<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934
NORAND CORPORATION
(Name of Subject Company)
WAI ACQUISITION CORP.
WESTERN ATLAS INC.
(Bidders)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
655421 10 5
(CUSIP number of class of securities)
NORMAN L. ROBERTS
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
WESTERN ATLAS INC.
360 NORTH CRESCENT DRIVE
BEVERLY HILLS, CALIFORNIA 90210
(310) 888-2700
(Name, address and telephone number of person authorized
to receive notices and communications on behalf of bidder)
COPIES TO:
ELLIOTT V. STEIN, ESQ.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
(212) 403-1000
CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
- -------------------------------------- --------------------------------------
$262,737,317.50 $52,547.47
- ------------------------
* For purposes of calculating the filing fee only. This calculation assumes
the purchase of all outstanding shares of Common Stock, par value
$0.01 per share, of Norand Corporation at $33.50 per share net to the seller
in cash.
** The fee, calculated in accordance with Rule 0-11(d) of the Securities
Exchange Act of 1934, is 1/50 of one percent of the aggregate Transaction
Valuation.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and date of its filing.
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<S> <C> <C> <C>
Amount Previously Paid: Filing
None Party: Not Applicable
Form or Registration Date Filed:
No.: Not Applicable Not Applicable
</TABLE>
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(Page 1 of 8 Pages)
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<TABLE>
<S> <C> <C>
CUSIP No. 655421 10 5 14D-1 Page 2 of 8 Pages
</TABLE>
<TABLE>
<C> <S>
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
WAI Acquisition Corp.
2. Check the Appropriate Box if a Member of a Group
(a) / /
(b) / /
3. SEC Use Only
4. Sources of Funds
AF
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or
2(f) / /
6. Citizenship or Place of Organization
Delaware
7. Aggregate Amount Beneficially Owned by Each Reporting Person
- 0 -
8. Check if the Aggregate Amount in Row (7) excludes Certain Shares / /
9. Percent of Class Represented by Amount in Row (7)
- 0 -
10. Type of Reporting Person
CO
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
CUSIP No. 655421 10 5 14D-1 Page 3 of 8 Pages
</TABLE>
<TABLE>
<C> <S>
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Western Atlas Inc. (95-3899675)
2. Check the Appropriate Box if a Member of a Group
(a) / /
(b) / /
3. SEC Use Only
4. Sources of Funds
BK, WC
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or
2(f) / /
6. Citizenship or Place of Organization
Delaware
7. Aggregate Amount Beneficially Owned by Each Reporting Person
- 0 -
8. Check if the Aggregate Amount in Row (7) excludes Certain Shares / /
9. Percent of Class Represented by Amount in Row (7)
- 0 -
10. Type of Reporting Person
CO
</TABLE>
<PAGE>
This Schedule 14D-1 relates to the offer by WAI Acquisition Corp. (the
"Purchaser"), a Delaware corporation and a wholly owned subsidiary of Western
Atlas Inc., a Delaware corporation ("Parent"), to purchase all outstanding
shares on a fully diluted basis (assuming exercise of all outstanding stock
options and warrants) of Common Stock, par value $0.01 per share (the "Shares"),
of Norand Corporation, a Delaware corporation (the "Company"), at a purchase
price of $33.50 per Share, net to the seller in cash, without interest thereon,
upon the terms and subject to the conditions set forth in the Offer to Purchase
and in the related Letter of Transmittal (which together constitute the
"Offer"), which are annexed to and filed with this Schedule 14D-1 as Exhibits
(a)(1) and (a)(2), respectively. This Schedule 14D-1 is being filed on behalf of
the Purchaser and Parent.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Norand Corporation. The address of
its principal executive offices is 550 Second Street Southeast, Cedar Rapids,
Iowa 52401.
(b) Reference is hereby made to the information set forth in the
"Introduction," Section 1 ("Terms of the Offer") and Section 11 ("Purpose of the
Offer; The Merger Agreement; Statutory Requirements; Appraisal Rights; Plans for
the Company; Other Agreements") of the Offer to Purchaser, which is incorporated
herein by reference.
(c) Reference is hereby made to the information set forth in Section 6
("Price Range of the Shares; Dividends") of the Offer to Purchase, which is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning Parent and the
Purchaser") and Schedule I ("Directors and Executive Officers of Parent and the
Purchaser") of the Offer to Purchase, which is incorporated herein by reference.
(e)-(f) During the last five years, neither Parent nor the Purchaser, nor,
to the best of their knowledge, any of their respective executive officers and
directors listed in Schedule I ("Directors and Executive Officers of Parent and
the Purchaser") of the Offer to Purchase, which is incorporated herein by
reference, has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or was a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
(g) Reference is hereby made to the information set forth in Schedule I
("Directors and Executive Officers of Parent and the Purchaser") of the Offer to
Purchase, which is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning Parent and the
Purchaser"), Section 10 ("Background of the Offer; Contacts with the Company")
and Section 11 ("Purpose of the Offer; The Merger Agreement; Statutory
Requirements; Appraisal Rights; Plans for the Company; Other Agreements") of the
Offer to Purchase, which is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Reference is made to the information set forth in Section 12
("Source and Amount of Funds") of the Offer to Purchase, which is incorporated
herein by reference.
(c) Not applicable.
(Page 4 of 8 Pages)
<PAGE>
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(g) Reference is hereby made to the information set forth in the
"Introduction," Section 7 ("Possible Effects of the Offer on the Market for the
Shares; Stock Quotation; Exchange Act Registration; Margin Regulations"),
Section 10 ("Background of the Offer; Contacts with the Company"), Section 11
("Purpose of the Offer; The Merger Agreement; Statutory Requirements; Appraisal
Rights; Plans for the Company; Other Agreements") and Section 13 ("Dividends and
Distributions") of the Offer to Purchase, which is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) Reference is hereby made to the information set forth in Section 9
("Certain Information Concerning Parent and the Purchaser") and Schedule I
("Directors and Executive Directors of Parent and the Purchaser") of the Offer
to Purchase, which is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
Reference is hereby made to the information set forth in the "Introduction,"
Section 9 ("Certain Information Concerning Parent and the Purchaser"), Section
10 ("Background of the Offer; Contacts with the Company"), Section 11 ("Purpose
of the Office; The Merger Agreement; Statutory Requirements; Appraisal Rights;
Plans for the Company; Other Agreements") and Section 15 ("Certain Legal
Matters; Required Regulatory Approvals") of the Offer to Purchase, which is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Reference is hereby made to the information set forth in Section 16
("Certain Fees and Expenses") of the Offer to Purchase, which is incorporated
herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Reference is hereby made to the information set forth in Section 9 ("Certain
Information Concerning Parent and the Purchaser") of the Offer to Purchase,
which is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Reference is hereby made to the information set forth in the
"Introduction," Section 10 ("Background of the Offer; Contacts with the
Company") and Section 11 ("Purpose of the Offer; The Merger Agreement; Statutory
Requirements; Appraisal Rights; Plans for the Company; Other Agreements") of the
Offer to Purchase, which is incorporated herein by reference.
(b)-(c) Reference is hereby made to the information set forth in the
"Introduction," Section 11 ("Purpose of the Offer; The Merger Agreement;
Statutory Requirements; Appraisal Rights; Plans for the Company; Other
Agreements") and Section 15 ("Certain Legal Matters; Required Regulatory
Approvals") of the Offer to Purchase, which is incorporated herein by reference.
(d) Reference is hereby made to the information set forth in Section 7
("Possible Effects of the Offer on the Market for the Shares; Stock Quotation;
Exchange Act Registration; Margin Regulations") of the Offer to Purchase, which
is incorporated herein by reference.
(e) To the best knowledge of Parent and the Purchaser, no such proceedings
are pending or have been instituted.
(f) Reference is hereby made to the entire texts of the Offer to Purchase
and the related Letter of Transmittal, which are incorporated herein by
reference.
(Page 5 of 8 Pages)
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
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(a)(1) -- Offer to Purchase, dated January 24, 1997.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees.
(a)(4) -- Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.
(a)(5) -- Notice of Guaranteed Delivery.
(a)(6) -- Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(7) -- Press release issued by Parent on January 22, 1997.
(a)(8) -- Form of Summary Advertisement, dated January 24, 1997.
(b)(1) -- Credit Agreement dated as of December 22, 1994 among Parent and the banks named
therein, together with Amendment No. 1 thereto dated as of March 20, 1996.
(c)(1) -- Agreement and Plan of Merger dated as of January 21, 1997 by and among the
Company, the Purchaser and Parent.
(c)(2) -- Original Equipment Manufacturer Agreement dated as of January 21, 1997 by and
between Parent and the Company.
(c)(3) -- Confidentiality Agreement dated February 16, 1996 between Parent and the Company.
(d) -- Not applicable.
(e) -- Not applicable.
(f) -- Not applicable.
</TABLE>
(Page 6 of 8 Pages)
<PAGE>
SIGNATURE
After due 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: January 24, 1997
WESTERN ATLAS INC.
By: __/s/__MICHAEL E. KEANE___________
Name: Michael E. Keane
Title: SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
WAI ACQUISITION CORP.
By: __/s/__MICHAEL E. KEANE___________
Name: Michael E. Keane
Title: PRESIDENT
(Page 7 of 8 Pages)
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------- ------------------------------------------------------------------------------------------------
<S> <C> <C>
(a)(1) --Offer to Purchase, dated January 24, 1997.....................................................
(a)(2) --Letter of Transmittal.........................................................................
(a)(3) --Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees............
(a)(4) --Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees....................................................................................
(a)(5) --Notice of Guaranteed Delivery.................................................................
(a)(6) --Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number
on Substitute Form W-9......................................................................
(a)(7) --Press release issued by Parent on January 22, 1997............................................
(a)(8) --Form of Summary Advertisement, dated January 24, 1997.........................................
(b)(1) --Credit Agreement dated as of December 22, 1994 among Parent and the banks named therein,
together with Amendment No. 1 thereto dated as of March 20, 1996............................
(c)(1) --Agreement and Plan of Merger dated as of January 21, 1997 by and among the Company, the
Purchaser and Parent........................................................................
(c)(2) --Original Equipment Manufacturer Agreement dated as of January 21, 1997 by and between Parent
and the Company.............................................................................
(c)(3) --Confidentiality Agreement dated February 16, 1996 between Parent and the Company..............
(d) --Not applicable................................................................................
(e) --Not applicable................................................................................
(f) --Not applicable................................................................................
</TABLE>
(Page 8 of 8 Pages)
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
of
NORAND CORPORATION
by
WAI ACQUISITION CORP.
a wholly owned subsidiary
of
WESTERN ATLAS INC.
at
$33.50 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, FEBRUARY 21, 1997, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF NORAND CORPORATION (THE "COMPANY") UNANIMOUSLY HAS
APPROVED THE MERGER AGREEMENT DESCRIBED HEREIN AND DETERMINED THAT THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER DESCRIBED HEREIN, ARE FAIR TO AND IN THE BEST INTERESTS OF THE HOLDERS OF
SHARES (AS HEREINAFTER DEFINED) AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SHARES REPRESENTING AT LEAST
A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING SHARES OF COMMON STOCK OF THE
COMPANY ON A FULLY DILUTED BASIS (ASSUMING THE EXERCISE OF ALL OUTSTANDING
OPTIONS AND WARRANTS) BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE
EXPIRATION OF THE OFFER.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares (as hereinafter defined) should either (a) complete and sign the Letter
of Transmittal (or a facsimile thereof) in accordance with the instructions in
the Letter of Transmittal and mail or deliver it together with the
certificate(s) representing tendered Shares and any other required documents to
the Depositary or tender such Shares pursuant to the procedures for book-entry
transfer set forth in Section 3 or (b) request such stockholder's broker,
dealer, commercial bank, trust company or other nominee to effect such
transaction. A stockholder whose Shares are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
broker, dealer, commercial bank, trust company or other nominee if such
stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available or who cannot comply with
the procedures for book-entry transfer on a timely basis may tender such Shares
by following the procedures for guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and other related materials may
be obtained from the Information Agent or from brokers, dealers, commercial
banks and trust companies.
January 24, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
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<C> <S> <C>
Introduction............................................................................................. 1
1. Terms of the Offer................................................................................... 2
2. Acceptance for Payment and Payment................................................................... 4
3. Procedures for Accepting the Offer and Tendering Shares.............................................. 5
4. Withdrawal Rights.................................................................................... 8
5. Certain Tax Consequences............................................................................. 9
6. Price Range of the Shares; Dividends................................................................. 10
7. Possible Effects of the Offer on the Market for the Shares; Stock Quotation; Exchange Act
Registration; Margin Regulations................................................................... 10
8. Certain Information Concerning the Company........................................................... 12
9. Certain Information Concerning Parent and the Purchaser.............................................. 15
10. Background of the Offer; Contacts with the Company................................................... 17
11. Purpose of the Offer; the Merger Agreement; Statutory Requirements; Appraisal Rights; Plans for the
Company; Other Agreements.......................................................................... 17
12. Source and Amount of Funds........................................................................... 27
13. Dividends and Distributions.......................................................................... 28
14. Certain Conditions of the Offer...................................................................... 29
15. Certain Legal Matters; Required Regulatory Approvals................................................. 30
16. Certain Fees and Expenses............................................................................ 33
17. Miscellaneous........................................................................................ 33
Schedule I--Directors and Executive Officers of Parent and the Purchaser................................... S-1
</TABLE>
i
<PAGE>
To: All Holders of Shares of Common Stock of Norand Corporation
INTRODUCTION
WAI Acquisition Corp. (the "Purchaser"), a Delaware corporation and a wholly
owned subsidiary of Western Atlas Inc., a Delaware corporation ("Parent"),
hereby offers to purchase all outstanding shares of Common Stock, par value
$0.01 per share (the "Shares"), of Norand Corporation, a Delaware corporation
(the "Company"), at a purchase price of $33.50 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal (which
together constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer. However, any tendering stockholder or other payee who
fails to complete and sign the Substitute Form W-9 that is included in the
Letter of Transmittal may be subject to a required backup federal income tax
withholding of 31% of the gross proceeds payable to such stockholder or other
payee pursuant to the Offer. See Section 3. The Purchaser will pay all charges
and expenses of The Bank of New York, as Depositary (the "Depositary"), and
Georgeson & Company Inc., as Information Agent (the "Information Agent"),
incurred in connection with the Offer. SEE SECTION 16.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS APPROVED THE MERGER
AGREEMENT (AS DEFINED BELOW) AND DETERMINED THAT THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, ARE FAIR
TO AND IN THE BEST INTERESTS OF THE HOLDERS OF SHARES, AND RECOMMENDS THAT
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES.
The Offer is conditioned upon, among other things, at least a majority of
the total number of outstanding Shares on a fully diluted basis (assuming
exercise of all outstanding stock options and warrants) being validly tendered
and not withdrawn prior to the Expiration Date (as defined in Section 1) (the
"Minimum Condition"). The Purchaser reserves the right (subject to the
applicable rules and regulations of the Securities and Exchange Commission (the
"Commission") and subject to the provision of the Merger Agreement), which it
currently has no intention of exercising, to waive or reduce the Minimum
Condition and to elect to purchase, pursuant to the Offer, a smaller number of
Shares. The Merger Agreement provides that the Purchaser may not waive the
Minimum Condition without the prior consent of the Company if, as a result, the
Purchaser would acquire less than a majority of the Shares actually outstanding.
The Offer is also subject to certain other terms and conditions. SEE SECTIONS 1,
14, AND 15 BELOW.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of January 21, 1997 (the "Merger Agreement"), among the Company, the
Purchaser and Parent pursuant to which, following the consummation of the Offer
and the satisfaction or waiver of certain conditions, the Purchaser will be
merged with and into the Company (the "Merger"), with the Company continuing as
the surviving corporation (the "Surviving Corporation"). In the Merger, each
outstanding Share (other than Shares held by Parent, the Purchaser or any
subsidiary of Parent or the Purchaser or in the treasury of the Company, which
Shares, by virtue of the Merger and without any action on the part of the holder
thereof, shall be cancelled with no payment being made with respect thereto, and
other than Shares, if any, held by stockholders who perfect their appraisal
rights under Delaware law ("Dissenting Shares")) will, by virtue of the Merger
and without any action by the holder thereof, be converted into the right to
receive $33.50 net to its holder in cash, or any higher price paid per Share in
the Offer (the "Merger Consideration"), payable to the holder thereof, without
interest thereon, upon the surrender of the certificate formerly representing
such Share. The Merger Agreement is more fully described in Section 11 below.
Certain federal income tax consequences of the sale of Shares pursuant to the
Offer and the Merger, as the case may be, are described in Section 5 below.
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), the Company's
financial advisor, has delivered to the Board of Directors of the Company a
written opinion to the effect that, as of the date of the Merger Agreement, the
consideration to be received by the holders of Shares pursuant to the Merger
<PAGE>
Agreement is fair from a financial point of view to such stockholders. A copy of
such opinion is included with the Company's Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9"), which is being mailed to
stockholders concurrently herewith, and stockholders are urged to read the
opinion in its entirety for a description of the assumptions made, matters
considered and limitations of the review undertaken by DLJ.
The Company has informed Parent that neither the Offer nor the Merger will
have any effect on the rights of class members under the previously announced
settlement of the stockholder litigation captioned IN RE NORAND SECURITIES
LITIGATION. Accordingly, any stockholder of the Company who is entitled to
participate in such settlement will retain all such rights regardless of whether
the Shares owned by such stockholder are acquired pursuant to the Offer or the
Merger.
The affirmative vote of holders of a majority of the outstanding Shares is
required to approve the Merger. As a result, if the Minimum Condition and the
other conditions to the Offer are satisfied and the Offer is consummated, the
Purchaser will own a sufficient number of Shares to ensure that the Merger will
be approved by the Company's stockholders. SEE SECTION 11.
The Company has advised the Purchaser that, to the knowledge of the Company,
all of its executive officers, directors, affiliates or subsidiaries who are
also stockholders intend either to tender their Shares in the Offer or to vote
in favor of the Merger.
The Company has informed the Purchaser that, as of January 17, 1997, there
were 7,842,905 Shares issued and outstanding, 1,252,347 Shares reserved for
issuance upon the exercise of outstanding stock options and 577,079 Shares
reserved for issuance upon the exercise of outstanding warrants.
THE OFFER IS CONDITIONED UPON THE FULFILLMENT OF CERTAIN CONDITIONS
DESCRIBED IN SECTION 14 BELOW. THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, FEBRUARY 21, 1997, UNLESS EXTENDED.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will accept for payment and thereby purchase all
Shares validly tendered and not withdrawn in accordance with the procedures set
forth in Section 4 on or prior to the Expiration Date. The term "Expiration
Date" means 12:00 midnight, New York City time, on Friday, February 21, 1997,
unless and until the Purchaser, in its sole discretion, shall have extended the
period of time for which the Offer is open, in which event the term "Expiration
Date" shall mean the time and date at which the Offer, as so extended by the
Purchaser, shall expire.
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and purchase, as soon as permitted under the terms of
the Offer, all Shares validly tendered and not withdrawn prior to the expiration
of the Offer. If at the Expiration Date, the conditions to the Offer described
in Section 14 hereof shall not have been satisfied or earlier waived but, in the
reasonable belief of Parent, may be satisfied prior to September 30, 1997, then,
subject to the provisions of the Merger Agreement, the Purchaser will extend the
Expiration Date for an additional period or periods of time by giving oral or
written notice of such extension to the Depositary. During any such extension,
all Shares previously tendered and not withdrawn will remain subject to the
Offer and subject to the right of a tendering stockholder to withdraw such
stockholder's Shares. SEE SECTION 4.
2
<PAGE>
Subject to the applicable regulations of the Commission and the terms of the
Merger Agreement, the Purchaser also expressly reserves the right, in its sole
discretion, at any time or from time to time, to (i) delay acceptance for
payment of or, regardless of whether such Shares were theretofore accepted for
payment, payment for any Shares pending receipt of any regulatory or
governmental approvals specified in Section 15; (ii) terminate the Offer
(whether or not any Shares have theretofore been accepted for payment) if any
condition referred to in Section 14 has not been satisfied or upon the
occurrence of any event specified in Section 14; and (iii) except as set forth
in the Merger Agreement, waive any condition or otherwise amend the Offer in any
respect, in each case, by giving oral or written notice of such delay,
termination, waiver or amendment to the Depositary and, other than in the case
of any such waiver, by making a public announcement thereof. The Purchaser
acknowledges (i) that Rule 14e-1(c) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), requires the Purchaser to pay the consideration
offered or return the Shares tendered promptly after the termination or
withdrawal of the Offer and (ii) that the Purchaser may not delay acceptance for
payment of, or payment for (except as provided in clause (i) of the preceding
sentence), any Shares upon the occurrence of any event specified in Section 14
without extending the period of time during which the Offer is open.
The rights reserved by the Purchaser in the preceding paragraph are in
addition to the Purchaser's rights pursuant to Section 14. Any such extension,
delay, termination or amendment will be followed as promptly as practicable by
public announcement thereof, and such announcement in the case of an extension
will be made no later than 9:00 a.m., New York City time, on the next business
day after the previously scheduled Expiration Date. Without limiting the manner
in which the Purchaser may choose to make any public announcement, subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that material changes be promptly disseminated to holders of
Shares), the Purchaser shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a
release to the Dow Jones News Service.
If the Purchaser makes a material change in the terms of the Offer, or if it
waives a material condition to the Offer, the Purchaser will extend the Offer
and disseminate additional tender offer materials to the extent required by
Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period
during which an offer must remain open following material changes in the terms
of the offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
materiality of the changes. In the Commission's view, an offer should remain
open for a minimum of five business days from the date the material change is
first published, sent or given to stockholders. With respect to a change in
price or the percentage of securities sought, a minimum of ten business days is
generally required to allow for adequate dissemination and investor response.
Accordingly, if prior to the Expiration Date, the Purchaser decreases the number
of Shares being sought, or increases or decreases the consideration offered
pursuant to the Offer, and if the Offer is scheduled to expire at any time
earlier than the period ending on the tenth business day from the date that
notice of such increase or decrease is first published, sent or given to holders
of Shares, the Offer will be extended at least until the expiration of such
period of ten business days. For purposes of the Offer, a "business day" means
any day other than a Saturday, Sunday or a federal holiday and consists of the
time period from 12:01 a.m. through 12:00 midnight, New York City time.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM CONDITION.
Consummation of the Offer is also conditioned upon expiration or termination
of all waiting periods imposed by the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the regulations thereunder (the "HSR Act"), and the
other conditions set forth in Section 14 below. The Purchaser reserves the right
(but shall not be obligated), in accordance with applicable rules and
regulations of the Commission and with the Merger Agreement, to waive any or all
of such conditions. If, by the Expiration Date, any or all of such conditions
have not been satisfied, the Purchaser may, in the exercise of its good faith
judgment, elect to (i) extend the Offer and, subject to applicable withdrawal
rights, retain all tendered
3
<PAGE>
Shares until the expiration of the Offer, as extended, subject to the terms of
the Offer and the Merger Agreement; (ii) waive all of the unsatisfied conditions
(other than the Minimum Condition) and, subject to complying with applicable
rules and regulations of the Commission, accept for payment all Shares so
tendered and not extend the Offer; or (iii) terminate the Offer and not accept
for payment any Shares and return all tendered Shares to tendering stockholders.
In the event that the Purchaser waives any condition set forth in Section 14,
the Commission may, if the waiver is deemed to constitute a material change to
the information previously provided to the stockholders, require that the Offer
remain open for an additional period of time and/or that the Purchaser
disseminate information concerning such waiver.
In the Merger Agreement, the Purchaser has agreed that, upon the terms and
subject to the conditions to the Offer, the Purchaser will accept for payment,
all Shares validly tendered and not withdrawn prior to the expiration of the
Offer as soon as it is permitted under the terms of the Offer. However, the
Merger Agreement provides that if the number of Shares that have been validly
tendered and not withdrawn prior to the Expiration Date represent less than 90%
of the Shares on a fully diluted basis, the Purchaser may, in its sole
discretion, extend the Offer for up to a maximum of 10 additional business days,
notwithstanding the prior satisfaction of the conditions set forth in Section
14, so long as the Purchaser waives all conditions to the Offer other than the
Minimum Condition and certain other conditions.
In addition, the Purchaser has agreed that it will not, without the prior
written consent of the Company, (i) decrease the price per Share or change the
form of consideration payable in the Offer, (ii) decrease the number of Shares
sought, (iii) impose additional conditions to the Offer or (iv) amend any other
term of the Offer in any manner adverse to the holders of Shares. The Purchaser
will not waive the Minimum Condition without the prior written consent of the
Company if, as a result, the Purchaser would acquire less than a majority of the
Shares actually outstanding.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed by the Purchaser to record holders of
Shares and will be furnished by the Purchaser to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the securityholder lists or, if applicable, who are listed
as participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of the Offer as so
extended or amended) and subject to the applicable rules of the Commission
(including Rule 14e-1(c)), the Purchaser will purchase, by accepting for
payment, and will pay for, all Shares validly tendered and not withdrawn (as
permitted by Section 4) prior to the Expiration Date promptly after the later to
occur of (i) the Expiration Date and (ii) the satisfaction or waiver of the
conditions to the Offer set forth in Section 14. SEE SECTION 14. In addition,
subject to applicable rules of the Commission, the Purchaser expressly reserves
the right to delay acceptance for payment of, or payment for, Shares pending
receipt of any regulatory or governmental approvals specified in Section 15.
For information with respect to approvals required to be obtained prior to
the consummation of the Offer, including under the HSR Act and other laws and
regulations see Section 15.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) certificates
representing such Shares ("Share Certificates") or timely confirmation (a
"Book-Entry Confirmation") of the book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company or Philadelphia Depository
Trust Company (collectively, the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth in Section 3; (ii) the appropriate Letter of
4
<PAGE>
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees or an Agent's Message (as defined below) in
connection with a book-entry transfer; and (iii) any other documents required by
the Letter of Transmittal.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares which are the subject of such Book-Entry
Confirmation that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Purchaser may enforce such
agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance of such Shares for payment pursuant to the Offer. In all
cases, upon the terms and subject to the conditions of the Offer, payment for
Shares purchased pursuant to the Offer will be made by deposit of the purchase
price therefor with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from the Purchaser and
transmitting payment to validly tendering stockholders.
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE
PAID BY THE PURCHASER.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if Share Certificates are submitted representing more Shares than are
tendered, Share Certificates representing unpurchased or untendered Shares will
be returned, without expense to the tendering stockholder (or, in the case of
Shares delivered by book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3,
such Shares will be credited to an account maintained within such Book-Entry
Transfer Facility), as promptly as practicable following the expiration,
termination or withdrawal of the Offer.
IF, PRIOR TO THE EXPIRATION DATE, THE PURCHASER SHALL INCREASE THE
CONSIDERATION OFFERED TO HOLDERS OF SHARES PURSUANT TO THE OFFER, SUCH INCREASED
CONSIDERATION SHALL BE PAID TO ALL HOLDERS OF SHARES THAT ARE PURCHASED PURSUANT
TO THE OFFER, WHETHER OR NOT SUCH SHARES WERE TENDERED PRIOR TO SUCH INCREASE IN
CONSIDERATION.
The Purchaser reserves the right, subject to the provisions of the Merger
Agreement, to transfer or assign at any time, in whole or from time to time in
part, to one or more of the Purchaser's subsidiaries or affiliates the right to
purchase all or any portion of the Shares tendered pursuant to the Offer, but
any such transfer or assignment will not relieve the Purchaser of its
obligations under the Offer or prejudice the rights of tendering stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
VALID TENDER OF SHARES. Except as set forth below, in order for Shares to
be validly tendered pursuant to the Offer, the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees or an Agent's Message in connection with a
book-entry delivery of Shares and any other documents required by the Letter of
Transmittal must be received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase on or prior to the Expiration Date
and either (i) Share Certificates representing tendered Shares must be received
by the Depositary or tendered pursuant to the procedure for book-entry transfer
set forth below and Book-Entry Confirmation must be received by the Depositary,
in each case on or prior to the Expiration Date, or (ii) the guaranteed delivery
procedures set forth below must be complied with.
5
<PAGE>
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER. The Depositary will make a request to establish
accounts with respect to the Shares at each of the Book-Entry Transfer
Facilities for purposes of the Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant in the
system of any Book-Entry Transfer Facility may make book-entry delivery of
Shares by causing such Book-Entry Transfer Facility to transfer such Shares into
the Depositary's account at such Book-Entry Transfer Facility in accordance with
such Book-Entry Transfer Facility's procedures for such transfer. However,
although delivery of Shares may be effected through book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message in connection with a
book-entry transfer, and any other required documents must, in any case, be
transmitted to and received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase on or prior to the Expiration Date,
or the guaranteed delivery procedure set forth below must be complied with.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
SIGNATURE GUARANTEES. Signatures on all Letters of Transmittal must be
guaranteed by a firm that is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program (an "Eligible Institution"), unless the Shares
tendered thereby are tendered (i) by a registered holder of Shares who has not
completed either the box labeled "Special Payment Instructions" or the box
labeled "Special Delivery Instructions" on the Letter of Transmittal or (ii) for
the account of an Eligible Institution. SEE INSTRUCTION 1 OF THE LETTER OF
TRANSMITTAL.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made to, or
Share Certificates for unpurchased Shares are to be issued or returned to, a
person other than the registered holder, then the tendered certificates must be
endorsed or accompanied by appropriate stock powers, signed exactly as the name
or names of the registered holder or holders appear on the certificates, with
the signatures on the certificates or stock powers guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. SEE INSTRUCTIONS 1 AND 5
OF THE LETTER OF TRANSMITTAL.
If the Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) must accompany each such delivery.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available or time will not permit all required documents to reach the Depositary
on or prior to the Expiration Date or the procedures for book-entry transfer
cannot be completed on a timely basis, such Shares may nevertheless be tendered
if all of the following guaranteed delivery procedures are duly complied with:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Purchaser, is
received by the Depositary, as provided below, on or prior to the Expiration
Date; and
6
<PAGE>
(iii) the Share Certificates (or a Book-Entry Confirmation) representing
all tendered Shares, in proper form for transfer together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message) and any other documents required by the Letter
of Transmittal are received by the Depositary within three National
Association of Securities Dealers Automatic Quotation System ("NASDAQ")
trading days after the date of execution of such Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by facsimile transmission to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery and a representation that the stockholder on whose behalf
the tender is being made is deemed to own the Shares being tendered within the
meaning of Rule 14e-4 under the Exchange Act.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or, of Book-Entry
Confirmation with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), together with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and any other documents required by the appropriate Letter of
Transmittal. Accordingly, payment might not be made to all tendering
stockholders at the same time, and will depend upon when Share Certificates are
received by the Depositary or Book-Entry Confirmations of such Shares are
received into the Depositary's account at a Book-Entry Transfer Facility.
BACKUP FEDERAL INCOME TAX WITHHOLDING. Under the backup federal income tax
withholding laws applicable to certain stockholders (other than certain exempt
stockholders, including, among others, all corporations and certain foreign
individuals), the Depositary may be required to withhold 31% of the amount of
any payments made to such stockholders pursuant to the Offer or the Merger. To
prevent backup federal income tax withholding, each such stockholder must
provide the Depositary with such stockholder's correct taxpayer identification
number and certify that such stockholder is not subject to backup federal income
tax withholding by completing the Substitute Form W-9 included in the Letter of
Transmittal. SEE INSTRUCTION 9 OF THE LETTER OF TRANSMITTAL.
APPOINTMENT AS PROXY. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser, and each of them,
as such stockholder's agents, attorneys-in-fact and proxies, with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the full
extent of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
and all other Shares and other securities or rights issued or issuable in
respect of such Shares on or after the date of this Offer to Purchase. All such
powers of attorney and proxies shall be considered irrevocable and coupled with
an interest in the tendered Shares. Such appointment will be effective upon the
acceptance for payment of such Shares by the Purchaser in accordance with the
terms of the Offer. Upon such acceptance for payment, all other powers of
attorney and proxies given by such stockholder with respect to such Shares and
such other securities or rights prior to such payment will be revoked, without
further action, and no subsequent powers of attorney and proxies may be given by
such stockholder (and, if given, will not be deemed effective). The designees of
the Purchaser will, with respect to the Shares and such other securities and
rights for which such appointment is effective, be empowered to exercise all
voting and other rights of such stockholder as they in their sole discretion may
deem proper at any annual or special meeting of the Company's stockholders, or
any adjournment or postponement thereof, or by consent in lieu of any such
meeting or otherwise. In order for Shares to be deemed validly tendered,
immediately upon the acceptance for payment of such Shares, the Purchaser or its
designee must be able to exercise full voting rights with respect to such Shares
and other securities, including voting at any meeting of stockholders.
DETERMINATION OF VALIDITY. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by the
7
<PAGE>
Purchaser, in its sole discretion, whose determination shall be final and
binding on all parties. The Purchaser reserves the absolute right to reject any
or all tenders determined by it not to be in proper form or the acceptance of or
payment for which may, in the opinion of the Purchaser's counsel, be unlawful.
The Purchaser also reserves the absolute right to waive any of the conditions of
the Offer or any defect or irregularity in any tender of Shares of any
particular stockholder whether or not similar defects or irregularities are
waived in the case of other stockholders.
The Purchaser's interpretation of the terms and conditions of the Offer will
be final and binding. No tender of Shares will be deemed to have been validly
made until all defects and irregularities with respect to such tender have been
cured or waived by the Purchaser. None of Parent, the Purchaser or any of their
respective affiliates or assigns, the Depositary, the Information Agent or any
other person or entity will be under any duty to give any notification of any
defects or irregularities in tenders or incur any liability for failure to give
any such notification.
The Purchaser's acceptance for payment of Shares tendered pursuant to any of
the procedures described above will constitute a binding agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time on or prior to the Expiration Date and, unless
theretofore accepted for payment as provided herein, may also be withdrawn at
any time after March 24, 1997 (or such later date as may apply in case the Offer
is extended).
If, for any reason whatsoever, acceptance for payment of any Shares tendered
pursuant to the Offer is delayed, or the Purchaser is unable to accept for
payment or pay for Shares tendered pursuant to the Offer, then, without
prejudice to the Purchaser's rights set forth herein, the Depositary may,
nevertheless, on behalf of the Purchaser, retain tendered Shares and such Shares
may not be withdrawn except to the extent that the tendering stockholder is
entitled to and duly exercises withdrawal rights as described in this Section 4.
Any such delay will be by an extension of the Offer to the extent required by
law.
In order for a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn, and (if Share
Certificates have been tendered) the name of the registered holder of the Shares
as set forth in the Share Certificate, if different from that of the person who
tendered such Shares. If Share Certificates have been delivered or otherwise
identified to the Depositary, then prior to the physical release of such
certificates, the tendering stockholder must submit the serial numbers shown on
the particular certificates evidencing the Shares to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Shares tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry transfer set forth in Section 3, the notice of withdrawal must
specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Shares, in which case a
notice of withdrawal will be effective if delivered to the Depositary by any
method of delivery described in the first sentence of this paragraph.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn will
be deemed not validly tendered for purposes of the Offer, but may be tendered at
any subsequent time prior to the Expiration Date by following any of the
procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding. None of Parent, the
Purchaser or any of their respective affiliates or assigns, the Depositary, the
Information
8
<PAGE>
Agent or any other person or entity will be under any duty to give any
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
5. CERTAIN TAX CONSEQUENCES.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local, foreign and other tax laws. For
United States federal income tax purposes, each selling or exchanging
stockholder would generally recognize gain or loss equal to the difference
between the amount of cash received and such stockholder's tax basis for the
sold or exchanged Shares. Such gain or loss will be capital gain or loss
(assuming the Shares are held as a capital asset) and any such capital gain or
loss will be long term if, as of the date of sale or exchange, the Shares were
held for more than one year or will be short term if, as of such date, the
Shares were held for one year or less.
The foregoing discussion may not be applicable to certain types of
stockholders, including stockholders who acquired Shares pursuant to the
exercise of employee stock options or otherwise as compensation, individuals who
are not citizens or residents of the United States and foreign corporations or
entities that are otherwise subject to special tax treatment under the Internal
Revenue Code of 1986, as amended (such as insurance companies, tax-exempt
entities and regulated investment companies).
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER AND MERGER,
INCLUDING FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES.
9
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6. PRICE RANGE OF THE SHARES; DIVIDENDS.
According to the Company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1996 (the "Form 10-K"), the Shares are traded in the
over-the-counter market and quoted on the NASDAQ National Market System (the
"NMS") under the symbol "NRND." The following table sets forth, for the periods
indicated, the reported high and low sale prices for the Shares on the NMS, as
reported in the Form 10-K with respect to periods occurring in fiscal 1995 and
1996, and as reported thereafter by published financial sources, with respect to
periods occurring in fiscal 1997.
NORAND CORPORATION
<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
FISCAL 1995
First Quarter............................................................. $ 40.75 $ 32.75
Second Quarter............................................................ 41.00 33.00
Third Quarter............................................................. 42.75 27.00
Fourth Quarter............................................................ 48.25 32.25
FISCAL 1996
First Quarter............................................................. 43.25 13.25
Second Quarter............................................................ 19.00 11.13
Third Quarter............................................................. 21.00 15.50
Fourth Quarter............................................................ 23.00 15.75
FISCAL 1997
First Quarter............................................................. 20.50 15.00
Second Quarter (through January 23, 1997)................................. 33.25 16.00
</TABLE>
To date, the Company has paid no cash dividends on the Shares.
On January 21, 1997, the last full day of trading prior to the announcement
of the execution of the Merger Agreement, according to published sources, the
reported closing price on the NMS for the Shares was $19.38 per Share. On
January 23, 1997, the last full day of trading prior to the commencement of the
Offer, according to published sources, the reported closing price on the NMS for
the Shares was $32.88 per Share.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
7. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK QUOTATION;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES. The purchase of
Shares pursuant to the Offer will reduce the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public. The purchase of Shares
pursuant to the Offer can also be expected to reduce the number of holders of
Shares. The Purchaser cannot predict whether the reduction in the number of
Shares that might otherwise trade publicly would have an adverse or beneficial
effect on the market price for or marketability of the Shares or whether it
would cause future market prices to be greater or less than the Offer price
therefor.
STOCK QUOTATION. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the requirements of the National
Association of Securities Dealers (the "NASD") for continued inclusion in the
NMS, which require that an issuer have at least 200,000 publicly held shares,
held by at least 400 stockholders or 300 stockholders of round lots, with a
market value of at least
10
<PAGE>
$1,000,000, and have net tangible assets of at least $1,000,000, $2,000,000 or
$4,000,000, depending on profitability levels during the issuer's four most
recent fiscal years. If these standards are not met, the Shares might
nevertheless continue to be included in the NASD's NASDAQ Stock Market (the
"NASDAQ Stock Market") with quotations published in the NASDAQ "additional list"
or in one of the "local lists", but if the number of holders of the Shares were
to fall below 300, or if the number of publicly held Shares were to fall below
100,000 or there were not at least two registered and active market makers for
the Shares, the NASD's rules provide that the Shares would no longer be
"qualified" for NASDAQ Stock Market reporting and the NASDAQ Stock Market would
cease to provide any quotations. Shares held directly or indirectly by
directors, officers or beneficial owners of more than 10% of the Shares are not
considered as being publicly held for this purpose. According to the Form 10-K,
as of November 8, 1996, there were approximately 8,000 holders of Shares and
there were 7,664,621 Shares outstanding. If, as a result of the purchase of
Shares pursuant to the Offer or otherwise, the Shares no longer meet the
requirements of the NASD for continued inclusion in the NASDAQ National Market
or in any other tier of the NASDAQ Stock Market and the Shares are no longer
included in the NASDAQ National Market or in any other tier of the NASDAQ Stock
Market, as the case may be, the market for Shares could be adversely affected.
In the event that the Shares no longer meet the requirements of the NASD for
continued inclusion in any tier of the NASDAQ Stock Market, it is possible that
the Shares would continue to trade in the over-the-counter market and that price
quotations would be reported by other sources. The extent of the public market
for the Shares and the availability of such quotations would, however, depend
upon the number of holders of Shares remaining at such time, the interests in
maintaining a market in Shares on the part of securities firms, the possible
termination of registration of the Shares under the Exchange Act, as described
below, and other factors.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. The purchase of the Shares pursuant to the Offer may result in the
Shares becoming eligible for deregistration under the Exchange Act. Registration
of the Shares may be terminated upon application by the Company to the
Commission if the Shares are not listed on a "national securities exchange" and
there are fewer than 300 record holders of Shares. Termination of registration
of the Shares under the Exchange Act would substantially reduce the information
required to be furnished by the Company to its stockholders and the Commission
and would make certain provisions of the Exchange Act, such as the short-swing
profit recovery provisions of Section 16(b) and the requirements of furnishing a
proxy statement in connection with stockholders' meetings pursuant to Section
14(a) or 14(c) and the related requirement of an annual report, no longer
applicable to the Company. If the Shares are no longer registered under the
Exchange Act, the requirements of Rule 13e-3 under the Exchange Act with respect
to "going private" transactions would no longer be applicable to the Company.
Furthermore, the ability of "affiliates" of the Company and persons holding
"restricted securities" of the Company to dispose of such securities pursuant to
Rule 144 promulgated under the Securities Act of 1933, as amended, may be
impaired or, with respect to certain persons, eliminated. If registration of the
Shares under the Exchange Act were terminated, the Shares would no longer be
"margin securities" or eligible for stock exchange listing or NASDAQ reporting.
The Purchaser believes that the purchase of the Shares pursuant to the Offer may
result in the Shares becoming eligible for deregistration under the Exchange
Act, and it would be the intention of the Purchaser to cause the Company to make
an application for termination of registration of the Shares as soon as possible
after successful completion of the Offer if the Shares are then eligible for
such termination.
If registration of the Shares is not terminated prior to the Merger, then
the registration of the Shares under the Exchange Act and the quotation of the
Shares on the NMS will be terminated following the consummation of the Merger.
MARGIN REGULATIONS. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which have the effect, among
11
<PAGE>
other things, of allowing brokers to extend credit on the collateral of such
Shares for the purpose of buying, carrying or trading in securities ("Purpose
Loans"). Depending upon factors such as the number of record holders of the
Shares and the number and market value of publicly held Shares, following the
purchase of Shares pursuant to the Offer, the Shares might no longer constitute
"margin securities" for purposes of the Federal Reserve Board's margin
regulations and, therefore, could no longer be used as collateral for Purpose
Loans made by brokers. In addition, if registration of the Shares under the
Exchange Act were terminated, the Shares would no longer constitute "margin
securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The following description of the Company and its business has been taken
from the Form 10-K and is qualified in its entirety by reference to the Form
10-K:
Norand Corporation, a Delaware corporation, was organized in 1988 as the
successor to a business established in 1968. In February 1993 Norand
completed an initial public offering of 4,025,000 shares of its common
stock. Norand's principal executive office is located at 550 Second Street
Southeast, Cedar Rapids, Iowa 52401. Norand's telephone number is (319)
369-3100. . . .
Norand designs, develops, manufactures, markets and services mobile
computing systems and wireless data communication networks using radio
frequency technology. These systems automate the collection, processing and
communication of information related to product sales and distribution,
inventory control and warehouse data management. Norand systems include
hand-held computers and radio frequency terminals as well as a variety of
other hardware devices; application-specific software; communication
networks; systems integration and support services; and related peripheral
items including portable printers and bar code scanning devices.
Norand has continued to invest in a variety of enabling technologies
(such as application software and network communications systems) that
support its systems solution approach. Norand has spent over $120 million on
product development and engineering expenses since October 1988 to transform
the Company from a hardware product-oriented company to an integrated
systems solutions provider.
12
<PAGE>
The selected financial information of the Company and its consolidated
subsidiaries set forth below has been excerpted and derived from the Form 10-K
and from the Company's Quarterly Report on Form 10-Q for the three-month period
ended November 30, 1996. More comprehensive financial and other information is
included in such reports (including management's discussion and analysis of
financial condition and results of operations) and in other reports and
documents filed by the Company with the Commission. The financial information
set forth below is qualified in its entirety by reference to such reports and
documents filed with the Commission and the financial statements and related
notes contained therein. These reports and other documents may be examined and
copies thereof may be obtained in the manner set forth below. As described in
such reports, certain information set forth below is a restatement of
information originally reported.
NORAND CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------- FISCAL YEAR ENDED AUGUST 31
NOVEMBER 30, DECEMBER 2, ----------------------------------
1996 1995 1996 1995 1994
------------ ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Product sales revenue.......................... $ 44,836 $ 39,231 $ 193,249 $ 179,266 $ 153,653
Customer service revenue....................... 10,600 10,575 42,251 38,648 33,816
------------ ----------- ---------- ---------- ----------
Total revenues............................... 55,436 49,806 235,500 217,914 187,469
Cost of products and services.................... 31,692 30,966 141,744 127,816 96,139
------------ ----------- ---------- ---------- ----------
Gross profit................................. 23,744 18,840 93,756 90,098 91,330
Operating Expenses:
Product developement and engineering
expenses..................................... 5,174 7,020 22,898 22,408 20,554
Selling expenses............................... 12,996 13,126 58,347 55,160 44,503
General and administrative expenses............ 4,167 4,201 17,006 15,006 12,868
Restructuring charge............................. -- -- 4,392 -- --
------------ ----------- ---------- ---------- ----------
22,337 24,347 102,643 92,574 77,925
------------ ----------- ---------- ---------- ----------
Income (loss) from operations.................... 1,407 (5,507) (8,887) (2,476) 13,405
Interest and other expenses...................... 1,740 1,112 6,256 3,482 1,437
Litigation settlement............................ -- 300 5,100 -- --
------------ ----------- ---------- ---------- ----------
Income (loss) before income taxes................ (333) (6,919) (20,243) (5,958) 11,968
Provision (benefit) for income taxes............. (100) (2,076) (6,073) (2,252) 5,594
------------ ----------- ---------- ---------- ----------
Net income (loss)................................ $ (233) $ (4,843) $ (14,170) $ (3,706) $ 6,374
------------ ----------- ---------- ---------- ----------
------------ ----------- ---------- ---------- ----------
Net income (loss) per common share............... $ (0.03) $ (0.63) $ (1.87) $ (0.50) $ 0.86
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital.................................. $ (5,291) $ (5,787) $ 14,777 $ 29,574
Total assets..................................... 160,877 172,065 160,588 133,431
Stockholders' equity............................. 42,636 42,734 55,271 56,977
</TABLE>
13
<PAGE>
Although neither Parent nor the Purchaser has any knowledge that any such
information is untrue, neither Parent nor the Purchaser takes any responsibility
for the accuracy or completeness of information contained in this Offer to
Purchase with respect to the Company or any of its subsidiaries or affiliates or
for any failure by the Company to disclose events which may have occurred or may
affect the significance or accuracy of any such information.
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
particular dates, concerning the Company's business, principal physical
properties, capital structure, material pending legal proceedings, operating
results, financial condition, directors and officers (including their
remuneration and the stock options granted to them), the principal holders of
the Company's securities, any material interests of such persons in transactions
with the Company and certain other matters is required to be disclosed in proxy
statements and annual reports distributed to the Company's stockholders and
filed with the Commission. Such reports, proxy statements and other information
may be inspected and copied at the Commission's public reference facilities at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and should also
be available for inspection at the following regional offices of the Commission:
7 World Trade Center, New York, New York 10048 and 500 West Madison Street,
Chicago, Illinois 60661-2511; and copies may be obtained by mail at prescribed
rates from the principal office of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Reports, proxy statements and other information
concerning the Company also should be available for inspection at the offices of
NASDAQ Operations, 1735 K Street, N.W., Washington, D.C. 20006.
In the course of the discussions between representatives of Parent and the
Company (see Section 10) certain projections of future operating performance
were furnished to Parent's representatives. These projections were not prepared
with a view to public disclosure or compliance with published guidelines of the
Commission or the guidelines established by the American Institute of Certified
Public Accountants regarding projections, and are included in this Offer to
Purchase only because they were provided to Parent. None of Parent, the
Purchaser or the Company assumes any responsibility for the accuracy of these
projections. While presented with numerical specificity, these projections are
based upon a variety of assumptions relating to the businesses of the Company
which may not be realized and are subject to significant uncertainties and
contingencies, many of which are beyond the control of the Company. These
assumptions, uncertainties and contingencies include, without limitation, the
Company's assumed ability to continue to realize historical revenue growth of
approximately 14% per year and operating margin improvements based on the
assumption that the Company will continue to be successful in implementing
initiatives to reduce procurement expenses and other operating expenses. There
can be no assurance that the projections will be realized, and actual results
may vary materially from those shown.
These projections indicated sales of $268.7 million, $305.9 million and
$350.0 million for fiscal years 1997, 1998 and 1999, respectively, net income of
$8.7 million, $16.0 million and $21.9 million for fiscal years 1997, 1998 and
1999, respectively and earnings per share of $1.13, $2.06 and $2.77 for fiscal
years 1997, 1998 and 1999, respectively. These projections should be read
together with the historical financial statements of the Company referred to
herein.
14
<PAGE>
9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER.
Parent is a Delaware corporation whose principal executive offices are
located at 360 North Crescent Drive, Beverly Hills, California, 90210-4867.
Parent operates in two principal business segments, "Oilfield Services" and
"Industrial Automation Systems". Oilfield Services' operations are conducted
through a wholly owned subsidiary of Parent, ("WAII"), and WAII's divisions and
subsidiaries. Oilfield Services operates in the high-technology information
services sector of the industry. As a source of integrated reservoir
description, Oilfield Services is involved worldwide in seismic surveys and
well-logging for exploration, development and production of oil and gas.
Oilfield Services also develops software products for analysis, integration and
graphic presentation of reservoir characteristics.
Parent's Industrial Automation Systems business segment is an international
supplier of industrial automation technologies and products, including
integrated manufacturing systems and automated data collection systems. Parent
supplies machining, body and assembly and precision grinding systems for the
automotive industry, and automated data collection systems for manufacturing and
distribution applications. Overall, customers of Industrial Automation Systems
are the global automotive and off-road vehicle industries, retail and wholesale
distribution companies, manufacturing industries, airlines and government
agencies.
Parent's automated data collection business is conducted by Intermec
Corporation ("Intermec") and Intermec's Subsidiaries. Automated data collection
systems are used to gather and organize data, and then transmit selected
information from various locations to a user's central computer or retrieval
system. Such products are employed in a growing number of applications worldwide
to improve productivity, efficiency and accuracy in data collection. Automated
data collection systems are typically used to track personnel, parts or products
and transactions through manufacturing, distribution and other processes.
Technologies used for automated data collection include bar code printers, laser
scanners and other imaging methods, as well as hand-held computers and wireless
radio frequency ("RF") transmission devices. Bar coding is currently the most
widely used technology for automated data collection, providing a cost-effective
solution and a rapid return on investment for customers.
The Purchaser's principal executive offices are located at 360 North
Crescent Drive, Beverly Hills, California, 90210-4867. The Purchaser is a newly
formed Delaware corporation and a wholly owned subsidiary of Parent. The
Purchaser has not conducted any business other than in connection with the Offer
and the Merger.
The name, business address, citizenship, present principal occupation and
employment history for the past five years of each of the directors and
executive officers of Parent and the Purchaser are set forth in Schedule I.
Parent is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
particular dates, concerning Parent's business, principal physical properties,
capital structure, material pending legal proceedings, operating results,
financial condition, directors and officers (including their remuneration and
stock options granted to them), the principal holders of Parent's securities,
any material interests of such persons in transactions with Parent and certain
other matters is required to be disclosed in proxy statements and annual reports
distributed to Parent's stockholders and filed with the Commission. Such
reports, proxy statements and other information may be inspected and copied at
the Commission's public reference facilities and should also be available for
inspection in the same manner as set forth with respect to the Company in
Section 8.
Set forth below is certain consolidated financial information with respect
to Parent and its consolidated subsidiaries for its fiscal years ended and as of
December 31, 1995, and 1994 and for the nine-month
15
<PAGE>
periods ended as of September 30, 1996 and 1995. More comprehensive financial
and other information is included in Parent's Annual Report on Form 10-K for its
fiscal year ended December 31, 1995 and Parent's Quarterly Report on Form 10-Q
for the quarter and nine-month period ended November 30, 1996 (including
management's discussion and analysis of financial condition and results of
operations) and in other reports and documents filed by Parent with the
Commission. The financial information set forth below is qualified in its
entirety by reference to such reports and documents filed with the Commission
and the financial statements and related notes contained therein. These reports
and other documents may be examined and copies thereof may be obtained in the
manner set forth above.
WESTERN ATLAS INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED FISCAL YEAR ENDED
SEPTEMBER 30 DECEMBER 31
-------------------- --------------------
<S> <C> <C> <C> <C>
1996 1995 1995 1994
--------- --------- --------- ---------
INCOME STATEMENT DATA:
Sales............................................................ $ 1,848.5 $ 1,641.3 $ 2,225.8 $ 2,165.7
Costs and Expenses............................................... 1,700.1 1,519.2 2,058.0 2,032.4
Earnings Before Taxes............................................ 148.4 122.0 167.8 133.3
Net Earnings..................................................... 89.0 72.6 99.8 77.7
Net Earnings Per Shares.......................................... $ 1.64 $ 1.35 $ 1.85 $ 1.60
BALANCE SHEET DATA (AT END OF PERIOD):
Working Capital.................................................. $ 453.4 $ 494.1 $ 400.0
Total Assets..................................................... 2,576.9 2,489.2 2,404.1
Long-term Obligations............................................ 489.3 535.0 522.3
Total Shareholders' Investment................................... 1,457.9 1,356.8 1,248.3
</TABLE>
Except as set forth elsewhere in this Offer to Purchase or Schedule I
hereto: (i) neither Parent nor the Purchaser nor, to the knowledge of Parent or
the Purchaser, any of the persons listed in Schedule I hereto or any associate
or majority-owned subsidiary of Parent or the Purchaser or any of the persons so
listed, beneficially owns or has a right to acquire any Shares or any other
equity securities of the Company; (ii) neither Parent nor the Purchaser nor, to
the knowledge of Parent or the Purchaser, any of the persons or entities
referred to in clause (i) above or any of their executive officers, directors or
subsidiaries has effected any transaction in the Shares or any other equity
securities of the Company during the past 60 days; (iii) neither Parent nor the
Purchaser nor, to the knowledge of Parent or the Purchaser, any of the persons
listed in Schedule I hereto, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the Company
(including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any such securities, joint
ventures, loan or option arrangements, puts or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies, consents or
authorizations); (iv) since September 1, 1993, there have been no transactions
which would require reporting under the rules and regulations of the Commission
between Parent or the Purchaser or any of their respective subsidiaries or, to
the knowledge of Parent or the Purchaser, any of the persons listed in Schedule
I hereto, on the one hand, and the Company or any of its executive officers,
directors or affiliates, on the other hand; and (v) since September 1, 1993,
there have been no contacts, negotiations or transactions between Parent or the
Purchaser or any of their respective subsidiaries or, to the knowledge of Parent
or the Purchaser, any of the persons listed in Schedule I hereto, on the one
hand, and the Company or any of its subsidiaries or affiliates, on the other
hand, concerning a merger, consolidation or acquisition, a tender offer or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets.
16
<PAGE>
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
Initial contacts between the Company and Parent concerning a possible
business combination or other strategic relationship began in January 1996. In
February 1996, the Company and Parent entered into a mutual
confidentiality/standstill agreement (the "Confidentiality Agreement") (SEE
SECTION 11) and began exchanging certain non-public information concerning the
Company. This process continued through May 1996.
In June 1996, the Company and Parent agreed to defer further consideration
of a possible transaction pending the resolution of certain stockholder
litigation against the Company. An agreement providing for the settlement of
such litigation was reached in August 1996 and confirmed by the court in
December 1996.
On January 6 and 7, 1997, representatives of the Company and Parent met to
discuss a possible business combination and the Company's financial outlook.
Additional discussions were held by telephone over the period between January 8
and January 16. Meetings among representatives of the Company and Parent and
their advisors took place on January 19 through January 21 at which the
significant terms of the Merger Agreement were negotiated. On January 21, 1997,
the Merger Agreement was presented to, and approved by, the Board of Directors
of the Company and the Executive Committee of the Board of Directors of Parent
(acting with the authority of the full Board of Directors), and the Merger
Agreement was executed by the parties.
11. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; STATUTORY REQUIREMENTS;
APPRAISAL RIGHTS; PLANS FOR THE COMPANY; OTHER AGREEMENTS.
PURPOSE. The purpose of the Offer and the Merger is to acquire control of,
and the entire equity interest in, the Company.
THE MERGER AGREEMENT. The following summary description of the Merger
Agreement is qualified in its entirety by reference to such agreement, which has
been filed as an exhibit to the Tender Offer Statement on Schedule 14D-1 filed
with the Commission by Parent and the Purchaser (the "Schedule 14D-1"), which
may be examined and copies obtained as set forth in Section 8 above (except that
it will not be available at the regional offices of the Commission).
The Merger Agreement provides that in accordance with the provisions thereof
and the General Corporation Law of the State of Delaware (the "DGCL"), at the
date and time when the Merger shall become effective pursuant to Section 2.02 of
the Merger Agreement (the "Effective Time"), the Purchaser will be merged with
and into the Company, and the Company will be the surviving corporation
(hereinafter sometimes called the "Surviving Corporation") and continue its
corporate existence under the laws of the State of Delaware. At the Effective
Time the separate existence of the Purchaser shall cease.
Pursuant to the Merger Agreement, as of the Effective Time, by virtue of the
Merger and without any action on the part of the holders thereof, each Share
issued and outstanding immediately prior to the Effective Time (other than any
Shares held by Parent, the Purchaser, any subsidiary of Parent or the Purchaser
or in the treasury of the Company, which Shares, by virtue of the Merger and
without any action on the part of the holder thereof, shall be cancelled and
retired and shall cease to exist with no payment being made with respect
thereto, and other than any Dissenting Shares) will be converted into the right
to receive $33.50 net to its holder in cash or any higher price per Share paid
in the Offer, payable to the holder thereof, without interest thereon, upon
surrender of the certificate formerly representing such Share.
For a description of certain appraisal rights available to stockholders
under the DGCL in connection with the Merger, see "--Appraisal Rights" below in
this Section 11.
As of the Effective Time, by virtue of the Merger and without any action on
the part of the holders thereof, each share of capital stock of the Purchaser
issued and outstanding immediately prior to the
17
<PAGE>
Effective Time will be converted into and become one fully paid and
nonassessable share of Common Stock, par value $0.01 per share, of the Surviving
Corporation.
Under the Merger Agreement, the Company and Parent have agreed to take all
actions necessary to provide that immediately prior to consummation of the Offer
(i) each outstanding option to purchase Shares (the "Options") granted under any
of the Company's 1989 Stock Option Plan, the Company's Long-Term Performance
Program or the Company's 1994 Stock Option Plan for Non-Employee Directors
(collectively, the "Option Plans") will, by virtue of the Merger and without any
further action on the part of the Company or the holder of such Option, be
assumed by Parent in a manner which complies with certain provisions of the
Internal Revenue Code of 1986, as amended (the "Code"). At the Effective Time,
all references in the Option Plans to the Company will be deemed to refer to
Parent, and Parent will issue to each holder of an Option a document evidencing
the assumption of such option by Parent. Each Option assumed by Parent will be
exercisable upon the same terms and conditions including, without limitation,
vesting, as under the applicable Option Plan and the applicable option agreement
issued thereunder, except that (a) each such Option will be exercisable for the
number of shares of Common Stock, par value $1.00 per share, of Parent ("Parent
Common Stock") (rounded to the nearest whole share) obtained by multiplying the
number of Shares subject to such Option immediately prior to the Effective Time
by $33.50 and dividing the result by the average of the closing prices for the
Parent Common Stock reported on the New York Stock Exchange Consolidated Tape
for the 10 consecutive trading days immediately prior to the Effective Time; and
(b) the option price per share of Parent Common Stock shall be an amount equal
to the aggregate exercise price of such Option prior to adjustment divided by
the number of shares of Parent Common Stock subject to such Option after
adjustment (the option price per share, as so determined, being rounded upward
to the nearest full cent). The date of grant of each Parent Option will be the
date on which the corresponding Option was granted. No payment will be made for
fractional interests.
Except as provided in the Merger Agreement or as otherwise agreed to by the
parties and to the extent permitted by the Option Plans (i) the Option Plans
will terminate as of the Effective Time and the provisions in any other plan,
program or arrangement providing for the issuance or grant by the Company or any
of its subsidiaries of any interest in respect of the capital stock of the
Company or any of its subsidiaries will be deleted as of the Effective Time and
(ii) the Company will use all reasonable efforts to ensure that following the
Effective Time no holder of Options or any participant in any Option Plan or any
other such plans, programs or arrangements shall have any right thereunder to
acquire any equity securities of the Company, the Surviving Corporation or any
subsidiary thereof.
The Merger Agreement provides that the Certificate of Incorporation and
By-Laws of the Purchaser will be the Certificate of Incorporation and By-Laws of
the Surviving Corporation until thereafter amended as provided by law, except
that the name of the Surviving Corporation will be "Norand Corporation."
Under the Merger Agreement the directors of the Purchaser immediately prior
to the Effective Time will be the initial directors of the Surviving Corporation
and will hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal. The officers of the
Company immediately prior to the Effective Time will be the initial officers of
the Surviving Corporation and will hold office until their respective successors
are duly elected and qualified, or their earlier death, resignation or removal.
AGREEMENTS OF THE COMPANY, PARENT AND THE PURCHASER. The Merger Agreement
provides that, if required by applicable law in order to consummate the Merger,
the Company, acting through its Board of Directors, shall, in accordance with
applicable law, duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Special Meeting") as soon as practicable following the
purchase of and payment for Shares by the Purchaser pursuant to the Offer for
the purpose of considering and adopting Merger Agreement and such other matters
as may be necessary to consummate the transactions contemplated by the Merger
Agreement.
18
<PAGE>
Under the Merger Agreement, in the event that Parent, the Purchaser or any
other subsidiary of Parent acquires at least 90% of the outstanding Shares
pursuant to the Offer or otherwise, at the request of Parent or the Purchaser,
Parent, the Purchaser and the Company will take all necessary and appropriate
action to cause the Merger to become effective as soon as practicable after the
acceptance for payment and purchase of Shares by the Purchaser pursuant to the
Offer without a meeting of stockholders of the Company in accordance with
Section 253 of the DGCL.
In the Merger Agreement, the Company has covenanted and agreed that, except
as contemplated by the Merger Agreement or as expressly agreed to in writing by
Parent, during the period from the date of the Merger Agreement to the Control
Date (as defined in "--Directors" below in this Section 11), each of the Company
and its subsidiaries will conduct its operations according to its ordinary
course of business consistent with past practice and will use commercially
reasonable efforts to preserve intact its business organization, to keep
available the services of its key employees and to maintain satisfactory
relationships with material suppliers, distributors, customers and others having
business relationships with it and will take no action not required by law that
would materially adversely affect the ability of the parties to consummate the
transactions contemplated by the Merger Agreement or be inconsistent with such
transactions.
In the Merger Agreement, the Company has covenanted and agreed that prior to
the Effective Time it will keep Parent advised of the status of all discussions
and negotiations concerning possible acquisitions and divestitures by it or any
of its subsidiaries of any corporations or businesses, and has further agreed
that without the prior written consent of Parent it will not make, or agree to
make, any such acquisition or divestiture.
Under the Merger Agreement, the Company has agreed that prior to the
Effective Time it will not, and will not authorize or permit any of its
subsidiaries or any of its or its subsidiaries' directors, officers, employees,
agents or representatives, directly or indirectly, to solicit, initiate,
facilitate or encourage (including by way of furnishing or disclosing nonpublic
information) any inquiries or the making of any proposal with respect to any
merger, consolidation or other business combination involving the Company or its
subsidiaries or acquisition of all or substantially all of the assets or capital
stock of the Company and its subsidiaries taken as a whole (an "Acquisition
Transaction") or negotiate or explore with any person (other than Parent, the
Purchaser or their respective directors, officers, employees, agents and
representatives) any Acquisition Transaction or enter into any agreement,
arrangement or understanding requiring it to abandon, terminate or fail to
consummate the Merger or any other transactions contemplated by the Merger
Agreement; provided that the Company may in response to an unsolicited written
proposal with respect to an Acquisition Transaction from a third party furnish
information to such third party, and negotiate, explore or otherwise communicate
with such third party, in each case only if the Board of Directors of the
Company determines in good faith by a majority vote, after consultation with its
financial advisors and outside legal counsel, and after the receipt of the
advice of outside legal counsel to the Company that failing to take such actions
would constitute a breach of the fiduciary duty of the Board, that failing to
take such action would constitute a breach of the fiduciary duties of the Board
of Directors of the Company. The Company has agreed to advise Parent as promptly
as practicable in writing of the receipt of any inquiries or proposals relating
to an Acquisition Transaction and any actions described in this paragraph.
Pursuant to the Merger Agreement, from the date of the Merger Agreement
until the Effective Time, and subject to any limitations imposed by applicable
law or the terms of any of the Company's or its subsidiaries' classified
contracts, the Company has agreed to give Parent and its authorized
representatives (including counsel, environmental and other consultants,
accountants and auditors) access during normal business hours to all facilities,
personnel and operations and to all books and records of the Company and its
subsidiaries, and to permit Parent to make such inspections as it may reasonably
require and to cause its officers and those of its subsidiaries to furnish
Parent with such financial and operating data and other information with respect
to its business and properties as Parent may from time to time reasonably
request.
19
<PAGE>
Pursuant to the Merger Agreement, Parent has agreed that any information
furnished to Parent, its subsidiaries or its authorized representatives will be
subject to the provisions of the Confidentiality Agreement. See--"The
Confidentiality Agreement" below in this Section 11.
The Merger Agreement provides that, subject to the terms and conditions
therein provided and applicable law, each of the Company, Parent and the
Purchaser will use its reasonable best efforts promptly to consummate the
transactions contemplated by the Merger Agreement, including, without limitation
using such reasonable best efforts to (i) obtain all necessary consents,
approvals or waivers under its material contracts and (ii) lift any legal bar to
the Merger; provided, however, that the foregoing will not require Parent, the
Purchaser or any other affiliate of Parent to agree to any action or restriction
which, if imposed by a governmental entity, would constitute a condition
described in paragraph (A) of Section 14.
Under the Merger Agreement, before issuing any press release or otherwise
making any public statements with respect to the Merger Agreement, the Offer or
the Merger, Parent, the Purchaser and the Company will consult with each other
as to its form and substance and will not issue any such press release or make
any such public statement prior to such consultation, except in either case as
may be required by law.
Under the Merger Agreement, each of the Company and Parent have agreed to
give prompt notice to the other party of (i) the occurrence, or non-occurrence,
of any event the occurrence, or non-occurrence, of which would be likely to
cause (A) any representation or warranty contained in the Merger Agreement to be
untrue or inaccurate in any material respect at any time from the date hereof to
the acceptance for payment of Shares pursuant to the Offer, (B) any condition
set forth in Section 14 to be unsatisfied in any material respect at any time
from the date of the Merger Agreement to the date the Purchaser purchases Shares
pursuant to the Offer or (C) any conditions set forth in "--Conditions to the
Merger" below to be unsatisfied in any material respect at any time from the
date of the Merger Agreement to the Effective Time, and (ii) any material
failure of the Company or Parent, as the case may be, or any officer, director,
employee or agent thereof, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under the Merger Agreement;
provided, however, that the delivery of any notice pursuant to this paragraph
will not limit or otherwise affect the remedies available under the Merger
Agreement to the party receiving such notice.
Under the Merger Agreement, from and after the Effective Time, Parent will
indemnify, defend and hold harmless the present and former officers, directors,
employees and agents of the Company and its subsidiaries against all losses,
claims, damages, expenses or liabilities arising out of or related to actions or
omissions or alleged actions or omissions occurring at or prior to the Effective
Time, including without limitation the transactions contemplated by the Merger
Agreement, to the same extent and on the same terms and conditions (including
with respect to advancement of expenses) provided for in the Company's
Certificate of Incorporation and By-Laws and agreements in effect at the date of
the Merger Agreement (to the extent consistent with applicable law).
Pursuant to the Merger Agreement, for a period of five years after the
Effective Time, Parent has agreed to maintain in effect the current policies of
directors' and officers' liability insurance maintained by the Company (provided
that Parent may substitute therefor policies with reputable and financially
sound carriers of at least the same coverage and amounts containing terms and
conditions which are no less advantageous) with respect to claims arising from
or related to facts or events which occurred at or before the Effective Time;
provided, however, that Parent is not obligated to make annual premium payments
for such insurance to the extent such premiums exceed 150% of the annual
premiums paid as of the date of the Merger Agreement by the Company for such
insurance.
Parent has agreed pursuant to the Merger Agreement that following
consummation of the Offer, it will cause the Company to honor in accordance with
their terms certain existing employment contracts and employee benefits in
effect on the date of the Merger Agreement. In addition, Purchaser has agreed in
the Merger Agreement to provide or cause the Company to provide to individuals
who are employed by the
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Company or any of its subsidiaries until the first anniversary of the Effective
Time employee benefits that are in the aggregate no less favorable than those
provided to them as of the date of the Merger Agreement, other than the
Company's Employee Stock Purchase Plan. Parent will make its employee stock
purchase plan available to employees of the Company as promptly as practicable
following the Effective Time.
Pursuant to the Merger Agreement, the Company has agreed that prior to the
Effective Time, it will use its reasonable best efforts to cause the Consulting
Agreement between the Company and Donald W. Rowley, dated February 12, 1996, as
amended, and the Consulting Agreement between the Company and Jay Alix dated
January 16, 1996, as amended, to be amended to provide that in lieu of the
warrants to purchase Shares granted pursuant to such agreements, Mr. Rowley and
Mr. Alix each be entitled to receive from the Company an immediate cash payment
from the Company equal to the Merger Price multiplied by the number of Shares
for which their respective warrants are exercisable, minus the aggregate
exercise price of such warrants.
Under the Merger Agreement, Parent has agreed to use its reasonable best
efforts to assist the Company in obtaining from The Bank of New York Financial
Corporation ("BONYFC") a written commitment to the Company extending through at
least May 31, 1997 to lend up to $75 million to the Company on commercially
reasonable terms that are no less favorable to the Company than the terms of the
latest written proposal made by BONYFC to the Company as of the date hereof;
provided, however, that such agreement will not obligate Parent to incur any
fees or expenses payable to BONYFC or to guarantee, directly or indirectly, any
obligations or indebtedness of the Company.
If, notwithstanding the foregoing, BONYFC does not extend such written
commitment to the Company on or before March 15, 1997, then, at the Company's
option, Parent will purchase from the Company, and the Company will sell to
Parent, shares of a newly created Series A Convertible Preferred Stock of the
Company ("Series A Convertible Preferred Stock") for an aggregate purchase price
of $25,000,000 payable to the Company by wire transfer in immediately available
funds with the closing of such purchase and sale to take place no later than
March 31, 1997. If this provision becomes effective and the Series A Convertible
Preferred Stock is issued, it will have substantially the following terms. The
Series A Convertible Preferred Stock will have a liquidation preference of
$25,000,000 and will be convertible after the first anniversary of the issue
date, at the option of the holder into common stock of the Company at the rate
of one share of common stock for each $23.00 of liquidation preference, subject
to antidilution provisions substantially identical to those in the Company's
Series A and Series B Warrants. The dividend will be 6 1/2% per annum of the
liquidation preference and will be payable at the option of the Company in
shares of Series A Convertible Preferred Stock or cash. The Company will be
required to redeem the Series A Convertible Preferred Stock at the request of
the holder upon the earlier to occur of (i) consummation of a transaction
resulting in a change in control of the Company and (ii) the tenth anniversary
of the date of issuance. The Company may redeem the Series A Convertible
Preferred Stock at the option of the Company (i) during the first year after the
date of issuance at 110% of the liquidation preference and (ii) after the first
year from the date of issuance at 100% of liquidation preference as long as the
Company's common stock has traded in excess of $25.30 for any 10 consecutive
trading days. If the Company defaults on its mandatory redemption obligation,
the dividend rate will increase by 25 basis points, and will thereafter increase
by an additional 25 basis points for each 91-day period the default continues,
up to a maximum dividend rate of 10 1/2%. During continuance of the default, the
holder will be entitled to appoint one member of the Company's Board of
Directors.
DIRECTORS. In the Merger Agreement, the Company has agreed that, subject to
compliance with applicable law, promptly upon the payment by the Purchaser for
Shares purchased pursuant to the Offer representing not less than a majority of
the outstanding Shares on a fully diluted basis, and from time to time
thereafter, the Company will, upon request of Parent, promptly take all actions
necessary to cause a majority of the directors of the Company to consist of
Parent's designees, including by accepting the resignations of those incumbent
directors designated by the Company or increasing the size of the
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Company's Board of Directors and causing Parent's designees to be elected. The
Company's obligations to appoint Parent's designees to the Board are subject to
Section 14(f) of the Exchange Act and Rule 14f-1 thereunder, if applicable.
Following the election or appointment of Parent's designees as described in this
paragraph and prior to the Effective Time, any amendment or termination of the
Merger Agreement by the Company or the Company's Board of Directors, any
extension by the Company or the Company's Board of Directors, of the time for
the performance of any of the obligations or other acts of Parent or the
Purchaser or waiver of any of the Company's rights under the Merger Agreement or
any other action by the Company concerning the Merger Agreement or any of the
transactions contemplated thereby, will require the concurrence of a majority of
the directors of the Company then in office who were not designated by Parent.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains certain
representations and warranties by the Company, including representations and
warranties concerning: the organization and qualification of the Company and its
subsidiaries; the capitalization of the Company; the authority of the Company
relative to the execution and delivery of, and consummation of the transactions
contemplated by, the Merger Agreement and approval by the Board of Directors of
the Company regarding certain related matters; the absence of any violations of
the corporate documents and certain instruments of the Company or its
subsidiaries or of any statute, rule, regulation, order or decree, subject to
certain exceptions; the accuracy of reports and documents filed by the Company
with the Commission since January 1, 1994 and certain financial statements of
the Company; the absence since November 30, 1996 (except as amended or
supplemented in filings prior to the date of the Merger Agreement with the
Commission) to the date of the Merger Agreement of any event or occurrence
(including the incurrence or existence of any liability) which, individually or
in the aggregate, would have a Company Material Adverse Effect (as defined in
the Merger Agreement); the absence of litigation which could have a Company
Material Adverse Effect; compliance by the Company with applicable laws,
regulations, and similar matters; payment by the Company of taxes; compliance
with certain laws relating to employee benefit plans; the possession of right,
title and interest by the Company and its subsidiaries in certain intellectual
property; the absence of ongoing infringement by the Company of intellectual
property rights belonging to a third-party, indemnification by the Company for
any such infringement or claims or demands against the Company for any such
infringement; the absence of pending or threatened challenges, or grounds for a
challenge, to the rights of the Company to use certain trade secrets or
proprietary or confidential information; the absence of any material defect in
the programming and operation of the Company's software; the absence of material
rights of third parties to use the Company's software; the taking by the Board
of Directors of the Company of all appropriate and necessary action such that
the provisions of Section 203 of the DGCL will not apply to the transactions
contemplated by the Merger Agreement; and incurrence of broker's and similar
fees.
The Merger Agreement also contains certain representations and warranties by
Parent and the Purchaser, including that Parent or the Purchaser has and will
have at the time of acceptance for payment and purchase of Shares under the
Offer and at the Effective Time the funds necessary to consummate the Offer and
the Merger and the transactions contemplated thereby and to pay related fees and
expenses.
CONDITIONS TO THE MERGER. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the fulfillment of
each of the following conditions: (i) the Purchaser shall have accepted for
payment and paid for Shares pursuant to the Offer in accordance with the terms
thereof; (ii) the vote of the stockholders of the Company necessary to
consummate the transactions contemplated by the Merger Agreement shall have been
obtained, if required by applicable law; and (iii) no statute, rule, regulation,
judgment, writ, decree, order or injunction shall have been promulgated,
enacted, entered or enforced, and no other action shall have been taken, by any
domestic, foreign or supranational government or governmental, administrative or
regulatory authority or agency of competent jurisdiction or by any court or
tribunal of competent jurisdiction, domestic, foreign or supranational, that in
any of the foregoing cases has the effect of making illegal or directly or
indirectly restraining, prohibiting or restricting the consummation of the
Merger.
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TERMINATION. The Merger Agreement may be terminated at any time prior to
the Effective Time: (i) by mutual written consent of the Boards of Directors of
Parent and the Company; (ii) by either Parent or the Company if, without any
material breach of the terminating party of its obligations under the Merger
Agreement, the purchase of Shares pursuant to the Offer shall not have occurred
on or before September 30, 1997 (which date may be extended by mutual written
consent of the parties to the Merger Agreement); (iii) by Parent or the Company
if the Offer expires or is terminated or withdrawn pursuant to its terms without
any Shares being purchased thereunder; or (iv) by either Parent or the Company
if any court of competent jurisdiction in the United States or other
governmental body in the United States shall have issued an order (other than a
temporary restraining order), decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the purchase of Shares pursuant
to the Offer or the Merger, and such order, decree, ruling or other action shall
have become final and nonappealable; provided that the party seeking to
terminate the Merger Agreement shall have used its reasonable best efforts,
subject to certain limitations, to remove or lift such order, decree or ruling.
The Merger Agreement may be terminated and the Offer and the Merger may be
abandoned by action of the Board of Directors of Parent at any time prior to the
purchase of Shares pursuant to the Offer if (i) the Board of Directors of the
Company shall withdraw, modify or change its recommendation or approval in
respect of the Merger Agreement or the Offer in a manner adverse to Parent, (ii)
the Board of Directors of the Company shall have recommended any proposal other
than by Parent or the Purchaser in respect of an Acquisition Transaction, or
(iii) a proposal for an Acquisition Transaction other than by Parent or the
Purchaser shall be publicly disclosed and at the scheduled expiration of the
Offer the Minimum Condition shall not have been satisfied.
Upon termination of the Merger Agreement, Parent has agreed to return to the
Company all copies of non-public information supplied to Parent by the Company
in Parent's possession at the time of such termination.
The Merger Agreement may be terminated and the Merger may be abandoned by
action of the Board of Directors of the Company at any time prior to the
Effective Time (i) if there shall be a material breach of any of Parent's or the
Purchaser's representations, warranties or covenants under the Merger Agreement,
which breach shall not be cured within ten days of notice thereof, or (ii) to
allow the Company to enter into an agreement in respect of an Acquisition
Transaction which the Board of Directors of the Company has determined is more
favorable to the Company and its stockholders than the transactions contemplated
by the Merger Agreement (provided that such termination shall not be effective
unless and until the Company shall have paid to Parent the fee described in the
second paragraph under "--Fees and Expenses" below).
FEES AND EXPENSES. Except to the extent Parent becomes entitled to an
expense reimbursement fee as described in the following paragraph, Parent and
the Company will bear their respective expenses incurred in connection with the
Merger Agreement, the Offer and the Merger, including, without limitation, the
preparation, execution and performance of the Merger Agreement and the
transactions contemplated thereby, and all fees and expenses of investment
bankers, finders, brokers, agents, representatives, counsel and accountants.
If (i) Parent shall have terminated the Merger Agreement as described in the
second paragraph of "--Termination" above or (ii) the Company shall have
terminated the Merger Agreement as described in clause (ii) of the fourth
paragraph of "--Termination" above, then the Company shall promptly, but in no
event later than two business days after the date of such termination or event,
pay Parent a termination fee of $9,000,000. If Parent shall have terminated this
Agreement pursuant to clause (iii) of the second paragraph of "--Termination"
above and, within one year after such termination, the Company shall have
entered into a definitive agreement providing for an Acquisition Transaction,
the Company shall promptly, but in no event later than two days after the date
of such definitive agreement, pay Parent a termination fee of $9,000,000. Any
termination fee payable as described in this paragraph shall be paid by the
issuance
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to Parent of shares of a newly issued series of preferred stock of the Company
(the "Series B Convertible Preferred Stock") having substantially the following
terms. The Series B Convertible Preferred Stock will have a liquidation
preference of $9,000,000 and will be convertible after the expiration of six
months from the issue date, at the option of the holder into common stock of the
Company at the rate of one share of common stock for each $23.00 of liquidation
preference, subject to antidilution provisions substantially identical to those
in the Company's Series A and Series B Warrants. The dividend will be 6% per
annum of the liquidation preference and will be payable at the option of the
Company in shares of Series B Convertible Preferred Stock or cash. The Company
will be required to redeem the Series B Convertible Preferred Stock at the
request of the holder upon the earlier to occur of (i) consummation of a
transaction resulting in a change in control of the Company and (ii) the third
anniversary of the date of issuance. The Company may redeem the Series A
Convertible Preferred Stock at the option of the Company (i) during the first
year after the date of issuance at 110% of the liquidation preference and (ii)
after the first year from the date of issuance at 100% of liquidation preference
as long as the Company's common stock has traded in excess of $25.30 for any 10
consecutive trading days. If the Company defaults on its mandatory redemption
obligation, the dividend rate will increase by 25 basis points, and will
thereafter increase by an additional 25 basis points for each 91-day period the
default continues, up to a maximum dividend rate of 10%. During continuance of
the default, the holder will be entitled to appoint one member of the Company's
Board of Directors.
AMENDMENT. At any time prior to the Effective Time, subject to applicable
law and the provisions of the Merger Agreement, the Merger Agreement may be
amended, modified or supplemented only by written agreement of Parent, the
Purchaser and the Company with respect to any of the terms contained therein;
provided, however, that after any approval and adoption of the Merger Agreement
by the stockholders of the Company, no such amendment, modification or
supplementation shall be made which reduces the amount of per-share
consideration paid in the Merger or the form of consideration therefor or which
in any way materially adversely affects the rights of such stockholders without
the further approval of such stockholders. Following the election or appointment
of Parent's designees as Directors of the Company as described above and prior
to the Effective Time, any amendment or termination of the Merger Agreement by
the Company, any extension by the Company of the time for the performance of any
of the obligations or other acts of Parent or the Purchaser or any other action
by the Company concerning the Merger Agreement or any of the transactions
contemplated thereby, will require the concurrence of a majority of the
directors of the Company then in office who were not designated by Parent.
WAIVERS. At any time prior to the Effective Time, Parent and the Purchaser,
on the one hand, and the Company, on the other hand, may (i) extend the time for
the performance of any of the obligations or other acts of the other, (ii) waive
any inaccuracies in the representations and warranties of the other contained
herein or in any documents delivered pursuant hereto and (iii) waive compliance
by the other with any of the agreements or conditions contained herein which may
legally be waived. Any such extension or waiver shall be valid only if set forth
in an instrument in writing specifically referring to this Agreement and signed
on behalf of such party. Following the election or appointment of Parent's
designees as Directors of the Company as described above and prior to the
Effective Time, any waiver of any of the Company's rights under the Merger
Agreement will require the concurrence of a majority of the directors of the
Company then in office who were not designated by Parent.
EFFECTS OF INABILITY TO CONSUMMATE THE MERGER. If for any reason the Merger
is not consummated, Parent and the Purchaser will evaluate their alternatives.
Such alternatives could include purchasing additional Shares in the open market,
in privately negotiated transactions, in another tender or exchange offer or
otherwise, or taking no further action to acquire additional Shares. Any
additional purchases of Shares could be at a price greater or less than the
price to be paid for Shares in the Offer and could be for cash or other
consideration. Alternatively, the Purchaser may sell or otherwise dispose of any
or all Shares acquired pursuant to the Offer or otherwise. Such transactions may
be effected on terms and at prices then determined by Parent and the Purchaser,
which may vary from the price to be paid for Shares in the Offer.
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STATUTORY REQUIREMENTS. In general, under the DGCL a merger of two Delaware
corporations requires the adoption of a resolution by the Board of Directors of
each of the corporations desiring to merge approving an agreement of merger
containing provisions with respect to certain statutorily specified matters and
the approval of such agreement of merger by the stockholders of each corporation
by the affirmative vote of the holders of a majority of all the outstanding
shares of stock entitled to vote on such merger. According to the Company
Certificate of Incorporation, the Shares are the only securities of the Company
which entitle the holders thereof to voting rights.
The DGCL also provides that if a parent company owns at least 90% of each
class of stock of a subsidiary, the parent company can effect a short-form
merger with that subsidiary without the action of the other stockholders of the
subsidiary. Accordingly, if as a result of the Offer or otherwise the Purchaser
acquires or controls the voting power of at least 90% of the Shares, the
Purchaser could, and intends to, effect the Merger without prior notice to, or
any action by, any other stockholder of the Company.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders of the Company will
have certain rights under Section 262 of the DGCL to dissent and demand
appraisal of, and payment in cash of the fair value of, their Shares. Such
rights, if the statutory procedures were complied with, could lead to a judicial
determination of the fair value (excluding any element of value arising from the
accomplishment or expectation of the Merger) required to be paid in cash to such
dissenting holders for their Shares. Any such judicial determination of the fair
value of Shares could be based upon considerations other than, or in addition
to, the price paid in the Offer and the market value of the Shares, including
asset values and the investment value of the Shares. The value so determined
could be more or less than the purchase price per Share pursuant to the Offer or
the consideration per Share to be paid in the Merger.
In addition, several decisions by Delaware courts have held that, in certain
instances, a controlling stockholder of a corporation involved in a merger has a
fiduciary duty to the other stockholders that requires the merger to be fair to
such other stockholders. In determining whether a merger is fair to minority
stockholders, the Delaware courts have considered, among other things, the type
and amount of consideration to be received by the stockholders and whether there
were fair dealings among the parties. Although the remedies of rescission or
other damages are possible in an action challenging a merger as a breach of
fiduciary duty, decisions of the Delaware courts have indicated that in most
cases the remedy available in a merger that is found not to be "fair" to
minority stockholders is a damages remedy based on essentially the same
principles as an appraisal.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE DISSENTERS' RIGHTS.
THE PRESERVATION AND EXERCISE OF DISSENTERS' RIGHTS REQUIRE STRICT ADHERENCE
TO THE APPLICABLE PROVISIONS OF THE DGCL.
PLANS FOR THE COMPANY. If Parent acquires control of the Company, it is its
present intent to operate the Company as a subsidiary under the Company's
current name and with essentially the same personnel, in the Company's existing
facilities in Cedar Rapids, Iowa. However, Parent will conduct a further review
of the Company and its subsidiaries and their respective assets, businesses,
corporate structure, capitalization, operations, properties, policies,
management and personnel. After such review, Parent will determine what actions
or changes, if any, would be desirable in light of the circumstances which then
exist, and reserves the right to effect such actions or changes. Parent's
decisions could be affected by information hereafter obtained, changes in
general economic or market conditions or in the business of the Company or its
subsidiaries, actions by the Company or its subsidiaries and other factors.
Except as described in this Offer to Purchase, neither Parent nor the
Purchaser has any present plans or proposals that would relate to or would
result in (i) an extraordinary corporate transaction, such as a
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merger, reorganization or liquidation, involving the Company or any of its
subsidiaries, (ii) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries, (iii) any change in the present Board of
Directors or management of the Company, (iv) any material change in the present
capitalization or dividend policy of the Company, (v) any material change in the
Company's corporate structure or business, (vi) causing a class of securities of
the Company to be delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association or (vii) a class of equity securities of the
Company becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Exchange Act.
The Commission has adopted Rule 13e-3 under the Exchange Act which is
applicable to certain "going private" transactions and which may under certain
circumstances be applicable to the Merger. However, Rule 13e-3 would be
inapplicable if (i) the Shares are deregistered under the Exchange Act prior to
the Merger or other business combination or (ii) the Merger or other business
combination is consummated within one year after the purchase of the Shares
pursuant to the Offer and the amount paid per Share in the Merger or other
business combination is at least equal to the amount paid per Share in the
Offer. If applicable, Rule 13e-3 requires, among other things, that certain
financial information concerning the fairness of the proposed transaction and
the consideration offered to minority stockholders in such transaction be filed
with the Commission and disclosed to stockholders prior to the consummation of
the transaction.
OTHER AGREEMENTS. The following summary description of the Original
Equipment Manufacturer Agreement (the "OEM Agreement") is qualified in its
entirety by reference to such agreement, which has been filed as an exhibit to
the Tender Offer Statement on Schedule 14D-1. The OEM Agreement gives Parent and
its subsidiaries the non-exclusive right to sell and license pen-based data
collection terminals and computers, charge coupled device products, and radio
products of the Company and the accessories, software and spare parts for such
products, for use in healthcare, manufacturing, warehouse and distribution
applications worldwide in such geographic locations where such products are
certified. The OEM Agreement is in effect as of January 21, 1997 and will expire
on January 21, 1999; provided, however, that the term of the OEM Agreement will
automatically be extended for successive one-year periods ending on the
anniversary of January 21, 1999, unless either party has, on or before 60 days
prior to the next scheduled renewal date, given notice to the other of its
intention not to renew the term of the OEM Agreement.
The OEM Agreement provides that the Company will sell the specified products
to Parent at a price based on the volume of purchases by Parent during the
twelve-month period ending on the preceding January 19, such price being no less
favorable than the lowest price then being charged by the Company for sales of
such products to other purchasers with sales volumes similar to Parent's volume
purchases during such twelve-month period. For the period beginning January 21,
1997 and continuing through January 19, 1998, the Company will sell products to
Parent at a price based on the sales forecast covering the twelve-month period
beginning on April 1, 1997, such price being no less favorable than the lowest
price then being charged by the Company for sales of such products to other
purchasers based on sales volumes similar to such forecast.
In February 1996, the Company and Parent (together with Intermec) entered
into the Confidentiality Agreement relating to (1) the mutual exchange of
confidential information concerning the business and affairs of each party and
(2) the agreement of each party to refrain from certain actions affecting
control of the other party. Pursuant to the Confidentiality Agreement, the
Company and Parent exchanged certain financial, technical, commercial and other
information concerning their respective businesses and affairs and agreed, among
other things, to use the confidential materials solely for the purpose of
evaluating a possible business combination or strategic relationship between the
Company and Parent. The Confidentiality Agreement prohibits disclosure of the
following, without prior written consent of the other party, (a) the contents of
the confidential materials, (b) the existence of the Confidentiality Agreement,
and (c) the existence of and status of negotiations over a possible business
combination or strategic relationship.
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Pursuant to the Confidentiality Agreement, the Company and Parent also
agreed, for a period of three years following the date of the Confidentiality
Agreement, not to directly or indirectly, without prior written consent of the
other party, (i) acquire, or offer, propose or agree to acquire, any shares of
the other party's common stock, or securities convertible or exchangeable into,
or the rights to acquire, such stock, (ii) solicit proxies or consents with
respect to such stock, become a participant in any election contest relating to
the election of directors of the other party or initiate, propose or otherwise
solicit holders of such stock with respect to any such proposal, (iii) form,
join or participate in a group within the meaning of Section 13(d)(3) of the
Exchange Act with respect to such stock, (iv) arrange or participate in any
arranging of financing for the purchase of such stock, (v) propose, disclose any
intent to propose or contact any officers, employees, directors, stockholders or
agents of the other party or any other person or entity with respect to any
acquisition, business combination, recapitalization or similar transaction with
respect to the other party or any material amount to its assets, or request any
waiver, amendment or termination of certain provisions of the Confidentiality
Agreement or (vi) attempt in any way to control the other party. The
Confidentiality Agreement also prohibits any direct or indirect solicitation,
negotiation or hiring of employees of one party by the other party for a period
of three years following the date of the Confidentiality Agreement, except
through or in response to general advertisement.
Pursuant to the Merger Agreement, Parent was released from the restrictions
described in the preceding paragraph.
12. SOURCE AND AMOUNT OF FUNDS.
The Purchaser estimates that the total amount of funds required to purchase
all outstanding Shares pursuant to the Offer and to pay related fees and
expenses will be approximately $265 million. The funds necessary to purchase
Shares pursuant to the Offer will be provided to the Purchaser by Parent as a
capital contribution or loan or combination thereof.
Parent presently intends to obtain the required funds from its general
corporate funds or those of its affiliates, including available cash, short-term
investments and marketable securities, and, to the extent necessary, through
borrowing under the Credit Agreement dated as of December 22, 1994, as amended
(the "Credit Agreement"), with the banks identified below, which have committed
to lend to Parent an aggregate of $400 million (the "Commitment Amount"), none
of which is presently borrowed.
The banks that are party to the Credit Agreement (the "Banks") are Morgan
Guaranty Trust Company of New York, Bank of America National Trust and Savings
Association, The Bank of New York, The Chase Manhattan Bank, N.A., CIBC Inc.,
Nationsbank of Texas, N.A., Union Bank of Switzerland, Wells Fargo Bank, N.A.,
Credit Suisse, Dresdner Bank AG, Mellon Bank, N.A., The First National Bank of
Chicago, Toronto Dominion (Texas), Inc., Bank of Hawaii, and The Northern Trust
Company. The Credit Agreement provides that Parent may borrow any or all of the
Commitment Amount on a revolving basis during the period prior to December 22,
2000.
Borrowings under the Credit Agreement presently bear interest at one of the
following rates of interest as specified by Parent: (1) the prime rate of Morgan
Guaranty Trust Company of New York, or, if higher, the Federal Funds rate plus
1/2 of 1%; (2) .16% over the average London Interbank Offered Rate of certain
designated reference banks for the relevant interest period; or (3) .285% over
the prevailing average rates bid by recognized dealers for the purchase of
certificates of deposit of high quality with a maturity comparable to the
relevant interest period, adjusted to take into account applicable bank reserve
requirements and the assessment rate for members of the Bank Insurance Fund. In
the case of borrowings bearing interest at either of the second and third
alternatives described above, Parent may select an interest period of one, two,
three or six months (30, 60, 90 or 180 days in the case of the third
alternative). Parent is also required to pay the Banks a facility fee of .09%
per annum. The margins over the London Interbank Offered Rate and the adjusted
certificate of deposit rate, as well as the facility fee referred to above, are
those in effect on the date of this Offer to Purchase. In the event of a change
in the ratings of
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Parent's senior unsecured long-term debt by national rating agencies, such
margins and fee are subject to adjustment upward (in the case of lowered
ratings) or downward (in the case of improved ratings).
There are no compensating balance requirements under the Credit Agreement.
The Credit Agreement contains representations, warranties, covenants,
conditions, and events of default which are customary in agreements of that
kind. Parent believes that, following payment for Shares purchased in the Offer
and related fees and expenses, Parent will continue to be in compliance with the
terms of the Credit Agreement.
Parent intends to repay any borrowings incurred for the purchase of Shares
and payment of related fees and expenses from internally generated funds of
Parent and its subsidiaries (possibly including the Company) and future
borrowings or financings, which may include the proceeds of short-term or
long-term borrowings or the public sale of debt.
The text of the Credit Agreement and all amendments thereto through the date
of this Offer to Purchase have been included as an exhibit to the Schedule 14D-1
with respect to the Offer filed by the Purchaser and Parent with the Commission,
and are available for inspection and copying at the offices of the Commission as
set forth in Section 8 of this Offer to Purchase.
13. DIVIDENDS AND DISTRIBUTIONS.
If on or after the date of the Merger Agreement the Company (i) splits,
combines or otherwise changes the Shares or its capitalization, (ii) acquires
Shares or otherwise causes a reduction in the number of Shares, (iii) issues or
sells additional Shares (other than the issuance of Shares reserved for issuance
as of the date of the Merger Agreement under option and employee stock purchase
plans in accordance with their terms as publicly disclosed as of the date of the
Merger Agreement) or any shares of any other class of capital stock, other
voting securities or any securities convertible into or exchangeable for, or
rights, warrants or options, conditional or otherwise, to acquire, any of the
foregoing or (iv) discloses that it has taken such action, then, without
prejudice to the Purchaser's rights under Section 14, the Purchaser, in its sole
discretion, may make such adjustments in the purchase price and other terms of
the Offer as it deems appropriate to reflect such split, combination or other
change or action, including, without limitation, the Minimum Condition or the
number or type of securities offered to be purchased.
If on or after the date of the Merger Agreement the Company declares or pays
any dividend on the Shares or any distribution (including, without limitation,
the issuance of additional Shares pursuant to a stock dividend or stock split,
the issuance of other securities or the issuance of rights for the purchase of
any securities) with respect to the Shares that is payable or distributable to
stockholders of record on a date prior to the transfer into the name of the
Purchaser or its nominees or transferees on the Company's stock transfer records
of the Shares purchased pursuant to the Offer, and if Shares are purchased in
the Offer, then, without prejudice to the Purchaser's rights under Section 14,
any such dividend, distribution, issuance, proceeds or rights to be received by
the tendering stockholders shall (A) be received and held by the tendering
stockholders for the account of the Purchaser and will be required to be
promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer or (B) at the direction of the Purchaser, be exercised
for the benefit of the Purchaser, in which case the proceeds of such exercise
will promptly be remitted to the Purchaser. Pending such remittance and subject
to applicable law, the Purchaser will be entitled to all rights and privileges
as owner of any such dividend, distribution, issuance, proceeds or rights and
may withhold the entire purchase price or deduct from the purchase price the
amount or value thereof, as determined by the Purchaser in its sole discretion.
28
<PAGE>
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) promulgated under the
Exchange Act (relating to the Purchaser's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer), pay for,
and may delay the acceptance for payment of any tendered Shares and, except as
set forth in the Merger Agreement, amend or terminate the Offer as to any Shares
not then paid for if (i) the Minimum Condition shall not have been satisfied,
(ii) any applicable waiting period under the HSR Act shall not have expired or
been terminated prior to the expiration of the Offer or (iii) at any time after
execution of the Merger Agreement and before the time of payment for any such
Shares (whether or not any Shares have theretofore been accepted for payment or
paid for pursuant to the Offer), any of the following conditions exists:
(A) there shall be in effect an injunction or other order, decree,
judgment or ruling by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission of competent
jurisdiction or a statute, rule, regulation, executive order or other action
shall have been promulgated, enacted, taken or threatened by a governmental
authority or a governmental, regulatory or administrative agency or
commission of competent jurisdiction which in any such case (I) restrains or
prohibits the making or consummation of the Offer or the consummation of the
Merger, (II) prohibits or restricts the ownership or operation by Parent or
the Purchaser (or any of their respective affiliates or subsidiaries) of any
portion of its or the Company's business or assets which is material to the
business of all such entities taken as a whole, or compels Parent or the
Purchaser (or any of their respective affiliates or subsidiaries) to dispose
of or hold separate any portion of its or the Company's business or assets
which is material to the business of all such entities taken as a whole,
(III) imposes material limitations on the ability of the Purchaser
effectively to acquire or to hold or to exercise full rights of ownership of
the Shares, including, without limitation, the right to vote the Shares
purchased by the Purchaser on all matters properly presented to the
stockholders of the Company, (IV) imposes any material limitations on the
ability of Parent or the Purchaser or any of their respective affiliates or
subsidiaries effectively to control in any material respect the business and
operations of the Company and its subsidiaries, or (V) which otherwise would
materially adversely affect the Company and its subsidiaries taken as a
whole; or
(B) there shall be pending any litigation or other proceeding brought by
any governmental entity or agency that seeks to impose any of the effects
referred to in paragraph (A) above or seeks material damages from the
Company or Parent in connection with the Offer or the Merger; or
(C) the Merger Agreement shall have been terminated by the Company,
Parent or the Purchaser in accordance with its terms; or
(D) (I) the representations and warranties made by the Company in the
Merger Agreement that are qualified as to materiality shall not have been
true and correct, or any such representations and warranties that are not so
qualified shall not be true and correct in all material respects, when made
or shall have ceased to be true and correct in all material respects as of
the Expiration Date as if made as of such date, or (II) as of the Expiration
Date the Company shall not in all material respects have performed its
material obligations and agreements and complied with its material covenants
to be performed and complied with by it under the Merger Agreement; or
(E) there shall have occurred (I) any general suspension of, or
limitation on prices for, trading in securities on any national securities
exchange or the over-the-counter market, (II) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory), (III) the commencement of a war, armed
hostilities or other international or national calamity directly involving
the United States, (IV) from the date of the Merger Agreement through the
date of termination or expiration of the Offer, a decline of at least 25% in
the Standard &
29
<PAGE>
Poor's 500 Index, or (V) in the case of any of the foregoing existing at the
time of the commencement of the Offer, a material acceleration or worsening
thereof; or
(F) Parent, the Purchaser and the Company shall have agreed that the
Purchaser shall amend the Offer to terminate the Offer or postpone the
payment for Shares pursuant thereto.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser and may be asserted by Parent or the Purchaser regardless of the
circumstances (including any action or inaction by Parent or the Purchaser)
giving rise to any such conditions and may be waived by Parent or the Purchaser
in whole or in part at any time and from time to time, in each case, in the
exercise of the good faith judgment of Parent and the Purchaser and subject to
the terms of the Merger Agreement. The failure by Parent or the Purchaser at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
A public announcement may be made of a material change in, or waiver of,
such conditions and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver.
The Purchaser acknowledges that the Commission believes that (i) if the
Purchaser is delayed in accepting the Shares it must either extend the Offer or
terminate the Offer and promptly return the Shares and (ii) the circumstances in
which a delay in payment is permitted are limited and do not include unsatisfied
conditions of the Offer, except with respect to most required regulatory
approvals.
15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.
Except as set forth in this Offer to Purchase, based on its review of
publicly available filings by the Company with the Commission and other
information regarding the Company, neither Parent nor the Purchaser is aware of
any governmental licenses or regulatory permits that appear to be material to
the business of the Company and its subsidiaries, taken as a whole, and that
might be adversely affected by the Purchaser's acquisition of Shares (and the
indirect acquisition of the stock of the Company's subsidiaries) as contemplated
herein, or any filings, approvals or other actions by or with any domestic,
foreign or supranational governmental authority or administrative or regulatory
agency that would be required for the acquisition or ownership of the Shares (or
the indirect acquisition of the stock of the Company's subsidiaries) by the
Purchaser pursuant to the Offer as contemplated herein. Should any such approval
or other action be required, it is presently contemplated that such approval or
action would be sought except as described below under "--State Takeover Laws."
Should any such approval or other action be required, there can be no assurance
that any such approval or action would be obtained without substantial
conditions or that adverse consequences might not result to the Company's or its
subsidiaries' businesses, or that certain parts of the Company's, Parent's, the
Purchaser's or any of their respective subsidiaries' businesses might not have
to be disposed of or held separate or other substantial conditions complied with
in order to obtain such approval or action or in the event that such approvals
were not obtained or such actions were not taken. The Purchaser's obligation to
purchase and pay for Shares is subject to certain conditions, including
conditions with respect to litigation and governmental actions. See Introduction
and Section 14 for a description thereof.
STATE TAKEOVER LAWS. A number of states (including Delaware, where the
Company is incorporated) have adopted takeover laws and regulations which
purport, to varying degrees, to be applicable to attempts to acquire securities
of corporations which are incorporated in such states or which have substantial
assets, stockholders, principal executive offices or principal places of
business therein. To the extent that certain provisions of certain of these
state takeover statutes purport to apply to the Offer or the Merger, the
Purchaser believes that such laws conflict with federal law and constitute an
unconstitutional burden on interstate commerce. In 1982, the Supreme Court of
the United States, in EDGAR V. MITE CORP., invalidated on constitutional grounds
the Illinois Business Takeovers Statute, which as a matter of state securities
law
30
<PAGE>
made takeovers of corporations meeting certain requirements more difficult. The
reasoning in such decision is likely to apply to certain other state takeover
statutes. In 1987, however, in CTS CORP. V. DYNAMICS CORP. OF AMERICA, the
Supreme Court of the United States held that the State of Indiana could as a
matter of corporate law and, in particular, those aspects of corporate law
concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without the prior
approval of the remaining stockholders, provided that such laws were applicable
only under certain conditions. Subsequently, in TLX ACQUISITION CORP. V. TELEX
CORP., a Federal district court in Oklahoma ruled that the Oklahoma statutes
were unconstitutional insofar as they apply to corporations incorporated outside
Oklahoma in that they would subject such corporations to inconsistent
regulations. Similarly, in TYSON FOODS, INC. V. MCREYNOLDS, a Federal district
court in Tennessee ruled that four Tennessee takeover statutes were
unconstitutional as applied to corporations incorporated outside Tennessee. This
decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a Federal district court in Florida held, in GRAND
METROPOLITAN PLC V. BUTTERWORTH, that the provisions of the Florida Affiliated
Transactions Act and Florida Control Share Acquisition Act were unconstitutional
as applied to corporations incorporated outside of Florida.
The Purchaser has not attempted to comply with any state takeover statutes
in connection with the Offer or the Merger. The Purchaser reserves the right to
challenge the validity or applicability of any state law allegedly applicable to
the Offer or the Merger, and nothing in this Offer to Purchase nor any action
taken in connection herewith is intended as a waiver of that right. In the event
that it is asserted that one or more takeover statutes apply to the Offer or the
Merger, and it is not determined by an appropriate court that such statute or
statutes do not apply or are invalid as applied to the Offer or the Merger, as
applicable, the Purchaser may be required to file certain documents with, or
receive approvals from, the relevant state authorities, and the Purchaser might
be unable to accept for payment or purchase Shares tendered pursuant to the
Offer or be delayed in continuing or consummating the Offer. In such case, the
Purchaser may not be obligated to accept for purchase, or pay for, any Shares
tendered. SEE SECTION 14.
ANTITRUST. Under the HSR Act, and the rules and regulations that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated until certain information and
documentary material has been furnished for review by the FTC and the Antitrust
Division of the Department of Justice (the "Antitrust Division") and certain
waiting period requirements have been satisfied. The acquisition of Shares
pursuant to the Offer and the Merger is subject to such requirements.
Under the provisions of the HSR Act applicable to the Offer and the Merger,
the purchase of Shares pursuant to the Offer and the Merger may not be
consummated until the expiration of a 15-calendar-day waiting period following
the filing of certain required information and documentary material with respect
to the Offer with the FTC and the Antitrust Division, unless such waiting period
is earlier terminated by the FTC and the Antitrust Division. The Purchaser
expects to file a Premerger Notification and Report Form with the FTC and the
Antitrust Division in connection with the purchase of Shares pursuant to the
Offer and the Merger under the HSR Act on or about January 28, 1997, and, in
such event, the required waiting period with respect to the Offer and the Merger
will expire at 11:59 p.m., New York City time, on February 12, 1997, unless
earlier terminated by the FTC or the Antitrust Division or the Purchaser
receives a request for additional information or documentary material prior
thereto. If within such 15-calendar-day waiting period either the FTC or the
Antitrust Division were to request additional information or documentary
material from the Purchaser, the waiting period with respect to the Offer and
the Merger would be extended for an additional period of 10 calendar days
following the date of substantial compliance with such request by the Purchaser.
Only one extension of the waiting period pursuant to a request for additional
information is authorized by the rules promulgated under the HSR Act.
Thereafter, the waiting period could be extended only by court order or with the
consent of the Purchaser. The additional 10-calendar-day waiting period may be
terminated sooner by the FTC or the Antitrust Division. Although the Company is
required to file certain information and documentary material with the FTC and
31
<PAGE>
the Antitrust Division in connection with the Offer, neither the Company's
failure to make such filings nor a request made to the Company (as opposed to a
request made to the Purchaser) from the FTC or the Antitrust Division or the
failure of the Company to be in substantial compliance with a request for
additional information or documentary material will extend the waiting period
with respect to the purchase of Shares pursuant to the Offer and the Merger.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the acquisition of Shares by the
Purchaser pursuant to the Offer and the Merger. At any time before or after the
Purchaser's purchase of Shares, the FTC or the Antitrust Division could take
such action under the antitrust laws as either deems necessary or desirable in
the public interest, including seeking to enjoin the purchase of Shares pursuant
to the Offer and the Merger, the divestiture of Shares purchased pursuant to the
Offer or the divestiture of substantial assets of Parent, the Purchaser, the
Company or any of their respective subsidiaries or affiliates. Private parties
as well as state attorneys general may also bring legal actions under the
antitrust laws under certain circumstances. SEE SECTION 14.
Based upon an examination of publicly available information relating to the
businesses in which the Company is engaged, the Purchaser believes that the
acquisition of Shares pursuant to the Offer and the Merger should not violate
the applicable antitrust laws. Nevertheless, there can be no assurance that a
challenge to the Offer and the Merger on antitrust grounds will not be made, or,
if such challenge is made, what the result will be. SEE SECTION 14.
FOREIGN APPROVALS. According to publicly available information, the Company
owns property and conducts business in a number of other foreign countries and
jurisdictions. In connection with the acquisition of the Shares pursuant to the
Offer or the Merger, the laws of certain of those foreign countries and
jurisdictions may require the filing of information with, or the obtaining of
the approval or consent of, governmental authorities in such countries and
jurisdictions. The governments in such countries and jurisdictions might attempt
to impose additional conditions on the Company's operations conducted in such
countries and jurisdictions as a result of the acquisition of the Shares
pursuant to the Offer or the Merger. If such approvals or consents are found to
be required, the parties intend to make the appropriate filings and
applications. In the event such a filing or application is made for the
requisite foreign approvals or consents, there can be no assurance that such
approvals or consents will be granted and, if such approvals or consents are
received, there can be no assurance as to the date of such approvals or
consents. In addition, there can be no assurance that the Purchaser will be able
to cause the Company or its subsidiaries to satisfy or comply with such laws or
that compliance or noncompliance will not have adverse consequences for the
Company or any subsidiary after purchase of the Shares pursuant to the Offer or
the Merger.
Under German laws and regulations relating to the control of concentrations,
certain acquisition transactions may not be consummated in Germany unless
certain information has been furnished to the German Federal Cartel Office (the
"FCO"), and certain waiting period requirements have been satisfied. The
purchase of Shares by the Purchaser pursuant to the Offer and the consummation
of the Merger may be subject to such requirements. Parent expects to file such
information as soon as practicable and such waiting period will expire one month
from the date of filing or may be extended by the FCO for a total of four months
from the date of the filing. Parent will request early termination of the
waiting period, although there can be no assurance of the outcome of such
request. Purchaser does not believe that the consummation of the Offer will
result in a violation of any applicable law or regulation in Germany relating to
the regulation of monopolies and competition. However, there can be no assurance
that a challenge to the Offer on such grounds will not be made, or if such a
challenge is made, of the result thereof.
32
<PAGE>
16. CERTAIN FEES AND EXPENSES.
The Bank of New York has been retained by the Purchaser as the Depositary in
connection with the Offer. The Purchaser will pay the Depositary reasonable and
customary compensation for its services in connection with the Offer, will
reimburse the Depositary for its reasonable out-of-pocket expenses in connection
therewith and will indemnify the Depositary against certain liabilities and
expenses in connection therewith, including certain liabilities under the
federal securities laws.
Georgeson & Company Inc. has been retained by the Purchaser as Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telex, telegraph and personal interview and may
request brokers, dealers and other nominee stockholders to forward material
relating to the Offer to beneficial owners of Shares. The Purchaser will pay the
Information Agent reasonable and customary compensation for all such services in
addition to reimbursing the Information Agent for reasonable out-of-pocket
expenses in connection therewith.
Except as set forth above, neither Parent nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person for soliciting tenders
of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies and other nominees will, upon request, be reimbursed by Parent or the
Purchaser for customary clerical and mailing expenses incurred by them in
forwarding offering materials to their customers.
17. MISCELLANEOUS.
The Purchaser is not aware of any jurisdiction where the making of the Offer
is prohibited by any administrative or judicial action pursuant to any valid
state statute. If Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of the Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with such state statute. If,
after such good faith effort, the Purchaser cannot comply with any such state
statute, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares in such state.
Parent and the Purchaser have filed with the Commission a Schedule 14D-1,
together with exhibits, pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file amendments thereto. Such Schedule 14D-1
and any amendments thereto, including exhibits, may be examined and copies may
be obtained from the office of the Commission in the same manner as described in
Section 8 with respect to information concerning the Company, except that copies
will not be available at the regional offices of the Commission.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR THE PURCHASER NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Neither the delivery of the Offer to Purchase nor any purchase pursuant to
the Offer shall under any circumstances create any implication that there has
been no change in the affairs of Parent, the Purchaser, the Company or any of
their respective subsidiaries since the date as of which information is
furnished or the date of this Offer to Purchase.
WAI ACQUISITION CORP.
January 24, 1997
33
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT
The following table sets forth the name and present principal occupation or
employment, and material occupations, positions, offices or employments for the
past five years of each director and executive officer of Parent. Unless
otherwise indicated below, each occupation set forth opposite each person refers
to employment with Parent. The business address of each such person is 360 North
Crescent Drive, Beverly Hills, California 90210-4867 and each such person is a
citizen of the United States of America.
(A) DIRECTORS OF PARENT
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- --------------------------------------------- ------------------------------------------------------------------
<S> <C>
Paul Bancroft, III........................... Director since 1994. Independent venture capitalist and con-
sultant since 1988.
Alton J. Brann............................... Director since 1994. Chairman of the Board and Chief Executive
Officer since 1994. Chairman of the Board of Litton Industries,
Inc. from 1994 to 1995, Chief Executive Officer of Litton from
1992 to 1994, and President of Litton from 1990 to 1994.
Joseph T. Casey.............................. Director since 1994. Vice Chairman and Chief Financial Officer
from 1994 to 1996. Prior thereto, Vice Chairman and Chief
Financial Officer of Litton Industries, Inc. from 1988 to 1994.
Principal business: Independent consultant.
William C. Edwards........................... Director since 1994. Partner of Bryan & Edwards since 1986 and
general partner of Ritter Partners and Banner Partners since 1962.
Principal Business: Venture capital investor.
Claire W. Gargalli........................... Director since 1994. Vice Chairman of Diversified Search and
Diversified Health Search (an executive recruiting firm) since
1990.
Orion L. Hoch................................ Director since 1994. Chairman Emeritus of Litton Industries, Inc.
Chairman of the Board of Litton from 1988 to 1994 and Chief
Executive Officer of Litton from 1988 to 1992. Principal business:
Independent consultant.
Steven B. Sample............................. Director since 1994. President of the University of Southern
California since 1991.
</TABLE>
(B) EXECUTIVE OFFICERS OF PARENT
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- --------------------------------------------- ------------------------------------------------------------------
<S> <C>
Alton J. Brann............................... Chairman of the Board and Chief Executive Officer since 1994. (For
further information see paragraph (A) above.)
Orval F. Brannan............................. Senior Vice President since 1994 and President of E & P Services*
since 1995. Prior to assuming his present position, Mr. Brannan
served as President of the Western Geophysical* from 1991 to 1995.
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- --------------------------------------------- ------------------------------------------------------------------
<S> <C>
Charles A. Cusumano.......................... Vice President, Finance since 1996. Prior to assuming his present
position, Mr. Cusumano served as Vice President and Controller
from 1994 to 1996 and as Vice President, Finance for Litton
Industries, Inc.'s Industrial Automation Systems Group from 1988
to 1994.
Michael E. Keane............................. Senior Vice President and Chief Financial Officer since 1996.
Prior to assuming his present position, Mr. Keane served as Vice
President and Treasurer from 1994 to 1996 and as Director of
Pensions and Insurance of Litton Industries, Inc. from 1991 to
1994.
Michael Ohanian.............................. Vice President since 1996 and President of Intermec Corporation (a
wholly owned subsidiary of Parent) since 1995. Prior to assuming
his present position, Mr. Ohanian served as an independent
consultant in 1994 and as Vice President, Strategic and Government
Programs for Intermec Corporation from 1987 to 1994.
Norman L. Roberts............................ Senior Vice President and General Counsel since 1994. Prior to
assuming his present position, Mr. Roberts served as Senior Vice
President and General Counsel of Litton Industries, Inc. from 1990
to 1994.
John R. Russell.............................. Executive Vice President and Chief Operating Officer, Oilfield
Services since 1994 and President of Western Atlas International,
Inc. (a wholly owned subsidiary of Parent) since 1991. Prior to
assuming his present position, Mr. Russell served as Senior Vice
President of Litton Industries, Inc. and as Group Executive of
Litton's Resource Exploration Services Group from 1991 to 1994.
Damir S. Skerl............................... Senior Vice President since 1994 and President of Western Atlas
Logging Services* since 1992.
Richard C. White............................. Senior Vice President since 1996 and President of Western
Geophysical* since 1995. Prior assuming his present position, Mr.
White served as Vice President from 1995 to 1996, as Chief
Operating Officer for the global activities of Western Geophysical
from 1994 to 1995, as Senior Vice President of its North and South
American Operations from 1993 to 1994, and as Vice President of
its North American Operations in 1992.
Clayton A. Williams.......................... Senior Vice President since 1996 and Group Executive of the
Manufacturing Systems Group since 1995. Prior to assuming his
present position, Mr. Williams was a Vice President from 1995 to
1996 and, prior thereto, a Vice President of Litton Industries,
Inc. from 1992 to 1995 and President of its Applied Technology
division from 1990 to 1995.
</TABLE>
- ------------------------
* A division of Western Atlas International, Inc., a wholly owned subsidiary
of Parent.
S-2
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER
The following table sets forth the name and present principal occupation or
employment, and material occupations, positions, offices or employments for the
past five years of each director and executive officer of the Purchaser. Unless
otherwise indicated below, each occupation set forth opposite each person refers
to employment with Parent. The business address of each such person is 360 North
Crescent Drive, Beverly Hills, California 90210-4867 and each such person is a
citizen of the United States of America.
(A) DIRECTORS OF THE PURCHASER
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- --------------------------------------------- ------------------------------------------------------------------
<S> <C>
Michael E. Keane............................. Director of the Purchaser. (For further information see "Executive
Officers of Parent" above.)
Norman L. Roberts............................ Director of the Purchaser. (For further information see "Executive
Officers of Parent" above.)
Virginia S. Young............................ Director of the Purchaser. Vice President and Secretary since
1994. Prior thereto, Vice President and Secretary of Litton
Industries, Inc. from 1992 to 1994.
</TABLE>
(B) EXECUTIVE OFFICERS OF THE PURCHASER
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- --------------------------------------------- ------------------------------------------------------------------
<S> <C>
Michael E. Keane............................. President of the Purchaser. (For further information see
"Executive Officers of Parent" above.)
Charles A. Cusumano.......................... Vice President of the Purchaser. (For further information see
"Executive Officers of Parent" above.)
Norman L. Roberts............................ Vice President of the Purchaser. (For further information see
"Executive Officers of Parent" above.)
Virginia S. Young............................ Vice President and Secretary of the Purchaser. (For further
information see "Directors of the Purchaser" above.)
Lori J. Segale............................... Treasurer of the Purchaser. Treasurer since October 1996. Prior to
assuming her present position, Ms. Segale was Assistant Treasurer
from March to October 1996 and, prior thereto, Assistant Treasurer
of The Hillhaven Corporation from 1991 to 1996.
</TABLE>
S-3
<PAGE>
Facsimile copies of Letters of Transmittal, properly completed and duly
executed, will be accepted. The appropriate Letter of Transmittal, certificates
for Shares and any other required documents should be sent or delivered by each
stockholder of the Company or his broker, dealer, commercial bank, trust company
or other nominee to the Depositary at one of its addresses set forth below:
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE BY HAND OR OVERNIGHT
Tender & Exchange Department TRANSMISSION: COURIER:
P.O. Box 11248 (for Eligible Tender & Exchange Department
Church Street Station Institutions Only) 101 Barclay Street
New York, New York 10286-1248 (212) 815-6213 Receive & Deliver Window
New York, New York 10286
FOR INFORMATION TELEPHONE:
(800) 507-9357
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number set forth below. Additional copies of
this Offer to Purchase, the Letters of Transmittal and other tender offer
materials may be obtained from the Information Agent as set forth below and will
be furnished promptly at the Purchaser's expense. You may also contact your
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
GEORGESON
Wall Street Plaza
New York, New York 10005
BANKS AND BROKERS CALL COLLECT (212) 440-9800
ALL OTHERS CALL TOLL FREE (800) 223-2064
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
of
NORAND CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED JANUARY 24, 1997
by
WAI ACQUISITION CORP.
a wholly owned subsidiary
of
WESTERN ATLAS INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 21, 1997, UNLESS THE OFFER IS EXTENDED
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department (for Eligible Tender & Exchange Department
P.O. Box 11248 Institutions Only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive & Deliver Window
New York, New York 10286-1248 New York, New York 10286
FOR INFORMATION TELEPHONE:
(800) 507-9357
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders either if
certificates for Shares (as defined in the Offer to Purchase, dated January 24,
1997 (the "Offer to Purchase")) are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offer to Purchase) is utilized, if tenders of
Shares are to be made by book-entry transfer to an account maintained by The
Bank of New York (the "Depositary") at The Depository Trust Company ("DTC") or
Philadelphia Depository Trust Company ("PDTC") (each a "Book-Entry Transfer
Facility" and collectively referred to as the "Book-Entry Transfer Facilities"),
pursuant to the procedures set forth in Section 3 of the Offer to Purchase.
Stockholders who tender Shares by book-entry transfer are referred to herein as
"Book-Entry Stockholders".
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other required documents to the Depositary on or prior to
the Expiration Date (as defined in the Offer to Purchase) or who cannot complete
the procedures for book-entry transfer on a timely basis, must tender their
Shares according to the guaranteed delivery procedures set forth in Section 3 of
the Offer to Purchase. SEE INSTRUCTION 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE AND REVERSE BACK COVER. PLEASE
READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _________________________________________________
<PAGE>
Check Box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
Account Number: ________________________________________________________________
Transaction Code Number: _______________________________________________________
/ / CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s): _______________________________________________
Window Ticket Number (if any): _________________________________________________
Date of Execution of Notice of Guaranteed Delivery: ____________________________
Name of Institution which Guaranteed Delivery: _________________________________
<TABLE>
<S> <C> <C>
DESCRIPTION OF SHARES TENDERED
NAME(S) & ADDRESS(ES) OF
REGISTERED HOLDER(S) (PLEASE
FILL IN, IF BLANK, EXACTLY AS
NAME(S) APPEAR(S) ON SHARE
CERTIFICATE(S))
<CAPTION>
SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
(ATTACH ADDITIONAL LIST, IF NECESSARY)
<S> <C> <C>
<CAPTION>
TOTAL NUMBER OF SHARES REPRESENTED
SHARE CERTIFICATE NUMBER(S)* BY SHARE CERTIFICATE(S)* NUMBER OF SHARES TENDERED**
<S> <C> <C>
TOTAL SHARES
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated it will be assumed that all Shares represented by certificates delivered to
the Depositary are being tendered. See Instruction 4.
</TABLE>
Ladies and Gentlemen:
The undersigned hereby tenders to WAI Acquisition Corp. (the "Purchaser"), a
Delaware corporation and a wholly owned subsidiary of Western Atlas Inc., a
Delaware corporation ("Parent"), the above described shares of Common Stock, par
value $0.01 per share (the "Shares"), of Norand Corporation, a Delaware
corporation (the "Company"), pursuant to the Purchaser's offer to purchase all
outstanding Shares at a price of $33.50 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set forth
in the Offer to Purchase, receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which together with the Offer to Purchase constitute the
"Offer"). The undersigned understands that the Purchaser reserves the right to
transfer or assign, in whole or from time to time in part, to one or more of its
subsidiaries or affiliates the right to purchase all or any portion of the
Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer, the undersigned hereby sells, assigns, and transfers
to, or upon the order of, the Purchaser all right, title and interest in and to
all of the Shares that are being tendered hereby and any and all dividends on
the Shares (including, without limitation, the issuance of additional Shares
pursuant to a stock dividend or stock split, the issuance of other securities or
the issuance of rights for the purchase of any securities) with respect to the
Shares that is declared or paid by the Company on or after January 21, 1997 and
is payable or distributable to stockholders of record on a date prior to the
transfer into the name of the Purchaser or its nominees or transferees on the
Company's stock transfer records of the Shares purchased pursuant to the Offer
(collectively "Distributions"), and constitutes and irrevocably appoints the
Depositary the true and lawful agent, attorney-in-fact and proxy of the
undersigned to the full extent of the undersigned's rights with respect to such
Shares (and any Distributions) with full power of substitution (such power of
attorney and proxy being deemed to be an irrevocable power coupled with an
interest), to (a) deliver Share Certificates (and any Distributions), or
transfer
<PAGE>
ownership of such Shares on the account books maintained by the Book-Entry
Transfer Facilities, together in either such case with all accompanying
evidences of transfer and authenticity, to or upon the order of the Purchaser
upon receipt by the Depositary, as the undersigned's agent, of the purchase
price, (b) present such Shares (and any Distributions) for transfer on the books
of the Company and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares (and any Distributions), all in accordance
with the terms of the Offer.
The undersigned hereby irrevocably appoints Michael E. Keane and Virginia S.
Young, and each of them, the attorneys-in-fact and proxies of the undersigned,
each with full power of substitution, to vote in such manner as each such
attorney and proxy or his or her substitute shall, in his or her sole
discretion, deem proper, and otherwise act (including pursuant to written
consent) with respect to all of the Shares tendered hereby which have been
accepted for payment by the Purchaser prior to the time of such vote or action
(and any Distributions) which the undersigned is entitled to vote at any meeting
of stockholders (whether annual or special and whether or not an adjourned
meeting) of the Company, or by written consent in lieu of such meeting, or
otherwise. This power of attorney and proxy is coupled with an interest in the
Company and in the Shares and is irrevocable and is granted in consideration of,
and is effective upon, the acceptance for payment of such Shares by the
Purchaser in accordance with the terms of the Offer. Such acceptance for payment
shall revoke, without further action, any other power of attorney or proxy
granted by the undersigned at any time with respect to such Shares (and any
Distributions) and no subsequent powers of attorney or proxies will be given
(and if given will be deemed not to be effective) with respect thereto by the
undersigned. The undersigned understands that the Purchaser reserves the right
to require that, in order for Shares to be deemed validly tendered, immediately
upon the Purchaser's acceptance for payment of such Shares, the Purchaser is
able to exercise full voting rights with respect to such Shares and other
securities, including voting at any meeting of stockholders.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and any Distributions) and that, when the same are accepted for payment
by the Purchaser, the Purchaser will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and the same will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares tendered hereby (and
any Distributions). In addition, the undersigned shall promptly remit and
transfer to the Depositary for the account of the Purchaser any and all other
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer and, pending such remittance or
appropriate assurance thereof, the Purchaser shall be entitled to all rights and
privileges as owner of any such Distributions, and may withhold the entire
purchase price or deduct from the purchase price of Shares tendered hereby the
amount or value thereof, as determined by the Purchaser in its sole discretion.
All authority herein conferred or herein agreed to be conferred shall not be
affected by, and shall survive, the death or incapacity of the undersigned and
any obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, legal representatives, successors and assigns of the
undersigned. Tenders of Shares pursuant to the Offer are irrevocable, except
that Shares tendered pursuant to the Offer may be withdrawn at any time on or
prior to the Expiration Date and, unless theretofore accepted for payment
pursuant to the Offer, may also be withdrawn at any time after March 24, 1997.
SEE SECTION 4 OF THE OFFER TO PURCHASE.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
Certificates not tendered or accepted for payment in the name(s) of the
undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price and/or return any
Share Certificates not tendered or accepted for payment (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signature. In the event that both the "Special Delivery
Instructions" and the "Special Payment Instructions" are completed, please issue
the check for the purchase price and/or return any Share Certificates not
tendered or accepted for payment in the name(s) of, and deliver said check
and/or return certificates to, the person or persons so indicated. Stockholders
tendering Shares by book-entry transfer may request that any Shares not accepted
for payment be returned by crediting such account maintained at such Book-Entry
Transfer Facility as such stockholder may designate by making an appropriate
entry under "Special Payment Instructions." The undersigned recognizes that the
Purchaser has no obligation pursuant to the "Special Payment Instructions" to
transfer any Shares from the name of the registered holder thereof if the
Purchaser does not accept for payment any of such Shares.
<PAGE>
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share To be completed ONLY if Share Certificates
Certificates not tendered or not purchased not tendered or not purchased and/or the
and/or the check for the purchase price of check for the purchase price of Shares
Shares purchased are to be issued in the purchased are to be sent to someone other
name of someone other than the than the undersigned, or to the
undersigned, or if Shares tendered by undersigned, at an address other than that
book-entry transfer which are not shown on the front cover.
purchased are to be returned by credit to Mail check and/or certificates to:
an account maintained at a Book-Entry
Transfer Facility other than that
designated on the front cover.
Issue check and/or certificates to:
Name: Name:
(Please Print) (Please Print)
Address: Address:
(Include Zip Code) (Include Zip Code)
(Taxpayer Identification or Social (Taxpayer Identification or Social
Security No.) Security No.)
(See Substitute Form W-9 on Back Cover)
/ / Credit unpurchased Shares tendered by
book-entry transfer to the Book-Entry
Transfer Facility account set forth
below:
/ / DTC / / PDTC
(Account Number)
</TABLE>
<PAGE>
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
________________________________________________________________________________
Signature(s) of Owner(s)
Dated: ___________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the necessary information.
See Instruction 5.)
Name(s): _______________________________________________________________________
________________________________________________________________________________
(Please Print)
Capacity (Full Title): _________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number: ________________________________________________
Tax Identification or Social Security No.: _____________________________________
(See Substitute Form W-9 on Reverse Side)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED - SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number: _________________________________
Dated: ____________________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in a Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of the Shares tendered
herewith, unless such holder(s) has completed either the box entitled "Special
Payment Instructions" or the box entitled "Special Delivery Instructions" on the
inside front cover hereof or (ii) if such Shares are tendered for the account of
a firm that is a bank, broker, dealer, credit union, savings association or
other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program (an "Eligible Institution"). In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or, unless an Agent's Message is utilized, if tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth in
Section 3 of the Offer to Purchase. Share Certificates, or timely confirmation
of a book-entry transfer (a "Book-Entry Confirmation") of such Shares into the
Depositary's account at a Book-Entry Transfer Facility, as well as this Letter
of Transmittal (or a facsimile hereof), properly completed and duly executed,
with any required signature guarantees, or an Agent's Message in the case of a
book-entry delivery, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth herein prior to the Expiration Date. Stockholders whose Share Certificates
are not immediately available or who cannot deliver their Share Certificates and
all other required documents to the Depositary prior to the Expiration Date or
who cannot complete the procedures for delivery by book-entry transfer on a
timely basis may tender their Shares by properly completing and duly executing a
Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set
forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i)
such tender must be made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form made available by the Purchaser, must be received by the Depositary on or
prior to the Expiration Date; and (iii) the Share Certificates (or a Book-Entry
Confirmation) representing all tendered Shares, in proper form for transfer
together with a properly completed and duly executed Letter of Transmittal (or a
facsimile hereof), with any required signature guarantees (or, in the case of a
book-entry delivery, an Agent's Message) and any other documents required by
this Letter of Transmittal, must be received by the Depositary within three
NASDAQ trading days after the date of execution of such Notice of Guaranteed
Delivery. If Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or facsimile hereof)
must accompany each such delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal or facsimile hereof, waive any right to receive any
notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and any other required
information should be listed on a separate schedule attached hereto and
separately signed on each page thereof in the same manner as this Letter of
Transmittal is signed.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER.) If fewer than all the Shares evidenced by any certificate submitted
are to be tendered, fill in the number of Shares which are to be tendered in the
box entitled "Number of Shares Tendered." In such case, new certificate(s) for
the remainder of the Shares that were evidenced by your old certificate(s) will
be sent to you, unless otherwise provided in the appropriate box marked "Special
Payment Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the certificate(s) without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
<PAGE>
persons should so indicate when signing, and proper evidence satisfactory to the
Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or purchased are to be issued in the name
of a person other than the registered owner(s). Signatures on such certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Shares listed, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered owner(s) appear(s) on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or purchased are to be registered in the
name of any person other than the registered holder(s), or if tendered
certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder(s) or such person) payable on account
of the transfer to such person will be deducted from the purchase price received
by such holder(s) pursuant to this Offer (i.e., such purchase price will be
reduced) unless satisfactory evidence of the payment of such taxes or exemption
therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If (i) a check is to be
issued in the name of and/or (ii) certificates for unpurchased Shares are to be
returned to a person other than the signer of this Letter of Transmittal or if a
check is to be sent and/or such certificates are to be returned to someone other
than the signer of this Letter of Transmittal or to an address other than that
shown on the front cover hereof, the appropriate boxes on this Letter of
Transmittal should be completed. Stockholders tendering Shares by book-entry
transfer (i.e., Book-Entry Stockholders) may request that Shares not purchased
be credited to such account maintained at such Book-Entry Transfer Facility as
such Book-Entry Stockholder may designate hereon. If no such instructions are
given, such Shares not purchased will be returned by crediting the account at
the Book-Entry Transfer Facility designated above. SEE INSTRUCTION 1.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to the Information Agent at its addresses set forth below.
Requests for additional copies of the Offer to Purchase and this Letter of
Transmittal may be directed to the Information Agent or to brokers, dealers,
commercial banks or trust companies.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a stockholder whose tendered Shares are accepted for payment is
required to provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary is
not provided with the correct TIN, the Internal Revenue Service may subject the
stockholder or other payee to a $50 penalty. In addition, payments that are made
to such stockholder or other payee with respect to Shares purchased pursuant to
the Offer may be subject to 31% backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any such payments made to the stockholder or other payee. Backup withholding is
not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Shares. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for additional
guidance on which number to report.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as
to the steps that must be taken in order to replace the certificate(s). This
Letter of Transmittal and related documents cannot be processed until the
procedures for replacing lost or destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY HEREOF) OR AN
AGENT'S MESSAGE TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY ON
OR PRIOR TO THE EXPIRATION DATE.
<PAGE>
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
<TABLE>
<S> <C> <C>
PAYER'S NAME: THE BANK OF NEW YORK
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR SOCIAL SECURITY NUMBER
FORM W-9 TIN IN THE BOX AT FORM W-9 AT OR EMPLOYER ID NUMBER
DEPARTMENT OF THE TREASURY RIGHT AND CERTIFY BY SIGNING AND
INTERNAL REVENUE SERVICE PAYER'S DATING BELOW.
REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER ("TIN")
PART 2 -- CERTIFICATES -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for
a number to be issued to me) and
(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b)
I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report all interest or dividends, or (c) the IRS has
notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been notified by the IRS
that you are currently subject to backup withholding because of underreporting interest or dividends
on your tax return. However, if after being notified by the IRS that you were subject to backup
withholding you received another notification from the IRS that you are no longer subject to backup
withholding, do not cross out such item (2).
PART 3
SIGNATURE DATE AWAITING TIN / /
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3
OF SUBSTITUTE FORM W-9.
<PAGE>
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld, but that such amounts
will be refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
Signature: ____________________________________ Date: ______________
FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY
EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR SHARES
AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH STOCKHOLDER
OF THE COMPANY OR HIS BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH BELOW:
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department (for Eligible Tender & Exchange Department
P.O. Box 11248 Institutions Only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive & Deliver Window
New York, New York 10286-1248 New York, New York 10286
FOR INFORMATION TELEPHONE:
(800) 507-9357
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number listed below. Additional copies of the
Offer to Purchase, the Letter of Transmittal and other tender offer materials
may be obtained from the Information Agent as set forth below, and will be
furnished promptly at the Purchaser's expense. You may also contact your broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
(800) 223-2064 (Toll Free)
(212) 440-9800 (Call Collect)
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
of
NORAND CORPORATION
by
WAI ACQUISITION CORP.
a wholly owned subsidiary
of
WESTERN ATLAS INC.
at
$33.50 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, FEBRUARY 21, 1997, UNLESS THE OFFER IS EXTENDED.
January 24, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by WAI Acquisition Corp., a Delaware corporation (the
"Purchaser"), and Western Atlas Inc., a Delaware corporation ("Parent"), to act
as Information Agent in connection with the Purchaser's offer to purchase all
outstanding shares of Common Stock, par value $0.01 per share (the "Shares"), of
Norand Corporation, a Delaware corporation (the "Company"), at a purchase price
of $33.50 per Share, net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated January 24, 1997 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which together constitute the "Offer") enclosed herewith.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee.
The Offer is conditioned upon, among other things, Shares representing at
least a majority of the total number of outstanding Shares on a fully diluted
basis (assuming the exercise of all outstanding options and warrants) being
validly tendered and not withdrawn prior to the expiration of the Offer. The
Offer is also subject to other terms and conditions contained in the Offer to
Purchase. See the Introduction and Sections 1, 14 and 15 of the Offer to
Purchase. Enclosed herewith for your information and forwarding to your clients
are copies of the following documents:
1. The Offer to Purchase, dated January 24, 1997.
2. Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of
Transmittal may be used to tender Shares.
3. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer.
4. The Notice of Guaranteed Delivery for Shares to be used to accept the
Offer if certificates for Shares ("Share Certificates") are not
immediately available or if such certificates and all other required
<PAGE>
documents cannot be delivered to The Bank of New York (the "Depositary") by the
Expiration Date (as defined in the Offer to Purchase) or if the procedure for
book-entry transfer cannot be completed by the Expiration Date.
5. Letter to shareholders from the Chairman, President and Chief Executive
Officer of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9.
6. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9.
7. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 21, 1997,
UNLESS THE OFFER IS EXTENDED.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal and any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry delivery of
Shares and any other required documents should be sent to the Depositary and
either Share Certificates representing the tendered Shares should be delivered
to the Depositary, or Shares should be tendered by book-entry transfer into the
Depositary's account maintained at one of the Book Entry Transfer Facilities (as
described in the Offer to Purchase), all in accordance with the instructions set
forth in the Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than the Information Agent, as described in the Offer to
Purchase) for soliciting tenders of Shares pursuant to the Offer. The Purchaser
will, however, upon request, reimburse you for customary clerical and mailing
expenses incurred by you in forwarding any of the enclosed materials to your
clients. The Purchaser will pay or cause to be paid any stock transfer taxes
payable on the transfer of Shares to it, except as otherwise provided in
Instruction 6 of the Letters of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed material may be obtained from, the
undersigned, at its address and telephone number set forth below and on the back
cover of the Offer to Purchase.
Very truly yours,
Georgeson & Company Inc.
as Information Agent
Wall Street Plaza
New York, New York 10005
(212) 440-9800
(Call Collect)
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, THE COMPANY, THE DEPOSITARY,
OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF
THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE
STATEMENTS CONTAINED THEREIN.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
of
NORAND CORPORATION
by
WAI ACQUISITION CORP.
a wholly owned subsidiary
of
WESTERN ATLAS INC.
at
$33.50 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, FEBRUARY 21, 1997, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated January 24,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by WAI Acquisition Corp.,
a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of
Western Atlas Inc., a Delaware corporation, to purchase all outstanding shares
of Common Stock, par value $0.01 per share (the "Shares"), of Norand
Corporation, a Delaware corporation (the "Company"), at a purchase price of
$33.50 per Share, net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in the Offer to Purchase and in
the related Letter of Transmittal enclosed herewith. Holders of Shares whose
certificates for such Shares (the "Share Certificates") are not immediately
available, or who cannot deliver their Share Certificates and all other required
documents to the Depositary on or prior to the Expiration Date (as defined in
the Offer to Purchase), or who cannot complete the procedures for book-entry
transfer on a timely basis, must tender their Shares according to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Shares held by us for your account pursuant to
the terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $33.50 per Share net to you in cash without interest
thereon, upon the terms and subject to the conditions set forth in the Offer.
2. The Offer is being made for all Shares.
3. The Board of Directors of the Company unanimously has approved the Merger
Agreement (as described in the Offer to Purchase) and determined that the Merger
Agreement and the transactions contemplated thereby, including the Offer and the
Merger (as described in the Offer to Purchase), are fair to and in the best
interests of the holders of Shares and recommends that stockholders accept the
Offer and tender their Shares.
<PAGE>
4. The Offer is conditioned upon, among other things, Shares representing at
least a majority of the total number of outstanding Shares on a fully diluted
basis (assuming the exercise of all outstanding options and warrants) being
validly tendered and not withdrawn prior to the expiration of the Offer. The
Offer is also subject to other terms and conditions contained in the Offer to
Purchase. See the Introduction and Sections 1, 14 and 15 of the Offer to
Purchase.
5. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer.
6. The Offer and withdrawal rights will expire at 12:00 midnight, New York
City time, on Friday, February 21, 1997, unless the Offer is extended.
7. Payment for Shares purchased pursuant to the Offer will in all cases be
made only after timely receipt by The Bank of New York (the "Depositary") of (a)
Share Certificates or timely confirmation of the book-entry transfer of such
Shares into the account maintained by the Depositary at The Depository Trust
Company or Philadelphia Depository Trust Company (collectively, the "Book-Entry
Transfer Facilities"), pursuant to the procedures set forth in Section 3 of the
Offer to Purchase, (b) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees or
an Agent's Message (as defined in the Offer to Purchase), in connection with a
book-entry delivery, and (c) any other documents required by the Letter of
Transmittal. Accordingly, payment may not be made to all tendering stockholders
at the same time depending upon when certificates for or confirmations of
book-entry transfer of such Shares into the Depositary's account at a Book-Entry
Transfer Facility are actually received by the Depositary.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth on the back page of this letter. If you
authorize the tender of your Shares, all such Shares will be tendered unless
otherwise specified on the back page of this letter. An envelope to return your
instructions to us is enclosed. Your instructions should be forwarded to us in
ample time to permit us to submit a tender on your behalf prior to the
expiration of the Offer.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal. The Offer is not being made to (nor will tenders be accepted from
or on behalf of) holders of Shares residing in any jurisdiction in which the
making of the Offer or the acceptance thereof would not be in compliance with
the securities, blue sky or other laws of such jurisdiction. However, the
Purchaser may, in its discretion, take such action as it may deem necessary to
make the Offer in any jurisdiction and extend the Offer to holders of Shares in
such jurisdiction.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
OF
NORAND CORPORATION
BY
WAI ACQUISITION CORP.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated January 24, 1997 (the "Offer to Purchase"), and the related
Letter of Transmittal (which together constitute the "Offer") in connection with
the offer by WAI Acquisition Corp., a Delaware corporation (the "Purchaser") and
a wholly owned subsidiary of Western Atlas Inc., a Delaware corporation, to
purchase all outstanding shares of Common Stock, par value $0.01 per share (the
"Shares"), of Norand Corporation, a Delaware corporation, at a purchase price of
$33.50 per Share, net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in the Offer to Purchase.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to Be Tendered:
- ------------------------Shares*
Date:
- ------------------------
SIGN HERE
Signature(s)
-------------------------------------------------------------------------------
(Print Name(s))
----------------------------------------------------------------------------
(Print Address(es))
-------------------------------------------------------------------------
----------------------------------------------------------------------------
(zip code)
(Area Code and Telephone Number(s))
-------------------------------------------------------
(Taxpayer Identification or Social Security Number(s))
------------------------------------------
- ------------------------
* Unless otherwise indicated, it will be assumed that you instruct us to
tender all Shares held by us for your account.
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF SHARES OF COMMON STOCK
of
NORAND CORPORATION
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates representing
shares of Common Stock, par value $0.01 per share (the "Shares"), of Norand
Corporation, a Delaware corporation (the "Company"), are not immediately
available or time will not permit all required documents to reach The Bank of
New York (the "Depositary") on or prior to the Expiration Date (as defined in
the Offer to Purchase), or the procedures for delivery by book-entry transfer
cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be
delivered by hand or sent by facsimile transmission or mail to the Depositary.
See Section 3 of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department (for Eligible Institutions Tender & Exchange Department
P.O. Box 11248 Only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive & Deliver Window
New York, New York 10286-1248 New York, New York 10286
<CAPTION>
FOR INFORMATION TELEPHONE:
(800) 507-9357
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO
A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to WAI Acquisition Corp., a Delaware
corporation (the "Purchaser"), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated January 24, 1997 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which together constitute
the "Offer"), receipt of each of which is hereby acknowledged, the number of
Shares indicated below pursuant to the guaranteed delivery procedures set forth
in Section 3 of the Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares: Name(s) of Record Holder(s):
Certificate No(s). (if available):
Address(es):
If Share(s) will be tendered by book-entry
transfer, check one box. Area Code and Telephone Number(s):
/ / The Depository Trust Company
/ / Philadelphia Depository
Trust Company
Signature(s):
Account Number:
Date:
</TABLE>
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of
the Securities Transfer Agents Medallion Program, hereby (a) represents that
the tender of Shares effected hereby complies with Rule 14e-4 under the
Securities Exchange Act of 1934, as amended, and (b) guarantees to deliver
to the Depositary, at one of its addresses set forth above, either the
certificates representing all tendered Shares, in proper form for transfer,
a Book-Entry Confirmation (as defined in the Offer to Purchase), together
with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or, in the case
of book-entry delivery of Shares, an Agent's Message (as defined in the
Offer to Purchase), and any other documents required by the Letter of
Transmittal within three NASDAQ trading days after the date of execution of
this Notice of Guaranteed Delivery.
<TABLE>
<S> <C>
Name of Firm: (Authorized Signature)
Address: Title:
Name:
(Zip Code) (Please type or print)
Area Code and
Telephone Number: Date:
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
IRS INSTRUCTIONS
(SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE.)
PURPOSE OF FORM. -- If you are required to file an information return with
the Internal Revenue Service (the IRS) you must obtain your correct taxpayer
identification number (TIN) to report income paid to you, real estate
transactions, mortgage interest you paid, the acquisition or abandonment of
secured property, or contributions you made to an individual retirement account
(IRA). Use Form W-9 to furnish your correct TIN to the requester (the person
asking you to furnish your TIN), and, when applicable (1) to certify that the
TIN you are furnishing is correct (or that you are waiting for a number to be
issued), (2) to certify that you are not subject to backup withholding, and (3)
to claim exemption from backup withholding if you are an exempt payee.
Furnishing your correct TIN and making the appropriate certifications will
prevent certain payments from being subject to backup withholding.
NOTE: IF A REQUESTER GIVES YOU A FORM OTHER THAN A W-9 TO REQUEST YOUR TIN,
YOU MUST USE THE REQUESTER'S FORM.
HOW TO OBTAIN A TIN. -- If you do not have a TIN, apply for one immediately.
To apply, get FORM SS-5, Application for Social Security Card (SSN) (for
individuals), from your local office of the Social Security Administration, or
FORM SS-4, Application for Employer Identification Number (EIN) (for businesses
and all other entities), from your local IRS office.
To complete Form W-9, if you do not have a TIN and have applied for one or
intend to apply for one in the near future, write "Applied For" in the space for
the TIN in Part I of the substitute Form W-9, sign and date the form, and give
it to the requester. Generally, you will then have 60 days to obtain a TIN and
furnish it to the requester. If the requester does not receive your TIN within
60 days, backup withholding, if applicable, will begin and continue until you
furnish your TIN to the requester. For reportable interest or dividend payments,
the payer must exercise one of the following options concerning backup
withholding during this 60-day period. Under option (1), a payer must backup
withhold on any withdrawals you make from your account after 7 business days
after the requester receives this form back from you. Under option (2), the
payer must backup withhold on any reportable interest or dividend payments made
to your account, regardless of whether you make any withdrawals. The backup
withholding under option (2) must begin no later than 7 business days after the
requester receives this form back. Under option (2), the payer is required to
refund the amounts withheld if your certified TIN is received within the 60-day
period and you were not subject to backup withholding during the period.
NOTE: WRITING "APPLIED FOR" ON THE SUBSTITUTE FORM W-9 MEANS THAT YOU HAVE
ALREADY APPLIED FOR A TIN OR THAT YOU INTEND TO APPLY FOR ONE IN THE NEAR
FUTURE.
As soon as you receive your TIN, complete another Form W-9, include your
TIN, sign and date this form, and give it to the requester.
WHAT IS BACKUP WITHHOLDING? -- Persons making certain payment to you after
1992 are required to withhold and pay to the IRS 31% of such payments under
certain conditions. This is called "backup withholding." Payments that could be
subject to backup withholding include interest, dividends, broker and barter
exchange transactions, rents, royalties, nonemployee compensation, and certain
payments from fishing boat operators, but do not include real estate
transactions.
If you give the requester your correct TIN, make the appropriate
certifications, and report all your taxable interest and dividends on your tax
return, your payments will not be subject to backup withholding. Payments you
receive will be subject to backup withholding if:
(1) You do not furnish your TIN to the requester, or
(2) The IRS notifies the requester that you furnished an incorrect TIN, or
(3) You are notified by the IRS that you are subject to backup withholding
because you failed to report all your interest and dividends on your tax
return (for reportable interest and dividends only), or
(4) You fail to certify to the requester that you are not subject to backup
withholding under (3) above (for reportable interest and dividend
accounts opened after 1983 only), or
(5) You fail to certify your TIN. This applies only to reportable interest,
dividend, broker or barter exchange accounts opened after 1983, or
broker accounts considered inactive in 1983.
Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies. Certain payees and payments
are exempt from backup withholding and information reporting. See PAYEES AND
PAYMENTS EXEMPT FROM BACKUP WITHHOLDING, below, and EXEMPT PAYEES AND PAYMENTS
under SPECIFIC INSTRUCTIONS, on page 2, if you are an exempt payee
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING -- The following is a
list of payees exempt from backup withholding and for which no information
reporting is required. For interest and dividends, all listed payees are exempt
except item (9). For broker transactions, payees listed in (1) through (13) and
a person registered under the Investment Advisers Act of 1940 who regularly acts
as a broker are exempt. Payments subject to reporting under sections 6041 and
6041A are generally exempt from backup withholding only if made to payees
described in items (1) through (7), except that a corporation that provides
medical and health care services or bills and collects payments for such
services is not exempt from backup withholding or information reporting. Only
payees described in items (2) through (6) are exempt from backup withholding for
barter exchange transactions, patronage dividends, and payments by certain
fishing boat operators.
(1) A corporation.
(2) An organization exempt from tax under Section 501(a), or an IRA, or a
custodial account under section 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(5) A foreign government or any of the political subdivisions, agencies or
instrumentalities.
(6) An international organization or any of its agencies or
instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the U.S.
or a possession of the U.S.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporation
Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends generally not subject to
backup withholding also include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in trade or business in the U.S. and
that have at least one nonresident partner.
- Payments of patronage dividends not paid in money.
- Payments made by certain foreign organizations.
Payments of interest generally not subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals
NOTE: YOU MAY BE SUBJECT TO BACKUP WITHHOLDING IF THIS INTEREST IS $600 OR
MORE AND IS PAID IN THE COURSE OF THE PAYER'S TRADE OR BUSINESS AND YOU HAVE NOT
PROVIDED YOUR CORRECT TIN TO THE PAYER.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Mortgage interest paid by you.
<PAGE>
Payments that are not subject to information reporting are also not subject
to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044,
6045, 6049, 6050A and 6050N, and their regulations.
PENALTIES
FAILURE TO FURNISH TIN. -- If you fail to furnish your correct TIN to a
requester, you are subject to a penalty of $50 for each such failure unless your
failure is due to reasonable cause and not to willful neglect.
CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
MISUSE OF TINS. -- If the requester discloses or uses TINs in violation of
Federal law, the requester may be subject to civil and criminal penalties.
SPECIFIC INSTRUCTIONS
NAME. -- If you are an individual, you must generally provide the name shown
on your social security card. However, if you have changed your last name, for
instance, due to marriage, without informing the Social Security Administration
of the name change, please enter your first name, the last name shown on your
social security card and your new last name.
If you are a sole proprietor, you must furnish your individual name and
either your SSN or EIN. You may also enter your business's name. Enter your
name(s) as shown on your social security card and/or as it was used to apply or
your EIN on Form SS-4.
SIGNING THE CERTIFICATION. --
(1) INTEREST, DIVIDEND, AND BARTER EXCHANGE ACCOUNTS OPENED BEFORE 1984 AND
BROKER ACCOUNTS CONSIDERED ACTIVE DURING 1983. -- You are requested to furnish
your correct TIN, but you are not required to sign the certification.
(2) INTEREST, DIVIDEND, BROKER AND BARTER EXCHANGE ACCOUNTS OPENED AFTER
1983 AND BROKER ACCOUNTS CONSIDERED INACTIVE DURING 1983. -- You must sign the
certification or backup withholding will apply. If you are subject to backup
withholding and you are merely providing your correct TIN to the requester, you
must cross out item (2) in the certification before signing the form.
(3) REAL ESTATE TRANSACTIONS. -- You must sign the certification. You may
cross out item (2) of the certification.
(4) OTHER PAYMENTS. -- You are required to furnish your correct TIN, but you
are not required to sign the certification unless you have been notified of an
incorrect TIN. Other payments include payments made in the course of the
requester's trade or business for rents, royalties, goods (other than bills for
merchandise), medical and health care services, payments to a nonemployee for
services (including attorney and accounting fees), and payments to certain
fishing boat crew members.
(5) MORTGAGE INTEREST PAID BY YOU, ACQUISITION OR ABANDONMENT OF SECURED
PROPERTY, OR IRA CONTRIBUTIONS. -- You are requested to furnish your correct
TIN, but you are not required to sign the certification.
(6) EXEMPT PAYEES AND PAYMENTS. -- If you are exempt from backup
withholding, you should complete this form to avoid possible erroneous backup
withholding. Enter your correct TIN in Part I, write "EXEMPT" in the block in
Part II, and sign and date the form. If you are a nonresident alien or foreign
entity not subject to backup withholding, give the requester a completed Form
W-8. Certificate of Foreign Status.
(7) "AWAITING TIN". -- Following the instructions under HOW TO OBTAIN A TIN,
on page 1, write "Applied For" in the space for the TIN in Part I of the
Substitute Form W-9 and sign and date the form.
SIGNATURE. -- For a joint account, only the person whose TIN is shown in
Part I should sign the form.
PRIVACY ACT NOTICE. -- Section 6109 requires you to furnish your correct TIN
to persons who must file information returns with the IRS to report interest,
dividends, and certain other income paid to you, mortgage interest you paid, the
acquisition or abandonment of secured property, or contributions you made to an
IRA. The IRS uses the numbers for identification purposes and to help verify the
accuracy of your tax return. You must provide your TIN whether or not you are
required to file a tax return. Payers must generally withhold 31% of taxable
interest, dividends, and certain other payments to a payee who does not furnish
a TIN to payer. Certain penalties may also apply.
WHAT NAME AND NUMBER TO GIVE THE REQUESTER
<TABLE>
<C> <S> <C>
- -----------------------------------------------------------------
GIVE THE NAME
AND
SOCIAL SECURITY
NUMBER OF:
FOR THIS TYPE OF ACCOUNT:
- -----------------------------------------------------------------
1. Individual The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if
combined funds, the
first individual on the
account(2)
3. Custodian account of a minor The minor(2)
(Uniform
Gift to Minors Act)
4. A. The usual revocable The grantor-trustee(1)
savings trust (grantor is The actual owner(1)
also trustee)
B. So-called trust account
that is not a legal or valid
trust under state law
5. Sole proprietorship The owner(3)
- ----------------------------------------------------------------
- ----------------------------------------------------------------
GIVE THE NAME AND
EMPLOYER
IDENTIFICATION
NUMBER OF:
FOR THIS TYPE OF ACCOUNT:
- -----------------------------------------------------------------
6. Sole proprietorship The owner(4)
7. A valid trust, estate or Legal entity(4)
pension trust
8. Corporate The corporation
9. Association, club, The organization
religious, charitable,
educational, or other tax-
exempt
organization
10. Partnership The partnership
11. A broker or registered The broker or nominee
nominee
12. Account with the Department The public entity
of Agriculture in the name
of a public entity (such as
a state or local government,
school district, or prison)
that receives agricultural
program payments
</TABLE>
<TABLE>
<C> <S> <C>
- -----------------------------------------------------------------
- -----------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the individual's name. You may also enter your business name. You may
use your SSN or EIN.
(4) List first and circle the name of the legal trust, estate or pension trust.
(Do not furnish the TIN of the personal representative or trustee unless the
legal entity itself is not designated in the account title.)
NOTE: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL BE
CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.
2
<PAGE>
Exhibit (a)(7)
For Immediate Release
Contacts: Dirk Koerber (310) 888-2575 (Western Atlas)
Donald Rowley (319) 369-3250 (Norand)
Keith Everett (206) 348-2686 (Intermec)
Western Atlas Acquisition of Norand
Creates A Leader in
High-Growth Data Collection
and Mobile Computing Industries
BEVERLY HILLS, Calif./CEDAR RAPIDS, Iowa - January 22, 1997 - Western Atlas
Inc. (NYSE: WAI) and Norand Corporation (NASDAQ: NRND) announced today that the
companies have entered into a definitive agreement under which Western Atlas
will acquire Norand Corporation, a designer and developer of mobile computing
systems and wireless data communications networks. The acquisition has been
unanimously approved by the Boards of Directors of both companies.
When completed, this acquisition will further strengthen the position of
Western Atlas' Seattle-based Intermec division in the automated data collection
(ADC) and mobile computing solutions industry.
Under the agreement, Western Atlas will offer $33.50 per share for all 7.8
million shares of Norand common stock outstanding through a cash tender offer.
The offer will be subject to receipt of a majority of the common stock of Norand
and satisfaction of Hart-Scott-Rodino and other customary approvals and
requirements.
"This acquisition will establish Western Atlas--through its Intermec
division -- as the company with the broadest technology range and most extensive
distribution network in the industrial automated data collection and mobile
computing solutions industry. The combined company will offer superior value
and solutions to its customers," said Alton J. Brann, Chairman and CEO of
Western Atlas. "The overall ADC industry has shown consistent annual growth
rates of 12 to 17 percent."
<PAGE>
Norand's strong positions in wireless technology, pen-based systems, and in
inventory tracking, route accounting and mobile computing solutions for the
transportation, car rental, automotive and food/beverage industries, directly
complement Intermec's expertise in rugged ADC systems for the industrial,
government and distribution industries. Customers for all these applications
increasingly are requiring the integration of products and services that the
two organizations provide.
"This is a combination of two companies with complementary technologies,
distribution channels and application know-how," Brann continued. "Both sales
organizations will benefit from a broader range of products and services, while
the resulting larger production runs should generate economies of scale and
major cost advantages. The acquisition is expected to be nondilutive to
earnings in 1997 and additive to cash flow. These positive impacts will
accelerate as we go forward."
Norand's Chairman and CEO, N. Robert Hammer, said, "The merger of our
company with Intermec combines two leaders in the global ADC industry that have
complementary product and service lines, and this provides the base for
excellent long-term growth. We fully support this transaction with Western
Atlas.
Brann added, "The acquisition represents an outstanding opportunity and it
is adding to our growing information technology activities in the energy and
industrial fields. Western Atlas is well on its way toward creating the
prototype for a fast-growing global 'solutions' company whose success is based
on information and systems integration technology."
Norand's mobile computing systems and wireless data networks use radio
frequency (RF) technology to automate the collection, processing and
communication of information. Major products used in the systems solutions are
hand-held computers, including pen-based units, radio-frequency terminals and
communication networks. Over the past few years, Norand has invested heavily to
move from a product orientation to an integrated systems solution provider in
mobile data collection, and has established one of the premier application
engineering capabilities in the industry.
"The timing of this acquisition is excellent," said Michael Ohanian, a
Western Atlas Vice President and President of Intermec. "Intermec already is an
important supplier of automated data collection systems for industrial
applications. Together with Norand, we will have the product offering,
market-specific applications experience, and sales and service capability to
become the
<PAGE>
leader in ADC for the emerging global logistics automation marketplace. We
expect to build significantly on this foundation."
Western Atlas, headquartered in Beverly Hills, California, is a global
supplier of oilfield information services and industrial automation systems with
annual revenues of more that $2.5 billion.
Norand designs, manufactures and markets mobile computing systems and
wireless data communications networks using radio frequency technology.
NORAND-Registered Trademark- systems allow businesses worldwide to apply
information technology to industrial and field automation settings. Typical
applications include route accounting, field-sales automation, and inventory
database management in manufacturing, warehouse and retail settings. Norand and
its partners provide hardware, application software, systems integration and
support to thousands of customers in dozens of industries to improve
accountability, productivity and management control. Corporate offices are at
550 Second Street Southeast in Cedar Rapids, Iowa. Norand's World Wide Web home
page is located at http://www.norand.com.
# # #
WAI083
------
------
<PAGE>
Exhibit (a)(8)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase,
dated January 24, 1997, and the related Letter of Transmittal, and is being
made to all holders of Shares. The Offer is not being made to (nor will
tenders be accepted from or on behalf of) holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
NORAND CORPORATION
BY
WAI ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY
OF
WESTERN ATLAS INC.
AT
$33.50 NET PER SHARE
WAI Acquisition Corp. (the "Purchaser"), a Delaware corporation and a wholly
owned subsidiary of Western Atlas Inc., a Delaware corporation ("Parent"), is
offering to purchase all outstanding shares of Common Stock, par value $0.01
per share (the "Shares"), of Norand Corporation, a Delaware corporation (the
"Company"), at a purchase price of $33.50 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated January 24, 1997 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, FEBRUARY 21, 1997, UNLESS THE OFFER IS EXTENDED.
<PAGE>
The Offer is being made pursuant to an Agreement and Plan of Merger, dated as
of January 21, 1997 (the "Merger Agreement"), among the Company, the
Purchaser and Parent pursuant to which, following the consummation of the
Offer and the satisfaction or waiver of certain conditions, the Purchaser
will be merged with and into the Company (the "Merger"), with the Company
continuing as the surviving corporation. On the effective date of the
Merger, each outstanding Share (other than any Shares held by Parent, the
Purchaser or any subsidiary of Parent or the Purchaser or in the treasury of
the Company, and other than Shares, if any, held by stockholders who perfect
their appraisal rights under Delaware law) will be converted into the right
to receive an amount in cash equal to $33.50 or any higher price per Share
paid in the Offer (without interest).
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS APPROVED THE MERGER
AGREEMENT AND DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, ARE FAIR TO AND IN
THE BEST INTERESTS OF HOLDERS OF SHARES, AND RECOMMENDS THAT STOCKHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, AT LEAST A MAJORITY OF THE
TOTAL NUMBER OF OUTSTANDING SHARES ON A FULLY DILUTED BASIS (ASSUMING
EXERCISE OF ALL OUTSTANDING OPTIONS AND WARRANTS (EACH AS DEFINED IN THE
OFFER TO PURCHASE)) BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE
EXPIRATION OF THE OFFER. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND
CONDITIONS. SEE THE INTRODUCTION AND SECTIONS 1, 14 AND 15 OF THE OFFER TO
PURCHASE.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as,
if and when the Purchaser gives oral or written notice to the Depositary of
the Purchaser's acceptance of such Shares for payment pursuant to the Offer.
In all cases, upon the terms and subject to the conditions of the Offer,
payment for Shares purchased pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the
Purchaser and transmitting payment to validly tendering stockholders. Under
no circumstances will interest on the purchase price for Shares be paid by
the Purchaser. In all cases, payment for Shares purchased pursuant to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates representing Shares (the "Share Certificates") or timely
confirmation of the
-2-
<PAGE>
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company or Philadelphia Depository Trust Company
(collectively, the "Book-Entry Transfer Facilities") pursuant to the
procedures set forth in Section 3 of the Offer to Purchase, (ii) the Letter
of Transmittal delivered with the Offer to Purchase (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees
or an Agent's Message (as defined in the Offer to Purchase) in connection
with a book-entry transfer of Shares and (iii) any other documents required
by the Letter of Transmittal.
Subject to the terms of the Merger Agreement, the Purchaser expressly
reserves the right, in its sole discretion, at any time and from time to
time, to extend the period during which the Offer is open for any reason,
including the existence of any of the conditions specified in Section 14 of
the Offer to Purchase, by giving oral or written notice of such extension to
the Depositary. Any such extension will be followed as promptly as
practicable by public announcement thereof, and such announcement will be
made no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date (as defined below).
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time on or
prior to the Expiration Date and, unless theretofore accepted for payment as
provided in the Offer to Purchase, may also be withdrawn at any time after
March 24, 1997 (or such later date as may apply in case the Offer is
extended). The term "Expiration Date" means 12:00 midnight, New York City
time, on Friday, February 21, 1997, unless and until the Purchaser, subject
to the terms of the Merger Agreement, shall have further extended the period
of time for which the Offer is open, in which event the term "Expiration
Date" shall mean the time and date at which the Offer, as so extended by the
Purchaser, shall expire. In order for a withdrawal to be effective, a
written or facsimile transmission notice of withdrawal must be timely
received by the Depositary at one of its addresses set forth on the back
cover of the Offer to Purchase. Any such notice of withdrawal must specify
the name of the person who tendered the Shares to be withdrawn, the number of
Shares to be withdrawn, and (if Share Certificates have been tendered) the
name of the registered holder of the Shares as set forth in the Share
Certificates, if different from that of the person who tendered such Shares.
If Share Certificates have been delivered or otherwise identified to the
Depositary, then prior to the physical release of such certificates, the
tendering stockholder must submit the serial numbers shown on
-3-
<PAGE>
the particular certificates evidencing the Shares to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by a firm that is a
bank, broker, dealer, credit union, savings association or other entity which
is a member in good standing of the Securities Transfer Agents Medallion
Program (an "Eligible Institution"), except in the case of Shares tendered
for the account of an Eligible Institution. If Shares have been tendered
pursuant to the procedures for book-entry transfer set forth in Section 3 of
the Offer to Purchase, the notice of withdrawal must specify the name and
number of the account at the appropriate Book-Entry Transfer Facility to be
credited with the withdrawn Shares, in which case a notice of withdrawal will
be effective if delivered to the Depositary by any method of delivery
described in this paragraph. All questions as to the form and validity
(including time of receipt) of notices of withdrawal will be determined by
the Purchaser, in its sole discretion, whose determination shall be final and
binding. Any Shares properly withdrawn will be deemed not validly tendered
for purposes of the Offer, but may be tendered at any subsequent time prior
to the Expiration Date by following any of the procedures described in
Section 3 of the Offer to Purchase.
The information required to be disclosed pursuant to Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Securities Exchange Act of 1934,
as amended, is contained in the Offer to Purchase, and is incorporated herein
by reference.
The Company is providing the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase and the related Letter of
Transmittal and, if required, other relevant materials will be mailed to
record holders of Shares and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the
names of whose nominees, appear on the stockholder list or who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number listed below. Additional copies of
the Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed
Delivery and other related materials may be obtained at the Purchaser's
expense from the Information Agent or from brokers, dealers, commercial
-4-
<PAGE>
banks and trust companies. Neither Parent nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person for soliciting
tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
Georgeson & Company Inc.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
ALL OTHERS CALL TOLL FREE (800) 223-2064
January 24, 1997
-5-
<PAGE>
EXHIBIT (b)(1)
[CONFORMED COPY]
$400,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of
December 22, 1994
among
Western Atlas Inc.
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent, and
Bank of America National Trust and Savings Association
The Bank of New York
Chemical Bank
CIBC Inc.
NationsBank of Texas, N.A.
Union Bank of Switzerland, Los Angeles Branch, and
Wells Fargo Bank, N.A.,
as Co-Agents
<PAGE>
TABLE OF CONTENTS(1)
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Accounting Terms and
Determinations . . . . . . . . . . . . . . . . . . . . 19
SECTION 1.03 Types of Borrowings. . . . . . . . . . . . . . . . . . 19
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. . . . . . . . . . . . . . . . . . 20
SECTION 2.02. Notice of Committed Borrowings . . . . . . . . . . . . 20
SECTION 2.03. Money Market Borrowings. . . . . . . . . . . . . . . . 21
SECTION 2.04. Notice to Banks; Funding of Loans. . . . . . . . . . . 25
SECTION 2.05. Notes. . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.06. Maturity of Loans. . . . . . . . . . . . . . . . . . . 27
SECTION 2.07. Interest Rates . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.08. Fees . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.09. Optional Termination or Reduction
of Commitments . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.10. Scheduled Termination or
Reduction of Commitments . . . . . . . . . . . . . . . 31
SECTION 2.11. Optional Prepayments . . . . . . . . . . . . . . . . . 31
SECTION 2.12. General Provisions as to Payments. . . . . . . . . . . 32
SECTION 2.13 Funding Losses . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.14 Computation of Interest and Fees . . . . . . . . . . . 33
SECTION 2.15. Regulation D Compensation. . . . . . . . . . . . . . . 33
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.02. Borrowings . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power. . . . . . . . . . . . . 37
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention. . . . . . . . . . . . 37
- ---------------
(1) The Table of Contents is not a part of this Agreement.
<PAGE>
SECTION 4.03. Binding Effect . . . . . . . . . . . . . . . . . . . . 37
SECTION 4.04. Financial Information. . . . . . . . . . . . . . . . . 37
SECTION 4.05. Litigation . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.06. Compliance with ERISA. . . . . . . . . . . . . . . . . 38
SECTION 4.07. Environmental Matters. . . . . . . . . . . . . . . . . 39
SECTION 4.08. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.09. Material Subsidiaries. . . . . . . . . . . . . . . . . 39
SECTION 4.10. Not an Investment Company. . . . . . . . . . . . . . . 40
SECTION 4.11. Use of Proceeds. . . . . . . . . . . . . . . . . . . . 40
SECTION 4.12. Full Disclosure. . . . . . . . . . . . . . . . . . . . 40
ARTICLE V
COVENANTS
SECTION 5.01. Information. . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.02. Maintenance of Property Insurance. . . . . . . . . . . 43
SECTION 5.03. Conduct of Business and
Maintenance of Existence . . . . . . . . . . . . . . . 43
SECTION 5.04. Compliance with Laws . . . . . . . . . . . . . . . . . 44
SECTION 5.05. Leverage Ratio . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.06. Minimum Consolidated Tangible Net
Worth. . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.07. Interest Coverage Ratio. . . . . . . . . . . . . . . . 44
SECTION 5.08. Maintenance of Certain Operations. . . . . . . . . . . 44
SECTION 5.09. Limitation on Subsidiary Debt. . . . . . . . . . . . . 44
SECTION 5.10. Negative Pledge. . . . . . . . . . . . . . . . . . . . 44
SECTION 5.11. Consolidations, Mergers and Sales
of Assets. . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.12. Limitation on Affiliate
Transactions . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.13. Limitation on Restrictions
Affecting Subsidiaries . . . . . . . . . . . . . . . . 46
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. . . . . . . . . . . . . . . . . . . 46
SECTION 6.02. Notice of Default. . . . . . . . . . . . . . . . . . . 49
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. . . . . . . . . . . . . 49
SECTION 7.02. Agent and Affiliates . . . . . . . . . . . . . . . . . 49
SECTION 7.03. Action by Agent. . . . . . . . . . . . . . . . . . . . 49
SECTION 7.04. Consultation with Experts. . . . . . . . . . . . . . . 49
SECTION 7.05. Liability of Agent . . . . . . . . . . . . . . . . . . 50
SECTION 7.06. Indemnification. . . . . . . . . . . . . . . . . . . . 50
ii
<PAGE>
SECTION 7.07. Credit Decision. . . . . . . . . . . . . . . . . . . . 50
SECTION 7.08. Successor Agent. . . . . . . . . . . . . . . . . . . . 51
SECTION 7.09. Agent's Fees . . . . . . . . . . . . . . . . . . . . . 51
SECTION 7.10. Co-Agents. . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest
Rate Inadequate or Unfair. . . . . . . . . . . . . . . 51
SECTION 8.02. Illegality . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 8.03. Increased Cost and Reduced Return. . . . . . . . . . . 53
SECTION 8.04. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.05. Base Rate Loans Substituted for
Affected Fixed Rate Loans. . . . . . . . . . . . . . . 57
SECTION 8.06. Substitution of Bank . . . . . . . . . . . . . . . . . 57
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 9.02. No Waivers.. . . . . . . . . . . . . . . . . . . . . . 58
SECTION 9.03. Expenses; Indemnification. . . . . . . . . . . . . . . 58
SECTION 9.04. Sharing of Set-Offs. . . . . . . . . . . . . . . . . . 59
SECTION 9.05. Amendments and Waivers . . . . . . . . . . . . . . . . 59
SECTION 9.06. Successors and Assigns . . . . . . . . . . . . . . . . 60
SECTION 9.07. Collateral . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.08. Governing Law; Submission to
Jurisdiction . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.09. Counterparts; Integration. . . . . . . . . . . . . . . 62
SECTION 9.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . 62
iii
<PAGE>
Schedule I - Pricing Grid
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Borrower and
the Guarantors
Exhibit F - Opinion of Special Counsel for the
Agent
Exhibit G - Assignment and Assumption Agreement
Exhibit H - Amended and Restated Subsidiary Guarantee
Agreement
iv
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
AGREEMENT dated as of December 22, 1994 among WESTERN ATLAS INC., the
BANKS listed on the signature pages hereof and MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Agent, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
THE BANK OF NEW YORK, CHEMICAL BANK, CIBC INC., NATIONSBANK OF TEXAS, N.A.,
UNION BANK OF SWITZERLAND, LOS ANGELES BRANCH, and WELLS FARGO BANK, N.A., as
Co-Agents.
W I T N E S S E T H:
WHEREAS, the Borrower, the Banks listed on the signature pages hereof,
the Agent and the Co-Agents are parties to a Credit Agreement dated as of
December 23, 1993 (as amended to the Effective Date (as defined below), the
"Original Agreement"); and
WHEREAS, the parties hereto wish to modify the Original Agreement in a
number of respects, as more fully set forth below;
NOW, THEREFORE, the parties hereto hereby agree that, on and as of the
Effective Date, the Original Agreement is hereby amended and restated in its
entirety as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. The following terms, as used herein, have
the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to the Borrower) duly completed by such Bank.
<PAGE>
"Affiliate" means any Person (other than a Subsidiary) directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Borrower. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" means the Original Agreement as amended and restated by
this Amended and Restated Agreement and as the same may be further amended or
restated from time to time in accordance with the terms hereof.
"Amended and Restated Agreement" means this Amended and Restated
Credit Agreement dated as of December 22, 1994 among the Borrower, the Banks,
the Agent and the Co-Agents.
"Agent" means Morgan Guaranty Trust Company of New York in its
capacity as agent for the Banks under the Financing Documents, and its
successors in such capacity.
"Applicable Lending Office" means, with respect to any Bank, (i) in
the case of its Domestic Loans, its Domestic Lending Office, (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of
its Money Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Assignee" has the meaning set forth in Section 9.06(c).
"Bank" means each financial institution listed on the signature pages
hereof, each Assignee which becomes a Bank pursuant to Section 9.06(c), and
their respective successors.
"Base Rate" means, for any day, a rate per annum equal to the higher
of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank as a Base
Rate Loan in accordance with the
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applicable Notice of Committed Borrowing or pursuant to Article VIII.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means Western Atlas Inc., a Delaware corporation, and its
successors.
"Borrower's Prospectus" means the Borrower's Prospectus dated
September 22, 1994 issued in connection with an offering of 6,000,000 shares of
its common stock registered under the Securities Act of 1933, as amended.. . . .
"Borrower's Latest Form 10-Q" means the Borrower's quarterly report on
Form 10-Q for the quarter ended September 30, 1994, as filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934.
"Borrowing" has the meaning set forth in Section 1.03.
"Capital Lease" means a lease that would be capitalized on a balance
sheet of the lessee prepared in accordance with generally accepted accounting
principles.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
"CD Loan" means a Committed Loan to be made by a Bank as a CD Loan in
accordance with the applicable Notice of Committed Borrowing.
"CD Margin" has the meaning set forth in Section 2.07(b).
"CD Reference Banks" means Chemical Bank, Union Bank of Switzerland
and Morgan Guaranty Trust Company of New York, or such other bank or banks as
the Borrower and the Agent may from time to time mutually designate.
"Change of Control" means any of the following:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial
3
<PAGE>
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 30% or more of either (i) the then outstanding shares of common stock of the
Borrower (the "Outstanding Borrower Common Stock") or (ii) the combined voting
power of the then outstanding voting securities of the Borrower entitled to vote
generally in the election of directors (the "Outstanding Borrower Voting
Securities"); PROVIDED, however, that for purposes of this subsection (a), the
following acquisitions of stock shall not constitute a Change of Control: (i)
any acquisition by the Borrower, (ii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Borrower or any
corporation controlled by the Borrower or (iii) any acquisition by any
corporation pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (c) of this definition;
(b) Individuals who, as of the date hereof, constitute the Board of
Directors of the Borrower (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; PROVIDED, however, that any
individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the Borrower's shareholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board;
(c) Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Borrower
(a "Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Borrower Common
Stock and Outstanding Borrower Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a
4
<PAGE>
result of such transaction owns the Borrower or all or substantially all of the
Borrower's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Borrower Common Stock and Outstanding
Borrower Voting Securities, as the case may be, (ii) no Person (excluding any
employee benefit plan (or related trust) of the Borrower or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 30% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation and (iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
(d) Approval by the shareholders of the Borrower of a complete
liquidation or dissolution of the Borrower.
"Co-Agent" means each of Bank of America National Trust and Savings
Association, The Bank of New York, Chemical Bank, CIBC Inc., NationsBank of
Texas, N.A., Union Bank of Switzerland, Los Angeles Branch, and Wells Fargo
Bank, N.A. in its capacity as co-agent hereunder, and its successors in such
capacity.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages of this Amended and
Restated Agreement, as such amount may be reduced from time to time pursuant to
Sections 2.09 and 2.10.
"Committed Loan" means a loan made by a Bank pursuant to Section 2.01.
"Consolidated Current Liabilities" means at any date the consolidated
current liabilities of the Borrower and its Consolidated Subsidiaries determined
as of such date.
"Consolidated EBITDAR" means, for any period, the sum of Consolidated
Net Income for such period plus, to the extent deducted in the determination of
such Consolidated Net Income, Consolidated Interest Expense for such period, the
provision for income taxes for such period, depreciation and amortization for
such period, and Consolidated Rental Expense for such period.
5
<PAGE>
"Consolidated Interest Expense" means, for any period, the interest
expense of the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis for such period.
"Consolidated Net Income" means, for any period, the net income of the
Borrower and its Consolidated Subsidiaries for such period, determined on a
consolidated basis.
"Consolidated Net Worth" means at any date the shareholders'
investment in the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis of such date.
"Consolidated Rental Expense" means, for any period, the rental
expense of the Borrower and its Consolidated Subsidiaries for such period
determined on a consolidated basis.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower in
its consolidated financial statements if such statements were prepared as of
such date.
"Consolidated Tangible Net Assets" means at any date Consolidated
Total Assets less Intangible Assets less Consolidated Current Liabilities, all
determined as of such date.
"Consolidated Tangible Net Worth" means at any date the shareholders'
investment in the Borrower and its Consolidated Subsidiaries less Intangible
Assets, all determined as of such date.
"Consolidated Total Assets" means at any date the total assets of the
Borrower and its Consolidated Subsidiaries, determined on a consolidated basis
as of such date.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable and deferred employee
6
<PAGE>
compensation obligations arising in the ordinary course of business, (iv) all
obligations of such Person as lessee which are capitalized in accordance with
generally accepted accounting principles, (v) all unpaid reimbursement
obligations of such Person in respect of letters of credit or similar
instruments but only to the extent that either (x) the issuer has honored a
drawing thereunder or (y) payment of such obligation is otherwise due under the
terms thereof, (vi) all Debt secured by a Lien on any asset of such Person,
whether or not such Debt is otherwise an obligation of such Person, and (vii)
all Debt of others Guaranteed by such Person.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to close.
"Domestic Lending Office" means, as to each Bank, its office located
at its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent; PROVIDED that any Bank may so designate
separate Domestic Lending Offices for its Base Rate Loans, on the one hand, and
its CD Loans, on the other hand, in which case all references herein to the
Domestic Lending Office of such Bank shall be deemed to refer to either or both
of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
7
<PAGE>
"Domestic Reserve Percentage" has the meaning set forth in Section
2.07(b).
"Effective Date" means the date the Commitments become effective in
accordance with Section 3.01.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"Equity Security" means any capital stock or other equity security, or
any warrant or other right to purchase such an equity security; PROVIDED that
any instrument or other security which constitutes Debt of a Person shall not
for purposes of this Agreement constitute an Equity Security of such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to
each Bank, its office, branch or affiliate located at
its address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Euro-Dollar Lending Office) or such other
office, branch or affiliate of such Bank as it may hereafter designate as
8
<PAGE>
its Euro-Dollar Lending Office by notice to the Borrower and the Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by a Bank as a
Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing.
"Euro-Dollar Margin" has the meaning set forth in Section 2.07(c).
"Euro-Dollar Reference Banks" means the principal London offices of
Chemical Bank, Union Bank of Switzerland and Morgan Guaranty Trust Company of
New York, or such other bank or banks as the Borrower and the Agent may from
time to time mutually designate.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents).
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day (the "accrual date"), the rate
per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on the
accrual date, as published by the Federal Reserve Bank of New York on the
Domestic Business Day next succeeding such day, PROVIDED that (i) if the accrual
date is not a Domestic Business Day, the Federal Funds Rate for the accrual date
shall be such rate on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business Day, and (ii) if no
such rate is so published on such next succeeding Domestic Business Day, the
Federal Funds Rate for the accrual date shall be the average rate quoted to
Morgan Guaranty Trust Company of New York on the accrual date (or next preceding
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<PAGE>
Domestic Business Day) on such transactions as determined by the Agent.
"Financing Documents" means this Agreement, the Notes and the
Subsidiary Guarantee Agreement.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money Market
Loans (excluding Money Market LIBOR Loans bearing interest at the Base Rate
pursuant to Section 8.01(a)) or any combination of the foregoing.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt (whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the holder of such Debt of the
payment thereof or to protect such holder against loss in respect thereof (in
whole or in part), PROVIDED that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" means each Subsidiary from time to time party to the
Subsidiary Guarantee Agreement.
"Hazardous Substances" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Intangible Assets" means, at any date, the amount (to the extent
reflected in Consolidated Total Assets) of (i) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of assets
of a going concern business made within twelve months after the acquisition of
such business) subsequent to September 30, 1994 in the book value of any asset
owned by the Borrower or a Consolidated Subsidiary, (ii) all
10
<PAGE>
investments in unconsolidated Subsidiaries and, to the extent the same exceed
$10,000,000 in aggregate amount, all equity investments in Persons which are not
Subsidiaries (other than investments in readily marketable securities) and (iii)
all unamortized debt discount and expense, unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade names, copyrights,
organization or developmental expenses and other intangible assets (other than
spec data), determined on a consolidated basis. Publicly traded securities will
be deemed "readily marketable" if the investment of the Borrower or a Subsidiary
therein may be offered or sold to the public generally without registration
under the Securities Act of 1933, as amended.
"Interest Coverage Ratio" means, for any period, the ratio of
Consolidated EBITDAR for such period to the sum of Consolidated Interest Expense
and Consolidated Rental Expense for such period.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending one,
two, three or six months thereafter, as the Borrower may elect in the applicable
Notice of Borrowing; PROVIDED that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (c) below, end on the last Euro-Dollar Business
Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(2) with respect to each CD Borrowing, the period commencing on the date of
such Borrowing and ending 30, 60, 90 or 180 days thereafter, as the Borrower may
elect in the applicable Notice of Borrowing; PROVIDED that:
11
<PAGE>
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(3) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending 30 days thereafter; PROVIDED that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(4) with respect to each Money Market LIBOR Borrowing, the period commencing on
the date of such Borrowing and ending such whole number of months thereafter as
the Borrower may elect in accordance with Section 2.03; PROVIDED that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (c) below, end on the last Euro-Dollar Business
Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
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<PAGE>
(5) with respect to each Money Market Absolute Rate Borrowing, the period
commencing on the date of such Borrowing and ending such number of days
thereafter (but not less than 14 days) as the Borrower may elect in accordance
with Section 2.03; PROVIDED that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Leverage Ratio" means, at any date, the ratio of Total Borrowed Funds
at such date to Consolidated Net Worth at such date.
"LIBOR Auction" means a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.03.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Borrower or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
"Litton" means Litton Industries, Inc., a Delaware corporation.
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money Market
Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money Market Loans
or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in Section
2.07(c).
"Material Debt" means Debt (other than the Notes) of the Borrower
and/or one or more of its
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Subsidiaries, arising in one or more related or unrelated transactions, in an
aggregate principal amount exceeding $10,000,000.
"Material Financial Obligations" means a principal amount of Debt
and/or payment obligations in respect of Derivatives Obligations of the Borrower
and/or one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, exceeding in the aggregate $10,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $10,000,000.
"Material Subsidiary" means (i) any Guarantor and (ii) any other
Subsidiary, including its Subsidiaries, which meets any of the following
conditions:
(1) the Borrower's and its other Subsidiaries' investments in and
advances to the Subsidiary exceed 5 percent of the total assets of the Borrower
and its Subsidiaries consolidated as of the end of the most recently completed
fiscal year; or
(2) the Borrower's and its other Subsidiaries' proportionate share of
the total assets (after intercompany eliminations) of the Subsidiary exceeds 5
percent of the total assets of the Borrower and its Subsidiaries consolidated as
of the end of the most recently completed fiscal year; or
(3) the Borrower's and its other Subsidiaries' equity in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principle of the Subsidiary exceeds
5 percent of such income of the Borrower and its Subsidiaries consolidated for
the most recently completed fiscal year.
Computational note: For purposes of making the prescribed income test
the following guidance should be applied:
1. When a loss has been incurred by either the Borrower and its
Subsidiaries consolidated or the tested Subsidiary, but not both, the equity in
the income or loss of the tested Subsidiary should be excluded from the income
of the Borrower and its Subsidiaries consolidated for purposes of the
computation.
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2. If income of the Borrower and its Subsidiaries consolidated for
the most recent fiscal year is at least 5 percent lower than the average of the
income for the last five fiscal years, such average income should be substituted
for purposes of the computation. Any loss years should be omitted for purposes
of computing average income.
"Minimum Compliance Level" means, at any date (the "date of
determination") an amount equal to the sum of (i) $553,410,000 plus (ii) for any
date of determination on or after December 31, 1994, an amount equal to 75% of
Consolidated Net Income for the quarter ending December 31, 1994 (if positive)
plus (iii) for each fiscal year of the Borrower ended after December 31, 1994
and on or prior to the date of determination for which Consolidated Net Income
is a positive number, an amount equal to 75% of Consolidated Net Income for each
such fiscal year. There shall be no reduction in the Minimum Compliance Level
on account of negative Consolidated Net Income for any fiscal year.
"Money Market Absolute Rate" has the meaning set forth in Section
2.03(d).
"Money Market Absolute Rate Loan" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the Borrower
and the Agent; PROVIDED that any Bank may from time to time by notice to the
Borrower and the Agent designate separate Money Market Lending Offices for its
Money Market LIBOR Loans, on the one hand, and its Money Market Absolute Rate
Loans, on the other hand, in which case all references herein to the Money
Market Lending Office of such Bank shall be deemed to refer to either or both of
such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank pursuant
to a LIBOR Auction (including such a loan bearing interest at the Base Rate
pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section 2.03(d).
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<PAGE>
"Money Market Quote" means an offer by a Bank to make a Money Market
Loan in accordance with Section 2.03.
"Moody's" means Moody's Investors Service, Inc., and its successors.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
in an amount exceeding $1,000,000 per annum or has within the preceding five
plan years made such contributions, including for these purposes any Person
which ceased to be a member of the ERISA Group during such five year period.
"Notes" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)).
"Obligors" means the Borrower and the Guarantors.
"Original Agreement" has the meaning set forth in the recitals hereto.
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum
16
<PAGE>
funding standards under Section 412 of the Internal Revenue Code and either (i)
is maintained, or contributed to, by any member of the ERISA Group for employees
of any member of the ERISA Group or (ii) has at any time within the preceding
five years been maintained, or contributed to, by any Person which was at such
time a member of the ERISA Group for employees of any Person which was at such
time a member of the ERISA Group.
"Pricing Schedule" means the Schedule attached hereto identified as
such.
"Prime Rate" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any one
of such Reference Banks.
"Refunding Borrowing" means a Committed Borrowing which, after
application of the proceeds thereof, results in no net increase in the
outstanding principal amount of Committed Loans made by any Bank.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Relaxation Period" means the 120-day period from and including the
date of the first Restricted Payment which would cause an Event of Default to
arise as a result of noncompliance with Section 5.05 and/or 5.06 (but for the
respective PROVISOS thereto).
"Required Banks" means at any time Banks having at least 60% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 60% of the aggregate unpaid
principal amount of the Loans.
"Restricted Payment" means (i) any dividend or other distribution on
any Equity Securities of the Borrower (except dividends payable solely in Equity
Securities of the same class) and (ii) any payment on account of the purchase,
redemption, retirement or acquisition of any Equity Securities of the Borrower;
PROVIDED that Restricted Payment shall not include payments pursuant to employee
benefit or compensation plans in an aggregate amount not exceeding $10,000,000.
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"Revolving Credit Period" means the period from and including the
Effective Date to but not including the Termination Date.
"S&P" means Standard & Poor's Ratings Group, and its successors.
"Subsidiary" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower (or, if such term is used with
reference to another Person, by such other Person).
"Subsidiary Guarantee Agreement" means the Amended and Restated
Subsidiary Guarantee Agreement dated as of the date hereof among the Borrower,
the Agent and the Subsidiaries of the Borrower from time to time parties
thereto, substantially in the form of Exhibit I, as the same may be amended from
time to time in accordance with the terms thereof.
"Termination Date" means December 22, 1999 (or if such date is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day).
"Total Borrowed Funds" means, at any date, the Debt of the Borrower
and its Consolidated Subsidiaries determined on a consolidated basis as of such
date.
"Trigger Date" means the date (if any) on which the Borrower gives (or
is required to give) the Banks notice pursuant to Section 5.01(j).
"Unfunded Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
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"United States" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
"WAII" means Western Atlas International, Inc., a Delaware
corporation.
"WAII Group" means WAII and its Subsidiaries.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests of
which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the Borrower's
independent public accountants) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks; PROVIDED that, if the Borrower notifies the Agent that the
Borrower wishes to amend any covenant in Article V to eliminate the effect of
any change in generally accepted accounting principles on the operation of such
covenant (or if the Agent notifies the Borrower that the Required Banks wish to
amend Article V for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Banks.
SECTION 1.03. TYPES OF BORROWINGS. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant to
Article II on a single date and for a single Interest Period. Borrowings are
classified for purposes of this Agreement either by reference to the pricing of
Loans comprising such Borrowing (E.G., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the provisions of Article II
under which participation therein is determined (I.E., a "Committed Borrowing"
is a
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Borrowing under Section 2.01 in which all Banks participate in proportion to
their Commitments, while a "Money Market Borrowing" is a Borrowing under
Section 2.03 in which the Bank participants are determined on the basis of
their bids in accordance therewith).
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS TO LEND. Subject to the terms and
conditions set forth in this Agreement, each Bank severally agrees to make loans
to the Borrower from time to time during the Revolving Credit Period in an
aggregate principal amount at any time outstanding not to exceed the amount of
such Bank's Commitment. Each Borrowing under this Section 2.01 shall be in an
aggregate principal amount of $10,000,000 or any larger multiple of $1,000,000
(except that any such Borrowing may be in an aggregate amount equal to the
amount available in accordance with Section 3.02(b) and shall be made from the
several Banks ratably in proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this Section, repay, or to the
extent permitted by Section 2.11, prepay loans and reborrow at any time during
the Revolving Credit Period under this Section.
SECTION 2.02. NOTICE OF COMMITTED BORROWINGS. The Borrower shall
give the Agent notice (a "Notice of Committed Borrowing") not later than 10:30
A.M. (New York City time) on (x) the date of each Base Rate Borrowing, (y) the
second Domestic Business Day before each CD Borrowing and (z) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Domestic Borrowing or a Euro-Dollar Business Day in
the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be CD Loans,
Base Rate Loans or Euro-Dollar Loans, and
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(d) in the case of a Fixed Rate Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
SECTION 2.03. MONEY MARKET BORROWINGS.
(a) THE MONEY MARKET OPTION. In addition to Committed Borrowings
pursuant to Section 2.01, the Borrower may, as set forth in this Section,
request the Banks during the Revolving Credit Period to make offers to make
Money Market Loans to the Borrower. The Banks may, but shall have no obligation
to, make such offers and the Borrower may, but shall have no obligation to,
accept any such offers in the manner set forth in this Section.
(b) MONEY MARKET QUOTE REQUEST. When the Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit to the
Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be received no later than
10:30 A.M. (New York City time) on (x) the fifth Euro-Dollar Business Day prior
to the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y)
the Domestic Business Day next preceding the date of Borrowing proposed therein,
in the case of an Absolute Rate Auction (or, in either case, such other time or
date as the Borrower and the Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market Quote Request
for the first LIBOR Auction or Absolute Rate Auction for which such change is to
be effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day in
the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$10,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto, subject
to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth a
Money Market Margin or a Money Market Absolute Rate.
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The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Agent may agree) of any other Money
Market Quote Request.
(c) INVITATION FOR MONEY MARKET QUOTES. Promptly upon receipt of a
Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially in
the form of Exhibit C hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Money Market Quotes offering to make the Money
Market Loans to which such Money Market Quote Request relates in accordance with
this Section.
(d) SUBMISSION AND CONTENTS OF MONEY MARKET QUOTES.
(i) Each Bank may submit a Money Market Quote containing an offer or
offers to make Money Market Loans in response to any Invitation for Money Market
Quotes. Each Money Market Quote must comply with the requirements of this
subsection (d) and must be submitted to the Agent by telex or facsimile
transmission at its offices specified in or pursuant to Section 9.01 not later
than (x) 2:00 P.M. (New York City time) on the fourth Euro-Dollar Business Day
prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (y)
9:30 A.M. (New York City time) on the proposed date of Borrowing, in the case of
an Absolute Rate Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall have notified to the
Banks not later than the date of the Money Market Quote Request for the first
LIBOR Auction or Absolute Rate Auction for which such change is to be
effective); PROVIDED that Money Market Quotes submitted by the Agent (or any
affiliate of the Agent) in the capacity of a Bank may be submitted, and may only
be submitted, if the Agent or such affiliate notifies the Borrower of the terms
of the offer or offers contained therein not later than (x) 1:00 P.M. (New York
City time) on the fourth Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) 9:15 A.M. (New York City time)
on the proposed date of Borrowing, in the case of an Absolute Rate Auction.
Subject to Articles III and VI, any Money Market Quote so made shall be
irrevocable except with the written consent of the Agent given on the
instructions of the Borrower.
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(ii) Each Money Market Quote shall be in substantially the form of
Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which each such
offer is being made, which principal amount (w) may be greater than or less
than the Commitment of the quoting Bank, (x) must be $5,000,000 or a larger
multiple of $1,000,000, (y) may not exceed the principal amount of Money
Market Loans for which offers were requested and (z) may be subject to an
aggregate limitation as to the principal amount of Money Market Loans for
which offers being made by such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or subtracted
from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of interest per
annum (specified to the nearest 1/10,000th of 1%) (the "Money Market
Absolute Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D hereto or does
not specify all of the information required by subsection (d)(ii);
(B) contains qualifying, conditional or similar language (other than
the limitation set forth in clause (ii)(B)(z) above);
(C) proposes terms other than or in addition to those set forth in
the applicable Invitation for Money Market Quotes; or
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(D) arrives after the time set forth in subsection (d)(i).
(e) NOTICE TO BORROWER. The Agent shall promptly notify the Borrower
of the terms (x) of any Money Market Quote submitted by a Bank that is in
accordance with subsection (d) and (y) of any Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market Quote Request. Any
such subsequent Money Market Quote shall be disregarded by the Agent unless such
subsequent Money Market Quote is submitted solely to correct a manifest error in
such former Money Market Quote. The Agent's notice to the Borrower shall
specify (A) the aggregate principal amount of Money Market Loans for which
offers have been received for each Interest Period specified in the related
Money Market Quote Request, (B) the respective principal amounts and Money
Market Margins or Money Market Absolute Rates, as the case may be, so offered
and (C) if applicable, limitations on the aggregate principal amount of Money
Market Loans for which offers in any single Money Market Quote may be accepted.
(f) ACCEPTANCE AND NOTICE BY BORROWER. Not later than 10:30 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed
date of Borrowing, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Agent shall have mutually agreed
and shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective), the Borrower shall notify the Agent of its
acceptance or non-acceptance of the offers so notified to it pursuant to
subsection (e). In the case of acceptance, such notice (a "Notice of Money
Market Borrowing") shall specify the aggregate principal amount of offers for
each Interest Period that are accepted. The Borrower may accept any Money
Market Quote in whole or in part; PROVIDED that:
(i) the aggregate principal amount of each Money Market Borrowing may
not exceed the applicable amount set forth in the related Money Market
Quote Request,
(ii) the principal amount of each Money Market Borrowing must be
$10,000,000 or a larger multiple of $1,000,000,
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(iii) acceptance of offers may only be made on the basis of ascending
Money Market Margins or Money Market Absolute Rates, as the case may be,
and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the requirements
of this Agreement.
(g) ALLOCATION BY AGENT. If offers are made by two or more Banks
with the same Money Market Margins or Money Market Absolute Rates, as the case
may be, for a greater aggregate principal amount than the amount in respect of
which such offers are accepted for the related Interest Period, the principal
amount of Money Market Loans in respect of which such offers are accepted shall
be allocated by the Agent among such Banks as nearly as possible (in multiples
of $1,000,000, as the Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determinations by the Agent of the amounts of
Money Market Loans shall be conclusive in the absence of manifest error.
SECTION 2.04. NOTICE TO BANKS; FUNDING OF LOANS.
(a) Upon receipt of a Notice of Borrowing, the Agent shall promptly
notify each Bank of the contents thereof and of such Bank's share (if any) of
such Borrowing and such Notice of Borrowing shall not thereafter be revocable by
the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of
each Borrowing, each Bank participating therein shall (except as provided in
subsection (c) of this Section) make available its share of such Borrowing, in
Federal or other funds immediately available in New York City, to the Agent at
its address referred to in Section 9.01. Unless the Agent determines that any
applicable condition specified in Article III has not been satisfied, the Agent
will make the funds so received from the Banks available to the Borrower at the
Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank, such
Bank shall apply the proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being borrowed and
the amount being repaid shall be made available by such Bank to the Agent as
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provided in subsection (b), or remitted by the Borrower to the Agent as provided
in Section 2.12, as the case may be.
(d) Unless the Agent shall have received notice from a Bank prior to
the date of any Borrowing that such Bank will not make available to the Agent
such Bank's share of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.04 and the Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such share available to the Agent, such Bank and, if such Bank shall fail
to do so within one Domestic Business Day, the Borrower severally agree to repay
to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at the Federal
Funds Rate. If such Bank shall repay to the Agent such corresponding amount,
such amount so repaid shall constitute such Bank's Loan included in such
Borrowing for purposes of this Agreement.
SECTION 2.05. NOTES. (a) The Loans of each Bank shall be evidenced
by a single Note payable to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the aggregate unpaid principal
amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent, request
that its Loans of a particular type be evidenced by a separate Note in an amount
equal to the aggregate unpaid principal amount of such Loans. Each such Note
shall be in substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely Loans of the relevant
type. Each reference in this Agreement to the "Note" of such Bank shall be
deemed to refer to and include any or all of such Notes, as the context may
require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(b), the
Agent shall forward such Note to such Bank. Each Bank shall record the date,
amount, type and maturity of each Loan made by it, and the date and amount of
each payment of principal made by the Borrower with respect thereto, and may, if
such Bank so elects in connection with any transfer or enforcement of its Note,
endorse on the schedule forming a part thereof appropriate notations to evidence
the foregoing information with respect to each such Loan then outstanding;
PROVIDED that
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the failure of any Bank to make any such recordation or endorsement shall not
affect the obligations of any Obligor under any Financing Document. Each Bank
is hereby irrevocably authorized by the Borrower so to endorse its Note and to
attach to and make a part of its Note a continuation of any such schedule as and
when required.
SECTION 2.06. MATURITY OF LOANS. Each Loan included in any Borrowing
shall mature, and the principal amount thereof shall be due and payable, on the
last day of the Interest Period applicable to such Borrowing.
SECTION 2.07. INTEREST RATES. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, at a rate per annum equal to the sum of
the Base Rate for such day plus the Applicable Margin for such day. Such
interest shall be payable for each Interest Period on the last day thereof. Any
overdue principal of or interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the sum
of 2% plus the rate otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for each day during the Interest Period applicable thereto, at a
rate per annum equal to the sum of the CD Margin for such day plus the Adjusted
CD Rate applicable to such Interest Period; PROVIDED that if any CD Loan shall,
as a result of clause (2)(b) of the definition of Interest Period, have an
Interest Period of less than 30 days, such CD Loan shall bear interest during
such Interest Period at the rate applicable to Base Rate Loans during such
period. Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than 90 days, at intervals of 90
days after the first day thereof. Any overdue principal of or interest on any
CD Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the higher of (i) the sum of the CD
Margin for such day plus the Adjusted CD Rate applicable to such Loan and (ii)
the rate applicable to Base Rate Loans for such day.
"CD Margin" means a rate per annum determined in accordance with the
Pricing Schedule.
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The "Adjusted CD Rate" applicable to any Interest Period means a rate
per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if necessary, to the next
higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate of
interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum bid
at 10:00 A.M. (New York City time) (or as soon thereafter as practicable) on the
first day of such Interest Period by two or more New York certificate of deposit
dealers of recognized standing for the purchase at face value from each CD
Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such CD Reference Bank to which such Interest
Period applies and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of $100,000
or more. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification)
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within the meaning of 12 C.F.R. Section 327.3(e) (or any successor provision) to
the Federal Deposit Insurance Corporation (or any successor) for such
Corporation's (or such successor's) insuring time deposits at offices of such
institution in the United States. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change in the Assessment
Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such
day plus the London Interbank Offered Rate applicable to such Interest Period.
Such interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at intervals of three
months after the first day thereof.
"Euro-Dollar Margin" means a rate per annum determined in accordance
with the Pricing Schedule.
The "London Interbank Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which deposits in dollars are offered to
each of the Euro-Dollar Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to
which such Interest Period is to apply and for a period of time comparable to
such Interest Period.
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a rate
per annum equal to the sum of 2% plus the higher of (i) the sum of the Euro-
Dollar Margin for such day plus the London Interbank Offered Rate applicable to
such Loan and (ii) the Euro-Dollar Margin for such day plus the quotient
obtained (rounded upward, if necessary, to the next higher 1/100 of 1%) by
dividing (x) the average (rounded upward, if necessary, to the next higher 1/16
of 1%) of the respective rates per annum at which one day (or, if such amount
due remains unpaid more than three Euro-Dollar Business Days, then for such
other period of time not longer than three months as the Agent may select)
deposits in dollars in an amount approximately equal to such overdue payment due
to each of the Euro-Dollar
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Reference Banks are offered to such Euro-Dollar Reference Bank in the London
interbank market for the applicable period determined as provided above by (y)
1.00 minus the Euro-Dollar Reserve Percentage (or, if the circumstances
described in clause (a) or (b) of Section 8.01 shall exist, at a rate per annum
equal to the sum of 2% plus the rate applicable to Base Rate Loans for such
day).
(e) Subject to Section 8.01(a), each Money Market LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the sum of the London
Interbank Offered Rate for such Interest Period (determined in accordance with
Section 2.07(c) as if the related Money Market LIBOR Borrowing were a
Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted by the
Bank making such Loan in accordance with Section 2.03. Each Money Market
Absolute Rate Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum equal
to the Money Market Absolute Rate quoted by the Bank making such Loan in
accordance with Section 2.03. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof. Any overdue
principal of or interest on any Money Market Loan shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to the sum of 2%
plus the Base Rate for such day.
(f) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations is available on
a timely basis, the provisions of Section 8.01 shall apply.
SECTION 2.08. FEES.
(a) FACILITY FEE. The Borrower shall pay to the Agent for the
account of the Banks ratably in
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proportion to their Commitments a facility fee at the Facility Fee Rate
determined daily in accordance with the Pricing Schedule. Such facility fee
shall accrue (i) from and including the Effective Date to but excluding the
Termination Date (or earlier date of termination of the Commitments in their
entirety), on the daily aggregate amount of the Commitments (whether used or
unused) and (ii) from and including the Termination Date or earlier date of
termination to but excluding the date the Loans shall be repaid in their
entirety, on the daily aggregate outstanding principal amount of the Loans.
Accrued fees under this subsection (a) shall be payable quarterly in arrears on
the last Euro-Dollar Business Day of each March, June, September and December,
and upon the date of termination of the Commitments in their entirety (and, if
later, the date the Loans shall be repaid in their entirety).
(b) ADDITIONAL FEE. On the Trigger Date, the Borrower shall pay the
Agent for the account of the Banks ratably in proportion to their Commitments an
additional fee in an amount equal to 0.125% of the aggregate amount of the
Commitments.
SECTION 2.09. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS. The
Borrower may, upon at least three Domestic Business Days' notice to the Agent,
(i) terminate the Commitments at any time, if no Loans are outstanding at such
time or (ii) ratably reduce from time to time by an aggregate amount of
$10,000,000 or any larger multiple thereof, the aggregate amount of the
Commitments in excess of the aggregate outstanding principal amount of the
Loans.
SECTION 2.10. SCHEDULED TERMINATION OR REDUCTION OF COMMITMENTS. The
Commitments shall terminate on the Termination Date and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable on
such date.
SECTION 2.11. OPTIONAL PREPAYMENTS. (a) The Borrower may (i) upon
at least one Domestic Business Day's notice to the Agent, prepay any Base Rate
Borrowing (or any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)), (ii) upon at least three Domestic Business Days'
notice to the Agent, subject to Section 2.13, prepay any CD Borrowing and (iii)
upon at least three Euro-Dollar Business Days' notice to the Agent, subject to
Section 2.13, prepay any Euro-Dollar Borrowing, in whole at any time, or from
time to time in part in amounts aggregating $10,000,000 or any larger
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multiple of $1,000,000, by paying the principal amount to be prepaid together
with accrued interest thereon to the date of prepayment. Each such prepayment
shall be applied to prepay ratably the Loans of the several Banks included in
such Borrowing.
(b) Except as provided in Section 2.11(a), the Borrower may not
prepay all or any portion of the principal amount of any Money Market Loan prior
to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section,
the Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.12. GENERAL PROVISIONS AS TO PAYMENTS. (a) The Borrower
shall make each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 12:00 Noon (New York City time) on the date when due,
in Federal or other funds immediately available in New York City, to the Agent
at its address referred to in Section 9.01. The Agent will promptly distribute
to each Bank its ratable share of each such payment received by the Agent for
the account of the Banks. Whenever any payment of principal of, or interest on,
the Domestic Loans or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. Whenever any payment of
principal of, or interest on, the Money Market Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on
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such date and the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the amount then due
such Bank. If and to the extent that the Borrower shall not have so made such
payment, each Bank shall repay to the Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day from the
date such amount is distributed to such Bank until the date such Bank repays
such amount to the Agent, at the Federal Funds Rate.
SECTION 2.13. FUNDING LOSSES. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan (pursuant to Article II, VI or
VIII or otherwise) on any day other than the last day of the Interest Period
applicable thereto, or the last day of an applicable period fixed pursuant to
Section 2.07(d), or if the Borrower fails to borrow or prepay any Fixed Rate
Loans after notice has been given to any Bank in accordance with Section 2.04(a)
or 2.11(c), the Borrower shall reimburse each Bank within 15 days after demand
for any resulting loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation) any
loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment or
failure to borrow or prepay, PROVIDED that such Bank shall have delivered to the
Borrower a certificate as to the amount of such loss or expense, setting forth
the basis of calculation thereof, which certificate shall be conclusive in the
absence of manifest error.
SECTION 2.14. COMPUTATION OF INTEREST AND FEES. Interest based on
the Prime Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
facility fees shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but excluding the
last day).
SECTION 2.15. REGULATION D COMPENSATION. For so long as any Bank
maintains reserves against "Eurocurrency liabilities" (or any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of such Bank to United
States residents), and as a result the cost to
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such Bank (or its Euro-Dollar Lending Office) of making or maintaining its
Euro-Dollar Loans is increased, then such Bank may require the Borrower to pay,
contemporaneously (or at such other time or times as the Borrower and such Bank
may mutually agree) with each payment of interest on the Euro-Dollar Loans,
additional interest on the related Euro-Dollar Loan of such Bank at a rate per
annum up to but not exceeding the excess of (i) (A) the applicable London
Interbank Offered Rate divided by (B) one MINUS the Euro-Dollar Reserve
Percentage over (ii) the applicable London Interbank Offered Rate. Any Bank
wishing to require payment of such additional interest (x) shall so notify the
Borrower and the Agent, in which case such additional interest on the
Euro-Dollar Loans of such Bank shall be payable to such Bank at the place
indicated in such notice with respect to each Interest Period commencing at
least three Euro-Dollar Business Days after the giving of such notice and (y)
shall furnish to the Borrower at least five Euro-Dollar Business Days prior to
each date on which interest is payable on the Euro-Dollar Loans (or at such
other time or times as the Borrower and such Bank may mutually agree) an
officer's certificate setting forth the amount to which such Bank is then
entitled under this Section (which shall be consistent with such Bank's good
faith estimate of the level at which the related reserves are maintained by it).
Each such certificate shall be accompanied by such information as the Borrower
may reasonably request as to the computation set forth therein.
ARTICLE III
CONDITIONS
SECTION 3.01. EFFECTIVENESS. This Amended and Restated Agreement
shall become effective on the date that each of the following conditions shall
have been satisfied (or waived in accordance with Section 9.05):
(a) receipt by the Agent of counterparts hereof signed by each of the
parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex or other written confirmation from
such party of execution of a counterpart hereof by such party);
(b) receipt by the Agent for the account of each Bank of a duly
executed Note dated on or before
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the Effective Date complying with the provisions of Section 2.05;
(c) receipt by the Agent of counterparts of the Subsidiary Guarantee
Agreement, duly executed by the Borrower and each of Subsidiaries listed on
the signature pages thereof;
(d) receipt by the Agent of an opinion of the principal legal officer
of the Borrower, substantially in the form of Exhibit E hereto and covering
such additional matters relating to the transactions contemplated hereby as
the Required Banks may reasonably request;
(e) receipt by the Agent of an opinion of Davis Polk & Wardwell,
special counsel for the Agent, substantially in the form of Exhibit F
hereto and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;
(f) receipt by the Agent of all documents it may reasonably request
relating to the existence of the Borrower and the Guarantors, the corporate
authority for and the validity of the Financing Documents, and any other
matters relevant hereto, all in form and substance satisfactory to the
Agent; and
(g) receipt by the Agent of evidence satisfactory to it of the
payment of all principal and interest on any loans outstanding under and of
all accrued fees under, the Original Agreement.
On the Effective Date the Original Agreement will be automatically amended and
restated in its entirety to read as set forth herein. On and after the
Effective Date the rights and obligations of the parties hereto shall be
governed by this Amended and Restated Agreement; PROVIDED the rights and
obligations of the parties hereto with respect to the period prior to the
Effective Date shall continue to be governed by the provisions of the Original
Agreement. On the Effective Date, any Bank whose Commitment is changed to zero
shall cease to be a Bank party to this Agreement and all accrued fees and other
amounts payable under this Agreement for the account of such Bank shall be due
and payable on such date; PROVIDED that the provisions of Section 9.03 of this
Agreement shall continue to inure to the benefit of each such Bank. The Notes
delivered to each Bank under the Original Agreement shall be canceled and Notes
under this Amended
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and Restated Agreement shall be given in substitution therefor. Each Bank shall
promptly after the Effective Date deliver to the Borrower for cancellation the
Note delivered to such Bank under the Original Agreement. The Agent shall
promptly notify the Borrower and each Bank of the effectiveness of this Amended
and Restated Agreement, and such notice shall be conclusive and binding on all
parties hereto.
SECTION 3.02. BORROWINGS. The obligation of any Bank to make a Loan
on the occasion of any Borrowing is subject to the satisfaction of the following
conditions:
(a) receipt by the Agent of a Notice of Borrowing as required by
Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately after such Borrowing, the aggregate
outstanding principal amount of the Loans will not exceed the aggregate
amount of the Commitments;
(c) the fact that, immediately before and after such Borrowing, no
Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the Borrower
contained in the Financing Documents (except (x) in the case of a Refunding
Borrowing and (y) in the case of any other Borrowing, solely if on the date
of such Borrowing, the Borrower's senior unsecured long-term debt is rated,
without third-party credit enhancement, A- or higher by S&P and A3 or
higher by Moody's, the representations and warranties set forth in Section
4.04(b) as to any matter which has theretofore been disclosed in writing by
the Borrower to the Banks) shall be true on and as of the date of such
Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. CORPORATE EXISTENCE AND POWER. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION. The execution, delivery and performance by each Obligor of the
Financing Documents to which it is a party are within its corporate powers, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of its certificate of incorporation or by-laws or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Borrower or any of its Subsidiaries or result in the creation or imposition
of any Lien on any asset of the Borrower or any of its Subsidiaries.
SECTION 4.03. BINDING EFFECT. This Agreement constitutes a valid and
binding agreement of the Borrower and the Notes, when executed and delivered in
accordance with this Agreement, will constitute valid and binding obligations of
the Borrower. When executed and delivered in accordance with this Agreement,
the Subsidiary Guarantee Agreement will constitute a valid and binding agreement
of each of the Obligors.
SECTION 4.04. FINANCIAL INFORMATION.
(a) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of September 30, 1994 and the related unaudited
consolidated statements of operations and cash flows for the nine months then
ended, set forth in the Borrower's Latest Form 10-Q, a copy of which has been
delivered to each of the Banks, fairly present, in conformity with generally
accepted accounting principles, the consolidated financial position of the
Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such nine month period
(subject to normal year-end adjustments).
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(b) Since September 30, 1994 there has been no material adverse
change in the business, financial position, results of operations or prospects
of the Borrower.
SECTION 4.05. LITIGATION.
(a) Except for actions, suits or proceedings (i) described in the
Borrower's Prospectus or the Borrower's Latest Form 10-Q or (ii) commenced after
the date of this Agreement and disclosed in writing to the Banks (which
diclosure may be included in the reports furnished to the Banks pursuant to
Section 5.01(f) and (g)), there is no action, suit or proceeding pending
against, or to the knowledge of the Borrower threatened against or affecting,
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official an adverse decision in which might
materially adversely affect the business, consolidated financial position or
consolidated results of operations of the Borrower and its Consolidated
Subsidiaries taken as a whole.
(b) Since the date of the Borrower's Latest Form 10-Q, there has been
no change in the status of the actions, suits and proceedings described therein
which materially and adversely affects the business, financial position, results
of operations or prospects of the Borrower and its Consolidated Subsidiaries,
considered as a whole.
(c) There is no action, suit or proceeding pending against, or to the
knowledge of the Borrower threatened against or affecting, the Borrower or any
of its Subsidiaries before any court or arbitrator or any governmental body,
agency or official which in any manner questions the validity of any Financing
Document.
SECTION 4.06. COMPLIANCE WITH ERISA. Each member of the ERISA Group
has fulfilled its obligations under the minimum funding standards of ERISA and
the Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could
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result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Internal Revenue Code or (iii) incurred any liability under
Title IV of ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA.
SECTION 4.07. ENVIRONMENTAL MATTERS. In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Subsidiaries, in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties presently or
previously owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by law or as
a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site disposal
of wastes or Hazardous Substances, and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On the
basis of this review, and based upon conditions of which the Borrower has
knowledge and upon its estimates of the costs of compliance with and/or
remediation mandated by Environmental Laws, the Borrower has reasonably
concluded that Environmental Laws are unlikely to have a material adverse effect
on the business, financial condition, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.08. TAXES. All United States federal income tax returns
and all other material tax returns which are required to be filed by or in
respect of the Borrower or any Subsidiary have been filed by either (i) the WAII
Group, (ii) the Borrower or a Subsidiary thereof (other than a member of the
WAII Group) or (iii) Litton in a consolidated or combined return which
incorporated the Borrower and its Subsidiaries (other than the WAII Group), and
all taxes due pursuant to such returns or pursuant to any assessment received in
respect thereof have been paid. United States federal income tax returns
covering the Borrower and its Subsidiaries have been examined and closed through
the fiscal year ended August 1, 1982.
SECTION 4.09. MATERIAL SUBSIDIARIES. Each of the Borrower's Material
Subsidiaries is a corporation duly
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incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
SECTION 4.10. NOT AN INVESTMENT COMPANY. Neither the Borrower nor
any Guarantor is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
SECTION 4.11. USE OF PROCEEDS. The proceeds of the loans under this
Agreement will be used by the Borrower for general corporate purposes, including
acquisitions and stock repurchases. None of such proceeds will be used in
violation of Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.
SECTION 4.12. FULL DISCLOSURE. All information heretofore furnished
by the Borrower or any Guarantor to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Borrower or any Guarantor to the
Agent or any Bank will be, true and accurate in all material respects on the
date as of which such information is stated or certified. The Borrower has
disclosed to the Banks in writing any and all facts which materially and
adversely affect or may affect (to the extent the Borrower can now reasonably
foresee), the business, operations or financial condition of the Borrower and
its Consolidated Subsidiaries, taken as a whole, or the ability of any Obligor
to perform its obligations under this Agreement or any other Financing Document.
ARTICLE V
COVENANTS
The Borrower agrees that, from and after the Effective Date for so
long as any Bank has any Commitment hereunder or any amount payable under any
Note remains unpaid:
SECTION 5.01. INFORMATION. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of
the
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Borrower and its Consolidated Subsidiaries as of the end of such fiscal
year and the related consolidated financial statements in the form then
required to be filed with the Securities and Exchange Commission on Form
10-K or its then equivalent, all reported on by independent public
accountants of nationally recognized standing;
(b) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such quarter and the related consolidated
financial statements in the form then required to be filed with the
Securities and Exchange Commission on Form 10-Q or its then equivalent, all
certified (subject to normal year-end audit adjustments) by the chief
financial officer or the chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer or the chief accounting officer of the Borrower (i)
setting forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the requirements of Sections
5.05 to 5.09, inclusive, on the date of such financial statements and (ii)
stating whether any Default exists on the date of such certificate and, if
any Default then exists, setting forth the details thereof and the action
which the Borrower is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements whether
anything has come to their attention to cause them to believe that any
Default existed on the date of such statements;
(e) within five days after any officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, a certificate
of the chief financial officer or the chief accounting officer of the
Borrower setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
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(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Borrower shall have filed with the Securities
and Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Material Plan which might
constitute grounds for a termination of such Plan under Title IV of ERISA,
or knows that the plan administrator of any Material Plan has given or is
required to give notice of any such reportable event, a copy of the notice
of such reportable event given or required to be given to the PBGC; (ii)
receives notice of complete or partial withdrawal liability under Title IV
of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such notice; (iii) receives
notice from the PBGC under Title IV of ERISA of an intent to terminate,
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or appoint a trustee to administer, any Material Plan, a copy
of such notice; (iv) applies for a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code, a copy of such application;
(v) gives notice of intent to terminate any Material Plan under Section
4041(c) of ERISA, a copy of such notice and other information filed with
the PBGC; (vi) gives notice of withdrawal from any Material Plan pursuant
to Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any
payment or contribution to any Material Plan or Multiemployer Plan or in
respect of any Benefit Arrangement or makes any amendment to any Material
Plan or Benefit Arrangement which has resulted or could result in the
imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting officer
of the Borrower setting forth details as to such occurrence and action, if
any, which the Borrower or applicable member of the ERISA Group is required
or proposes to take;
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(i) forthwith, notice of any change of which the Borrower becomes
aware in the rating by any Rating Agency (as defined in the Pricing
Schedule) of the Borrower's long-term debt;
(j) not later than the date of commencement thereof, notice of any
Relaxation Period; and
(k) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. MAINTENANCE OF PROPERTY; INSURANCE.
(a) The Borrower will keep, and will cause each Subsidiary to keep,
all property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.
(b) The Borrower will, and will cause each of its Subsidiaries to,
maintain (either in the name of the Borrower or in such Subsidiary's own name)
with financially sound and responsible insurance companies, insurance on all
their respective properties in at least such amounts and against at least such
risks (and with such risk retention) as are usually insured against in the same
general area by companies of established repute engaged in the same or a similar
business; and will furnish to the Banks, upon request from the Agent,
information presented in reasonable detail as to the insurance so carried.
SECTION 5.03. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The
Borrower will continue, and will cause each Material Subsidiary to continue, to
engage in business of the same general type as now conducted by the Borrower and
its Subsidiaries, and will preserve, renew and keep in full force and effect,
and will cause each Material Subsidiary to preserve, renew and keep in full
force and effect their respective corporate existence and their respective
rights, privileges and franchises necessary or desirable in the normal conduct
of business; PROVIDED that nothing in this Section 5.03 shall prohibit (i) the
merger of a Subsidiary into the Borrower or the merger or consolidation of a
Subsidiary with or into another Person if the corporation surviving such
consolidation or merger is a Subsidiary and if, in each case, after giving
effect thereto, no Default shall have
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occurred and be continuing or (ii) the termination of the corporate existence of
any Subsidiary if the Borrower in good faith determines that such termination is
in the best interest of the Borrower and is not materially disadvantageous to
the Banks.
SECTION 5.04. COMPLIANCE WITH LAWS. The Borrower will comply, and
cause each Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder) except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings.
SECTION 5.05. LEVERAGE RATIO. The Leverage Ratio will not exceed (i)
120% on any date on or prior to December 31, 1995 and (ii) 110% on any date
thereafter; PROVIDED that during the Relaxation Period, the Leverage Ratio may
exceed the otherwise applicable maximum but may not exceed 175%.
SECTION 5.06. MINIMUM CONSOLIDATED TANGIBLE NET WORTH. Consolidated
Tangible Net Worth will at no time be less than the Minimum Compliance Level;
PROVIDED that during the Relaxation Period, Consolidated Net Worth may be less
than the Minimum Compliance Level but not less than $150,000,000.
SECTION 5.07. INTEREST COVERAGE RATIO. The Interest Coverage Ratio
will not be less than 250% for any period of four consecutive fiscal quarters.
SECTION 5.08. MAINTENANCE OF CERTAIN OPERATIONS. The Borrower will
at all times maintain direct or indirect ownership of 100% of the Equity
Securities of WAII. The Borrower will not sell more than 35% (in cumulative
book value) of the assets of its Western Atlas Industrial Automation Systems
business segment.
SECTION 5.09. LIMITATION ON SUBSIDIARY DEBT. The aggregate
outstanding principal amount of Debt of Subsidiaries of the Borrower (exclusive
of Debt owing to the Borrower or another Subsidiary) shall at no time exceed 12%
of Consolidated Tangible Net Assets.
SECTION 5.10. NEGATIVE PLEDGE. The Borrower will not, and will not
permit any Consolidated Subsidiary to, create, assume or suffer to exist any
Lien securing
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Debt or Derivatives Obligations on any asset now owned or hereafter acquired by
it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal amount
not exceeding $20,000,000;
(b) any Lien existing on the assets of any Person at the time such
Person becomes a Consolidated Subsidiary;
(c) any Lien on any asset securing Debt incurred or assumed for the
purpose of financing all or any part of the purchase price or cost of
construction of such asset, PROVIDED that such Lien attaches to such asset
within 270 days after the acquisition or completion of construction and
commencement of full operations thereof;
(d) any Lien on any asset of any Person existing at the time such
Person is acquired by, merged into or consolidated with the Borrower or a
Consolidated Subsidiary;
(e) any Lien existing on any asset prior to the acquisition thereof
by the Borrower or a Consolidated Subsidiary and not created in
contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, PROVIDED that such Debt is not increased and is
not secured by any additional assets;
(g) Liens on real property (and ancillary personalty) not otherwise
permitted by the foregoing clauses of this Section securing Debt in an
aggregate principal amount at any time outstanding not to exceed
$75,000,000; and
(h) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed $20,000,000.
SECTION 5.11. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. The
Borrower will not (i) consolidate or merge with or into any other Person or (ii)
sell, lease or
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otherwise transfer, directly or indirectly, all or any substantial part of the
assets of the Borrower and its Subsidiaries, taken as a whole, to any other
Person; PROVIDED that the Borrower may merge with another Person if the Borrower
is the surviving corporation and, after giving effect thereto, no Default
exists.
SECTION 5.12. LIMITATION ON AFFILIATE TRANSACTIONS. The Borrower
will not, and will not permit any of its Subsidiaries to, enter into any
material transaction, including, without limitation, the purchase, sale or
exchange of property or assets or the rendering of any services, with any
Affiliate, except a transaction in the ordinary course of business which is upon
terms no less favorable to the Borrower or such Subsidiary, as the case may be,
than it would obtain in a comparable transaction on an arm's length basis with a
Person not an Affiliate.
SECTION 5.13. LIMITATION ON RESTRICTIONS AFFECTING SUBSIDIARIES.
Neither the Borrower nor any of its Subsidiaries will enter into, or suffer to
exist, any agreement with any Person, other than this Agreement, which prohibits
or limits the ability of any Subsidiary to (a) pay dividends or make other
distributions or pay any Debt owed to the Borrower or any Subsidiary, (b) make
loans or advances to the Borrower or any Subsidiary or (c) transfer any
substantial part of its properties or assets to the Borrower or any Subsidiary.
ARTICLE VI
DEFAULTS
SECTION 6.01. EVENTS OF DEFAULT. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower (i) shall fail to pay when due any principal of any
Loan or (ii) shall fail to pay any interest on any Loan, any fees or any
other amount payable hereunder within five days after the due date thereof;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.05 through 5.13, inclusive;
(c) any Obligor shall fail to observe or perform any covenant or
agreement contained in any
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Financing Document (other than those covered by clause (a) or (b) above)
for 30 days after notice thereof has been given to such Obligor by the
Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made (or
deemed made) by any Obligor in any Financing Document or in any
certificate, financial statement or other document delivered pursuant to
any Financing Document shall prove to have been incorrect in any material
respect when made (or deemed made) or delivered;
(e) the Borrower or any Subsidiary shall fail to make any payment in
respect of any Material Financial Obligations when due or within any
applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (with the
giving of appropriate notice if required) the holder of such Debt or any
Person acting on such holder's behalf to accelerate the maturity thereof;
(g) the Borrower or any Material Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Material Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such
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involuntary case or other proceeding shall remain undismissed and unstayed
for a period of 60 days; or an order for relief shall be entered against
the Borrower or any Material Subsidiary under the federal bankruptcy laws
as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $10,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate, to impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or to cause a trustee to be appointed to
administer, any Material Plan; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or there shall occur a complete or
partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which
could cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $10,000,000;
(j) a judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against the Borrower or any Material
Subsidiary and such judgment or order shall continue unsatisfied and
unstayed for a period of 30 days;
(k) a Change of Control shall occur; or
(l) the Subsidiary Guarantee Agreement shall cease to be a legal,
valid, binding and enforceable obligation of any Guarantor (otherwise than
in accordance with the terms thereof), or any Guarantor shall so assert in
writing;
then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in aggregate principal
amount of the Loans, by notice to the Borrower declare the Notes (together with
accrued interest thereon) to be, and the Notes (together with accrued interest
thereon) shall
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thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; PROVIDED that in the case of any of the Events of Default specified in
clause (g) or (h) above with respect to any Obligor, without any notice to any
Obligor or any other act by the Agent or any Bank, the Commitments shall
thereupon terminate and the Notes (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Obligors.
SECTION 6.02. NOTICE OF DEFAULT. The Agent shall give notice to an
Obligor under Section 6.01(c) promptly upon being requested to do so by any Bank
and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. APPOINTMENT AND AUTHORIZATION. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Financing Documents as are delegated to the
Agent by the terms thereof, together with all such powers as are reasonably
incidental thereto.
SECTION 7.02. AGENT AND AFFILIATES. Morgan Guaranty Trust Company of
New York shall have the same rights and powers under the Financing Documents as
any other Bank and may exercise or refrain from exercising the same as though it
were not the Agent, and Morgan Guaranty Trust Company of New York and its
affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if it were not the Agent hereunder.
SECTION 7.03. ACTION BY AGENT. The obligations of the Agent
hereunder are only those expressly set forth in the Financing Documents.
Without limiting the generality of the foregoing, the Agent shall not be
required to take any action with respect to any Default, except as expressly
provided in Article VI.
SECTION 7.04. CONSULTATION WITH EXPERTS. The Agent may consult with
legal counsel (who may be counsel for any Obligor), independent public
accountants and other experts selected by it and shall not be liable for any
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action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. LIABILITY OF AGENT. Neither the Agent nor any of its
affiliates nor any of the directors, officers, agents or employees of the
foregoing shall be liable for any action taken or not taken by it or them in
connection herewith (i) with the consent or at the request of the Required Banks
or (ii) in the absence of its or their own gross negligence or willful
misconduct. Neither the Agent nor any of its affiliates nor any of the
directors, officers, agents or employees of the foregoing shall be responsible
for or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement or any
borrowing hereunder; (ii) the performance or observance of any of the covenants
or agreements of any Obligor; (iii) the satisfaction of any condition specified
in Article III, except receipt of items required to be delivered to the Agent;
or (iv) the validity, effectiveness or genuineness of the Financing Documents or
any other instrument or writing furnished in connection herewith. The Agent
shall not incur any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire, telex or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
SECTION 7.06. INDEMNIFICATION. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with the Financing Documents or
any action taken or omitted by such indemnitees thereunder.
SECTION 7.07. CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time,
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continue to make its own credit decisions in taking or not taking any action
under this Agreement.
SECTION 7.08. SUCCESSOR AGENT. The Agent may resign at any time by
giving notice thereof to the Banks and the Borrower. Upon any such resignation,
the Required Banks shall have the right to appoint a successor Agent, subject to
the approval of the Borrower. If no successor Agent shall have been so
appointed by the Required Banks, with the approval of the Borrower, and shall
have accepted such appointment, within 30 days after the retiring Agent gives
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a Bank, if any Bank is willing to
accept such appointment, and in any event shall be a commercial bank organized
or licensed under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $50,000,000. Upon
the acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent.
SECTION 7.09. AGENT'S FEES. The Borrower shall pay to the Agent for
its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agent.
SECTION 7.10. CO-AGENTS. (a) Nothing in this Agreement shall impose
upon any Co-Agent, in such capacity, any duty or responsibility whatsoever.
(b) The Borrower shall pay to each Co-Agent for its own account fees
in the amounts and at the times previously agreed upon between the Borrower and
such Co-Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR
UNFAIR. If on or prior to the first day of any Interest Period for any Fixed
Rate Borrowing:
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(a) the Agent is advised by the Reference Banks that deposits in
dollars (in the applicable amounts) are not being offered to the Reference
Banks in the relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks having 50% or more of
the aggregate amount of the Commitments advise the Agent that the Adjusted
CD Rate or the London Interbank Offered Rate, as the case may be, as
determined by the Agent will not adequately and fairly reflect the cost to
such Banks of funding their CD Loans or Euro-Dollar Loans, as the case may
be, for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make CD
Loans or Euro-Dollar Loans, as the case may be, shall be suspended. Unless the
Borrower notifies the Agent at least two Domestic Business Days before the date
of any Fixed Rate Borrowing for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, (i) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a
Base Rate Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market
LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall
bear interest for each day from and including the first day to but excluding the
last day of the Interest Period applicable thereto at the Base Rate for such
day.
SECTION 8.02. ILLEGALITY. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any change
in any applicable law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its
Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent shall
forthwith give notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Bank to
make Euro-Dollar Loans shall be suspended. Before giving
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any notice to the Agent pursuant to this Section 8.02, such Bank shall designate
a different Euro-Dollar Lending Office if such designation will avoid the need
for giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans
to maturity and shall so specify in such notice, the Borrower shall immediately
prepay in full the then outstanding principal amount of each such Euro-Dollar
Loan, together with accrued interest thereon. Concurrently with prepaying each
such Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal
principal amount from such Bank (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of the other
Banks), and such Bank shall make such a Base Rate Loan.
SECTION 8.03. INCREASED COST AND REDUCED RETURN. (a) If on or after
(x) the date hereof, in the case of any Committed Loan or any obligation to make
Committed Loans or (y) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding (i) with respect to any CD Loan any such requirement
included in an applicable Domestic Reserve Percentage and (ii) with respect to
any Euro-Dollar Loan any such requirement with respect to which such Bank is
entitled to compensation during the relevant Interest Period under Section
2.15), special deposit, insurance assessment (excluding, with respect to any CD
Loan, any such requirement reflected in an applicable Assessment Rate) or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Applicable Lending Office) or shall impose
on any Bank (or its Applicable Lending
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Office) or on the United States market for certificates of deposit or the London
interbank market any other condition affecting its Fixed Rate Loans, its Note or
its obligation to make Fixed Rate Loans and the result of any of the foregoing
is to increase the cost to such Bank (or its Applicable Lending Office) of
making or maintaining any Fixed Rate Loan, or to reduce the amount of any sum
received or receivable by such Bank (or its Applicable Lending Office) under
this Agreement or under its Note with respect thereto, by an amount deemed by
such Bank to be material, then, within 15 days after demand by such Bank (with a
copy to the Agent), the Borrower shall pay to such Bank such additional amount
or amounts as will compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days after
demand by such Bank (with a copy to the Agent), the Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank (or its
Parent) for such reduction; PROVIDED that the Borrower shall not be liable for
any such amounts attributable to a period more than three months prior to the
date of notice by such Bank to the Borrower of its intention to seek
compensation under this subsection (b).
(c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this
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Section, setting forth the additional amount or amounts to be paid to it
hereunder and the basis of calculation thereof, shall be conclusive in the
absence of manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
SECTION 8.04. TAXES. (a) Any and all payments by the Borrower to or
for the account of any Bank or the Agent hereunder or under any Note shall be
made free and clear of and without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, charges and withholdings, and all
liabilities with respect thereto, EXCLUDING, in the case of each Bank and the
Agent, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Bank or the Agent (as the case may be)
is organized or any political subdivision thereof and, in the case of each Bank,
taxes imposed on its income, and franchise or similar taxes imposed on it, by
the jurisdiction of such Bank's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Bank or the
Agent, (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 8.04) such Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower shall
furnish to the Agent, at its address referred to in Section 9.01, the original
or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar levies which arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any Note (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Bank and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
and Other Taxes imposed or asserted by any jurisdiction on amounts payable
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under this Section 8.04) paid by such Bank or the Agent (as the case may be) and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto. This indemnification shall be made within 15 days from
the date such Bank or the Agent (as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by the Borrower (but
only so long as such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Bank is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States. If the form provided by a Bank at the time such Bank first becomes a
party to this Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from "Taxes" as defined in Section 8.04(a).
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the form required pursuant to Section 8.04(d), if any (unless
such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Bank shall not be entitled to indemnification under Section 8.04(a) with
respect to Taxes imposed by the United States; PROVIDED, HOWEVER, that should a
Bank, which is otherwise exempt from or subject to a reduced rate of withholding
tax, become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Bank shall reasonably
request to assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 8.04, then such Bank will
change the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may
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thereafter accrue if such change, in the judgment of such Bank, is not otherwise
disadvantageous to such Bank.
SECTION 8.05. BASE RATE LOANS SUBSTITUTED FOR AFFECTED FIXED RATE
LOANS. If (i) the obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03 or 8.04 with respect to its CD Loans or Euro-Dollar Loans and
the Borrower shall, by at least five Euro-Dollar Business Days' prior notice to
such Bank through the Agent, have elected that the provisions of this Section
shall apply to such Bank, then, unless and until such Bank notifies the Borrower
that the circumstances giving rise to such suspension or demand for compensation
no longer exist:
(a) all Loans which would otherwise be made by such Bank as CD Loans
or Euro-Dollar Loans, as the case may be, shall be made instead as Base
Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Fixed Rate Loans of the other Banks),
and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case may
be, has been repaid, all payments of principal which would otherwise be
applied to repay such Fixed Rate Loans shall be applied to repay its Base
Rate Loans instead.
SECTION 8.06. SUBSTITUTION OF BANK. If (i) the obligation of any
Bank to make Euro-Dollar Loans has been suspended pursuant to Section 8.02 or
(ii) any Bank has demanded compensation under Section 8.03 or 8.04, the Borrower
shall have the right, with the assistance of the Agent, to seek a mutually
satisfactory substitute bank or banks (which may be one or more of the Banks) to
purchase the Note and assume the Commitment of such Bank.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Agent, at its address or
facsimile or telex number set forth on the signature pages hereof, (y) in the
case of any Bank, at its address or facsimile or telex number set forth in
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its Administrative Questionnaire or (z) in the case of any party, such other
address or facsimile or telex number as such party may hereafter specify for the
purpose by notice to the Agent and the Borrower. Each such notice, request or
other communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the appropriate
answerback is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid or (iii) if given by any other means, when delivered at the address
specified in this Section; PROVIDED that notices to the Agent under Article II
or Article VIII shall not be effective until received.
SECTION 9.02. NO WAIVERS. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege under any Financing Document
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies therein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.03. EXPENSES; INDEMNIFICATION. (a) The Borrower shall pay
(i) all out-of-pocket expenses of the Agent, including fees and disbursements of
special counsel for the Agent, in connection with the preparation and
administration of the Financing Documents, any waiver or consent thereunder or
any amendment thereof or any Default or alleged Default thereunder and (ii) if
an Event of Default occurs, all out-of-pocket expenses incurred by the Agent or
any Bank, including fees and disbursements of outside counsel (or, in lieu
thereof, the allocated cost of in-house counsel), in connection with such Event
of Default and collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Agent and each Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) brought or threatened
relating to or arising out of the Financing
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Documents, or any actual or proposed use of proceeds of Loans hereunder;
PROVIDED that no Indemnitee shall have the right to be indemnified hereunder for
such Indemnitee's own gross negligence or willful misconduct.
SECTION 9.04. SHARING OF SET-OFFS. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of principal and
interest due with respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks shall be shared by the
Banks pro rata; PROVIDED that nothing in this Section shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness under the Notes. Each of the Borrower and
the Guarantors agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Note, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrower or such
Guarantor, as the case may be, in the amount of such participation.
SECTION 9.05. AMENDMENTS AND WAIVERS. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent or any Co-Agent are affected thereby,
by the Agent or such Co-Agent); PROVIDED that no such amendment or waiver shall,
unless signed by all the Banks, (i) increase or decrease the Commitment of any
Bank (except for a ratable decrease in the Commitments of all Banks) or subject
any Bank to any additional obligation, (ii) reduce the principal of, accrued
interest on or rate of interest on any Loan or any fees hereunder, (iii)
postpone the date fixed for any payment of principal of or interest on any Loan
or any fees hereunder or for any scheduled termination of any Commitment or (iv)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of
59
<PAGE>
the Notes, or the number of Banks, which shall be required for the Banks or any
of them to take any action under this Section or any other provision of the
Financing Documents.
SECTION 9.06. SUCCESSORS AND ASSIGNS. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in up to 45% of its
Commitment or in any or all of its Loans. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon notice to
the Borrower and the Agent, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Borrower and the Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. Any agreement pursuant to
which any Bank may grant such a participating interest shall provide that such
Bank shall retain the sole right and responsibility to enforce the obligations
of the Borrower hereunder including, without limitation, the right to approve
any amendment, modification or waiver of any provision of this Agreement;
PROVIDED that such participation agreement may provide that such Bank will not
agree to any modification, amendment or waiver of this Agreement described in
clause (i), (ii) or (iii) of Section 9.05 without the consent of the
Participant. The Borrower agrees that each Participant shall, to the extent
provided in its participation agreement, be entitled to the benefits of Section
2.15 and Article VIII with respect to its participating interest. An assignment
or other transfer which is not permitted by subsection (c) or (d) below shall be
given effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (equivalent to a
Commitment of not less than $5,000,000) of all, of its rights and obligations
under this Agreement and the Notes, and such Assignee shall assume such rights
and obligations, pursuant to an Assignment and Assumption Agreement in
substantially the form of Exhibit G hereto executed by such Assignee and such
transferor Bank, with (and subject
60
<PAGE>
to) the subscribed consent of the Borrower (which shall not be unreasonably
withheld) and the Agent; PROVIDED that if an Assignee is an affiliate of such
transferor Bank, no such consent shall be required; PROVIDED FURTHER that such
assignment may, but need not, include rights of the transferor Bank in respect
of outstanding Money Market Loans; and PROVIDED FURTHER that if an Assignee is
another Bank, such consent shall not be unreasonably withheld. Upon execution
and delivery of such instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such transferor
Bank and such Assignee, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a Commitment as set
forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the consummation
of any assignment pursuant to this subsection (c), the transferor Bank, the
Agent and the Borrower shall make appropriate arrangements so that, if required,
a new Note is issued to the Assignee. In connection with any such assignment,
the transferor Bank shall pay to the Agent an administrative fee for processing
such assignment in the amount of $2,500. If the Assignee is not incorporated
under the laws of the United States of America or a state thereof, it shall
deliver to the Borrower and the Agent certification as to exemption from
deduction or withholding of any United States federal income taxes in accordance
with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.03 or 8.04 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.02, 8.03 or 8.04 requiring
such Bank to designate a different Applicable Lending Office under certain
circumstances.
SECTION 9.07. COLLATERAL. Each of the Banks represents to the Agent
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the
61
<PAGE>
extension or maintenance of the credit provided for in this Agreement.
SECTION 9.08. GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York. Each of the Borrower and the Guarantors
hereby submits to the nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New York State court
sitting in New York City for purposes of all legal proceedings arising out of or
relating to the Financing Documents or the transactions contemplated thereby.
Each of the Borrower and the Guarantors irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum.
SECTION 9.09. COUNTERPARTS; INTEGRATION. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
GUARANTORS, THE AGENT, THE CO-AGENTS AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
62
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
WESTERN ATLAS INC.
By: /s/ Michael E. Keane
------------------------------
Title: V.P. and Treasurer
360 North Crescent Drive
Beverly Hills, California 90210
Telex number:
Telecopy number: (310)888-2848
63
<PAGE>
Commitments
- -----------
$45,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Diana H. Imhof
------------------------------
Title: Vice President
$30,000,000 BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Lori Y. Kannegieter
------------------------------
Title: Vice President
$30,000,000 THE BANK OF NEW YORK
By: /s/ Craig J. Rethmeyer
------------------------------
Title: Vice President
$30,000,000 CHEMICAL BANK
By: /s/ Robert P. Kellas
------------------------------
Title: Vice President
$30,000,000 CIBC INC.
By: /s/ Robert J. Wagner
------------------------------
Title: Vice President
$30,000,000 NATIONSBANK OF TEXAS, N.A.
By: /s/ Tom F. Scharfenberg
------------------------------
Title: Vice President
64
<PAGE>
Commitments
- -----------
$30,000,000 UNION BANK OF SWITZERLAND,
Los Angeles Branch
By: /s/ James I. Chu
------------------------------
Title: Assistant V.P.
By: /s/ Thomas G. Jackson
------------------------------
Title: First V.P.
$30,000,000 WELLS FARGO BANK, N.A.
By: /s/ David A. Neuman
------------------------------
Title: Vice President
$20,000,000 CREDIT SUISSE
By: /s/ Stephen M. Flynn
------------------------------
Title: Member of Sr. Mgmt.
By: /s/ Deborah A. Shea
------------------------------
Title: Associate
$20,000,000 DRESDNER BANK AG
By: /s/ Jon M. Bland
------------------------------
Title: Sr. Vice President
By: /s/ Sidney S. Jordan
------------------------------
Title: Vice President
$20,000,000 MELLON BANK, N.A.
By: /s/ Edwin H. Wiest
------------------------------
Title: First Vice President
65
<PAGE>
Commitments
- -----------
$20,000,000 NBD BANK, N.A.
By: /s/ James R. Frye
------------------------------
Title: First Vice President
$20,000,000 TORONTO DOMINION (TEXAS), INC.
By: /s/ Frederic Hawley
------------------------------
Title: Vice President
$15,000,000 BANK OF HAWAII
By: /s/ Marcy E. Fleming
------------------------------
Title: Vice President
$15,000,000 FIRST INTERSTATE BANK OF CALIFORNIA
By: /s/ Daniel H. Hom
------------------------------
Title: Vice President
$15,000,000 THE NORTHERN TRUST COMPANY
By: /s/ Robert J. Stegmann
------------------------------
Title: Vice President
$-0- BANK OF AMERICA ILLINOIS
By: /s/ Lori Y. Kannegieter
------------------------------
Title: Authorized Officer
66
<PAGE>
_________________
Total Commitments
$400,000,000
=================
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By: /s/ Diana H. Imhof
------------------------------
Title: Vice President
60 Wall Street
New York, New York 10260-0060
Attention: Robert M. Osieski
Telex number: 177615
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Co-Agent
By: /s/ Lori Y. Kannegieter
------------------------------
Title: Vice President
Credit Products #5618,
11th Floor
555 South Flower Street
Los Angeles, California 90071
Telecopy number: (213)228-2756
THE BANK OF NEW YORK, as Co-Agent
By: /s/ Craig J. Rethmeyer
------------------------------
Title: Vice President
10990 Wilshire Boulevard
Suite 1700
Los Angeles, California 90024
Telecopy number: (310)996-8667
67
<PAGE>
CHEMICAL BANK, as Co-Agent
By: /s/ Robert P. Kellas
------------------------------
Title: Vice President
270 Park Avenue, 10th Floor
New York, New York 10017
Telecopy number: (212)270-1403
CIBC INC., as Co-Agent
By: /s/ Robert J. Wagner
------------------------------
Title: Vice President
300 South Grand Avenue
Los Angeles, California 90071
Telecopy number: (213)346-0157
NATIONSBANK OF TEXAS, N.A.,
as Co-Agent
By: /s/ Tom F. Scharfenberg
------------------------------
Title: Vice President
444 South Flower Street
Suite 1500
Los Angeles, CA 90071-2001
Telecopy number: (213)624-5815
UNION BANK OF SWITZERLAND,
Los Angeles Branch, as Co-Agent
By: /s/ James I. Chu
------------------------------
Title: Assistant V. P.
By: /s/ Thomas G. Jackson
------------------------------
Title: First V. P.
444 South Flower Street
Suite 4600
Los Angeles, California 90071
Telecopy number:(213)489-0637
68
<PAGE>
WELLS FARGO BANK, N.A., as Co-Agent
By: /s/ David A. Neumann
------------------------------
Title: Vice President
420 Montgomery Street
9th Floor
San Francisco, California 94104
Telecopy number: (415)421-1352
69
<PAGE>
PRICING SCHEDULE
The "Euro-Dollar Margin", "CD Margin" and "Facility Fee Rate" for
any day are the respective percentages set forth below in the applicable row
under the column corresponding to the Status that exists on such day:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Status Level I Level II Level III Level IV Level V LevelVI Level VII
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Euro-Dollar Margin .065% .15% .215% .25% .30% .40% .50%
- ----------------------------------------------------------------------------------------------
CD Margin .19% .275% .34% .375% .425% .525% .625%
- ----------------------------------------------------------------------------------------------
Facility Fee Rate .085% .10% .11% .15% .175% .225% .3125%
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</TABLE>
For purposes of this Schedule, the following terms have the following
meanings:
"D&P" means Duff & Phelps Credit Rating Co.
"Level I Status" exists at any date if, at such date, the Borrower's
long-term debt is rated AA-/Aa3 or higher by at least two Rating Agencies.
"Level II Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated A+/A1 or A/A2 or higher by at least two
Rating Agencies and (ii) Level I Status does not exist at such date.
"Level III Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated A-/A3 or higher by at least two Rating
Agencies and (ii) neither Level I Status nor Level II Status exists at such
date.
"Level IV Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB+/Baa1 or higher by at least two Rating
Agencies and (ii) none of Level I Status, Level II Status or Level III Status
exists at such date.
"Level V Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB/Baa2 or higher by at least two Rating
Agencies and (ii) none of Level I Status, Level II Status, Level III Status or
Level IV Status exists at such date.
<PAGE>
"Level VI Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB-/Baa3 or higher by at least two Rating
Agencies and (ii) none of Level I Status, Level II Status, Level III Status,
Level IV Status or Level V Status exists at such date.
"Level VII Status" exists at any date, if at the close of business on
such date, none of Level I Status, Level II Status, Level III Status, Level IV
Status, Level V Status or Level VI exists.
"Moody's" means Moody's Investors Service, Inc., and its successors.
"Rating Agencies" means D&P, Moody's and S&P.
"S&P" means Standard & Poor's Ratings Group, and its successors.
"Status" refers to the determination of which of Level I Status, Level
II Status, Level III Status, Level IV Status, Level V Status, Level VI Status or
Level VII Status exists at any date.
The credit ratings to be utilized for purposes of determining a Status
hereunder are those assigned to the senior unsecured long-term debt of the
Borrower without third-party credit enhancement, and any rating assigned to any
other debt of the Borrower shall be disregarded; PROVIDED that if at any time
the Borrower's senior unsecured long-term debt is rated by exactly two Rating
Agencies and the ratings assigned to such debt by such two Rating Agencies are
more than one full rating category apart, Status shall be determined based on a
rating one category higher than the lower of such two ratings (E.G., if the S&P
rating is A+, the Moody's rating is Baa1 and there is no D&P rating, then Level
III Status shall exist); PROVIDED FURTHER that if at any time the Borrower's
senior unsecured long-term debt, without third party credit enhancement, is not
rated by at least two Rating Agencies, then Status shall be Level VII Status.
The rating in effect at any date is that in effect at the close of business on
such date.
2
<PAGE>
EXHIBIT A
NOTE
New York, New York
December 22, 1994
For value received, Western Atlas Inc., a Delaware corporation (the
"Borrower"), promises to pay to the order of (the "Bank"), for
the account of its Applicable Lending Office, the unpaid principal amount of
each Loan made by the Bank to the Borrower pursuant to the Credit Agreement
referred to below on the last day of the Interest Period relating to such Loan.
The Borrower promises to pay interest on the unpaid principal amount of each
such Loan on the dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately available funds at
the office of Morgan Guaranty Trust Company of New York, 60 Wall Street, New
York, New York.
Each Loan made by the Bank, the type and maturity thereof, and all
repayments of the principal thereof, shall be recorded by the Bank and, if the
Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; PROVIDED that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower or any Guarantor
hereunder or under any other Financing Document.
This note is one of the Notes referred to in the Amended and Restated
Credit Agreement dated as of December 22, 1994 among the Borrower, the banks
parties thereto and Morgan Guaranty Trust Company of New York, as Agent, and
Bank of America National Trust and Savings Association, The Bank of New York,
Chemical Bank, CIBC Inc., NationsBank of Texas, N.A., Union Bank of Switzerland,
Los Angeles Branch, and Wells Fargo Bank, N.A., as Co-Agents (as the same may be
amended from time to time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference is made to the
Credit Agreement for provisions for the prepayment hereof and the acceleration
of the maturity hereof.
WESTERN ATLAS INC.
By________________________
Title:
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
_______________________________________________________________________________
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
2
<PAGE>
EXHIBIT B
FORM OF MONEY MARKET QUOTE REQUEST
[Date]
To: Morgan Guaranty Trust Company of New York
From: Western Atlas Inc. (the "Borrower")
Re: Amended and Restated Credit Agreement (as amended from time
to time, the "Credit Agreement") dated as of December 22, 1994 among
the Borrower, the Banks parties thereto and Morgan Guaranty Trust
Company of New York, as Agent, and Bank of America National Trust and
Savings Association, The Bank of New York, Chemical Bank, CIBC Inc.,
NationsBank of Texas, N.A., Union Bank of Switzerland, Los Angeles
Branch, and Wells Fargo Bank, N.A., as Co-Agents
We hereby give notice pursuant to Section 2.03 of the Credit Agreement
that we request Money Market Quotes for the following proposed Money Market
Borrowing(s):
Date of Borrowing: __________________
PRINCIPAL AMOUNT INTEREST PERIOD
- ---------------- ---------------
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
- ---------------------
*Amount must be $10,000,000 or a larger multiple of $1,000,000.
**Not less than one month (LIBOR Auction) or not less than 14 days
(Absolute Rate Auction), subject to the provisions of the definition of Interest
Period.
<PAGE>
Terms used herein have the meanings assigned to them in the Credit
Agreement.
WESTERN ATLAS INC.
By________________________
Title:
2
<PAGE>
EXHIBIT C
FORM OF INVITATION FOR MONEY MARKET QUOTES
To: [Name of Bank]
Re: Invitation for Money Market Quotes
to Western Atlas Inc. (the "Borrower")
Pursuant to Section 2.03 of the Amended and Restated Credit Agreement
(as amended from time to time, the "Credit Agreement") dated as of December 22,
1994 among the Borrower, the Banks parties thereto and the undersigned, as
Agent, and Bank of America National Trust and Savings Association, The Bank of
New York, Chemical Bank, CIBC Inc., NationsBank of Texas, N.A., Union Bank of
Switzerland, Los Angeles Branch, and Wells Fargo Bank, N.A., as Co-Agents, we
are pleased on behalf of the Borrower to invite you to submit Money Market
Quotes to the Borrower for the following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
PRINCIPAL AMOUNT INTEREST PERIOD
- ---------------- ---------------
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than [2:00 P.M.] [9:30
A.M.] (New York City time) on [date].
Terms used herein have the meanings assigned to them in the Credit
Agreement.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By______________________
Authorized Officer
<PAGE>
EXHIBIT D
FORM OF MONEY MARKET QUOTE
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
60 Wall Street
New York, New York 10260-0060
Attention:
Re: Money Market Quote to
Western Atlas Inc. (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at the following
rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
- -------- --------- ------------ --------------------
$
$
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed
$____________.]**
__________
* As specified in the related Invitation.
(notes continued on following page)
<PAGE>
We understand and agree that the offer(s) set
forth above, subject to the satisfaction of the applicable conditions
set forth in the Amended and Restated Credit Agreement (as amended
from time to time, the "Credit Agreement") dated as of December 22,
1994 among the Borrower, the Banks parties thereto and yourselves, as
Agent, and Bank of America National Trust and Savings Association, The
Bank of New York, Chemical Bank, CIBC Inc., NationsBank of Texas,
N.A., Union Bank of Switzerland, Los Angeles Branch, and Wells Fargo
Bank, N.A., as Co-Agents, irrevocably obligates us to make the Money
Market Loan(s) for which any offer(s) are accepted, in whole or in
part.
Terms used herein have the meanings assigned to
them in the Credit Agreement.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
__________
** Principal amount bid for each Interest Period may not exceed principal amount
requested. Specify aggregate limitation if the sum of the individual offers
exceeds the amount the Bank is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
*** Not less than one month or not less than 14 days, as specified in the
related Invitation. No more than five bids are permitted for each Interest
Period.
(notes continued on following page)
2
<PAGE>
**** Margin over or under the London Interbank Offered Rate determined for the
applicable Interest Period. Specify percentage (to the nearest 1/10,000 of 1%)
and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
<PAGE>
EXHIBIT E
OPINION OF COUNSEL FOR THE
BORROWER AND THE GUARANTORS
December __, 1994
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260-0060
Dear Sirs:
I am the chief legal officer of Western Atlas Inc. (the "Borrower")
and have acted in that capacity in connection with the Amended and Restated
Credit Agreement (the "Credit Agreement") dated as of December 22, 1994 among
the Borrower, the banks listed on the signature pages thereof and Morgan
Guaranty Trust Company of New York, as Agent, and Bank of America National Trust
and Savings Association, The Bank of New York, Chemical Bank, CIBC Inc.,
NationsBank of Texas, N.A., Union Bank of Switzerland, Los Angeles Branch, and
Wells Fargo Bank, N.A., as Co-Agents. Terms defined in the Credit Agreement are
used herein as therein defined.
I have examined originals or copies, certified or otherwise identified
to my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware and has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
2. The execution, delivery and performance by each Obligor of the
Financing Documents to which it is a
<PAGE>
party are within its corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or filing
with, any governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
its certificate of incorporation or by-laws or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Borrower or any
of its Subsidiaries or result in the creation or imposition of any Lien on any
asset of the Borrower or any of its Subsidiaries.
3. The Credit Agreement constitutes a valid and binding agreement of
the Borrower, the Notes constitute valid and binding obligations of the Borrower
and the Subsidiary Guarantee Agreement is a valid and binding agreement of each
Obligor.
4. (a) Except for actions, suits or proceedings described in the
Borrower's Prospectus or the Borrower's Latest Form 10-Q, there is no action,
suit or proceeding pending against, or to the best of my knowledge threatened
against or affecting, the Borrower or any of its Subsidiaries before any court
or arbitrator or any governmental body, agency or official, in which there is a
reasonable possibility of an adverse decision which could materially adversely
affect the business, consolidated financial position or consolidated results of
operations of the Borrower and its Consolidated Subsidiaries, taken as a whole.
(b) Since the date of the Borrower's Latest Form 10-Q, there has
been no change in the status of the actions, suits and proceedings described
therein which materially and adversely affects the business, financial position,
results of operations or prospects of the Borrower and its Consolidated
Subsidiaries, considered as a whole.
(c) There is no action, suit or proceeding pending against, or to
the best of my knowledge threatened against or affecting, the Borrower or any of
its Subsidiaries before any court or arbitrator or any governmental body, agency
or official which in any manner questions the validity of any Financing
Document.
5. Each of the Borrower's Material Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and
2
<PAGE>
approvals required to carry on its business as now conducted.
I am a member of the Bar of the State of California, and the foregoing
opinion is limited to the laws of the State of California, the General
Corporation Law of the State of Delaware and the Federal laws of the United
States of America. Inasmuch as the Credit Agreement and the Notes are governed
by the law of the State of New York, I have assumed for purposes of the
foregoing opinion that such law is the same as the law of the State of
California.
Very truly yours,
3
<PAGE>
EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
[Dated the Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260-0060
Dear Sirs:
We have participated in the preparation of the Amended and Restated
Credit Agreement (the "Credit Agreement") dated as of December 22, 1994 among
Western Atlas Inc., a Delaware corporation (the "Borrower"), the banks listed on
the signature pages thereof (the "Banks") and Morgan Guaranty Trust Company of
New York, as Agent (the "Agent"), and Bank of America National Trust and Savings
Association, The Bank of New York, Chemical Bank, CIBC Inc., NationsBank of
Texas, N.A., Union Bank of Switzerland, Los Angeles Branch, and Wells Fargo
Bank, N.A., as Co-Agents, and have acted as special counsel for the Agent for
the purpose of rendering this opinion pursuant to Section 3.01(e) of the Credit
Agreement. Terms defined in the Credit Agreement are used herein as therein
defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the
Financing Documents are within the Borrower's corporate powers and have been
duly authorized by all necessary corporate action.
<PAGE>
2. The Credit Agreement and the Subsidiary Guarantee Agreement
constitute valid and binding agreements of the Borrower and each Note
constitutes a valid and binding obligation of the Borrower, in each case
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
by general principles of equity.
3. The Subsidiary Guarantee Agreement constitutes a valid and binding
agreement of each Guarantor, enforceable in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
4. The documents delivered to the Agent by the Borrower pursuant to
Section 3.01 of the Credit Agreement are substantially responsive to the
requirements of said Section.
In giving the opinion set forth in paragraph 3 above, we have, with
your permission, assumed that the execution, delivery and performance by each
Guarantor of the Subsidiary Guarantee Agreement are within such Guarantor's
corporate powers and have been duly authorized by all necessary corporate
action.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the federal laws of the
United States of America and the General Corporation Law of the State of
Delaware. In giving the foregoing opinion, (i) we express no opinion as to the
effect (if any) of any law of any jurisdiction (except the State of New York) in
which any Bank is located which limits the rate of interest that such Bank may
charge or collect and (ii) the opinion expressed in paragraph 3 above is subject
to the effect, if any, of Section 548 of the United States Bankruptcy Code and
any comparable provisions of applicable state law.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other person without our prior written consent.
Very truly yours,
2
<PAGE>
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), WESTERN ATLAS INC. (the "Borrower")
and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the Amended and Restated Credit Agreement dated as of December 22,
1994 among the Borrower, the Assignor and the other Banks party thereto, as
Banks, and the Agent and Bank of America National Trust and Savings Association,
The Bank of New York, Chemical Bank, CIBC Inc., NationsBank of Texas, N.A.,
Union Bank of Switzerland, Los Angeles Branch, and Wells Fargo Bank, N.A., as
Co-Agents (as amended from time to time, the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Committed Loans to the Borrower in an aggregate principal
amount at any time outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by the Assignor under
the Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $__________ (the "Assigned Amount"),
together with a corresponding portion of its outstanding Committed Loans, and
the Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
<PAGE>
SECTION 1. DEFINITIONS. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. ASSIGNMENT. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement and the
other Financing Documents to the extent of the Assigned Amount, and the Assignee
hereby accepts such assignment from the Assignor and assumes all of the
obligations of the Assignor under the Credit Agreement to the extent of the
Assigned Amount, including the purchase from the Assignor of the corresponding
portion of the principal amount of the Committed Loans made by the Assignor
outstanding at the date hereof. Upon the execution and delivery hereof by the
Assignor, the Assignee, the Borrower and the Agent and the payment of the
amounts specified in Section 3 required to be paid on the date hereof (i) the
Assignee shall, as of the date hereof, succeed to the rights and be obligated to
perform the obligations of a Bank under the Credit Agreement and the other
Financing Documents with a Commitment in an amount equal to the Assigned Amount,
and (ii) the Commitment of the Assignor shall, as of the date hereof, be reduced
by a like amount and the Assignor released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee. The
assignment provided for herein shall be without recourse to the Assignor.
SECTION 3. PAYMENTS. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them. It is
understood that commitment and/or facility fees accrued to the date hereof are
for the account of the Assignor and such fees accruing from and including the
date hereof in respect of the Assigned Amount are for the account of the
Assignee. Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement or any other Financing Document
which is for the account of the other party hereto, it shall receive the same
for the account of such other party to the extent of such other party's interest
therein and shall promptly pay the same to such other party.
SECTION 4. CONSENT OF THE BORROWER AND THE AGENT. This Agreement is
conditioned upon the consent of the Borrower and the Agent, pursuant to Section
9.06(c) of the Credit Agreement. The execution of this Agreement by the
Borrower and the Agent is evidence of this consent. Pursuant to Section 9.06(c)
the Borrower agrees to execute
2
<PAGE>
and deliver a Note payable to the order of the Assignee to evidence the
assignment and assumption provided for herein.
SECTION 5. NON-RELIANCE ON ASSIGNOR. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower or any Guarantor, or the validity and enforceability of the obligations
of the Borrower or any Guarantor in respect of any Financing Document. The
Assignee acknowledges that it has, independently and without reliance on the
Assignor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the Borrower and
each Guarantor.
SECTION 6. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. COUNTERPARTS. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
3
<PAGE>
WESTERN ATLAS INC.
By__________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By___________________________
Title:
4
<PAGE>
EXHIBIT H
AMENDED AND RESTATED
SUBSIDIARY GUARANTEE AGREEMENT
dated as of
December 22, 1994
among
Western Atlas Inc.
The Guarantors Referred to Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
5
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
1.01 Definitions................................ 2
ARTICLE II
Guarantees
2.01 The Guarantees............................. 2
2.02 Guarantees Unconditional................... 3
2.03 Limit of Liability......................... 4
2.04 Discharge; Reinstatement in
Certain Circumstances.................... 4
2.05 Waiver..................................... 4
2.06 Subrogation................................ 4
2.07 Stay of Acceleration....................... 5
ARTICLE III
COVENANT OF THE BORROWER
3.01 Additional Guarantors...................... 5
ARTICLE IV
MISCELLANEOUS
4.01 Notices.................................... 5
4.02 No Waiver.................................. 6
4.03 Amendments and Waivers..................... 6
4.04 Governing Law; Submission to
Jurisdiction; Waiver of a
Jury Trial............................... 6
4.05 Successors and Assigns..................... 6
4.06 Counterparts; Effectiveness................ 6
- ------------------------
*The Table of Contents is not a part of this Agreement.
<PAGE>
AMENDED AND RESTATED
SUBSIDIARY GUARANTEE AGREEMENT
AGREEMENT dated as of December 22, 1994 among Western Atlas Inc., a
Delaware corporation (the "Borrower"), each of the Guarantors listed on the
signature pages hereof under the caption "Guarantors" and each Person that
shall, at any time after the date hereof, become a "Guarantor" hereunder
(collectively, the "Guarantors") and Morgan Guaranty Trust Company of New York,
as Agent.
WHEREAS, the Borrower has entered into a Credit Agreement dated as of
December 23, 1993 and amended and restated as of December 22, 1994 (as the same
may be amended from time to time, the "Credit Agreement") among the Borrower,
the banks parties thereto, Morgan Guaranty Trust Company of New York, as Agent,
and Bank of America National Trust and Savings Association, The Bank of New
York, Chemical Bank, CIBC Inc., NationsBank of Texas, N.A., Union Bank of
Switzerland, Los Angeles Branch, and Wells Fargo Bank, N.A., as Co-Agents,
pursuant to which the Borrower is entitled, subject to certain conditions, to
borrow up to $400,000,000;
WHEREAS, the Borrower and the Guarantors have entered into a
Subsidiary Guarantee Agreement, dated as of December 23, 1993 (the "Original
Guarantee");
WHEREAS, the Credit Agreement provides, among other things, that one
condition to the effectiveness of the Commitments thereunder is the execution
and delivery by the Borrower and the Guarantors of an amendment and restatement
of the Original Guarantee substantially in the form of this Agreement;
WHEREAS, in conjunction with the transactions contemplated by the
Credit Agreement and in consideration of the financial and other support that
the Borrower has provided, and such financial and other support as the Borrower
may in the future provide, to the Guarantors, and in order to induce the Banks,
the Agent and the Co-Agents to enter into the Credit Agreement and to make Loans
thereunder, the Guarantors are willing to guarantee the obligations of the
Borrower under the Credit Agreement and the Notes;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and
<PAGE>
sufficiency of which are hereby acknowledged, the parties hereby agree that the
Original Guarantee is hereby amended and restated to read in its entirety as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Terms defined in the Credit Agreement and
not otherwise defined herein are used herein as therein defined. In addition
the following terms, as used herein, have the following meanings:
"Guaranteed Obligations" means (i) all obligations of the Borrower in
respect of principal of and interest on the Loans and the Notes, (ii) all other
amounts payable by the Borrower under the Credit Agreement or the Notes and
(iii) all renewals or extensions of the foregoing, in each case whether now
outstanding or hereafter arising. The Guaranteed Obligations shall include,
without limitation, any interest, costs, fees and expenses which accrue on or
with respect to any of the foregoing, whether before or after the commencement
of any case, proceeding or other action relating to the bankruptcy, insolvency
or reorganization of any one or more than one of the Borrower and the
Guarantors, and any such interest, costs, fees and expenses that would have
accrued thereon or with respect thereto but for the commencement of such case,
proceeding or other action.
"Material Subsidiary" means (i) each Material Subsidiary (as defined
in the Credit Agreement) of the Borrower, (ii) each Subsidiary of the Borrower
that the Required Banks have by notice to the Borrower designated as a "Material
Subsidiary" for purposes hereof and (iii) all direct or indirect successors in
interest to any of the entities described in clauses (i) and (ii) of this
definition (including, without limitation, by way of merger or consolidation
with, or acquisition of all or a substantial part of the assets of, any such
entity).
ARTICLE II
Guarantees
SECTION 2.01. THE GUARANTEES. Subject to Section 2.03, the
Guarantors hereby jointly, severally,
2
<PAGE>
unconditionally and irrevocably guarantee to the Banks, the Agent and the Co-
Agents and to each of them, the due and punctual payment of all Guaranteed
Obligations as and when the same shall become due and payable, whether at
maturity, by declaration or otherwise, according to the terms thereof. In case
of failure by the Borrower punctually to pay the indebtedness guarantied hereby,
the Guarantors, subject to Section 2.03, hereby jointly, severally,
unconditionally and irrevocably agree to cause such payment to be made
punctually as and when the same shall become due and payable, whether at
maturity or by declaration or otherwise, and as if such payment were made by the
Borrower.
SECTION 2.02. GUARANTEES UNCONDITIONAL. The obligations of each
Guarantor under this Article II shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged or
otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of any other Obligor under any Financing
Document, by operation of law or otherwise;
(b) any modification or amendment of or supplement to any Financing
Document;
(c) any modification, amendment, waiver, release, impairment,
non-perfection or invalidity of any direct or indirect security, or of any
guarantee or other liability of any third party, for any obligation of any
other Obligor under any Financing Document;
(d) any change in the corporate existence, structure or ownership of
any other Obligor, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting any other Obligor or its assets or any
resulting release or discharge of any obligation of any other Obligor
contained in any Financing Document;
(e) the existence of any claim, set-off or other rights which any
Obligor may have at any time against any other Obligor, the Agent, any Co-
Agent, any Bank or any other Person, whether or not arising in connection
with the Financing Documents; PROVIDED that nothing herein shall prevent
the assertion of any such claim by separate suit or compulsory
counterclaim;
(f) any invalidity or unenforceability relating to or against any
other Obligor for any reason of any Financing Document, or any provision of
applicable law
3
<PAGE>
or regulation purporting to prohibit the payment by any other Obligor of
the principal of or interest on any Note or any other amount payable by any
other Obligor under any Financing Document; or
(g) any other act or omission to act or delay of any kind by any
other Obligor, the Agent, any Co-Agent, any Bank or any other Person or any
other circumstance whatsoever that might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the obligations of
any Guarantor under this Article II.
SECTION 2.03. LIMIT OF LIABILITY. Each Guarantor shall be liable
under this Agreement only for amounts aggregating up to the largest amount that
would not render its obligations hereunder subject to avoidance under Section
548 of the United States Bankruptcy Code or any comparable provisions of any
applicable state law.
SECTION 2.04. DISCHARGE; REINSTATEMENT IN CERTAIN CIRCUMSTANCES.
Each Guarantor's obligations under this Article II shall remain in full force
and effect until the Commitments are terminated and the principal of and
interest on the Notes and all other amounts payable by the Borrower under the
Financing Documents shall have been paid in full. The obligations of any
Guarantor under this Article II may only be terminated with the consent of all
of the Banks. If at any time any payment of the principal of or interest on any
Note or any other amount payable by the Borrower under any Financing Document is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of any other Obligor or otherwise, each Guarantor's
obligations under this Article II with respect to such payment shall be
reinstated at such time as though such payment had become due but had not been
made at such time.
SECTION 2.05. WAIVER. Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided for herein, as
well as any requirement that at any time any action be taken by any Person
against any other Obligor or any other Person.
SECTION 2.06. SUBROGATION. Upon making any payment hereunder, the
Guarantor making such payment shall be subrogated to the rights of the payee
against the Borrower with respect to such payment; PROVIDED that such Guarantor
shall not enforce any payment by way of subrogation until all amounts of
principal of and interest on the Notes and all other amounts payable by the
Borrower under the Credit Agreement shall have been paid in full.
4
<PAGE>
SECTION 2.07. STAY OF ACCELERATION. If acceleration of the time for
payment of any amount payable by the Borrower under the Financing Documents is
stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all
such amounts otherwise subject to acceleration under the terms of the Financing
Documents shall nonetheless be payable by each Guarantor hereunder forthwith on
demand by the Agent made at the request of the Required Banks.
ARTICLE III
COVENANT OF THE BORROWER
SECTION 3.01. ADDITIONAL GUARANTORS. The Borrower represents and
warrants that, as of the date of this Agreement, the Guarantors set forth on the
signature pages hereof constitute all Material Subsidiaries. The Borrower
agrees, within ten days after any Person hereafter becomes a Material
Subsidiary, to cause such Person to become a Guarantor hereunder, and in
connection therewith to deliver such opinions of counsel and other documents
relating to such Guarantor and its obligations hereunder as the Agent may
reasonably request.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. NOTICES. Unless otherwise specified herein, all
notices, requests and other communications to any party hereunder shall be in
writing (including facsimile transmission or similar writing) and shall be given
to such party at its address or facsimile number set forth on the signature
pages hereof (or, in the case of any Guarantor as to which no such address or
facsimile number is so set forth, to it at the address or facsimile number of
the Borrower set forth on the signature pages hereof) or such other address or
facsimile number as such party may hereafter specify for the purpose by notice
to the Agent. Each such notice, request or other communication shall be
effective (i) if given by facsimile transmission, when such facsimile is
transmitted to the facsimile transmission number specified in or pursuant to
this Section 4.01, (ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid
or (iii) if
5
<PAGE>
given by any other means, when delivered at the address specified in this
Section 4.01.
SECTION 4.02. NO WAIVER. No failure or delay by the Agent, any Co-
Agent or any Bank in exercising any right, power or privilege under this
Agreement or any other Financing Document shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein and therein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 4.03. AMENDMENTS AND WAIVERS. Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and is signed by the Borrower, each Guarantor and the Agent with the
prior written consent of the Required Banks under the Credit Agreement; PROVIDED
that the second sentence of Section 2.04 and the PROVISO in Section 4.05 of this
Agreement may only be amended with the consent of all of the Banks.
SECTION 4.04. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF A
JURY TRIAL. This Agreement shall be construed in accordance with and governed
by the laws of the State of New York. Each of the Guarantors hereby agrees to
be bound by each provision of the Credit Agreement which purports to bind it,
including without limitation Sections 8.04, 9.04, 9.08 and 9.10, to the same
extent as if it were a signatory party thereto.
SECTION 4.05. SUCCESSORS AND ASSIGNS. This Subsidiary Guarantee is
for the benefit of the Banks, the Agent and the Co-Agents and their respective
successors and assigns and in the event of an assignment of the Loans, the Notes
or other amounts payable under the Financing Documents, the rights hereunder, to
the extent applicable to the indebtedness so assigned, shall be transferred with
such indebtedness. All the provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; PROVIDED that no Guarantor shall assign its rights and obligations
hereunder without the consent of all of the Banks.
SECTION 4.06. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
signed in any number of counterparts, each of which shall be an original, and
all of which taken together shall constitute a single instrument, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when
6
<PAGE>
the Agent shall have received a counterpart hereof signed by the Borrower, and
one or more of the Guarantors and when the Credit Agreement shall become
effective in accordance with its terms. Thereafter, upon execution and delivery
of a counterpart of this Agreement on behalf of any other Guarantor, this
Agreement shall become effective with respect to such Guarantor as of the date
of such delivery.
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Subsidiary
Guarantee Agreement to be duly executed by their respective authorized officers
as of the date first above written.
WESTERN ATLAS INC.
By ________________________
Title:
360 North Crescent Drive
Beverly Hills, California 90210
Telex number:
Telecopy number: (310) 888-2848
GUARANTORS
----------
INTERMEC CORPORATION
By ________________________
Title:
WESTERN ATLAS INTERNATIONAL, INC.
By ________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By ________________________
Title:
60 Wall Street
New York, New York 10260-0060
Attention: Robert M. Osieski
Telex number: 177615
8
<PAGE>
[EXECUTION COPY]
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT dated as of March 20, 1996 among WESTERN ATLAS INC.
(the "Borrower"), the BANKS listed on the signature pages hereof (the "Banks")
and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"), and BANK
OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, THE BANK OF NEW YORK,
CHEMICAL BANK, CIBC INC., NATIONSBANK OF TEXAS, N.A., UNION BANK OF
SWITZERLAND, LOS ANGELES BRANCH, and WELLS FARGO BANK, N.A., as Co-Agents.
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into a
Credit Agreement dated as of December 22, 1994 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement as
set forth below:
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise
specifically defined herein, each term used herein which is defined in the
Agreement shall have the meaning assigned to such term in the Agreement. Each
reference to "hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and each other
similar reference contained in the Agreement shall from and after the date
hereof refer to the Agreement as amended hereby.
SECTION 2. Amendment of the Agreement. The Agreement is
hereby amended as follows:
(a) The following new definition is added to Section 1.01 in
its appropriate alphabetical position:
Page 1
<PAGE>
"PetroAlliance" means PetroAlliance Services
Company Limited, a Cyprus limited liability company.
(b) The definition of Consolidated Subsidiary is hereby
amended by the addition of the following proviso thereto:
provided that PetroAlliance shall not be deemed a Consolidated
Subsidiary.
(c) The definition of Subsidiary is hereby amended by the
addition of the following proviso thereto:
provided that PetroAlliance shall not be deemed a Subsidiary.
(d) Clause (ii) of the definition of Intangible Assets is
amended to read as follows:
(ii) all investments in unconsolidated Subsidiaries and,
to the extent the same exceed $10,000,000 in aggregate amount,
all direct and indirect investments in PetroAlliance and all
equity investments in other Persons which are not Subsidiaries
(other than investments in readily marketable securities) and
(e) The definition of Termination Date is amended to read as
follows:
"Termination Date" means December 22, 2000
(or if such date is not a Euro-Dollar Business Day, the next
preceding Euro-Dollar Business Day).
SECTION 3. Pricing Schedule. The Agreement is further amended
by replacing the existing Pricing Schedule with the attached Pricing Schedule.
SECTION 4. Changes in Commitments. With effect from and
Page 2
<PAGE>
including the date this Amendment becomes effective in accordance with
Section 6 hereof, the Commitment of each Bank shall be the amount set forth
opposite the name of such Bank on the signature pages hereof, as such amount
may be reduced from time to time pursuant to Section 2.09 of the Agreement.
Any Bank whose commitment is changed to zero shall upon such effectiveness
cease to be a Bank party to the Agreement, and all accrued fees and other
amounts payable under the Agreement for the account of such Bank shall be due
and payable on such date; provided that the provisions of Section 9.03 of the
Agreement shall continue to inure to the benefit of each such Bank.
SECTION 5. Governing Law. This Amendment shall be governed
by and construed in accordance with the laws of the State of New York.
SECTION 6. Counterparts; Effectiveness. This Amendment may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Amendment shall become effective as of the date hereof
when the Agent shall have received duly executed counterparts hereof signed
by the Borrower and each of the Banks (or, in the case of any party as to
which an executed counterpart shall not have been received, the Agent shall
have received telegraphic, telex or other written confirmation from such
party of execution of a counterpart hereof by such party).
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
WESTERN ATLAS INC.
By:
Page 3
<PAGE>
Title:
Commitments
$46,750,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:
Title:
$31,170,000 BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By:
Title:
$31,170,000 THE BANK OF NEW YORK
By:
Title:
$31,170,000 CHEMICAL BANK
By:
Title:
$31,170,000 CIBC INC.
By:
Title:
$31,170,000 NATIONSBANK OF TEXAS, N.A.
Page 4
<PAGE>
By:
Title:
$31,170,000 UNION BANK OF SWITZERLAND,
Los Angeles Branch
By:
Title:
By:
Title:
$31,170,000 WELLS FARGO BANK, N.A.
By:
Title:
$20,780,000 CREDIT SUISSE
By:
Title:
$20,780,000 DRESDNER BANK AG
By:
Title:
By:
Title:
$20,780,000 MELLON BANK, N.A.
By:
Title:
$20,780,000 NBD BANK
Page 5
<PAGE>
By:
Title:
$20,780,000 TORONTO DOMINION (TEXAS), INC.
By:
Title:
$15,580,000 BANK OF HAWAII
By:
Title:
$15,580,000 THE NORTHERN TRUST COMPANY
By:
Title:
$-0- FIRST INTERSTATE BANK OF CALIFORNIA
By:
Title:
Total Commitments
$400,000,000
PRICING SCHEDULE
The "Euro-Dollar Margin", "CD Margin" and "Facility Fee Rate"
for any day are the respective percentages set forth below in the applicable
Page 6
<PAGE>
row under the column corresponding to the Status that exists on such day:
<TABLE>
<CAPTION>
Level Level Level Level Level Level Level
Status I II III IV V VI VII
<S> <C> <C> <C> <C> <C> <C> <C>
Euro-Dollar Margin .08% .12% .16% .20% .275% .325% .50%
CD Margin .205% .245% .285% .325% .40% .45% .625%
Facility Fee Rate .07% .08% .09% .10% .125% .175% .25%
</TABLE>
For purposes of this Schedule, the following terms have the
following meanings:
"D&P" means Duff & Phelps Credit Rating Co.
"Level I Status" exists at any date if, at such date, the
Borrower's long-term debt is rated AA-/Aa3 or higher by at least two Rating
Agencies.
"Level II Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated A+/A1 or higher by at least two Rating
Agencies and (ii) Level I Status does not exist at such date.
"Level III Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated A-/A3 or higher by at least two Rating
Agencies and (ii) neither Level I Status nor Level II Status exists at such
date.
"Level IV Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB+/Baa1 or higher by at least two Rating
Agencies and (ii) none of Level I Status, Level II Status or Level III Status
exists at such date.
Page 7
<PAGE>
"Level V Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB/Baa2 or higher by at least two Rating
Agencies and (ii) none of Level I Status, Level II Status, Level III Status or
Level IV Status exists at such date.
"Level VI Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB-/Baa3 or higher by at least two Rating
Agencies and (ii) none of Level I Status, Level II Status, Level III Status,
Level IV Status or Level V Status exists at such date.
"Level VII Status" exists at any date, if at the close of
business on such date, none of Level I Status, Level II Status, Level III
Status, Level IV Status, Level V Status or Level VI exists.
"Moody's" means Moody's Investors Service, Inc., and its
successors.
"Rating Agencies" means D&P, Moody's and S&P.
"S&P" means Standard & Poor's Ratings Group, and its successors.
"Status" refers to the determination of which of Level I
Status, Level II Status, Level III Status, Level IV Status, Level V Status,
Level VI Status or Level VII Status exists at any date.
The credit ratings to be utilized for purposes of determining a
Status hereunder are those assigned to the senior unsecured long-term debt of
the Borrower without third-party credit enhancement, and any rating assigned to
any other debt of the Borrower shall be disregarded; provided that if at any
time the Borrower's senior unsecured long-term debt is rated by exactly two
Rating Agencies and the ratings assigned to such debt by such two Rating
Agencies are more than one full rating category apart, Status shall be
determined based on a rating one category higher than the lower of such two
Page 8
<PAGE>
ratings (e.g., if the S&P rating is A+, the Moody's rating is Baa1 and there
is no D&P rating, then Level III Status shall exist); provided further that if
at any time the Borrower's senior unsecured long-term debt, without third
party credit enhancement, is not rated by at least two Rating Agencies, then
Status shall be Level VII Status. The rating in effect at any date is that
in effect at the close of business on such date.
Page 9
<PAGE>
Exhibit (c)(1)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of January 21, 1997 (the
"Agreement"), by and among NORAND CORPORATION, a Delaware corporation (the
"Company"), WAI ACQUISITION CORP., a Delaware corporation (the "Purchaser"),
and WESTERN ATLAS INC., a Delaware corporation ("Parent"). The Company and
the Purchaser are hereinafter sometimes collectively referred to as the
"Constituent Corporations."
RECITALS
WHEREAS, the Boards of Directors of Parent, the Purchaser and the
Company have each approved the acquisition of the Company by Parent upon the
terms and subject to the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, the Boards of Directors
of Parent, the Purchaser and the Company have each approved the merger of the
Purchaser with and into the Company in accordance with the terms of this
Agreement and the General Corporation Law of the State of Delaware (the
"DGCL") and with any other applicable law; and
WHEREAS, the Board of Directors of the Company (the "Board") has, in
light of and subject to the terms and conditions set forth herein, (i)
determined that the consideration to be paid for each Share in the Offer and
the Merger (as hereinafter defined) is fair to the stockholders of the
Company, and the Offer and the Merger are otherwise in the best interests of
the Company and its stockholders, and (ii) resolved to approve and adopt this
Agreement and the transactions contemplated hereby and to recommend
acceptance of the Offer and approval and adoption by the stockholders of the
Company of this Agreement and the Merger.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions contained
herein, the parties hereto agree as follows:
ARTICLE I
THE OFFER
Section 1.01. The Offer. (a) Provided that this Agreement shall not
have been terminated in accordance with
<PAGE>
Article IX hereof and none of the events set forth in Annex I hereto shall
have occurred, as promptly as practicable (but in no event later than five
business days from the date hereof) Purchaser shall commence (within the
meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended
(including the rules and regulations promulgated thereunder, the "Exchange
Act")) an offer to purchase all outstanding shares of Common Stock, par value
$0.01 per share (the "Shares"), of the Company, at a price of $33.50 per
Share net to the seller in cash (the "Offer") and, subject to the conditions
of the Offer, shall use reasonable best efforts to consummate the Offer. The
obligation of the Purchaser to consummate the Offer and to accept for payment
and to pay for any Shares tendered pursuant thereto shall be subject to only
those conditions set forth in Annex I hereto, including the condition that a
number of Shares representing at least a majority of the number of Shares
outstanding on a fully diluted basis (assuming the exercise of all
outstanding Options and Warrants) be validly tendered and not withdrawn at
the expiration of the Offer (the "Minimum Condition").
(b) Without the prior written consent of the Company, the Purchaser
shall not decrease the price per Share or change the form of consideration
payable in the Offer, decrease the number of Shares sought, impose additional
conditions to the Offer or amend any other term of the Offer in any manner
adverse to the holders of Shares. Without the prior written consent of the
Company, the Purchaser will not waive the Minimum Condition if, as a result,
the Purchaser would acquire less than a majority of the Shares actually
outstanding. Upon the terms and subject to the conditions of the Offer, the
Purchaser will accept for payment and purchase, as soon as permitted under
the terms of the Offer, all Shares validly tendered and not withdrawn prior
to the expiration of the Offer.
(c) Each of Parent and the Purchaser, on the one hand, and the
Company, on the other hand, agrees promptly to correct any information
provided by it for use in the documents filed by Parent and the Purchaser
with the Securities and Exchange Commission (the "SEC") in connection with
the Offer (the "Offer Documents") if and to the extent that it shall have
become false or misleading in any material respect, and Parent and the
Purchaser further agree to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and to be disseminated to
stockholders of the Company, in each case as and to the extent required by
applicable federal securities laws.
(d) Parent and the Purchaser agree that, without the prior written
consent of the Company, the Purchaser shall not
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<PAGE>
terminate or withdraw the Offer or extend the expiration date of the Offer
unless at the expiration date of the Offer the conditions to the Offer
described in Annex I hereto shall not have been satisfied or earlier waived;
provided that, if the number of Shares that have been validly tendered and
not withdrawn prior to the initial expiration date of the Offer represent
less than 90% of the Shares on a fully diluted basis, the Purchaser shall
have the right, in its sole discretion, to extend the Offer for up to a
maximum of 10 additional business days, notwithstanding the prior
satisfaction of such conditions, so long as the Purchaser waives all
conditions to the Offer other than the Minimum Condition and the conditions
set forth in paragraphs (a)(i) or (f) of Annex I hereto. If at the
expiration date of the Offer, the conditions to the Offer described in Annex
I hereto shall not have been satisfied or earlier waived but, in the
reasonable belief of Parent, may be satisfied prior to September 30, 1997,
the Purchaser shall extend the expiration date of the Offer for an additional
period or periods of time until the earlier of (i) the date such conditions
are satisfied or earlier waived and the Purchaser becomes obligated to accept
for payment and pay for Shares tendered pursuant to the Offer or (ii) this
Agreement is terminated in accordance with its terms; provided that this
sentence shall not be applicable in the event the conditions set forth in
paragraph (d)(ii) of Annex I hereto shall not have been satisfied or earlier
waived at the expiration date of the Offer.
Section 1.02. Company Actions. (a) The Company hereby approves of
and consents to the Offer and represents that (i) the Board, by vote of all
directors at a meeting duly called and held, has, in light of and subject to
the terms and conditions set forth herein, unanimously (x) determined that
the consideration to be paid in each of the Offer and the Merger is fair to
the stockholders of the Company and the Offer and the Merger are otherwise in
the best interests of the Company and its stockholders and (y) approved and
adopted this Agreement and the transactions contemplated hereby, including
the Offer and the Merger, and resolved to recommend acceptance of the Offer
and approval and adoption of this Agreement and the Merger and the other
transactions contemplated hereby by the stockholders of the Company and (ii)
Donaldson, Lufkin & Jenrette Securities Corporation, the Company's financial
advisors, have rendered to the Board their opinion that the consideration to
be received by the stockholders of the Company pursuant to the Offer and the
Merger is fair to such stockholders from a financial point of view.
(b) The Company hereby agrees promptly to prepare and, after review
by the Purchaser, to file with the SEC and to
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<PAGE>
mail to its stockholders, a Solicitation/Recommendation Statement on Schedule
14D-9 with respect to the Offer (together with any amendments or supplements
thereto, the "Schedule 14D-9") containing the recommendation described in
Section 1.02(a) hereof and to disseminate the Schedule 14D-9 as required by
Rule 14d-9 promulgated under the Exchange Act; provided, however, that,
subject to the provisions of Article IX, such recommendation may be
withdrawn, modified or amended only to the extent that the Board deems it
necessary to do so in the exercise of its fiduciary obligations after being
so advised by outside counsel. Each of the Company, on the one hand, and
Parent and the Purchaser, on the other hand, agree promptly to correct any
information provided by either of them for use in the Schedule 14D-9 if and
to the extent that it shall have become false or misleading in any material
respect, and the Company further agrees to take all steps necessary to cause
the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to the stockholders of the Company, in each case as and to the
extent required by applicable federal securities laws.
(c) In connection with the Offer, the Company will furnish the
Purchaser with such information (which subject to applicable law, shall be
held in confidence) and assistance as the Purchaser or its agents or
representatives may reasonably request in connection with the preparation of
the Offer and communicating the Offer to the record and beneficial holders of
the Shares.
Section 1.03. Directors. (a) Subject to compliance with applicable
law, promptly upon the payment by the Purchaser for Shares purchased pursuant
to the Offer representing not less than a majority of the outstanding Shares
on a fully diluted basis, and from time to time thereafter, the Company
shall, upon request of Parent, promptly take all actions necessary to cause a
majority of the directors of the Company to consist of Parent's designees,
including by accepting the resignations of those incumbent directors
designated by the Company or increasing the size of the Board and causing
Parent's designees to be elected.
(b) The Company's obligations to appoint Parent's designees to the
Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
thereunder, if applicable. The Company shall promptly take all actions
required pursuant to such Section and Rule in order to fulfill its
obligations under this Section 1.03 and shall include in the Schedule 14D-9
such information with respect to the Company and its officers and directors
as is required under such Section and Rule in order to fulfill its
obligations under this Section 1.03. Parent
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<PAGE>
will supply any information with respect to itself and its officers,
directors and affiliates required by such Section and Rule to the Company.
(c) Following the election or appointment of Parent's designees
pursuant to this Section 1.03 and prior to the Effective Time (as hereinafter
defined), any amendment or termination of this Agreement by the Company, any
extension by the Company of the time for the performance of any of the
obligations or other acts of Parent or the Purchaser, waiver of any of the
Company's rights hereunder or any other action by the Company concerning this
Agreement or any of the transactions contemplated hereby, will require the
concurrence of a majority of the directors of the Company then in office who
were not designated by Parent.
ARTICLE II
THE MERGER
Section 2.01. The Merger. (a) In accordance with the provisions of
this Agreement and the DGCL, at the Effective Time, the Purchaser shall be
merged with and into the Company (the "Merger"), and the Company shall be the
surviving corporation (hereinafter sometimes called the "Surviving
Corporation") and shall continue its corporate existence under the laws of
the State of Delaware. At the Effective Time the separate existence of the
Purchaser shall cease.
(b) The name of the Surviving Corporation shall be "Norand
Corporation."
(c) The Merger shall have the effects on the Company and the
Purchaser as Constituent Corporations of the Merger as provided under the
DGCL.
Section 2.02. Effective Time. The Merger shall become effective at
the time of filing of, or at such later time specified in, a certificate of
merger (the "Certificate of Merger") (or, if applicable, a certificate of
ownership and merger), in the form required by and executed in accordance
with the DGCL, filed with the Secretary of State of the State of Delaware
(the "Delaware Secretary of State") in accordance with the provisions of
Section 251 of the DGCL (or in the event Section 3.04 hereof is applicable,
Section 253 of the DGCL). The date and time when the Merger shall become
effective is herein referred to as the "Effective Time."
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<PAGE>
Section 2.03. Certificate of Incorporation and By-Laws of Surviving
Corporation. The Certificate of Incorporation and By-Laws of the Purchaser
shall be the Certificate of Incorporation and By-Laws of the Surviving
Corporation until thereafter amended as provided by law.
Section 2.04. Directors and Officers of Surviving Corporation. (a)
Subject to applicable law, the directors of the Purchaser immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation and shall hold office until their respective successors are duly
elected and qualified, or their earlier death, resignation or removal.
(b) The officers of the Company immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation and shall
hold office until their respective successors are duly elected and qualified,
or their earlier death, resignation or removal.
Section 2.05. Further Assurances. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that
any deeds, bills of sale, assignments, assurances or any other actions or
things are necessary or desirable to vest, perfect or confirm of record or
otherwise in the Surviving Corporation its right, title or interest in, to or
under any of the rights, properties or assets of either of the Constituent
Corporations acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger or otherwise to carry out this
Agreement, the officers of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of each of the Constituent
Corporations or otherwise, all such deeds, bills of sale, assignments and
assurances and to take and do, in the name and on behalf of each of the
Constituent Corporations or otherwise, all such other actions and things as
may be necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and under such rights, properties or assets in the
Surviving Corporation or otherwise to carry out this Agreement.
ARTICLE III
CONVERSION OF SHARES
Section 3.01. Effect on Shares and the Purchaser's Capital Stock.
(a) As of the Effective Time, by virtue of the Merger and without any action
on the part of the holders thereof, each Share issued and outstanding
immediately prior to the
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<PAGE>
Effective Time (other than any Shares held by Parent, the Purchaser or any
subsidiary of Parent or the Purchaser, in the treasury of the Company or by
any subsidiary of the Company, which Shares, by virtue of the Merger and
without any action on the part of the holder thereof, shall be cancelled and
retired and shall cease to exist with no payment being made with respect
thereto, and other than any Dissenting Shares (as hereinafter defined)) shall
be converted into the right to receive $33.50 in cash or any higher price per
Share paid in the Offer (the "Merger Price"), payable to the holder thereof,
without interest thereon, as set forth in Section 4.02 hereof.
(b) As of the Effective Time, by virtue of the Merger and without
any action on the part of the holders thereof, each share of capital stock of
the Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into and become one fully paid and nonassessable share of
Common Stock, par value $0.01 per share, of the Surviving Corporation.
Section 3.02. Company Option Plans. (a) Prior to the consummation
of the Offer, the Company and Parent shall take all actions necessary to
provide that, at the Effective Time, each outstanding option to purchase
Shares (the "Options") granted under any of the Company's 1989 Stock Option
Plan, the Company's Long-Term Performance Program or the Company's 1994 Stock
Option Plan for Non-Employee Directors (collectively, the "Option Plans")
shall, by virtue of the Merger and without any further action on the part of
the Company or the holder of such Option, be assumed by Parent in such manner
that Parent (a) is a corporation (or a parent or a subsidiary corporation of
such corporation) "assuming a stock option in a transaction to which Section
424(a) applied" within the meaning of Section 424 of the Internal Revenue
Code of 1986, as amended (the "Code"); or (b) to the extent that Section 424
of the Code does not apply to any such Options, would be such a corporation
(or a parent or a subsidiary corporation of such corporation) were Section
424 applicable to such Option. At the Effective Time, (i) all references in
the Option Plans to the Company shall be deemed to refer to Parent and (ii)
Parent shall issue to each holder of an Option a document evidencing the
assumption of such option by Parent in accordance herewith. Each Option
assumed by Parent (as assumed, the "Parent Options") shall be exercisable
upon the same terms and conditions including, without limitation, vesting, as
under the applicable Option Plan and the applicable option agreement issued
thereunder, except that (x) each such Option shall be exercisable for the
number of shares of Common Stock, par value $1.00 per share, of Parent
("Parent Common Stock") (rounded to the nearest whole share) obtained by
multiplying the number of Shares
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<PAGE>
subject to such Option immediately prior to the Effective Time by $33.50 and
dividing the result by the average of the closing prices for the Parent
Common Stock reported on the New York Stock Exchange Consolidated Tape for
the 10 consecutive trading days immediately prior to the Effective Time; and
(y) the option price per share of Parent Common Stock shall be an amount
equal to the aggregate exercise price of such Option prior to adjustment
divided by the number of shares of Parent Common Stock subject to such Option
after adjustment (the option price per share, as so determined, being rounded
upward to the nearest full cent). The date of grant of each Parent Option
shall be the date on which the corresponding Option was granted. No payment
shall be made for fractional interests. Parent shall take all corporate
actions necessary to reserve for issuance such number of shares of Parent
Common Stock as will be necessary to satisfy exercises in full of all Options
after the Effective Time.
(b) Except as provided herein or as otherwise agreed to by the
parties and to the extent permitted by the Option Plans, (i) the Option Plans
shall terminate as of the Effective Time and the provisions in any other
plan, program or arrangement, providing for the issuance or grant of any
interest in respect of the capital stock of the Company or any of its
subsidiaries shall be deleted as of the Effective Time and (ii) the Company
shall use all reasonable efforts to ensure that following the Effective Time
no holder of Options or any participant in the Option Plans or any other
plans, programs or arrangements shall have any right thereunder to acquire
any equity securities of the Company, the Surviving Corporation or any
subsidiary thereof.
Section 3.03. Stockholders' Meeting. (a) If required by applicable
law in order to consummate the Merger, the Company, acting through the Board,
shall, in accordance with applicable law:
(i) duly call, give notice of, convene and hold a special meeting
of its stockholders (the "Special Meeting") as soon as practicable
following the purchase of and payment for Shares by the Purchaser
pursuant to the Offer for the purpose of considering and adopting this
Agreement and such other matters as may be necessary to consummate the
transactions contemplated herein;
(ii) prepare and file with the SEC a preliminary proxy statement
relating to the matters to be considered at the Special Meeting pursuant
to this Agreement and use its reasonable best efforts (x) to obtain and
furnish the information required to be included by the SEC in the
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<PAGE>
Proxy Statement (as hereinafter defined) and, after consultation with
Parent, to respond promptly to any comments made by the SEC with respect
to the preliminary proxy statement and to cause a definitive proxy
statement (the "Proxy Statement") to be mailed to its stockholders and
(y) to obtain the necessary approvals of the Merger, this Agreement and
such other matters as may be necessary to consummate the transactions
contemplated hereby by its stockholders; and
(iii) subject to the fiduciary obligations of the Board under
applicable law as advised by outside counsel, include in the Proxy
Statement the recommendation of the Board that stockholders of the
Company vote in favor of the approval of the Merger, the adoption of this
Agreement and such other matters as may be necessary to consummate the
transactions contemplated hereby.
(b) Parent agrees that it will vote, or cause to be voted, all of
the Shares then owned by it, the Purchaser or any of its other subsidiaries
in favor of the approval and adoption of this Agreement and such other
matters as may be necessary to consummate the transactions contemplated
hereby.
Section 3.04. Merger Without Meeting of Stockholders.
Notwithstanding Section 3.03 hereof, in the event that Parent, the Purchaser
or any other subsidiary of Parent shall acquire at least 90% of the
outstanding Shares pursuant to the Offer or otherwise, the parties hereto
agree, at the request of Parent or the Purchaser, to take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after the acceptance for payment and purchase of Shares by the
Purchaser pursuant to the Offer without a meeting of stockholders of the
Company in accordance with Section 253 of the DGCL.
Section 3.05. Consummation of the Merger. As soon as practicable
after the satisfaction or waiver of the conditions set forth in Article VIII
hereof, the Surviving Corporation shall execute in the manner required by the
DGCL and file with the Delaware Secretary of State the Certificate of Merger
(or, in the event Section 3.04 hereof is applicable, the Purchaser shall
execute in the manner required by the DGCL and file with the Delaware
Secretary of State a certificate of ownership and merger), and the parties
shall take such other and further actions as may be required by law to make
the Merger effective as promptly as is practicable.
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<PAGE>
ARTICLE IV
DISSENTING SHARES; PAYMENT FOR SHARES
Section 4.01. Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Shares outstanding immediately prior to the
Effective Time and held by a holder who has not voted in favor of the Merger
or consented thereto in writing and who has demanded appraisal for such
Shares in accordance with Section 262 of the DGCL, if such Section 262
provides for appraisal rights for such Shares in the Merger ("Dissenting
Shares"), shall not be converted into the right to receive the Merger Price,
as provided in Section 3.01 hereof, unless and until such holder fails to
perfect or withdraws or otherwise loses his right to appraisal and payment
under the DGCL. If, after the Effective Time, any such holder fails to
perfect or withdraws or loses his right to appraisal, such Dissenting Shares
shall thereupon be treated as if they had been converted as of the Effective
Time into the right to receive the Merger Price to which such holder is
entitled, without interest or dividends thereon. The Company shall give
Parent prompt notice of any demands received by the Company for appraisal of
Shares and Parent shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with
the prior written consent of Parent, make any payment with respect to, or
settle or offer to settle, any such demands.
Section 4.02. Payment for Shares. (a) From and after the Effective
Time, a bank or trust company to be designated by Parent shall act as paying
agent (the "Paying Agent") in effecting the payment of the Merger Price for
certificates (the "Certificates") formerly representing Shares and entitled
to payment of the Merger Price pursuant to Section 3.01 hereof. At the
Effective Time, Parent or the Purchaser shall pursuant to irrevocable
instructions deposit, or cause to be deposited, in trust with the Paying
Agent the aggregate Merger Price to which holders of Shares shall be entitled
at the Effective Time pursuant to Section 3.01 hereof.
(b) The Merger Price shall be invested by the Paying Agent as
directed by Parent, provided such investments shall be limited to direct
obligations of the United States of America, obligations for which the full
faith and credit of the United States of America is pledged to provide for
the payment of principal and interest, commercial paper rated of the highest
quality by Moody's Investors Service, Inc. or Standard & Poor's Corporation
or certificates of deposit issued by a commercial bank having at least
$10,000,000,000 in assets.
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<PAGE>
(c) As soon as practicable after the Effective Time, the Paying
Agent shall mail to each record holder of Certificates that immediately prior
to the Effective Time represented Shares (other than Certificates
representing Shares held by Parent or the Purchaser, any subsidiary of Parent
or the Purchaser, in the treasury of the Company or by any subsidiary of the
Company) a form of letter of transmittal which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon proper delivery of the Certificates to the Paying Agent and
instructions for use in surrendering such Certificates and receiving the
Merger Price therefor. Upon the surrender of each such Certificate, the
Paying Agent shall pay the holder of such Certificate the Merger Price
multiplied by the number of Shares, as appropriate, formerly represented by
such Certificate, in consideration therefor, and such Certificate shall
forthwith be cancelled. Until so surrendered, each such Certificate (other
than Certificates representing Dissenting Shares and Certificates
representing Shares held by Parent or the Purchaser, any subsidiary of Parent
or the Purchaser, in the treasury of the Company or by any subsidiary of the
Company) shall represent solely the right to receive the aggregate Merger
Price relating thereto. No interest shall be paid or accrued on the Merger
Price.
(d) Promptly following the date which is one year after the
Effective Time, the Paying Agent shall deliver to Parent all cash,
Certificates and other documents in its possession relating to the
transactions described in this Agreement, and the Paying Agent's duties shall
terminate. Thereafter, each holder of a Certificate formerly representing a
Share (other than Certificates representing Dissenting Shares and
Certificates representing Shares held by Parent or the Purchaser, any
subsidiary of Parent or the Purchaser, in the treasury of the Company or by
any subsidiary of the Company) may surrender such Certificate to Parent and
(subject to applicable abandoned property, escheat and similar laws) receive
in consideration therefor the aggregate Merger Price relating thereto,
without any interest or dividends thereon.
(e) The Merger Price shall be net to each holder of Certificates in
cash, subject to reduction only for any applicable federal back-up
withholding or stock transfer taxes payable by such holder.
(f) If payment of cash in respect of any Certificate is to be made
to a person other than the person in whose name such Certificate is
registered, it shall be a condition to such payment that the Certificate so
surrendered shall be properly endorsed or shall be otherwise in proper form
for transfer and that the person requesting such payment shall have paid any
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<PAGE>
transfer and other taxes required by reason of such payment in a name other
than that of the registered holder of the Certificate surrendered or shall
have established to the satisfaction of Parent or the Paying Agent that such
tax either has been paid or is not payable.
(g) After the Effective Time, there shall be no transfers on the
stock transfer books of the Surviving Corporation of any Shares which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates formerly representing Shares (other than Certificates
representing Shares held by Parent or the Purchaser, any subsidiary of Parent
or the Purchaser, in the treasury of the Company or by any subsidiary of the
Company) are presented to the Surviving Corporation or the Paying Agent, they
shall be surrendered and cancelled in return for the payment of the aggregate
Merger Price relating thereto, without interest, as provided in this Article
IV, subject to applicable law in the case of Dissenting Shares.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the Purchaser as
follows:
Section 5.01. Organization. The Company and each of its Significant
Subsidiaries (as defined below) is a corporation duly organized, validly
existing and in good standing under the laws of their respective
jurisdictions of incorporation and the Company and each of its Significant
Subsidiaries has all requisite corporate power and authority to own, lease
and operate their respective properties and to carry on their respective
businesses as now being conducted. The Company and each of its subsidiaries
is duly qualified or licensed and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary,
except in such jurisdictions where the failure to be so duly qualified or
licensed and in good standing would not, individually or in the aggregate,
have a material adverse effect on the business, operations, assets, financial
condition or results of operations of the Company and its subsidiaries taken
as a whole (a "Company Material Adverse Effect"). The Company owns directly
all of the outstanding capital stock of each of its Significant Subsidiaries.
As used in this Agreement a
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"Significant Subsidiary" means a corporation which is a "significant
subsidiary" within the meaning of Rule 1-02(v) of Regulation S-X.
Section 5.02. Capitalization. The authorized capital stock of the
Company consists of 15,000,000 Shares and 15,000,000 shares of preferred
stock, par value $0.01 per share ("Company Preferred Stock"). As of January
17, 1997, there were 7,842,905 Shares and no shares of Company Preferred
Stock issued and outstanding, and there are no Shares or shares of Company
Preferred Stock held in the Company's treasury. As of the date hereof, there
were outstanding options to purchase 1,252,347 Shares under the Option Plans
at a weighted average exercise price of $20.409163. As of the date hereof, a
total of 250,000 Shares are subject to issuance upon exercise of Series A
Warrants at an exercise price of $21.15 per Share and a total of 300,000
Shares are subject to issuance upon exercise of Series B Warrants at an
exercise price of $21.15 per Share and a total of 27,079 Shares are subject
to issuance upon the exercise of warrants granted to two consultants to the
Company at a weighted average exercise price of $17.394006 per Share
(collectively, with the Series A Warrants and Series B Warrants, the
"Warrants"). Except for Options under the Option Plans and Warrants, there
were not as of the date hereof, and at all times thereafter through the
Effective Time there will not be, any existing options, warrants, calls,
subscriptions, or other rights or other agreements or commitments obligating
the Company or any of its subsidiaries to issue, transfer or sell any shares
of capital stock of the Company or any of its subsidiaries or any other
securities convertible into or evidencing the right to subscribe for any such
shares. All issued and outstanding Shares are duly authorized and validly
issued, fully paid, non-assessable and free of preemptive rights with respect
thereto. Schedule 5.02 lists each outstanding Option or Warrant, its
exercise price, expiration date and vesting or exercisability schedule.
Section 5.03. Authority. The Company has full corporate power and
authority to execute and deliver this Agreement and, subject to the approval
of its stockholders, if required, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized
and approved by the Board, and other than the approval by its stockholders,
if required, no other corporate proceedings are necessary to authorize this
Agreement or the consummation of the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the Company
and, assuming this Agreement constitutes a legal, valid and binding agreement
of the other parties hereto, it
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constitutes a legal, valid and binding agreement of the Company, enforceable
against it in accordance with its terms.
Section 5.04. No Violations; Consents and Approvals. (a) Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby nor compliance by the Company with any of
the provisions hereof will (i) violate any provision of its certificate of
incorporation or by-laws, (ii) except as set forth in Schedule 5.04(a)(ii),
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default, or give rise to any right of
termination, cancellation or acceleration or any right which becomes
effective upon the occurrence of a merger, consolidation or change in control
or ownership, under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture or other instrument of indebtedness for money
borrowed to which the Company or any of its subsidiaries is a party, or by
which the Company or any of its subsidiaries or any of their respective
properties is bound, or (iii) except as set forth in Schedule 5.04(a)(iii),
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default, or give rise to any right of
termination, cancellation or acceleration or any right (including any right
to receive any payment) which becomes effective upon the occurrence of a
merger, consolidation or change in control or ownership, under, any of the
terms, conditions or provisions of any license, franchise, permit or
agreement to which the Company or any of its subsidiaries is a party, or by
which the Company or any of its subsidiaries or any of their respective
properties is bound, or (iv) violate any statute, rule, regulation, order or
decree of any public body or authority by which the Company or any of its
subsidiaries or any of their respective properties is bound, excluding from
the foregoing clauses (iii) and (iv) violations, breaches, defaults or rights
under the laws of any jurisdiction outside the United States or which, either
individually or in the aggregate, would not have a Company Material Adverse
Effect or materially impair the Company's ability to consummate the
transactions contemplated hereby or for which the Company has received or,
prior to the consummation of the Offer, shall have received appropriate
consents or waivers.
(b) No filing or registration with, notification to, or
authorization, consent or approval of, any governmental entity is required in
connection with the execution and delivery of this Agreement by the Company,
or the consummation by the Company of the transactions contemplated hereby,
except (i) expiration of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (ii) in
connection, or in compliance, with the provisions of
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the Exchange Act, (iii) the filing of the Certificate of Merger with the
Delaware Secretary of State, (iv) such filings and consents as may be
required under any environmental law pertaining to any notification,
disclosure or required approval triggered by the Merger or the transactions
contemplated by this Agreement, (v) filing with, and approval of, the
National Association of Securities Dealers, Inc. and the SEC with respect to
the delisting and deregistration of the Shares, (vi) such consents,
approvals, orders, authorizations, notifications, registrations, declarations
and filings as may be required under the corporation, takeover or blue sky
laws of various states, (vii) compliance with any applicable requirements of
any laws or regulations relating to the regulation of monopolies or
competition in Germany and (viii) such other consents, approvals, orders,
authorizations, notifications, registrations, declarations and filings not
obtained prior to the consummation of the Offer the failure of which to be
obtained or made would not, individually or in the aggregate, have a Company
Material Adverse Effect, or materially impair the Company's ability to
perform its obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby.
Section 5.05. SEC Documents; Financial Statements. (a) The Company
has made available to Parent and the Purchaser copies of each registration
statement, report, proxy statement, information statement or schedule filed
with the SEC by the Company since January 1, 1994 (the "SEC Documents"). As
of their respective dates, as amended or supplemented by subsequent SEC
Documents prior to the date hereof, the Company's SEC Documents complied in
all material respects with the applicable requirements of the Securities Act
of 1933, as amended, and the Exchange Act, as the case may be, none of such
SEC Documents, as amended or supplemented by subsequent SEC Documents prior
to the date hereof, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(b) Neither the Company nor any of its subsidiaries, nor any of
their respective assets, businesses, or operations, is as of the date of this
Agreement a party to, or is bound or affected by, or receives benefits under
any contract or agreement or amendment thereto, that in each case would be
required to be filed as an exhibit to a Form 10-K as of the date of this
Agreement that has not been filed as an exhibit to an SEC Document filed
prior to the date of this Agreement.
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(c) As of their respective dates, the consolidated financial
statements included in the Company's SEC Documents, as amended or
supplemented by subsequent SEC Documents prior to the date hereof, complied
as to form in all material respects with then applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, were prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except
as may be indicated therein or in the notes thereto) and fairly presented the
Company's consolidated financial position and that of its consolidated
subsidiaries as at the dates thereof and the consolidated results of their
operations and statements of cash flows for the periods then ended (subject,
in the case of unaudited statements, to the lack of footnotes thereto, to
normal year-end audit adjustments and to any other adjustments described
therein).
Section 5.06. Absence of Certain Changes; No Undisclosed
Liabilities. (a) Since November 30, 1996, except as disclosed in the SEC
Documents prior to the date hereof, the Company has not (i) incurred any
liability, whether or not accrued, contingent or otherwise, or suffered any
event or occurrence which, individually or in the aggregate, could reasonably
be expected to have a Company Material Adverse Effect, (ii) made any changes
in accounting methods, principles or practices, (iii) declared, set aside or
paid any dividend or other distribution with respect to its capital stock,
(iv) issued, or agreed to issue, any capital stock except pursuant to
outstanding Options or Warrants or (v) materially revalued any of its assets,
including but not limited to materially writing down its inventory or
accounts receivable. Since November 30, 1996 to the date of this Agreement,
each of the Company and its subsidiaries has conducted its operations
according to its ordinary course of business consistent with past practice,
subject to the transactions contemplated by this Agreement.
(b) Except as and to the extent disclosed by the Company in the SEC
Documents, as of November 30, 1996, neither the Company nor any of its
subsidiaries had any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, that would be required by generally
accepted accounting principles to be reflected on a consolidated balance
sheet of the Company and its subsidiaries (including the notes thereto) or
which could reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect.
(c) Since August 31, 1996, except as disclosed on Schedule 5.06(c),
the Company has not made any changes to any
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employee benefit plan or program or any agreement or arrangement providing
compensation or benefits to any of its officers or directors.
Section 5.07. Litigation. Except as disclosed by the Company in the
SEC documents, there is no suit, claim, action, proceeding or investigation
pending or, to the knowledge of the Company, threatened against the Company
or any of its subsidiaries or any of their respective properties or assets
before any court or governmental entity which, individually or in the
aggregate, could reasonably be expected to have a Company Material Adverse
Effect or could reasonably be expected to prevent or delay the consummation
of the transactions contemplated by this Agreement. Except as disclosed by
the Company in the SEC Documents, neither the Company nor any of its
subsidiaries is subject to any outstanding order, writ, injunction or decree
which, insofar as can be reasonably foreseen, individually or in the
aggregate, in the future could reasonably be expected to have a Company
Material Adverse Effect or could reasonably be expected to prevent or delay
the consummation of the transactions contemplated hereby.
Section 5.08. Compliance with Applicable Law. (a) Except as
disclosed by the Company in the SEC Documents, the Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all governmental entities necessary for the lawful conduct of
their respective businesses (the "Company Permits"), except for failures to
hold such permits, licenses, variances, exemptions, orders and approvals
which could not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect. Except as disclosed by the Company
in the SEC Documents, the Company and its subsidiaries are in compliance with
the terms of the Company Permits, except where the failure so to comply would
not have a Company Material Adverse Effect. Except as disclosed by the
Company in the SEC Documents, the businesses of the Company and its
subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any governmental entity except for violations or possible
violations which individually or in the aggregate do not, and, insofar as
reasonably can be foreseen, in the future could not, have a Company Material
Adverse Effect. Except as disclosed by the Company in the SEC Documents, no
investigation or review by any governmental entity with respect to the
Company or any of its subsidiaries is pending or, to the best knowledge of
the Company, threatened nor, to the best knowledge of the Company, has any
governmental entity indicated an intention to conduct the same, other than,
in each case, those which the Company reasonably believes could not have a
Company Material Adverse Effect.
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(b) To the best knowledge of the Company, except as set forth on
Schedule 5.08(b), all proceedings or investigations concerning the practices
of the Company's Italian subsidiary have been concluded, and all penalties,
fines or other payments required to be made by the Company or any of its
subsidiaries in connection therewith have been reflected in the Company's
financial statements included in the SEC Documents or otherwise disclosed in
the SEC Documents. To the Company's knowledge, no employee of the Company or
any of its subsidiaries is the subject of any continuing proceeding or
investigation by any domestic or foreign governmental entity relating to
these matters.
Section 5.09. Taxes. Each of the Company and its subsidiaries has
filed, or caused to be filed, all federal, state, local and foreign income
and other material tax returns required to be filed by it, has paid or
withheld, or caused to be paid or withheld, all taxes of any nature
whatsoever, with any related penalties, interest and liabilities (any of the
foregoing being referred to herein as a "Tax"), that are shown on such tax
returns as due and payable, or otherwise required to be paid, other than such
Taxes as are being contested in good faith and for which adequate reserves
have been established and other than such Taxes for which adequate reserves
have been established and reflected in the November 30, 1996 financial
statements and in the books and records of the Company, and other than where
the failure to so file, pay or withhold would not have a Company Material
Adverse Effect. Adequate reserves have been established in the November 30,
1996 financial statements and in the books and records of the Company for
deferred Taxes applicable to all differences between book and taxable income.
There are no material claims or assessments pending against the Company or
its subsidiaries for any alleged deficiency in any Tax, and the Company does
not know of any threatened Tax claims or assessments against the Company or
any of its subsidiaries which if upheld could have a Company Material Adverse
Effect. Neither the Company nor any of its subsidiaries has made an election
to be treated as a "consenting corporation" under Section 341(f) of the Code.
There is no material deferred inter-company gain within the meaning of the
Treasury Regulations promulgated under Section 1502 of the Code. Except as
set forth on Schedule 5.09, there are no waivers or extensions of any
applicable statutes of limitations to assess any United States federal state
or local Taxes. All returns filed with respect to Taxes are true and correct
in all material respects. Except as set forth on Schedule 5.09, there are no
outstanding requests for any extension of time within which to file any
return or within which to pay any United States federal, state or local Taxes
shown to be due on any return. To the best knowledge of the Company's
Director
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of Corporate Taxes, there are no (i) outstanding requests for any extension
of time within which to file any return or within which to pay any foreign
Taxes shown to be due on any return or (ii) waivers or extensions of any
applicable statutes of limitations to assess any foreign Taxes.
Section 5.10. Certain Employee Plans. Each "employee benefit
plan," as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), maintained by the Company or any of its
subsidiaries or under which they have any liability, contingent or otherwise
(the "Plans"), complies in all material respects with all applicable
requirements of ERISA (to the extent required to so comply) and the Code and
other applicable laws, and no "reportable event" (as such term is defined in
ERISA) or termination has occurred with respect to any Plan under
circumstances which present a risk of liability to any governmental entity or
other person which could reasonably be expected to have a Company Material
Adverse Effect. None of the Plans is a multiemployer plan, as such term is
defined in ERISA, and none of the Plans is subject to Title IV of ERISA.
Neither the Company and its subsidiaries, nor any of their respective
directors, officers, employees or agents has, with respect to any Plan,
engaged in any "prohibited transaction", as such term is defined in Section
4975 of the Code or Section 406 of ERISA, nor has any Plan engaged in any
such prohibited transaction which could result in any taxes or penalties or
prohibited transactions under Section 4975 of the Code or under Section
502(i) of ERISA, which in the aggregate could have a Company Material Adverse
Effect. Except as set forth on Schedule 5.10, no Plan provides benefits,
including, without limitation, death or medical benefits (whether or not
insured), with respect to current or former employees of the Company or its
subsidiaries or any Company ERISA Affiliate beyond their retirement or other
termination of service, other than (A) coverage mandated by applicable law,
(B) death benefits or retirement benefits under any "employee pension plan"
(as such term is defined in Section 3(2) of ERISA), (C) deferred compensation
benefits accrued as liabilities on the books of the Company, its subsidiaries
or the Company ERISA Affiliates or (D) benefits the full cost of which is
borne by the current or former employee (or his beneficiary). Copies of all
of the Company's Plans covering United States employees of the Company and
any related trusts and summary plan descriptions have been made available to
the Purchaser. Except as specifically contemplated by this Agreement or as
set forth on Schedule 5.10, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
result in, cause the accelerated vesting or delivery of, or increase the
amount or
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value of, any payment or benefit to any employee or former employee of the
Company or any of its subsidiaries. "Company ERISA Affiliate" means any trade
or business which would together with the Company be deemed a "single
employer" within the meaning of Section 4001 of ERISA.
Section 5.11. Patents, Trade Names, Trademarks, Service Marks,
Copyrights and Chip Registrations. (a) Set forth on Schedule 5.11(a) is a
list and description of all material patents, patent applications, trade
names, trademark registrations and trademark applications, service mark
registrations and service mark applications, copyright registrations and
copyright registration applications, both domestic and foreign, which are
owned by the Company or any of its subsidiaries. The assets described on
Schedule 5.11(a), all patent disclosures, common law trademarks and service
marks, certification marks and their registrations and applications, chip
registrations and their applications, and all "Software" (as defined in
Section 5.14(a)), trade secrets, know-how, industrial property, technology or
other proprietary rights which are owned or used by the Company or any of its
subsidiaries are referred to as the "Intellectual Property." Except as
otherwise indicated on Schedule 5.11(a), the Company and its subsidiaries own
all right, title and interest in and to the Intellectual Property validly and
beneficially, free and clear of all material liens or encumbrances of title,
with the sole and exclusive right to use the same, subject to those licenses
listed on Schedule 5.11(b). None of the Intellectual Property is the subject
of any material claim or challenge asserted by any third party, except as
specifically identified on Schedule 5.11(a).
(b) Set forth on Schedule 5.11(b) is a list and description of (i)
all material licenses, assignments and other transfers of Intellectual
Property granted to others by the Company or any of its subsidiaries, and
(ii) all material licenses, assignments and other transfers of material
patents, trade names, trademarks, service marks, copyrights, chip
registrations, Software, trade secrets, know-how, technology or other
proprietary rights granted to the Company or any of its subsidiaries by
others. Except as set forth in Schedule 5.04(a)(iii), none of the licenses
described above is subject to termination or cancellation or material change
in its terms or provisions as a result of this Agreement or the transactions
provided for in this Agreement.
(c) To the knowledge of Company without making inquiry of any third
party, no person or entity is infringing, or has misappropriated, in any
material respect, any Intellectual Property.
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(d) The Company has paid all material maintenance, renewal or
similar fees required by the applicable governmental agencies to maintain the
Intellectual Property.
Section 5.12. Patent, Trade Name, Trademark, Service Mark,
Copyright or Chip Registration Indemnification and Infringement. Except as
set forth on Schedule 5.12, neither the Company nor any of its subsidiaries
has given or granted any significant indemnification for, and there are no
pending written or, to the best knowledge of the Company, oral claims or
demands against the Company for, patent, trade name, trademark, service mark,
copyright, chip registration or Software infringement. To the knowledge of
the Company, the present conduct of the business of the Company and its
subsidiaries does not infringe in any material respect, any material patents,
trade names, trademarks, service marks, copyrights, chip registrations or
other proprietary rights of others.
Section 5.13. Confidential Information or Trade Secrets. Except as
set forth on Schedule 5.13, there are no material claims or demands of any
person pertaining to, or any material proceedings which are pending or, to
the Company's knowledge, threatened, which challenge the rights of the
Company or any of its subsidiaries in respect of any material proprietary or
confidential information or trade secrets used in the conduct of its
business, and, to the Company's knowledge without making inquiry of any third
party, no methods, processes, procedures, apparatus or equipment used by the
Company or any of its subsidiaries use or include any material proprietary or
confidential information or trade secrets misappropriated from any person or
entity. To the Company's knowledge without making inquiry of any third
party, neither the Company nor any of its subsidiaries has any material
proprietary or confidential information or trade secrets owned or claimed by
third parties not rightfully in its possession, and the Company and its
subsidiaries have complied in all material respects with all material
agreements, understandings and licenses governing the use of such proprietary
or confidential information or trade secrets.
Section 5.14. Software. (a) For purposes of this Agreement,
"Software" shall mean any material computer program or any part of such
computer program, whether in source code, object code or in any other form,
whether recorded on tape or on any other media, and all material
modifications, enhancements or corrections made to such program, and all
material documentation relating to such program, including any flow charts,
designs, instructions, job control procedures and manuals relating to such
program in printed or machine readable
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form. All Software that is included in the Intellectual Property or under
development for use by the Company and its subsidiaries is referred to as the
"Company Software". To the knowledge of the Company, the Company Software is
not subject to any material defect in programming and operation.
(b) The Company is not aware of any material breach by any third
parties of any material confidentiality agreement in favor of the Company or
any of its subsidiaries relating to such Software. Except as disclosed in
the licenses listed on Schedule 5.11(b) or as otherwise disclosed on Schedule
5.11(a), neither the Company nor any of its subsidiaries has conveyed or
granted to any third parties any other material rights to Company Software,
nor is it obligated to grant or convey any material rights to license,
market, incorporate in other Software, sell or otherwise use any such
Software, and to the knowledge of the Company without making inquiry of any
third party, no third party has unauthorized access to the documentation,
source code or similar material for such Software.
Section 5.15. Information. None of the Schedule 14D-9, the Proxy
Statement, if any, or any other document filed or to be filed by or on behalf
of the Company with the SEC or any other governmental entity in connection
with the transactions contemplated by this Agreement contained when filed or
will, at the respective times filed with the SEC or other governmental entity
and, in addition, in the case of the Proxy Statement, if any, at the date it
or any amendment or supplement is mailed to stockholders and at the time of
any Special Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances
under which they were made, not misleading; provided that the foregoing shall
not apply to information supplied by Parent or the Purchaser specifically for
inclusion or incorporation by reference in any such document. The Schedule
14D-9 and the Proxy Statement, if any, will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and
regulations thereunder. None of the information supplied by the Company
specifically for inclusion or incorporation by reference in the Offer
Documents or in any other document filed or to be filed by or on behalf of
Parent or the Purchaser with the SEC or any other governmental entity in
connection with the transactions contemplated by this Agreement contains any
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
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Section 5.16. Delaware Section 203. The Board has taken all
appropriate and necessary action such that the provisions of Section 203 of
the DGCL will not apply to any of the transactions contemplated by this
Agreement.
Section 5.17. Broker's Fees; Transaction Expenses. (a) Except for
Donaldson, Lufkin & Jenrette Securities Corporation, neither the Company nor
any of its subsidiaries or any of its directors or officers has incurred any
liability for any broker's fees, commissions, or financial advisory or
finder's fees in connection with any of the transactions contemplated by this
Agreement, and neither the Company nor any of its subsidiaries or any of its
directors or officers has employed any other broker, finder or financial
advisor in connection with any of the transactions contemplated by this
Agreement.
(b) Schedule 5.17(b) lists all financial advisory, legal,
accounting, consulting and similar fees for services that will be payable by
the Company in connection with the negotiation and execution of this
Agreement and the consummation of the Offer and the Merger.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND
THE PURCHASER
Parent and the Purchaser represent and warrant to the Company as
follows:
Section 6.01. Organization. Each of Parent and the Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of Delaware and each of Parent and the Purchaser has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Purchaser is an indirect
wholly owned subsidiary of Parent.
Section 6.02. Authority. Each of Parent and the Purchaser has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized and approved by the Board of
Directors of each of Parent and the Purchaser and by Parent (or another
wholly owned subsidiary of Parent) as the sole stockholder of the Purchaser
and no other corporate proceedings are necessary to authorize this Agreement
or the consummation of the transactions contemplated hereby. This Agreement
has
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been duly and validly executed and delivered by each of Parent and the
Purchaser and, assuming this Agreement constitutes a legal, valid and binding
agreement of the Company, it constitutes a legal, valid and binding agreement
of each of Parent and the Purchaser, enforceable against them in accordance
with its terms.
Section 6.03. No Violations; Consents and Approvals. (a) Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby nor compliance by Parent or the Purchaser
with any of the provisions hereof will (i) violate any provision of their
respective certificates of incorporation or by-laws, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default, or give rise to any right of termination,
cancellation or acceleration or any right which becomes effective upon the
occurrence of a merger, under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture or other instrument of indebtedness for
money borrowed to which Parent or the Purchaser is a party, or by which
Parent or the Purchaser or any of their respective properties is bound, (iii)
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default, or give rise to any right of
termination, cancellation or acceleration or any right which becomes
effective upon the occurrence of a merger, under, any of the terms,
conditions or provisions of any license, franchise, permit or agreement to
which Parent or the Purchaser is a party, or by which Parent or the Purchaser
or any of their respective properties is bound, or (iv) violate any statute,
rule, regulation, order or decree of any public body or authority by which
Parent or the Purchaser or any of its respective properties is bound,
excluding from the foregoing clauses (ii), (iii) and (iv) violations,
breaches, defaults or rights which, either individually or in the aggregate,
would not have a material adverse effect on Parent's or the Purchaser's
ability to perform their respective obligations pursuant to this Agreement or
consummate the Offer and the Merger (a "Parent Material Adverse Effect") or
for which Parent or the Purchaser has received appropriate consents or
waivers.
(b) No filing or registration with, notification to, or
authorization, consent or approval of, any governmental entity is required by
Parent or the Purchaser in connection with the execution and delivery of this
Agreement, or the consummation by Parent or the Purchaser of the transactions
contemplated hereby, except (i) expiration of the waiting period under the
HSR Act, (ii) in connection, or in compliance, with the provisions of the
Exchange Act, (iii) the filing of the Certificate of Merger with the Delaware
Secretary of State, (iv)
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such filings and consents as may be required under any environmental law
pertaining to any notification, disclosure or required approval triggered by
the Merger or the transactions contemplated by this Agreement, (v) such
consents, approvals, orders, authorizations, notifications, approvals,
registrations, declarations and filings as may be required under the
corporation, takeover or blue sky laws of various states
[or non-U.S. change-in-control laws or regulations] and (vi) such other
consents, orders, authorizations, registrations, declarations and filings not
obtained prior to the Effective Time the failure of which to be obtained or
made would not, individually or in the aggregate, have a Parent Material
Adverse Effect.
Section 6.04. Information. Neither the Offer Documents nor any
other document filed or to be filed by or on behalf of Parent or the
Purchaser with the SEC or any other governmental entity in connection with
the transactions contemplated by this Agreement contained when filed or will,
at the respective times filed with the SEC or other governmental entity,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading; provided that the foregoing shall not apply to
information supplied by the Company specifically for inclusion or
incorporation by reference in any such document. None of the information
supplied by Parent or the Purchaser specifically for inclusion or
incorporation by reference in the Schedule 14D-9, the Proxy Statement, if
any, or any other document filed or to be filed by or on behalf of the
Company with the SEC or any other governmental entity in connection with the
transactions contemplated by this Agreement contains any untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
Section 6.05. Financing. Parent currently has in effect and will
have at the time of acceptance for payment and purchase of Shares under the
Offer and at the Effective Time, lines of credit and sufficient unused
borrowing capacity thereunder to provide the funds necessary to consummate
the Offer and the Merger and the transactions contemplated thereby and to pay
related fees and expenses.
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ARTICLE VII
COVENANTS
Section 7.01. Conduct of Business of the Company. Except as
contemplated by this Agreement or as expressly agreed to in writing by
Parent, during the period from the date of this Agreement to the Effective
Time, each of the Company and its subsidiaries will conduct its operations
according to its ordinary course of business consistent with past practice,
and will use all commercially reasonable efforts to preserve intact its
business organization, to keep available the services of its employees and to
maintain satisfactory relationships with suppliers, distributors, customers
and others having business relationships with it and will take no action
which would materially adversely affect the ability of the parties to
consummate the transactions contemplated by this Agreement or be inconsistent
with such transactions. Without limiting the generality of the foregoing
restriction, neither the Company nor any of its subsidiaries shall, without
the written consent of Parent (which consent will not be unreasonably
withheld) (i) amend any employee benefit plans or change the compensation or
benefits due to any employee (other than normal merit increases in accordance
with past practice), (ii) hire any officer at the vice president level or
higher, (iii) enter into any license of intellectual property, whether as
licensee or licensor, (iv) incur indebtedness for borrowed money in any
amount over $1,000,000, (v) enter into any lease having a term in excess of
one year, (vi) incur any capital expenditure in excess of $100,000, (vii)
sell or otherwise dispose of any capital assets for consideration in excess
of $100,000 or any real property, (viii) permit the creation of any lien on
any of its, except in the ordinary course of business or in connection with
its contemplated refinancing or (ix) enter into any sales contract or
purchase order or related group of contracts or orders calling for aggregate
payments in excess of $500,000 or having a term in excess of one year.
Section 7.02. Acquisitions and Divestitures. Prior to the Effective
Time, the Company shall keep Parent advised of the status of all discussions
and negotiations concerning possible acquisitions and divestitures of any
corporations or businesses, and the Company agrees that without the prior
written consent of Parent it shall not make, or agree to make, any such
acquisition or divestiture.
Section 7.03. No Solicitation. (a) The Company agrees that, prior
to the Effective Time, it shall not, and shall not authorize or permit any of
its subsidiaries or any of its or its subsidiaries' directors, officers,
employees, agents
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or representatives (including financial advisors), directly or indirectly, to
solicit, initiate, facilitate or encourage (including by way of furnishing or
disclosing non-public information) any inquiries or the making of any
proposal with respect to any merger, consolidation or other business
combination involving the Company or its subsidiaries or acquisition of any
kind of all or substantially all of the assets or capital stock of the
Company and its subsidiaries taken as a whole (an "Acquisition Transaction")
or negotiate or explore with any person (other than Parent or the Purchaser)
any Acquisition Transaction or enter into any agreement, arrangement or
understanding requiring it to abandon, terminate or fail to consummate the
Merger or any other transactions contemplated by this Agreement; provided
that the Company may, in response to an unsolicited written proposal with
respect to an Acquisition Transaction from a third party that the Board
believes to be capable of obtaining financing for such proposal, (i) furnish
or disclose non-public information to such third party and (ii) negotiate,
explore or otherwise communicate with such third party, in each case only if
the Board determines in good faith by a majority vote, after consultation
with its legal and financial advisors, and after receipt of the advice of
outside legal counsel of the Company that failing to take such action would
constitute a breach of the fiduciary duties of the Board, that failing to
take such action would constitute a breach of the Board's fiduciary duties.
(b) The Company shall as promptly as practicable advise Parent in
writing of the receipt of any inquiries or proposals relating to an
Acquisition Transaction and any actions taken pursuant to Section 7.03(a).
Section 7.04. Access to Information. From the date of this
Agreement until the Effective Time, the Company will give Parent and its
authorized representatives (including counsel, environmental and other
consultants, accountants and auditors) full access during normal business
hours, subject to applicable law, to all facilities, personnel and operations
and to all books and records of the Company and its subsidiaries, will permit
Parent to make such inspections as it may reasonably require and will cause
its employees and those of its subsidiaries to furnish Parent with such
financial and operating data and other information with respect to its
business and properties as Parent may from time to time reasonably request.
The Company shall use its best efforts to make available to Parent and its
authorized representatives the Company's accountants to facilitate Parent's
investigation. Other than as required by applicable law, Parent agrees that
any information
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furnished to it, its subsidiaries or its authorized representatives pursuant
to this Section 7.04 will be subject to the confidentiality provisions of the
letter agreement dated February 16, 1996 between Parent and the Company.
Section 7.05. Best Efforts; Other Actions. Subject to the terms and
conditions herein provided and applicable law, each of the Company, Parent
and the Purchaser shall use its reasonable best efforts promptly to take, or
cause to be taken, all other actions and do, or cause to be done, all other
things necessary, proper or appropriate under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement, including, without limitation, (i) the obtaining of all necessary
consents, approvals or waivers under its material contracts and (ii) the
lifting of any legal bar to the Merger; provided, however, that the foregoing
shall not require Parent, the Purchaser or any other affiliate of Parent to
agree to any action or restriction which, if imposed by a governmental
entity, would constitute a condition described in paragraph (a) of Annex I to
this Agreement.
Section 7.06. Public Announcements. Before issuing any press
release or otherwise making any public statements with respect to this
Agreement, the Offer or the Merger, Parent, the Purchaser and the Company
will consult with each other as to its form and substance and shall not issue
any such press release or make any such public statement prior to such
consultation, except as may be required by law; provided, however, that
neither Parent nor the Company shall be required to consult with the other
concerning any portion of such a press release or public statement that
relates to matters other than the transactions contemplated by this Agreement.
Section 7.07. Notification of Certain Matters. Each of the Company
and Parent shall give prompt notice to the other party of (i) the occurrence,
or non-occurrence, of any event the occurrence, or non-occurrence, of which
would be likely to cause either (A) any representation or warranty contained
in this Agreement to be untrue or inaccurate in any material respect at any
time from the date hereof to the acceptance for payment of Shares pursuant to
the Offer, (B) any condition set forth in Annex I to be unsatisfied in any
material respect at any time from the date hereof to the date the Purchaser
purchases Shares pursuant to the Offer or (C) any condition set forth in
Article VIII hereof to be unsatisfied in any material respect at any time
from the date hereof to the Effective Time, and (ii) any material failure of
the Company or Parent, as the
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case may be, or any officer, director, employee or agent thereof, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 7.07 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
Section 7.08. Indemnification. (a) From and after the Effective
Time, Parent shall indemnify, defend and hold harmless the present and former
officers, directors, employees and agents of the Company and its subsidiaries
against all losses, claims, damages, expenses or liabilities arising out of
actions or omissions or alleged actions or omissions occurring at or prior to
the Effective Time, including without limitation the transactions
contemplated by this Agreement, to the same extent and on the same terms and
conditions (including with respect to advancement of expenses) provided for
in the Company's Certificate of Incorporation and By-Laws and agreements in
effect at the date hereof (to the extent consistent with applicable law).
(b) For a period of five years after the Effective Time, Parent
shall cause to be maintained in effect the current policies of directors' and
officers' liability insurance maintained by the Company (provided that Parent
may substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are no less advantageous) with respect
to claims arising from facts or events which occurred before the Effective
Time; provided, however, that Parent shall not be obligated to make annual
premium payments for such insurance to the extent such premiums exceed 150%
of the premiums paid as of the date hereof by the Company for such insurance
(the "Maximum Premium"). If the amount of the annual premiums necessary to
maintain or procure such insurance coverage exceeds the Maximum Premium,
Parent shall maintain the most advantageous policies of directors' and
officers' insurance obtainable for an annual premium equal to the Maximum
Premium.
(c) The provisions of this Section 7.08 are intended to be for the
benefit of, and shall be enforceable by each indemnified party hereunder, his
or her heirs and his or her representatives.
Section 7.09. Expenses. Except as set forth in Section 9.05(b)
hereof, Parent and the Company shall bear their respective expenses incurred
in connection with this Agreement, the Offer and the Merger, including,
without limitation, the preparation, execution and performance of this
Agreement and the transactions contemplated hereby, and all fees and expenses
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of investment bankers, finders, brokers, agents, representatives, counsel and
accountants.
Section 7.10. State Takeover Laws. The Company shall, upon the
request of Parent or the Purchaser, take all reasonable steps to assist in
any challenge by Parent or the Purchaser to the validity or applicability to
the transactions contemplated by this Agreement, including the Offer and the
Merger, of any state takeover law.
Section 7.11. Employee Benefits. Following the Effective Time,
Purchaser shall cause the Company to honor in accordance with their terms the
employment contracts set forth on Schedule 7.11, as in effect on the date
hereof. Until the first anniversary of the Effective Time, Parent shall
provide or cause the Company to provide to individuals who are employed by
the Company or any of its subsidiaries as of the Effective Time employee
benefits that are in the aggregate no less favorable than those generally
provided to employees of the Company on the date hereof, other than the
Company's Employee Stock Purchase Plan. Parent will make its employee stock
purchase plan available to employees of the Company as promptly as
practicable following the Effective Time.
Section 7.12. Warrants. Prior to the Effective Time, the Company
shall use its reasonable best efforts to cause the Consulting Agreement
between the Company and Donald W. Rowley ("Rowley") dated February 12, 1996,
as amended (the "Rowley Agreement"), and the Consulting Agreement between the
Company and Jay Alix ("Alix") dated January 16, 1996, as amended (the "Alix
Agreement"), to be amended to provide that each of the Warrants to purchase
Shares granted to Rowley pursuant to the Rowley Agreement and each of the
Warrants to purchase Shares granted to Alix pursuant to the Alix Agreement
shall, at the Effective Time, be cancelled and each of Rowley and Alix,
respectively, shall be entitled to receive from the Company in lieu thereof
an immediate cash payment from the Company equal to the Merger Price
multiplied by the number of Shares for which their respective Warrants are
exercisable, minus the aggregate exercise price of such Warrants.
Section 7.13. Credit Commitment. Parent shall use its reasonable
best efforts to assist the Company in obtaining from The Bank of New York
Financial Corporation ("BONYFC") a written commitment to the Company
extending through at least May 31, 1997 to lend up to $75 million to the
Company on commercially reasonable terms that are no less favorable to the
Company than the terms of the latest written proposal made by BONYFC to the
Company as of the date hereof; provided, however, that the foregoing shall
not obligate Parent to incur any fees
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or expenses payable to BONYFC or to guarantee, directly or indirectly, any
obligations or indebtedness of the Company. If, notwithstanding the
foregoing, BONYFC does not extend such written commitment to the Company on
or before March 15, 1997, then, at the Company's option, Parent shall
purchase from the Company, and the Company shall sell to Parent, shares of a
newly created series of preferred stock of the Company having the terms set
forth in Annex II hereto for an aggregate purchase price of $25,000,000
payable to the Company by wire transfer in immediately available funds with
the closing of such purchase and sale to take place no later than March 31,
1997.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF PARENT,
THE PURCHASER AND THE COMPANY
The respective obligations of each party to effect the Merger shall
be subject to the satisfaction or, if permissible, waiver at or prior to the
Effective Time of each of the following conditions:
Section 8.01. Purchase of Shares. The Purchaser shall have accepted
for payment and paid for Shares pursuant to the Offer in accordance with the
terms thereof.
Section 8.02. Stockholder Approval. The vote of the stockholders of
the Company necessary to consummate the transactions contemplated by this
Agreement shall have been obtained, if required by applicable law.
Section 8.03. No Legal Impediments. No statute, rule, regulation,
judgment, writ, decree, order or injunction shall have been promulgated,
enacted, entered, enforced or deemed applicable to this Agreement or the
Merger, and no other action shall have been taken, by any domestic, foreign
or supranational government or governmental, administrative or regulatory
authority or agency or by any court or tribunal, domestic, foreign or
supranational, that has the effect of making illegal or directly or
indirectly restraining, prohibiting or restricting the consummation of the
Merger.
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ARTICLE IX
TERMINATION AND ABANDONMENT
Section 9.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time:
(a) by mutual consent of the Boards of Directors of Parent and the
Company;
(b) by either Parent or the Company if, without fault of such
terminating party, the purchase of Shares pursuant to the Offer shall not
have occurred on or before September 30, 1997, which date may be extended
by mutual written consent of the parties hereto;
(c) by Parent or the Company if the Offer expires or is terminated
or withdrawn pursuant to its terms without any Shares being purchased
thereunder; or
(d) by either Parent or the Company if any court of competent
jurisdiction in the United States or other governmental body in the
United States shall have issued an order (other than a temporary
restraining order), decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the purchase of Shares
pursuant to the Offer or the Merger, and such order, decree, ruling or
other action shall have become final and nonappealable; provided that the
party seeking to terminate this Agreement shall have used its reasonable
best efforts, subject to Section 7.05, to remove or lift such order,
decree or ruling.
Section 9.02. Termination by Parent. This Agreement may be
terminated and the Offer and the Merger may be abandoned by action of the
Board of Directors of Parent, at any time prior to the purchase of Shares
pursuant to the Offer, if (a) the Board shall withdraw, modify or change its
recommendation or approval in respect of this Agreement or the Offer in a
manner adverse to Parent, (b) the Board shall have recommended any proposal
other than by Parent or the Purchaser in respect of an Acquisition
Transaction, or (c) a proposal for an Acquisition Transaction other than by
Parent or the Purchaser shall be publicly disclosed and at the scheduled
expiration of the Offer the Minimum Condition shall not have been satisfied.
Section 9.03. Termination by the Company. This Agreement may be
terminated and the Merger may be abandoned by action of the Board, at any
time prior to the Effective Time, (a) if there shall be a material breach of
any of Parent's or
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the Purchaser's representations, warranties or covenants hereunder, which
breach shall not be cured within ten days of notice thereof, or (b) provided
the Company is not in breach of any obligation under this Agreement, to allow
the Company to enter into an agreement in respect of an Acquisition
Transaction which the Board determines is more favorable to the Company's
stockholders from a financial point of view than the transactions
contemplated hereby (provided that such termination shall not be effective
unless and until the Company shall have paid to Parent the fee described in
Section 9.05(b) hereof).
Section 9.04. Procedure for Termination. In the event of
termination and abandonment of the Merger and the Offer by Parent or the
Merger by the Company pursuant to this Article IX, written notice thereof
shall forthwith be given to the other.
Section 9.05. Effect of Termination and Abandonment. (a) In the
event of termination of this Agreement and abandonment of the Merger pursuant
to this Article IX, no party hereto (or any of its directors or officers)
shall have any liability or further obligation to any other party to this
Agreement, except as provided in this Section 9.05 and except that nothing
herein shall relieve any party from liability for any breach of this
Agreement.
(b) If (i) Parent shall have terminated this Agreement pursuant to
clause (a) or (b) of Section 9.02 hereof or (ii) the Company shall have
terminated this Agreement pursuant to Section 9.03(b) hereof, then in any
such case the Company shall promptly, but in no event later than two days
after the date of such termination or event, pay Parent in the manner set
forth in the last sentence of this paragraph a termination fee of $9,000,000.
If Parent shall have terminated this Agreement pursuant to clause (c) of
Section 9.02 hereof and, within one year after such termination, the Company
shall have entered into a definitive agreement providing for an Acquisition
Transaction, the Company shall promptly, but in no event later than two days
after the date of such definitive agreement, pay Parent in the manner set
forth in the last sentence of this paragraph a termination fee of $9,000,000.
Any termination fee payable under this paragraph shall be paid by the
issuance to Parent of shares of preferred stock of the Company having the
terms set forth in Annex III.
(c) Upon termination of this Agreement, Parent will return to the
Company all copies in Parent's possession of all non-public information
supplied to Parent by the Company.
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ARTICLE X
DEFINITIONS
Section 10.01. Terms Defined in the Agreement. The following terms
used herein shall have the meanings ascribed in the indicated sections.
Acquisition Transaction ......................................... 7.03(a)
Agreement........................................................ Preamble
Alix............................................................. 7.12
Alix Agreement .................................................. 7.12
Board ........................................................... Recitals
BONYFC........................................................... 7.13
Certificate of Merger ........................................... 2.02
Certificates .................................................... 4.02(a)
Code............................................................. 3.02(a)
Company ......................................................... Preamble
Company ERISA Affiliate.......................................... 5.10
Company Material Adverse Effect ................................. 5.01
Company Permits ................................................. 5.08
Company Preferred Stock.......................................... 5.02
Company Software................................................. 5.14(a)
Constituent Corporations......................................... Preamble
Delaware Secretary of State ..................................... 2.02
DGCL ............................................................ Recitals
Dissenting Shares ............................................... 4.01
Effective Time .................................................. 2.02
ERISA ........................................................... 5.10
Exchange Act..................................................... 1.01(a)
Intellectual Property ........................................... 5.11(a)
Maximum Premium ................................................. 7.08(b)
HSR Act ......................................................... 5.04(b)
Merger .......................................................... 2.01(a)
Merger Price .................................................... 3.01
Minimum Condition ............................................... 1.01(a)
Offer ........................................................... 1.01(a)
Offer Documents ................................................. 1.01(c)
Option Plans .................................................... 3.02(a)
Options ......................................................... 3.02(a)
Parent .......................................................... Preamble
Parent Common Stock ............................................. 3.02(a)
Parent Material Adverse Effect .................................. 6.03(a)
Parent Options .................................................. 3.02(a)
Paying Agent .................................................... 4.02(a)
Person .......................................................... 11.09
Plans ........................................................... 5.10
Proxy Statement ................................................. 3.03(a)(ii)
Purchaser ....................................................... Preamble
Rowley .......................................................... 7.12
Rowley Agreement ................................................ 7.12
Schedule 14D-9 .................................................. 1.02(b)
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SEC ............................................................. 1.01(c)
SEC Documents ................................................... 5.05(a)
Shares .......................................................... 1.01(a)
Significant Subsidiary .......................................... 5.01
Software ........................................................ 5.14(a)
Special Meeting ................................................. 3.03(a)(i)
Subsidiary ...................................................... 11.09
Surviving Corporation ........................................... 2.01(a)
Tax ............................................................. 5.09
Warrants ........................................................ 5.02
ARTICLE XI
MISCELLANEOUS
Section 11.01. Amendment and Modification. At any time prior to the
Effective Time, subject to applicable law and the provisions of Section
1.03(c) hereof, this Agreement may be amended, modified or supplemented only
by written agreement (referring specifically to this Agreement) of Parent,
the Purchaser and the Company with respect to any of the terms contained
herein; provided, however, that after any approval and adoption of this
Agreement by the stockholders of the Company, no such amendment, modification
or supplementation shall be made which reduces the Merger Price or the form
of consideration therefor or which in any way materially adversely affects
the rights of such stockholders, without the further approval of such
stockholders.
Section 11.02. Waiver. At any time prior to the Effective Time,
Parent and the Purchaser, on the one hand, and the Company, on the other
hand, may (i) extend the time for the performance of any of the obligations
or other acts of the other, (ii) waive any inaccuracies in the
representations and warranties of the other contained herein or in any
documents delivered pursuant hereto and (iii) waive compliance by the other
with any of the agreements or conditions contained herein which may legally
be waived. Any such extension or waiver shall be valid only if set forth in
an instrument in writing specifically referring to this Agreement and signed
on behalf of such party.
Section 11.03. Survivability; Investigations. The respective
representations and warranties of Parent, the Purchaser and the Company
contained herein or in any certificates or other documents delivered prior to
or as of the Effective Time shall not be deemed waived or otherwise affected
by any investigation made by any party hereto and shall not survive the
Merger. The covenants and agreements of the Surviving Corporation and Parent
and the Purchaser, including those contained in Section 7.08 hereof, shall
survive the Effective Time without limitation.
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Section 11.04. Notices. All notices and other communications
hereunder shall be in writing and shall be delivered personally or by
next-day courier or telecopied with confirmation of receipt, to the parties
at the addresses specified below (or at such other address for a party as
shall be specified by like notice; provided that notices of a change of
address shall be effective only upon receipt thereof). Any such notice shall
be effective upon receipt, if personally delivered or telecopied, or one day
after delivery to a courier for next-day delivery.
(a) if to the Company, to
Norand Corporation
550 Second Street S.E.
Cedar Rapids, Iowa 52401
Telecopy: (319) 369-3630
Attention: James I. Johnson
with a copy to:
Mayer Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Telecopy: (312) 701-7711
Attention: John R. Sagan
(b) if to Parent or the Purchaser, to
Western Atlas Inc.
360 North Crescent Drive
Beverly Hills, California 90210
Telecopy: (310) 888-2913
Attention: General Counsel
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopy: (212) 403-2000
Attention: Elliott V. Stein, Esq.
Section 11.05. Assignment; Third-Party Beneficiaries. This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights,
interests or obligations
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hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties. This Agreement is not intended to
confer any rights or remedies hereunder upon any other person except the
parties hereto and, with respect to Section 7.08, the present and former
officers, directors, employees and agents of the Company.
Section 11.06. Governing Law. This Agreement shall be governed by
the laws of the State of Delaware (regardless of the laws that might
otherwise govern under applicable Delaware principles of conflicts of law) as
to all matters, including but not limited to matters of validity,
construction, effect, performance and remedies.
Section 11.07. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 11.08. Severability. In case any one or more of the
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect against a party hereto, the validity, legality
and enforceability of the remaining provisions contained herein shall not in
any way be affected or impaired thereby and such invalidity, illegality or
unenforceability shall only apply as to such party in the specific
jurisdiction where such judgment shall be made.
Section 11.09. Interpretation. The article and section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not in any way affect the
meaning or interpretation of this Agreement. As used in this Agreement, (i)
the term "person" shall mean and include an individual, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof; and (ii) the term
"subsidiary" of any specified corporation shall mean any corporation of which
a majority of the outstanding securities having ordinary voting power to
elect a majority of the board of directors are directly or indirectly owned
by such specified corporation or any other person of which a majority of the
equity interests therein are, directly or indirectly, owned by such specified
corporation.
Section 11.10. Guarantee. Parent hereby guarantees the due
performance by the Purchaser of all of the Purchaser's obligations incurred
in connection with the Offer and the Merger.
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Section 11.11. Confidentiality Agreement. The letter agreement
dated February 16, 1996 between Parent and the Company is hereby amended by
deleting the eighth paragraph thereof.
Section 11.12. Entire Agreement. This Agreement, including the
schedules, annexes and exhibits hereto and the documents and instruments
referred to herein and therein, embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter
contained herein and therein and supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
There are no representations, promises, warranties, covenants, or
undertakings in respect of such subject matter, other than those expressly
set forth or referred to herein and therein.
IN WITNESS WHEREOF, Parent, the Purchaser and the Company have
caused this Agreement to be signed by their respective duly authorized
officers as of the date first above written.
WESTERN ATLAS INC.
By: /s/ Michael E. Keane
---------------------
Name: Michael E. Keane
Title: Senior Vice President
and Chief Financial
Officer
WAI ACQUISITION CORP.
By: /s/ Michael E. Keane
---------------------
Name: Michael E. Keane
Title: President
NORAND CORPORATION
By: /s/ N. Robert Hammer
---------------------
Name: N. Robert Hammer
Title: Chairman, President and
Chief Executive Officer
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ANNEX I
Conditions to the Offer. Notwithstanding any other provision of the
Offer, the Purchaser shall not be required to accept for payment or, subject
to any applicable rules and regulations of the SEC, including Rule 14e-1(c)
promulgated under the Exchange Act (relating to the Purchaser's obligation to
pay for or return tendered Shares promptly after termination or withdrawal of
the Offer), pay for, and may delay the acceptance for payment of any tendered
Shares and amend or terminate the Offer as to any Shares not then paid for if
(i) there shall not be validly tendered and not withdrawn prior to the
expiration of the Offer a number of Shares which represents at least a
majority of the number of Shares outstanding on a fully diluted basis
(assuming the exercise of all outstanding Options and Warrants) or (ii) any
applicable waiting period under the HSR Act or other applicable laws or
regulations shall not have expired or been terminated prior to the expiration
of the Offer or (iii) at any time after the date of this Merger Agreement and
before the time of payment for any such Shares (whether or not any Shares
have theretofore been accepted for payment or paid for pursuant to the
Offer), any of the following conditions exists:
(a) there shall be in effect an injunction or other order, decree,
judgment or ruling by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission or a statute, rule,
regulation, executive order or other action shall have been promulgated,
enacted, taken or threatened by a governmental authority or a governmental,
regulatory or administrative agency or commission which in any such case (i)
restrains or prohibits the making or consummation of the Offer or the
consummation of the Merger, (ii) prohibits or restricts the ownership or
operation by Parent or the Purchaser (or any of their respective affiliates
or subsidiaries) of any portion of its or the Company's business or assets
which is material to the business of all such entities taken as a whole, or
compels Parent or the Purchaser (or any of their respective affiliates or
subsidiaries) to dispose of or hold separate any portion of its or the
Company's business or assets which is material to the business of all such
entities taken as a whole, (iii) imposes material limitations on the ability
of the Purchaser effectively to acquire or to hold or to exercise full rights
of ownership of the Shares, including, without limitation, the right to vote
the Shares purchased by the Purchaser on all matters properly presented to
the stockholders of the Company, (iv) imposes any material limitations on the
ability of Parent or the Purchaser or any of their respective affiliates or
subsidiaries effectively to control in any material respect the business and
operations of the Company
<PAGE>
and its subsidiaries, or (v) which otherwise would materially adversely
affect the Company and its subsidiaries taken as a whole; or
(b) there shall be pending any litigation or other proceeding
brought by any governmental entity or agency that seeks to impose any of the
effects referred to in paragraph (a) above or seeks material damages from the
Company or Parent in connection with the Offer or the Merger; or
(c) this Agreement shall have been terminated by the Company, Parent
or the Purchaser in accordance with its terms; or
(d)(i) any of the representations and warranties of the Company set
forth in this Agreement that are qualified as to materiality shall not be
true and correct, or any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, when made,
or as of the Expiration Date (as defined in the Offer Documents) as if made
as of such date, or (ii) as of the Expiration Date the Company shall not in
all material respects have performed its obligations and agreements and
complied with its covenants to be performed and complied with by it under
this Agreement; or
(e) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on any national securities
exchange or the over-the-counter market, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory), (iii) the commencement of a war, armed
hostilities or other international or national calamity directly involving
the United States, (iv) from the date of this Merger Agreement through the
date of termination or expiration of the Offer, a decline of at least 25% in
the Standard & Poor's 500 Index, or (v) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or
(f) Parent, the Purchaser and the Company shall have agreed that the
Purchaser shall amend the Offer to terminate the Offer or postpone the
payment for Shares pursuant thereto.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser and may be asserted by Parent or the Purchaser regardless of the
circumstances (including any action or inaction by Parent or the Purchaser)
giving rise to any such conditions and may be waived by Parent or the
Purchaser in whole or in part at any time and from time to time, in each
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<PAGE>
case, in the good faith judgment of Parent and the Purchaser and subject to
the terms of this Agreement. The failure by Parent or the Purchaser at any
time to exercise any of the foregoing rights shall not be deemed a waiver of
any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time.
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<PAGE>
ANNEX II
Term Sheet for Series A
Convertible Preferred Stock
Issuer: Norand Corporation (the "Company")
Liquidation
Preference: $25,000,000
Conversion: After the first anniversary of issue date, convertible
at the option of holder into common stock of the
Company at the rate of 1 share of common stock for each
$23.00 of liquidation preference, subject to
antidilution provisions substantially identical to
those in the Company's Series A and Series B Warrants.
Dividend: 6-1/2% per annum of liquidation preference amount
payable at the option of the Company in shares of
Series A Convertible Preferred Stock or cash.
Mandatory Redemption: Upon request of holder on earlier to occur of (i)
consummation of a transaction resulting in a change in
control of the Company and (ii) tenth anniversary of
date of issue.
Optional Redemption: At the option of the Company (i) during first year of
issuance at 110% of liquidation preference and (ii)
after first year from issuance at 100% of liquidation
preference as long as the Company's common stock has
traded in excess of $25.30 for any 10 consecutive
trading days.
Default: If the Company defaults on its mandatory redemption
obligation, the dividend rate will increase by 25 basis
points, and will thereafter increase by an additional
25 basis points for each 91-day period the default
continues, up to a maximum dividend rate of
<PAGE>
10-1/2%. During continuance of the default, the
holder will be entitled to appoint one member of the
Company's board of directors.
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<PAGE>
ANNEX III
Term Sheet for Series B
Convertible Preferred Stock
Issuer: Norand Corporation (the "Company")
Liquidation
Preference: $9,000,000
Conversion: After the expiration of six months from issue date,
convertible at the option of holder into common stock
of the Company at the rate of 1 share of common stock
for each $23.00 of liquidation preference, subject to
antidilution provisions substantially identical to
those in the Company's Series A and Series B Warrants.
Dividend: 6% per annum of liquidation preference amount payable
semi-annually and at the option of the Company in
shares of Series B Convertible Preferred Stock or cash.
Mandatory Redemption: Upon request of holder on earlier to occur of (i)
consummation of a transaction resulting in a change in
control of the Company and (ii) third anniversary of
date of issue.
Optional Redemption: At the option of the Company (i) during first year of
issuance at 110% of liquidation preference and (ii)
after first year from issuance at 100% of liquidation
preference so long as Target's common stock has traded
in excess of $25.30 for any 10 consecutive trading
days.
Default: If the Company defaults on its mandatory redemption
obligation, the dividend rate will increase by 25 basis
points, and will thereafter increase by an additional
25 basis points for each 91-day period the default
contin-
<PAGE>
ues, up to a maximum dividend rate of 10%. During
continuance of the default, the holder will be
entitled to appoint one member of the Company's board
of directors.
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<PAGE>
Exhibit (c)(2)
Contract Expiration Date: January 21, 1999
ORIGINAL EQUIPMENT MANUFACTURER AGREEMENT
This Agreement is between Norand Corporation ("NORAND"), 550 Second Street S.E.,
Cedar Rapids, IA 52401, and Western Atlas, Inc., including its subsidiaries
("WESTERN ATLAS"), located at 360 North Crescent Drive, Beverly Hills,
California 90210.
BACKGROUND
A. Norand is in the business of selling computer hardware and associated hand
held terminal equipment, software and services for use with such computer
hardware.
B. Western Atlas is in the business of selling integrated manufacturing
systems, automated data collection systems and material management systems.
C. Western Atlas wishes to purchase computer hardware and systems software from
Norand for resale in the Territory (defined in Section 1.1 below).
AGREEMENT
1. APPOINTMENT OF WESTERN ATLAS
1.1 TERRITORY
On a non-exclusive basis, Western Atlas may sell and license Products (as
defined in Section 2) for use in healthcare, manufacturing, warehouse and
distribution applications worldwide in such geographic locations where the
Products are certified (the "TERRITORY"). Norand reserves the right to
appoint other original equipment manufacturers, distributors and resellers
in the Territory to sell Products and support customers using Products if
Norand determines that is advisable. In addition, Norand reserves the
right to make sales and provide service directly through its own employees,
sales representatives and other original equipment manufacturers,
distributors and resellers.
1.2 NOT AN AGENT
Western Atlas is not Norand's agent for any purpose. This Agreement is not
to be construed as a joint venture, partnership, agency, employer/employee
relationship or any other form of business obligation between Norand and
West-
<PAGE>
ern Atlas to share profits or bear any losses of the other. Western Atlas
is acting solely as an independent contractor.
2. PRODUCTS
The products which may be purchased pursuant to this Agreement ("PRODUCTS")
are those listed on Schedule A, as may be amended from time to time by the
parties hereto. Any Products sold to Western Atlas pursuant to this
Agreement shall bear the "Intermec" name and/or logo as specified from time
to time by Western Atlas. Norand reserves the right, without incurring any
liability, to change prices, change the design or to discontinue the
manufacture or sale of any Products. Norand will give Western Atlas thirty
(30) days notice of any price changes or design changes to be made that
change form, fit or function of such products and ninety (90) days notice
of discontinuance of any Products. Norand will notify Western Atlas when
any product listed on Schedule A, but not yet released for sale, is so
released.
3. WESTERN ATLAS RESPONSIBILITIES
3.1 REASONABLE EFFORTS
Western Atlas agrees to use reasonable efforts to service customers in the
Territory.
3.2 VALUE ADDED
Western Atlas represents that it is a reseller of computer systems and
products and that it will purchase Products under this Agreement which it
will then remarket to third-party end-users in the regular course of its
business. The systems that Western Atlas sells will include additions or
integration of other equipment or software which Western Atlas
manufactures, acquires or develops.
3.3 SALES PROMOTION
Western Atlas will maintain a sales organization knowledgeable in the
Products. All Western Atlas sales personnel shall be certified by Norand
in accordance with Section 3.4.
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<PAGE>
3.4 CUSTOMER SUPPORT
Western Atlas will provide the appropriate personnel, facilities and
equipment necessary to provide support in the use and sale of Products to
customers in the Territory. Western Atlas will have its personnel attend
product, sales and service training courses as may be offered by Norand
from time to time or as required by Norand of its sales employees,
including but not limited to, the requirements set forth in Schedule B
hereto. Western Atlas will make available adequate and competent technical
resources to promptly answer technical start-up questions, to counsel
end-users regarding the selection, integration and use of Products and
available software programs; to assist end-users with obtaining appropriate
FCC licenses; to survey the customer's facilities to determine the
appropriate quantity and configuration of Products for that facility;
install Products at the customer's facilities and act as the primary
resource for end-user's support requirements.
3.5 MAINTENANCE
Western Atlas shall have the right to sell its maintenance services to
purchasers of Products. Norand will also make available to Western Atlas
for sale to its customers that purchase Products Norand's maintenance
services in the Territory in accordance with Norand's then current Value
Added Reseller Maintenance Incentive Program.
3.6 SALES FORECAST
Western Atlas will participate and cooperate with Norand fully in a monthly
forecast system to provide good faith qualitative and quantitative details
by month of projected sales and purchases of Products for the following
twelve calendar months. The forecast will include such information and be
in such form as Norand will from time to time require, including but not
limited to, the quantity and type of Products to be sold, projected
delivery dates and an assessment of the likelihood that the transaction
will be completed. The first such forecast to be provided by Western Atlas
pursuant to this Section shall be provided to Norand on or before April 1,
1997.
3.7 MONTHLY SALES AND SHIPMENT STATEMENT
Western Atlas will provide Norand with written reports each
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<PAGE>
month detailing sales by location and monthly shipment information,
including the serial numbers of the Products sold. This report will be
used to initiate the warranty period hereunder, and, while delay in such
report will not serve to lengthen the warranty period, failure or delay in
making such report may diminish the warranty coverage. The report will
include such information and be in such form as Norand will from time to
time require. All such records will be maintained by Western Atlas for a
period of three years from the date of termination of this Agreement.
3.8 FUNCTIONAL REQUIREMENTS
Western Atlas agrees that it is responsible for the selection of the
Products and the determination of the suitability of the Products for the
purpose for which Western Atlas intends to use them.
3.9 INSPECTION
Western Atlas agrees to inspect the Products upon receipt to ascertain that
they are operable and function properly prior to resale.
3.10 INDEMNITY
Western Atlas agrees to defend and hold Norand, its employees, agents,
successors and assigns harmless from any liability, loss, damage, claims
and expense whatsoever, including but not limited to judgments and
attorneys fees, caused or alleged to be caused directly or indirectly by
the products or services, or both, sold by Western Atlas or by the
negligent, grossly negligent or willful acts of any agent, employee or
subcontractor of Western Atlas; provided, however, that Western Atlas'
obligations hereunder shall not arise to the extent that the claim or
damage is caused solely by: (a) the Products; or (b) the negligent,
grossly negligent or willful acts of Norand or its agents or employees.
4. NORAND RESPONSIBILITIES
4.1 SALES ASSISTANCE
Norand may provide sales assistance in the Territory (as mutually agreed
upon) and will provide brochures and materials at Norand's standard prices
for such items then in
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<PAGE>
effect.
4.2 NORAND TRAINING, SUPPORT AND INTEGRATION
Norand shall make available to Western Atlas training programs, support
services and programs and system integration consulting at Norand's
standard prices for such services then in effect.
5. ORDERS AND RETURNS
5.1 AUTHORIZED ORDER FORM
The terms and conditions of this Agreement will be the only terms and
conditions which apply to all orders Western Atlas makes for Products,
unless Norand specifically agrees otherwise in writing. Any additional or
conflicting terms Western Atlas may propose with its orders will not apply.
All orders are subject to written acceptance by Norand.
5.2 ORDER INFORMATION
Western Atlas' orders must be in writing and identify the product or
service ordered, the shipping instructions, the requested delivery dates,
and the system number if applicable. Requested delivery dates must be
within one hundred and eighty (180) days of the date of order.
5.3 RESCHEDULING SHIPMENT
Western Atlas may reschedule shipment of an accepted order one time if
Western Atlas gives Norand written notice at least thirty (30) days before
the scheduled ship date; provided that, the requested rescheduling date is
within ninety (90) days of the original order date and Norand accepts the
new ship date requested. Such acceptance will not be unreasonably
withheld.
Western Atlas may cancel shipment of an accepted order if it gives Norand
written notice at least fifteen (15) business days before the scheduled
shipment date.
Cancellations, rescheduling and reconfigurations are subject to the
following charges:
Cancellation/Reconfiguration/
-----------------------------
If Notice is Received Rescheduling Charges
--------------------- --------------------
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<PAGE>
More than 60 days 0%
31 to 60 days 5%
16 to 30 days 10%
15 days 15%
Prior to Date of
Scheduled Shipment
An accepted order may be rescheduled or reconfigured no more than once.
Except as permitted by Norand in its sole and absolute discretion,
cancellation, reconfiguration or rescheduling is not permitted less than
fifteen (15) business days before the scheduled shipment date.
6. PRICES
6.1 PRICES
For the period beginning on the date hereof and continuing through January
19, 1998, Norand will sell Products to Western Atlas at a price based on
the sales forecast provided pursuant to Section 3.6 covering the
twelve-month period beginning on April 1, 1997, such price being no less
favorable than the lowest price then being charged by Norand for such
Products for sales to other purchasers based on sales volumes similar to
such forecast. For each period beginning on January 20 and ending on the
following January 19, commencing January 20, 1998, Norand will sell
Products to Western Atlas at a price based on the volume of purchases by
Western Atlas during the twelve-month period ending on the preceding
January 19, such price being no less favorable than the lowest price then
being charged by Norand for such Products for sales to other purchasers
with sales volumes similar to Western Atlas' volume purchases during such
twelve-month period. Prices are F.O.B. point of shipment and exclude all
transportation charges, duties and taxes. Western Atlas is responsible to
reimburse Norand for all duties and taxes (other than taxes on Norand's
income) which arise from the purchase and sale of Products, unless Western
Atlas provides Norand with written evidence that is satisfactory to Norand
of an exemption from such duties and taxes. Western Atlas is also
responsible for all transportation charges. Risk of loss shall pass to
Western Atlas F.O.B. point of shipment.
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<PAGE>
6.2 PRICE CHANGES
Norand will use reasonable efforts to provide Western Atlas written notice
of any price changes ninety (90) days before the new prices become
effective. If the change is an increase, orders placed within ninety (90)
days of the written notice will be at the old price; provided Western Atlas
accepts shipment within sixty (60) days from date of order. Orders for
shipment more than sixty (60) days after the date of order will be at the
new prices. In addition, the old price will apply to shipments made under
an order accepted before the notice of the price increase is given;
provided that, the agreed upon scheduled ship dates are within one hundred
and eighty (180) days of the order date and Western Atlas does not
reschedule shipment. If a shipment under such an order is rescheduled, the
new prices will apply to all subsequent shipments under that order.
If the change is a price decrease, Norand will apply the new lower price to
all shipments made under orders accepted, but not shipped, before the date
of notice of the price change.
7. INVOICING AND PAYMENT
Prices and other charges will be invoiced on shipment. Subject to prior
credit approval by Norand, payment will be due within thirty (30) days from
the date of invoice. If deliveries are made in installments, each shipment
will be paid for when due without regard to the other scheduled deliveries.
Failure to make payment when due may result in delay of scheduled
shipments. All amounts not paid when due will be subject to the lesser of:
(a) a 1-1/2% per month delinquency charge and (b) the highest interest rate
permitted under applicable law. Norand reserves the right to withhold
shipment and to require prepayment or other payment arrangements on all
future shipments if Western Atlas does not pay any invoice when due. To
assist Norand in establishing and updating credit limits and payment terms,
Western Atlas agrees to provide Norand with financial information relating
to Western Atlas' business, including audited financial statements and
other credit related information as Norand may reasonably request. Western
Atlas also agrees to provide updated financial information prior to renewal
of this Agreement for any additional term. To secure any indebtedness now
or hereafter owed by Western Atlas to Norand, Western Atlas hereby grants
to Norand a continuing security interest in
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<PAGE>
the Products whether now existing or hereafter acquired by Western Atlas
and all additions to, improvements on and substitutions for the Products
and all proceeds of the foregoing to secure any and all amounts owed Norand
by Western Atlas. Western Atlas authorizes Norand to file this Agreement
as a nonuniform financing statement and also agrees, upon request from
Norand, to sign and file appropriate documentation to perfect this security
interest.
8. ADVERTISING
Western Atlas agrees not to advertise Products in a false, misleading or
derogatory fashion and agrees to indemnify, defend and hold Norand harmless
for any claim, cause of action, suit, loss or liability (including court
costs and attorneys fees) based upon Western Atlas' advertisements.
Western Atlas will provide Norand with a copy of any advertisement upon
request and will cease and desist using any advertisement or forth of
advertisement which is not consistent with the requirements of this
Section.
9. LIMITED WARRANTIES AND REMEDIES
9.1 WARRANTY FOR NORAND EQUIPMENT
Norand warrants that Hardware will be free from defects in manufacturing
materials and workmanship for the warranty period applicable to the
Hardware as set forth in the Price Guide in effect when Western Atlas
places its order for such Hardware. The warranty period begins to run on
the date Norand ships the Hardware to Western Atlas. If an item of
Hardware has such a defect, Norand will repair it without charge or, if
Norand is not able to repair it, Western Atlas may return it to Norand and
Norand will credit the purchase price to Western Atlas' account for the
original price paid. Warranty repairs will be completed within 10 working
days and then returned to Western Atlas by prepaid surface freight carrier.
As used herein, the term "HARDWARE" means the Products excluding the
Software.
For this warranty to apply:
a. Western Atlas must obtain a Repair Return Authorization from the
Norand Service Center within the warranty period;
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<PAGE>
b. Norand must be given a written, detailed description of the
defect;
c. The item of Hardware must be promptly returned to the designated
Norand service center, freight prepaid by Western Atlas; and
d Upon examination of the item, Norand must agree that the defect
exists and is covered by this warranty.
9.2 WARRANTY FOR NORAND SOFTWARE
Norand warrants that Software will function in accordance with the user
manual provided with the Norand Software Products for one hundred eighty
(180) days from the date Norand ships to Western Atlas. If an item of
Software does not function as warranted, Norand will, without charge,
attempt to provide information to correct the program or the user manual.
If Norand is not able to provide this information, Western Atlas may return
the item of Software to Norand and Norand will credit the purchase price to
Western Atlas' account.
For this warranty to apply:
a. Norand must be given a written, detailed description of the
problem, within the warranty period; and
b. Norand must be able to reproduce the reported problem.
9.3LIMITATION OF WARRANTIES AND REMEDIES
The warranties set forth in Sections 9.1 and 9.2 do not apply to:
a. expendable items such as customer replaceable batteries and the
like, nor
b. defects or problems caused by causes outside of Norand's control;
such as, but not limited to, accident, misuse, neglect,
alteration, adjustments or repairs made by persons other than
authorized Norand personnel, unauthorized testing, use not within
specifications, or a product for which Norand is not responsible.
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<PAGE>
The remedies set forth in Section 9.1 and 9.2 are the only remedies that
apply. THE WARRANTIES IN THIS SECTION REPLACE AND ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL OTHER
WARRANTIES ARE DISCLAIMED.
Norand does not warrant uninterrupted or error-free operation of products
provided under this Agreement.
Non-Norand hardware and software is provided by Norand without warranty on
an "AS IS, WITH ALL FAULTS" basis. However, the manufacturers, suppliers
or publishers of the non-Norand hardware or Software may provide their own
warranties.
9.4 LIMITATION ON PATENT INFRINGEMENT SUITS
Western Atlas agrees not to assert any claims during the term of this
Agreement against Norand alleging that any of the Products infringe any
patent owned or controlled by Western Atlas or any of its subsidiaries.
10. LIMITATIONS OF LIABILITY
Norand does not guarantee delivery of Products by any particular date. If
Norand accepts Western Atlas' order and fails to deliver ordered Products,
Western Atlas' sole remedy will be limited to refund of money paid to
Norand for the undelivered products.
NEITHER NORAND NOR WESTERN ATLAS WILL HAVE ANY LIABILITY OR RESPONSIBILITY
TO WESTERN ATLAS OR NORAND, AS THE CASE MAY BE, OR ANY OTHER PERSON OR
ENTITY FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL
DAMAGES OR LOST PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON
CLAIMS OF NORAND, WESTERN ATLAS OR WESTERN ATLAS' CUSTOMERS, AS THE CASE
MAY BE, (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA, GOODWILL,
PROFITS, USE OF MONEY OR USE OF PRODUCT, INTERRUPTION IN USE OR
AVAILABILITY OF DATA, STOPPAGE OF OTHER WORK OR IMPAIRMENT OF OTHER
ASSETS), ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR IMPLIED WARRANTY,
BREACH OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT
OR OTHERWISE, EXCEPT
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<PAGE>
ONLY IN THE CASE OF DEATH OR PERSONAL INJURY WHERE AND TO THE EXTENT THAT
APPLICABLE LAW REQUIRES SUCH LIABILITY. IN NO EVENT WILL THE AGGREGATE
LIABILITY INCURRED BY NORAND OR WESTERN ATLAS, AS THE CASE MAY BE, IN ANY
ACTION OR PROCEEDING EXCEED THE TOTAL AMOUNT ACTUALLY PAID TO NORAND BY
WESTERN ATLAS OR BY WESTERN ATLAS TO NORAND, AS THE CASE MAY BE, FOR THE
PURCHASE OF THE PRODUCT(S) THAT ACTUALLY CAUSED THE DAMAGE OR LOSS.
11. INTERNATIONAL SALES
Western Atlas represents and warrants that the Products and all other
software and technical data which Western Atlas receives under this
Agreement is for resale within the Territory, subject, where applicable, to
the consent of the United States government.
12. TERM
12.1 INITIAL TERM
The initial term of this Agreement will commence upon the Effective Date
hereof, and, subject to Section 12.2, will expire on the date set forth on
the face page of this Agreement, unless sooner terminated or extended as
provided herein. The expiration or earlier termination of this Agreement
will not relieve either party of obligations incurred prior thereto.
12.2 EXTENSION OF TERM
The term of this Agreement shall automatically be extended for successive
one-year periods ending on the anniversary of the date set forth on the
cover page of this Agreement, provided that neither party has, on or before
60 days prior to the next scheduled renewal date, given notice to the other
of its intention not to renew the term of this Agreement.
12.3 TERMINATION
This Agreement may be terminated:
A. Immediately, if Western Atlas assigns this Agreement or any of
its rights hereunder; the
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<PAGE>
term "assign" to include, without limiting the generality
thereof, a transfer of a majority interest in Western Atlas'
business, or a sale of substantially all of Western Atlas'
assets.
B. By either party upon one (1) day's written notice in the event
the other party ceases to function as a going concern or to
conduct its operations in the normal course of business, or a
receiver for it is appointed or applied for, or a Petition under
the Federal Bankruptcy Act is filed by or against it, or it makes
an assignment for the benefit of creditors.
C. By written notice from Norand to Western Atlas effective
immediately if Western Atlas violates Section 1.1, Section 13,
or Section 17.2 of this Agreement.
D. By written notice from Western Atlas to Norand effective
immediately if Norand violates Section 17.2.
E. By either party, upon thirty (30) days written notice if the
other party fails in any material respect to perform or observe
any of its obligations (except those obligations otherwise
specifically addressed in this Section 12.3) under this
Agreement and such party has failed to cure such default within
thirty (30) days after the date of such notice of default.
Orders which are accepted but not shipped on the date of such
notice shall be deemed canceled as of the date of such notice.
13. SOFTWARE PRODUCT LICENSING
Products consisting of software programs ("SOFTWARE") are licensed, not
sold. Norand authorizes Western Atlas to offer end-users, in conjunction
with Western Atlas' resale of other Products, a limited license for the use
of Software with the Products sold by Western Atlas to the end-user.
Western Atlas agrees to distribute such Software only in conjunction with
the sale of Western Atlas' proprietary products, upon a signed, written
license agreement containing provisions substantially in the form of
Schedule C of this Agreement and payment in accordance with this Agreement.
Software will be distributed in object code only. Western Atlas may not
otherwise distribute the Software. Norand shall have the right during
normal
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<PAGE>
business hours and upon reasonable notice to audit Western Atlas' relevant
books and records for the sole purpose of verifying performance of Western
Atlas' obligations under this Agreement. Norand reserves the right to
change the terms and conditions of Schedule C from time to time upon giving
Western Atlas notice of such changes.
14. PATENT AND COPYRIGHT INDEMNIFICATION
If an action is brought against Western Atlas claiming that a Product
infringes a patent or copyright within the Territory, Norand will defend
Western Atlas at Norand's expense and, subject to this Section and Section
10, above, will pay the damages and costs finally awarded against Western
Atlas in the infringement action, but only if (a) Western Atlas notifies
Norand promptly upon learning that the claim might be asserted, (b) Norand
has sole control over the defense of the claim and any negotiation for its
settlement or compromise; and (c) Western Atlas takes no action, that in
Norand's judgment, is contrary to Norand's interest.
If a claim described in this Section 14 may be or has been asserted,
Western Atlas will permit Norand, at Norand's option and expense, to (a)
procure the right to continue using the Product, (b) replace or modify the
Product to eliminate the infringement while providing functionally
equivalent performance, or (c) accept the return of the Product in exchange
for a refund of the price that Western Atlas actually paid to Norand for
such Product, less depreciation based on a 3-year straight-line
depreciation schedule, and a pro rata share of any maintenance fees that
Western Atlas actually paid to Norand for the then-current maintenance
period of the product.
Notwithstanding the above, Norand will have no duty to indemnify Western
Atlas if the patent or copyright infringement claim contemplated in this
Section 14 results from (a) a correction or modification of the Product not
provided by Norand, (b) the failure to promptly install any update which
Norand may have provided to Western Atlas, or (c) the combination of the
Product with other software or hardware not provided by Norand.
15. INTEGRATED LASER SCANNING TERMINALS
Norand is authorized by license to sell the integrated laser scanning
terminals Norand offers for use as a one-
-13-
<PAGE>
piece unit to read bar codes and process data. Western Atlas agrees not to
make any changes to these terminals and to use them for only these
purposes. The licensor under Norand's license has the sole right to
enforce these provisions. If Western Atlas makes an authorized transfer of
these terminals to another party, that party must agree to these conditions
in writing.
16. PUBLIC ANNOUNCEMENTS
Neither party to this Agreement may make any public announcements with
respect hereto without the approval of such announcement by the other party
hereto, which consent shall not be unreasonably withheld.
17. GENERAL
17.1 GOVERNING LAW
This Agreement and performance hereunder will be governed by and construed
in accordance with the laws of the State of Iowa, U.S.A.
17.2 CONFIDENTIALITY
Western Atlas and its employees and Norand and its employees each agree to
not directly or indirectly, use, divulge or reveal to any person any
Confidential Information without the prior written consent of Norand or
Western Atlas, as the case may be. For purposes of this Agreement, the
term "CONFIDENTIAL INFORMATION" shall mean information which is not known
outside of Norand's business or Western Atlas' business, as the case may
be, and from which Norand or Western Atlas, as the case may be, obtains an
economic benefit because it is not known outside of Norand's business or
Western Atlas' business, as the case may be, and which is disclosed by
Norand to Western Atlas or Western Atlas to Norand, as the case may be, or
becomes known to Western Atlas or Norand, as the case may be, as a
consequence of this Agreement or any actions taken under this Agreement,
including but not limited to all drawings, specifications, parts lists,
lists of other resellers of Products, the Price Guide and other price
lists, channel marketing programs and other types of information or data
relating to Norand's business or Western Atlas' business, as the case may
be.
-14-
<PAGE>
Western Atlas also agrees not to reverse engineer, disassemble or decompile
any of the Products. Western Atlas and Norand also each agree to comply
with all reasonable regulations which Norand may ask Western Atlas to
follow or Western Atlas may ask Norand to follow, as the case may be, to
preserve the confidential nature of such Confidential Information and to
enforce such regulations against their respective officers, employees and
agents and otherwise assure that the Confidential Information is protected.
In the event of a breach or a threatened breach by Western Atlas or Norand
of any provision of this Section, Norand or Western Atlas, as the case may
be, will be entitled to an injunction restraining Western Atlas or Norand,
as the case may be, from any use or disclosure, or threatened use or
disclosure, in whole or in part, of the other's Confidential Information.
Nothing herein will be construed as prohibiting Norand or Western Atlas
from pursuing any other remedies for such breach or threatened breach,
including the recovery of damages.
In addition, Western Atlas and Norand each agree not to disclose the
financial terms of this Agreement, including discounts, without the prior
written consent of the other, except as required by law.
Upon termination of this Agreement, Western Atlas and Norand each agree to
promptly return all Confidential Information belonging to the other or to
certify to the other that such information has been destroyed.
17.3 NOTICES
Notices required or allowed to be given hereunder will be deemed given on
the date deposited, postage prepaid, for delivery by the U.S. Postal
Service, to the parties at the following respective addresses:
IF TO NORAND: IF TO WESTERN ATLAS:
Norand Corporation Western Atlas, Inc.
550 Second Street S.E. 360 North Crescent Drive
Cedar Rapids, IA 52403 Beverly Hills, CA 90210
Attention: Legal Services Attn: General Counsel
with copy to:
-15-
<PAGE>
Intermec Corporation
6001 36th Avenue West
Everett, Washington 98203
Attn: Michael Ohanian
Addresses may be from time to time modified by like notice. Routine
periodic notices (such as price and product changes and the like) may be
given by first class mail, all other notices must be given by certified
mail, return receipt requested.
17.4 ENTIRE AGREEMENT
Each party acknowledges that it has read this Agreement, fully understands
it, and agrees to be bound by its terms and further agrees that it,
including the Schedules, Price Guide and any addenda hereto, is the
complete and exclusive statement of the agreement between the parties,
which supersedes and merges all prior proposals, understandings and all
other agreements, oral and written, between the parties, relating to the
subject matter of this Agreement. This Agreement cannot be modified or
altered except by a written instrument duly executed by both parties. In
the event of any conflict between the provisions of this Agreement, the
Schedules, the Price Guide and any addenda hereto, the following order or
precedence will apply: Addenda, if any, the Agreement, Schedules, and then
the Price Guide.
17.5 ENFORCEABILITY
If any provision of this Agreement will be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions will in no way be affected or impaired thereby.
17.6 NO WAIVER
The failure of either party to exercise in any respect any right provided
for herein will not be deemed a waiver of any right hereunder.
17.7 SURVIVAL
The provisions of Sections 7, 8, 10, 14 and 15 of this Agreement will
survive termination hereof.
-16-
<PAGE>
17.8 EFFECTIVE DATE
This Agreement will be effective on the date when it is accepted by Norand
and signed by Norand's authorized representative (the "EFFECTIVE DATE").
-17-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed below by
their authorized representatives.
Accepted By:
NORAND CORPORATION WESTERN ATLAS INC.
BY: BY:
------------------------------- -------------------------------
Signature Signature
Name: N. Robert Hammer Name: Michael E. Keane
--------------------------------- -------------------------
Title: Chairman, President and Title: Senior Vice President and
Chief Executive Officer Chief Financial Officer
Date: Date:
--------------------------------- ----------------------------
-18-
<PAGE>
__________________________________SCHEDULE "A"
PRODUCTS 1.
PEN*KEY 6100
PEN*KEY 6600
OWL Radio Network, including
- 6700 Access Point
- Radio Network Software
- Gateway hardware and software
- Emulation software, if required
- 900 radio cards
- Norand 2.4 radio cards, when available
- Norand Synthetic UHF radio cards, when available
Any charge coupled device product modular engines
Accessories, software and spare parts
____________________
1 Including improvements, upgrades, replacements and enhancements of any
Product.
A-1
<PAGE>
SCHEDULE "B"
TRAINING PROGRAM REQUIREMENTS 2.
I. LEVEL ONE CERTIFICATION -- CERTIFIED WIRELESS SPECIALIST
I.A. Western Atlas must complete the following courses:
1. Introduction to Products (RF101)
2. UHF Systems
3. SST Systems
4. Hands-on Configuration
5. Troubleshooting RF Systems
6. TCP/IP or 3270/5250
7. PEN*KEY-TM-
II. LEVEL TWO CERTIFICATION -- CERTIFIED WIRELESS ENGINEER
II.A. Western Atlas must complete the following courses in addition to
completion of the courses set forth in Paragraph A above:
1. UHF Site Survey
2. SST Site Survey
3. Local Area Networking
4. Ethernet From A to Z
5. Taken Ring
6. TCP/IP and 3270/5250
____________________
2. Courses and course content are subject to change at the sole
discretion of Norand.
B-1
<PAGE>
SCHEDULE "C"
Western Atlas agrees that it will obtain written agreements containing
substantially the following provisions before delivering any Norand Software to
another person.
1. Certain software programs provided under this Agreement are provided under
license from Norand Corporation ("Norand Corporation"). Norand Software is
licensed, not sold. Western Atlas, Inc. ("Western Atlas") hereby grants
________________________ (Buyer) a non-exclusive right and license to use
Norand Software on the Products covered by this Agreement. No other right
or license is granted nor implied.
________________________ (Buyer) agrees to not modify, copy, distribute or
otherwise disclose Norand Software without the prior written consent of
Norand. Buyer further agrees not to reverse engineer, disassemble, or
decompile the Products, including but not limited to the Norand Software.
This license shall expire when ________________________ (Buyer) no longer
owns or ceases to use the Products with which ________________________
(Buyer) is licensed to use.
2. Western Atlas warrants that Norand Software will function in accordance
with the user manual provided with the Norand Software for ninety (90) days
from date of shipment. If an item of Norand Software does not function as
warranted, Western Atlas will, without charge, attempt to provide
information to correct the program or the user manual. If Western Atlas is
not able to provide this information, ________________________ (Buyer) may
return the item of Norand Software to Western Atlas and Western Atlas will
refund ________________________ (Buyer's) money.
THE WARRANTIES IN THIS SECTION REPLACE ALL OTHER WARRANTIES OF NORAND
SOFTWARE, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
3. IN NO EVENT WILL WESTERN ATLAS NOR NORAND BE LIABLE FOR ANY SPECIAL,
INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE, INCLUDING WITHOUT LIMITATION,
ANY LOST PROFITS OR SAVINGS, AND ANY LOSS OR DAMAGE CAUSED BY THE LOSS OF
USE OF ANY DATA OR INFORMATION OR ANY INACCURATE DATA OR INFORMATION.
C-1
<PAGE>
Exhibit (c)(3)
[NORAND CORPORATION LOGO] NORAND CORPORATION
CORPORATE OFFICES
550 SECOND STREET S.E.
CEDAR RAPIDS, IOWA 52401
PHONE (319) 369-3100
EXECUTIVE FAX (319) 369-3630
PERSONAL & CONFIDENTIAL
February 16, 1996
Intermec Corporation Western Atlas Inc.
6001 36th Avenue West 360 North Crescent Drive
Everett, Washington 98203-9280 Beverly Hills, CA 90210-4867
Gentlemen:
We have mutually expressed an interest in exploring a possible strategic
relationship and/or transaction between Norand Corporation and its
subsidiaries ("Norand") and Western Atlas Inc. ("WAI") and its subsidiary
Intermec Corporation (collectively with WAI, "Intermec"). (Norand and
Intermec being sometimes hereinafter referred to singularly as a "party" and
collectively as the "parties"). In consideration for and as a condition of
our meeting to explore this matter and our mutually exchanging Evaluation
Material (as hereinafter defined), each of the parties acknowledges the
confidential and proprietary nature of the Evaluation Material to be provided
to the other party and each agrees to hold and keep the same confidential as
provided in this Agreement and to take or abstain from taking certain other
actions herein set forth.
As used herein the term "Evaluation Material" refers to any and all
financial, technical, commercial or other information concerning the business
and affairs of a party (whether prepared by the party or its employees,
agents, directors, consultants or advisors (collectively referred to as its
"Representatives")) that may be provided to the other party or its
Representatives, irrespective of the form of the communication, by or on
behalf of either party. The term "Evaluation Material" also includes those
portions of any analyses, compilations, studies or other material prepared by
any party or its Representatives which contain or are based in whole or in
part on any information which otherwise constitutes Evaluation Material. The
term "Evaluation Material" does not include information which (i) is already
in the other party's possession, provided that such information is not known
to be subject to any confidentiality agreement with or other obligation of
secrecy in favor of the other party, (ii) becomes generally available to the
public other than as a result of a disclosure by a party or its
Representatives in violation of this Agreement, (iii) becomes available on a
non-confidential basis from a
<PAGE>
Intermec Corporation
Western Atlas Inc.
February 16, 1996
Page 2
source other than the other party or its Representatives, provided that such
source is not known to be bound by a confidentiality agreement with or other
obligation of secrecy to the other party.
Each party hereby agrees that the Evaluation Material will be used by it
solely for the purpose of evaluating a possible strategic relationship and/or
transaction between the parties, and that such information will be kept
confidential; provided, however, that any of such information may be disclosed
to those Representatives who need to know such information for the purpose of
evaluating any such possible relationship or transaction between the parties (it
being understood that such Representatives shall be informed of the confidential
nature of such information and shall agree to treat such information as
confidential and to comply with all other provisions of this Agreement). We
each agree to be responsible for any breach of this Agreement by any of our
Representatives. Neither party shall disclose Evaluation Material to any other
person, including potential sources of debt or equity financing, without the
prior written consent of the other party, which consent shall not be given
unless such person has executed and returned a confidentiality agreement
substantially in the form of this Agreement. We shall both maintain a list of
those Representatives to whom such information (or any part of it) has been
disclosed, which list will be presented to the other party upon request.
In addition, without prior written consent of the other party, neither
of us nor our Representatives shall, disclose to any person (i) the fact that
discussions or negotiations are taking place between us and/or our
Representatives or (ii) any of the terms, conditions or other facts with respect
to any such discussions or negotiations, including the status thereof or the
termination of discussions or negotiations, or (iii) that this Agreement exists
or that Evaluation Material has been exchanged between us. The term "person" as
used in this Agreement shall be broadly interpreted to include, without
limitation, any corporation, company, group, partnership or individual.
In the event that any party or a Representative of such party who has
obtained any Evaluation Material receives a request to disclose under the terms
of subpoena, order, civil investigative demand or similar process issued by a
court of competent jurisdiction or by a governmental body (x) all or any part of
the information contained in the Evaluation Material, or (xx) any information
relating to any opinion, judgment, or recommendation concerning any party and
any potential relationship or transaction between us, or (xxx) the fact that the
<PAGE>
Intermec Corporation
Western Atlas Inc.
February 16, 1996
Page 3
Evaluation Material has been exchanged between us, that discussions or
negotiations are taking place or have been terminated, or the status of such
discussions or negotiations or any of the terms, conditions or other facts with
respect to the possibility of a relationship or transaction between us each
party agrees, to (i) immediately notify the other party of the existence, terms
and circumstances surrounding such a request, (ii) consult with the other party
on the advisability of taking legally available steps to resist or narrow such
request, and (iii) if disclosure of such information is required, furnish only
that portion of the Evaluation Material which, in the written opinion of our
counsel, is legally compelled and exercise its reasonable efforts to obtain an
order or other reliable assurance that confidential treatment will be accorded
to such disclosed information.
We each hereby acknowledge that we are aware that the United States
securities law prohibits any person who has received from an issuer material,
non-public information from purchasing or selling securities of such issuer or
from communicating such information to any other person under the circumstances
in which it is reasonably foreseeable that such person is likely to purchase or
sell securities. Neither party nor any of its Representatives has made any
representations or warranties as to the accuracy or completeness of the
Evaluation Material. Neither party nor its Representatives shall have any
liability to the other party or any of its Representatives resulting from the
use of the Evaluation Material.
Promptly upon request from the other party, each party agrees to return
to the other party all tangible Evaluation Material furnished by the other party
and to destroy all tangible Evaluation Material prepared by or on behalf of
such party without, in each case, retaining any copies, extracts or other
reproductions in whole or in part of such tangible material. Any such
destruction shall be certified in writing to the other party by an authorized
officer supervising the same. This Agreement shall cover any Evaluation
Material delivered by any party (or its Representatives) to the other party (or
its Representatives) for a one year period after the date hereof and shall be in
full force and effect for a five year period after the date hereof.
For three years after the date of this letter, Intermec shall not,
directly or indirectly, without the prior written consent of Norand, (i)
acquire, or offer, propose or agree to acquire, any shares of common stock of
Norand, or securities convertible or exchangeable into, or rights to acquire,
such common stock.
<PAGE>
Intermec Corporation
Western Atlas Inc.
February 16, 1996
Page 4
(collectively, the "Norand Common Shares"), (ii) solicit proxies or consents
with respect to the Norand Common Shares, become a participant in any
election contest relating to the election of directors of Norand or initiate,
propose or otherwise solicit holders of the Norand Common Shares with respect
to any proposal, (iii) form, join or participate in a group within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended, with respect to the Norand Common Shares, (iv) arrange or
participate in the arranging of financing for the purchase of Norand Common
Shares, (v) propose, disclose any intent to propose or contact any officers,
employees, directors, stockholders or agents of Norand or any other person or
entity with respect to any acquisition of Norand Common Shares or
acquisition, business combination, recapitalization or similar transaction
with respect to Norand or any material amount of its assets, or request any
waiver, amendment or termination of the provisions of this paragraph or (vi)
attempt in any way to control Norand. Notwithstanding the foregoing,
however; the current discussions shall not be a violation of clause (v) above
so long as Norand does not give Intermec written notice of its desire to
terminate such discussions.
For three years after the date of this letter, Norand shall not,
directly or indirectly, without the prior written consent of Intermec, (i)
acquire, or offer, propose or agree to acquire, any shares of common stock of
WAI, or securities convertible or exchangeable into, or rights to acquire, such
common stock (collectively, the "WAI Common Shares"), (ii) solicit proxies or
consents with respect to the WAI Common Shares, become a participant in any
election contest relating to the election of directors of WAI or initiate,
propose or otherwise solicit holders of the WAI Common Shares with respect to
any proposal, (iii) form, join or participate in a group within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, with
respect to the WAI Common Shares, (iv) arrange or participate in the arranging
of financing for the purchase of WAI Common Shares, (v) propose, disclose any
intent to propose or contact any officers, employees, directors, stockholders or
agents of WAI or any other person or entity with respect to any acquisition of
WAI Common Shares or acquisition, business combination, recapitalization or
similar transaction with respect to WAI or any material amount of its assets, or
request any waiver, amendment or termination of the provisions of this paragraph
or (vi) attempt in any way to control Intermec. Notwithstanding the foregoing,
however; the current discussions shall not be a violation of clause (v) above so
long as Intermec does not give Norand written notice of its desire to terminate
such discussions.
<PAGE>
Intermec Corporation
Western Atlas Inc.
February 16, 1996
Page 5
Except as may be permitted by any definitive written agreement between Norand
and Intermec, for three years after the date of this letter agreement,
neither Intermec not its subsidiaries or affiliates shall, directly or
indirectly, solicit the employment of, negotiate employment with, or hire any
employees of Norand or its subsidiaries or affiliates except in response to a
general advertisement.
Except as may be permitted by any definitive written agreement between Norand
and Intermec, for three years after the date of this letter agreement,
neither Norand nor its subsidiaries or affiliates shall, directly or
indirectly, solicit the employment of, negotiate employment with, or hire any
employees of Intermec or its subsidiaries or affiliates except in response to
a general advertisement.
Each party acknowledges and agrees that in the event of any breach of
this Agreement, the other party would be irreparably and immediately harmed and
could not be made whole by monetary damages. It is accordingly agreed that any
party, in addition to any other remedy to which it may be entitled in law or
equity, shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and/or to compel specific performance of this Agreement. We each
agree to waive, and to use our reasonable efforts to cause or Representatives to
waive, any requirement for the securing or posting of any bond in connection
with such remedy. In the event of a dispute over the parties' respective rights
and obligations under this Agreement, the party prevailing in such dispute shall
be entitled to recover from the party all costs and expenses, including
attorney's fees, incurred by such party in successfully enforcing or defending
its rights hereunder.
NORAND CORPORATION
/s/Alan G. Bunte
------------------
Alan G. Bunte
Vice President, Planning &
Business Development
<PAGE>
Intermec Corporation
Western Atlas Inc.
February 16, 1996
Page 6
Confirmed and Agreed to as of
February 16, 1996
--
Intermec Corporation, a subsidiary of Western Atlas Inc.
By: /s/Cathy Younger
----------------
Name: Cathy Younger
-------------
Title: Counsel
-------
Confirmed and Agreed to as of
February 16, 1996
--
Western Atlas Inc.
By: /s/Cathy Younger
----------------
Name: Cathy Younger
-------------
Title: Counsel
------------
