ZBRA » Topics » The Merger Agreement

This excerpt taken from the ZBRA 8-K filed Oct 16, 2007.

The Merger Agreement

On October 15, 2007, Zebra Technologies Corporation, a Delaware corporation (“Zebra”), Nero Acquisition LLC, a Delaware limited liability company and wholly-owned subsidiary of Zebra (“Merger Sub”), Navis Holdings, LLC, a Delaware limited liability company (the “Company”), and Navis Corporation as the “Members’ Representative,” entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Zebra will acquire all of the share capital of the Company through a merger of Merger Sub with and into the Company (the “Merger”), with the Company continuing as the surviving corporation.

At the effective time and as a result of the Merger, the purchase price to be paid by Zebra at closing is $145.0 million in cash, subject to applicable post-closing price adjustments, if any, as set forth in the Merger Agreement (the “Aggregate Merger Consideration”) and subject to an aggregate escrow amount of $25,900,000 to be deposited on behalf of the Company’s members and the holders of Vested Company Options pursuant to the terms of an Escrow Agreement to be executed at closing by Zebra, the Members’ Representative and the escrow agent. The escrow will be distributed in the amounts and at the times set forth in the Merger Agreement and Escrow Agreement. The Company’s members will also be entitled to retain the Company’s cash on hand at closing, and they will be responsible to pay out of the Aggregate Merger Consideration the Company’s transaction expenses related to the Merger.

In the Merger, (i) each outstanding option to acquire Class E Shares of the Company granted under the Navis Holdings, LLC 2000 Option Plan (the “Company Option Plan”) that is vested and exercisable in accordance with its terms immediately prior to the effective time of the Merger (each, a “Vested Company Option”) shall be cancelled and converted into the right to receive payment, from the proceeds of the Aggregate Merger Consideration, of an amount per Class E Share underlying such option equal to the difference of (a) the amount of cash allocable to each Class E Share underlying such option, pursuant to the Merger Agreement, less (b) the exercise price per Class E Share underlying such option, and (ii) each issued and outstanding Class A Share, Class B Share, Class C Share and Class E Share of the Company and each share of any other class of share capital, if any, of the Company (each, a “Company Share”) will be converted into the right to receive the portion of the balance of the Aggregate Merger Consideration, after payment of all Company transaction expenses and subject to the Escrow Agreement, that is allocable to such Company Share pursuant to the Operating Agreement of the Company.

The Company has made customary representations, warranties and covenants in the Merger Agreement, including, among others, representations relating to (i) the due organization and good standing of the Company, (ii) the requisite power and authority to enter into the Merger Agreement and related documents to which it is a party, (iii) capitalization of the Company, (iv) non-contravention of laws or agreements, (v) financial statements of the Company, (vi) absence of undisclosed liabilities, (vii) taxes, (viii) intellectual property, (ix) compliance with laws and permits, (x) absence of litigation, (xi) labor and employment matters, (xii) real property, (xiii) possession of business assets, (xiv) insurance, (xv) customers and other relationships, (xvi) bank accounts, and (xvii) customs laws and regulations. In addition, the Company made certain additional customary covenants, including, among others, covenants, (A) to provide Zebra access to the Company’s books, records, properties and personnel between the execution of the Merger Agreement and the consummation of the Merger, (B) not to solicit proposals relating to alternative business combination transactions, (C) to conduct its business in the ordinary course between the execution of the Merger Agreement and the consummation of the Merger, and (D) not to engage in certain kinds of transactions, take certain actions or permit or suffer certain events or circumstances to occur during such period without Zebra’s consent. Consummation of the Merger is also subject to customary conditions, including, among others, (i) the approvals of the members of the Company holding the requisite numbers and classes of Company Shares, (ii) obtaining certain governmental approvals, (iii) the continued non-occurrence and non-existence of any material adverse effect on the Company or its business, (iv) delivery to Zebra of agreements for the cancellation and conversion of Company options, (v) delivery to Zebra of certain releases, payoff letters and agreements and an opinion of counsel for the Company, and (vi) subject to certain exceptions, the absence of any inaccuracy in the representations and warranties of the Company that constitutes a material adverse effect, and the compliance by the Company with its covenants contained in the Merger Agreement.

 

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The Merger Agreement also provides that each of the members of the Company shall indemnify Zebra, the Company and any and all affiliates of the foregoing for any and all losses as a result of, among other things, any misrepresentation or breach of any representation or warranty under the Merger Agreement. In most cases such indemnification obligation will be triggered only after such losses exceed $700,000, and in most cases only for the amount by which such losses exceed $350,000. Generally, Zebra’s recourse is limited to a specified portion of the amount in the escrow ($21,750,000), although an increased limit is applicable with respect to certain liabilities specified in the Merger Agreement.

In addition, a separate amount ($3,500,000), will be escrowed for payment of the excess, if any, of all actual out-of-pocket costs and expenses of the Company in excess of applicable cash receipts of the Company applicable to performance by the Company under certain agreements specified in the Merger Agreement. A further amount, ($500,000), also will be escrowed to pay post-closing price adjustments to the Aggregate Merger Consideration. Such payments will reconcile the estimated amounts of certain items used in calculating the Aggregate Merger Consideration with the actual amounts of such items at closing of the Merger, including the Company’s cash balance, its working capital and certain of its transaction expenses. An additional amount ($150,000) will be escrowed for payment of the Members’ Representative’s expenses incurred in connection with the acceptance or administration of the Members’ Representative’s duties under the Merger Agreement or Escrow Agreement.

This excerpt taken from the ZBRA 8-K filed Jan 11, 2007.

The Merger Agreement

On January 11, 2007, Zebra Technologies Corporation, a Delaware corporation (“Zebra”), Waldo Acquisition Corp., a California corporation (“Merger Sub”), WhereNet Corp., a California corporation (the “Company”) and Crosspoint Venture Partners 1996, LLP (the “Shareholders’ Representative”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Zebra will acquire all of the capital stock of the Company through a merger of Merger Sub with and into the Company (the “Merger”), with the Company continuing as the surviving corporation.

At the effective time and as a result of the Merger, the purchase price to be paid by Zebra at closing is $126.0 million in cash, less applicable post-closing price adjustments, if any, as set forth in the Merger Agreement and subject to an escrow amount of $13.6 million to be deposited on behalf of the Company’s shareholders pursuant to the terms of an Escrow Agreement to be executed on the closing date, by Zebra, the Shareholders’ Representative and the escrow agent. The escrow will be distributed in one year, except for amounts reserved for claims pending at such time. In the Merger, (i) each issued and outstanding share of Company series A-1 preferred stock and warrants exercisable for shares of Company series A-1 preferred stock will be converted into the right to receive $1.68 per share, less any applicable exercise price (after payment of all Company transaction expenses, approximately $37 million) and (ii) each issued and outstanding share of Company common stock, Company series B-1 preferred stock and vested Company options shall receive the balance of the merger consideration, as set forth in the Merger Agreement.

The Company has made customary representations, warranties and covenants in the Merger Agreement, including, among others, representations relating to (i) the due organization and good standing of the Company, (ii) the requisite power and authority to execute and deliver the Merger Agreement and related documents to which it is a party, (iii) no conflicts of laws and agreements, (iv) capitalization of the Company, (v) financial statements of the Company, (vi) absence of undisclosed liabilities, (vii) possession of tangible personal property, (viii) absence of litigation, (ix) compliance with applicable laws, (x) insurance, (xi) payment of taxes and (xii) bank accounts. In addition, the Company made certain additional customary covenants, including, among others, covenants, (A) to allow Zebra between the execution of the Merger Agreement and the consummation of the Merger, to conduct due diligence and investigations with respect to the Company, (B) not to solicit proposals relating to alternative business combination transactions, (C) to conduct its business in the ordinary course between the execution of the Merger Agreement and the consummation of the Merger and (D) not to engage in certain kinds of transactions during such period. Consummation of the Merger is also subject to customary conditions, including, among others, (i) approval of the shareholders of the Company, (ii) delivery to Zebra of certain releases, payoff letters and opinion of counsel for the Company and (iii) subject to certain exceptions, the accuracy of representations and warranties with respect to the Company’s business and compliance by the Company with its covenants contained in the Merger Agreement.

The Merger Agreement also provides that each of the shareholders of the Company shall, jointly and severally, indemnify Zebra, the surviving corporation and the affiliates of the foregoing for any and all losses as a result of, among other things, any misrepresentation or breach of any representation or warranty under the Merger Agreement, in most cases only to the extent the losses exceed $250,000. Generally, Zebra’s recourse is limited to the amounts in the escrow.

EXCERPTS ON THIS PAGE:

8-K
Oct 16, 2007
8-K
Jan 11, 2007
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