-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PMoC1vws0Ft1G1bIC20QDTFs+L5apogtxVqH4UU1Zd4cmY2fM+D0YlZh9jYHatEC tMD+0rzwxDPoa0Cadr3+UA== 0000912057-97-001655.txt : 19970127 0000912057-97-001655.hdr.sgml : 19970127 ACCESSION NUMBER: 0000912057-97-001655 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 19970124 SROS: NYSE GROUP MEMBERS: WAI AQUISITION CORP. GROUP MEMBERS: WESTERN ATLAS INC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NORAND CORP /DE/ CENTRAL INDEX KEY: 0000886034 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER COMMUNICATIONS EQUIPMENT [3576] IRS NUMBER: 421323151 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: 1934 Act SEC FILE NUMBER: 005-44847 FILM NUMBER: 97510199 BUSINESS ADDRESS: STREET 1: 550 SECOND ST S E CITY: CEDAR RAPIDS STATE: IA ZIP: 52401 BUSINESS PHONE: 3193693100 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WESTERN ATLAS INC CENTRAL INDEX KEY: 0000913340 STANDARD INDUSTRIAL CLASSIFICATION: OIL AND GAS FIELD EXPLORATION SERVICES [1382] IRS NUMBER: 953899675 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 360 NORTH CRESCENT DR CITY: BEVERLY HILLS STATE: CA ZIP: 90210 BUSINESS PHONE: 3108882500 MAIL ADDRESS: STREET 1: 360 NORTH CRESCENT DR CITY: BEVERLY HILLS STATE: CA ZIP: 90210 SC 14D1 1 SCHEDULE 14D1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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.
Amount Previously Paid: Filing None Party: Not Applicable Form or Registration Date Filed: No.: Not Applicable Not Applicable
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Page 1 of 8 Pages) CUSIP No. 655421 10 5 14D-1 Page 2 of 8 Pages
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
CUSIP No. 655421 10 5 14D-1 Page 3 of 8 Pages
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
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) 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) ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (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.
(Page 6 of 8 Pages) 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) EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - --------- ------------------------------------------------------------------------------------------------ (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................................................................................
(Page 8 of 8 Pages) EX-99.(A)(1) 2 EXHIBIT 99(A)(1) 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 TABLE OF CONTENTS
PAGE ----- 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
i 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 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 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 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 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 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 (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 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 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 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
HIGH LOW --------- --------- 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
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 $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 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 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)
THREE MONTHS ENDED ------------------------- FISCAL YEAR ENDED AUGUST 31 NOVEMBER 30, DECEMBER 2, ---------------------------------- 1996 1995 1996 1995 1994 ------------ ----------- ---------- ---------- ---------- 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
13 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 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 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)
NINE MONTHS ENDED FISCAL YEAR ENDED SEPTEMBER 30 DECEMBER 31 -------------------- -------------------- 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
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 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 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 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 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 20 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 21 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. 22 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 23 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. 24 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 25 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. 26 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 27 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 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 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 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 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 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 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
PRINCIPAL OCCUPATION AND NAME FIVE-YEAR EMPLOYMENT HISTORY - --------------------------------------------- ------------------------------------------------------------------ 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.
(B) EXECUTIVE OFFICERS OF PARENT
PRINCIPAL OCCUPATION AND NAME FIVE-YEAR EMPLOYMENT HISTORY - --------------------------------------------- ------------------------------------------------------------------ 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.
S-1
PRINCIPAL OCCUPATION AND NAME FIVE-YEAR EMPLOYMENT HISTORY - --------------------------------------------- ------------------------------------------------------------------ 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.
- ------------------------ * A division of Western Atlas International, Inc., a wholly owned subsidiary of Parent. S-2 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
PRINCIPAL OCCUPATION AND NAME FIVE-YEAR EMPLOYMENT HISTORY - --------------------------------------------- ------------------------------------------------------------------ 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.
(B) EXECUTIVE OFFICERS OF THE PURCHASER
PRINCIPAL OCCUPATION AND NAME FIVE-YEAR EMPLOYMENT HISTORY - --------------------------------------------- ------------------------------------------------------------------ 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.
S-3 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 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
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 EX-99.(A)(2) 3 EXHIBIT 99(A)(2) 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 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
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: _________________________________________________ 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: _________________________________ 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))
SHARE CERTIFICATE(S) AND SHARE(S) TENDERED (ATTACH ADDITIONAL LIST, IF NECESSARY) TOTAL NUMBER OF SHARES REPRESENTED SHARE CERTIFICATE NUMBER(S)* BY SHARE CERTIFICATE(S)* NUMBER OF SHARES TENDERED** 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.
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 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. 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)
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: ____________________________ 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 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. TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS (SEE INSTRUCTION 9) 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 / /
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. 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 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
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) EX-99.(A)(3) 4 EXHIBIT 99(A)(3) 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 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. EX-99.(A)(4) 5 EXHIBIT 99(A)(4) 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. 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. 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. EX-99.(A)(5) 6 EXHIBIT 99(A)(5) 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 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
FOR INFORMATION TELEPHONE: (800) 507-9357
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. 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. 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:
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. Name of Firm: (Authorized Signature) Address: Title: Name: (Zip Code) (Please type or print) Area Code and Telephone Number: Date:
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. EX-99.(A)(6) 7 EXHIBIT 99(A)(6) 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. 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 - ----------------------------------------------------------------- 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
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(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 EX-99.(A)(7) 8 EXHIBIT 99(A)(7) 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." 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 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 ------ ------ EX-99.(A)(8) 9 EXHIBIT 99(A)(8) 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. 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- 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- 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- 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- EX-99.(B)(1) 10 EXHIBIT 99(B)(1) 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 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. 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 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 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 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. "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 2 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 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 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 "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 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 "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 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 9 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 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 (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; 12 (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 13 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. 14 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). 15 "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 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. 17 "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. 18 "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 19 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 20 (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. 21 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. 22 (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 23 (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, 24 (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 25 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 26 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. 27 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) 28 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 29 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 30 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 31 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 32 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 33 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 34 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 35 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. 36 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). 37 (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 38 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 39 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 40 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; 41 (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; 42 (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 43 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 44 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 45 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 46 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 47 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 48 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 49 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, 50 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: 51 (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 52 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 53 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 54 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 55 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 56 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 57 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 58 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 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 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 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 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 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 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 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 _________________ 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 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 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 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:
- ---------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------- Status Level I Level II Level III Level IV Level V LevelVI Level VII - ---------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------- 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% - ---------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------
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. "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 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: 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 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. Terms used herein have the meanings assigned to them in the Credit Agreement. WESTERN ATLAS INC. By________________________ Title: 2 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 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) 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 **** 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%). 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 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 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 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. 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 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: 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 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 WESTERN ATLAS INC. By__________________________ Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK By___________________________ Title: 4 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 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. 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 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 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 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 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 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 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 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 [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 "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 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 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 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 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 row under the column corresponding to the Status that exists on such day:
Level Level Level Level Level Level Level Status I II III IV V VI VII 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%
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 "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 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 EX-99.(C)(1) 11 EXHIBIT 99(C)(1) 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 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 -2- 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 -3- 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 -4- 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." -5- 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 -6- 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 -7- 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 -8- 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. -9- 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. -10- (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 -11- 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 -12- "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 -13- 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 -14- 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. -15- (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 -16- 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. -17- (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 -18- 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 -19- 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. -20- (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 -21- 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. -22- 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 -23- 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) -24- 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. -25- 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 -26- 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 -27- 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 -28- 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 -29- 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 -30- 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. -31- 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 -32- 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. -33- 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) -34- 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. -35- 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 -36- 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. -37- 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 -38- 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 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 -2- 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. -3- 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 10-1/2%. During continuance of the default, the holder will be entitled to appoint one member of the Company's board of directors. -2- 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- 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. -2- EX-99.(C)(2) 12 EXHIBIT 99(C)(2) 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- 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. -2- 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 -3- 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 -4- 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 --------------------- -------------------- -5- 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. -6- 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 -7- 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; -8- 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. -9- 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 -10- 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 -11- 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 -12- 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- 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- 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- 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- 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- 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- __________________________________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 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 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 EX-99.(C)(3) 13 EXHIBIT 99(C)(3) 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 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 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. 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. 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 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 ------------ -----END PRIVACY-ENHANCED MESSAGE-----