule 14D-9 nor any of the
information relating to the Company or its Affiliates provided by or on behalf
of the Company specifically for inclusion in the Schedule 14D-1 or the Offer
Documents will, at the respective times the Schedule 14D-9, the Schedule 14D-1
and the other Offer Documents or any amendments or supplements thereto are filed
with the SEC and are first published, sent or given to Stockholders, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading;
provided, however, that no representation or warranty is made by the Company
with respect to any Parent SEC Information.
3.22. Certain Business Practices. None of the Company or any of its
Subsidiaries or any director, officer, employee or agent of the Company or any
of its Subsidiaries has, in furtherance of any business of the Company: (i) used
any funds for unlawful contributions, gifts, entertainment or other unlawful
payments relating to political activity, (ii) made any unlawful payment to any
foreign or domestic government official or employee or to any foreign or
domestic political party or campaign or violated any provision of the Foreign
Corrupt
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Practices Act of 1977, as amended, (iii) consummated any transaction, made any
payment, entered into any agreement or arrangement or taken any other action in
violation of Section 1128(B)(b) of the Social Security Act, as amended, or (iv)
made any other unlawful payment.
IV. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Each of Parent and Purchaser represents and warrants to the Company as
follows:
4.1. Existence; Good Standing; Corporate Authority. Parent is a societe
anonyme and Purchaser is a corporation duly incorporated, each validly existing
and in good standing (to the extent such a concept exists) under the laws of the
jurisdiction of its incorporation or organization. Each of Parent and Purchaser
is duly licensed or qualified to do business as a foreign corporation and is in
good standing (to the extent such concept exists) in each jurisdiction in which
the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary, except where the
failure to be so qualified or to be in good standing could not reasonably be
expected to have a Parent Material Adverse Effect. A "Parent Material Adverse
Effect" means any change, effect, event or condition that has had or could
reasonably be expected to (i) have a material adverse effect on the business,
assets, results of operations or financial condition of Parent, Purchaser and
Parent's Subsidiaries, taken as a whole, or (ii) prevent or materially delay
Parent's or Purchaser's ability to consummate the transactions contemplated
hereby. Each of Parent and Purchaser has all requisite corporate power and
authority to own, operate and lease its properties and carry on its business as
now conducted. The copies of the articles of incorporation and bylaws or
equivalent organizational documents of Parent and Purchaser previously made
available to the Company are true and correct.
4.2. Authorization, Validity and Effect of Agreement. Each of Parent and
Purchaser has the requisite corporate power and authority to execute and deliver
this Agreement, the Shareholder Agreement and all agreements and documents
contemplated hereby and thereby to be executed respectively by it. This
Agreement, the Shareholder Agreement, the Offer, the Merger and the consummation
by Parent and Purchaser of the transactions contemplated hereby and thereby have
been duly and validly authorized by the respective Boards of Directors (or
similar
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governing body) of Parent and Purchaser and by Parent as sole shareholder of
Purchaser, and no other corporate action on the part of Parent and Purchaser is
necessary to authorize this Agreement, the Shareholder Agreement, the Offer and
the Merger, or to consummate the transactions contemplated hereby or thereby
other than the authorization and approval by the holders of two-thirds of
ordinary shares of Parent of the reserved capital increase contemplated by the
Subscription Agreement dated October 23, 1999 (the "Subscription Agreement")
between Parent and The Beacon Group Energy Investment Fund II, L.P. ("Beacon")
(such approval, the "Parent Stockholder Approval") and the approval of such
reserved capital increase by the Board of Directors (or similar governing body)
of the Parent (the "Parent Board") (together with the Parent Stockholder
Approval, the "Parent Financing Approvals"). This Agreement and the Shareholder
Agreement constitute, and all agreements and documents contemplated hereby to be
executed and delivered by Parent or Purchaser (when executed and delivered
pursuant hereto) will constitute, the valid and binding obligations of Parent or
Purchaser, as the case may be, enforceable respectively against them in
accordance with their respective terms, except that (i) the enforceability
hereof may be subject to applicable bankruptcy, insolvency or other similar laws
now or hereinafter in effect affecting creditors' rights generally and (ii) the
availability of the remedy of specific performance or injunctive or other forms
of equitable relief may be subject to equitable defenses and would be subject to
the discretion of the court before which any proceeding therefor may be brought.
4.3. No Conflict; Required Filings and Consents. (a) The execution and
delivery of this Agreement and the Shareholder Agreement by Parent and Purchaser
do not, and the consummation by Parent and Purchaser of the transactions
contemplated hereby and thereby will not, (i) conflict with or violate the
articles of incorporation, bylaws or other similar constituent documents of
Parent or any of its Subsidiaries, (ii) conflict with or violate any Law or
Order applicable to Parent or any of its Subsidiaries or by which any property
or asset of Parent or any of its Subsidiaries is bound or affected, or (iii)
subject to making the filings, obtaining the approvals and effecting any other
matters identified in Section 4.3(b), result in any breach of or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, result in the loss of a material benefit under, or give to
others any right of termination, amendment, acceleration, increased payments or
cancellation of, or result in the creation of a Lien on any
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property or asset of Parent or any of its Subsidiaries pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or any of its
Subsidiaries is a party or by which Parent or any of its Subsidiaries or any
property or asset of Parent or any of its Subsidiaries is bound or affected,
except (A) in the case of clauses (i), (ii) and (iii), for the Parent Financing
Approvals, and (B) in the case of clauses (ii) and (iii), for any such
conflicts, violations, breaches, defaults, events, losses, rights, payments,
cancellations, encumbrances or other occurrences that could not, individually or
in the aggregate, reasonably be expected to have a Parent Material Adverse
Effect.
(b) The execution and delivery of this Agreement and the Shareholder
Agreement by Parent and Purchaser do not, and the performance of this Agreement
and the Shareholder Agreement and the consummation of the transactions
contemplated hereby and thereby by either of them will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Entity, except (i) for (A) applicable requirements, if any, of the
Exchange Act, (B) the applicable pre-merger notification requirements of the HSR
Act, and any other required filings with or approvals of foreign competition
authorities, (C) the Parent Financing Approvals, and (D) the filing of articles
of merger pursuant to the NRS, and (ii) where failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
could not, individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect.
4.4. SEC Documents. (a) The Parent has filed all forms, reports and
documents required to be filed by it with the SEC since June 30, 1997
(collectively, the "Parent Reports"). As of their respective dates, the Parent
Reports and any such reports, forms and other documents filed by the Parent with
the SEC after the date of this Agreement (i) complied, or will comply, in all
material respects with the applicable requirements of the Securities Act, the
Exchange Act and the rules and regulations thereunder and (ii) did not, and will
not, contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. The representation in clause (ii) of the preceding sentence does not
apply to any misstatement or omission in any Parent Report filed prior to the
date of this
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Agreement which was superseded by a subsequent Parent Report filed prior to the
date of this Agreement.
(b) Each of the financial statements included in or incorporated by
reference into the Parent Reports (including the related notes and schedules)
presents fairly, in all material respects, the consolidated financial position
of the Parent and its Subsidiaries as of its date and, to the extent applicable,
the results of operations, retained earnings or cash flows, as the case may be,
of the Parent and its Subsidiaries for the periods set forth therein (subject,
in the case of unaudited statements, to normal recurring year-end audit
adjustments, none of which will be material in kind or amount), in each case in
accordance with GAAP during the periods involved, except as may be noted
therein.
4.5. No Brokers. Neither Parent nor Purchaser has entered into any
contract, arrangement or understanding with any Person or firm which may result
in the obligation of the Company to pay any investment banker's or finder's
fees, brokerage or agent's commissions or other like payments in connection with
the negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby, any such amounts to be the sole liability of
Parent.
4.6. Proxy Statement; Offer Documents. None of the information provided by
Parent, Purchaser or their respective officers, directors, representatives,
agents or employees for inclusion in the Proxy Statement, or in any amendments
thereof or supplements thereto, will, on the date the Proxy Statement or any
amendments or supplements thereto is first mailed to Stockholders or at the time
of the Company Stockholders Meeting, contain any untrue statement of a material
fact, or will omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Neither the Offer Documents nor any
amendments thereof or supplements thereto will, at any time the Offer Documents
or any such amendments or supplements are filed with the SEC or first published,
sent or given to the Stockholders, contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Notwithstanding the foregoing, Parent and Purchaser do not make
any representation or warranty with respect to any Company SEC Information.
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4.7. Financing. Parent and Beacon have entered into the Subscription
Agreement pursuant to which, subject to satisfaction of the conditions stated
therein (including the Parent Financing Approvals), Parent will issue and Beacon
will purchase shares of Parent, the proceeds of which will be used by Parent to
finance or caused to be financed the Offer, the Merger and the transactions
contemplated by this Agreement (such transaction shall be referred to as the
"Financing"). Parent has provided to the Company a true and correct copy of the
Subscription Agreement.
V. COVENANTS
5.1. Conduct of Business. (a) Conduct of Business By the Company. During
the period from the date of this Agreement to the Effective Time, the Company
will, and will cause its Subsidiaries to, carry on their respective businesses
in the usual, regular and ordinary course in substantially the same manner as
heretofore conducted and in compliance in all material respects with all
applicable Laws and, to the extent consistent therewith, use all reasonable
efforts to continue to pursue the Company's plans for becoming Millennium
Compliant prior to January 1, 2000 and to preserve intact their current business
organizations, and use all reasonable efforts to keep available the services of
their current officers and other key employees and preserve their relationships
with all key customers, suppliers and other Persons having business dealings
with them to the end that their goodwill and ongoing businesses will be
unimpaired at the Effective Time. Without limiting the generality or effect of
the foregoing, except as expressly and specifically described in Section 5.1 of
the Company Disclosure Letter or as expressly provided by this Agreement, during
the period from the date of this Agreement to the Effective Time, the Company
will not, and will not permit any of its Subsidiaries to, without the prior
written consent of Parent:
(i) other than dividends and distributions (including liquidating
distributions) by a direct or indirect wholly owned Subsidiary of the
Company to its parent, or by a Subsidiary that is partially owned by the
Company or any of its Subsidiaries, provided, that the Company or any such
Subsidiary receives or is to receive its proportionate share thereof, (A)
declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, (B) split, combine
or reclassify any of its capital stock or issue or authorize the issuance
of any
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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 capital stock of the Company or any of its Subsidiaries or any
other securities thereof or any rights, warrants or options to acquire any
such shares or other securities;
(ii) except for the issuance of Shares pursuant to the exercise of
Options that are outstanding on the Measurement Date, issue, deliver,
sell, pledge or otherwise encumber any shares of its capital stock, any
other voting securities or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, voting securities or
convertible securities;
(iii) amend its articles of incorporation, bylaws or other
comparable organizational documents;
(iv) acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets of, or in any other manner, any business
or any corporation, limited liability company, partnership, joint venture,
association or other business organization or division thereof;
(v) sell, lease, license, mortgage or otherwise encumber or subject
to any Lien or otherwise dispose of any of its properties or assets, other
than (x) in the ordinary course of business consistent with past practice,
(y) sales of assets which do not individually or in the aggregate exceed
$500,000 and (z) the sale by the Company of a note receivable dated
December 29, 1998 from CGG Marine in the original amount of
$10,848,320.30, which sale referred to in clause (z) shall require the
prior written consent of Parent, which consent shall not be unreasonably
withheld;
(vi) (A) incur, except as set forth in Section 5.1(a)(vi)(A) of the
Company Disclosure Letter, any indebtedness for borrowed money or
guarantee any such indebtedness of another Person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities of
the Company or any of its Subsidiaries, guarantee any debt securities of
another Person, enter into any "keep well" or other agreement to maintain
any financial statement condition of another Person or enter into any
arrangement having the economic effect of any of the foregoing, except for
the incurrence of indebtedness for
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borrowed money from the Stockholder to fund working capital requirements
consistent with past practice and in connection with any capital
expenditures permitted under Section 5.1(a)(vii) of this Agreement or (B)
make any loans, advances or capital contributions to, or investments in,
any other Person, other than to the Company or any wholly owned Subsidiary
of the Company or to officers and employees of the Company or any of its
Subsidiaries for travel, business or relocation expenses in the ordinary
course of business;
(vii) make any capital expenditures other than (i) capital
expenditures set forth in the estimate of the Company dated October 5,
1999 previously delivered to Parent or (ii) expenditures in the ordinary
course of business consistent with past practice which individually or in
the aggregate do not exceed $500,000;
(viii) make any change to its accounting methods, principles or
practices, except as may be required by GAAP, or make or change any Tax
election or settle or compromise any material Tax liability or refund;
(ix) except as required by Law or contemplated hereby, enter into,
adopt or amend in any material respect or terminate any Company Benefit
Plan, Foreign Plan or any other agreement, plan or policy involving the
Company or any of its Subsidiaries and one or more of their directors,
officers or employees, or materially change any actuarial or other
assumption used to calculate funding obligations with respect to any
Company Benefit Plans or Foreign Plans, or change the manner in which
contributions to any Company Benefit Plans or Foreign Plans are made or
the basis on which such contributions are determined;
(x) hire or terminate the employment of any executive officer or key
employee or increase the compensation of any director, executive officer
or other key employee of the Company or pay any benefit or amount not
required by a plan or arrangement as in effect on the date of this
Agreement to any such Person;
(xi) enter into or amend in any material respect any Material
Contract or enter into any contract or agreement, written or oral, with
any Affiliate, associate or relative of the Company, or make any payment
to or for the benefit of, directly or indirectly, any of the foregoing,
except for
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payments made by the Company to the Stockholder (A) to repay indebtedness
incurred by the Company as permitted by clause (vi) above or (B) in
accordance with the terms of the Tax Allocation Agreement or Corporate
Services Agreement of amounts that have accrued prior to the date hereof
and that are listed on Section 3.14(c) of the Company Disclosure Letter or
amounts that are attributable to any period or partial period commencing
on the date of this Agreement not incurred in breach of this Agreement;
(xii) authorize, recommend, propose or announce an intention to
adopt a plan of complete or partial liquidation or dissolution of the
Company or any of its Subsidiaries; or
(xiii) authorize, or commit or agree to take, any of the foregoing
actions.
(b) Other Actions. Except as required by Law, neither the Company, on the
one hand, nor Parent or Purchaser, on the other hand, will, or will permit any
of their respective Subsidiaries to, voluntarily take any action that would, or
that could reasonably be expected to, result in (i) any of the representations
and warranties of such party becoming untrue in any material respect or (ii) any
of the conditions set forth in Annex A or Article VI not being satisfied.
(c) Notice of Changes. Each of the Company and Parent will promptly advise
the other party orally and in writing of (i) any representation or warranty made
by it or, in the case of Parent, it or Purchaser, contained in this Agreement
becoming untrue or inaccurate in any material respect, (ii) the failure by it
or, in the case of Parent, it or Purchaser, to comply in any material respect
with or satisfy in any material respect any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement, or (iii) any change or
event which could reasonably be expected to have a Company Material Adverse
Effect or a Parent Material Adverse Effect, as applicable; provided, however,
that no such notification will affect the representations, warranties, covenants
or agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
(d) Company Stockholders Meeting. (i) The Company will take all action
necessary in accordance with applicable Law and its articles of incorporation
and bylaws to convene a meeting of the Stockholders as promptly as practicable
after the Offer
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Completion Date to consider and vote upon the approval and adoption of this
Agreement and the Merger. The Company Board will recommend such approval and
adoption and the Company will take all lawful action to solicit such approval,
including, without limitation, timely mailing any Proxy Statement; provided,
however, that such recommendation (but not such actions to convene the Company
Stockholders Meeting) is subject to any action, including any withdrawal or
change of its recommendation, taken by, the Company Board, expressly permitted
by Section 5.2(b). Without limiting the generality or effect of the foregoing,
the Company's obligations pursuant to the first sentence of this Section 5.1(d)
will not be affected by the commencement, public proposal, public disclosure or
communication to the Company of any Company Takeover Proposal. If the Parent or
Purchaser purchases any Common Stock pursuant to the Offer, the record date for
the Company Stockholder Meeting shall be a date subsequent to the date the
Parent or Purchaser becomes a record holder of Common Stock purchased pursuant
to the Offer.
(ii) Notwithstanding Section 5.1(d)(i) hereof, in the event that Parent,
Purchaser or any other Subsidiary of Parent acquires at least 90% of the
outstanding Shares pursuant to the Offer or otherwise, the parties hereto agree,
at the request of Parent or Purchaser, to take all necessary and appropriate
action to cause the Merger to become effective in accordance with Section
92A-180 of the NRS without a meeting of Stockholders as soon as practicable
after the acceptance for payment and purchase of Shares by Purchaser pursuant to
the Offer.
5.2. No Solicitation. (a) The Company, its affiliates and their respective
officers, directors, employees, representatives and agents will immediately
cease any existing discussions or negotiations, if any, with any parties with
respect to any Company Takeover Proposal, take the necessary steps to inform
such parties of the obligations undertaken in this Section 5.2, and request that
such parties promptly return all documents (and all copies thereof) furnished to
them by the Company or its representatives in connection with such discussions
and negotiations. The Company will not, nor will it permit any of its
Subsidiaries to, nor will it authorize or permit any of its officers, directors
or employees or any investment banker, financial advisor, attorney, accountant
or other representative retained by it or any of its Subsidiaries to, directly
or indirectly, (i) solicit, initiate or encourage (including, without
limitation, by way of furnishing information), or take any other action designed
or reasonably likely to facilitate, any
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inquiries or the making of any proposal which constitutes or reasonably may give
rise to any Company Takeover Proposal or (ii) participate in any discussions or
negotiations regarding any Company Takeover Proposal; provided, however, that
if, at any time prior to the date on which Purchaser purchases Shares in the
Offer (the "Offer Completion Date"), the Company Board determines in good faith,
based upon and in conformity with the advice of outside counsel, that failure to
do so would result in a breach of its fiduciary duties to the Stockholders under
applicable Law, the Company may, in response to a Superior Proposal which was
not solicited by it and did not otherwise result from a breach of any provision
of this Agreement and subject to the Company providing Parent prior written
notice of its decision to take such action and the information required pursuant
to Section 5.3(c), (A) furnish information with respect to the Company and each
of its Subsidiaries to any Person pursuant to a customary confidentiality
agreement and (B) participate in negotiations regarding such Superior Proposal.
For purposes of this Agreement, "Company Takeover Proposal" means any inquiry,
proposal or offer from any Person relating to any direct or indirect acquisition
or purchase of 10% or more of the assets, net income or net revenues of the
Company and its Subsidiaries or 10% or more of any class of equity securities of
the Company or any of its Subsidiaries, any tender offer or exchange offer for
Shares for any class of equity securities of the Company or any of its
Subsidiaries, or any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries, other than the transactions contemplated by
this Agreement, or any other transaction that is intended or could frustrate the
completion of the transactions contemplated hereby and "Superior Proposal" means
a bona fide written Company Takeover Proposal that (w) involves the direct or
indirect acquisition or purchase of 100% or more of the assets of the Company
and its Subsidiaries or 50% or more of the Common Stock of the Company (x)
involves payment of consideration to the Company's Stockholders and other terms
and conditions that, taken as a whole, the Company Board reasonably determines
is superior to the Offer and the Merger, (y) is not subject to a financing
condition unless the Company Board, by action of a majority of the entire
Company Board in good faith, based on the advice of the Company Financial
Advisor, determines that the Company Takeover Proposal is readily financeable,
and (z) is made by a Person reasonably capable of completing such Company
Takeover Proposal, taking into account the legal, financial, regulatory
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and other aspects of such Company Takeover Proposal and the Person making such
Company Takeover Proposal.
(b) Except as expressly permitted by this Section 5.2(b), neither the
Company Board nor any committee thereof may (i) withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse to Parent or Purchaser, the
approval or recommendation by the Company Board or such committee of the Offer,
the Merger or this Agreement, (ii) approve or recommend, or propose publicly to
approve or recommend, any Company Takeover Proposal, (iii) cause the Company to
enter into any letter of intent, agreement in principle, acquisition agreement
or other similar agreement related to any Company Takeover Proposal (each, a
"Company Acquisition Agreement"), or (iv) release any third party from, or waive
any provisions of, any confidentiality or standstill agreement to which the
Company is a party. Notwithstanding the foregoing, in the event that prior to
the Offer Completion Date, the Company Board determines in good faith (after
consultation with the Company Financial Advisor) after the Company has received
a Superior Proposal and based upon and in conformity with the advice of outside
counsel, that failure to do so would result in a breach of its fiduciary duties
to the Stockholders under applicable Law, the Company Board may, subject to
Section 7.5(b), withdraw or modify its approval or recommendation of the Offer,
the Merger or this Agreement, approve or recommend a Superior Proposal or
terminate this Agreement pursuant to Section 7.3(c), provided, however, that not
less than five Business Days prior to such termination, the Company will notify
Parent of its intention to terminate this Agreement pursuant to this Section
5.2(b) and Section 7.3(c) and will cause its financial and legal advisers to
negotiate in good faith with Parent and Parent's financial and legal advisers
during such five-day period to make such adjustments in the terms and conditions
of this Agreement as are acceptable to Parent and the Company and would cause
such Company Takeover Proposal not to be a Superior Proposal and, upon the
agreement between Parent and the Company on such adjustments, the Company Board
shall not be entitled to terminate this Agreement pursuant to Section 7.3(c).
(c) In addition to the obligations of the Company set forth in Sections
5.2(a) and (b), the Company will (i) immediately advise Parent orally and in
writing of any Company Takeover Proposal, the material terms and conditions of
such request or Company Takeover Proposal and the identity of the Person making
such request or Company Takeover Proposal, (ii) promptly notify Parent in
writing after receipt of any request for nonpublic
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information relating to it or any of its Subsidiaries or for access to its or
its Subsidiaries' properties, books or records by any Person that, to the
Knowledge of the Company's executive officers, may be considering making, or has
made, a Company Takeover Proposal, and (iii) keep Parent informed of the status
and details (including amendments or proposed amendments) of any such Company
Takeover Proposal or any such request for information or access.
(d) Nothing contained in this Section 5.2 will prohibit the Company from
taking and disclosing to its Stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act based on the written advice of
outside counsel; provided, however, that neither the Company nor the Company
Board nor any committee thereof may, except as expressly permitted by Section
5.2(b), withdraw or modify, or propose publicly to withdraw or modify, its
position with respect to the Offer, this Agreement or the Merger or approve or
recommend, or propose publicly to approve or recommend, a Company Takeover
Proposal.
5.3. Filings, Reasonable Efforts. (a) Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties will use all
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things, necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Offer, the Merger and the other
transactions contemplated by this Agreement, including, without limitation, (i)
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and making of all necessary registrations
and filings (including filings with Governmental Entities) and taking of all
reasonable steps as may be necessary to obtain an approval or waiver from, or to
avoid an action or proceeding by, any Governmental Entity, (ii) obtaining of all
necessary consents, approvals or waivers from third parties, and (iii) execution
and delivery of any additional instruments necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this
Agreement.
(b) In connection with and without limiting the foregoing, the Company and
Parent will, and Parent will cause Purchaser to, (i) take all action necessary
to ensure that no state takeover statute or similar statute or regulation is or
becomes applicable to the Offer, the Merger or any of the other transactions
contemplated hereby and (ii) if any state takeover statute or
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similar statute or regulation becomes applicable thereto, take all action
necessary to ensure that the Offer and the Merger and such other transactions
may be consummated as promptly as practicable on the terms contemplated hereby
and otherwise to minimize the effect of such statute or regulation thereon.
(c) Notwithstanding any other provision hereof, in no event will Parent be
required to agree to any divestiture, hold- separate or other requirement or
restriction in connection with this Agreement or any of the transactions
contemplated thereby.
(d) If, at any time after the Effective Time, the Surviving Corporation
considers or is advised that any deeds, bills of sale, assignments, assurances
or any other actions or things are necessary or desirable to vest, perfect or
confirm of record or otherwise in the Surviving Corporation its right, title or
interest in, to or under any of the rights, properties or assets of Purchaser or
the Company or otherwise to carry out this Agreement, the officers and directors
of the Surviving Corporation will be authorized to execute and deliver, in the
name and on behalf of Purchaser or the Company, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of
Purchaser or the Company, all such other actions and things as may be necessary
or desirable to vest, perfect or confirm any and all right, title and interest
in, to and under such rights, properties or assets in the Surviving Corporation
or otherwise to carry out this Agreement.
(e) The Parent and the Purchaser will cooperate with the Company to
satisfy the Offer Condition set forth in clause (L) of Annex A hereto; provided,
however, that Parent and the Purchaser will not be obligated to provide a
guarantee or any other form of financial assurance, or to pay any fee or other
amounts or make any commitments, which may be requested by the banks who are
parties to the loan agreements specified in such clause (L).
5.4. Inspection of Records. (a) From the date hereof to the Effective
Time, the Company will (i) allow all designated officers, attorneys, accountants
and other representatives of Parent, including, without limitation,
representatives of Beacon, reasonable access at all reasonable times to the
officers, key employees, accountants and other representatives of the Company
and its Subsidiaries and the offices, records and files, correspondence, audits
and properties, as well as to all information relating to commitments,
contracts, titles and financial position, or otherwise pertaining to the
business and
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affairs, of the parties and their respective Subsidiaries, as the case may be
and (ii) furnish to Parent and its counsel, financial advisors, auditors and
other authorized representatives such financial and operating data and other
information as such Persons may reasonably request.
(b) Subject to the requirements of applicable Law, and except for such
actions as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer and the Merger, the parties will,
and will instruct each of their respective Affiliates, associates, partners,
employees, agents and advisors to, hold in confidence all such information as is
confidential or proprietary and will use such information only in connection
with the Offer and the Merger.
(c) If the transactions contemplated herein are not consummated, then each
receiving party shall return to the disclosing party (or destroy and provide
certification of the destruction of) all documents, studies, analyses,
compilations, data and other information provided by the disclosing party to
such receiving party or compilations, extracts, summaries or other documents
prepared by such receiving party from information supplied by the disclosing
party (together, the "Confidential Information"). No receiving party shall use
or reveal to any third party any of the Confidential Information, provided, that
the obligations of any receiving party hereunder shall not apply to:
(i) any Confidential Information which was known to such receiving
party prior to its disclosure by the disclosing party or developed by the
receiving party other than in breach of this Agreement, provided, that
such Confidential Information was not, to the knowledge of the receiving
party obtained in violation of another confidentiality agreement or
similar obligation with the disclosing party or another party;
(ii) any Confidential Information which was in the public domain
prior to the disclosure thereof by the disclosing party to the receiving
party or which thereafter enters the public domain other than in breach of
this Agreement;
(iii) any Confidential Information which is disclosed to the
receiving party by a third party (which term shall not include the
counsel, accountants and other non-employee
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representatives of the Company) having, to the knowledge of the receiving
party, the legal right to make such disclosure; or
(iv) any Confidential Information which is required to be disclosed
by order of any court or other tribunal of competent jurisdiction or by
any other applicable Law, provided, that the receiving party shall notify
the disclosing party of any order promptly so as to afford the disclosing
party the opportunity to intervene in order to prevent such disclosure, if
the disclosing party so desires.
5.5. Publicity. The initial press release in the United States and France
relating to this Agreement will be in the form of a joint press release
previously agreed between Parent and the Company and thereafter the Company and
Parent will, subject to their respective legal obligations (including
requirements of stock exchanges and other similar regulatory bodies), consult
with each other, and use reasonable efforts to agree upon the text of any press
release, before issuing any such press release or otherwise making public
statements with respect to the transactions contemplated hereby and in making
any filings with any Governmental Entity or with any national securities
exchange with respect thereto.
5.6. Proxy Statement. If required by applicable Law, Parent and the
Company will cooperate and promptly prepare and file with the SEC as soon as
practicable after the Offer Completion Date the Proxy Statement, and promptly
thereafter will mail the Proxy Statement to the Stockholders. Any Proxy
Statement will contain the recommendation of the Company Board that the
Stockholders approve and adopt this Agreement and approve the Merger and the
other transactions contemplated hereby. The Company agrees not to mail the Proxy
Statement to the Stockholders until Parent confirms that the information
provided by Parent and Purchaser continues to be accurate. If at any time prior
to the Company Stockholders Meeting any event or circumstance relating to the
Company or any of its Subsidiaries or Affiliates, or its or their respective
officers or directors, should be discovered by the Company that is required to
be set forth in a supplement to any Proxy Statement, the Company will promptly
inform Parent and Purchaser to supplement such Proxy Statement and mail such
supplement to the Stockholders.
5.7. Insurance; Indemnity. (a) All rights to indemnification and
exculpation from liabilities for acts or
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omissions occurring at or prior to the Effective Time existing in favor of the
current or former directors or officers of the Company or each of its
Subsidiaries as provided in their respective articles of incorporation or bylaws
(or comparable organizational documents) or contracts for indemnification in the
form of those agreements in effect as of the date hereof will be assumed by the
Surviving Corporation and the Surviving Corporation will be directly responsible
for such indemnification, without further action, as of the Effective Time and
such indemnification will continue in full force and effect in accordance with
their respective terms until the expiration of all periods in which claims may
be made thereunder pursuant to applicable statutes of limitation,
notwithstanding any change to the articles of incorporation or bylaws pursuant
to this Agreement (including Section 2.4) or at any time after the Offer
Completion Date. In addition, from and after the Effective Time, directors and
officers of the Company who become or remain directors or officers of the
Surviving Corporation will be entitled to the same indemnity rights and
protections (including those provided by directors' and officers' liability
insurance) of the Surviving Corporation. Notwithstanding any other provision
hereof, the provisions of this Section 5.7 are intended to be for the benefit
of, and will be enforceable by, each indemnified party, his or her heirs and his
or her representatives.
(b) The Company and the Surviving Corporation, as applicable, will
maintain in effect for not less than six years after the Offer Completion Date
policies of directors' and officers' liability insurance equivalent in all
material respects to those maintained by or on behalf of the Company and its
Subsidiaries on the date hereof (and having at least the same coverage and
containing terms and conditions which are no less advantageous to the Persons
currently covered by such policies as insured) with respect to matters existing
or occurring at or prior to the Offer Completion Date; provided, however, that
if the aggregate annual premiums for such insurance at any time during such
period exceed 150% of the per annum rate of premium currently paid by the
Company and its Subsidiaries for such insurance on the date of this Agreement,
then the Surviving Corporation will provide the maximum coverage that is then
available at an annual premium equal to 150% of such rate.
5.8. Employee Benefits Matters. (a) On and after the Effective Time, the
Surviving Corporation will promptly pay or provide when due all compensation and
benefits as provided
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pursuant to the terms of, and to honor in accordance with their current existing
terms (except to the extent amended or terminated in accordance with such
terms), all compensation arrangements, employment agreements and employee or
director benefit plans, programs and policies in existence as of the date hereof
for all employees (and former employees) and directors (and former directors) of
the Company and its Subsidiaries that were not entered into in breach of this
Agreement.
(b) The Surviving Corporation, for the period commencing at the Effective
Time and ending on the date that is one year after the Effective Time, will
provide employee benefits under plans, programs and arrangements which, in the
aggregate, will provide benefits to the employees of the Surviving Corporation
and its Subsidiaries (other than employees covered by a collective bargaining
agreement) that are not materially less favorable in the aggregate than those
provided pursuant to the plans, programs and arrangements of the Company and its
Subsidiaries in effect on the date hereof (other than those related to the
equity securities of the Company); provided, however, that nothing herein will
prevent the amendment or termination of any specific plan, program or
arrangement or require that the Surviving Corporation provide or permit
investment in the securities of Parent, the Company or the Surviving Corporation
or interfere with the Surviving Corporation's right or obligation to make such
changes as are necessary to comply with applicable Law.
(c) Employees of the Surviving Corporation will be given credit for all
service with the Company and its Subsidiaries, to the same extent as such
service was credited for such purpose by the Company and its Subsidiaries, under
each employee benefit plan, program, or arrangement of Parent in which such
employees are eligible to participate for all purposes, except for purposes of
benefit accrual, under defined benefit pension plans, and, in all cases, except
to the extent such credit would result in duplication of benefits. If employees
of the Surviving Corporation and its Subsidiaries become eligible to participate
in a medical, dental or health plan of Parent or its Subsidiaries, Parent will
cause such plan to (i) waive any preexisting condition limitations for
conditions covered under the applicable medical, health or dental plans of the
Company and its Subsidiaries and (ii) honor any deductible and out-of-pocket
expenses incurred by the employees and their beneficiaries under such plans
during the portion of the calendar year prior to such participation.
Notwithstanding the foregoing, in no event will the employees be entitled to any
credit for service, deductibles
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or out-of-pocket expenses to the extent that it would result in a duplication of
benefits with respect to the same period of service, deductible or out-of-pocket
expenses.
(d) Nothing in this Section 5.8 will require the continued employment of
any person or will create any legal rights or cause of action by, any employee
of the Company or any of its Subsidiaries, or their heirs, dependents or
personal representatives.
5.9. Conveyance Taxes. The Company and Parent will cooperate in the
preparation, execution and filing of all returns, questionnaires, applications
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees and any similar Taxes which become payable in
connection with the transactions contemplated by this Agreement that are
required or permitted to be filed on or before the Effective Time and each party
will pay any such Tax or fee which becomes payable by it on or before the
Effective Time.
5.10. Parent Stockholders' Meeting. Parent will use its reasonable best
efforts to convene an extraordinary general meeting of its Stockholders (the
"Parent Stockholders Meeting") to be duly called and held as soon as reasonably
practicable for the purpose of obtaining the Parent Stockholder Approval.
Subject to fiduciary obligations and requirements of applicable Law under the
terms of this Agreement, the Board of Directors of the Parent will recommend to
its Stockholders each of the matters required for Parent Stockholder Approval
and will use reasonable efforts to solicit such approval.
5.11. Financing. Parent will use its reasonable best efforts to obtain the
Financing.
VI. CONDITIONS PRECEDENT
6.1. Conditions to Each Party's Obligation To Effect the Merger. The
respective obligations of each party to effect the Merger will be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) Purchaser shall have made, or caused to be made, the Offer and shall
have purchased, or caused to be purchased, the Shares validly tendered and not
withdrawn pursuant to the Offer,
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provided, that this condition shall be deemed to have been satisfied with
respect to the obligation of Parent and Purchaser to effect the Merger if
Purchaser fails to accept for payment or pay for Shares pursuant to the Offer in
violation of the terms of the Offer or of this Agreement;
(b) This Agreement and the transactions contemplated hereby shall have
been approved in the manner required by applicable Law by the holders of the
issued and outstanding shares of capital stock of the Company; and
(c) No Order or Law enacted, entered, promulgated, enforced or issued by
any court of competent jurisdiction or other Governmental Entity or other legal
restraint or prohibition (collectively, "Restraints") preventing the
consummation of the Merger shall be in effect.
6.2. Condition to Obligation of Parent and Purchaser to Effect the Merger.
The obligation of Parent and Purchaser to effect the Merger will be subject to
the fulfillment at or prior to the Closing Date (or such other date as may be
specified below) of the condition that the Company shall have performed in all
material respects its covenants contained in this Agreement required to be
performed on or prior to the Closing Date.
VII. TERMINATION
7.1. Termination by Mutual Consent. This Agreement may be terminated at
any time prior to the Effective Time, whether or not the Company Stockholder
Approval or the Parent Stockholder Approval has been obtained, by the mutual
consent of Parent and the Company.
7.2. Termination by Either Parent or Company. This Agreement may be
terminated by action of the Board of Directors of either Parent or the Company,
whether or not the Company Stockholder Approval or the Parent Stockholder
Approval has been obtained, if (a) the Offer Completion Date shall not have
occurred on or before February 15, 2000 (the "Outside Date"); provided, however,
that the Outside Date shall be extended until March 31, 2000 in the event that
the Effective Time shall not have occurred prior to February 15, 2000 (x) due to
the failure of the Offer Condition set forth in clause (b) of Annex A or (y)
because at least 90% of the Voting Securities, calculated on a fully diluted
basis, had not been validly tendered and not withdrawn in the Offer; provided,
further, that no party may
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terminate this Agreement pursuant to this Section 7.2(a) if such party's failure
to fulfill any of its obligations under this Agreement shall have been the
reason that the Offer Completion Date shall not have occurred on or before said
date, (b) any Governmental Entity shall have issued a Restraint or taken any
other action permanently enjoining, restraining or otherwise prohibiting the
consummation of the Offer, the Merger or any of the other transactions
contemplated by this Agreement and such Restraint or other action shall have
become final and nonappealable, or (c) the Offer expires or is terminated or
withdrawn pursuant to its terms without any Shares being purchased thereunder by
Purchaser as a result of the failure of any of the Offer Conditions to be
satisfied or waived prior to the Expiration Date or any extension thereof,
provided, that any termination described in Section 7.2(a) or 7.2(c) will not be
effective unless and until (i) the Company shall have paid to Purchaser any
applicable Company Termination Fee, if required by Section 7.5(b) and (ii) the
Purchaser shall have paid to the Company any applicable Parent Termination Fee,
if required by Section 7.5(c).
7.3. Termination by Company. This Agreement may be terminated at any time
prior to the Offer Completion Date, whether or not the Company Stockholder
Approval has been obtained, by action of the Board of Directors of the Company,
if (a) there has been a material breach by Parent or Purchaser of any
representation or warranty contained in this Agreement which is not curable or,
if curable, is not cured within 15 calendar days after written notice of such
breach is given by the Company to Parent and such breach had or could reasonably
be likely to have a Parent Material Adverse Effect, (b) there has been a
material breach of any of the covenants set forth in this Agreement on the part
of Parent or Purchaser, which breach is not curable or, if curable, is not cured
within 15 calendar days after written notice of such breach is given by the
Company to Parent, or (c) in accordance with Section 5.2(b) (unless the Superior
Proposal is the result directly or indirectly of any action proscribed by
Section 5.2), provided, that any termination described in this Section 7.3 will
not be effective unless and until the Company pays to Purchaser the Company
Termination Fee, if required by Section 7.5(b).
7.4. Termination by Parent. This Agreement may be terminated at any time
prior to the Offer Completion Date, whether or not the Parent Stockholder
Approval has been obtained, by Parent, if (a) there has been a material breach
by the Company
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of any representation or warranty contained in this Agreement which is not
curable or, if curable, is not cured within 15 calendar days after written
notice of such breach is given by Parent to the Company and such breach had or
could reasonably be likely to have a Company Material Adverse Effect, (b) there
has been a material breach of any of the covenants set forth in this Agreement
on the part of the Company, which breach is not curable or, if curable, is not
cured within 15 calendar days after written notice of such breach is given by
Parent to the Company, (c) the Board of Directors or any committee thereof of
the Company shall have (i) withdrawn or modified in a manner adverse to Parent
or Purchaser its approval or recommendation of this Agreement, the Offer or the
Merger or failed to reconfirm its approval or recommendation within five
Business Days after a written request from Parent to do so, or (ii) approved or
recommended, or proposed publicly to approve or recommend, a third-party Company
Takeover Proposal to the Stockholders, or (iii) authorized or caused the Company
to enter into a Company Acquisition Agreement, or (iv) resolved to take any of
the foregoing actions, (d) the Company or any of its officers, directors,
employees, representatives or agents shall have taken any of the actions
proscribed by Section 5.2 in a manner that constitutes a material breach
thereof, or (e) the Parent Stockholder Approval shall not have been obtained at
the Parent Stockholders Meeting.
7.5. Effect of Termination and Abandonment; Termination Fee. (a) In the
event of termination of this Agreement pursuant to this Article VII, all
obligations of the parties hereto will terminate, except the obligations of the
parties pursuant to this Section 7.5, the last sentence of Section 1.3, Section
5.4(b), Section 5.4(c) and Sections 8.1 through 8.15, inclusive. Notwithstanding
the foregoing or any other provision of this Agreement, in the event of
termination of this Agreement, nothing herein will prejudice the ability of the
non-breaching party to seek damages from any other party for any prior
deliberate or willful breach of this Agreement, including, without limitation,
attorneys' fees and the right to pursue any remedy at law or in equity with
respect thereto.
(b)(i) The Company will pay to Purchaser an amount equal to $1.5 million
(the "Company Termination Fee") in any of the following circumstances:
(A) This Agreement is terminated pursuant to Section 7.3(c),
7.4(c) or 7.4(d); or
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(B) This Agreement is terminated by either Parent or the
Company pursuant to Section 7.2(a) or 7.2(c) and
(1) at the time of such termination:
(a) the Minimum Condition shall not have been
satisfied;
(b) any of the events set forth in paragraphs (C),
(D), (E) or (L) of clause (ii) of Annex A shall have
occurred;
(c) the Company shall not have the right to
terminate this Agreement pursuant to Section 7.3(a) or
7.3(b); and
(d) the Financing Approval Condition (as defined
in Annex A) shall have been satisfied; and
(2) prior to such termination, a Company Takeover
Proposal is (x) publicly disclosed or has been made directly to
Stockholders generally or (y) any Person (including, without
limitation, the Company or any of its Subsidiaries) publicly
announces an intention (whether or not conditional) to make such a
Company Takeover Proposal; and
(3) prior to the termination of this Agreement or within
six months after the termination of this Agreement, the Company or a
Subsidiary thereof enters into a Company Acquisition Agreement or
closes a Company Takeover Proposal.
(C) This Agreement is terminated by Parent pursuant to Section
7.4(a) or 7.4(b) and, prior to such termination, events described in both
Sections 7.5(b)(i)(B)(2) and 7.5(b)(i)(B)(3) shall have occurred.
(ii) If a Company Termination Fee is payable pursuant to Section
7.5(b)(i)(B), then the Company will pay the Company Termination Fee to Parent
upon the signing of a Company Acquisition Agreement or, if no Company
Acquisition Agreement is signed, then at the closing (and as a condition to the
closing) of a Company Takeover Proposal. Notwithstanding any other provision
hereof, (A) in no event may the Company enter into a
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Company Acquisition Agreement unless, prior thereto, the Company has paid any
amount due under Section 7.5(b) or which will become due under Section 7.5(b),
(B) the Company may not terminate this Agreement under Section 5.2(b) or 7.3(c)
unless prior thereto it has paid all amounts due under Section 7.5(b) to Parent,
(C) all amounts due in the event that this Agreement is terminated under Section
7.3(c) or 7.4(c) and in circumstances in which the Company has not entered into
a Company Acquisition Agreement will be payable promptly, but in no event more
than two Business Days after request therefor is made, and (D) all amounts due
under this Section 7.5(b) will be paid on the date due in immediately available
funds wire transferred to the account designated by the Parent.
(iii) This Section 7.5(b) will survive any termination of this Agreement.
(iv) The Company acknowledges that the agreements contained in this
Section 7.5(b) are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Parent and Purchaser would not
enter into this Agreement; accordingly, if the Company fails promptly to pay any
amount due pursuant to this Section 7.5, and, in order to obtain such payment,
Parent or Purchaser commences a suit which results in a judgment against the
Company for any amounts set forth in this Section 7.5(b), the Company will pay
to Parent and Purchaser their costs and expenses (including attorneys' fees and
expenses) in connection with such suit, together with interest on the amount of
the fee at the prime rate of Citibank N.A. in effect on the date such payment
was required to be made.
(c) (i) The Parent will pay to the Company an amount equal to $1.5 million
(the "Parent Termination Fee") in the event that this Agreement is terminated by
either the Company or the Parent pursuant to Section 7.2(a) or pursuant to
Section 7.4(e) and, at the time of such termination, (x) any of the events set
forth in clauses (I), (J) or (K) of Annex A hereto shall have occurred, and (y)
the Parent shall not have the right to terminate this Agreement pursuant to
Section 7.4(a), 7.4(b), 7.4(c) or 7.4(d).
(ii) Parent acknowledges that the agreements contained in this
Section 7.5(c) are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, the Company would not enter into
this Agreement; accordingly, if the Parent fails promptly to pay any amount due
pursuant to this Section 7.5(c), and, in order to obtain such
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payment, the Company commences a suit which results in a judgment against the
Parent for any amounts set forth in this Section 7.5(c), the Parent will pay to
the Company its costs and expenses (including attorneys' fees and expenses) in
connection with such suit, together with interest on the amount of the fee at
the prime rate of Citibank N.A. in effect on the date such payment was required
to be made.
(d) In the event that an amount is payable by a party to the other party
pursuant to this Section 7.5, then (i) such amount shall be full compensation
and liquidated damages for the loss suffered by the receiving party as a result
of the failure of the transactions contemplated by this Agreement to be
consummated and to avoid the difficulty of determining damages under the
circumstances and (ii) such amount shall be in lieu of any other entitlement of
the receiving party, and shall be the sole and exclusive liability of the paying
party, with respect to all matters arising under or relating to this Agreement.
VIII. GENERAL PROVISIONS
8.1. Nonsurvival of Representations and Warranties. Except as set forth in
the Shareholder Agreement, all representations and warranties in this Agreement
or in any instrument delivered pursuant to this Agreement will terminate upon
the termination of this Agreement pursuant to Article VII.
8.2. Notices. Any notice or other communication required to be given
hereunder shall be in writing, and sent by reputable courier service (with proof
of service), by hand delivery or by facsimile (followed on the same day by
delivery by courier service (with proof of delivery) or by hand delivery),
addressed as follows:
If to Parent or Purchaser:
Compagnie Generale de Geophysique
1, rue Leon Migaux
91341 Massy, France
Attn: Thierry Le Roux
Fax No.: 011.33.1.64.47.34.31
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With copies to:
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, NY 10022
Attn: Jere R. Thomson, Esq.
Fax No.: (212) 755-7306
If to the Company:
Geoscience Corporation
10500 Westoffice Drive, Suite 210
Houston, TX 77042-5326
Attn: J. Rankin Tippins
Fax No.: (713) 780-1445
With copies to:
Andrews & Kurth L.L.P.
600 Travis, Suite 4200
Houston, TX 77002
Attn: Thomas P. Mason, Esq.
Fax No.: (713) 220-4285
or to such other address as any party will specify by written notice so given,
and such notice will be deemed to have been delivered as of the date so
telecommunicated or personally delivered.
8.3. Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder will be assigned by any of the
parties hereto (whether by operation of Law or otherwise) without the prior
written consent of the other parties except that Parent and Purchaser will have
the right to assign to any direct or indirect wholly owned subsidiary of Parent
or Purchaser any and all rights and obligations of Parent or Purchaser under
this Agreement, including all Shares acquired pursuant to the Option, provided,
that any such assignment will not relieve either Parent or Purchaser from any of
its obligations hereunder. Any assignment not granted in accordance with the
foregoing shall be null and void. Subject to the first sentence of this Section
8.3, this Agreement will be binding upon and will inure to the benefit of the
parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, except for the provisions
of Section 5.7, nothing in this Agreement, expressed
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or implied, is intended to confer on any Person other than the parties hereto or
their respective heirs, successors, executors, administrators and assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
8.4. Entire Agreement. This Agreement, the Shareholder Agreement, Annex A,
the Company Disclosure Letter and any documents delivered by the parties in
connection herewith or therewith, constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings among the parties with respect thereto. No
addition to or modification of any provision of this Agreement will be binding
upon any party hereto unless made in writing and signed by all parties hereto.
8.5. Amendment. This Agreement may be amended by the parties hereto, by
action taken by their respective Boards of Directors (or similar governing
bodies), at any time before or after approval of matters presented in connection
with the Merger by the Stockholders but after any such Stockholder approval, no
amendment will be made which by Law requires the further approval of the
Stockholders without obtaining such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
8.6. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York, without regard to its
conflict of laws principles.
8.7. Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered will be an
original, but all such counterparts will together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto. A
facsimile copy of a signature page shall be deemed to be an original signature
page.
8.8. Headings. Headings of the Articles and Sections of this Agreement are
for the convenience of the parties only, and will be given no substantive or
interpretive effect whatsoever.
8.9. Certain Definitions/Interpretations. (a) For purposes of this
Agreement:
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(i) An "Affiliate" of any Person means another Person that directly
or indirectly, through one or more intermediaries, controls, is controlled
by, or is under common control with, such first Person;
(ii) "Business Day" means any day other than a Saturday, Sunday or
day on which banks in New York, New York are authorized or required by Law
to close.
(iii) "Knowledge" of any Person which is not an individual means the
knowledge of any of such Person's executive officers after reasonable
inquiry; and
(iv) "Person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
(b) When a reference is made in this Agreement to an Article, Section or
Annex, such reference will be to an Article or Section of, or an Annex to, this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and will not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they will be
deemed to be followed by the words "without limitation." The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Agreement
will refer to this Agreement as a whole and not to any particular provision of
this Agreement. All terms used herein with initial capital letters have the
meanings ascribed to them herein and all terms defined in this Agreement will
have such defined meanings when used in any certificate or other document made
or delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such term. Any agreement, instrument or statute defined or referred
to herein or in any agreement or instrument that is referred to herein means
such agreement, instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and references to all attachments thereto and instruments incorporated
therein. References to a Person are also to its permitted successors and
assigns.
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8.10. Waivers. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, will be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder will not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
Subject to Section 1.5(b), at any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, and (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby.
8.11. Incorporation of Annex A. Annex A attached hereto is hereby
incorporated herein and made a part hereof for all purposes as if fully set
forth herein.
8.12. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction will, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision will be interpreted
to be only so broad as is enforceable.
8.13. Enforcement of Agreement. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the parties will be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof, this being in addition to any other remedy to
which they are entitled at law or in equity.
8.14. Expenses. Except as set forth in Section 7.5, all fees and expenses
incurred in connection with the Offer, the
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Merger, this Agreement, the Shareholder Agreement and the transactions
contemplated hereby and thereby will be paid by the party incurring such fees or
expenses, whether or not the Merger is consummated, except that each of Parent
and the Company will bear and pay one-half of the costs and expenses incurred in
connection with (i) the filing, printing and mailing of the Proxy Statement, the
Schedule 14D-9, the Schedule 14D-1 and the other Offer Documents (including SEC
filing fees) and (ii) the filings of the premerger notification and report forms
under the HSR Act (including filing fees).
8.15 Jurisdiction; Consent to Service of Process. (a) Each party hereby
irrevocably and unconditionally submits, for itself and its property, to the
exclusive jurisdiction of the New York state court located in the Borough of
Manhattan, City of New York or the United States District Court for the Southern
District of New York (as applicable, a "New York Court"), and any appellate
court from any such court, in any suit, action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment
resulting from any such suit, action or proceeding, and each party hereby
irrevocably and unconditionally agrees that all claims in respect of any such
suit, action or proceeding may be heard and determined in a New York Court.
(b) It will be a condition precedent to each party's right to bring any
such suit, action or proceeding that such suit, action or proceeding, in the
first instance, be brought in a New York Court (unless such suit, action or
proceeding is brought solely to obtain discovery or to enforce a judgment), and
if each such court refuses to accept jurisdiction with respect thereto, such
suit, action or proceeding may be brought in any other court with jurisdiction;
provided that the foregoing will not apply to any suit, action or proceeding by
a party seeking indemnification or contribution pursuant to this Agreement or
otherwise in respect of a suit, action or proceeding against such party by a
third party if such suit, action or proceeding by such party seeking
indemnification or contribution is brought in the same court as the suit, action
or proceeding against such party.
(c) No party may move to (i) transfer any such suit, action or proceeding
from a New York Court to another jurisdiction, (ii) consolidate any such suit,
action or proceeding brought in a New York Court with a suit, action or
proceeding in another jurisdiction, or (iii) dismiss any such suit, action or
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proceeding brought in a New York Court for the purpose of bringing the same in
another jurisdiction.
(d) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, (i) any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in a New York Court,
(ii) the defense of an inconvenient forum to the maintenance of such suit,
action or proceeding in any such court, and (iii) the right to object, with
respect to such suit, action or proceeding, that such court does not have
jurisdiction over such party. Each party irrevocably consents to service of
process in any manner permitted by law.
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IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf on the day and year first written
above.
COMPAGNIE GENERALE DE GEOPHYSIQUE
By: _____________________________________
Robert Brunck
Chairman and Chief Executive Officer
GEOSCIENCE CORPORATION
By: _____________________________________
J. Michael Camp
Chief Executive Officer
SERCEL ACQUISITION CORP.
By: _____________________________________
Thierry Le Roux
President
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ANNEX A
CONDITIONS TO COMPLETION OF THE OFFER
Notwithstanding any other provision of the Offer, Purchaser will not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e- 1(c) under the Exchange Act
(relating to Purchaser's obligation to pay for or return tendered Shares
promptly after expiration or termination of the Offer), to pay for any Shares,
and (subject to any such rules or regulations) may postpone the acceptance for
payment or payment for any Shares tendered, and, subject to the terms of the
Agreement, may amend or terminate the Offer (whether or not any Shares have
theretofore been purchased or paid for pursuant to the Offer) (i) unless the
following conditions have been satisfied: (a) there have been validly tendered
and not withdrawn prior to the Expiration Date a number of Shares which
represent at least 70% of the total voting power of the outstanding securities
of the Company entitled to vote in the election of directors or in a merger
("Voting Securities"), calculated on a fully diluted basis, on the date of
purchase (the "Minimum Condition") ("on a fully diluted basis" having the
following meaning; as of any date, the number of Shares outstanding, together
with the number of Shares the Company is then required to issue pursuant to
obligations outstanding at that date under employee stock option or other
benefit plans or otherwise) and (b) any waiting periods or approvals applicable
to the Offer or the Merger under the HSR Act or the antitrust laws of the
European Union or any member country thereof shall have expired or been
terminated prior to the expiration of the Offer or (ii) if at any time on or
after the date of this Agreement and before the Expiration Date (whether or not
any Shares have theretofore been accepted for payment or paid for pursuant to
the Offer), any of the following shall have occurred:
(A) any Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order which is in effect and which (1)
restricts, prevents or prohibits consummation of the transactions
contemplated by any of this Agreement, including the Offer or the Merger,
(2) prohibits, limits or otherwise adversely affects the ownership or
operation by Parent or any of its Subsidiaries of all or any material
portion of the business or assets of the Company and its Subsidiaries or
compels the Company,
A-1
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Parent or any of their Subsidiaries to dispose of or hold separate all or
any material portion of the business or assets of the Company and its
Subsidiaries, (3) imposes material limitations on the ability of Parent,
Purchaser or any other Subsidiary of Parent to exercise effectively full
rights of ownership of any Shares, including, without limitation, the
right to vote any Shares acquired by Purchaser pursuant to the Offer or
otherwise on all matters properly presented to the Stockholders,
including, without limitation, the approval and adoption of this Agreement
and the transactions contemplated thereby, or (4) in connection with the
Offer or the Merger or the transactions contemplated by the Merger
Agreement, affects the Purchaser, the Company or any of their respective
affiliates in a manner which, in the sole judgment of Purchaser, may have
or be likely to have a Company Material Adverse Effect or a material
adverse effect on the Purchaser or any of its affiliates or otherwise
makes consummation of the Offer or the Merger or the consummation of the
transactions contemplated hereunder unduly burdensome;
(B) there shall be instituted or pending any action or proceeding
before any United States or foreign court or Governmental Entity by any
United States or foreign Governmental Entity seeking any order, decree or
injunction having any effect set forth in paragraph (A) above;
(C) the representations and warranties of the Company contained in
this Agreement (i) that are qualified by materiality or Company Material
Adverse Effect shall not be so true and correct as of the Expiration Date
(as the same may be extended from time to time) and (ii) that are not
qualified by materiality or Company Material Adverse Effect shall not be
true and correct in all material respects as of the Expiration Date (as
the same may be extended from time to time), in each case as though made
anew on and as of such date (except for representations and warranties
made as of a specified date, which shall be so true and correct as of the
specified date);
(D) the Company shall not have performed or complied in all material
respects with its covenants under this Agreement and such failure
continues until the later of (1) 15 calendar days after actual receipt by
it of written notice from Parent setting forth in reasonable detail the
nature of such failure or (2) the Expiration Date;
A-2
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(E) there shall have occurred any material adverse change, or any
development that is reasonably likely to result in a material adverse
change, in the business, financial condition, results of operations or
prospects of the Company and its Subsidiaries, taken as a whole, other
than any such material adverse effect resulting from (i) factors generally
affecting the marine seismic industry, the oil field services industry or
the United States economy, (ii) the exercise or threatened exercise by
Petroleum Geophysical Services ("PGS") of the option to acquire a
non-exclusive right to use certain intellectual property of the Company as
described in the After Sales Support Agreement, dated as of January 4,
1995, between PGS and Syntron, Inc., a copy of which has been provided by
the Company to the Purchaser, or (iii) any failure by the Company to meet
any specific financial projections or any change in the financial
projections provided to the Purchaser or the Parent, or any of their
representatives or advisors, whether provided before or after the date of
this Agreement, provided, however, that this clause (iii) shall not
exclude any material adverse effect resulting from any change, effect,
event or condition that has had or could reasonably be expected to have a
material adverse effect on the business, assets, financial condition or
results of operations of the Company and its Subsidiaries, taken as a
whole;
(F) this Agreement shall have been terminated in accordance with its
terms;
(G) the Company Board shall have (1) withdrawn or materially
modified or changed its recommendation of the Offer, the Merger or this
Agreement (including by amendment of Schedule 14D-9) in a manner adverse
to Purchaser or Parent or failed to reconfirm its approval or
recommendation within five Business Days after a written request to do so,
(2) approved or recommended, or proposed publicly to approve or recommend,
any Company Takeover Proposal, (3) authorized or caused the Company to
enter into a Company Acquisition Agreement, or (4) resolved or publicly
disclosed any intention to do any of the foregoing;
(H) there shall have occurred (1) any general suspension of, or
limitation on prices for, trading in securities on the NYSE or the Paris
Bourse, (2) a decline of at least 20% in either the Dow Jones Average of
Industrial
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Stocks, the Standard & Poor's 500 Index or CAC-40 index from the date of
the Agreement, (3) the declaration of a banking moratorium or any
limitation or suspension of payments in respect of the extension of credit
by banks or other lending institutions in the United States, (4) any
commencement of war, armed hostilities or other international or national
calamity directly involving the United States or having a significant
adverse effect on the functionality of financial markets in the United
States, or (5) in the case of any of the foregoing, existing at the time
of commencement of the Offer, a material acceleration or worsening
thereof;
(I) the Parent Financing Approvals shall not have been obtained (the
"Financing Approval Condition");
(J) Parent shall not have consummated the rights offering for its
ordinary shares in the United States and Europe with gross aggregate
proceeds of at least FRF 300,000,000 to Parent;
(K) at the time of the consummation of the Offer, Parent shall not
have funds available to it from the Financing sufficient to consummate the
Offer and the Merger on the terms contemplated hereby; or
(L) the "Termination Date" under each of the Loan Agreement, dated
as of December 6, 1996 (as amended), between the Company and Wells Fargo
Bank (Texas), National Association, as agent, and the Loan Agreement,
dated as of December 6, 1996 (as amended), between Syntron, Inc. and Wells
Fargo Bank (Texas), National Association, as agent, shall not have been
extended to the Offer Completion Date.
The foregoing conditions are for the sole benefit of Purchaser and
its Affiliates and may be asserted by Purchaser, or Parent on behalf of
Purchaser, regardless of the circumstances (including, without limitation,
any action or inaction by Purchaser or any of its Affiliates other than a
material breach by Purchaser or Parent of this Agreement) giving rise to
any such condition or may be waived by Purchaser, in whole or in part,
from time to time in its sole discretion, except as otherwise provided in
this Agreement. The failure by Purchaser at any time to exercise any of
the foregoing rights will not be deemed a waiver of any such right and
each such right will be deemed an ongoing
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right and may be asserted at any time and from time to time. Any good
faith determination by Purchaser concerning any of the events described
herein will be final and binding.
A-5
<PAGE> EX-99.(c)(2)
SHAREHOLDER AGREEMENT
SHAREHOLDER AGREEMENT, dated as of October 23, 1999 (this
"Agreement"), by and among Compagnie Generale de Geophysique, a French societe
anonyme ("Parent"),Sercel Acquisition Corp., a Nevada corporation ("Purchaser"),
and Tech-Sym Corporation, a Nevada corporation (the "Stockholder").
A. The Stockholder is the beneficial owner of 7,995,000 shares (the
"Shares") of common stock, $.01 par value per share (the "Common Stock"), of the
Company.
B. Parent, Purchaser and Geoscience Corporation, a Nevada
corporation (the "Company"), have entered into an Agreement and Plan of Merger,
dated as of the date hereof (as amended from time to time, the "Merger
Agreement"), which provides, among other things, that, upon the terms and
subject to the conditions therein, Purchaser will commence a cash tender offer
to purchase at a price equal to $6.71 per share all the Common Stock and
thereafter provides that Purchaser will merge (the "Merger") with and into the
Company and each issued and outstanding share of Common Stock will be converted
into the right to receive $6.71 in cash.
C. As a condition to the willingness of Parent and Purchaser to
enter into the Merger Agreement, Parent and Purchaser have requested that the
Stockholder agree, and in order to induce Parent and Purchaser to enter into the
Merger Agreement, the Stockholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements set forth herein, the
parties hereto hereby agree as follows:
ARTICLE I.
Section 1.1. Certain Definitions. Capitalized terms used but not
otherwise defined herein have the meanings ascribed to such terms in the Merger
Agreement.
Section 1.2 Representations and Warranties of the Stockholder. The
Stockholder represents and warrants to Parent
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and Purchaser, as of the date hereof and as of the Offer Completion Date, as
follows:
(a) The Stockholder is the beneficial owner (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which meaning will apply for all purposes of this Agreement) of, and has good
title to, all of the Shares, free and clear of any mortgage, pledge,
hypothecation, rights of others, claim, security interest, charge, encumbrance,
title defect, title retention agreement, voting trust agreement, interest,
option, lien, charge or similar restriction or limitation (including any
restriction on the right to vote, sell or otherwise dispose of the Shares)
(each, a "Lien"), except as set forth in this Agreement or for liens not caused
or created by the Stockholder.
(b) The Shares constitute all of the securities (as defined in Section
3(10) of the Exchange Act, which definition will apply for all purposes of this
Agreement) of the Company beneficially owned, directly or indirectly, by the
Stockholder (excluding any securities beneficially owned by any of the
Stockholder's affiliates or associates (as such terms are defined in Rule 12b-2
under the Exchange Act, which definition will apply for all purposes of this
Agreement) as to which the Stockholder does not have voting or investment
power).
(c) The Stockholder does not, directly or indirectly, beneficially own or
have any option, warrant or other right to acquire any securities of the Company
that are or may by their terms become entitled to vote or any securities that
are convertible or exchangeable into or exercisable for any securities of the
Company that are or may by their terms become entitled to vote, nor is the
Stockholder subject to any contract, commitment, arrangement, understanding or
relationship (whether or not legally enforceable), other than this Agreement,
that allows or obligates him to vote or acquire any securities of the Company.
The Stockholder holds exclusive power to vote the Shares and has not granted a
proxy to any other Person to vote the Shares, except as set forth in this
Agreement.
(d) The Stockholder is a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada. The Stockholder has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby, and has taken all
necessary
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corporate action to authorize the execution, delivery and performance of this
Agreement.
(e) This Agreement has been duly executed and delivered by the Stockholder
and is a valid and binding obligation of the Stockholder, enforceable against
the Stockholder in accordance with its terms, except that (i) the enforceability
hereof may be subject to applicable bankruptcy, insolvency or other similar
laws, now or hereinafter in effect, affecting creditors' rights generally and
(ii) the availability of the remedy of specific performance or injunctive or
other forms of equitable relief may be subject to equitable defenses and would
be subject to the discretion of the court before which any proceeding therefor
may be brought.
(f) Neither the execution and delivery of this Agreement nor the
performance by the Stockholder of its obligations hereunder will conflict with,
result in a violation or breach of, or constitute a default (or an event that,
with notice or lapse of time or both, would result in a default) or give rise to
any right of termination, amendment, cancellation, or acceleration or result in
the creation of any Lien on any Shares under, (i) its articles of incorporation,
bylaws or similar constituent documents, (ii) any contract, commitment,
agreement, understanding, arrangement or restriction of any kind to which the
Stockholder is a party or by which the Stockholder is bound, or (iii) any
injunction, judgment, writ, decree, order or ruling applicable to the
Stockholder, except in the case of clauses (ii) and (iii) for conflicts,
violations, breaches or defaults that could not individually or in the aggregate
be reasonably expected to prevent, impair or delay the consummation by the
Stockholder of any of the transactions contemplated hereby or the performance by
the Stockholder of any of its obligations hereunder.
(g) Neither the execution and delivery of this Agreement nor the
performance by the Stockholder of its obligations hereunder will violate any
law, statute, rule, regulation, order or decree applicable to the Stockholder or
require any order, consent, authorization or approval of, filing or registration
with, or declaration or notice to, any court, administrative agency or other
governmental body or authority, other than any required notices or filings
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder (the "HSR Act"),
the antitrust laws of the European Union or any member country thereof or the
U.S. securities laws.
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<PAGE>
(h) All agreements, contracts, transfers of assets or liabilities or other
commitments or transactions, whether or not entered into in the ordinary course
of business, to or by which the Company or any of its Subsidiaries, on the one
hand, and the Stockholder or any of its Affiliates (other than the Company or
any of its Subsidiaries), on the other hand, are or have been a party or
otherwise bound or affected, that (i) are currently pending or in effect or (ii)
involve continuing liabilities and obligations that, individually or in the
aggregate, have been, are or will be material to the Company or any of its
Subsidiaries, taken as a whole (collectively, "Affiliate Agreements"), have
either been disclosed in the Company Reports or are set forth in Schedule
3.14(c) of the Company Disclosure Letter to the Merger Agreement. All
liabilities that have accrued and are payable to the Stockholder or any of its
Affiliates (other than the Company or any of its Subsidiaries) as of the date
hereof pursuant to any of the Affiliate Agreements are set forth in Section
3.14(c) of the Company Disclosure Letter.
(i) Except as set forth in Section 3.19 of the Merger Agreement, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement or the Merger Agreement based upon arrangements made by or on behalf
of the Stockholder that is or will be payable by the Company or any of its
Subsidiaries.
(j) The Stockholder understands and acknowledges that Parent is entering
into, and causing Purchaser to enter into, the Merger Agreement in reliance upon
the Stockholder's execution and delivery of this Agreement.
1.3 Representations and Warranties of Parent and Purchaser. Parent
and Purchaser represent and warrant to the Stockholder, as of the date hereof
and as of the Offer Completion Date, as follows:
(a) Each of Parent and Purchaser is a corporation duly organized, validly
existing and in good standing (to the extent such concept exists) under the laws
of its jurisdiction of incorporation and has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby, and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement.
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(b) This Agreement has been duly executed and delivered by Parent and
Purchaser and is a valid and binding obligation of each of Parent and Purchaser,
enforceable against each of them in accordance with its terms, except that (i)
the enforceability hereof may be subject to applicable bankruptcy, insolvency or
other similar laws, now or hereinafter in effect, affecting creditors' rights
generally and (ii) the availability of the remedy of specific performance or
injunctive or other forms of equitable relief may be subject to equitable
defenses and would be subject to the discretion of the court before which any
proceeding therefor may be brought.
(c) Neither the execution and delivery of this Agreement nor the
performance by Parent and Purchaser of their respective obligations hereunder
will conflict with, result in a violation or breach of, or constitute a default
(or an event that, with notice or lapse of time or both, would result in a
default) or give rise to any right of termination, amendment, cancellation, or
acceleration under, (i) their respective certificates of incorporation, bylaws
or similar constituent documents, (ii) any contract, commitment, agreement,
understanding, arrangement or restriction of any kind to which Parent or
Purchaser is a party or by which Parent or Purchaser is bound, or (iii) any
injunction, judgment, writ, decree, order or ruling applicable to Parent or
Purchaser, except in the case of clauses (ii) and (iii) for conflicts,
violations, breaches or defaults that would not individually or in the aggregate
be reasonably expected to prevent, impair or delay the consummation by Parent or
Purchaser of the transactions contemplated hereby.
(d) Neither the execution and delivery of this Agreement nor the
performance by Parent and Purchaser of their respective obligations hereunder
will violate any law, statute, rule, regulation, order or decree applicable to
Parent or Purchaser or require any order, consent, authorization or approval of,
filing or registration with, or declaration or notice to, any court,
administrative agency or other governmental body or authority, other than any
required notices or filings pursuant to the HSR Act, the antitrust laws of the
European Union or any member country thereof or the U.S. securities laws.
(e) Any Shares acquired upon exercise of the Parent Option will be
acquired for Parent's own account, for investment purposes only and will not be,
and the Parent Option is not being, acquired by Parent with a view to public
distribution
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<PAGE>
thereof in violation of any applicable provisions of the Securities Act of 1933,
as amended (the "Securities Act").
ARTICLE II.
Section 2.1 Share Transactions. During the term of this Agreement,
except as otherwise provided herein, the Stockholder will not (a) accept any
tender or exchange offer for the Shares or otherwise sell, transfer, pledge,
assign, hypothecate or otherwise dispose of, or encumber with any Lien, any of
the Shares, (b) acquire any shares of Common Stock or other securities of the
Company (otherwise than (i) in connection with a transaction of the type
described in 2.2 or (ii) as necessary for the Stockholder to maintain ownership
of 80% of the outstanding Common Stock), (c) deposit the Shares into a voting
trust, enter into a voting agreement or arrangement with respect to the Shares,
or grant any proxy or power of attorney with respect to the Shares, except
pursuant to this Agreement, (d) exercise any rights (including, without
limitation, under Section 92A.380 of the NRS) to demand appraisal of any Shares
which may arise with respect to the Merger, to the extent any such rights may
exist under applicable law, or (e) enter into any contract, option or other
arrangement or undertaking with respect to the direct or indirect acquisition,
or direct or indirect sale, transfer, pledge, assignment, hypothecation or other
disposition, of any interest in or the voting of any shares of Common Stock or
any other securities of the Company.
Section 2.2 Adjustments. (a) In the event (i) of any stock dividend
or distribution, stock split, recapitalization, reclassification, combination or
exchange of shares of capital stock or other securities of the Company on, of or
affecting the Shares or any other action that would have the effect of changing
the Stockholder's ownership of the Company's capital stock or other securities
or (ii) the Stockholder becomes the beneficial owner of any additional shares of
Common Stock or other securities of the Company, then the terms of this
Agreement will apply to the shares of capital stock or other securities held by
the Stockholder immediately following the effectiveness of the events described
in clause (i) or the Stockholder becoming the beneficial owner thereof as
described in clause (ii), as though they were Shares hereunder.
(b) The Stockholder hereby agrees, while this Agreement is in effect, to
promptly notify Parent of the number of any new
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shares of Common Stock or other securities of the Company acquired by the
Stockholder, if any, after the date hereof.
ARTICLE III.
Section 3.1 Sale of Shares. The Stockholder will tender and sell
(and not withdraw) pursuant to and in accordance with the terms of the Offer all
of the Offer Shares not later than the fifth Business Day after commencement of
the Offer (or the earlier of the expiration date of the Offer and the fifth
Business Day after such shares of Common Stock are acquired by the Stockholder
if the Stockholder acquires shares of Common Stock after the date hereof.
("Offer Shares" means all of the Shares beneficially owned by the Stockholder).
In the event, notwithstanding the provisions of the first sentence of this
Section 3.1, any Offer Shares are for any reason withdrawn from the Offer or are
not purchased pursuant to the Offer, such Offer Shares will remain subject to
the terms of this Agreement. The Stockholder acknowledges that Purchaser's
obligation to accept for payment and pay for the Offer Shares in the Offer is
subject to all the terms and conditions of the Offer.
Section 3.2 Shareholder Agreement. The Stockholder, by this
Agreement, does hereby constitute and appoint Parent and Purchaser, or any
nominee thereof, with full power of substitution, during and for the term of
this Agreement, as the Stockholder's true and lawful attorney and proxy for and
in the Stockholder's name, place and stead, to vote all the Shares Stockholder
beneficially owns at the time of such vote, at any annual, special or adjourned
meeting of the stockholders of the Company (and this appointment will include
the right to sign the Stockholder's name (as stockholder) to any consent,
certificate or other document relating to the Company that the laws of the State
of Nevada may require or permit) (a) in favor of the approval and adoption of
the Merger Agreement and approval of the Merger and the other transactions
contemplated thereby and (b) against (i) any Company Takeover Proposal, (ii) any
action or agreement that would result in a breach in any respect of any
covenant, agreement, representation or warranty of the Company under the Merger
Agreement, and (iii) the following actions (other than the Merger and the other
transactions contemplated by the Merger Agreement): (A) any change in any of the
persons who constitute the Board of Directors of the Company as of the date
hereof; (B) any change in the present capitalization of the Company or any
amendment of the Company's articles of incorporation or bylaws, as amended to
date; (C) any other
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material change in the Company's corporate structure, assets, liabilities or
business; or (D) any other action that, in the case of each of the matters
referred to in clauses (iii)(A), (B) and (C) is intended, or could reasonably be
expected, to impede, interfere with, delay, postpone, or adversely affect the
Merger and the other transactions contemplated by this Agreement and the Merger
Agreement. This proxy and power of attorney is a proxy and power coupled with an
interest, and the Stockholder declares that it is irrevocable. The Stockholder
hereby revokes all and any other proxies with respect to the Shares that it may
have heretofore made or granted. For Shares as to which the Stockholder is the
beneficial but not the record owner, the Stockholder shall use its best efforts
to cause any record owner of such Shares to grant to Parent a proxy to the same
effect as that contained herein. Stockholder hereby agrees to permit Parent and
Purchaser to publish and disclose in the Offer Documents and the Proxy Statement
and related filings under the securities laws the Stockholder's identity and
ownership of Shares and the nature of its commitments, arrangements and
understandings under this Agreement.
Section 3.3 No Solicitation. The Stockholder will not, directly or
indirectly, through any officer, director, employee, representative, agent,
(including, without limitation, any financial advisor, attorney or accountant)
or otherwise, (a) solicit, initiate or encourage submission of proposals or
offers from any Person relating to, or that could reasonably be expected to lead
to, any Company Takeover Proposal or (b) participate in any negotiations or
discussions regarding, or furnish to any other Person any information with
respect to, or otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any other Person to do or seek
any Company Takeover Proposal. The Stockholder shall immediately advise Parent
in writing of the receipt of request for information or any inquiries or
proposals relating to any Company Takeover Proposal.
Section 3.4 Related Transactions. (a) Within five Business Days
after a majority of the Company Board shall be comprised of Parent's Designees,
the following actions shall be taken:
(i) Parent shall deliver to the Stockholder releases (reasonably
satisfactory in form and substance to the Stockholder) from the
Stockholder's guarantees of the Company's indebtedness which are described
in the Company
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Disclosure Letter with respect to Section 3.8(d) of the Merger Agreement;
and
(ii) Parent shall have paid, or caused the Purchaser to pay, all
amounts owed by the Company to the Stockholder pursuant to the incurrence
(to the extent approved in advance by Purchaser) of indebtedness as
permitted by Section 5.1(a)(vi) of the Merger Agreement and pursuant to
the terms of the Affiliate Agreements, other than amounts incurred in
breach of the provisions of this Agreement or the Merger Agreement.
(b) After the Effective Time, Parent shall cause the Surviving Corporation
to pay when due all amounts payable to the Stockholder in accordance with the
terms of the Affiliate Agreements, other than amounts incurred in breach of the
provisions of this Agreement or the Merger Agreement.
(c) The Stockholder shall cause the Company to use all reasonable efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, all
things reasonably necessary to assist and cooperate with the Parent in
performing its obligations under Section 3.4(a) in the most expeditious manner
possible, including, without limitation, (i) obtaining all necessary consents,
approvals and waivers from third parties and (ii) furnishing to Parent and its
representatives all information relating to the matters set forth in Section
3.4(a) as the Parent may reasonably request.
Section 3.5 Cooperation Regarding Tax Filings; Section 338(h)(10).
(a) After the Closing, the Purchaser and the Stockholder shall act in good
faith and cooperate with one another for the purpose of filing all Tax Returns
and reports required to be filed by any of them. The Stockholder shall join
Purchaser in a timely election pursuant to Section 338(h)(10) of the Code (and
under any comparable provision of any state or local law) (the "338(h)(10)
Election") with respect to the Shares and each target affiliate, as such term is
defined in Section 338(h)(6) of the Code, of the Company ("Target Affiliate").
The parties hereto recognize that the 338(h)(10) Election will result in the
purchase of the Shares hereunder being treated as a sale of assets by the
Company and each Target Affiliate for Federal income Tax purposes and for
applicable state and local Tax purposes and that any Tax liability arising with
respect to the
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338(h)(10) Election shall be deemed a Covered Tax attributable to the period
ending on the Closing Date and shall be the responsibility of the Stockholder.
None of the parties hereto shall make any Tax Return or other filing that is
inconsistent with the foregoing.
(b) Purchaser and Stockholder will cooperate with regard to the timely
preparation and filing of a 338(h)(10) Election and any and all forms with
respect thereto under the laws of each appropriate jurisdiction for which such
election is made. In particular, and without limiting the generality of the
foregoing and subject to Section 3.5(c), the Purchaser shall deliver to
Stockholder a duly executed and completed Internal Revenue Service Form 8023 (or
any successor form) and any similar state or local form to be filed, as well as
any required attachments (collectively, the "Section 338 Forms") no later than
the later of ninety (90) days after the Closing Date and ten (10) days after the
date the Section 338 Determinations shall have been agreed pursuant to Section
3.5(c). In the event of any dispute with regard to the content of any Section
338 Form (including, without limitation, any "Section 338 Determination" (as
defined in Section 3.5(c))), the parties hereto shall diligently attempt to
resolve such dispute; but if the parties hereto have been unable to resolve such
dispute by the sixtieth (60th) day prior to the date any such form is to be
filed, such dispute shall be resolved by submitting the issue to a mutually
acceptable independent accounting firm for resolution. Each party shall promptly
cause such Section 338 Forms to be executed by an authorized person, and
(subject to the receipt of the other party's signature) the party responsible
for filing such forms with its Tax Returns will duly and timely do so, providing
written evidence to the other party that it has done so.
(c) The Purchaser and Stockholder shall determine the liabilities of the
Company and the "modified aggregate deemed sale price" (or the "aggregate deemed
sale price", if applicable, or any deemed sale price comparable to the "modified
aggregate deemed sale price" or the "aggregate deemed sale price" required to be
allocated under state, local or foreign Tax law) and other relevant items shall
be allocated among the Company's and each Target Affiliate's assets in
accordance with Section 338 of the Code, the Treasury Regulations promulgated
thereunder and analogous provisions of state, local and foreign Tax law (such
determination and allocation, the "Section 338 Determinations"). The Section 338
Determinations shall be set forth in writing and agreed to by the Purchaser and
Stockholder and/or the Company
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prior to the Closing. If the Stockholder and the Purchaser are unable to agree
on the Section 338 Determinations within ninety (90) days after the Closing
Date, the Section 338 Determinations shall be resolved by submitting the issue
to a mutually acceptable independent investment banking or other independent
appraiser for determination. Any adjustments to the "modified aggregate deemed
sale price" (or the "aggregate deemed sale price", if applicable, or any deemed
sale price comparable to the "modified aggregate deemed sale price" or the
"aggregate deemed sale price" required to be allocated under state, local or
foreign Tax law) shall be allocated in accordance with Section 338 of the Code,
the Treasury Regulations promulgated thereunder and analogous provisions of
state, local and foreign Tax law. Purchaser and Stockholder (and/or the Company)
agree to act in accordance with the Section 338 Determinations, as finally
determined pursuant to this Section 3.5(c), in the preparation and filing of all
Tax Returns (including, without limitation, any amended Tax Returns and claims
for refund) and in the course of any tax audit, appeal or litigation relating
thereto, unless advised by counsel that it may not take such position without
violating applicable law and without incurring penalties and except as may be
required by a final determination (of a relevant taxing authority) with respect
to any such issue. Upon payment of any indemnification obligations hereunder
resulting in an adjustment of the "modified aggregate deemed sale price" (or the
"aggregate deemed sale price," if applicable, or any deemed sale price
comparable to the "modified aggregate deemed sale price" or the "aggregate
deemed sale price" under state, local or foreign Tax law), the Section 338
Determinations shall be appropriately adjusted in accordance with the procedures
described in this Section 3.5(c).
(d) The Stockholder shall cause to be prepared and cause to be timely
filed all consolidated, combined or unitary federal, state, local or foreign Tax
Returns required to be filed with respect to the Company for all Taxable periods
ending before or including the Closing Date and shall include the Company in all
such Tax Returns in which it is eligible to be included. The Stockholder shall
cause to be prepared all other required federal, state, local and foreign Tax
Returns of the Company for any Tax period which ends on or before the Closing
Date. The Purchaser agrees to cooperate with the Stockholder and its Affiliates
in the preparation of the portions of such Tax Returns pertaining to the
Company. The Stockholder shall permit the Purchaser to review and comment on the
portion of all Tax Returns prepared by Stockholder pursuant to this Section
3.5(d)
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pertaining to the Company prior to the filing of such Tax Returns. To the extent
the parties cannot reach agreement as to the proper treatment of any item on a
Tax Return, the matter shall be referred to a mutually acceptable independent
accounting firm for resolution. The Stockholder shall cause to be timely paid
all Covered Taxes to which such Tax Returns relate for all periods covered by
such Tax Returns.
(e) The extent to which Taxes of the Company for a Taxable period that
includes but does not end on the Closing Date are treated as Taxes for the
period ending on or prior to the Closing Date shall be determined for all
purposes, including for purposes of calculating Covered Taxes, as follows: (i)
Taxes measured in whole or in part by net or gross income and Taxes relating to
specific transactions shall be apportioned on the basis of a closing of the
books of the entity liable for such Tax at the close of business on the Closing
Date; provided, however, that exemptions, allowances, deductions or credits that
are calculated on an annual basis (such as the deduction for depreciation or
capital allowances) shall be apportioned on a per diem basis; and provided,
further, that all transactions not in the ordinary course of business that occur
on the Closing Date after Purchaser's purchase of the Shares shall be reported
on Purchaser's federal income Tax Return to the extent permitted by Treas. Reg.
Section 1.1502-76(b)(1)(ii)(B)(3), and (ii) all other Taxes shall be prorated
according to the ratio of the number of days in such Taxable period prior to and
including the Closing Date to the number of days in such Taxable period.
(f) The Purchaser shall cause to be prepared and cause to be timely filed
all required federal, state, local and foreign Tax Returns of the Company (other
than Tax Returns to be filed by the Stockholder pursuant to Section 3.5(d)) for
Taxable periods beginning before and ending after the Closing Date. The
Stockholder and Purchaser agree to cooperate with each other in the preparation
of such Tax Returns. The Purchaser shall permit the Stockholder to review and
comment on all Tax Returns prepared by the Purchaser pursuant to this Section
3.5(f) and such Tax Returns shall be subject to the prior approval of the
Stockholder, which approval shall not be unreasonably withheld. To the extent
the parties cannot reach agreement as to the proper treatment of any item on a
Tax Return, the matter shall be referred to a mutually acceptable independent
accounting firm for resolution.
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(g) The Stockholder shall be entitled to any refund of Taxes paid by or
with respect to the Company that is attributable to Taxable periods ending on or
prior to the Closing Date, and the Purchaser shall cause the Company to pay over
to the Stockholder any such refunds (net of any Tax liability attributable
thereto and any expenses incurred in the collection of such refund) within 30
days after receipt thereof. If the amount of such refund that is paid over to
the Stockholder is subsequently reduced by a Governmental Entity, the
Stockholder shall pay to Purchaser an amount necessary to reflect such
adjustment.
(h) The Stockholder shall not file any claim for a refund or credit, or an
amended return claiming a refund or credit, after the Closing Date, for any Tax
paid by the Company without the prior written consent of the Purchaser, which
consent shall not be unreasonably withheld.
(i) After the Closing Date, the Stockholder and the Purchaser shall make
available to the other, as reasonably requested, all information, records or
documents relating to Tax liabilities or potential Tax liabilities of the
Company for all periods ending on or prior to the Closing Date, and shall
preserve all such information, records and documents until the expiration of any
applicable statute of limitations or extensions thereof.
(j) All Tax Returns which are required to be prepared by Stockholder
pursuant to Section 3.5(d) shall be prepared and filed in a manner consistent
with past practice and applicable Law and, on such Tax Returns, no position
shall be taken, elections made or method adopted that is inconsistent with
positions taken, elections made or methods used in preparing and filing similar
Tax Returns in prior periods.
(k) From the date hereof until the Closing Date, (i) the Stockholder shall
and shall cause the Company to file all Tax Returns and reports ("Post-Signing
Returns") required to be filed in a manner consistent with past practices; (ii)
the Stockholder shall and shall cause the Company to timely pay all Taxes shown
as due and payable on the Post-Signing Returns; (iii) the Stockholder shall and
shall cause the Company to make provision for all Taxes payable for which no
Post-Signing Return is due prior to the Closing Date; (iv) the Stockholder shall
allow the Purchaser an opportunity to review and comment on any Post-Signing
Return prior to the filing of such Post-Signing Return;
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and (v) the Stockholder will promptly notify the Purchaser of any action, suit,
proceeding, claim or audit pending against or with respect to the Stockholder or
the Company in respect of any Tax where there is a possibility of a
determination or decision which could have an adverse effect on the Company's
Tax liabilities or Tax attributes.
(l) For purposes of this Agreement, the following terms used herein with
initial capital letters will have the following meanings:
(i) "Code" means the Internal Revenue Code of 1986, as amended.
(ii) "Covered Taxes" means all Taxes of the Company with respect to
periods ending on or prior to the Closing Date.
(iii) "Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.
(iv) "Taxes" (and words of similar meaning) means, with respect to
any Person, (i) all income taxes (including any tax on or based upon net
income, gross income, income as specifically defined, earnings, profits or
selected items of income, earnings or profits), and all gross receipts,
sales, use, ad valorem, transfer, franchise, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium,
property or windfall profits taxes, alternative or add-on minimum taxes,
customers duties and other taxes, fees, assessments or charges of any kind
whatsoever, together with all interest and penalties, additions to tax and
other additional amounts imposed by any taxing authority (domestic or
foreign) on such Person and (ii) any liability for the payment of any
amount of the type described in clause (i) above as a result of (A) being
a "transferee" (within the meaning of Section 6901 of the Code or any
other applicable Law) of another Person, (B) being a member of an
affiliated, combined or consolidated group, or (C) a contractual
arrangement or otherwise.
ARTICLE IV.
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Section 4.1 Grant of Option. The Stockholder hereby grants Parent an
irrevocable option (the "Parent Option") to purchase for cash, in a manner set
forth below, any or all of the Shares beneficially owned by the Stockholder at a
price (the "Exercise Price") per Share equal to the Per Share Amount. In the
event of any stock dividends, stock splits, recapitalizations, combinations,
exchanges of shares or the like, the Per Share Amount will be appropriately
adjusted for the purpose of this Section 4.1.
Section 4.2 Exercise of Option. (a) Subject to the conditions set
forth in Section 4.4 hereof, the Parent Option may be exercised by Parent, in
whole or in part, at any time or from time to time after (i) the Expiration Date
has occurred and the Stockholder has not validly tendered, or has withdrawn, the
Stockholder's Shares to be tendered by the Stockholder pursuant to Section 3.1
of this Agreement, or (ii) the Merger Agreement becomes terminable under
circumstances that could entitle Purchaser to termination fees under Section
7.5(b)(i) of the Merger Agreement (regardless of whether the Merger Agreement is
actually terminated); provided, however, that the Parent Option may not be
exercised during the period after commencement, and prior to the expiration or
earlier termination, of the Offer. Any such event by which the Merger Agreement
becomes so terminable by Parent is referred to herein as a "Trigger Event." The
Company and the Stockholder shall notify Parent promptly in writing of the
occurrence of any Trigger Event, it being understood that the giving of such
notice by the Company or the Stockholder is not a condition to the right of
Parent to exercise the Option. In the event Parent wishes to exercise the
Option, Parent shall deliver to the Stockholder a written notice (an "Exercise
Notice") specifying the total number of Shares Parent or Parent's nominee wishes
to purchase. Each closing of a purchase of Shares (a "Closing") will occur at a
place, on a date and at a time designated by Parent in an Exercise Notice
delivered at least two Business Days prior to the date of the Closing.
(b) The Exercise Price for each Share purchased upon the exercise of the
Parent Option shall be paid in cash.
Section 4.3 Deemed Transfer. Upon the giving by Parent or Parent's
nominee to the Stockholder of the Exercise Notice and the tender of the
aggregate Exercise Price, Parent or Parent's nominee will be deemed to be the
holder of record of the Shares transferrable upon such exercise, notwithstanding
that the
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stock transfer books of the Company are then closed or that certificates
representing such Shares have not been actually delivered to Parent or Parent's
nominee.
Section 4.4 Conditions to Closing. The obligation of the Stockholder
to sell the Shares to Parent or Parent's nominee hereunder is subject to the
conditions that (a) all waiting periods and approvals, if any, under the HSR Act
and the antitrust laws of the European Union and any member country thereof,
applicable to the sale of the Shares or the acquisition of the Shares by Parent
or Parent's nominee hereunder have expired or have been terminated (the
"Antitrust Approvals"), (b) all consents, approvals, orders or authorizations
of, or registrations, declarations or filings with, any court, administrative
agency or other governmental body or authority, if any, required in connection
with sale of the Shares or the acquisition of the Shares by Parent or Parent's
nominee hereunder have been obtained or made, the failure of which to have
obtained or made would have the effect of making the purchase of Shares by
Parent or Parent's nominee illegal (collectively, the "Regulatory Approvals"),
and (c) no preliminary or permanent injunction or other order by any court of
competent jurisdiction prohibiting or otherwise restraining such sale or
acquisition is in effect. Notwithstanding anything to the contrary contained
herein, if the Parent Option is exercisable in part without first obtaining the
Antitrust Approvals or obtaining or making certain Regulatory Approvals and
Parent or Parent's nominee wishes to exercise the Parent Option, the Parent
Option may be exercised in accordance with Section 4.2 and Parent or Parent's
nominee shall acquire the maximum number of Shares specified in the Exercise
Notice that Parent or Parent's nominee is then permitted to acquire under the
applicable laws and regulations, and if Parent or Parent's nominee thereafter
obtains the Antitrust Approvals and the Regulatory Approvals to acquire some or
all of the remaining balance of the Shares specified in the Exercise Notice,
then Parent or Parent's nominee shall be entitled to acquire such portion of the
remaining balance. The Stockholder agrees to use its reasonable efforts to
assist Parent or Parent's nominee in obtaining the Antitrust Approvals and
Regulatory Approvals.
Section 4.5 Closing. At any Closing, (a) the Stockholder will
deliver to Parent or its nominee a certificate or certificates in definitive
form representing the number of the Shares designated by Parent in its Exercise
Notice, such certificate to be registered in the name of Parent or its nominee
and (b) Parent will deliver to the Stockholder the aggregate
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Exercise Price for the Shares so designated and being purchased by wire transfer
of immediately available funds. The Stockholder will pay all expenses, and any
and all United States federal, state and local taxes and other charges that may
be payable in connection with the preparation, issue and delivery of stock
certificates under this Section 4.5 in the name of Parent or its nominee.
ARTICLE V.
Section 5.1 (a) Indemnity by Stockholder. Stockholder hereby agrees
to indemnify, defend and hold harmless Parent, Purchaser and, if the
transactions contemplated hereby are consummated, the Company, and their
respective officers, directors, employees, affiliates and agents (including any
successors to any of the foregoing) (the "Parent Indemnitees") from and against
all losses, claims, obligations, demands, assessments, penalties, liabilities,
costs, damages, attorneys' fees and expenses (collectively, "Damages"), asserted
against or incurred by Parent or Purchaser (and if the transactions contemplated
hereby are consummated, the Company) by reason of or resulting from a breach of
(i) any representation, warranty or covenant of the Company contained in the
Merger Agreement (excluding the representations and warranties contained in
Section 3.7, Section 3.10, Sections 3.12 through 3.17 and Sections 3.20 through
3.22 of the Merger Agreement) or (ii) any representation, warranty or covenant
of the Stockholder contained in this Agreement, provided, however, that Section
5.1(a)(i) and (ii) shall be read as though all of the representations,
warranties and covenants contained in the Merger Agreement or in this Agreement
contain no Material Adverse Effect or materiality qualifications. Stockholder
further agrees to indemnify, defend and hold harmless the Parent Indemnitees
from and against all Damages asserted against or incurred by the Parent
Indemnitees by reason of or resulting from any claim by a holder of Options
(other than Dick Miles) who is not identified as an employee of the Company or
its Subsidiaries on Section 3.3 of the Company Disclosure Letter pursuant to the
Options listed on Section 3.3 of the Company Disclosure Letter as a result of
the consummation of the transactions contemplated by the Merger Agreement and
the termination of the Options as of the Effective Time, other than the
Purchaser's obligation to pay the holders of Options an amount in cash equal to
the Option Consideration.
(b) Indemnity by Parent. Parent and the Purchaser hereby agree, jointly
and severally, to indemnify, defend and hold
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harmless the Stockholder and its officers, directors, employees, affiliates and
agents (including any successors to any of the foregoing) (collectively, the
"Stockholder Indemnitees") from and against all Damages asserted against or
incurred by the Stockholder Indemnitees by reason of or resulting from a breach
of (i) any representation, warranty or covenant of the Parent or the Purchaser
contained in the Merger Agreement or (ii) any representation, warranty or
covenant of the Parent or the Purchaser contained in this Agreement. In the
event Parent pays a Parent Termination Fee pursuant to Section 7.5(b) of the
Merger Agreement, then the terms of Section 7.5(d) of the Merger Agreement shall
be applicable to the Stockholder Indemnitees as if such Persons were the
"receiving party" referred to in Section 7.5(d) of the Merger Agreement.
Parent and Purchaser also agree, jointly and severally, to indemnify,
reimburse and hold harmless the Stockholder Indemnitees from and against all
Damages asserted against or incurred by the Stockholder Indemnitees, and for all
payments made or required to be made by the Stockholder Indemnitees, in respect
of any of the guarantees specified in Section 3.4(a)(i) of this Agreement (the
"Stockholder Obligations") to the extent such Damages or payments arise out of
(i) the change in control of the Company due to the consummation of the Offer or
the Merger or (ii) events occurring after a majority of the Company Board is
comprised of Parent's Designees (the "Board Change") (other than any Damages or
payments that relate to a breach by the Company or any Stockholder Indemnitee of
any of the terms and conditions of the Stockholder Obligations or any of the
obligations to which such Stockholder Obligations relate that occurred prior to
the Board Change).
Section 5.2 Conditions of Indemnification. (a) The indemnification
obligations and liabilities of any party (in this Article V referred to as the
"indemnifying party") to any other party (in this Article V referred to as the
"party to be indemnified") under Article V with respect to Damages resulting
from the assertion of liability or other claims by third parties shall be
subject to the following terms and conditions:
(i) With reasonable promptness after receipt of notice of any claim
by a third party, the party to be indemnified shall give the indemnifying
party written notice thereof together with a copy of such claim, process
or other legal pleading, and the indemnifying party shall have the right
to undertake the defense thereof by representatives of its own
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choosing and at its own expense; provided, however, that the party to be
indemnified may participate in the defense with counsel of its own choice
and at its own expense. If the indemnifying party undertakes such defense,
the indemnified party shall cooperate with the indemnifying party in such
defense and make available to the indemnifying party, at such party's
expense, all witnesses, pertinent records, materials and information in
its possession or under its control relating thereto as is reasonably
requested by the indemnifying party.
(ii) If the indemnifying party does not elect to defend against such
claim or if the indemnifying party fails to take reasonable steps
necessary to defend diligently such claim within ten days after receiving
written notice to that effect from the party to be indemnified, the party
to be indemnified will (upon further notice to the indemnifying party)
have the right to undertake the defense, compromise or settlement of such
claim on behalf of and for the account and risk of the indemnifying party
and at the indemnifying party's expense, subject to the right of the
indemnifying party, to assume the defense of such claims at any time prior
to settlement, compromise or final determination thereof.
(iii) Anything in this Article V to the contrary notwithstanding,
the indemnifying party shall not settle any claim without the consent of
the party to be indemnified unless such settlement involves only the
payment of money and the claimant provides to the party to be indemnified
a release from all liability in respect of such claim. If the settlement
of the claim involves more than the payment of money, the indemnifying
party shall not settle the claim without the prior consent of the party to
be indemnified, which consent shall not be unreasonably withheld.
(b) In the event that the party to be indemnified asserts the existence of
Damages (but excluding Damages resulting from the assertion of liability or
other claims by third parties), it shall give written notice to the indemnifying
party. Such written notice shall state that it is being given pursuant to this
Article V, specify the nature and amount of the Damages asserted and indicate
the date on which such assertion shall be deemed accepted and the amount of the
Damages deemed valid Damages (such date to be established in accordance with the
next sentence). If the indemnifying party, within sixty days after
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the mailing of notice by the party to be indemnified shall not given written
notice to the party to be indemnified announcing its intention to contest such
assertion of the party to be indemnified, such assertion shall be deemed
accepted and the amount of Damages shall be deemed valid Damages. In the event,
however, that the indemnifying party contests the assertion of Damages by giving
such written notice to the party to be indemnified within said period, then if
the parties hereto, acting in good faith, cannot reach agreement with respect to
such Damages within thirty days after such notice, the contested assertion of
Damages shall be resolved by a court having jurisdiction in the matter.
(c) The failure to give timely notice in this Section 5.2 will not affect
the rights or obligations of any party hereunder, except and only to the extent
that, as a result of such failure, any party that was entitled to receive such
notice was materially prejudiced as a result of such failure.
Section 5.3 Limitation on Remedy for Breach of Representations and
Warranties. Notwithstanding the foregoing, the Stockholder shall not have any
liability under Article V for any breaches by the Company of its representations
or warranties in the Merger Agreement unless the aggregate liability for all
such breaches exceeds $500,000; provided, that the Stockholder's aggregate
liability for all such breaches shall not exceed $10 million; provided, further,
that the Stockholder's liability for breaches by the Company of the
representations and warranties set forth in Sections 3.11 and 3.19 of the Merger
Agreement shall not be subject to the limitations set forth in this Section 5.3.
Section 5.4 Survival. All representations and warranties made by the
Company in the Merger Agreement and made by the Stockholder in this Agreement
shall survive the Effective Time and shall expire on April 30, 2001; provided,
that the representations and warranties of the Company in Section 3.11 of the
Merger Agreement shall survive until expiration of the statute of limitations
applicable to the matters covered thereby (giving effect to any waiver,
mitigation or extension thereof). All representations and warranties made by the
Parent and the Purchaser in the Merger Agreement will terminate upon the earlier
of (i) the Offer Completion Date and (ii) the six month anniversary of the date
of the termination of the Merger Agreement and all representations and
warranties made by the Parent and the Purchaser in this Agreement shall expire
on April 30, 2001. No claim or action for indemnification pursuant to
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this Article for breach of any representation or warranty shall be asserted or
maintained by any indemnified party after the expiration of such representation
or warranty pursuant to this Article, except for claims made in writing before
such expiration and actions (whether instituted before or after such expiration)
based on any claim made in writing before such expiration.
ARTICLE VI.
Section 6.1 Termination. The provisions of Articles II and III of
this Agreement will terminate (a) upon the purchase of all the Offer Shares
pursuant to the Offer in accordance with Section 3.1, (b) on the earlier to
occur of (i) the Effective Time or (ii) the date the Merger Agreement is
terminated in accordance with its terms, or (c) by the mutual written consent of
the respective Board of Directors (or similar governing body) of the
Stockholder, the Company and the Parent. The Parent Option (and the related
provisions of Sections 4.1, 4.2, 4.3, 4.4 and 4.5 of this Agreement) will
terminate (x) upon the purchase of all the Offer Shares pursuant to the Offer in
accordance with Section 3.1, or (y) upon the earliest of: (i) the Effective
Time, (ii) termination of the Merger Agreement other than upon or during the
continuance of a Trigger Event, or (iii) 180 days following any termination of
the Merger Agreement upon or during the continuance of a Trigger Event (or if,
at the expiration of such 180-day period, the Parent Option cannot be exercised
by reason of any applicable judgment, decree or order or the failure to have
made or obtained any required Regulatory Approval or Antitrust Approvals, ten
Business Days after such impediment to exercise has been removed or any
applicable judgment, decree or order has become final and not subject to
appeal). The remaining provisions of this Agreement will survive in accordance
with their respective terms.
Section 6.2 Expenses. Except as otherwise expressly provided herein
or in the Merger Agreement, all costs and expenses incurred by any of the
parties hereto will be borne by the party incurring such costs and expenses.
Parent and Purchaser, on the one hand, and the Company and the Stockholder, on
the other hand, will indemnify and hold harmless the other from and against any
and all claims or liabilities for finder's fees or brokerage commissions or
other like payments incurred by reason of action taken by him, it or any of
them, as the case may be.
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Section 6.3 Further Assurances. Each party hereto will execute and
deliver all such further documents and instruments and take all such further
action as may be necessary in order to consummate the transactions contemplated
hereby.
Section 6.4 Jurisdiction; Consent to Service of Process. (a) Each
party hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of the New York state court located in
the Borough of Manhattan, City of New York or the United States District Court
for the Southern District of New York (as applicable, the "New York Court"), and
any appellate court from any such court, in any suit, action or proceeding
arising out of or relating to this Agreement or for recognition or enforcement
of any judgment resulting from any such suit, action or proceeding, and each
party hereby irrevocably and unconditionally agrees that all claims in respect
of any such suit, action or proceeding may be heard and determined in the New
York Court.
(b) It will be a condition precedent to each party's right to bring any
such suit, action or proceeding that such suit, action or proceeding, in the
first instance, be brought in the New York Court (unless such suit, action or
proceeding is brought solely to obtain discovery or to enforce a judgment), and
if each such court refuses to accept jurisdiction with respect thereto, such
suit, action or proceeding may be brought in any other court with jurisdiction;
provided, that the foregoing will not apply to any suit, action or proceeding by
a party seeking indemnification or contribution pursuant to this Agreement or
otherwise in respect of a suit, action or proceeding against such party by a
third party if such suit, action or proceeding by such party seeking
indemnification or contribution is brought in the same court as the suit, action
or proceeding against such party.
(c) No party may move to (i) transfer any such suit, action or proceeding
from the New York Court to another jurisdiction, (ii) consolidate any such suit,
action or proceeding brought in the New York Court with a suit, action or
proceeding in another jurisdiction, or (iii) dismiss any such suit, action or
proceeding brought in the New York Court for the purpose of bringing the same in
another jurisdiction.
(d) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, (i) any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of
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or relating to this Agreement in the New York Court, (ii) the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court, and (iii) the right to object, with respect to such suit, action or
proceeding, that such court does not have jurisdiction over such party. Each
party irrevocably consents to service of process in any manner permitted by law.
Section 6.5 Enforcement of the Agreement. The Stockholder and the
Company acknowledge that irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that Parent
and Purchaser will be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any New York Court, this being in addition to any other remedy to
which it is entitled at law or in equity and no party will oppose the granting
of such relief on the basis that the other party has an adequate remedy at law.
Section 6.6 Publicity. Stockholder shall not issue any press release
or otherwise make any public statements with respect to this Agreement or the
Merger Agreement or the other transactions contemplated hereby or thereby
without the consent of Parent or Purchaser, except as may be required by Law or
applicable exchange rules as long as it has used all reasonable efforts to
consult with the Parent and Purchaser and to obtain Parent and Purchaser's
consent but has been unable to do so in a timely manner.
Section 6.7 Miscellaneous. (a) Any provision of this Agreement may
be waived at any time by the party that is entitled to the benefits thereof. No
such waiver, amendment or supplement will be effective unless in writing and
signed by the party or parties sought to be bound thereby. Any waiver by any
party of a breach of any provision of this Agreement will not operate as or be
construed to be a waiver of any other breach of such provision or of any breach
of any other provision of this Agreement. The failure of a party to insist upon
strict adherence to any term of this Agreement or one or more sections hereof
will not be considered a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
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(b) This Agreement and the Merger Agreement and any documents delivered by
the parties in connection herewith or therewith constitute the entire agreement
among the parties hereto with respect to the subject matter hereof, and
supersede all prior agreements among the parties with respect to such matters.
This Agreement may not be amended, changed, supplemented, waived or otherwise
modified, except upon the delivery of a written agreement executed by the
parties hereto.
(c) This Agreement will be governed by and construed in accordance with
the laws of the State of New York, without regard to the conflicts of laws
principles thereof.
(d) The descriptive headings contained herein are for convenience and
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
(e) All notices and other communications hereunder will be in writing and
will be given (and will be deemed to have been duly given upon receipt) by
delivery in person, by telecopy or by overnight courier addressed as follows:
If to the Company or the Stockholder to:
Geoscience Corporation
10500 Westoffice Drive, Suite 210
Houston, TX 77042-5326
Attn: J. Rankin Tippins
Fax No.: (713) 780-1445
With a copy to:
Andrews & Kurth L.L.P.
600 Travis, Suite 4200
Houston, TX 77002
Attention: Thomas P. Mason, Esq.
Telecopier: (713) 220-4285
If to Parent or Purchaser to:
Compagnie Generale de Geophysique
1, rue Leon Migaux
91341 Massy, France
Attn: Thierry Le Roux
Fax No.: 011.33.1.64.47.34.31
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With a copy to:
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, NY 10022
Attention: Jere R. Thomson, Esq.
Telecopier: (212) 755-7306
or to such other address as any party may have furnished to the other parties in
writing in accordance herewith.
(f) This Agreement may be executed in any number of counterparts, each of
which will be deemed to be an original, but all of which together will
constitute one agreement. A facsimile copy of a signature page shall be deemed
to be an original signature page.
(g) This Agreement is binding upon and is solely for the benefit of the
parties hereto and their respective successors, legal representatives and
assigns. The Stockholder agrees that this Agreement and the obligations
hereunder shall attach to such Stockholder's Shares and shall be binding upon
any Person to which legal or beneficial ownership of such Shares shall pass,
whether by operation of law or otherwise. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement will be assigned by any of
the parties hereto without the prior written consent of the other parties,
except that Parent and Purchaser will have the right to assign to any direct or
indirect wholly owned subsidiary of Parent or Purchaser any and all rights and
obligations of Parent or Purchaser under this Agreement including all Shares
acquired pursuant to the Parent Option, provided, that any such assignment will
not relieve either Parent or Purchaser from any of its obligations hereunder.
Any assignment not granted in accordance with the foregoing shall be null and
void.
(h) If any term or provision of this Agreement is determined to be
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party hereto. Upon any such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
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intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated by this Agreement are consummated to the
extent possible. If for any reason any court or regulatory agency determines
that the Parent Option does not permit Parent or Parent's nominee to acquire the
full number of Shares subject to such Option, it is the express intention of the
Stockholder to allow Parent or Parent's nominee to acquire such lesser number of
Shares as may be permissable without any amendment or modification hereof.
(i) All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity will be cumulative and
not alternative, and the exercise of any thereof by either party will not
preclude the simultaneous or later exercise of any other such right, power or
remedy by such party.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first above written.
COMPAGNIE GENERALE DE GEOPHYSIQUE
By: ______________________________________
Robert Brunck
Chairman and Chief Executive Officer
SERCEL ACQUISITION CORP.
By: ______________________________________
Thierry Le Roux
President
TECH-SYM CORPORATION
By: ______________________________________
J. Michael Camp
President and Chief Executive Officer
27
