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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. )1
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WANG LABORATORIES, INC.
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
93369N109
(CUSIP Number)
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Roberto Colannino
Ing. C. Olivetti & C. S.p.A.
Via Jervis, 77
10015 Ivrea
Italy
39-125-522-423
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
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Copy to:
Michael S. Immordino, Esq.
Rogers & Wells LLP
City Tower
40 Basinghall Street
London EC2V 5DE, England
44-171-628-0101
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March 17, 1998
(Date of Event which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box. |_|
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits.
See Rule 13d-7 for other parties to whom copies are to be sent.
(Continued on following page)
(Page 1 of 9 pages)
1 The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP No. 93369N109 13D Page 2 of 9
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
ING. C. OLIVETTI & C. S.p.A.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) / /
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
00 (see Item 3 below)
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e)
/ /
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
REPUBLIC OF ITALY
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7. SOLE VOTING POWER
NUMBER OF
SHARES 7,250,000
BENEFICIALLY ----------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH
REPORTING ----------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER
7,250,000
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10. SHARED DISPOSITIVE POWER
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,250,000
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
/ /
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.9%
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14. TYPE OF REPORTING PERSON
CO
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SCHEDULE 13D
Item 1. Security and Issuer.
This Statement relates to shares of common stock, $0.01 par value per
share ("Common Stock"), of Wang Laboratories, Inc., a Delaware corporation (the
"Issuer"). The Issuer's principal executive offices are located at 600
Technology Park Drive, Billerica, Massachusetts 01821.
Item 2. Identity and Background.
This Schedule 13D is being filed by Ing. C. Olivetti & C. S.p.A., an
Italian corporation ("Olivetti").
Olivetti, together with its subsidiaries and affiliates, is an
industrial and financial concern that operates in two sectors world-wide:
telecommunications and information technology. Olivetti's capital stock
is listed on the Milan Stock Exchange. Olivetti's principal business and
principal office are located at Via Jervis, 77, 10015 Ivrea, Italy.
(a)-(c) Not applicable.
(d)-(e) During the last five years, none of Olivetti nor, to the best
knowledge of Olivetti, any of the persons listed on Schedule I hereto: (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 further
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
(f) Not applicable.
Item 3. Source and Amount of Funds or Other Consideration.
On March 17, 1998, Olivetti sold its information technology solutions
and services division, Olivetti Solutions S.p.A. ("Olsy") to the Issuer (the
"Transaction"). The Transaction was structured as a purchase by the Issuer from
Olivetti and certain of its affiliates of all of the outstanding shares of
capital stock of Olsy, Olivetti Corporation of Japan and Olivetti do Brasil
pursuant to a Stock Purchase Agreement, by and among the Issuer, Wang Nederland
B.V., Olivetti, Olivetti Sistemas e Servicios Limitada and Olivetti do Brasil,
dated as of February 28, 1998, as amended by Amendment No. 1 to Stock Purchase
Agreement, by and among Wang Laboratories, Inc., Wang Nederland B.V., Olivetti,
Olivetti Sistemas e Servicios Limitada and Olivetti do Brasil, dated as of March
17, 1998 (as amended, the "Purchase Agreement"), copies of which are attached
hereto as Exhibits 7.1 and 7.7, respectively. In exchange for these shares of
capital stock, Olivetti was paid in consideration, among other things, 7,250,000
shares of Common Stock of the Issuer (the "Wang Shares"). The Transaction is
more fully described in Item 6, herein.
Item 4. Purpose of the Transaction.
Olivetti acquired the Wang Shares as payment from the Issuer in the
Transaction. Olivetti is holding the Wang Shares for investment purposes.
Pursuant to certain agreements executed in connection with the Transaction, each
described in Item 6, herein, Olivetti is subject to certain "standstill"
restrictions with respect to the Issuer and its capital stock and was also
granted the right to appoint two nominees to the Issuer's Board of Directors
(the "Board"). Olivetti has no present plans or proposals,
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except those described in Item 6 herein, which relate to or would result in (a)
the acquisition by any person of additional securities of the Issuer or the
disposition of any such securities, (b) an extraordinary corporate transaction,
such as a merger, reorganization or liquidation, involving the Issuer or any of
its subsidiaries, (c) a sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries, (d) any change in the present management of
the Issuer, (e) any material change in the present capitalization or dividend
policy of the Issuer, (f) any other material change in the Issuer's business or
corporate structure, (g) any other material change in the Issuer's charter,
bylaws or instruments corresponding thereto or other actions which may impede
the acquisition of control of the Issuer by any person, (h) causing a class of
securities of the Issuer to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, (i) a class of equity securities of
the Issuer becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934, or (j) any action similar to
any of the enumerated in (a) through (i) above.
Item 5. Interest in Securities of the Issuer.
(a)-(b) Based on the Issuer's most recent Quarterly Report on
Form 10-Q filed with the Securities and Exchange Commission for the quarter
ended December 31, 1997, there were then issued and outstanding 38,433,215
shares of Common Stock. As of the date of this Schedule 13D, Olivetti is the
record and beneficial owner of 7,250,000 shares of Common Stock of the Issuer,
constituting 18.9% of the Issuer's shares issued and outstanding. Olivetti has
the sole voting power with respect to these shares. Olivetti has the sole
dispositive power with respect to these shares, except as this power may be
limited by the terms of: (1) the Stockholders Agreement, by and between the
Issuer and Olivetti, dated as of March 17, 1998 (the "Stockholders Agreement"),
a copy of which is attached hereto as Exhibit 7.5 and (2) the Stock Escrow
Agreement, by and among the Issuer, Olivetti and American Stock Transfer and
Trust Company (the "Agent"), dated as of March 17, 1998 (the "Stock Escrow
Agreement"), a copy of which is attached hereto as Exhibit 7.2. The Stockholders
Agreement and the Stock Escrow Agreement are both more fully described in Item 6
herein.
(c) On March 17, 1998, as part of the Transaction, Olivetti
received the Wang Shares and, subject to approval of the Issuer's stockholders,
the right to acquire up to an additional 1,500,000 shares of Common Stock of the
Issuer pursuant to the terms of the Ancillary Consideration Agreement, by and
between the Issuer and Olivetti, dated as of March 17, 1998 (the "Ancillary
Consideration Agreement"). Other than pursuant to the Transaction, Olivetti and,
to the best knowledge of Olivetti, the persons listed on Schedule I hereto, have
not effected any transactions in the Common Stock directly or indirectly during
the 60 days prior to March 17, 1998.
(d) No one other than Olivetti has the right to receive, or
the power to direct the receipt of, ordinary cash dividends from, or the
proceeds from the sale of, the Wang Shares. The Wang Shares have been deposited
in an escrow fund (the "Stock Escrow") pursuant to the Stock Escrow Agreement.
The Stock Escrow Agreement provides that all ordinary cash dividends will be
paid directly to Olivetti. All other dividends and distributions paid on the
Wang Shares will be paid by the Issuer directly to the Agent who will hold such
dividends or distributions on Olivetti's behalf. The Stock Escrow Agreement is
more fully described in Item 6 herein.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
The following descriptions of the Purchase Agreement, the Stock Escrow
Agreement, the Ancillary Consideration Agreement, the Stock Appreciation Right
Certificate issued by the Issuer to
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Olivetti on March 17, 1998 (the "SAR Certificate"), the Stockholders Agreement
and the Earn Out Agreement, by and between the Issuer and Olivetti, dated as of
March 17, 1998 (the "Earn Out Agreement") are qualified in their entirety by
reference to the full text of such agreements, copies of which are attached as
Exhibits 7.1, 7.2, 7.3, 7.4, 7.5, 7.6 and 7.7 hereto and are incorporated herein
by reference.
On February 28, 1998 the Issuer and Olivetti agreed to the terms of the
Transaction and executed the Purchase Agreement. On March 17, 1998 (the "Closing
Date"), pursuant to the Purchase Agreement, Olivetti received the following
consideration from the Issuer: (1) $68,612,783.83 in cash, $56,269,113.15 of
which was deposited in escrow; (2) the Wang Shares, all of which were deposited
in the Stock Escrow pursuant to the Stock Escrow Agreement; (3) the right to
certain earn-outs as set forth in the Earn-Out Agreement, (4) the right to
certain ancillary consideration (the "Ancillary Consideration") as set forth in
the Ancillary Consideration Agreement; and (5) stock appreciation rights as set
forth in the SAR Certificate. Olivetti and the Issuer also entered into the
Stockholders Agreement. The Stock Escrow Agreement, the Ancillary Consideration
Agreement, the SAR Certificate, the Stockholders Agreement and the Earn Out
Agreement are each more fully described below.
Stock Escrow Agreement. To secure Olivetti's indemnification
obligations under the Purchase Agreement, all of the Wang Shares issued to
Olivetti and Olivetti's rights to receive cash or shares of Common Stock
pursuant to the Ancillary Consideration Agreement were deposited in the Stock
Escrow pursuant to the terms of the Stock Escrow Agreement. The Issuer may make
indemnification claims against the Stock Escrow by filing certain loss notices
with the Agent pursuant to the terms of the Purchase Agreement. During the term
of the Stock Escrow Agreement, Olivetti has the right to vote all of the shares
of Common Stock that have been deposited in the Stock Escrow. All ordinary cash
dividends on these shares are to be paid directly by the Issuer to Olivetti, or
the holder of record. All other dividends and distributions on shares of
Common Stock held in the Stock Escrow are to be paid by the Issuer to the Agent
who shall hold such dividends and distributions on Olivetti's behalf. The
Stock Escrow Agreement provides that the Stock Escrow will terminate on the
third anniversary of the Closing Date, March 17, 2001. Subject to certain
exceptions, upon termination of the Stock Escrow, all of the shares of Common
Stock held in the Stock Escrow and all dividends or other distributions
that have been paid on these shares will be delivered by the Agent to Olivetti.
At any time after the earlier of March 17, 2001 or the occurrence of an
"Early Termination Event," as defined in the Stockholders Agreement, Olivetti
may notify the Agent that it has delivered a letter of credit to the Issuer as
substitution for all or a portion of the Common Stock held in the Stock Escrow
(the "Substitution of Collateral Letter of Credit"). The Agent shall then
deliver to the Issuer the share certificate then held in the Stock Escrow and
the Issuer will simultaneously issue and deliver to: (aa) Olivetti a certificate
representing the number of shares of Common Stock determined by dividing the
face amount of the Substitution of Collateral Letter of Credit by $27.00
(subject to adjustment as provided in the Stock Escrow Agreement), and (bb) if
the number of shares of Common Stock represented by the certificate delivered by
the Agent to the Issuer exceeds the number of shares of Common Stock represented
by the certificate delivered by the Issuer to Olivetti, the Agent a certificate
representing a number of shares of Common Stock equal to such excess.
Ancillary Consideration Agreement. The Ancillary Consideration
Agreement provides that the Issuer will take certain steps to secure a
stockholder vote approving the additional issuance of 1,500,000 shares of
Common Stock to Olivetti (the "Additional Stock Issuance"). Specifically, the
Issuer must include for approval in the Notice of Meeting, Proxy Statement and
Proxy distributed in connection with its 1998 Annual Meeting of Stockholders or
Special Meeting of Stockholders called prior thereto, a resolution of
stockholders approving the Additional Stock Issuance. The Issuer is obligated to
recommend to its stockholders that they approve the Additional Stock Issuance
and must use its best commercially reasonable efforts to solicit stockholder
votes and proxies in favor of such approval. If the stockholders
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approve the Additional Stock Issuance, the Issuer will issue 1,500,000 shares of
Common Stock to Olivetti and deliver these shares to the Agent for deposit in
the Stock Escrow in accordance with the terms of the Stock Escrow Agreement.
If the Additional Stock Issuance is not approved by the stockholders of
the Issuer on or prior to December 15, 1998, or if the Issuer sells all or
substantially all of its assets or undergoes a "change of control" (as defined
in the Ancillary Consideration Agreement), the Issuer is then obligated to
pay Olivetti an amount equal to the "Fair Market Value" (as defined in the
Ancillary Consideration Agreement) of one share of Common Stock multiplied
by 1,500,000 (the "Additional Cash Consideration"). The Issuer shall then
deposit the Additional Cash Consideration in an escrow account pursuant
to an agreement having substantially the same terms as the Stock Escrow
Agreement.
The Ancillary Consideration Agreement expires upon the earlier to occur
of (a) the Additional Stock Issuance or (b) payment of the Additional Cash
Consideration. Commencing May 1, 1998 and for the remainder of the term of the
Ancillary Consideration Agreement, the Issuer is also obligated to make certain
"Periodic Payments" to Olivetti. These payments are to be made each May 1,
August 1, November 1 and February 1. The payments are computed on the basis of a
"Periodic Payment Period" (as defined in the Ancillary Consideration Agreement),
with each full Periodic Payment Period corresponding to a cash payment of
$658,125.
The SAR Certificate. The SAR Certificate initially represents 5,000,000
stock appreciation rights (collectively, the "SARS" and each an "SAR"). The
number of SARS and the strike price of each SAR are subject to adjustment based,
among other things, on: (1) Olsy's 1997 earnings before interest, taxes,
depreciation and amortization ("EBITDA"); (2) increases or decreases in the
outstanding Common Stock; and (3) the payment of dividends in Common Stock. Each
SAR entitles Olivetti to receive from the Issuer an amount equal to the higher
of (i) $4 and (ii) the difference between (A) the "Fair Market Value" (as
defined in the SAR Certificate) per share of the Common Stock on the date of
exercise of such SAR and (B) $30. The Issuer may, at its option, pay such amount
in either cash or shares of Common Stock. If the Issuer elects to pay this
amount in shares of Common Stock, such shares shall be valued at the Fair Market
Value per share of the Common Stock on the exercise date. The SARS may only be
exercised on or after the third anniversary of the SAR Certificate, March 17,
2001, and on or before the seventh anniversary of the SAR Certificate, March 17,
2005. The SARS and the SAR Certificate are not permitted to be sold, assigned or
transferred by Olivetti.
The Stockholders Agreement. The Stockholders Agreement governs: (1)
Olivetti's rights to representation on the Issuer's Board; (2) the purchase
and disposition of shares of Common Stock by Olivetti; and (3) Olivetti's
rights to participate in public offerings by the Issuer and to request the
registration of its shares of Common Stock under the Securities Act of
1933, as amended (the "1933 Act").
The Stockholders Agreement provides that the Issuer will increase the
size of its Board by two members and will initially elect two of Olivetti's
nominees (the "Olivetti Nominees") as members of Class I and Class III of the
Board, respectively. Subject to the terms and conditions of the Stockholders
Agreement, the Issuer is obligated to cause the continual reelection of the
applicable Olivetti Nominees. The number of Olivetti Nominees will be reduced to
(i) one (1) if Olivetti holds less than sixty-six percent (66%) of the Total
Wang Shares (as defined below) and (ii) zero (0) if Olivetti holds less
than thirty-three percent (33%) of the Total Wang Shares. In addition, the
number of Olivetti Nominees is subject to adjustment based on changes in the
size of the Issuer's Board. For so long as Olivetti has the right to designate
at least two Olivetti Nominees for election to the Board, Olivetti is also
entitled to designate at least one (1) of these Olivetti Nominees to serve on
each standing committee of the Board. For so long as Olivetti has the right to
designate one Olivetti Nominee for election to the Board, Olivetti is also
entitled to designate such Olivetti Nominee to serve on one-half of the then
existing Board committees.
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The Stockholders Agreement places restrictions on Olivetti's ability to
transfer all or a portion of the 8,750,000 shares of Common Stock (collectively,
the "Total Wang Shares") that Olivetti may acquire pursuant to the terms of the
Purchase Agreement and the Ancillary Consideration Agreement. As of the date of
this Schedule 13D, Olivetti owns the Wang Shares but may acquire an additional
1,500,000 shares of Common Stock pursuant to the Ancillary Consideration
Agreement. Until the earlier of March 17, 2001 or the occurrence of an "Early
Termination Event," Olivetti may not, subject to certain limited exceptions,
without the prior written consent of the Issuer duly authorized by the Board,
sell, transfer or otherwise dispose of its Common Stock. An "Early Termination
Event" is deemed to have occurred if: (i) the Issuer fails to cause the Olivetti
Nominees to be elected to the Board; (ii) the Board's Nominee Committee
determines that neither of the two Olivetti Nominees are "qualified"; (iii) the
Issuer breaches the Stockholders Agreement; (iv) the Issuer undergoes a change
of control (as defined in the Stockholders Agreement); or (v) the Issuer sells,
leases, transfers or other disposes of all or substantially all of its assets.
In addition, so long as Olivetti beneficially owns thirty three percent (33%) or
more of the Total Wang Shares, it may not engage in the following types of
transactions without the prior written consent of the Issuer: (i) short sales;
(ii) hedges; and (iii) stock pledges (subject to certain exceptions).
In addition, the Stockholders Agreement limits Olivetti's ability to
engage in certain actions which may have the effect of changing control of the
Issuer. Until the earlier of: (1) ninety (90) days after the occurrence of a
"Modified Early Termination Event" or (2) one hundred and eighty (180) days
after the date after March 17, 2001 on which all of the Olivetti Nominees resign
from the Board, Olivetti is subject to certain "standstill" restrictions. A
"Modified Early Termination Event" is generally deemed to have occurred if: (i)
the Issuer fails to cause the Olivetti Nominees to be elected to the Board; (ii)
the Board's Nominee Committee determines that the neither of the two Olivetti
Nominees are "qualified"; or (iii) the Issuer breaches the Stockholders
Agreement. The standstill restrictions prohibit Olivetti, among other things,
from: (i) acting in concert with any person or group by becoming a member of a
"13D Group" (as defined in the Stockholders Agreement), other than any 13D Group
comprised exclusively of Olivetti and its affiliates; (ii) purchasing or
otherwise acquiring shares of "Capital Stock" (as defined in the Stockholders
Agreement) of the Issuer as a result of which, after giving effect to such
purchase or acquisition, Olivetti and its affiliates will beneficially own 19.9%
of the outstanding shares of Common Stock; (iii) soliciting, initiating,
engaging or participating in any "solicitation" or "proxies" or becoming a
"participant" in any "election contest" (as such terms are defined or used in
Regulation 14A under the Securities Exchange Act of 1934); (iv) otherwise
acting, alone or in concert with others, to propose any form of business
combination transaction with the Issuer or any of its affiliates or any
restructuring, recapitalization or any similar transaction; (v) seeking
representation on the Board or a change in the size of the Board; and (vi)
assisting, advising or encouraging any person to do any of the foregoing.
The Stockholders Agreement provides that, except for purchases and
acquisitions of Common Stock pursuant to the Ancillary Consideration Agreement
or with the Additional Cash Consideration, if Olivetti intends to purchase or
acquire Capital Stock, the Issuer may: (i) approve the purchase or (ii) prohibit
or impose restrictions on the purchase to the extent that such purchase would be
reasonably likely to cause the undue risk of loss of, or limitation on the use
of, the net operating loss, capital loss, or tax credit carryforwards to which
the Issuer is entitled pursuant to the Internal Revenue Code of 1986, as
amended.
The Stockholders Agreement grants Olivetti certain rights to
participate in public offerings of the Issuer's Common Stock. If, at any time
prior to the date on which Olivetti sells any Total Wang Shares, the Issuer
proposes to issue or sell any shares of Common Stock in a registered offering,
Olivetti may purchase a number of shares of Common Stock such that Olivetti
would own the same percentage of the shares of Common Stock immediately
following the consummation of such offering as it owned of the number of shares
of Common Stock outstanding immediately prior to the consummation of such
offering.
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The Stockholders Agreement also grants Olivetti certain demand, shelf
and "piggyback" registration rights under the 1933 Act. Upon complying with the
pre-registration requirements described below and, subject to certain other
limitations as set forth in the Stockholders Agreement, after the earlier to
occur of: (1) March 17, 2001 or (2) an Early Termination Event, Olivetti may
make demand registration and shelf registration requests in writing to the
Issuer. Prior to making any shelf or demand registration requests to the Issuer,
Olivetti is required to comply with certain pre-registration procedures.
Olivetti is required to deliver a notice (the "Desired Sale Notice") to the
Issuer specifying the number of Total Wang Shares that it desires to sell. The
Issuer has forty-five (45) days to deliver to Olivetti a proposal (the
"Proposal") for the sale of such Total Wang Shares. The Proposal shall propose
that the sale of the Total Wang Shares be effected through any one, or a
combination, of the following methods: (i) a private sale that is exempt from
the registration requirements of the 1933 Act (a "Private Sale"); (ii) a
repurchase (a "Repurchase") by the Issuer; (iii) a demand registration; or (iv)
a shelf registration. If the Proposal involves a Private Sale, such sale must be
acceptable in Olivetti's sole discretion and Olivetti must deliver an acceptance
or rejection to the Issuer within fifteen (15) days of the Proposal. If the
Proposal involves a Repurchase, Olivetti shall deliver an acceptance or
rejection of such Repurchase within fifteen (15) days of the Proposal. If
Olivetti accepts such Private Sale or Repurchase, it must be consummated not
later than the ninetieth (90th) day following the date of the Desired Sale
Notice. If the Private Sale or Repurchase is not consummated within 90 days,
Olivetti is entitled to request a demand or shelf registration of the Total Wang
Shares covered by the Private Sale or Repurchase. However, if Olivetti requests
a demand registration, the Issuer may effect either a demand or shelf
registration, at its option. If the Proposal involves either a demand or shelf
registration, such registration shall be effected by the Issuer in accordance
with the terms of the Stockholders Agreement, except that Olivetti's duty to
make a written request to the Issuer for a demand or shelf registrations
will be deemed to have been satisfied by the Proposal. If the demand or shelf
registration is not effected by the Issuer, Olivetti is entitled to request a
demand or shelf registration. However, if Olivetti requests a demand
registration, the Issuer may effect either a demand or shelf registration, at
its option. If the Issuer should fail to deliver a Proposal to Olivetti within
forty-five (45) days after the date of any Desired Sale Notice, Olivetti is
entitled to request a demand or shelf registration of the Total Wang Shares
covered by such Desired Sale Notice. However, if Olivetti requests a demand
registration, the Issuer may effect either a demand or shelf registration, at
its option.
Without complying with the pre-registration procedures described above,
if after the earlier to occur of: (1) March 17, 2001 or (2) an Early Termination
Event, the Issuer proposes to effect a Piggyback Registration (as defined in the
Stockholders Agreement), Olivetti may request that all or a portion of the
Total Wang Shares be included in such registration. The Issuer is obligated to
use its commercially reasonable best efforts to include the applicable Total
Wang Shares in the registration statement relating to such Piggyback
Registration.
The Earn Out Agreement. The Earn Out Agreement obligates the Issuer to
make additional payments to Olivetti of up to 100 billion Italian lira in the
year 2000. The exact payment to be made by the Issuer is based upon three
financial performance indicators: (i) the Issuer's EBITDA for the period from
January 1, 1998 through December 31, 1999, as adjusted, (ii) the consolidated
earnings, before interest, taxes and restructuring charges and including
dividends from Olsy's "Noncontrolled Subsidiaries" (as defined in the Earn Out
Agreement), of the commercial operations of Olsy and its "Controlled
Subsidiaries" (as defined in the Earn Out Agreement) in Italy for the period
from January 1, 1998 through December 31, 1999, as adjusted, and (iii) the
consolidated revenue of the commercial operations of Olsy and the Controlled
Subsidiaries in Italy for the period from January 1, 1998 through December 31,
1999, as adjusted.
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Item 7. Material to be Filed as Exhibits.
<TABLE>
<S> <C>
Exhibit 7.1 Stock Purchase Agreement, by and among Wang Laboratories, Inc., Wang
Nederland B.V., Ing. C. Olivetti & C. S.p.A., Olivetti Sistemas e Servicios
Limitada and Olivetti do Brasil, dated as of February 28, 1998.
Exhibit 7.2 Stock Escrow Agreement, by and among Wang Laboratories, Inc., Ing. C.
Olivetti & C. S.p.A. and American Stock Transfer and Trust Company, dated
as of March 17, 1998.
Exhibit 7.3 Ancillary Consideration Agreement, by and between Wang Laboratories, Inc. and
Ing. C. Olivetti & C. S.p.A., dated as of March 17, 1998.
Exhibit 7.4 Stock Appreciation Right Certificate, dated March 17, 1998.
Exhibit 7.5 Stockholders Agreement, by and between Wang Laboratories, Inc. and Ing. C.
Olivetti & C. S.p.A., dated as of March 17, 1998.
Exhibit 7.6 Earn-Out Agreement, by and between Wang Laboratories, Inc. and Ing. C.
Olivetti & C. S.p.A., dated as of March 17, 1998.
Exhibit 7.7 Amendment No. 1 to Stock Purchase Agreement, by and among Wang
Laboratories, Inc., Wang Nederland B.V., Ing. C. Olivetti and C. S.p.A.,
Olivetti Sistemas e Servicios Limitada and Olivetti do Brasil, dated as of March
17, 1998.
</TABLE>
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 27, 1998
ING. C. OLIVETTI & C. S.p.A.
By: /s/ Roberto Colaninno
----------------------------
Name: Roberto Colaninno
Title: Chief Executive Officer
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF OLIVETTI
<TABLE>
<CAPTION>
Present Principal Occupation
or
Name Employment Business Address Citizenship
---- ----------------------------- ---------------- -----------
<S> <C> <C> <C>
Antonio Tesone Chairman of the Board of Olivetti S.p.A.
Directors of Olivetti S.p.A. and via Jervis, 77 Italian
Vice President of the Board of 10015 Ivrea (TO), Italy
Directors of Banca di Legnano
S.p.A.
Peter Reimpell Member of the Board of Bayerische Vereinsbank
Directors of Olivetti S.p.A. AG German
Kardinal - Faulhaber Str.
14
D-80311 Munich,
Germany
Gerard Worms Chairman of the Supervisory Rothschild et Cie Banque
Board - Rothschild et Cie 17 Avenue Matignon French
Banque 75008 Paris, France
Peter A. Cohen Principal in investment Ramius Capital Group
management business - Ramius 767 Third Avenue American
Capital Group 27th Floor
New York, N.Y. 10028
Maria Luisa Lizier Architect Via Uguccione de Pisa 6 Italian
Galardi Milan, Italy
Bruno Lamborghini Member of the Board of Olivetti S.p.A.
Directors of Olivetti S.p.A., via Jervis, 77 Italian
Chairman of the Board of 10015 Ivrea (TO), Italy
Directors of Olivetti Lexikon
S.p.A. and
Vice Chairman of Olivetti
Telemedia
Piera Rosiello Member of the Board of Olivetti S.p.A.
Directors (Secretary) of Olivetti via Jervis, 77 Italian
S.p.A. and Director of Technost 10015 Ivrea (TO), Italy
S.p.A.
Dario Trevisan Lawyer and partner of law firm Studio Legale Calesella
"Studio Legale Calesella Trevisan e Associati Italian
Trevisan e Associati" via Camperio 14
20123 Milan, Italy
Luca Paravicini Crespi Private banker for Banca Banca Euromobiliare
Euromobiliare via Turati 9 Italian
Milan, Italy
</TABLE>
<PAGE> 12
<TABLE>
<S> <C> <C> <C>
Gordon Michael Chairman - Energis Energis Communications
William Communications Plc Plc
Owen Carmelite, 50 Victoria British
Embankment London
EC4Y 0DE, England
Claudio Recchi Manager and Director of Ferrocemento Recchi
Ferrocemento Recchi S.p.A. S.p.A. Italian
(General Contractors) via Montevecchio No. 28
10128 Torino, Italy
Alberto Pirelli Deputy Chairman, Pirelli Pirelli S.p.A.
S.p.A. Viale Sarca, 222 Italian
20126 Milano, Italy
Franco Girard Chairman - LASA S.p.A.; CIR
Member of the Board of Via Ciovassino 1 Italian
Directors of CIR S.p.A., Milano, Italy
COFIDE S.p.A., Sogefi
S.p.A., Olivetti S.p.A., and
Sasilo;
and Member of the Board of
Directors and of the Executive
Committee of Espresso
Repubblica
Dr. Klaus Esser Member of the Board of Mannesmann AG German
Directors, Mannesmann AG Mannesmannufer 2
D-40213 Dusseldorf
Roberto Colaninno Chief Executive Officer - Olivetti S.p.A
Olivetti S.p.A.; Chairman- Via Jervis, 77 Italian
Oliman B.V. and Omnitel 10015 Ivrea (TO), Italy
Sistemi Radiocellulari; Vice
President - Omnitel Pronto
Italia; Executive Vice President
- Sogefi S.p.A; and Member of
the Board of Directors of Banca
Agricola Mantovana
Luciano P. La Noce Chief of Corporate Finance Olivetti S.p.A.
Division - Olivetti S.p.A. via Jervis, 77 Italian
10015 Ivrea (TO), Italy
Corrado Ariaudo Chief of Central Division for Olivetti S.p.A.
Administration, Finance & via Jervis, 77 Italian
Control - Olivetti S.p.A. 10015 Ivrea (TO), Italy
Vittorio Meloni Chief of Central Division for Olivetti S.p.A Italian
Communications and Image - Via Jervis, 77
Olivetti S.p.A. 10015 Ivrea (TO), Italy
</TABLE>
<PAGE> 13
<TABLE>
<S> <C> <C> <C>
Giorgio Arona Co-chief of Human Resources Olivetti S.p.A Italian
Division and Vice President of Via Jervis, 77
Industry Relations 10015 Ivrea (TO), Italy
Maurizio De Magistris Executive Vice President - Olivetti S.p.A.
Human Resources Division - via Jervis, 77 Italian
Olivetti Group 10015 Ivrea (TO), Italy
Andrea Camanzi Chief of Legal and Licensing Olivetti S.p.A.
Division - Olivetti S.p.A. via Jervis, 77 Italian
10015 Ivrea (TO), Italy
Enzo Badalotti Chief of Operations and Olivetti S.p.A.
Information Systems Division - via Jervis 77 Italian
Olivetti S.p.A. and Advisor to 10015 Ivrea (TO), Italy
Omnitel Printo Italia S.p.A. and
Infostrada S.p.A.
Daniele Signorini Chief of Central Division for IT Olivetti Lexikon S.p.A. Italian
Strategy - Olivetti S.p.A. and via Jervis, 77
Chief Executive Officer - 10015 Ivrea (TO) Italy
Lexicon S.p.A.
Roberto Maglione Co-Chief of Human Resources Olivetti S.p.A. Italian
Division and Vice President via Jervis, 77
Corporate Human Resources - 10015 Ivrea (TO), Italy
Olivetti S.p.A.
Marco De Benedetti Chairman of Infostrada S.P.A., Olivetti S.p.A. Italian
Director of Oliman Holding B.V. via Jervis, 77
Chief of Central Division for 10015 Ivrea (TO), Italy
Telecommunications Strategy -
Olivetti S.p.A.
</TABLE>
<PAGE> 1
Exhibit 7.1
-----------
STOCK PURCHASE AGREEMENT
by and among
WANG LABORATORIES, INC.,
WANG NEDERLAND BV,
ING. C. OLIVETTI & C. S.P.A.,
OLIVETTI SISTEMAS E SERVICIOS LIMITADA
and
OLIVETTI DO BRASIL S.A.
dated as of February 28, 1998
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I CERTAIN PRE-CLOSING ACTIONS..........................2
1.1 Business Items.......................................2
1.2 NonBusiness Items....................................3
1.3 Securitization; Factoring............................4
1.4 Third Party and Intercompany Funded
Debt.................................................5
1.5 Intercompany Trade Receivables.......................6
1.6 La Defense...........................................6
1.7 Separation of Personnel, Assets and
Records; Termination of Powers of
Attorney and Employment Agreements...................7
1.8 12/31/97 Projected Balance Sheet
Actions; Additional Capital
Contribution.........................................8
1.9 Olsy France.........................................10
1.10 Olsy Germany........................................10
1.11 Oliricerca..........................................11
1.12 Lexikon.............................................11
1.13 Cerdanyola Factory..................................12
ARTICLE II SALES AND PURCHASES.................................12
2.1 Sales and Purchases.................................12
ARTICLE III THE CLOSING.........................................14
3.1 Time and Place of Closing...........................14
3.2 Deliveries by the Sellers...........................14
3.3 Deliveries by Wang..................................15
3.4 Escrows.............................................16
3.5 Further Assurances..................................16
3.6 Simultaneous Deliveries and Actions.................17
ARTICLE IV REPRESENTATIONS AND WARRANTIES
OF OLIVETTI.........................................17
4.1 Organization, Standing and
Qualification; Disclosure Schedule..................17
4.2 Capitalization; Minority Interests..................19
4.3 No Other Interests..................................21
4.4 Authority...........................................21
4.5 Consents; No Violation..............................23
4.6 Financial Statements; Accounts
and Accounting Controls.............................25
4.7 No Undisclosed Liabilities..........................27
4.8 Absence of Certain Changes..........................27
4.9 Properties and Assets...............................28
i
<PAGE> 3
4.10 Title to Personal Properties and
Assets..............................................28
4.11 Real Estate.........................................29
4.12 Real Estate Leases..................................32
4.13 Personal Property Leases............................35
4.14 Contracts...........................................36
4.15 Intellectual Property...............................41
4.16 Bank Accounts.......................................50
4.17 Insurance...........................................51
4.18 Taxes...............................................51
4.19 Employees; Employee Relations.......................54
4.20 Employee Benefit Plans; ERISA.......................57
4.21 Compliance with Law; Political
Payments............................................61
4.22 Environmental Matters...............................63
4.23 Litigation..........................................68
4.24 Products Liability..................................69
4.25 Securities Act......................................70
4.26 Brokers and Finders.................................70
4.27 Disclosure..........................................70
ARTICLE V REPRESENTATIONS AND WARRANTIES OF WANG..............71
5.1 Organization, Standing and
Qualification.......................................71
5.2 Capitalization......................................72
5.3 Authority...........................................73
5.4 Consents; No Violation..............................73
5.5 Reports.............................................74
5.6 Financial Statements................................75
5.7 Political Payments..................................75
5.8 Litigation..........................................76
5.9 Brokers and Finders.................................76
5.10 Letter Concerning Financing.........................76
5.11 Net Operating Loss..................................77
5.12 Absence of Adverse Change...........................77
5.13 Disclosure..........................................77
ARTICLE VI CERTAIN COVENANTS, AGREEMENTS AND
REPRESENTATIONS AND WARRANTIES OF
THE PARTIES.........................................77
6.1 Conduct of Business Pending the
Closing.............................................77
6.2 Nonsolicitation.....................................85
6.3 Full Access.........................................86
6.4 Supplements to Disclosure Schedules.................87
6.5 Non-Governmental Consents...........................88
6.6 Governmental Consents...............................91
ii
<PAGE> 4
6.7 Best Efforts........................................92
6.8 Expenses............................................92
6.9 Records; Access.....................................93
6.10 Delivery of Reports By Wang.........................95
6.11 Financing...........................................96
6.12 Certain Information and
Financial Statements................................97
6.13 1997 EBITDA Purchase Price Adjustment..............101
6.14 Closing Balance Sheet Purchase Price
Adjustment.........................................103
6.15 Olsy Germany Asbestos Clean-Up.....................108
6.16 Guarantees.........................................108
6.17 Certain Employee Benefit Matters...................110
6.18 Determination of Funding Status
of OCJ Pension Plan................................112
6.19 Spares.............................................116
6.20 Trade Receivables..................................117
6.21 Work in Progress...................................118
6.22 Statutory Recapitalization.........................119
6.23 Coopers & Lybrand Consent..........................120
6.24 Cooperation in Italy...............................121
6.25 Cooperation With Respect to Certain
Business Items and NonBusiness Items...............122
6.26 Certain Intellectual Property
Covenants..........................................123
6.27 Subleases..........................................126
ARTICLE VII TAX MATTERS........................................126
7.1 Preparation and Filing of Tax Returns;
Payment of Taxes...................................126
7.2 Tax Indemnification................................127
7.3 Entity Classification Election.....................129
7.4 Tax Claims.........................................129
7.5 Refunds............................................132
7.6 Tax Payments Resulting from Audit
Adjustment.........................................132
7.7 Amnesty............................................133
7.8 Transfer and Similar Taxes.........................134
7.9 FIRPTA Compliance..................................135
7.10 Assistance and Cooperation.........................135
7.11 Characterization of Indemnification
Payments...........................................136
7.12 Indemnity Payments.................................136
7.13 Survival...........................................137
iii
<PAGE> 5
ARTICLE VIII CONDITIONS TO THE OBLIGATIONS
OF SELLERS......................................137
8.1 Representations and Warranties.....................138
8.2 Performance........................................138
8.3 Officers' Certificate..............................138
8.4 Non-Governmental Consents..........................138
8.5 Waiting Periods....................................138
8.6 No Injunction......................................138
8.7 Governmental Actions...............................139
8.8 Absence of Adverse Change..........................139
8.9 Related Agreements.................................139
8.10 Opinions...........................................139
ARTICLE IX CONDITIONS TO THE OBLIGATIONS OF
BUYERS.............................................139
9.1 Representations and Warranties.....................139
9.2 Performance; Olsy Shares; Pre-Closing..............139
9.3 Officers' Certificate..............................140
9.4 Olivetti Non-Governmental Notices..................140
9.5 Waiting Periods....................................140
9.6 No Injunction......................................140
9.7 Governmental Actions...............................141
9.8 Financing..........................................141
9.9 Absence of Adverse Change..........................141
9.10 Related Agreements.................................141
9.11 Opinions...........................................141
ARTICLE X SURVIVAL AND INDEMNIFICATION.......................141
10.1 Survival...........................................141
10.2 Indemnification by Olivetti........................142
10.3 Indemnification by Wang............................145
10.4 Procedures Relating to Indemnification.............146
10.5 Consideration for Payment of
Indemnification Obligations........................149
10.6 Recovery Principles................................149
ARTICLE XI TERMINATION AND ABANDONMENT........................150
11.1 Termination........................................150
11.2 Procedure Upon Termination.........................150
ARTICLE XII MISCELLANEOUS PROVISIONS...........................151
12.1 Amendment and Modification.........................151
12.2 Waiver of Compliance...............................151
12.3 Notices............................................152
12.4 Assignment.........................................153
12.5 Publicity..........................................154
12.6 Governing Law......................................154
iv
<PAGE> 6
12.7 Counterparts.......................................154
12.8 Headings...........................................154
12.9 Entire Agreement...................................154
12.10 Third Parties......................................155
12.11 Certain Defined Terms..............................155
12.12 Dispute Resolution.................................160
12.13 Miscellaneous......................................163
v
<PAGE> 7
LIST OF SCHEDULES
Schedule 1 Description of the Business
Schedule 1.2 Presumed NonBusiness Items
Schedule 1.8(a)(iv) Public Administration Trade Receivables
Schedule 1.10 Olsy Germany Shares
Schedule 3.2(d) Certain Directors
Schedule 4.2(e) Certain Formation Transactions
Schedule 4.14(a) Major Customers
Schedule 4.14(b)(xvi) Certain Countries
Schedule 6.12(a) 12/31/97 Projected Balance Sheet
Schedule 6.12(b) Information Documents
Schedule 6.13(d) 1997 EBITDA Illustration
Schedule 6.14(d) Closing Tangible Equity Value
Adjustment Amount Illustration
Schedule 6.16(b) Customer Bonds
Schedule 6.16(c) Guarantees
Schedule 6.18(b) Actuarial Assumptions
Schedule 6.20 Trade Receivables Collection
Periods
Schedule 6.21 Works in Progress Collection
Periods
Schedule 6.27 Sublets with Olivetti Affiliates
Schedule 8.4 Wang Non-Governmental Consents
Schedule 9.4 Olivetti Non-Governmental Notices
Schedule 10.2(a)(viii) Civil Cases Pending in Italy
Schedule 10.6(d) Certain Plans
Schedule 12.11(a) Indemnified Related Agreements
Schedule 12.11(b) Major Subsidiaries
Schedule 12.11(c) Real Estate Agreements
Schedule 12.11(d) Related Agreements
Schedule 12.13 Defined Terms
LIST OF EXHIBITS
Exhibit 1 Oliricerca Share Transfer and Shareholder
Agreement
Exhibit 2 Oliricerca Development and Cooperation
Agreement
Exhibit 3 Lexikon Agreement
Exhibit 4 Earn-Out Agreement
Exhibit 5 Ancillary Consideration Agreement
Exhibit 6 Stock Appreciation Right Certificate
Exhibit 7 Letter of Credit
Exhibit 8 Cash Escrow Agreement
Exhibit 9 Stock Escrow Agreement
Exhibit 10 Stockholder Agreement
Exhibit 11 Form of Customer Consents
vi
<PAGE> 8
Exhibit 12 Transitional Authorisation and Trademark
License Agreement
Exhibit 13 Matters to be Covered in Opinion of
Counsel for Wang
Exhibit 14 Matters to be Covered in Opinion of Counsel
for Olivetti
Exhibit 15 Noncompetition and Nonsolicitation Agreement
Exhibit 16 Indemnification Agreement (MIS)
Exhibit 17 Oliman Agreement
Exhibit 18 Transitional Services Agreement (Olivetti to
Olsy)
Exhibit 19 Transitional Services Agreement (Olsy to
Olivetti
Exhibit 20 Framework Preferred Services Provider
Agreement
vii
<PAGE> 9
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of February 28, 1998 (this
"Agreement"), by and among Wang Laboratories, Inc., a Delaware corporation
("Wang"), Wang Nederland BV, a Netherlands corporation ("Wang Nederland" and
together with Wang, the "Buyers"), Ing. C. Olivetti & C. S.p.A., an Italian
corporation ("Olivetti"), Olivetti Sistemas e Servicios Limitada, a Brazilian
corporation ("Olivetti Sistemas"), and Olivetti do Brasil S.A., a Brazilian
corporation ("Olivetti Brazil" and together with Olivetti and Olivetti Sistemas,
the "Sellers").
Olivetti is engaged in, among other things, the business of
providing information technology solutions and services to customers worldwide
more fully described on Schedule 1 hereto (such business being hereinafter
referred to as the "Business").
Through a series of transactions beginning at the end of 1995 and
concluding on the date hereof described in general terms in the notes to the
9/30/97 Italian GAAP Financial Statements (as defined in Section 4.6(b)),
Olivetti has transferred its entire right, title and interest in the Business to
Olivetti Solutions S.p.A., an Italian corporation ("Olsy"), Olivetti Corporation
of Japan, a Japanese corporation ("Olsy Japan"), or Olsy do Brasil Ltda., a
Brazilian corporation ("Olsy Brazil") (such series of transactions being
hereinafter referred to as the "Formation").
This Agreement sets forth the terms and conditions upon which
Olivetti will sell to Wang, and Wang will purchase from Olivetti, the Business
through the sale and purchase of the outstanding shares of Olsy and Olsy Japan,
owned by Olivetti and of Olsy Brazil, owned by Olivetti Sistemas and Olivetti
Brazil, and certain related transactions.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements hereinafter set forth, and
intending to be legally bound hereby, the parties hereto agree as follows:
1
<PAGE> 10
ARTICLE I
CERTAIN PRE-CLOSING ACTIONS
1.1 Business Items. Prior to the Closing (as defined in Section 3.1)
(except as otherwise provided in this Agreement or in any Related Agreement (as
defined in Section 12.11)), Olivetti (at its expense and without any
consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary (as
defined in Section 12.11) or any Olsy Japan Subsidiary (as defined in Section
12.11) therefor other than as set forth in Section 2.1(b)) shall (with not less
than five Business Days prior notice to, and the consent of, Wang) sell,
transfer, convey, assign and deliver to Olsy, Olsy Japan, Olsy Brazil or a
Wholly-Owned Subsidiary (as defined in Section 12.11) (a) any employment
relationship, benefit plan or arrangement, asset, property, Contract (as defined
in Section 12.11), Intellectual Property (as defined in Section 4.15(a)(ii)),
right, privilege, franchise, operation or business (or any interest in or
license for or relating to any of the foregoing) owned or held by Olivetti or
any Olivetti Affiliate (as defined in Section 12.11) which does or did relate
exclusively to, or arises or arose exclusively out of, the Business, or is or
was used in providing products, services or support predominately (measured by
usage, revenue or cost) to customers of the Business or pursuant to or under
which products, services or support are or were provided predominately (measured
by usage, revenue or cost) to customers of the Business (such employment
relationship, benefit plan or arrangement, assets, properties, Contracts,
rights, privileges, franchises, operations or businesses (whether or not so
transferred) being hereinafter referred to as a "Business Item" and collectively
as the "Business Items") and (b) any liability or obligation which does or did
relate exclusively to, or arises or arose predominately out of any Business Item
so sold, transferred, conveyed, assigned and delivered. Notwithstanding anything
herein to the contrary, if Olivetti has unintentionally failed to sell,
transfer, convey, assign or deliver a Business Item prior to the Closing in
accordance with this Section 1.1 it shall not be in breach of this Section 1.1
if (a) (i) such Business Item is de minimis or (ii) the failure to so sell,
transfer, convey, assign or deliver has not
2
<PAGE> 11
had an adverse financial or economic effect on the business, assets, properties,
liabilities, results of operations or financial condition of Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary and (b) it sells, transfers, conveys,
assigns or delivers such Business Item within 45 days of the earlier of (i) the
date it becomes aware of such failure or (ii) the date of notice from Wang of
such failure. Wang acknowledges that (except as otherwise provided in this
Agreement or in any Related Agreement) it is not, pursuant to this Agreement,
acquiring (a) Olivetti's interest in OIS Italia S.p.A., Olivetti Information
Services S.p.A., Olivetti Sanita S.p.A. or Lottomatica S.c.p.A. (or any
employment relationship, benefit plan or arrangement, asset, property, right,
privilege, franchise, operation or business owned or held by any of the
foregoing on or before January 1, 1997 or acquired by any of the foregoing since
such date other than by way of sale, transfer, conveyance, assignment or
delivery from Olsy, Olsy Japan, Olsy Brazil or any Subsidiary) or (b) the
general purpose printers and specialized printers manufactured by Olivetti
Lexikon S.p.A. ("Lexikon") or any Affiliate (as defined in Section 12.11) of
Lexikon and any intellectual property relating solely and specifically thereto;
and Wang shall not assert that these are Business Items.
1.2 NonBusiness Items. Prior to the Closing (except as otherwise
provided in this Agreement or in any Related Agreement), Olivetti (at its
expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy
Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set
forth in Section 2.1(b)) shall (with not less than five Business Days prior
notice to, and the consent of, Wang) cause Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary (as defined in Section 12.11) to transfer to it (in
exchange for an amount in cash from Olivetti, in immediately available funds,
equal to the net book value thereof, if any) any employment relationship,
benefit plan or arrangement, asset, property, Contract, right, privilege,
franchise, operation or business (or any interest in or license for or relating
to any of the foregoing) owned or held by Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary, or any liability or obligation to which Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary is subject, in each case, which does
not or did not relate
3
<PAGE> 12
exclusively to, or does not or did not arise exclusively out of, the Business,
or is not or was not used in providing products, services or support
predominately (measured by usage, revenue or cost) to customers of the Business
or pursuant to or under which products, services or support are not or were not
provided predominately (measured by usage, revenue or cost) to customers of the
Business (such employment relationships, benefit plans or arrangements, assets,
properties, Contracts, rights, privileges, franchises, operations, businesses,
liabilities or obligations (whether or not so transferred) being hereinafter
referred to individually as a "NonBusiness Item" and collectively as the
"NonBusiness Items"). Notwithstanding anything herein to the contrary, if
Olivetti has unintentionally failed to cause Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary to transfer a NonBusiness Item to it prior to the
Closing in accordance with this Section 1.2 it shall not be in breach of this
Section 1.2 if (a) the failure to cause such transfer has not had an adverse
financial or economical effect on the business, assets, properties, liabilities,
results of operations or financial condition of Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary and (b) it causes the transfer of such NonBusiness
Item within 45 days of the earlier of (i) the date it becomes aware of such
failure or (ii) the date of notice from Wang of such failure. The entities
listed on Schedule 1.2 hereto shall be presumed to be NonBusiness Items (subject
to this Section 1.2 prior to the Closing and Section 3.5(a) after the Closing)
unless Wang notifies Olivetti otherwise within 90 days after the date hereof.
1.3 Securitization; Factoring. (a) Prior to the Closing, Olivetti
(at Olsy's expense and without any consideration from the Buyers, Olsy, Olsy
Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other
than as set forth in Section 2.1(b)) shall cause (i) all plans, programs or
arrangements under which any trade receivables of any of Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary were securitized to be terminated, (ii) all
amounts due to or from Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary thereunder to be settled, (iii) all ongoing reporting obligations
thereunder of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to be
terminated and (iv) all Liens (as defined in Section 12.11) arising
4
<PAGE> 13
thereunder to be released. At the Closing, Olivetti shall deliver to Wang true,
complete and correct copies of letters from each Person (as defined in Section
12.11) with whom any trade receivable of Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary was securitized confirming the foregoing.
(b) Prior to the Closing, Olivetti (at Olsy's expense and
without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any
Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in
Section 2.1(b)) shall cause (i) all plans, programs or arrangements under which
any trade receivables of any of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary were factored with recourse to be terminated, (ii) all trade
receivables factored thereunder to be repurchased and (iii) all Liens arising
thereunder to be released.
1.4 Third Party and Intercompany Funded Debt. (a) Prior to the
Closing, Olivetti (at its expense and without any consideration from the Buyers,
Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary
therefor other than as set forth in Section 2.1(b)) shall cause (i) all amounts
owed under any credit facility, loan agreement or similar arrangement by Olsy,
Olivetti Australia Pty, Ltd., Olsy Canada Ltd. or any Major Subsidiary (as
defined in Section 12.11) (other than Olsy Japan) to be paid or otherwise
extinguished, (ii) all such credit facilities, loan agreements or similar
agreements to be terminated and (iii) all Liens arising thereunder to be
released, such that as of the Closing, none of Olsy, Olivetti Australia Pty,
Ltd., Olsy Canada Ltd. or any Major Subsidiary (other than Olsy Japan) will owe
any amounts to third parties under any such credit facility, loan agreement or
similar agreement (provided that Olivetti and Wang may mutually agree in writing
to defer any of the foregoing with respect to a particular credit facility, loan
agreement or similar arrangement until after the Closing if such deferral would
avoid substantial termination expenses associated with consummation of any of
the foregoing prior to the Closing).
(b) Prior to the Closing, Olivetti (at its expense and
without any consideration from the
5
<PAGE> 14
Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan
Subsidiary therefor other than as set forth in Section 2.1(b)) shall cause all
amounts owed by Olivetti or any Olivetti Affiliate, on the one hand, to Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary, on the other hand, or vice
versa, arising out of loans from one to the other to be paid or otherwise
extinguished, such that as of the Closing there will be a single amount owing
from Olivetti to Olsy, which Olivetti shall pay in cash, in immediately
available funds, immediately prior to the Closing.
1.5 Intercompany Trade Receivables. Prior to the Closing, Olivetti
(at its expense and without any consideration from the Buyers, Olsy, Olsy Japan,
Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as
set forth in Section 2.1(b)) shall cause all amounts owed by Olivetti or any
Olivetti Affiliate, on the one hand, to Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary, on the other hand, or vice versa, arising out of the sale
of products, services or support by one to the other to be, subject to payment
terms stated in OLGA (as defined in Section 12.11) or other specific stated
terms, paid, such that as of the Closing none of such amounts shall be in
dispute.
1.6 La Defense. Not later than the later of the Closing or June 30,
1998, Olivetti (at its expense and without any consideration from the Buyers,
Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary
therefor other than as set forth in Section 2.1(b)) shall cause Olsy to transfer
to a newly formed French Olivetti Affiliate the sale-leaseback agreement, dated
December 23, 1987, as amended, among Societe Lyonnaise Immobiliere pour le
Commerce et l'Industrie ("SLICOMI"), Compagnie Financiere pour la Location
d'Immeubles Industriels et Commerciaux ("LOCINDUS"), "NATIOCREDIBAIL", "Societe
Immobiliere pour le Commerce et l'Industrie", "Societe Generale pour le
Developpement des Operations de Credit Bail Immobilier SOGEBAIL" (collectively,
the "Landlord") and Olivetti Logabax S.A. renamed "Olsy France S.A." (the "La
Defense Agreement").
The assignment shall be evidenced by a deed of assignment in form
and substance reasonably satisfactory to Wang among the Landlord, Olsy France
S.A. ("Olsy France") and the French Olivetti Affiliate (the "La
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Defense Deed of Assignment") duly executed before French notaries which La
Defense Deed of Assignment shall record (i) the Landlord's consent to the
assignment of the La Defense Agreement to the French Olivetti Affiliate, (ii) a
full and unconditional release by the Landlord of Olsy France's obligations as
joint guarantor under Article 204.5 of the La Defense Agreement (or
alternatively, the joint undertaking of the French Olivetti Affiliate and of
Olivetti to indemnify Olsy France should the Landlord not waive its right of
recourse against Olsy France under Article 204.5 of the La Defense Agreement)
and (iii) an acknowledgement that the terms and conditions stipulated in the La
Defense Agreement shall remain applicable.
The La Defense Deed of Assignment shall be delivered by Olivetti to
Wang not later than the later of the Closing or June 30, 1998. Olivetti shall
reimburse Wang for all costs and expenses associated with the La Defense
Agreement (in excess of its obligations under the sublease for a portion of the
La Defense premises referred to on Schedule 12.11(c) hereto) incurred by Olsy,
Olsy France or any Affiliate of Olsy between the Closing and the date the La
Defense Deed of Assignment is delivered. If Olivetti does not deliver the La
Defense Deed of Assignment by the later of the Closing or June 30, 1998,
Olivetti shall pay Wang 5,000,000,000 Italian lira and remain obligated under
this Section 1.6 to deliver the La Defense Deed of Assignment as soon as
practicable thereafter.
Olivetti shall be responsible for the payment of all taxes, if any,
which may become due by reason of the assignment to the French Olivetti
Affiliate of the La Defense Agreement and shall indemnify and hold Olsy France
harmless with respect to any negative tax impact on Olsy France of such
assignment.
1.7 Separation of Personnel, Assets and Records; Termination of
Powers of Attorney and Employment Agreements. (a) Prior to the Closing or as
soon as practicable thereafter, Olivetti (at its expense and without any
consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or
any Olsy Japan Subsidiary therefor other than as set forth in Section 2.1(b))
shall (except as otherwise provided in this Agreement or any Related Agreement)
move the personnel, assets and records of Olsy, Olsy Japan, Olsy Brazil or
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any Controlled Subsidiary into contiguous and secure space separated from the
personnel, assets and records of Olivetti or any Olivetti Affiliate as is
reasonable for the personnel, assets or records concerned.
(b) Prior to the Closing (or in the case of clause (ii) not
later than 30 days after the Closing), Olivetti (at its expense and without any
consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or
any Olsy Japan Subsidiary therefor other than as set forth in Section 2.1(b))
shall cause (i) all powers of attorney granted by Olsy, Olsy Japan, Olsy Brazil
or any Controlled Subsidiary to any director, officer or employee of Olivetti or
any Olivetti Affiliate to be terminated and (ii) cause the employment agreements
with the four executives previously identified to Olivetti by Wang to be
terminated.
1.8 12/31/97 Projected Balance Sheet Actions; Additional Capital
Contribution. (a) Prior to the Closing and effective not later than as of
December 31, 1997 (or in the case of clauses (ii) and (iii), effective as at
January 1, 1998 or in the case of clauses (v) and (vii), effective as at
February 15, 1998), Olivetti (at its expense and without any consideration from
the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan
Subsidiary therefor other than as set forth in this Section 1.8(a) or Section
2.1(b)) has caused or shall cause each of the following actions to be taken:
(i) the sale, transfer, conveyance, assignment and delivery
by Olsy Espana S.A. of all the assets or liabilities of, or associated
with, the "Fondo de Indemnizaciones de pago diferido" to an Olivetti
Affiliate and the purchase by such Olivetti Affiliate of all such assets
for 71,400,000,000 Italian lira and the assumption by such Olivetti
Affiliate of all costs, expenses, liabilities and obligations relating to
the "Fondo de Indemnizaciones de pago diferido" and the provision of
retirement income benefits and death benefits to former employees of Olsy
Espana S.A., including, without limitation, all internal and external
administrative costs (including, but not limited to, legal fees, expenses
of paying benefits,
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responding to participant inquiries and record keeping) and funding
obligations relating thereto;
(ii) the increase of the restructuring fund for empty spaces
on the books and records of Olsy and the Controlled Subsidiaries to an
aggregate of 30,000,000,000 Italian lira;
(iii) the increase of the accrual for unpaid holidays on the
books and records of Olsy and the Controlled Subsidiaries to an aggregate
of whatever amount as is necessary to reflect the status thereof as of
December 31, 1997;
(iv) the sale, transfer, conveyance, assignment and delivery
by Olsy to Olivetti of the trade receivables set forth on Schedule
1.8(a)(iv) hereto for 102,300,000,000 Italian lira in cash, in immediately
available funds;
(v) the payment by Olivetti to Olsy of 25,000,000,000
Italian lira in cash, in immediately available funds, which payment shall
be converted prior to the Closing into a contribution to capital with the
resulting share capital increase resolved at the extraordinary
shareholders meeting of Olsy held on January 30, 1998;
(vi) the increase of the headcount restructuring fund on the
books and records of Olsy and the Controlled Subsidiaries in Italy to
50,000,000,000 Italian lira; and
(vii) the increase of the restructuring fund for the
clean-up of the building located in Frankfurt-am-Main at Lyner Strasse, 34
on the books and records of Olsy by an amount of D.M. 12,936,000
(converted in Italian lira on the basis of the exchange rate of the day on
which the increase is effective) additional to the fund of D.M. 12,780,000
recorded on the books and records of Olivetti G.m.b.H., a German company
("Olsy Germany").
(b) In addition, not later than February 15, 1998, Olivetti
(at its expense and without any consideration from the Buyers, Olsy, Olsy Japan,
Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary
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<PAGE> 18
therefor other than as set forth in this Section 1.8(b) or Section 2.1(b)) shall
pay 15,000,000,000 Italian lira in cash, in immediately available funds to Olsy,
which payment shall be converted prior to the Closing into a contribution to
capital with the resulting share capital increase resolved at the extraordinary
shareholders meeting of Olsy held on January 30, 1998.
1.9 Olsy France. At a pre-closing to be held immediately prior to
the Closing at places to be mutually agreed by Wang and Olivetti (the
"Pre-Closing"), Olivetti (without any consideration from the Buyers, Olsy Japan,
Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as
set forth in this Section 1.9 or Section 2.1(b)) shall cause Olsy International
NV, a Dutch company which shall remain a Wholly-Owned Subsidiary after the
Closing ("Olsy International"), to sell, transfer, convey, assign and deliver to
Wang (or any subsidiary assignee of Wang permitted under Section 12.4) 3,000,000
shares, par value 10 French francs per share (the "Olsy France Shares"), of Olsy
France, representing all of the outstanding shares of capital stock of Olsy
France, free and clear of any Lien. In consideration for such sale, transfer,
conveyance, assignment and delivery, Wang shall pay (or cause to be paid) the
consideration to be agreed not later than two Business Days prior to the
Pre-Closing (the "Olsy France Consideration") to Olsy International. At the
Pre-Closing, Olivetti will deliver (or cause to be delivered) (i) duly executed
ordres de mouvement and (ii) the resignations of those individuals who are
members of the Board of Directors of Olsy France and those officers of Olsy
France specified by Wang not later than five Business Days prior to the
Pre-Closing, and Wang will deliver (or cause to be delivered) the Olsy France
Consideration by wire transfer of immediately available funds to an account
designated by Olsy International at least three Business Days prior to the
Pre-Closing.
1.10 Olsy Germany. At the Pre-Closing, Olivetti (without any
consideration from the Buyers, Olsy Japan, Olsy Brazil, any Subsidiary or any
Olsy Japan Subsidiary therefor other than as set forth in this Section 1.10 or
Section 2.1(b)) shall cause Olsy International to sell, transfer, convey, assign
and deliver to Wang (or any subsidiary assignee of Wang permitted under Section
12.4) the eleven shares set forth
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in Schedule 1.10 hereto with total nominal value of DM 50,100,000 (the "Olsy
Germany Shares"), of Olsy Germany, representing all of the outstanding shares of
capital stock of Olsy Germany, free and clear of any Lien. In consideration for
such sale, transfer, conveyance, assignment and delivery, Wang shall pay (or
cause to be paid) the consideration to be agreed not later than two Business
Days prior to the Pre-Closing (the "Olsy Germany Consideration") to Olsy
International. At the Pre-Closing, Olivetti will deliver (or cause to be
delivered) a duly executed and notarized deed of sale and transfer, and Wang
will deliver (or cause to be delivered) the Olsy Germany Consideration by wire
transfer of immediately available funds to an account designated by Olsy
International at least three Business Days prior to the Pre-Closing. At the
Closing, Olivetti shall cause appropriate notification to be made pursuant to
ss. 16(1) of the Gesetz betreffend die Gesellschaften mit beschrankter Haftung.
1.11 Oliricerca. Concurrently with the execution hereof, Olivetti
(without any consideration from the Buyers, Olsy Japan, Olsy Brazil, any
Subsidiary or any Olsy Japan Subsidiary therefor, except as set forth in Section
2.1(b)) shall, and shall cause Olsy to, execute the Share Transfer and
Shareholder Agreement substantially in the form of Exhibit 1 hereto (the
"Oliricerca Share Transfer and Shareholder Agreement"). Olivetti shall not, and
shall cause Olsy not to, consent to any modification, amendment, termination or
waiver of any provision of the Share Transfer and Shareholder Agreement prior to
the Closing. At the Pre-Closing, Olivetti shall, and shall cause Olsy to,
consummate the transactions described in the Share Transfer and Shareholder
Agreement, including causing Oliricerca to execute a Development and Cooperation
Agreement substantially in the form of Exhibit 2 hereto (the "Oliricerca
Development and Cooperation Agreement").
1.12 Lexikon. Prior to the Pre-Closing, Olivetti shall have caused
Lexikon and Olsy to execute a Supplemental Agreement substantially in the form
of Exhibit 3 hereto (the "Lexikon Agreement"), amending the Framework OEM
Agreement between Lexikon and Olivetti S.p.A. Olivetti shall not, and shall
cause Lexikon not to, consent to any modification, amendment, termination
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or waiver of any provision of such Lexikon Agreement or Framework OEM Agreement
prior to the Closing.
1.13 Cerdanyola Factory. Prior to the Closing, Olivetti (at its
expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy
Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set
forth in Section 2.1(b)) shall cause (a) Olivetti Espana S.A. to sell, transfer,
convey, assign and deliver the real property known as Boters 5 Cerdanyola,
Property Register No. 5 of Barcelona, volume No. 648, book No. 500 sheet No. 62,
estate No. 22.737 and all buildings and improvements thereon to an Olivetti
Affiliate for an amount in cash, in immediately available funds, equal to the
OLGA net book value thereof as of December 31, 1997 and (b) such Olivetti
Affiliate to purchase such real property and all buildings and improvements
thereon and assume all liabilities and obligations associated therewith.
ARTICLE II
SALES AND PURCHASES
2.1 Sales and Purchases. (a) Subject to the terms and conditions of
this Agreement, at the Closing, and in consideration of the payments to be made
hereunder:
(i) Olivetti shall sell, transfer, convey, assign and
deliver to Wang Nederland (or any subsidiary assignee of Wang permitted
under Section 12.4) all of the ordinary shares, par value 1,000 Italian
lira per share, of Olsy outstanding as of the Closing Date (as defined in
Section 3.1) (which shall include those to be issued pursuant to Sections
1.8(a)(v) and 1.8(b) and in satisfaction of the condition in Section
9.2(b)), representing all of the outstanding shares of capital stock of
Olsy (the "Olsy Shares"), free and clear of any Lien;
(ii) Olivetti shall sell, transfer, convey, assign and
deliver to Wang (or any non-Japanese subsidiary assignee of Wang permitted
under Section 12.4) 87,000 shares, par value 50,000 yen per share, of Olsy
Japan, representing 80% of the
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outstanding shares of capital stock of Olsy Japan (the "Olsy Japan
Shares"), free and clear of any Lien (other than the restrictions in the
by-laws of Olsy Japan or in the Memorandum of Understanding and
Shareholders Agreement, both dated as of May 13, 1985, by and between
Olivetti and Toshiba Corporation of Tokyo, Japan); and
(iii) Olivetti Sistemas and Olivetti Brazil shall sell,
transfer, convey, assign and deliver to Wang (or any subsidiary assignee
of Wang permitted under Section 12.4) the quotas of Real 1,126,318 and
5,229,566 respectively, held in the capital of Olsy Brazil, representing
all of the outstanding shares of capital stock of Olsy Brazil (the "Olsy
Brazil Shares"), free and clear of any Lien.
(b) Subject to the terms and conditions of this Agreement
(including, without limitations, the adjustment of the Purchase Price (as
defined in Section 2.1(c)) pursuant to Sections 6.13 and 6.14), at the Closing,
in consideration of the sale, transfer, conveyance, assignment and delivery by
Olivetti pursuant to Section 2.1(a), Wang shall pay, deliver or transfer (or
cause Wang Nederland or any subsidiary assignee of Wang permitted under Section
12.4 to pay) to Olivetti:
(i) 123,400,000,000 Italian lira in cash (the "Cash Portion
of the Purchase Price"), 30,000,000,000 Italian lira of which shall be
deposited in escrow in accordance with Section 3.4(a);
(ii) 7,250,000 shares of common stock, par value $0.01 per
share ("Wang Common Stock"), of Wang (the "Wang Shares"), all of which
shall be deposited in escrow in accordance with Section 3.4(b);
(iii) the right to the earn-outs (the "Earn-Outs") set forth
in an Earn-Out Agreement by and between Wang and Olivetti substantially in
the form of Exhibit 4 hereto;
(iv) the right to the ancillary consideration (the
"Ancillary Consideration")
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set forth in the Ancillary Consideration Agreement by and between Wang and
Olivetti substantially in the form of Exhibit 5 hereto, all of which shall
be deposited in escrow in accordance with Section 3.4(b); and
(v) the Stock Appreciation Rights (the "Rights") set forth
in a Stock Appreciation Right Certificate substantially in
the form of Exhibit 6 hereto.
(c) The Cash Portion of the Purchase Price, the Wang Shares,
the Earn-Outs, the Ancillary Consideration and the Rights are hereinafter
collectively referred to as the "Purchase Price." The Purchase Price is subject
to adjustment pursuant to Sections 6.13 and 6.14.
ARTICLE III
THE CLOSING
3.1 Time and Place of Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Skadden, Arps, Slate, Meagher & Flom LLP, One Beacon Street, Boston,
Massachusetts at 10:00 a.m. (local time) on the later of (a) March 16, 1998 or
(b) the third Business Day following the date on which all of the conditions in
Articles VIII and IX to each party's respective obligations to consummate the
transactions contemplated by this Agreement shall have been satisfied or waived
(the "Condition Satisfaction Date"), provided that if the clause (b) applies and
the Condition Satisfaction Date occurs after the fifteenth day of any month, the
Closing shall occur on the later of (i) the last Business Day of the month in
which the Condition Satisfaction Date occurs or (ii) the third Business Day
following the Condition Satisfaction Date, or (c) at such other time and place
as the parties may agree in writing. The date on which the Closing occurs is
referred to herein as the "Closing Date."
3.2 Deliveries by the Sellers. At the Closing, the Sellers will
deliver (or cause to be delivered) the following to Wang:
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(a) the certificate or certificates representing the Olsy
Shares and the Olsy Japan Shares, duly executed, and a power of attorney
authorizing the named attorney-in-fact to record the transfer of the Olsy Brazil
Shares in accordance with applicable Brazilian law, duly executed;
(b) a Letter of Credit (the "Letter of Credit") issued in
accordance with ICC publication 500 substantially in the form of Exhibit 7
hereto issued by Banca Commerciale Italiana S.p.A. (or any other primary Italian
or U.S. bank reasonably acceptable to Wang) in the face amount of 50,000,000,000
Italian lira;
(c) each Related Agreement to which any Seller or any
Affiliate of Olivetti is a party, duly executed;
(d) the resignations of all directors of Olsy and each
Controlled Subsidiary listed on Schedule 3.2(d) hereto, duly executed, and
resolutions electing successors thereto designated by Wang; and
(e) all other previously undelivered documents required to
be delivered by Olivetti or any Affiliate of Olivetti to Wang pursuant to this
Agreement at or prior to the Closing (including, without limitation, the
officers' certificate and the opinions of counsel required to be delivered by
Olivetti pursuant to Sections 9.3 and 9.11, respectively), duly executed where
such execution is called for.
3.3 Deliveries by Wang. At the Closing, Wang will deliver (or cause
Wang Nederland or any assignee of Wang permitted under Section 12.4 to deliver)
the following to Sellers:
(a) the Cash Portion of the Purchase Price, by wire transfer
of immediately available funds, 93,400,000,000 Italian lira of which shall be
delivered to one or more accounts as shall be designated by Olivetti at least
three Business Days prior to the Closing, and 30,000,000,000 Italian lira of
which shall be deposited in escrow in accordance with Section 3.4(a);
(b) a certificate representing the Wang Shares issued in the
name of Olivetti or its designee,
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duly executed by Wang (the "Wang Shares Certificate"), which shall be deposited
in escrow in accordance with Section 3.4(b);
(c) each Related Agreement to which it is a party, duly
executed; and
(d) all other previously undelivered documents required to
be delivered by Wang or any of its Affiliates to the Sellers pursuant to this
Agreement at or prior to the Closing (including, without limitation, the
officers' certificate and opinion of counsel required to be delivered by Wang
pursuant to Sections 8.3 and 8.10, respectively), duly executed where such
execution is called for.
3.4 Escrows. At the Closing, Wang and Olivetti shall deposit (a)
30,000,000,000 Italian lira of the Cash Portion of the Purchase Price in escrow
pursuant to a Cash Escrow Agreement, substantially in the form of Exhibit 8
hereto (the "Cash Escrow Agreement") and (b) the Wang Shares Certificate and the
Ancillary Consideration in escrow pursuant to a Stock Escrow Agreement,
substantially in the form of Exhibit 9 hereto (the "Stock Escrow Agreement").
3.5 Further Assurances. (a) After the Closing, Olivetti shall from
time to time, at the request of Wang and, except as otherwise provided in the
proviso to this Section 3.5(a), without further cost or expense to Wang, execute
and deliver such other instruments of sale, transfer, conveyance and assignment
and take such other actions as Wang may reasonably request in order to more
effectively consummate the transactions contemplated hereby (including, without
limitation, the transactions contemplated by Article I) without regard to
whether such transactions were to be consummated before or after the Closing and
to vest in Wang or Wang Nederland (or any subsidiary assignee of Wang permitted
under Section 12.4) good, valid and marketable title to the Olsy Shares, the
Olsy Japan Shares, the Olsy Brazil Shares, the Olsy France Shares, the Olsy
Germany Shares, the Business Items and the assets, properties, Contracts,
Intellectual Property, rights, privileges, franchises, operations and business
of the Business, free and clear of any Lien (other than those contemplated by
this Agreement); provided, however, that Wang shall reimburse Olivetti for
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any out-of-pocket costs or expenses incurred by Olivetti with respect to any
action taken pursuant to this Section 3.5(a) with respect to the Olsy France
Shares or the Olsy Germany Shares; and provided further, however, that
Olivetti's obligations under this Section 3.5(a) with respect to Sections 1.1,
1.2 and 1.7 shall expire on the second year anniversary of the Closing Date, the
eighteen month anniversary of the Closing Date and the second year anniversary
of the Closing Date, respectively; provided further, however, that Olivetti's
obligations under this Section 3.5(a) with respect to any Business Item or
NonBusiness Item the subject of the second sentences of Section 1.1 and 1.2,
respectively, shall be satisfied by Olivetti's sale, transfer, conveyance,
assignment or delivery of such Business Item or NonBusiness Item in accordance
with such sentences.
(b) After the Closing, Wang shall from time to time, at the
request of Olivetti and without further cost or expense to Olivetti, execute and
deliver such other instruments of sale, transfer, conveyance and assignment and
take such other actions as Olivetti may reasonably request in order to more
effectively consummate the transactions contemplated hereby.
3.6 Simultaneous Deliveries and Actions. All deliveries shall be
made or other actions to be taken at the Closing shall be deemed to occur
simultaneously, and no such delivery or action shall be deemed complete until
all such deliveries and actions have been completed or the relevant parties had
agreed to waive such delivery or action. If the Closing does not occur, any
delivery made or other action taken at the Pre-Closing shall be deemed not to
have occurred and be without force or effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF OLIVETTI
Olivetti hereby represents and warrants to (and as provided in
Sections 4.5(a), 4.16, 4.23(a) and 4.25 covenants with) Wang as follows:
4.1 Organization, Standing and Qualification; Disclosure Schedule.
(a) Each of the
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Sellers, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries: (i) is a
corporation duly organized or incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation; (ii) has full
corporate power and authority to carry on its business as it is now being
conducted and to own, lease and operate its properties and assets; and (iii) is
duly qualified or licensed to do business as a foreign corporation in good
standing in each jurisdiction in which the conduct of its business or the
ownership, leasing or operation of its properties or assets or the nature of the
business conducted by it makes such qualification necessary, except where the
failure to be so qualified or licensed would not, in the aggregate, have or
result in a Material Adverse Effect (as defined in Section 12.11).
(b) Olivetti has previously delivered to Wang a true,
complete and correct copy of a Disclosure Schedule, dated as of the date hereof
(the "Olivetti Disclosure Schedule"), which sets forth on individual schedules
corresponding to the sections of this Article IV or other Articles of this
Agreement to which they relate, without any general cross reference to other
schedules, the various disclosures required to be made pursuant to this Article
IV or other Articles of this Agreement and which, with respect to any disclosure
required to be made pursuant to this Article IV or other Articles of this
Agreement based on amounts in U.S. dollars stated therein, is based on the
conversion rates for U.S. dollars and the local currency in effect on December
31, 1997. Any paraphrasing of the text of this Article IV or other Articles of
this Agreement in the Olivetti Disclosure Schedule is for reference purposes
only and does not affect the disclosures required to be made pursuant to this
Article IV or other Articles of this Agreement.
(c) Schedule 4.1 of the Olivetti Disclosure Schedule sets
forth a complete and correct list of all jurisdictions in which each of Olivetti
(with respect to the Business), Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries is qualified to do business as a foreign corporation. The copies of
the certificates or articles of incorporation, memoranda or articles of
association or by-laws (or other organizational documents) of each of Olivetti,
Olsy, Olsy
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Japan, Olsy Brazil and the Controlled Subsidiaries heretofore delivered to Wang
by Olivetti are complete and correct copies of such instruments, as currently in
effect.
4.2 Capitalization; Minority Interests. (a) Schedule 4.2(a) of the
Olivetti Disclosure Schedule sets forth (i) the jurisdiction of incorporation
and capitalization of each of Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries, (ii) the type (including currency denomination), number and
percentage of the outstanding shares of capital stock of or other ownership
interest in (aa) Olsy owned by Olivetti, (bb) Olsy Japan owned by Olivetti, (cc)
Olsy Brazil owned by Olivetti Sistemas or Olivetti Brazil or (dd) each
Controlled Subsidiary owned by Olsy or a Controlled Subsidiary and, in each
case, the holder of record thereof, (iii) the holder of record of any
outstanding shares of capital stock of or other ownership interest in (aa) Olsy
Japan not owned by Olivetti or (bb) any Controlled Subsidiary not owned by Olsy
or a Controlled Subsidiary and, in each case, the type (including currency
denomination), number and percentage of the outstanding shares of capital stock
or other ownership interest so held of record and (iv) the holder of record of
any outstanding shares of capital stock of or other ownership interest in any
Noncontrolled Subsidiary (as defined in Section 12.11) or any Olsy Japan
Subsidiary held of record by Olsy, Olsy Japan or a Controlled Subsidiary and, in
each case, the type (including currency denomination), number of the shares of
capital stock or other ownership interest so held of record and, to the Best
Knowledge of Olivetti (as defined in Section 12.11), the jurisdiction of
incorporation of any such Noncontrolled Subsidiary or Olsy Japan Subsidiary and
the holder of record of any outstanding shares of capital stock of or other
ownership interest in any such Noncontrolled Subsidiary or Olsy Japan Subsidiary
not held of record by Olsy, Olsy Japan or a Controlled Subsidiary. Except as set
forth on Schedule 4.2(a) of the Olivetti Disclosure Schedule, neither Olivetti
nor any Olivetti Affiliate owns, directly or indirectly, any capital stock of or
other ownership interest in Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any
Olsy Japan Subsidiary.
(b) Except as set forth in Schedule 4.2(b) of the Olivetti
Disclosure Schedule, there is (i)
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no outstanding right of subscription, option, warrant, call or other right
(including any right of conversion or exchange under any outstanding security or
other instrument but excluding any rights of preemption required by laws of
their respective jurisdictions of incorporation) to acquire any capital stock of
or other ownership interest in Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary or (ii) no outstanding put right or other right to sell any capital
stock of or other ownership interest in Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary. Except as set forth on Schedule 4.2(b) of the Olivetti Disclosure
Schedule, there is no agreement, commitment, understanding or arrangement
relating to the voting, issuance, sale, operation, delivery, transfer or
redemption of any of the capital stock, asset or business of or ownership
interest in Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary. Upon
consummation of the transactions contemplated hereby, Wang will acquire good,
valid and marketable title to all of the issued and outstanding shares of
capital stock of or other ownership interest in (i) Olsy owned by Olivetti, (ii)
Olsy Japan owned by Olivetti, (iii) Olsy Brazil owned by Olivetti Sistemas or
Olivetti Brazil, (iv) each Controlled Subsidiary owned by Olsy or a Controlled
Subsidiary, (v) each Noncontrolled Subsidiary owned directly by Olsy or a
Controlled Subsidiary or (vi) each Olsy Japan Subsidiary owned directly by Olsy
Japan, free and clear of any Lien (other than restrictions set forth on Schedule
4.2(b) of the Olivetti Disclosure Schedule).
(c) Except as set forth on Schedule 4.2(c) of the Olivetti
Disclosure Schedule, all of the outstanding shares of capital stock of or other
ownership interest in each of Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries are duly authorized, validly issued, fully paid, nonassessable and,
except as required by the laws of their respective jurisdictions of
incorporation, free of preemptive rights and all of the outstanding shares of
capital stock of or other ownership interest in each of the Noncontrolled
Subsidiaries held of record by Olsy or a Controlled Subsidiary and each of the
Olsy Japan Subsidiaries held of record by Olsy Japan are fully paid and
nonassessable. Except as set forth on Schedule 4.2(c) of the Olivetti Disclosure
Schedule, each of Olsy, Olsy Japan, Olsy Brazil and the Controlled
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Subsidiaries is capitalized in accordance with applicable law. Except as set
forth on Schedule 4.2(c) of the Olivetti Disclosure Schedule, neither Olsy, Olsy
Japan, Olsy Brazil nor any Controlled Subsidiary has any obligation to
contribute additional capital to any Subsidiary, except as required by the laws
of a Subsidiary's jurisdiction of incorporation. Except as set forth in Schedule
4.2(c) of the Olivetti Disclosure Schedule, neither Olsy, Olsy Japan, Olsy
Brazil nor any Controlled Subsidiary has any obligation to make any payments to
any other current or former stockholder of Olsy, Olsy Japan, Olsy Brazil, any
Subsidiary or any Olsy Japan Subsidiary (other than payments made in the
ordinary course of business for services rendered or products provided in the
ordinary course of business at arm's length).
(d) The minority partners and managers of Open Systems
Olivetti Austria Gesellschaft mbH & Co. K.G. ("Open Systems") do not have rights
relating to the interests currently or previously held by the same in, or other
interests in, the capital of Open Systems or to their relationships with Open
Systems, other than those set forth in the Partnership Agreement dated June 18,
1996 or in the Share Transfer Agreement (version September 30, 1996) as amended
and supplemented by the Option Agreement, Call Option Agreement and Declaration
of Waiver previously supplied by Olivetti to Wang or, as to compensation, so
agreed with the same in the ordinary course of business.
(e) In the Formation, the transactions set forth on Schedule
4.2(e) hereto were effected in the manner set forth thereon.
4.3 No Other Interests. Neither Olsy, Olsy Japan, Olsy Brazil nor
any Controlled Subsidiary owns, directly or indirectly, any capital stock of or
other ownership interest in any Person not listed in Schedule 4.2(a) of the
Olivetti Disclosure Schedule.
4.4 Authority. (a) Each of the Sellers has full corporate power and
authority to execute and deliver this Agreement and each of the Related
Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by each of the
Sellers of this Agreement and
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each of the Related Agreements to which it is a party and the consummation of
the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary action on the part of each of the Sellers. Each of
the Sellers has duly and validly executed and delivered this Agreement and, at
or prior to the Closing, shall duly and validly execute and deliver each of the
Related Agreements to which it is a party and, assuming the due authorization,
execution and delivery thereof by Wang (where such authorization, execution and
delivery thereof is called for), this Agreement constitutes and each of the
Related Agreements to which it is a party, when executed and delivered, shall
constitute a legal, valid and binding obligation of each of the Sellers,
enforceable against each of the Sellers in accordance with its respective terms,
except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and by general equitable
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law).
(b) Each Olivetti Affiliate which is a party to a Related
Agreement has full corporate power and authority to execute and deliver such
Related Agreement to which it is a party and to consummate the transactions
contemplated thereby. The execution and delivery by each Olivetti Affiliate
which is a party to a Related Agreement of such Related Agreement and the
consummation of the transactions contemplated thereby have been duly and validly
authorized by all necessary action on the part of such Affiliate. Each Olivetti
Affiliate which is a party to a Related Agreement, at or prior to the Closing,
shall duly and validly execute and deliver each of the Related Agreements to
which it is a party and, assuming the due authorization, execution and delivery
thereof by Wang (where such authorization, execution and delivery thereof is
called for), each of the Related Agreements to which an Olivetti Affiliate is a
party, when executed and delivered, shall constitute a legal, valid and binding
obligation of such Olivetti Affiliate a party thereto, enforceable against such
Olivetti Affiliate in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
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<PAGE> 31
creditors' rights and by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at law).
4.5 Consents; No Violation. (a) Except as set forth on Schedule
4.5(a) of the Olivetti Disclosure Schedule, there is no requirement applicable
to Olivetti, any Olivetti Affiliate, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to give any notice to, make any filing with, or obtain any
consent or approval of, any Person or Governmental Authority (as defined in
Section 12.11) (in its capacity as a customer of Olsy, Olsy Japan, Olsy Brazil
or any Controlled Subsidiary) in connection with the execution and delivery of
this Agreement or any of the Related Agreements or the consummation of the
transactions contemplated hereby or thereby except any individual such notice,
filing, consent or approval the failure of which to give, does not cause Olsy,
Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to lose aggregate
(without duplication) revenue of U.S. $1,500,000 (or an equivalent amount in
another currency) or more or incur aggregate (without duplication) cost or
expense of U.S. $250,000 (or an equivalent amount in another currency) or more
(including, without limitation, cost or expense incurred in giving, making or
obtaining such notice, filing, consent or approval). Olivetti shall reimburse
Wang for all costs and expenses (in excess of the first U.S. $2,000,000 thereof)
associated with Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary
giving any notice to, making any filing with, or obtaining any consent or
approval of, any Person or Governmental Authority (in its capacity as a customer
of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary) required to be
given, made or obtained in connection with the execution and delivery of this
Agreement or any of the Related Agreements or the consummation of the
transactions contemplated hereby or thereby which are not set forth on Schedule
4.5(a) of the Olivetti Disclosure Schedule.
(b) Except as set forth in Schedule 4.5(b) of the Olivetti
Disclosure Schedule, there is no (and in the case of the Drop-Down (as defined
in Section 12.11), was no) requirement applicable to Olivetti, any Olivetti
Affiliate, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to make
any filing with or obtain
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any permit, authorization, consent or approval of, any Governmental Authority
(in its capacity as such and not in its capacity as a customer of Olsy, Olsy
Japan, Olsy Brazil, a Subsidiary or an Olsy Japan Subsidiary) in connection with
the execution and delivery of this Agreement or any of the Related Agreements,
the consummation of the transactions contemplated hereby or thereby or the
consummation of the Drop-Down.
(c) Except as set forth in Schedule 4.5(c) of the Olivetti
Disclosure Schedule, neither the execution and delivery by Olivetti of this
Agreement or any of the Related Agreements to which it is a party nor the
consummation of the transactions contemplated hereby or thereby will (and, in
the case of clause (iii), the Drop-Down did not): (i) conflict with or result in
a breach of any provision of the certificates or articles of incorporation,
memoranda or articles of association or by-laws (or other organizational
documents) of Olivetti, any Olivetti Affiliate, Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary; (ii) result in a breach of or default under (or give
rise to any right of termination, cancellation or acceleration under) any note,
bond, mortgage, indenture, license, agreement, lease or other similar instrument
or obligation (other than any of the foregoing with respect to which the
representations and warranties in this clause (ii) is given in Sections 4.12,
4.13, 4.14(a) or 4.15) to which Olivetti, any Olivetti Affiliate, Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary is a party or by which any of
their respective properties or assets may be bound, except for any such
individual breach or default; (or right of termination, cancellation or
acceleration) (aa) as to which any requisite waiver or consent has been or, on
or prior to the Closing, shall have been, obtained or (bb) which does not cause
Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to lose aggregate
(without duplication) revenue of U.S. $1,500,000 (or an equivalent amount in
another currency) or more or incur aggregate (without duplication) cost or
expense of U.S. $250,000 (or an equivalent amount in another currency) or more
(including, without limitation, cost or expense incurred in curing such breach
or default); or (iii) violate any order, judgment, writ, injunction, decree,
statute, rule or regulation applicable to Olivetti, any Olivetti Affiliate,
Olsy, Olsy Japan, Olsy Brazil or any
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Controlled Subsidiary or any of their respective assets or properties.
4.6 Financial Statements; Accounts and Accounting Controls. (a)
Olivetti has previously delivered to Wang true, complete and correct copies of a
carve-out consolidated balance sheet of the Olivetti Solutions (Olsy) Business
Unit described in the notes thereto (the "12/31/96 Business Unit") as of
December 31, 1996 and carve-out consolidated statements of income and cash flows
of the 12/31/96 Business Unit for the twelve month period then ended, all
audited (other than the carve-out consolidated statement of cash flows) by
Coopers & Lybrand s.a.s. ("Coopers & Lybrand"), independent certified public
accountants, whose audit report thereon is included therein, and accompanied by
footnotes (collectively, the "12/31/96 Italian GAAP Financial Statements"). The
12/31/96 Italian GAAP Financial Statements (i) give a true and fair view of the
combined consolidated financial position of the 12/31/96 Business Unit as of
December 31, 1996 and the combined consolidated results of operations of the
12/31/96 Business Unit for the twelve month period then ended and (ii) were
prepared in accordance with Italian GAAP (as defined in Section 12.11) and OLGA
(as defined in Section 12.11) applied on a consistent basis and presented with
reference to a presentation generally accepted in the United States.
(b) Olivetti has previously delivered to Wang true, complete
and correct copies of a combined consolidated balance sheet of the Olivetti
Solutions (Olsy) Business Unit described in the notes thereto (the "9/30/97
Business Unit") as of September 30, 1997 (the "9/30/97 Italian GAAP Balance
Sheet") and combined consolidated statements of income and cash flows of the
9/30/97 Business Unit for the period then ended, all audited (other than the
combined consolidated statement of cash flows) by Coopers & Lybrand, independent
certified public accountants, whose audit report thereon is included therein,
and accompanied by footnotes (collectively, "9/30/97 Italian GAAP Financial
Statements"). The 9/30/97 Italian GAAP Financial Statements (i) give a true and
fair view of the combined consolidated financial position of the 9/30/97
Business Unit as of September 30, 1997 and the combined consolidated results of
operations and cash flows of the
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9/30/97 Business Unit for the nine month period then ended and (ii) were
prepared in accordance with Italian GAAP and OLGA applied on a consistent basis
consistent with the 12/31/96 Italian GAAP Financial Statements and presented
with reference to a presentation generally accepted in the United States, except
that in preparing the 9/30/97 Italian GAAP Financial Statements, Olivetti
referred to the rules issued by CONSOB allowing companies listed in the Italian
Stock Exchange to prepare interim financial statements without accounting for
income taxes.
(c) Olivetti has previously delivered to Wang true, complete
and correct copies of combined consolidated balance sheets of the Olivetti
Solutions (Olsy) Business Unit described in the notes thereto (the "U.S. GAAP
Business Unit") as of December 31, 1996 and September 30, 1997 and combined
consolidated statements of income and cash flows of the U.S. GAAP Business Unit
for the twelve month and nine month periods then ended, respectively, all
audited by Coopers & Lybrand, independent certified public accountants, whose
audit report thereon is included therein, and accompanied by footnotes
(collectively, the "U.S. GAAP Financial Statements"). The U.S. GAAP Financial
Statements (i) present fairly in all material respects the combined consolidated
financial position of the U.S. GAAP Business Unit as of December 31, 1996 and
September 30, 1997 and the combined consolidated results of operations and cash
flows of the U.S. GAAP Business Unit for the twelve month and nine month periods
then ended, respectively, and (ii) were prepared in accordance with United
States generally accepted accounting principles ("U.S. GAAP") applied on a
consistent basis.
(d) The books, records and accounts of Olivetti (with
respect to the Business), Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries accurately and fairly reflect in reasonable detail the transactions
in which they have engaged and the dispositions of their assets, have been
maintained in a manner adequate to permit the preparation of financial
statements which give a true and fair view of the financial position, results of
operations and cash flows of the Business, Olsy, Olsy Japan, Olsy Brazil and the
Controlled Subsidiaries in accordance with Italian GAAP and OLGA and do permit
the preparation of the U.S. GAAP Financial Statements. The operations of the
Business,
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Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries have continuously
been subject to a system of internal accounting controls sufficient to provide
reasonable assurances that: (i) transactions have been executed in accordance
with management's authorization; and (ii) transactions have been recorded as
necessary to permit preparation of financial statements in conformity with
Italian GAAP and OLGA and other applicable criteria and to maintain
accountability for assets and do permit preparation of the U.S. GAAP Financial
Statements.
4.7 No Undisclosed Liabilities. Except as set forth in Schedule 4.7
of the Olivetti Disclosure Schedule, neither Olsy, Olsy Japan, Olsy Brazil nor
any Controlled Subsidiary has any liabilities (whether reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured and whether or not of a
nature required by Italian GAAP to be reflected in a consolidated balance sheet
of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries or disclosed in
the notes thereto), except (a) such liabilities which (i) are reflected in the
9/30/97 Italian GAAP Balance Sheet or (ii) were incurred after the date of the
9/30/97 Italian GAAP Balance Sheet in the ordinary course of business and
consistent with past practice and (b) such liabilities not covered by clause (a)
which in the aggregate do not exceed 15,000,000,000 Italian lira.
4.8 Absence of Certain Changes. (a) Except as set forth in Schedule
4.8 of the Olivetti Disclosure Schedule, since September 30, 1997, and through
and as of the date of this Agreement, (i) Olsy, Olsy Japan, Olsy Brazil and each
Controlled Subsidiary have been operated in the ordinary course of business and
consistent with past practice, (ii) neither Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries, taken as a whole, nor Olsy or any of the Major
Subsidiaries, taken separately, has suffered any material adverse change in
their business, assets, properties, liabilities, results of operations or
condition (financial or otherwise) and (iii) neither Olsy, Olsy Japan, Olsy
Brazil nor any Controlled Subsidiary has (aa) taken any action which, if it were
taken after the date hereof, would require the prior written consent of Wang
pursuant to Sections 6.1(b)(i), (iii), (ix), (xiii), (xvi), (xvii), (xix), (xx),
(xxii), (xxiii), (xxiv) or (xxv), (bb) written up
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the value of any assets, (cc) increased in any manner the compensation of any of
its directors, officers or employees (including any such increase under any Plan
(as defined in Section 4.20)), except increases required to comply with
applicable law, any Plan or any applicable collective bargaining agreement,
sales commission increases or regularly scheduled merit increases for other than
general managers of Olsy, Olsy Japan, Olsy Brazil or the Controlled Subsidiaries
or their direct reports, (dd) hired any additional employees (other than in the
ordinary course of business consistent with past practice) or (ee) reversed any
fund for headcount reductions other than the reversal reflected on the 12/31/97
Projected Balance Sheet (as defined in Section 6.12).
(b) The 12/31/97 Net Financial Position (as defined in
Section 6.14(d)) shall not be less than negative 65,000,000,000 Italian lira
(meaning there shall not be less than 65,000,000,000 Italian lira in cash) after
giving effect to the actions required to be taken pursuant to Sections 1.3(a) or
(b). Since December 31, 1997, neither Olsy, Olsy Japan, Olsy Brazil nor any
Controlled Subsidiary has paid, distributed or otherwise transferred any cash to
Olivetti or any Olivetti Affiliate except in exchange for goods or services
pursuant to existing contractual relationships and in compliance with the same
or, while retaining title thereto, in connection with the centralized treasury
functions of Olivetti, in each case in the ordinary course of business
consistent with past practice.
4.9 Properties and Assets. The assets, properties, furniture,
equipment, Contracts, Intellectual Property, rights, privileges, franchises,
operations and business presently owned, leased or licensed by Olsy, Olsy Japan,
Olsy Brazil or a Controlled Subsidiary include all assets, properties,
Contracts, Intellectual Property, rights, privileges, franchises, operations and
business used by Olsy, Olsy Japan, Olsy Brazil and each Controlled Subsidiary to
conduct their respective businesses as going concerns as conducted on the date
hereof.
4.10 Title to Personal Properties and Assets. Each of Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries has good, valid and
marketable title to all
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of the personal (tangible or intangible) properties or assets which it purports
to own, in each case, including, without limitation, all of the personal
properties and assets reflected in the 9/30/97 Italian GAAP Balance Sheet and
all of the personal properties and assets purchased by Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary since the date of the 9/30/97 Italian GAAP
Balance Sheet, except such items of personal property or assets (a) sold since
the date of the 9/30/97 Italian GAAP Balance Sheet in the ordinary course of
business and consistent with past practice or (b) the failure to have good,
valid and marketable title to which will not cause Olsy, Olsy Japan, Olsy Brazil
and the Controlled Subsidiaries to lose aggregate revenue with respect to any
individual item of personal property or asset or all such items of personal
property or assets respectively, of U.S. $1,500,000 or U.S. $5,000,000 (or an
equivalent amount in another currency) or more or incur aggregate cost or
expense with respect to any individual item of personal property or asset or all
such items of personal property or assets respectively, of U.S. $250,000 or U.S.
$2,000,000 (or an equivalent amount in another currency) or more (including,
without limitation, cost or expense incurred in acquiring good, valid and
marketable title to any such item of personal property or asset). All such
personal properties and assets (other than those excepted in the except clause
of the immediately preceding sentence) are free and clear of all Liens except,
with respect to all such properties and assets: (i) Liens shown on the 9/30/97
Italian GAAP Balance Sheet as securing specified liabilities or obligations with
respect to which no default exists; (ii) Liens that will be released or
discharged at or prior to Closing; (iii) statutory Liens for current Taxes (as
defined in Section 4.18(g)) not yet due and payable or being contested in good
faith by appropriate proceedings; (iv) statutory Liens arising in the ordinary
course of business by operation of law (including mechanic's, workmen's or
warehousemen's Liens); and (v) minor imperfections of title which do not impair
the value of the personal property or asset to which they relate.
4.11 Real Estate. (a) Schedule 4.11(a) of the Olivetti Disclosure
Schedule contains the complete and correct address and legal description of all
of the real property in which either Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary holds a fee interest
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(the "Real Estate") and a complete and correct list of all Liens affecting the
Real Estate (collectively the "Permitted Exceptions"). Either Olsy, Olsy Japan,
Olsy Brazil or a Controlled Subsidiary has as of the date hereof, and will have
as of the Closing Date, good, valid and marketable title to the Real Estate,
free and clear of all Liens other than the Permitted Exceptions.
(b) Except as set forth in Schedule 4.11(b) of the Olivetti
Disclosure Schedule, no work has been performed on or materials supplied to the
Real Estate within any applicable statutory period which could give rise to any
individual valid mechanic's or materialmen's lien which would cause Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary to incur aggregate (without
duplication) cost or expense of U.S. $250,000 (or an equivalent amount in
another currency) or more.
(c) There is no pending or, to the Best Knowledge of
Olivetti, threatened condemnation or eminent domain proceeding or proceeding to
change or redefine the zoning classification with respect to the Real Estate.
(d) To the Best Knowledge of Olivetti, the Real Estate is
legally subdivided and consists of separate tax lots so that it is assessed
separate and apart from any other property, and is an independent facility which
does not rely upon any other facility to fulfill any zoning or other legal
requirement, for structural support or the furnishing of utilities to the Real
Estate.
(e) To the Best Knowledge of Olivetti, all utility systems
serving the Real Estate, public or private, are, in all material respects, in
good operating condition, all installation charges therefor have been fully paid
and all service charges therefor have been or will be paid by the respective
owner up to and including the Closing Date.
(f) To the Best Knowledge of Olivetti and except as set
forth in Schedule 4.11(f) of the Olivetti Disclosure Schedule, the Real Estate
is not located in any special flood hazard area designated by any Governmental
Authority having jurisdiction over the
Real Estate.
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(g) To the Best Knowledge of Olivetti, the Real Estate
complies with the requirements of all building, zoning, subdivision, health,
safety, environmental, pollution control, waste products, sewage control and all
other applicable statutes, laws, codes, ordinances, rules, orders, regulations
and decrees (collectively the "Government Regulations"). Olivetti has obtained
all material consents, permits, licenses and approvals required by such
Government Regulations (the "Approvals"), and none of Olivetti, Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary has received notice that such
Approvals are not in full force and effect, or have not been properly and
validly issued. If not solely in the name of Olsy, Olsy Japan, Olsy Brazil or a
Controlled Subsidiary on or prior to the Closing or as soon thereafter as
practicable unless such approval is required to be obtained earlier under this
Agreement, such Approvals will be assigned to Wang by Olivetti. There is no
action pending or, to the Best Knowledge of Olivetti, threatened, by any
Governmental Authority claiming that the Real Estate violates such Government
Regulations. To the Best Knowledge of Olivetti, the conduct of the operation of
the Business by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in
the Real Estate, including the right to ingress or egress from the premises,
does not violate any Governmental Regulations, and does not depend upon the
continuing consent of any Person.
(h) There are no suits, petitions, notices or proceedings
pending, given or, to the Best Knowledge of Olivetti, threatened by any Persons
or Governmental Authority before any Governmental Authority or otherwise, which,
if given, commenced or concluded, would have an adverse effect on the title of
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to the Real Estate.
(i) To the Best Knowledge of Olivetti, all of the buildings,
fixtures and other improvements located on the Real Estate, including the
mechanical and utility systems, are, in all material respects, in good operating
condition and repair, free of material construction defects, and the operation
thereof as presently conducted is not in material violation of any applicable
building code, zoning ordinance or other law or regulation.
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(j) Schedule 4.11(j) of the Olivetti Disclosure Schedule
contains a true, complete and correct list of the building amnesties ("condono
edilizio") duly filed in compliance with the relevant Government Regulations.
All the amounts due in connection thereof have been fully paid, no further
obligations are pending towards the relevant Governmental Authority and no
claims have been filed or are expected to be filed by such Governmental
Authority.
(k) Except as set forth in Schedule 4.11(k) of the Olivetti
Disclosure Schedule, none of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary has assigned any interest in the Real Estate nor leased
all or any portion of the Real Estate or granted any license, concession or
option or entered into any management or other service contract with respect to
any portion of the Real Estate to any Person other than Olsy or a Controlled
Subsidiary.
4.12 Real Estate Leases. (a) Schedule 4.12(a) of the Olivetti
Disclosure Schedule sets forth (i) the addresses and the name of the record
owner of all real property in which Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary holds a leasehold interest or rental contract interest
(the "Leased Premises") and (ii) a complete and correct list of each of the
leases or rental contracts for each of the Leased Premises, including all
amendments, modifications and supplements thereto (whether embodied in a formal
amendment, a letter or other written document) (the "Real Estate Leases").
Complete and correct copies of the Real Estate Leases, including all such
amendments, modifications and supplements, have previously been delivered to
Wang by Olivetti.
(b) Except as set forth on Schedule 4.12(b) of the Olivetti
Disclosure Schedule, each of the Leased Premises is occupied only by Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary pursuant to a Real Estate Lease
between Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and the
record owner of the Leased Premises (other than Olivetti or an Olivetti
Affiliate). Each Real Estate Lease between Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary on the one hand, and Olivetti or an Olivetti Affiliate, on
the other hand, for leased premises occupied by Olsy, Olsy
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Japan, Olsy Brazil or any Controlled Subsidiary has a remaining term of not more
than three years.
(c) To the Best Knowledge of Olivetti, each of the Real
Estate Leases is valid, is in full force and effect and is binding and
enforceable against each of the parties thereto in accordance with its terms.
None of the Real Estate Leases has been modified or amended, in any material
respect, since the date of delivery of copies thereof to Wang by Olivetti. There
has not occurred any event which would constitute a material breach of or
default in the performance of any covenant, agreement or condition contained in
any Real Estate Lease, nor, to the Best Knowledge of Olivetti, has there
occurred any event which with the passage of time or the giving of notice or
both would constitute such a breach or default. To the Best Knowledge of
Olivetti, none of Olivetti, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or an
Olsy Japan Subsidiary has given or received any notice or claim of such breach
or default, other than under a Real Estate Lease under which the gross annual
rent is less than U.S. $60,000 (or an equivalent amount in another currency).
(d) To the Best Knowledge of Olivetti, none of Olivetti,
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is obligated to pay
any leasing or brokerage commission relating to any Real Estate Lease, and Wang
will not have any enforceable obligation to pay any leasing or brokerage
commission upon the renewal of any Real Estate Lease.
(e) No material construction, alteration or other leasehold
improvement work with respect to any of the Real Estate Leases remains to be
paid for or to be performed by Olivetti, Olsy, Olsy Japan, Olsy Brazil, any
Subsidiary or any Olsy Japan Subsidiary, other than any such payment or work
having a cost of less than U.S. $250,000 (or an equivalent amount in another
currency).
(f) To the Best Knowledge of Olivetti, Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary has obtained all permits, licenses and
approvals required for the use and operation of the business of Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiaries in each of the Leased
Premises,
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and the conduct of the Business by Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary in the Leased Premises, including the right to ingress or
egress from the Leased Premises, does not violate any Government Regulations and
does not depend on the continuing consent of any Person. At the Closing, no
notices, permits, licenses, approvals, Taxes or fees, including, without
limitation, transfer Taxes and recording fees, are required to be filed, secured
or paid with respect to the Real Estate Leases in connection with the
transactions contemplated by this Agreement or any of the Real Estate Agreements
(as defined in Section 12.11).
(g) To the Best Knowledge of Olivetti, all of the buildings,
fixtures and other improvements located on or comprising a part of each of the
Leased Premises (including, without limitation, the heat, ventilation,
air-conditioning and sprinkler systems) are, in all material respects, in good
operating condition and repair, and the operation thereof and the business
thereon as presently conducted is not in violation of any applicable building
code, zoning ordinance or other law or regulation; provided, however, that the
above representation as to buildings (as opposed to Leased Premises) shall apply
only with respect to buildings leased by Olsy in La Defense, France and
Lorenteggio, Italy, and buildings in which Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary is the sole occupant.
(h) None of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary has received any notice that a lessor or sublessor under
any of the Real Estate Leases has commenced any litigation with respect to any
Real Estate Lease nor have Olivetti, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary received notice that any such lessor or sublessor intends
to cancel, terminate or refuse to renew any Real Estate Lease under which the
gross annual rent is greater than U.S. $60,000 (or an equivalent amount in
another currency), and to the Best Knowledge of Olivetti, no such notices have
been received for any of the other Real Estate Leases.
(i) Except as set forth in Schedule 4.12(i) of the Olivetti
Disclosure Schedule, none of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary has assigned any interest under any Real
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<PAGE> 43
Estate Lease or subleased all or any portion of such Leased Premises or granted
any license or concession or entered into any management or other service
contract with respect to any portion of such Leased Premises. Where Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary has assigned any interest under
any Real Estate Lease or subleased all or any portion of such Leased Premises or
granted any license or concession or entered into any management or other
service contract with respect to any portion of such Leased Premises as set
forth on Schedule 4.12(i) of the Olivetti Disclosure Schedule, there has not, to
the Best Knowledge of Olivetti, occurred any event which would constitute a
material breach of or default in the performance of any covenant, agreement or
condition contained in any such assignment, sublease, license, concession or
contract, nor has there occurred, to the Best Knowledge of Olivetti, any event
which with the passage of time or the giving of notice or both would constitute
such a breach or default. None of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary has given or received any notice or claim of such breach
or default.
(j) To the Best Knowledge of Olivetti, except as set forth
in Schedule 4.12(j) of the Olivetti Disclosure Schedule, the Drop-Down did not,
and neither the execution and delivery by Olivetti of this Agreement or any of
the Related Agreements to which it is a party nor the consummation of the
transactions contemplated hereby or thereby will, result in any breach,
violation or default of any material provision of any Real Estate Lease, or
require the consent of any lessor under, any such Real Estate Lease.
(k) Schedule 4.12(k) of the Olivetti Disclosure Schedule
contains a true, complete and correct list of the building amnesties ("condono
edilizio") duly filed in compliance with the relevant Government Regulations.
All the amounts due in connection thereof have been fully paid, no further
obligations are pending towards the relevant Governmental Authority and no
claims have been filed or are expected to be filed by such Governmental
Authority.
4.13 Personal Property Leases. Schedule 4.13 of the Olivetti
Disclosure Schedule lists all personal property leases pursuant to which Olsy,
Olsy Japan, Olsy
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Brazil and the Controlled Subsidiaries paid an aggregate U.S. $350,000 (or an
equivalent amount in another currency) or more in the fiscal year ended December
31, 1997. Except as set forth in Schedule 4.13 of the Olivetti Disclosure
Schedule, (a) all such leases are in full force and effect and valid, binding
and enforceable in accordance with their respective terms, (b) none of Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary party thereto nor, to the
Best Knowledge of Olivetti, any other party thereto, is in breach, violation or
default under any such lease (other than breaches, violations or defaults which
would not reasonably be expected to result in termination of any such lease or
the acceleration of the payment of any amounts under any such lease) and (c)
neither the execution and delivery by Olivetti of this Agreement or any of the
Related Agreements to which it is a party nor the consummation of the
transactions contemplated hereby or thereby will, result in any breach,
violation or default of any term (other than a nonmaterial term) of, or require
the consent of any lessor under, any such lease.
4.14 Contracts. (a) (i) Each Customer Contract (as defined in this
Section 4.14(a)) is in the name of or was (or pursuant to Section 1.1 will be)
duly and validly assigned to Olsy, Olsy Japan, Olsy Brazil or a Controlled
Subsidiary. (ii) Each Major Customer Contract (as defined in this Section
4.14(a)) is in full force and effect and is valid, binding and enforceable by
and against all of the parties thereto in accordance with its terms. (iii) None
of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary party to a Major
Customer Contract nor, to the Best Knowledge of Olivetti, any other Person or
Governmental Authority party to a Major Customer Contract, is in breach (other
than a de minimis breach), violation or default under any such Major Customer
Contract. (iv) Neither the execution and delivery by the Sellers of this
Agreement or any of the Related Agreements to which any Seller is a party nor
the consummation of the transactions contemplated hereby or thereby will, result
in any breach, violation or default under, or require the consent of any Person
or Governmental Authority under, any Major Customer Contract. (v) To the Best
Knowledge of Olivetti, Schedule 4.14(a)(v) of the Olivetti Disclosure Schedule
sets forth, by Major Customer (as defined in this Section
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4.14(a)), each written complaint from a Major Customer received by Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary since January 1, 1997. (vi) The
term "Customer Contract" means any written agreement, contract, understanding or
legally binding arrangement of any nature pursuant to which Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary has agreed to provide, or is providing,
any products, service or support. The term "Major Customer Contract" means (aa)
any Customer Contract pursuant to, or with respect to which, Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary, individually or in the aggregate,
earned or received U.S. $1,000,000 (or an equivalent amount in another currency)
or more during the fiscal year ended December 31, 1997 or (bb) any Customer
Contract with a Major Customer pursuant to, or with respect to which, Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary, individually or in the
aggregate, earned or received U.S. $650,000 (or an equivalent amount in another
currency) or more during the fiscal year ended December 31, 1997. The term
"Major Customer" means the customers set forth on Schedule 4.14(a) hereto.
(b) Except as set forth in Schedule 4.14(b) of the Olivetti
Disclosure Schedule, none of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary is a party to, nor is Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary or any of their respective properties or assets bound by, any of the
following:
(i) any Contract relating to the employment of, or the
performance of services by, any director, officer or employee for an
amount in annual base compensation and bonus in excess of U.S. $150,000
(or an equivalent amount in another currency);
(ii) any Contract with any agent, contractor, subcontractor,
consultant, advisor, salesperson, sales representative, distributor or
dealer (other than any of the foregoing in their capacity as a supplier of
products) pursuant to which Olsy, Olsy Japan, Olsy Brazil and the
Controlled Subsidiaries paid or are expected to pay an aggregate of U.S.
$1,500,000 (or an equivalent amount in another currency) or more in any
year
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which is not terminable on not more than 60 days
notice (without penalty or premium);
(iii) any Contract pursuant to which Olsy, Olsy Japan, Olsy
Brazil and the Controlled Subsidiaries is in possession of inventory or
other assets (including, without limitation, service and repair parts)
with an aggregate value of U.S. $2,000,000 (or an equivalent amount in
another currency) or more by way of consignment;
(iv) any Contract that contains any severance or termination
pay liabilities or obligations of U.S. $600,000 (or an equivalent amount
in another currency) or more;
(v) any Contract imposing any restriction on the right or
ability of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (aa)
to compete with any other Person, (bb) to acquire any product or other
assets or any services from any other Person, to sell any product or other
asset or to perform any services for any other Person or to transact
business or deal in any other manner with any other Person or (cc) to
develop or distribute any technology or Intellectual Property, except any
such restriction which will not cause Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries to lose aggregate revenue of U.S. $1,500,000
(or an equivalent amount in another currency) or more or incur aggregate
cost or expense of U.S. $250,000 (or an equivalent amount in another
currency) or more (including, without limitation, cost or expense to
relieve such restriction);
(vi) any Contract creating or involving (aa) any agency or
franchise relationship pursuant to which Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries earned or received or is expected to earn or
receive an aggregate of U.S. $5,000,000 (or an equivalent amount in
another currency) or more in any year or (bb) any power of attorney in
favor of any Person not a full time employee of Olsy, Olsy Japan, Olsy
Brazil or a Controlled Subsidiary;
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(vii) any Contract relating to the acquisition, disposition,
issuance or transfer (other than in the ordinary course of business
consistent with past practice) of any securities, assets, properties,
rights, privileges, franchises, operation or business (real, personal or
mixed, tangible or intangible) with respect to which there remains any
obligation to make any future payments of any kind of U.S. $2,000,000 (or
an equivalent amount in another currency) or more, including, without
limitation, payments with respect to indemnification given thereunder;
(viii) any Contract relating to the creation of any Lien of
U.S. $5,000,000 (or an equivalent amount in another currency) or more on
any asset or property of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary;
(ix) any Contract involving or incorporating any guaranty,
any pledge, any performance or completion bond, any indemnity or any
surety arrangements of U.S. $1,000,000 (or an equivalent amount in another
currency) or more;
(x) any Contract creating or relating to any partnership,
joint venture or strategic alliance or any sharing of revenues, profits,
losses, costs or liabilities pursuant to which Olsy, Olsy Japan, Olsy
Brazil and the Controlled Subsidiaries (aa) earned or received or is
expected to earn or receive an aggregate of U.S. $1,500,000 (or an
equivalent amount in another currency) or more, or (bb) incurred or paid
or is expected to incur or pay an aggregate of U.S. $250,000 (or an
equivalent amount in another currency) or more;
(xi) any Contract relating to the purchase or sale of any
product or other asset by or to, or the performance of any services or
support by or for, (aa) Olivetti or any Olivetti Affiliate pursuant to
which Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries (x)
earned or received or is expected to earn or receive an aggregate of U.S.
$1,000,000 (or an equivalent amount in another currency) or more in any
year, or (y) incurred or paid or is expected to incur or pay an aggregate
of
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U.S. $1,000,000 (or an equivalent amount in another currency) or more in
any year, or (bb) any officer or director of Olivetti or any such
Affiliate or any Associate (as defined in Section 12.11) of any such
director or officer;
(xii) any Contract relating to the return of inventory or
other assets with a value of U.S. $2,000,000 (or an equivalent amount in
another currency) or more in the possession of wholesalers, distributors,
retailers or other customers;
(xiii) any Contract relating to software development
pursuant to which Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries (aa) earned or received or is expected to earn or receive an
aggregate of U.S. $1,500,000 (or an equivalent amount in another currency)
or more in any year, or (bb) incurred or paid or is expected to incur or
pay an aggregate of U.S. $1,500,000 (or an equivalent amount in another
currency) or more in any year;
(xiv) any Contract for borrowed money in amount of U.S.
$5,000,000 (or an equivalent amount in another currency) or more;
(xv) any Contract not otherwise disclosed on Schedule
4.14(b) of the Olivetti Disclosure Schedule pursuant to which Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries (aa) earned or received
an aggregate of U.S. $5,000,000 (or an equivalent amount in another
currency) or more in any year, or (bb) incurred or paid an aggregate of
U.S. $5,000,000 (or an equivalent amount in another currency) or more in
any year; and
(xvi) any Contract with any Person or Governmental Authority
in any of the countries set forth in Schedule 4.14(b)(xvi) hereto.
(c) Schedule 4.14(c) of the Olivetti Disclosure Schedule
sets forth the standard warranties given by Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary in connection with providing products, services or
support.
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(d) Except as set forth on Schedule 4.14(d) of the Olivetti
Disclosure Schedule, none of the Business, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary has given any uncapped warranty or representation
specifically with respect to the Year 2000
or eurocompliance.
(e) Except as set forth in Schedule 4.14(e) of the Olivetti
Disclosure Schedule, to the Best Knowledge of Olivetti, no direct or indirect
shareholder in, nor member of the Board of Directors (or other governing body)
of, any Person, that has a direct or indirect interest in any partnership, joint
venture, alliance or other venture set forth in Section 4.14(b) of the Olivetti
Disclosure Schedule with respect to Section 4.14(b)(x) is an Official (as
defined in Section 12.11) of any Governmental Authority in which such venture
conducts operations related to any such Official or candidate.
(f) Olivetti has, to the Best Knowledge of Olivetti,
previously delivered to Wang true, complete and correct copies of all notices of
breach, default or termination received by Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary with respect to any Customer Contracts (i) pursuant to
which, or with respect to which, Olsy, Olsy Japan, Olsy Brazil and the
Controlled Subsidiaries earned or received an aggregate of U.S. $1,000,000 (or
an equivalent amount in another currency) or more during the fiscal year ended
December 31, 1997 and (ii) which provides for the payment of consequential
damages or lost profits.
(g) The Lexikon Agreement and Oliricerca Share Transfer and
Shareholder Agreement will be in full force and effect in the forms attached
hereto, and will not have been altered, modified, amended or terminated, and no
provision thereof waived or breached by any party thereto, prior to the Closing
Date.
4.15 Intellectual Property.
(a) Certain Definitions. As used
herein:
(i) "Copyrights" shall mean all copyrights (except
moral rights), rights in mask
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works and database rights, and all registrations and applications for
registration of any of the foregoing;
(ii) "Intellectual Property" shall mean Copyrights, Patents,
Know-How, Software and Trademarks, and all rights (except moral rights)
vesting in the owner thereof pursuant to the applicable laws of any
competent jurisdiction;
(iii) "Intellectual Property Agreements" shall mean the Olsy
IP Agreements (as defined in Section 4.15(c)(i)) and the Olsy Licensing
Agreements (as defined in Section 4.15(c)(iii));
(iv) "Know How" shall mean methods, devices, technology,
trade secrets, industrial designs, know-how, technical manuals and
documentation and other proprietary information, including, without
limitation, proprietary processes and formulae;
(v) "Olsy Intellectual Property" shall mean such
Intellectual Property as is required by Sections 4.15(b)(i) and
4.15(b)(ii) to be listed in Schedules 4.15(b)(i) and 4.15(b)(ii) of the
Olivetti
Disclosure Schedule;
(vi) "Patents" shall mean patents and patent applications,
all continuations, continuations-in-part, divisions, reissues,
reexaminations, extensions and foreign counterparts of such patents and
patent applications, and all invention disclosures;
(vii) "Software" shall mean all (aa) computer software,
including, without limitation, all source code, object code, interpreted
code, Java byte code, firmware, middleware, programs, utilities,
languages, subroutines or routines, (bb) databases and compilations,
including any and all data and collections of data, whether machine
readable or otherwise, (cc) all content contained on any Internet or
intranet site(s) and (dd) descriptions, flowcharts and other work product
used
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to design, plan, organize and develop any of the foregoing; and
(viii) "Trademark" shall mean (aa) registered trademarks and
registered service marks, applications for registration for trademarks and
service marks, renewal registrations and applications for renewal
registrations, extensions and foreign counterparts of such registrations
and applications for registration; (bb) material unregistered trademarks
and service marks; (cc) corporate names, business names and trade names,
whether registered or unregistered; and (dd) Internet domain names and
associated addresses and URLs.
(b) Owned Intellectual Property.
(i) Schedule 4.15(b)(i) of the Olivetti Disclosure Schedule
sets forth a correct and complete list of all (aa) Patents, (bb)
Trademarks and (cc) registered Copyrights and material unregistered
Copyrights (inclusive of but not limited to material Software), that are
owned as of the date hereof by Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary. Such list includes the name of the owner of each
item of Intellectual Property and the state or country where such item is
owned, and shall also indicate whether such item qualifies as a
NonBusiness Item as defined in and for the purposes of Section 1.2.
(ii) Schedule 4.15(b)(ii) of the Olivetti Disclosure
Schedule sets forth a correct and complete list of all (aa) Patents, (bb)
Trademarks (other than the Olivetti Trademarks as defined in Section
6.26(a)(i)) and (cc) registered Copyrights and material unregistered
Copyrights (inclusive of but not limited to material Software), that are
owned as of the date hereof by Olivetti or any Olivetti Affiliate,
provided that such item qualifies as a Business Item as defined in and for
the purposes of Section 1.1. Such list includes the name of the owner of
each such item of Intellectual Property and the state or country where
such item is owned.
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(iii) Schedule 4.15(b)(iii) of the Olivetti Disclosure
Schedule sets forth a correct and complete list of all (aa) Patents, (bb)
Trademarks and (cc) registered Copyrights and material unregistered
Copyrights (inclusive of, but not limited to, material Software), that are
owned as of the date hereof by Olivetti or any Olivetti Affiliate,
provided that such item qualifies as a NonBusiness Item as defined in and
for purposes of Section 1.2 and such item was used by Olsy, Olsy Japan,
Olsy Brazil or a Subsidiary in their respective commercial activities
during the two-year period ending on the date of the Closing
(collectively, with all other Patents, Trademarks (other than the Olivetti
Trademarks) and Copyrights (including Software) used in the Business which
qualify as NonBusiness Items, the "Licensed Olivetti Intellectual
Property"). Such list includes the name of the owner of each such item of
Intellectual Property and the state or country where such item is owned.
(iv) Except as set forth in Schedule 4.15(b)(iv) of the
Olivetti Disclosure Schedule: (aa) either Olsy, Olsy Japan, Olsy Brazil or
a Controlled Subsidiary is, or will be upon Closing, the sole and
exclusive owner of the Olsy Intellectual Property, free and clear of any
Lien; (bb) either Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary
has, or will have upon Closing, such rights to use, protect, prosecute,
sell, transfer, license, dispose of or bring actions for the infringement
of its rights in and to, and to exclude others from using the Olsy
Intellectual Property as are established by the applicable laws of each
relevant jurisdiction to the sole and exclusive owner of an item of
Intellectual Property of such kind; (cc) the Olsy Intellectual Property
which is registered or the subject of an application for registration
(collectively, the "Olsy Registered Intellectual Property") has been duly
maintained in all material respects in accordance with the legal and
administrative requirements of the appropriate jurisdictions, and has not
lapsed, expired, been cancelled or been abandoned; (dd) no registration or
application for registration of any material item of Olsy Registered
Intellectual Property is the subject
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of any pending opposition, interference, cancellation or other legal or
governmental proceeding filed before any Governmental Authority in any
competent jurisdiction before September 30, 1997, nor to the Best
Knowledge of Olivetti, has any of the foregoing been filed after such
date; (ee) there is no pending or threatened claim by any former or
present employees, officers, directors or independent contractors of Olsy,
Olsy Japan, Olsy Brazil or a Controlled Subsidiary asserted with respect
to any Olsy Intellectual Property (including, but not limited to such Olsy
Intellectual Property which has been or will be acquired by Olsy, Olsy
Japan, Olsy Brazil or a Subsidiary from Olivetti or any Olivetti
Affiliate); (ff) to the Best Knowledge of Olivetti neither Olsy, Olsy
Japan, Olsy Brazil, Olivetti nor any Controlled Subsidiary or Affiliate of
Olivetti has provided, licensed, sublicensed or disclosed a material
portion of any source code for any of the Software listed in Schedules
4.15(b)(i)-(iii) of the Olivetti Disclosure Schedule to any third party,
except pursuant to a signed agreement requiring the licensee, for an
indefinite period, to maintain the confidentiality of such source code and
not to use the source code other than for purposes approved by Olsy or the
applicable Affiliate; and (gg) all Trademarks included in the Olsy
Intellectual Property are or will be at the Closing assigned (but not
necessarily recorded) to Olsy. For purposes of this Section 4.15 the terms
"registered" and "registration" shall include issued patents.
(c) Intellectual Property Agreements.
(i) Schedule 4.15(c)(i) of the Olivetti Disclosure Schedule
sets forth a correct and complete list of (aa) all material Contracts to
which Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a
Party and pursuant to which Olsy, Olsy Japan, Olsy Brazil or the relevant
Controlled Subsidiary has obtained from any Person the right to use, copy,
disclose, distribute, transmit, modify, maintain, create derivative works
of or otherwise exploit any Intellectual Property or which relate to the
development for, acquisition by, sale or transfer to Olsy, Olsy Japan,
Olsy Brazil or
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a Controlled Subsidiary, of any Intellectual Property, and (bb) all
material Contracts of such a kind to which Olivetti or any Olivetti
Affiliate is a Party which qualify as Business Items as defined in Section
1.1. Schedule 4.15(c)(i) of the Olivetti Disclosure Schedule identifies
the parties to such Contracts and the nature and subject matter thereof.
The Contracts listed in Schedule 4.15(c)(i) of the Olivetti Disclosure
Schedule are collectively referred to as "Olsy IP Agreements".
(ii) Except as set forth in Schedule 4.15(c)(ii) of the
Olivetti Disclosure Schedule: (aa) each Olsy IP Agreement is, or will be
at Closing, valid, binding and enforceable in accordance with its terms;
(bb) to the Best Knowledge of Olivetti none of Olsy, Olsy Japan, Olsy
Brazil or a Controlled Subsidiary (or, as the case may be, Olivetti or any
Affiliate of Olivetti), or any other Person or Governmental Authority
party to an Olsy IP Agreement is in material breach, material violation or
default under any Olsy IP Agreement; (cc) neither the execution and
delivery of this Agreement or any of the Related Agreements, nor the
transfer by Olivetti or any Affiliate of Olivetti of any Olsy IP Agreement
pursuant to Section 1.1, nor the consummation of the transactions
contemplated hereby or thereby, will result in any material breach,
material violation, default under or termination of any Olsy IP Agreement
and (dd) the transfer by Olivetti or any Affiliate of Olivetti of any Olsy
IP Agreement pursuant to Section 1.1 will not require the consent of any
Person or Governmental Authority.
(iii) Schedule 4.15(c)(iii) of the Olivetti Disclosure
Schedule sets forth a correct and complete list of (aa) all material
Contracts (other than Customer Contracts) to which Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary is a party pursuant to which Olsy,
Olsy Japan, Olsy Brazil or the relevant Controlled Subsidiary has
licensed, sublicensed, assigned (in part) or otherwise granted to any
Person the right to use, copy, disclose, distribute, transmit, modify,
maintain, create derivative works of or otherwise exploit any Intellectual
Property, or which relate
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to the development of any Intellectual Property for any Person by Olsy,
Olsy Japan, Olsy Brazil or a Controlled Subsidiary or which relate to the
sale, transfer or other disposition of any Olsy Intellectual Property to
any Person by Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary,
(bb) all material Contracts to which Olivetti or any Olivetti Affiliate is
a Party which qualify as Business Items as defined in and for the purposes
of Section 1.1 and which relate in any way to the Olsy Intellectual
Property, and (cc) all Customer Contracts that grant licenses, sublicenses
or other rights in or to, or which sell, transfer, assign or otherwise
dispose of, any Olsy Intellectual Property, other than solely by granting
to end user customers non-exclusive licenses to use or reproduce object
code versions of software for their internal business purposes. Schedule
4.15(c)(iii) of the Olivetti Disclosure Schedule identifies the parties to
such agreements and the nature and subject matter thereof. The Contracts
listed in Schedule 4.15(c)(iii) of the Olivetti Disclosure Schedule are
collectively referred to as "Olsy Licensing Agreements".
(iv) Except as set forth in Schedule 4.15(c)(iv) of the
Olivetti Disclosure Schedule: (aa) each Olsy Licensing Agreement is or
will be at Closing valid, binding and enforceable in accordance with its
terms; (bb) none of Olsy, Olsy Japan, Olsy Brazil or a Controlled
Subsidiary (or, as the case may be, Olivetti or any Affiliate of
Olivetti), or any other Person or Governmental Authority party to an Olsy
Licensing Agreement is in material breach, material violation or default
under any Olsy Licensing Agreement; (cc) neither the execution and
delivery of this Agreement or any of the Related Agreements, nor the
transfer by Olivetti or any Affiliate of Olivetti of any Olsy Licensing
Agreement pursuant to Section 1.1, nor the consummation of the
transactions contemplated hereby or thereby, will result in any material
breach, material violation or default under any such Olsy Licensing
Agreement; and (dd) the transfer by Olivetti or any Affiliate of Olivetti
of any Olsy IP Agreement pursuant to Section 1.1 will not require the
consent of any Person or Governmental Authority.
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(v) Except as set forth in Schedule 4.15(c)(v) of the
Olivetti Disclosure Schedule, there are no milestone or other payments of
more than U.S. $200,000 except payments which are royalties and license
fees due and payable in the ordinary course of business by Olsy, Olsy
Japan, Olsy Brazil or any of the Controlled Subsidiaries to any Person by
reason of the ownership, use, reproduction or distribution of any Olsy
Intellectual Property.
(d) Infringement. Except as set forth in Schedule 4.15(d) of
the Olivetti Disclosure Schedule:
(i) neither the manufacture, marketing, use or sale of any
product, the rendering of any service under, or the licensing or
sublicensing of, any Intellectual Property by Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary in the manner such product is
manufactured, marketed, used or sold, such service is rendered, or such
Intellectual Property is licensed or sublicensed by Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary as of the date hereof, nor the conduct
by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary of the
Business as heretofore conducted by each of them do or will: (aa)
materially violate any Contract with any Person or Governmental Authority;
or (bb) to the Best Knowledge of Olivetti, infringe upon, violate,
misappropriate, misuse or otherwise conflict with any Patents or
Trademarks of any Person or Governmental Authority; or (cc) infringe upon,
violate, misappropriate, misuse or otherwise conflict with any
Intellectual Property other than Patents and Trademarks of any Person or
Governmental Authority;
(ii) there is no pending material claim or litigation, or to
the Best Knowledge of Olivetti, any threatened claim or litigation or
grounds therefor, by any Person or Governmental Authority (aa) alleging
the infringement, violation, misappropriation, misuse or conflict with the
Intellectual Property of any Person or Governmental Authority, or (bb)
challenging or questioning the ownership, validity or enforceability of
any Olsy Intellectual Property;
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(iii) there is no pending litigation brought by Olivetti or
any Affiliate of Olivetti (including Olsy, Olsy Japan, Olsy Brazil and the
Controlled Subsidiaries) against any Person or Governmental Authority
claiming the infringement, violation, misappropriation or misuse by any
such Person or Governmental Authority of Olsy Intellectual Property; and
(iv) to the Best Knowledge of Olivetti, there are no grounds
for any claim or litigation which could be brought by Olivetti or any
Affiliate of Olivetti (including Olsy, Olsy Japan, Olsy Brazil and the
Controlled Subsidiaries) against any Person or Governmental Authority
based on the material infringement, violation, misappropriation or misuse
of any Olsy Intellectual Property.
(e) Miscellaneous.
(i) Year 2000. Olivetti represents and warrants that
Olivetti and its Affiliates (including Olsy, Olsy Japan, Olsy Brazil and
its Controlled Subsidiaries) have not received any written claims, demands
or complaints alleging a breach of any Contract on the grounds that the
Software listed in Schedules 4.15(b)(i)-(iii) of the Olivetti Disclosure
Schedule has not or will not operate prior to, during, and after the
calendar year 2000 AD, without error relating to date data, specifically
including but not limited to any error relating to calculations, sorting,
interpretation, processing or acceptance date data which represents or
references different centuries or more than one century or any specific
date.
(ii) Viruses. To the best knowledge of the Managing Director
of Olivetti, any of the finance, treasury, legal, administration, human
resources, industrial relations, real estate, intellectual property, tax
or corporate development staff function directors of Olivetti or Marco De
Benedetti (acquired (x) in the performance of their respective duties in
the ordinary course of business or (y) in the course of consulting with
the general manager and controller of Olsy with respect to the subject
matter of these representations or
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warranties, which consulting Olivetti hereby represents and warrants to
Wang was conducted), the Software listed in Schedules 4.15(b)(i)-(iii) of
the Olivetti Disclosure Schedule will not at the time of the Closing
contain any codes, commands or instructions, including material viruses,
time bombs, worms, and Trojan horses (collectively, "Viruses"), that may,
or may be used to, access, alter, delete, damage or disable such Software
or any other software, data, information or machines. Schedule 4.15(e)(ii)
of the Olivetti Disclosure Schedule contains a description of the
procedures adopted by Olsy to protect the Software developed or
distributed by Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries from Viruses. To the best knowledge of the Managing Director
of Olivetti, any of the finance, treasury, legal, administration, human
resources, industrial relations, real estate, intellectual property, tax
or corporate development staff function directors of Olivetti or Marco De
Benedetti (acquired (x) in the performance of their respective duties in
the ordinary course of business or (y) in the course of consulting with
the general manager and controller of Olsy with respect to the subject
matter of these representations or warranties, which consulting Olivetti
hereby represents and warrants to Wang was conducted), there have been no
material failures to follow the procedures described in Schedule
4.15(e)(ii) of the Olivetti Disclosure Schedule.
4.16 Bank Accounts. As of the Closing, no funds or other assets of
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary will be in any
account of any nature of any bank, trust company, savings or loan association or
other financial institution maintained by Olivetti or any Olivetti Affiliate.
Olivetti shall cause each of Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries to deliver to Wang, not later than five Business Days prior to the
Closing, a schedule setting forth the names and addresses of all banks, trust
companies, savings and loan associations and other financial institutions and
post offices at which Olsy, Olsy Japan, Olsy Brazil or any of the Controlled
Subsidiaries maintains any account (including, without limitation, any safe
deposit account), the account numbers thereof and the names of all persons
authorized
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to draw thereon, make withdrawals therefrom or have access thereto.
4.17 Insurance. Schedule 4.17 of the Olivetti Disclosure Schedule
(a) lists all policies of fire, liability (including products liability),
property, workers' compensation, officers' and directors' liability and other
forms of insurance covering any of the assets or properties of, or relating to,
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary owned or held by
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and (b) identifies
all risks of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary which
have been designated as being self-insured. Except as set forth in Schedule 4.17
of the Olivetti Disclosure Schedule, each policy listed is valid, binding and
enforceable in accordance with its respective terms and is in full force and
effect, all premiums due with respect to each policy listed have been paid or
deferred with the agreement of the insurers or are the subject of a legitimate
dispute, and there are no notices of cancellation or termination with respect to
any policy listed. The coverage provided by the policies listed is consistent
with the past practice of the Business and the business of Olsy, Olsy Japan,
Olsy Brazil or each Controlled Subsidiary and is normal and customary for
businesses similarly situated in the jurisdictions in which they are located or
are conducting business. To the Best Knowledge of Olivetti, neither Olivetti
(with respect to the Business), Olsy, Olsy Japan, Olsy Brazil nor any Controlled
Subsidiary has been refused any insurance with respect to its respective assets,
properties or operations, nor has its coverage been limited by any insurance
carrier to which it has applied for any such insurance or with which it has
carried insurance during the last three years.
4.18 Taxes. (a) Except as set forth in Schedule 4.18(a) of the
Olivetti Disclosure Schedule, all Tax Returns (as defined in this Section 4.18)
by or on behalf of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or
any affiliated, combined or unitary group of which Olsy, Olsy Japan, Olsy Brazil
or a Controlled Subsidiary is or was a member, have been duly and timely filed
with the appropriate taxing authorities and were, in all respects, true,
complete and correct, except for any errors or omissions on such Tax Returns
which would
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not have a Material Adverse Effect.
(b) Except as set forth in Schedule 4.18(b) of the Olivetti
Disclosure Schedule, Olsy, Olsy Japan, Olsy Brazil and each Controlled
Subsidiary has paid or will have had paid to the appropriate taxing authority on
its behalf, within the time and in the manner prescribed by law, all Taxes for
which it is liable, except for Taxes the failure of which to pay would not have
a Material Adverse Effect.
(c) Except as set forth in Schedule 4.18(c) of the Olivetti
Disclosure Schedule (which shall set forth the nature of the proceeding, the
type of return, the deficiencies claimed, asserted, proposed or assessed and the
amount thereof, and the taxable year in question), no Tax audits, investigations
or written claims or other administrative proceedings or court proceedings are
presently pending against Olivetti or any Olivetti Affiliate or against Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary with regard to any Taxes or
Tax Returns of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and no
written notification has been received by Olivetti, any Olivetti Affiliate,
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary that such an audit or
other proceeding is pending or threatened with regard to any such Taxes or Tax
Return.
(d) Except as set forth in Schedule 4.18(d) of the Olivetti
Disclosure Schedule, no jurisdiction where Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary has not filed a Tax Return has made a written claim that
Olsy, Olsy Japan, Olsy Brazil or such Controlled Subsidiary is required to file
a Tax Return in such jurisdiction.
(e) Except as set forth in Schedule 4.18(e) of the Olivetti
Disclosure Schedule, no Controlled Subsidiary that has been organized, created
or otherwise formed pursuant to the laws of the United States or any state or
territory thereof (each a "U.S. Controlled Subsidiary") or any entity
(regardless of its organizational form) Controlled (as defined in Section 12.11)
by a U.S. Controlled Subsidiary has elected under Treasury Regulation ss.
301.7701-3 to be classified for U.S. federal income tax purposes (i) as a
partnership or disregarded as a separate entity where such entity would
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otherwise be classified as a corporation, or (ii) as a corporation where such
entity would otherwise be classified as a partnership or disregarded as a
separate entity.
(f) Olivetti and/or its Affiliates (including Olsy, Olsy
Japan, Olsy Brazil and any Controlled Subsidiary) has previously delivered or
made available to Wang complete and accurate copies of each of (i) all audit
reports, letter rulings and technical advice memoranda relating to United States
federal, state, local or foreign Taxes due with respect to the income or
business of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, (ii) any
closing agreement, settlement agreement or similar agreement or arrangement
entered into by or on behalf of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary with any taxing authority, and (iii) any Tax sharing agreement, Tax
indemnification agreement or similar contract or arrangement entered into by or
on behalf of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary.
(g) For purposes of this Agreement, "Taxes" shall mean all
taxes, charges, fees, levies or other assessments, including, without
limitation, all net income, gross income, gross receipts, sales, use, ad
valorem, goods and services, capital, transfer, franchise, profits, license,
withholding, payroll, employment, employer health, excise, severance, stamp,
occupation, real and personal property, social security, estimated, recording,
gift, value assessed, windfall profits or other taxes, customs duties, fees,
assessments or charges of any kind whatsoever, whether computed on a separate,
consolidated, unitary, combined or other basis, together with any interest,
fines, penalties, additions to tax or other additional amounts imposed by any
taxing authority. For the avoidance of any doubt, any and all interest,
penalties, additions to tax or other additional amounts included within the
definition of "Taxes" shall be treated as attributable to the same taxable
period as the Taxes to which such interest, penalties, additions to tax or other
additional amounts relate. For purposes of this Agreement, "Tax Return" shall
mean any return, declaration, report, estimate, information or other document
(including any documents or statements attached thereto) required to be filed
with any taxing authority with respect to Taxes.
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4.19 Employees; Employee Relations. (a) Schedule 4.19(a)(i) of the
Olivetti Disclosure Schedule contains a true and complete list of all the
employees of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in Italy
as of January 31, 1998 with an indication of their employment classification for
purposes of applicable collective bargaining agreements. Schedule 4.19(a)(ii) of
the Olivetti Disclosure Schedule contains a true and complete list of all other
employees of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary as of
January 31, 1998 by country with an indication of their employment
classification for purposes of applicable collective bargaining agreements, if
any. As of December 31, 1997, Olsy and the Controlled Subsidiaries employed
3,817 employees in Italy. No present or former employees of Olivetti or any of
its Affiliates other than those listed in Schedules 4.19(a)(i) or (ii) of the
Olivetti Disclosure Schedule have a right vis-a-vis Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary which will entitle them to be hired as an
employee of the latter nor has any of the employees listed in Schedules
4.19(a)(i) or (ii) a right to obtain an employment classification other than as
listed in Schedules 4.19(a)(i) or (ii) of the Olivetti Disclosure Schedule under
any collective bargaining agreement or applicable law. Except as set forth on
Schedule 4.19(a)(iii) of the Olivetti Disclosure Schedule, none of the employees
listed on Schedules 4.19(a)(i) or (ii) of the Olivetti Disclosure Schedule is
employed or paid by, or receives or is entitled to receive benefits from, more
than one of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary. None of
the employees listed on Schedules 4.19(a)(i) or (ii) of the Olivetti Disclosure
Schedule has been authorized or instructed not to report to work or otherwise
designated "no-shows". None of the employees listed on Schedules 4.19(a)(i) or
(ii) of the Olivetti Disclosure Schedule are performing services for Olivetti or
any Olivetti Affiliate on a regular basis. The approximately 80
contractors/fixed term employees in Holland previously discussed by Olivetti and
Wang may be terminated at the expiration of their respective contract terms
without cost or expense to Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary. All costs of the employees listed on Schedule 4.19(a)(i) or (ii) of
the Olivetti Disclosure Schedule for the period ended September 30, 1997 are
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reflected on the 9/30/97 Italian GAAP Financial Statements.
(b) Schedule 4.14(b)(i) of the Olivetti Disclosure Schedule
lists all employees of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary with annual base compensation and bonus in excess of U.S. $150,000
(or an equivalent amount in another currency) for the calendar year ended
December 31, 1997.
(c) Schedule 4.19(c) of the Olivetti Disclosure Schedule
lists all collective bargaining agreements or other written agreements
(including shop level agreements), work rules or practices, agreed to with any
labor organization, employee association or works council, applicable to
employees of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary.
(d) Except as set forth in Schedule 4.19(d) of the Olivetti
Disclosure Schedule, to the Best Knowledge of Olivetti, there are no
controversies involving an amount greater than U.S. $35,000 (or an equivalent
amount in another currency) pending (or to the Best Knowledge of Olivetti,
threatened) between Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary and any employees, former employees, employees' collective bargaining
representatives, job applicants or any association or group of such persons,
relating to employment in or with Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary. Except as set forth in Schedule 4.19(d) of the Olivetti
Disclosure Schedule, there are no written personnel policies, rules or
procedures applicable to employees of Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary. True and correct copies of all such policies, rules or
procedures scheduled in Schedule 4.19(d) of the Olivetti Disclosure Schedule
have been provided to Wang. Each of Olivetti, Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries has complied in all material respects with all
federal, state, local or foreign laws applicable to present or former employees
(or any Person found to be a present or former employee), employees' collective
bargaining representatives, job applicants or any association or group of such
persons, of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary,
including without limitation any provisions thereof relating to terms and
conditions of employment, wages,
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hours, the payment of social security and similar taxes and occupational safety
and health.
(e) Except as set forth in Schedule 4.19(e) of the Olivetti
Disclosure Schedule, neither Olivetti, Olsy, Olsy Japan, Olsy Brazil nor any
Controlled Subsidiary (i) is a party to, otherwise involved in (or to the Best
Knowledge of Olivetti, threatened by) any labor dispute, strike, stoppage,
slowdown or lockout, any union organizing activity in the United States, or any
administrative, governmental, judicial or appellate proceeding or investigation,
directly or indirectly, arising out of the wages, hours or other terms or
conditions of employment of any person who was or is now employed by Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary, (ii) is currently negotiating,
or is subject to any order, judgment, decree or injunction of any court,
regulatory authority, arbitrator or other tribunal requiring it to negotiate any
collective bargaining agreement with regard to persons employed by Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary or (iii) has experienced any
strike, stoppage, slowdown or lockout during the preceding three years.
(f) Each of Olivetti, Olsy, Olsy Japan, Olsy Brazil and the
Controlled Subsidiaries has complied with any applicable foreign, state or local
law with regard to plant closings, mass layoffs, collective dismissals or
redundancies, as such terms are defined for purposes of such laws, applicable to
present or former employees of the Business, Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary. Except as set forth in Schedule 4.19(f) of the
Olivetti Disclosure Schedule, none of the present or former employees of the
Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has
suffered an employment loss, dismissal, redundancy, or termination as those
terms are defined for purposes of such laws in the six-month period ending on
the Closing Date.
(g) Olivetti North America complied with the Worker
Adjustment and Retraining Notification Act of 1988 (the "WARN Act") with regard
to plant closings or mass layoffs, as such terms are defined in the WARN Act.
Except as set forth in Schedule 4.19(g) of the Olivetti Disclosure Schedule,
none of the present or
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former employees of Olivetti North America has suffered an employment loss as
that term is defined in the WARN Act in the six-month period ending on the
Closing Date.
(h) Olivetti has taken or will take in a timely fashion all
necessary actions required by law or by agreement to inform, consult, notify or
obtain the consent, as applicable, of the works council or other employee
representation bodies of all entities which shall be acquired directly or
indirectly by Wang pursuant to this Agreement.
4.20 Employee Benefit Plans; ERISA. (a) For purposes of this
Agreement, "Plan" shall mean each thrift, savings, bonus, deferred compensation,
incentive compensation, stock purchase, stock option, severance or termination
pay, vacation or sick leave, hospitalization or other medical, life or other
insurance, supplemental unemployment benefits, employee welfare, profit-sharing,
pension, or retirement plan, program, agreement or arrangement, statutory,
contractual or otherwise, and each other fringe or employee benefit plan,
program, agreement or arrangement, statutory, contractual or otherwise,
sponsored, maintained or contributed to or required to be contributed to by
Olivetti or by any Controlled Subsidiary, for the benefit of any employee or
former employee of the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary, other than any such plan, program, agreement or arrangement
sponsored or maintained by a state, local, federal or foreign government or
governmental subdivision or entity of any kind. Schedule 4.20(a) of the Olivetti
Disclosure Schedule sets forth a true and complete list of all Plans.
(b) With respect to each Plan other than any Plan maintained
for the benefit of any employees of any United States Subsidiary (the "Olsy
Plans"), Olivetti has delivered or made available to Wang all correct and
complete copies of material documentation available to Olivetti, Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary with respect to such Olsy Plan,
including, without limitation, Plan texts and all amendments thereto, funding
agreements, actuarial reports, funding and financial information returns and
statements, all professional opinions (whether or not internally prepared) with
respect to each Olsy Plan, all
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material internal memoranda concerning the Olsy Plan, copies of material
correspondence with all regulatory authorities with respect to each Olsy Plan
and plan summaries, booklets and personnel manuals.
(c) Each Olsy Plan has been maintained in material
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities; neither Olsy,
Olsy Japan, Olsy Brazil, nor any Controlled Subsidiary has incurred, nor
reasonably expects to incur, any obligation in connection with the termination
of or withdrawal from any Olsy Plan that has not been satisfied in full. Except
as set forth in Schedule 4.20(c) of the Olivetti Disclosure Schedule, no Olsy
Plan that provides pension or retirement benefits is intended to enjoy any
special tax status under applicable law, nor have any advance tax rulings been
sought or received in respect of any such Olsy Plan. No fact or circumstances
exist that would reasonably be expected to materially adversely affect such
special tax status of any such Olsy Plan. Except as set forth in Schedule
4.20(c) of the Olivetti Disclosure Schedule, Olsy, Olsy Japan, Olsy Brazil or
each Controlled Subsidiary may unilaterally amend, modify, vary or terminate, in
whole or in part, each Olsy Plan, merge any such Olsy Plan with another
arrangement, plan or fund and, to the extent permitted under applicable law,
take contribution holidays under or withdraw surplus, on an ongoing and
termination basis, from each such Olsy Plan, subject only to approvals required
by applicable law. No Olsy Plan is liable, or would reasonably be expected to be
liable, to an order that it be wound-up in whole or in part. Except as set forth
in Schedule 4.20(c) of the Olivetti Disclosure Schedule, no amounts are required
to be transferred out of, or in respect of, any Olsy Plans. As of the Closing
Date, all employee and other data necessary to administer each Olsy Plan will be
provided by Olivetti to Wang and will be true, correct and complete as of the
Closing Date. No insurance policy or any other contract or agreement affecting
any Olsy Plan requires or permits a retroactive increase in premiums or payments
due thereunder in respect of events or circumstances occurring prior to the
Closing Date. The level of insurance reserves under or in respect of each
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insured Olsy Plan is reasonable and sufficient to provide
for all incurred but unreported claims.
(d) With respect to (i) each Plan that is not an Olsy Plan,
in the case of clause (aa) below and (ii) each Plan that is an "employee benefit
plan" (as that term is defined in section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) subject to ERISA (hereinafter
referred to collectively as the "ERISA Plans"), in the case of clauses (bb)
through (gg) below, Olivetti has heretofore delivered to Wang correct and
complete copies of each of the following documents:
(aa) a copy thereof (including all amendments thereto);
(bb) a copy of the annual report, if required under ERISA,
with respect thereto for the last two years;
(cc) a copy of the actuarial report, if any, with respect
thereto for the last two years;
(dd) a copy of the most recent report prepared with respect
thereto in accordance with Statement of Financial Accounting Standards No.
87 or No. 106, if any;
(ee) a copy of the most recent Summary Plan Description,
together with each Summary of Material Modifications, required under ERISA
with respect thereto;
(ff) if the Plan is funded through a trust or any third
party funding vehicle, a copy of the trust or other funding agreement
(including all amendments thereto) and the latest financial statements
thereof; and
(gg) the most recent determination letter, if any, received
from the Internal Revenue Service with respect to each Plan that is
intended to be qualified under section 401 of the Code.
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(e) Except as set forth in Schedule 4.20(e) of the Olivetti
Disclosure Schedule, (i) no material liability under Title IV of ERISA has been
incurred by Olivetti or any ERISA Affiliate that has not been satisfied in full
except for any such liability the payment of which is not yet due and (ii) no
condition exists that presents a material risk to Olsy, Olsy Japan, Olsy Brazil
or any Controlled Subsidiary of incurring a liability under such Title, other
than liability for premiums due the Pension Benefit Guaranty Corporation
("PBGC") (which premiums have been paid when due).
(f) Neither Olivetti nor any ERISA Affiliate, nor any ERISA
Plan, nor any trust created thereunder, nor any trustee or administrator thereof
has engaged in a transaction in connection with which Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary could reasonably be expected to be subject
to either a material civil penalty assessed pursuant to section 409 or 502(i) of
ERISA or a material Tax imposed pursuant to section 4975 or 4976 of the Code.
(g) No ERISA Plan, or any trust established thereunder has
incurred any "accumulated funding deficiency" (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived, as of the last day of
the most recent fiscal year of each ERISA Plan ended prior to the Closing Date;
and all contributions (other than contributions that are not material in amount)
required to be made with respect to each ERISA Plan (whether pursuant to the
terms thereof or otherwise) on or prior to the Closing Date have been timely
made.
(h) Except as set forth in Schedule 4.20(h) of the Olivetti
Disclosure Schedule, no ERISA Plan is a "multiemployer pension plan," as such
term is defined in section 3(37) of ERISA, nor is any ERISA Plan a multiple
employer plan described in section 4063(a) of ERISA.
(i) Except as set forth in Schedule 4.20(i) of the Olivetti
Disclosure Schedule, each Plan (other than any Olsy Plan) has been operated and
administered in all material respects in accordance with its terms and
applicable law, including but not limited
to ERISA and the Code.
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(j) Each ERISA Plan which is intended to be "qualified"
within the meaning of section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service as to its "qualified"
status.
(k) Except as set forth in Schedule 4.20(k) of the Olivetti
Disclosure Schedule, no Plan provides benefits, including, without limitation,
death or medical benefits (whether or not insured), with respect to current or
former employees of the Business, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary beyond their retirement or other termination of service
(other than (i) coverage mandated by applicable law, (ii) death benefits or
retirement benefits under any "employee pension plan," as that term is defined
in section 3(2) of ERISA, (iii) benefits the full cost of which are borne by the
current or former employee (or his beneficiary) or (iv) benefits the payment of
which would not result in material cost to Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary).
(l) Except as set forth in Schedule 4.20(l) of the Olivetti
Disclosure Schedule, the Drop-Down did not, and the consummation of the
transactions contemplated by this Agreement or any of the Related Agreements
will not by themselves (i) entitle any current or former employee or officer of
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to severance pay,
unemployment compensation or any other payment or (ii) accelerate the time of
payment or vesting, or increase the amount of compensation due any such employee
or officer.
(m) Except as set forth in Schedule 4.20(m) of the Olivetti
Disclosure Schedule, there are no pending, threatened or anticipated claims by
or on behalf of any Plan, by any employee or beneficiary covered under any such
Plan or otherwise involving any such Plan (other than routine claims for
benefits) that is reasonably expected to result in a material cost or liability
to Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary.
4.21 Compliance with Law; Political Payments. (a) Except (i) as set
forth in Schedule 4.21(a) of the
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Olivetti Disclosure Schedule or disclosed to Wang in the review referred to in
Section 4.21(c) and (ii) any noncompliance which would cause Olsy, Olsy Japan,
Olsy Brazil and the Controlled Subsidiaries to lose aggregate (without
duplication) revenue of U.S. $1,500,000 (or an equivalent amount in another
currency) or more or incur aggregate (without duplication) cost or expense of
U.S. $250,000 (or an equivalent amount in another currency) or more, the
operations of the Business and the business of each of Olsy, Olsy Japan, Olsy
Brazil and the Controlled Subsidiaries have been since January 1, 1995, and are
being, conducted in compliance, in all material respects, with all (applicable
from time to time) laws, rules, regulations and other requirements of all
national Governmental Authorities and of all states, municipalities and other
political subdivisions and agencies thereof, having jurisdiction over the
Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, including,
without limitation, all such laws, rules, regulations and other requirements
relating to antitrust, consumer protection, currency exchange, employment
(including equal opportunity), health, occupational safety, pension, securities,
anti-boycott compliance, export control, foreign asset control, foreign corrupt
practices, trading-with-the-enemy matters or doing business with or providing
services to a Governmental Authority. Except as set forth in Schedule 4.21(a) of
the Olivetti Disclosure Schedule, neither Olivetti, Olsy, Olsy Japan, Olsy
Brazil nor any Controlled Subsidiary has received any notification, demand,
subpoena or inquiry relating to any present or past failure by the Business,
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to comply, in any
material respect, with such laws, rules, regulations or other requirements nor,
to the Best Knowledge of Olivetti, has the Business, Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary been the subject of any inquiry or
investigation by any Governmental Authority regarding any such present or past
failure.
(b) Except as set forth in Schedule 4.21(b) of the Olivetti
Disclosure Schedule or disclosed to Wang in the review referred to in Section
4.21(c): (i) no offer, payment, gift, promise to pay or give, or authorization
of the payment or giving of any money or anything of value has been made by or
on behalf of the Business, Olsy, Olsy Japan, Olsy Brazil or any of the
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Controlled Subsidiaries, either directly or through any intermediary, to any
Official of any Governmental Authority, or to any political party or Official
thereof, or to any candidate for governmental or political office, for the
purpose of affecting or influencing any act or decision of such person or
inducing such person to use his influence to affect or influence any act or
decision of any Governmental Authority in order to assist the Business, Olsy,
Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries in obtaining or
retaining business for or with, or directing business to, any person and (ii)
neither Olivetti, Olsy, Olsy Japan, Olsy Brazil nor any of the Controlled
Subsidiaries has received any written communication, whether from a Governmental
Authority, competitor, employee or otherwise, alleging that Olivetti, Olsy, Olsy
Japan, Olsy Brazil or any of the Controlled Subsidiaries has engaged in any
action that would be inconsistent with the representations and warranties set
forth in this Section 4.21(b). Olivetti has delivered or otherwise made
available for inspection to Wang, true, complete and correct copies of any and
all reports, studies, analyses, or other writings regarding any audits,
inquiries, investigations, reviews or other evaluations that have been conducted
by or on behalf of Olivetti, Olsy, Olsy Japan, Olsy Brazil, any of the
Controlled Subsidiaries, or any of the Boards of Directors thereof with respect
to the possible occurrence of any action that would be inconsistent with the
representations and warranties set forth in this Section 4.21(b).
(c) Olivetti has reviewed with Wang the material facts
relating to any pending inquiries or investigations by any Governmental
Authority concerning the Business or the business of Olsy, Olsy Japan, Olsy
Brazil, any Subsidiary or any Olsy Japan Subsidiary.
4.22 Environmental Matters. (a) Except as set forth in Schedule
4.22(a) of the Olivetti Disclosure Schedule:
(i) The operations of Olsy, Olsy Japan, Olsy Brazil and each
of the Controlled Subsidiaries, including the use and operations of all
Real Estate and the Leased Premises, are in compliance with all applicable
Environmental Laws (as defined in Section 4.22(c)) (which compliance
includes, but is not
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limited to, the possession by Olsy, Olsy Japan, Olsy Brazil and the
Controlled Subsidiaries of all permits, licenses and other governmental
authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof) except where any
Individual Environmental Noncompliance (as defined in Section 4.22(c))
will not cause Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiaries to lose aggregate (without duplication) revenue of U.S.
$1,500,000 (or an equivalent amount in another currency) or more or incur
aggregate (without duplication) costs or expense of U.S. $250,000 (or an
equivalent amount in another currency) or more. Neither Olivetti, Olsy,
Olsy Japan, Olsy Brazil nor any of the Controlled Subsidiaries has
received any written communication, whether from a Governmental Authority,
citizens group, employee or otherwise, alleging that the Business, Olsy,
Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries is not in
such compliance, and to the Best Knowledge of Olivetti, there are no past
or present actions, activities, circumstances, conditions, events or
incidents that may prevent or interfere with such compliance in the
future.
(ii) There is no Environmental Claim (as defined in Section
4.22(c)) pending (or to the Best Knowledge of Olivetti threatened) against
Olsy, Olsy Japan, Olsy Brazil, any of the Controlled Subsidiaries or, to
the Best Knowledge of Olivetti, against any person or entity whose
liability for any Environmental Claim Olsy, Olsy Japan, Olsy Brazil or any
of the Controlled Subsidiaries has or may have retained or assumed either
contractually or by operation of law.
(iii) To the Best Knowledge of Olivetti, there are no past
or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the Release (as defined in
Section 4.22(c)) or presence of any Hazardous Material (as defined in
Section 4.22(c)), of which could form the basis of any Environmental Claim
against Olsy, Olsy Japan, Olsy Brazil, any of the Controlled Subsidiaries
or, to the Best Knowledge of Olivetti, against any person
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or entity whose liability for any Environmental Claim Olsy, Olsy Japan,
Olsy Brazil or any of the Controlled Subsidiaries has or may have retained
or assumed either contractually or by operation of law except where any
individual such action, activity, circumstance, condition, event, incident
or Individual Environmental Noncompliance will not cause Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary to lose aggregate (without
duplication) revenue of U.S. $1,500,000 (or an equivalent amount in
another currency) or more or incur aggregate (without duplication) costs
or expense of U.S. $250,000 (or an equivalent amount in another currency)
or more.
(iv) No transfer, reissuance or renewal of any permit,
license or other governmental authorization and no notice to any
Governmental Authority under any Environmental Law will be required to
permit Wang to conduct the business of Olsy, Olsy Japan, Olsy Brazil or
any of the Controlled Subsidiaries, and the business of Olsy, Olsy Japan,
Olsy Brazil and each of the Controlled Subsidiaries will be in compliance
with all applicable Environmental Laws immediately following the Closing
except where any Individual Environmental Noncompliance will not cause
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to lose
aggregate (without duplication) revenue of U.S. $1,500,000 (or an
equivalent amount in another currency) or more or incur aggregate (without
duplication) costs or expense of U.S. $250,000 (or an equivalent amount in
another currency) or more.
(v) (i) Neither Olsy, Olsy Japan, Olsy Brazil nor any of the
Controlled Subsidiaries has, and to the Best Knowledge of Olivetti, no
other Person has, Released, placed, stored, buried or disposed of any
Hazardous Material in, on, beneath, from or adjacent to any real property
now owned, leased, operated or used by Olsy, Olsy Japan, Olsy Brazil, any
of the Controlled Subsidiaries or any of their respective predecessors in
interest, except for inventories of such items to be used in the ordinary
course of business of Olsy, Olsy Japan, Olsy Brazil or any of the
Controlled Subsidiaries (which inventories were and are stored, tested,
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handled and disposed of in accordance with applicable Environmental Laws
and in a manner such that there has been no Release of any such item) and
(ii) no Person, including Olsy, Olsy Japan, Olsy Brazil or any of the
Controlled Subsidiaries will be required to Cleanup (as defined in Section
4.22(c)) any site or facility owned, leased, operated or used by Olsy,
Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries pursuant to
any Environmental Law, as a result of any act or omission of Olsy, Olsy
Japan, Olsy Brazil or any of the Controlled Subsidiaries or any use or
Release or threatened Release of any Hazardous Material at or from real
property owned, operated, leased or used by Olsy, Olsy Japan, Olsy Brazil
or any of the Controlled Subsidiaries prior to the Closing, except where
any individual circumstance or state of fact referred to in this clause
(v) will not cause Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to lose aggregate (without duplication) revenue of U.S.
$1,500,000 (or an equivalent amount in another currency) or more or incur
aggregate (without duplication) costs or expense of U.S. $250,000 (or an
equivalent amount in another currency) or more.
(b) Schedule 4.22(b) of the Olivetti Disclosure Schedule
sets forth all permits, licenses and other governmental authorizations currently
held by Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries
pursuant to applicable Environmental Laws. Olivetti has delivered or otherwise
made available for inspection to Wang true, complete and correct copies and
results of any reports, studies, analyses, tests or monitoring possessed or
initiated by Olivetti, Olsy, Olsy Japan, Olsy Brazil or any of the Controlled
Subsidiaries pertaining to Hazardous Materials in, on, beneath or adjacent to
any Real Estate and Leased Premises currently or formerly owned, operated or
leased by Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries,
or regarding compliance with applicable Environmental Laws by the Business,
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary.
(c) For purposes of this Section 4.22:
(i) "Cleanup" means all actions required to (aa) clean up,
remove, treat or
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remediate Hazardous Materials in the indoor or outdoor environment, (bb)
prevent the Release of Hazardous Materials so that they do not migrate,
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment or (cc) perform pre-remedial studies and
investigations and post-remedial monitoring and care;
(ii) "Environmental Claim" means any claim, action, cause of
action, investigation or written notice by any person or entity alleging
potential liability (including, without limitation, potential liability
for investigatory costs, Cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries, or
penalties) arising out of, based on or resulting from (aa) the presence or
Release of any Hazardous Materials at any location, whether or not owned
or operated by Olsy, Olsy Japan, Olsy Brazil or any of the Controlled
Subsidiaries or (bb) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law;
(iii) "Environmental Laws" means all national, federal,
state, and local laws and regulations relating to pollution or protection
of human health or the environment, including without limitation, laws
relating to Releases or threatened Releases of Hazardous Materials or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, Release, disposal, transport or handling of Hazardous
Materials, and all laws and regulations with regard to recordkeeping,
notification, disclosure and reporting requirements respecting Hazardous
Materials;
(iv) "Hazardous Materials" means all materials, substances
and wastes defined in an Environmental Law as "hazardous substances,"
"hazardous waste," "dangerous materials," and "solid waste" or words of
similar import as in effect as of the Closing Date, and in addition, shall
include, without limitation, petroleum and petroleum products, chemicals,
pollutants, contaminants, wastes, toxic substances, asbestos in any form
that is friable, and transformers and other equipment
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that contain dielectric fluid containing polychlorinated biphenyls;
(v) "Individual Environmental Noncompliance" means (aa) all
claims of noncompliance with Environmental Law set forth in a notice of
violation of a certain date prepared by a governmental entity or in a
civil or criminal complaint alleging noncompliance with Environmental
Laws, or (bb) any specific violation of Environmental Law, including but
not limited to exceedances of permit requirements, from the first date of
a violation until the violation is corrected or the facility involved
otherwise comes into compliance with law; and
(vi) "Release" means any release, spill, emission,
discharge, leaking, pumping, injection, deposit, disposal, dispersal,
leaching or migration into the indoor or outdoor environment (including,
without limitation, ambient air, surface water, groundwater and surface or
subsurface strata) or into or out of any property, including the movement
of Hazardous Materials through or in the air, soil, surface water,
groundwater or property.
4.23 Litigation. (a) Except as set forth in Schedule 4.23(a) of the
Olivetti Disclosure Schedule, there is no action, suit, charge, proceeding,
arbitration, inquiry, grievance or investigation pending (or, to the Best
Knowledge of Olivetti, threatened) by or before any court or governmental or
other regulatory or administrative agency or commission involving Olivetti (with
respect to the Business), Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary involving, individually, an amount in excess of U.S. $500,000, or in
the aggregate, an amount in excess of U.S. $2,000,000. Olivetti shall reimburse
Wang for all costs (including, without limitation, all judgments, awards,
assessments or expenses (including, without limitation, reasonable out-of-pocket
expenses of investigation and reasonable attorneys' and consultants' fees)
associated with any action, suit, charge, proceeding, arbitration, inquiry,
grievance or investigation pending as of the Closing (or, to the Best Knowledge
of Olivetti, threatened as of the Closing) by or before any court or
governmental or other
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regulatory or administrative agency or commission involving Olivetti (with
respect to the Business), Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary in excess of the amounts specifically reserved therefor on the
Closing Balance Sheet plus U.S. $2,000,000.
(b) Except as set forth in Schedule 4.23(b) of the Olivetti
Disclosure Schedule, there is no action, suit, charge, proceeding, arbitration,
inquiry, grievance or investigation, pending (or, to the Best Knowledge of
Olivetti, threatened) against Olivetti (with respect to the Business), Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary by or before any court or
governmental or other regulatory or administrative agency or commission which
questions or challenges the validity of this Agreement or any of the Related
Agreements or any action taken or to be taken by the Sellers, Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary pursuant to this Agreement, or any of
the Related Agreements or in connection with the transactions contemplated
hereby or thereby, and neither Olivetti, Olsy, Olsy Japan, Olsy Brazil nor any
Controlled Subsidiary knows or has reason to know of any valid basis for any
such action, suit, inquiry, grievance, proceeding, arbitration or investigation.
4.24 Products Liability. Except as set forth in Schedule 4.24 of the
Olivetti Disclosure Schedule, there is no action, suit, inquiry, proceeding,
arbitration, grievance or investigation pending (or, to the Best Knowledge of
Olivetti, threatened) by or before any court or governmental or other regulatory
or administrative agency or commission against or involving Olivetti (with
respect to the Business), Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary relating to any product alleged to have been manufactured or sold by
Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and alleged
to have been defective or improperly designed or manufactured or any service
alleged to have been provided by Olivetti, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary and alleged to have been defective or improperly
performed, in each case, involving an amount in excess of U.S. $500,000. To the
Best Knowledge of Olivetti, Olivetti has previously delivered to Wang true,
complete and correct copies of any and all reports, studies, analyses or other
writings regarding any audits, inquiries,
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investigations, reviews or other evaluations that have been conducted by or on
behalf of Olivetti, Olsy, Olsy Japan, Olsy Brazil, the Controlled Subsidiaries
or any of the Boards of Directors thereof with respect to whether any product
may have been defective or improperly designed or manufactured or any service
that may have been defective or improperly performed.
4.25 Securities Act. Olivetti represents that the Wang Shares being
delivered to Olivetti (or its designee) pursuant to Section 2.1(b)(ii) of this
Agreement are being received for its own account, not as nominee or agent for
any other person, firm or corporation and not for distribution or resale to
others in contravention of the Securities Act (as defined in Section 12.11).
Olivetti agrees that it will not sell or otherwise transfer the Wang Shares
unless they are registered under the Securities Act or unless an exemption from
such registration is available. Olivetti consents to the placement of a legend
on any certificate or other document evidencing the Wang Shares stating that
such Wang Shares have not been registered under the Securities Act or under any
state securities or "blue sky" laws and setting forth or referring to the
restrictions on transferability and sale thereof set forth in the Stockholder
Agreement attached as Exhibit 10 hereto until such time as such restrictions are
no longer applicable.
4.26 Brokers and Finders. Except for Lehman Brothers, which are
serving as financial advisors to Olivetti and whose fees will be paid by
Olivetti, neither Olivetti nor any Affiliate of Olivetti is obliged to pay, or
has retained any broker or finder or other person who is entitled to, any
broker's or finder's fee based upon any agreement or undertaking made by
Olivetti or any Affiliate of Olivetti in connection with this Agreement or any
Related Agreements to which any of them is a party or the transactions
contemplated hereby or thereby.
4.27 Disclosure. No representations or warranties by Olivetti in
this Agreement or any Related Agreement to which Olivetti is a party and no
statement contained in the financial statements referred to in Sections 4.6(a)
or (b), the Olivetti Disclosure Schedule or Schedules 1, 1.8(a)(iv), 1.10,
4.2(e), 6.16(b), 6.16(c), 6.20, 6.21, 10.2(a)(viii) or 10.6(d) hereto
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contain (or, with respect to any of the foregoing which are completed, amended
or supplemented after the date hereof, will contain) any untrue statement of
material fact or omit (or, with respect to any of the foregoing which are
completed, amended or supplemented after the date hereof, will omit) to state
any material fact necessary, in light of the circumstances under which it was
made, in order to make such representation, warranty or statement not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF WANG
Wang represents and warrants to Olivetti as follows:
5.1 Organization, Standing and Qualification. Each of the Buyers (a)
is a corporation duly organized or incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, (b) has full
corporate power and authority to carry on its business as it is now being
conducted and to own, lease and operate its properties and assets and (c) is
duly qualified or licensed to do business as a foreign corporation in good
standing in each jurisdiction in which the conduct of its business, the
ownership, leasing or operation of its properties or assets or the nature of the
business conducted by it makes such qualification necessary, except where the
failure to be so qualified or licensed would not, in the aggregate, have or
result in a material adverse effect on or change in the business, assets,
properties, liabilities, results of operations or condition (financial or
otherwise) of Wang, taken as a whole. The copies of the certificate of
incorporation and by-laws of Wang heretofore delivered to Olivetti by Wang are
complete and correct copies of such instruments, as currently in effect. The
copies of the minutes of the meetings of the Board of Directors of Wang held
during the period beginning on January 1, 1995 and ending on December 31, 1997
heretofore made available to Olivetti by Wang are, except for the portions
thereof redacted relating to the transactions contemplated hereby, other
business combinations, acquisitions or similar transactions or strategic
investments by or in
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Wang, true and complete copies of such minutes (other than the exhibits
thereto).
5.2 Capitalization. As of the date of this Agreement, the authorized
capital stock of Wang consists of (a) 5,000,000 shares of preferred stock, $.01
par value per share (the "Wang Preferred Stock"), of which 90,000 shares have
been designated as 4-1/2% Series A Cumulative Convertible Preferred Stock and
are issued and outstanding, 143,750 shares have been designated as 6- 1/2%
Series B Cumulative Convertible Preferred Shares and are issued and outstanding
and (b) 100,000,000 shares of common stock, $.01 par value per share (the "Wang
Common Stock"), of which 38,503,186 shares are issued and outstanding (2,591,331
of which remain in a disputed claims reserve established pursuant to (i) the
reorganization plan of Wang pursuant to Chapter 11 of the United States
Bankruptcy Code that was approved by the United States Bankruptcy Court for the
District of Massachusetts (the "Bankruptcy Court") on September 20, 1993, (ii)
the disclosure statement used to solicit consents to such reorganization plan
and (iii) the signed confirmation order with respect to such reorganization plan
(the documents referred to in clauses (i), (ii) and (iii) being referred to
hereinafter collectively as the "Reorganization Plan") of which 2,585,331 are
expected to be distributed within 90 days of the date hereof). All issued and
outstanding shares of Wang Preferred Stock and Wang Common Stock are duly
authorized, validly issued, fully paid, nonassessable and free of preemptive
rights, and there is no outstanding subscription, option, warrant, call, right,
agreement, commitment, understanding or arrangement relating to the issuance,
sale, delivery, transfer or redemption of Wang Preferred Stock or Wang Common
Stock (including any right of conversion or exchange under any outstanding
security or other instrument) other than, in the case of Wang Common Stock, in
each case as of January 31, 1998, up to 12,500,000 shares which may be issued
upon the conversion of intercompany convertible instruments issued or issuable
to subsidiaries of Wang pursuant to the Reorganization Plan, up to 7,500,000
shares which may be issued upon exercise of common stock purchase warrants
issued or issuable to former stockholders of Wang pursuant to the Reorganization
Plan, up to 9,324,807 shares which may be issued upon the conversion of the Wang
Preferred Stock, up to 303,030 shares which may be
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issued upon exercise of a common stock purchase warrant issued to Microsoft
Corporation, up to 11,530,021 shares which may be issued to employees of Wang
pursuant to Wang's 1993 Stock Incentive Plan, 1994 Employees' Stock Incentive
Plan, Employees' Stock Purchase Plan and 1995 Employees' Stock Purchase Plan and
320,000 shares issuable upon the exercise of stock options granted to the
directors of Wang pursuant to Wang's 1993 and 1995 Directors' Stock Option
Plans. The issuance of the Wang Shares has been duly authorized and, upon
delivery to Olivetti of certificates therefor against payment in accordance with
the terms hereof, the Wang Shares will have been validly issued, fully paid,
nonassessable and free of preemptive rights.
5.3 Authority. Each of the Buyers has full corporate power and
authority to execute and deliver this Agreement and each of the Related
Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by each of the
Buyers of this Agreement and each of the Related Agreements to which it is a
party and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary action on the part of
each of the Buyers. Each of the Buyers has duly and validly executed and
delivered this Agreement and, at or prior to the Closing, shall duly and validly
execute and deliver each of the Related Agreements to which it is a party and,
assuming the due authorization, execution and delivery thereof by Olivetti, this
Agreement constitutes and each of the Related Agreements to which it is a party,
when executed and delivered, shall constitute a legal, valid and binding
obligation of each of the Buyers, enforceable against each of the Buyers in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights and
by general equitable principles (regardless of whether enforceability is
considered in a proceeding in equity or at law).
5.4 Consents; No Violation. (a) Except as set forth in Schedule
5.4(a) of the Disclosure Schedule delivered by Wang to Olivetti dated as of the
date of this Agreement (the "Wang Disclosure Schedule"), there is
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no requirement applicable to any of the Buyers to give any notice to, to make
any filing with, or to obtain any consent or approval of, any Person in
connection with the execution and delivery of this Agreement or any of the
Related Agreements or the consummation of the transactions contemplated hereby
or thereby.
(b) Except as set forth in Schedule 5.4(b) of the Wang
Disclosure Schedule, there is no requirement applicable to any of the Buyers to
make any filing with, or to obtain any permit, authorization, consent or
approval of, any Governmental Authority in connection with the execution and
delivery of this Agreement or any of the Related Agreements or the consummation
of the transactions contemplated hereby or thereby.
(c) Except as set forth in Schedule 5.4(c) of the Wang
Disclosure Schedule, neither the execution and delivery of this Agreement or any
of the Related Agreements to which any of the Buyers is a party nor the
consummation of the transactions contemplated hereby or thereby will (i)
conflict with or result in a breach of any provision of the certificate of
incorporation or by-laws of any of the Buyers, (ii) result in a breach of or
default under (or give rise to any right of termination, cancellation or
acceleration under) any of any note, bond, mortgage, indenture, license,
agreement, lease or other similar instrument or obligation to which any of the
Buyers is a party or by which their respective properties or assets may be
bound, except for such breaches or defaults (or rights of termination,
cancellation or acceleration) as to which requisite consents have been or, on or
prior to the Closing, shall have been obtained or (iii) violate any order,
judgment, writ, injunction, decree, statute, rule or regulation applicable to
any of the Buyers or any of their respective assets or properties.
5.5 Reports. Since June 30, 1996, Wang has filed all required forms,
reports and documents with the SEC (as defined in Section 12.11) required to be
filed by it pursuant to the Securities Act or the Exchange Act (as defined in
Section 12.11), all of which complied at the time of filing in all material
respects with all then applicable requirements of the Securities Act or the
Exchange Act. Schedule 5.5 of the Wang Disclosure
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Schedule lists all such forms, reports or documents, complete and correct copies
of which have previously been furnished to Olivetti. None of such forms, reports
or documents, including, without limitation, any financial statements or
schedules included therein, 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.
5.6 Financial Statements. The balance sheets and financial
statements included in the reports and other documents referred to in Section
5.5 fairly present the financial position of Wang as of the dates therein
indicated and the results of Wang's operations for the periods then ended and
have been prepared in conformity with U.S. GAAP applied on a consistent basis.
5.7 Political Payments. No offer, payment, gift, promise to pay or
give, or authorization of the payment or giving of any money or anything of
value has been made by or on behalf of Wang, either directly or through any
intermediary, to any Official of any Governmental Authority, or to any political
party or Official thereof, or to any candidate for governmental or political
office, for the purpose of affecting or influencing any act or decision of such
person or inducing such person to use his influence to affect or influence any
act or decision of any Governmental Authority in order to assist Wang in
obtaining or retaining business for or with, or directing business to, any
person. Wang has not received any communication (written or oral), whether from
a Governmental Authority, competitor, employee or otherwise, alleging that Wang
has engaged in any action that would be inconsistent with the representations
and warranties set forth in this Section 5.7. Wang has delivered or otherwise
made available for inspection to Olivetti, true, complete and correct copies of
any and all reports, studies, analyses, or other writings regarding any audits,
inquiries, investigations, reviews or other evaluations that have been conducted
by or on behalf of Wang or its Board of Directors with respect to the possible
occurrence of any action that would be inconsistent with the representations and
warranties set forth in this Section 5.7.
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5.8 Litigation. (a) Except as set forth in Schedule 5.8(a) of the
Wang Disclosure Schedule, there is no action, suit, proceeding or arbitration,
or (to the best knowledge of Wang) no inquiry, grievance or investigation,
pending (or, to the best knowledge of Wang after due inquiry, threatened) by or
before any court or governmental or other regulatory or administrative agency or
commission involving Wang involving an amount in excess of U.S. $500,000 or
which, in the aggregate, would have or result in a material adverse effect on or
change in the business, assets, properties, liabilities, results of operations
or condition (financial or otherwise) of Wang and its subsidiaries taken as a
whole.
(b) Except as set forth in Schedule 5.8(b) of the Wang
Disclosure Schedule, there is no action, suit, proceeding or arbitration, or (to
the best knowledge of Wang) no inquiry, grievance or investigation, pending (or,
to the best knowledge of Wang after due inquiry, threatened) by or before any
court or governmental or other regulatory or administrative agency or commission
which questions or challenges the validity of this Agreement or any of the
Related Agreements to which Wang is a party or any action taken or to be taken
by Wang pursuant to this Agreement or any of the Related Agreements to which
Wang is a party or in connection with the transactions contemplated hereby or
thereby and Wang does not know or have reason to know of any valid basis for any
such action, suit, inquiry, grievance, proceeding, arbitration or investigation.
5.9 Brokers and Finders. Except for Greenhill & Co., LLC, which is
serving as financial advisor to, and whose fees will be paid by, Wang, Wang is
not obliged to pay, and has not retained any broker or finder or other person
who is entitled to, any broker's or finder's fee based upon any agreement or
undertaking made by Wang in connection with this Agreement or any Related
Agreements to which it is a party or the transactions contemplated hereby or
thereby.
5.10 Letter Concerning Financing. Wang has previously delivered to
Olivetti a true, complete and correct copy of a letter from Bankers Trust
Company to Wang, dated February 20, 1998, concerning the financing for the
transactions contemplated by this Agreement and
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related financing, and, as of the date hereof, such letter has not been
withdrawn or modified in writing.
5.11 Net Operating Loss. Based solely on the cumulative owner shifts
of which Wang is aware as of the date of this Agreement, Wang has not been
subject to an "ownership change" (as defined in Section 382(g) of the Code)
which would limit the use of its United States net operating loss ("NOL") under
Section 382 of the Code. Based solely on the cumulative owner shifts of which
Wang is aware as of the date of this Agreement, the issuance of the Wang Shares
pursuant to Section 2.1(b)(ii) herein will not result in an "ownership change"
under Section 382(g) of the Code.
5.12 Absence of Adverse Change. Since December 31, 1997 (and
excluding any effects of the transactions contemplated hereby), Wang and its
subsidiaries, taken as a whole, have not suffered any material adverse change in
their business, assets, properties, liabilities, results of operations or
condition (financial or otherwise).
5.13 Disclosure. No representations or warranties by Wang in this
Agreement or in any Related Agreement to which Wang is a party and no statement
contained in the financial statements referred to in Section 5.6 or the Wang
Disclosure Schedule contain (or, with respect to any of the foregoing which are
completed, amended or supplemented after the date hereof, will contain) any
untrue statement of material fact or omit (or, with respect to any of the
foregoing which are completed, amended or supplemented after the date hereof,
will omit) to state any material fact necessary, in light of the circumstances
under which it was made, in order to make such representation, warranty or
statement not misleading.
ARTICLE VI
CERTAIN COVENANTS, AGREEMENTS AND
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
6.1 Conduct of Business Pending the Closing. (a) Except as otherwise
expressly provided in this Agreement or in any Related Agreement, or as
expressly
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required to consummate the transactions contemplated hereby or thereby, during
the period from the date of this Agreement through the Closing Date, Olivetti
shall cause each of Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries to conduct its business in the same manner as such businesses have
been conducted prior to the date hereof.
(b) Except as otherwise expressly provided in this Agreement
or in any Related Agreement, or as expressly required to consummate the
transactions contemplated hereby or thereby, during the period from the date of
this Agreement through the Closing Date, without the prior written consent of
Wang to be provided in accordance with Section 6.1(g), Olivetti shall not, shall
not cause and shall not permit:
(i) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to amend their respective certificates or articles of
incorporation, memoranda or articles of association or by-laws (or other
organizational documents), except as required to capitalize Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary in accordance with the
laws of their jurisdiction of incorporation;
(ii) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to (aa) issue, sell, deliver, transfer or redeem any of its
capital stock or other ownership interest or issue or sell any securities
convertible into, or options with respect to, or warrants to purchase or
rights to subscribe to, any of its capital stock or other ownership
interest, (bb) organize any new subsidiary or (cc) take any action that
would change the organizational structure of Olsy, Olsy Japan, Olsy Brazil
and the Controlled Subsidiaries from that set forth on Schedule 4.2(a) of
the Olivetti Disclosure Schedule;
(iii) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to effect any recapitalization, reclassification, stock
dividend, stock split or like change in capitalization;
(iv) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to sell, transfer, convey, assign, deliver or otherwise dispose
of any assets,
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properties, Contracts, Intellectual Property, rights, privileges,
franchises, operations or business (real, personal or mixed, tangible or
intangible) to Olivetti or any Olivetti Affiliate, except in exchange for
goods or services pursuant to existing contractual relationships and in
compliance with the same;
(v) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary (aa) except in exchange for goods or services pursuant to
existing contractual relationships and in compliance with the same, to
purchase or otherwise acquire any assets, properties, rights, privileges,
franchises, operations or business (real, personal or mixed, tangible or
intangible) from, (bb) to loan or advance any amount to or (cc) to amend
or enter into any new agreement or other arrangement with, Olivetti or any
Olivetti Affiliate;
(vi) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to declare, pay or set aside for payment any dividend or other
distribution (whether in cash, stock or property or any combination
thereof);
(vii) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary, except in the ordinary course of business and consistent with
past practice, to sell, transfer, convey, assign, deliver or otherwise
dispose of any assets, properties, rights, privileges, franchises,
operations or business (real, personal or mixed, tangible or intangible);
(viii) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to (aa) purchase or otherwise acquire any capital stock,
assets, properties, rights, privileges, franchises, operations or business
(real, personal or mixed, tangible or intangible) of, or any other
ownership interest in, any Person, except such of the foregoing as are
utilized in the ordinary course of their respective business consistent
with past practice, (bb) enter into any partnership, joint venture,
strategic alliance or sharing of revenues, profits, losses, costs or
liabilities with any
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Person which would be required to be disclosed pursuant to Section
4.14(b)(x) or (cc) enter into any agreement or other arrangement relating
to the development of Software requiring 1,000 or more man hours;
(ix) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to (aa) borrow any funds other than in the ordinary course of
business consistent with past practice or (bb) incur, assume or become
subject to, whether directly or by way of guarantee or otherwise, any
liability or obligation (whether reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured), except liabilities and
obligations incurred in the ordinary course of business and consistent
with past practice;
(x) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary, except in the ordinary course of business and consistent with
past practice, to pay, discharge or satisfy any liability or obligation
(whether reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured);
(xi) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to permit or allow any of their respective assets, properties,
rights, privileges, franchises, operations or business (real, personal or
mixed, tangible or intangible) to be subjected to any Lien other than (aa)
Liens that will be released or discharged at or prior to Closing, (bb)
Liens for Taxes not yet due or delinquent or being contested in good faith
by appropriate proceedings or (cc) statutory Liens arising in the ordinary
course of business by operation of law (including mechanic's, workmen's or
warehousemen's Liens);
(xii) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to write down or write up the value of any assets or write off
as uncollectible any trade accounts receivable;
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(xiii) Olivetti (with respect to Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary), Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to make any change in accounting methods, principles
or practices;
(xiv) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to make any individual expenditure or commitment for inventory
(including consumable spares) in excess of U.S. $500,000 or make aggregate
expenditures and commitments for inventory or spares in excess of U.S.
$5,000,000;
(xv) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to make any individual expenditure or commitment for additions
to property, plant or equipment (including repairable spares) in excess of
U.S. $500,000 or make aggregate expenditures and commitments for additions
to property, plant or equipment in excess of U.S.
$5,000,000;
(xvi) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary (aa) to dispose of any rights to the use of any Intellectual
Property or dispose of or disclose to any person any trade secret,
formula, process or know-how not theretofore a matter of public knowledge,
except in accordance with existing contractual commitments disclosed in
the Olivetti Disclosure Schedule or in the ordinary course of business
consistent with past practice or (bb) to permit to lapse any rights to use
any Intellectual Property;
(xvii) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to sell, transfer, convey, assign, deliver or otherwise dispose
of any assets, properties, rights, privileges, franchises, operations or
business (real, personal or mixed, tangible or intangible) to, or to
purchase or otherwise acquire any of the foregoing from, to pay, loan or
advance any amount to, or to enter into any agreement or other arrangement
with, any officer or director of Olivetti, Olsy, Olsy Japan, Olsy Brazil,
any Subsidiary, any Olsy Japan Subsidiary or any Affiliate of Olivetti or
any Associate of any such officer or director;
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(xviii) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to change any of the banking or safe deposit arrangements;
(xix) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to grant or extend any power of attorney to any Person (other
than full time employees of Olsy, Olsy Japan, Olsy Brazil or a Controlled
Subsidiary or attorneys engaged by Olsy, Olsy Japan, Olsy Brazil or a
Controlled Subsidiary) or act as guarantor, surety, co-signer, endorser,
co-maker, indemnitor or otherwise in respect of the obligation of any
Person other than (aa) Olsy, Olsy Japan, Olsy Brazil or a Controlled
Subsidiary or (bb) a supplier of products, services or support to
customers of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary in
the ordinary course of business consistent with past practice;
(xx) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to permit any of its current insurance (or reinsurance)
policies to be cancelled or terminated or any of the coverage thereunder
to lapse, unless simultaneously with such cancellation, termination or
lapse, replacement policies providing coverage equal to or greater than
coverage under those policies cancelled, terminated or lapsed are in full
force and effect other than in the ordinary course of business consistent
with past practice;
(xxi) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to increase in any manner the compensation of any of its
directors, officers or employees (including any such increase under any
Plan), except such increases required to comply with applicable law, any
Plan or any applicable collective bargaining agreement;
(xxii) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to hire any employees of Olivetti or any Olivetti Affiliate or
Olivetti or any Olivetti Affiliate to hire any employees of Olsy, Olsy
Japan, Olsy Brazil or any Controlled
Subsidiary;
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(xxiii) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary, except in the ordinary course of business consistent with past
practice, to hire any additional employees or terminate the employment of
any existing employees;
(xxiv) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to (aa) amend, terminate or create any Plan or (bb) enter into
any collective bargaining agreement;
(xxv) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary, except in the ordinary course of business and consistent with
past practice, to (aa) make any bid or proposal for, or enter into any
agreement, contract or commitment to, provide products, service or support
to customers or (bb) accept any bid or proposal from, or enter into any
agreement, contract or commitment with, any supplier;
(xxvi) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to settle any litigation set forth in Schedule 4.23(a) of the
Olivetti Disclosure Schedule without Wang's prior written consent, which
shall not be unreasonably withheld;
(xxvii) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to give any warranty or representation specifically with
respect to Year 2000 or eurocompliance; or
(xxviii) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to agree to do any of the foregoing.
(c) Except as otherwise expressly provided in this Agreement
or in any Related Agreement, or as expressly required to consummate the
transactions contemplated hereby or thereby, during the period from the date of
this Agreement through the Closing Date, Olivetti shall and shall cause each of
Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to use its
commercially reasonable best efforts to preserve its corporate existence and
business relationships intact, to keep available to Wang its officers and key
employees and to preserve for Wang its relationships with employees,
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licensors, suppliers, distributors, customers and others having business
relations with it, provided that Wang acknowledges that the transactions
contemplated by this Agreement and the Related Agreements may impact
relationships with the foregoing.
(d) During the period from the date of this Agreement
through the Closing Date, neither Olivetti, Olsy, Olsy Japan nor any Controlled
Subsidiary shall do any act or omit to do any act which act or omission would
cause a breach of any of the representations and warranties or covenants or
agreements made by Olivetti in this Agreement.
(e) During the period from the date of this Agreement
through the Closing Date, Olivetti shall and shall cause each of Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries to continue to generate
internal reports on the businesses of each of Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries in the ordinary course of business consistent with
past practice and to provide copies thereof to Wang promptly after the
generation thereof. Not later than February 28, 1998, Olivetti shall prepare and
deliver (or cause to be prepared and delivered) to Wang an unaudited combined
profit and loss statement for Olsy and the Subsidiaries and Olsy Japan and a
report on the combined net financial position of Olsy and the Subsidiaries, Olsy
Japan and Olsy Brazil for the twelve month period ended December 31, 1997, in
each case, reflecting the best estimate of the senior management of Olivetti,
Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries as of the date
thereof.
(f) During the period from the date of this Agreement
through the Closing Date, (i) Olivetti shall and shall cause each of Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries to strictly adhere to Italian
GAAP and OLGA as selected and applied in the preparation of the 9/30/97 Italian
GAAP Financial Statements and (ii) except as otherwise provided in this
Agreement or any Related Agreement, Olivetti shall not, and shall cause each of
Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries not to, make any
change in any policy or practice relating to non-cash balance sheet accruals or
adjustments.
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(g) Not later than two Business Days after the date hereof,
each of Olivetti and Wang shall designate two representatives to address matters
arising under Section 6.1(b) (respectively, the "Olivetti Interim Operating
Representatives" and the "Wang Interim Operating Representatives") and agree to
protocols for the communications contemplated by this Section 6.1(g). In the
event that Olivetti desires to cause Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to take any action which requires the consent of Wang
pursuant to Section 6.1(b), an Olivetti Interim Operating Representative shall
deliver a notice containing a description of the proposed action and the
rationale therefor to the Wang Interim Operating Representatives at the address
set forth in and in accordance with the provisions of Section 12.3. Within five
Business Days following the receipt of such notice, a Wang Interim Operating
Representative shall deliver a notice to an Olivetti Interim Operating
Representative containing either Wang's consent to such proposed action or
rationale for not consenting to such proposed action. If a Wang Interim
Operating Representative does not deliver such notice within such period, Wang
shall be deemed to have consented to such action.
(h) Notwithstanding anything in this Section 6.1 to the
contrary, Olivetti shall, per Wang's consent prior to the date hereof, cause (i)
Olivetti Belgium SA/NV to sell the 24% interest held in the capital of
Infotechnique S.A. for approximately Luxembourg Fl 70,000,000 (with the proceeds
of such sale remaining with Olsy) and (ii) Olsy to subscribe for its pro-rata
share of the capital increase resolved upon by the shareholders of Oliricerca to
cover 1997 losses.
6.2 Nonsolicitation. Neither Olivetti, any Affiliates of Olivetti
nor any directors, officers or employees of Olivetti or any such Affiliate
shall, and Olivetti shall use its best efforts to cause its and any such
Affiliate's investment bankers not to, directly or indirectly, (a) (i) initiate
contact with, solicit or encourage any inquiries or proposals by, (ii) enter
into any discussions or negotiations with, (iii) disclose, directly or
indirectly, any information not customarily disclosed concerning the Business,
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to or (iv) afford any
access to Olsy, Olsy Japan, Olsy Brazil or any Controlled
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Subsidiary or any properties, books and records relating to the Business or any
of the foregoing to any Person in connection with any possible proposal
regarding a sale or transfer of all or any portion of or any merger involving
(or any similar transaction involving) the assets, stock or business of Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary or (b) enter into any
agreement with any Person with respect to any such transaction. Olivetti shall
notify Wang immediately if any discussions or negotiations are sought to be
initiated, any inquiry or proposal is made or any such information is requested,
with respect to any such proposal, or if any such proposal is received or
indicated to be forthcoming. If Olivetti, any of its Affiliates, any of the
directors, officers or employees of Olivetti or any of its Affiliates or any of
its or any such Affiliate's investment bankers takes any action prohibited by
this Section 6.2, then Olivetti shall reimburse Wang for one-half of the
documented, external fees, costs and expenses incurred by Wang in connection
with the transactions contemplated by this Agreement including, without
limitation, fees, costs and expenses of investment bankers, accountants,
attorneys and other advisors and potential financial sources and their advisors
and travel expenses of Wang personnel (but excluding the time of such personnel)
(collectively "Wang Transaction Expenses"), by wire transfer of immediately
available funds to an account designated by Wang. Such reimbursement will be
made not later than ten Business Days after the date on which such action was
taken. In addition to the right to reimbursement provided for in this Section
6.2, Wang shall have all other legal and equitable remedies as may be available
to it, with respect to any action taken by Olivetti, any of its Affiliates, any
of the directors, officers or employees of Olivetti or any of its Affiliates or
any agent or representative of Olivetti or any of its Affiliates prohibited by
this Section 6.2 (including, without limitation, the right to initiate
arbitration pursuant to Section 12.12 with respect thereto).
6.3 Full Access. (a) From the date of this Agreement to the Closing
Date, Olivetti shall and shall cause each of Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries to (i) afford to Wang and its authorized
representatives reasonable access (including the time thereof) to all books,
records, plants, offices,
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warehouses and other facilities and properties of the Business, Olsy, Olsy
Japan, Olsy Brazil and each Controlled Subsidiary and their respective officers
and managers, (ii) permit Wang and its authorized representatives to make such
inspections thereof as Wang may reasonably request (including the time thereof)
and (iii) cause their officers and managers (and, where appropriate their
financial, legal, accounting or other advisory firms) to furnish Wang with such
financial and operating data and other information (which is not duplicative of
the reports delivered by Olivetti to Wang pursuant to Section 6.1(e)) with
respect to the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary as Wang may from time to time reasonably request.
(b) From the date of this Agreement to the Closing Date,
Wang shall (i) afford to senior officers of the Olivetti group reasonable access
(including the time thereof) to its senior officers responsible for finance,
legal, human resources and business development and cause such finance, legal,
human resources and business development officers to furnish such senior
officers of the Olivetti group with such financial and operating data and other
information (which is not duplicative of the reports delivered by Wang to
Olivetti pursuant to Section 6.10) with respect to, and to respond to questions
concerning, Wang as they may from time to time reasonably request or ask and
(ii) afford to Olivetti's legal counsel referred to in Section 12.3 reasonable
access (including the time thereof) to the so-called data room established in
connection with the transactions contemplated by this Agreement.
(c) No investigation by, or furnishing of information to, Wang shall
affect the right of Wang to rely on the representations, warranties, covenants
and agreements of Olivetti set forth herein (including, without limitation,
Article IV), and no investigation by, or furnishing of information to, Olivetti
shall affect the right of Olivetti to rely on the representations, warranties,
covenants and agreements of Wang set forth herein (including, without
limitation, Article V).
6.4 Supplements to Disclosure Schedules. (a) From time to time prior
to the Closing, Olivetti shall promptly (i) supplement or amend the Olivetti
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Disclosure Schedule with respect to (aa) any matter which is required to be set
forth or described in the Olivetti Disclosure Schedule as of the date hereof of
which Olivetti becomes aware after the date hereof or (bb) any matter hereafter
arising which, if existing or occurring on the date hereof, would have been
required to be set forth or described in the Olivetti Disclosure Schedule and
(ii) deliver a copy of such supplement or amendment to Wang. No supplement or
amendment of the Olivetti Disclosure Schedule made pursuant to this Section
6.4(a) shall be deemed to cure any breach of any representation or warranty made
by Olivetti unless Wang specifically agrees thereto in writing.
(b) From time to time prior to the Closing, Wang shall
promptly (i) supplement or amend the Wang Disclosure Schedule with respect to
(aa) any matter which is required to be set forth or described in the Wang
Disclosure Schedule as of the date hereof of which Wang becomes aware after the
date hereof or (bb) any matter hereafter arising which, if existing or occurring
on the date hereof, would have been required to be set forth or described in the
Wang Disclosure Schedule and (ii) deliver a copy of such supplement or amendment
to Olivetti. No supplement or amendment of the Wang Disclosure Schedule made
pursuant to this Section 6.4(b) shall be deemed to cure any breach of any
representation or warranty made by Wang unless Olivetti specifically agrees
thereto in writing.
6.5 Non-Governmental Consents. (a) Each of Wang and Olivetti shall
use its respective commercially reasonable best efforts to give or make or cause
to be given or made in a timely manner all notices to and filings with, and to
obtain or cause to be obtained, prior to Closing, all authorizations, consents
or approvals of, all Persons or Governmental Authority (in its capacity as a
customer of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary) required
to be given, made or obtained by it (or any of its Affiliates) in connection
with the execution and delivery of this Agreement or any of the Related
Agreements or the consummation of the transactions contemplated hereby or
thereby. In obtaining any authorization, consent or approval of any Person or
Governmental Authority (in its capacity as a customer of Olsy, Olsy Japan, Olsy
Brazil or a Controlled Subsidiary) required to be given, made or
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obtained by Olivetti (or any of its Affiliates) in connection with the execution
and delivery of this Agreement or any Related Agreement or the consummation of
the transactions contemplated hereby or thereby, Olivetti (i) shall submit to
such Person or Governmental Authority the standard form attached as Exhibit 11
hereto and shall not agree to any material modification thereof without Wang's
prior consent, which shall not be unreasonably withheld, and (ii) shall not
agree to any modification of any commercial or economic term of any Contract
between Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and such
Person or Governmental Authority or the assumption by Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary of any liability or obligation, without
Wang's prior written consent.
(b) Notwithstanding anything herein to the contrary, if (i)
the approval of the Board of Directors of Olsy Japan and (ii) the consent of
Toshiba Corporation under the Shareholders Agreement dated May 13, 1985 required
in connection with the consummation of the transactions contemplated hereby
(collectively, the "Olsy Japan Consents") are not all obtained prior to Closing,
(aa) the delivery of the certificate or certificates representing the Olsy Japan
Shares provided for in Section 3.2(a) shall be delayed until the earlier of (x)
the date all of the Olsy Japan Consents are obtained or (y) the date six months
after the Closing Date (the earlier of (x) and (y) being referred to herein as
the "Olsy Japan Delayed Date"), (bb) 71,200,000,000 Italian lira of the Cash
Portion of the Purchase Price shall be placed in escrow until the Olsy Japan
Delayed Date and (cc) Section 6.1 shall continue to apply to Olsy Japan until
the Olsy Japan Delayed Date. If all of the Olsy Japan Consents are not obtained
by the date six months after the Closing Date, (i) Olivetti shall retain the
certificate or certificates representing the Olsy Japan Shares and (ii) the
71,200,000,000 Italian lira in escrow shall be returned to Wang (together with
all interest thereon).
(c) Notwithstanding anything herein to the contrary, if the
consents of Bull S.A. under the Shareholders Agreement dated October 10, 1989
between Olivetti and Bull S.A., Master Agreement dated December 20, 1985 between
Olivetti and Bull S.A. and Shareholders Agreement dated December 20, 1985
between Olivetti and
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Bull S.A. required in connection with the consummation of the transactions
contemplated hereby (collectively the "Bull Consents") are not obtained prior to
Closing, (i) Olivetti shall cause Olsy or a Controlled Subsidiary to transfer
all the outstanding shares of SIAB S.A. to Olivetti or an Olivetti Affiliate for
an amount in cash equal to the net book value thereof at the time of such
transfer, (ii) Olivetti and Wang shall continue to use their respective
commercially reasonable best efforts to obtain the Bull Consents, and (iii) Wang
and Olivetti shall enter into an arrangement (such as a pledge or usufruct of
such shares) providing Wang with control (including, without limitation, the
economic benefit thereof) over SIAB S.A. as nearly as practicable equal to what
Wang would have had if SIAB S.A. remained a Controlled Subsidiary until the Bull
Consents are obtained. When the Bull Consents are obtained, Olivetti shall
transfer all the outstanding shares of SIAB S.A. to Olsy for an amount in cash
equal to the amount referred to in clause (i) of the preceding sentence.
(d) Notwithstanding anything herein to the contrary, if the
consents of the minority shareholders under the Shareholders Agreement for
Regulus S.p.A. dated July 28, 1994 as amended by Amendment dated March 11, 1996
by and among Olteco - Fin S.p.A. (predecessor to Olsy S.p.A.) Mr. Dalla Valle,
Mr. S. Ghedini, Mr. P. Natali, and Mrs. M. Pasquini required in connection with
the consummation of the transactions contemplated hereby (collectively the
"Regulus Consents") are not obtained prior to Closing, (i) Olivetti shall cause
Olsy or a Controlled Subsidiary to transfer all the outstanding shares of
Regulus S.p.A. to Olivetti or an Olivetti Affiliate for an amount in cash equal
to the net book value thereof at the time of such transfer, (ii) Olivetti and
Wang shall continue to use their respective commercially reasonable best efforts
to obtain the Regulus Consents and (iii) Wang and Olivetti shall enter into an
arrangement (such as a pledge or usufruct of such shares) providing Wang with
ownership and operational control (including, without limitation, the economic
benefit thereof) over Regulus S.p.A. as nearly as practicable equal to what Wang
would have had if Regulus S.p.A. remained a Controlled Subsidiary until the
Regulus Consents are obtained. When the Regulus Consents are obtained, Olivetti
shall transfer all the outstanding shares of Regulus S.p.A. to Olsy for an
amount in cash
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equal to the amount referred to in clause (i) of the preceding sentence.
(e) If the Master Distribution Agreement, dated December 14,
1993, by and between Olsy and Hitachi Data Systems Europe Holdings BV is not
renewed and as a result of such nonrenewal Olsy (or a Controlled Subsidiary)
terminates all or any portion of the employees of the division known as Olivetti
Informatica Centrale, Olivetti shall reimburse Wang for one-half of all amounts
associated with the termination of up to 150 of such employees (including
without limitation, all termination and incentives payments and reasonable
advisory costs with the exception of any TFR severance payment and of any
payment on account of unused holidays, thirteenth or fourteenth monthly salaries
and reimbursement of expenses).
(f) If the Engagement for Purchasing Services dated 1996
between Olivetti France and France Telecom or the Agreement #968004795 dated May
17, 1996 between Olivetti France and La Poste are terminated as a result of the
failure to obtain the consents thereunder required in connection with the
transactions contemplated hereby, Olivetti shall indemnify Wang against and hold
it harmless from the consequences (including, without limitation, lost profits)
of such termination.
6.6 Governmental Consents. (a) Each of Wang and Olivetti shall use
its respective commercially reasonable best efforts to make or cause to be made
in a timely manner all filings with, and to obtain or cause to be obtained,
prior to Closing, any permit, authorization, consent or approval of, any
Governmental Authority (in their capacity as such) required to be made or
obtained by it in connection with this Agreement or any of the Related
Agreements or the consummation of the transactions contemplated hereby or
thereby not specifically provided for in Section 6.6(b).
(b) As soon as practicable after the date hereof, Olivetti
and Wang will prepare and file (i) any notification or special report with
respect to this Agreement and the transactions contemplated hereby required
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), or any other statute, rule or regulation administered by the
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Antitrust Division of the United States Department of Justice (the "DOJ") and
the Federal Trade Commission (the "FTC") with the DOJ or the FTC, (ii)
pre-closing notifications with the Italian Competition Authority, German Federal
Cartel Office, Dutch Competition Authority and Australian Foreign Investment
Review Board and (iii) all other foreign pre-closing competition filings or
notifications, the failure of which to make would have or result in a material
adverse effect on either party. Olivetti and Wang shall promptly comply with any
request by any such Governmental Authority for additional documents or
information and shall use their best efforts to obtain early termination of the
waiting period under any of the foregoing.
6.7 Best Efforts. Subject to the terms and conditions of this
Agreement, Wang and Olivetti shall use their respective commercially reasonable
best efforts to take, or cause to be taken, and to do or cause to be done, all
action and all things necessary (including, without limitation, under applicable
laws and regulations) to consummate and make effective the transactions
contemplated by this Agreement or the Related Agreements as soon as practicable
after the date hereof.
6.8 Expenses. (a) Except as otherwise provided in Sections 6.2,
6.8(c) or 11.2(c)(i), whether or not the transactions contemplated hereby are
consummated, (i) all costs and expenses incurred through the Closing Date by
Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in
connection with this Agreement or any Related Agreement and the transactions
contemplated hereby or thereby shall be paid by Olivetti and (ii) all costs and
expenses incurred through the Closing Date by Wang in connection with this
Agreement or any Related Agreement and the transactions contemplated hereby or
thereby shall be paid by Wang.
(b) All costs and expenses required to be borne by Olivetti
pursuant to Article I and those costs and expenses incurred by Olivetti, Olsy,
Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary in
connection with the preparation, delivery and audit of the financial statements
referred to in Sections 4.6 or 6.12(c) shall be paid by Olivetti.
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(c) Olivetti shall pay all expenses associated with actions
required to be taken with regard to any credit facility, loan agreement or
similar agreement pursuant to Section 1.4(a) which were not completed prior to
the Closing and which Wang causes to be taken after the Closing (provided that
if Olivetti and Wang mutually agreed in writing pursuant to the proviso to
Section 1.4(a) to defer any such action with respect to a particular credit
facility, loan agreement or similar arrangement until after the Closing, Wang
shall defer such action as so mutually agreed).
6.9 Records; Access. (a) Not later than two Business Days after the
date hereof, each of Olivetti and Wang shall designate an appropriate number of
representatives (respectively, the "Olivetti Records Representatives" and the
"Wang Records Representatives") to: (i) identify all original agreements,
documents, books, records and files relating to the Business, Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary (or any Subsidiary or Olsy Japan
Subsidiary, if any) or any asset, property, Contract, Intellectual Property,
right, privilege, franchise, operation, business, liability or obligation of any
of the foregoing which are in the possession of Olivetti or an Olivetti
Affiliate (the "Olsy Records") and (ii) prepare copies of any of the Olsy
Records which also relate to Olivetti or an Olivetti Affiliate which Olivetti
elects to retain. Olivetti and Wang, respectively, shall cause the Olivetti
Records Representatives and the Wang Records Representatives to work in a
cooperative fashion. As soon as practicable after the Closing (but not later
than 90 days thereafter), Olivetti shall deliver the Olsy Records to Olsy. On
the Closing Date, Olivetti shall deliver or cause to be delivered to Olsy or a
Major Subsidiary the contents of the so-called data rooms established in
connection with the transactions contemplated by this Agreement as existing as
of the date hereof; Olivetti may copy the contents of such data rooms prior to
the delivery thereof.
(b) After the Closing and upon reasonable notice, Olivetti
shall give, or cause to be given, to Wang and its designated representatives
access to any agreements, documents, books, records or files containing
information concerning Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary (or any Subsidiary or
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Olsy Japan Subsidiary, if any) or the Drop-Down not delivered pursuant to
Section 6.9(a) relating to periods prior to the Closing, and Olivetti shall
permit such persons to examine and copy such books, records or files to the
extent requested by Wang, at Wang's expense, in connection with tax and
financial reporting matters, tax audits or any pending or threatened litigation
or other proceeding in which Wang, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary is involved. After the Closing, Olivetti shall direct the
employees of Olivetti and Olivetti Affiliates, upon reasonable notice from Wang
or Olsy, to be reasonably available to Wang or Olsy for the purpose of assisting
Wang or Olsy in connection with any matter referred to in the preceding sentence
(provided that if such assistance requires any such personnel to be absent from
their place of employment, Wang or Olsy shall reimburse such personnel's
employer for the cost of such absence and any travel costs incurred by such
employee in providing such assistance).
(c) After the Closing and upon reasonable notice, Wang shall
give, or cause to be given, to Olivetti and its designated representatives
access to any agreements, documents, books, records and files of Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary (or any Subsidiary or Olsy Japan
Subsidiary, if any) relating to periods prior to the Closing, and Wang shall
permit such persons to examine and copy such books, records and files to the
extent requested by Olivetti, at Olivetti's expense, in connection with tax and
financial reporting matters, tax audits or any pending or threatened litigation
or other proceeding in which Olivetti is involved and which involves or arises
out of the ownership or operation of the Business, Olsy, Olsy Japan, Olsy Brazil
or any Controlled Subsidiary by Olivetti. After the Closing, Wang shall direct
the employees of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries,
upon reasonable notice from Olivetti, to be reasonably available to Olivetti for
the purpose of assisting Olivetti in connection with any matter referred to in
the preceding sentence (provided that if such assistance requires any such
personnel to be absent from their place of employment, Olivetti shall reimburse
such personnel's employer for the cost of such absence and any travel costs
incurred by such employee in providing such assistance).
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(d) Olivetti and Wang acknowledge that in certain
circumstances it may be necessary for them and their designated representatives
to have access to, and to present to third parties, the originals of the
agreements, documents, books, records and files referred to in Sections 6.9(a)
or (b) and each shall give, or cause to be given, to the other and its
designated representatives access to such originals and, with the written
assurance of the other to return such originals, shall permit the other to
present such originals to third parties.
(e) Olivetti shall retain, and after the Closing Wang shall
cause each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to
retain, any agreements, documents, books, records or files relating to the
Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (or any
Subsidiary or Olsy Japan Subsidiary, if any) for not less than six years, and
Olivetti shall notify Wang, and Wang shall cause each of Olsy, Olsy Japan, Olsy
Brazil and the Controlled Subsidiaries to notify Olivetti, not less than 30 days
prior to the destruction of any documents, books, records or files.
6.10 Delivery of Reports By Wang. Between the date hereof and the
Closing Date, Wang shall deliver to Olivetti promptly after the filing thereof,
copies of all forms, reports and documents filed by Wang with the SEC or
distributed by Wang to its stockholders, all of which shall comply at the time
of filing in all material respects with all then applicable requirements of the
Securities Act and the Exchange Act. Prior to the date hereof, Wang has provided
Olivetti's previously designated representative with four true, complete and
correct copies of the most recent report delivered to Wang's lenders pursuant to
Section 7.1 of that certain Credit Agreement among Wang, Bankers Trust, as agent
and the other persons named therein on Schedule I, dated August 29, 1996;
between the date hereof and the Closing, Wang shall provide Olivetti's
previously designated representative with four true, complete and correct copies
of all other reports delivered to Wang's lenders pursuant to such section.
Olivetti shall not permit such representative to distribute such reports or the
Financing Plan referred to in Section 9.8, or disclose the contents thereof, to
any Person other than the three
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Olivetti officers previously identified. Olivetti shall not permit any
reproduction of all or any portion of any such report.
6.11 Financing. (a) From the date of this Agreement to the Closing
Date, Olivetti shall and shall cause each of Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries to (i) afford to financing sources identified by
Wang and their officers and authorized representatives reasonable access
(including the time thereof) to all books, records, plants, offices, warehouses
and other facilities and properties of each of Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries and their respective officers and managers, (ii)
permit such financing sources and their officers and authorized representatives
to make such inspections thereof as they may reasonably (including the time
thereof) request, (iii) cause their officers and managers (and, where
appropriate, their financial, legal, accounting or other advisory firms) to
furnish such financing sources with such financial and operating data and other
information with respect to the Business, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary as such financing sources may from time to time reasonably
request and (iv) cause the officers and managers of each of Olivetti, Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries to otherwise assist Wang in
arranging financing from such financing sources, including, without limitation,
by attending meetings with such financing sources; provided, however, that Wang
shall cooperate with Olivetti to minimize any disruption of its business
resulting from the foregoing and to endeavor to satisfy any such financing
source's request for access to books or records from those contained in the
so-called data rooms established in connection with the transactions
contemplated by this Agreement. The terms and conditions of arrangements for
financing satisfying the condition in Section 9.8 shall permit, as of the
Closing, the consummation of the transactions contemplated by this Agreement and
the Related Agreements, including without limitation, the payment of the
Ancillary Consideration.
(b) Wang shall use its commercially reasonable best efforts
to satisfy the condition in Section 9.8.
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6.12 Certain Information and Financial Statements. (a) Olivetti has
previously delivered to Wang a true, complete and correct copy of a
reclassified, projected consolidated balance sheet of Olsy, Olsy Japan and
certain of the Subsidiaries projected as of December 31, 1997 (the "12/31/97
Projected Balance Sheet"). The 12/31/97 Projected Balance Sheet is attached as
Schedule 6.12(a) hereto. Olivetti hereby represents and warrants to Wang that
(i) the projected consolidated financial position of Olsy, Olsy Japan and such
Subsidiaries presented in the column of the 12/31/97 Projected Balance Sheet
entitled "Projected MRP 31/12/1997" reflected the best estimate of the senior
management of Olivetti, Olsy, Olsy Japan and such Subsidiaries (which was based
on and was consistent with the management reporting package available at that
time), as of the date of the preparation of the 12/31/97 Projected Balance
Sheet, of the projected consolidated financial position of Olsy, Olsy Japan and
such Subsidiaries as of December 31, 1997 and (ii) the pro forma adjustments to
the 12/31/97 Projected Balance Sheet reflected on Schedule 6.12(a) fairly
reflect the adjustments required to be made to reflect the transactions
contemplated by this Agreement and the actions which Olivetti is required to
have taken or to cause to be taken pursuant to Section 1.8(a).
(b) Olivetti acknowledges that during the course of the
negotiation of the transactions contemplated by this Agreement, Olivetti or its
advisors have heretofore supplied Wang with a certain book of written documents,
the table of contents of which is set forth on Schedule 6.12(b) hereto (the
"Information Documents"). Olivetti hereby represents and warrants to Wang that
such Information Documents were prepared from time to time: (i) as to the
historical data contained therein, on the basis of the information available at
Olsy in Ivrea (Italy) or obtained from the controllers of the Controlled
Subsidiaries which information was consistent with the books, records and
systems of Olsy, Olsy Japan or the Controlled Subsidiaries, as the case may be,
and (ii) as to the projected data contained therein, on the basis of then
current best estimates of senior management of Olivetti, Olsy, Olsy Japan and
the Controlled Subsidiaries of the projected performance reflected therein.
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(c) Not later than April 15, 1998, Olivetti shall prepare
and deliver (or cause to be prepared and delivered) to Wang true, complete and
correct copies of (i) a consolidated balance sheet of Olsy and the Subsidiaries,
a balance sheet of Olsy Japan, a balance sheet of Olsy Brazil and a combined
balance sheet of Olsy and the Subsidiaries, Olsy Japan and Olsy Brazil, in each
case as of December 31, 1997 (such combined balance sheet being referred to
herein as the "12/31/97 Balance Sheet"), a consolidated statement of income of
Olsy and the Subsidiaries, a statement of income of Olsy Japan, and a combined
statement of income of Olsy and the Subsidiaries and Olsy Japan (the "12/31/97
Income Statement"), in each case for the twelve month period then ended and a
consolidated statement of cash flows of Olsy and the Subsidiaries, a statement
of cash flows of Olsy Japan and a combined statement of cash flows of Olsy and
the Subsidiaries and Olsy Japan, in each case for the twelve month period then
ended, all (other than statements of cash flows) audited by Coopers & Lybrand,
independent certified public accountants, whose audit report thereon shall be
included therein and accompanied by footnotes (collectively, the "12/31/97
Financial Statements") and (ii) a version of the 12/31/97 Balance Sheet
reclassified consistent with the 12/31/97 Projected Balance Sheet (the
"Reclassified 12/31/97 Balance Sheet"). The 12/31/97 Financial Statements (i)
shall give a true and fair view of the consolidated financial position of Olsy
and the Subsidiaries, the financial position of Olsy Japan, the financial
position of Olsy Brazil and the combined financial position of Olsy and the
Subsidiaries, Olsy Japan and Olsy Brazil, in each case as of December 31, 1997,
and the consolidated results of operations and cash flows of Olsy and the
Subsidiaries, the results of operations and cash flows of Olsy Japan and the
combined results of operations and cash flows of Olsy and the Subsidiaries and
Olsy Japan, in each case, for the period then ended, and (ii) shall be prepared
in accordance with Italian GAAP and OLGA as selected and applied in the
preparation of the 9/30/97 Italian GAAP Financial Statements.
(d) Not later than 105 days after the Closing Date, Wang
shall prepare and deliver (or cause to be prepared and delivered) to Olivetti
true, complete and correct copies of (i) a consolidated balance sheet of Olsy
and the Subsidiaries, a balance sheet of Olsy Japan,
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a balance sheet of Olsy Brazil and a combined balance sheet of Olsy and the
Subsidiaries and Olsy Japan (such combined balance sheet being referred to
herein as the "Closing Balance Sheet"), in each case as of (aa) the Closing Date
or (bb) if the Closing Date is not a month end, as of the month end immediately
preceding the Closing Date (such date being referred to herein as the "Closing
Financial Statements Date"), consolidated statements of income of Olsy and the
Subsidiaries, a statement of income of Olsy Japan, a statement of income of Olsy
Brazil and a combined statement of income of Olsy and the Subsidiaries, Olsy
Japan and Olsy Brazil, in each case for the period beginning on January 1, 1998
and ending on the Closing Financial Statements Date (the "Closing Financial
Statements Period"), and a consolidated statement of cash flows of Olsy and the
Subsidiaries, a statement of cash flows of Olsy Japan, a statement of cash flows
of Olsy Brazil and a combined statement of cash flows of Olsy and the
Subsidiaries, Olsy Japan and Olsy Brazil, in each case for the Closing Financial
Statements Period, all (other than statements of cash flows) audited by Ernst &
Young LLP ("Ernst & Young"), independent certified public accountants, whose
audit report thereon shall be included therein, and accompanied by footnotes
(collectively, the "Closing Financial Statements") and (ii) a version of the
Closing Balance Sheet reclassified consistent with the 12/31/97 Projected
Balance Sheet (the "Reclassified Closing Balance Sheet"). The Closing Financial
Statements (i) shall give a true and fair view of the consolidated financial
position of Olsy and the Subsidiaries, the financial position of Olsy Japan, the
financial position of Olsy Brazil and the combined financial position of Olsy
and the Subsidiaries and Olsy Japan, in each case as of the Closing Financial
Statements Date and the consolidated results of operations and cash flows of
Olsy and the Subsidiaries, the results of operations and cash flows of Olsy
Japan, the results of operations and cashflows of Olsy Brazil and the combined
results of operations and cash flows of Olsy and the Subsidiaries, Olsy Japan
and Olsy Brazil, in each case, for the Closing Financial Statements Period and
(ii) shall be prepared in accordance with Italian GAAP and OLGA as selected and
applied in the preparation of the 9/30/97 Italian GAAP Financial Statements,
except (aa) if such application was improper under Italian GAAP or OLGA or (bb)
to the extent that such application was inconsistent. In connection
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with the preparation of the Closing Financial Statements, (i) if any of the
actions required to be taken pursuant to Section 1.8(a) shall not have been
taken prior to the Closing Financial Statements Date, Wang shall cause such
actions to be taken effective as of the date such actions should have been taken
pursuant to Section 1.8(a) and (ii) Wang shall cause all repair costs
capitalized by Olsy North America, Inc. not previously reversed and expensed to
be reversed and expensed.
(e) After the date hereof and through the Closing Date, upon
reasonable notice, Olivetti shall give, or cause to be given, to Wang and its
representatives access to the books, records, files and personnel of the
Business, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries for
purposes of monitoring the preparation or audit of the 12/31/97 Financial
Statements. After the date hereof, upon reasonable notice, Olivetti shall give,
or cause to be given, to Wang and its representatives access to the books,
records and files of Olivetti (and if still in the possession of Olivetti, of
Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries) relating to any
of the financial statements delivered by Olivetti to Wang pursuant to this
Agreement and any work papers, audits or reports thereon and all analyses,
reports, memoranda and documents relating thereto for purposes of performing its
obligations or enforcing its rights under Sections 6.13, 6.14, 6.16, 6.17, 6.18,
6.19, 6.20, 6.21 or 6.22 or with respect to the Earn-Outs.
(f) After the Closing and through the date the Closing
Financial Statements are delivered pursuant to Section 6.12(d), upon reasonable
notice, Wang shall give, or cause to be given, to Olivetti and its
representatives access to the books, records, files and personnel of Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries for purposes of preparing or
auditing the 12/31/97 Financial Statements and monitoring the preparation or
audit of the Closing Financial Statements. After the Closing, upon reasonable
notice, Wang shall give, or cause to be given, to Olivetti and its
representatives access to the books, records and files of Olsy, Olsy Japan, Olsy
Brazil and the Controlled Subsidiaries relating to any of the financial
statements delivered by Wang to Olivetti pursuant to this Agreement and any work
papers, audits or reports thereon and all
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analyses, reports, memoranda and documents relating thereto for purposes of
performing its obligations or enforcing its rights under Sections 6.13, 6.14,
6.16, 6.17, 6.18, 6.19, 6.20, 6.21 or 6.22 or with respect to the Earn-Outs.
6.13 1997 EBITDA Purchase Price Adjustment. (a) Not later than 60
days after the date Olivetti delivers (or causes to be delivered) the 12/31/97
Financial Statements (the "12/31/97 Objection Period"), Wang shall notify
Olivetti of any and all objections, if any, to the 12/31/97 Financial Statements
(the "12/31/97 Objections"). If Wang fails to notify Olivetti of any 12/31/97
Objections within the 12/31/97 Objection Period, Wang shall be deemed to have
accepted the 12/31/97 Financial Statements. If Wang notifies Olivetti of any
12/31/97 Objections within the 12/31/97 Objection Period, Olivetti and Wang
shall attempt to resolve such 12/31/97 Objections not later than 30 days after
the date Wang notifies Olivetti of such 12/31/97 Objections. If Olivetti and
Wang are unable to resolve all such 12/31/97 Objections within such period,
either party may submit the unresolved 12/31/97 Objections to arbitration in
London, England before three arbitrators, then active certified public
accountants, in accordance with the Rules of Arbitration of the International
Chamber of Commerce (the "Rules") then in effect as modified herein, as the sole
means of resolving such 12/31/97 Objections. Each party shall bear its own costs
in any such proceeding, and the expenses of the arbitration tribunal shall be
borne by Wang and Olivetti in equal portions. The decision of the arbitrators
shall be final and binding upon Wang and Olivetti and may be enforced in any
court of competent jurisdiction. To the fullest extent permitted by law, each
party to this Agreement irrevocably submits to the jurisdiction of such forum
with respect to unresolved 12/31/97 Objections and waives any objection it may
have to either the jurisdiction or venue of such forum with respect to
unresolved 12/31/97 Objections. If any 12/31/97 Objections are to be submitted
to arbitration pursuant to this Section 6.13(a), then each party shall nominate
an active certified public accountant knowledgeable in Italian GAAP to serve as
its party-appointed arbitrator within ten days of submission or its receipt of
notice thereof. The two arbitrators so nominated shall mutually nominate a third
then active certified public accountant
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knowledgeable in Italian GAAP within ten days of the nomination of the second
arbitrator to serve as the chair of the arbitral tribunal. If any party fails to
timely nominate an arbitrator or if the two party-nominated arbitrators fail to
timely agree on a third arbitrator, then any party may request that an active
certified public accountant be appointed by the International Chamber of
Commerce Court of Arbitration within 15 days of such request in accordance with
the Rules. The hearing (if any) shall be held, if possible, within 30 days of
the confirmation of the appointment of the third arbitrator, and the tribunal
shall render its award within 30 days of the conclusion of the hearing or, if
there is no hearing, within 30 days after the parties' final submissions to the
arbitrators. The parties expressly agree that leave to appeal under Section 45
or 69 of the English Arbitration Act 1996 may not be sought with respect to any
question of law arising in the course of the arbitration or with respect to any
award made.
(b) If the amount of 1997 EBITDA (as defined in Section
6.13(d)) is less than 120,000,000,000 Italian lira, then, not later than (i) if
Wang fails to notify Olivetti of any 12/31/97 Objections within the 12/31/97
Objection Period, five days after expiration of the 12/31/97 Objection Period or
(ii) if Wang notifies Olivetti of any 12/31/97 Objections within such 12/31/97
Objection Period, five days after the date all such 12/31/97 Objections are
resolved (by mutual agreement or arbitration) in accordance with Section 6.13(a)
(the later of clause (i) or (ii) being referred to as the "1997 EBITDA
Determination Date"), Olivetti shall pay Wang an amount (the "1997 EBITDA
Determined Cash Payment Amount") in cash, in immediately available funds, equal
to 60,000,000,000 Italian lira minus 4 times the difference between
120,000,000,000 Italian lira and the amount of 1997 EBITDA. If the amount of
1997 EBITDA is equal to or greater than 105,000,000,000 Italian lira, Olivetti
shall not be obligated to make any payment to Wang pursuant to this Section
6.13(b).
(c) If the amount of 1997 EBITDA is greater than
88,750,000,000 Italian lira, then, effective as of the EBITDA Determination
Date, the number of rights shall be adjusted to a number of Rights (the "1997
EBITDA Determined Number of Rights") equal to (i) if the amount of 1997 EBITDA
is 105,000,000,000 Italian lira or more,
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5,000,000 or (ii) if the amount of 1997 EBITDA is less than 105,000,000,000
Italian lira but more than 88,750,000,000 Italian lira, then a number determined
by multiplying 5,000,000 by a fraction, the numerator of which equals
65,000,000,000 minus 4 times the difference between 105,000,000,000 Italian lira
and the amount of 1997 EBITDA and the denominator of which is 65,000,000,000. If
the amount of 1997 EBITDA is equal to or less than 88,750,000,000 Italian lira,
the Rights shall become wholly void and of no force or effect.
(d) The term "1997 EBITDA" means the sum of (i) the
aggregate amount of earnings of Olsy and the Subsidiaries and Olsy Japan, before
interest (including securitization and factoring related charges), taxes,
depreciation and amortization and excluding any extraordinary items set forth on
Schedule 6.13(d), derived from the 12/31/97 Income Statement (as adjusted to
reflect the resolution of any 12/31/97 Objections, if any, by mutual agreement
or arbitration in accordance with Section 6.13(a)) and (ii) 25,000,000,000
Italian lira of the share capital increase made pursuant to Sections 1.8(a)(v)
and 1.8(b). For purposes of determining 1997 EBITDA, repair costs capitalized by
Olsy North America, Inc. during the nine month period ended September 30, 1997
shall be reversed and expensed and repair costs of Olsy North America, Inc. for
the three month period ended December 31, 1997 shall be expensed. By way of
example and solely for illustration purposes, Schedule 6.13(d) hereto
illustrates how 1997 EBITDA is derived from the 9/30/97 Italian GAAP Income
Statement in accordance with this definition.
6.14 Closing Balance Sheet Purchase Price Adjustment. (a) Not later
than 60 days after the date Wang delivers (or causes to be delivered) the
Closing Financial Statements (plus a number of days equal to the number of days,
if any, in the month of August falling in such period the "Closing Objection
Period"), Olivetti shall notify Wang of any and all objections, if any, to the
Closing Financial Statements (the "Closing Objections"). If Olivetti fails to
notify Wang of any Closing Objections within the Closing Objection Period,
Olivetti shall be deemed to have accepted the Closing Financial Statements. If
Olivetti notifies Wang of any Closing Objections within the Closing Objection
Period, Wang and Olivetti shall attempt to resolve such Closing
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Objections not later than 30 days after the date Olivetti notifies Wang of such
Closing Objections. If Wang and Olivetti are unable to resolve all such Closing
Objections within such period, either party may submit the unresolved Closing
Objections to arbitration in London, England before three arbitrators, then
active certified public accountants, in accordance with the Rules then in effect
as modified herein, as the sole means of resolving such Closing Objections. Each
party shall bear its own costs in any such proceeding, and the expenses of the
arbitration tribunal shall be borne by Wang and Olivetti in equal portions. The
decision of the arbitrators shall be final and binding upon Wang and Olivetti
and may be enforced in any court of competent jurisdiction. To the fullest
extent permitted by law, each party to this Agreement irrevocably submits to the
jurisdiction of such forum with respect to unresolved Closing Objections and
waives any objection it may have to either the jurisdiction or venue of such
forum with respect to unresolved Closing Objections. If any Closing Objections
are to be submitted to arbitration pursuant to this Section 6.14(a), then each
party shall nominate an active certified public accountant knowledgeable in
Italian GAAP to serve as its party-appointed arbitrator within ten days of
submission or its receipt of notice thereof. The two arbitrators so nominated
shall mutually nominate a third then active certified public accountant
knowledgeable in Italian GAAP within ten days of the nomination of the second
arbitrator to serve as the chair of the tribunal. If any party fails to timely
nominate an arbitrator or if the two party-nominated arbitrators fail to timely
nominate on a third arbitrator, then any party may request that an active
certified public accountant be appointed by the International Chamber of
Commerce Court of Arbitration within 15 days of such request in accordance with
the Rules. The hearing (if any) shall be held, if possible, within 30 days of
the confirmation of the appointment of the third arbitrator, and the tribunal
shall render its award within 30 days of the conclusion of the hearing or, if
there is no hearing, within 30 days after the parties' final submissions to the
arbitrators. The parties expressly agree that leave to appeal under Section 45
or 69 of the English Arbitration Act 1996 may not be sought with respect to any
question of law arising in the course of the arbitration or with respect to any
award made.
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(b) Not later than (i) if Olivetti fails to notify Wang of
any Closing Objections within the applicable Closing Objection Period, five days
after expiration of such Closing Objection Period or (ii) if Olivetti notifies
Wang of any Closing Objections within such Closing Objection Period, five days
after the date all such Closing Objections are resolved (by mutual agreement or
arbitration) in accordance with Section 6.14(a) (the later of clauses (i) or
(ii) being referred to as the "Closing Balance Sheet Determination Date"),
either: (aa) Olivetti shall pay Wang the amount by which the Target Tangible
Equity Value (as defined in Section 6.14(d)) exceeds the sum of (x) the Closing
Tangible Equity Value (as defined in Section 6.14(d)) and (y) the Closing
Tangible Equity Value Adjustment Amount (as defined in Section 6.14(d)); or (bb)
Wang shall pay Olivetti the amount by which the sum of (x) the Closing Tangible
Equity Value and (y) the Closing Tangible Equity Value Adjustment Amount exceeds
the Target Tangible Equity Value. Any payment pursuant to this Section 6.14(b)
by Olivetti shall be made in cash first by the escrow agent under the Cash
Escrow Agreement to Wang by wire transfer of immediately available funds in
escrow in accordance with the Cash Escrow Agreement and, if the amount of such
payment exceeds funds in escrow available therefor, by Olivetti to Wang by wire
transfer of immediately available funds. Any payment pursuant to this Section
6.14(b) by Wang shall be made in cash by Wang to Olivetti by wire transfer of
immediately available funds.
(c) Not later than the Closing Balance Sheet Determination
Date, Olivetti shall pay Wang (i) the amount, if any, by which the 12/31/97 Net
Financial Position was greater than negative 65,000,000,000 Italian lira
(meaning there was less than 65,000,000,000 Italian lira in cash) after giving
effect to the actions required to be taken pursuant to Sections 1.3(a) or (b)
and (ii) an amount equal to the amount of Cash Leakage (as defined in Section
6.14(d)), if any. Any payment pursuant to this Section 6.14(c) by Olivetti shall
be made in cash, to the extent any funds remain in escrow under the Cash Escrow
Agreement after any payment therefrom pursuant to Section 6.14(b), first by the
escrow agent under the Cash Escrow Agreement to Wang by wire transfer of
immediately available funds in escrow in accordance with the Cash Escrow
Agreement and, if the amount of such payment
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exceeds funds in escrow available therefor, by Olivetti to Wang by wire transfer
of immediately available funds.
(d) The following terms shall have the following meanings:
Cash Leakage. The term "Cash Leakage" means the use of cash
(decrease in cash) due to dividends and equity distributions, or payments and
loans out of the ordinary course of business as prohibited and not otherwise
waived pursuant to Section 6.1 for the Closing Financial Statements Period (as
if such Section 6.1 applied throughout the Closing Financial Statements Period);
provided that any such use of cash is not captured in the Closing Tangible
Equity Value and provided that any loan or purchased asset made other than in
the ordinary course of business and not approved in writing by Wang shall be
transferred to Olivetti free of charge other than any related expense of
transfer.
Closing Tangible Equity Value. The term "Closing Tangible Equity
Value" means the result obtained by subtracting the amount of "Intangible
Assets" shown on the Reclassified Closing Balance Sheet (as adjusted to reflect
the resolution of any Closing Objections, if any, by mutual agreement or
arbitration in accordance with Section 6.14(a)) from the amount of "Total
Shareholders' Equity" shown on the Reclassified Closing Balance Sheet (as
adjusted to reflect the resolution of any Closing Objections, if any, by mutual
agreement or arbitration in accordance with Section 6.14(a)).
Closing Tangible Equity Value Adjustment Amount. The term "Closing
Tangible Equity Value Adjustment Amount" means the amount of the "Loss"
(expressed as a positive number) derived from the Closing Financial Statements
and the books and records relating thereto (as adjusted to reflect the
resolution of any Closing Objections, if any, by mutual agreement or arbitration
in accordance with Section 6.14(a)), less the sum of the following (each of
which shall be expressed as a positive number and similarly derived): (i) the
amortization of intangible assets and the amortization of goodwill for the
Closing Financial Statements Period; (ii) any non-recurring loss, expense or
provision or non ordinary course of business expense for the Closing Financial
Statements Period, including any audit
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adjustment resulting from the Closing Financial Statements audit that effects
shareholders' equity through the income statement, provided that such
non-recurring loss, expense or provision or non ordinary course of business
expense do not result from any of the actions in accordance with Section 1.8 or
Section 6.1(h) or that have not been agreed in writing by Olivetti and Wang; and
(iii) the amount, if any, by which the 1998 Operating Loss (as defined in this
Section 6.14(d)) exceeds 65,000,000,000 Italian lira. By way of example and
solely for illustration purposes, Schedule 6.14(d) hereto sets forth some
computations (using hypothetical numbers) of the Closing Tangible Equity Value
Adjustment Amount in accordance with this definition and based on the assumption
that the "Tangible Equity Value" as of 12/31/97 is equal to the Target Tangible
Equity Value.
12/31/97 Net Financial Position. The term "12/31/97 Net Financial
Position" means the amount, positive or negative, of "Total Net Debt" shown on
the Reclassified 12/31/97 Balance Sheet (as adjusted to reflect the resolution
of any EBITDA Objections, if any, by mutual agreement or arbitration in
accordance with Section 6.13(a)) and, if negative, means there is net cash and,
if positive, means there is net debt.
1998 Operating Loss. The term "1998 Operating Loss" means the amount
of Income/(Loss) for the Closing Financial Statements Period derived from the
Closing Financial Statements and the books and records relating thereto (as
adjusted to reflect the resolution of any Closing Objections, if any, by mutual
agreement or arbitration in accordance with Section 6.14(a)) before the
following (each of which shall be similarly derived): (i) taxes for the Closing
Financial Statements Period; (ii) minority interest for the Closing Financial
Statements Period; (iii) accounting adjustments relating to decisions made by
Wang after the Closing; (iv) any closing costs associated with the transactions
provided for in Sections 1.9 and 1.10; (v) goodwill amortization for the Closing
Financial Statements Period; (vi) non-recurring income, gain, loss, expense or
provision for the Closing Financial Statements Period, including any audit
adjustment resulting from the Closing Financial Statements audit that effects
shareholders' equity through the income statement; and (vii) net financial
charges for the Closing Financial Statements Period.
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Target Tangible Equity Value. The term "Target Tangible Equity
Value" means 361,700,000,000 Italian lira.
(e) For purposes of the adjustments to the Purchase Price
set forth in this Section 6.14, no effect shall be given to (i) any amount which
effected the adjustment to the Purchase Price set forth in Section 6.13 if the
Purchase Price was adjusted pursuant thereto or (ii) any amount covered by the
more specific provisions of Sections 6.18, 6.19, 6.20 or 6.21.
6.15 Olsy Germany Asbestos Clean-Up. After the Closing and while
Wang has authority to do so, Wang shall not permit Olsy Germany to change the
current scope of work of, or the current contractor administering, the clean-up
referred to in Section 10.2(a)(vi) without Olivetti's consent, which consent
shall not be unreasonably withheld. If the clean-up referred to in Section
1.8(a)(vii) is completed in accordance with all Environmental Laws for less than
the restructuring fund therefor referred to in Section 1.8(a)(vii), Wang shall
cause Olsy Germany to refund the difference to Olivetti if Wang then has
authority to do so.
6.16 Guarantees. (a) After the Closing, Wang shall use its
commercially reasonable best efforts to replace financial guarantees of Olivetti
with respect to the business of Olsy, Olsy Japan, Olsy Brazil or any Subsidiary,
including, without limitation, financial guarantees with respect to VAT,
customs, import/export, rent deposits or insurance, to be replaced with a
financial guarantee of Wang or Affiliate of Wang. Wang shall indemnify Olivetti
for any amounts paid by Olivetti after the Closing (other than with respect to
events which occurred prior to the Closing and of which Olsy, Olsy Japan, Olsy
Brazil or any Subsidiary had notice) under any such financial guarantees prior
to the replacement thereof pursuant to this Section 6.16(a).
(b) Olivetti hereby represents and warrants to Wang that (i)
Schedule 6.16(b) hereto sets forth all bid, performance, advance payment or
residual bonds (the "Customer Bonds") issued by Olivetti with respect to (aa)
any Customer Contract which as of the date hereof, has not been fully performed
by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and under
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which any product, service or support provided after the date hereof can be
invoiced in accordance with such Customer Contract, (bb) any Customer Contract
with respect to which, as of the date hereof, there is any trade receivable on
the books and records of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary, (cc) any Customer Contract which, as of the date hereof, has not
been fully performed by Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary with a customer to whom Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary is providing invoiceable products, services or support,
(dd) any Customer Contract which is being performed in substantial part by a
subcontractor of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or
(ee) Customer Contracts or tender mutually agreed by Olivetti and Wang prior to
the date hereof and (ii) Schedule 6.16(b) does not set forth any Customer Bond
issued with respect to any Customer Contract or tender with respect to which any
action, suit or proceeding is pending (or to the Best Knowledge of the Olivetti
Group, threatened). In reliance on the foregoing representation and warranty,
after the Closing, Wang shall indemnify Olivetti if and to the extent any of the
Customer Bonds set forth on Schedule 6.16(b) are called after the Closing as a
result of any breach (other than a breach which occurred prior to the Closing
and of which Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary had
notice) by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary of the
Customer Contract with respect to which Olivetti issued any such Customer Bond
(provided that the sole and exclusive remedy for Wang for any breach of the
foregoing representation and warranty with respect to any particular Customer
Bond or Customer Contract shall be that Wang shall be relieved of the foregoing
indemnification obligation with respect to such Customer Bond or Customer
Contract). Olivetti hereby waives all rights of subrogation or similar rights,
whether arising under law or contract (including, without limitation, any
counter guarantee given by Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to Olivetti), with respect to all Customer Bonds issued by Olivetti
with respect to the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary not listed on Schedule 6.16(b) hereto.
(c) Olivetti hereby represents and warrants to Wang that (i)
Schedule 6.16(c) hereto sets
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forth all corporate guarantees issued by Olivetti to suppliers of Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary and with respect to each such
corporate guarantee, the supplier to which it was issued and the amount
outstanding thereunder as of December 31, 1997 and (ii) that Schedule 6.16(c)
does not set forth any such corporate guarantee with respect to which any
action, suit or proceeding is pending (or to the Best Knowledge of Olivetti,
threatened). In reliance on the foregoing representation and warranty, after the
Closing, Wang shall (i) use its commercially reasonable best efforts to assist
Olivetti in obtaining the return of such corporate guarantees and (ii) indemnify
Olivetti for any amounts paid by Olivetti after the Closing other than with
respect to events which occurred prior to the Closing and of which Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary had notice) under any such
corporate guarantees prior to the return thereof pursuant to this Section
6.16(c) (provided that the sole and exclusive remedy for Wang for any breach of
the foregoing representation and warranty with respect to any particular
corporate guarantee shall be that Wang shall be relieved of the foregoing
indemnification obligation with respect to such corporate guarantee).
6.17 Certain Employee Benefit Matters. (a) Olivetti prior to the
Closing, and Wang on and after the Closing, shall use their respective best
efforts, and shall cause Olsy U.K. Ltd. ("Olsy U.K.") to use its respective best
efforts, take all actions necessary or appropriate to (i) cause the trustees of
the Olsy U.K. Employees Pension Scheme (the "UK Scheme") to declare a full
pension contribution holiday such that, for the period ending on April 1, 2002
(the "Holiday Close Date"), Olsy U.K. will not be required to make any
contributions to the UK Scheme and (ii) amend the UK Scheme such that no
individual first hired after the Closing Date shall become eligible to
participate therein. Olivetti shall promptly reimburse Wang for any
contributions required (whether pursuant to applicable law or as may be required
by the trustees of the UK Scheme) to be made by Wang or Olsy U.K. to the UK
Scheme on or before the Holiday Close Date. Without limiting any other provision
of this Section 6.17(a), (i) Wang shall not take any actions during the period
ending on the Holiday Close Date which would indicate to the trustees of the
U.K. Pension Scheme that (aa) Wang
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intends to alter the U.K. Pension Scheme in any manner other than as required by
applicable law, or (bb) the U.K. Pension Scheme should be funded at more than
105% of the Minimum Funding Requirement (as defined in applicable law), (ii) if
Wang elects to terminate or wind up the U.K. Pension Scheme, Olivetti shall have
no further liability with respect to such scheme, and (iii) if Wang elects to
increase benefits under the U.K. Pension Scheme in any manner, the cost of such
increased benefits shall be borne solely by Wang.
(b) Prior to the Closing, Olivetti shall assume all
liabilities and obligations of Olsy or any Controlled Subsidiary in Italy
arising under or pursuant to or otherwise relating to the FASIDO, FSIO-SI and
FSIO-SC plans of Olsy or any Controlled Subsidiary in Italy (the "Welfare
Plans") and shall take all such actions necessary or appropriate to ensure that
neither Wang, Olsy nor any Controlled Subsidiary has any liability therefore
following the Closing. Without limiting the generality of the foregoing, for so
long as Olivetti provides benefits to its Italian employees under the Welfare
Plans or other similar plans, Olivetti shall provide benefits to employees and
former employees of Olsy or any Controlled Subsidiary in Italy and their
respective dependents and beneficiaries (other than any individual (and his or
her dependents and beneficiaries) who first becomes employed by Olsy or any
Controlled Subsidiary in Italy after the Closing Date) under the Welfare Plans
or such other similar Plans, as applicable, which benefits shall not be
materially less favorable to the participants therein as those in effect with
respect to other participants therein at any relevant time. Wang shall, or shall
cause Olsy or any Controlled Subsidiary in Italy to, reimburse Olivetti for the
normal contributions incurred by Olivetti in providing such benefits to
employees of Olsy or any Controlled Subsidiary in Italy and their dependents and
beneficiaries but shall have no obligation to pay any amounts in respect of the
benefits provided by Olivetti, the Welfare Plans or such other similar plans to
(i) any individual who, at the time such benefits are provided, is a former
employee or retiree of Olsy or any Controlled Subsidiary in Italy or (ii) their
respective dependents and beneficiaries. The amount required to be reimbursed by
Wang pursuant to the preceding sentence shall be
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determined on the same basis as is applied with respect to other participating
employers for the applicable year.
(c) As soon as practicable after the date hereof, Olivetti
shall provide to Wang a complete and accurate list of all active and inactive
participants and beneficiaries in the pension plans of any Controlled Subsidiary
in Germany, the United Kingdom or Spain and all information required in order
for Wang to effectively administer each such plan including, but not limited to,
with respect to each such participant and beneficiary, the (i) date of birth,
(ii) date of hire, (iii) gender, (iv) pensionable earnings, (v) marital status,
(vi) frozen benefit amount (in the case of the frozen pension plans of
Controlled Subsidiaries in Germany, the United Kingdom or Spain only) and (vii)
date of termination and/or retirement and benefit amounts (in the case of
inactive participants and beneficiaries only).
(d) Olivetti shall pay to Wang an amount equal to any
amounts required to be contributed by Wang, Olsy or any Controlled Subsidiary in
Spain to or in respect of the retirement or death benefits of former employees
of Controlled Subsidiaries in Spain accrued as of the date hereof. Such payment
or payments shall be made no later than the third Business Day preceding the day
any such amounts are required to be paid by Wang, Olsy or any Controlled
Subsidiary in Spain.
6.18 Determination of Funding Status of OCJ Pension Plan. (a)
Olivetti shall promptly reimburse Wang for all amounts paid by Wang, Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary during the period commencing on
the Closing Date and ending on December 31, 2000 in respect of benefits accrued
under the Olivetti Corporation of Japan Employee Benefit Fund (the "OCJ Pension
Plan") as of the Closing Date as described in clause (A)(iii) of the definition
of Part I Assets in Section 6.18(b) below.
(b) For purposes of this Agreement, the following terms
shall have the following meanings:
OCJ Asset Requirement. The term "OCJ Asset Requirement" means the
present value of all benefits, whether or not vested, accrued under the OCJ
Pension Plan for each OCJ Designated Employee as of December 31, 2000,
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determined under U.S. Benefit Accounting Standards. For purposes of the
foregoing, (a) all service of the OCJ Designated Employees through the Closing
Date, projected future increases in remuneration, and cost of living adjustments
to pensions shall be taken into account, (b) the actuarial method to be used
will be the Projected Unit Credit Method as prescribed in U.S. Benefit
Accounting Standards, and (c) the actuarial assumptions to be used shall be the
assumptions specified in Schedule 6.18(b). If an actuarial assumption is
required but is not specified in Schedule 6.18(b), an assumption proposed by
Wang (on a basis which is in accordance with U.S. Benefit Accounting Standards)
and consented to by Olivetti, which consent shall not be unreasonably withheld,
shall be used.
OCJ Benefit Deficit. The term "OCJ Benefit Deficit" means the
excess, if any, of (a) the OCJ Asset Requirement over (b) the fair market value,
determined as of December 31, 2000, of the Part I Assets held under the OCJ
Pension Plan to the extent such Part I Assets are transferred to or remain with
Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (or a trust or
other funding arrangement to which Wang, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary is a party) as of such date.
OCJ Benefit Surplus. The term "OCJ Benefit Surplus" means the
excess, if any, of (a) the fair market value, determined as of December 31,
2000, of the Part I Assets held under the OCJ Pension Plan to the extent such
assets are transferred to or remain with Wang, Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary (or a trust or other funding arrangement to which
Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a party) as
of such date over (b) the OCJ Asset Requirement; provided however, that the
amount taken into account under clause (a) of this definition shall not exceed
the OCJ Asset Requirement, except to the extent that Wang could, consistent with
applicable law, either withdraw such excess from the OCJ Pension Plan or utilize
such excess to reduce the contributions it would otherwise be required to make
thereto, in either case, during the five-year period immediately following
December 31, 2000.
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OCJ Designated Employee. The term "OCJ Designated Employee" means an
employee of Olivetti, any Affiliate of Olivetti, Olsy, Olsy Japan, Olsy Brazil
or any Controlled Subsidiary who will continue as or become an employee of Olsy,
Olsy Japan, Olsy Brazil or a Controlled Subsidiary as of the Closing and who
participates in the OCJ Pension Plan. The term shall also include any other
person for whom liabilities under the OCJ Pension Plan are assumed by Wang,
Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary (or retained by Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary) as of the Closing.
Olivetti Actuary. The term "Olivetti Actuary" shall mean an
actuarial consulting firm selected by Olivetti to perform the functions
described in Section 6.18(c).
Olivetti Tax Adjustment. The term "Olivetti Tax Adjustment" means
the number one (1) minus the highest marginal rate of tax (expressed as a
decimal number) actually applicable to the income of Olivetti in its fiscal year
in which the payment, if any, required to be made to Olivetti under Section
6.18(d) below is required to be made.
Part I Assets. The term "Part I Assets" means the excess, if any, of
(A) the sum of (i) the assets held under the OCJ Pension Plan as of the Closing
Date, (ii) a pro rata portion, determined on a monthly basis (based upon the
ratio of the value of the Part I Assets to the value of all assets held under
the OCJ Pension Plan) of the income, gains and losses of the OCJ Pension Plan
after the Closing Date and prior to January 1, 2001 and (iii) the amount, if
any, by which the amount of the contributions made to the OCJ Pension Plan after
the Closing Date and prior to January 1, 2001 in respect of individuals who were
participants in the OCJ Pension Plan as of the Closing Date exceeds the normal
cost funding contributions during such period in respect of individuals who were
participants in the OCJ Pension Plan as of the Closing Date (excluding any such
amounts attributable to any enhancement of the benefit formula under the OCJ
Pension Plan adopted after the Closing Date) over (B) all amounts paid or
distributed from the OCJ Pension Plan after the Closing Date and prior to
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January 1, 2001 in respect of benefits accrued thereunder as of the Closing
Date.
U.S. Benefit Accounting Standards. The term "U.S. Benefit Accounting
Standards" means the U.S. GAAP relating to Employee Benefit Plans under FAS 87
and 88, and other relevant principles and, in particular, shall refer to the
methodology used to determine the projected benefit obligation (as that term is
defined in FAS 87).
Wang Actuary. The term "Wang Actuary" shall mean an actuarial
consulting firm selected by Wang to perform the functions described in Section
6.18(c).
Wang Tax Adjustment. The term "Wang Tax Adjustment" means the number
one (1) minus the highest marginal rate of tax (expressed as a decimal number)
actually applicable to the income of Olsy Japan in its fiscal year in which the
payment, if any, required to be made to Wang under Section 6.18(d) below is
required to be made.
(c) As soon as practicable following December 31, 2000, but
in no event more than 90 days following the later of (i) December 31, 2000 and
(ii) the date Olivetti or the Olivetti Actuary delivers to the Wang Actuary all
information requested by the Wang Actuary pursuant to the last sentence of this
Section 6.18(c), Wang shall cause the Wang Actuary to compute the OCJ Benefit
Deficit or OCJ Benefit Surplus, as the case may be, and to deliver its
calculations together with reasonable supporting information with respect
thereto, to the Olivetti Actuary. If the Olivetti Actuary objects to the manner
in which the actuarial assumptions specified in Schedule 6.18(b) are applied in
such calculations, it shall notify the Wang Actuary of its objections, and shall
supply to the Wang Actuary reasonable detail supporting its objections, no later
than 15 days following its receipt of the calculations of the Wang Actuary. If
the Olivetti Actuary fails to so object during such 15 day period, the
calculations of the Wang Actuary shall be final and binding upon the parties. If
the Olivetti Actuary shall notify the Wang Actuary of its objections during such
15 day period, the Wang Actuary and the Olivetti Actuary shall consult with one
another and attempt to agree upon the correct application of the actuarial
assumptions. If, at the end of the 15
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day period commencing on the date the Olivetti Actuary notifies the Wang Actuary
of its objections to the calculations, the Wang Actuary and the Olivetti Actuary
shall fail to so agree, the appropriate application of such actuarial
assumptions shall be determined by arbitration by an actuary mutually agreeable
to the Wang Actuary and the Olivetti Actuary, which determination shall be final
and binding upon the parties and may be enforced in any court having
jurisdiction. If the Wang Actuary and the Olivetti Actuary fail to agree on an
actuary arbitrator within 20 days after the expiration of the 15 day period in
the preceding sentence, then either Wang or Olivetti may request that the
International Chamber of Commerce Court of Arbitration appoint such actuary
arbitrator within 30 days of such request. Wang shall be responsible for all
fees and expenses of the Wang Actuary, Olivetti shall be responsible for all
fees and expenses of the Olivetti Actuary, and Wang and Olivetti shall each be
responsible for 50% of the fees and expenses incurred by any actuary appointed
in accordance with the preceding sentences. Olivetti shall, or shall cause the
Olivetti Actuary to, provide to the Wang Actuary, as soon as reasonably
practicable following any such request, such information with respect to the OCJ
Pension Plan and the OCJ Designated Employees as the Wang Actuary shall
reasonably request in order to perform the calculations required of it pursuant
to this Section 6.18(c). The arbitrator shall render an award if possible within
90 days of his or her appointment.
(d) As soon as practicable following the final determination
of the OCJ Benefit Deficit and the OCJ Benefit Surplus, but in no event more
than 10 days following such determination, Olivetti shall pay to Wang an amount
equal to eighty percent (80%) of the OCJ Benefit Deficit multiplied by the Wang
Tax Adjustment or Wang shall pay to Olivetti an amount equal to eighty percent
(80%) of the OCJ Benefit Surplus multiplied by the Olivetti Tax Adjustment.
6.19 Spares. In preparing (or causing to be prepared) the Closing
Financial Statements, Wang shall (a) conduct (or cause to be conducted) a
physical inventory of all of the fixed assets of Olsy, Olsy Japan, Olsy Brazil
or any Controlled Subsidiary and (b) prepare (or cause to be prepared) a report
with respect to the spares ("Repairable Spares") of Olsy, Olsy Japan, Olsy
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Brazil or any Controlled Subsidiary which are accounted for in accordance with
OLGA as fixed assets (the "Repairable Spares Report") reflecting (i) by part
number, the number of Repaired Repairable Spares, (ii) by part number, the
number of Repairable Spares which would have to be acquired or repaired by Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary to reach target stocking
levels for such part number set by Olsy as of December 31, 1997 (the "12/31/97
TSLs") and (iii) by part number, the aggregate cost of acquiring or repairing,
whichever is less, a number of Repairable Spares to reach the 12/31/97 TSLs for
such part number and the total of such costs for all part numbers (the "Total
Repairable Spares Cost"). If Olivetti objects to the Repairable Spares Report,
Olivetti shall notify Wang of such objections within not later than 60 days
after receipt thereof and Wang and Olivetti shall attempt to resolve such
objections, or failing that submit such objections to arbitration, in
conjunction with any Closing Objections in accordance with Section 6.14(a). Not
later than five days after Wang delivers the Spares Report to Olivetti (or if
Olivetti notifies Wang of any objections to the Repairable Spares Report, five
days after the resolution thereof by mutual agreement or arbitration), Olivetti
shall pay Wang an amount in cash equal to the lesser of (a) the Total Repairable
Spares Cost or (b) 20% of the net book value of the Repairable Spares on the
12/31/97 Balance Sheet (excluding any residual capitalized repair costs).
Olivetti shall have the right to participate in the physical inventory referred
to in this Section 6.19.
6.20 Trade Receivables. As promptly as practicable after the end of
each month following the Closing, Wang shall cause Olsy to deliver to Olivetti
an ageing report for the trade receivables of Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries as of the Closing Financial Statements Date (other
than trade receivables owed from Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary), classified according to the categories set forth on Schedule 6.20
hereto (each a "Trade Receivables Ageing Report"). Within ten Business Days of
receipt of a Trade Receivables Ageing Report, Olivetti shall purchase any trade
receivable of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary
reflected on such report which has not been collected, from the date of billing,
within the period specified for
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trade receivables of such category on Schedule 6.20 hereto, plus 45 days, for an
amount in cash, in immediately available funds, equal to the amount of such
trade receivable (less the amount of any reserve specifically matched in the
books and records of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary to
such trade receivable as of the Closing Date, if any); provided, however, that
Olivetti shall not be obligated to purchase any trade receivables pursuant to
this Section 6.20 until an amount in trade receivable equal to the aggregate
general reserve therefor reflected in the books and records of Olsy, Olsy Japan,
Olsy Brazil and the Controlled Subsidiaries as of the Closing Financial
Statements Date shall not have been collected, from the date of billing, within
the applicable periods specified on Schedule 6.20 hereto, plus 45 days. If Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary subsequently receives any
payment with respect to any trade receivable sold to Olivetti pursuant to this
Section 6.20, such payment shall be promptly (and in any event, within ten
Business Days of receipt) paid over to Olivetti. At the request of Olivetti,
Wang shall cause Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary to
continue its collection efforts, in its ordinary course of business and
consistent with its past practice, with respect to any trade receivable
purchased from it pursuant to this Section 6.20; with respect to any such trade
receivable collected, Olsy, Olsy Japan, Olsy Brazil or the Controlled
Subsidiary, as the case may be, shall retain 5% of the amount collected and
promptly (and in any event, within ten Business Days of receipt) pay the balance
of the amount collected over to Olivetti.
6.21 Work in Progress. (a) Attached as Schedule 6.21 hereto is a
report on the Customer Contracts with respect to which unbilled trade
receivables for work in progress are reflected in the books and records of Olsy
as of December 31, 1997 (the "Unbilled Trade Receivables") which sets forth (i)
each such Customer Contract and (ii) with respect to each such Customer Contract
the date by which the Unbilled Trade Receivables relating thereto will be paid.
As promptly as practicable after the end of each month following the Closing,
Wang shall cause Olsy to deliver to Olivetti an ageing report for the Unbilled
Trade Receivables (each, a "WIP Ageing Report"). Within ten Business Days of
receipt of a WIP Ageing Report, Olivetti shall purchase
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any Unbilled Trade Receivable on such report which has not been paid by the date
specified therefor on Schedule 6.21 hereto for an amount in cash, in immediately
available funds, equal to the amount of such Unbilled Trade Receivable. If Olsy
subsequently receives any payment with respect to any Unbilled Trade Receivable
sold to Olivetti pursuant to this Section 6.21, such payment shall be promptly
(and in any event, within ten Business Days of receipt) paid over to Olivetti.
At the request of Olivetti, Wang shall cause Olsy to continue its collection
efforts, in its ordinary course of business and consistent with its past
practice, with respect to any Unbilled Trade Receivables purchased from it
pursuant to this Section 6.21; with respect to any such trade receivable
collected, Olsy shall retain 5% of the amount collected and promptly (an in any
event, within ten Business Days of receipt) pay the balance of the amount
collected over to Olivetti. After the Closing, Wang shall cause Olsy to use its
commercially reasonable best efforts to continue to perform the Customer
Contracts set forth on Schedule 6.21 relating to the work in progress in
substantially the same manner as such Customer Contract was being performed
prior to the Closing.
(b) As promptly as practicable at the end of the year ending
December 31, 1999, Wang shall deliver (or cause to be delivered) to Olivetti a
report with respect to the work in progress receivables and inventories of
"Poste Italiane" set forth on Schedule 6.21 hereto showing the amount thereof
which remained unpaid as of December 31, 1999, and within ten Business Days of
receipt of such report Olivetti shall pay Wang an amount in cash, in immediately
available funds, equal to the amount of such work in progress receivables and
inventories which remained unpaid as of December 31, 1999. If Olsy subsequently
receives any payment with respect to any such work in progress receivables and
inventories, such payment shall be promptly (and in any event, within ten
Business Days of receipt) paid over to Olivetti.
6.22 Statutory Recapitalization. As soon as practicable after the
Closing, Wang shall recapitalize (or shall cause to be recapitalized) any
Controlled Subsidiary which was not, as of the Closing Date, capitalized in
accordance with local law, and Olivetti
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shall reimburse Wang for all Taxes and costs associated with such
recapitalization (up to the amount required by local law) within ten days of the
receipt of a notice from Wang specifying the amount of such Taxes and costs.
6.23 Coopers & Lybrand Consent. (a) Simultaneously with the
execution and delivery of this Agreement, Coopers and Lybrand delivered to Wang
a duly executed letter in which Coopers & Lybrand (i) acknowledged that it
understood that Wang intends to file the U.S. GAAP Financial Statements in
statements and reports required to be filed by Wang from time to time with the
SEC pursuant to the Securities Act and the Exchange Act ("SEC Filings") and (ii)
subject to its usual procedures and professional standards and after being given
reasonable opportunity to review such SEC Filings and documents incorporated by
reference therein, has agreed that it shall consent to the inclusion of any of
its audit reports on the U.S. GAAP Financial Statements in any SEC Filing.
Olivetti shall use its commercially reasonable best efforts to cause Coopers &
Lybrand to consent to the inclusion of any of its audit reports on the U.S. GAAP
Financial Statements in any SEC Filing.
(b) If Coopers & Lybrand fails, for any reason whatsoever,
to consent to the inclusion of any such audit report in any SEC filing, Olivetti
(i) shall provide Wang and its representatives access to its books, records,
files and personnel commensurate with what it provided to Coopers & Lybrand in
connection with its audit of the 12/31/96 Italian GAAP Financial Statements, the
9/30/97 Italian GAAP Financial Statements or the U.S. GAAP Financial Statements
so that Wang may expeditiously cause any or all or such financial statements to
be reaudited and (ii) shall use its commercially reasonable best efforts to
cause Coopers & Lybrand to cooperate with the auditors engaged by Wang to
conduct such audit. Olivetti acknowledges that if Coopers & Lybrand fails to
consent to the inclusion of any such audit report in any SEC filing and Wang is
denied in any manner whatsoever the access provided for in this Section 6.23(b),
Wang will suffer irreparable injury and damage. Therefore, Olivetti agrees that
if Wang is denied the access provided for in this Section 6.23(b) in any manner
whatsoever Wang will be entitled to, in addition to all other remedies available
to it, injunctive relief and
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specific performance to prevent a breach of and to secure the enforcement of
this Section 6.23(b) hereof.
(c) Wang acknowledges that the U.S. GAAP Financial
Statements are not being delivered for purposes of the adjustments to the
Purchase Price pursuant to Sections 6.13 or 6.14.
6.24 Cooperation in Italy. (a) (i) For a period of two years
following the Closing, Olivetti will cause Olivetti executives to use their
commercially reasonable best efforts to provide Wang executives with personal
introductions to significant customers of Olsy and customer prospects with whom
Olivetti or its officers maintain relationships.
(ii) For a period of two years following the Closing,
Olivetti will cause Olivetti executives to provide Wang, upon Wang's
request, with advice and the benefit of Olivetti's past experience
relating to the handling of industrial relations and government relations
issues and relations with banks and other financial institutions in Italy.
(iii) For a period of two years following the Closing, and
provided that Wang or Olsy has advised Olivetti of its position regarding
the matters concerned and Wang or Olsy's position is not unreasonable, or
adverse to Olivetti, Olivetti will afford Wang or Olsy reasonable access
to Olivetti's personnel who deal with industrial, labor and governmental
relations issues with respect to industrial relations matters for
consultation on such issues and will cause its executives (aa) to assist
in arranging meetings relating to industrial relations matters with
industrial, labor and governmental officials and (bb) at Wang or Olsy's
request, with reasonable notice and at reasonable times, attend such
meetings and assist Wang or Olsy in negotiating with such officials.
(iv) For a period of two years following the Closing, and
provided that Wang or Olsy has advised Olivetti of its position regarding
the matters concerned and Wang or Olsy's position is not unreasonable or
adverse to Olivetti, Olivetti
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will afford Wang and Olsy reasonable access to Olivetti's personnel who
deal with governmental officials and officers of banks and financial
institutions for consultations on such issues and will cause its executive
(aa) to assist Wang or Olsy in arranging meetings with governmental
officials and officers of banks and financial institutions and (bb) at
Wang or Olsy's request, with reasonable notice and at reasonable times,
attend such meetings and assist Wang and Olsy in negotiations with such
officials.
(b) Each party agrees to comply with all applicable laws,
regulations, court orders and ethical rules in the performance of the
obligations described herein. Olivetti and Wang expressly agree and understand
that nothing contained in this Section 6.24 shall be construed as any inducement
or invitation to violate any law, regulation, court order or ethical rule.
6.25 Cooperation With Respect to Certain Business Items and
NonBusiness Items. (a) Wang acknowledges that there may be Business Items which
are being used in providing products, services or support to customers of the
Business and other customers of Olivetti or an Olivetti Affiliate or pursuant to
or under which products, services or support are being provided to customers of
the Business and other customers of Olivetti or an Olivetti Affiliate, and for a
period of two years following the Closing, shall cause Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary to cooperate with Olivetti or such Olivetti
Affiliate to permit Olivetti or such Olivetti Affiliate to continue to use such
Business Items to provide products, services or support to their respective
customers or to continue to provide products, services or support pursuant to or
under such Business Items to their respective customers in substantially the
same manner as used or provided prior to the Closing as is practicable.
(b) Olivetti acknowledges that there may be NonBusiness
Items which are being used in providing products, services or support to
customers of the Business or pursuant to or under which products, services or
support are being provided to customers of the Business, and for a period of two
years following the Closing, Olivetti shall (or shall cause an Olivetti
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Affiliate to) cooperate with Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to permit Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary
to continue to use such NonBusiness Items to provide products, services or
support to their respective customers or to continue to provide products,
services or support pursuant to or under such NonBusiness Items to their
respective customers in substantially the same manner as used or provided prior
to the Closing as is practicable.
6.26 Certain Intellectual Property Covenants. (a) Olivetti
Trademarks. Wang acknowledges, accepts and respectively undertakes, as follows:
(i) Olivetti is and shall remain the sole and exclusive
owner of any and all rights to the exclusive use of any and all Trademarks
(as defined in Section 4.15(a)(viii) consisting of or including the words
"Olivetti" and/or any other word including as a prefix the combination of
letters "OLI", howsoever written, pronounced or spelled and in whatever
form of written, verbal or visual communication, which constitute a family
of Trademarks (collectively, the "Olivetti Trademarks"), in any form and
for any purpose.
(ii) Olsy, Olsy Brazil, Olsy Japan and certain Subsidiaries
have used heretofore and will continue to use hereafter until Closing the
Olivetti Trademarks in the carrying out of the Business on the strength of
license rights and privileges which have been granted or as has been
otherwise consented by Olivetti to Olsy, Olsy Brazil, Olsy Japan and the
relevant Subsidiaries solely in consideration of their belonging to the
group of companies controlled by Olivetti, and only so long as such group
relationship continues to exist, and any and all such license rights and
privileges or consents granted by Olivetti to Olsy, Olsy Brazil, Olsy
Japan and the Subsidiaries shall and shall to all effects be deemed to be
automatically terminated or revoked forthwith upon Closing and of no
further effect.
(iii) Any Olivetti Trademark which is registered or applied
for registration by Olsy, Olsy Brazil, Olsy Japan or any Subsidiary
anywhere in the
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world: (aa) if registered or applied for registration at any time before
Closing, shall qualify as a Non Business Item for the purposes of Section
1.2 hereof and (bb) if registered or applied for registration after
Closing by Wang or any Affiliate of Wang in violation of the Transitional
Authorization and Trademark License Agreement substantially in the form of
Exhibit 12 hereto (the "Transitional Authorization and Trademark License
Agreement"), shall be deemed for all purposes to be the sole and exclusive
property of Olivetti, and the registration or application for registration
thereof shall be promptly transferred by Wang or the relevant Affiliate of
Wang (at Wang's expense and without any consideration from Olivetti) to
Olivetti or any Affiliate of Olivetti, as Olivetti may direct, without
prejudice of any other right or remedy available to Olivetti against Wang,
Olsy, Olsy Brazil, Olsy Japan or any Subsidiary under the Transitional
Authorization and Trademark License Agreement or the applicable laws of
any country of competent jurisdiction.
(iv) All rights or consents granted to Olsy, Olsy Brazil,
Olsy Japan and all Subsidiaries in the Olivetti Trademarks are terminated
upon the Closing and all future rights to use the Olivetti Trademarks
shall be governed by the Transitional Authorization and Trademark License
Agreement.
(b) Licensed Olivetti Intellectual Property.
(i) Olivetti hereby grants to Wang, Olsy, Olsy Japan, Olsy
Brazil and the Controlled Subsidiaries, to the extent it is entitled to do
so, a perpetual, worldwide, non-exclusive license to use, copy, modify,
enhance, maintain, distribute and create derivative works of the Licensed
Olivetti Intellectual Property (except Olivetti Trademarks the use of
which shall be governed by the Transitional Authorization and Trademark
License Agreement) in a manner and for purposes consistent with, and to an
extent not exceeding, the manner, purposes and extent in and for which
such Licensed Olivetti Intellectual Property was in use by Olsy, Olsy
Japan, Olsy Brazil and the relevant Controlled
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Subsidiaries during the two-year period ending on the date of Closing and
in connection with any direct and immediate evolution thereof imposed by
technological evolution or by the market.
(ii) If subsequent to Closing Wang wishes (whether directly
or through Olsy, Olsy Brazil, Olsy Japan or any Subsidiary) to use, copy,
modify, enhance, maintain, distribute and create derivative works of the
Licensed Olivetti Intellectual Property in a manner, for purposes and/or
to an extent exceeding that specified in Paragraph (i) above, then, in
such event, Wang shall notify Olivetti thereof, in writing, and the terms
and conditions of any such new license to use, copy, modify, enhance,
maintain, distribute and/or create derivative works of such Licensed
Olivetti Intellectual Property shall be negotiated and agreed upon by
Olivetti and Wang on an arms-length basis.
(iii) After Closing Wang shall and shall cause Olsy, Olsy
Brazil, Olsy Japan and any relevant Subsidiary to extend to Olivetti or
the relevant Affiliate of Olivetti all reasonable cooperation in respect
of the foregoing. After Closing Olivetti shall extend to Wang and the
Controlled Subsidiaries all reasonable co-operation in respect of the
foregoing. To the extent Wang or a Controlled Subsidiary reasonably
requires a copy of any Licensed Olivetti Intellectual Property to continue
the use of such Licensed Olivetti Intellectual Property, Olivetti shall
deliver such copy to Wang or the Controlled Subsidiary.
(c) Registration of Ownership.
(i) Olivetti agrees that promptly upon execution of this
Agreement it shall or shall cause any relevant Affiliate of Olivetti to
file the necessary documents to record Olsy, Olsy Japan, Olsy Brazil or a
Controlled Subsidiary, as applicable, as the registered owner of such
Patents as constitute an Olsy Intellectual Property (as identified in
Schedule 4.15(b)(i)(aa) or Schedule 4.15(b)(ii)(aa) of Olivetti Disclosure
Schedule) and are not so recorded as at the date hereof. Olivetti and Wang
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shall each pay one-half of all costs and expenses for such filings.
(ii) Olivetti further agrees that promptly upon request by
Wang it shall or shall cause any relevant Affiliate of Olivetti to file
the necessary documents to record Olsy, Olsy Brazil, Olsy Japan or a
Controlled Subsidiary, as applicable, as the registered owner of such
registered Trademarks as constitute an Olsy Intellectual Property (as
identified in Schedule 4.15(b)(i)(bb) or Schedule 4.15(b)(ii)(bb) of
Olivetti Disclosure Schedule) and are not so recorded as at the date
hereof; provided however that Wang agrees that it shall not require
without reason the filing of such documents in respect of such Trademarks
as consist of or contain the word Olsy and such other Trademarks which are
not in use by Olsy, Olsy Brazil, Olsy Japan or the Controlled
Subsidiaries. Olivetti shall pay all costs and expenses for such filings.
6.27 Subleases. Prior to the Closing Date, Olivetti shall have
caused the terms of those sublease agreements listed on Schedule 6.27 to be
amended in the manner set forth on Schedule 6.27.
ARTICLE VII
TAX MATTERS
7.1 Preparation and Filing of Tax Returns; Payment of Taxes. (a)
Olivetti shall prepare or cause to be prepared (at its own cost and expense and
in a manner consistent with past practice) all Tax Returns of Olsy, Olsy Japan,
Olsy Brazil and/or each Controlled Subsidiary (including the Tax Returns of any
affiliated, combined, consolidated, unitary or aggregate Tax Return of which
Olsy, Olsy Japan, Olsy Brazil and/or any Controlled Subsidiary is a member
before the Closing Date) required to be filed on or before the Closing Date.
Olivetti shall, on a timely basis, file the Tax Return and pay the amount due
with the Tax Return to the appropriate taxing authority. At or prior to the
Closing Date, Olivetti shall deliver a copy of such Tax Return (or that portion
of such Tax Return as it relates to
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Olsy, Olsy Japan, Olsy Brazil and/or any Controlled Subsidiary) to Wang.
(b) Wang shall cause Olsy, Olsy Japan, Olsy Brazil and each
Controlled Subsidiary (or the common parent of any affiliated, combined,
consolidated, unitary or aggregate group of which Olsy, Olsy Japan, Olsy Brazil
and/or any Controlled Subsidiary is a member after the Closing Date) to prepare
and file, on a timely basis, all Tax Returns (other than those provided for in
Section 7.1(a)) of Olsy, Olsy Japan, Olsy Brazil and/or each Controlled
Subsidiary. With respect to any Tax Return for any taxable period beginning
before the Closing Date and ending after the Closing Date (such period, a
"Straddle Period"), not less than 30 Business Days prior to the date on which
any such Tax Return is due to be filed (taking into account any applicable
extensions), Wang shall deliver a draft of each such Tax Return (or that portion
of such Tax Return as it relates to Olsy, Olsy Japan, Olsy Brazil and/or each
Controlled Subsidiary) to Olivetti. Wang shall timely pay or cause the
appropriate company to timely pay the amount shown to be due with such Tax
Return to the appropriate taxing authority.
(c) Any disputes with respect to such Tax Returns shall be
resolved by arbitration by an independent accounting firm, or such other
independent expert as may be mutually agreed upon by Olivetti and Wang (the "Tax
Arbitrator"), whose determination shall be binding upon the parties and may be
enforced in any court having jurisdiction. The fees and expenses of the Tax
Arbitrator shall be borne equally by Olivetti and Wang. If Olivetti and Wang
fail to agree on a Tax Arbitrator within 20 days of receipt of notice of a
dispute with respect to Tax Returns, then at the request of either party, the
International Chamber of Commerce Court of Arbitration shall appoint an
independent accounting firm or independent expert to serve as the Tax Arbitrator
within 30 days of such request. The Tax Arbitrator shall, if possible, render an
award within 90 days of his or her appointment.
7.2 Tax Indemnification. (a) Subject to Section 10.2(b)(ii) and to
the extent not accrued on the Closing Balance Sheet, Olivetti shall indemnify,
defend and hold harmless Wang and its Affiliates (including,
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after the Closing Date, Olsy, Olsy Japan, Olsy Brazil and any Controlled
Subsidiary) and their respective officers, directors, employees and agents
(collectively, the "Wang Tax Indemnified Parties") from and against any and all
Taxes, claims or damages imposed on, sustained, incurred or suffered by any Wang
Tax Indemnified Party, directly or indirectly, by reason of or resulting from
any and all Taxes imposed upon Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary (other than claims or damages solely arising as a result of any Taxes
imposed due to any failure by Wang or its Affiliates, including, after the
Closing Date, Olsy, Olsy Japan, Olsy Brazil or the Controlled Subsidiaries, to
fully comply with any applicable law or regulation relating to Taxes) with
respect or pursuant to (i) any Pre-Closing Period, (ii) any Straddle Period, but
only with respect to the portion of such Straddle Period ending on the Closing
Date and in the manner provided in Section 7.2(c) (such portion, a "Pre-Closing
Straddle Period"), and (iii) Treasury Regulations section 1.1502-6 (or any
comparable provision under state, local or foreign law or regulation imposing
several liability upon members of a consolidated, combined, affiliated or
unitary group) for any Pre-Closing Period or Pre-Closing Straddle Period.
Notwithstanding anything to the contrary herein, the amount that Olivetti shall
be obligated to indemnify Wang under this Section 7.2(a) with respect to
Pre-Closing Straddle Periods shall not exceed the amount by which the sum of the
1998 Operating Loss and the aggregate amount of Taxes, claims or damages with
respect to such Pre-Closing Straddle Periods exceeds 65,000,000,000 Italian
lira. For purposes of this Article VII, Taxes with respect to a Pre-Closing
Straddle Period shall be considered accrued on the Closing Balance Sheet only to
the extent such accrual is specifically designated on the Closing Balance Sheet
as attributable to a Pre-Closing Straddle Period.
(b) Subject to Section 10.3(b)(ii), Wang shall indemnify,
defend and hold harmless Olivetti and its Affiliates and their respective
officers, directors, employees and agents (collectively, the "Olivetti Tax
Indemnified Parties") from and against any and all Taxes, claims or damages
imposed on, sustained, incurred or suffered by any Olivetti Tax Indemnified
Party, directly or indirectly, by reason of or resulting from any and all Taxes
imposed upon Olsy, Olsy Japan,
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Olsy Brazil, or any Controlled Subsidiary (other than claims or damages solely
arising as a result of any Taxes imposed due to a failure by Olivetti or its
Affiliates, including, prior to the Closing Date, Olsy, Olsy Japan, Olsy Brazil
and the Controlled Subsidiaries, to fully comply with any applicable law or
regulation relating to Taxes) with respect or pursuant to (i) any taxable period
beginning after the Closing Date (such period, a "Post-Closing Period") and (ii)
any Straddle Period, but only with respect to the portion of such Straddle
Period beginning the day after the Closing Date and in the manner provided in
Section 7.2(c) (such portion, a "Post-Closing Straddle Period").
(c) For purposes of calculating the Taxes imposed which
relate to a Straddle Period and must be allocated between a Pre-Closing Straddle
Period and a Post-Closing Straddle Period, the Taxes attributable to the
Pre-Closing Straddle Period shall be computed as if such taxable period ended on
and included the Closing Date and the Taxes attributable to the Post-Closing
Straddle Period shall be computed as if such taxable period began on the day
immediately following the Closing Date.
7.3 Entity Classification Election. With respect to the acquisition
of the Olsy Shares, the Olsy Japan Shares, the Olsy Brazil Shares and the
capital stock of any Controlled Subsidiary pursuant to this Agreement, at the
sole option and discretion of Wang and with the assumption of and payment by
Wang of all costs, expenses or damages payable by Olivetti as a result of or
attributable thereto, Olivetti, prior to the Closing Date, shall make an
election under Treasury Regulations section 301.7701-3(c) to have Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary classified as a partnership or
disregarded as a separate entity for United States federal income tax purposes.
7.4 Tax Claims. (a) Except as otherwise provided in this Section
7.4, if a notice of deficiency, proposed adjustment, adjustment, audit,
examination or other administrative or court proceeding, suit, dispute or other
claim (a "Tax Claim") is delivered, sent, commenced or initiated to or against
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary by any taxing
authority and, as of the date such Tax Claim is so
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delivered, sent, commenced or initiated, such entity has any Tax credits or net
operating losses ("Tax Benefits"), Wang shall be solely responsible for
controlling the defense of such Tax Claim. Notwithstanding anything to the
contrary herein and to the extent that a Tax Claim relates to a Pre-Closing
Period or a Pre-Closing Straddle Period for which Olivetti is responsible
pursuant to Section 7.2(a), (i) Olivetti and its Affiliates agree to cooperate
with Wang in pursuing such contest, (ii) Wang shall consult with Olivetti and
shall not enter into any settlement with respect to any such Tax Claim without
Olivetti's prior written consent, which shall not be unreasonably withheld,
(iii) Wang shall keep Olivetti informed of all material developments and events
relating to such Tax Claim, (iv) at its own cost and expense, Olivetti shall
have the right to participate in (but not control) the defense of such Tax Claim
and (iv) Wang shall be responsible for all costs and expenses incurred in
connection with such Tax Claim, excluding costs and expenses incurred by
Olivetti in connection with its participation in the defense of such Tax Claim
pursuant to (iv) above.
(b) Any disputes with respect to Olivetti's consent to
settle a Tax Claim described in Section 7.4(a) shall be resolved by arbitration
by the Tax Arbitrator, whose determination shall be binding upon the parties and
may be enforced in any court having jurisdiction. The fees and expenses of the
Tax Arbitrator shall be borne equally by Olivetti and Wang. If Olivetti and Wang
fail to agree on a Tax Arbitrator with respect to such dispute within 20 days of
receipt by Wang of notice of a settlement offer with respect to such Tax Claim,
then at the request of either party, the International Chamber of Commerce Court
of Arbitration shall appoint an independent accounting firm or independent
expert to serve as the Tax Arbitrator within 30 days of such request. The Tax
Arbitrator shall, if possible, render a decision within 90 days of his or her
appointment.
(c) If a Tax Claim involving Taxes for any Pre-Closing
Period for which Olivetti is responsible pursuant to Section 7.2(a) is
delivered, sent, commenced or initiated to or against Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary by any taxing authority and, as of the date
such Tax Claim is so delivered, sent,
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commenced or initiated, such entity does not have any Tax Benefits, Olivetti
shall be solely responsible for controlling the defense of such Tax Claim.
Notwithstanding anything to the contrary herein, (i) Wang and its Affiliates
(including, after the Closing Date, Olsy, Olsy Japan, Olsy Brazil and each
Controlled Subsidiary) agree to cooperate with Olivetti in pursuing such
contest, (ii) Olivetti shall consult with Wang and shall not enter into any
settlement with respect to any such Tax Claim without Wang's prior written
consent, which shall not be unreasonably withheld, (iii) Olivetti shall keep
Wang informed of all material developments and events relating to such Tax
Claim, (iv) at its own cost and expense, Wang shall have the right to
participate in (but not control) the defense of such Tax Claim and (v) Olivetti
shall be responsible for all costs and expenses incurred in connection with such
Tax Claim, excluding costs and expenses incurred by Wang in connection with its
participation in the defense of such Tax Claim pursuant to (iv) above.
(d) If Wang has withheld its consent with respect to a bona
fide settlement offer by any taxing authority for any Tax Claim described in
Section 7.4(c), Olivetti may, at its election and in lieu of continuing to
control the defense of such Tax Claim, pay to Wang the amount that would be
necessary to settle such Tax Claim, as determined by the bona fide settlement
offer. Upon such payment to Wang, (i) Olivetti shall be released from any
further liability with respect to further adjustments related to such Tax Claim,
(ii) Wang shall assume and control the defense of such Tax Claim and (iii)
regardless of the final outcome of such Tax Claim, Wang shall be entitled to
retain the full amount of Olivetti's payment to Wang pursuant to the preceding
sentence and Olivetti shall have no right to any reimbursement or refund of any
kind with respect to such payment.
(e) If Olivetti or any of its Affiliates (including, before
the Closing Date, Olsy, Olsy Japan, Olsy Brazil and any Controlled Subsidiary)
receives notice of a Tax Claim by any taxing authority with respect to a
Pre-Closing Period or Pre-Closing Straddle Period, Olivetti or such Affiliate
shall notify Wang of such notice and the nature of such Tax Claim within five
days of receipt of such notice by Olivetti or
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such Affiliate. If Wang or any of its Affiliates (including, after the Closing
Date, Olsy, Olsy Japan, Olsy Brazil and any Controlled Subsidiary) receives
notice of a Tax Claim by any taxing authority with respect to a Pre-Closing
Period or Pre-Closing Straddle Period, Wang or such Affiliate shall notify
Olivetti of such notice and the nature of such Tax Claim within five days of
receipt of such notice by Wang or such Affiliate.
7.5 Refunds. To the extent not accrued on the Closing Balance Sheet,
any refund of Taxes (including any statutory interest thereon) received by Wang,
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary attributable to any
Pre-Closing Period, or that are attributable to amounts paid by Olivetti
pursuant to this Article VII, shall be for the benefit of Olivetti, and Wang
shall cause any such refund to be paid to Olivetti within ten (10) Business Days
after Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary receives
such refund.
7.6 Tax Payments Resulting from Audit Adjustment. (a) To the extent
not accrued on the Closing Balance Sheet, if there is an adjustment to any item
reported on a Tax Return with respect to a Pre-Closing Period or Pre-Closing
Straddle Period that results in an increase in the Taxes payable by Olivetti,
and such adjustment results in a corresponding adjustment to items reported on a
Tax Return with respect to a Post-Closing Period with the result that the Taxes
payable either by Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary
or any consolidated, affiliated, combined or unitary group of companies of which
Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a member are
reduced, or a refund of Taxes is increased, then Wang shall pay to Olivetti the
amount by which such Taxes are reduced or such refund is increased within five
Business Days following the date on which a payment or refund of such Taxes is
made or received. The amount of such payment shall be the excess of (i) the Tax
liability of Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary or,
if applicable, any consolidated, affiliated, combined or unitary group of
companies of which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary is a member for the taxable period in question computed without
regard to such adjustment or amendment, over (ii) the actual Tax
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liability of Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary or,
if applicable, any consolidated, affiliated, combined or unitary group of
companies of which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary is a member for the taxable period in question. Notwithstanding the
foregoing, the amount that Wang shall pay to Olivetti pursuant to this Section
7.6 with respect to Pre-Closing Straddle Periods shall not exceed the amount
that Olivetti is obligated to indemnify Wang pursuant to Section 7.2(a) with
respect to such Pre-Closing Straddle Periods.
(b) To the extent not accrued on the Closing Balance Sheet,
if there is an adjustment to any item reported on a Tax Return with respect to a
Pre-Closing Period or Pre-Closing Straddle Period that results in a decrease in
the Taxes payable by Olivetti, and such adjustment results in a corresponding
adjustment to items reported on a Tax Return with respect to a
Post-Closing-Period with the result that the Taxes payable either by Wang, Olsy,
Olsy Japan, Olsy Brazil, any Controlled Subsidiary or any consolidated,
affiliated, combined or unitary group of companies of which Wang, Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary is a member are increased, or a
refund of Taxes is decreased, then Olivetti shall pay to Wang the amount by
which such Taxes are increased or such refund is decreased within five Business
Days following the date on which a payment or refund of such Taxes is made or
received. The amount of such payment shall be the excess of (i) the actual Tax
liability of Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary or,
if applicable, any consolidated affiliated, combined or unitary group of
companies of which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary is a member for the tax period in question, over (ii) the tax
liability of Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary or,
if applicable, any consolidated, affiliated, combined or unitary group of
companies of which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary is a member for the tax period in question computed without regard to
such adjustment or amendment.
7.7 Amnesty. In the event that, at any time between the Closing Date
and the date upon which the liability of Olivetti for Taxes shall expire
pursuant to
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this Agreement, any law, regulation, order or decree should be enacted in any
relevant jurisdiction having as an effect the right to settle, in whole or in
part, the Tax obligation of any entity covered by Olivetti's indemnity
obligation hereunder (any such law, regulation, order or decree is hereinafter
referred to as an "Amnesty"), (a) Olivetti shall have the right to request Wang
to cause such entity to avail itself of the Amnesty, (b) Wang shall have the
right to determine, in its sole discretion (irrespective of any request of
Olivetti under Section 7.7(a)), whether or not to cause such entity to avail
itself of the Amnesty, (c) if Wang elects to proceed with the Amnesty without
the prior agreement or request of Olivetti, all cost and expenses of such
Amnesty shall be borne by Wang or such entity, without recourse against
Olivetti, (d) if Wang elects to proceed with the Amnesty in agreement with
Olivetti or pursuant to Olivetti's request hereunder, all costs and expenses of
such Amnesty shall be borne by Olivetti, and (e) if Wang elects not to proceed
with an Amnesty notwithstanding Olivetti's request pursuant to Section 7.7(a)
preceding, Wang shall be free to do so, but Olivetti's liability in respect of
the matter constituting the subject of such Amnesty shall be limited to the
amount that would have been paid by Olivetti had Wang elected to proceed with
the Amnesty in accordance with Olivetti's request.
7.8 Transfer and Similar Taxes. Olivetti and Wang shall each pay
one-half of all sales, use, transfer, recording, ad valorem, privilege,
documentary, gains, stamp, duties, or similar Taxes and fees (collectively, the
"Transfer Taxes"), arising out of, in connection with or attributable to the
transactions contemplated by this Agreement, including, without limitation, the
sales, transfers, conveyances, assignments and deliveries contemplated by
Section 2.1(a) or (b); provided, however, Olsy shall pay all Transfer Taxes
arising out of, in connection with or attributable to the transactions
contemplated by Sections 1.9 or 1.10. The party which has primary responsibility
for the payment of any particular Transfer Tax shall prepare and timely file all
relevant Tax Returns required to be filed in respect of such Transfer Tax, pay
the Transfer Tax shown on such Tax Return, and notify the other party in writing
of the Transfer Tax shown on such Tax Return and how such Transfer Tax was
calculated, and the other party
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shall reimburse the party paying such Transfer Tax for its applicable share of
such Transfer Tax in immediately available funds within five days of receipt of
such notice.
7.9 FIRPTA Compliance. Olivetti shall deliver to Wang at the Closing
a certification of non-foreign status for Olivetti in a form which complies with
the requirements of section 1445 of the Code and the regulations promulgated
thereunder; provided, however, that if Olivetti shall fail to deliver any such
certification of non-foreign status, Wang shall withhold at the Closing and pay
over to the appropriate taxing authority an amount equal to ten percent (10%) of
the total "amount realized" as defined in section 1445 of the Code.
7.10 Assistance and Cooperation. Olivetti and Wang agree that, after
the Closing Date:
(a) each party shall assist (and cause their respective
Affiliates to assist) the other party in preparing any Tax Returns (including,
without limitation, making available personnel) which such other party is
responsible for preparing and filing in accordance with Section 7.1;
(b) each party shall cooperate fully in preparing for any
audits of, or disputes or litigation with, any taxing authority regarding, any
Tax Return with respect to Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary, and payments in respect thereof;
(c) each party shall make available to the other party and
to any taxing authority as reasonably requested all information, records and
documents relating to Taxes of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary;
(d) each party shall provide timely notice to the other in
writing of any pending, proposed or threatened Tax audits, assessments or
litigation with respect to Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary for which the other party may have an indemnification obligation
under Section 7.2; and
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(e) each party shall furnish the other party with copies of
all relevant correspondence received from any taxing authority in connection
with any Tax audit or information request with respect to any taxable period for
which the other may have an indemnification obligation under Section 7.2.
7.11 Characterization of Indemnification Payments. All amounts paid
by Olivetti to Wang or by Wang to Olivetti pursuant to Article VII or Article X
shall be treated as adjustments to the Purchase Price for all Tax purposes.
7.12 Indemnity Payments. (a) All amounts payable or to be paid to
Wang or to Olivetti under Section 7.2 ("Indemnity Payments") shall be paid in
immediately available funds within 20 Business Days after the later of (a)
receipt of a written request from the party entitled to such Indemnity Payment
which demonstrates to the reasonable satisfaction of the party receiving such
request that the party providing such request is entitled to such payment under
the terms of the Agreement and (b) the day of payment of the amount that is the
subject of the Indemnity Payment by the party entitled to receive the Indemnity
Payment. All such Indemnity Payments shall be made to the accounts and in the
manner specified in such written notice. If the party receiving a request for an
Indemnity Payment notifies the party providing such request within such 20
Business Day period that it rejects such request for an Indemnity Payment, in
whole or in part, the matter shall be resolved in accordance with Section 12.12.
In addition to the right of payment in this Section 7.12(a), Wang has, at its
option and without any further action, the right to be paid for any Indemnity
Payment not paid by Olivetti within ten days of Olivetti becoming obligated to
pay such Indemnity Payment pursuant to (a) the Letter of Credit until the
Original Amount (as defined therein) is reduced to zero or the issuing bank
thereof shall refuse to honor any proper draw of Wang thereunder and then (b)
the Stock Escrow Agreement.
(b) The amount due any Wang Tax Indemnified Party or
Olivetti Tax Indemnified Party (for purposes of this provision, a "Tax
Indemnified Party"), as the case may be, under Sections 7.2 with respect to any
Taxes, claims or damages (for purposes of this
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provision, a "Tax Loss") shall be determined after taking into account (i) any
insurance proceeds or other indemnity payments actually received by such Tax
Indemnified Party with respect to such Tax Loss at the time the amount of such
obligation is determined and paid and (ii) if the Tax Indemnified Party owns,
directly or indirectly, less than all of the outstanding capital stock of the
Person to which such Tax Loss relates, the percentage of the outstanding capital
stock of the Person to which such Tax Loss relates that is owned, directly or
indirectly, by the Tax Indemnified Party. Tax Indemnified Parties shall use
their commercially reasonable best efforts to collect any insurance proceeds or
other indemnity payments to which they may be entitled with respect to any Tax
Loss, but the collection thereto shall not be a condition to or defer the
obligation of any indemnifying party under Section 7.2. If any Tax Indemnified
Party receives any insurance proceeds or other indemnity payments with respect
to a Tax Loss after such Tax Loss has been determined and paid, such Tax
Indemnified Party shall promptly turn over such proceeds or payments to the
indemnifying party who paid such Tax Loss.
7.13 Survival. (a) The respective covenants and agreements of
Olivetti and Wang in this Article VII shall be unconditional and absolute and,
notwithstanding any other provision of this Agreement to the contrary, including
Article X, shall remain in effect as long as any taxing authority could issue an
assessment for Taxes for any Pre-Closing Period.
(b) Notwithstanding any other provision of this Agreement to
the contrary (other than Sections 10.2(b) and 10.3(b)), including Article 7.6(b)
(other than Sections 10.2(b) and 10.3(b)), any indemnification for matters
relating to Taxes shall be governed by this Article VII.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF SELLERS
The obligations of the Sellers under this Agreement to consummate
the transactions contemplated by this Agreement are subject to the satisfaction,
on or
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before the Closing, of each of the following conditions, unless waived in
writing by Olivetti:
8.1 Representations and Warranties. The representations and
warranties of Wang in this Agreement shall be true, complete and correct as of
the date hereof, except for representations and warranties made as of a
specified date, which will be true, complete and correct as of such date, except
for changes expressly permitted or contemplated by this Agreement.
8.2 Performance. Wang shall have performed and complied with all
covenants and agreements required by this Agreement to be performed or complied
with by it on or prior to the Closing.
8.3 Officers' Certificate. Wang shall have delivered to Olivetti a
certificate, dated the Closing Date and signed by its president and the chief
financial officer certifying, to the best of their knowledge, to the fulfillment
of the conditions specified in Sections 8.1 and 8.2.
8.4 Non-Governmental Consents. The authorizations, consents or
approvals of Persons required to be obtained by Wang in connection with the
transactions contemplated by this Agreement or any Related Agreement set forth
on Schedule 8.4 hereto shall have been obtained.
8.5 Waiting Periods. All waiting or review periods applicable to
this Agreement and the transactions contemplated hereby under the HSR Act, the
German 1990 Act Against Restraints of Competition, the Italian Law on the
Protection of Competition and the Market (Law No. 287 of Oct. 10, 1990), the
Dutch Competition Act of May 22, 1997 and the Australian Foreign Acquisitions
and Takeovers Act 1975 shall have expired or been earlier terminated.
8.6 No Injunction. Olivetti shall not be prohibited by any order,
judgment, writ, injunction, decree, statute, rule or regulation of any
Governmental Authority of competent jurisdiction from consummating the
transactions contemplated by this Agreement or any Related Agreement.
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8.7 Governmental Actions. No suit, action or other proceeding shall
have been initiated and remain in effect by any Governmental Authority seeking
to enjoin or otherwise restrain the consummation of the transactions
contemplated by this Agreement or any Related Agreement.
8.8 Absence of Adverse Change. Excluding any effects of the
transactions contemplated hereby, Wang and its subsidiaries, taken as a whole,
shall not have suffered any material adverse change in their business, assets,
properties, liabilities, results of operations or condition (financial or
otherwise).
8.9 Related Agreements. The Related Agreements to which Olivetti or
any Olivetti Affiliate is a party shall have executed and delivered by Wang and
the other parties thereto in a form reasonably satisfactory to Olivetti.
8.10 Opinions. Wang shall have delivered to Olivetti the opinions of
counsel reasonably acceptable to Olivetti, dated the Closing Date, covering the
matters set forth on Exhibit 13 hereto.
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF BUYERS
The obligations of the Buyers under this Agreement to consummate the
transactions contemplated by this Agreement are subject to the satisfaction, on
or before the Closing, of each of the following conditions, unless waived in
writing by Wang:
9.1 Representations and Warranties. The representations and
warranties of Olivetti in this Agreement shall be true, complete and correct as
of the date hereof, except for representations and warranties made as of a
specified date, which will be true, complete and correct as of such date, and
except for changes expressly permitted or contemplated by this Agreement.
9.2 Performance; Olsy Shares; Pre-Closing. (a) Each of the Sellers,
Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries shall have
performed and
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complied with all covenants and agreements (including, without limitation, the
covenants and agreements in Article I) required by this Agreement to be
performed or complied with by them on or prior to the Closing.
(b) The Olsy Shares to be issued in connection with the
share capital increase resolved at the extraordinary shareholders meeting of
Olsy held on January 30, 1998 referred to in Sections 1.8(a)(v) and 1.8(b) shall
have been duly and validly issued.
(c) The transactions contemplated by Sections 1.9, 1.10,
1.11 and 1.12 shall have been consummated prior to or at the Pre-Closing.
9.3 Officers' Certificate. Olivetti shall have delivered to Wang a
certificate, dated the Closing Date and signed by its chief executive officer
and chief financial officer (in any case duly authorized to bind Olivetti by
resolution of its Board of Directors), certifying, to the best of their
knowledge, to the fulfillment of the conditions specified in Sections 9.1 and
9.2.
9.4 Olivetti Non-Governmental Notices. The notices required to be
given by Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in
connection with the transactions contemplated by this Agreement or any Related
Agreement set forth on Schedule
9.4 hereto shall have been given.
9.5 Waiting Periods. All waiting or review periods applicable to
this Agreement and the transactions contemplated hereby under the HSR Act or,
the German 1990 Act Against Restraint of Competition, the Italian Law on the
Protection of Competition and the Market (Law No. 287 of Oct. 10, 1990), the
Dutch Competition Act of May 22, 1997 and the Australian Foreign Acquisitions
and Takeovers Act 1975 shall have expired or been earlier terminated.
9.6 No Injunction. Wang shall not be prohibited by any order,
judgment, writ, injunction, decree, statute, rule or regulation of any
Governmental Authority of competent jurisdiction from consummating the
transactions contemplated by this Agreement or any Related Agreement.
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9.7 Governmental Actions. No suit, action or other proceeding shall
have been initiated and remain in effect by any Governmental Authority seeking
to enjoin or otherwise restrain the consummation of the transactions
contemplated by this Agreement or any Related Agreement.
9.8 Financing. Wang shall have completed arrangements for financing
with a group of lenders led by Bankers Trust Company in an aggregate principal
amount of no less than U.S. $500,000,000 and on terms and conditions consistent
with the Financing Plan of Wang dated February 12, 1998, a copy of which was
made available to Olivetti prior to the date hereof, and shall have the
availability of the aggregate principal amount able to be drawn thereunder.
9.9 Absence of Adverse Change. Neither Olsy, Olsy Japan, Olsy Brazil
and the Controlled Subsidiaries, taken as a whole, nor Olsy or any of the Major
Subsidiaries, taken separately, shall have suffered any material adverse change
in their business, assets, properties, liabilities, results of operations or
condition (financial or otherwise).
9.10 Related Agreements. The Related Agreements to which any of
Wang, any Affiliate of Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary is a party shall have been executed and delivered by Olivetti and the
other parties thereto in a
form reasonably satisfactory to Wang.
9.11 Opinions. Olivetti shall have delivered to Wang the opinions of
counsel reasonably acceptable to Wang, dated the Closing Date, covering the
matters set forth on Exhibit 14 hereto.
ARTICLE X
SURVIVAL AND INDEMNIFICATION
10.1 Survival. (a) The respective representations and warranties of
Wang and Olivetti in this Agreement shall survive the Closing for a period of
three years and shall terminate and be of no further force or effect as of the
date three years after the
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Closing Date, except that (i) the representations and warranties of Olivetti in
Sections 4.2, 4.3, 4.4 and 4.26 shall survive the Closing forever and shall not
terminate, (ii) the representations and warranties of Olivetti in Section 4.18
shall survive the Closing for so long as any taxing authority could issue an
assessment for Taxes for any Pre-Closing Period, (iii) the representations and
warranties of Olivetti in Section 6.12(a) shall terminate and be of no further
force or effect as of the Closing Balance Sheet Determination Date and (iv) the
representations and warranties of Wang in Sections 5.2, 5.3 and 5.9 shall
survive the Closing forever and shall not terminate.
(b) The respective covenants and agreements of Olivetti and
Wang in this Agreement shall survive the Closing and shall be fully effective
and enforceable for the periods therein indicated or where not indicated,
forever.
(c) Neither Olivetti nor Wang shall be entitled to any
indemnification under Section 10.2 or 10.3 with respect to any breach of a
representation or warranty, covenant or agreement after the termination thereof
pursuant to Sections 10.1(a) or (b), except for claims previously asserted
pursuant to Section 10.4(a).
10.2 Indemnification by Olivetti. (a) In addition to the
indemnification pursuant to Section 7.2(a), Olivetti shall indemnify Wang and
its Affiliates (including, without limitation, after the Closing Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries) and their respective
directors, officers, employees, agents and representatives (individually a "Wang
Indemnified Person" and collectively the "Wang Indemnified Persons") against and
hold them harmless from any loss, liability, damage, demand, claim, payment,
cost, suit, action, cause of action, investigation, inquiry, judgment, award,
assessment, interest, penalty or expense (including, without limitation,
reasonable out-of-pocket expenses of investigation and reasonable attorneys' and
consultants' fees) (any of the foregoing being hereinafter referred to
individually as a "Loss" and collectively as "Losses") suffered or incurred by
any such indemnified person for or on account of or arising from or in
connection with:
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(i) any breach of any representation or warranty of Olivetti
in this Agreement or any of the Indemnified Related Agreements (as defined
in Section 12.11) or of any representation or warranty of Oliricerca in
the Oliricerca Development and Corporation Agreement;
(ii) any breach of any covenant or agreement of Olivetti in
this Agreement or any of the Indemnified Related Agreements or of any
covenant or agreement of Oliricerca in the Oliricerca Development and
Cooperation Agreement;
(iii) the La Defense Agreement;
(iv) any of the Retained Liabilities (as defined in Section
12.11);
(v) subject to the Indemnification Agreement (MIS) to be
entered into by and among Wang, Olsy and Olivetti simultaneously with the
Closing, the IT Frame Agreement, dated as of July 24, 1996, among
Olivetti, Syntax Processing S.p.A. and Sema Group plc to which Olsy became
a party pursuant to a letter dated July 10, 1997;
(vi) the amount by which the costs and expenses associated
with the clean-up referred to in Section 1.8(a)(vii) exceeds the
restructuring fund established therefor referred to in Section
1.8(a)(vii);
(vii) United States v. Helen Kramer, et al., State of New
Jersey v. Almo Antipollution Services Corp. et al. or the Buzby Bros.
landfill environmental matters;
(viii) all civil cases pending in Italy against Olsy or any
Controlled Subsidiary set forth on Schedule 10.2(a)(viii) hereto;
(ix) any decision of the competent Italian authorities taken
in relation to or arising out of the inquiries and investigations
disclosed or required to be disclosed to Wang in the review referred to in
Section 4.21(c) which affects the qualification of Olsy to participate in
bids or
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auctions for supply of products services or support to Governmental
Authorities in Italy; or
(x) any matter set forth on an amendment or supplement to
the Olivetti Disclosure Schedule (aa) pursuant to Section 6.4(a)(i)(aa) to
the extent any such matter materially changes the disclosures on the
Olivetti Disclosure Schedule or has an adverse effect on the business,
assets, properties, liabilities, results of operation or condition
(financial or otherwise) of Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary or (bb) pursuant to Section 6.4(a)(i)(bb).
(b) Notwithstanding anything herein to the contrary: (i)
Olivetti shall have no obligation to indemnify any Wang Indemnified Person
pursuant to Sections 10.2(a)(i) or (ii) unless and until the aggregate amount of
Losses incurred by Wang Indemnified Persons with respect thereto exceeds
20,000,000,000 Italian lira (the "Olivetti Indemnification Threshold"), and
then, subject to the immediately following clause (ii), Olivetti's obligation
shall be to indemnify Wang Indemnified Persons to the full extent of such Losses
(provided, however, that the representations and warranties of Olivetti in
Sections 4.2, 4.4, 4.18 or 4.27 and the covenants or agreements of Olivetti in
Articles I, II or III or Sections 4.5(a) (last sentence), 6.1(b)(xxvii),
6.5(b)-(f), 6.12(c), 6.13, 6.14, 6.17, 6.18, 6.19, 6.20, 6.21, 6.22, 6.23,
6.25(b), 6.26, 7.2(a), 7.6(b) or 10.2(a)(iii)-(x) shall not be subject to the
Olivetti Indemnification Threshold); and (ii) Olivetti shall have no obligation
to indemnify any Wang Indemnified Person or Wang Tax Indemnified Person pursuant
to Sections 10.2(a)(i) or (ii) or 7.2(a) after it has paid an aggregate amount
pursuant thereto equal to 500,000,000,000 Italian lira (the "Olivetti
Indemnification Cap") (provided, however, that the representations and
warranties of Olivetti in Sections 4.2, 4.4 or 4.27 and the covenants or
agreements of Olivetti in Articles I, II or III or Sections 6.5(b)-(f), 6.12(c),
6.13, 6.14, 6.17, 6.18, 6.19, 6.20, 6.21, 6.22, 6.25(b), 6.26, or
10.2(a)(iii)-(x) shall not be subject to the Olivetti Indemnification Cap).
Notwithstanding anything herein to the contrary, Olivetti shall have no
obligation to indemnify any Wang Indemnified Person for Losses pursuant to
Section 10.2(a)(i) with respect to
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Section 4.6(c) unless such Loss is suffered or incurred by such Wang Indemnified
Person as a result of a demand, claim, suit, action, cause of action,
investigation or inquiry made or brought by a Person not party to this Agreement
or a Governmental Authority. Notwithstanding anything herein to the contrary,
Olivetti shall have no obligation to indemnify Wang pursuant to Section
10.2(a)(ix) if the qualification can be re-obtained (or the striking of Olsy
from any relevant log can be avoided) by a sale by Olivetti to Wang of all or
part of the Wang Shares and Olivetti offers to sell the relevant number of Wang
Shares to Wang at the then market value thereof. If Olivetti tenders all or part
of the Wang Shares to Wang in order to avoid any obligation to indemnify Wang
pursuant to Section 10.2(a)(ix) by sending Wang written notice to that effect,
Wang shall have the obligation to acquire the Wang Shares so tendered by
Olivetti at a per share price equal to the Average Market Price (as defined in
Section 12.11) for the date of the written notice from Olivetti.
10.3 Indemnification by Wang. (a) In addition to the indemnification
pursuant to Section 7.2(b), Wang shall indemnify Olivetti and the Olivetti
Affiliates and their respective directors, officers, employees, agents and
representatives (individually an "Olivetti Indemnified Person" and collectively
the "Olivetti Indemnified Persons") against, and hold them harmless from, any
Losses suffered or incurred by any such indemnified person for or on account of
or arising from or in connection with:
(i) any breach of any representation or warranty of Wang
contained in this Agreement or any of the Indemnified Related Agreements;
or
(ii) any breach of any covenant or agreement of Wang
contained in this Agreement or any of the Indemnified Related Agreements.
(b) Notwithstanding anything herein to the contrary: (i)
Wang shall have no obligation to indemnify any Olivetti Indemnified Person for
Losses pursuant to Sections 10.3(a)(i) or (ii) unless and until the aggregate
amount of Losses incurred by Olivetti Indemnified Persons with respect thereto
exceeds 20,000,000,000 Italian lira (the "Wang Indemnification Threshold"), and
then, subject to the immediately
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following clause (ii), Wang's obligation shall be to indemnify Olivetti
Indemnified Persons to the full extent of such Losses (provided, however, that
the representations and warranties of Wang in Sections 5.2, 5.3 or 5.13 and the
covenants or agreements of Wang in Articles II or III or Sections 6.12(d), 6.13,
6.14, 6.17, 6.18, 6.25(a), 6.26, 7.2(b), 7.5 or 7.6(a) or the Ancillary
Consideration Agreement shall not be subject to the Wang Indemnification
Threshold); and (ii) Wang shall have no obligation to indemnify any Olivetti
Indemnified Person or Olivetti Tax Indemnified Person pursuant to Sections
10.3(a)(i) or (ii) or 7.2(b) after it has paid an aggregate amount pursuant
thereto equal to 500,000,000,000 Italian lira (the "Wang Indemnification Cap")
(provided, however, that the representation and warranties of Wang in Sections
5.2, 5.3 or 5.13 and the covenants or agreements of Wang in Articles II or III
or Sections 6.12(d), 6.13, 6.14, 6.17, 6.18, 6.25(a) or 6.26 or the Ancillary
Consideration Agreement shall not be subject to the Wang Indemnification Cap).
10.4 Procedures Relating to Indemnification. (a) An indemnified
person under Sections 10.2 or 10.3 (the "Indemnified Party") shall give prompt
written notice to the indemnifying party (the "Indemnifying Party") of any Loss
in respect of which such Indemnifying Party is obligated to indemnify such
Indemnified Party under Sections 10.2 or 10.3, specifying in reasonable detail
the nature of such Loss, the section or sections of this Agreement or any
Related Agreement to which the Loss relates, and the amount of such Loss (or if
not then determinable, its best estimate of the amount of such Loss), except
that any delay or failure so to notify the Indemnifying Party shall only relieve
the Indemnifying Party of its obligations hereunder to the extent, if at all,
that it is prejudiced by reason of such delay or failure.
(b) If a Loss is suffered or incurred for or on account of
or arises from or in connection with any demand, claim, suit, action, cause of
action, investigation or inquiry by a Person not party to this Agreement or a
Governmental Authority (a "Third Party Claim"), the Indemnifying Party shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all expenses. The
Indemnified Party shall have the right
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to employ separate counsel in such Third Party Claim and participate in such
defense thereof, but the fees and expenses of such counsel shall be at the
expense of the Indemnified Party. If the Indemnifying Party fails to assume the
defense of any Third Party Claim within 20 days after notice thereof, the
Indemnified Party shall have the right to undertake the defense, compromise or
settlement of such Third Party Claim for the account of the Indemnifying Party,
subject to the right of the Indemnifying Party to assume the defense of such
Third Party Claim with counsel reasonably satisfactory to the Indemnified Party
at any time prior to the compromise, settlement or final determination thereof.
Anything in this Section 10.4 to the contrary notwithstanding, the Indemnifying
Party shall not, without the Indemnified Party's prior written consent, settle
or compromise any Third Party Claim or consent to the entry of any judgment with
respect to any Third Party Claim which would have an adverse effect on the
Indemnified Party. The Indemnifying Party may, without the Indemnified Party's
prior written consent, compromise or settle any such Third Party Claim or
consent to entry of any judgment with respect to any Third Party Claim which
requires solely money damages paid by the Indemnifying Party, and which includes
as an unconditional term thereof the release by the claimant or the plaintiff of
the Indemnified Party from all liability in respect of such Third Party Claim.
If an Indemnifying Party refuses to pay, in whole or in part, any Loss suffered
or incurred for or on account of or arising from or in connection with any Third
Party Claim within 20 Business Days of receipt of notice from the Indemnified
Party of such Loss, the matter shall be resolved in accordance with Section
12.12.
(c) With respect to any Loss (other than any Loss suffered
or incurred for or on account of or arising from or in connection with any Third
Party Claim), the Indemnifying Party shall have 20 Business Days from receipt of
notice from the Indemnified Party of such Loss within which to respond thereto.
If the Indemnifying Party does not respond within such 20 Business Day period,
the Indemnifying Party shall be deemed to have accepted responsibility to make
payment and shall have no further right to contest the validity of such Loss. If
the Indemnifying Party notifies the Indemnified Party within such 20 Business
Day period that
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it rejects such Loss, in whole or in part, the matter shall be resolved in
accordance with Section 12.12.
(d) The amount of the obligation of any Indemnifying Party
to any Indemnified Party under Sections 10.2 or 10.3 with respect to any Loss
shall be determined after taking into account (i) any insurance proceeds or
other indemnity payments actually received by such Indemnified Party with
respect to such Loss at the time the amount of such obligation is determined and
paid, (ii) the then present value of any reduction in Taxes to be paid by such
Indemnified Party as result of such Loss, (iii) if the Indemnified Person owns,
directly or indirectly, less than all of the outstanding capital stock of the
Person to which such Loss relates, the percentage of the outstanding capital
stock of the Person to which such Loss relates owned, directly or indirectly, by
the Indemnified Person and (iv)(aa) in the case of any Wang Indemnified Person,
any reserve specifically for the matter resulting in such Loss on the Closing
Balance Sheet or (bb) in the case of any Olivetti Indemnified Party, any reserve
specifically for the matter resulting in such Loss on the books and records of
Wang or its subsidiaries as of the Closing Date. Indemnified Parties shall use
their commercially reasonable best efforts to collect any insurance proceeds or
other indemnity payments to which they may be entitled with respect to any Loss,
but the collection thereto shall not be a condition to or defer the obligation
of any Indemnifying Party under Sections 10.2 or 10.3. If any Indemnified Party
receives any insurance proceeds or other indemnity payments with respect to a
Loss after such Loss has been determined and paid, such Indemnified Party shall
promptly turn over such proceeds or payments to the Indemnifying Party who paid
such Loss.
(e) The procedures set forth in Sections 10.4(a), (b), (c)
or (d) (and to the extent set forth in Sections 10.4(b) or (c), the dispute
resolution procedures set forth in Section 12.12) shall apply to any Loss
suffered or incurred for or on account of or arising from or in connection with
any breach of any representation or warranty or covenant or agreement in any
Indemnified Related Agreement unless such Indemnified Related Agreement
specifically provides for alternative procedures and any such Loss shall remain
subject to
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indemnification pursuant to Section 10.2 or 10.3, as the case may be,
irrespective of which procedures apply.
10.5 Consideration for Payment of Indemnification Obligations. With
respect to any indemnification obligation under this Article X, such obligation
shall be satisfied by means of a payment in cash by the Indemnifying Party to
the applicable Indemnified Party in an amount equal to the Loss incurred by such
Indemnified Party; provided, however, that Wang has, in addition to any other
rights it may have, at its option and without any further action, the right to
be paid for any Loss not paid by Olivetti within ten days of Olivetti becoming
obligated to pay such Loss pursuant to Sections 10.4(b), (c) or (d) pursuant to
(a) the Letter of Credit until the Original Amount (as defined therein) is
reduced to zero or the issuing bank thereof shall refuse to honor any proper
draw of Wang thereunder and then (b) the Stock Escrow Agreement.
10.6 Recovery Principles. (a) If the transactions contemplated by
this Agreement are consummated, the indemnification provisions of Section 7.2
shall be the sole and exclusive remedy of the parties hereto against one another
with respect to the matters covered by Section 7.2.
(b) If the transactions contemplated by this Agreement are
consummated, the indemnification provisions of this Article X shall be the sole
and exclusive remedy of the parties hereto against one another with respect to
the matters covered by this Article X.
(c) Whenever a party hereto may have more than one remedy
hereunder for any matter, the remedy most specifically relating to such matter
(and any indemnification hereunder for such remedy) shall be such party's sole
and exclusive remedy hereunder for such matter. For avoidance of doubt, no party
hereto may recover hereunder more than once for the same matter.
(d) For avoidance of doubt, no party hereto may recover
hereunder for any underfunding or overfunding of the plans set forth on Schedule
10.6(d).
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ARTICLE XI
TERMINATION AND ABANDONMENT
11.1 Termination. This Agreement may be terminated at any time prior
to the Closing Date under the following circumstances:
(a) by mutual consent of Wang and Olivetti;
(b) by Wang at any time after April 20, 1998, if the Closing
shall not have occurred by such date, unless the failure of such consummation
shall be due to failure of Wang to have satisfied the conditions to Closing in
Sections 8.1 or 8.2; or
(c) by Olivetti at any time after April 20, 1998, if the
Closing shall not have occurred by such date, unless the failure of such
consummation shall be due to the failure of Olivetti to have satisfied the
conditions to Closing in Sections 9.1 or 9.2.
11.2 Procedure Upon Termination. In the event of termination of this
Agreement and abandonment of the transactions contemplated hereby by one of the
parties hereto pursuant to Sections 11.1(b) or (c), notice thereof shall
forthwith be given to the other party hereto and the transactions contemplated
by this Agreement shall be abandoned, without further action by either of the
parties hereto. If this Agreement is terminated as provided herein:
(a) Olivetti and each of its Affiliates will redeliver to
Wang or destroy (and if Olivetti elects to destroy, Olivetti shall certify as to
the destruction of) all documents, work papers and other material of Wang
relating to the transactions contemplated hereby, whether obtained before or
after the execution hereof, and Wang will redeliver to Olivetti or destroy (and
if Wang elects to destroy, Wang shall certify as to the destruction of) all
documents, work papers and other material of Olivetti, Olsy, Olsy Japan, Olsy
Brazil, any Subsidiary or any Olsy Japan Subsidiary relating to the transactions
contemplated hereby, whether obtained before or after the execution hereof;
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(b) all confidential information received by any party
hereto with respect to the business of any other party shall be treated in
accordance with the Confidential Disclosure Agreements, dated as of December 11,
1996 and February 18, 1997 (the "Confidentiality Agreements"), between Olivetti
and Wang;
(c) this Agreement shall become wholly void and of no force
or effect and no party hereto, nor its respective directors, officers,
affiliates, representatives or advisors, shall have any liability or further
obligation to any other party to this Agreement, except (i) for any breach of
this Agreement by such party prior to the termination hereof, (ii) for any
action taken prior to the termination hereof by Olivetti, any of its Affiliates,
any of the directors, officers or employees of Olivetti or any of its Affiliates
or any of its or any such Affiliate's investment bankers inconsistent with
Section 6.2 and (iii) that Sections 6.8, 11.2(a) and 11.2(b) and (to the extent
applicable to any breach referred to in clause (i), any action referred to in
clause (ii) or Sections 6.8, 11.2(a) or 11.2(b)) Article X and the
Confidentiality Agreements shall survive any termination of this Agreement; and
(d) all filings, applications and other submissions made
pursuant to Section 6.6 shall, to the extent practicable, be withdrawn from the
Governmental Authority to which made.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Amendment and Modification. This Agreement may be amended,
modified and supplemented only by written agreement of Wang and Olivetti.
12.2 Waiver of Compliance. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party or parties
entitled to the benefits thereof only by a written instrument signed by the
party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or
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condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto, such consent shall be given in writing in a
manner consistent with the notice provisions set forth in Section 12.3 and the
requirements for a waiver of compliance as set forth in this Section 12.2.
12.3 Notices. All notices and other communications hereunder shall
be in writing and shall be sent by hand delivery or overnight courier, in each
case receipt acknowledged, registered or certified mail, in each case with
postage prepaid and return receipt requested, to the respective parties at the
following addresses:
If to Wang, to
Wang Laboratories, Inc.
600 Technology Park Drive
Billerica, MA 01821
United States
Attention: Albert A. Notini, Senior
Vice President, General
Counsel and Secretary
with a copy to
Skadden, Arps, Slate, Meagher
& Flom LLP
One Beacon Street
Boston, MA 02108
United States
Attention: David T. Brewster, Esq.
and
Gianni, Origoni & Partners
20121 Milano
Piazza Belgioioso, 2
Italy
Attention: Avv. Mario Amoroso
If to Olivetti, to
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Ing. C. Olivetti & C. S.p.A.
Via Jervis, 77
10015 Ivrea
Italy
Attention: Dott. Vincenzo Cassibba
Ing. Marino Bonamico
with a copy to
Erede & Associati
Via Serbelloni, 12
20122 Milano
Italy
Attention: Avv. Umberto Nicodano
and
Rogers & Wells
40 Basinghall Street
London EC2V 5DE
England
Attention: Michael S. Immordino, Esq.
Any party may change its address for receiving notice by written notice given to
the other parties. All notices and other communications hereunder shall be
deemed to have been duly given as of the earlier of (x) the date received at the
address and in the manner provided above or (y) the date receipt is
acknowledged.
12.4 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties,
except (a) by operation of law, (b) that Wang may assign any of its rights (but
not its obligations to the Sellers) under this Agreement to any one or more of
its majority-owned subsidiaries, foreign or domestic, and (c) that Wang may
grant a security interest in its entire right, title and interest in this
Agreement to the party or parties from which it obtains the financing for the
transactions contemplated hereby (provided, however, that until foreclosure of
such security interest Wang shall at all
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times be the sole counterparty of Olivetti for any matter arising under this
Agreement).
12.5 Publicity. Neither Olivetti, on the one hand, nor Wang, on the
other hand, shall make, issue or publish, or cause to be made, issued or
published, any announcement or written statement concerning this Agreement, the
Related Agreements or the transactions contemplated hereby or thereby for
dissemination to the general public without the prior consent of the other
party. This provision shall not apply, however, to any announcement or written
statement required to be made by law or the regulations of any Governmental
Authority or any stock exchange, except that the party required to make such
announcement shall, whenever practicable, consult with the other party
concerning the timing and content of such announcement before such announcement
is made.
12.6 Governing Law. This Agreement shall be governed by the laws of
the State of New York (without giving effect to the principles of conflicts of
law thereof except for General Obligations Law Sections 5-1401 and 5- 1402) as
to all matters, including but not limited to, matters of validity, construction,
effect, performance and remedies. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision.
12.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.8 Headings. The table of contents, headings of the sections and
articles of this Agreement are inserted for convenience only and shall not
constitute a part hereof or affect in any way the meaning or interpretation of
this Agreement.
12.9 Entire Agreement. This Agreement (including the Olivetti
Disclosure Schedule, the Wang Disclosure Schedule and the other documents and
certificates delivered pursuant hereto), the Related Agreements, the Indemnified
Related Agreements, and the Confidentiality Agreements embody the entire
agreement and understanding of the parties hereto in respect of the transactions
contemplated by this Agreement. This Agreement supersedes
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all prior agreements, promises, covenants, arrangements, communications or
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto (other than the Confidentiality Agreements
which shall remain in full force and effect), including, without limitation, (a)
the Memorandum of Understanding dated as of November 12, 1997, by and among
Wang, Olivetti and Olsy, as amended by Amendment No. 1 thereto dated as of
November 25, 1997 and Amendment No. 2 thereto dated as of December 17, 1997 and
(b) the Letter of Intent, by and among Wang, Olivetti and Olsy dated as of
January 31, 1998.
12.10 Third Parties. Nothing herein expressed or implied is intended
or shall be construed to confer upon or give to any person or corporation other
than the parties hereto and their successors or assigns, any rights or remedies
under or by reason of this Agreement.
12.11 Certain Defined Terms. The following terms shall have the
following meanings:
Affiliate. The term "Affiliate" means, with respect to any Person,
each Person, directly or indirectly, controlling, controlled by or under common
control with such Person.
Associate. The term "Associate" means, with respect to any Person,
any corporation or other business organization of which such Person is an
officer or partner or is the beneficial owner, directly or indirectly, of 5% or
more of any class of equity securities, any trust or estate in which such Person
has a substantial beneficial interest or as to which such Person serves as a
trustee or in a similar capacity and any spouse or child of such Person who has
the same home as such Person.
Average Market Price. The term "Average Market Price" means the
average of the daily Current Market Prices of a share of Wang Common Stock
during the 45 consecutive trading days immediately prior to the day in question.
Best Knowledge of Olivetti. The term "Best Knowledge of Olivetti"
means the knowledge of the Managing Director of Olivetti, any of the finance,
treasury, legal, administration, human resources, industrial relations, real
estate, intellectual property, tax or corporate development
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staff function directors of Olivetti or Marco De Benedetti acquired (a) in the
performance of their respective duties in the ordinary course of business or (b)
in the course of consulting (directly or indirectly and including, without
limitation, through the distribution of questionnaires) with the general
managers and controllers of each of Olsy, Olsy Japan, Olsy Brazil and the
Controlled Subsidiaries and the functional reports of such staff function
directors of Olivetti in connection with the transactions contemplated by this
Agreement with respect to the subject matter of the pertinent representations or
warranties or covenants or agreements of Olivetti herein (which consulting
(including, without limitation, through the distribution of questionnaires)
Olivetti hereby represents and warrants to Wang was conducted).
Business Day. The term "Business Day" means any day other than a
Saturday, Sunday or a day on which commercial banks in New York, New York or
Milan, Italy are required or permitted by law to close.
Contract. The term "Contract" means any written or oral agreement,
contract, understanding or other legally binding arrangement of any nature.
Control. The term "Control" (including the terms "controlling",
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction or the management
and policies of a Person, whether through ownership of voting securities or
otherwise.
Controlled Subsidiary. The term "Controlled Subsidiary" means any
partnership, corporation, association, trust, joint venture, unincorporated
organization, consortia (including, without limitations, pure consortia,
mandatory consortia or societa consortili) or other entity (or groups including
any of the foregoing), directly or indirectly, controlled by Olsy as of the date
hereof. Olsy shall be deemed to control any partnership, corporation,
association, trust, joint venture, unincorporated organization, consortia
(including, without limitations, pure consortia, mandatory consortia or societa
consortili) or other entity (or groups including any of the foregoing) in which
Olsy, directly or indirectly, owns or controls any shares of stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other governing body
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of such partnership, corporation, association, trust, joint venture,
unincorporated organization, consortia (including, without limitations, pure
consortia, mandatory consortia or societa consortili) or other entity (or groups
including any of the foregoing) as of the date hereof. For the avoidance of any
doubt, the term "Controlled Subsidiary" shall include, without limitation, Olsy
France, Olsy UK and Olsy Germany. The term "Controlled Subsidiaries" means all
of the foregoing.
Current Market Price. The term "Current Market Price" of share of
Wang Common Stock means the last reported sales price, regular way on such day,
or, if no sale takes place on such day, the average of the reported closing bid
and asked prices on such day, regular way, in either case as reported on the
Nasdaq National Market System of the National Association of Securities Dealers,
or, if such security is not quoted on such Nasdaq National Market, on the
principal national securities exchange on which such security is listed or
admitted for trading on any national securities exchange, the average of the
closing bid and asked prices on such day in the over-the-counter market as
reported by Nasdaq or, if bid and asked prices for such security on such day
shall not have been reported through Nasdaq, the average of the bid and asked
prices on such day as furnished by any New York Stock Exchange member firm
regularly making a market in such security selected for such purpose by Wang.
Drop-Down. The term "Drop-Down" means the contribution of the assets
and liabilities constituting the portion of the Business directly operated by
Olivetti as well as the contribution of the equity participation in certain
Subsidiaries made by Olivetti to Olsy (effective as of January 1, 1997) by the
deed of contribution dated December 23, 1996 n. 38,550 (Rep n. 14,772 Notary
Public Soudaz of Ivrea) as supplemented by the supplementary expertise dated
June 16, 1997 approved at Olsy's Board of Directors Meeting held on June 30,
1997 and subsequent Olsy Shareholders' Meeting held on September 2, 1997 (Rep.
n. 15,123 Notary Public Soudaz of Ivrea).
Exchange Act. The term "Exchange Act" means the United States
Securities and Exchange Act of 1934, as amended.
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Governmental Authority. The term "Governmental Authority" means any
federal, state, local or foreign government, or any regulatory or administrative
agency or instrumentality thereof (or any department, bureau or division
thereof).
Indemnified Related Agreement. The term "Indemnified Related
Agreement" means any agreement by and among or between any of the parties hereto
that specifically provides that it is an Indemnified Related Agreement within
the meaning of this Agreement and any agreement set forth on Schedule 12.11(a)
hereto.
Italian GAAP. The term "Italian GAAP" means the accounting standards
approved by the National Councils of "Dottori Commercialisti e Ragioneri," and
in the absence thereof, those issued by the International Accounting Standards
Committee.
Lien. The term "Lien" means any title defect or objection, lien,
claim, charge, security interest, easement, restriction, tenancy or other
encumbrance of any nature whatsoever.
Major Subsidiaries. The term "Major Subsidiaries" means the entities
set forth in Schedule 12.11(b) hereto.
Material Adverse Effect. The term "Material Adverse Effect" means a
material adverse effect on or change in the business, assets, properties,
liabilities, results of operations or condition (financial or otherwise) of
Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries, taken as a whole,
or Olsy or any of the Major Subsidiaries, taken separately.
Noncontrolled Subsidiary. The term "Noncontrolled Subsidiary" means
any partnership, corporation, association, trust, joint venture, unincorporated
organization, consortia (including, without limitations, pure consortia,
mandatory consortia or societa consortili) or other entity (or group including
any of the foregoing) in which Olsy, directly or indirectly, owns or controls
any shares of stock or other ownership interest as of the date hereof other than
a Controlled Subsidiary. The term "Noncontrolled Subsidiaries" means all of the
foregoing.
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Official. The term "Official" means any officer or employee of a
Governmental Authority or political party, or any person acting in an official
capacity for or on behalf of such Governmental Authority or political party.
OLGA. The term "OLGA" means general accounting policies reflected in
the "OLGA II - 1997 Accounting Manual O.S." previously delivered by Olivetti to
Wang.
Olivetti Affiliate. The term "Olivetti Affiliate" means any
Affiliate of Olivetti other than Olsy, Olsy Japan, Olsy Brazil, any Subsidiary
or any Olsy Japan Subsidiary.
Olsy Japan Subsidiary. The term "Olsy Japan Subsidiary" means any
partnership, corporation, association, trust, joint venture, unincorporated
organization, consortia (including, without limitations, pure consortia,
mandatory consortia or societa consortili) or other entity (or groups including
any of the foregoing) in which Olsy Japan, directly or indirectly, owns or
controls any shares of stock or other ownership interest as of the date hereof.
Person. The term "Person" means any individual, partnership,
corporation, association, trust, joint venture, unincorporated organization,
consortia (including, without limitations, pure consortia, mandatory consortia
or societa consortili) or other entity (or group including any of the foregoing)
other than any Governmental Authority.
Real Estate Agreement. The term "Real Estate Agreement" means any
agreement set forth on Schedule 12.11(c) hereto.
Related Agreement. The term "Related Agreement" means any agreement
by and among or between any of the parties hereto that specifically provides
that it is an Indemnified Related Agreement within the meaning of this
Agreement, any Real Estate Agreement and any agreement set forth on Schedule
12.11(d) hereto.
Retained Liabilities. The term "Retained Liabilities" means (a) all
liabilities or obligations of Olivetti or any Affiliate of Olivetti (whether
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured) other
than the liabilities or obligations of Olsy, Olsy Japan, Olsy Brazil or any
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Subsidiary (including, without limitation, the liabilities of Olsy, Olsy Japan,
Olsy Brazil or any Subsidiary reflected on the 9/30/97 Italian GAAP Balance
Sheet or incurred after the date of the 9/30/97 Italian GAAP Balance Sheet by
any of them in the ordinary course of business and consistent with past
practice) and (b) the liabilities or obligations of Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary transferred to Olivetti or an Olivetti
Affiliate pursuant to Sections 1.2, 1.3, 1.4, 1.5, 1.6, 1.8, 1.13 or otherwise
pursuant to this Agreement.
Securities Act. The term "Securities Act" means the United States
Securities Act of 1933, as amended.
SEC. The term "SEC" means the United States Securities Exchange
Commission.
Subsidiary. The term "Subsidiary" means any Controlled Subsidiary or
Noncontrolled Subsidiary. The terms "Subsidiaries" means all of the foregoing.
Wholly-Owned Subsidiary. The term "Wholly-Owned Subsidiary" means
any Controlled Subsidiary in which Olsy owns or controls all of the outstanding
shares of stock or other ownership interest.
12.12 Dispute Resolution. (a) Except as otherwise provided in
Sections 6.2, 6.13, 6.14, 6.18(c), 6.19, 7.1(c) or 12.12(c) or any Related
Agreement, any dispute, controversy or claim arising out of or relating to this
Agreement or any of the Related Agreements, or the breach, termination or
validity thereof ("Dispute"), shall be finally resolved in accordance with the
Rules (as defined in Section 6.13) then in effect, except as modified herein.
(b) The arbitration shall be held in London, England. The
arbitration proceedings shall be conducted and the award shall be rendered in
the English language. There shall be three arbitrators of whom each the claimant
and the respondent shall nominate one. The claimant shall nominate its
arbitrator in its Request For Arbitration which shall also include its statement
of claim. The respondent shall nominate its arbitrator in its Answer. The two
arbitrators so appointed shall nominate a third arbitrator to serve as presiding
arbitrator, such nomination to be made within 30 days of the nomination of the
second arbitrator. If any arbitrator has not been nominated within
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the time limits specified herein, such appointment shall be made by the
International Chamber of Commerce Court of Arbitration in accordance with the
Rules. The hearing shall be held, if possible, within 120 days of the
confirmation of the third arbitrator, and the tribunal shall render its award
within 30 days of the conclusion of the hearing.
(c) By agreeing to arbitration the parties do not intend to
deprive any court of its jurisdiction to issue a prearbitral injunction,
prearbitral attachment or other order in aid of arbitration proceedings or the
enforcement of any award. Without prejudice to such provisional remedies as may
be available under the jurisdiction of a national court, the arbitral tribunal
shall have full authority to grant provisional remedies and to award damages for
the failure of any party to respect the arbitral tribunal's order to that
effect. Nothing in this Agreement shall limit the rights of either party, either
before or during the pendency of the arbitration proceedings, to seize and
foreclose (through judicial foreclosure or otherwise) against any funds,
securities or any other real or personal property placed as collateral,
guarantee, bond or security under this Agreement.
(d) The arbitrators shall have the authority to award any
remedy or relief that is not in conflict with the provisions of this Agreement
including, without limitation, specific performance of any obligation created
hereunder and the issuance of permanent injunctive relief; provided, however,
that the arbitrators shall have no authority to award punitive or exemplary
damages or any other monetary damages not measured by the prevailing party's
actual damages.
(e) The award shall be final and binding upon the parties
and shall be the sole and exclusive remedy between the parties regarding any
claims, counter-claims, issues, or accounting presented to the arbitral
tribunal. Judgment upon any award may be entered in any court having
jurisdiction thereof. Any monetary award shall be made and promptly payable in
U.S. dollars, and the arbitral tribunal shall have the authority in its
discretion to grant pre-award and post-award interest at commercial rates. Any
arbitration proceedings, decision or award rendered hereunder shall be governed
by the United Nations Convention on the Recognition and Enforcement of Foreign
Arbitral Awards, 1958.
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(f) Service of all notices, statements and written
communications shall be at the addresses specified in Section 12.3 of this
Agreement and in accordance with the Rules.
(g) The rights and obligations of the parties shall remain
in full force and effect pending the award in any arbitration proceeding
hereunder, except that if this Agreement is terminated in accordance with
Article XI, only the rights and obligations which survive such termination shall
so remain in full force and effect.
(h) The arbitration conducted pursuant to this Agreement
shall be confidential. Neither party shall disclose or permit the disclosure of
any of the documents produced by the other party in the arbitration proceedings
or the existence, contents or results of any proceeding except as may be
required by a Governmental Authority or as required in an action in aid of
arbitration or for enforcement of an arbitral award. Before making any
disclosure permitted by the preceding sentence, the party intending to make such
disclosure shall if practicable give the other party reasonable written notice
of the intended disclosure and afford the other party a reasonable opportunity
to protect its interests.
(i) The parties unconditionally and irrevocably agree to
submit to the non-exclusive jurisdiction of the courts located in London,
England for the purpose of any proceedings in aid of arbitration, for
pre-arbitral attachment or injunction, for enforcement of an arbitral award or
for any claim by Wang under Section 6.2 and unconditionally and irrevocably
waive any objections which they may have now or in the future to such
jurisdiction including, without limitation, objections by reason of lack of
personal jurisdiction, improper venue, or inconvenient forum. The parties
expressly agree that leave to appeal under Section 45 or 69 of the English
Arbitration Act 1996 may not be sought with respect to any question of law
arising in the course of the arbitration or with respect to any award made.
(j) The arbitral tribunal may consolidate any arbitration
arising under or relating to this Agreement, with any arbitration arising under
or relating to any of the Related Agreements, if the subject matter of the
Dispute arises out of or relates essentially to the same set of
162
<PAGE> 171
facts or transactions. In any consolidated proceedings, any or all of Wang, Wang
Nederland and their respective Affiliates that participate shall be treated as
one party and any or all of Olivetti, Olivetti Sistemas, Olivetti Brazil and
their respective Affiliates that participate shall be treated as one party. Such
consolidated arbitration shall be determined by the arbitral tribunal appointed
for the arbitration proceeding that was commenced first in time.
12.13. Miscellaneous. A chart of all defined terms used in this
Agreement and the respective section in which they are defined is set forth on
Schedule 12.13.
163
<PAGE> 172
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their duly authorized officers as of the date first above written.
WANG LABORATORIES, INC.
Attest: By /s/ Joseph M. Tucci
----------------------
Name: Joseph M. Tucci
Title:Chairman and Chief Executive
Officer
/s/ Attestor
- ------------
Title:
WANG NEDERLAND BV
Attest: By /s/ Albert A. Notini
---------------------
Name: Albert A. Notini
Title:Director
/s/ Attestor
- ------------
Title:
ING. C. OLIVETTI & C. S.P.A.
Attest: By /s/ Roberto Colaninno
-----------------------
Name: Roberto Colaninno
Title:Chief Executive Officer
/s/ Attestor
- ------------
Title:
164
<PAGE> 173
OLIVETTI SISTEMAS E SERVICIOS
LIMITADA
Attest: By /s/ Marino Bonamico
---------------------
Name: Marino Bonamico
Title:Attorney-in-fact
/s/ Attestor
- ------------
Title:
OLIVETTI DO BRASIL S.A.
Attest: By /s/ Marino Bonamico
--------------------
Name: Marino Bonamico
Title:Attorney-in-fact
/s/ Attestor
- ------------
Title:
165
<PAGE> 1
Exhibit 7.2
-----------
STOCK ESCROW AGREEMENT
STOCK ESCROW AGREEMENT, dated as of March 17th, 1998 (this
"Stock Escrow Agreement"), by and among Wang Laboratories, Inc., a Delaware
corporation ("Wang"), Ing. C. Olivetti & C. S.p.A., an Italian corporation
("Olivetti"), and American Stock Transfer and Trust Company, a New York trust
company, as Escrow Agent (the "Agent").
This Stock Escrow Agreement is being entered into pursuant to
Section 3.4(b) of the Stock Purchase Agreement, dated as of February 28, 1998
(the "Agree ment"), by and among Wang, Wang Nederland BV, Olivetti, Olivetti
Sistemas e Servicios Limitada and Olivetti do Brasil S.A. Capitalized terms used
and not otherwise defined herein shall have the respective meanings as cribed to
them in the Agreement. This Stock Escrow Agreement is a Related Agreement and an
Indemnified Related Agreement with the meaning of the Agreement.
NOW, THEREFORE, in consideration of the forego ing, the
respective representations, warranties, cove nants and agreements set forth in
the Agreement and herein and other good and valuable consideration, the adequacy
and receipt of which are hereby acknowledged, and intending to be bound hereby,
the parties hereto hereby agree as follows:
ARTICLE I
STOCK ESCROW FUND
1.1 Establishment of Stock Escrow Fund. Simultaneously with
the execution and delivery of this Stock Escrow Agreement and in accordance with
Section 3.4(b) of the Agreement, Wang and Olivetti are depositing a certificate
representing 7,250,000 shares of Wang Common Stock (as defined in Section 1.4)
with the Agent. After the date hereof and in accordance with Section 3.2 of the
Ancillary Consideration Agreement, dated as of the date hereof, by and between
Wang and Olivetti, Wang and Olivetti may deposit a certificate representing
1,500,000 shares of Wang Common Stock with the Agent. Such certif icates (which
shall be collectively referred to herein as the "Wang Shares Certificate") are
being deposited to secure the indemnification obligations of Olivetti under
<PAGE> 2
(a) Sections 7.2(a) or 10.2 of the Agreement (including, without limitation,
with respect to any Indemnified Related Agreement) or (b) Section 4.1 of the
Indemnifica tion Agreement (MIS), dated as of the date hereof (the
"Indemnification Agreement (MIS)"), by and among Wang, Olsy and Olivetti. The
Agent agrees to hold, as escrow agent, the Wang Shares Certificate (which,
together with any dividends or other distributions on the shares of Wang Common
Stock represented thereby and amounts into which the shares of Wang Common Stock
represented thereby may be changed, shall be hereafter referred to as the "Stock
Escrow Fund") in escrow in accordance with this Stock Escrow Agreement.
1.2 Payment of Losses from Stock Escrow Fund.
(a) At any time prior to the third anni versary of
the Closing Date (the "Stock Escrow Fund Release Date"), Wang may notify the
Agent, by notice substantially in the form of Exhibit A hereto (a "Loss
Notice"), of any Loss in respect of which Olivetti is obligated to indemnify a
Wang Tax Indemnified Party or a Wang Indemnified Person pursuant to Sections
7.2(a) or 10.2 of the Agreement or Section 4.1 of the Indemnifica tion Agreement
(MIS) which has not been paid within ten days of Olivetti becoming so obligated.
The Loss Notice (i) shall set forth the Loss, the date on which Olivetti became
obligated to pay such Loss, the amount of such Loss (which shall be stated in
U.S. dollars at then prevailing exchange rates) and the section of the Agree
ment or the MIS Agreement pursuant to which Olivetti is obligated to pay such
Loss and (ii) shall have attached to it documentation with respect to (aa)
Olivetti having been notified of such Loss in accordance with the appli cable
section of the Agreement or the Indemnification Agreement (MIS), (bb) if
Olivetti refused to pay or rejected such Loss in accordance with the applicable
section of the Agreement or the Indemnification Agreement (MIS), the resolution
of such refusal or rejection in accordance with the Agreement, the
Indemnification Agree ment (MIS) or any Indemnified Related Agreement and (cc)
Olivetti having been notified of it having become obli gated to pay such Loss
(as a result of such resolution or otherwise) not less than 10 days prior to the
date of such Loss Notice. Wang shall simultaneously deliver a copy of each Loss
Notice to Olivetti.
(b) Not later than five Business Days of receipt of
any Loss Notice, (i) the Agent shall deliver
<PAGE> 3
to Wang the Wang Shares Certificate then held in escrow by the Agent and (ii)
Wang shall simultaneously issue and deliver to the Agent a Wang Shares
Certificate represent ing a number of shares of Wang Common Stock equal to the
number of shares of Wang Common Stock represented by the Wang Shares Certificate
delivered by the Agent to Wang pursuant to clause (i) of this sentence, less a
number of shares of Wang Common Stock determined by dividing the amount of the
Loss set forth in such Loss Notice by the Average Market Price of a share of
Wang Common Stock (as defined in Section 1.4) as of the date of such Loss
Notice.
1.3 Release of Stock Escrow Fund.
(a) On the fifth Business Day prior to the Stock
Escrow Fund Release Date, Wang shall notify the Agent, by notice substantially
in the form of Exhibit B hereto (the "Pending Loss Notice"), of any Loss in re
spect of which any Wang Tax Indemnified Person or Wang Indemnified Person
asserts that Olivetti is obligated to indemnify such Wang Tax Indemnified Party
or Wang Indem nified Person pursuant to Sections 7.2(a) or 10.2 of the Agreement
or Section 4.1 of the Indemnification Agreement (MIS) of which Olivetti has been
given notice pursuant to the Agreement or the Indemnification Agreement (MIS)
and which is pending as of the date of the Pending Loss Notice (any such Loss
being hereinafter referred to as a "Pending Loss"). The Pending Loss Notice (i)
shall set forth each Pending Loss, the amount of each Pending Loss (or if not
then determinable, Wang's best estimate thereof) and the aggregate amount (the
"Pending Loss Aggregate Amount") of all Pending Losses (or Wang's best estimate
thereof) and (ii) shall have attached to it documentation with respect to each
Pending Loss (aa) of Olivetti having been notified of such Pending Loss in
accordance with the applicable section of the Agreement or the Indemnification
Agreement (MIS) and (bb) estab lishing that such Pending Loss is pending, such
as a copy of Olivetti's refusal to pay or rejection of such Pending Loss or a
recent filing or submission in any court, arbitration or other proceeding
regarding such Pending Loss or other appropriate documentation. Wang shall
simultaneously deliver a copy of the Pending Loss Notice to Olivetti.
(b) If Wang fails to notify the Agent of any Pending
Loss, on the Stock Escrow Fund Release Date the Agent shall deliver the Wang
Shares Certificate then
<PAGE> 4
held in escrow by the Agent (and all dividends or other distributions on the
shares of Wang Common Stock repre sented thereby then held by the Agent) to
Olivetti.
(c) If Wang notifies the Agent of any Pending Loss,
on the Stock Escrow Fund Release Date (i) the Agent shall deliver the Wang
Shares Certificate then held in escrow by the Agent to Wang and (ii) simulta
neously with such delivery, Wang shall deliver (aa) to the Agent a Wang Shares
Certificate representing a number of shares (the "Pending Loss Shares") of Wang
Common Stock equal to the amount of the Pending Loss Aggregate Amount divided by
the Average Market Price of a share of Wang Common Stock as of the date of the
Pending Loss Notice (but not more than the number of shares of Wang Common Stock
represented by the Wang Shares Certificate delivered by the Agent to Wang
pursuant to clause (i) of this sentence) and (bb) to Olivetti a Certificate
repre senting a number of shares of Wang Common Stock equal to the difference
between the number of shares of Wang Common Stock represented by the Wang Shares
Certificate delivered by the Agent to Wang pursuant to clause (i) of this
sentence and the number of shares of Wang Common Stock represented by the Wang
Shares Certificate deliv ered by Wang to the Agent pursuant to clause (ii)(aa)
of this sentence. Simultaneously with the delivery by Wang to Olivetti of a
certificate pursuant to clause (ii)(bb) of the immediately preceding sentence,
the Escrow Agent shall deliver to Olivetti all dividends or other distri butions
on the shares of Wang Common Stock represented by such certificate then held by
the Agent.
(d) At any time after the Stock Escrow Fund Release
Date and prior to the date on which Wang and Olivetti mutually notify the Agent
that all Pending Losses have been are resolved pursuant to the Agreement, the
Indemnification Agreement (MIS) or any Indemnified Related Agreement (the "Stock
Escrow Fund Termination Date"), Wang may be paid for any Pending Loss for which
Olivetti becomes obligated to pay a Wang Tax Indemnified Party or a Wang Tax
Indemnified Person pursuant to Sec tion 7.2(a) or 10.2 of the Agreement or
Section 4.1 of the Indemnification Agreement (MIS) which has not been paid
within 10 days of Olivetti becoming so obligated in the manner provided for in
Section 1.2. On the Stock Escrow Fund Termination Date, the Agent shall deliver
the Wang Shares Certificate then held in Escrow by the Agent (and all dividends
or other distributions on the shares
<PAGE> 5
of Wang Common Stock represented thereby then held by the Agent) to Olivetti.
(e) At any time after 120 days after the Stock Escrow
Fund Release Date and prior to the Stock Escrow Fund Termination Date, Olivetti
may notify the Agent, by notice substantially in the form of Exhibit C hereto (a
"Failure to Prosecute Notice"), of any Pending Loss (other than a Pending Loss
involving a Third Party Claim) which no Wang Tax Indemnified Person or Wang
Indemnified Person is using commercially reasonable best efforts to prosecute.
The Failure to Prosecute Notice (i) shall set forth the Pending Loss and the
amount of such Pending Loss (or estimate thereof) set forth on the Pending Loss
Notice and (ii) shall have attached to it an affidavit of the President of
Olivetti with respect to the facts that establish that no Wang Tax Indemnified
Person or Wang Indemnified Person is using commercially reasonable best efforts
to prosecute it. Olivetti shall simultaneously deliver a copy of any Failure to
Prosecute Notice to Wang. Not later than five Business Days after receipt of any
Failure to Prosecute Notice, (i) the Agent shall deliver to Wang the Wang Shares
Certificate then held in escrow by the Agent and (ii) Wang shall simulta neously
issue and deliver to (aa) the Agent a Wang Shares Certificate representing a
number of shares of Wang Common Stock equal to the number of shares of Wang
Common Stock represented by the Wang Shares Certificate deliv ered by the Agent
to Wang pursuant to clause (i) of this sentence, less a number of shares (the
"Failure to Prose cute Shares") of Wang Common Stock determined by dividing the
amount of the Pending Loss set forth in such Failure to Prosecute Notice by the
Average Market Price of a share of Wang Common Stock as of the date of such
Failure to Prosecute Notice and (bb) Olivetti a certificate representing the
Failure to Prosecute Shares.
(f) At any time after the earlier of the third
anniversary of the Closing Date and the occurrence of an Early Termination Event
(as defined in the Stock holders Agreement, dated as of the date hereof, by and
between Wang and Olivetti), Olivetti may notify the Agent, by notice
substantially in the form of Exhibit D hereto (a "Substitution of Collateral
Notice"), that Olivetti has delivered to Wang a letter of credit (a
"Substitution of Collateral Letter of Credit") substan tially in the form of the
Letter of Credit. The Substi tution of Collateral Notice (i) shall set forth the
amount of the Substitution of Collateral Letter of Credit
<PAGE> 6
and (ii) shall have a copy of the Substitution of Collat eral Letter of Credit
attached to it. Olivetti shall simultaneously deliver a copy of any Substitution
of Collateral Notice to Wang. Not later than five Business Days after receipt of
any Substitution of Collateral Notice, (i) the Agent shall deliver to Wang the
Wang Shares Certificate then held in escrow by the Agent and (ii) Wang shall
simultaneously issue and deliver to (aa) Olivetti a certificate representing a
number of shares of Wang Common Stock equal to the number of shares of Wang
Comon Stock determined by dividing the face amount of such Substitution of
Collateral Letter of Credit by U.S. $27 (the "Substitution of Collateral
Factor"), as ad justed from time to time pursuant to Section 2.15, and (bb) if
the number of shares of Wang Common Stock repre sented by the Wang Shares
Certificate delivered by the Agent to Wang pursuant to clause (i) of this
sentence exceeds the number of shares of Wang Common Stock repre sented by the
certificate delivered by Wang to Olivetti pursuant to clause (ii)(aa) of this
sentence, the Agent a Wang Shares Certificate representing a number of shares of
Wang Common Stock equal to such excess.
1.4 Certain Defined Terms.
Average Market Price. The term "Average Market Price" for a
share of Wang Common Stock means the average of the daily Current Market Prices
of a share of Wang Common Stock during the 45 consecutive trading days
immediately prior to the day in question.
Current Market Price. The term "Current Market Price" for a
share of Wang Common Stock means the last reported sales price, regular way on
such day, or, if no sale takes place on such day, the average of the reported
closing bid and asked prices on such day, regular way, in either case as
reported on the Nasdaq National Market System of the National Association of
Securities Dealers, or, if such security is not quoted on such Nasdaq Na tional
Market, on the principal national securities exchange on which such security is
listed or admitted for trading or, if not listed or admitted for trading on any
national securities exchange, the average of the closing bid and asked prices on
such day in the over-the-counter market as reported by Nasdaq or, if bid and
asked prices for such security on such day shall not have been re ported through
Nasdaq, the average of the bid and asked prices on such day as furnished by any
New York Stock
<PAGE> 7
Exchange member firm regularly making a market in such security selected for
such purpose by Wang.
Wang Common Stock. The term "Wang Common Stock" means shares
of common stock, par value $0.01 per share, of Wang, as constituted on the date
hereof, any stock into which such common stock shall have been changed or any
stock resulting from any reclassification of such common stock.
ARTICLE II
GENERAL PROVISIONS
2.1 Wang Common Stock in Stock Escrow Fund. Olivetti shall
have the right to vote shares of Wang Common Stock held in the Stock Escrow Fund
for all pur poses. Wang shall pay all ordinary cash dividends on shares of Wang
Common Stock held in the Stock Escrow Fund to the holder of record thereof; Wang
shall pay all other dividends and other distributions on shares of Wang Common
Stock held in the Stock Escrow Fund to the Agent.
2.2 Term of Agreement. This Stock Escrow Agreement shall be in
effect until the date one month following (a) the Stock Escrow Fund Release Date
or (b) if there is any Pending Loss as of the Stock Escrow Fund Release Date,
the Stock Escrow Fund Termination Date.
2.3 Expenses of the Agent. The Agent shall be entitled to
reasonable compensation for its services hereunder and shall be reimbursed for
all reasonable expenses, disbursements and advancements incurred or made by it
in performance of its services hereunder, which will be paid by one-half by
Olivetti and one-half by Wang.
2.4 Taxes on Stock Escrow Fund. Olivetti and Wang shall each
bear one-half all federal, state and local taxes based upon or measured by net
or gross income arising from the Stock Escrow Fund and shall provide the Agent
with sufficient information so that the Agent can comply with reporting
obligations imposed under any laws relating to such taxes.
2.5 Investment of Cash in Stock Escrow Fund. Cash held in the
Stock Escrow Fund shall be invested by the Agent in short-term obligations of
the U.S. govern ment or in certificates of deposit issued by a bank or trust
company having combined capital and surplus of at least $500,000,000 or in such
other manner as the parties hereto may agree. All interest or other accretions
from property held in the Stock Escrow Fund shall become part of the Stock
Escrow Fund and be subject to the terms hereof.
2.6 The Agent. The obligations of the Agent under this
Agreement are subject to the following terms and conditions:
(a) The Agent is not a party to and is not bound by
any agreement other than as expressly set forth in this Stock Escrow Agreement;
(b) The Agent acts hereunder as a deposi tory only
and is not responsible for or liable in any manner whatsoever for the
sufficiency, correctness, genuineness or validity of any funds, shares,
documents or other materials deposited with it. Wang and Olivetti agree to and
hereby do waive any suit, claim, demand or cause of action of any kind which
they may have or may assert against the Agent arising out of or relating to the
execution or performance by the Agent of this Stock Escrow Agreement, unless
such suit, claim, demand or cause of action is based upon the willful
misconduct, gross negligence or bad faith of the Agent. To the extent that the
Agent delivers any funds, shares or documents in accordance with the
instructions described in this Agreement, Wang and Olivetti further agree,
jointly and severally, to indemnify the Agent against and from any and all
claims, demands, costs, liabilities and expenses, including counsel fees, which
may be asserted against it or to which it may be exposed or which it may incur
by reason of its execution or performance of this Stock Escrow Agreement unless
arising from the Agent's willful misconduct, gross negligence or bad faith. The
Agent shall not be required to defend any legal proceed ing which may be
instituted against it with respect to the subject matter of this Stock Escrow
Agreement unless it is requested to do so by one of the parties hereto and is
indemnified by such requesting party to the Agent's satisfaction against the
cost and expenses (including reasonable attorney's fees) of such defense, unless
arising from the Agent's willful misconduct, gross negli gence or bad faith. The
Agent shall not be required to institute legal proceedings of any kind. The
Agent shall
<PAGE> 8
not be required to perform any acts which violate any law or applicable rules of
any governmental agency;
(c) The Agent shall not have any respon sibility for
the genuineness or validity of any notice, evidence or other document or item
delivered to it, and the Agent shall be entitled to rely upon and shall be
protected in acting upon any written notice, waiver, consent, receipt or other
evidence or paper document which the Agent reasonably believes to be genuine and
to be signed by the proper person;
(d) The Agent shall not be liable for any error of
judgment or for any acts done or steps taken or omitted or admitted by it or for
any mistake of facts or law or for anything which the Agent may do or refrain
from doing in connection herewith except for the Agent's own willful misconduct,
gross negligence or bad faith; and
(e) As to any legal questions arising in connection
with the administration of this Agreement, the Agent may rely absolutely upon
the opinions given to it by its counsel and shall be free of liability for
acting in reliance on such opinions.
2.7 Removal of Agent. The Agent agrees that Wang and Olivetti
may, by mutual agreement at any time, remove the Agent as agent hereunder, and
substitute another therefor. In such event the Agent shall, upon receipt of
written notice of such removal, account for and deliver to such substituted
escrow agent the Stock Escrow Fund and the Agent shall thereafter be discharged
of all liability hereunder.
2.8 Amendment and Modification. This Stock Escrow Agreement
may be amended, modified and supple mented only by written agreement of Wang,
Olivetti and the Agent.
2.9 Waiver of Compliance. Except as otherwise provided in this
Stock Escrow Agreement, any failure of any of the parties to comply with any
obligation, cove nant, agreement or condition herein may be waived by the party
or parties entitled to the benefits thereof only by a written instrument signed
by the party granting such waiver, but such waiver or failure to insist upon
strict compliance with such obligation, covenant, agreement or
<PAGE> 9
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
2.10 Notices. All notices and other communica tions hereunder
shall be in writing and shall be sent by hand delivery or overnight courier, in
each case receipt acknowledged, or registered or certified mail, in each case
with postage prepaid and return receipt requested, to the respective parties at
the following addresses:
If to Wang, to:
Wang Laboratories, Inc.
600 Technology Park
Billerica, MA 01821
United States
Attention: Albert A. Notini, Senior
Vice President, General
Counsel and Secretary
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, MA 02108
Attention: David T. Brewster, Esq.
and
Gianni, Origoni & Partners
20121 Milano
Piazza Belgioioso, 2
Italy
Attention: Avv. Mario Amoroso
If to Olivetti, to:
Ing. C. Olivetti & C. S.p.A.
Via G. Jervis, 77
10015 Ivrea
Italy
Attention: Managing Director
<PAGE> 10
with a copy to:
Erede e Associati
Via Serbelloni, 12
20122 Milano
Italy
Attention: Avv. Umberto Nicodano
and
Rogers & Wells
40 Basinghall Street
London EC2V 5DE
England
Attention: Michael S. Immordino, Esq.
If to the Agent, to:
American Stock Transfer and Trust Company
40 Wall Street
New York, New York 10005
Attention: Executive Vice President
Any party may change its address for receiving notice by written notice given to
the other parties. All notices and other communications hereunder shall be
deemed to have been duly given as of the earlier of (a) the date received at the
address and in the manner provided above or (b) the date receipt is
acknowledged.
2.11 Assignment. This Stock Escrow Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but neither this
Stock Escrow Agreement nor any of the rights, inter ests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties, except (a) by operation of law, (b) that
Wang may assign any of its rights (but not its obligations to Olivetti or the
Agent) under this Stock Escrow Agreement to any one or more of its
majority-owned subsidiaries, foreign or domestic, and (c) that Wang may grant a
security interest in its entire right, title and interest in this Stock Escrow
Agreement to the party or parties from which it obtains the financing for the
transactions contemplated by the Agreement (provided, however, that until
foreclosure of such security interest Wang shall at all times be the sole
counterparty of
<PAGE> 11
Olivetti and the Agent for any matter arising under this Stock Escrow
Agreement).
2.12 Governing Law. This Stock Escrow Agree ment shall be
governed by the laws of the State of New York (without giving effect to the
principles of con flicts of law thereof except for General Obligations Law
Section 5-1401 and with respect to the exception to Section 2.14 of this Stock
Escrow Agreement, Section 5- 1402) as to all matters, including but not limited
to, matters of validity, construction, effect, performance and remedies. The
invalidity or unenforceability of any provision of this Stock Escrow Agreement
shall not affect the validity or enforceability of any other provision.
2.13 Counterparts. This Stock Escrow Agreement may be executed
simultaneously in two or more counter parts, each of which shall be deemed to be
an original, but all of which together shall constitute one and the same
instrument.
2.14 Dispute Resolution. Any dispute between Wang and Olivetti
arising out of this Stock Escrow Agree ment shall be resolved in accordance with
Section 12.12 of the Agreement, except that any dispute arising out of the Stock
Escrow Agreement with respect to a breach or alleged breach of this Stock Escrow
Agreement by the Agent shall be decided by the state or federal courts of the
State of New York (and each of the parties hereto expressly submits itself to
the non-exclusive jurisdic tions of the state and federal courts of the State of
New York in any action, suit or proceeding relating to any such breach or
alleged breach of this Cash Escrow Agree ment by the Agent and irrevocably
waives, to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such action, suit or proceeding
brought in such a court and any claim that any such action, suit or proceeding
brought in such a court has been brought in an inconve nient forum).
2.15 Adjustment of the Substitution of Collat eral Factor. If
the outstanding shares of Wang Common Stock shall be subdivided into a greater
number of shares of Wang Common Stock, the Substitution of Collateral Factor in
effect at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and con versely,
if the outstanding shares of Wang Common Stock
<PAGE> 12
shall be combined into a smaller number of shares of Wang Common Stock, the
Substitution of Collateral Factor in effect at the opening of business on the
day following the day upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the case may be, to
become effective immedi ately after the opening of business on the day following
the day upon which such subdivision or combination be comes effective.
<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have caused this Stock
Escrow Agreement to be duly executed as of the day and year first above written.
WANG LABORATORIES, INC.
By: /s/ David Goulden
-------------------
Name: David Goulden
Title:Senior Vice President
ING. C. OLIVETTI & C. S.P.A.
By: /s/ Marino Bonamico
--------------------
Name: Marino Bonamico
Title:Attorney-in-fact
AMERICAN STOCK TRANSFER
AND TRUST COMPANY
By: /s/ Herbert J. Lemmer
----------------------
Name: Herbert J. Lemmer
Title:Vice President
<PAGE> 14
Exhibit A
[Letterhead of Wang Laboratories, Inc.]
[Date]
American Stock Transfer and Trust Company
40 Wall Street
New York, New York 10005
Attention: Executive Vice President
Ladies and Gentlemen:
Reference is made to the Stock Escrow Agreement, dated as of
March __, 1998, by and among Wang Laboratories, Inc., Ing. C. Olivetti & C.
S.p.A. and American Stock Transfer and Trust Company (the "Stock Escrow
Agreement"). Capitalized terms used and not otherwise defined herein have the
respective meanings ascribed to them in the Stock Escrow Agreement.
Pursuant to Section 1.2(a) of the Stock Escrow Agreement, the
undersigned hereby notifies you that on [____________, Olivetti became obligated
to pay a Loss in the amount of U.S. $[ ] pursuant to Section [ ] of the
[Agreement][Indemnification Agreement (MIS)] [Indem nified Related Agreement]
relating to [ ] and has not paid such Loss within ten days of such date. Accord
ingly, please deliver the Wang Share Certificate held by you to the undersigned
in accordance with Section 1.2(b) of the Stock Escrow Agreement.
Attached hereto is documentation with respect to (a) Olivetti
having been notified of such Loss in accordance with the applicable section of
the [Agreement] [Indemnification Agreement (MIS)] [Indemnified Related
Agreement], (b) if Olivetti refused to pay or rejected such Loss in accordance
with the applicable section of the [Agreement] [Indemnification Agreement (MIS)]
[Indem nified Related Agreement], the resolution of such refusal or rejection in
accordance with the [Agreement] [Indemni fication Agreement (MIS)] [Indemnified
Related Agreement] and (c) Olivetti having been notified of it having become
<PAGE> 15
obligated to pay such Loss not less than 10 days prior to the date of such Loss
Notice.
Very truly yours,
WANG LABORATORIES, INC.
By_________________________
Name:
Title:
cc: Ing. C. Olivetti & C. S.p.A.
Via G. Jervis, 77
10015 Ivrea
Italy
Attention: Managing Director
<PAGE> 16
Exhibit B
[Letterhead of Wang Laboratories, Inc.]
[Date]
American Stock Transfer and Trust Company
40 Wall Street
New York, New York 10005
Attention: Executive Vice President
Ladies and Gentlemen:
Reference is made to the Stock Escrow Agreement, dated as of
March __, 1998, by and among Wang Laboratories, Inc., Ing. C. Olivetti & C.
S.p.A. and American Stock Transfer and Trust Company (the "Stock Escrow
Agreement"). Capitalized terms used and not otherwise defined herein have the
respective meanings ascribed to them in the Stock Escrow Agreement.
Pursuant to Section 1.3(a) of the Stock Escrow Agreement, the
undersigned hereby notifies you by way of Schedule 1 hereto of each Pending
Loss, the amount of each Pending Loss (or if not determinable, a good faith
estimate thereof) and the Pending Loss Aggregate Amount. Accordingly, please
deliver the Wang Share Certificate held by you to the undersigned in accordance
with Section 1.3(c) of the Stock Escrow Agreement.
Attached hereto is documentation with respect to each Pending
Loss (a) of Olivetti having been notified of such Pending Loss in accordance
with the applicable section of the [Agreement] [Indemnification Agreement (MIS)]
[Indemnified Related Agreement] and (b) establish ing that such Pending Loss is
pending, such as a copy of Olivetti's refusal to pay or rejection of such
Pending
<PAGE> 17
Loss or a recent filing or submission in any court, arbitration or other
proceeding regarding such Pending Loss or other appropriate documentation.
Very truly yours,
WANG LABORATORIES, INC.
By________________________
Name:
Title:
cc: Ing. C. Olivetti & C. S.p.A.
Via G. Jervis, 77
10015 Ivrea
Italy
Attention: Managing Director
<PAGE> 18
Exhibit C
[Letterhead of Ing. C. Olivetti & C. S.p.A.]
[Date]
American Stock Transfer and Trust Company
40 Wall Street
New York, New York 10005
Attention: Executive Vice President
Ladies and Gentlemen:
Reference is made to the Stock Escrow Agreement, dated as of
March __, 1998, by and among Wang Laboratories, Inc., Ing. C. Olivetti & C.
S.p.A. and American Stock Transfer and Trust Company (the "Stock Escrow
Agreement"). Capitalized terms used and not otherwise defined herein have the
respective meanings ascribed to them in the Stock Escrow Agreement.
Pursuant to Section 1.3(e) of the Stock Escrow Agreement, the
undersigned hereby notifies you that no Wang Tax Indemnified Person or Wang
Indemnified Person is using commercially reasonable best efforts to prosecute
the Pending Loss referred to as [ ] on the Pending Loss in the amount (or
estimated amount) of [ ] as set forth on the Pending Loss Notice. Accordingly,
please deliver the Wang Share Certificate held by you to Wang in accordance with
Section 1.3(e) of the Stock Escrow Agreement.
<PAGE> 19
Attached hereto is an affidavit of the Presi dent the
undersigned with respect to the facts that establish that no Wang Tax
Indemnified Person or Wang Indemnified Person is using commercially reasonable
best efforts to prosecute such Pending Loss.
Very truly yours,
ING. C. OLIVETTI & C. S.P.A.
By________________________
Name:
Title:
cc: Wang Laboratories, Inc.
600 Technology Park Drive
Billerica, MA 01821
Attention: Albert A. Notini
Senior Vice President,
General Counsel and Secretary
<PAGE> 20
Exhibit D
[Letterhead of Ing. C. Olivetti & C. S.p.A.]
[Date]
American Stock Transfer and Trust Company
40 Wall Street
New York, New York 10005
Attention: [ ]
Ladies and Gentlemen:
Reference is made to the Stock Escrow Agreement, dated as of
March __, 1998, by and among Wang Laboratories, Inc., Ing. C. Olivetti & C.
S.p.A. and American Stock Transfer and Trust Company (the "Stock Escrow
Agreement"). Capitalized terms used and not otherwise defined herein have the
respective meanings ascribed to them in the Stock Escrow Agreement.
Pursuant to Section 1.3(f) of the Stock Escrow Agreement, the
undersigned hereby notifies you that Olivetti has delivered to Wang a
Substitution of Collat eral Letter of Credit in the face amount of U.S.$[ ]
substantially in the form of the Letter of Credit. A copy of the Substitution of
Collateral Letter of Credit is attached hereto. Accordingly, please deliver the
Wang Share Certificate held by you to Wang in accordance with Section 1.3(f) of
the Stock Escrow Agreement.
Very truly yours,
ING. C. OLIVETTI & C. S.P.A.
By________________________
Name:
Title:
cc: Wang Laboratories, Inc.
600 Technology Park Drive
Billerica, MA 01821
Attention: Albert A. Notini
Senior Vice President,
General Counsel and Secretary
<PAGE> 1
Exhibit 7.3
-----------
ANCILLARY CONSIDERATION AGREEMENT
ANCILLARY CONSIDERATION AGREEMENT ("Agreement"), dated as of March 17th, 1998
between Wang Laboratories, Inc., a Delaware USA corporation ("Wang" or the
"Corporation") and Ing. C. Olivetti & C. S.p.A., an Italian corporation
("Olivetti").
WHEREAS, Wang, Olivetti, and certain other entities are parties to a Stock
Purchase Agreement dated February 28, 1998 (the "Stock Purchase Agreement")
pursuant to which Wang and certain Affiliates (as defined in the Stock Purchase
Agreement) purchased from Olivetti and certain Affiliates Olivetti's information
technology solutions and services business (the "Transaction"); and
WHEREAS, as part of the consideration for such purchase, Wang has agreed to pay
to Olivetti the consideration described in this Agreement; and
WHEREAS, this Agreement is a "Related Agreement" and an "Indemnified Related
Agreement" within the meaning of the Stock Purchase Agreement;
NOW THEREFORE, in consideration of the foregoing and the respective covenants
and agreements hereinafter set forth, and intending to be legally bound hereby,
the Parties agree as follows:
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings indicated below:
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions are obligated or authorized to be
closed in New York, New York or in Boston, Massachusetts.
"Common Stock" means the Common Stock, $0.01 par value per share, of
Wang.
"Current Market Price" of publicly traded shares of Common Stock or any
other class of capital stock or other security of the Corporation or
any other issuer for any day shall mean the last reported sales price,
regular way on such day, or, if no sale takes place on such day, the
average of the reported closing bid and asked prices on such day,
regular way, in either case as reported on the principal national
securities exchange on which such security is listed or admitted for
trading or, if not listed or admitted for trading on any national
securities exchange, on the Nasdaq National Market System of the
National Association of Securities Dealers, or, if such security
-1-
<PAGE> 2
is not quoted on such Nasdaq National Market, the average of the
closing bid and asked prices on such day in the over-the-counter market
as reported by Nasdaq or, if bid and asked prices for such security on
such day shall not have been reported through Nasdaq, the average of
the bid and asked prices on such day as furnished by any New York Stock
Exchange member firm regularly making a market in such security
selected for such purpose by the Board of Directors.
"Fair Market Value" means the average of the daily Current Market
Prices of a share of Common Stock during the ten (10) consecutive
Trading Days immediately prior to the earlier of the day in question
and the day before the "ex" date with respect to the issuance or
distribution requiring such computation. The term "'ex date," when used
with respect to any issuance or distribution, means the first day on
which the Common Stock trades regular way, without the right to receive
such issuance or distribution, on the exchange or in the market, as the
case may be, used to determined that day's Current Market Price.
"Measurement Date" means December 15, 1998.
"Periodic Payment" shall have the meaning established in Section 5
hereof.
"Periodic Payment Date" means May 1, August 1, November 1 and February
1 in each year, commencing on May 1, 1998; provided, however, that if
any Periodic Payment Date falls on any day other than a Business Day,
the Periodic Payment due on such Periodic Payment Date shall be paid on
the Business Day immediately following such Periodic Payment Date. The
Periodic Payment Date with respect to the final Periodic Payment Period
shall be the date on which this Agreement terminates.
"Periodic Payment Periods" shall mean quarterly periods commencing on
May 1, August 1, November 1 and February 1 of each year and ending on
and including the day preceding the first day of the next succeeding
Periodic Payment Period (other than the initial Periodic Payment
Period, which shall commence on the date hereof and end on and include
April 30, 1998, and the final Periodic Payment Period, which shall end
on the date on which this Agreement terminates).
"Stock Escrow Agent" means American Stock Transfer and Trust Company or
the replacement escrow agent appointed in accordance with the Stock
Escrow Agreement.
"Stock Escrow Agreement" means that Stock Escrow Agreement among Wang,
Olivetti and the Stock Escrow Agent which was executed in conjunction
with the Stock Purchase Agreement.
"Stockholders Agreement" means that Stockholders Agreement of even date
herewith between Wang and Olivetti.
-2-
<PAGE> 3
"Trading Day" shall mean any day on which the securities in question
are traded on the principal national securities exchange on which such
securities are listed or admitted, or if not listed or admitted for
trading on any national securities exchange, on the Nasdaq National
Market System of the National Association of Securities Dealers, or if
such securities are not quoted on such Nasdaq National Market, in the
applicable securities market in which the securities are traded.
2. STOCKHOLDER APPROVAL
2.1 Wang will include in the Notice of Meeting, Proxy Statement and
Proxy distributed in connection with its 1998 Annual Meeting of
Stockholders or Special Meeting of Stockholders called prior thereto
(each, a "Stockholder Meeting") a resolution of stockholders approving
the issuance of 1,500,000 shares of Common Stock to Olivetti as part of
the consideration for the Transaction (the AAdditional Stock
Issuance").
2.2 Wang will recommend to its stockholders that they approve the
Additional Stock Issuance and Wang shall use its commercially
reasonable best efforts to solicit stockholder votes and proxies in
favor of such approval.
2.3 Wang will notify Olivetti, no later than five (5) Business Days
following a Stockholder Meeting, as to the approval or rejection by the
stockholders of the Additional Stock Issuance.
2.4 Olivetti acknowledges that no votes cast in respect of any shares
of Common Stock held or voted by it or its Affiliates shall be counted
for purposes of determining whether or not the Additional Stock
Issuance is approved or rejected by the stockholders of Wang.
3. ISSUANCE OF ADDITIONAL STOCK
3.1 In the event that the Additional Stock Issuance is approved by the
Wang stockholders at a Stockholders Meeting on or prior to the
Measurement Date, then, no later than ten (10) days following such
approval, Wang will issue to Olivetti (on the terms described in
Section 3.2 below), without additional consideration, 1,500,000 shares
of Common Stock (the AAdditional Stock").
3.2 Wang will deliver the certificate representing the Additional
Stock, duly registered in the name of Olivetti, to the Stock Escrow
Agent for holding in accordance with the Stock Escrow Agreement.
3.3 The parties agree that the Additional Stock shall be AWang Shares"
as defined in the Stockholders Agreement and subject to the
restrictions and benefits set forth in the Stockholders Agreement.
-3-
<PAGE> 4
4. PAYMENT OF ADDITIONAL CONSIDERATION
4.1 If (a) the Additional Stock Issuance has not been approved by the
Wang Stockholders on or prior to the Measurement Date, or (b) Wang
consummates the sale, lease, transfer or other disposition of all or
substantially all of the assets of Wang or any other Change in Control
of Wang (as defined in the Stockholders Agreement), Wang shall, in lieu
of the Additional Stock Issuance, pay to Olivetti (on the terms
described in Section 4.3 below) an amount (the "Additional Cash
Consideration") equal to the Fair Market Value of the Common Stock (on
the Measurement Date or on the date of such transaction described in
clause (b), as applicable) multiplied by 1,500,000.
4.2 The Additional Cash Consideration shall be paid no later than ten
(10) days following the Measurement Date or the consummation of the
transaction described in clause 4.1(b), as applicable or, at Wang's
option, at any earlier time following a rejection by Wang's
stockholders at a Stockholders Meeting of the Additional Stock
Issuance.
4.3 Wang shall pay the Additional Cash Consideration in an escrow
account established pursuant to an escrow agreement on substantially
the terms of the Stock Escrow Agent which shall be executed by the
parites prior to the payment of the Additional Cash Consideration. Such
escrow agreement shall provide that the escrow agent shall invest the
escrowed funds in customary instruments in accordance with the
reasonable instructions of Olivetti.
5. PERIODIC PAYMENTS
5.1 Wang shall pay Olivetti, on each Periodic Payment Date during the
term hereof, certain periodic payments (the "Periodic Payments"), each
of which shall equal, with respect to each full Periodic Payment
Period, $658,125.00. The amount of the Periodic Payment for the initial
Periodic Payment Period, or any other period shorter or longer than a
full three-month Periodic Payment Period, shall be computed on the
basis of twelve 30-day months and a 360-day year.
6. MISCELLANEOUS
6.1 Waiver. The waiver by any party of a breach of or a default under
any provision of this Agreement by another party shall not be construed
as a waiver of any subsequent breach of the same or any other provision
of this Agreement, nor shall any delay or omission on the part of any
party to exercise or avail itself of any right, power or privilege that
it has or may have hereunder operate as a waiver of any right, power or
privilege by such party.
6.2 Notices. All notices and other communications hereunder shall be in
writing and shall be sent by hand delivery or overnight courier, in
each case receipt
-4-
<PAGE> 5
acknowledged, registered or certified mail, in each case with postage
prepaid and return receipt requested, to the respective parties at the
following addresses:
If to Wang, to
Wang Laboratories, Inc.
600 Technology Park Drive
Billerica, MA 01821
United States
Attention: General Counsel
with a copy to
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attention: John A. Burgess, Esq.
If to Olivetti, to
Ing. C. Olivetti & C. S.p.A.
Via Jervis, 77
10015 Ivrea
Italy
Attention: Dott. Vincenzo Cassibba
Ing. Marino Bonamico
-5-
<PAGE> 6
with a copy to
Erede & Associati
Via Serbelloni, 12
20122 Milano
Italy
Attention: Avv. Umberto Nicodano
and
Rogers & Wells
40 Basinghall Street
London EC2V 5DE
England
Attention: Michael S. Immordino, Esq.
Any party may change its address for receiving notice by written notice given to
the other parties. All notices and other communications hereunder shall be
deemed to have been duly given as of the earlier of (x) the date received at the
address and in the manner provided above or (y) the date receipt is
acknowledged.
6.3 Assignment. Neither this Agreement nor any rights granted
hereunder may be assigned, transferred, subcontracted or
otherwise encumbered or disposed of in whole or in part by
either party without the express prior written consent of the
other party. Any attempted assignment in violation of this
Section 6.3 shall be void ab initio. Subject to the express
limitations set forth herein, this Agreement shall be binding
upon and inure to the benefit of the parties and their
respective successors and permitted assigns.
6.4 Governing Law. This Agreement shall be subject to and
interpreted in accordance with the laws of the State of New
York (without giving effect to its principles of conflicts of
laws) as to all matters, including but not limited to, matters
of validity, construction, effect, performance and remedies.
6.5 Headings. The headings contained in this Agreement are for
convenience and ease of reference only and shall not be
considered in construing this Agreement.
6.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same
instrument.
-6-
<PAGE> 7
6.7 Dispute Resolution. Any dispute between Wang and Olivetti
arising under this Agreement shall be resolved in accordance
with Section 12.12 of the Stock Purchase Agreement.
6.8 Entire Agreement. This Agreement, together with the Stock
Purchase Agreement, Stock Escrow Agreement and Stockholders
Agreement, constitutes the entire understanding of the parties
with respect to the subject matter hereof, and shall not be
amended, altered, suspended, or modified without the written
consent of both parties hereto.
6.9 Term and Termination. This Agreement, and all rights and
obligations of the parties hereunder, shall terminate
automatically upon the earlier to occur of (a) the Additional
Share Issuance under Section 3 above or (b) the payment of the
Additional Cash Consideration under Section 4 above; provided
that the provisions of Sections 6.2, 6.4 and 6.7 shall survive
any termination of this Agreement.
6.10 Indemnification. Any claim for indemnification by Wang or
Olivetti shall be resolved in accordance with Article X of the
Stock Purchase Agreement.
-7-
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this ANCILLARY CONSIDERATION
AGREEMENT to be duly executed as of the day and year first above written.
WANG LABORATORIES, INC.
Attest: By: /s/ David Goulden
--------------------
Name: David Goulden
Title: Senior Vice President
/s/ Attestor
- -----------
Title:
ING. C. OLIVETTI & C. S.P.A.
Attest: By: /s/ Marino Bonamico
-------------------
Name: Marino Bonamico
/s/ Attestor Title:Attorney-in-fact
- ------------
Title:
-8-
<PAGE> 1
Exhibit 7.4
-----------
STOCK APPRECIATION RIGHT
Certificate No. 1 Number of Rights: 5,000,000
(subject to adjustment)
Date of Issuance: March 17, 1998
This Certificate represents 5,000,000 stock appreciation rights
(collectively the "Rights" and individually a "Right") issued by WANG
LABORATORIES, INC., a Delaware corporation (the "Company"), to ING. C. OLIVETTI
& C. S.P.A., an Italian corporation (the "Holder"). Each Right entitles the
Holder to receive from the Company an amount, payable as provided below, equal
to the higher of (i) $4 and (ii) the difference between (A) the Fair Market
Value per share of Common Stock (as defined and determined as provided in
Section 2(e) below) on the date of exercise of such Right (the "Exercise Date")
and (B) $30 (the "Strike Price"). The Company may, at its option, pay such
amount to the Holder in either cash or shares of common stock, par value $.01
per share, of the Company (the "Common Stock") as hereinafter provided. If the
Company elects to pay the amount due to the Holder in shares of Common Stock,
such shares shall be valued at the Fair Market Value per share of Common Stock
on the Exercise Date.
The number of Rights represented by this Certificate and the Strike
Price are subject to adjustment as provided in Section 2 below.
1. Exercise
(a) Each Right may be exercised by the Holder at any
time and from time to time on and after the third anniversary of the date hereof
and on or before 5:00 p.m., Boston, Massachusetts time, on the seventh
anniversary of the date hereof (the "Expiration Date").
(b) (i) The Rights represented hereby may be
exercised by surrendering this Certificate, together with a written notice of
exercise, in the form attached hereto as Exhibit A, duly executed by the Holder
or by such Holder's duly authorized attorney, at the principal office of the
Company (which is located at 600 Technology Park Drive, Billerica, Massachusetts
01821), or at such other office or agency as the Company may designate in
writing to the Holder in accordance with Section 10 hereof.
1
<PAGE> 2
(ii) As soon as practicable after the exercise of any
Rights, and in any event within ten (10) days thereafter, the Company, at its
expense, will cause to be delivered to the Holder:
(A) if the Company has elected to
pay the amount due to the Holder in shares of Common
Stock, a certificate or certificates for the number
of full shares of Common Stock to which the Holder
shall be entitled upon such exercise registered in
the name of the Holder or its nominee plus, in lieu
of any fractional share to which the Holder would
otherwise be entitled, cash in an amount equal to the
product of the Fair Market Value per share of Common
Stock on the Exercise Date times such fractional
share amount;
(B) if the Company has elected to
pay the amount due to the Holder in cash, a certified
or bank check for such amount payable in lawful money
of the United States to the Holder or its order; and
(C) if such exercise is for less
than all of the Rights, a new Certificate (dated the
date hereof) of like tenor, providing on the face
thereof for the number of Rights with respect to
which this Certificate has not been exercised
previously.
(c) Each exercise of Rights shall be deemed to have
been effected immediately prior to the close of business on the day on which
this Certificate shall have been surrendered to the Company as provided in
subsection 1(b) above.
2. Adjustments of Rights.
(a) Immediately following the 1997 EBITDA
Determination Date, as such term is defined in Section 6.13(b) of the Stock
Purchase Agreement dated as of February 28, 1998 by and among the Company, the
Holder and the other parties named therein (the "Purchase Agreement"), the
number of Rights represented by this Certificate shall be adjusted to equal the
1997 EBITDA Determined Number of Rights, as such term is defined in Section
6.13(c) of the Purchase Agreement. Not later than ten (10) days after the 1997
EBITDA Determination Date, the Company shall issue to the Initial Holder against
the surrender of this Certificate a new Certificate (dated the date hereof) of
like tenor, providing on the face thereof for the number of Rights equal to the
1997 EBITDA Determined Number of Rights. If the amount of 1997 EBITDA, as such
term is defined in Section 6.13(d) of the Stock Purchase Agreement, is equal to
or less than 88,750,000,000 Italian lira, the Rights shall become wholly void
and of no force or effect.
(b) If outstanding shares of Common Stock shall be
subdivided into a greater number of shares or a dividend in Common Stock shall
be paid in respect of Common Stock, the Strike Price in effect immediately prior
to such subdivision or at the record date of
2
<PAGE> 3
such dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately reduced.
If outstanding shares of Common Stock shall be combined into a smaller number of
shares, the Strike Price in effect immediately prior to such combination shall,
simultaneously with the effectiveness of such combination, be proportionately
increased. When any adjustment is required to be made in the Strike Price, the
number of Rights shall be changed to the number determined by dividing (i) an
amount equal to the number of Rights represented by this Certificate immediately
prior to such adjustment, multiplied by the Strike Price in effect immediately
prior to such adjustment, by (ii) the Strike Price in effect immediately after
such adjustment.
(c) If there shall occur any capital reorganization
or reclassification of the Common Stock (other than a change in par value or a
subdivision or combination as provided for in subsection 2(b) above), then, as
part of any such reorganization or reclassification, as the case may be, lawful
provision shall be made so that the Holder shall have the right thereafter to
receive upon the exercise of any Right the kind and amount of shares of stock or
other securities or property which such Holder would have been entitled to
receive if, immediately prior to any such reorganization or reclassification, as
the case may be, such Holder had exercised such Right and the Company had
elected to pay the amount due in Common Stock. In any case, appropriate
adjustment (as reasonably determined in good faith by the Board of Directors of
the Company) shall be made in the application of the provisions set forth herein
with respect to the rights and interests thereafter of the Holder such that the
provisions set forth in this Section 2 (including provisions with respect to
adjustment of the Strike Price) shall thereafter be applicable, as nearly as is
reasonably practicable, in relation to any shares of stock or other securities
or property thereafter deliverable upon the exercise of any Right.
(d) When any adjustment is required to be made in the
Strike Price, the Company shall promptly mail to the Holder a certificate
setting forth the Strike Price and the number of Rights represented by this
Certificate after such adjustment and setting forth a brief statement of the
facts requiring such adjustment. Such certificate shall also set forth any
change in the kind and amount of stock or other securities or property payable
on exercise of any Right following the occurrence of any of the events specified
in subsection 2(b) or (c) above.
(e) As used herein, the term Fair Market Value per
share of Common Stock shall mean and be determined as of any Exercise Date as
follows:
(i) If the Common Stock is listed on a national
securities exchange, the Nasdaq Stock Market, or another nationally recognized
exchange or trading system as of the Exercise Date such Fair Market Value per
share of Common Stock is to be determined, the Fair Market Value per share of
Common Stock shall be deemed to be the average of the closing sale price per
share of Common Stock thereon on each of the ten (10) consecutive trading days
immediately preceding such Exercise Date; or
3
<PAGE> 4
(ii) If the Common Stock is not listed on a
national securities exchange, the Nasdaq Stock Market, or another nationally
recognized exchange or trading system as of the Exercise Date such Fair Market
Value per share of Common Stock is to be determined, and if such Common Stock is
traded over the counter and is the subject of regular quotations by a recognized
market maker, the Fair Market Value per share of Common Stock shall be deemed to
be the average of the closing bid and asked prices quoted for such stock by the
principal market maker for the ten (10) consecutive trading days immediately
preceding such Exercise Date; or
(iii) If paragraphs (i) and (ii) above are
inapplicable, the Fair Market Value per share of Common Stock shall be deemed to
be the amount most recently determined by the Board of Directors of the Company
to represent the fair market value per share of the Common Stock (including,
without limitation, a determination of purposes of granting Common Stock options
or issuing Common Stock under an employee benefit plan of the Company); and,
upon request of the Holder, the Board of Directors (or a representative thereof)
shall promptly notify the Holder of the Fair Market Value per share of Common
Stock. Notwithstanding the foregoing, if the Board of Directors has not made
such a determination within the three-month period prior to the Exercise Date
such Fair Market Value per share of Common Stock is to be determined, then (A)
the Fair Market Value per share of Common Stock shall be the amount next
determined by the Board of Directors to represent the fair market value per
share of the Common Stock (including, without limitation, a determination for
purposes of granting Common Stock options or issuing Common Stock under an
employee benefit plan of the Company), (B) the Board of Directors shall make
such a determination within fifteen (15) days of a request by the Holder that it
do so and (C) the exercise of any Right shall be delayed until such
determination is made.
3. Fractional Shares. The Company shall not be
required, if it should elect to pay the amount due on exercise of any Right in
shares of Common Stock, to issue any fractional shares, but shall make an
adjustment therefor in cash on the basis of the Fair Market Value per share of
Common Stock, as determined pursuant to subsection 1(b) above.
4. Prohibition on Transfer. Neither this Certificate
nor any of the Holder's rights hereunder shall be sold, assigned or transferred
by the Holder.
5. No Impairment. The Company will not, by amendment
of its charter or through reorganization, consolidation, merger, dissolution,
sale of assets or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Certificate, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate to protect the
rights of the Holder.
6. Liquidating Dividends. If the Company pays a
dividend or makes a distribution on the Common Stock payable otherwise than in
cash out of earnings or earned
4
<PAGE> 5
surplus (determined in accordance with generally accepted accounting principles)
except for a stock dividend payable in shares of Common Stock (a "Liquidating
Dividend"), then the Company will pay or distribute to the Holder, upon the
exercise of any Right, in addition to the consideration payable upon such
exercise, the Liquidating Dividend which would have been paid to such Holder if
he had been the owner of record of a share of Common Stock immediately prior to
the date on which a record is taken for such Liquidating Dividend or, if no
record is taken, the date as of which the record holders of Common Stock
entitled to such dividend or distribution are to be determined.
7. Notices of Record Date. In case:
(a) the Company shall take a record of the holders of
its Common Stock (or other stock or securities deliverable upon the exercise of
any Right) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Holder a notice specifying, as the case may be, (i) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or
(ii) the effective date on which such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up is to
take place.
8. Validity of Shares of Common Stock. If the Company
has elected to pay the amount due to the Holder in shares of Common Stock, the
Company represents and warrants that all shares of Common Stock to be issued
upon exercise of the Rights shall be duly and validly issued and fully paid and
non-assessable and free from all taxes, liens and charges with respect to the
issue thereof. If any shares of Common Stock are issued upon exercise of the
Rights, the Company will cause such shares to be listed or quoted on each
national securities exchange or trading system, if any, on which the other
shares of outstanding Common Stock are then listed or quoted. In addition, if it
is required under US securities laws for the Holder to sell or transfer any such
shares of Common Stock, the Company shall promptly prepare and file and cause to
become effective a registration statement registering such shares.
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9. Replacement of Certificate. Upon delivery of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Certificate and (in the case of loss, theft or
destruction) upon delivery of an indemnity agreement reasonably satisfactory to
the Company, or (in the case of mutilation), upon surrender and cancellation of
this Certificate, the Company will issue, in lieu thereof, a new Certificate
(dated the date hereof) of like tenor.
10. Notices. All notices and other communications
from the Company to the Holder shall be sent by hand delivery, receipt
acknowledged, or by first-class certified or registered mail, postage prepaid,
to the address of the Holder set forth on the books of the Company or such other
address as the Holder may furnish to the Company in writing. All notices and
other communications from the Holder in connection herewith to the Company shall
be sent by hand delivery, receipt acknowledged, or by first-class certified or
registered mail, postage prepaid, to the Company at its principal office
referred to in Section 1 hereof. If the Company should at any time change the
location of its principal office, it shall give prompt written notice to the
Holder and thereafter all references in this Certificate to the location of the
Company's principal office at the particular time shall be as so specified in
such notice. No notice, including any notice of exercise, given hereunder shall
be effective until received by the party to whom addressed.
11. No Rights as Stockholder. Unless the Company
elects to pay the amount due to the Holder in shares of Common Stock and until
such time as delivery of such shares is made to the Holder, the Holder shall not
have or be entitled to exercise any rights by virtue hereof as a stockholder of
the Company.
12. Change of Waiver. Any term of this Certificate
may be changed or waived only by an instrument in writing signed by the Company
and the Holder.
13. Headings. The headings in this Certificate are
for purposes of reference only and shall not limit or otherwise affect the
meaning of any provision of this Certificate.
14. Governing Law. This Certificate will be governed
by and construed in accordance with the laws of the State of New York.
15. Dispute Resolution. Any dispute between the
Company and the Holder arising out of this Agreement shall be resolved in
accordance with Section 12.12 of the Stock Purchase Agreement.
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IN WITNESS WHEREOF, this Certificate has been executed as of the date first
written above.
WANG LABORATORIES, INC.
By: /s/ David Goulden
------------------
Name: David Goulden
Title:Senior Vice President
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Exhibit A to Stock
Appreciation Right
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise pursuant to
Section 1(b) of the Certificate accompanying this Notice of Exercise, _______
Rights represented by such Certificate out of the __________ Rights that the
undersigned is entitled to exercise pursuant to the terms of the accompanying
Certificate.
_____________________________
Name of Holder
_____________________________
Signature
Address
_____________________________
_____________________________
_____________________________
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Exhibit 7.5
-----------
STOCKHOLDERS AGREEMENT
BY AND BETWEEN
WANG LABORATORIES, INC.
AND
ING. C. OLIVETTI & C. S.P.A.
<PAGE> 2
TABLE OF CONTENTS
SECTION 1. LEGENDS.......................................................1
SECTION 2. BOARD OF DIRECTORS............................................2
Initial Election of Olivetti Nominees.........................2
Reelection of Olivetti Nominees...............................2
Criteria for Olivetti Nominees................................2
Changes in the Size of the Board..............................3
Vacancies.....................................................3
D&O Coverage..................................................3
Committees....................................................4
SECTION 3. INFORMATION RIGHTS; INSIDER TRADING POLICY....................4
SECTION 4. CERTAIN RESTRICTIONS..........................................5
Transfer Restrictions.........................................5
Short Sale, Hedging and Pledge Restrictions...................5
Standstill Restrictions.......................................6
NOL Restrictions..............................................7
Voting Restrictions...........................................7
SECTION 5. RIGHT TO PARTICIPATE IN PUBLIC OFFERINGS......................7
SECTION 6. PRE-REGISTRATION PROCEDURES...................................8
SECTION 7. DEMAND REGISTRATIONS..........................................9
Registration Requests.........................................9
Limitations on Requested Registrations........................9
Registration Statement Form..................................11
Registration Expenses........................................11
Priority in Cutback Registrations............................11
SECTION 8. SHELF REGISTRATIONS..........................................11
Shelf Registration Requests..................................11
Limitations on Shelf Registration Statements.................11
Registration Expenses........................................13
Discontinuance of Disposition................................13
SECTION 9. PIGGYBACK REGISTRATIONS......................................13
Right to Include Registrable Securities......................13
Limitation on Piggyback Registrations........................14
Registration Expenses........................................14
Priority in Cutback Registrations............................14
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SECTION 10. REGISTRATION PROCEDURES......................................14
SECTION 11. UNDERWRITTEN OFFERINGS.......................................18
Underwritten Requested Offerings.............................18
Underwritten Piggyback Offerings.............................19
SECTION 12. HOLDBACK AGREEMENTS..........................................19
By Olivetti..................................................19
By Wang......................................................19
Exception....................................................20
SECTION 13. INDEMNIFICATION..............................................20
Indemnification by Wang......................................20
Indemnification by the Sellers...............................21
Notices of Claims, etc.......................................21
Contribution.................................................22
Other Indemnification........................................23
Indemnification Payments.....................................23
SECTION 14. COVENANTS RELATING TO RULE 144...............................23
SECTION 15. OTHER REGISTRATION RIGHTS....................................23
No Existing Agreements.......................................23
Future Agreements............................................24
SECTION 16. INTERPRETATION OF THE AGREEMENT..............................24
Definitions..................................................24
Interpretation...............................................29
Accounting Principles........................................29
Directly or Indirectly.......................................29
Governing Law................................................29
Section Headings.............................................30
Severability.................................................30
SECTION 17. MISCELLANEOUS................................................30
Termination..................................................30
Notices......................................................30
Reproduction of Documents....................................31
Successors and Assigns.......................................31
Entire Agreement; Amendment and Waiver.......................32
No Third Party Beneficiary...................................32
Counterparts.................................................32
ii
<PAGE> 4
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of this 17th day of March, 1998 by
and between Ing. C. Olivetti & C. S.p.A., an Italian corporation ("Olivetti"),
and Wang Laboratories, Inc., a Delaware corporation ("Wang").
R E C I T A L S:
WHEREAS, Wang has agreed to purchase, among other things, and
Olivetti has agreed, among other things, to sell, all of the outstanding capital
shares of Olivetti Solutions S.p.A., an Italian corporation and a subsidiary of
Olivetti ("Olsy"), pursuant to a Stock Purchase Agreement, dated as of February
28, 1998 (the "Stock Purchase Agreement"); and
WHEREAS, the consideration to be paid by Wang to Olivetti for the
shares of Olsy includes up to 8,750,000 shares of Common Stock (collectively,
the "Wang Shares"), 7,250,000 shares of which will be delivered on the date
hereof and 1,500,000 shares of which may be delivered in December 1998 pursuant
to the Ancillary Consideration Agreement; and
WHEREAS, Olivetti and Wang desire to promote their mutual interests
by agreeing to, among other things, the orderly disposition of the Wang Shares;
and
WHEREAS, certain capitalized terms used herein and not otherwise
defined have the meanings ascribed to such terms in Section 16(a) hereof;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. LEGENDS.
The certificates evidencing the Wang Shares will bear one or
both of the following legends:
"THE SECURITIES EVIDENCED HEREBY ARE SUBJECT TO THE TERMS AND
PROVISIONS OF THAT CERTAIN STOCKHOLDERS AGREEMENT, DATED AS
OF MARCH 17, 1998, BY AND BETWEEN ING. C. OLIVETTI & C., S.P.A. AND
WANG LABORATORIES, INC. ("WANG"), A COPY OF WHICH IS ON FILE AT
THE PRINCIPAL OFFICES OF WANG AND IS AVAILABLE UPON REQUEST."
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, OFFERED FOR
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SALE, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
EXCEPT IN COMPLIANCE WITH, OR PURSUANT TO AN EXEMPTION FROM
THE REQUIREMENTS OF SUCH ACT OR SUCH LAWS."
SECTION 2. BOARD OF DIRECTORS.
(a) Initial Election of Olivetti Nominees. As soon as
practicable (but not later than thirty (30) days) following the date of closing
of the transactions contemplated by the Stock Purchase Agreement, Wang will take
all actions (consistent with applicable law and Wang's certificate of
incorporation and by-laws) necessary to increase the size of the board of
directors of Wang (the "Board") by two members and to elect Mr. Roberto
Colaninno as a member of Class I of the Board and Mr. Sergio Erede as a member
of Class III of the Board (Messrs. Colaninno and Erede and any other Olivetti
nominee designated by Olivetti in accordance with this Section 2 are referred to
herein individually as an "Olivetti Nominee" and collectively as the "Olivetti
Nominees").
(b) Reelection of Olivetti Nominees. Subject to Section 2(c),
(i) at each annual or special meeting of stockholders of Wang, or the taking of
action by written consent of stockholders of Wang, at which any class of the
Board of which an Olivetti Nominee is a member is to be elected, Olivetti shall
have the right (but not the obligation) to designate an Olivetti Nominee to be
elected to such class of the Board and (ii) if Olivetti so designates an
Olivetti Nominee, (A) the Organization, Compensation and Nominating Committee
(or other committee exercising a similar function, the "Nominating Committee")
of the Board will recommend to the Board the election of such Olivetti Nominee
to the Board and (B) Wang will take all actions (consistent with applicable law
and Wang's certificate of incorporation and by-laws) necessary to submit such
Olivetti Nominee to the stockholders of Wang for election to such class of the
Board and, if not elected by the stockholders of Wang, to otherwise cause,
within thirty (30) days of such non-election, such Olivetti Nominee to become a
member of such class of the Board; provided, however, that the number of
directors that Olivetti is entitled to designate shall be reduced to (i) one (1)
if Olivetti holds less than sixty-six percent (66%) of the Wang Shares and (ii)
zero (0) if Olivetti holds less than thirty-three percent (33%) of the Wang
Shares. As soon as practicable following the date on which Olivetti owns less
than sixty-six percent (66%) of the Wang Shares, Olivetti shall cause all but
one of the Olivetti Nominees serving on the Board to resign (regardless of the
remaining term, if any) from the Board. As soon as practicable following the
date on which Olivetti owns less than thirty-three percent (33%) of the Wang
Shares, Olivetti shall cause all the Olivetti Nominees serving on the Board to
resign (regardless of the remaining term, if any) from the Board.
(c) Criteria for Olivetti Nominees. Olivetti will not
designate any person as an Olivetti Nominee for election to the Board if (i)
such person has been convicted of, or has pled nolo contendere to, a felony,
(ii) the election of such person would violate any law, (iii) any event required
to be disclosed pursuant to Item 401(f) of the Regulation S-K of the Securities
Exchange Act of 1934, as amended (the "1934 Act") has occurred with respect to
such person, (iv) such person cannot commit the time and attention necessary to
serve as an active Board member, (v) such person is employed by or owns directly
or indirectly more than 5% of the stock or voting rights of a direct competitor
of Wang
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(other than Olivetti or one of its Affiliates) or (vi) such person is not
"qualified" to serve as a member of the Board. A person shall be presumed to be
"qualified" if such person has (A) significant business expertise or experience
in the information, high technology or computer or other related industries and
(B) served as a member of the board of directors, or as chief operating officer,
chief executive officer or managing director of a public company or a privately
held company with annual revenue in excess of Five Hundred Million Dollars
($500,000,000) unless the Nominating Committee (with any Olivetti Nominee who is
a member thereof abstaining) determines that such person is not "qualified." If
the Nominating Committee determines that any such person is not "qualified" Wang
shall promptly notify Olivetti of such determination.
(d) Changes in the Size of the Board. Subject to Sections 2(b)
and 2(c), (i) if the size of the Board is increased, Olivetti shall have the
right (but not the obligation) to designate additional Olivetti Nominees to the
Board so that the percentage of Olivetti Nominees as compared to the total
number of members on the Board will not be less than (A) twenty percent (20%) in
the event Olivetti holds not less than fifteen percent (15%) of the then
outstanding shares of Capital Stock and (B) ten percent (10%) in the event
Olivetti holds not less than seven and one-half percent (7 1/2%) of the then
outstanding shares of Capital Stock and (ii) if Olivetti so designates any such
additional Olivetti Nominee, (A) the Nominating Committee of the Board will
recommend to the Board the election of any such additional Olivetti Nominee to
the Board and (B) Wang will take all actions (consistent with applicable law and
Wang's certificate of incorporation and by-laws) necessary to submit any such
additional Olivetti Nominee to the stockholders of Wang for election to the
Board and, if not elected by the stockholders of Wang, to otherwise cause,
within thirty (30) days of such non-election, any such additional Olivetti
Nominee to be elected to the Board. If the size of the Board is reduced,
Olivetti shall cause the applicable number of Olivetti Nominees to immediately
resign (regardless of the remaining term, if any) from the Board so that the
percentage of Olivetti Nominees as compared to the total number of members on
the Board will not be less than (i) twenty percent (20%) in the event Olivetti
holds not less than 5,800,000 of the Wang Shares and (ii) ten percent (10%) in
the event Olivetti holds not less than 2,900,000 of the Wang Shares. The number
of Olivetti Nominees to which Olivetti is entitled pursuant to this Section 2(d)
shall equal the product of (x) the percentage representation to which Olivetti
is entitled at such time multiplied by (y) the number of members constituting
the entire Board after taking into account the increase or decrease thereto,
which number shall be rounded down to the nearest whole number if the fractional
portion thereof is less than .5 and shall be rounded up to the nearest whole
number if the fractional portion thereof is .5 or greater.
(e) Vacancies. Subject to Section 2(c), if any Olivetti
Nominee shall cease to serve as a director for any reason, other than pursuant
to the proviso to the first sentence of Section 2(b) or Section 2(d), and
Olivetti designates an Olivetti Nominee in accordance with this Section 2 to
fill such vacancy, Wang will take all actions (consistent with applicable law
and Wang's certificate of incorporation and by-laws) to fill such vacancy with
such Olivetti Nominee within thirty (30) days of such designation.
(f) D&O Coverage. Until such time as Olivetti is no longer
entitled to designate at least one (1) Olivetti Nominee for election to the
Board, Wang shall cause to be
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maintained directors' and officers' liability insurance in favor of the Olivetti
Nominees on the same terms and conditions maintained for other members of the
Board or shall implement an alternative liability insurance program (which may
include self insurance) approved by a majority vote of the Board; provided, that
in all such cases the Olivetti Nominees are treated in the same manner as all
other members of the Board.
(g) Committees. Subject to Section 2(c), (i) for so long as
Olivetti has the right to designate two (2) Olivetti Nominees for election to
the Board, Olivetti shall have the right (but not the obligation) to designate
at least one (1) Olivetti Nominee to serve on each standing committee of the
Board (which currently include the Strategy and Technology Committee, the
Finance and Audit Committee and the Organization, Compensation and Nominating
Committee) or other committee established by a resolution duly adopted by the
Board (except where such service would be prohibited by law or regulation) (the
foregoing, the "Committees") and (ii) if Olivetti so designates at least one (1)
Olivetti Nominee to serve on each such Committee, Wang will take all actions
(consistent with applicable law and Wang's certificate of incorporation and
by-laws) to cause at least one (1) Olivetti Nominee to serve on each such
Committee within thirty (30) days of such designation. Subject to Section 2(c),
(i) for so long as Olivetti has the right to designate one (1) Olivetti Nominee
for election to the Board, Olivetti shall have the right (but not the
obligation) to designate such Olivetti Nominee to serve on one-half (1/2) of the
then existing Committees, which Committees shall be chosen by such Olivetti
Nominee in his sole discretion, and (ii) if Olivetti so designates such Olivetti
Nominee to serve on one-half of the then existing Committees, Wang will take all
actions (consistent with applicable law and Wang's certificate of incorporation
and by-laws) to cause such Olivetti Nominee to serve on one-half (1/2) of the
then existing Committees so selected within thirty (30) days of such designation
and selection.
SECTION 3. INFORMATION RIGHTS; INSIDER TRADING POLICY.
(a) For so long as any Olivetti Nominee is a member of the
Board, Wang will: (i) deliver to the Olivetti Nominees on the Board copies of
all information distributed by Wang to a majority of the members of the Board;
and (ii) deliver to Olivetti, as promptly as practicable following filing, a
copy of each report, schedule or other document filed by Wang pursuant to the
requirements of any federal securities laws.
(b) For as long as Olivetti beneficially owns (as determined
pursuant to Rule 13d-3 of the 1934 Act) any Wang Shares, Wang will continue to
comply in all material respects with the reporting requirements of Section 13 or
15(d) of the 1934 Act, to the extent such reporting requirements are applicable
to Wang.
(c) For as long as Olivetti beneficially owns (as determined
pursuant to Rule 13d-3 of the 1934 Act) any Wang Shares, Wang will afford
Olivetti a reasonable opportunity to review any filing with any governmental or
regulatory authority and any press release or similar public announcement which
refers to, describes or mentions Olivetti or any of its Affiliate (other than
solely in its capacity as a stockholder of Wang) prior to the time that such
filing is filed with or sent to the
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<PAGE> 8
applicable governmental or regulatory authority or such announcement is
disseminated, provided that Wang shall not be required to provide Olivetti with
an opportunity to review such filing, press release or announcement to the
extent such information (i) has been previously disclosed by Olivetti or Wang
not in violation of this Agreement or (ii) (A) Wang has previously provided
Olivetti with a copy of such information and (B) Olivetti has not objected to
the disclosure of such information.
(d) For as long as Olivetti beneficially owns (as determined
pursuant to Rule 13d-3 of the 1934 Act) any Wang Shares, (i) Olivetti will, and
will cause each of Affiliates to, and will use its commercially reasonable best
efforts to cause its and each of its Affiliates, directors, officers, employees,
agents and representatives to, comply with the written policies of Wang
regarding insider trading or similar laws to the extent that any of the
foregoing are provided (whether by Wang, Olivetti or any Olivetti Nominee) with
any information provided by Wang pursuant to Section 3(a) or 3(c) and (ii) Wang
will notify Olivetti of any amendment to such policy or the adoption of any
additional policy regarding insider trading or similar laws (any such policy,
"Wang's Insider Trading Policy"). Olivetti shall use its commercially reasonable
best efforts to cause each Olivetti Nominee to (i) review Wang's Insider Trading
Policy and (ii) deliver to Wang a statement to such effect upon election on the
Board. Wang, with the concurrence of a majority of the Board, shall be
authorized to remove from the Board any Olivetti Nominee who discloses or uses
any non-public information regarding Wang in violation of any applicable law or
Wang's Insider Trading Policy.
SECTION 4. CERTAIN RESTRICTIONS.
(a) Transfer Restrictions. Except with the prior written
consent of Wang duly authorized by a majority of the Board, excluding the
Olivetti Nominees, until the earlier of (i) the third anniversary of the date
hereof or (ii) the occurrence of an Early Termination Event, Olivetti will not,
and will cause each of its Affiliates not to, directly or indirectly sell,
transfer or otherwise dispose of any Wang Shares, except to one or more
Majority-Owned Olivetti Affiliates (provided that prior thereto any such
Majority-Owned Olivetti Affiliate agrees in writing to be bound by the terms and
conditions of this Agreement and that Olivetti shall remain liable to Wang for
any breach of this Agreement by any such Majority-Owned Olivetti Affiliate).
(b) Short Sale, Hedging and Pledge Restrictions. Except with
the prior written consent of Wang duly authorized by a majority of the Board,
excluding the Olivetti Nominees, for so long as Olivetti beneficially owns (as
determined pursuant to Rule 13d-3 of the 1934 Act) thirty-three percent (33%) or
more of the Wang Shares, Olivetti will not, and will cause each of its
Affiliates not to, directly or indirectly:
(i) engage in any short sale or hedging transaction with
respect to any Wang Shares; or
(ii) pledge any Wang Shares, except to one or more bona fide
financial institutions for the purpose of securing bona fide
indebtedness of Olivetti (provided that prior thereto any such
financial institution agrees in writing to be bound by the terms
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<PAGE> 9
and conditions of this Agreement (other than Sections 2 and 3) and
that Olivetti shall remain liable to Wang for any breach of this
Agreement by any such financial institution).
(c) Standstill Restrictions. Except with the prior written
consent of Wang duly authorized by a majority of the Board, excluding the
Olivetti Nominees, until the earlier of (i) ninety (90) days after the
occurrence of a Modified Early Termination Event or (ii) one hundred eighty
(180) days after the date after the third (3rd) anniversary of the date hereof
on which all of the Olivetti Nominees on the Board resign from the Board,
Olivetti will not, and will cause each of its Affiliates not to, directly or
indirectly:
(i) act in concert with any other person or Group by becoming
a member of a 13D Group, other than any 13D Group comprised
exclusively of Olivetti and one or more of its Affiliates;
(ii) purchase or otherwise acquire shares of Capital Stock as
a result of which, after giving effect to such purchase or
acquisition, Olivetti and its Affiliates will beneficially own (as
determined pursuant to Rule 13d-3 of the 1934 Act) more than 19.9%
of the outstanding shares of Common Stock;
(iii) solicit, initiate, encourage or participate in any
"solicitation" of "proxies" or become a "participant" in any
"election contest" (as such terms are defined or used in Regulation
14A under the 1934 Act; disregarding clause (iv) of Rule 14a 1(1)(2)
and including an exempt solicitation pursuant to Rule 14a 2(b)(1));
call, or in any way encourage or participate in a call for, any
special meeting of stockholders of Wang (or take any action with
respect to action by written consent of the stockholders of Wang);
seek to advise any Person with respect to voting of any securities
of Wang; make any statement in a press release, newspaper
advertisement or similar general communication of how it intends to
vote at any meeting of stockholders of Wang (or with respect to any
action by written consent of the stockholders of Wang); request, or
take any action to obtain or retain, any list of holders of any
securities of Wang; or initiate or propose any stockholder proposal
or participate in or encourage the making of, or solicit
stockholders of Wang for the approval of, one or more stockholder
proposals; provided, however, that Olivetti shall not be prohibited
from receiving communications from a security holder who is engaged
in any "solicitation" of "proxies" or who is a "participant" in any
"election contest";
(iv) otherwise act, alone or in concert with others, to seek
propose or seek to effect any form of business combination
transaction with Wang or any of its Affiliates or any restructuring,
recapitalization or any similar transaction with respect to any
thereof (other than through Olivetti Nominees at meetings of the
Board);
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<PAGE> 10
(v) seek representation on the Board or a change in the
composition or size of the Board other than as set forth in Section
2; or
(vi) assist, advise or encourage any Person with respect to,
or seek to do, any of the foregoing.
(d) NOL Restrictions. Except for purchases and acquisitions of
Common Stock pursuant to the Ancillary Consideration Agreement or with the
Additional Cash Consideration (as defined in the Ancillary Consideration
Agreement), if Olivetti, at any time, intends to purchase or otherwise acquire
Capital Stock, Olivetti shall notify Wang in writing (the "Purchase Notice") of
(i) the Capital Stock which Olivetti intends to purchase or otherwise acquire,
(ii) the estimated period of time over which such contemplated purchase or other
acquisition is to be effected and (iii) the estimated price for such purchase or
other acquisition. Upon receipt of the Purchase Notice, Wang shall have three
(3) Business Days to, in its good faith judgment, either (A) approve the
purchase or other acquisition contemplated in the Purchase Notice or (B)
prohibit or impose restrictions on the purchase or other acquisition
contemplated in the Purchase Notice to the extent that the consummation thereof
would be reasonably likely to cause the undue risk of loss of, or the limitation
on the use of, the net operating loss, capital loss or tax credit carryforwards
to which Wang is entitled pursuant to Section 382 of the Code or any successor
statutes and the regulations promulgated thereunder. Olivetti shall conform to
the conduct prescribed by Wang with respect to the purchase or other acquisition
contemplated in the Purchase Notice.
(e) Voting Restrictions. If Olivetti or an Olivetti Affiliate
purchases or otherwise acquires any shares of Capital Stock in violation of
Sections 4(c)(ii) or (d), then (i) all such shares of Capital Stock shall
automatically lose their voting rights and (ii) Wang shall have the right to
compel Olivetti to dispose of all of such shares of Capital Stock.
SECTION 5. RIGHT TO PARTICIPATE IN PUBLIC OFFERINGS.
If, at any time prior to the date on which Olivetti sells any
of the Wang Shares, Wang proposes to issue or sell any shares of Common Stock in
an offering of Common Stock registered under the Securities Act of 1933, as
amended (the "1933 Act"), Wang shall send to (or cause to be sent to) Olivetti a
copy of the prospectus for such offering simultaneously with the distribution of
the same. If Olivetti notifies Wang not later than five (5) Business Days prior
to the "pricing" of such offering that it is interested in acquiring shares of
Common Stock in such offering on the terms of such offering, (a) Wang shall,
subject to Section 4(d) and to applicable law and regulations, cause a number of
shares of Common Stock to be sold to Olivetti in such offering and on the terms
of such offering and (b) Olivetti shall purchase a number of shares of Common
Stock in such offering and on the terms and conditions of such offering, in each
case, such that Olivetti would own the same percentage of the shares of Common
Stock outstanding immediately following the consummation of such offering as it
owned of the number of shares of Common Stock outstanding immediately prior to
the consummation of such offering.
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<PAGE> 11
SECTION 6. PRE-REGISTRATION PROCEDURES.
(a) Prior to making any request pursuant to Sections 7(a) or
8(a), Olivetti shall deliver to Wang a written notice (a "Desired Sale Notice")
that it desires to sell not less than and up to that number of the Wang Shares
with respect to which it is then entitled to make a request pursuant to Sections
7(a) or 8(a) which Wang is required to honor pursuant to Sections 7(b) or 8(b),
specifying the number of Wang Shares it desires to sell. Wang shall use its
commercially reasonable best efforts to present to Olivetti, within forty-five
(45) days after the date of such Desired Sale Notice, a proposal (the
"Proposal") for the sale of the Wang Shares specified in any Desired Sale
Notice. In the Proposal, Wang shall propose to Olivetti that the sale of the
Wang Shares specified in any Desired Sale Notice be effected through (i) a
private sale that is exempt from the registration requirements of the 1933 Act
(a "Private Sale"), (ii) a repurchase by Wang (a "Repurchase"), (iii) a
Requested Registration, (iv) a Shelf Registration or (v) any combination of the
foregoing.
(b) If any Proposal involves a Private Sale, the terms and
conditions of such Private Sale must be acceptable to Olivetti in its sole
discretion and Olivetti shall deliver in writing an acceptance or rejection of
any Private Sale within fifteen (15) days of the date of the Proposal. If
Olivetti accepts such Private Sale, such Private Sale shall be consummated not
later than the ninetieth (90th) day following the date of the Desired Sale
Notice.
(c) If any Proposal involves a Repurchase, such Proposal shall
state the number of Wang Shares covered by such Repurchase and the per share
price to be paid in such Repurchase and Olivetti shall deliver in writing an
acceptance or rejection of such Repurchase within fifteen (15) days of the date
of the Proposal. If Olivetti accepts such Repurchase, such Repurchase shall be
consummated not later than the ninetieth (90th) day following the date of the
Desired Sale Notice.
(d) If the Proposal involves a Requested Registration, such
Requested Registration shall be effected in accordance with Section 7 with the
Proposal being deemed the written request of Olivetti referred to in Section
7(a).
(e) If the Proposal involves a Shelf Registration, such Shelf
Registration shall be effected in accordance with Section 8 with the Proposal
being deemed the written request of Olivetti referred to in Section 8(a).
(f) If Wang (i) fails to deliver a Proposal to Olivetti within
forty-five (45) days after the date of any Desired Sale Notice, (ii) delivers a
Proposal involving a Private Sale or Repurchase within forty-five (45) days of
any Desired Sale Notice but such Private Sale or Repurchase is not consummated
within ninety (90) days of the date of such Desired Sale Notice (other than as a
result of Olivetti's failure to consummate such Private Sale or Repurchase) or
(iii) delivers a Proposal involving a Requested Registration or Shelf
Registration within forty-five (45) days of any Desired Sale Notice but such
Requested Registration or Shelf Registration is not effected in accordance with
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Sections 7 or 8, as the case may be (except by reason of some act or omission on
the part of Olivetti), then Olivetti shall be entitled to request registration
of the Wang Shares covered by such Private Sale, Repurchase, Requested
Registration or Shelf Registration under the 1933 Act pursuant to either Section
7(a) or Section 8(a). If Olivetti requests registration of such Wang Shares
pursuant to Section 7(a), Wang shall effect such registration in accordance with
either Section 7 or Section 8, at Wang's election. If Olivetti requests
registration of such Wang Shares pursuant to Section 8(a), Wang shall effect
such registration in accordance with Section 8.
SECTION 7. DEMAND REGISTRATIONS.
(a) Registration Requests. Subject to Section 6, at any time
after the earliest to occur of (i) the third (3rd) anniversary of the date
hereof or (ii) an Early Termination Event, upon the written request of Olivetti
(specifying that such request is being made pursuant to this Section 7(a))
delivered to Wang requesting that Wang effect the registration under the 1933
Act of all or part of Olivetti's Registrable Securities as an underwritten
offering and specifying the number of Registrable Securities to be registered,
Wang will use its commercially reasonable best efforts to effect the
registration under the 1933 Act of the Registrable Securities which Wang has
been so requested to register by Olivetti within sixty (60) days of such
request, all to the extent required to permit the disposition (in accordance
with the intended methods thereof) of the Registrable Securities so to be
registered. Subject to Section 7(e), Wang may include in such registration other
securities of the same class as the Registrable Securities for sale for its own
account or for the account of any other Person. Neither Wang nor any of its
security holders shall have the right to include any of Wang's securities (other
than Registrable Securities) in a registration statement to be filed as part of
a Requested Registration unless (i) such securities are of the same class as the
Registrable Securities and (ii) Wang or such security holders, as applicable,
agree in writing to sell, subject to Section 7(e), their securities on the same
terms and conditions as apply to the Registrable Securities being sold. If any
security holders of Wang (other than Olivetti) register securities of Wang in a
Requested Registration in accordance with this Section 7, such holders shall pay
the fees and expenses of their counsel and their pro rata share, on the basis of
the respective amounts of the securities included in such registration on behalf
of each such holder, of the Registration Expenses if the Registration Expenses
for such registration are not paid by Wang for any reason.
(b) Limitations on Requested Registrations.
(i) Notwithstanding anything herein to the contrary, Wang
shall not be required to honor a request for a Requested
Registration if:
(A) Wang has previously effected an aggregate of three
(3) Private Sales, Repurchases or Effective
Registrations;
(B) the market value of the Registrable Securities
requested by Olivetti to be so registered is less
than $20,000,000;
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(C) if an Early Termination Event has not occurred, if
such request for a Requested Registration is made
prior to the fourth (4th) anniversary of the date
hereof and the sum of the number of Registrable
Securities the subject thereof and all Registrable
Securities the subject of prior requests for
Requested Registrations or Shelf Registrations
exceed 2,900,000 Registrable Securities;
(D) in the event an Early Termination Event has not
occurred, if such request for a Requested
Registration is made prior to the fifth (5th)
anniversary and the sum of the number of
Registrable Securities the subject thereof and all
Registrable Securities the subject of prior
requests for Requested Registrations or Shelf
Registrations exceed 5,800,000 Registrable
Securities;
(E) such request is received from Olivetti with
respect to Registrable Securities that may
immediately be sold under Rule 144 during any
ninety (90) day period; provided that the
foregoing shall not apply where Olivetti owns more
that ten percent (10%) of the outstanding shares
of Capital Stock immediately prior to the date of
such request; or
(F) such request is received by Wang less than (X)
three hundred (300) days following the effective
date of any previous registration statement filed
in connection with a Requested Registration or a
Shelf Registration (Y) ninety (90) days following
the effective date of any previous registration
statement filed in connection with a Piggyback
Registration (regardless of whether Olivetti
exercised its rights under this Agreement with
respect to such Piggyback Registration).
(ii) In addition, if (A) in the bona fide opinion of one or
more reputable investment banking firms, effecting any Requested
Registration would adversely affect a material financing,
acquisition, disposition of assets or stock, merger or other
comparable transaction by Wang, Wang may postpone taking action with
respect to such Requested Registration for a reasonable period of
time (not exceeding one hundred eighty (180) days from the date of
the Desired Sale Notice relating to such Requested Registration) or
(B) effecting any Requested Registration would require Wang to make
public disclosure of information which Wang has a bona fide business
purpose for preserving as confidential, Wang may postpone taking
action with respect to such Requested Registration until the earlier
of (x) the date upon which such material information is disclosed to
the public or ceases to be material or (y) one hundred eighty (180)
days after Wang makes such good faith determination.
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<PAGE> 14
(c) Registration Statement Form. Wang may, if permitted by
law, effect any Requested Registration by the filing of a registration statement
on Form S-3 unless the Managing Underwriter shall notify Wang in writing that,
in the judgment of such Managing Underwriter, the use of a more detailed form
specified in such notice is of material importance to the success of the Public
Offering of such Registrable Securities, in which case such registration shall
be effected on the form so specified. Requested Registrations shall be on such
appropriate registration form promulgated by the Commission as shall be selected
by Wang, and shall be reasonably acceptable to Olivetti, and shall permit the
disposition of such Registrable Securities in accordance with the intended
method or methods specified in their request for such registration.
(d) Registration Expenses. Wang will pay all Registration
Expenses incurred in connection with any Requested Registration.
(e) Priority in Cutback Registrations. If a Requested
Registration becomes a Cutback Registration, Wang will include in any such
registration to the extent of the number which the Managing Underwriter advises
Wang can be sold in such offering (i) first, the Registrable Securities
requested to be included in such registration by Olivetti and (ii) second, other
securities of Wang proposed to be included in such registration, allocated among
the holders thereof in accordance with the priorities then existing among Wang
and the holders of such other securities. Any securities excluded from such
Requested Registration shall be withdrawn from and shall not be included in such
Requested Registration.
SECTION 8. SHELF REGISTRATIONS.
(a) Shelf Registration Requests. Subject to Section 6, at any
time after the earliest to occur of (i) the third (3rd) anniversary of the date
hereof or (ii) an Early Termination Event, upon the written request of Olivetti
(specifying that such request is being made pursuant to this Section 8(a))
delivered to Wang requesting that Wang effect the registration under the 1933
Act of all or part of Olivetti's Registrable Securities on a Form S-3 for a
public offering on a delayed or continuous basis pursuant to Rule 415 under the
1933 Act and specifying the number of Registrable Securities to be registered,
provided Wang is then entitled pursuant to the 1933 Act to file a Form S-3, Wang
shall use its commercially reasonable best efforts to effect the registration
under the 1933 Act of the Registrable Securities which Wang has been so
requested to register by Olivetti within thirty (30) days of such request.
(b) Limitations on Shelf Registration Statements.
(i) Notwithstanding anything herein to the contrary, Wang
shall not be required to honor a request for a Shelf Registration
if:
(A) Wang has previously effected an aggregate of three
(3) Private Sales, Repurchases or Effective
Registrations;
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(B) if an Early Termination Event has not occurred, if
such request for a Shelf Registration is made
prior to the fourth (4th) anniversary of the date
hereof and the sum of the number of Registrable
Securities the subject thereof and all Registrable
Securities the subject of prior requests for
Requested Registrations or Shelf Registrations
exceed 2,900,000 Registrable Securities;
(C) in the event an Early Termination Event has not
occurred, if such request for a Shelf Registration
is made prior to the fifth (5th) anniversary and
the sum of the number of Registrable Securities
the subject thereof and all Registrable Securities
the subject of prior requests for Requested
Registrations or Shelf Registrations exceed
5,800,000 Registrable Securities; or
(D) such request is received by Wang less than (X)
three hundred (300) days following the effective
date of any previous registration statement filed
in connection with a Requested Registration or a
Shelf Registration or (Y) ninety (90) days
following the effective date of any previous
registration statement filed in connection with a
Piggyback Registration (regardless of whether
Olivetti exercised its rights under this Agreement
with respect to such Piggyback Registration).
(ii) In addition, if (A) in the bona fide opinion of one or
more reputable investment banking firms, effecting any Shelf
Registration would adversely affect a material financing,
acquisition, disposition of assets or stock, merger or other
comparable transaction by Wang, Wang may postpone taking action with
respect to such Shelf Registration for a reasonable period of time
(not exceeding one hundred eighty (180) days from the date of the
Desired Sale Notice relating to such Shelf Registration) or (B) in
the good faith determination of Wang effecting any Shelf
Registration would require Wang to make public disclosure of
information which Wang has a bona fide business purpose for
preserving as confidential, Wang may postpone taking action with
respect to such Shelf Registration until the earlier of (x) the date
upon which such material information is disclosed to the public or
ceases to be material or (y) one hundred eighty (180) days after
Wang makes such good faith determination.
(iii) In addition, if an Early Termination Event has occurred
and the number of Registrable Securities the subject of a request
for any Shelf Registration exceeds 5,000,000 Registrable Securities
and a reputable investment banking firm advises Wang and Olivetti in
writing that, in its opinion, the number of Registrable Securities
requested to be included in such Shelf Registration exceeds the
number which can be
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sold pursuant to such Shelf Registration without a material
reduction in the selling price anticipated to be received for such
Registrable Securities, Wang shall include in such Shelf
Registration the greater of (A) 5,000,000 Registrable Securities or
(B) such number of Registrable Securities as such investment banking
firm advises Wang and Olivetti can be sold pursuant to such Shelf
Registration without a material reduction in the selling price
anticipated to be received for such Registrable Securities .
(c) Registration Expenses. Wang will pay all Registration
Expenses incurred in connection with any Shelf Registration.
(d) Discontinuance of Disposition. Olivetti agrees that upon
receipt of any notice from Wang that (i) in the opinion of one or more
investment banking firms, Olivetti's disposition of Registrable Securities
pursuant to any Shelf Registration would adversely affect a material financing,
acquisition, disposition of assets or stock, merger or other comparable
transaction by Wang, Olivetti shall forthwith discontinue such disposition of
Registrable Securities pursuant to such Shelf Registration for a period of up to
one hundred eighty (180) days or (ii) in the good faith determination of Wang,
Olivetti's disposition of Registrable Securities pursuant to any Shelf
Registration would require Wang to make public disclosure of information of
which Wang has a bona fide business purpose for preserving as confidential,
Olivetti shall forthwith discontinue such disposition of Registrable Securities
pursuant to such Shelf Registration until the earlier of (x) the date upon which
such material information is disclosed to the public or ceases to be material or
(y) one hundred eighty (180) days after Wang makes such good faith
determination.
SECTION 9. PIGGYBACK REGISTRATIONS.
(a) Right to Include Registrable Securities. If Wang at any
time after the earlier to occur of (i) the third (3rd) anniversary of the date
hereof or (ii) the occurrence of an Early Termination Event, proposes to effect
a Piggyback Registration Wang will give prompt written notice (a "Notice of
Piggyback Registration") at least thirty (30) days prior to the anticipated
filing date, to Olivetti of its intention to effect a Piggyback Registration,
which Notice of Piggyback Registration shall include a description of the
intended method of disposition of such securities. Upon the written request of
Olivetti made within twenty (20) days after receipt of a Notice of Piggyback
Registration (which request shall specify the Registrable Securities intended to
be disposed of by Olivetti and the intended method of disposition thereof), Wang
will use its commercially reasonable best efforts to include in the registration
statement relating to such Piggyback Registration all Registrable Securities
which Wang has been so requested by Olivetti to register. Notwithstanding the
foregoing, if, at any time after giving a Notice of Piggyback Registration and
prior to the effective date of the registration statement filed in connection
with such Piggyback Registration, Wang shall determine for any reason not to
register or to delay registration of such securities, Wang may, at its election,
give written notice of such determination to Olivetti and, thereupon, (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection
therewith) without prejudice, however, to the rights of Olivetti to request that
such registration be effected as a Requested
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<PAGE> 17
Registration under Section 7 hereof, and (ii) in the case of a determination to
delay registering, shall be permitted to delay registering any Registrable
Securities for the same period as the delay in registering such other
securities. No registration effected under this Section 9 shall relieve Wang of
its obligations under Sections 6, 7 or 8.
(b) Limitation on Piggyback Registrations. Notwithstanding
anything contained herein to the contrary, Wang shall not be required to effect
any registration of Registrable Securities under this Section 9 incidental to
the registration of any of its securities in connection with mergers,
acquisitions, exchange offers, subscription offers, dividend reinvestment plans
or stock option or other employment benefit or similar plans.
(c) Registration Expenses. Wang will pay all Registration
Expenses incurred in connection with each Piggyback Registration.
(d) Priority in Cutback Registrations. If a Piggyback
Registration becomes a Cutback Registration, Wang will include in such
registration to the extent of the amount of the securities which the Managing
Underwriter advises Wang can be sold in such offering:
(i) if such registration as initially proposed by Wang was
solely a primary registration of its securities, (x), first, the
securities proposed by Wang to be sold for its own account and (y)
second, any Registrable Securities requested to be included in such
registration by Olivetti and any other securities of Wang proposed
to be included in such registration, allocated among the holders
thereof (including Olivetti) in accordance with the priorities then
existing among Wang and such holders; and
(ii) if such registration as initially proposed by Wang was in
whole or in part requested by holders of securities of Wang, other
than holders of Registrable Securities in their capacities as such,
pursuant to demand registration rights, (x) first, such securities
held by the holders initiating such registration and (y) second, any
Registrable Securities requested to be included in such registration
by Olivetti and any other securities of Wang proposed to be included
in such registration, allocated among the holders thereof in
accordance with the priorities then existing among Wang and the
holders of such other securities.
and any securities so excluded shall be withdrawn from and shall not be included
in such Piggyback Registration.
SECTION 10. REGISTRATION PROCEDURES.
If and whenever Wang is required to use its commercially reasonable
best efforts to effect the registration of any Registrable Securities under the
1933 Act pursuant to Section 7, Section 8 or Section 9 hereof, Wang will use its
commercially reasonable best efforts to effect the registration
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<PAGE> 18
and sale of such Registrable Securities in accordance therewith. Without
limiting the foregoing, Wang in each such case will, as expeditiously as
possible:
(a) prepare and file with the Commission (in the case of a
Requested Registration or a Shelf Registration Statement, not later than thirty
(30) days after Wang's receipt of the request therefor from Olivetti) the
requisite registration statement to effect such registration and use its
commercially reasonable best efforts to cause such registration statement to
become effective, provided that as far in advance as practical before filing
such registration statement or any amendment thereto, Wang will furnish to
Olivetti copies of reasonably complete drafts of all such documents proposed to
be filed (including exhibits), and Olivetti shall have the opportunity to object
to any information pertaining solely to Olivetti or its Affiliates that is
contained therein and Wang will make the corrections reasonably requested by
Olivetti with respect to such information prior to filing any such registration
statement or amendment;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and any prospectus used in connection
therewith as may be necessary to maintain the effectiveness of such registration
statement and to comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities covered by such registration
statement, in accordance with the intended methods of disposition thereof, until
the earlier of (i) such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement and (ii) one hundred twenty
(120) days after such registration statement becomes effective (or if an Early
Termination Event has occurred and such registration statement is for a Shelf
Registration, (x) one hundred eighty (180) days after such registration becomes
effective if less than 5,000,000 Registrable Securities were registered on such
registration statement or (y) one (1) year after such registration statement
becomes effective if 5,000,000 or more Registrable Securities were registered on
such registration statement);
(c) promptly notify Olivetti and the underwriter or
underwriters, if any:
(i) when such registration statement or any prospectus used in
connection therewith, or any amendment or supplement thereto, has
been filed and, with respect to such registration statement or any
post-effective amendment thereto, when the same has become
effective;
(ii) of any written comments from the Commission with respect
to any filing referred to in clause (i) or of any written request by
the Commission for amendments or supplements to such registration
statement or prospectus;
(iii) of the notification to Wang by the Commission of its
initiation of any proceeding with respect to the issuance by the
Commission of, or of the issuance by the Commission of, any stop
order suspending the effectiveness of such registration statement;
and
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(iv) of the receipt by Wang of any notification with respect
to the suspension of the qualification of any Registrable Securities
for sale under the applicable securities or blue sky laws of any
jurisdiction.
(d) furnish to each seller of Registrable Securities covered
by such registration statement such number of conformed copies of such
registration statement and of each amendment and supplement thereto (in each
case including all exhibits and documents incorporated by reference), such
number of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 promulgated under the 1933 Act relating to
Olivetti's Registrable Securities, and such other documents, as such seller of
Registrable Securities may reasonably request to facilitate the disposition of
its Registrable Securities;
(e) use its commercially reasonable best efforts to register
or qualify all Registrable Securities covered by such registration statement
under such other securities or blue sky laws of such jurisdictions as Olivetti
shall reasonably request, to keep such registration or qualification in effect
for so long as such registration statement remains in effect, and take any other
action which may be reasonably necessary or advisable to enable Olivetti to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by Olivetti, except that Wang shall not for any such purpose be required
(i) to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this subparagraph
(e) be obligated to be so qualified, (ii) to subject itself to taxation in any
such jurisdiction or (iii) to consent to general service of process in any
jurisdiction;
(f) use its commercially reasonable best efforts to cause all
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable Olivetti to consummate the disposition of such Registrable
Securities;
(g) until such time as Olivetti ceases to be an "affiliate" of
Wang for purposes of the 1933 Act, furnish to Olivetti a signed counterpart,
addressed to it, of
(i) an opinion of counsel for Wang, dated the effective date
of such registration statement (or, if such registration includes an
underwritten Public Offering, dated the date of any closing under
the underwriting agreement), reasonably satisfactory in form and
substance to Olivetti, and
(ii) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an
underwritten Public Offering, dated the date of any closing under
the underwriting agreement), signed by the independent public
accountants who have certified Wang's financial statements included
or incorporated by reference in such registration statement,
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in each case covering substantially the same matters with
respect to such registration statement (and the prospectus
included therein) and, in the case of the accountants' letter,
with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions
of issuer's counsel and in accountants' letters delivered to
the underwriters in underwritten Public Offerings of
securities and, in the case of the accountants' letter, such
other financial matters, as Olivetti (or the underwriters, if
any) may reasonably request;
(h) notify Olivetti, at any time when a prospectus relating
thereto is required to be delivered under the 1933 Act, of the happening of any
event as a result of which any prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and at the request of Olivetti promptly prepare and
furnish to Olivetti a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(i) otherwise use its commercially reasonable best efforts to
comply with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve (12) months, but not
more than eighteen (18) months, beginning with the first (1st) full calendar
month after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule
158 promulgated thereunder;
(j) until such time as Olivetti ceases to be an "affiliate" of
Wang for purposes of the 1933 Act, make available for inspection by Olivetti,
any underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by Olivetti or
any such underwriter (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of Wang (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause Wang's officers, directors and employees to
supply all information reasonably requested by any such Inspector in connection
with such registration statement, and permit the Inspectors to participate in
the prepara tion of such registration statement and any prospectus contained
therein and any amendment or supplement thereto. Records which Wang determines,
in good faith, to be confidential and which it notifies the Inspectors are
confidential shall not be disclosed by the Inspectors unless (i) the disclosure
of such Records is necessary to avoid or correct a misstatement or omission in
the registration statement, (ii) the release of such Records is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction or (iii) the
information in such Records has been made generally available to the public. The
seller of Registrable Securities agrees by acquisition of such Registrable
Securities that it will, upon learning that disclosure of such Records is sought
in a court of competent jurisdiction,
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give notice to Wang and allow Wang, at Wang's expense, to undertake appropriate
action to prevent disclosure of the Records deemed confidential;
(k) provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement; and
(l) use its commercially reasonable best efforts to cause all
Registrable Securities covered by such registration statement to be listed, upon
official notice of issuance, on any securities exchange on which any of the
securities of Wang of the same class as the Registrable Securities are then
listed.
Wang may require Olivetti, as a condition to including Registrable
Securities in such registration, shall, furnish Wang with such information and
affidavits regarding Olivetti and the distribution of such securities as Wang
may from time to time reasonably request in writing in connection with such
registration.
Olivetti agrees by acquisition of such Registrable Securities that
upon receipt of any notice from Wang of the happening of any event of the kind
described in subparagraph (h) of this Section 10, Olivetti will forthwith
discontinue its disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until Olivetti's
receipt of the copies of the supplemented or amended prospectus contemplated by
subparagraph (h) of this Section 10 and, if so directed by Wang, will deliver to
Wang (at Wang's expense) all copies, other than permanent file copies, then in
Olivetti's possession of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice. In the event Wang shall give any
such notice, the period referred to in subparagraph (b) of this Section 10 shall
be extended by a number of days equal to the number of days during the period
from and including the giving of notice pursuant to subparagraph (h) of this
Section 10 and to and including the date when Olivetti shall receive the copies
of the supplemented or amended prospectus contemplated by subparagraph (h) of
this Section 10.
SECTION 11. UNDERWRITTEN OFFERINGS.
(a) Underwritten Requested Offerings. In the case of any
underwritten Public Offering being effected pursuant to a Requested
Registration, the Managing Underwriter and any other underwriter or underwriters
with respect to such offering shall be selected by Wang. Wang shall enter into
an underwriting agreement in customary form with such underwriter or
underwriters, which shall include, among other provisions, indemnities to the
effect and to the extent provided in Section 13 hereof. Olivetti shall be a
party to such underwriting agreement and may, at their option, require that any
or all of the representations and warranties by, and the other agreements on the
part of, Wang to and for the benefit of such underwriters also be made to and
for their benefit and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement also be
conditions precedent to Olivetti's obligations. Olivetti shall not be required
to make any representations or warranties to or agreements with Wang or the
underwriters other than
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<PAGE> 22
representations, warranties or agreements regarding Olivetti and its ownership
of the securities being registered on its behalf and Olivetti's intended method
of distribution and any other representation required by law. Olivetti may not
participate in such underwritten offering unless it agrees to sell its
Registrable Securities on the basis provided in such underwriting agreement and
completes and executes all questionnaires, powers of attorney, indemnities and
other documents reasonably required under the terms of such underwriting
agreement.
(b) Underwritten Piggyback Offerings. If Wang at any time
proposes to register any of its securities in a Piggyback Registration and such
securities are to be distributed by or through one or more underwriters, Wang
will, subject to the provisions of Section 9(d) hereof, use its commercially
reasonable best efforts, if requested by Olivetti, to arrange for such
underwriters to include the Registrable Securities to be offered and sold by
Olivetti among the securities to be distributed by such underwriters, and
Olivetti shall be obligated to sell their Registrable Securities in such
Piggyback Registration through such underwriters on the same terms and
conditions as apply to the other Wang securities to be sold by such underwriters
in connection with such Piggyback Registration. Olivetti shall be a party to the
underwriting agreement between Wang and such underwriter or underwriters and
may, at their option, require that any or all of the representations and
warranties by, and the other agreements on the part of, Wang to and for the
benefit of such underwriters also be made to and for Olivetti's benefit and that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement also be conditions precedent to Olivetti's
obligations. Olivetti shall not be required to make any representations or
warranties to or agreements with Wang or the underwriters other than
representations, warranties or agreements regarding Olivetti and its ownership
of the securities being registered on its behalf and Olivetti's intended method
of distribution and any other representation required by law. Olivetti may not
participate in such underwritten offering unless it agrees to sell its
Registrable Securities on the basis provided in such underwriting agreement and
completes and executes all questionnaires, powers of attorney, indemnities and
other documents reasonably required under the terms of such underwriting
agreement.
SECTION 12. HOLDBACK AGREEMENTS.
(a) By Olivetti. Unless the Managing Underwriter (or, in the
case of a non-underwritten Public Offering, Wang) otherwise agrees, Olivetti, by
acquisition of such Registrable Securities, agrees, to the extent permitted by
law, not to effect any public sale or distribution (including a sale under Rule
144) of such securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the thirty (30) days prior to and the
one hundred thirty-five (135) days after the effective date of any registration
statement filed by Wang in connection with an underwritten Public Offering (or
for such shorter period of time as is sufficient and appropriate, in the opinion
of the Managing Underwriter (or, in the case of a non-underwritten Public
Offering, Wang), in order to complete the sale and distribution of the
securities included in such registration), except as part of such registration
statement, whether or not Olivetti participates in such registration.
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(b) By Wang. Unless the Managing Underwriter otherwise agrees,
Wang agrees not to effect any public sale or distribution of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the thirty (30) days prior to and the one hundred
thirty-five (135) days after the effective date of the registration statement
filed in connection with an underwritten offering made pursuant to a Requested
Registration or a Piggyback Registration (or for such shorter period of time as
is sufficient and appropriate, in the opinion of the Managing Underwriter, in
order to complete the sale and distribution of the securities included in such
registration), except as part of such underwritten registration and except
pursuant to registrations on Form S-4 or Form S-8 promulgated by the Commission
or any successor or similar forms thereto.
(c) Exception. The foregoing provisions shall not apply to
Olivetti to the extent Olivetti is prohibited by applicable law from agreeing to
withhold from sale or to the extent Olivetti is acting in its capacity as a
fiduciary or an investment adviser. Without limiting the scope of the term
"fiduciary", a holder shall be deemed to be acting as a fiduciary or an
investment adviser if its actions or the shares proposed to be sold are subject
to the Employee Retirement Income Security Act, the Investment Company Act of
1940 or the Investment Advisers Act of 1940 or if such shares are held in a
separate account under applicable insurance law or regulation.
SECTION 13. INDEMNIFICATION
(a) Indemnification by Wang. Wang shall, to the full extent
permitted by law, indemnify and hold harmless Olivetti in connection with a
Requested Registration or a Piggyback Registration, its directors and officers,
and each other Person, if any, who controls Olivetti within the meaning of the
1933 Act, against any losses, claims, damages, expenses (including reasonable
attorney fees) or liabilities, joint or several (together, "Losses"), to which
Olivetti or any such director or officer or controlling Person may become
subject under the 1933 Act or otherwise, insofar as such Losses (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a prospectus, in the light of the
circumstances under which they were made) not misleading, and Wang will
reimburse Olivetti and each such director, officer and controlling Person for
any legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such Loss (or action or proceeding in respect
thereof); provided that Wang shall not be liable in any such case to the extent
that any such Loss (or action or proceeding in respect thereof) arises out of or
is based upon (x) an untrue statement or alleged untrue statement or omission or
alleged omission made in any such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to Wang by
Olivetti specifically stating that it is for use in the preparation thereof or
(y) Olivetti's failure to send or give a copy of the final prospectus to the
Persons asserting an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of
Registrable Securities
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to such Person if such statement or omission was corrected in such final
prospectus. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of Olivetti or any such director, officer
or controlling Person, and shall survive the transfer of such securities by such
seller. Wang shall also indemnify each other Person who participates (including
as an underwriter) in the offering or sale of Registrable Securities, their
officers and directors and each other Person, if any, who controls any such
participating Person within the meaning of the 1933 Act to the same extent as
provided above with respect to holders of Registrable Securities.
(b) Indemnification by the Sellers. Olivetti, as a condition
to including Registrable Securities in any registration statement filed in
connection with a Requested Registration or a Piggyback Registration, shall, to
the full extent permitted by law, indemnify and hold harmless Wang, its
directors and officers, and each other Person, if any, who controls Wang within
the meaning of the 1933 Act, against any Losses to which Wang or any such
director or officer or controlling Person may become subject under the 1933 Act
or otherwise, insofar as such Losses (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any such registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, if such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to Wang by such seller specifically stating that it is for
use in the preparation of such registration statement, preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement; provided,
however, that the obligation to provide indemnification pursuant to this Section
13(b) shall be several, and not joint and several, among such Indemnifying
Parties and the aggregate amount which may be recovered from any holder of
Registrable Securities pursuant to the indemnification provided for in this
Section 13(b) in connection with any registration and sale of Registrable
Securities shall be limited to the total proceeds received by such holder from
the sale of such Registrable Securities. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of Wang or
any such director, officer or participating or controlling Person and shall
survive the transfer of such securities by such seller. Such holders shall also
indemnify each other Person who participates (including as an underwriter) in
the offering or sale of Registrable Securities, their officers and directors and
each other Person, if any, who controls any such participating Person within the
meaning of the 1933 Act to the same extent as provided above with respect to
Wang.
(c) Notices of Claims, etc. Promptly after receipt by an
Indemnified Party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding paragraph (a) or (b) of this
Section 13, such Indemnified Party will, if a claim in respect thereof is to be
made against an Indemnifying Party pursuant to such paragraphs, give written
notice to the latter of the commencement of such action, provided that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under the preceding para
graphs of this Section 13, except to the extent that the Indemnifying Party is
actually prejudiced by
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such failure to give notice. In case any such action is brought against an
Indemnified Party, the Indemnifying Party shall be entitled to participate in
and to, unless, in the reasonable judgment of any Indemnified Party, a conflict
of interest between such Indemnified Party and any Indemnifying Party exists
with respect to such claim, to assume the defense thereof, jointly with any
other Indemnifying Party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such Indemnified Party, and after notice from
the Indemnifying Party to such Indemnified Party of its election so to assume
the defense thereof, the Indemnifying Party shall not be liable to such Indemni
fied Party for any legal or other expenses subsequently incurred by the latter
in connection with the defense thereof other than reasonable costs of
investigation; provided that the Indemnified Party may participate in such
defense at the Indemnified Party's expense; and provided, further that the
Indemnified Party or Indemnified Parties shall have the right to employ one
counsel to represent it or them if, in the reasonable judgment of the
Indemnified Party or Indemnified Parties, it is advisable for it or them to be
represented by separate counsel by reason of having legal defenses which are
different from or in addition to those available to the Indemnifying Party, and
in that event the reasonable fees and expenses of such one counsel shall be paid
by the Indemnifying Party. If the Indemnifying Party is not entitled to, or
elects not to, assume the defense of a claim, it will not be obligated to pay
the fees and expenses of more than one counsel for the Indemnified Parties with
respect to such claim, unless in the reasonable judgment of any Indemnified
Party a conflict of interest may exist between such Indemnified Party and any
other Indemnified Parties with respect to such claim, in which event the
Indemnifying Party shall be obligated to pay the fees and expenses of such
additional counsel for the Indemnified Parties. No Indemnifying Party shall
consent to entry of any judgment or enter into any settlement without the
consent of the Indemnified Party which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation. No
Indemnifying Party shall be subject to any liability for any settlement made
without its consent, which consent shall not be unreasonably withheld.
(d) Contribution. If the indemnity and reimbursement
obligation provided for in any paragraph of this Section 13 is unavailable or
insufficient to hold harmless an Indemnified Party in respect of any Losses (or
actions or proceedings in respect thereof) referred to therein, then the
Indemnifying Party shall contribute to the amount paid or payable by the
Indemnified Party as a result of such Losses (or actions or proceedings in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and the Indemnified Party on the
other hand in connection with statements or omissions which resulted in such
Losses, as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Indemnifying Party or the Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this paragraph were to be determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable consider ations referred to in the first sentence of
this paragraph. The amount paid by an Indemnified Party as a result of the
Losses referred to in the first sentence of this paragraph shall be deemed to
include any
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legal and other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any Loss which is the subject of this
paragraph.
No Indemnified Party guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from the Indemnifying Party if the Indemnifying Party was not guilty of such
fraudulent misrepresentation.
(e) Other Indemnification. Indemnification similar to that
specified in the preceding paragraphs of this Section 13 (with appropriate
modifications) shall be given by Wang and each seller of Registrable Securities
with respect to any required registration or other qualification of securities
under any federal or state law or regulation of any governmental authority other
than the 1933 Act. The provisions of this Section 13 shall be in addition to any
other rights to indemnification or contribution which an Indemnified Party may
have pursuant to law, equity, contract or otherwise.
(f) Indemnification Payments. The indemnification required by
this Section 13 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
Losses are incurred.
SECTION 14. COVENANTS RELATING TO RULE 144.
If at any time Wang is required to file reports in
compliance with either Section 13 or Section 15(d) of the 1934 Act, Wang will
file reports in compliance with the 1934 Act, will comply with all rules and
regulations of the Commission applicable in connection with the use of Rule 144
and take such other actions and furnish Olivetti with such other information as
Olivetti may request in order to avail itself of such rule or any other rule or
regulation of the Commission allowing Olivetti to sell any Registrable
Securities without registration, and will, at its expense, forthwith upon the
request of Olivetti, deliver to Olivetti a certificate, signed by Wang's
principal financial officer, stating (a) Wang's name, address and telephone
number (including area code), (b) Wang' s Internal Revenue Service
identification number, (c) Wang's Commission file number, (d) the number of
shares of each class of Stock outstanding as shown by the most recent report or
statement published by Wang and (e) whether Wang has filed the reports required
to be filed under the 1934 Act for a period of at least ninety (90) days prior
to the date of such certificate and in addition has filed the most recent annual
report required to be filed thereunder. If at any time Wang is not required to
file reports in compliance with either Section 13 or Section 15(d) of the 1934
Act, Wang at its expense will, forthwith upon the written request of Olivetti,
make available adequate current public information with respect to Wang within
the meaning of paragraph (c)(2) of Rule 144.
SECTION 15. OTHER REGISTRATION RIGHTS.
(a) No Existing Agreements. Wang represents and warrants to
Olivetti that there is not in effect on the date hereof any agreement by Wang
pursuant to which any holders of
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securities of Wang have a right to cause Wang to register or qualify such
securities under the 1933 Act or any securities or blue sky laws of any
jurisdiction that would conflict or be inconsistent with any provision of this
Agreement.
(b) Future Agreements. Wang shall not hereafter agree with the
holders of any securities issued or to be issued by Wang to register or qualify
such securities under the 1933 Act or any securities or blue sky laws of any
jurisdiction unless such agreement specifically provides that: (i) such holder
of such securities may not participate in any Requested Registration except as
provided in Section 7; (ii) the holder of such securities may not participate in
any Piggyback Registration except as provided in Section 9; and (iii) such
securities may not be publicly offered or sold for the period specified in
Section 12(b)(y) under the circumstances described in such Section.
SECTION 16. INTERPRETATION OF THE AGREEMENT.
(a) Definitions. Except as otherwise specifically indicated,
the following terms will have the following meanings for all purposes of this
Agreement:
"Affiliate" means any person or entity, directly or indirectly,
controlling, controlled by or under common control with such person or entity.
"Agreement" means this Stockholders Agreement, as the same shall be
amended from time to time.
"Ancillary Consideration Agreement" means the Ancillary
Consideration Agreement dated as of the date hereof between Wang and Olivetti.
"Board" has the meaning ascribed to it in Section 2(a).
"Business Day" means a day other than Saturday, Sunday or any other
day on which banks located in the State of New York or the Commonwealth of
Massachusetts are authorized or obligated to close.
"Capital Stock" means any security, option, warrant, call,
commitment, subscription, right to purchase or other agreement of any character
that is convertible into or exchangeable or redeemable for shares of capital
stock of Wang, and shall also include additional shares of capital stock to be
issued pursuant to the conversion, exchange or redemption of any security,
option, warrant, call, commitment, subscription, right to purchase or other
agreement of any character that is convertible into or exchangeable or
redeemable for shares of capital stock.
"Change of Control" means one or more of the following events:
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(i) less than a majority of the members of the Board shall be
persons who either (A) were serving as directors on the date of this
Agreement or (B) were nominated as directors and approved by the vote of
the majority of the directors who are directors referred to in clause (A)
above or this clause (B);
(ii) the stockholders of Wang shall approve any plan or proposal for
the liquidation or dissolution of Wang; and
(iii) an announcement by any person, or group of persons acting in
concert, of an acquisition of Wang's securities or other transaction which
will require the filing with the Commission of a Schedule 13D under the
1934 Act, with respect to beneficial ownership of Wang (other than by a
financial entity or other similar institutional investor holding
securities of Wang for investment purposes that is eligible to file a
Schedule 13G under the 1934 Act with respect to such acquisition in
accordance with Rule 13d-1(b)(1) of the 1934 Act) in which Item 4 thereof
will indicate a plan or proposal under subsections (a)-(j) thereof with
respect to either (x) the acquisition of forty percent (40%) of Wang's
voting securities (other than securities issued in a public offering made
by Wang) or (y) the merger or consolidation of Wang with another entity
where the stockholders of Wang would not, immediately after the merger or
consolidation, own at least fifty percent (50%) of the voting securities
of the entity issuing the cash or securities in the merger or
consolidation, or the sale of substantially all of the assets of Wang;
provided, however, that if such previously announced acquisition or
transaction is withdrawn or not otherwise consummated, the Change of
Control triggered by this subparagraph (iii) shall be deemed to be of no
further force and the restrictions in Section 4(a) of this Agreement shall
apply as if no Change of Control had occurred.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the United States Securities and Exchange
Commission, or any successor governmental agency or authority.
"Committees" has the meaning ascribed to it in Section 2(g).
"Common Stock" means shares of Common Stock, par value $0.01 per
share, of Wang, as constituted on the date hereof, and any stock into which such
Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock.
"Cutback Registration" means any Requested Registration or Piggyback
Registration to be effected as an underwritten Public Offering in which the
Managing Underwriter with respect thereto advises Wang and Olivetti in writing
that, in its opinion, the number of securities requested to be included in such
registration (including securities of Wang which are not Registrable Securities)
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exceed the number which can be sold in such offering without a material
reduction in the selling price anticipated to be received for the securities to
be sold in such Public Offering.
"Desired Sale Notice" has the meaning ascribed to it in Section
6(a).
"Early Termination Event" shall be deemed to have occurred upon the
occurrence of any one or more of the following: (i) if Wang fails to (A) cause
any Olivetti Nominee not elected to the Board by the stockholders of Wang to
otherwise become a member of the Board as required by Sections 2(b) or (d)
within the period provided for therein, (B) fill any vacancy on the Board as
required by Section 2(e) within the period provided for therein or (C) cause the
Olivetti Nominees to serve on Committees as required by Section 2(g) within the
period provided for therein (unless at the time of any such failure one (1) or
more Olivetti Nominees are then serving on the Board and all such Olivetti
Nominees do not resign from the Board within ninety (90) days of such failure,
in which case no Early Termination Event shall occur as a result of such
failure); (ii) if the Nominee Committee determines that two (2) persons
designated in sequence by Olivetti, in good faith as satisfying the criteria set
forth in Section 2(c), pursuant to Sections 2(b) or (d) for the same seat on the
Board are not "qualified" (unless at the time of the second (2nd) of such
determinations one (1) or more Olivetti Nominees are then serving on the Board
and all such Olivetti Nominees do not resign from the Board within ninety (90)
days of the second (2nd) of such determinations, in which case no Early
Termination Event shall occur as a result of such determinations); (iii) if Wang
breaches this Agreement and such is neither cured nor desisted from within
thirty (30) days of receipt of written notice from Olivetti of such breach and
such breach would reasonably be expected to materially adversely affect
Olivetti; (iv) the occurrence of a Change of Control; or (v) the sale, lease,
transfer or other disposition of all or substantially all of the assets of Wang.
"Effective Registration" means a Requested Registration or a Shelf
Registration which (a) has been declared or ordered effective in accordance with
the rules of the Commission, and (b) has been kept effective for the period of
time contemplated by Section 10(b) and (c), with respect to a Requested
Registration, has resulted in at least fifty percent (50%) of the Registrable
Securities requested to be included in such registration actually being sold
(except by reason of some act or omission on the part of Olivetti); provided
that a Cutback Registration in which the number of Registrable Securities
actually included in such Requested Registration is not at least fifty (50%) of
the number of Registrable Securities requested to be included in such
registration shall not be an Effective Registration for purposes of this
Agreement. Notwithstanding the foregoing, a registration that does not become
effective after it has been filed with the Commission solely by reason of the
refusal to proceed of Olivetti shall be deemed to be an Effective Registration
for purposes of this Agreement.
"Form S-3" means Form S-3 promulgated by the Commission under the
1933 Act, or any successor or similar short-form registration statement.
"Group" means a "group" as such term is used in Section 13(d)(3) of
the 1934 Act.
"Indemnified Party" means a party entitled to indemnity in
accordance with Section 13.
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"Indemnifying Party" means a party obligated to provide indemnity in
accordance with Section 13.
"Inspectors" has the meaning ascribed to it in Section 10(j).
"Losses" has the meaning ascribed to it in Section 13(a).
"Majority-Owned Olivetti Affiliate" means any corporation in which
Olivetti, directly or indirectly, owns or controls shares of stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors of such corporation.
"Managing Underwriter" means, with respect to any Public Offering,
the underwriter or underwriters managing such Public Offering.
"Modified Early Termination Event" shall be deemed to have occurred
upon the occurrence of any one or more of the following: (i) if Wang fails to
(A) cause any Olivetti Nominee not elected to the Board by the stockholders of
Wang to otherwise become a member of the Board as required by Sections 2(b) or
(d) within the period provided for therein, (B) fill any vacancy on the Board as
required by Section 2(e) within the period provided for therein or (C) cause the
Olivetti Nominees to serve on Committees as required by Section 2(g) within the
period provided for therein (unless at the time of any such failure one (1) or
more Olivetti Nominees are then serving on the Board and all such Olivetti
Nominees do not resign from the Board within ninety (90) days of such failure,
in which case no Modified Early Termination Event shall occur as a result of
such failure); or (ii) if the Nominee Committee determines that any two (2)
persons designated in sequence by Olivetti, in good faith as satisfying the
criteria set forth in Section 2(c), pursuant to Sections 2(b) or (d) for the
same seat on the Board are not "qualified" (unless at the time of the second
(2nd) of such determinations one (1) or more Olivetti Nominees are then serving
on the Board and all such Olivetti Nominees do not resign from the Board within
ninety (90) days of the second (2nd) of such determinations, in which case no
Early Termination Event shall occur as a result of such determinations).
"NASD" means the National Association of Securities Dealers.
"1933 Act" has the meaning ascribed to it in Section 5.
"1934 Act" has the meaning ascribed to it in Section 2(c).
"Notice of Piggyback Registration" has the meaning ascribed to it in
Section 9(a).
"Olivetti Nominee" has the meaning ascribed to it in Section 2(a).
"Person" means any natural person, corporation, general partnership,
limited partnership, proprietorship, other business organization, trust, union
or association.
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"Piggyback Registration" means any registration of securities of
Wang of the same class as the Registrable Securities under the 1933 Act (other
than a registration in respect of a dividend reinvestment or similar plan for
stockholders of Wang or on Form S-4 or Form S-8 promulgated by the Commission,
or any successor or similar forms thereto), whether for sale for the account of
Wang or for the account of any holder of securities of Wang (other than
Registrable Securities).
"Private Sale" has the meaning ascribed to it in Section 6(a).
"Public Offering" means any offering of Common Stock to the public,
either on behalf of Wang or any of its securityholders, pursuant to an effective
registration statement under the 1933 Act.
"Purchase Notice" has the meaning ascribed to it in Section 4(d).
"Records" has the meaning ascribed to it in Section 10(j).
"Registrable Securities" means (i) the Wang Shares and (ii) any
additional shares of Common Stock issued or distributed by way of a dividend,
stock split or other distribution in respect of the Wang Shares, acquired by way
of any rights offering or similar offering made in respect of the Wang Shares.
As to any particular Registrable Securities, once issued such securities shall
cease to be Registrable Securities when (i) a registration statement with
respect to the sale of such securities shall have become effective under the
1933 Act and such securities shall have been disposed of in accordance with such
registration statement, (ii) they shall have been distributed to the public
pursuant to Rule 144, or (iii) they shall have ceased to be outstanding.
"Registration Expenses" means all expenses incident to Wang's
performance of or compliance with its obligations under this Agreement to effect
(i) a Special Private Sale, (ii) a Special Repurchase, (iii) a Special Public
Offering or (iv) the registration of Registrable Securities in a Requested
Registration or a Piggyback Registration, including, without limitation, all
registration, filing, securities exchange listing and NASD fees, all
registration, filing, qualification and other fees and expenses of complying
with securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and disbursements of counsel
for Wang and of its independent public accountants, including the expenses of
any special audits or "cold comfort" letters required by or incident to such
performance and compliance, and any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but excluding underwriting
discounts and commissions and transfer taxes, if any, in respect of Registrable
Securities, and any fees and disbursements of counsel and accountants retained
by Olivetti, which shall be payable by Olivetti; provided, however, that if an
Early Termination Event shall have occurred, Registration Expenses shall include
the reasonable fees and expenses of a single counsel retained by Olivetti in
connection with the registration of Registrable Securities.
"Requested Registration" means any registration of Registrable
Securities under the 1933 Act effected in accordance with Section 7.
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"Repurchase" has the meaning ascribed to it in Section 6(a).
"Rule 144" means Rule 144 promulgated by the Commission under the
1933 Act, and any successor provision thereto.
"Shelf Registration" means any registration of Registrable
Securities under the 1933 Act effected in accordance with Section 8.
"13D Group" means any group of persons acquiring, holding, voting or
disposing of Common Stock which would be required under Section 13(d) of the
1934 Act and the rules and regulations thereunder (as in effect, and based on
legal interpretations thereof existing, on the date hereof) to file a statement
on Schedule 13D with the Commission as a "person" within the meaning of Section
13(d)(3) of the 1934 Act if such group beneficially owned voting securities
representing more than 5% of the Common Stock then outstanding.
"Wang Shares" has the meaning ascribed to it in the preamble.
(b) Interpretation. Unless the context of this Agreement
otherwise requires, (i) words of any gender include each other gender; (ii)
words using the singular or plural number also include the plural or singular
number, respectively; (iii) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Agreement; and (iv) the term
"Section" refers to the specified Section of this Agreement. Whenever this
Agreement refers to a number of days, such number shall refer to calendar days
unless Business Days are specified.
(c) Accounting Principles. Where the character or amount of
any asset or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, this shall be done in
accordance with U.S. generally accepted accounting principles at the time in
effect, to the extent applicable, except where such principles are inconsistent
with the requirements of this Agreement.
(d) Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person.
(e) Governing Law; Choice of Forum. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed entirely within such State (and
each of the parties hereto expressly submits itself to the non-exclusive
jurisdictions of the state and federal courts of the State of Delaware in any
action, suit or proceeding relating to any dispute under this Agreement and
irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of the venue of any such action, suit
or proceeding brought in such a court and any claim that any such action, suit
or proceeding brought in such a court has been brought in an inconvenient
forum).
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(f) Section Headings. The headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof.
(g) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision.
SECTION 17. MISCELLANEOUS.
(a) Termination. This Agreement shall terminate on (i) the
date of the consent of each of the parties hereto; (ii) as to any share of
Common Stock, when such share is disposed of in a Requested Registration, a
Shelf Registration or a Piggyback Registration; or (iii) on the tenth
anniversary of the date hereof.
(b) Notices. All notices and other communications hereunder
shall be in writing and shall be sent by hand delivery or overnight courier, in
each case receipt acknowledged, or registered or certified mail, in each case
with postage prepaid and return receipt requested, to the respective parties at
the following addresses:
If to Wang, to:
Wang Laboratories, Inc.
600 Technology Park
Billerica, MA 01821
United States
Attention: Frank A. Caine
Executive Vice President
Chief Financial Officer and
Albert A. Notini, Senior
Vice President, General
Counsel and Secretary
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, MA 02108
Attention: David T. Brewster, Esq.
If to Olivetti, to:
Ing. C. Olivetti & C. S.p.A.
Via Jervis, 77
10015 Ivrea
Italy
Attention: Managing Director
30
<PAGE> 34
with a copy to:
Erede E Associati
Via Serbelloni, 12
20122 Milano
Italy
Attention: Avv. Umberto Nicodano
and
Rogers & Wells
40 Basinghall Street
London EC2V 5DE
England
Attention: Michael S. Immordino, Esq.
Any party may change its address for receiving notice by written notice given to
the other parties. All notices and other communications hereunder shall be
deemed to have been duly given as of the earlier of (a) the date received at the
address and in the manner provided above or (b) the date receipt is
acknowledged.
(c) Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation, (i) consents, waivers
and modifications which may hereafter be executed, (ii) documents received by
each party pursuant hereto and (iii) financial statements, certificates and
other information previously or hereafter furnished to each party, may be
reproduced by each party by an photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and each party may destroy any
original document so reproduced. All parties hereto agree and stipulate that any
such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by Olivetti in the
regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
but neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other party, except (a) by operation of law or (b) that
Olivetti may, subject to Section 4(b), assign any of its rights (but not its
obligations) under this Agreement to any one or more Majority-Owned Olivetti
Affiliates.
31
<PAGE> 35
(e) Entire Agreement; Amendment and Waiver. This Agreement
constitutes the entire understanding of the parties hereto relating to the
subject matter hereof and supersede all prior agreements or understandings with
respect to the subject matter hereof among such parties. This Agreement may be
amended, and the observance of any term of this Agreement may be waived, with
(and only with) the written consent of each of the Parties.
(f) No Third Party Beneficiary. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give to any person
or corporation other than the parties hereto and their successors or assigns,
any rights or remedies under or by reason of this Agreement.
(g) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
32
<PAGE> 36
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement as of the date first above written.
WANG LABORATORIES, INC.
By: /s/ David Goulden
---------------------
Name: David Goulden
Title:Senior Vice President
ING. C. OLIVETTI & C. S.P.A.
By: /s/ Corrado Ariaudo
-----------------------
Name: Corrado Ariaudo
Title: Attorney-in-fact
<PAGE> 1
Exhibit 7.6
-----------
EARN-OUT AGREEMENT
EARN-OUT AGREEMENT, dated as of March 17th, 1998 (this
"Earn-Out Agreement"), by and among Wang Laboratories, Inc., a Delaware
corporation ("Wang"), and Ing. C. Olivetti & C. S.p.A., an Italian corporation
("Olivetti").
This Earn-Out Agreement is being entered into simultaneously
with the consummation of the transactions contemplated by the Stock Purchase
Agreement, dated as of February 28, 1998 (the "Agreement"), by and among Wang,
Wang Nederland BV, Olivetti, Olivetti Sistemas e Servicios Limitada and Olivetti
do Brasil S.A., as an inducement for Olivetti to consummate such transactions.
Capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to them in the Agreement. This Earn-Out Agreement
is a Related Agreement and an Indemnified Related Agreement with the meaning of
the Agreement.
NOW, THEREFORE, in consideration of the foregoing, the
respective representations, warranties, covenants and agreements set forth in
the Agreement and herein and other good and valuable consideration, the adequacy
and receipt of which are hereby acknowledged, and intending to be bound hereby,
the parties hereto hereby agree as follows:
ARTICLE I
EARN-OUTS
1.1 Wang EBITDA Earn-Out. Not later than March 31,
2000, Wang shall deliver to Olivetti a report (the "Wang EBITDA Report")
reflecting the amount of consolidated earnings, before interest, taxes,
depreciation, amortization and restructuring charges, of Wang and its
subsidiaries for the period from January 1, 1998 through December 31, 1999 (the
"WANG EBITDA Measuring Period"), as adjusted (the "Wang EBITDA Adjustment") in
accordance with Section 1.5 to exclude the effects of any acquisitions or
divestitures made by Wang (other than the transactions contemplated by the
Agreement) during the Wang EBITDA Measuring Period (the "Wang EBITDA Amount").
If the Wang EBITDA Amount exceeds U.S. $550,000,000, not later than ten Business
Days after
<PAGE> 2
delivery of the Wang EBITDA Report, Wang shall pay Olivetti an amount,
in U.S. dollars in immediately available funds, equal to the lesser of
(i) the sum of (aa) 25% of the first U.S. $40,000,000 of the amount by
which the Wang EBITDA Amount exceeds U.S. $550,000,000 (or if the Wang
EBITDA Amount exceeds U.S. $550,000,000 by less than U.S. $40,000,000,
25% of such excess) and (bb) 50% of the amount, if any, by which the
Wang EBITDA Amount exceeds U.S. $590,000,000 or (ii) U.S. $28,000,000.
If Wang merges or consolidates with another corporation during the WANG
EBITDA Measuring Period, the entity surviving such merger or
consolidation shall prepare the Wang EBITDA Report on pro forma basis
as if such merger or consolidation had not occurred.
1.2 Olsy EBIT Earn-Out. Not later than March 31,
2000, Wang shall deliver to Olivetti a report (the "Olsy EBIT Report")
reflecting the amount of consolidated earnings, before interest, taxes and
restructuring charges and including dividends from Noncontrolled Subsidiaries,
of the "commercial" operations of Olsy and the Controlled Subsidiaries in Italy
for the period from January 1, 1998 through December 31, 1999 (the "Olsy EBIT
Measuring Period"), as adjusted (the "Olsy EBIT Adjustment") in accordance with
Section 1.5 to exclude the effects of (i) any acquisition or divestiture made by
Olsy or a Controlled Subsidiary during the Olsy EBIT Measuring Period or (ii)
the transfer of any costs that were Olsy headquarters costs as of December 31,
1997 to the "commercial" operations of Olsy and the Controlled Subsidiaries in
Italy during the Olsy EBIT Measuring Period (the "Olsy EBIT Amount"). If the
Olsy EBIT Amount exceeds 185,000,000,000 Italian lira, not later than ten
Business Days after delivery of the Olsy EBIT Report, Wang shall pay Olivetti an
amount, in Italian lira in immediately available funds, equal to the lesser of
(i) 50% of the amount of such excess or (ii) 25,000,000,000 Italian lira. For
purposes of the Olsy EBIT Report "commercial" operations of Olsy and the
Controlled Subsidiaries in Italy shall include all of Wang's commercial
operations in Italy during the Olsy EBIT Measuring Period.
1.3 Olsy Revenue Earn-Out. Not later than March 31,
2000, Wang shall deliver to Olivetti a report (the "Olsy Revenue Report")
reflecting the amount of consolidated revenue (excluding standard product
revenue) of the "commercial" operations of Olsy and the Controlled Subsidiaries
in Italy for the period from January 1, 1998 through December 31, 1999 (the
"Olsy Revenue Measuring Period"), as adjusted (the "Olsy Revenue Adjustment") in
accordance with Section 1.5 to
<PAGE> 3
exclude the effects of any acquisition or divestiture made by Olsy or a
Controlled Subsidiary during the Olsy Revenue Measuring Period (the "Olsy
Revenue Amount"). If the Olsy Revenue Amount exceeds 2,060,000,000,000 Italian
lira, not later than 10 Business Days after delivery of the Olsy Revenue Report,
Wang shall pay Olivetti an amount, in Italian lira in immediately available
funds, equal to the lesser of (i) 20% of the amount of such excess or (ii)
25,000,000,000 Italian lira. For purposes of the Olsy Revenue Report
"commercial" operations of Olsy and the Controlled Subsidiaries in Italy shall
include all of Wang's commercial operations in Italy during the Olsy Revenue
Measuring Period.
1.4 Interim Reports. Not later than March 31, 1999,
Wang shall deliver to Olivetti, for informational purposes only, interim reports
on the Wang EBITDA Amount, the Olsy EBIT Amount and the Olsy Revenue Amount for
the period from January 1, 1998 through December 31, 1998.
1.5 Approval of Adjustments. The Wang EBITDA
Adjustment, Olsy EBIT Adjustment and Olsy Revenue Adjustment, in each case, if
any, must be approved by the Board of Directors of Wang (the "Board"). Not later
than 10 Business Days prior to submission of any proposed Wang EBITDA
Adjustment, Olsy EBIT Adjustment or Olsy Revenue Adjustment to the audit and
finance committee of the Board (or any other committee of the Board charged with
reviewing any such proposal prior to submission thereof to the Board), Wang
shall review with Olivetti the proposal to be submitted to such committee. If
Olivetti disagrees with any such proposal and Wang and Olivetti are not able to
resolve such disagreement prior to the submission of such proposal to the Board,
Olivetti shall be entitled to, and afforded the opportunity to, explain its
disagreement therewith to the Board before the Board acts thereon.
1.6 Financial Statements. The Wang EBITDA Amount
shall be derived from the applicable financial statements of Wang and its
subsidiaries for the applicable periods, which shall be prepared in accordance
with U.S. GAAP applied on a consistent basis, and the books and records relating
thereto. The Olsy EBIT Amount and the Olsy Revenue Amount shall be derived from
the Italian statutory reports prepared by Wang for the "commercial" operations
of Olsy and the Controlled Subsidiaries in Italy for the applicable periods and
the books and records relating thereto.
<PAGE> 4
ARTICLE II
GENERAL PROVISIONS
2.1 Amendment and Modification. This Earn-Out
Agreement may be amended, modified and supplemented only by written agreement of
Wang and Olivetti.
2.2 Waiver of Compliance. Except as otherwise
provided in this Earn-Out Agreement, any failure of any of the parties to comply
with any obligation, covenant, agreement or condition herein may be waived by
the party entitled to the benefits thereof only by a written instrument signed
by the party granting such waiver, but such waiver or failure to insist upon
strict compliance with such obligation, covenant, agreement or condition shall
not operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Earn-Out Agreement requires or permits consent by or on
behalf of any party hereto, such consent shall be given in writing in a manner
consistent with the notice provisions set forth in Section 2.3 and the
requirements for a waiver of compliance as set forth in this Section 2.2.
2.3 Notices. All notices and other communications
hereunder shall be in writing and shall be sent by hand delivery or overnight
courier, in each case receipt acknowledged, or registered or certified mail, in
each case with postage prepaid and return receipt requested, to the respective
parties at the following addresses:
If to Wang, to:
Wang Laboratories, Inc.
600 Technology Park
Billerica, MA 01821
United States
Attention: Albert A. Notini, Senior
Vice President, General
Counsel and Secretary
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, MA 02108
Attention: David T. Brewster, Esq.
and
<PAGE> 5
Gianni, Origoni & Partners
20121 Milano
Piazza Belgioioso, 2
Italy
Attention: Avv. Mario Amoroso
If to Olivetti, to:
Ing. C. Olivetti & C. S.p.A.
Via Jervis, 77
10015 Ivrea
Italy
Attention: Managing Director
with a copy to:
Erede E Associati
Via Serbelloni, 12
20122 Milano
Italy
Attention: Avv. Umberto Nicodano
and
Rogers & Wells
40 Basinghall Street
London EC2V 5DE
England
Attention: Michael S. Immordino, Esq.
Any party may change its address for receiving notice by written notice given to
the other parties. All notices and other communications hereunder shall be
deemed to have been duly given as of the earlier of (a) the date received at the
address and in the manner provided above or (b) the date receipt is
acknowledged.
2.4 Assignment. This Earn-Out Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but
neither this Earn-Out Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties, except by operation of law.
2.5 Governing Law. This Earn-Out Agreement shall be
governed by the laws of the State of New York (without giving effect to the
principles of conflicts of law thereof except for General Obligations Law
Section 5-1401) as to all matters, including but not limited to, matters of
validity, construction, effect,
<PAGE> 6
performance and remedies. The invalidity or unenforceability of any provision of
this Earn-Out Agreement shall not affect the validity or enforceability of any
other provision.
2.6 Counterparts. This Earn-Out Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.
2.7 Dispute Resolution. Any dispute between Wang and
Olivetti arising out of this Earn-Out Agreement shall be resolved in accordance
with Section 12.12 of the Agreement.
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this
Earn-Out Agreement to be duly executed as of the day and year first above
written.
WANG LABORATORIES, INC.
By: /s/ David Goulden
-------------------
Name: David Goulden
Title:Senior Vice President
ING. C. OLIVETTI & C. S.P.A.
By: /s/ Marino Bonamico
--------------------
Name: Marino Bonamico
Title:Attorney-in-fact
<PAGE> 1
Exhibit 7.7
-----------
AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT (this "Amendment No.
1") is being entered into as of March 17, 1998, by and among Wang Laboratories,
Inc., a Delaware corporation ("Wang"), Wang Nederland BV, a Netherlands
corporation ("Wang Nederland" and together with Wang, the "Buyers"), Ing. C.
Olivetti & C. S.p.A., an Italian corporation ("Olivetti"), Olivetti Sistemas e
Servicios Limitada, a Brazilian corporation ("Olivetti Sistemas"), and Olivetti
do Brasil S.A., a Brazilian corporation ("Olivetti Brazil" and together with
Olivetti and Olivetti Sistemas, the "Sellers").
The Buyers and the Sellers are parties to a Stock Purchase Agreement,
dated as of February 28, 1998 (the "Agreement"), and desire to amend the
Agreement.
NOW THEREFORE, in consideration of the foregoing, the mutual covenants
contained herein and the consummation of the transactions contemplated by the
Agreement, the Buyers and the Sellers agree to amend the Agreement as follows
(with capitalized terms used and not defined herein having their respective
meanings ascribed to them in the Agreement):
1. Cash Portion of the Purchase in U.S. Dollars. The Cash Portion of
the Purchase Price shall be paid in U.S. Dollars at the exchange rate of U.S.
$1.00 per 1,798.5 Italian lira. Accordingly, pursuant to Sections 2.1(b)(i) of
the Agreement, Wang shall pay and deliver (or cause Wang Nederland or any
subsidiary assigned of Wang permitted under Section 12.4 of the Agreement to pay
and deliver) to Olivetti U.S. $68,612,732.83, of which (a) U.S. $16,680,567.14
shall be deposited in escrow in accordance with Section 3.4(a) of the Agreement,
(b) U.S. $39,588,546.01 shall be deposited in escrow pursuant to 6.5(b) of the
Agreement and (c) U.S. $5,560,189.05 shall be paid and delivered to Olivetti
Sistemas and Olivetti Brazil in exchange for the Olsy Brazil Shares.
2. Olsy Germany. Olsy International shall not grant Olsy Germany an
irrevocable revenue contribution in the amount of German DM 15,800,000 in
connection with the recapitalization thereof as December 31, 1997.
3. Italy Welfare Plans. Section 6.17(b) of the Agreement is hereby
amended to read in its entirety as follows:
"Olivetti hereby assumes all liabilities and obligations of Olsy and
each Controlled Subsidiary in Italy to provide medical or other similar
benefits after retirement or other termination of employment, to any
individual who, as of the Closing Date, is an employee or former
employee of Olsy or any Controlled Subsidiary in Italy, whether such
<PAGE> 2
liabilities and obligations arise under the FASIDO, FSIO-SI, FSIO-SC,
FADO AND CPIDO (collectively, the "Italian Plans"), under other similar
plans or pursuant to collective bargaining or other written agreement
with any labor organization, employee association or works council. In
consideration of the foregoing, from and after the Closing Date, Olsy
shall use its commercially reasonable best efforts to, and shall cause
each Controlled Subsidiary in Italy to use its commercially reasonable
best efforts to (i) apply to continue to be a contributing employer to
the Italian Plans and (ii) if such application is accepted by the
relevant bodies of the Italian Plans, continue to contribute to the
Italian Plans."
4. Certain Schedules to the Agreement. (a) Attached hereto are
Schedules 3.2(d), 6.16(b), 6.16(c) and 6.27 to the Agreement which,
respectively, supersede Schedules 3.2(d), 6.16(b), 6.16(c) and 6.27 attached to
the Agreement at signing.
(b) In connection with the change of Schedule 6.16(b) of the Agreement
effected by Section 4(a) of this Amendment No. 1, (i) for avoidance of doubt the
term "Customer Bond" means only those bid, performance, advance payment or
residual bonds listed on Schedule 6.16(b) to the Agreement attached hereto
denoted with a "C" which satisfy the criteria in clauses (i) and (ii) of the
first sentence of Section 6.16(b) of the Agreement and (ii) the last sentence of
Section 6.16(b) of the Agreement is hereby amended to read in its entirety as
follows:
"Olivetti hereby waives all rights of subrogation or similar rights,
whether arising under law or contract (including, without limitation,
any counter guarantee given by Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to Olivetti), with respect to all bid,
performance, advance payment or residual bonds issued by Olivetti with
respect to the Business, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary other than the Customer Bonds."
(c) In connection with the change of Schedule 6.27 to the Agreement
effected by Section 4(a) of this Amendment No. 1 and the surrender of the lease
for the property at Didsbury, Manchester, UK on March 11, 1998, the last
sentence of Section 6.12(d) of the Agreement is hereby amended to read in its
entirety as follows:
"In connection with the preparation of the Closing Financial
Statements, (i) if any of
2
<PAGE> 3
the actions required to be taken pursuant to Section 1.8(a) shall not
have been taken prior to the Closing Financial Statements Date, Wang
shall cause such actions to be taken effective as of the date such
actions should have been taken pursuant to Section 1.8(a), (ii) Wang
shall cause all repair costs capitalized by Olsy North America, Inc.
not previously reversed and expensed to be reversed and expensed and
(iii) Wang shall increase the restructuring fund for empty spaces on
the books and records of Olsy and the Controlled Subsidiaries by
200,000,000 Italian lira."
5. Certain Schedules to the Olivetti Disclosure Schedule. Attached
hereto are Schedules 4.14(b) (ix) for Italy, 4.15(b) (i) (aa), 4.15(b) (i) (cc)
and 4.20 for Hong Kong, Germany, Netherlands and Rest of the World to the
Olivetti Disclosure Schedule which, respectively, supersede Schedules 4.14 (b)
(ix) for Italy, 4.15 (b) (i) (aa), 4.15(b) (i) (cc) and 4.20 for Hong Kong,
Germany, Netherlands and Rest of the World included in the Olivetti Disclosure
Schedule at signing.
6. Indemnification for Approval of Statutory Reports. In addition to
the indemnification pursuant to Section 7.2(a) or 10.2(a) of the Agreement,
Olivetti shall indemnify Wang, Olsy and the Controlled Subsidiaries and the
directors of Olsy and the Controlled Subsidiaries against and hold them harmless
from any Loss suffered or incurred by any of them for or on account of or
arising from or in connection with the approval of the "statutory reports" for
the year ended December 31, 1997.
7. Intercompany Funded Debt. Olivetti hereby represents and warrants to
Wang that, except for the Unsettled Amount (as defined below), all amounts owed
by Olivetti or any Olivetti Affiliate, on the one hand, to Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary, on the other hand, or vice versa,
arising out of loans from one to the other have been paid or otherwise
extinguished resulting in a single amount owing from Olsy to Olivetti of
48,300,000,000 Italian lira (the "Olsy Payable"), which includes a net unsettled
amount of approximately 600,000,000 Italian lira (the "Unsettled Amount") owing
from Olsy to Olivetti. By no later than April 15, 1998, Olivetti shall deliver
to Wang a complete accounting and reconciliation of the foregoing from December
31, 1997 to the Closing Date. By not later than April 15, 1998, the Unsettled
Amount shall be settled and neither Olivetti or any Olivetti Affiliates, on the
one hand, nor Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary,
on the other hand, shall dispute the settlement of any part thereof. By not
later than March 23, 1998, Wang shall cause Olsy to pay Olivetti an amount, in
cash in immediately available funds, equal to the Olsy Payable less the amounts
payable by Olivetti or an Olivetti Affiliate pursuant to Sections 6.5(c) or (d)
of the Agreement.
3
<PAGE> 4
8. Cash Leakage. The definition of "Cash Leakage" in Section 6.14(d) of
the Agreement is hereby amended to read in its entirety as follows:
"The term "Cash Leakage" means the use of cash (decrease in cash) due
to dividends and equity distributions, or payments and loans out of the
ordinary course of business as prohibited and not otherwise waived
pursuant to Section 6.1 for the period beginning on January 1, 1998 and
ending on the Closing Date (as if such Section 6.1 applied throughout
such period); provided that any such use of cash is not captured in the
Closing Tangible Equity Value and provided that any loan or purchased
asset made other than in the ordinary course of business and not
approved in writing by Wang shall be transferred to Olivetti free of
charge other than any related expense of transfer."
9. Miscellaneous. The "s" at the end of the word "Sections" and the
words and numbers "and 5-1402" in the parenthetical in the first sentence of
Section 12.6 of the Agreement are hereby deleted. The Closing is occurring on,
and the Closing Date is, March 17, 1998. All references to the Agreement in the
documents being delivered at the Closing shall be deemed to be to the Agreement
as amended by this Amendment No. 1.
10. Agreement in Full Force and Effect. The Agreement, as amended by
this Amendment No. 1, shall remain in full force and effect.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to be signed by their duly authorized officers as of the date above written.
WANG LABORATORIES, Inc.
Attest: By /s/ David Goulden
------------------------------------
Name: David Goulden
Title: Senior Vice President
/s/ Attestor
- -------------
Title:
WANG NEDERLAND BV
Attest: By /s/ Albert A. Notini
------------------------------------
Name: Albert A. Notini
Title: Director
/s/ Attestor
- ------------
Title:
ING. C. Olivetti & C. S.P.A.
Attest: By: /s/ Corrado Ariado
------------------------------------
Name: Corrado Ariado
Title: Attorney-on-fact
/s/ Attestor
- -------------
Title:
OLIVETTI SISTEMAS E SERVICIOS
LIMITADA
Attest: By: /s/ Corrado Ariado
------------------------------------
Name: Corrado Ariado
Title: Attorney-in-fact
/s/ Attestor
- ------------
Title:
OLIVETTI DO BRASIL S.A.
Attest: By /s/ Marino Bonamico
------------------------------------
Name: Marino Bonamico
Title: Attorney-in-fact
/s/ Attestor
- ------------
Title:
5
