AMENDMENT TO AGREEMENT
This Amendment To Agreement (the "Agreement") is made as of
the 19th day of April, 1995 between Geodynamics Corporation, a
California corporation ("Geodynamics") and Alney A. Baham
("Baham") (collectively "the Parties") with reference to the
following facts.
A. Baham and Geodynamics entered into an Agreement as of
April 5, 1995, which Agreement was to be effective only upon
approval by the Geodynamics' Board of Directors (the "Board").
B. On April 19, 1995, Geodynamics' Board approved the
Agreement signed as of the same date subject only to Baham's
willingness to modify subparagraph 4 (c) (4) of the Agreement.
C. Baham has consented to the amendment requested by the
Geodynamics' Board.
Accordingly, in consideration of the foregoing premises and
the agreements contained herein and in the Agreement, Geodynamics
and Baham agree as follows:
1. Paragraph 1 of the Agreement shall be deleted and the
following substituted in its place:
"1. Effective Date. The term "Effective Date" as used
in this Agreement shall mean April 19, 1995."
2. Subparagraph 4 (d) (4) of the Agreement shall be
amended to delete the words "or to influence any decision of the
Board (other than as set forth in Section 5 below)".
3. Subparagraph 6 (a) of the Agreement shall be amended to
delete the first sentence thereof consisting of the words
"Attached hereto as Exhibit B is a copy of the press release to
be issued by the Parties on the Effective Date." Exhibit B is
also deleted from the Agreement and no press release shall be
issued.
4. This amendment constitutes the entire agreement among
the parties to amend the Agreement and supersedes all prior and
contemporaneous agreements, representations, warranties,
statements and understandings, whether oral or written, with
respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the day and year first written above.
GEODYNAMICS CORPORATION
By: /s/
David P. Nelson
Chief Financial Officer
/s/
ALNEY A. BAHAM
AGREEMENT
This Agreement is made as of the 5th day of April, 1995
between Geodynamics Corporation, a California corporation
("Geodynamics") and Alney A. Baham ("Baham") (collectively "the
Parties") with reference to the following facts:
A. Baham is an employee of Geodynamics, most recently as a
Senior Systems Engineer in Valley Forge, Pennsylvania, He has
been suspended without pay since January 1, 1995.
B. Baham, on behalf of himself, members of his family and
his self-directed pension plan, is the beneficial owner of
34,900 shares of the Common Stock of Geodynamics (the
"Geodynamics Stock") and is the holder of options to purchase
approximately 9,100 additional shares of Geodynamics' Stock.
C. From mid-1994 through the date of the Geodynamics
Annual Meeting of Shareholders held on February 16, 195 (the
"annual Meeting"), Baham conducted various proxy solicitations to
the shareholders of Geodynamics including the presentation of an
opposing slate of nominees for election to the Geodynamics Board
of Directors (the "Board") at the Annual Meeting. In connection
therewith, Geodynamics instituted legal proceedings against Baham
and the other members of the opposing slate alleging, among other
things, false and misleading solicitation materials. Baham
contends that the election is null and void because Geodynamics
made false and misleading statements in its proxy solicitation
materials. Geodynamics and Baham each deny the allegations of
wrongdoing made by the other.
D. Geodynamics has raised objections concerning the voting
of certain late proxies by Baham at the Annual Meeting, which
objections the Inspector of Elections sustained. Baham has
informed the Company that he believes the Inspector acted
incorrectly.
E. Geodynamics and Baham wish to resolve the various
disputes which have arisen between them and to establish the
guidelines respecting Baham's continued ownership of Geodynamics
Stock and the continued relationship between Baham and
Geodynamics.
F. This settlement is the compromise of a disputed claim
and neither the payment nor this Agreement is to be construed as
an admission of liability on the part of any of the settling
parties. In settling this matter, it is the desire of the
parties to terminate the lawsuit between them and buy their
peace.
Accordingly, in consideration of the foregoing premises and
the agreements contained herein, Geodynamics and Baham agree as
follows:
1. Effective Date. Geodynamics shall be bound by the
Agreement only if it and the Settlement Agreement of this same
date are approved by a majority of the members of the Board of
Geodynamics. The date Geodynamics' Board of Directors approves
this Agreement shall be referred to as the "Effective Date." If
no such approval is given, this Agreement shall be null and void.
2. Election of Directors. The parties acknowledge
that Geodynamics has secured the resignations of Richard Smith
and Frederick Evans, two of the six management nominees elected
at the Annual Meeting, and has appointed Bruce Gordon and Will
Stackouse, two members of the slate of nominees proposed by Baham
at the Annual Meeting, to fill the vacancies created by those
resignations. Geodynamics will use its best efforts to cause
Messrs. Edleson, Gordon, and Stackhouse to be renominated and
reelected to the Board at the 1995 Annual Meeting of Shareholders
provided, however, that these directors may be identified as the
last three candidates on the management slate if cumulative
voting is employed. Baham hereby waives all of his rights to
challenge the results of the election of directors at the Annual
Meeting and agrees that he will not encourage or support any
other shareholder making such a challenge.
3. Dismissal of Lawsuit; General Releases.
(a) As soon as practicable following the
Effective Date, Geodynamics shall dismiss with prejudice, and
not reinstitute in any form, as to Baham and the other members of
his slate the lawsuit currently pending in the United States
District Court for the Central District of California, (Case No.
CV-94-8335 LGB) entitled Geodynamics Corporation vs. Alney A.
Baham, et al, (the "Lawsuit"). Prior to filing a request for
dismissal, Geodynamics shall execute and file a stipulation and
order seeking to vacate the existing preliminary injunction and
temporary restraining order issued in the Lawsuit.
(b) In consideration of the foregoing dismissal
of the Lawsuit and the other agreements contained herein,
Geodynamics, on the one hand, and Baham and Baham's spouse (by
execution of a joinder concurrently herewith), on the other hand,
on behalf of themselves, their successors, assigns, agents,
heirs, administrators and representatives, each fully and forever
release and discharge the other(s) of them and their respective
officers, directors, employed, attorneys, agents, insurers, and
affiliates from any and all cause or causes of actions, actions,
judgments, liens, indebtedness, damages, losses, claims,
liabilities, and demands of whatsoever kind or character, known
or unknown, suspected to exist or not suspected to exist,
anticipated or not anticipated, whether or not heretofore brought
before any state or federal court or before any state or federal
agency or other governmental entity, whether statutory or common
law ("Claims") to the Effective Date, including without
limitation on the generality of the foregoing, any and all
claims, demands or causes of action attributable to, connected
with or incidental to the annual Meeting, the election of
directors at the Annual Meeting, the solicitation of proxies, the
Lawsuit or otherwise.
(c) IT IS EXPRESSLY UNDERSTOOD that California
Civil Code Section 1542 provides as follows:
A general release does not extend to
claims which the creditor does not know or
suspect to exist in his favor at the time of
executing the release, which if known by him
must have materially affected his settlement
with the debtor.
THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 ARE HEREBY
EXPRESSLY WAIVED BY EACH OF THE PARTIES HERETO to the fullest
extent that a party may waive all such rights and benefits, if
any, of such provisions pertaining to the matters released
herein. In addition, each of the parties hereto hereby waives
any similar provision in any other jurisdiction, if in any way
applicable, and each of the parties hereto acknowledges that
these waivers are an essential and material term of this
Agreement. In connection with such waiver, each of the parties
hereto acknowledges that such party has been advised of and has
considered the possibility that such party may not now fully know
the number or magnitude of all the Claims that such party may
have against any other party hereto with respect to the matters
released herein, and that such party may hereafter discover
Claims presently unknown or unsuspected, or facts in addition to
or different from those that such party now knows or believes to
be true, with respect to the matters released herein.
Nevertheless, it is each of the parties' intention, through this
release, fully, finally, and forever to settle and release all
such matters, and all Claims relative thereto, which may exist,
or hereto have existed against the other, and each agrees that
this release is such a full and final release. In furtherance of
such intention, the release herein given shall be and remain in
effect as a full and complete release of such additional or
different Claims or facts relative thereto notwithstanding the
discovery by such part of the existence of any additional or
different Claims or facts relating to the Claims.
4. Agreements Respecting Geodynamics Stock and Future
Relationships. With respect to the continuing relationship of
Baham with Geodynamics and in consideration of the dismissal of
the lawsuit and the other agreements herein, the parties agree as
follows:
(a) Irrevocable Proxy and Option. Baham hereby
grants Geodynamics an option (the "Option") to purchase all
shares of Geodynamics Stock beneficially owned by Baham, whether
now owned or hereafter acquired and whether owned of record by
Baham, members of his family, his self-directed pension trust, or
any affiliate of the foregoing (the "Option Shares"), for the
period commencing the date hereof and ending on March 1, 2000
(the "Option Period") at an exercise price of the greater of
$10.00 over the fair market value of each share or two times the
fair market value of each share on the date Geodynamics exercises
that option. For purposes of this subparagraph and subparagraph
4 (c), fair market value shall mean the average of bid and ask on
the NASDAQ system. In connection with the grant of the Option
and to secure his obligations under subparagraph (d) below,
concurrently herewith, Baham shall execute and deliver to
Geodynamics an irrevocable proxy, in the form attached hereto as
Exhibit A, to vote all the Option Shares during the Option
Period.
(b) Options. The parties acknowledge that all
options to purchase shares of Geodynamics Stock currently held by
Baham are hereby deemed expired on the Effective Date.
(c) Right of First Refusal. If, at any time
prior to March 1, 2000, Baham proposes to sell or offer for sale
any shares of Geodynamics Stock then owned by him, including
shares issued upon exercise of options (the "Shares"), he shall
first offer the Shares for purchase by Geodynamics and shall
advise Geodynamics as to the number of Shares being offered and
the price proposed for such Shares. For a period of two (2)
business days thereafter, or, in the case of a private sale of
the Shares, for a period of five (5) business days, Geodynamics
may accept such offer on the terms provided and either purchase
or cause another person designated by it to purchase the Shares
at the purchase price by company check or by certified check. If
Geodynamics does not elect to purchase the Shares, Baham may sell
the Shares in the market or consummate the private transaction.
However, if the sale were to be at fair market value, and if the
price has decreased from the time Baham first notified
Geodynamics of the option to buy, Geodynamics shall pay Baham the
difference between the price he receives for his Shares and the
fair market value at the time he gave notice to the Company,
provided Baham consummates the sale within two days of receiving
notice from Geodynamics of its decision not to by the Shares. If
Baham does not sell the Shares within two days, then Baham shall
be free to sell such Shares at any time within 90 days thereafter
so long as the price at which such Shares are sold is not less
than the price offered to Geodynamics. Should the offering price
be reduced or should the shares not be sold within such 90-day
period, then Baham shall follow the foregoing procedure in
connection with any subsequent offer to sell the Shares.
(d) No Further Proxy Contest; Etc. Until March
1, 2000, Baham shall not purchase or otherwise acquire any
additional shares of Geodynamics' Stock. In addition, until such
date, Baham shall not, alone or with others, without the prior
written consent of the Board specifically expressed in a
resolution adopted by a majority of the members of the Board:
(1) submit any proposal for the vote of
shareholders of Geodynamics, seek the consent of Geodynamics'
shareholders to any action, or seek to influence the vote of
Geodynamics shareholders on any election of directors or other
proposal submitted by management or others;
(2) with respect to securities of
Geodynamics, become a member of any "group" within the meaning of
Section 13 (d) (3) of the Securities Exchange Act of 1934, as
amended;
(3) induce or attempt to induce, directly or
indirectly, any other person to initiate or support any tender or
exchange offer for Geodynamics Stock or any proposal for change
of control of Geodynamics, whether in connection with a proxy
contest or otherwise, or to offer or seek to cause any third
party to offer to purchase the stock or substantially all of the
assets of Geodynamics, whether by merger, tender offer or
otherwise;
(4) attempt to obtain election or
appointment to the Board or to influence any decision of the
Board (other than as set forth in Section 5 below);
(5) take any action inconsistent with the
foregoing; or
(6) seek employment with Geodynamics or any
current subsidiary or affiliate of Geodynamics.
5. Baham Expenses. Without in any way limiting the
scope of subparagraph 3 (b) of this Agreement, Geodynamics agrees
that, at the first meeting of the Board after the Effective Date,
Geodynamics will place on the agenda a request by Baham to
reimburse him for his expenses in conducting the proxy contest
with respect to the Annual Meeting as compensation for what Baham
views as services rendered to all shareholders and efforts to
increase shareholder value. Baham will be entitled to make a
presentation to the Board at that time and to contact any person
(if such person is willing) before that meeting to campaign in
favor of his request. The parties acknowledge that this
Agreement does not create, and shall not be construed as
creating, any legal obligation by Geodynamics with respect to
such proposal and that Geodynamics has made no representations or
warranties concerning the likelihood that such request will be
honored. In the event reimbursement is denied by the Board,
Baham will take no further action to seek reimbursement and, in
particular, agrees that he will not institute any legal action
against Geodynamics with respect thereto and will not seek to
have the issue of reimbursement reconsidered by the Board. In the
event that Geodynamics expands its Board of Directors beyond
seven persons prior to the Board meeting at which this matter is
considered, Geodynamics will delegate the authority to vote on
the Baham proposal to a special committee composed of the seven
directors serving on the Board immediately following the
resignations and appointments referred to in paragraph 2 of this
Agreement.
6. Miscellaneous.
(a) Announcement; Non-Disclosure. Attached
hereto as Exhibit B is a copy of the press release to be issued
by the Parties on the Effective Date. Except as required to
comply with the law, to consult with their financial and tax
advisors, or to meet their contractual obligations, each party
agrees to keep the terms of this Agreement confidential and
agrees not to make, nor case to be made, any other news release,
disclosure or public announcement pertaining to this Agreement or
the subject matter hereof without the prior written approval of
the other party.
(b) Equitable Remedies. Each of the parties
hereto acknowledges that the remedy at law for any breach, or
threatened breach, of the provisions of this Agreement will be
inadequate and, accordingly, each of them covenants and agrees
that, with respect to any such breach or threatened breach, the
non-breaching party, in addition to any other rights or remedies
that it may have and regardless of whether such other rights or
remedies have been previously exercised, will be entitled to such
equitable and injunctive relief as may be available.
(c) Arbitration. Except with respect to any
application by Geodynamics or Baham for injunctive or other non-
monetary equitable relief pursuant to paragraph 6 (b) of this
Agreement, any controversy, dispute, or claim between the parties
to this Agreement or any party released pursuant to it, including
any claim arising out of, in connection with, or in relation to
the interpretation, performance or breach of this Agreement shall
be settled by arbitration before a single arbitrator conducted in
Los Angeles, California, in accordance with the most applicable
then existing rules of the American Arbitration Association, and
judgment upon any award rendered by the arbitrator(s) may be
entered by any state or federal court having jurisdiction
thereof. Such arbitration shall be the exclusive remedy for
determining any such dispute, regardless of its nature. In the
event the parties are unable to agree upon an arbitrator, the
parties shall select a single arbitrator by striking alternately
(the first to strike being chosen by lot) from a list of seven
arbitrators designated by the American Arbitration Association;
four shall be retired judges of the Superior or Appellate Courts
resident in Los Angeles or Orange Counties selected from the
"Independent List" of retired judges and three shall be members
of the National Academy of Arbitrators resident within Los
Angeles or Orange Counties, California. In the event of any such
arbitration, the fees of the arbitrator and any costs associated
with the arbitration shall be divided equally between the
parties. The prevailing party shall be awarded reasonable
attorney's fees as part of the arbitration award.
(d) Entire Agreement. This Agreement constitutes
the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior and
contemporaneous agreements, representations, warranties,
statements and understandings, whether oral or written, with
respect to the subject matter hereof.
(e) Notices. All notices, demands, elections, or
requests provided for or permitted to be given pursuant to this
Agreement must be in writing. All notices, demands, elections,
and requests shall be deemed to have been duly given on the date
delivered personally or on the date of receipt if sent by
overnight delivery services, facsimile transmission, or
registered or certified U.S. Mail with return receipt requested,
to the following addresses, or such other addresses as may be
subsequently designated in writing and delivered to the other
parties hereto:
To Geodynamics:
Geodynamics Corporation
21171 Western Avenue, Suite 110
Torrance, California 90501
Attention: Robert L. Paulson,
Chief Executive Officer
Fax: (310) 781-3615
with copies to:
Joseph E. Nida, Esq.
Nida & Maloney
801 Garden Street, Suite 201
Santa Barbara, California 93101
Fax: (805) 568-1955
and
Alexander F. Wiles, Esq.
Irell & Manella
1800 Avenue of the Stars, Suite 900
Los Angeles, California 90067
Fax: (310) 203-7199
To Baham:
Mr. Alney A. Baham
19502 Georgina Avenue
Cerritos, California 90703
Fax: (310) 860-3341
with a copy to:
Mitchell Albert, Esq.
Haight, Brown & Bonesteel
1620 26th Street
Santa Monica, California, 90404
Fax: (310) 829-5117
(f) Governing Law; Attorneys' Fees. This
Agreement and the rights and obligations of the parties
hereunder, shall be interpreted, construed, and enforced in
accordance with the laws of the State of California without
regard to principles of law (such as "conflicts of laws") that
might make the law of some other jurisdiction applicable. In the
event any legal action or arbitration is instituted to construe
or enforce this Agreement or the rights or obligations of any
party, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and expenses incurred in such legal
action. Attorneys' fees incurred in enforcing any judgment in
respect of this Agreement are recoverable as a separate item.
The preceding sentence is intended to be severable from the other
provisions of this Agreement and to survive any judgment and, to
the maximum extent permitted by law, shall not be deemed merged
into any such judgment.
(g) Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties and their
respective successors and assigns.
(h) Amendments, Supplements. This Agreement may
not be amended or modified except in a writing signed by
Geodynamics and Baham and expressly stating that it is intended
to amend this Agreement, except for the addresses to which
communications may be sent, which any party may change in
accordance with the terms of this Agreement.
(i) No Third Party Beneficiaries. Nothing
contained in this Agreement is intended to and nothing contained
herein shall be interpreted to confer on any party not a party
hereto or a successor or assign thereof the rights of a third
party beneficiary.
(j) Captions. All section titles or captions
contained in this Agreement or in any schedule or exhibit annexed
hereto or referred to herein are for convenience only, shall not
be deemed a part of this Agreement and shall not affect the
meaning or interpretation of this Agreement. All references
herein to sections shall be deemed references to such parts of
this Agreement, unless the context shall otherwise require.
(k) Severability. If any provision of this
Agreement or the application thereof to any person or
circumstances shall be held to be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of
such provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent
permitted by law.
(l) 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.
(m) No Representations; Counsel. Baham
represents that he has secured the advice of counsel prior to
executing this Agreement and acknowledges that no representations
or warranties have been made by him by Geodynamics to induce him
to enter into this Agreement other than those set forth in
writing in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first written above.
GEODYNAMICS CORPORATION
("Geodynamics")
By: /s/
Robert L. Paulson
Chairman of the Board and
Chief Executive Officer
/s/
ALNEY A. BAHAM
CONSENT OF SPOUSE
The undersigned, Julia H. Baham, spouse of Alney A. Baham,
hereby consents to the execution of the foregoing Agreement by
Alney Baham, waives and relinquishes any rights she might
otherwise have in the subject matter thereof, by her community
property interest, if any, or otherwise, and expressly joins in
an reiterates the general release set forth in Section 3 of the
Settlement Agreement and the irrevocable prosy and limitations on
shareholder activity contained in Section 4 of the Agreement.
Dated: April 5th, 1995
/s/
Julia H. Baham
Exhibit A
IRREVOCABLE PROXY
(coupled with an interest)
The undersigned, Alney A. Baham, as the beneficial owner of
34,900 shares of Common Stock (the Shares ) of Geodynamics
Corporation, a California corporation (the Company ) owned by
himself, members of his family, and his self-directed pension
plan, hereby revokes any and all previous proxies granted with
respect to the Shares and grants to the Company as irrevocable
proxy to vote the Shares,, together with any additional shares of
Geodynamics Common Stock here after required by any of them (all
such additional shares being included within the terms Shares
herein), with all power to attend any and all meetings of the
shareholders of the Company and to represent, vote, execute
consents and waivers, and otherwise to act for the undersigned in
the same manner and with the same effect as if the undersigned
were personally present at any such meeting and voting such
shares or personally acting on any matters submitted to
shareholders for approval or consent. Certain of the Shares
owned beneficially by Baham are owned of record by persons, firms
or entities other than Baham individually. Baham agrees to take
all action required in order to cause the record owners of all
Shares to vote such Shares, through the execution of proxies or
otherwise, in accordance with the instructions received by him
from the Company, including without limitation any recommendation
of a majority of the Board of Directors of the Company in any
proxy or consent solicitation.
The undersigned authorizes any officer of the Company to act
on the Company s behalf with respect to the proxy granted
hereunder and further authorizes the Company to substitute any
other person to act hereunder, to revoke any such substitution,
and to file this proxy and any substitution or revocation with
the Secretary of the Company.
This proxy is being made in connection with the grant by the
undersigned to the Company of an option to purchase the Shares
set forth in that certain Agreement or even date herewith between
the Company and the undersigned and is irrevocable in accordance
with such Agreement until March 1, 2000, or until the option is
exercised in full or the Shares are otherwise sold in accordance
with the Agreement.
The undersigned acknowledges that the remedy at law for any
breach, or threatened breach, of the provisions hereof will be
inadequate and, accordingly, covenants and agrees that in
addition to any other rights or remedies that the Company may
have with respect to any such breach or threatened breach, and
regardless of whether such other rights or remedies have been
previously exercised, the Company will be entitled to such
equitable and injunctive relief as may be available.
In the event any legal action or arbitration is instituted
to construe or enforce this Proxy or the rights or obligations of
any party, the prevailing party shall be entitled to reasonable
attorneys fees, costs and expenses incurred in such legal
action.
Dated: April 5th , 1995
/s/ Alney A. Baham
Alney A. Baham
CONSENT OF SPOUSE
The undersigned, Julia H. Baham, spouse of Alney A. Baham
hereby consents to the execution of the foregoing Irrevocable
Proxy by Alney A. Baham, waives and relinquishes any rights she
might otherwise have in the subject matter thereof, by her
community property interest, if any, or otherwise.
Dated: April 5th, 1995
/s/ Julia H. Baham
Julia H. Baham
Exhibit B
Press Release
Draft
April , 1995
Press Release
Geodynamics Corporation and Alney A. Baham today announced
they had reached a settlement of their ongoing disputes. The
settlement resolves any possible challenge by Mr. Baham to the
results of the election of members of Geodynamics Board of
Directors at the Company s Annual Meeting of Shareholders held on
February 16, 1995. As previously reported, Geodynamics Board
now consists of Thomas R. LaFehr, Robert L. Paulson, W. Richard
Ellis and Donald L. Haas, each of whom was a management nominee,
and Michael E. Edleson, Bruce J. Gordon, and Will Stackhouse,
each of whom was a member of Mr. Baham s slate.
Pursuant to the settlement, Geodynamics will dismiss the
lawsuit against Mr. Baham and his slate of nominees relating to
the Annual Meeting and has agreed to re-nominate the directors
from Mr. Baham s slate at the next Annual Meeting of
Shareholders. Geodynamics also announced that, pursuant to the
settlement, Mr. Baham had agreed to support the new Board and had
given the Company a general release from all claims. The other
terms of the settlement are confidential.
In announcing the settlement, Robert Paulson, Chief
Executive Officer of the Company, said that he looks forward to
working with the new Board, including the new members from Mr.
Baham s slate, and wishes Mr. Baham well in his future endeavors.
Mr. Baham stated that he has confidence in the new Board, intends
to remain a shareholder of Geodynamics, and wishes the new Board
well in its efforts to maximize shareholder value.