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Exhibit 7.3
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ANCILLARY CONSIDERATION AGREEMENT
ANCILLARY CONSIDERATION AGREEMENT ("Agreement"), dated as of March 17th, 1998
between Wang Laboratories, Inc., a Delaware USA corporation ("Wang" or the
"Corporation") and Ing. C. Olivetti & C. S.p.A., an Italian corporation
("Olivetti").
WHEREAS, Wang, Olivetti, and certain other entities are parties to a Stock
Purchase Agreement dated February 28, 1998 (the "Stock Purchase Agreement")
pursuant to which Wang and certain Affiliates (as defined in the Stock Purchase
Agreement) purchased from Olivetti and certain Affiliates Olivetti's information
technology solutions and services business (the "Transaction"); and
WHEREAS, as part of the consideration for such purchase, Wang has agreed to pay
to Olivetti the consideration described in this Agreement; and
WHEREAS, this Agreement is a "Related Agreement" and an "Indemnified Related
Agreement" within the meaning of the Stock Purchase Agreement;
NOW THEREFORE, in consideration of the foregoing and the respective covenants
and agreements hereinafter set forth, and intending to be legally bound hereby,
the Parties agree as follows:
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings indicated below:
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions are obligated or authorized to be
closed in New York, New York or in Boston, Massachusetts.
"Common Stock" means the Common Stock, $0.01 par value per share, of
Wang.
"Current Market Price" of publicly traded shares of Common Stock or any
other class of capital stock or other security of the Corporation or
any other issuer for any day shall mean the last reported sales price,
regular way on such day, or, if no sale takes place on such day, the
average of the reported closing bid and asked prices on such day,
regular way, in either case as reported on the principal national
securities exchange on which such security is listed or admitted for
trading or, if not listed or admitted for trading on any national
securities exchange, on the Nasdaq National Market System of the
National Association of Securities Dealers, or, if such security
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is not quoted on such Nasdaq National Market, the average of the
closing bid and asked prices on such day in the over-the-counter market
as reported by Nasdaq or, if bid and asked prices for such security on
such day shall not have been reported through Nasdaq, the average of
the bid and asked prices on such day as furnished by any New York Stock
Exchange member firm regularly making a market in such security
selected for such purpose by the Board of Directors.
"Fair Market Value" means the average of the daily Current Market
Prices of a share of Common Stock during the ten (10) consecutive
Trading Days immediately prior to the earlier of the day in question
and the day before the "ex" date with respect to the issuance or
distribution requiring such computation. The term "'ex date," when used
with respect to any issuance or distribution, means the first day on
which the Common Stock trades regular way, without the right to receive
such issuance or distribution, on the exchange or in the market, as the
case may be, used to determined that day's Current Market Price.
"Measurement Date" means December 15, 1998.
"Periodic Payment" shall have the meaning established in Section 5
hereof.
"Periodic Payment Date" means May 1, August 1, November 1 and February
1 in each year, commencing on May 1, 1998; provided, however, that if
any Periodic Payment Date falls on any day other than a Business Day,
the Periodic Payment due on such Periodic Payment Date shall be paid on
the Business Day immediately following such Periodic Payment Date. The
Periodic Payment Date with respect to the final Periodic Payment Period
shall be the date on which this Agreement terminates.
"Periodic Payment Periods" shall mean quarterly periods commencing on
May 1, August 1, November 1 and February 1 of each year and ending on
and including the day preceding the first day of the next succeeding
Periodic Payment Period (other than the initial Periodic Payment
Period, which shall commence on the date hereof and end on and include
April 30, 1998, and the final Periodic Payment Period, which shall end
on the date on which this Agreement terminates).
"Stock Escrow Agent" means American Stock Transfer and Trust Company or
the replacement escrow agent appointed in accordance with the Stock
Escrow Agreement.
"Stock Escrow Agreement" means that Stock Escrow Agreement among Wang,
Olivetti and the Stock Escrow Agent which was executed in conjunction
with the Stock Purchase Agreement.
"Stockholders Agreement" means that Stockholders Agreement of even date
herewith between Wang and Olivetti.
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"Trading Day" shall mean any day on which the securities in question
are traded on the principal national securities exchange on which such
securities are listed or admitted, or if not listed or admitted for
trading on any national securities exchange, on the Nasdaq National
Market System of the National Association of Securities Dealers, or if
such securities are not quoted on such Nasdaq National Market, in the
applicable securities market in which the securities are traded.
2. STOCKHOLDER APPROVAL
2.1 Wang will include in the Notice of Meeting, Proxy Statement and
Proxy distributed in connection with its 1998 Annual Meeting of
Stockholders or Special Meeting of Stockholders called prior thereto
(each, a "Stockholder Meeting") a resolution of stockholders approving
the issuance of 1,500,000 shares of Common Stock to Olivetti as part of
the consideration for the Transaction (the AAdditional Stock
Issuance").
2.2 Wang will recommend to its stockholders that they approve the
Additional Stock Issuance and Wang shall use its commercially
reasonable best efforts to solicit stockholder votes and proxies in
favor of such approval.
2.3 Wang will notify Olivetti, no later than five (5) Business Days
following a Stockholder Meeting, as to the approval or rejection by the
stockholders of the Additional Stock Issuance.
2.4 Olivetti acknowledges that no votes cast in respect of any shares
of Common Stock held or voted by it or its Affiliates shall be counted
for purposes of determining whether or not the Additional Stock
Issuance is approved or rejected by the stockholders of Wang.
3. ISSUANCE OF ADDITIONAL STOCK
3.1 In the event that the Additional Stock Issuance is approved by the
Wang stockholders at a Stockholders Meeting on or prior to the
Measurement Date, then, no later than ten (10) days following such
approval, Wang will issue to Olivetti (on the terms described in
Section 3.2 below), without additional consideration, 1,500,000 shares
of Common Stock (the AAdditional Stock").
3.2 Wang will deliver the certificate representing the Additional
Stock, duly registered in the name of Olivetti, to the Stock Escrow
Agent for holding in accordance with the Stock Escrow Agreement.
3.3 The parties agree that the Additional Stock shall be AWang Shares"
as defined in the Stockholders Agreement and subject to the
restrictions and benefits set forth in the Stockholders Agreement.
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4. PAYMENT OF ADDITIONAL CONSIDERATION
4.1 If (a) the Additional Stock Issuance has not been approved by the
Wang Stockholders on or prior to the Measurement Date, or (b) Wang
consummates the sale, lease, transfer or other disposition of all or
substantially all of the assets of Wang or any other Change in Control
of Wang (as defined in the Stockholders Agreement), Wang shall, in lieu
of the Additional Stock Issuance, pay to Olivetti (on the terms
described in Section 4.3 below) an amount (the "Additional Cash
Consideration") equal to the Fair Market Value of the Common Stock (on
the Measurement Date or on the date of such transaction described in
clause (b), as applicable) multiplied by 1,500,000.
4.2 The Additional Cash Consideration shall be paid no later than ten
(10) days following the Measurement Date or the consummation of the
transaction described in clause 4.1(b), as applicable or, at Wang's
option, at any earlier time following a rejection by Wang's
stockholders at a Stockholders Meeting of the Additional Stock
Issuance.
4.3 Wang shall pay the Additional Cash Consideration in an escrow
account established pursuant to an escrow agreement on substantially
the terms of the Stock Escrow Agent which shall be executed by the
parites prior to the payment of the Additional Cash Consideration. Such
escrow agreement shall provide that the escrow agent shall invest the
escrowed funds in customary instruments in accordance with the
reasonable instructions of Olivetti.
5. PERIODIC PAYMENTS
5.1 Wang shall pay Olivetti, on each Periodic Payment Date during the
term hereof, certain periodic payments (the "Periodic Payments"), each
of which shall equal, with respect to each full Periodic Payment
Period, $658,125.00. The amount of the Periodic Payment for the initial
Periodic Payment Period, or any other period shorter or longer than a
full three-month Periodic Payment Period, shall be computed on the
basis of twelve 30-day months and a 360-day year.
6. MISCELLANEOUS
6.1 Waiver. The waiver by any party of a breach of or a default under
any provision of this Agreement by another party shall not be construed
as a waiver of any subsequent breach of the same or any other provision
of this Agreement, nor shall any delay or omission on the part of any
party to exercise or avail itself of any right, power or privilege that
it has or may have hereunder operate as a waiver of any right, power or
privilege by such party.
6.2 Notices. All notices and other communications hereunder shall be in
writing and shall be sent by hand delivery or overnight courier, in
each case receipt
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acknowledged, registered or certified mail, in each case with postage
prepaid and return receipt requested, to the respective parties at the
following addresses:
If to Wang, to
Wang Laboratories, Inc.
000 Xxxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxx
Attention: General Counsel
with a copy to
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
If to Olivetti, to
Ing. C. Olivetti & C. S.p.A.
Xxx Xxxxxx, 00
00000 Xxxxx
Xxxxx
Attention: Dott. Xxxxxxxx Xxxxxxxx
Ing. Xxxxxx Xxxxxxxx
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with a copy to
Erede & Associati
Xxx Xxxxxxxxxx, 00
00000 Xxxxxx
Xxxxx
Attention: Avv. Xxxxxxx Xxxxxxxx
and
Xxxxxx & Xxxxx
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Any party may change its address for receiving notice by written notice given to
the other parties. All notices and other communications hereunder shall be
deemed to have been duly given as of the earlier of (x) the date received at the
address and in the manner provided above or (y) the date receipt is
acknowledged.
6.3 Assignment. Neither this Agreement nor any rights granted
hereunder may be assigned, transferred, subcontracted or
otherwise encumbered or disposed of in whole or in part by
either party without the express prior written consent of the
other party. Any attempted assignment in violation of this
Section 6.3 shall be void ab initio. Subject to the express
limitations set forth herein, this Agreement shall be binding
upon and inure to the benefit of the parties and their
respective successors and permitted assigns.
6.4 Governing Law. This Agreement shall be subject to and
interpreted in accordance with the laws of the State of New
York (without giving effect to its principles of conflicts of
laws) as to all matters, including but not limited to, matters
of validity, construction, effect, performance and remedies.
6.5 Headings. The headings contained in this Agreement are for
convenience and ease of reference only and shall not be
considered in construing this Agreement.
6.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same
instrument.
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6.7 Dispute Resolution. Any dispute between Wang and Olivetti
arising under this Agreement shall be resolved in accordance
with Section 12.12 of the Stock Purchase Agreement.
6.8 Entire Agreement. This Agreement, together with the Stock
Purchase Agreement, Stock Escrow Agreement and Stockholders
Agreement, constitutes the entire understanding of the parties
with respect to the subject matter hereof, and shall not be
amended, altered, suspended, or modified without the written
consent of both parties hereto.
6.9 Term and Termination. This Agreement, and all rights and
obligations of the parties hereunder, shall terminate
automatically upon the earlier to occur of (a) the Additional
Share Issuance under Section 3 above or (b) the payment of the
Additional Cash Consideration under Section 4 above; provided
that the provisions of Sections 6.2, 6.4 and 6.7 shall survive
any termination of this Agreement.
6.10 Indemnification. Any claim for indemnification by Wang or
Olivetti shall be resolved in accordance with Article X of the
Stock Purchase Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this ANCILLARY CONSIDERATION
AGREEMENT to be duly executed as of the day and year first above written.
WANG LABORATORIES, INC.
Attest: By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Senior Vice President
/s/ Attestor
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Title:
ING. C. OLIVETTI & C. S.P.A.
Attest: By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
/s/ Attestor Title:Attorney-in-fact
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Title:
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