<PAGE> 1
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
-----------------------
TELESCIENCES, INC.
(Name of Subject Company)
EDB 4TEL ACQUISITION CORP.
a wholly-owned subsidiary of
EDB BUSINESS PARTNER ASA
(Bidders)
COMMON STOCK, PAR VALUE $0.04 PER SHARE
(Title of Class of Securities)
87951X202
(CUSIP Number)
-----------------------
EIVIND KINCK
c/o EDB BUSINESS PARTNER ASA
Ruselokkveien 6.
N-0251 Olso
(Postal Address:
POSTBOKS 6798
ST. OLAVS PLASS
N-0130 OSLO, NORWAY)
Telephone: (011) 47 22 94 40 34
(Name, address and telephone number of person authorized to receive notices and
communications on behalf of bidder)
Copy to:
JOEL D. MAYERSOHN, ESQ.
MATTHEW W. MILLER, ESQ.
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
200 EAST LAS OLAS BOULEVARD
SUITE 1900
FORT LAUDERDALE, FLORIDA 33301
TELEPHONE: (954) 763-1200
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<PAGE> 2
CALCULATION OF FILING FEE
- -------------------------------------------------------------------------------
Transaction Valuation* Amount of Filing Fee**
$9,182,307 $2,553
- -------------------------------------------------------------------------------
* Based on the offer to purchase all of the outstanding shares of common
stock, par value $0.04 per share (the shares of common stock
hereinafter being referred to as the "Shares"), of the Subject Company
at $8.79 net per share. Based on information provided by Telesciences,
Inc., the number of Shares outstanding as of October 19, 1999 is
assumed to be 1,044,631.
** 1/50 of 1% of Transaction Valuation.
[ ] 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.
Amount Previously Paid: Not applicable. Filing Party: Not applicable
Form or Registration No.: Not applicable. Date Filed: Not applicable.
- -------------------------------------------------------------------------------
CUSIP No. 87951X202
- -------------------------------------------------------------------------------
1. Name of Reporting Person: S.S. or I.R.S. Identification No. of
Above Person
EDB 4tel Acquisition Corp.
EDB Business Partner ASA
- -------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Sources of Funds
WC
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(e) or 2(f) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
EDB 4tel Acquistion Corp. -- Delaware
EDB Business Partner ASA -- Norway
- -------------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each Reporting Person
0
- -------------------------------------------------------------------------------
8. Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares
[ ]
- -------------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row (7)
0.0%
- -------------------------------------------------------------------------------
10. Type of Reporting Person
CO
- -------------------------------------------------------------------------------
2
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This Tender Offer Statement on Schedule 14D-1 relates to the offer by
EDB 4tel Acquisition Corp., a Delaware corporation (the "Purchaser"), a
wholly-owned subsidiary of EDB Business Partner ASA, a Norwegian limited
company ("Parent"), to purchase all of the issued and outstanding shares of
common stock, par value $0.04 per share (all of the shares of common stock
being hereinafter collectively referred to as the "Shares") of Telesciences,
Inc., a Delaware corporation (the "Company"), at a price of not less than $8.79
per Share net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated October 25, 1999 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which, together
with the Offer to Purchase and supplements thereto, collectively constitute the
"Offer"), copies of which are attached as Exhibits (a)(1) and (a)(2),
respectively. 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 Telesciences, Inc. The
principal executive offices of the Company are located at 4000 Midlantic Drive,
Mount Laurel, New Jersey 08054-5476.
(b) The exact title of the class of equity securities being sought in
the Offer is common stock, par value $0.04 per share, of the Company.
Information regarding the number of Shares outstanding, the amount of Shares
being sought and the consideration being offered therefor is set forth in the
Introduction Section (the "Introduction") of the Offer to Purchase and is
incorporated herein by reference.
(c) Information concerning the principal market in which the Shares
are traded and the high and low sales prices of the Shares for each quarterly
period during the past two years is set forth in Section 6 ("Price Range of the
Shares") of the Offer to Purchase and is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(d) and (g) This Statement is filed by the Purchaser and Parent.
The information concerning the name, the state of its organization, its
principal business and address of the principal office of the Purchaser and
Parent, and the information regarding the name, business address, present
principal occupation or employment and the name, principal business and address
of any corporation or other organization in which such employment or occupation
is conducted, material occupations, positions, offices or employments during
the last five years and the citizenship of each of the executive officers and
directors of the Purchaser and Parent is set forth in Section 9 ("Certain
Information Concerning Purchaser and Parent") of the Offer to Purchase and
in Schedule I to the Offer to Purchase and is incorporated herein by reference.
(e) and (f) During the last five years, neither the Purchaser nor
Parent nor, to the best knowledge of Purchaser or Parent, any of the persons
listed in Schedule I to the Offer to Purchase (i) has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) was a party to a civil proceeding of a judicial or administrative body of
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) The information set forth in Section 9 ("Certain Information
Concerning Purchaser and Parent") of the Offer to Purchase is incorporated
herein by reference. Except as set forth in Section 9 of the Offer to Purchase,
since December 31, 1995, there have been no transactions which would be
required to be disclosed under this Item 3(a) between either the Purchaser or
Parent or, to the best knowledge of the Purchaser and Parent, any of the
persons listed in Schedule I to the Offer to Purchase and the Company or any of
its executive officers, directors or affiliates.
3
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(b) The information set forth in Section 9 ("Certain Information
Concerning Purchaser and Parent") and Section 11 ("Contacts and
Transactions with the Company; Background of the Offer") of the Offer to
Purchase is incorporated herein by reference. Except as set forth in Section 9
and Section 11 of the Offer to Purchase, since December 31, 1995, there have
been no contacts, negotiations or transactions which would be required to be
disclosed under this Item 3(b) between either the Purchaser or Parent or any of
their respective subsidiaries or, to the best knowledge of the Purchaser and
Parent, any of those persons listed in Schedule I to the Offer to Purchase and
the Company or its affiliates 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.
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.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER
(a)-(g) The information set forth in the Introduction Section, Section
7 ("Purpose of the Offer; Plans for the Company; Effect of the Offer on the
Market for the Shares; Stock Quotation; Exchange Act Registration; Margin
Regulations"), Section 11 ("Contacts and Transactions with the Company;
Background of the Offer"), Section 12 ("The Merger Agreement and Shareholder
Agreements") and Section 13 ("Dividends and Distributions") of the Offer to
Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
(a) Not applicable.
(b) Not applicable.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES
The information set forth in the Introduction Section, Section 9
("Certain Information Concerning Purchaser and Parent"), Section 11
("Contacts and Transactions with the Company; Background of the Offer"),
Section 10 ("Source and Amount of Funds"), Section 12 ("The Merger Agreement
and Shareholder Agreements") and Section 16 ("Fees and Expenses") of the Offer
to Purchase is incorporated herein by reference. Except as set forth in the
Introduction and Sections 9, 10, 11, 12 and 16 of the Offer to Purchase,
neither the Purchaser nor Parent, nor, to the best knowledge of the Purchaser
or Parent, any of the persons listed in Schedule I to the Offer to Purchase,
has any contract, arrangement, understanding or relationship with any other
person with respect to any securities of the Company (including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any securities of the Company, joint ventures,
loans or option arrangements, puts or calls, guarantees of loans, guarantees
against loss, guarantee agreements or any giving or withholding of proxies).
4
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ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
The information set forth in the Introduction Section and 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 Purchaser and Parent") of the Offer to Purchase, including the
financial statements and related notes thereto incorporated by reference in
Section 9, is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION
(a) The information set forth in the Introduction Section, in Section
9 ("Certain Information Concerning Purchaser and Parent"), in Section 11
("Contacts and Transactions with the Company; Background of the Offer") and in
Section 12 ("The Merger Agreement and Shareholder Agreements") of the Offer to
Purchase is incorporated herein by reference.
(b) and (c) The information set forth in the Introduction Section,
Section 12 ("The Merger Agreement and Shareholder Agreements") and Section 15
("Certain Legal Matters") of the Offer to Purchase is incorporated herein by
reference.
(d) The information set forth in Section 7 ("Purpose of the Offer;
Plans for the Company; Effect of the Offer on the Market for the Shares; Stock
Quotation; Exchange Act Registration; Margin Regulations") and Section 15
("Certain Legal Matters") of the Offer to Purchase is incorporated herein by
reference.
(e) Not applicable.
(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.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
(a)(1) Offer to Purchase dated October 25, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Summary Advertisement as published on October 25, 1999.
(a)(8) Press Release issued on October 19, 1999.
(b) None.
(c)(1) Confidentiality Letter, dated August 26, 1999, between
Parent and the Company.
(c)(2) Agreement and Plan of Merger, dated as of October 19,
1999, among Parent, the Purchaser and the Company.
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(c)(3) Escrow Agreement, dated as of October 19, 1999, among
Parent, Purchaser and the Company.
(c)(4) Shareholder Agreement, dated as of October 19, 1999,
among Parent, Purchaser and Michael Moore.
(c)(5) Shareholder Agreement dated as of October 19, 1999, among
Parent, Purchaser and Frances Penfold.
(d) None.
(e) Not applicable.
(f) None.
Signature. After due inquiry and to the best of our knowledge and
belief, we certify that the information set forth in this Statement is true,
complete and correct.
Date: October 25, 1999 EDB 4tel Acquisition Corp.
By: /s/ Asbjorn Eide
-----------------------------------
Name: Asbjorn Eide
Title: President
EDB Business Partner ASA
By: /s/ Eivind Kinck
-----------------------------------
Name: Eivind Kinck
Title: Executive Vice President
6
<PAGE> 7
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
(a)(1) Offer to Purchase, dated October 25, 1999
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Nominees
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks Trust Companies and Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
(a)(7) Summary Advertisement as published on October 25, 1999
(a)(8) Press Release issued on October 19, 1999
(c)(1) Confidentiality Letter, dated August 26, 1999, between Parent
and the Company
(c)(2) Agreement and Plan of Merger, dated as of October 19, 1999,
among Parent, the Purchaser and the Company
(c)(3) Escrow Agreement, dated as of October 19, 1999, among Parent,
Purchaser and the Company.
(c)(4) Shareholder Agreement, dated as of October 19, 1999, among
Parent, Purchaser and Michael Moore.
(c)(5) Shareholder Agreement, dated as of October 19, 1999, among
Parent, Purchaser and Frances Penfold.
7
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TELESCIENCES, INC.
AT
$8.79 NET PER SHARE
BY
EDB 4TEL ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
EDB BUSINESS PARTNER ASA
---------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, NOVEMBER 22, 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 OF THE OFFER THAT NUMBER OF
SHARES (AS DEFINED HEREIN) WHICH WHEN ADDED TO SHARES THEN BENEFICIALLY OWNED BY
PARENT REPRESENT AT LEAST A MAJORITY OF THE TOTAL NUMBER OF THEN OUTSTANDING
SHARES ON THE DATE SHARES ARE ACCEPTED FOR PAYMENT. THE OFFER IS ALSO SUBJECT TO
CERTAIN OTHER CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE THE
INTRODUCTION AND SECTIONS 1, 14 AND 15 OF THIS OFFER TO PURCHASE.
---------------------
TELESCIENCES, INC. (THE "COMPANY"), EDB BUSINESS PARTNER ASA ("PARENT") AND
EDB 4TEL ACQUISITION CORP. HAVE ENTERED INTO AN AGREEMENT AND PLAN OF MERGER
PROVIDING FOR THE ACQUISITION OF THE COMPANY BY PARENT PURSUANT TO THE OFFER AND
A SUBSEQUENT MERGER. THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") HAS
APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER, AND DETERMINED THAT THE TERMS OF THE OFFER
AND THE MERGER ARE ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF THE
STOCKHOLDERS OF THE COMPANY, AND RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
---------------------
IMPORTANT
Any stockholder desiring to tender Shares should either (1) complete and
sign the Letter of Transmittal (or a facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it with the
certificate(s) representing tendered Shares and all other required documents to
the Depositary (as defined herein) or tender such Shares pursuant to the
procedures for book-entry transfer set forth in Section 2 of this Offer to
Purchase or (2) request such stockholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such stockholder. A
stockholder having Shares registered in the name of a broker, dealer, commercial
bank, trust company or other nominee must contact such person to tender such
Shares.
Any stockholder who desires to tender Shares and cannot deliver such Shares
and all other required documents to the Depositary by the expiration of the
Offer, or who cannot comply with the procedures for book-entry transfer on a
timely basis, may tender such Shares by following the guaranteed delivery
procedures set forth in Section 2 of this Offer to Purchase.
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. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery, or other tender offer
materials, may also be obtained from the Information Agent, brokers, dealers,
commercial banks or trust companies and their nominees.
---------------------
October 25, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
INTRODUCTION..................................................... 1
THE MERGER....................................................... 2
OFFER TO PURCHASE................................................ 2
1. Terms of the Offer.......................................... 2
2. Procedure for Tendering Shares.............................. 4
3. Withdrawal Rights........................................... 6
4. Acceptance for Payment and Payment.......................... 7
5. Certain Federal Income Tax Consequences..................... 8
6. Price Range of the Shares................................... 9
7. Purpose of the Offer; Plans for the Company; Effect of the
Offer on the Market for the Shares; Stock Quotation;
Exchange Act Registration; Margin Regulations............... 9
8. Certain Information Concerning the Company.................. 11
9. Certain Information Concerning Purchaser and Parent......... 14
10. Source and Amount of Funds.................................. 15
11. Contacts and Transactions with the Company; Background of
the Offer................................................... 15
12. The Merger Agreement and Shareholder Agreements............. 17
13. Dividends and Distributions................................. 25
14. Certain Conditions of the Offer............................. 25
15. Certain Legal Matters....................................... 26
16. Fees and Expenses........................................... 29
17. Miscellaneous............................................... 29
Schedule I -- Directors and Executive Officers of Parent and
Purchaser................................................... S-1
</TABLE>
ii
<PAGE> 3
To the Holders of Common Stock of
Telesciences, Inc.:
INTRODUCTION
EDB 4tel Acquisition Corp., a Delaware corporation ("Purchaser") and a
wholly-owned subsidiary of EDB Business Partner ASA, a Norwegian limited company
("Parent"), hereby offers to purchase all outstanding shares of common stock,
par value $.04 per share (the shares of common stock of the Company being
hereinafter referred to as the "Shares"), of Telesciences, Inc. (the "Company"),
at a price of $8.79 per Share (such price, or such higher price per Share as may
be paid in the Offer, being referred to herein as the "Offer Price"), net to the
seller in cash, without interest thereon, upon 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 hereto or
thereto, collectively constitute the "Offer"). The Offer is being made pursuant
to the Agreement and Plan of Merger, dated as of October 19, 1999 (the "Merger
Agreement"), among Parent, Purchaser and the Company. Tendering stockholders
will not be obligated to pay brokerage fees or commissions or, except as set
forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the
purchase of Shares pursuant to the Offer. Purchaser will pay all fees and
expenses of American Stock Transfer & Trust Company, which is acting as the
Depositary (the "Depositary"), and Georgeson Shareholder Communications, Inc.,
which is acting as Information Agent (the "Information Agent"), incurred in
connection with the Offer and in accordance with the terms of the agreements
entered into between Purchaser and each such person. See Section 16.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in Section
1) that number of Shares which when added to the Shares then beneficially owned
by Parent represent at least a majority of the total number of then outstanding
Shares on the date Shares are accepted for payment (the "Minimum Condition").
Purchaser reserves the right, subject to the applicable rules and regulations of
the Securities and Exchange Commission (the "Commission"), which it presently
has no intention of exercising (and which it may not exercise without the
Company's written consent), to increase the Minimum Condition or to elect to
purchase, pursuant to the Offer, less than the minimum number of Shares which
would otherwise be required to satisfy the Minimum Condition. The Offer is not
conditioned on obtaining financing. See Section 14, which sets forth in full the
conditions to the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MERGER AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, (EACH
AS DEFINED BELOW) AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE
ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE
COMPANY, AND RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER
AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
BROOKS, HOUGHTON SECURITIES, INC., FINANCIAL ADVISOR TO THE COMPANY, HAS
DELIVERED TO THE BOARD ITS WRITTEN OPINION TO THE EFFECT THAT, AS OF OCTOBER 19,
1999, AND BASED UPON AND SUBJECT TO THE MATTERS SET FORTH THEREIN, THE $8.79 PER
SHARE CASH CONSIDERATION TO BE PAID IN THE OFFER AND THE MERGER IS FAIR FROM A
FINANCIAL POINT OF VIEW TO THE HOLDERS OF SHARES. THE FULL TEXT OF THE WRITTEN
OPINION OF BROOKS, HOUGHTON SECURITIES, INC. CONTAINING THE ASSUMPTIONS MADE,
THE MATTERS CONSIDERED AND THE SCOPE OF THE REVIEW UNDERTAKEN IN RENDERING SUCH
OPINION AS WELL AS THE LIMITATIONS OF SUCH OPINION WILL BE ATTACHED AS AN ANNEX
TO THE COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9, WHICH
WILL BE MAILED TO STOCKHOLDERS WITHIN FIVE BUSINESS DAYS AFTER THE DATE OF THIS
OFFER TO PURCHASE. STOCKHOLDERS ARE URGED TO READ THE FULL TEXT OF SUCH OPINION
IN CONJUNCTION WITH THIS OFFER TO PURCHASE.
1
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The Company has represented and warranted to Purchaser that, as of October
15, 1999, after giving effect to the four-for-one stock split effective October
15, 1999, there were 1,044,631 Shares issued and outstanding and there were
outstanding options to purchase an aggregate of 309,267 Shares, 84,675 of which
were then exercisable. The Merger Agreement provides, among other things, that
the Company will not, without the prior consent of Parent, issue (i) additional
shares of capital stock of any class of the Company, or securities convertible
into any such shares, or any rights, warrants or options to acquire any such
shares or other convertible securities, other than such issuance of Shares
pursuant to the exercise of options outstanding on the date hereof, and other
than the issuance of Shares in connection with the Company's employee stock
purchase plan, or (ii) any other securities in respect of, in lieu of or in
substitution for, Shares outstanding on the date of the Merger Agreement.
Accordingly, assuming that no outstanding options are exercised or Shares are
issued pursuant to the Company employee stock purchase plan, the Minimum
Condition will be satisfied if at least 522,316 Shares, or approximately 50.1%
of the outstanding Shares as of October 15, 1999, are validly tendered and not
withdrawn prior to the Expiration Date. Assuming that no outstanding options are
exercised after the Expiration Date, if the Minimum Condition is satisfied and
Purchaser accepts for payment Shares tendered pursuant to the Offer, Purchaser
will be able to elect a majority of the members of the Company's Board of
Directors and to effect the Merger (as hereinafter defined) without the
affirmative vote of any other stockholder of the Company.
THE MERGER
Pursuant to the Merger Agreement, following the consummation of the Offer
and the satisfaction or waiver of certain conditions, Purchaser will be merged
with and into the Company (the "Merger"), with the Company surviving the Merger
(as such, the "Surviving Corporation") as a wholly-owned subsidiary of Parent.
In the Merger, each outstanding Share (other than Shares owned by Parent,
Purchaser or any other subsidiary of Parent or held in the treasury of the
Company or by stockholders, if any, who are entitled to and who properly
exercise appraisal rights under Delaware law) will be converted into the right
to receive from the Surviving Corporation the Offer Price in cash, without
interest. The Merger is subject to a number of conditions, including approval by
stockholders of the Company, if such approval is required by applicable law. See
Section 12.
Under the Delaware General Corporate Law ("DGCL"), if a Delaware
corporation owns 90% or more of each outstanding class of capital stock of
another corporation, it can effect a "short-form" merger with such other
corporation without prior notice to, or any other action by, any other
stockholder of such corporation. As a result, assuming no outstanding stock
options are exercised or Shares issued by the Company in connection with the
Company's employee stock purchase plan, following October 15, 1999, if Purchaser
were to acquire ownership of 940,168 Shares pursuant to the Offer, Purchaser
would own more than 90% of the Shares, the only class of capital stock of the
Company then outstanding and would be able to effect the Merger pursuant to the
"short form" merger provisions of the DGCL. See Section 15.
Certain U.S. federal income tax consequences of the sale of Shares pursuant
to the Offer and the conversion of Shares pursuant to the Merger are described
in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
OFFER TO PURCHASE
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension or
amendment), Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not withdrawn in accordance with
Section 3. The term "Expiration Date" means 12:00 midnight, New York City time,
on Monday, November 22, 1999, unless and until Purchaser in accordance with the
terms of the Merger Agreement has extended the period of time during which the
Offer is open, in which event the term "Expiration Date" shall mean the latest
time and date
2
<PAGE> 5
at which the Offer, as so extended by Purchaser, shall expire. In the Merger
Agreement, Parent and Purchaser have agreed that if all conditions to
Purchaser's obligation to accept for payment and pay for Shares pursuant to the
Offer are not satisfied on the scheduled Expiration Date, Purchaser may, in its
sole discretion, extend the Offer from time to time until the earlier of the
consummation of the Offer or the date which is twenty (20) business days from
the Expiration Date of the Offer (such date, the "Final Date"). The Merger
Agreement further provides that Purchaser shall, subject to the terms and
conditions of the Offer, accept for payment Shares validly tendered and not
withdrawn prior to the Expiration Date as soon as it is legally permitted to do
so under applicable law; provided, however, that Purchaser shall be entitled to
extend the Offer one or more times beyond the Final Date for an aggregate period
of up to ten (10) business days if on the Final Date the conditions to the Offer
set forth in Annex A to the Merger Agreement have been satisfied or waived, but
there shall not have been tendered that number of Shares which would equal at
least ninety percent (90%) of the issued and then outstanding Shares. Purchaser
is obligated to consummate the Offer immediately upon reaching such ninety
percent (90%) threshold. The Company has agreed that it will not tender, and
will not permit any of its subsidiaries to tender, any Shares held by it or any
such subsidiary pursuant to the Offer.
The Offer is conditioned upon the satisfaction of certain conditions set
forth in Section 14, including the Minimum Condition. The Merger Agreement
provides that no change or waiver may be made, without the prior written consent
of the Company, that (i) decreases the Offer Price, (ii) decreases the number of
Shares to be purchased in the Offer, (iii) changes the form of consideration
payable in the Offer, (iv) adds to or changes the conditions to the Offer set
forth in Section 14, (v) waives the Minimum Condition or (vi) changes any other
terms or conditions of the Offer.
The Merger Agreement requires Purchaser to accept for payment and pay for
all Shares validly tendered and not withdrawn pursuant to the Offer if all
conditions to the Offer are satisfied on the Expiration Date. However, if
immediately prior to the scheduled Expiration Date, all conditions to the Offer
are not satisfied, Purchaser is generally obligated to extend the Offer from
time to time until the earlier of the consummation of the Offer or the date
which is twenty (20) business days from the originally scheduled Expiration
Date. If the conditions to the Offer are not satisfied prior to the Expiration
Date, Purchaser reserves the right (but shall not be obligated, except as set
forth above), subject to the terms of the Merger Agreement, to (i) decline to
purchase any of the Shares tendered and terminate the Offer, (ii) waive any of
the conditions to the Offer, to the extent permitted by applicable law, and,
subject to complying with applicable rules and regulations of the Commission,
purchase all Shares validly tendered, or (iii) extend the Offer and, subject to
the right of stockholders to withdraw Shares until the Expiration Date, retain
the Shares tendered during the period or periods for which the Offer is
extended.
If Purchaser extends the Offer, or if Purchaser (whether before or after
its acceptance for payment of Shares) is delayed in its purchase of, or payment
for, Shares or is unable to pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may retain tendered Shares on behalf of Purchaser, and such Shares may not be
withdrawn, except to the extent tendering stockholders are entitled to
withdrawal rights as described in Section 3. However, the ability of Purchaser
to delay the payment for Shares which Purchaser has accepted for payment is
limited by Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended
("Exchange Act"), which requires that a bidder pay the consideration offered or
return the securities deposited by, or on behalf of, holders of securities
promptly after the termination or withdrawal of the Offer.
Any extension of the period during which the Offer is open, delay in
acceptance for payment or payment, termination or amendment of the Offer will be
followed, as promptly as practicable, by a public announcement thereof, such
announcement in the case of an extension to be issued not later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date in accordance with the public announcement requirements of Rules
14d-4(c) and 14e-1(d) under the Exchange Act. Without limiting the obligation of
Purchaser under such rules or the manner in which Purchaser may choose to make
any public announcement, Purchaser currently intends to make announcements by
issuing a press release to the Dow Jones News Service and making any appropriate
filing with the Commission.
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<PAGE> 6
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer
(including a waiver of the Minimum Condition), Purchaser will disseminate
additional tender offer materials and extend the Offer to the extent required by
Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period
during which the Offer must remain open following material changes in the terms
of the Offer or information concerning the Offer, other than a change in price
or a change in the percentage of securities sought, will depend upon the facts
and circumstances then existing, including the relative materiality of changed
terms. With respect to a change in price or a change in the percentage of
securities sought, a minimum period of ten (10) business days is required to
allow for adequate dissemination to stockholders and investor response. If
Purchaser should decide to change the price offered or the percentage of Shares
sought, such change will be applicable to all stockholders of the Company who
hold any Shares.
The Company has provided Purchaser with the Company's stockholder lists and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase, the related Letter of Transmittal and other
relevant materials will be mailed by Purchaser to record holders of Shares and
will be furnished to brokers, dealers, banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the stockholder
lists, 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. PROCEDURE FOR TENDERING SHARES
To tender Shares pursuant to the Offer, either (a) a Letter of Transmittal
(or a facsimile thereof) properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message (as defined below) in
connection with a book-entry transfer of Shares, and any other documents
required by the Letter of Transmittal, must be received by the Depositary at its
address set forth on the back cover of this Offer to Purchase and either (i)
certificates for the Shares to be tendered must be received by the Depositary at
such address or (ii) such Shares must be tendered pursuant to the procedures for
book-entry transfer described below and a confirmation of such delivery received
by the Depositary, in each case by the Expiration Date, or (b) the guaranteed
delivery procedure described below must be complied with. The term "Agent's
Message" means a message, transmitted by the Book-Entry Transfer Facility (as
hereinafter defined) to and received by the Depositary and forming a part of a
book-entry confirmation ("Book-Entry Confirmation") which states that the
Book-Entry Transfer Facility has received an express acknowledgment from the
participant in the Book-Entry Transfer Facility tendering the Shares which are
the subject of such book-entry confirmation that such participant has received
and agrees to be bound by the terms of the Letter of Transmittal and that
Purchaser may enforce such agreement against such participant.
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, and any financial institution that is a
participant in the system of the Book-Entry Transfer Facility may make a
book-entry transfer of Shares by causing the Book-Entry Transfer Facility to
transfer such Shares into the Depositary's account in accordance with the
procedures of the Book-Entry Transfer Facility. However, although delivery of
Shares may be effected through book-entry transfer at the Book-Entry Transfer
Facility, the Letter of Transmittal (or facsimile thereof) properly completed
and duly executed, together with any required signature guarantees, or an
Agent's Message and any other required documents must, in any case, be received
by the Depositary at its address set forth on the back cover of this Offer to
Purchase by the Expiration Date, or the guaranteed delivery procedure described
below must be complied with. Delivery of the Letter of Transmittal and any other
required documents to the Book-Entry Transfer Facility does not constitute
delivery to the Depositary.
Signature Guarantees. Except as otherwise provided below, all signatures
on a Letter of Transmittal must be guaranteed by a financial institution
(including most banks, savings and loan associations and brokerage houses) which
is a member in good standing of the Securities Transfer Association Medallion
Program, the New York Stock Exchange, Inc., Medallion Signature Program or the
Stock Exchange Medallion Program (an "Eligible Institution"). Signatures on a
Letter of Transmittal need not be guaranteed (a) if the Letter of Transmittal is
signed by the registered holder of the Shares tendered therewith and such
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<PAGE> 7
holder has not completed the box entitled "Special Payment Instructions" or the
box entitled "Special Delivery Instructions" on the Letter of Transmittal or (b)
if such Shares are tendered for the account of an Eligible Institution. If the
certificate for Shares is registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made, or
certificates for Shares not tendered or accepted for payment are to be issued,
in the name of a person other than the registered holder(s), then the tendered
certificates must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name(s) of the registered holder(s) appear on
the certificates, with the signature(s) on the certificates or stock powers
guaranteed by an Eligible Institution. See Instructions 1 and 5 of the Letter of
Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and cannot deliver certificate(s) representing such Shares and all
other required documents to the Depositary by the Expiration Date, or such
stockholder cannot complete the procedure for delivery by book-entry transfer on
a timely basis, such Shares may nevertheless be tendered if all of the following
conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser, is received by
the Depositary (as provided below) by the Expiration Date; and
(iii) the 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), together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantee (or, in the case of a book-entry transfer, an Agent's
Message) and any other documents required by the Letter of Transmittal, are
received by the Depositary within three Nasdaq Stock Market trading days
after the date of execution of the Notice of Guaranteed Delivery. A "Nasdaq
Stock Market trading day" is any day on which the Nasdaq Stock Market,
Inc.'s Nasdaq SmallCap Market is open for business.
The Notice of Guaranteed Delivery may be delivered by hand (including
delivery by overnight courier service) or transmitted by telegram, telex or
facsimile transmission or mail to the Depositary and must include a guarantee by
an Eligible Institution in the form set forth in such Notice.
The method of delivery of Shares and all other required documents,
including delivery through the Book-Entry Transfer Facility, is at the option
and risk of the tendering stockholder and the delivery will be deemed made only
when actually received by the Depositary (including, in the case of a book-entry
transfer, by a timely confirmation). If delivery is sent by mail, registered
mail with return receipt requested, properly insured, is recommended. In all
cases, sufficient time should be allowed to ensure timely delivery.
Backup Withholding. Under United States federal income tax laws, the
Depositary will be required to withhold 31% of the amount of any payments made
to certain stockholders pursuant to the Offer. In order to avoid such backup
withholding, each tendering stockholder must provide the Depositary with such
stockholder's correct taxpayer identification number ("TIN") and certify that
such stockholder is not subject to backup withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal. If a stockholder is a
non-resident alien or foreign entity not subject to back-up withholding, the
stockholder must give the Depositary a completed Form W-8 Certificate of Foreign
Status prior to receipt of any payment.
Letter of Transmittal. By executing a Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of Purchaser as such stockholder's
proxies, each with full power of substitution, in the manner set forth in the
Letter of Transmittal, to the full extent of such stockholder's rights with
respect to the Shares tendered by such stockholder and accepted for payment by
Purchaser. All such proxies shall be irrevocable and coupled with an interest in
the tendered Shares. Such appointment is effective only upon the acceptance for
payment of such Shares by Purchaser. Upon such acceptance for payment, all prior
proxies and consents granted by such stockholder with respect to such Shares and
other securities will, without further action, be revoked, and no subsequent
proxies may be given nor subsequent written consents executed by such
stockholder (and, if given or executed, will not be deemed to be effective) with
respect thereto. Such designees of Purchaser will be empowered to exercise all
voting and other rights of such stockholder as they, in
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<PAGE> 8
their sole discretion, may deem proper at any annual, special or adjourned
meeting of the Company's stockholders, by written consent or otherwise.
Purchaser reserves the right to require that, in order for Shares to be validly
tendered, immediately upon Purchaser's acceptance for payment of such Shares,
Purchaser is able to exercise full voting, consent and all other rights with
respect to such Shares (including voting at any meeting of stockholders then
scheduled or acting by written consent without a meeting to the extent permitted
under Delaware law).
The tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the Offer, as well as
the tendering stockholder's representation and warranty that (a) such
stockholder owns the Shares being tendered within the meaning of Rule 14e-4
promulgated under the Exchange Act, (b) the tender of such Shares complies with
Rule 14e-4 and (c) such stockholder has the full power and authority to tender
and assign the Shares tendered, as specified in the Letter of Transmittal.
Purchaser's acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the tendering stockholder and Purchaser
upon the terms and subject to the conditions of the Offer.
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
will be determined by Purchaser, in its sole discretion, which determination
shall be final and binding. Purchaser reserves the absolute right to reject any
or all tenders of Shares determined by it not to be in proper form or the
acceptance for payment of or payment for which may, in the opinion of
Purchaser's counsel, be unlawful. Purchaser also reserves the absolute right to
waive any defect or irregularity in any tender of Shares of any particular
stockholder, whether or not similar defects or irregularities are waived in the
case of other stockholders. No tender of Shares will be deemed to have been
validly made until all defects and irregularities have been cured or waived.
None of Purchaser, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification.
Purchaser's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and the instructions thereto) will be final and
binding.
3. WITHDRAWAL RIGHTS
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 after December 23, 1999 unless theretofore accepted
for payment as provided in this Offer to Purchase. If Purchaser extends the
period of time during which the Offer is open, is delayed in accepting for
payment or paying for Shares or is unable to accept for payment or pay for
Shares pursuant to the Offer for any reason, then, without prejudice to
Purchaser's rights under the Offer, the Depositary may, on behalf of Purchaser,
retain all Shares tendered, and such Shares may not be withdrawn except as
otherwise provided in this Section 3.
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 on the back cover of this 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 holder of Shares, if different from
that of the person who tendered such 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) 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.
Withdrawals of Shares may not be rescinded, and Shares properly withdrawn will
thereafter be deemed not validly tendered for purposes of the Offer. However,
withdrawn Shares may be retendered at any time prior to the Expiration Date by
following one of the procedures described in Section 2.
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<PAGE> 9
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by Purchaser, in its sole
discretion, which determination shall be final and binding. None of 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 failure to give any such notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT
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), Purchaser will accept for payment, and will pay for, as soon as
practicable after the Expiration Date, all Shares validly tendered prior to the
Expiration Date and not properly withdrawn in accordance with Section 3.
Purchaser expressly reserves the right to delay acceptance for payment of, or
payment for, Shares in order to comply in whole or in part with any applicable
law.
For purposes of the Offer, Purchaser shall be deemed to have accepted for
payment tendered Shares when, as and if Purchaser gives oral or written notice
to the Depositary of its acceptance of the tenders of such Shares. Upon the
terms and subject to the conditions of the Offer, payment for Shares accepted
for payment 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 payments from Purchaser and transmitting such payments
to tendering stockholders. In all cases, payment for Shares accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of (i) certificates for such Shares (or of a confirmation of a book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility (as defined in Section 2)), (ii) a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer, and
(iii) any other required documents. For a description of the procedure for
tendering Shares pursuant to the Offer, see Section 2. Accordingly, payment may
be made to tendering stockholders at different times if delivery of the Shares
and other required documents occur at different times. Under no circumstances
will interest be paid by Purchaser on the consideration paid for Shares pursuant
to the Offer, regardless of any delay in making such payment.
If Purchaser increases the consideration to be paid for Shares pursuant to
the Offer, Purchaser will pay such increased consideration for all Shares
purchased pursuant to the Offer.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE TO BE
PAID BY PURCHASER FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
ANY DELAY IN MAKING SUCH PAYMENT.
Subject to applicable rules and regulations of the Commission and to the
terms and conditions of the Merger Agreement, Purchaser expressly reserves the
right, in its sole discretion, to delay acceptance for payment of, or payment
for, Shares in order to comply in whole or in part with any applicable law. If
Purchaser is delayed in its acceptance for payment of, or payment for, Shares or
is unable to accept for payment or pay for Shares pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer (but
subject to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary
may, nevertheless, on behalf of Purchaser, retain tendered Shares, and such
Shares may not be withdrawn, except to the extent tendering stockholders are
entitled to exercise, and duly exercise, withdrawal rights as described in
Section 3.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted for more Shares than are tendered,
certificates for such unpurchased or untendered Shares will be returned (or, in
the case of Shares tendered by book-entry transfer, such Shares will be credited
to an account maintained at the Book-Entry Transfer Facility), without expense
to the tendering stockholder, as promptly as practicable following the
expiration or termination of the Offer.
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<PAGE> 10
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash in exchange for Shares pursuant to the Offer or the
Merger (and the receipt of cash by a stockholder that exercises appraisal rights
in connection with the Merger under Delaware law) will be a taxable transaction
for federal income tax purposes under the Internal Revenue Code of 1986, as
amended (the "Code"), and may also be a taxable transaction under applicable
state, local or foreign income or other tax laws. Generally, for federal income
tax purposes, a tendering stockholder will recognize gain or loss equal to the
difference between the amount of cash received by the stockholder pursuant to
the Offer or the Merger (other than amounts received pursuant to a stockholder's
exercise of appraisal rights that are denominated as interest, which amounts
would be taxable as ordinary income) and the aggregate tax basis in the Shares
tendered by the stockholder and purchased pursuant to the Offer or converted in
the Merger, as the case may be. Gain or loss will be calculated separately for
each block of Shares tendered and purchased pursuant to the Offer or converted
in the Merger, as the case may be. If Shares are held by a stockholder as
capital assets, gain or loss recognized by the stockholder will be capital gain
or loss. Such capital gain or loss will be long-term if such stockholder's
holding period for the Shares exceeds twelve months and short-term in all other
cases.
A stockholder that tenders Shares may be subject to 31% backup withholding
unless the stockholder provides its TIN and certifies that such number is
correct or properly certifies that it is awaiting a TIN, or unless an exemption
applies. Exemptions are available for stockholders that are corporations and for
certain foreign individuals and entities. A stockholder that does not furnish a
required TIN may be subject to a penalty imposed by the Internal Revenue Service
("IRS"). See "Backup Withholding" under Section 2.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon filing an income tax return.
The foregoing discussion is a general summary of certain material U.S.
federal income tax consequences of the Offer and the Merger relevant to a
beneficial holder of Shares whose Shares are tendered and accepted for payment
pursuant to the Offer. The discussion is based on the Code, regulations issued
thereunder, judicial decisions and administrative rulings, all of which are
subject to change with possible retroactive effect. The foregoing discussion
does not address U.S. federal income tax consequences to all categories of
holders of Shares that may be subject to special rules (e.g., holders that
acquired Shares pursuant to the exercise of employee stock options or other
compensation arrangements, holders of Shares who are subject to special tax
treatment under the Code, such as non-U.S. persons, life insurance companies,
tax-exempt organizations and financial institutions) and may not apply to other
holders of Shares in light of their individual circumstances. STOCKHOLDERS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL
OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER AND THE MERGER.
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6. PRICE RANGE OF THE SHARES
The Shares are traded on the Nasdaq SmallCap Market under the symbol
"TLSDC". The following table sets forth, for each of the periods indicated, the
high and low closing bid prices per Share as reported in the Company's Annual
Report on Form 10-K for the fiscal year ended September 30, 1998 and by the
Nasdaq Stock Market. The Shares were traded on the Nasdaq National Market
throughout the periods reflected below until September 27, 1999 when the Shares
commenced trading on the Nasdaq SmallCap Market. The following table gives
effect to a 1-for-4 reverse stock split effective October 15, 1999.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
Fiscal Year ended September 30, 1998
First Quarter............................................. $60.50 $16.00
Second Quarter............................................ 25.50 15.75
Third Quarter............................................. 17.75 11.00
Fourth Quarter............................................ 12.00 5.00
Fiscal Year ended September 30, 1999
First Quarter............................................. $13.00 $ 3.50
Second Quarter............................................ 7.00 4.50
Third Quarter............................................. 6.75 3.38
Fourth Quarter............................................ 3.75 1.75
</TABLE>
On October 18, 1999, the last full trading day before the public
announcement of the execution of the Merger Agreement, the closing bid price of
the Shares on the Nasdaq SmallCap Market was $3.125 per Share. On October 22,
1999, the last full trading day before commencement of the Offer, the closing
bid price of the Shares on the Nasdaq SmallCap Market was $8.4375 per Share.
Stockholders are urged to obtain current market quotations for the Shares.
7. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; EFFECT OF THE OFFER ON THE
MARKET FOR THE SHARES; STOCK QUOTATION; EXCHANGE ACT REGISTRATION; MARGIN
REGULATIONS
Purpose of the Offer. The purpose of the Offer and the Merger is to enable
Parent to acquire control of, and the entire equity interest in, the Company.
Upon consummation of the Merger, the Company will become a wholly-owned
subsidiary of Parent. The Offer is being made pursuant to the Merger Agreement
and is intended to increase the likelihood that the Merger will be effected. The
purpose of the Merger is to acquire all of the outstanding Shares not purchased
pursuant to the Offer.
Plans for the Company. If, as and to the extent that Purchaser acquires
control of the Company, Parent and Purchaser intend to conduct a detailed review
of the Company and its assets, corporate structure, capitalization, operations,
properties, policies, management and personnel and to consider and determine
what, if any, changes would be desirable in light of the circumstances which
then exist. Such changes could include, among other things, changes in the
Company's business, corporate structure, capitalization, management or dividend
policy.
Except as described above or elsewhere in this Offer to Purchase, Parent
has no present plans or proposals that would relate to or result in an
extraordinary corporate transaction involving the Company (such as a merger,
reorganization, liquidation, relocation of any operations or sale or other
transfer of a material amount of assets), or any material change in the
Company's corporate structure or business.
Market for the Shares. The purchase of Shares by Purchaser pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
will reduce the number of holders of Shares, which, depending upon the number of
Shares so purchased, could adversely affect the liquidity and market value of
the remaining Shares held by stockholders. 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 Offer Price. If the Merger is consummated, the Company would become a
wholly-owned subsidiary of Parent and, accordingly, there would be no further
trading in the Shares.
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<PAGE> 12
Nasdaq Quotation. Depending upon the number of Shares purchased pursuant
to the Offer, the Shares may no longer meet the requirements for continued
inclusion on the Nasdaq SmallCap Market, which requires that an issuer have at
least 500,000 publicly held shares, held by at least 300 round lot stockholders,
with a market value of at least $1,000,000, have at least two market makers,
have a minimum bid price of $1 and have either (A) net tangible assets of at
least $2,000,000; (B) a market capitalization of at least $35,000,000; or (C)
net income of $500,000 in the most recently completed fiscal year or in two of
the last three most recently completed fiscal years. If the Nasdaq SmallCap
Market were to cease to publish quotations for the Shares, it is possible that
the Shares would continue to trade in the over-the-counter market and that price
or other quotations would be reported by other sources. The extent of the public
market for such Shares and the availability of such quotations would depend,
however, upon such factors as the number of stockholders and/or the aggregate
market value of such securities remaining at such time, the interest in
maintaining a market in the Shares on the part of securities firms, the possible
termination of registration under the Exchange Act as described below, and other
factors. Purchaser cannot determine 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 lesser than the Offer Price.
If the Merger is consummated, the Company would become a wholly-owned subsidiary
of Parent and, accordingly, there would be no further trading in the Shares.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more holders
of record. Termination of registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to its stockholders and to the Commission and would make certain
provisions of the Exchange Act no longer applicable to the Company, such as the
short-swing profit recovery provisions of Section 16(b), the requirement of
furnishing a proxy statement pursuant to Section 14(a) in connection with
stockholders' meetings and the related requirement of furnishing an annual
report to stockholders and the requirements of Rule 13e-3 under the Exchange Act
with respect to "going private" transactions. Furthermore, the ability of
"affiliates" of the Company and persons holding "restricted securities" of the
Company to dispose of such securities pursuant to Rule 144 or Rule 144A
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
may be impaired or eliminated.
Parent currently intends to seek delisting of the Shares from the Nasdaq
SmallCap Market and the termination of the registration of the Shares under the
Exchange Act as soon after the completion of the Offer as the requirements for
such delisting and termination are met. If the Nasdaq SmallCap Market listing
and the Exchange Act registration of the Shares are not terminated prior to the
Merger, then the Shares will be delisted from the Nasdaq SmallCap Market and the
registration of the Shares under the Exchange Act will be terminated following
the consummation of the Merger.
Margin Regulations. The Shares are presently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Shares. Depending
upon factors similar to those described above regarding Nasdaq listing of the
Shares and market quotations, it is possible that, following the Offer, the
Shares would no longer constitute "margin securities" for the purposes of the
margin regulations of the Federal Reserve Board and therefore could no longer be
used as collateral for loans made by brokers. In addition, if registration of
the Shares under the Exchange Act were terminated, the Shares would no longer
constitute "margin securities."
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8. CERTAIN INFORMATION CONCERNING THE COMPANY
General. The Company is a Delaware corporation with its principal offices
at 4000 Midlantic Drive, Mount Laurel, New Jersey 08054. The Company was
incorporated in 1994 and according to the Company's Annual Report on Form 10-K
for its fiscal year ended September 30, 1998 (the "Fiscal 1998 10-K"), is a
provider of systems for billing data collection, transaction data management,
revenue assurance, fraud management and traffic management to telecommunications
service providers.
Selected Financial Data. The following selected consolidated financial
data relating to the Company and its subsidiaries has been taken or derived from
the audited financial statements contained in the Fiscal 1998 10-K and the
unaudited financial statements contained in the Company's Quarterly Report on
Form 10-Q for its fiscal quarter ended June 30, 1999. More comprehensive
financial information is included in such 10-K and 10-Q and the other documents
filed by the Company with the Commission, and the financial data set forth below
is qualified in its entirety by reference to such reports and other documents
including the financial statements contained therein. Such reports and other
documents may be examined and copies may be obtained from the offices of the
Commission in the manner set forth below under "Available Information".
11
<PAGE> 14
TELESCIENCES, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED JUNE 30, YEAR ENDED SEPTEMBER 30,
------------------ ----------------------------
1999 1998 1998 1997 1996
------- ------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
REVENUES:
Unrelated third parties:
Equipment............................... $ 9,590 $16,131 $ 20,429 $25,049 $23,358
Services................................ 6,717 7,759 10,250 7,958 7,739
------- ------- -------- ------- -------
16,307 23,890 30,679 33,007 31,097
Related parties........................... -- -- -- -- 2,867
------- ------- -------- ------- -------
Total revenues.................. 16,307 23,890 30,679 33,007 33,964
------- ------- -------- ------- -------
COST OF REVENUES:
Unrelated third parties:
Equipment............................... 8,082 8,024 11,664 13,202 11,639
Services................................ 3,110 6,424 7,679 4,697 4,580
------- ------- -------- ------- -------
11,192 14,448 19,343 17,899 16,219
Related parties........................... -- -- -- -- 1,946
------- ------- -------- ------- -------
Total cost of revenues.......... 11,192.. 14,448 19,343 17,899 18,165
------- ------- -------- ------- -------
Gross profit.............................. 5,115 9,442 11,336 15,108 15,799
------- ------- -------- ------- -------
OPERATING EXPENSES:
Research, development and engineering..... 5,317.. 5,763 8,023 7,580 7,003
Selling, general and administrative....... 5,833 13,273 16,853 9,026 6,711
Charge for purchased research and
development(1).......................... -- 2,387 2,387 -- --
------- ------- -------- ------- -------
Total operating expenses........ 11,150 21,423 27,263 16,606 13,714
------- ------- -------- ------- -------
Operating income (loss)................... (6,035) (11,981) (15,927) (1,498) 2,085
INTEREST (EXPENSE) INCOME
(includes related party)................ 13 (241) 232 (327) (514)
OTHER INCOME.............................. 37 5 16 1 430
EQUITY IN LOSS OF INVESTEE................ -- -- -- -- (18)
GAIN ON SALE OF INVESTMENT................ -- -- -- -- 2,061
------- ------- -------- ------- -------
Income (loss) before income taxes......... (6,011) (11,735) (15,679) (1,824) 4,044
INCOME TAX (EXPENSE) BENEFIT.............. -- 1,939 -- 645 (1,543)
------- ------- -------- ------- -------
NET INCOME (LOSS)......................... $(6,011) $(9,796) $(15,679) $(1,179) $ 2,501
======= ======= ======== ======= =======
BASIC AND DILUTED NET INCOME (LOSS) PER
COMMON SHARE............................ $ (0.78) $ (1.46) $ (2.25) $ (0.28) $ 0.72
======= ======= ======== ======= =======
SHARES USED IN COMPUTING BASIC AND DILUTED
NET INCOME (LOSS) PER COMMON SHARE...... 7,748 6,689 6,960 4,144 3,477
======= ======= ======== ======= =======
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
SEPTEMBER 30,
JUNE 30, -----------------
1999 1998 1997
----------- ------- -------
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... 272 $ 1,093 $ 7,206
Total assets................................................ 20,672 29,799 37,023
Working capital, excluding obligations to Securicor and
affiliates(2)............................................. 4,367 10,344 23,925
Obligations to Securicor and affiliates(2).................. 73 64 183
Long-term debt.............................................. 279 499 --
Stockholders' equity(2)..................................... 12,178 18,831 29,687
</TABLE>
- ---------------
(1) Purchased research and development of $2,387 in fiscal 1998 represents a
one-time charge for in-process research and development which was purchased
in the acquisition of IDT by the Company on May 15, 1998. The acquisition
was accounted for under the purchase method of accounting. Purchased
research and development of $6,700 in fiscal 1994 represents a one-time
charge for in-process research and development which was purchased in the
acquisition of the predecessor business by the Company on July 1, 1994. The
acquisition was accounted for under the purchase method of accounting.
(2) The Company's acquisition of the predecessor business and other financing
requirements have been primarily funded from borrowings from Securicor plc
or its subsidiaries ("Securicor") rather than equity investment. These
borrowings are classified as obligations to Securicor and affiliates.
Additionally, these borrowings were substantially repaid with the proceeds
from the Company's initial public offering of its Common Stock, completed in
July 1997.
Available Information. The Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports relating to its business, financial condition and other matters.
Information as of particular dates concerning the Company's directors and
officers, their remuneration, stock options and other matters, the principal
holders of the Company's securities and any material interest of such persons in
transactions with the Company is disclosed in the Company's proxy statement
dated February 16, 1999, and filed with the Commission. Such information should
be available for inspection at the public reference facilities of the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the regional offices of the Commission located at Seven World Trade
Center, Suite 1300, New York, NY 10048 and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, IL 60661. Copies of such information should be
obtainable from the Public Reference Section of the Commission upon payment of
prescribed fees. Such material should also be available for inspection at the
offices of Nasdaq Operations, 9801 Washington Blvd., Gaithersburg, Maryland
20878. The Commission also maintains a worldwide web site at http://www.sec.gov
which contains reports, proxy and information statements and other information
about companies, including the Company, that file electronically.
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or based upon
publicly available documents on file with the Commission and other publicly
available information. Although Purchaser and Parent do not have any knowledge
that any such information is untrue, none of Purchaser or Parent takes any
responsibility for the accuracy or completeness of such information or for any
failure by the Company to disclose events that may have occurred and may affect
the significance or accuracy of any such information.
In the course of discussions between representatives of Parent and the
Company (see Section 11), the Company provided Purchaser with an unaudited
estimated balance sheet as of September 30, 1999 (the "Estimated September 30,
1999 Balance Sheet") and an unaudited estimated statement of operations for its
fiscal year ended September 30, 1999 (the "Estimated Fiscal 1999 Statement of
Operations") that did not reflect the Company's Series A Preferred Stock or any
adjustments based on a possible restructuring of the lease for the Company's
executive offices or on a dispute with a customer. The Estimated September 30,
1999 Balance Sheet reflects an estimated stockholders' equity of approximately
$5.4 million. The Estimated Fiscal 1999 Statement of Operations reflects the
following estimated amounts for the Company's fiscal year ended
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<PAGE> 16
September 30, 1999: Total revenues - approximately $21.1 million; gross
profit - approximately $5.3 million; operating loss - approximately $10.1
million; and net loss - approximately $12.8 million.
The Company also provided a projected statement of operations for the
Company's fiscal year ending September 30, 2000, and projections of sales for
its fiscal years ending September 30, 2000, 2001 and 2002 (the "Projections"
and, together with the Estimated September 30, 1999 Balance Sheet and the
Estimated Fiscal 1999 Statement of Operations, the "Estimated and Projected
Financial Information"). For the fiscal year ending September 30, 2000, the
Company estimated total revenues of approximately $31.3 million, gross profit of
approximately $13.7 million, operating income of approximately $5.0 million and
net income of approximately $5.0 million. Projected sales for the fiscal year
ending September 30, 2000 were $31.3 million on a "baseline" basis and $50.3
million on a "best case" basis. Projected sales for the fiscal years ending
September 30, 2001 and 2002 were $37.0 million and $45.5 million, respectively.
The Estimated and Projected Financial Information was provided without
detailed written assumptions. The Estimated and Projected Financial Information
was 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 projections, and it is
summarized in this Offer to Purchase only because it was provided to Parent.
None of Parent, Purchaser, the Company, or any of their financial advisors or
other representatives assumes any responsibility for the accuracy or validity of
the Estimated and Projected Financial Information. While presented with
numerical specificity, the Projections were based upon a variety of assumptions
relating to the business of the Company which may not be realized and are
subject to significant risks, uncertainties and contingencies, many of which are
beyond the control of the Company. Actual results will vary from those shown in
the Estimated and Projected Financial Information and the positive or negative
variances may be material. Except as required by law, none of the Company,
Parent or Purchaser intends to update, revise or correct the Estimated and
Projected Financial Information if it becomes inaccurate.
9. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT
Purchaser is a newly incorporated Delaware corporation and a wholly-owned
subsidiary of Parent organized to acquire the Company. The principal executive
offices of Purchaser are located at Ruselokkveien 6, N-0251 Oslo (Postal
Address: Postboks 6798, St. Olavs Plass, N-0130 Oslo, Norway). Purchaser has not
conducted any business, other than in connection with the Offer and the Merger
since its incorporation on October 18, 1999. Until immediately prior to the time
Purchaser purchases Shares pursuant to the Offer, it is not anticipated that
Purchaser will have any significant assets or liabilities or engage in
activities other than those incident to its formation and capitalization and the
transactions contemplated by the Offer and the Merger. Because Purchaser is a
newly formed corporation and has minimal assets and capitalization, no
meaningful financial information regarding Purchaser is available.
Parent, a Norwegian limited company, is a publicly owned company whose
shares are listed on the Oslo Stock Exchange. Its principal executive office is
located at Ruselokkveien 6, N-0251 Oslo (Postal Address: Postboks 6798, St.
Olavs Plass, N-0130 Oslo, Norway). The principal business of Parent is supplying
both large and medium sized companies with cost-efficient and up-to-date IT
Solutions by providing consulting services and computer operating services as
well as the supply of hardware and software.
The name, citizenship, business address, present principal occupation or
employment and five-year employment history of each of the directors and
executive officers of Purchaser and Parent are set forth in Schedule I hereto
and incorporated herein by reference.
Neither Parent nor Purchaser is subject to the informational requirements
of the Exchange Act and in accordance therewith does not file periodic reports,
proxy statements or other information with the Commission relating to its
business, financial condition or other matters.
Because the only consideration in the Offer and Merger is cash, and in view
of the fact that Purchaser has deposited into escrow with First Union National
Bank a sufficient amount of funds necessary to make a cash payment to purchase
all of the Shares tendered in the Offer, Purchaser believes that the financial
condition of
14
<PAGE> 17
Parent, Purchaser and their affiliates is not material to a decision by a holder
of Shares whether to tender and sell or Shares pursuant to the Offer or to
continue to hold such Shares.
Except as described in this Offer to Purchase, (i) none of Parent,
Purchaser or, to the best knowledge of Parent and Purchaser, any of the persons
listed in Schedule I to this Offer to Purchase or any associate or
majority-owned subsidiary of Parent, Purchaser or any of the persons so listed
beneficially owns or has any right to acquire, directly or indirectly, any
Shares and (ii) none of Parent, Purchaser or, to the best knowledge of Parent
and Purchaser, any of the persons or entities referred to above or any director,
executive officer or subsidiary of any of the foregoing has effected any
transaction in the Shares during the past 60 days.
Except as described in this Offer to Purchase, none of Parent, Purchaser
or, to the best knowledge of Parent and Purchaser any of the persons listed in
Schedule I hereto, has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company, including,
but not limited to, any contract, arrangement, understanding or relationship
concerning the transfer or voting of such securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees of profits, guarantees against loss, division of profits or loss or
the giving or withholding of proxies. Except as set forth in this Offer to
Purchase, since October 1, 1996, none of Parent, Purchaser or, to the best
knowledge of Parent and Purchaser, any of the persons listed in Schedule I
hereto, has had any business relationship or transaction with the Company or any
of its executive officers, directors, or affiliates that is required to be
reported under the rules and regulations of the Commission applicable to the
Offer. Except as set forth in this Offer to Purchase, since October 1, 1996,
there have been no contracts, negotiations or transactions between Parent,
Purchaser or any of their subsidiaries or, to the best knowledge of Parent and
Purchaser any of the persons listed in Schedule I hereto, on the one hand, and
the Company or its affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets.
10. SOURCE AND AMOUNT OF FUNDS
The Offer is not conditioned upon any financing arrangements. The total
amount of funds required by Purchaser to consummate the Offer and the Merger,
the redemption of the Company's Series A Preferred Stock and the settlement of
the Company's outstanding in-the-money stock options based on the difference
between the Offer Price and the applicable exercise price, is estimated to be
$13.65 million, exclusive of fees and expenses estimated to be $0.35 million.
Pursuant to the terms of an Escrow Agreement among Parent, Purchaser, the
Company and First Union National Bank, Purchaser has deposited into escrow with
First Union National Bank $13.65 million. Purchaser has obtained all such funds
and expects to obtain the funds necessary to pay fees and expenses from Parent
in the form of capital contributions and/or loans. Parent has provided such
funds from available cash on hand.
11. CONTACTS AND TRANSACTIONS WITH THE COMPANY; BACKGROUND OF THE OFFER
One of Parent's strategic objectives is to grow at a faster rate than the
rate of growth of its industry. An important part of this strategy involves the
acquisition of companies within its industry. In order to implement this
strategy, Parent began seeking potential acquisition candidates primarily in the
areas of network management and customer relationship management. On June 30,
1999, the Company publicly announced its interest in investigating strategic
alternatives, including possibly a business combination. In August 1999, Parent
became aware the Company was pursuing strategic alternatives and arranged to
have a meeting with Michael Moore, Executive Vice President of the Company
during an upcoming trip of Mr. Moore's in Romania. In preparation for that
meeting, on August 26, 1999, John Freeman, Executive Director of Brooks,
Houghton Securities, Inc., the Company's financal advisor, sent Mr. Asbjorn
Eide, Chief Executive Officer of EDB 4tel, a division of Parent ("EDB 4tel"), a
confidentiality letter agreement which was signed and returned. Mr. Freeman then
provided Mr. Eide with certain non-public information about the Company.
On August 31, 1999, Mr. Eide met with Michael Moore in Bucharest, Romania.
At the meeting, the parties exchanged general industry and company information,
including an introduction of their businesses and
15
<PAGE> 18
an explanation of their current and future growth strategies. At the conclusion
of the meeting, Mr. Eide expressed to Mr. Moore Parent's possible interest in
acquiring the Company.
On September 14 and 15, 1999, at the Company's executive offices in Mt.
Laurel, New Jersey, and on September 16, 1999, in San Diego, California, Mr.
Eide and a team of EDB 4tel employees met with the Company's executive
management to discuss the opportunities available to their respective companies
which could result from a business combination.
During the week of September 27, 1999, EDB 4tel executives conducted
interviews with certain customers of Parent.
On September 29, 1999, the Board of Directors of Parent met to consider the
proposed acquisition by Parent of the Company, and approved such acquisition at
a price of not more than an aggregate of $8.5 million for all of the outstanding
shares of the Company. Subsequently, Mr. Eide contacted executives of Securicor
Communications Limited ("Securicor"), the Company's largest stockholder, and
made an offer to buy Shares owned by Securicor for a purchase price of $2.40 per
Share. No response was provided by Securicor to Parent's offer.
On October 1, 1999, Parent provided a preliminary expression of interest in
acquiring the Company at an approximate valuation of $8.5 million. The Company
and its financial advisor advised Parent that interest had been expressed by
other third parties in acquiring the Company based on a substantially higher
valuation.
Between October 6, 1999 and October 13, 1999, there were occasional
informal communications between representatives of Parent and the Company in
which the possibility of an offer by Parent based on a higher valuation, as well
as the structure and timing of such an offer, were discussed.
On October 12, 1999, Mr. Moore met with Mr. Eide in Oslo, Norway and
continued discussions regarding Parent's interest in acquiring the Company based
on a higher valuation.
On October 14, 1999, the Board of Directors of Parent met to consider
increasing the purchase price of the proposed acquisition by Parent of the
Company, and approved such increase to a price of not more than an aggregate of
$13.65 million for all of the outstanding shares of capital stock of the
Company. Subsequently, Parent sent a letter to Andrew P. Maunder, President and
Chief Executive Officer of the Company, indicating that Parent was prepared to
make an offer of $13.65 million for all of the shares of the Company if the
Company would negotiate exclusively with Parent through October 17, 1999.
On October 14, 1999, the Board of Directors of the Company met to consider
the letter from Parent and authorized the Company's management to enter into
negotiations with Parent. The preceding sentence and other descriptions
contained in this Section 11 relating to the meetings of the Company's Board of
Directors are based on information provided by the Company.
On October 14, 1999, the Company's legal counsel sent a draft of a proposed
Merger Agreement to legal counsel for Parent. On October 15, 1999,
representatives of Parent flew to Philadelphia in preparation for negotiations
to commence on October 16, 1999.
On October 16, 1999, executives of Parent met with executives of the
Company and the Company's financial advisor to discuss the terms of a proposed
transaction. That same day, Parent's legal counsel provided comments on the
Merger Agreement to the Company's legal counsel. Those comments were discussed
pursuant to a telephonic conference call that included executives and legal
counsel of Parent and the Company, and representatives of the Company's
financial advisor.
Negotiation of the Merger Agreement was ongoing from October 16, 1999
through October 18, 1999. On October 17, 1999, the Board of Directors of the
Company held a special meeting at which the Board was informed as to the status
of negotiations. The Board authorized the Company's representatives to continue
negotiations at a purchase price at or above $13.65 million.
By the morning of October 18, 1999, the Company's and Parent's
representatives reached agreement on all aspects of the Merger Agreement. A
special meeting of the Company's Board of Directors was held on the afternoon of
October 18, 1999, prior to which substantially final drafts of the Merger
Agreement and the
16
<PAGE> 19
fairness opinion prepared by Brooks, Houghton Securities, Inc. were distributed.
At the meeting, the Company's President reported on the status of negotiations
with Parent. The Company's legal counsel made a presentation regarding the Board
of Director's fiduciary duties when considering the sale of the Company and then
summarized the terms and conditions of the Merger Agreement. A representative of
Brooks, Houghton Securities, Inc. then rendered its oral opinion that the
consideration to be received by the Company's common stockholders in the Offer
and the Merger, at $8.79 per share, was fair, from a financial point of view, to
the Company's common stockholders and gave a presentation on the basis of that
opinion. Following discussion of the Offer and the Merger, the Board of
Directors of the Company approved the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, and resolved to
recommend that the stockholders of the Company accept the Offer and tender their
Shares pursuant to the Offer and that the stockholders of the Company approve
and adopt the Merger Agreement. There were no dissents or abstentions, but one
director was unable to participate because he was not in the country.
As of Tuesday, October 19, 1999, the parties executed and delivered the
Merger Agreement. On the morning of Tuesday, October 19, 1999, Parent and the
Company publicly announced that they had entered into the Merger Agreement.
On October 25, 1999, Parent and Purchaser commenced the Offer.
12. THE MERGER AGREEMENT AND SHAREHOLDER AGREEMENTS
INTRODUCTION
On October 19, 1999, Parent, Purchaser and the Company entered into the
Merger Agreement, pursuant to which Purchaser has agreed to make the Offer. The
Merger Agreement provides that, at the effective time of the Merger (the
"Effective Time"), Purchaser will be merged with and into the Company, and each
then outstanding Share (other than Shares owned by the Company, any subsidiary
of the Company, Parent, Purchaser, any other subsidiary of Parent or by
stockholders, if any, who are entitled to and who properly exercise appraisal
rights under the DGCL) will be converted into the right to receive an amount in
cash equal to the Offer Price. Each share of common stock of Purchaser issued
and outstanding immediately prior to the Effective Time will be converted into
one share of common stock of the Surviving Corporation. The Certificate of
Incorporation and Bylaws of Purchaser, as in effect immediately before the
Effective Time will be the Certificate of Incorporation and Bylaws of the
Surviving Corporation.
Vote Required to Approve Merger. The DGCL requires, among other things,
that the adoption of any plan of merger or consolidation of the Company must be
approved by the Board and generally by the holders of the Company's outstanding
voting securities. The Board has approved the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger;
consequently, the only additional action of the Company that may be necessary to
effect the Merger is approval by the Company's stockholders if the "short-form"
merger procedure described below is not available. Under the DGCL, the
affirmative vote of holders of a majority of the voting power of the then
outstanding Shares (including any Shares owned by Purchaser) is generally
required to approve the Merger. If Purchaser acquires, through the Offer or
otherwise, a majority of the voting power of the outstanding Shares (which would
be the case if the Minimum Condition were satisfied and Purchaser were to accept
for payment Shares tendered pursuant to the Offer and no outstanding options are
exercised after the Expiration Date), it would have sufficient voting power to
effect the Merger without the vote of any other stockholder of the Company.
Short Form Merger Procedures. Under the DGCL, if a corporation owns 90% or
more of each outstanding class of capital stock of another corporation, it can
effect a "short-form" merger with such corporation without prior notice to, or
any other action by, any other stockholder of such corporation. As a result,
assuming no outstanding stock options are exercised, and no shares are issued by
the Company in connection with the Company's employee stock purchase plan,
following October 15, 1999, if Purchaser were to acquire ownership of 940,168
Shares pursuant to the Offer, Purchaser would own more than 90% of the only
class of capital stock of the Company then outstanding and would be able to
effect the Merger pursuant to the "short form" merger provisions of the DGCL.
See Section 15.
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<PAGE> 20
Stockholders Meeting. If required by applicable law, in order to
consummate the Merger, the Company, acting through its Board, shall, subject to
the Board's fiduciary duties under applicable law, take all necessary action
pursuant to its Certificate of Incorporation and Bylaws to duly call, give
notice of, convene and hold a special meeting (the "Special Meeting") of its
stockholders as soon as practicable following the completion of the Offer
(provided that, if a Form 15 is promptly filed with the Commission after such
completion, the Board shall be entitled to delay giving notice until the
registration of the Shares under the Exchange Act has been terminated, but not
more than 100 days after the completion of the Offer) for the purpose of
considering and taking action upon the Merger Agreement. The Company shall also
prepare and file with the Commission a proxy statement in accordance with all
applicable requirements of the Exchange Act, if any.
THE MERGER AGREEMENT
The following is a summary of certain provisions of the Merger Agreement
and Shareholders Agreement, copies of which have been filed with the Commission
as exhibits to the Schedule 14D-1 relating to the Offer and are incorporated
herein by reference. Such summaries are qualified in their entirety by reference
to the text of such agreements.
The Offer. The Merger Agreement provides that Purchaser will commence the
Offer and that, upon the terms and subject to the prior satisfaction or waiver
of the conditions of the Offer, Purchaser will purchase all Shares validly
tendered pursuant to the Offer and not withdrawn prior to the Expiration Date.
The obligation of Purchaser to accept for payment and pay for Shares tendered is
subject to the Minimum Condition, which is the valid tender and non-withdrawn
prior to the Expiration Date of that number of Shares which when added to any
Shares then beneficially owned by Parent represent at least a majority of the
total number of the outstanding Shares, and to the satisfaction of the other
conditions described in Annex A to the Merger Agreement. The Merger Agreement
provides that Purchaser may not, without prior written consent of the Company,
(i) decrease the Offer Price with respect to any Shares, (ii) decrease the
number of Shares to be purchased in the Offer, (iii) change the form of
consideration payable in the Offer, (iv) add to or change the conditions to the
Offer set forth in Annex A to the Merger Agreement, (v) waive the Minimum
Condition or (vi) make any other change in the terms or conditions of the Offer;
provided that, if the Merger Agreement shall not have been terminated in
accordance with the terms of the Merger Agreement, if the conditions set forth
in Annex A to the Merger Agreement are not satisfied or, to the extent permitted
by the Merger Agreement, waived by Purchaser as of the date the Offer would
otherwise have expired, then, except to the extent that such conditions are
incapable of being satisfied, Purchaser will extend the Offer from time to time
until the earlier of the consummation of the Offer or the date which is twenty
(20) business days from the Expiration Date of the Offer (such date, the "Final
Date"). The Merger Agreement further provides that Purchaser shall, subject to
the terms and conditions of the Offer, accept for payment Shares validly
tendered and not withdrawn prior to the Expiration Date as soon as it is legally
permitted to do so under applicable law; provided, however, that Purchaser shall
be entitled to extend the Offer one or more times beyond the Final Date for an
aggregate period of up to ten (10) business days if on the Final Date the
conditions to the Offer set forth in Annex A to the Merger Agreement have been
satisfied or waived, but there shall not have been tendered that number of
Shares which would equal at least ninety percent (90%) of the issued and then
outstanding Shares. Purchaser is obligated to consummate the Offer immediately
upon reaching such ninety percent (90%) threshold. The Company has agreed that
it will not tender, and will not permit any of its subsidiaries to tender, any
Shares held by it or any such subsidiary pursuant to the Offer.
Conditions to the Merger. The Merger Agreement provides that the
obligations of Parent, Purchaser and the Company to consummate the Merger are
subject to the satisfaction of certain conditions, including the following:
- the Merger Agreement shall have been adopted by the affirmative vote of
the stockholders of the Company at a Special Meeting by the requisite
vote in accordance with applicable law, if such vote is required by
applicable law;
18
<PAGE> 21
- all regulatory approvals required to consummate the transactions
contemplated hereby shall have been obtained and shall remain in full
force and effect and all statutory waiting periods in respect thereof
shall have expired;
- no statute, rule or regulation shall have been enacted or promulgated by
any governmental authority which prohibits the consummation of the
Merger;
- there shall be no order or injunction of a United States Federal or state
court of competent jurisdiction (each party agreeing to use its
reasonable efforts to have any such order reversed or injunction lifted)
in effect precluding consummation of the Merger; and
- Purchaser shall have purchased the Shares pursuant to the Offer;
provided, however, that this condition shall be deemed satisfied with
respect to Parent and Purchaser if Purchaser's failure to purchase Shares
pursuant to the Offer results from a breach of the Parent's or
Purchaser's obligations under the Merger Agreement.
Board Recommendation. The Company represents in the Merger Agreement that
the Board has (1) determined that the terms of the Offer and the Merger are
advisable, fair to and in the best interests of, the stockholders of the
Company, (2) approved the Merger Agreement and the transactions contemplated
thereby, including the Offer and the Merger, and (3) resolved to recommend that
stockholders of the Company accept the Offer and tender their Shares pursuant to
the Offer, the Merger Agreement and the transactions contemplated thereby,
including the Merger. The Company has agreed to file with the Commission a
Solicitation/Recommendation Statement on Schedule 14D-9 containing such
recommendations, subject to certain conditions.
Termination of the Merger Agreement. The Merger Agreement may be
terminated and the Merger may be abandoned at any time notwithstanding approval
thereof by the stockholders of the Company, but prior to the Effective Time:
(a) by mutual consent of Parent and the Company;
(b) by Parent or Purchaser, if an occurrence or circumstance (except
where Parent's or Purchaser's failure to fulfill any of their respective
obligations under the Merger Agreement is the cause of or resulted in such
occurrence or circumstance or except where there has been a material breach
of any representation or warranty on the part of Parent or Purchaser which
has not been cured) has rendered the conditions set forth in Annex A of the
Merger Agreement incapable of being satisfied, and (i) Purchaser shall have
failed to commence the Offer within the time required by Regulation 14D
under the Exchange Act, (ii) the Offer shall have been terminated or shall
have expired without Purchaser having purchased any Shares pursuant to the
Offer or (iii) Purchaser shall have failed to pay for Shares pursuant to
the Offer prior to the Final Date;
(c) by either Parent or the Company if any court of competent
jurisdiction or other governmental body within the United States shall have
issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the Merger and such order,
decree, ruling or other action shall have become final and non-appealable;
provided, however, that a termination of the Merger Agreement by the
Company pursuant to this paragraph (c) after the Board Transition Date (as
defined in the Merger Agreement) shall require the affirmative vote of a
majority of the Board and a majority of the Independent Directors (as
defined below);
(d) by Parent or Purchaser prior to the purchase of Shares pursuant to
the Offer, if:
(i) Purchaser shall discover that any representation or warranty
made by the Company in the Merger Agreement is untrue at the time such
representation or warranty was made or (except for those representations
and warranties made as of a particular date which need only be true and
correct as of such date) shall not be true and correct as of the date of
consummation of the Offer, except where the failure to be so true and
correct would not have a Material Adverse Effect (as defined in the
Merger Agreement), provided that, if any such failure to be so true and
correct is
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<PAGE> 22
capable of being cured prior to the Final Date, then Parent and
Purchaser may not terminate the Merger Agreement under this paragraph
(d) until the Final Date;
(ii) there shall have been a breach of any covenant or agreement on
the part of the Company under the Merger Agreement resulting in a
Material Adverse Effect which shall not be capable of being cured prior
to the Final Date;
(iii) the Board (x) fails to recommend approval and adoption of the
Merger Agreement and the Merger by the stockholders of the Company or
withdraws or amends or modifies in a manner adverse to Parent and
Purchaser its recommendation or approval in respect of the Merger
Agreement, the Offer or the Merger, (y) makes any recommendation with
respect to an Alternative Acquisition (as defined below) other than a
recommendation to reject such Alternative Acquisition or (z) publicly
announces its intention to enter into an Alternative Acquisition; or
(iv) there shall not have been validly tendered and not withdrawn
prior to the expiration of the Offer at least a majority of the then
outstanding Shares, and on or prior to such date a person shall have
made a written proposal to the Company and not withdrawn such proposal
for an Alternative Acquisition;
(e) by the Company, if:
(i) the Company discovers that any representation or warranty made
by Parent or Purchaser in the Merger Agreement is untrue at the time
such representation or warranty was made or (except for those
representations and warranties made as of a particular date which need
only be true and correct as of such date) shall not be true and correct
as of the date of consummation of the Offer, except where the failure to
be so true and correct would not materially adversely affect (or
materially delay) the consummation of the Offer or the Merger, provided
that if any such failure to be so true and correct is capable of being
cured prior to the Final Date, then the Company may not terminate the
Merger Agreement under this paragraph (e) until the Final Date and
unless at such time the matter has not been cured;
(ii) there shall have been a material breach of any covenant or
agreement in the Merger Agreement on the part of Parent or Purchaser
which materially adversely affects (or materially delays) the
consummation of the Offer or the Merger which shall not be capable of
being cured prior to the Final Date;
(iii) prior to the acceptance of any Shares pursuant to the Offer
and the Company is in compliance with the non-solicitation provisions
described below, such termination is necessary to allow the Company to
enter into a binding written agreement with respect to a Superior
Proposal (as defined below); provided, however, that a termination of
the Merger Agreement by the Company pursuant to paragraphs (e)(i) or
(ii) above after the Board Transition Date (as defined below) shall
require the affirmative vote of a majority of the Board and a majority
of the Independent Directors; or
(f) by the Company, if there shall not have been a material breach of
any representation, warranty, covenant or agreement on the part of the
Company which has not been cured and (i) Purchaser shall have failed to
commence the Offer within the time required by Regulation 14D under the
Exchange Act, (ii) the Offer shall have been terminated or shall have
expired without Purchaser having purchased any Shares pursuant to the Offer
or (iii) Purchaser shall have failed to pay for Shares pursuant to the
Offer prior to the Final Date.
An "Alternative Acquisition" is the possible acquisition of the Company
(whether by way of merger, purchase of capital stock, purchase of assets or
otherwise) or any material portion of its capital stock or assets (with any such
efforts by any such person, including a firm proposal to make such an
acquisition).
A "Superior Proposal" is an unsolicited proposal by any person, entity or
group delivered to the Company, prior to the consummation of the Offer and in
writing, for an Alternative Acquisition which is not subject to any financing
contingency, which the Board by a majority vote in its good faith judgment
(after
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<PAGE> 23
consultation with its independent financial advisor) determines is reasonably
likely to be consummated and if consummated will be more favorable, from a
financial point of view, to the holders of the Shares than the transactions
contemplated by the Merger Agreement.
Termination Fees and Expenses. The Merger Agreement provides that the
Company will pay, or cause to be paid, to Parent $400,000 as a termination fee
within two business days after the date of termination if (i) the Company
terminates the Merger Agreement in accordance with the provision described in
paragraph (e)(iii) under "Termination of Merger Agreement" above, or (ii)
Purchaser terminates the Merger Agreement in accordance with the provisions
described in paragraph (d)(iii) under "Termination of Merger Agreement" above,
at any time after a proposal for an Alternative Acquisition has been made. The
Company will also pay or cause to be paid, to Purchaser the Purchaser Expenses
(as defined below) upon demand if Parent or Purchaser terminates the Merger
Agreement in accordance with the provision described in paragraph (d)(i) or
(d)(ii) under "Termination of Merger Agreement" above. "Parent Expenses" mean
reasonable and reasonably documented out-of-pocket fees and expenses incurred or
paid by or on behalf of Parent and its subsidiaries in connection with the Offer
and the Merger or the consummation of any of the transactions contemplated by
the Merger Agreement; provided, that in no event shall Parent Expenses exceed
$100,000 (which $100,000 limit shall not apply in the event of a breach by the
Company of the Merger Agreement).
The Merger Agreement also provides that Parent will pay, or cause to be
paid, to the Company the Company Expenses (as defined below) upon demand if the
Company terminates the Merger Agreement in accordance with the provision
described in paragraph (e)(i), (e)(ii) or (f)(i) under "Termination of Merger
Agreement" above. Company Expenses shall mean reasonable and reasonably
documented out-of-pocket fees and expenses incurred or paid by or on behalf of
the Company in connection with the Offer and the Merger or the consummation of
any of the transactions contemplated by the Merger Agreement; provided, that in
no event shall Company Expenses exceed $100,000. The foregoing does not,
however, limit the Company's right to pursue remedies for breach of the Merger
Agreement.
In addition, no fee or expense reimbursement will be paid to any party who
is in material breach of its obligations under the Merger Agreement.
COVENANTS
Conduct of Business by the Company. The Company has agreed that, except as
contemplated by the Merger Agreement, during the period from the date of the
Merger Agreement to such time at which directors of the Company affiliated with
or designated by Parent or Purchaser shall constitute a majority of the Board
(such time, the "Board Transition Date"), the Company and its subsidiaries will
each conduct its operations according to its ordinary and usual course of
business, substantially consistent with past practice.
Without limiting the generality of the foregoing, and except as otherwise
contemplated by the Merger Agreement, neither the Company nor any of its
subsidiaries will, prior to the Board Transition Date, without the prior written
consent of Parent:
(i) issue, sell or pledge, or authorize or propose the issuance, sale
or pledge of (A) additional shares of capital stock of any class of the
Company, or securities convertible into any such shares, or any rights,
warrants or options to acquire any such shares or other convertible
securities, other than such issuance of Shares pursuant to the exercise of
options outstanding on the date hereof, and other than the issuance of
Shares in connection with the Company's employee stock purchase plan, or
(B) any other securities in respect of, in lieu of or in substitution for,
Shares outstanding on the date of the Merger Agreement,
(ii) purchase or otherwise acquire, or propose to purchase or
otherwise acquire, any outstanding Shares,
(iii) declare or pay any dividend or distribution on any shares of its
capital stock,
(iv) propose or adopt any amendments to its Amended and Restated
Certificate of Incorporation, as amended, or Amended and Restated Bylaws,
or
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<PAGE> 24
(v) agree in writing or otherwise to take any of the foregoing actions
or any action which would prevent the conditions to Purchaser's obligation
to purchase Shares under the Offer or Parent's and Purchaser's obligation
to consummate the Merger from being satisfied; provided, however, that the
Company shall be permitted to accelerate the vesting schedule of all
outstanding Options. The Company shall, through its Board or any committee
thereof, terminate the Company's Employee Stock Purchase Plan so that no
Shares shall be issued thereunder subsequent to the date of the Merger
Agreement.
Indemnification and Insurance. In the Merger Agreement, Parent and
Purchaser have agreed that all rights to indemnification existing in favor, and
all limitations on the personal liability of, each present and former director,
officer, employee or agent of the Company or any of its subsidiaries or a
director, officer, employee, agent or trustee of any employee benefit plan for
employees of the Company or any of its subsidiaries, and each person who is or
was then serving in any such capacity (or any person who is or was then serving
any other corporation or entity in any such capacity at the request of the
Company) (individually, an "Indemnified Party" and collectively, the
"Indemnified Parties") provided for in the Company's Amended and Restated
Certificate of Incorporation, as amended, or Amended and Restated Bylaws or
similar organizational documents of any Company subsidiary as in effect on the
date of the Merger Agreement with respect to matters occurring prior to the
Effective Time shall survive the Merger and shall continue in full force and
effect for a period of not less than six (6) years from the Effective Time;
provided, however, that all rights to indemnification in respect of any claim
for indemnification for losses, damages or liabilities of any kind or nature
incurred (an "Indemnifiable Claim") which is asserted or made within such period
shall continue until the final disposition of such claim. The Merger Agreement
further provides that Parent has agreed that it shall indemnify any Indemnified
Party in respect of any Indemnifiable Claim to the extent that the Company does
not promptly indemnify such party for an Indemnifiable Claim.
The Merger Agreement provides that Parent and the Surviving Corporation
shall cause to be put into effect by the completion of the Offer, with a carrier
satisfactory to the Board on the date of the Merger Agreement, directors' and
officers' liability insurance covering each Indemnified Party who is currently
covered by the Company's directors' and officers' liability insurance with
respect to claims arising from facts or events which occurred at or prior to the
Effective Time, which insurance shall remain in effect for a period of at least
six (6) years after the Effective Time and which shall be no less favorable than
such insurance maintained in effect by the Company on the date of the Merger
Agreement in terms of coverage and amounts; provided that, in no event shall the
Surviving Corporation be required to make annual premium payments for such
insurance in excess of $150,000.
Other Covenants. The Merger Agreement further provides that; except as set
forth on the Disclosure Schedule or contemplated by the Merger Agreement, from
the date of the Merger Agreement to the Board Transition Date (as defined in the
Merger Agreement), (i) the Company will not, and will not permit any of its
subsidiaries to, merge or consolidate with any other person or acquire a
material amount of stock or assets of any other person; (ii) the Company will
not, and will not permit any of its subsidiaries to, sell, lease, license or
otherwise dispose of any material subsidiary or material amount of assets,
securities or property except (A) pursuant to existing contracts or commitments
and (B) in the ordinary course consistent of business with past practice; (iii)
the Company will (and will cause its subsidiaries to) use reasonable efforts not
to, (A) take any action that (x) would make any representation and warranty of
the Company in the Merger Agreement that is qualified by materiality or Material
Adverse Effect inaccurate in any respect at, or as of any time prior to, the
Effective Time or (y) would make any representation or warranty of the Company
in the Merger Agreement that is not so qualified to be inaccurate in any
material respect at, or as of any time prior to, the Effective Time or (B) omit
to take any action necessary to prevent any such representation or warranty from
being inaccurate in any respect or material respect, as the case may be, at any
such time; (iv) the Company will not, and will not permit any of its
subsidiaries to, sell, transfer, license, sublicense or otherwise dispose of any
material intellectual property rights (other than in the ordinary course of
business consistent with past practice) or amend or modify any existing
agreements with respect to any material intellectual property rights or third
party intellectual property rights; (v) the Company will not, and will not
permit any of its subsidiaries to, (A) incur any indebtedness for borrowed money
or issue any debt securities or assume, guarantee or endorse or otherwise as an
accommodation become responsible for, the obligations of any other person (other
than
22
<PAGE> 25
(x) for an amount not exceeding $4,000,000 in the aggregate, or make any loans,
advances, or capital contributions to, or investments in, any other person, (B)
enter into or amend any contract or agreement other than in the ordinary course
of business consistent with past practice, (C) authorize or make any capital
expenditures or purchases of fixed assets that are not currently budgeted and
that in the aggregate exceeds $1,000,000, (D) terminate any material contract to
which the Company is a party or amend in any material respect any such material
contract or (E) enter into or amend any contract, agreement, commitment or
arrangement to effect any of the matters prohibited by the Merger Agreement;
(vi) the Company will not, and will not permit any of its subsidiaries to, take
any action, other than as required by generally accepted accounting principles,
to change accounting policies or procedures or cash maintenance policies or
procedures (including, without limitation, procedures with respect to revenue
recognition, capitalization of development costs, payments of accounts payable
and collection of accounts receivable); (vii) the Company will not, and will not
permit any of its subsidiaries to, make any tax election not required by law and
inconsistent with past practice or settle or compromise any tax liability,
except to the extent the amount of any such settlement or compromise has been
reserved for on the consolidated financial statements contained in the Company's
filings with the Commission, (viii) the Company will not, and will not permit
any of its subsidiaries to, pay, discharge, settle, or satisfy any lawsuits,
claims, liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction in
the ordinary course of business consistent with past practice of liabilities
reflected or reserved against on the Estimated September 30, 1999 Balance Sheet
or incurred in the ordinary course of business consistent with past practice or
other payments, discharges or satisfactions which in the aggregate do not exceed
$1,000,000 or waive the benefits of, or agree to modify in any manner, any
confidentiality or standstill agreement.
No Solicitation. The Merger Agreement provides that, until the earlier of
the Board Transition Date (as defined in the Merger Agreement) or the
termination of the Merger Agreement, the Company will not directly or indirectly
(i) solicit, engage in discussions or negotiate with any person (whether such
discussions or negotiations are initiated by the Company or otherwise) or take
any other action intended or designed to facilitate the efforts of any person
(other than Parent) relating to the possible acquisition of the Company (whether
by way of merger, purchase of capital stock, purchase of assets or otherwise) or
any material portion of its capital stock or assets, (ii) provide information
with respect to the Company to any person, other than Parent, relating to a
possible Alternative Acquisition by any person, other than the Parent, (iii)
enter into an agreement with any person, other than Parent, providing for a
possible Alternative Acquisition, or (iv) make or authorize any statement,
recommendation or solicitation in support of any possible Alternative
Acquisition by any person, other than by Parent.
The Merger Agreement provides that the Company shall and shall cause its
representatives to, cease immediately and cause to be terminated all activities,
discussions and negotiations, if any, conducted prior to the date of the Merger
Agreement with respect to any Alternative Acquisition. Notwithstanding the
foregoing, prior to the consummation of the Offer, the Company may participate
in discussions or negotiations with, and furnish non-public information, and
afford access to the properties, books, records, officers, employees and
representatives of the Company to any person, entity or group if such person,
entity or group has delivered a Superior Proposal to the Company. In the event
the Company receives a Superior Proposal, nothing contained in the Merger
Agreement will prevent the Board from executing or entering into an agreement
relating to such Superior Proposal and recommending such Superior Proposal to
its stockholders; in such case, the Board may withdraw, modify or refrain from
making its recommendation of the Offer and the Merger; provided, however that
the Company (i) shall have promptly notified Parent, and in any event within 24
hours, of any proposal for an Alternative Acquisition received by, any such
information requested from, or any such negotiations or discussions sought to be
initiated or recommended with, the Company or any of its subsidiaries,
indicating, in connection with such notice, the name of the person making the
proposal for an Alternative Acquisition or taking such action and, in reasonable
detail, the significant terms of any such proposal for an Alternative
Acquisition and including with such notice any documentation relating to such
Alternative Acquisition, (ii) shall provide Parent at least two business days
prior written notice of the Company's intention to execute or enter into an
agreement relating to such Superior Proposal and (iii) may only terminate the
Merger Agreement by written notice to Parent, provided no sooner than two
business days after Parent's receipt of a copy of such Superior Proposal (or a
detailed description of the significant terms and conditions thereof).
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<PAGE> 26
Control of Board of Directors. The Merger Agreement provides that, subject
to the requirements of applicable law, promptly upon the purchase of not less
than a majority of the outstanding Shares by Purchaser pursuant to the Offer and
from time to time thereafter, subject to Section 1.03(c) of the Merger Agreement
(relating to the appointment of Independent Directors (as defined below)),
Purchaser shall be entitled to designate up to such number of directors, rounded
up to the next whole number plus one, on the Board as will give Purchaser
representation on the Board equal to the product of the total number of
directors on the Board, after giving effect to such representation, and the
percentage that such number of Shares so purchased bears to the total number of
issued and outstanding Shares, and the Company shall use its reasonable efforts
to, upon request by Purchaser, promptly, at the Company's election, either
increase the size of the Board or secure the resignation of such number of
directors as is necessary to enable Purchaser's designees to be elected to the
Board and shall cause Purchaser's designees to be so elected, but in no event
less than a majority of directors. At such times the Company will use its
reasonable efforts to cause individuals designated by Purchaser to constitute
the same percentage as is on the Board of (i) each committee of the Board (other
than any committee of the Independent Directors), (ii) each board of directors
of each subsidiary of the Company designated by Purchaser and (iii) each
committee of each such board.
The Merger Agreement provides that the Company's obligation to appoint
designees to the Board shall be subject to Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder. The Company agreed to promptly take all
actions required pursuant to Section 14(f) and Rule 14f-1 in order to fulfill
its obligations under this provision of the Merger Agreement and to include in
the Schedule 14D-9 such information with respect to the Company and its officers
and directors as is required under Section 14(f) and Rule 14f-1. Parent or
Purchaser will supply to the Company has in writing and be solely responsible
for any information with respect to any of them and their nominees, officers,
directors and affiliates required by Section 14(f) and Rule 14f-1.
Pursuant to the Merger Agreement, after the time that Purchaser's designees
constitute at least a majority of the Board and until the Effective Time, the
Board shall always have at least two members (the "Independent Directors") who
are neither officers of Parent nor designees, stockholders or affiliates of
Parent or Parent's affiliates. During such period, any (i) amendment or
termination of the Merger Agreement, (ii) extension of time for the performance
or waiver of the obligations or other acts of Parent or Purchaser or waiver of
the Company's rights under the Merger Agreement, or (iii) action by the Company
with respect to the Merger Agreement and the transactions contemplated thereby
which adversely affects the interests of the stockholders of the Company, shall
require the approval of a majority of the Independent Directors in addition to
any required approval thereof by the full Board.
Stock Options. Pursuant to the Merger Agreement, on the latest of (i) the
completion of the Offer, (ii) the first business day of January 2000 and (iii)
the earlier of (A) 30 days after termination notice is given in accordance with
the terms of the plan governing the Options (as defined below) and (B) the date
that the Option holder agrees to the treatment provided in Section 2.08 of the
Merger Agreement, each holder of then outstanding options to purchase Shares
granted by the Company (whether or not then currently exercisable) (the
"Options") will be entitled to receive, and shall receive, at the sole election
of the holder of such Option in settlement of each Option where the amount set
forth in clause (i) below is a positive amount, a cash payment from the Company
in an amount equal to the product of (i) the Offer Price minus the exercise
price per Share of the Option and (ii) the number of Shares covered by such
Option. Such payment shall be reduced by any applicable withholding taxes. The
Company, acting through its Board or any committee thereof, has the right at any
time or from time to time following the execution of the Merger Agreement to
accelerate and vest, in full or in part, any and all Options not currently
exercisable in full. Effective as of the Effective Time of the Merger, the
Company, acting through its Board or a committee thereof, shall terminate those
Options with an exercise price that is greater than the Offer Price.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto, including
representations by the Company as to, among other things, organization,
capitalization, subsidiaries, compliance with laws and court orders, absence of
certain changes since June 30, 1999, undisclosed liabilities, public filings,
consents and approvals, litigation, title to properties, benefit plans, taxes,
and patents, trademarks and trade names. In addition, Parent and Purchaser have
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represented as to, among other things, organization and good standing, corporate
authorizations, consents and approvals and ownership of Shares.
SHAREHOLDER AGREEMENTS
On October 19, 1999, Parent, Purchaser and each of Michael Moore ("Moore")
and Frances Penfold ("Penfold") entered into a shareholder agreement
(collectively the "Shareholder Agreements"). Pursuant to the terms of the
Shareholder Agreements, at least two (2) business days prior to the consummation
by Purchaser of the Offer, Moore and Penfold shall tender to the Depositary (i)
letters of transmittal with respect to an aggregate of 198,597 Shares (the
"Executive Shares") and any other Shares held by Moore and Penfold, (ii) the
certificates representing the Executive Shares, and (iii) all other documents or
instruments required to be delivered pursuant to the terms of the Offer to
Purchase. The Shareholder Agreements provide that Moore and Penfold may decline
to tender, or may withdraw, any and all Executive Shares or other Shares held by
them if Purchaser amends the Offer Price to less than $8.79 per Share, reduces
the number of Shares subject to the Offer, changes the form of consideration
payable in the Offer in a manner adverse to the stockholders of the Company
(other than insignificant changes or amendments or other than to waive any
conditions. Moore and Penfold are required to give Purchaser at least two (2)
business days prior notice of any withdrawal of the Executive Shares. The
Shareholder Agreements further provide that, so long as the Merger Agreement is
in effect, or Purchaser notifies Moore or Penfold of its intent to continue the
Offer or a revised offer within two (2) business days after the date of
termination of the Merger Agreement, Moore and Penfold will (i) vote all
Executive Shares now or hereafter owned by them or execute a consent or proxy,
and not revoke any proxy, vote or a consent, in favor of the Merger Agreement,
the Merger and the transactions contemplated thereby, and (ii) oppose any
Alternative Acquisition and vote all Executive Shares now or hereafter owned by
them, or execute a consent or proxy, against any Alternative Acquisition.
13. DIVIDENDS AND DISTRIBUTIONS
Pursuant to the terms of the Merger Agreement, prior to the effective time
of the Merger, unless otherwise approved in writing by Purchaser, the Company
may not (a) declare, set aside, make or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, or (b) issue or sell any
shares of any class of its capital stock, or any securities convertible into or
exchangeable for any such shares, or issue, sell, grant or enter into any
subscriptions, options, warrants, conversion or other rights, agreements,
commitments, arrangements or understandings of any kind, contingently or
otherwise, to purchase or otherwise acquire any such shares or any securities
convertible into or exchangeable for any such shares.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) Purchaser's rights to extend and amend the Offer at any
time in its sole discretion (subject to the terms of the Merger Agreement),
Purchaser shall not be required to accept for payment (whether or not the Shares
have theretofore been accepted for payment), or pay for, and may delay the
acceptance for payment of, or the payment for, any tendered Shares, and may
terminate the Offer and not accept for payment any Shares if (i) there are not
validly tendered and not withdrawn prior to the Expiration Date that number of
Shares that would represent at least a majority of the total number of then
outstanding Shares (the "Minimum Condition"), (ii) all regulatory approvals
required to consummate the Offer and the Merger shall have been obtained and
shall remain in full force and effect and all statutory waiting periods in
respect thereof shall have expired; or (iii) on or after date of the Merger
Agreement, and prior to the payment of Shares any of the following events shall
have occurred:
(a) there shall be pending any action, investigation, proceeding,
claim or counterclaim by any governmental authority or agency which seeks
to: (i) prohibit the making or consummation of the Offer or the Merger;
(ii) restrain or prohibit the performance of the Merger Agreement; (iii)
seeks to impose limitations on the ability of Purchaser or to render
Purchaser unable to accept payment, pay for or purchase some or all of the
Shares pursuant to the Offer or Merger; (iv) restrain or prohibit Parent's
ownership or operation of all or any portion of the business and assets of
the Company and its
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subsidiaries, or to compel Parent or its affiliates to dispose of or hold
all or any portion of the business or assets of the Company and its
subsidiaries; or (v) to impose limitations on the ability of Parent and its
affiliates to exercise full voting rights or ownership of the Shares; or
that otherwise is reasonably likely to have a Material Adverse Effect (as
defined in the Merger Agreement); or
(b) there is in effect any order, decree or injunction (whether
preliminary, final or appealable, other than a temporary restraining order)
issued by a court or governmental authority of competent jurisdiction which
prohibits consummation of the Offer or the Merger or requires Parent or
Purchaser to hold separate any material portion of the stock or assets of
the Company or its subsidiaries; or
(c) there shall have been any statute, rule, regulation, injunction,
order or decree proposed, enacted or promulgated or any similar action
taken or deemed applicable to the Offer or the Merger which prohibits
consummation of the Offer or the Merger; or
(d) there shall be in effect a banking moratorium or any suspension of
payments in respect of banks in the United States (whether or not
mandatory); or
(e) Purchaser shall discover that any representation or warranty made
by the Company in the Merger Agreement is untrue at the time such
representation or warranty was made or shall not be true and correct as of
the date of consummation of the Offer (except for those representations and
warranties made as of a particular date which need only be true and correct
as of such date), except where the failure to be so true and correct would
not have a Material Adverse Effect; or
(f) there shall have been a breach in any material respect by the
Company of any of its covenants or agreements contained in the Merger
Agreement, except for any such breaches that would not have a Material
Adverse Effect; or
(g) the Merger Agreement shall have been terminated in accordance with
its terms;
(h) any person shall have entered into a definitive agreement or an
agreement in principle with the Company regarding an Alternative
Acquisition; or
(i) the Company's Board of Directors will have withdrawn or modified
(including by amendment of the Schedule 14D-9) in a manner adverse to
Parent or Purchaser its approval or recommendation of the Offer, the Merger
Agreement or the Merger, will have recommended to the Company's
stockholders another offer or will have adopted any resolution to effect
any of the foregoing which, in the sole judgment of Purchaser in any such
case, and regardless of the circumstances (including any action or omission
by Purchaser) giving rise to any such condition, makes it inadvisable to
proceed with such acceptance or payment.
The foregoing conditions are for the sole benefit of Purchaser and may be
asserted by Purchaser regardless of the circumstances giving rise to such
condition or may be waived by Purchaser in whole or in part at any time and from
time to time in its sole discretion, subject in each case to the terms of the
Merger Agreement and applicable law. The failure by Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right and may be asserted
at any time and from time to time.
15. CERTAIN LEGAL MATTERS
General.
Except as described in this Section 15, based on a review of publicly
available filings made by the Company with the Commission and other publicly
available information concerning the Company and discussions of representatives
of Parent with representatives of the Company, neither Purchaser nor 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 Purchaser's acquisition of Shares (and the indirect
acquisition of the capital stock of the Company's subsidiaries) as contemplated
herein or of any approval or other action by any governmental entity that would
be required or desirable for the acquisition or
26
<PAGE> 29
ownership of Shares by Purchaser as contemplated herein. Should any such
approval or other action be required or desirable, Purchaser and Parent
currently contemplate that such approval or other action will be sought, except
as described below under "Other State Takeover Laws". While, except as otherwise
expressly described in this Section 15, Purchaser does not presently intend to
delay the acceptance for payment of or payment for Shares tendered pursuant to
the Offer pending the outcome of any such matter, there can be no assurance that
any such 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 such 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, Purchaser could decline to accept for payment or pay for any Shares
tendered. See Section 14.
Under the DGCL, the affirmative vote of holders of a majority of the voting
power of the then outstanding Shares (including any Shares owned by Purchaser)
is generally required to approve the Merger. If Purchaser acquires, through the
Offer or otherwise, a majority of the voting power of the outstanding Shares
(which would be the case if the Minimum Condition were satisfied and Purchaser
were to accept for payment Shares tendered pursuant to the Offer (and no
outstanding Options were exercised after the Expiration Date and no Shares were
issued by the Company in connection with the Company's employee stock purchase
plan), it would have sufficient voting power to effect the Merger without the
vote of any other stockholders of the Company.
Under the DGCL, if a corporation owns 90% or more of each outstanding class
of capital stock of another corporation, it can effect a "short-form" merger
with such corporation without prior notice to, or any other action by, any other
stockholder of such corporation. As a result, assuming no Options are exercised
following October 19, 1999, if Purchaser were to acquire ownership of 940,168
Shares pursuant to the Offer, Purchaser would own more than 90% of the only
class of capital stock of the Company then outstanding and would be able to
effect the Merger pursuant to the "short form" merger provisions of the DGCL.
Section 203 of the DGCL.
Section 203 of the DGCL, in general, prohibits a Delaware corporation such
as the Company from engaging in a "Business Combination" (defined as a variety
of transactions, including mergers, as set forth below) with an "Interested
Stockholder" (defined generally as a person that is the beneficial owner of 15%
or more of a corporation's outstanding voting stock) for a period of three years
following the date that such person became an Interested Stockholder, unless,
among other things, prior to the date such person became an Interested
Stockholder, the board of directors of the corporation approved either the
Business Combination or the transaction that resulted in the stockholder
becoming an Interested Stockholder. The Company's Board of Directors has
approved the Merger Agreement and Purchaser's acquisition of Shares pursuant to
the Offer. Therefore, Section 203 of the DGCL is inapplicable to the Merger.
Other State Takeover Laws.
A number of states throughout the United States 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 such states. In Edgar
v. MITE Corp., the Supreme Court of the United States held that the Illinois
Business Takeover Act, which involved state securities laws that made the
takeover of certain corporations more difficult, imposed a substantial burden on
interstate commerce, and, therefore, was unconstitutional. 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 stockholders, provided that such laws were applicable
only under certain conditions. Subsequently, a number of Federal courts ruled
that various state takeover statutes were unconstitutional insofar as they apply
to corporations incorporated outside the state of enactment.
27
<PAGE> 30
Based on information supplied by the Company, Purchaser does not believe
that any other state takeover statutes purport to apply to the Offer or the
Merger. Except as discussed above, neither Purchaser nor Parent has currently
complied with any state takeover statute or regulation. Purchaser reserves the
right to challenge the applicability or validity of any state law purportedly
applicable to the Offer or the Merger and nothing in this Offer to Purchase or
any action taken in connection with the Offer or the Merger is intended as a
waiver of such right. If it is asserted that any state takeover statute is
applicable to the Offer or the Merger and an appropriate court does not
determine that it is inapplicable or invalid as applied to the Offer or the
Merger, Purchaser might be required to file certain information with, or to
receive approvals from, the relevant state authorities, and Purchaser might be
unable to accept for payment or pay for Shares tendered pursuant to the Offer,
or be delayed in consummating the Offer or the Merger. In such case, Purchaser
may not be obligated to accept for payment or pay for any Shares tendered
pursuant to the Offer. See Section 14.
Other Foreign Approvals
The Company conducts business in a number of foreign countries and
jurisdictions. In connection with the acquisition of the Shares pursuant to the
Offer, the laws of certain of those foreign countries and jurisdictions may
require the filing of information with, or the obtaining of the approval of,
governmental authorities in such countries and jurisdictions. The governments in
such countries and jurisdictions might attempt to impose additional conditions
on the Company's operations conducted in such countries and jurisdictions as a
result of the acquisition of the Shares pursuant to the Offer. There can be no
assurance that Purchaser will be able to cause the Company or its subsidiaries
to satisfy or comply with such laws or that compliance or non-compliance will
not have adverse consequences for the Company or any subsidiary after purchase
of the Shares pursuant to the Offer.
Appraisal Rights
Holders of Shares do not have appraisal rights as a result of the Offer.
However, if the Merger is consummated, holders of Shares at the effective time
of the Merger will have certain rights pursuant to the provisions of Section 262
of the DGCL ("Section 262") to dissent and demand appraisal of their Shares.
Under Section 262, dissenting stockholders who comply with the applicable
statutory procedures will be entitled to receive a judicial determination of the
fair value of their Shares (exclusive of any element of value arising from the
accomplishment or expectation of the Merger) and to receive payment of such fair
value in cash, together with a fair rate of interest, if any. Any such judicial
determination of the fair value of Shares could be based upon factors other
than, or in addition to, the price per Share to be paid in the Merger or the
market value of the Shares. The value so determined could be more or less than
the price per Share to be paid in the Merger.
THE FOREGOING SUMMARY OF SECTION 262 DOES NOT PURPORT TO BE COMPLETE AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SECTION 262. FAILURE TO FOLLOW THE
STEPS REQUIRED BY SECTION 262 FOR PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE
LOSS OF THOSE RIGHTS.
Going Private Transactions
The Commission has adopted Rule 13e-3 under the Exchange Act, which is
applicable to certain "going private" transactions. Purchaser does not believe
that Rule 13e-3 will be applicable to the Merger because it is anticipated that
the Merger would be effected within one year after the consummation of the Offer
and in the Merger, stockholders would receive the same price per share as in the
Offer. If applicable, Rule 13e-3 requires, among other things, that certain
financial information concerning the fairness of the Merger and the
consideration offered to minority stockholders in such transaction be filed with
the Commission and disclosed to stockholders prior to the consummation of the
Merger.
28
<PAGE> 31
16. FEES AND EXPENSES
Purchaser and Parent have retained Georgeson Shareholder Communications,
Inc. to act as the Information Agent and American Stock Transfer & Trust Company
to serve as the Depositary in connection with the Offer. The Information Agent
and the Depositary each will receive reasonable and customary compensation for
their services, be reimbursed for certain reasonable out-of-pocket expenses and
be indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities and expenses under the Federal securities laws.
Neither Purchaser nor Parent will pay any fees or commissions to any broker
or dealer or other person (other than the Depositary and the Information Agent)
in connection with the solicitation of tenders of Shares pursuant to the Offer.
Brokers, dealers, banks and trust companies will be reimbursed by Purchaser upon
request for customary mailing and handling expenses incurred by them in
forwarding material to their customers.
Except as set forth above, neither Purchaser nor Parent will pay any fees
or commissions to any broker, dealer or other person or entity in connection
with the solicitation of tenders of Shares pursuant to the Offer. Brokers,
dealers, commercial banks and trust companies will be reimbursed by Purchaser
for customary mailing and handling expenses incurred by them in forwarding Offer
materials to their clients.
17. MISCELLANEOUS
Parent, Purchaser or an affiliate of Parent may, following the consummation
or termination of the Offer, seek to acquire additional Shares through open
market transactions, privately negotiated transactions, a tender or exchange
offer or otherwise, upon such terms and at such prices as it shall determine,
which may be more than the Offer Price. Each of Parent, Purchaser and their
respective affiliates also reserve the right to dispose of any or all Shares
acquired by them pursuant to the terms of the Merger Agreement.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. Neither Purchaser nor Parent is aware of any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the laws of such jurisdiction. To the extent Purchaser or Parent becomes
aware of any state law that would limit the class of offerees in the Offer,
Purchaser will amend the Offer and, depending on the timing of such amendment,
if any, will extend the Offer to provide adequate dissemination of such
information to holders of Shares prior to the expiration of the Offer. In any
jurisdiction the securities, blue sky or other laws of which require the Offer
to be made by a licensed broker or dealer, the Offer shall be deemed to be made
on behalf of Purchaser by one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OR PARENT NOT CONTAINED HEREIN OR IN THE
LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Purchaser and Parent have filed with the Commission a Schedule 14D-1
pursuant to Rule 14d-3 under the Exchange Act, together with exhibits,
furnishing certain additional information with respect to the Offer, and may
file amendments thereto. Such Schedule 14D-1 and any amendments thereto,
including exhibits, are available for inspection and copies are obtainable in
the manner set forth in Section 8 of this Offer to Purchase (except that such
material will not be available at the regional offices of the Commission).
EDB 4TEL ACQUISITION CORP.
October 25, 1999
29
<PAGE> 32
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets
forth the name and current principal occupation or employment of the directors
and executive officers of Parent. Unless otherwise indicated, all occupations,
offices or positions of employment listed opposite an individual's name were
held by such individual during the last five years. The business address of each
such director and executive officer is c/o EDB BUSINESS PARTNER ASA,
Ruselokkveien 6, N-0251 Oslo (Postal Address: Postboks 6798, St. Olavs Plass,
N-0130 Oslo, Norway). All such directors and executive officers listed below are
citizens of Norway.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- ----------------------------------------------
<S> <C>
Peter Pay, Executive Vice President of Telenor AS since 1999. From 1997
Chairman of Board to 1999, Mr. Pay served as Senior Vice President and member
c/o Postboks 6798 St. Olavs of the Executive Committee of the Parent. From 1994 to 1997,
Plass Mr. Pay served as the Chief Executive Officer of Telenor
N-0130 Oslo Plus.
Norway
Jarle Gundersen, Since 1995, Mr. Gundersen served as Project Director of
Vice Chairman of the Board Norsk Vekst. From 1992 to 1995, Mr. Gundersen served as Vice
Norsk Vekst AS President of Finance of Aker ASA.
Postboks 1223 Vitea
N-0110 Oslo
Norway
Asmund Laseth, Since 1999, Mr. Laseth has served as Vice President of
Director Telenor Program. From 1997 to 1999, he served as Vice
c/o Postboks 6798 St. Olavs President of Telenor Nett. From 1992 until 1997, Mr. Laseth
Plass served as Vice President.
N-0130 Oslo
Norway
Eivind Kinck Since 1999, Mr. Kinck has served as Executive Vice
Executive Vice President President. From 1992 to 1999, Mr. Kinck served as President
Ruselokkveien 6 of EDB ASA.
N-0251 Oslo
Norway
Eli Giske Since 1999, Mr. Giske has served as the Vice President of
Vice President, Finance Finance. Since 1994 to 1999, Mr. Giske served as the Vice
Ruselokkveien 6 President of Finance of EDB ASA.
N-0251 Oslo
Norway
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The following table sets
forth the name and current principal occupation or employment of the directors
and executive officers of Purchaser. Unless otherwise indicated, all
occupations, offices or positions of employment listed opposite an individual's
name were held by such individual during the last five years. The business
address of each such director and executive officer is EDB 4tel Acquisition
Corp. c/o EDB Business Partner ASA, Ruselokkveien 6, N-0251 Oslo (Postal
Address:
S-1
<PAGE> 33
Postboks 6798, St. Olavs Plass, N-0130 Oslo, Norway). All such directors and
executive officers listed below are citizens of Norway.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- ----------------------------------------------
<S> <C>
Asbjorn Eide Mr. Eide has served as President since October, 1999. Since
Director and 1998, he has served as President of EDB 4tel. From 1997 to
President 1998 he served as Executive Vice President of the Product
Division and member of the Executive Committee of Telenor
Bedlift.
Arahild Schia Ms. Schia has served as the Vice President and Secretary
Vice President and since October 1999. Since 1999 she has served as Executive
Secretary Vice President of EDB 4tel. From 1998 to 1999 Ms. Schia
served as Vice President of Marketing of EDB 4tel. From 1994
to 1998 she served as Director of the IT division of Telenor
R&D.
</TABLE>
S-2
<PAGE> 34
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or such stockholder's broker, dealer, commercial bank, trust
company or other nominee to the Depositary at its address set forth below.
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER TRUST COMPANY
By Mail, Overnight Courier or Hand:
40 Wall Street, 46th Floor
New York, New York 10005
Attention: Reorganization Department
By Facsimile Transmission
(for eligible institutions only):
(718) 234-5001
Confirm facsimile by telephone only:
(212) 936-5100
(718) 921-8200
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal may be directed to the INFORMATION
AGENT at its address and telephone number set forth below. Stockholders may also
contact their broker, dealer, commercial bank, trust company or other nominee
for assistance concerning the Offer.
The Information Agent for the Offer is:
Georgeson Shareholder Communications, Inc.
17 State Street
10th Floor
New York, New York 10004
Bankers and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
TELESCIENCES, INC.
PURSUANT TO THE OFFER TO PURCHASE DATED OCTOBER 25, 1999
BY
EDB 4TEL ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
EDB BUSINESS PARTNER ASA
THE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, NOVEMBER 22, 1999,
UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By Mail, Overnight Courier or Hand Delivery
40 Wall Street, 46th Floor
New York, New York 10005
Attention: Reorganization Department
By Facsimile Transmission
(for eligible institutions only):
(718) 234-5001
Confirm facsimile by telephone only:
(212) 936-5100
(718) 921-8200
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN
AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
PLEASE REFER TO INSTRUCTION 9 OF THIS LETTER OF TRANSMITTAL FOR IMPORTANT
INFORMATION REGARDING BACKUP WITHHOLDING REQUIRED BY THE INTERNAL REVENUE
SERVICE AND THE SUBMISSION OF A SUBSTITUTE FORM W-9 TO THE DEPOSITARY.
<PAGE> 2
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- -----------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF SHARE TOTAL NUMBER OF
REGISTERED HOLDER(S) CERTIFICATE SHARES
(PLEASE FILL IN, IF BLANK, EXACTLY NUMBER(S) REPRESENTED BY TOTAL NUMBER
HOW NAME(S) APPEAR ON SHARE (IF SHARE OF SHARES
CERTIFICATE(S)) APPLICABLE)(1) CERTIFICATE(S)(1)(2) TENDERED(3)
- -----------------------------------------------------------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
(1) Need not be completed by stockholders delivering by book-entry transfer.
(2) As adjusted for the four-for-one stock split effective on October 15, 1999.
(3) Unless otherwise indicated, it will be assumed that all Shares represented by certificates delivered
to the Depositary are being tendered. See Instruction 4.
- -----------------------------------------------------------------------------------------------------------
</TABLE>
PLEASE READ THE INSTRUCTIONS SET FORTH BELOW.
This Letter of Transmittal is to be completed by stockholders of
Telesciences, Inc., if certificates for Shares (as defined below) are to be
forwarded herewith or, unless an Agent's Message (as defined in Section 2 of the
Offer to Purchase (as defined below)) is utilized, if delivery of Shares is to
be made by book-entry transfer into the account maintained by American Stock
Transfer & Trust Company as Depositary (the "Depositary"), at The Depository
Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures
set forth in Section 2 of the Offer to Purchase (as defined below).
<PAGE> 3
Stockholders whose certificates evidencing Shares (the "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 (as defined in Section 1 of the Offer to Purchase), or who
cannot complete the procedure for book-entry transfer on a timely basis, must
tender their Shares according to the guaranteed delivery procedure set forth in
Section 2 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO
THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE
THE FOLLOWING:
Name of Tendering Institution:
- ------------------------------------------------------------------------------
Account Number:
- --------------------------------------------------------------------------------
Transaction Code Number:
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY, THEN COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s):
- --------------------------------------------------------------------------
Window Ticket Number (if any):
- ---------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
- -------------------------------------------------------
Name of Institution which Guaranteed Delivery:
- ------------------------------------------------------------
If delivery is by book-entry transfer:
Name of Tendering Institution:
- --------------------------------------------------------------------
Account Number:
------------------------------------------------------------------------
Transaction Code Number:
------------------------------------------------------------------------
<PAGE> 4
LADIES AND GENTLEMEN:
The undersigned hereby tenders to EDB 4tel Acquisition Corp., a Delaware
corporation ("Purchaser") and a wholly-owned subsidiary of EDB BUSINESS PARTNER
ASA, a Norwegian limited company, the above-described shares of common stock,
par value $0.04 per Share (all of the shares of common stock being hereinafter
collectively referred to as the "Shares" and individually, as a "Share"), of
Telesciences, Inc., a Delaware corporation (the "Company"), at a purchase price
of $8.79 per Share, net to the seller in cash (the "Offer Price"), without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated October 25, 1999 (the "Offer to Purchase") and in this
Letter of Transmittal (which together with the Offer to Purchase, constitutes
the "Offer"). The undersigned understands that Purchaser reserves the right to
transfer or assign, in whole at any time, or from time to time in part, to one
or more of its affiliates, 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 the Shares
tendered herewith in accordance with the terms and subject to the conditions of
the Offer (including, if the Offer is extended, amended or supplemented, the
terms and conditions of any such extension, amendment or supplement), the
undersigned hereby sells, assigns and transfers to, or upon the order of,
Purchaser all right, title and interest of the undersigned in and to all of the
Shares that are being tendered hereby and any and all dividends, distributions
(including, without limitation, the issuance of additional Shares pursuant to
stock dividends or stock splits, the issuance of other securities, the issuance
of rights declared, paid or issued with respect to the tendered Shares on or
after October 25, 1999, and payable or for purchase of securities or any cash
dividends) distributable to the undersigned on a date prior to the transfer to
the name of Purchaser (or nominee or transferee of Purchaser) on the Company's
stock transfer records of the Shares tendered herewith (collectively, a
"Distribution"), and irrevocably constitutes and appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares (and any Distributions) with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest) to
(a) deliver certificates for such Shares (and any Distributions) ("Share
Certificates") or transfer ownership of such Shares (and any Distributions) on
the account books maintained by the Book-Entry Transfer Facility, together in
either case with appropriate evidences of transfer and authenticity, to the
Depositary for the account of Purchaser, (b) present such Shares (and any
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 any Distributions), all in accordance with the terms and subject to
the conditions of the Offer.
The undersigned hereby irrevocably appoints Purchaser or any other
designees of Purchaser, and each of them, as such stockholder's
attorneys-in-fact and proxies, each with full power of substitution, to the full
extent of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by Purchaser and with respect to any and
all other shares or other securities issued or issuable in respect of such
Shares on or after October 19, 1999. Such appointment will be effective upon the
acceptance for payment of such Shares by Purchaser in accordance with the terms
of the Offer. Upon such acceptance for payment, all prior powers of attorney and
proxies given by such stockholder with respect to such Shares (and such other
shares and securities) will be revoked without further action, and no subsequent
proxies may be given nor any subsequent written consents executed (and, if given
or executed, will not be deemed effective). The proxies (or other designees of
Purchaser) will be empowered to exercise all voting and other rights of such
stockholder as they in their sole discretion may deem proper at any annual or
special meeting of the Company's stockholders or any adjournment or postponement
thereof, by consent in lieu of any such meeting or otherwise. Purchaser reserves
the right to require that, in order for Shares to be deemed validly tendered,
immediately upon Purchaser's payment for such Shares, Purchaser must be able to
exercise full voting rights with respect to such Shares.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares (and
any Distributions) tendered hereby, and (b) when the Shares are accepted for
payment by Purchaser, Purchaser will acquire good, marketable and unencumbered
title to the Shares (and all Distributions), 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
signature guarantee or additional documents deemed by the Depositary or
Purchaser to be necessary or
<PAGE> 5
desirable to complete the sale, assignment and transfer of the Shares (and all
Distributions) tendered hereby. In addition, the undersigned shall promptly
remit and transfer to the Depositary for the account of Purchaser any and all
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer, and pending such remittance or
appropriate assurance thereof, Purchaser will be, subject to applicable law,
entitled to all rights and privileges as owner of any such Distribution and may
withhold the entire purchase price or deduct from the purchase price the amount
or value thereof, as determined by Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall survive the
death, incapacity, liquidation or dissolution of the undersigned and any
obligations of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, trustees in bankruptcy, personal and legal
representatives, successors and assigns of the undersigned. Except as stated in
the Offer to Purchase this tender of Shares is irrevocable.
The undersigned understands that tenders of Shares pursuant to any of the
procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and Purchaser upon the terms and subject to the conditions set forth in the
Offer, including the undersigned's representation and warranty that the
undersigned owns the Shares tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the Offer Price of all Shares purchased, and/or
return any Share Certificates not tendered or not accepted for payment in the
name(s) of the registered holder(s) appearing under "Description of Shares
Tendered." Similarly, unless otherwise indicated herein under "Special Delivery
Instructions," please mail the check for the Offer Price and/or return any Share
Certificates not tendered or not accepted for payment (and accompanying
documents, as appropriate) to the address(es) of the registered holder(s)
appearing under "Description of Shares Tendered." In the event that both the
"Special Delivery Instructions" and the "Special Payment Instructions" are
completed, please issue the check for the Offer Price of any Shares purchased
and/or return any Share Certificates not tendered or accepted for payment and
any accompanying documents, as appropriate in the name(s) of, and deliver such
check and/or return any such Share Certificates (and any accompanying documents)
to, the person(s) so indicated. Unless otherwise indicated herein under "Special
Payment Instructions," please credit any Shares tendered herewith by book-entry
transfer that are not accepted for payment by crediting the account designated
above. The undersigned recognizes that Purchaser has no obligation, pursuant to
the "Special Payment Instructions," to transfer any Shares from the name(s) of
the registered holder(s) thereof if Purchaser does not accept for payment any of
the Shares so tendered.
<PAGE> 6
[ ] CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING THE SHARES THAT YOU OWN
HAVE BEEN LOST, DESTROYED OR STOLEN AND SEE INSTRUCTION 11.
Number of Shares represented by lost, destroyed or stolen certificates:
--------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
accepted for payment is to be issued in the name of a person other than
the undersigned or if certficates for Shares not tendered or not accepted
for payment are to be issued in the name of a person other than the
undersigned or if Shares tendered hereby and delivered by book-entry
transfer which are not accepted for payment are to be returned by credit
to an account maintained at the Book-Entry Transfer Facility other than
the account shown above.
Issue [ ] Check [ ] Certificates to:
Name:
--------------------------------------------------
(Please Print)
Address:
------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
(Include Zip Code)
---------------------------------------------------------
(Taxpayer Identification or
Social Security No.)
(See Substitute Form W-9 on Back Cover)
Credit Shares tendered by book-entry transfer that are not accepted for
payment to:
---------------------------------------------------------
(Account Number)
SPECIAL DELIVERY INSTRUCTIONS
IF THE CHECK FOR THE PURCHASE PRICE
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of shares
accepted for payment is to be sent to someone other than the undersigned
or to the undersigned at an address other than that shown above.
Mail [ ] Check [ ] Certificates to:
Name:
--------------------------------------------------
(Please Print)
Address:
------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
(Include Zip Code)
---------------------------------------------------------
(Taxpayer Identification or
Social Security No.)
(See Substitute Form W-9 on Back Cover)
<PAGE> 7
IMPORTANT:
STOCKHOLDERS SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S) OR AUTHORIED SIGNATORY)
DATE
- --------------------------------------------------------------------------------
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holders(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 following information
and see Instruction 5.)
Name(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print)
Capacity (Full Title):
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Daytime Telephone Number: ( )
- -------------------------------------------------------------------------
(Area Code)
Tax Identification or Social Security No.:
- --------------------------------------------------------------------
(See Substitute Form W-9 on Reverse Side)
GUARANTEE OF SIGNATURE(s)
(If Required -- See Instructions 1 and 5)
(Authorized Signature):
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
Name of Firm:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Daytime Telephone Number: ( )
- -------------------------------------------------------------------------
(Area Code)
Dated:
- --------------------------------------------------------------------------------
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) of Shares (which term, for purposes of this document, shall
include any participant in the Book-Entry Transfer Facility whose name appears
on a security position listing as the owner of Shares) tendered herewith, unless
such holder(s) has completed either the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" above, or (b)
if such Shares are tendered for the account of a firm which is a bank, broker,
dealer, credit union, savings association or other entity which is a member in
good standing of the Securities Transfer Association Medallion Program, the New
York Stock Exchange, Inc., Medallion Signature Program or the Stock Exchange
Medallion Program (each of the foregoing being referred to as an "Eligible
Institution"). In all other cases, all signatures on this Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instruction 5 of this Letter
of Transmittal.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed
by stockholders either if certificates are to be forwarded herewith or, unless
an Agent's Message is utilized, if tenders are to be made pursuant to the
procedure for tender by book-entry transfer set forth in Section 2 of the Offer
to Purchase. Certificates for all physically tendered Shares or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Shares into the Depositary's account at the Book-Entry Transfer Facility,
together with a properly completed and duly executed Letter of Transmittal (or a
facsimile hereof), with any required signature guarantees, or an Agent's Message
in connection with a book-entry transfer, and any other documents required by
this Letter of Transmittal, must be received by the Depositary at its address
set forth herein on or prior to the Expiration Date (as defined in Section 1 of
the Offer to Purchase). If certificates for Shares are forwarded to the
Depositary in multiple deliveries, a properly completed and duly executed Letter
of Transmittal must accompany each such delivery.
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 procedure 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 procedure set forth in Section 2 of the Offer to
Purchase. Pursuant to such procedure: (i) such tender must be made by or through
an Eligible Institution; (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by Purchaser, must
be received by the Depositary on or prior to the Expiration Date; and (iii) the
Share Certificates (or a Book-Entry Confirmation) representing all tendered
Shares, in proper form for transfer, in each case together with the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and any other documents required by this Letter of Transmittal,
must be received by the Depositary within three Nasdaq Stock Market trading days
after the date of execution of such Notice of Guaranteed Delivery. A "Nasdaq
Stock Market trading day" is any day in which the Nasdaq Stock Market, Inc.'s
Nasdaq SmallCap Market is open for business. If Share Certificates are forwarded
separately to the Depositary a properly completed and duly executed Letter of
Transmittal must accompany such delivery.
Tendering stockholders should use this Letter of Transmittal (and, if
necessary, the Notice of Guaranteed Delivery provided with the Offer to
Purchase). Stockholders will be able to tender (or withdraw) their Shares
pursuant to the Offer until 12:00 midnight, New York City time, Monday, November
22, 1999 (or such later date to which the Offer may be extended).
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH
<PAGE> 9
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 and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or a facsimile hereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE AND THE NUMBER OF SHARES TENDERED. If the space
provided herein under "Description of Shares Tendered" is inadequate, the
certificate numbers and/or the number of Shares evidenced by such Share
Certificates and any other required information should be listed on a separate
signed schedule attached hereto.
4. PARTIAL TENDER.(NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares evidenced by any Share Certificate
delivered to the Depositary herewith are to be tendered, fill in the number of
Shares which are to be tendered in the box entitled "Number of Shares Tendered."
In such cases, new certificates for the Shares that were evidenced by your old
Share Certificates, but which were not tendered by you, will be sent to you,
unless otherwise provided in the appropriate box on this Letter of Transmittal
entitled "Special Delivery Instructions", as soon as practicable after the
Expiration Date. All Shares represented by 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 with the name(s) as written on
the face of the certificate(s) evidencing such Shares without alteration,
enlargement or any change whatsoever.
If any Shares tendered hereby are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of 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 Purchaser of their authority to so 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 certificates or
separate stock powers are required unless payment is to be made to, or
certificates for Shares not tendered or not purchased are to be issued in the
name of, a person other than the registered holder(s). Signatures on such
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 Share Certificate(s) listed, the Share Certificate(s)
must be endorsed or accompanied by appropriate stock powers, in either case
signed exactly as the name(s) of the registered holder(s) appear on the
certificate(s). Signatures on such Share Certificates and stock powers must be
guaranteed by an Eligible Institution, unless the signature is that of an
Eligible Institution.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, Purchaser will pay any stock transfer taxes with respect to the purchase of
Shares pursuant to the Offer. If, however, payment of the Offer Price of any
Shares purchased is to be made to, or if certificate(s) evidencing Shares not
tendered or purchased are to be registered in the name of, any person other than
the registered owner(s), or if tendered Share Certificate(s) 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 owner(s) or such person) payable on account of the transfer to such
person will be deducted from the purchase price of such Shares unless
satisfactory evidence of the payment of such taxes, or an exemption therefrom,
is submitted.
<PAGE> 10
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the Offer
Price of any Shares tendered hereby is to be issued in the name of, and/or Share
Certificates for Shares not tendered or not purchased are to be issued or
returned to, a person other than the signer of this Letter of Transmittal or if
a check and/or such certificates are to be returned to a person other than the
person(s) signing this Letter of Transmittal or to an address other than that
shown in this Letter of Transmittal in the box entitled "Description of Shares
Tendered", the appropriate boxes on this Letter of Transmittal must be
completed. A stockholder who tenders by book-entry transfer may request that
Shares not accepted for payment be credited to such account maintained at the
Book-Entry Transfer Facility as such stockholder may designate under "Special
Payment Instructions." If no such instructions are given, such Shares not
accepted for payment will be returned by crediting the account designated above
under "Description of Shares Tendered."
8. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by
Purchaser in whole or in part at any time and from time to time in its sole
discretion, subject to the terms of the Agreement and Plan of Merger dated as of
October 19, 1999, among Telesciences, Inc., EDB 4tel Acquisition Corp. and EDB
Business Partner ASA.
9. 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"), generally the stockholder's social security or
federal employer identification number, and certain other information, 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. In addition, 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.
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, the stockholder must submit a Form W-8, 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 such 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.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
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 holders (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 holder
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
<PAGE> 11
additional instructions. In order for a nonresident alien or foreign entity to
qualify as exempt, such person must submit a completed Form W-8, "Certificate of
Foreign Status" signed under the penalties of perjury attesting to such exempt
status. Such forms may be obtained from the Depositary.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) 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 "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for additional
guidance on which number to report.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests
for assistance may be directed to the Information Agent at the address and
telephone numbers set forth below. Additional copies of the Offer to Purchase,
this Letter of Transmittal and the Notice of Guaranteed Delivery may also be
obtained from the Information Agent or from brokers, dealers, commercial banks
or trust companies.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary by checking the box immediately preceding special
payment/special delivery instructions and indicating the number of Shares lost.
The stockholder will then be instructed as to the steps that must be taken in
order to replace the certificate. This Letter of Transmittal and related
documents cannot be processed until the procedures for replacing lost or
destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER
WITH STOCK CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE NOTICE OF
GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO
PURCHASE).
<PAGE> 12
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
PAYER'S NAME: AMERICAN STOCK TRANSFER & TRUST COMPANY, AS DEPOSITARY
- -------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE ----------------------------
BOX AT RIGHT AND CERTIFY BY SIGNING AND Social Security Number
FORM W-9 DATING BELOW. or
----------------------------
Employee Identification Number
- -------------------------------------------------------------------------------------------------------
DEPARTMENT OF THE PART 2 -- CERTIFICATION -- Under penalties PART 3 --
TREASURY of perjury, I certify that:
INTERNAL REVENUE Awaiting TIN
SERVICE (1) The number shown on this form is my
correct TIN (or I am waiting for a number [ ]
to be issued to me) and
DEPOSITARY REQUEST
FOR TAXPAYER (2) I am not subject to backup withholding
IDENTIFICATION because (a) I am exempt from backup
NUMBER ("TIN") withholding, or (b) I have not been
notified by the Internal Revenue Service
("IRS") that I am subject to backup
withholding as a result of a failure to
report all interest or dividends, or (c)
the IRS has notified me that I am no longer
subject to backup withholding.
- -------------------------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been notified by the IRS
that you are currently subject to backup withholding because of under-reporting interest or dividends
on your tax return. However, if after being notified by the IRS that you were subject to backup
withholding you received another notification from the IRS that you are no longer subject to backup
withholding, do not cross out such Item (2).
SIGNATURE
------------------------------------------------------------------------------------------------------ DATE
--------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
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.
<PAGE> 13
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 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 by the time of payment, 31%
of all reportable payments made to me will be withheld but that such amounts
will be refunded to me if I then provide a taxpayer identification number within
sixty (60) days.
SIGNATURE
- ------------------------------------------------------ DATE
- ------------------------
The Information Agent for the Offer is:
Georgeson Shareholder Communications, Inc.
17 State Street
10th Floor
New York, New York 10004
Bankers and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF SHARES OF COMMON STOCK OF
TELESCIENCES, INC.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or a form substantially equivalent
hereto, must be used to accept the Offer (as defined below) (i) if certificates
("Share Certificates") evidencing shares of common stock, par value $0.04 per
share (the "Common Stock"; all of the shares of Common Stock being hereinafter
collectively referred to as the "Shares"), of Telesciences, Inc. are not
immediately available, (ii) if Share Certificates and all other required
documents cannot be delivered to American Stock Transfer & Trust Company as
Depositary (the "Depositary") on or prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase (as defined below)) or (iii) if the procedure
for delivery by book-entry transfer cannot be completed on a timely basis. This
Notice of Guaranteed Delivery may be delivered by hand (including delivery by
courier service) or mail or transmitted by facsimile transmission, telex or
telegram to the Depositary. See Section 2 of the Offer to Purchase.
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By Mail, Overnight Courier or Hand Delivery:
40 Wall Street, 46th Floor
New York, New York 10005
Attention: Reorganization Department
By Facsimile Transmission
(for eligible institutions only):
(718) 234-5001
To Confirm facsimile by telephone only:
(212) 936-5100
(718) 921-8200
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION,
TELEX OR TELEGRAM 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 NOTICE OF GUARANTEED DELIVERY
MUST COMMUNICATE THE GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF
TRANSMITTAL AND SHARE CERTIFICATES TO THE DEPOSITARY WITHIN THE TIME PERIOD
SHOWN HEREIN. FAILURE TO DO SO COULD RESULT IN FINANCIAL LOSS TO THE ELIGIBLE
INSTITUTION.
<PAGE> 2
LADIES AND GENTLEMEN:
The undersigned hereby tenders to EDB 4tel Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of EDB BUSINESS PARTNER ASA, a Norwegian
limited company, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated October 25, 1999 (the "Offer to Purchase"), and the
related Letter of Transmittal (which, together with any amendments or
supplements thereto from time to time, constitute the "Offer"), receipt of each
of which is hereby acknowledged, the number of Shares specified below pursuant
to the guaranteed delivery procedures described in Section 2 of the Offer to
Purchase.
Number of Shares:
- --------------------------------------------------------------------------------
Certificate Nos. (If Available):
- ------------------------------------------------------------------------------
[ ] Check if Shares will be delivered by book-entry transfer
Name of Tendering Institution:
----------------------------------------------------------------------------
Account No.:
------------------------------------------------------------------------
Dated:
- ----------------------------- , 1999
Signature(s) of Holder(s):
- ------------------------------------------------------
- ------------------------------------------------------
Name(s) of Holders:
- ------------------------------------------------------
- ------------------------------------------------------
Please Type or Print Address:
- --------------------------------------------------------------------------------
Zip Code
Area Code and Telephone No.:
- ------------------------------------------------------------------------------
THE GUARANTEE ON PAGE 3 MUST BE COMPLETED (NOT TO BE USED FOR SIGNATURE
GUARANTEES).
2
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.
or which is a commercial bank or trust company having an office or correspondent
in the United States that is a member in good standing of the Securities
Transfer Association Medallion Program, the New York Stock Exchange, Inc.,
Medallion Signature Program or the Stock Exchange Medallion Program, guarantees
to deliver to the Depositary, at its address set forth above, Share Certificates
evidencing the Shares tendered hereby, in proper form for transfer, or
confirmation of book-entry transfer of such Shares into the Depositary's account
at The Depository Trust Company, in each case with delivery of (a) a Letter of
Transmittal (or facsimile thereof) properly completed and duly executed,
together with any required signature guarantees, or (b) an Agent's Message (as
defined in the Offer to Purchase) in the case of a book-entry transfer, and any
other required documents, all within three Nasdaq Stock Market trading days
after the date of execution of this Notice of Guaranteed Delivery. A "Nasdaq
Stock Market trading day" is any day on which the Nasdaq Stock Market, Inc.'s
Nasdaq SmallCap Market is open for business.
PLEASE TYPE OR PRINT:
Name of Firm:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
Zip Code
Area Code and Telephone No.:
Name:
- ------------------------------------------ Title:
- ------------------------------------------
Authorized Signature:
- --------------------------------------------------------------------------------
Dated:
- --------------------------------------------------------------------------------
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TELESCIENCES, INC.
AT
$8.79 NET PER SHARE
BY
EDB 4TEL ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
EDB BUSINESS PARTNER ASA
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, NOVEMBER 22, 1999,
UNLESS THE OFFER IS EXTENDED.
October 25, 1999
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been appointed by EDB 4tel Acquisition Corp., a Delaware
corporation (the "Purchaser") and a wholly-owned subsidiary of EDB Business
Partner ASA, a Norwegian limited company ("Parent"), to act as Information Agent
in connection with Purchaser's offer to purchase all outstanding shares of
common stock, par value $0.04 per share (all of the shares of common stock being
hereinafter collectively referred to as the "Shares"), of Telesciences, Inc., a
Delaware corporation (the "Company"), at a price of $8.79 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in Purchaser's Offer to Purchase, dated October 25, 1999
(the "Offer to Purchase"), and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto from time to time,
constitute the "Offer") enclosed herewith. Please furnish copies of the enclosed
materials to those of your clients for whose accounts you hold Shares registered
in your name or in the name of your nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES WHICH WHEN ADDED TO THE SHARES THEN BENEFICIALLY OWNED BY PARENT
REPRESENT AT LEAST A MAJORITY OF THE TOTAL NUMBER OF THEN OUTSTANDING SHARES ON
THE DATE SHARES ARE ACCEPTED FOR PAYMENT.
Enclosed for your information and use are copies of the following
documents:
1. Offer to Purchase, dated October 25, 1999;
2. Letter of Transmittal to be used by holders of Shares in accepting
the Offer and tendering Shares;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
certificates evidencing Shares and all other required documents are not
immediately available or cannot be delivered to American Stock Transfer &
Trust Company (the "Depositary") by the Expiration Date (as defined in the
Offer to Purchase) or if the procedure for book-entry transfer cannot be
completed by the Expiration Date;
4. 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; and
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, NOVEMBER 22, 1999, UNLESS THE
OFFER IS EXTENDED.
<PAGE> 2
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
evidencing such Shares (the "Share Certificates") or, timely 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), (ii) a
Letter of Transmittal (or facsimile thereof) properly completed, with the
signatures guaranteed thereon, if required, and duly executed or an Agent's
Message (as defined in the Offer to Purchase) in connection with a book-entry
transfer, and (iii) any other required documents in accordance with the
instructions contained in the Letter of Transmittal. Accordingly, payment may
not be made to all tendering stockholders at the same time depending on when
Share Certificates for, or confirmations of book-entry transfer of, such Shares
are actually received by the Depositary.
If a holder of Shares wishes to tender Shares, but such stockholders' Share
Certificates are not immediately available or such stockholder cannot deliver
the Share Certificates and all other required documents, or cannot complete the
procedure for book-entry transfer, prior to the expiration of the Offer, a
tender of Shares may be effected by following the guaranteed delivery procedure
described in Section 2 of the Offer to Purchase.
Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Depositary and the Information Agent as described
in the Offer) in connection with the solicitation of tenders of Shares pursuant
to the Offer. However, Purchaser will reimburse you for customary mailing and
handling expenses incurred by you in forwarding any of the enclosed materials to
your clients. Purchaser will pay or cause to be paid any stock transfer taxes
payable with respect to the transfer of 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, or requests for
additional copies of the enclosed materials, should be addressed to us at the
address and telephone number set forth on the back cover page of the Offer to
Purchase.
Very truly yours,
GEORGESON SHAREHOLDER
COMMUNICATIONS INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL AUTHORIZE YOU
OR ANY OTHER PERSON TO ACT ON BEHALF OF OR AS THE AGENT OF PURCHASER, PARENT,
THE COMPANY, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY
OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TELESCIENCES, INC.
AT $8.79 NET PER SHARE
BY
EDB 4TEL ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY
OF
EDB BUSINESS PARTNER ASA
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY,
NOVEMBER 22, 1999, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are an Offer to Purchase, dated October 25,
1999 (the "Offer to Purchase"), and a related Letter of Transmittal (which,
together with any amendments or supplements thereto from time to time,
constitute the "Offer") and other materials in connection with the offer to
purchase by EDB 4tel Acquisition Corp., a Delaware corporation (the "Purchaser")
and a wholly-owned subsidiary of EDB Business Partner ASA, a Norwegian limited
company ("Parent"), all outstanding shares of common stock, par value $0.04 per
share (all of the shares of common stock being hereinafter collectively referred
to as the "Shares"), of Telesciences, Inc., a Delaware corporation (the
"Company"), at the price of $8.79 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer.
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 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 on your behalf 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 offer price is $8.79 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 being made for all of the outstanding Shares.
3. The Purchaser, the Parent and the Company have entered into an
Agreement and Plan of Merger dated October 19, 1999 (the "Merger
Agreement"). The Board of Directors of the Company has approved the terms
of the Merger Agreement, including the Offer and the Merger (as defined in
the Offer to Purchase), and has determined that the terms of the Offer and
the Merger are advisable, fair to, and in the best interests of
stockholders of the Company, and recommends that the stockholders of the
Company accept the Offer and tender their Shares pursuant to the Offer.
4. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Monday, November 22, 1999, unless the Offer is extended.
<PAGE> 2
5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the Offer
that number of shares which when added to the Shares then beneficially
owned by Parent represent at least a majority of the total number of then
outstanding Shares on the date Shares are accepted for payment. The Offer
is also subject to the conditions set forth in the Offer to Purchase (see
the Introduction Section and Sections 12 and 14 of the Offer to Purchase).
6. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes with respect to the purchase of
Shares by Purchaser pursuant to the Offer. However, federal income tax
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 9 of Letter of Transmittal.
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
2 of the Offer to Purchase, (b) the Letter of Transmittal (or a manually
signed facsimile thereof), properly completed and duly executed, together
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 YOUR SHARES, PLEASE SO INSTRUCT
US BY COMPLETING, EXECUTING AND RETURNING TO US THE INSTRUCTION FORM CONTAINED
IN THIS LETTER. AN ENVELOPE IN WHICH 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 IN YOUR INSTRUCTIONS. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR
BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made only by the Offer to Purchase and the related Letter of
Transmittal and is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the Offer or the
acceptance thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. However, 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 holders of Shares in such jurisdiction. In those
jurisdictions where the securities laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
Purchaser by or one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TELESCIENCES, INC.
BY
EDB 4TEL ACQUISITION CORP.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated October 25, 1999, and the related Letter of Transmittal
(which, together with any amendments or supplements thereto from time to time,
constitute the "Offer"), in connection with the offer to purchase by EDB 4tel
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of EDB
Business Partner ASA, a Norwegian limited company, all outstanding shares of
common stock, par value $0.04 per share (all of the shares of common stock being
hereinafter collectively referred to as the "Shares"), of Telesciences, Inc., a
Delaware corporation, at the price of $8.79 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions set
forth in the Offer. This will instruct you to tender the number of Shares
indicated below (or, if no number is indicated below, all Shares) that 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*:
- -------------------------------------------------------------------------
Date: ____________________ , 1999
Signature(s):
- --------------------------------------------------------------------------------
(SIGN HERE)
- --------------------------------------------------------------------------------
(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> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<C> <S> <C>
<CAPTION>
- -----------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- -----------------------------------------------------------
1. An individual's account. The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, any
one of the
individuals(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 minor The minor(2)
(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
guardian or committee for a incompetent person(3)
designated ward, minor, or
incompetent person
7. a. The usual revocable savings The grantor-
trust account (grantor is trustee(1)
also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or valid
trust under State law
8. Sole proprietorship account The owner(4)
- -----------------------------------------------------------
</TABLE>
<TABLE>
<C> <S> <C>
<CAPTION>
- -----------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- -----------------------------------------------------------
<C> <S> <C>
9. A valid trust, estate, or The legal entity (Do
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 account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held in The partnership
the name of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district, or prison) that
receives agricultural 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> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't 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 and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
Section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding 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 U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally 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 non-resident aliens.
- Payments on tax-free covenant bonds under Section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS
BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under Sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividends, 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 correct 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) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. -- If you fail to
include any portion of an includable payment for interest, dividends, or
patrionage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE STATEMENTS WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- If you falsify
certifications or affirmations, you are subject to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
EXHIBIT 99(a)(7)
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
25, 1999, AND THE RELATED LETTER OF TRANSMITTAL, AND ANY AMENDMENTS OR
SUPPLEMENTS THERETO, AND IS NOT BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM
OR ON BEHALF OF) HOLDERS OF SHARES IN ANY JURISDICTION IN WHICH THE MAKING OF
THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF
SUCH JURISDICTION. IN THOSE JURISDICTIONS WHERE 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 EDB 4TEL ACQUISITION CORP. BY ONE OR
MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF SUCH JURISDICTION.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TELESCIENCES, INC.
AT
$8.79 NET PER SHARE
BY
EDB 4TEL ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
EDB BUSINESS PARTNER ASA
EDB 4tel Acquisition Corp., a Delaware corporation ("Purchaser") and a
wholly owned subsidiary of EDB Business Partner ASA, a Norwegian limited company
("EDB"), is offering to purchase all outstanding shares of common stock, $.04
par value (the "Shares"), of Telesciences, Inc., a Delaware corporation (the
"Company"), at $8.79 per Share (the "Offer Price"), net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated October 25, 1999, and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, NOVEMBER 22, 1999, UNLESS EXTENDED. SHARES WHICH ARE TENDERED
PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
The Offer is conditioned upon, among other things, the satisfaction or
waiver of certain conditions to the obligations of Purchaser, EDB and the
Company, including there being validly tendered and not withdrawn prior to the
expiration of the Offer, such number of Shares that would constitute at least a
majority of the then outstanding Shares (the "Minimum Condition"). The Offer is
not conditioned on obtaining financing.
The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of October 19, 1999 (the "Merger Agreement"), among EDB, Purchaser and
the Company pursuant to which, following the
<PAGE> 2
consummation of the Offer, Purchaser will be merged with and into the Company
and the Company will become a wholly owned subsidiary of EDB (the "Merger"). On
the effective date of the Merger, each outstanding Share (except for Shares held
by Purchaser, EDB or their subsidiaries or by stockholders exercising their
appraisal rights under the Delaware General Corporation Law) will be converted
into the right to receive the Offer Price net in cash (or any greater amount per
Share paid pursuant to the Offer), without interest. EDB and Purchaser have
entered into shareholder agreements (the "Shareholder Agreements") with two
stockholders of the Company (the "Agreeing Stockholders") holding in the
aggregate 198,597 Shares, representing approximately 19% of the issued and
outstanding Shares. Pursuant to these agreements, each Agreeing Stockholder has
agreed, provided the Merger Agreement has not been terminated, or the Purchaser
has not notified the Agreeing Stockholder of its intent to continue the Offer or
a revised Offer within 2 business days after termination of the Merger
Agreement, to (i) tender to Purchaser all Shares beneficially owned by such
Agreeing Stockholder, (ii) vote all Shares in favor of approval of the Merger
Agreement and the transactions contemplated thereby and (iii) oppose any
Alternative Acquisition (as defined in the Merger Agreement) and to vote all
Shares now or hereafter owned by such Stockholder, or execute a consent or
proxy, against any Alternative Acquisition.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MERGER AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER,
AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE AT A PRICE AND ON
TERMS THAT ARE ADVISABLE AND FAIR TO, AND IN THE BEST INTERESTS OF, STOCKHOLDERS
OF THE COMPANY AND RESOLVED TO RECOMMEND THAT STOCKHOLDERS OF THE COMPANY ACCEPT
THE OFFER AND TENDER THEIR SHARES.
For purposes of the Offer, Purchaser shall be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered to Purchaser and not
property withdrawn when, as and if Purchaser gives oral or written notice to
American Stock Transfer & Trust Company, as Depositary (the "Depositary") of its
acceptance of such Shares for payment. Upon the terms and subject to the
conditions of the Offer, payment for Shares accepted for payment 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
payments from Purchaser and transmitting such payments to tendering stockholders
whose shares have been accepted for payment. In all cases, payment for Shares
purchased pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates for such Shares (or of a confirmation of a
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility (as defined in Section 2 of the Offer to
Purchase)), (ii) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) with any required guaranteed signature or, in the case of
a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase)
and (iii) any other documents required by the Letter of Transmittal. For a
description of the procedure for tendering Shares pursuant to the Offer, see
Section 2 of the Offer to Purchase. Accordingly, payment may be made to
tendering stockholders at different times if delivery of the Shares and other
required documents occur at different times. Under no circumstances will
interest be paid by Purchaser on the consideration paid for Shares pursuant to
the Offer, regardless of any delay in making such payment.
The term "Expiration Date" means 12:00 midnight, New York City time, on
Monday, November 22, 1999, unless and until Purchaser (subject to the Merger
Agreement) extends the period of time during which the Offer is open, in which
event the term "Expiration Date" shall mean the latest time and date on which
the Offer, as so extended by Purchaser, shall expire subject to the terms of the
Merger Agreement and to applicable rules and regulations of the Securities and
Exchange Commission. Provided that the Merger Agreement shall not have been
terminated in accordance with its terms, if the conditions set forth in Annex A
of the Merger Agreement are not satisfied or, to the extent permitted thereby,
waived by Purchaser as of the date the Offer would otherwise have expired, then,
except to the extent that such conditions are incapable of being satisfied,
Purchaser will extend the Offer from time to time until the earlier of the
consummation of the Offer or the date which is twenty (20) business days from
the original Expiration Date. Pursuant to the terms of the Merger Agreement,
Purchaser shall be entitled to extend the Offer one or more times beyond the
Expiration Date for an aggregate period of up to ten (10) business days if on
the Expiration Date, the conditions to the Offer set forth in Annex A of the
Merger Agreement have been satisfied or waived, but
2
<PAGE> 3
there shall not have been tendered that number of Shares which would equal at
least ninety percent (90%) of the issued and then outstanding Shares. Any such
extension will be followed by a public announcement thereof no later than 9:00
a.m., New York City Time, on the next business day after the previously
scheduled expiration of the Offer. During any such extension, all Shares
previously tendered and not withdrawn will remain tendered, subject to the right
of a tendering stockholder to withdraw such stockholder's Shares.
Pursuant to the Merger Agreement, no change or waiver may be made,
without the prior written consent of the Company, except as permitted by the
Merger Agreement, that (i) decreases the Offer Price, (ii) decreases the number
of Shares to be purchased in the Offer, (iii) changes the form of consideration
payable in the Offer, (iv) adds to or changes the conditions to the Offer set
forth in Section 15 of the Offer to Purchase, (v) waives the Minimum Condition
or (vi) changes any other terms or conditions of the Offer.
Except as otherwise provided below, tenders of Shares made pursuant to
the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time on or prior to the Expiration Date and, unless theretofore
accepted for payment pursuant to the Offer, may also be withdrawn at any time
after December 23, 1999. For a withdrawal to be effective, a written, telex,
telegraphic or facsimile transmission notice of withdrawal must be timely
received by the Depositary at its address set forth on the back cover of the
Offer to Purchase and must specify the name of the person having tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn, if different from the name of
the person who tendered the Shares. If Certificates for 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 and
otherwise comply with the Book-Entry Transfer Facility's procedures. Withdrawals
of Shares may not be rescinded, and Shares properly withdrawn will thereafter be
deemed not validly tendered for purposes of the Offer. However, withdrawn Shares
may be retendered at any time prior to the Expiration Date by following one of
the procedures described in Section 2 of the Offer to Purchase. All questions as
to the form and validity (including time of receipt) of notices of withdrawal
will be determined by Purchaser, in its sole discretion, whose determination
will be final and binding on all parties.
The Offer to Purchase and the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and furnished to
brokers, dealers, 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.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated herein by reference.
THE OFFER TO PURCHASE AND LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER.
Requests for copies of the Offer to Purchase, the Letter of Transmittal
and all other tender offer materials may be directed to the Information Agent,
as set forth below, and copies will be furnished promptly at Purchaser's
expense. Questions or requests for assistance may be directed to the Information
Agent.
3
<PAGE> 4
THE INFORMATION AGENT FOR THE OFFER IS:
GEORGESON
SHAREHOLDER
COMMUNICATIONS INC.
17 State Street, 10th Floor
New York, New York 10004
Bankers and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
October 25, 1999
4
<PAGE> 1
Exhibit 99(a)(8)
Telesciences, Inc
USA
Phone 609 866 1000
Fax 609 866 0185
Contact: Fran Penfold Chris Fullam
Telesciences, Inc Edelman Financial
(856) 866-1000 (212) 704-4532
TELESCIENCES, INC ENTERS INTO DEFINITIVE MERGER
AGREEMENT WITH EDB BUSINESS PARTNER ASA
- PRECEDING CASH TENDER OFFER VALUED AT $13.65 MILLION-
MOUNT LAUREL, NJ, OCTOBER 19, 1999 - Telesciences, Inc (Nasdaq: TLSDC) today
announced that it has signed a definitive merger agreement, valued at $13.65
million with the Norwegian telecom company EDB BUSINESS PARTNER ASA.
The transaction will take the form of a cash tender offer by EDB for all
outstanding shares of Telesciences at a purchase price of $8.79 per share (after
adjustment for the one-for-four reverse stock split effected on October 15,
1999) and will commence within five business days. The full $13.65 million is to
be placed into escrow this week.
The tender offer is scheduled to expire twenty business days after commencement,
unless extended, and is subject to customary terms and conditions. The Board of
Directors of both companies have approved the transaction. The tender offer for
shares of Telesciences' common stock will be made only through definitive tender
offer documents, which will be filed with the Securities and Exchange Commission
and mailed to the stockholders of Telesciences.
Pursuant to the merger agreement with EDB, all outstanding shares of
Telesciences not purchased in the initial tender offer (other than shares held
by EDB or its affiliates or dissenting stockholders) will be converted into the
right to receive $8.79 per share in cash.
EDB Business Partner ASA is the second largest IT-group listed on the Oslo Stock
Exchange, and one of Norway's largest providers of IT services. The company has
approximate revenues of $360 million, pre-tax profits of approximately $13
million, and 2,200 employees.
<PAGE> 2
EDB 4tel, a division of EDB Business Partner ASA, is one of Europe's largest
companies specializing exclusively in IT solutions for the telecom industry,
offering state of the art software solutions, system integration,
implementation, support and consultancy services.
Headquartered in Oslo, with development offices in Norway, Ireland, and Paris,
EDB 4tel has more than 800 employees. Originating in the R&D division of
Telenor, Norway's incumbent operator, it was spun off as a separate business
unit in 1998, before merging with one of Norway's leading IT groups - EDB
Business Partner ASA - and changing name to EDB 4tel.
Andrew Maunder, President and CEO of Telesciences said "We consider this a great
deal for the shareholders, employees and customers of Telesciences. EDB is a
proven provider of IT solutions to the telecommunications industry, and has
products and services that complement our own. We have been reviewing our
strategic options for some time and have now found a partner and owner with
experience in our technologies and market. A lot of the work we have done in
streamlining the business will be very beneficial to them. We believe this
transaction represents good value to our shareholders."
Serving telecommunications and information service providers worldwide for 30
years, Telesciences, Inc is an ISO 9001 Certified company. Telesciences is
recognized as a leader in the provision of real-time billing data collection and
processing, fraud management and traffic management systems. Additional
information on Telesciences can be found on its home page at
http://www.telesciences.com.
THIS RELEASE CONTAINS FORWARD LOOKING STATEMENTS THAT ARE SUBJECT TO RISKS AND
UNCERTAINTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPACT OF COMPETITIVE PRODUCTS
AND PRICING, THE VOLATILITY OF INTERNATIONAL MARKETS, PRODUCT DEMAND AND MARKET
ACCEPTANCE, NEW PRODUCT DEVELOPMENT, RELIANCE ON KEY STRATEGIC ALLIANCES,
AVAILABILITY OF RAW MATERIALS, THE REGULATORY ENVIRONMENT, FLUCTUATIONS IN
OPERATING RESULTS AND OTHER RISKS DETAILED FROM TIME TO TIME IN THE COMPANY'S
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
####
<PAGE> 1
Exhibit 99(c)(1)
BROOKS, HOUGHTON & COMPANY, INC.
444 MADISON AVENUE o 25TH FLOOR o NEW YORK, NY 10022 o
TELEPHONE: 212-753-1991 o FACSIMILE: 212-753-7730
- --------------------------------------------------------------------------------
EMAIL: [email protected]
JOHN Y. FREEMAN,
EXECUTIVE DIRECTOR
CONFIDENTIALITY LETTER
August 26, 1999
EDB 4tel AS
P.O. Box 6701, St. Olavs plass
N-0130 Oslo
Norway
Attention: Asbjorn Eide, CEO
Re: Possible investment by EDB 4tel AS in the equity of Telesciences, Inc. (the
"Transaction")
Gentlemen:
You have expressed an interest in a possible transaction (the "Transaction")
described above involving Telesciences, Inc. (the "Company") and have requested
certain information concerning the Company from the Company and Brooks, Houghton
& Company, Inc.("BHC"). As a condition to furnishing you with such information,
including certain non-public confidential information, the Company is requiring
that you agree, as set forth below, to treat confidentially such information and
any other information which the Company, BHC, or any of the Company's
representatives or agents furnish to you (collectively, the "Evaluation
Material").
You agree that the Evaluation Material will be used only in connection with the
Transaction, and that all Evaluation Material will be kept confidential by you
and your agents and employees, and shall not, except as hereinafter provided,
without the prior written consent of the Company, be disclosed by you or your
agents or employees in any manner whatsoever, and shall not be used by you or
your agents or employees other than for the purpose of evaluating the
Transaction. Moreover, you further agree to transmit the Evaluation Material
only to your directors, agents, and employees who need to know such information
for the purpose of evaluating the Transaction and who shall (i) be advised by
you of this agreement and (ii) agree with you to be bound by the provisions
hereof.
Without the prior written consent of the Company, you, your directors, agents
and employees who have knowledge of the Transaction will not disclose to any
person or entity who is not a direct participant in the Transaction any of the
terms, conditions or other facts with respect to the possible Transaction,
including without limitation the facts that the Company is considering a
possible Transaction or may be discussing a possible Transaction with you or
other parties.
In the event you are requested or required (by oral questions, interrogatories,
requests for information or documents subpoena, Civil Investigative Demand or
similar process) to disclose any of the Evaluation Material, it is agreed that
you will provide the Company with prompt notice of such request(s) so that the
Company may seek an appropriate protective order and/or waive your compliance
with the provisions of this Agreement. It is further agreed that, if in the
absence of a protective order or the receipt of a waiver hereunder you are
nonetheless, in the opinion of your counsel, compelled to disclose any of the
Evaluation Material to any tribunal or else stand liable for contempt or suffer
other censure or penalty, you may disclose such Evaluation Material to such
tribunal without liability hereunder.
In addition, you hereby acknowledge that you are aware (and, if applicable, that
your directors, officers, employees and representatives who are apprised of this
matter have been advised) that the United States
<PAGE> 2
Telesciences Confidentiality Agreement, Page 2
- --------------------------------------------------------------------------------
securities laws prohibit any person who has material non-public information
about a company from purchasing or selling securities of such company, and you
agree not to trade in the Company's securities while in possession of material
non-public information as a result of the information included in the Evaluation
Material or otherwise. You further agree that you will not acquire, directly or
indirectly, in any manner, or propose to acquire in any manner (including by
making any unilateral offer or proposal), for a period of two years from the
date of this Agreement, any securities or property of the Company, except
pursuant to a Transaction approved by the Company's Board of Directors. This
will not be valid if shareholders represented in the board of directors
initiates such a transaction.
Without the Company's prior written consent, you will not, for a period of two
years from the date hereof, directly or indirectly solicit for employment any
person who is now employed by the Company who becomes known to you as a result
of this investigation of the Company.
In the event that the Transaction is not effected after you have been furnished
with Evaluation Material, you will promptly upon the request of the Company
deliver to the Company the Evaluation Material, without retaining any copy
thereof.
The term "Evaluation Material" does not include information which (i) becomes or
has been generally available to the public other than as a disclosure by you or
your representative, (ii) was available to you on a non-confidential basis prior
to its disclosure to you by the Company or its representatives, or (iii) becomes
available to you on a non-confidential basis from a source other than the
Company or its representatives, provided however, that such source is not bound
by a confidentiality agreement with the Company or its representatives.
Although you understand that the Company and BHC have endeavored to include in
the Evaluation Material information believed to be relevant or the purpose of
your investigation, you further understand that, except as may otherwise be
agreed in writing, the Company and BHC do not make any representation or
warranty as to the accuracy or completeness of the Evaluation Material. You
agree that neither the Company, BHC nor any of the Company's representatives
shall have any liability to you or any of your representatives resulting from
the use of the Evaluation Material by you or such representatives.
You understand that in the event of a breach by you of this Agreement the
Company shall be entitled to specific performance as a remedy for such breach,
in addition to the remedies it may have at law.
You understand and agree that this Agreement is being entered into on behalf of
the Company and for its benefit, and that, accordingly the Company may enforce
this agreement as if it were a party hereto.
If you are in agreement with the foregoing, please sign and return one copy of
this letter which will constitute our agreement with respect to the subject
matter of this letter.
Very truly yours,
/s/ John Y. Freeman
- -----------------------------------
Brooks, Houghton & Company, Inc.
Confirmed and Agreed to as of this date:
EDB 4tel AS
By: /s/ Asbjorn Eide Title: CEO
------------------------------- -------------------------------
<PAGE> 1
Exhibit 99(c)(2)
AGREEMENT AND PLAN OF MERGER
dated as of October 19, 1999
by and among
TELESCIENCES, INC.,
EDB BUSINESS PARTNER ASA
and
EDB 4TEL ACQUISITION CORP.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I THE OFFER..............................................................................................1
1.01 The Offer....................................................................................................1
1.02 Company Actions; Rights.....................................................................................3
1.03 Board of Directors and Committees; Section 14(f)............................................................4
ARTICLE II THE MERGER............................................................................................6
2.01 The Merger..................................................................................................6
2.02 Effective Time..............................................................................................6
2.03 Effects of the Merger.......................................................................................6
2.04 Certificate of Incorporation and By-Laws....................................................................6
2.05 Directors...................................................................................................6
2.06 Officers....................................................................................................6
2.07 Conversion of Shares........................................................................................6
2.08 Employee Stock Options......................................................................................7
2.09 Conversion of Purchaser Common Stock........................................................................7
2.10 Stockholders' Meeting.......................................................................................7
2.11 Merger Without Meeting of Stockholders......................................................................8
2.12 Closing.....................................................................................................8
ARTICLE III DISSENTING SHARES; EXCHANGE OF SHARES................................................................8
3.01 Dissenting Shares...........................................................................................8
3.02 Exchange of Shares..........................................................................................9
3.03. Lost Certificates.........................................................................................10
3.04. Investment of Funds.......................................................................................10
3.05. No Liability..............................................................................................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................11
4.01 Organization...............................................................................................11
4.02 Capitalization; Subsidiaries...............................................................................11
4.03 Authority Relative to this Agreement; Compliance with Laws and Court Orders................................12
4.04 Absence of Certain Changes.................................................................................12
4.05 No Undisclosed Liabilities.................................................................................13
4.06 Reports....................................................................................................13
4.07 Offer Documents; Proxy Statements; Other Information.......................................................14
4.08 Consents and Approvals; No Violation.......................................................................15
4.09 Litigation, etc............................................................................................15
4.10 Title to Properties; Encumbrances..........................................................................15
4.11 Benefit Plans..............................................................................................16
4.12 Compliance With Agreements; Law............................................................................17
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
<C> <C>
4.13 Patents, Trademarks, Trade Names, etc......................................................................18
4.14 Taxes......................................................................................................18
4.15 Antitakeover Statutes......................................................................................19
ARTICLE V REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER.................................................................................19
5.01 Organization and Good Standing.............................................................................19
5.02 Authority Relative to this Agreement.......................................................................19
5.03 Consents and Approvals; No Violation.......................................................................20
5.04 Offer Documents; Proxy Statement...........................................................................20
5.05 Ownership of Shares .......................................................................................21
ARTICLE VI COVENANTS............................................................................................21
6.01 Conduct of Business of the Company.........................................................................21
6.02 No Solicitation, etc.......................................................................................22
6.03 Access to Information......................................................................................23
6.04 Best Efforts...............................................................................................24
6.05 Public Announcements.......................................................................................24
6.06 Indemnification; Insurance.................................................................................25
6.07 Employment Contracts, Benefits, etc........................................................................26
6.08 Substitution of Letter of Credit...........................................................................26
6.09 Purchase of Shares.........................................................................................26
6.10. Further Assurances........................................................................................26
6.11 Notification of Certain Matters............................................................................26
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER............................................................27
7.01 Conditions to Each Party's Obligation to Effect the Merger.................................................27
ARTICLE VIII TERMINATION; AMENDMENTS; WAIVER....................................................................28
8.01 Termination................................................................................................28
8.02 Effect of Termination......................................................................................30
8.03 Amendment..................................................................................................30
8.04 Extension; Waiver..........................................................................................30
ARTICLE IX MISCELLANEOUS........................................................................................31
9.01 Survival of Representations and Warranties.................................................................31
9.02 Brokerage Fees and Commissions.............................................................................31
9.03 Entire Agreement; Assignment...............................................................................31
9.04 Validity...................................................................................................31
9.05 Notices....................................................................................................31
9.06 Governing Law..............................................................................................33
9.07 Descriptive Headings.......................................................................................33
9.08 Counterparts...............................................................................................33
9.09 Expenses...................................................................................................33
9.10 Third Party Beneficiaries..................................................................................33
9.11 Certain Definitions........................................................................................33
9.12 Consent to Jurisdiction....................................................................................34
9.13 Construction; Interpretation...............................................................................34
Annex A - Conditions of the Offer
Annex B - Escrow Agreement
Annex C - Calculation of Deposit
</TABLE>
<PAGE> 4
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of October 19, 1999 (the
"Agreement"), by and among Telesciences, Inc., a Delaware corporation (the
"Company"), EDB Business Partner ASA, a Norwegian public limited company
("Parent"), and EDB 4Tel Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of Parent ("Purchaser").
W I T N E S S E T H :
WHEREAS, the Boards of Directors of Parent, Purchaser and the Company
deem it advisable and in the best interests of the respective stockholders of
such corporations to effect the merger of the Purchaser with and into the
Company (the "Merger") upon the terms and subject to the conditions set forth
herein; and
WHEREAS, the respective Boards of Directors of Parent, Purchaser and
the Company have approved the acquisition of the Company by Parent and, in
furtherance of such acquisition, Parent proposes to cause Purchaser to make a
cash tender offer for all of the issued and outstanding shares of Common Stock,
par value $.04 per share (the "Common Stock"), of the Company, on the terms
specified herein and the Board of Directors of the Company has approved the
tender offer and intends to recommend that it be accepted by the stockholders
of the Company.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements hereinafter contained and
intending to be bound hereby, the parties hereto agree as follows:
1
<PAGE> 5
ARTICLE I
THE OFFER
SECTION 1.01 The Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Section 8.01 and nothing shall have
occurred that would render any of the conditions set forth in Annex A
hereto incapable of being satisfied, as promptly as practicable (but
in no event later that five (5) business days after the date of this
Agreement), Purchaser shall commence (within the meaning of Rule 14d-2
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) an offer to purchase for cash (the "Offer") any and all of the
issued and outstanding shares of Common Stock (the "Shares") at a
price of $8.79 per Share, net to the seller in cash, without interest.
For purposes of this Agreement, the term "Transaction Consideration"
shall mean $8.79 per Share in cash or any higher price as shall be
paid in respect of the Shares in the Offer. The obligations of
Purchaser to commence the Offer and to accept for payment and to pay
for any Shares tendered shall be subject to only the conditions set
forth in Annex A hereto (any or all of which may, subject to the
provisions hereof, be waived by Parent or Purchaser, subject to
applicable law). Without the prior written consent of the Company,
Purchaser shall not (i) decrease the Transaction Consideration with
respect to any Shares, (ii) decrease the number of Shares to be
purchased in the Offer, (iii) change the form of consideration payable
in the Offer, (iv) add to or change the conditions to the Offer set
forth in Annex A, (v) waive the Minimum Condition (as defined in Annex
A) or (vi) make any other change in the terms or conditions of the
Offer. Parent and Purchaser expressly reserve the right to waive any
condition (other than the Minimum Condition) specified in Annex A or
to increase the Transaction Consideration. Provided that this
Agreement shall not have been terminated in accordance with Article
VIII hereof, if the conditions set forth in Annex A are not satisfied
or, to the extent permitted hereby, waived by Purchaser as of the date
the Offer would otherwise have expired, then, except to the extent
that such conditions are incapable of being satisfied, Purchaser will
extend the Offer from time to time until the earlier of the
consummation of the Offer or the date which is twenty (20) business
days from the original expiration date of the Offer (such date, the
"Final Date"). Purchaser shall, subject to the terms and conditions of
the Offer, accept for payment Shares validly tendered and not
withdrawn as soon as it is legally permitted to do so under applicable
law; provided, however, that Purchaser shall be entitled to extend the
Offer one or more times beyond the Final Date for an aggregate period
of up to ten (10) business days if on the Final Date the conditions to
the Offer set forth in Annex A have been satisfied or waived but there
shall not have been tendered that number of Shares which would equal
at least ninety percent (90%) of the issued and then outstanding
Shares. Purchaser shall be obligated to consummate the Offer
immediately upon reaching such ninety percent (90%) threshold. Such
extended date shall then be the Final Date for purposes of this
Agreement. The Company agrees that it will not tender, and will not
permit any of its subsidiaries to tender, any Shares held by it or any
such subsidiary pursuant to the Offer.
2
<PAGE> 6
(b) Purchaser shall deposit with First Union National Bank
(the "Escrow Agent") a sufficient amount of funds (the "Escrowed
Funds") necessary to (i) make the cash payments contemplated by
Section 1.01(a) to purchase all of the Shares tendered in the Offer,
(ii) make the cash payments contemplated by Section 2.08 with respect
to the settlement of the Options (as defined in Section 2.08), and
(iii) redeem the outstanding shares of Series A Preferred Stock of the
Company (the "Series A Preferred Shares") for cash in accordance with
the terms of the Certificate of Designation of Preferences and Rights
of the Series A Preferred Stock (the "Certificate of Designation"). A
calculation of this amount is attached hereto as Annex C. The Escrowed
Funds shall be deposited with the Escrow Agent pursuant to, and shall
be held, applied, invested, reinvested, and disbursed in accordance
with, an escrow agreement among the Company, the Parent, the Purchaser
and the Escrow Agent substantially in the form of Annex B attached
hereto (the "Escrow Agreement"). Unless otherwise provided in the
Escrow Agreement, said deposit shall be made by wire transfer of
immediately available funds pursuant to wire transfer instructions set
forth in the Escrow Agreement. Purchaser shall use its reasonable
efforts to initiate such wire transfer on Tuesday, October 19, 1999
and complete such wire transfer as soon as practical thereafter, but
in no event later than Friday, October 22, 1999.
(c) Within five (5) business days after the public
announcement of the execution of this Agreement, Parent and Purchaser
shall file with the United States Securities and Exchange Commission
(the "SEC") and the National Association of Securities Dealers, Inc.
("NASD"), if applicable, a Tender Offer Statement on Schedule 14D-1
(together with all amendments and supplements thereto and including
the exhibits thereto, the "Schedule 14D-1") with respect to the Offer.
The Schedule 14D-1 will include, as exhibits, the Offer to Purchase
and a form of letter of transmittal (collectively, the "Offer
Documents"). Parent and Purchaser agree that the Schedule 14D-1 and
the Offer Documents will comply as to form and content in all material
respects with the applicable provisions of the federal securities
laws. The Company will cooperate fully in the preparation of the
Schedule 14D-1 prior to its being filed with the SEC. The Company and
its counsel shall be given an opportunity to review and comment upon
the Schedule 14D-1 and the Offer Documents and any amendment or
supplement thereto prior to the filing thereof with the SEC, and
Parent and Purchaser shall consider such comments in good faith.
Parent and Purchaser agree to provide to the Company and its counsel
any comments which Parent, Purchaser or their counsel may receive from
the Staff of the SEC promptly after receipt thereof, and any proposed
responses thereto, with respect to the Schedule 14D-1 or the Offer
Documents and any amendment or supplement thereto. Parent, Purchaser
and the Company agree to correct promptly any information provided by
any of them for use in the Schedule 14D-1 or the Offer Documents which
shall have become false or misleading in any material respect, and
Parent and Purchaser further agree to take all steps reasonably
necessary to cause the Schedule 14D-1 as so corrected to be filed with
the SEC and to disseminate any revised Offer Documents to the
Company's stockholders, in each case as and to the extent required by
the applicable provisions of the federal securities laws.
3
<PAGE> 7
(d) Contemporaneously with the purchase by Purchaser of at
least a majority of the Shares pursuant to the Offer (the "Completion
of the Offer"), Purchaser shall cause the Company to redeem the Series
A Preferred Shares for cash in accordance with the terms of the
Certificate of Designation, and shall cause the funds to be used for
such redemption to be transferred from the Escrowed Funds to the
Company.
SECTION 1.02 Company Actions; Rights. The Company hereby consents to
the Offer and represents that (a) its Board of Directors (at a meeting duly
called and held) has (i) determined that each of the Offer and the Merger is
advisable and fair to and in the best interests of the stockholders of the
Company, (ii) approved and adopted this Agreement and the transactions
contemplated hereby, including the Merger, and (iii) resolved to recommend
acceptance of the Offer and approval and adoption of this Agreement and the
transactions contemplated hereby, including the Merger, by the stockholders of
the Company and (b) Brooks, Houghton & Company, Inc. ("BHC") has delivered to
the Company's Board of Directors its oral opinion (to be confirmed in writing
no later than the date of the filing of the Schedule 14D-1, which opinion
Parent and Purchaser shall be entitled to include as an exhibit to the Schedule
14D-1), that the cash consideration to be received by the holders of the Common
Stock in the Offer and the Merger is fair to such stockholders from a financial
point of view. The Company hereby agrees to file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
and shall use reasonable efforts to file the Schedule 14D-9 as soon as
practicable after the Offer is commenced but no later than ten (10) business
days after the date this Agreement is announced, which shall, subject to the
provisions of Section 6.02 of this Agreement, contain such recommendation.
The Parent, Purchaser and their counsel shall be given an opportunity
to review and comment upon the Schedule 14D-9 and any amendment or supplement
thereto prior to the filing thereof with the SEC, and the Company shall
consider such comments in good faith. The Company agrees to provide to the
Parent, Purchaser and their counsel any comments which the Company or its
counsel may receive from the staff of the SEC promptly after receipt thereof,
and any proposed responses thereto, with respect to the Schedule 14D-9 and any
amendment or supplement thereto. Parent, Purchaser and the Company agree to
correct promptly any information provided by any of them for use in the
Schedule 14D-9 which shall have become false or misleading in any material
respect, and the Company further agrees to take all steps necessary to cause
the Schedule 14D-9 as so corrected to be filed with the SEC and to disseminate
any revised Schedule 14D-9 to the Company's stockholders, in each case as and
to the extent required by the applicable provisions of the federal securities
laws. Company agrees to make reasonable efforts to include Parent, Purchaser
and their counsel in any substantive oral communications with the SEC with
respect to the Schedule 14D-9. In connection with the Offer, provided that this
Agreement shall not have been terminated in accordance with Article VIII
hereof, the Company will promptly furnish Purchaser with mailing labels,
security position listings and any available listing or computer file
4
<PAGE> 8
containing the names and addresses of the record holders of the Shares as of a
recent date, and shall furnish Purchaser with such information and assistance
as Purchaser or its agents may reasonably request in communicating the Offer to
the stockholders of the Company. Subject to the requirements of law, and except
for such steps as are necessary to disseminate the Schedule 14D-1, Parent and
Purchaser shall hold in confidence the information contained in any of such
labels and lists and the additional information referred to in the preceding
sentence, will use such information only in connection with the Offer and, if
this Agreement is terminated, will upon request deliver to the Company all
copies of such information then in their possession.
SECTION 1.03 Board of Directors and Committees; Section 14(f).
(a) Subject to the requirements of applicable law, promptly
upon the purchase of not less than a majority of the outstanding
shares by Purchaser of Shares pursuant to the Offer and from time to
time thereafter, subject to paragraph (c) of this Section 1.03,
Purchaser shall be entitled to designate up to such number of
directors, rounded up to the next whole number plus one, on the Board
of Directors of the Company (the "Board") as will give Purchaser
representation on the Board equal to the product of the total number
of directors on the Board, after giving effect to such representation,
and the percentage that such number of Shares so purchased bears to
the total number of issued and outstanding Shares, and the Company
shall use its reasonable efforts to, upon request by Purchaser,
promptly, at the Company's election, either increase the size of the
Board or secure the resignation of such number of directors as is
necessary to enable Purchaser's designees to be elected to the Board
and shall cause Purchaser's designees to be so elected, but in no
event less than a majority of directors. At such times the Company
will use its reasonable efforts to cause individuals designated by
Purchaser to constitute the same percentage as is on the Board of (i)
each committee of the Board (other than any committee of the
Independent Directors), (ii) each board of directors of each
subsidiary of the Company designated by Purchaser and (iii) each
committee of each such board.
(b) The Company's obligations to appoint designees to the
Board shall be subject to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder. The Company shall promptly take all
actions required pursuant to Section 14(f) and Rule 14f-1 in order to
fulfill its obligations under this Section 1.03 and shall include in
the Schedule 14D-9 such information with respect to the Company and
its officers and directors as is required under Section 14(f) and Rule
14f-1. Parent or Purchaser will supply to the Company in writing and
be solely responsible for any information with respect to any of them
and their nominees, officers, directors and affiliates required by
Section 14(f) and Rule 14f-1.
(c) After the time that Purchaser's designees constitute at
least a majority of the Board and until the Effective Time, the Board
shall always have at least two members (the "Independent Directors")
5
<PAGE> 9
who are neither officers of Parent nor designees, shareholders or
affiliates of Parent or Parent's affiliates. During such period, any
(i) amendment or termination of this Agreement, (ii) extension of time
for the performance or waiver of the obligations or other acts of
Parent or Purchaser or waiver of the Company's rights hereunder or
(iii) action by the Company with respect to this Agreement and the
transactions contemplated hereby which adversely affects the interests
of the stockholders of the Company, shall require the approval of a
majority of the Independent Directors in addition to any required
approval thereof by the full Board. If the number of Independent
Directors shall be reduced below two for any reason whatsoever, any
remaining Independent Director shall be entitled to designate a person
to fill the vacancy, which designee shall not be a current or former
officer or affiliate of Parent or any of Parent's affiliates, or, if
no Independent Directors then remain, the other directors shall
designate two persons to fill such vacancies who shall not be current
or former officers or affiliates of Parent or any of Parent's
affiliates, and such persons shall be deemed to be Independent
Directors for purposes of this Agreement. The Board shall not delegate
any matter set forth in this Section 1.03(c) to any committee of the
Board.
(d) Following the election or appointment of Purchaser's
designees pursuant to this Section 1.03 and prior to the Effective
Time, any amendment of this Agreement or the Amended and Restated
Certificate of Incorporation, as amended, or the Amended and Restated
By-Laws of the Company, any extension by the Company of the time for
the performance of any of the obligations or other acts of Parent or
Purchaser or waiver of any of the Company's rights hereunder, will
require the concurrence of a majority of the directors of the Company
then in office who are neither designated by Purchaser, employees of
the Company or any of its subsidiaries nor otherwise affiliated with
Purchaser.
ARTICLE II
THE MERGER
SECTION 2.01 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the General Corporation Law of the State of
Delaware (the "DGCL"), Purchaser shall be merged with and into the Company as
soon as practicable following the satisfaction or waiver, if permissible, of
the conditions set forth in Article VII hereof. Following the Merger, the
Company shall continue as the surviving corporation (the "Surviving
Corporation") and the separate corporate existence of Purchaser shall cease.
SECTION 2.02 Effective Time. The Merger shall be consummated, as and
when provided in Section 2.12 hereof, by filing with the Secretary of State of
the State of Delaware a certificate of merger in such form as is required by,
and executed in accordance with, the relevant provisions of the DGCL (the time
of such filing being the "Effective Time").
SECTION 2.03 Effects of the Merger. The Merger shall have the effects
set forth in Section 259 of the DGCL and from and after the Effective Time, the
Surviving Corporation shall possess all the rights, privileges, powers and
franchises and be subject to all of the restrictions, disabilities, liabilities
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and duties of the Company and Purchaser. In particular, the Surviving
Corporation, as of the Effective Time, hereby expressly assumes any and all
financial obligations of the Company under the Credit Facility. As of the
Effective Time, the Company shall be a wholly owned subsidiary of Parent.
SECTION 2.04 Certificate of Incorporation and By-Laws. The Amended and
Restated Certificate of Incorporation, as amended, and the Amended and Restated
By-Laws of the Purchaser shall be the Certificate of Incorporation and By-Laws
of the Surviving Corporation until thereafter changed or amended as provided
therein or by law.
SECTION 2.05 Directors. The directors of Purchaser immediately prior
to the Effective Time shall constitute the Board of Directors of the Surviving
Corporation until their respective successors are duly elected and qualified.
SECTION 2.06 Officers. The officers of the Purchaser immediately prior
to the Effective Time shall be the officers of the Surviving Corporation until
their respective successors are duly elected and qualified.
SECTION 2.07 Conversion of Shares. Each Share issued and outstanding
immediately prior to the Effective Time (other than Shares held by Parent, the
Company or any subsidiary of Parent or of the Company, which shall be canceled,
and Dissenting Shares (as hereinafter defined)) shall, by virtue of the Merger
and without any action on the part of the holder thereof, be converted into the
right to receive the Transaction Consideration in respect of such Shares in
cash, payable to the holder thereof, without interest thereon, upon surrender
of the certificate representing such Share.
SECTION 2.08 Employee Stock Options. On the latest of (i) the
Completion of the Offer (ii) the first business day of January 2000 or (iii)
the earlier of (A) 30 days after termination notice is given in accordance with
the terms of the plan governing the Options (as defined herein) or (B) the date
that the Option holder agrees to the treatment provided in this Section 2.08,
each holder of then outstanding options to purchase Shares granted by the
Company (whether or not then currently exercisable) (the "Options") will be
entitled to receive, and shall receive, at the sole election of the holder of
such Option in settlement of each Option where the amount set forth in clause
(i) below is positive, a cash payment from the Company in an amount equal to
the product of (i) the Transaction Consideration minus the exercise price per
Share of the Option and (ii) the number of Shares covered by such Option. Such
payment shall be reduced by any applicable withholding taxes. If and to the
extent required by the terms of the plan governing such Options or pursuant to
the terms of any Option granted thereunder, each of Parent and the Company
shall use its best efforts to obtain the consent of each holder of outstanding
Options to the foregoing treatment of such Options, including without
limitation, giving the termination notice contemplated by the plan governing
such Options. The Company, acting through its Board of Directors or any
committee thereof, shall have the right at any time or from time to time
following the execution hereof to accelerate and vest, in full or in part, any
and all Options not currently exercisable in full. Effective as of the
Effective Time, the Company, acting through its Board or any committee thereof,
shall terminate those Options with an exercise price that is greater than the
Transaction Consideration.
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SECTION 2.09 Conversion of Purchaser Common Stock. Each share of
common stock of Purchaser issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into and exchangeable for one share of
common stock of the Surviving Corporation.
SECTION 2.10 Stockholders' Meeting. If required by applicable law, in
order to consummate the Merger, the Company, acting through its Board, shall,
subject to the Board's fiduciary duties under applicable law, as advised by
counsel:
(a) duly call, give notice of, convene and hold a special
meeting (the "Special Meeting") of its stockholders as soon as
practicable following the Completion of the Offer (provided that, if a
Form 15 is promptly filed with the SEC after such completion, the
Board shall be entitled to delay giving notice until the registration
of the Company's Common Stock under the Exchange Act has been
terminated, but not more than one hundred (100) days after the
Completion of the Offer) for the purpose of considering and taking
action upon this Agreement;
(b) prepare and file with the SEC the Proxy Statement in
accordance with all applicable requirements of the Exchange Act;
(c) subject to its fiduciary duties under applicable law,
include in the Proxy Statement (as defined in Section 4.07) the
recommendation of its Board that stockholders of the Company vote in
favor of the approval and adoption of this Agreement and the Merger;
and
(d) use its reasonable efforts to (i) obtain and furnish the
information required to be included by it in the Proxy Statement, and
after consultation with Parent, respond promptly to any comments made
by the SEC with respect to the Proxy Statement and any preliminary
version thereof, if filing with the SEC is required, and cause the
Proxy Statement to be mailed to its stockholders at the earliest
practicable time following the expiration or termination of the Offer
and (ii) obtain the necessary approval of this Agreement by its
stockholders. Parent agrees that, at the Special Meeting, all of the
Shares then owned by Parent, Purchaser or any other entity controlled
by Parent will be voted in favor of approval and adoption of this
Agreement.
SECTION 2.11 Merger Without Meeting of Stockholders. Notwithstanding
the foregoing, in the event that Purchaser, or any other direct or indirect
subsidiary of Parent or other entity controlled by Parent, shall acquire at
least ninety percent (90%) of the outstanding shares of the capital stock of
the Company, 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, as soon as practicable after the expiration of the Offer, without a
meeting of stockholders of the Company, in accordance with Section 253 of the
DGCL.
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SECTION 2.12 Closing. Upon the terms and subject to the conditions
hereof, as soon as practicable after consummation of the Offer and after the
vote of the stockholders of the Company in favor of the approval of this
Agreement has been obtained, the Company shall execute in the manner required
by the DGCL and deliver to the Secretary of State of the State of Delaware a
duly executed and verified certificate of merger (or certificate of ownership
and merger) as required by the DGCL and the parties shall take such other and
further actions as may be required by law to make the Merger effective. Prior
to the filings referred to in this Section 2.12, a closing (the "Closing") will
be held at the offices of Wolf, Block, Schorr and Solis-Cohen LLP, 1650 Arch
Street, Philadelphia, Pennsylvania (or such other place as the parties may
agree) for the purpose of confirming all of the foregoing.
ARTICLE III
DISSENTING SHARES; EXCHANGE OF SHARES;
LOST CERTIFICATES; ETC.
SECTION 3.01 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Shares which are issued and outstanding immediately
prior to the Effective Time and which are held by stockholders who object to
the Merger and comply with all of the relevant provisions of Section 262 of the
DGCL (the "Dissenting Shares") shall not be converted into or be exchangeable
for the right to receive the consideration provided in Section 2.07 of this
Agreement but shall instead be entitled to receive payment of the appraised
value of such Shares in accordance with the relevant provisions of such Section
262, unless and until such holders shall have failed to perfect or shall have
effectively withdrawn or lost their rights to appraisal and payment under the
DGCL. If any such holder shall have so failed to perfect or shall have
effectively withdrawn or lost such right, such holder's Shares shall thereupon
be deemed to have been converted into and to have become exchangeable for, at
the Effective Time, the right to receive the consideration provided in Section
2.07. The Company shall give Parent (i) prompt notice of any written demand for
appraisal, and (ii) the opportunity to direct all negotiations and proceedings
with respect to demands for appraisal. The Company shall not, without the prior
consent of Parent, voluntarily make any payment, settle any demands or approve
any withdrawals.
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SECTION 3.02 Exchange of Shares.
(a) Prior to the Effective Time, Parent shall designate a
bank or trust company or similar entity reasonably acceptable to the
Company which is authorized to exercise corporate trust or stock
powers to act as Exchange Agent in the Merger (the "Exchange Agent").
Prior to the Effective Time, Parent will provide the Exchange Agent
funds necessary to make the cash payments contemplated by Section 2.07
(the "Payment Fund"). The Exchange Agent shall cause the Payment Fund
to be (i) held for the benefit of the Shares and (ii) promptly applied
to making the payments provided for in Section 2.07. The Payment Fund
shall not be used for any purpose that is not provided for herein. The
Payment Fund may be transferred from the Escrowed Funds after the
expiration of the Offer.
(b) Promptly after the Effective Time, Parent shall cause the
Exchange Agent to mail to each record holder, as of the Effective
Time, of an outstanding certificate or certificates which immediately
prior to the Effective Time represented outstanding Shares (the
"Certificates"), one or more forms of a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent) and instructions for use in
effecting the surrender of the Certificate or payment therefor. Upon
surrender to the Exchange Agent of a Certificate, together with such
letter of transmittal duly executed, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor, and
Parent shall cause the Exchange Agent to promptly so pay, cash in an
amount equal to the product of the number of Shares represented by
such Certificate multiplied by the amount of the Transaction
Consideration with respect to the Shares, and such Certificate shall
then be canceled. No interest will be paid or accrued on the cash
payable upon the surrender of any Certificate. If payment is to be
made to a person other than the person in whose name the Certificate
surrendered is registered, it shall be a condition of payment that the
Certificate so surrendered shall be properly endorsed or otherwise in
proper form for transfer and that the person requesting such payment
shall pay transfer or other taxes required by reason of the payment to
a person other than the registered holder of the Certificate
surrendered or establish to the satisfaction of the Exchange Agent
that such tax has been paid or is not applicable. Until surrendered in
accordance with the provisions of this Section 3.02, each Certificate
(other than Certificates representing Shares held by Parent or any
subsidiary of Parent or of the Company and Dissenting Shares) shall
represent for all purposes the right to receive the Transaction
Consideration in cash multiplied by the number of Shares evidenced by
such Certificate, without any interest thereon. Any funds remaining
with the Exchange Agent one year following the Effective Time shall be
returned to Parent after which time former stockholders of the
Company, subject to applicable law, shall look only to Parent for
payment of amounts due hereunder, without interest thereon.
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(c) After the Effective Time there shall be no transfers on
the stock transfer books of the Surviving Corporation of the Shares
which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation or the Exchange Agent, they shall be canceled and
exchanged for cash as provided in Article II and this Article III.
SECTION 3.03. Lost Certificates. In the event that any Certificate
shall have 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 and, if reasonably required by Parent (which shall not exceed amounts
generally required by Parent from holders of Parent's capital stock under
similar circumstances), the granting of an indemnity reasonably satisfactory to
Parent against any claim that may be made against it, the Surviving Corporation
or the Exchange Agent, with respect to such Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate the
Transaction Consideration with respect to such Certificate, to which such
person is entitled pursuant hereto.
SECTION 3.04. Withholding Rights. Each of the Surviving Corporation
and Parent shall be entitled to deduct and withhold from the consideration
otherwise payable to any person pursuant to this Article such amounts as it is
required to deduct and withhold with respect to the making of such payment
under any provision of federal, state, local or foreign tax law. If the
Surviving Corporation or Parent, as the case may be, so withholds amounts, such
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the Shares in respect of which the Surviving Corporation or
Parent, as the case may be, made such deduction and withholding.
SECTION 3.04. Investment of Funds. The Payment Fund shall be invested
by the Exchange Agent in obligations of, or guaranteed by, the United States of
America, in commercial paper obligations rated A-1 or P-l or better by Moody's
Investor Services or Standard & Poor's Corporation, respectively, in each case
with maturities not exceeding seven days or investments of comparable risk and
return. All earnings thereon shall inure to the benefit of Parent or the
Surviving Corporation.
SECTION 3.05. No Liability. None of Parent, Purchaser, the Company or
the Exchange Agent shall be liable to any person in respect of any Transaction
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any Certificate has not been
surrendered prior to five years after the Effective Time (or immediately prior
to such earlier date on which Transaction Consideration in respect of such
Certificate would otherwise escheat to or become the property of any public
official), any such shares, cash, dividends or distributions in respect of such
Certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Schedule delivered to Parent by
the Company prior to the execution of this Agreement, the Company represents
and warrants to Parent and Purchaser as follows:
SECTION 4.01 Organization. Each of the Company and its subsidiaries is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and each such corporation has
all requisite corporate power and corporate authority to own, operate and lease
its respective properties and to carry on its businesses substantially as they
are being conducted on the date of this Agreement, except for such failures to
be so organized or in good standing which would not individually or in the
aggregate be reasonable likely to have a Material Adverse Effect (as defined in
Section 9.11 hereof). The Company and each of its subsidiaries is duly
qualified and in good standing in each jurisdiction in which the nature of the
property owned, leased or operated by it or the nature of the business
conducted by it requires such qualification except for such failures to be so
qualified or in good standing which are not reasonably likely to have a
Material Adverse Effect. The Company's Certificate of Incorporation, as
amended, and Amended and Restated Bylaws, as amended, are in the same form as
previously provided to Parent and Purchaser.
SECTION 4.02 Capitalization; Subsidiaries. The authorized capital
stock of the Company consists of 25,000,000 shares of Common Stock, par value
$.04 per share and 5,000,000 shares of preferred stock, par value $.01 per
share (the "Preferred Stock"). As of October 15, 1999, there were 1,044,631
shares of Common Stock and 3,476,900 Series A Preferred Shares issued and
outstanding and 869,225 Shares were held in the Company's treasury. As of
October 15, 1999, except for the obligation of the Company to issue (a) 308,018
Shares pursuant to Options currently outstanding (including the currently
non-exercisable portions thereof), and (b) Shares pursuant to an Employee Stock
Purchase Plan, there are not outstanding any options, warrants, calls,
convertible securities, subscriptions or other rights or other agreements or
commitments obligating the Company or any of its subsidiaries to issue,
transfer or sell any shares of capital stock of the Company or any of its
subsidiaries. No Options have exercise prices below the Transaction
Consideration except as and to the extent set forth on Exhibit C to the
Disclosure Schedule. All issued and outstanding Shares are validly issued,
fully paid and nonassessable and are not subject to, and were not issued in
violation of, preemptive rights. There are no voting trusts or other agreements
or understandings to which the Company is a party with respect to the voting of
the capital stock of the Company or any of its subsidiaries.
All of the outstanding shares of capital stock of the Company's
subsidiaries are owned, directly or indirectly, by the Company free and clear
of all liens, claims, options, charges, security interests or other legal and
equitable rights and encumbrances of whatsoever nature. All issued and
outstanding shares of capital stock of the Company's subsidiaries are validly
issued, fully paid and nonassessable and are not subject to, and were not
issued in violation of, preemptive rights.
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SECTION 4.03 Authority Relative to this Agreement; Compliance with
Laws and Court Orders. The Company has full corporate power and authority to
execute and deliver this Agreement and, subject to approval and adoption of
this Agreement by the holders of Shares representing a majority of the votes
which may be cast by holders of the Shares to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Board and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions so contemplated (other than the approval of this Agreement by the
holders of Shares representing a majority of the votes which may be cast by
holders of Shares). This Agreement has been duly and validly executed and
delivered by the Company and, assuming this Agreement has been duly authorized,
executed and delivered by each of Parent and Purchaser, this Agreement
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except that (i) enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting creditors' rights
generally and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
The Company and its subsidiaries are and have been in compliance with, and to
the knowledge of the Company are not under investigation with respect to and
have not been threatened to be charged with or given notice of any violation
of, any applicable law, statute, ordinance, rule, regulation, judgment,
injunction, order or decree, including, without limitation, any Environmental
Laws, except for (i) failures to comply or violations that have not had and
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
SECTION 4.04 Absence of Certain Changes. Since June 30, 1999 and prior
to the Board Transition Date, neither the Company nor any of its subsidiaries
has suffered any change or changes in the financial condition or business,
results of operations or assets which has resulted or reasonably would be
expected to result in a Material Adverse Effect. Since June 30, 1999, there has
not been (a) any declaration, setting aside or payment of any dividend or other
distribution in respect of the shares of capital stock of the Company, or any
redemption or other acquisition by the Company or any of its subsidiaries of
any shares of capital stock of the Company except for (i) the exchange by
Securicor Communications Limited, a company organized under the laws of England
and Wales, of 3,476,900 shares of Common Stock (prior to adjustment for the
reverse stock split referenced immediately below) for 3,476,900 shares of
Series A Preferred Stock of the Company on September 30, 1999; and (ii) the
one-for-four reverse stock split effected on October 15, 1999; (b) (i) any
increase in the compensation paid, payable or to become payable by the Company
or any of its subsidiaries (including the rate and terms thereof) to its
directors, officers, employees or consultants, except increases which occur in
the ordinary course of business in accordance with its customary practices or
(ii) any increase in the rate or terms of any bonus, insurance, pension or
other employee benefit plan, payment or arrangement made to, for or with any
such directors, officers or employees, except increases occurring in the
ordinary course of business in accordance with its customary practices; (c) any
entry into any agreement, commitment or transaction by the
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Company or any of its subsidiaries, which is material to the Company and its
subsidiaries taken as a whole (except agreements, commitments or transactions
in the ordinary course of business in accordance with its customary practices);
(d) any material change by the Company or any of its subsidiaries in accounting
methods, principles or practices except as required by generally accepted
accounting principles; (e) except as contemplated by this Agreement, any
amendment of any material term of any outstanding security of the Company or
any of its subsidiaries; (f) any incurrence, assumption or guarantee by the
Company or any of its subsidiaries of any indebtedness for borrowed money (i)
exceeding $4,000,000 in the aggregate or (ii) having a term longer than one
year in duration; (g) any creation or other incurrence by the Company or any of
its subsidiaries of any lien on any asset other than in the ordinary course of
business consistent with past practices; (h) any damage, destruction or other
similar casualty loss (whether or not covered by insurance) affecting the
business or assets of the Company or any of its subsidiaries that has resulted,
or could reasonably be expected to result, in an aggregate amount in excess of
$1,000,000; (i) any transaction or commitment made, or any contract or
agreement entered into, by the Company or any of its subsidiaries relating to
its assets or business (including the acquisition or disposition of any assets)
or any relinquishment by the Company or any of its subsidiaries of any contract
or other right, in either case, material to the Company and its subsidiaries,
taken as a whole, other than transactions and commitments in the ordinary
course of business consistent with past practices and those contemplated by
this Agreement; (j) any tax election, other than those consistent with past
practice, not required by law or any settlement or compromise of any tax
liability in either case that is material to the Company and its subsidiaries;
(k) any grant of any severance or termination pay to (or amendment to any
existing arrangement with) any director or officer of the Company or any of its
subsidiaries; (l) to the Company's knowledge, any labor dispute, other than
routine individual grievances, or any activity or proceeding by a labor union
or representative thereof to organize any employees of the Company or any of
its subsidiaries, which employees were not subject to a collective bargaining
agreement at June 30, 1999, or any lockouts, strikes, slowdowns, work stoppages
or threats thereof by or with respect to such employees.
SECTION 4.05 No Undisclosed Liabilities. Neither the Company nor any
of its subsidiaries has incurred any liabilities of any nature, whether or not
accrued, contingent or otherwise, which would be required to be included on a
balance sheet prepared in accordance with generally accepted accounting
principles, except for liabilities that are reflected on the Company's June 30,
1999 balance sheet or that would not have or could not reasonably be expected
to have a Material Adverse Effect.
SECTION 4.06 Reports. The Company has timely filed all required forms,
reports and documents (including all prospectuses and all registration
statements) with the SEC required to be filed by it with respect to all periods
commencing on or after October 1, 1997 pursuant to the
federal securities laws and the SEC rules and regulations thereunder, all of
which have complied in all material respects with all applicable requirements
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of the Securities Act of 1933 (the "Securities Act") and the Exchange Act, and
the rules and regulations promulgated thereunder (the "Company Filings"). None
of such forms, reports or documents (excluding the financial statements
included therein, which are dealt with in the following paragraph), at the time
filed, contained any untrue statement of a material fact or omitted to state a
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.
The consolidated balance sheets and the related consolidated
statements of income, retained earnings and changes in financial position
(including the related notes thereto) of the Company included in the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 1998, and in
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1999, present fairly in all material respects the consolidated financial
position of the Company as of their respective dates, and the results of
consolidated operations and consolidated cash flows for the periods presented
therein, all in conformity with generally accepted accounting principles
applied on a consistent basis, except (i) as otherwise noted therein, (ii) in
the case of quarterly financial statements for year-end audit adjustments and
(iii) in the case of the quarterly financial statements to the extent they may
not include footnotes or may be condensed or summary financial statements.
The unaudited pro forma estimated consolidated balance sheet and
related consolidated unaudited pro forma estimated statements of income,
retained earnings and changes in financial position of the Company for the year
ended September 30, 1999 attached as Exhibit A to the Disclosure Schedule, to
the knowledge of the Company, present fairly in all material respects the
consolidated position of the Company, and the results of consolidated
operations and consolidated cash flows for the periods presented therein, all
in conformity with generally accepted accounting principles applied on a
consistent basis, except to the extent that they do not include footnotes and
may be condensed or summary financial statements and except that such
statements do not reflect the Series A Preferred Stock or any adjustments
relative to expected lease arrangements reflected in the Disclosure Schedule.
SECTION 4.07 Offer Documents; Proxy Statements; Other Information.
None of the information relating to the Company and its subsidiaries supplied
in writing by the Company specifically for inclusion in the Offer Documents,
including any amendments or supplements thereto will at the respective times
the Offer Documents or any amendments or supplements thereto are filed with the
SEC, to the knowledge of the Company, 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. The Schedule 14D-9,
will comply in all material respects with the Exchange Act. If a Proxy
Statement is required for the consummation of the Merger under applicable law,
the Proxy Statement will comply in all material respects with the Exchange Act,
if applicable, except that no representation is made by the Company with
respect to information supplied in writing by Parent or Purchaser specifically
for inclusion in the Proxy Statement. The letter to stockholders, notice of
meeting, proxy statement and form of proxy, or the information statement, as
the case may be, to be distributed to stockholders in connection with the
Merger, or any schedules required to be filed with the SEC in connection
therewith are collectively referred to herein as the "Proxy Statement".
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SECTION 4.08 Consents and Approvals; No Violation. Neither the
execution and delivery of this Agreement by the Company nor the consummation of
the transactions contemplated hereby will (i) conflict with or result in any
breach of any provision of the Amended and Restated Certificate of
Incorporation, as amended, or Amended and Restated ByLaws (or other similar
governing documents) of the Company, (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority or body, except (A) in connection with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), if applicable, (B) pursuant to the Exchange Act or the rules and
requirements of NASD, (C) the filing of a certificate of merger (or certificate
of merger and ownership) pursuant to the DGCL or (D) where the failure to
obtain such consent, approval, authorization or permit, or to make such filing
or notification, would not individually or in the aggregate when taken together
with all such other failures have a Material Adverse Effect; (iii) result in a
default (or give rise to any right of termination, unilateral modification or
amendment, cancellation or acceleration) under any of the terms, conditions or
provisions of any note, license, agreement or other instrument or obligation to
which the Company or any of its subsidiaries is a party or by which the
Company, any of its subsidiaries or any of their respective assets may be
bound, except for such defaults (or rights of termination, unilateral
modification or amendment, cancellation or acceleration) as to which requisite
waivers or consents have been obtained prior to the date Shares are first
accepted for payment under the Offer or which in the aggregate would not have a
Material Adverse Effect; or (iv) violate any order, writ, injunction, decree,
judgment, ordinance, statute, rule or regulation applicable to the Company, any
of its subsidiaries or any of their respective properties or businesses, except
for violations (other than of orders, writs, injunctions or decrees issued
against the Company or any of its subsidiaries or naming the Company or any of
its subsidiaries as a party) which would not in the aggregate have a Material
Adverse Effect.
SECTION 4.09 Litigation, etc. As of the date of this Agreement, there
is no claim, action or proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries or their respective
properties or businesses before any court or governmental or regulatory
authority or body acting in an adjudicative capacity with respect to which
there is a reasonable likelihood of an adverse determination which would have a
Material Adverse Effect. Neither the Company nor any of its subsidiaries nor
any of their respective properties or businesses is subject to any outstanding
order, writ, judgment, stipulation, award, injunction or decree of any court
issued against the Company or any of its subsidiaries or naming the Company or
any of its subsidiaries as a party which has a Material Adverse Effect.
SECTION 4.10 Title to Properties; Encumbrances. The Company and each
of its subsidiaries has good title to all properties, interests in properties
and assets (real and personal) reflected in the consolidated balance sheet of
the Company as at June 30, 1999 free and clear of all mortgages, liens,
pledges, charges or encumbrances of any kind or character, except liens for
current taxes not yet due and payable and except for such mortgages, liens,
pledges, charges or encumbrances which would not in the aggregate have a
Material Adverse Effect.
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SECTION 4.11 Benefit Plans.
(a) The Company does not have any Company Benefit Plan (as
defined herein) except for the 1997 Stock Incentive Plan, the Employee
Stock Purchase Plan or as set forth on the Disclosure Schedule. With
respect to each employee benefit plan (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), and any material bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization or insurance (all of the
foregoing being herein called the "Company Benefit Plans"), maintained
or contributed to by the Company or any of its subsidiaries, the
Company has made available, to the extent applicable, to Parent a true
and correct copy of (i) the most recent annual report (Form 5500)
filed with the Internal Revenue Service, (ii) such Company Benefit
Plan, (iii) each trust agreement and group annuity contract, if any,
relating to such Company Benefit Plan and (iv) the most recent
actuarial report or valuation relating to a Company Benefit Plan
subject to Title IV of ERISA.
(b) With respect to the Company Benefit Plans, individually
and in the aggregate, no event has occurred, and to the knowledge of
the Company, there exists no condition or set of circumstances in
connection with which the Company or any of its subsidiaries would be
subject to any liability that is reasonably likely to have a Material
Adverse Effect (except liability for benefit claims and funding
obligations payable in the ordinary course), under ERISA, the Code or
any other applicable law.
(c) Each of the Company Benefit Plans has been operated and
administered in all material respects in accordance with its terms and
applicable laws, including, but not limited to, ERISA and the Code.
(d) Except as disclosed in the Company's Filings or as
provided for in this Agreement, as of the date of this Agreement,
neither the Company nor any of its subsidiaries is a party to any oral
or written (i) consulting agreement not terminable on 60 days' or less
notice involving the payment of more than $1,000,000 per annum, (ii)
union or collective bargaining agreement, (iii) agreement with any
executive officer or other key employee of the Company or any of its
subsidiaries the benefits of which are contingent, or the terms of
which are materially altered, upon the occurrence of a transaction
involving the Company of the nature contemplated by this Agreement or
agreement with respect to any executive officer of the Company
providing any term of employment or compensation guarantee extending
for a period longer than three years and for the payment of in excess
of $1,000,000 per annum, or (iv) agreement or plan, including any
stock option plan, stock appreciation right plan, restricted stock
plan or stock purchase plan, any of the benefits of which will be
increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by
this Agreement.
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(e) Except as disclosed in the Disclosure Schedule, neither
the Company nor any of its subsidiaries currently contributes to or
maintains any plan subject to Title IV of ERISA, other than a
"multiemployer plan" as defined in Section 3 (37) of ERISA (a
"Multiemployer Plan"). With respect to any Multiemployer Plan or other
plan subject to Title IV of ERISA which the Company or any of its
subsidiaries has contributed to or maintained during the past five
years, neither the Company nor any of its subsidiaries has any
contingent liability that (i) is reasonably likely to become a
liability of Parent or its subsidiaries after the Effective Time and
(ii) individually or in the aggregate, would have a Material Adverse
Effect.
(f) Except as set forth in the Disclosure Schedule or as
otherwise contemplated by this Agreement, the consummation of the
transactions contemplated by this Agreement will not entitle any
employee or independent contractor of the Company or any of its
subsidiaries to severance pay or accelerate the time of payment or
vesting or trigger any payment or funding (through a grantor trust or
otherwise) of compensation or benefits under, increase the amount
payable or trigger any other material obligation pursuant to, any
Company Benefit Plan.
(g) Except as otherwise contemplated by this Agreement, there
has been no amendment to, written interpretation or announcement
(whether or not written) by the Company or any of its subsidiaries
relating to, or change in employee participation or coverage under,
any Company Benefit Plan which would increase materially the expense
of maintaining such Company Benefit Plan above the level of the
expense incurred in respect thereof for the fiscal year ended
September 30, 1999.
SECTION 4.12 Compliance With Agreements; Law. Neither the Company nor
any of its subsidiaries is in default or violation of (i) any term, provision
or condition of (A) its Amended and Restated Certificate of Incorporation, as
amended, or Amended and Restated ByLaws (or similar charter documents) or (B)
any note, license, agreement or other instrument or obligation to which the
Company or any of its subsidiaries is a party or by which the Company, any of
its subsidiaries or any of their respective assets may be bound ("agreement"),
or (ii) any judgment, order, writ, injunction, decree, stipulation, award, law,
ordinance, rule or regulation of any governmental or regulatory authority or
body (including, but not limited to, any law, ordinance, rule or regulation
relating to the protection of the environment), except for possible violations
in the case of clauses (i)(B) and (ii) which in the aggregate do not and,
insofar as reasonably can be foreseen, in the future will not have a Material
Adverse Effect. To the knowledge of the Company, no other party to any such
agreement is, or, based on existing facts and circumstances, with the passage
of time will be, in default or violation of any such agreement except for
possible violations of such agreements which will not have a Material Adverse
Effect. All licenses, permits and other governmental authorizations held by the
Company or any of its subsidiaries are valid and sufficient for all businesses
conducted by the Company and its subsidiaries except where the failure to hold
such licenses, permits and other governmental authorizations would not in the
aggregate have a Material Adverse Effect.
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SECTION 4.13 Patents, Trademarks, Trade Names, etc. The Company or one
of its subsidiaries owns, or is licensed or otherwise entitled to use, all
patents, trademarks, trade names, service marks, copyrights, trade secrets,
proprietary rights, applications for any of the foregoing, together with all
other technology, know-how, tangible or intangible proprietary information or
material and formulae in the countries to which such apply, that are in any
material respect necessary to the business of the Company and its subsidiaries
as currently conducted (the "Company Intellectual Property"). No claims have
been asserted or, to the knowledge of the Company, threatened by any person (i)
to the effect that the sale or use of any product or process as now used or
offered by the Company or any subsidiary infringes on any patents, (ii) against
the use by the Company or any of its subsidiaries of any trademarks, trade
names, technology, know-how or processes necessary for the operation of the
business of the Company and its subsidiaries as currently conducted or
presently contemplated or (iii) challenging or questioning the validity or
effectiveness of any of the Company Intellectual Property.
SECTION 4.14 Taxes.
(a) The Company and each of its subsidiaries on or prior to
the date of this Agreement has filed or has had filed on its behalf,
and will file or will have filed on its behalf prior to the Effective
Time, in a timely manner (within any applicable extension periods)
with the appropriate governmental entity all income and other material
Tax Returns (as defined herein) required to be filed prior to the
Effective Time with respect to Taxes (as defined herein) of the
Company and each of its subsidiaries, and such Tax Returns are true,
correct and complete in all material respects.
(b) All material Taxes with respect to the Company and its
subsidiaries have been paid in full to the extent required to be so
paid as of the date of this Agreement or have been provided for in
accordance with generally accepted accounting principles on the
Company's most recent balance sheet (as of the date of such balance
sheet) which is part of the Company Filings.
(c) There are no outstanding agreements or waivers extending
the statutory period of limitations applicable to any federal, state,
local or foreign income or other material Tax Returns required to be
filed by or with respect to the Company and its subsidiaries.
(d) No deficiency, delinquency or default for any Tax has
been claimed, proposed or assessed against the Company or any of its
subsidiaries which has not been abated or paid in full or which is
being contested in good faith by the Company, and to the Company's
knowledge, neither the Company nor any subsidiary of the Company has
received written notice of any such deficiency, delinquency or default
nor does the Company otherwise have knowledge of any threat of any
governmental entity to assert
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such deficiency, delinquency or default or any facts or circumstances
that would form a basis of such threat.
(e) There are no liens for Taxes upon the assets of the
Company or any of its subsidiaries except statutory liens for current
Taxes not yet due.
(f) Neither the Company nor any of its subsidiaries is
currently the subject of any audit with respect to any Tax Return nor
has the Company or any subsidiary been notified that the Company or
any subsidiary will become the subject of any such audit.
(g) Neither the Company nor any of its subsidiaries is a
party to or bound by or has any obligation under any written or
unwritten tax sharing or similar agreement or arrangement.
(h) For purposes of this Agreement, (i) "Taxes" shall mean
all taxes, government fee, charges, fees, levies or other assessments
of any kind, including, without limitation, income, gross receipts,
sales, use, ad valorem, goods and services, capital, transfer,
franchise, profits, license, withholding, payroll, employment,
employer health, excise, estimated, severance, stamp, occupation,
property or other taxes, customs duties, fees, assessments or charges
of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority
and (ii) "Tax Return" shall mean any report, return, document,
declaration or other information or filing required to be supplied to
any taxing authority or jurisdiction with respect to Taxes.
SECTION 4.15 Antitakeover Statutes. The Board has taken the necessary
action to render Section 203 of the Delaware General Corporation Law, and any
other potentially applicable antitakeover or similar statute or regulation
inapplicable to this Agreement, the Merger and the Offer and the transactions
contemplated hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company as follows:
SECTION 5.01 Organization and Good Standing. Each of Parent and
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation.
SECTION 5.02 Authority Relative to this Agreement. Each of Parent and
Purchaser has full corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by Parent and
Purchaser, and Parent as the sole stockholder of Purchaser, and no other
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corporate proceedings on the part of Parent or Purchaser are necessary to
authorize this Agreement, or commence the Offer or to consummate the
transactions contemplated by this Agreement (including the Offer). This
Agreement has been duly and validly executed and delivered by each of Parent
and Purchaser and, assuming this Agreement has been duly authorized, executed
and delivered by the Company, this Agreement constitutes a valid and binding
agreement of each of Parent and Purchaser, enforceable against each of Parent
and Purchaser in accordance with its terms, except that (i) enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting creditors' rights
generally and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
SECTION 5.03 Consents and Approvals; No Violation. Neither the
execution and delivery of this Agreement by Parent and Purchaser nor the
consummation of the transactions contemplated hereby will (i) conflict with or
result in any breach of any provision or the respective Certificate of
Incorporation or By-Laws (or other similar governing documents) of Parent or
any of its subsidiaries, (ii) require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental or regulatory
authority or body, except those set forth in clauses (A) through (E) of Section
4.08 hereof; (iii) result in a default (or give rise to any right of
termination, unilateral modification or amendment, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
license, agreement or other instrument or obligation to which the Parent or any
of its subsidiaries is a party; or (iv) violate any order, writ, injunction,
decree, judgment, ordinance, statute, rule or regulation applicable to Parent,
any of its subsidiaries or any of their respective properties or businesses.
SECTION 5.04 Offer Documents; Proxy Statement. The Schedule 14D-1,
including the Offer Documents and any amendments or supplements thereto, and
the Offer will comply in all material respects with the Exchange Act. None of
the information contained in the Offer Documents, including any amendments or
supplements thereto, will at the respective times the Offer Documents or any
amendments or supplements thereto, are filed with the SEC 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, except that no
representation is made by Parent with respect to information supplied by the
Company specifically for inclusion in the Offer Documents. None of the
information supplied by Parent and its affiliates specifically for inclusion in
the Proxy Statement will, at the time the Proxy Statement is mailed, or, at the
time of the Special Meeting or at the Effective Time, 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.
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SECTION 5.05 Ownership of Shares. As of the date hereof, neither
Parent nor Purchaser nor any subsidiary or affiliate of Parent has beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of any
Shares.
ARTICLE VI
COVENANTS
SECTION 6.01 Conduct of Business of the Company.
(a) Except as contemplated by this Agreement, during the
period from the date of this Agreement to such time at which directors
of the Company affiliated with or designated by Parent or Purchaser
shall constitute a majority of the Board (such time, the "Board
Transition Date"), the Company and its subsidiaries will each conduct
its operations according to its ordinary and usual course of business,
substantially consistent with past practice. Without limiting the
generality of the foregoing, and except as otherwise contemplated by
this Agreement, neither the Company nor any of its subsidiaries will,
prior to the Board Transition Date, without the prior written consent
of Parent (i) issue, sell or pledge, or authorize or propose the
issuance, sale or pledge of (A) additional shares of capital stock of
any class of the Company, or securities convertible into any such
shares, or any rights, warrants or options to acquire any such shares
or other convertible securities, other than such issuance of Shares
pursuant to the exercise of Options outstanding on the date hereof,
and other than the issuance of Shares in connection with the Company's
employee stock purchase plan, or (B) any other securities in respect
of, in lieu of or in substitution for, Shares outstanding on the date
hereof, (ii) purchase or otherwise acquire, or propose to purchase or
otherwise acquire, any outstanding Shares, (iii) declare or pay any
dividend or distribution on any shares of its capital stock, (iv)
propose or adopt any amendments to its Amended and Restated
Certificate of Incorporation, as amended, or Amended and Restated
By-Laws, (v) agree in writing or otherwise to take any of the
foregoing actions or any action which would prevent the conditions to
Purchaser's obligation to purchase Shares under the Offer or Parent's
and Purchaser's obligation to consummate the Merger from being
satisfied; provided, however, that the Company shall be permitted to
accelerate the vesting schedule of all outstanding Options. The
Company shall, through its Board or any committee thereof, terminate
the Company's Employee Stock Purchase Plan so that no Shares shall be
issued thereunder subsequent to the date of this Agreement.
(b) Except as set forth on the Disclosure Schedule or
contemplated by this Agreement, from the date of this Agreement to the
Board Transition Date, (i) the Company will not, and will not permit
any of its subsidiaries to, merge or consolidate with any other person
or acquire a material amount of stock or assets of any other person;
(ii) the Company will not, and will not permit any of its subsidiaries
to, sell, lease, license or otherwise dispose of any material
subsidiary or material amount of assets, securities or property except
(A) pursuant to existing contracts or commitments and (B) in the
ordinary course consistent of business with past practice; (iii) the
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Company will (and will cause its subsidiaries to) use reasonable
efforts not to, (A) take any action that (x) would make any
representation and warranty of the Company hereunder that is qualified
by materiality or Material Adverse Effect inaccurate in any respect
at, or as of any time prior to, the Effective Time or (y) would make
any representation or warranty of the Company hereunder that is not so
qualified to be inaccurate in any material respect at, or as of any
time prior to, the Effective Time or (B) omit to take any action
necessary to prevent any such representation or warranty from being
inaccurate in any respect or material respect, as the case may be, at
any such time; (iv) the Company will not, and will not permit any of
its subsidiaries to, sell, transfer, license, sublicense or otherwise
dispose of any material intellectual property rights (other than in
the ordinary course of business consistent with past practice) or
amend or modify any existing agreements with respect to any material
intellectual property rights or third party intellectual property
rights; (v) the Company will not, and will not permit any of its
subsidiaries to, (A) incur any indebtedness for borrowed money or
issue any debt securities or assume, guarantee or endorse or otherwise
as an accommodation become responsible for, the obligations of any
other person (other than (x) for an amount not exceeding $4,000,000 in
the aggregate, or make any loans, advances, or capital contributions
to, or investments in, any other person, (B) enter into or amend any
contract or agreement other than in the ordinary course of business
consistent with past practice, (C) authorize or make any capital
expenditures or purchases of fixed assets that are not currently
budgeted and that in the aggregate exceeds $1,000,000, (D) terminate
any material contract to which the Company is a party or amend in any
material respect any such material contract or (E) enter into or amend
any contract, agreement, commitment or arrangement to effect any of
the matters prohibited hereunder; (vi) the Company will not, and will
not permit any of its subsidiaries to, take any action, other than as
required by generally accepted accounting principles, to change
accounting policies or procedures or cash maintenance policies or
procedures (including, without limitation, procedures with respect to
revenue recognition, capitalization of development costs, payments of
accounts payable and collection of accounts receivable); (vii) the
Company will not, and will not permit any of its subsidiaries to, make
any tax election not required by law and inconsistent with past
practice or settle or compromise any tax liability, except to the
extent the amount of any such settlement or compromise has been
reserved for on the consolidated financial statements contained in the
Company's filings with the SEC, (viii) the Company will not, and will
not permit any of its subsidiaries to, pay, discharge, settle, or
satisfy any lawsuits, claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction in the ordinary course of
business consistent with past practice of liabilities reflected or
reserved against on the Company's September 30, 1999 pro forma balance
sheet which is attached to the Disclosure Schedule or incurred in the
ordinary course of business consistent with past practice or other
payments, discharges or satisfactions which in the aggregate do not
exceed $1,000,000 or waive the benefits of, or agree to modify in any
manner, any confidentiality or standstill agreement.
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SECTION 6.02 No Solicitation, etc. From the date of this Agreement
until the earlier of the Board Transition Date or the termination of this
Agreement, the Company will not (and it will use its best efforts to not permit
any of its officers, directors, agents, affiliates, investment bankers,
accountants or attorneys to) directly or indirectly (i) solicit, engage in
discussions or negotiate with any person (whether such discussions or
negotiations are initiated by the Company or otherwise) or take any other
action intended or designed to facilitate the efforts of any person (other than
Parent) relating to the possible acquisition of the Company (whether by way of
merger, purchase of capital stock, purchase of assets or otherwise) or any
material portion of its capital stock or assets (with any such efforts by any
such person, including a firm proposal to make such an acquisition, to be
referred to as an "Alternative Acquisition"), (ii) provide information with
respect to the Company to any person, other than Parent, relating to a possible
Alternative Acquisition by any person, other than Parent, (iii) enter into an
agreement with any person, other than Parent, providing for a possible
Alternative Acquisition, or (iv) make or authorize any statement,
recommendation or solicitation in support of any possible Alternative
Acquisition by any person, other than by Parent. The Company shall and shall
cause its representatives to cease immediately and cause to be terminated all
activities, discussions and negotiations, if any, conducted prior to the date
hereof with respect to any Alternative Acquisition. Notwithstanding anything to
the contrary contained in Section 6.02 or elsewhere in this Agreement, prior to
the consummation of the Offer, the Company may participate in discussions or
negotiations with, and furnish non-public information, and afford access to the
properties, books, records, officers, employees and representatives of the
Company to any person, entity or group if such person, entity or group has
delivered unsolicited to the Company, prior to the consummation of the Offer,
and in writing, a proposal for an Alternative Acquisition which is not subject
to any financing contingency, which the Board by a majority vote in its good
faith judgment (after consultation with its independent financial advisor)
determines that such proposal is reasonably likely to be consummated and if
consummated would be more favorable, from a financial point of view, to the
Company's stockholders than the transactions contemplated by this Agreement and
the Company's Board determines in good faith that it is necessary to furnish
such information and negotiate in order to comply with its fiduciary
obligations to its stockholders (a "Superior Proposal"). In the event the
Company receives a Superior Proposal, nothing contained in this Agreement (but
subject to the terms of this paragraph (b)) will prevent the Board from
executing or entering into an agreement relating to such Superior Proposal and
recommending such Superior Proposal to its stockholders; in such case, the
Board may withdraw, modify or refrain from making its recommendation of the
Offer and the Merger; provided, however that the Company (i) shall have
promptly notified Parent, and in any event within 24 hours, of any proposal for
an Alternative Acquisition received by, any such information requested from, or
any such negotiations or discussions sought to be initiated or recommenced
with, the Company or any of its subsidiaries, indicating, in connection with
such notice, the name of the person making the proposal for an Alternative
Acquisition or taking such action and, in reasonable detail, the significant
terms of any such proposal for an Alternative Acquisition and including with
such notice any documentation relating to such Alternative Acquisition, (ii)
shall provide Parent at least two business days prior written notice of the
Company's intention to execute or enter into an agreement relating to such
Superior Proposal and (iii) may only terminate this Agreement by written notice
to Parent provided no sooner than two business days after Parent's receipt of a
copy of such Superior Proposal (or a detailed description of the significant
terms and conditions thereof).
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SECTION 6.03 Access to Information.
(a) Subject to any confidentiality requirements of any
agreement to which the Company or any of its subsidiaries is a party,
any regulatory obligations to maintain the confidentiality of
information or any confidentiality privileges applicable to
communications between the Company or any of its subsidiaries and its
respective attorneys or accountants, between the date of this
Agreement and the Effective Time, upon reasonable prior notice to the
Company, the Company will give Parent and its authorized
representatives reasonable access during normal business hours to the
plants, offices, warehouses and other facilities and to the books and
records of it and its subsidiaries, will permit Parent to make such
reasonable inspections during normal business hours as it may
reasonably request and will cause its officers and those of its
subsidiaries to furnish Parent with such financial and operating data
and other information with respect to the business and properties of
the Company and its subsidiaries as Parent may from time to time
reasonably request; provided, however, that all such access and
inspections shall be coordinated by Parent with a designee of the
Company and shall be conducted in such manner so as not to unduly
interfere with the normal business operations of the Company or any of
its subsidiaries.
(b) All information received by Parent and its
representatives pursuant to this Section 6.03 will be subject to the
confidentiality agreement between Parent or an affiliate thereof and
the Company.
SECTION 6.04 Best Efforts. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to promptly effect all necessary
filings under the HSR Act, if any, and use its best efforts to secure all
government clearances (including by taking all reasonable steps to avoid or set
aside any preliminary or permanent injunction or other order of any federal or
state court of competent jurisdiction or other governmental authority). Each of
the parties hereto further agrees to use its reasonable efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all other things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In particular, Parent and the Company will use their respective reasonable
efforts to obtain all other consents, authorizations, orders and approvals
required in connection with, and waivers of any violations, breaches and
defaults that may be caused by, the consummation of the Merger or the other
transactions contemplated by this Agreement, other than consents,
authorizations, orders, approvals and waivers the failure to obtain which would
not (A) be material to the consummation of the Merger or the other transactions
contemplated by this Agreement or (B) have a Material Adverse Effect. In case
at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall take all such necessary action,
including, without limitation, providing for the sale or other disposition or
the holding separate (through the establishment of a trust or otherwise) of
particular assets or categories of assets, or businesses, of the Company or any
of its subsidiaries.
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SECTION 6.05 Public Announcements. Parent and the Company will consult
with each other before issuing any press release or otherwise making any public
statements with respect to the Offer or the Merger and shall not issue any such
press release or make any such public statement prior to such consultation,
except as may be required by law or by obligations pursuant to any listing
agreement with any national securities exchanges or The Nasdaq Stock Market.
SECTION 6.06 Indemnification; Insurance.
(a) Notwithstanding anything to the contrary in Section 2.04,
Parent and Purchaser agree that all rights to indemnification existing
in favor, and all limitations on the personal liability of, each
present and former director, officer, employee or agent of the Company
or any of its subsidiaries or a director, officer, employee, agent or
trustee of any employee benefit plan for employees of the Company or
any of its subsidiaries, and each person who is or was then serving in
any such capacity (or any person who is or was then serving any other
corporation or entity in any such capacity at the request of the
Company) (individually, an "Indemnified Party" and collectively, the
"Indemnified Parties") provided for in the Company's Amended and
Restated Certificate of Incorporation, as amended, or Amended and
Restated By-Laws or similar organizational documents of any Company
subsidiary as in effect on the date of this Agreement with respect to
matters occurring prior to the Effective Time shall survive the Merger
and shall continue in full force and effect for a period of not less
than six (6) years from the Effective Time; provided, however, that
all rights to indemnification in respect of any claim for
indemnification for losses, damages or liabilities of any kind or
nature incurred (an "Indemnifiable Claim") which is asserted or made
within such period shall continue until the final disposition of such
claim. Parent hereby agrees that it shall indemnify any Indemnified
Party in respect of any Indemnifiable Claim to the extent that the
Company does not promptly indemnify such party for an Indemnifiable
Claim.
(b) Parent and the Surviving Corporation shall cause to be
put into effect by the Completion of the Offer, with a carrier
satisfactory to the Board of the Company on the date of this
Agreement, directors' and officers' liability insurance covering each
Indemnified Party who is currently covered by the Company's directors'
and officers' liability insurance with respect to claims arising from
facts or events which occurred at or prior to the Effective Time,
which insurance shall remain in effect for a period of at least six
(6) years after the Effective Time and which shall be no less
favorable than such insurance maintained in effect by the Company on
the date hereof in terms of coverage and amounts; provided that, in no
event shall the Surviving Company be required to make annual premium
payments for such insurance in excess of $150,000.
(c) This Section 6.06 shall survive the closing of the
transactions contemplated hereby, is intended to benefit the Company,
the Surviving Corporation and each of the Indemnified Parties (each of
whom shall be entitled to enforce this Section 6.06 against Parent or
the Surviving Corporation, as the case may be) and shall be binding on
all successors and assigns of Parent and the Surviving Corporation.
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(d) In the event the Surviving Corporation or Parent or any
of their respective successors or assigns (i) consolidates with or
merges into any other person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger, or
(ii) transfers all or substantially all of its properties and assets
to any person, then, and in each such case, proper provision shall be
made so that the successors and assigns of Parent or the Surviving
Corporation, as the case may be, assume the obligations set forth
in this Section 6.06.
SECTION 6.07 Employment Contracts, Benefits, etc.
(a) Parent agrees that following the Board Transition Date it
will cause the Company or the Surviving Corporation, as the case may
be, to comply with the applicable terms and provisions of the
employment, retirement, termination, severance and similar agreements
and arrangements with officers or other employees of the Company and
its subsidiaries which are in effect on the Board Transition Date. The
Company will not enter into any such agreement after the date hereof
without Parent's prior written consent, except that the Company may,
without Parent's prior written consent, amend any employment contract
as provided in the Disclosure Schedule.
(b) Parent agrees that following the Effective Time, it will,
or will cause the Surviving Corporation and its subsidiaries to,
continue to maintain the employee benefit plans for employees and
former employees of the Company and its subsidiaries which are in
effect on the Board Transition Date, or other plans that, in the
aggregate, provide benefits that are no less favorable to such
employees than the benefits currently in effect with respect to such
employees for a period of six months.
SECTION 6.08 Substitution of Letter of Credit. Parent agrees that
prior to the Completion of the Offer it shall either (a) provide a letter of
credit securing the Company's obligations under its bank credit facility with
Silicon Valley Bank (the "Credit Facility") on substantially similar terms as
the letter of credit provided by Securicor Communications Limited or an
affiliate thereof to Silicon Valley Bank, which letter of credit shall remain
in effect until the earlier of (i) the Closing of the Merger or (ii) December
31, 2000, or (b) provide substitute financing in amounts and on terms at least
as favorable to the Company as the Credit Facility.
SECTION 6.09 Purchase of Shares. Prior to the Completion of the Offer
or the termination of this Agreement, except pursuant to the Offer, neither
Parent nor Purchaser nor any subsidiary or affiliate of Parent shall acquire
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
of any Shares without the prior written consent of the Company.
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<PAGE> 31
SECTION 6.10. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Purchaser, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or Purchaser, any other actions and things to
vest, perfect or confirm of record or otherwise in the Surviving Corporation
any and all right, title and interest in, to and under any of the rights,
properties or assets of the Company acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger.
SECTION 6.11 Notification of Certain Matters.
(a) The Company shall give prompt notice to Parent, and
Parent and Purchaser shall give prompt notice to the Company, of (i)
the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which would be likely to cause any representation or
warranty contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the Effective Time, (ii) any material
failure of the Company, Parent or Purchaser, as the case may be, to
comply with or satisfy in any material respect any covenant, condition
or agreement to be complied with or satisfied by it hereunder, (iii)
any notice or other communication from any third party alleging that
the consent of such third party is required in connection with the
transactions contemplated by this Agreement, or (iv) any Material
Adverse Effect or material adverse effect on the financial condition,
assets, liabilities, business or results of operations of Parent and
its subsidiaries taken as a whole.
(b) The Company shall confer on a regular and frequent basis
with Parent with respect to the Company's and its subsidiaries'
business and operations and other matters relevant to the Merger, and
Parent and the Company shall promptly advise the other, orally and in
writing, of any change or event, including, without limitation, any
complaint, investigation or hearing by any governmental entity (or
communication indicating the same may be contemplated) or the
institution or threat of litigation, having, or which, insofar as can
be reasonably foreseen, would have, a Material Adverse Effect or a
material adverse effect on the financial condition, assets,
liabilities, business or results of operations of Parent and its
subsidiaries taken as a whole.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.01 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger are
subject to the satisfaction or waiver, where permissible, prior to the
Effective Time of the following conditions:
(a) This Agreement shall have been adopted by the affirmative
vote of the stockholders of the Company at the Special Meeting by the
requisite vote in accordance with applicable law, if such vote is
required by applicable law;
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<PAGE> 32
(b) All regulatory approvals required to consummate the
transactions contemplated hereby shall have been obtained and shall
remain in full force and effect and all statutory waiting periods in
respect thereof shall have expired;
(c) No statute, rule or regulation shall have been enacted or
promulgated by any governmental authority which prohibits the
consummation of the Merger;
(d) There shall be no order or injunction of a United States
Federal or state court of competent jurisdiction (each party agreeing
to use its reasonable efforts to have any such order reversed or
injunction lifted) in effect precluding consummation of the Merger;
and
(e) Purchaser shall have purchased the Shares pursuant to the
Offer; provided, however, that this condition shall be deemed
satisfied with respect to Parent and Purchaser if Purchaser's failure
to purchase Shares pursuant to the Offer results from a breach of the
Parent's or Purchaser's obligations hereunder.
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.01 Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time notwithstanding
approval thereof by the stockholders of the Company, but prior to the Effective
Time:
(a) by mutual consent of Parent and the Company;
(b) by Parent or Purchaser if an occurrence or circumstance
(except where Parent's or Purchaser's failure to fulfill any of their
respective obligations under this Agreement is the cause of or
resulted in such occurrence or circumstance or except where there has
been a material breach of any representation or warranty on the part
of Parent or Purchaser which has not been cured) has rendered the
conditions set forth in Annex A hereto incapable of being satisfied,
and (i) Purchaser shall have failed to commence the Offer within the
time required by Regulation 14D under the Exchange Act, (ii) the Offer
shall have been terminated or shall have expired without Purchaser
having purchased any Shares pursuant to the Offer or (iii) Purchaser
shall have failed to pay for Shares pursuant to the Offer prior to the
Final Date;
(c) by either Parent or the Company if any court of competent
jurisdiction or other governmental body within the United States shall
have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the Merger
and such order, decree, ruling or other action shall have become final
and nonappealable; provided, however, that a termination of this
Agreement by the Company pursuant to this Section 8.01(c) after the
Board Transition Date shall require the affirmative vote of a majority
of the Board and a majority of the Independent Directors;
29
<PAGE> 33
(d) by Parent or Purchaser prior to the purchase of Shares
pursuant to the Offer, if (i) Purchaser shall discover that any
representation or warranty made by the Company in this Agreement is
untrue at the time such representation or warranty was made or (except
for those representations and warranties made as of a particular date
which need only be true and correct as of such date) shall not be true
and correct as of the date of consummation of the Offer, except where
the failure to be so true and correct would not have a Material
Adverse Effect, provided that if any such failure to be so true and
correct is capable of being cured prior to the Final Date, then Parent
and Purchaser may not terminate this Agreement under this paragraph
(d) until the Final Date, (ii) there shall have been a breach of any
covenant or agreement on the part of the Company under this Agreement
resulting in a Material Adverse Effect which shall not be capable of
being cured prior to the Final Date, (iii) the Board (x) fails to
recommend approval and adoption of this Agreement and the Merger by
the stockholders of the Company or withdraws or amends or modifies in
a manner adverse to Parent and Purchaser its recommendation or
approval in respect of this Agreement, the Offer or the Merger, (y)
makes any recommendation with respect to an Alternative Acquisition
other than a recommendation to reject such Alternative Acquisition or
(z) publicly announces its intention to enter into an Alternative
Acquisition or (iv) there shall not have been validly tendered and not
withdrawn prior to the expiration of the Offer at least a majority of
the then outstanding Shares, and on or prior to such date a person
shall have made a written proposal to the Company and not withdrawn
such proposal for an Alternative Acquisition;
(e) by the Company, if (i) the Company shall discover that
any representation or warranty made by Parent or Purchaser in this
Agreement is untrue at the time such representation or warranty was
made or (except for those representations and warranties made as of a
particular date which need only be true and correct as of such date)
shall not be true and correct as of the date of consummation of the
Offer, except where the failure to be so true and correct would not
materially adversely affect (or materially delay) the consummation of
the Offer or the Merger, provided that if any such failure to be so
true and correct is capable of being cured prior to the Final Date,
then the Company may not terminate this Agreement under this paragraph
(e) until the Final Date and unless at such time the matter has not
been cured or (ii) there shall have been a material breach of any
covenant or agreement in this Agreement on the part of Parent or
Purchaser which materially adversely affects (or materially delays)
the consummation of the Offer or the Merger which shall not be capable
of being cured prior to the Final Date, or (iii) prior to the
acceptance of any Shares pursuant to the Offer and the Company is in
compliance with Section 6.02, such termination is necessary to allow
the Company to enter into a binding written agreement with respect to
a proposal for an Alternative Acquisition; provided, however, that a
termination of this Agreement by the Company pursuant to Section
8.01(e)(i) or (ii) after the Board Transition Date shall require the
affirmative vote of a majority of the Board and a majority of the
Independent Directors; or
30
<PAGE> 34
(f) by the Company if there shall not have been a material
breach of any representation, warranty, covenant or agreement on the
part of the Company which has not been cured and (i) Purchaser shall
have failed to commence the Offer within the time required by
Regulation 14D under the Exchange Act, (ii) the Offer shall have been
terminated or shall have expired without the Purchaser having
purchased any Shares pursuant to the Offer or (iii) Purchaser shall
have failed to pay for Shares pursuant to the Offer prior to the Final
Date.
SECTION 8.02 Effect of Termination.
(a) In the event of the termination and abandonment of this
Agreement pursuant to Section 8.01 hereof, this Agreement shall
forthwith become void, without liability on the part of any party
hereto except as provided in this Section 8.02 and Sections 6.03(b)
and 9.09 and the last sentence of Section 1.02, and except that
nothing herein shall relieve any party from liability for any breach
of this Agreement. Notwithstanding the foregoing, neither Parent or
Purchaser, on the one hand, nor the Company, on the other hand, shall
have any rights with respect to the recovery of expenses, except as
provided for in Sections 8.02(b)(i) and 8.02(b)(ii), respectively.
(b)(i) If Parent or Purchaser shall have terminated this
Agreement pursuant to Section 8.01(d)(i) or 8.01(d)(ii), then the
Company shall promptly reimburse Parent for all out-of-pocket expenses
of Parent and its subsidiaries, up to an amount of $100,000 (which
$100,000 limit shall not apply in the event of a breach by the Company
of this Agreement), incurred in connection with the transactions
contemplated hereby.
(ii) If the Company shall have terminated this Agreement
pursuant to Section 8.01(e)(i), 8.01(e)(ii) or 8.01(f)(i), then Parent
shall promptly reimburse the Company for all out-of-pocket expenses of
Company and its subsidiaries, up to an amount of $100,000, incurred in
connection with the transactions contemplated hereby. Nothing herein
shall limit the Company's right under Section 8.02(a) to pursue
remedies for breach of this Agreement.
(iii) If Parent or Purchaser shall have terminated this
Agreement pursuant to Section 8.01(d)(iii) or the Company shall have
terminated this Agreement pursuant to Section 8.01(e)(iii), then in
any such case the Company shall promptly, but in no event later than
two business days after the date of such termination, pay Parent a
termination fee of $400,000 and shall have no obligation to pay any
amounts under Section 8.02(b)(i).
(iv) Notwithstanding any other provision hereof, no fee or
expense reimbursement shall be paid pursuant to this Section 8.02(b)
to any party who shall be in material breach of its obligations
hereunder. For purposes of this clause (iv), Parent and Purchaser
shall be deemed a single party.
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<PAGE> 35
SECTION 8.03 Amendment. This Agreement may be amended by action taken
by or on behalf of the Boards of Directors of the Company (excluding any
representative of Parent or any subsidiary of Parent), Parent and Purchaser at
any time before or after adoption of this Agreement by the stockholders of the
Company but, after any such approval, no amendment shall be made which
decreases the Transaction Consideration or otherwise adversely affects such
stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of all the parties.
SECTION 8.04 Extension; Waiver. Subject to Section 1.01 hereof, at any
time prior to the Effective Time, the parties hereto, by action taken by or on
behalf of the respective Boards of Directors of the Company (excluding any
representative of Parent or any subsidiary of Parent), Parent and Purchaser,
may (i) extend the time for the performance of any of the obligations or other
acts of any other applicable party hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein by any other applicable party
or in any document, certificate or writing delivered pursuant hereto by any
other applicable party or (iii) waive compliance with any of the agreements of
any other applicable party or with any conditions to its own obligations. Any
agreement on the part of any other applicable party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Survival of Representations and Warranties. The
representations and warranties made in this Agreement shall not survive beyond
the Board Transition Date. This Section 9.01 shall not limit any covenant or
agreement of the parties hereto, which by its terms contemplates performance
after the Effective Time.
SECTION 9.02 Brokerage Fees and Commissions. Except for BHC, the
Company hereby represents and warrants to Parent with respect to the Company,
and Parent hereby represents and warrants to the Company with respect to Parent
and Purchaser, that no person is entitled to receive from the Company or
Parent, respectively, or any of their respective subsidiaries or affiliates,
any investment banking, brokerage or finder's fee or fees for financial
consulting or advisory services in connection with this Agreement or the
transactions contemplated hereby.
SECTION 9.03 Entire Agreement; Assignment. This Agreement (a)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings,
both written and oral (other than the agreement referred to in Section 6.03(b)
hereof), among the parties or any of them with respect to the subject matter
hereof, (b) shall be binding upon the parties hereto and their successors and
permitted assigns and (c) shall not be assigned by operation of law or
32
<PAGE> 36
otherwise, provided that Parent or Purchaser may assign its respective rights
and obligations to any wholly owned, direct or indirect, subsidiary of Parent,
but no such assignment shall relieve Parent of its obligations hereunder. It is
understood and agreed that either Parent, Purchaser or any other direct wholly
owned subsidiary of Parent may commence the Offer or purchase Shares thereunder
(in which event, references herein to (and similar to) Purchaser purchasing
Shares shall be deemed appropriately modified).
SECTION 9.04 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, each of which shall remain in full
force and effect.
SECTION 9.05 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person or by next-day courier, or by facsimile
transmission with confirmation of receipt to the respective parties as follows:
If to Parent or Purchaser:
EDB Business Partner ASA
Rusel0kkveien 6,
N-0251 Oslo, Norway
Attention: Asbjorn Eide
Facsimile No.: 011 47 22 94 40 44
with a copy to:
Atlas Pearlman Trop & Borkson, P.A.
New River Center, Suite 1900
200 East Las Olas Boulevard
Fort Lauderdale, Florida 33301
Attention: Joel D. Mayersohn, Esq.
Facsimile No.: (954) 766-7800
If to the Company:
Telesciences, Inc.
4000 Midlantic Drive
Mt. Laurel, NJ 08054
Attention: Andrew P. Maunder
Facsimile No.: (856) 866-2439
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<PAGE> 37
with a copy to:
Wolf, Block, Schorr and Solis-Cohen LLP
1650 Arch Street, 22nd Floor
Philadelphia, Pennsylvania 19103
Attention: Jason M. Shargel, Esq.
Facsimile No.: (215) 977-2740
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof). Any such notice shall be effective upon receipt, if
personally delivered or sent by facsimile transmission, or one day after
delivery to a courier for next-day delivery. Nothing in this Section 9.05 shall
be deemed to constitute consent to the manner and address for service of
process in connection with any legal proceeding (including litigation arising
out of or in connection with this Agreement), which service shall be effected
as required by applicable law.
SECTION 9.06 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
SECTION 9.07 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of
or to affect the meaning of interpretation of this Agreement.
SECTION 9.08 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
SECTION 9.09 Expenses. Subject to Section 8.02(b), all costs and
expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses.
SECTION 9.10 Third Party Beneficiaries. Except for Sections 2.08, 6.06
and 6.07 which are intended to confer third party beneficiary rights on the
persons referred to therein, this Agreement is not intended to, and does not,
create any rights or benefits of any person other than the parties hereto.
SECTION 9.11 Certain Definitions.
(a) "Related Entities" shall mean any company, partnership,
trust or limited liability company of which the Company, directly or
indirectly, owns 25% or more of the equity or can elect a majority of
the directors or partners or the Company is otherwise deemed to
control.
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<PAGE> 38
(b) "subsidiary" shall mean, when used with reference to an
entity, any corporation or other entity, a majority of the outstanding
voting securities of which are owned directly or indirectly by such
entity.
(c) "Material Adverse Effect" shall mean any adverse change
in the financial condition, assets, liabilities, business or results
of operations of the Company and its subsidiaries which is material to
the Company and its subsidiaries taken as a whole, excluding any
changes relating to (i) public or industry knowledge relating to the
transactions contemplated by this Agreement (including, without
limitation, actions or inactions of employees, customers or vendors)
or (ii) past, existing or prospective general economic or regulatory
conditions affecting at any time the Company or any of its
subsidiaries or the industry or industries in which any of them
operate. Notwithstanding the foregoing, the Company may, at its
option, include in the Disclosure Schedules items which would not have
a Material Adverse Effect within the meaning of the previous sentence,
and such inclusion shall not be deemed to be an acknowledgment by the
Company that such items would have a Material Adverse Effect or
further define the meaning of such term for purposes of this
Agreement.
(d) "person" shall include individuals, corporations,
partnerships, trusts, other entities and groups.
(e) "knowledge of the Company" shall be deemed to include
only the actual knowledge of the directors and executive officers of
the Company.
(f) "Environmental Laws" shall mean any and all foreign,
federal, state and local laws (including, without limitation, common
law), statutes, ordinances, rules, regulations, permits, licenses or
other governmental requirements relating to health, pollution, the
environment (including, without limitation, ambient air, surface
water, groundwater, and surface or subsurface strata), the release or
threatened release, discharge, emission, of any Hazardous Materials or
materials containing Hazardous Materials or otherwise relating to the
manufacture, processing, distribution, use treatment, storage,
disposal, transport or handling of Hazardous Materials or the
pollution of the environment.
(g) "Hazardous Materials" shall mean asbestos, petroleum
products and all other materials on the date hereof defined as
"hazardous substances", "hazardous wastes", "toxic substances", "solid
wasters" or otherwise on or prior to the date hereof listed or
regulated pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S. C. (S)
9601 et seq. and any amendments thereto; the Hazardous Materials
Transportation Act, 49 U.S.C. (S)(s) 1801 et. seq.; the Clean Water
Act, the Safe Drinking Water Act, the Atomic Energy Act; the Federal
Insecticide, Fungicide, and Rodenticide Act, the Clean Air Act; or any
other similar foreign, federal, state or local statute, regulation or
ordinance or any other law of common law theory of any foreign, state
or federal court, laws now in effect, relating to, or imposing
liability or standards of conduct concerning any hazardous or toxic
waste, substance or material.
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<PAGE> 39
SECTION 9.12 Consent to Jurisdiction. Each of Parent, Purchaser and
the Company irrevocably submits to the exclusive jurisdiction of any Delaware
State court, or any Federal court of the United States of America, sitting in
Delaware, and any appellate court from any thereof for the purposes of any
suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby. Parent and Purchaser irrevocably designate,
appoint and empower the registered agent of Purchaser in the State of Delaware
as set forth on Purchaser's Certificate of Incorporation and the Company hereby
irrevocably designates, appoints and empowers Wolf, Block, Schorr and
Solis-Cohen LLP, in each case as its true and lawful agent and attorney-in-fact
in its name, place and stead to receive and accept on its behalf service of
process in any action, suit or proceeding in Delaware with respect to any
matters as to which it has submitted to jurisdiction as set forth in the
immediately preceding sentence.
SECTION 9.13 Construction; Interpretation. The parties hereby agree
that any rule of law or any legal decision that would require interpretation of
any claimed ambiguities in this Agreement against the party that drafted it has
no application and is expressly waived.
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<PAGE> 40
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed under seal on its behalf by its officers thereunto duly authorized,
all as of the day and year first above written.
EDB BUSINESS PARTNER ASA
[SEAL]
By: /s/ Eivind Kinck
----------------------------------
Name: Eivind Kinck
Title:
ATTEST:
/s/ Asbjorn Eide
- ---------------------------
Name: Asbjorn Eide
Title:
EDB 4TEL ACQUISITION CORP.
[SEAL]
By: /s/ Asbjorn Eide
----------------------------------
Name: Asbjorn Eide
Title:
ATTEST:
/s/ Eivind Kinck
- ---------------------------
Name:
Title:
TELESCIENCES, INC.
[SEAL]
By: /s/ Andrew P. Maunder
----------------------------------
Name: Andrew P. Maunder
Title: Chief Executive Officer
and President
ATTEST:
/s/ Frances Penfold
- ----------------------------
Name:
Title:
37
<PAGE> 41
ANNEX A
to
Agreement and Plan of Merger*
Conditions of the Offer. Notwithstanding any other provisions of the
Offer, and in addition to (and not in limitation of) Purchaser's rights to
extend and amend the Offer at any time in its sole discretion (subject to the
terms of the Merger Agreement), Purchaser shall not be required to accept for
payment (whether or not the Shares have theretofore been accepted for payment),
or pay for, and may delay the acceptance for payment of, or the payment for,
any tendered Shares, and may terminate the Offer and not accept for payment any
Shares if (i) there are not validly tendered and not withdrawn prior to the
expiration date of the Offer a number of Shares which when added to the Shares
then beneficially owned by Parent represent at least a majority of the total
number of then outstanding Shares (the "Minimum Condition"), (ii) all
regulatory approvals required to consummate the Offer and the Merger shall have
been obtained and shall remain in full force and effect and all statutory
waiting periods in respect thereof shall have expired; or (iii) on or after
date of this Agreement, and prior to the payment of Shares any of the following
conditions exist:
(a) there shall be pending any action, investigation,
proceeding, claim or counterclaim by any governmental authority or
agency which seeks to (i) prohibit the making or consummation of the
Offer or the Merger or (ii) restrain or prohibit the performance of
the Merger Agreement; (iii) seeks to impose limitations on the ability
of Purchaser or to render Purchaser unable to accept payment, pay for
or purchase some or all of the Shares pursuant to the Offer or Merger;
(iv) seeking to restrain or prohibit Parent's ownership or operation
of all or any portion of the business and assets of the Company and
its subsidiaries, or to compel Parent or its affiliates to dispose of
or hold all or any portion of the business or assets of the Company
and its subsidiaries; (iv) seeking to impose limitations on the
ability of Parent and its affiliates to exercise full voting rights or
ownership of the Shares or (v) that otherwise is reasonably likely to
have a Material Adverse Effect; or
(b) there is in effect any order, decree or injunction
(whether preliminary, final or appealable, other than a temporary
restraining order) issued by a court or governmental authority of
competent jurisdiction which prohibits consummation of the Offer or
the Merger or requires Parent or Purchaser to hold separate any
material portion of the stock or assets of the Company or its
subsidiaries; or
- --------------
* Capitalized terms not defined herein shall have the meanings given
them in the Agreement and Plan of Merger (the "Merger Agreement").
A-1
<PAGE> 42
(c) there shall have been any statute, rule, regulation,
injunction, order or decree proposed, enacted or promulgated or any
similar action taken or deemed applicable to the Offer or the Merger
which prohibits consummation of the Offer or the Merger; or
(d) there shall be in effect a banking moratorium or any
suspension of payments in respect of banks in the United States
(whether or not mandatory); or
(e) Purchaser shall discover that any representation or
warranty made by the Company in the Merger Agreement is untrue at the
time such representation or warranty was made or shall not be true and
correct as of the date of consummation of the Offer (except for those
representations and warranties made as of a particular date which need
only be true and correct as of such date), except where the failure to
be so true and correct would not have a Material Adverse Effect; or
(f) there shall have been a breach in any material respect by
the Company of any of its covenants or agreements contained in the
Merger Agreement, except for any such breaches that would not have a
Material Adverse Effect; or
(g) the Merger Agreement shall have been terminated in
accordance with its terms;
(h) any person shall have entered into a definitive agreement
or an agreement in principal with the Company regarding an Alternative
Acquisition; or
(i) the Company's Board of Directors will have withdrawn or
modified (including by amendment of the Schedule 14D-9) in a manner
adverse to Parent or Purchaser its approval or recommendation of the
Offer, the Merger Agreement or the Merger, will have recommended to
the Company's stockholders another offer or will have adopted any
resolution to effect any of the foregoing which, in the sole judgment
of Purchaser in any such case, and regardless of the circumstances
(including any action or omission by Purchaser) giving rise to any
such condition, makes it inadvisable to proceed with such acceptance
or payment.
The foregoing conditions are for the sole benefit of Purchaser and may
be asserted by Purchaser regardless of the circumstances giving rise to such
condition or may be waived by Purchaser in whole or in part at any time and
from time to time in its sole discretion, subject in each case to the terms of
the Merger Agreement. The failure by Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right and may be asserted at any time and
from time to time.
A-2
<PAGE> 1
Exhibit 99(c)(3)
ANNEX B
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is entered into this 19th day of
October, 1999, by and among, Telesciences, Inc., a Delaware corporation (the
"Company"), EDB Business Partner ASA, a Norwegian public limited company
("Parent"), EDB 4Tel Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of Parent ("Purchaser") and First Union National Bank (the
"Escrow Agent").
BACKGROUND
A. Pursuant to an Agreement and Plan of Merger dated October 19, 1999
("Agreement and Plan of Merger"), Parent has agreed to cause Purchaser to make a
cash tender offer (the "Offer") for all of the issued and outstanding shares of
Common Stock of the Company (the "Shares") and thereafter to cause Purchaser to
merge with and into the Company.
B. Pursuant to the Agreement and Plan of Merger, Purchaser has agreed
to deposit in escrow a sufficient amount of funds (the "Deposit") necessary to
(i) make the cash payments contemplated by Section 1.01(a) of the Agreement and
Plan of Merger to purchase all of the Shares tendered in the Offer (the "Tender
Payment"), (ii) make the cash payments contemplated by Section 2.08 of the
Agreement and Plan of Merger with respect to the settlement of the options to
purchase Shares granted by the Company, and (iii) redeem the outstanding shares
of Series A Preferred Stock of the Company for cash in accordance with the terms
of the Certificate of Designation of Preferences and Rights of the Series A
Preferred Stock (the "Preferred Stock Redemption").
C. Company, Parent, Purchaser and Escrow Agent wish to provide for the
appointment of an escrow agent to hold the Deposit, and to set forth the terms
and conditions under which the Deposit shall be disbursed.
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound, the parties hereto agree as follows:
1. DEFINITIONS.
Capitalized terms not otherwise defined herein which are
defined in the Agreement and Plan of Merger shall have the meanings given in the
Agreement and Plan of Merger, a complete and correct copy of which has been
delivered to the Escrow Agent by the Company, Parent and Purchaser.
<PAGE> 2
2. CREATION OF ESCROW.
2.1 ESCROW. Company, Parent and Purchaser hereby designate and appoint
First Union National Bank as Escrow Agent to serve in accordance with the terms
and conditions of this Escrow Agreement, and First Union National Bank agrees to
act as such Escrow Agent upon the terms and conditions of this Escrow Agreement.
2.2 ESCROWED FUNDS. Purchaser agrees to deliver to Escrow Agent, in
accordance with Section 1.01(b) of the Agreement and Plan of Merger, the Deposit
in the amount of Thirteen Million Six Hundred and Fifty-Five Thousand Four
Hundred and Forty-Five Dollars ($13,655,445). Such funds plus all interest
earned thereon, less the fees and expenses of Escrow Agent chargeable thereto
under Section 4.2 hereof, are hereinafter collectively called the "ESCROWED
FUNDS." Until released as set forth herein, Escrow Agent shall hold the Escrowed
Funds in escrow hereunder.
2.3 INVESTMENT OF ESCROWED FUNDS. Pending release from escrow, the
Escrow Funds shall be invested and reinvested by Escrow Agent in any money
market fund substantially all of which is invested in the following investment
categories, including any money market fund managed by Escrow Agent and any of
its affiliates: direct obligations of the United States of America or
obligations the principal interest of and the interest on which are
unconditionally guaranteed by the United States of America; certificates of
deposit issued by any bank, bank and trust company, or national banking
association (including Escrow Agent and its affiliates), which certificates of
deposit are insured by the Federal Deposit Insurance Corporation or similar
governmental agency; or repurchase agreements with any bank, trust company, or
national banking association (including Escrow Agent and its affiliates); or in
such other investments as are approved by Company and Purchaser.
2.4 STATEMENT OF ACCOUNTS. From time to time upon the written request
of Company, Parent or Purchaser, and upon termination of this Escrow Agreement,
Escrow Agent shall furnish to Company, Parent and Purchaser a statement of
account of the Escrowed Funds.
2
<PAGE> 3
3. RELEASE OF ESCROWED FUNDS.
3.1 RELEASE OF ESCROWED FUNDS IN ACCORDANCE WITH JOINT INSTRUCTIONS.
From time to time, Asbjorn Eide or such other person as shall be designated by
Asbjorn Eide, on behalf of Purchaser ("Purchaser's Representative"), and Andrew
Maunder or such other person as shall be designated by Andrew Maunder, on behalf
of Company ("Company's Representative"), may jointly deliver signed written
instructions to Escrow Agent specifying that all or a designated portion of the
Escrowed Funds shall be released from escrow in the manner and to the persons
specified in such instructions. No portion of the Escrowed Funds shall be paid
to any person except as directed by such joint written instructions or by a
court of competent jurisdiction. If Shares are accepted for payment in the Offer
in accordance with the terms thereof, the Purchaser and Company shall give joint
written instructions to the Escrow Agent to pay over (i) to the paying agent
identified on the letter of transmittal sent to Company's stockholders in
connection with the Offer, promptly after Shares are accepted for payment in the
Offer, the amount of the Tender Payment (ii) to Company, promptly after Shares
are accepted for payment in the Offer, the amount necessary to effectuate the
Preferred Stock Redemption and (iii) to the Exchange Agent, no later than one
business day prior to the Effective Time, the balance of the Escrowed Funds to
be held in the Payment Fund. If the Agreement and Plan of Merger is terminated
in accordance with its terms without any Shares having been accepted for
purchase in the Offer, and neither the Purchaser nor Parent is in breach of the
Agreement and Plan of Merger, promptly thereafter, the Purchaser and Company
shall give joint written instructions to the Escrow Agent to pay over the
Escrowed Funds to Parent.
3.2 RELEASE OF ESCROWED FUNDS - TERMINATION. This Escrow Agreement
shall terminate upon release of all of the Escrowed Funds pursuant to Section
3.1 above. Upon the release of all of the Escrowed Funds, Escrow Agent shall be
released and forever discharged of any liabilities and duties hereunder.
3.3 LIQUIDATION OF INVESTMENT; PAYMENT. Escrow Agent shall, as
necessary, liquidate investments and release amounts from the Escrowed Funds as
expressly provided in this Escrow Agreement. Payments by Escrow Agent shall be
made by delivery of bank check, or, at the option of the recipient, by wire
transfer of immediately available funds to a bank account designated by the
recipient.
3.4 TAXES. Purchaser is entitled to the interest earned on the Escrowed
Funds and for federal, state and local tax purposes shall include the income or
interest earned or payable on the Escrowed Funds in its gross income. The
employer identification number of Purchaser is ______________.
4. ESCROW AGENT.
4.1 LIMITATION OF LIABILITY. Escrow Agent will not be bound by the
Agreement and Plan of Merger or by any other agreement between the parties
hereto, to which Escrow Agent is not a party, whether or not it has knowledge
thereof, and will be required only to retain, invest,
3
<PAGE> 4
collect and disburse income from and deliver the Escrowed Funds, as herein
provided. Escrow Agent will not in any way be required to determine whether or
not the terms and conditions of the Agreement and Plan of Merger have been
complied with by the parties. Escrow Agent's duties are only such as are
specifically provided herein and are administrative, not discretionary. Escrow
Agent shall incur no liability whatsoever to Company, Parent or Purchaser except
for gross negligence or wilful misconduct. Escrow Agent shall have no
responsibility hereunder other than to follow faithfully the instructions herein
contained or such further supplemental instructions as Company and Purchaser may
collectively provide. Escrow Agent shall not be subject to liability with
respect to losses suffered from investment of funds in the Escrowed Funds,
except for the safekeeping of the securities in which said funds are invested
and collection of interest thereon. Escrow Agent may consult with counsel and
shall be fully protected in any action taken in good faith in accordance with
such advice. Escrow Agent shall be fully protected in acting in accordance with
any written instructions given to it hereunder and reasonably believed by it to
have been executed by the proper parties. Escrow Agent shall not be liable for
interest on the Escrowed Funds except as provided herein.
4.2 FEES AND EXPENSES. The Escrow Agent shall charge a fee for its
services hereunder as set forth in SCHEDULE I hereto, Parent and Purchaser
jointly and severally agree to pay all reasonable expenses of Escrow Agent,
including its attorney's fees and expenses, which it may incur in connection
with the performance of its duties under this Escrow Agreement or under the
indemnity provided in Section 4.7. To the extent not otherwise so paid, such
fees and expenses will be chargeable to the Escrowed Funds in existence when the
fees are earned or the expense incurred. Escrow Agent shall notify Company and
Purchaser of the amount to be chargeable pursuant to the preceding sentence, but
shall not be required to collect such amount from Parent or Purchaser; provided
that the failure of Escrow Agent to collect such amount shall not relieve Parent
or Purchaser of their obligations to pay such amounts, which obligations may be
enforced by Company.
4.3 SUCCESSOR ESCROW AGENT. Escrow Agent may resign at any time by
giving written notice thereof to Company and Purchaser and may be removed at any
time by Company and Purchaser giving joint written notice thereof to Escrow
Agent; PROVIDED, HOWEVER, that any such resignation or removal shall not become
effective until a successor escrow agent shall have been appointed as provided
herein and shall have accepted such appointment in writing upon the resignation
or removal of Escrow Agent. A successor Escrow Agent will be appointed by joint
agreement of Company and Purchaser; PROVIDED, HOWEVER, that in the event no
successor Escrow Agent is appointed by mutual agreement of Company and Purchaser
within ten days after such resignation or removal, Company shall promptly
appoint the successor Escrow Agent, which successor shall be a bank or trust
company organized under the laws of the United States having reported capital
and surplus of not less than $100,000,000. Any such successor escrow agent shall
deliver to Escrow Agent, Company and Purchaser a written instrument accepting
such appointment hereunder, and thereupon it shall succeed to all of the rights,
powers and duties of Escrow Agent hereunder and shall be entitled to receive and
hold all of the then remaining amounts held in escrow hereunder. Pending the
appointment of the successor Escrow Agent, Escrow Agent shall only be
responsible for continuing to hold and invest the Escrowed Funds
4
<PAGE> 5
pursuant to the terms of this Escrow Agreement. If an instrument of acceptance
by a successor escrow agent shall not have been delivered to Escrow Agent within
30 days after the giving of such notice of resignation, the resigning Escrow
Agent or Company or Purchaser, may at the expense of Company and Purchaser,
petition any court of competent jurisdiction for the appointment of a successor
escrow agent.
4.4 DISPUTES. It is understood and agreed that, should any dispute
arise with respect to the payment and/or ownership or right of possession of the
Escrowed Funds, Escrow Agent is authorized and directed to retain in its
possession, without liability to anyone, all or any part of the Escrowed Funds
until such dispute shall have been settled either by mutual agreement by the
parties concerned or by the final order, decree or judgment of a court or other
tribunal of competent jurisdiction in the United States of America and time for
appeal has expired and no appeal has been perfected as so certified by the
parties. Escrow Agent shall be under no duty whatsoever to institute or defend
any such proceedings.
4.5 ESCROW AGENT NOT REQUIRED TO INSTITUTE ACTION. Escrow Agent shall
not be required to institute or defend, except in the case of Escrow Agent's
wilful misconduct or gross negligence, any action or legal process involving any
matter referred to herein which in any manner affects it or its duties or
liabilities hereunder. In the event Escrow Agent shall institute or defend any
such action or legal process, it shall do so only upon receiving full indemnity
in an amount and of such character as it shall require, against any and all
claims, liabilities, judgments, attorneys' fees and other expenses of every kind
in relation thereto, except in the case of its own wilful misconduct or gross
negligence.
4.6 INTERPLEADER. If any two parties, whether or not they are parties
to this Escrow Agreement, shall be in disagreement about the interpretation of
this Escrow Agreement, or about the rights and obligations, or the propriety, of
any action contemplated by Escrow Agent hereunder, or if any other dispute shall
arise hereunder, or if Escrow Agent otherwise has any doubts as to the proper
disposition of funds or any execution of any of its duties hereunder, Escrow
Agent may, at its sole discretion, file an action in interpleader to resolve
such disagreement in any Delaware State court, or any Federal Court of the
United States of America, sitting in Delaware. Escrow Agent shall be indemnified
for all costs, including reasonable attorneys' fees and expenses, and shall be
fully protected in suspending all or part of its activities under this Escrow
Agreement until a final judgment in the interpleader action is received.
4.7 INDEMNIFICATION. Company, Parent and Purchaser, jointly and
severally, shall hold Escrow Agent harmless and indemnify Escrow Agent against
any loss, liability, expenses (including attorney's fees and expenses), claim or
demand arising out of or in connection with the performance of its obligations
in accordance with the provisions of this Escrow Agreement, except for gross
negligence or wilful misconduct of Escrow Agent; PROVIDED, HOWEVER, that Company
shall have no liability for any payments which are due to Escrow Agent pursuant
to Section 4.2 hereof. The foregoing indemnities in this paragraph shall survive
the resignation or removal of Escrow Agent or the termination of this Escrow
Agreement.
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<PAGE> 6
5. NOTICES.
All notices, requests, demands, claims and other
communications hereunder shall (i) be in writing; (ii) be delivered personally
or by confirmed courier delivery; (iii) be deemed to have been duly given on the
date received; and (iv) be addressed to the intended recipient as set forth
below:
If to the Escrow Agent:
First Union National Bank
21 South Street - 3rd Floor
Morristown, New Jersey 07960
Attention: Rick Barnes
Fascimile No.: (973) 682-4531
If to the Parent or Purchaser:
EDB Business Partner ASA
Rusel0kkveien 6,
N-0251 Oslo, Norway
Attention: Asbjorn Eide
Fascimile No.: 011 47 22 94 40 44
with a copy to:
Atlas Pearlman Trop & Barkson, P.A.
New River Center, Suite 1900
200 East Las Olas Boulevard
Fort Lauderdale, Florida 33301
Attention: Joel D. Mayersohn, Esquire
Facsimile No.: (954) 766-7800
If to Company:
Telesciences, Inc.
4000 Midlantic Drive
Mt. Laurel, NJ 08054
Attention: Andrew P. Maunder
Facsimile No.: (856) 778-0836
6
<PAGE> 7
with a copy to:
Wolf, Block, Schorr and Solis-Cohen LLP
1650 Arch Street, 22nd Floor
Philadelphia, Pennsylvania 19103
Attention: Jason M. Shargel, Esq.
Facsimile No.: (215) 977-2740
Any party may change the address to which notices, requests, demands, claims, or
other communications hereunder are to be delivered by giving the other parties
notice in the manner herein set forth.
6. MISCELLANEOUS.
6.1 ASSIGNMENT. Subject to Section 4.3, this Escrow Agreement
and the rights of the parties hereunder may not be assigned by any party without
the consent of Company, Parent and Purchaser.
6.2 SUCCESSORS AND ASSIGNS. This Escrow Agreement and all
action taken hereunder in accordance with its terms shall be binding upon and
inure to the benefit of the parties hereto and their respective permitted
successors and permitted assigns.
6.3 GOVERNING LAW. THIS ESCROW AGREEMENT WILL BE GOVERNED BY,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
6.4 AMENDMENT. This Escrow Agreement may be amended or
canceled by and upon written notice to Escrow Agent at any time given by
Company, Parent and Purchaser but the duties, responsibilities or compensation
of Escrow Agent may not be altered without the consent of Escrow Agent.
6.5 HEADINGS. The section headings contained in this Escrow
Agreement are for convenient references only and shall not in any way affect the
meaning or interpretation of this Escrow Agreement.
6.6 WAIVER. Waiver of any term or condition of this Escrow
Agreement by any party shall not be construed as a waiver of a subsequent breach
or failure of the same term or condition, or waiver of any other term or
condition of this Escrow Agreement.
6.7 COUNTERPARTS. This Escrow Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
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<PAGE> 8
6.8 FURTHER ASSURANCES. Upon delivery by Escrow Agent of any
portion of the Escrowed Funds to any party hereto, such party shall deliver or
cause to be delivered to Escrow Agent any tax form or other document required by
any governmental authority to be obtained by Escrow Agent from such party.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the day, month and year first above written.
EDB BUSINESS PARTNER ASA
By: /s/ Eivind Kinck
--------------------------------
Name:
Title:
EDB 4TEL ACQUISITION CORP.
By: /s/ Asbjorn Eide
--------------------------------
Name:
Title:
TELESCIENCES, INC.
By: /s/ Andrew P. Maunder
--------------------------------
Name: Andrew P. Maunder
Title: President and Chief Executive Officer
FIRST UNION NATIONAL BANK
By: /s/ Rick Barnes
--------------------------------
Name:
Title:
8
<PAGE> 1
Exhibit 99(c)(4)
SHAREHOLDER AGREEMENT
SHAREHOLDER AGREEMENT, dated as of October 19, 1999 (this "Agreement"),
among EDB Business Partner ASA, a Norwegian Public Limited Company (the
"Parent"), EDB 4tel Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of the Parent ("Purchaser"), and Frances Penfold (the "Stockholder").
WHEREAS, concurrently with the execution and delivery of this Agreement
the Parent, Purchaser and Telesciences, Inc., a Delaware corporation (the
"Company"), have entered into an Agreement and Plan of Merger dated as of the
date hereof (such Agreement and Plan of Merger, as amended from time to time,
the "Merger Agreement"), which provides, among other things, that Purchaser
shall make the Offer (as defined in the Merger Agreement) to purchase at a price
of $8.79 per share, net to the sellers in cash, all of the issued and
outstanding shares of the Company's Common Stock, par value $0.04 per share (the
"Company Common Stock"), and shall merge with and into the Company (the
"Merger"), upon the terms and subject to the conditions set forth in the Merger
Agreement (any term used herein without definition shall have the definition
ascribed thereto in the Merger Agreement);
WHEREAS, the Stockholder owns beneficially and of record 97,837 shares
of Company Common Stock (such shares of Company Common Stock being collectively
referred to herein as the "Stockholder Shares"); and
WHEREAS, as a condition to the willingness of the Parent and Purchaser
to enter into the Merger Agreement, and as an inducement to them to do so, the
Stockholder has agreed for the benefit of the Parent and Purchaser to tender the
Stockholder Shares and any other shares of Company Common Stock at any time
during the term of this Agreement held by the Stockholder, pursuant to the
Offer, to vote all the Stockholder Shares and any other shares of Company Common
Stock owned by the Stockholder in favor of the Merger, all on the terms and
conditions contained in this Agreement.
<PAGE> 2
2
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties hereby agree
as follows:
ARTICLE I
Tender Offer
SECTION 1.1. Tender of Shares. (a) At least two business days prior to
the consummation by the Purchaser of the Offer, the Stockholder shall tender to
the Depository designated in the Offer to Purchase (the "Offer to Purchase")
distributed by Purchaser in connection with the Offer (i) a letter of
transmittal with respect to the Stockholder Shares and any other shares of
Company Common Stock held by the Stockholder (whether or not currently held by
the Stockholder; the Stockholder Shares, together with any shares acquired by
the Stockholder in any capacity after the date hereof and prior to the
termination of this Agreement whether upon the exercise of options, warrants or
rights, the conversion or exchange of convertible or exchangeable securities, or
by means of purchase, dividend, distribution or otherwise (the "Shares")),
complying with the terms of the Offer to Purchase, (ii) the certificates
representing the Shares, and (iii) all other documents or instruments required
to be delivered pursuant to the terms of the Offer to Purchase.
(b) The Stockholder shall not, subject to applicable law,
withdraw the tender effected in accordance with Section 1.1(a); provided,
however, that the Stockholder may decline to tender, or may withdraw, any and
all Shares owned by the Stockholder if the Purchaser amends the Offer to (w)
reduce the Offer Price to less than $8.79 in cash, net to the stockholders, (x)
reduce the number of shares of Company Common Stock subject to the Offer, (y)
change the form of consideration payable in the Offer or (z) amend or modify any
term or condition of the Offer in a manner adverse to the stockholders of the
Company (other than insignificant changes or amendments or other than to waive
any condition). The Stockholder shall give Purchaser at least two business days'
prior notice of any withdrawal of Shares owned by the Stockholder pursuant to
the immediately preceding proviso.
SECTION 1.2. No Purchase. Purchaser and Parent may allow the Offer to
expire without accepting for payment or paying for any Shares, on the terms and
conditions set forth in the Offer to Purchase. If all Shares validly tendered
and not withdrawn are not accepted for payment and paid for in accordance with
the terms of the Offer to Purchase, they shall be returned to the Stockholder,
whereupon they shall continue to be held by the Stockholder subject to the terms
and conditions of this Agreement.
<PAGE> 3
3
ARTICLE II
Consent and Voting
The Stockholder hereby revokes any and all previous proxies granted
with respect to the Shares owned by the Stockholder. By entering into this
Agreement, the Stockholder hereby consents to the Merger Agreement and the
transactions contemplated thereby, including the Merger. So long as the Merger
Agreement is in effect, or Purchaser notifies Stockholder of its intent to
continue its Offer or a revised offer within 2 business days of termination of
the Merger Agreement the Stockholder hereby agrees (i) to vote all Shares now or
hereafter owned by such Stockholder or execute a consent or proxy and not revoke
any proxy, vote or consent, in favor of the Merger Agreement, the Merger and the
transactions contemplated thereby, and (ii) to oppose any Alternative
Acquisition and to vote all Shares now or hereafter owned by such Stockholder,
or execute a consent or proxy, against any Acquisition Proposal.
ARTICLE III
Representations, Warranties and Covenants
of the Stockholder
The Stockholder represents, warrants and covenants to the Purchaser
that:
SECTION 3.1. (a) Ownership. As of the date hereof the Stockholder is
the sole, true, lawful and beneficial owner of 97,837 Shares and that there are
no restrictions on voting rights or rights of disposition pertaining to such
Shares. The Stockholder will convey good and valid title to the Shares owned by
the Stockholder and being acquired pursuant to the Offer or the Merger, as the
case may be, free and clear of any and all liens, restrictions, security
interests or any encumbrances whatsoever, other than restrictions under
applicable securities laws (collectively, "Liens"). None of the Shares owned by
the Stockholder is subject to any voting trust or other agreement, arrangement
or restriction with respect to the voting of such Shares.
(b) Transfer of the Shares. (i) Until this Agreement is
terminated, the Stockholder shall not directly or indirectly offer to sell, sell
short, transfer (including gift), assign, pledge or otherwise dispose of or
transfer (each, a "Transfer") any interest in or encumber with
<PAGE> 4
4
any Lien any of the Shares, (ii) enter into any contract, option, put, call,
"collar" or other agreement or understanding with respect to any Transfer of any
or all of the Shares or any interest therein; (iii) grant any proxy,
power-of-attorney or other authorization or consent in or with respect to the
Shares; (iv) deposit the Shares into a voting trust or enter into a voting
agreement or arrangement with respect to the Shares; or (v) take any other
action with respect to the Shares that would in any way restrict, limit or
interfere with the performance of its obligations hereunder.
(c) The Stockholder agrees to place the following legend on
any and all certificates evidencing the Shares:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER PURSUANT TO THAT
SHAREHOLDER AGREEMENT, DATED AS OF OCTOBER 19, 1999, BY AND AMONG
PARENT, PURCHASER AND STOCKHOLDER. ANY TRANSFER OF SUCH SHARES OF
COMMON STOCK IN VIOLATION OF THE TERMS OF SUCH AGREEMENT SHALL BE
NULL AND VOID AND OF NO EFFECT WHATSOEVER.
SECTION 3.2. Authority and Non-Contravention. The execution, delivery
and performance by the Stockholder of this Agreement and the consummation of the
transactions contemplated hereby (i) are within the Stockholder's power and
authority, have been duly authorized by all necessary action (including any
consultation, approval or other action by or with any other person), (ii)
require no action by or in respect of, or filing with, any Governmental Body
(except as may be required under the HSR Act and under the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder
(the "Exchange Act")), and (iii) do not and will not contravene or constitute a
default under, or give rise to a right of termination, cancellation or
acceleration of any right or obligation of the Stockholder or to a loss of any
benefit of the Stockholder under, any provision of applicable law or regulation
or any agreement, judgment, injunction, order, decree, or other instrument
binding on the Stockholder or result in the imposition of any Lien on any assets
of the Stockholder. If the Stockholder is married and the Shares constitute
community property or otherwise are owned or held in a manner that requires
spousal or other approval for this Agreement to be legal, valid and binding,
this Agreement has been duly consented to and delivered by the Stockholder's
spouse or the person giving such approval, enforceable against such spouse or
person in accordance with its terms.
<PAGE> 5
5
SECTION 3.3. Binding Effect. This Agreement has been duly executed and
delivered by the Stockholder and is the valid and binding agreement of the
Stockholder, enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights generally.
SECTION 3.4. Total Shares. The Stockholder Shares owned by the
Stockholder are the only shares of Company Common Stock beneficially owned as of
the date hereof by the Stockholder and, except as set forth in the disclosure
schedule to the Merger Agreement, the Stockholder has no option to purchase or
right to subscribe for or otherwise acquire any securities of the Company and
has no other interest in or voting rights with respect to any other securities
of the Company.
SECTION 3.5. Finder's Fees. No investment banker, broker or finder is
entitled to a commission or fee from Purchaser or the Company in respect of this
Agreement based upon any arrangement or agreement made by or on behalf of the
Stockholder, except as otherwise disclosed in the Merger Agreement.
ARTICLE IV
Representations and Warranties
of the Parent and Purchaser
The Parent and Purchaser represent and warrant to the Stockholder:
SECTION 4.1. Corporate Power and Authority; Noncontravention. The
Parent and Purchaser have all requisite corporate power and authority to enter
into this Agreement and to perform their obligations hereunder. The execution,
delivery and performance by the Parent and Purchaser of this Agreement and the
consummation by the Parent and Purchaser of the transactions contemplated hereby
(i) have been duly authorized by all necessary corporate action on the part of
the Parent and Purchaser, (ii) require no action by or in respect of, or filing
with, any Governmental Body (except as may be required under the HSR Act and
under the Exchange Act), or (iii) do not and will not contravene or constitute a
default under, the certificate of incorporation or by-laws of Parent or
Purchaser or any provision of applicable law or regulation or any, judgment,
injunction, order, decree, material agreement or other material instrument
binding on the Parent or Purchaser.
<PAGE> 6
6
SECTION 4.2. Binding Effect. This Agreement has been duly executed
and delivered by the Parent and Purchaser and is a valid and binding agreement
of the Parent and Purchaser, enforceable against each of them in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
SECTION 4.3. Acquisition for Purchaser's Account. Any Shares to be
acquired upon consummation of the Offer will be acquired by Parent for its own
account and not with a view to the public distribution thereof and will not be
transferred except in compliance with the Securities Act and the rules and
regulations promulgated thereunder.
ARTICLE V
Additional Agreements
SECTION 5.1. Agreements of Stockholder. The Stockholder hereby
covenants and agrees that:
(a) No Solicitation. From the date hereof, the Stockholder
shall not directly or indirectly (i) solicit, initiate or knowingly
encourage (or authorize any person to solicit, initiate or encourage)
any Alternative Acquisition, or (ii) participate in any discussion or
negotiations regarding, or furnish to any other person any
information with respect to, or otherwise knowingly cooperate in any
way with, or participate in, facilitate or encourage any effort or
attempt by any other person to do or seek the foregoing. The
Stockholder shall promptly advise the Purchaser of the terms of any
communications it or any of its affiliates may receive relating to
any Alternative Acquisition (including, without limitation, the
identify of the party making any such Alternative Acquisition).
(b) Adjustment upon Changes in Capitalization or Merger.
In the event of any change in the Company's capital stock by reason
of stock dividends, stock splits, mergers, consolidations,
recapitalization, combinations, conversions, exchanges of shares,
extraordinary or liquidating dividends, or other changes in the
corporate or capital structure of the Company which would have the
effect of diluting or changing Parent and Purchaser's rights
hereunder, the number and kind of shares or securities subject to
this Agreement and the price set forth herein at which Shares may be
<PAGE> 7
7
purchased from the Stockholder pursuant to the Offer shall be
appropriately and equitably adjusted so that Parent and Purchaser
shall receive pursuant to the Offer the number and class of shares or
other securities or property that Parent or Purchaser, as the case
may be, would have received in respect of the Shares purchasable
pursuant to the Offer if such purchase had occurred immediately prior
to such event.
ARTICLE VI
Miscellaneous
SECTION 6.1. Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by Purchaser.
SECTION 6.2. Further Assurances. The Parent, Purchaser and the
Stockholder will execute and deliver or cause to be executed and delivered all
further documents and instruments and use its reasonable best efforts to secure
such consents and take all such further action as may be reasonably necessary in
order to consummate the transactions contemplated hereby and by the Merger
Agreement.
SECTION 6.3. Additional Agreements. Subject to the terms and conditions
of this Agreement, each of the parties hereto agrees to use all reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations and which may be required under any agreements, contracts,
commitments, instruments, understandings, arrangements or restrictions of any
kind to which such party is a party or by which such party is governed or bound,
to consummate and make effective the transactions contemplated by this
Agreement.
SECTION 6.4. Specific Performance. The parties acknowledge and agree
that performance of their respective obligations hereunder will confer a unique
benefit on the other and that a failure of performance will not be compensable
by money damages. The parties therefore agree that this Shareholder Agreement
shall be specifically enforceable and that specific enforcement and injunctive
relief shall be available to the Parent, Purchaser or the Stockholder for any
breach by the other party or parties of any agreement, covenant or
representation hereunder.
<PAGE> 8
8
SECTION 6.5. Notices. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in person, by telecopy, or by registered or certified mail (postage prepaid,
return receipt requested) to such party at its address set forth on the
signature page hereto.
SECTION 6.6. Survival of Representations and Warranties. All
representations and warranties contained in this Agreement shall survive
delivery of and payment for the Shares pursuant to Section 1.2 hereof. None of
the representations and warranties contained in this Agreement shall survive the
acceptance for payment and payment for the Shares pursuant to the Offer.
SECTION 6.7. Amendments; Termination. This Agreement may not be
modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto. Notwithstanding
anything herein to the contrary, this Agreement shall expire and be of no
further force or effect if (i) the conditions to the Purchaser's obligations to
accept for payment and pay for Shares pursuant to the Offer shall have been
satisfied and the Purchaser breaches any obligation of Purchaser under the
Merger Agreement to accept for payment and promptly pay for all Shares validly
tendered and not withdrawn pursuant to the Offer upon expiration of the Offer or
(ii) Purchaser amends the Offer to (w) reduce the Offer Price to less than $8.79
in cash, net to the sellers, (x) reduce the number of shares of Company Common
Stock subject to the Offer, (y) change the form of consideration payable in the
Offer or (z) amend or modify any term or condition of the Offer in a manner
adverse to the stockholders of the Company (other than insignificant changes or
amendments or other than to waive any condition). This Agreement will also
terminate upon the later of (i) the Merger Agreement or (ii) termination of the
Offer or any revised Offer if Purchaser notifies Stockholder of its intent to
continue its Offer or a revised Offer within 2 business days after termination
of the Merger Agreement.
SECTION 6.8. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that Purchaser may assign
its rights and obligations to another wholly-owned subsidiary of the Parent
which is the assignee of Purchaser's rights under the Merger Agreement; and
provided further that except as set forth in the prior clause, a party may not
assign, delegate or otherwise transfer any of its rights or obligations under
this Agreement without the consent of the other parties hereto and any purported
assignment, delegation or
<PAGE> 9
9
transfer without such consent shall be null and void.
SECTION 6.9. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of Delaware without giving effect to the
principles of conflicts of laws thereof.
SECTION 6.10. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effects as if the signatures thereto and thereof were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
SECTION 6.11. Stockholder Capacity. The Stockholder signs solely in its
capacity as the record holder and beneficial owner of the Shares and nothing
herein shall limit or affect any actions taken by the Stockholder in his or her
capacity as an officer, director, partner, employee or affiliate of the Company
and no such actions shall be deemed a breach of this Agreement.
SECTION 6.12. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions be consummated as originally contemplated to the
fullest extent possible. To the extent that any provision of this Agreement and
the Merger Agreement conflict, the provisions of the Merger Agreement shall
control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
EDB BUSINESS PARTNER ASA
By: /s/ Eivind Kinck
--------------------------------------
Name:
Title:
Address for Notices:
<PAGE> 10
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EDB 4TEL
By: /s/ Asbjorn Eide
--------------------------------------
Name:
Title:
Address for Notices:
/s/ Frances Penfold
-----------------------------------------
Address for Notices:
<PAGE> 1
Exhibit 99(c)(5)
SHAREHOLDER AGREEMENT
SHAREHOLDER AGREEMENT, dated as of October 19, 1999 (this
"Agreement"), among EDB Business Partner ASA, a Norwegian Public Limited
Company (the "Parent"), EDB 4tel Acquisition Corp., a Delaware corporation and
a wholly owned subsidiary of the Parent ("Purchaser"), and Michael Moore (the
"Stockholder").
WHEREAS, concurrently with the execution and delivery of this
Agreement the Parent, Purchaser and Telesciences, Inc., a Delaware corporation
(the "Company"), have entered into an Agreement and Plan of Merger dated as of
the date hereof (such Agreement and Plan of Merger, as amended from time to
time, the "Merger Agreement"), which provides, among other things, that
Purchaser shall make the Offer (as defined in the Merger Agreement) to purchase
at a price of $8.79 per share, net to the sellers in cash, all of the issued
and outstanding shares of the Company's Common Stock, par value $0.04 per share
(the "Company Common Stock"), and shall merge with and into the Company (the
"Merger"), upon the terms and subject to the conditions set forth in the Merger
Agreement (any term used herein without definition shall have the definition
ascribed thereto in the Merger Agreement);
WHEREAS, the Stockholder owns beneficially and of record 100,760
shares of Company Common Stock (such shares of Company Common Stock being
collectively referred to herein as the "Stockholder Shares"); and
WHEREAS, as a condition to the willingness of the Parent and
Purchaser to enter into the Merger Agreement, and as an inducement to them to
do so, the Stockholder has agreed for the benefit of the Parent and Purchaser
to tender the Stockholder Shares and any other shares of Company Common Stock
at any time during the term of this Agreement held by the Stockholder, pursuant
to the Offer, to vote all the Stockholder Shares and any other shares of
Company Common Stock owned by the Stockholder in favor of the Merger.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties hereby agree
as follows:
<PAGE> 2
2
ARTICLE I
Tender Offer
SECTION 1.1. Tender of Shares. (a) At least two business days prior
to the consummation by the Purchaser of the Offer, the Stockholder shall tender
to the Depository designated in the Offer to Purchase (the "Offer to Purchase")
distributed by Purchaser in connection with the Offer (i) a letter of
transmittal with respect to the Stockholder Shares and any other shares of
Company Common Stock held by the Stockholder (whether or not currently held by
the Stockholder; the Stockholder Shares, together with any shares acquired by
the Stockholder in any capacity after the date hereof and prior to the
termination of this Agreement whether upon the exercise of options, warrants or
rights, the conversion or exchange of convertible or exchangeable securities,
or by means of purchase, dividend, distribution or otherwise (the "Shares")),
complying with the terms of the Offer to Purchase, (ii) the certificates
representing the Shares, and (iii) all other documents or instruments required
to be delivered pursuant to the terms of the Offer to Purchase.
(b) The Stockholder shall not, subject to applicable law,
withdraw the tender effected in accordance with Section 1.1(a); provided,
however, that the Stockholder may decline to tender, or may withdraw, any and
all Shares owned by the Stockholder if the Purchaser amends the Offer to (w)
reduce the Offer Price to less than $8.79 in cash, net to the stockholders, (x)
reduce the number of shares of Company Common Stock subject to the Offer, (y)
change the form of consideration payable in the Offer or (z) amend or modify
any term or condition of the Offer in a manner adverse to the stockholders of
the Company (other than insignificant changes or amendments or other than to
waive any condition). The Stockholder shall give Purchaser at least two
business days' prior notice of any withdrawal of Shares owned by the
Stockholder pursuant to the immediately preceding proviso.
SECTION 1.2. No Purchase. Purchaser and Parent may allow the Offer
to expire without accepting for payment or paying for any Shares, on the terms
and conditions set forth in the Offer to Purchase. If all Shares validly
tendered and not withdrawn are not accepted for payment and paid for in
accordance with the terms of the Offer to Purchase, they shall be returned to
the Stockholder, whereupon they shall continue to be held by the Stockholder
subject to the terms and conditions of this Agreement.
<PAGE> 3
3
ARTICLE II
Consent and Voting
The Stockholder hereby revokes any and all previous proxies granted
with respect to the Shares owned by the Stockholder. By entering into this
Agreement, the Stockholder hereby consents to the Merger Agreement and the
transactions contemplated thereby, including the Merger. So long as the Merger
Agreement is in effect, or Purchaser notifies Stockholder of its intent to
continue its Offer or a revised offer within 2 business days of termination of
the Merger Agreement the Stockholder hereby agrees (i) to vote all Shares now
or hereafter owned by such Stockholder or execute a consent or proxy and not
revoke any proxy, vote or consent, in favor of the Merger Agreement, the Merger
and the transactions contemplated thereby, and (ii) to oppose any Alternative
Acquisition and to vote all Shares now or hereafter owned by such Stockholder,
or execute a consent or proxy, against any Acquisition Proposal.
ARTICLE III
Representations, Warranties and Covenants
of the Stockholder
The Stockholder represents, warrants and covenants to the Purchaser
that:
SECTION 3.1. (a) Ownership. As of the date hereof the Stockholder is
the sole, true, lawful and beneficial owner of 100,760 Shares and that there
are no restrictions on voting rights or rights of disposition pertaining to
such Shares. The Stockholder will convey good and valid title to the Shares
owned by the Stockholder and being acquired pursuant to the Offer or the
Merger, as the case may be, free and clear of any and all liens, restrictions,
security interests or any encumbrances whatsoever, other than restrictions
under applicable securities laws (collectively, "Liens"). None of the Shares
owned by the Stockholder is subject to any voting trust or other agreement,
arrangement or restriction with respect to the voting of such Shares.
(b) Transfer of the Shares. (i) Until this Agreement is
terminated, the Stockholder shall not directly or indirectly offer to sell,
sell short, transfer (including gift), assign, pledge or otherwise dispose of
or transfer (each, a "Transfer") any interest in or encumber with any Lien any
of the Shares, (ii) enter into any contract, option, put, call, "collar" or
<PAGE> 4
4
other agreement or understanding with respect to any Transfer of any or all of
the Shares or any interest therein; (iii) grant any proxy, power-of-attorney or
other authorization or consent in or with respect to the Shares; (iv) deposit
the Shares into a voting trust or enter into a voting agreement or arrangement
with respect to the Shares; or (v) take any other action with respect to the
Shares that would in any way restrict, limit or interfere with the performance
of its obligations hereunder.
(c) The Stockholder agrees to place the following legend
on any and all certificates
evidencing the Shares:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER PURSUANT TO THAT
SHAREHOLDER AGREEMENT, DATED AS OF OCTOBER 19, 1999, BY AND AMONG
PARENT, PURCHASER AND STOCKHOLDER. ANY TRANSFER OF SUCH SHARES OF
COMMON STOCK IN VIOLATION OF THE TERMS OF SUCH AGREEMENT SHALL BE
NULL AND VOID AND OF NO EFFECT WHATSOEVER.
SECTION 3.2. Authority and Non-Contravention. The execution,
delivery and performance by the Stockholder of this Agreement and the
consummation of the transactions contemplated hereby (i) are within the
Stockholder's power and authority, have been duly authorized by all necessary
action (including any consultation, approval or other action by or with any
other person), (ii) require no action by or in respect of, or filing with, any
Governmental Body (except as may be required under the HSR Act and under the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act")), and (iii) do not and will not
contravene or constitute a default under, or give rise to a right of
termination, cancellation or acceleration of any right or obligation of the
Stockholder or to a loss of any benefit of the Stockholder under, any provision
of applicable law or regulation or any agreement, judgment, injunction, order,
decree, or other instrument binding on the Stockholder or result in the
imposition of any Lien on any assets of the Stockholder. If the Stockholder is
married and the Shares constitute community property or otherwise are owned or
held in a manner that requires spousal or other approval for this Agreement to
be legal, valid and binding, this Agreement has been duly consented to and
delivered by the Stockholder's spouse or the person giving such approval,
enforceable against such spouse or person in accordance with its terms.
<PAGE> 5
5
SECTION 3.3. Binding Effect. This Agreement has been duly executed
and delivered by the Stockholder and is the valid and binding agreement of the
Stockholder, enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights generally.
SECTION 3.4. Total Shares. The Stockholder Shares owned by the
Stockholder are the only shares of Company Common Stock beneficially owned as
of the date hereof by the Stockholder and, except as set forth in the
disclosure schedule to the Merger Agreement, the Stockholder has no option to
purchase or right to subscribe for or otherwise acquire any securities of the
Company and has no other interest in or voting rights with respect to any other
securities of the Company.
SECTION 3.5. Finder's Fees. No investment banker, broker or finder
is entitled to a commission or fee from Purchaser or the Company in respect of
this Agreement based upon any arrangement or agreement made by or on behalf of
the Stockholder, except as otherwise disclosed in the Merger Agreement.
ARTICLE IV
Representations and Warranties
of the Parent and Purchaser
The Parent and Purchaser represent and warrant to the Stockholder:
SECTION 4.1. Corporate Power and Authority; Noncontravention. The
Parent and Purchaser have all requisite corporate power and authority to enter
into this Agreement and to perform their obligations hereunder. The execution,
delivery and performance by the Parent and Purchaser of this Agreement and the
consummation by the Parent and Purchaser of the transactions contemplated
hereby (i) have been duly authorized by all necessary corporate action on the
part of the Parent and Purchaser, (ii) require no action by or in respect of,
or filing with, any Governmental Body (except as may be required under the HSR
Act and under the Exchange Act), or (iii) do not and will not contravene or
constitute a default under, the certificate of incorporation or by-laws of
Parent or Purchaser or any provision of applicable law or regulation or any,
judgment, injunction, order, decree, material agreement or other material
instrument binding on the Parent or Purchaser.
<PAGE> 6
6
SECTION 4.2. Binding Effect. This Agreement has been duly executed
and delivered by the Parent and Purchaser and is a valid and binding agreement
of the Parent and Purchaser, enforceable against each of them in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
SECTION 4.3. Acquisition for Purchaser's Account. Any Shares to be
acquired upon consummation of the Offer will be acquired by Parent for its own
account and not with a view to the public distribution thereof and will not be
transferred except in compliance with the Securities Act and the rules and
regulations promulgated thereunder.
ARTICLE V
Additional Agreements
SECTION 5.1. Agreements of Stockholder. The Stockholder hereby
covenants and agrees that:
(a) No Solicitation. From the date hereof, the Stockholder
shall not directly or indirectly (i) solicit, initiate or knowingly
encourage (or authorize any person to solicit, initiate or
encourage) any Alternative Acquisition, or (ii) participate in any
discussion or negotiations regarding, or furnish to any other person
any information with respect to, or otherwise knowingly cooperate in
any way with, or participate in, facilitate or encourage any effort
or attempt by any other person to do or seek the foregoing. The
Stockholder shall promptly advise the Purchaser of the terms of any
communications it or any of its affiliates may receive relating to
any Alternative Acquisition (including, without limitation, the
identify of the party making any such Alternative Acquisition).
(b) Adjustment upon Changes in Capitalization or Merger.
In the event of any change in the Company's capital stock by reason
of stock dividends, stock splits, mergers, consolidations,
recapitalization, combinations, conversions, exchanges of shares,
extraordinary or liquidating dividends, or other changes in the
corporate or capital structure of the Company which would have the
effect of diluting or changing Parent and Purchaser's rights
hereunder, the number and kind of shares or securities subject to
this Agreement and the price set forth herein at which Shares may be
<PAGE> 7
7
purchased from the Stockholder pursuant to the Offer shall be
appropriately and equitably adjusted so that Parent and Purchaser
shall receive pursuant to the Offer the number and class of shares
or other securities or property that Parent or Purchaser, as the
case may be, would have received in respect of the Shares
purchasable pursuant to the Offer if such purchase had occurred
immediately prior to such event.
ARTICLE VI
Miscellaneous
SECTION 6.1. Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by Purchaser.
SECTION 6.2. Further Assurances. The Parent, Purchaser and the
Stockholder will execute and deliver or cause to be executed and delivered all
further documents and instruments and use its reasonable best efforts to secure
such consents and take all such further action as may be reasonably necessary
in order to consummate the transactions contemplated hereby and by the Merger
Agreement.
SECTION 6.3. Additional Agreements. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees to use all
reasonable best efforts to take, or cause to be taken, all actions and to do,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations and which may be required under any agreements, contracts,
commitments, instruments, understandings, arrangements or restrictions of any
kind to which such party is a party or by which such party is governed or
bound, to consummate and make effective the transactions contemplated by this
Agreement.
SECTION 6.4. Specific Performance. The parties acknowledge and agree
that performance of their respective obligations hereunder will confer a unique
benefit on the other and that a failure of performance will not be compensable
by money damages. The parties therefore agree that this Shareholder Agreement
shall be specifically enforceable and that specific enforcement and injunctive
relief shall be available to the Parent, Purchaser or the Stockholder for any
breach by the other party or parties of any agreement, covenant or
representation hereunder.
<PAGE> 8
8
SECTION 6.5. Notices. All notices, requests, claims, demands and
other communications hereunder shall be deemed to have been duly given when
delivered in person, by telecopy, or by registered or certified mail (postage
prepaid, return receipt requested) to such party at its address set forth on
the signature page hereto.
SECTION 6.6. Survival of Representations and Warranties. All
representations and warranties contained in this Agreement shall survive
delivery of and payment for the Shares pursuant to Section 1.2 hereof. None of
the representations and warranties contained in this Agreement shall survive
the acceptance for payment and payment for the Shares pursuant to the Offer.
SECTION 6.7. Amendments; Termination. This Agreement may not be
modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto. Notwithstanding
anything herein to the contrary, this Agreement shall expire and be of no
further force or effect if (i) the conditions to the Purchaser's obligations to
accept for payment and pay for Shares pursuant to the Offer shall have been
satisfied and the Purchaser breaches any obligation of Purchaser under the
Merger Agreement to accept for payment and promptly pay for all Shares validly
tendered and not withdrawn pursuant to the Offer upon expiration of the Offer
or (ii) Purchaser amends the Offer to (w) reduce the Offer Price to less than
$8.79 in cash, net to the sellers, (x) reduce the number of shares of Company
Common Stock subject to the Offer, (y) change the form of consideration payable
in the Offer or (z) amend or modify any term or condition of the Offer in a
manner adverse to the stockholders of the Company (other than insignificant
changes or amendments or other than to waive any condition). This Agreement
will also terminate upon the later of (i) the Merger Agreement or (ii)
termination of the Offer or any revised Offer if Purchaser notifies Stockholder
of its intent to continue its Offer or a revised Offer within 2 business days
after termination of the Merger Agreement.
SECTION 6.8. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided, however, that Purchaser
may assign its rights and obligations to another wholly-owned subsidiary of the
Parent which is the assignee of Purchaser's rights under the Merger Agreement;
and provided further that except as set forth in the prior clause, a party may
not assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the consent of the other parties hereto and any
purported assignment, delegation or transfer without such consent shall be null
and void.
<PAGE> 9
9
SECTION 6.9. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of Delaware without giving effect to
the principles of conflicts of laws thereof.
SECTION 6.10. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effects as if the signatures thereto and thereof were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
SECTION 6.11. Stockholder Capacity. The Stockholder signs solely in
its capacity as the record holder and beneficial owner of the Shares and
nothing herein shall limit or affect any actions taken by the Stockholder in
his or her capacity as an officer, director, partner, employee or affiliate of
the Company and no such actions shall be deemed a breach of this Agreement.
SECTION 6.12. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions be consummated as originally
contemplated to the fullest extent possible. To the extent that any provision
of this Agreement and the Merger Agreement conflict, the provisions of the
Merger Agreement shall control.
<PAGE> 10
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
EDB BUSINESS PARTNER ASA
By: /s/ Eivind Kinck
-------------------------------
Name:
Title:
Address for Notices:
EDB 4TEL
By: /s/ Asbjorn Eide
-------------------------------
Name:
Title:
Address for Notices:
/s/ Michael Moore
-----------------------------------
Name:
Address for Notices:
