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EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
DATED AS OF DECEMBER 23, 1998
BY AND AMONG
CHEVRON CORPORATION,
CHEVRON THAILAND INC.
AND
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ OIL CORPORATION
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TABLE OF CONTENTS
Page
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ARTICLE 1
The Merger.................................................. 1
SECTION 1.01 The Merger............................................................................... 1
SECTION 1.02 Closing.................................................................................. 1
SECTION 1.03 Effective Time........................................................................... 2
SECTION 1.04 Effects of the Merger.................................................................... 2
SECTION 1.05 The Surviving Corporation................................................................ 2
ARTICLE 2
Conversion of Securities........................................... 2
SECTION 2.01 Effect on Capital Stock.................................................................. 2
SECTION 2.02 Exchange of Certificates................................................................. 3
ARTICLE 3
Representations and Warranties of the Company................................ 5
SECTION 3.01 Organization, Standing and Corporate Power............................................... 6
SECTION 3.02 Company Subsidiaries..................................................................... 6
SECTION 3.03 Capital Structure........................................................................ 6
SECTION 3.04 Authority; Non-Contravention............................................................. 7
SECTION 3.05 Company Public Documents, Financial Statements and Outstanding Indebtedness.............. 9
SECTION 3.06 Absence of Certain Changes or Events..................................................... 10
SECTION 3.07 Litigation; Compliance with Law.......................................................... 10
SECTION 3.08 Company Benefit Plans and Labor Relations................................................ 10
SECTION 3.09 Tax Returns and Tax Payments............................................................. 11
SECTION 3.10 Environmental, Health and Safety Matters................................................. 12
SECTION 3.11 Assets; Encumbrances..................................................................... 13
SECTION 3.12 Intellectual Property.................................................................... 13
SECTION 3.13 Books and Records........................................................................ 13
SECTION 3.14 Brokers.................................................................................. 14
SECTION 3.15 Insurance................................................................................ 14
SECTION 3.16 Material Contracts....................................................................... 14
SECTION 3.17 Affiliate Transactions................................................................... 15
SECTION 3.18 Opinion of Company's Financial Advisor................................................... 15
SECTION 3.19 Company Board Approval and Recommendation................................................ 15
SECTION 3.20 Company Stockholder Approval............................................................. 15
SECTION 3.21 Concession and Joint Operating Agreement................................................. 16
SECTION 3.22 No Other Agreements to Sell the Company Stock............................................ 17
SECTION 3.23 Year 2000 Compliance..................................................................... 18
SECTION 3.24 Accuracy of Information.................................................................. 18
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ARTICLE 4
Representations and Warranties of Parent and Merger Sub........................... 18
SECTION 4.01 Organization, Standing and Corporate Power............................................... 18
SECTION 4.02 Authority; Non-Contravention............................................................. 18
SECTION 4.03 Parent SEC Documents..................................................................... 19
SECTION 4.04 Litigation; Compliance with Law.......................................................... 20
SECTION 4.05 Organization and Authority of Merger Sub................................................. 20
SECTION 4.06 No Prior Activities...................................................................... 20
SECTION 4.07 Parent Common Stock...................................................................... 20
SECTION 4.08 Ownership of Company Capital Stock....................................................... 20
ARTICLE 5
Covenants Regarding Conduct of Business................................... 20
SECTION 5.01 Conduct of Business by the Company....................................................... 20
SECTION 5.02 Acts Permitted to Preserve Enterprise.................................................... 22
ARTICLE 6
Additional Agreements............................................ 23
SECTION 6.01 Preparation of Form S-4 and Proxy Statement; Stockholder Meetings........................ 23
SECTION 6.02 Access to Financial and Operational Information.......................................... 24
SECTION 6.03 Notices of Certain Events................................................................ 24
SECTION 6.04 Mutual Best Efforts...................................................................... 25
SECTION 6.05 Public Announcements..................................................................... 26
SECTION 6.06 Affiliate Agreements..................................................................... 26
SECTION 6.07 Stock Exchange Listing................................................................... 26
SECTION 6.08 Acquisition of 5% Interest............................................................... 26
SECTION 6.09 No Solicitation.......................................................................... 27
SECTION 6.10 Indemnification.......................................................................... 27
SECTION 6.11 Insurance................................................................................ 28
SECTION 6.12 Financial Information.................................................................... 28
SECTION 6.13 Obligations of Merger Sub................................................................ 28
SECTION 6.14 Tax Treatment............................................................................ 28
SECTION 6.15 HSR Act.................................................................................. 28
SECTION 6.16 Parent Board Approval.................................................................... 29
SECTION 6.17 Interim Financing........................................................................ 29
ARTICLE 7
Employment Matters.............................................. 29
SECTION 7.01 Employees................................................................................ 29
SECTION 7.02 Conduct of Business by the Company with Respect to Certain Employee Matters.............. 29
SECTION 7.03 Continuing COBRA Coverage................................................................ 30
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ARTICLE 8
Conditions Precedent to Merger........................................ 30
SECTION 8.01 Conditions to Each Party's Obligation.................................................... 30
SECTION 8.02 Conditions to Obligations of Parent...................................................... 31
SECTION 8.03 Conditions to Obligation of the Company.................................................. 32
SECTION 8.04 Effect of Exercise of Options............................................................ 32
ARTICLE 9
Termination, Amendment, Fees and Expenses.................................. 32
SECTION 9.01 Termination.............................................................................. 32
SECTION 9.02 Effect of Termination.................................................................... 34
SECTION 9.03 Amendment................................................................................ 34
SECTION 9.04 Extension; Waiver........................................................................ 34
SECTION 9.05 Authorization of Termination, Amendment, Etc............................................. 34
SECTION 9.06 Fees and Expenses........................................................................ 35
ARTICLE 10
General Provisions.............................................. 35
SECTION 10.01 Nonsurvival of Representations and Warranties........................................... 35
SECTION 10.02 Notices................................................................................. 35
SECTION 10.03 Certain Definitions..................................................................... 36
SECTION 10.04 Interpretation.......................................................................... 41
SECTION 10.05 Counterparts............................................................................ 41
SECTION 10.06 Entire Agreement........................................................................ 41
SECTION 10.07 Governing Law........................................................................... 41
SECTION 10.08 Assignment.............................................................................. 41
SECTION 10.09 Enforcement............................................................................. 42
SECTION 10.10 Severability............................................................................ 42
SECTION 10.11 Service of Process...................................................................... 42
SECTION 10.12 Company Disclosure Schedules............................................................ 42
EXHIBITS
Exhibit A Option and Voting Agreement
Exhibit B Company Tax Certificate
Exhibit C Parent Tax Certificate
COMPANY DISCLOSURE SCHEDULES
Schedule 3.02 Company Subsidiaries
Schedule 3.03(a) Capitalization and Stock Options and Warrants
Schedule 3.03(d) Capitalization of Thai ▇▇▇▇
Schedule 3.03(e) Capitalization of B8/32 Partners
Schedule 3.03(f) Securities Having Voting and/or Registration Rights
Schedule 3.04(b) Non-Contravention
Schedule 3.04(c) Consents and Approvals
Schedule 3.05(c) Indebtedness and Liens
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Schedule 3.06 Absence of Changes
Schedule 3.07 Litigation
Schedule 3.08(a) Company Benefit Plans
Schedule 3.08(b) Severance Payments
Schedule 3.09(a) Tax Returns and Tax Payments
Schedule 3.10 Environmental Matters
Schedule 3.11 Encumbrances
Schedule 3.16(a) Material Contracts
Schedule 3.16(b) Licenses
Schedule 3.21(c) Concession and Joint Operating Agreement
Schedule 3.21(g) Disputes Regarding the Concession
Schedule 3.21(h) Writings Related to the Concession or the JOA
Schedule 3.21(j) Sole Risk Operations
Schedule 5.01 Conduct of Business by Company
Schedule 7.01 Employees, Directors and Consultants
Schedule 7.02 Conduct of Business by Company Related to Employee Matters
PARENT DISCLOSURE SCHEDULE
Schedule 4.02(c) Consents and Approvals
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as of
December 23, 1998, by and among Chevron Corporation, a Delaware corporation (the
"Parent"), Chevron Thailand Inc., a Delaware corporation (the "Merger Sub") and
a wholly owned subsidiary of Parent, and ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ Oil Corporation, a
Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Merger Sub and the
Company have approved the reorganization whereby Merger Sub will acquire all of
the stock of the Company through the merger of Merger Sub with and into the
Company, and the Company would become a wholly owned subsidiary of Parent (the
"Merger"); and
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to Parent's and Merger Sub's willingness to
enter into this Agreement, certain record and beneficial stockholders of the
Company representing approximately 75.1% of the voting power of the Company have
granted to Parent options (the "Options") pursuant to an Option and Voting
Agreement (the "Option and Voting Agreement") attached hereto as Exhibit A to
acquire such stockholders' shares of Company Stock, along with an agreement to
vote in favor of the Merger and irrevocable proxies to Parent authorizing a vote
in favor of the Merger; and
WHEREAS, for Federal income-tax purposes, it is intended that the
acquisition of the shares of the stockholders of the Company pursuant to the
Option and Voting Agreement and the Merger will constitute an integrated
transaction qualifying as a tax free reorganization under the provisions of
section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements in this Agreement, the
parties, intending to be legally bound hereby, agree as follows:
ARTICLE 1
The Merger
SECTION 1.01 The Merger. Under the terms and subject to the conditions
in this Agreement, and in accordance with the Delaware General Corporation Law,
as amended (the "DGCL"), Merger Sub shall be merged with and into the Company at
the Effective Time (as hereinafter defined). At the Effective Time, the separate
existence of Merger Sub shall cease, and the Company shall continue as the
surviving corporation in the Merger (the "Surviving Corporation"), and as a
wholly owned subsidiary of Parent.
SECTION 1.02 Closing. Unless this Agreement shall have been terminated
pursuant to Article 9, and subject to satisfaction or waiver of the conditions
in Article 8, the closing of the Merger (the "Closing") will occur at 10:00
a.m., local time, on the first Business Day after satisfaction or waiver of the
conditions set forth in Section 8.01 (or as soon as practicable thereafter
following satisfaction or waiver of the conditions set forth in Sections 8.02
and 8.03), at the offices of Pillsbury Madison & Sutro
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LLP in San Francisco, California (the day on which the Closing occurs being the
"Closing Date") or at such other time, date and place as Parent and the Company
may agree.
SECTION 1.03 Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date (or on such other date as
Parent and the Company may agree), the parties shall cause to be duly prepared
and filed with the Secretary of State of the State of Delaware a certificate of
merger for the Merger (a "Certificate of Merger"), executed in accordance with
the applicable provisions of the DGCL, and shall make all other filings or
recordings required under the DGCL. The Merger shall become effective upon (i)
the date and time of filing of the Certificate of Merger with the Secretary of
State of the State of Delaware or (ii) on such other date as Parent and the
Company may agree (such time when the Merger becomes effective being the
"Effective Time").
SECTION 1.04 Effects of the Merger. The Merger shall have the effects
stated in the DGCL.
SECTION 1.05 The Surviving Corporation.
(a) Certificate of Incorporation. At the Effective Time, the
Certificate of Incorporation of Merger Sub, as in effect immediately prior to
the Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation.
(b) Bylaws. At the Effective Time, the Bylaws of Merger Sub, as in
effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation.
(c) Directors and Officers. At and after the Effective Time, until
successors are duly elected or appointed and qualified in accordance with
applicable law or until their earlier death, resignation or removal, the
directors of Merger Sub at the Effective Time shall be the directors of the
Surviving Corporation, and the officers of Merger Sub at the Effective Time
shall be the initial officers of the Surviving Corporation.
ARTICLE 2
Conversion of Securities
SECTION 2.01 Effect on Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of Common Stock, par value $0.01 per share, of the Company (the "Company
Stock") or capital stock of Merger Sub, each of the following shall occur:
(a) Conversion of Company Stock.
(i) Except as otherwise provided herein, at the Effective
Time, each issued and outstanding share of Company Stock (including
those shares of Company Stock issued upon exercise of Stock Options)
shall be converted into the right to receive that number of fully paid
and nonassessable shares of common stock, $1.50 par value, of Parent
("Parent Common Stock") equal to the Exchange Ratio (as hereinafter
defined) divided by the Average Closing Price (as hereinafter defined)
(the "Merger Per Share Consideration").
(ii) "Exchange Ratio" shall be the result obtained by dividing
a numerator equal to the sum of (a) Ninety-One Million Dollars
($91,000,000), (b) the amount, if any, of
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cash received by the Company in consideration of the issuance of its
equity securities after the date of this Agreement, and (c) an amount
equal to the value, if any, as agreed by the Company and Parent, of any
non-cash consideration received by the Company in consideration of its
equity securities after the date of this Agreement, by a denominator
equal to the number of shares of Company Stock (including those shares
issued upon exercise of Stock Options) issued and outstanding at the
Effective Time. "Average Closing Price" shall be the arithmetic average
of the closing prices of Parent Common Stock as reported on the NYSE
Composite Transactions Tape for the twenty (20) consecutive trading
days ending on the second trading day prior to the Closing Date (or if
the Options are exercised by Parent, the second trading day prior to
the exercise of the Options).
(iii) Holders of shares of Company Stock shall also receive
together with each share of Parent Common Stock issued in the Merger,
one associated preferred stock purchase right (a "Right") in accordance
with the Rights Agreement dated as of November 23, 1998, between Parent
and ChaseMellon Shareholder Services, L.L.C., as Rights Agent.
References herein to the shares of Parent Common Stock issuable in the
Merger shall also be deemed to include the associated Rights.
(b) Cancellation of Treasury Stock and Parent Owned Company Stock. At
the Effective Time, each share of Company Stock that is owned by the Company as
treasury stock or by any Company Subsidiary, and each share of Company Stock
that is owned by Parent or Merger Sub, shall automatically be canceled and
retired and shall cease to exist, and no cash, Parent Common Stock or other
consideration shall be delivered in exchange therefor.
(c) Company Options and Warrants. Any Stock Options (as hereinafter
defined) which have not vested or which have not been exercised prior to the
Closing Date shall be canceled, and none of the Parent, Merger Sub, the Company
or the Surviving Corporation shall have any obligations with respect to such
Stock Options.
(d) Capital Stock of Merger Sub. Each issued and outstanding share of
the capital stock of Merger Sub 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.
(e) Adjustments to Merger Per Share Consideration. In the event that,
between the date of this Agreement and the Effective Time, the issued and
outstanding shares of Company Stock or Parent Common Stock shall have been
changed into a different number of shares or a different class of shares as a
result of a stock split, reverse stock split, dividend payable in stock or other
securities, recapitalization, reclassification or other similar transaction,
then the Merger Per Share Consideration shall be appropriately adjusted to
reflect such event to provide to the holders of Company Stock with the same
economic effect as contemplated by this Agreement prior to such stock split,
reverse stock split, dividend payable in stock or other securities, spin-off,
combination or exchange of shares, extraordinary dividend, recapitalization,
reclassification or other similar transaction.
SECTION 2.02 Exchange of Certificates.
(a) Exchange Agent. On the Closing Date, Parent shall deposit with
ChaseMellon Shareholder Services, L.L.C. or such other bank or trust company
designated by Parent and reasonably acceptable to the Company (the "Exchange
Agent") all certificates evidencing Parent Common Stock and cash for fractional
shares thereof which holders of shares of Company Stock are entitled to receive
under this
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Agreement as the Merger Per Share Consideration for the benefit of such holders
and for exchange in accordance with this Article 2 (such cash and shares of
Parent Common Stock, together with any dividends or distributions with respect
thereto with a record date after the Effective Time, being hereinafter referred
to as the "Exchange Fund"). The Exchange Agent shall, under irrevocable
instructions, deliver and pay all Merger Per Share Consideration and other
consideration in accordance with this Article 2.
(b) Exchange Procedures.
(i) Promptly after the Effective Time, Parent shall cause the
Exchange Agent to mail to each holder of record of a certificate
evidencing shares of Company Stock ("Company Stock Certificate")
outstanding at the Effective Time, whose shares were converted pursuant
to Section 2.01 into the right to receive shares of Parent Common
Stock, (A) a letter of transmittal and (B) instructions to effect the
surrender of such Company Stock Certificate in exchange for
certificates representing shares of Parent Common Stock and cash in
lieu of fractional shares.
(ii) With respect to each holder of a Company Stock
Certificate that is surrendered to the Exchange Agent (together with
and in accordance with the duly executed letter of transmittal and such
other customary documents as may be reasonably required pursuant to the
instructions provided by the Exchange Agent), Parent shall cause the
Exchange Agent to deliver and pay to such holder certificates
evidencing the number of whole shares of Parent Common Stock to which
such holder is entitled pursuant to this Agreement and a check
representing the amount of cash in lieu of fractional shares, if any,
to which such holder is entitled pursuant to this Agreement, plus, in
the event the Options are exercised by Parent, such holder's pro rata
portion of the amount of any accrued dividends or other distributions
with a record date after the date of exercise of the Options by the
Parent to the Closing Date paid with respect to the Parent Common
Stock.
(iii) After the Effective Time, there shall be no further
transfer on the records of the Company or its transfer agent of any
Company Stock Certificate. If any Company Stock Certificate is
presented for transfer, it shall be canceled against delivery by the
Exchange Agent of the Merger Per Share Consideration. If any Merger Per
Share Consideration is to be delivered or paid to a name other than
that in which the surrendered Company Stock Certificate is registered,
a condition of such exchange shall be that such Stock Certificate so
surrendered shall be properly endorsed, with signature guaranteed, or
otherwise in proper form for transfer and the Person requesting such
exchange shall (A) pay to Merger Sub any transfer (or other) tax
required by reason of the issuance of such certificate in a name other
than that in which the surrendered certificate is registered, or (B)
establish to the reasonable satisfaction of Parent or Merger Sub that
such tax has been paid or is not applicable. Until surrendered as
contemplated by this Section, each Company Stock Certificate shall, at
all times after the Effective Time, represent only the right to receive
the Merger Per Share Consideration upon such surrender.
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions having a record date after the Effective Time with respect
to Parent Common Stock shall be paid to the holder of any unsurrendered Company
Stock Certificate, until surrender thereof in accordance with this Agreement.
Following surrender of any such Company Stock Certificate, there shall be paid
(without interest) to the holder of Company Stock issued in exchange therefor,
(i) at the time of such surrender, the amount of any dividends or other
distributions with a record date after the Effective Time theretofore
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paid with respect to whole shares of Parent Common Stock, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with
respect to such Company Stock having a record date after the Effective Time but
prior to such surrender, and a payment date after such surrender with respect to
such whole shares of Parent Common Stock.
(d) No Further Ownership Rights in Company Stock. The Merger Per Share
Consideration paid and delivered upon surrender of any Company Stock Certificate
in accordance with this Article 2 shall be deemed to have been issued (and paid)
in full satisfaction of all rights regarding Company Stock theretofore
represented by such Stock Certificate, subject, however, to the Surviving
Corporation's obligations, with respect to shares of Company Stock outstanding
immediately before the Effective Time, to pay any dividends or make any other
distributions having a record date prior to the Effective Time which were
declared or made by the Company with respect to such Company Stock, prior to the
date hereof, or thereafter in accordance with this Agreement and which remain
unpaid at the Effective Time. If, after the Effective Time, Company Stock
Certificates are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided in Article 2.
(e) No Fractional Shares. Notwithstanding anything in this Article 2 to
the contrary, no certificate or scrip representing any fractional shares of
Parent Common Stock shall be issued as Merger Per Share Consideration and no
such fractional-share interest will entitle the holder thereof to any vote or
any other right of a stockholder of Parent. Each holder entitled to receive
Merger Per Share Consideration who would otherwise have been entitled to receive
a fraction of a share of Parent Common Stock (after taking into account all
Merger Per Share Consideration) shall receive, in lieu thereof, a cash payment
(without interest) equal to such fraction multiplied by the Average Closing
Price (each a "Fractional Share Payment").
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains unclaimed by the former stockholders of the Company for one year
after the Closing Date shall be delivered to Parent upon demand, and any Person
otherwise entitled to receive Merger Per Share Consideration or other
consideration who has not theretofore complied with this Article 2 shall
thereafter look only to Parent and only as a general creditor thereof for
payment of any claim for Merger Per Share Consideration, any dividends or
distributions with respect to Parent Common Stock and any cash in lieu of
fractional shares of Parent Common Stock, to which such Person may be entitled.
(g) No Liability. None of the Company, the Parent, Merger Sub, the
Surviving Corporation or the Exchange Agent shall be liable to any Person in
respect of any cash from the Exchange Fund that may be delivered to a public
official pursuant to any applicable law regarding abandoned property, escheat or
similar matters.
(h) Affiliates. Notwithstanding anything herein to the contrary,
Company Stock Certificates surrendered by an "affiliate" (as determined pursuant
to Section 6.06) of the Company shall not be exchanged until Parent has received
a written agreement from such Person as provided in Section 6.06 hereof.
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ARTICLE 3
Representations and Warranties of the Company
The Company represents and warrants to Parent and Merger Sub that,
except as disclosed in the disclosure schedules delivered to Parent and Merger
Sub by the Company at the time of execution of this Agreement (the "Company
Disclosure Schedules" and each a "Company Disclosure Schedule"):
SECTION 3.01 Organization, Standing and Corporate Power. Each of the
Company and the Company Subsidiaries is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated and
has the requisite corporate power and authority to carry on its business as now
being conducted, to own or use the properties and assets that it purports to own
or use, and to perform all its obligations under its Material Contracts (as
hereinafter defined). Each of the Company and the Company Subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or its properties makes such
qualification or licensing necessary, other than in such jurisdictions where the
failure to be so qualified or licensed or to be in good standing would not have
a material adverse effect (as hereinafter defined) on the Company. The Company
has made available to Parent complete and correct copies of the organizational
documents and bylaws of the Company and of each Company Subsidiary, in each case
as in effect on the date of this Agreement.
SECTION 3.02 Company Subsidiaries. The only direct or indirect
subsidiaries of the Company are those listed in Company Disclosure Schedule 3.02
(the "Company Subsidiaries" and each a "Company Subsidiary"). All outstanding
shares of capital stock of each such Company Subsidiary that is a corporation
have been duly authorized and validly issued, are fully paid and nonassessable,
were not issued in violation of preemptive rights or similar rights and are
owned (of record and beneficially) by the Company or by another Company
Subsidiary, and except as disclosed on Company Disclosure Schedule 3.02, are
free and clear of all rights of first refusal, pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever. Except for
(a) the ownership interests listed in Company Disclosure Schedule 3.02 and (b)
other ownership interests not having a value in excess of $100,000, the Company
does not own, directly or indirectly, any capital stock or other ownership
interest in any corporation, partnership, joint venture or other entity.
SECTION 3.03 Capital Structure.
(a) The authorized capital stock of the Company consists of 40,000,000
shares of Company Stock and 10,000,000 shares of preferred stock, $0.01 par
value per share ("Company Preferred Stock"). As of the close of business on
December 18, 1998, there were 25,598,000 shares of Company Stock issued and
outstanding and no shares of Company Preferred Stock outstanding. As of the date
of this Agreement, there are options to purchase 223,800 shares of Company Stock
outstanding and warrants to purchase 1,480,700 shares of Company Stock
outstanding. Company Disclosure Schedule 3.03(a) lists all outstanding options,
warrants or other rights to purchase or acquire shares of Company Stock ("Stock
Options"), showing for each such option: (1) the holder, (2) the number of
shares issuable, (3) the number of vested shares, (4) the date of expiration and
(5) the exercise price.
(b) The authorized capital stock of RMEC consists of an aggregate of
10,000 shares of common stock, par value $.01 per share, of which 1000 shares
are duly and validly issued and outstanding, each of which shares is fully paid
and nonassessable. All of such issued and outstanding shares of common stock are
owned beneficially and of record by the Company.
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(c) The authorized capital stock of TRH consists of an aggregate of
1000 shares of common stock, par value $.01 of which 1000 shares are duly and
validly issued and outstanding, each of which shares is fully paid and
nonassessable. All of such issued and outstanding shares of common stock are
owned beneficially and of record by the Company.
(d) The registered capital of Thai ▇▇▇▇ consists of an aggregate of
1,065,317 ordinary shares of which 1,065,317 shares are duly and validly issued
and outstanding, each of which shares is fully paid and nonassessable. All of
such issued and outstanding ordinary shares of common stock are owned
beneficially and of record as set forth on Company Disclosure Schedule 3.03(d)
hereto.
(e) The registered capital of B8/32 Partners consists, on the date
hereof, of an aggregate of 110,000 ordinary shares all of which are duly and
validly issued and outstanding, each of which shares is fully paid and
nonassessable. As of the date hereof, all of such issued and outstanding
ordinary shares of common stock are owned beneficially and of record by the
Persons as set forth on Company Disclosure Schedule 3.03(e) hereto.
(f) Except as stated above, no shares of capital stock or other equity
securities of the Company are issued and outstanding and neither the Company nor
any Company Subsidiary is a party to any contract, understanding or arrangement
based on or otherwise tracking the performance or characteristics of such stock
or other equity securities. All outstanding shares of Company Stock are duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive (or similar) rights. Except as set forth on Company Disclosure
Schedule 3.03(f), there are no outstanding bonds, debentures, notes or other
indebtedness or other securities of the Company having the right to vote (or
convertible into, or exercisable or exchangeable for securities having the right
to vote) on any matters on which stockholders of the Company may vote. Except as
disclosed on Company Disclosure Schedule 3.03(a) or 3.03(f), there are no
outstanding securities, options, warrants, rights, or agreements of any kind to
which the Company or any Company Subsidiary is a party (or by which any of them
is bound) obligating the Company or any Company Subsidiary to issue, deliver,
transfer or sell shares of capital stock or other equity securities of the
Company or any Company Subsidiary. There are no outstanding contractual
obligations, commitments or arrangements of the Company or any Company
Subsidiary to repurchase, redeem or otherwise acquire or make any payment in
respect of any shares of capital stock of the Company or any Company Subsidiary.
Except as disclosed in Company Disclosure Schedule 3.03(f), there are no
agreements or arrangements pursuant to which the Company is required to register
shares of Company Stock under the Securities Act of 1933, as amended (the
"Securities Act"). None of the outstanding equity securities of the Company was
issued in violation of the Securities Act or applicable blue sky laws of any
jurisdiction.
(g) The Board of Directors of the Company has taken all necessary
action to cause all unexpired and unexercised Stock Options to automatically
expire and terminate to the extent unexercised immediately prior to the
Effective Time.
SECTION 3.04 Authority; Non-Contravention.
(a) The Company has the requisite corporate power and authority to
enter into this Agreement and (subject to the Company Stockholder Approval) to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company (subject to the Company Stockholder
Approval). This Agreement has been duly executed and delivered by the Company
and (assuming this Agreement is a valid and binding obligation of Checkers and
Merger Sub) constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms (subject in each
case to the effect of any applicable
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bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally, and to general principles of equity and the
discretion of the court before which any proceedings seeking injunctive relief
or specific performance may be brought).
(b) Except as disclosed in Company Disclosure Schedule 3.04(b) and
except for the governmental filings and other matters referred to in paragraph
(c) below, execution and delivery of this Agreement by the Company do not (and
consummation of the transactions contemplated hereby will not)
(i) conflict with or violate the certificate of incorporation
or bylaws of the Company or any comparable charter documents of any
Company Subsidiary, or any resolution adopted by the Board of Directors
or stockholders of the Company or any Company Subsidiary;
(ii) violate in any material respect any judgment, order,
statute, law, rule or regulation applicable to the Company or any
Company Subsidiary; or
(iii) with respect to any loan or credit agreement, or note,
bond, mortgage, indenture, lease or other material agreement,
instrument, or license applicable to the Company or any Company
Subsidiary (including by virtue of any effect on the Joint Operating
Agreement or the operations conducted thereunder), result in any breach
or violation of, or default thereunder (with or without notice or lapse
of time, or both), or give rise to a material right of termination,
cancellation or modification, or imposition of material fees or
penalties thereunder, or acceleration of any material obligation
thereunder, or result in the creation of any material Lien upon assets
of the Company or any Company Subsidiary thereunder.
(c) No consent, approval, order or authorization of (or from), or
registration, notification, declaration or filing with, any Federal, state or
local government or any court, administrative agency of other governmental
authority, domestic or foreign (each a "Governmental Entity"), or other third
party, is required by or with respect to the Company or any Company Subsidiary
in connection with execution and delivery of this Agreement by the Company or
consummation by the Company of the transactions contemplated hereby or the
preservation of the Company's rights under the Joint Operating Agreement or the
operations conducted thereunder, except for
(i) filing of a pre-merger notification and report form under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended
(the "HSR Act");
(ii) filing with the SEC of a proxy statement relating to the
Company Stockholder Approval (such proxy statement as amended or
supplemented from time to time, being referred to herein as the "Proxy
Statement");
(iii) filing of the Certificate of Merger with the Secretary
of State of the State of Delaware and appropriate documents with
authorities of other states in which Merger Sub or the Company is
qualified to do business;
(iv) the notices and approvals required pursuant to the terms
of the Joint Operating Agreement;
(v) the notices and approvals required by the Government of
the Kingdom of Thailand (the "Thai Government") with respect to the
transactions contemplated hereby;
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(vi) such other consents, approvals, orders, authorizations,
registrations, declarations, filings or notices disclosed in Company
Disclosure Schedule 3.04(c); and
(vii) such third-party consents and approvals (if any), the
absence of which would not be material to the Company and its
subsidiaries taken as a whole or would not prevent or materially delay
the consummation of the transactions contemplated hereby.
SECTION 3.05 Company Public Documents, Financial Statements and
Outstanding Indebtedness.
(a) The Company has filed all required reports, schedules, forms,
statements and other documents with the SEC since June 3, 1996. The Company has
delivered or made available to the Parent all reports, schedules, forms,
statements and other documents filed with the SEC since such date (collectively,
and in each case including all exhibits and schedules thereto and documents
incorporated by reference therein, the "Company Public Documents"). As of their
respective filing dates, the Company Public Documents complied in all material
respects with the requirements of the Securities Act or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as the case may be, and the rules
and regulations of the SEC promulgated thereunder applicable to such Company
Public Documents. As of their respective filing dates, none of the Company
Public Documents (including any and all financial statements therein) contained
any untrue statement of a material fact or failed to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The consolidated financial statements of the Company included in the
Company Public Documents (the "Company Financial Statements") comply as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles of the
United States ("GAAP") (except, in the case of unaudited consolidated quarterly
statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis
during the period involved (except as may be indicated in the notes thereto) and
present fairly, in all material respects, the consolidated financial position of
the Company and the Company Subsidiaries at the respective dates thereof and the
consolidated results of operations and cash flows for the periods specified
therein (subject, in the case of unaudited quarterly statements, to normal
year-end audit adjustments). The consolidated balance sheet of the Company and
the Company Subsidiaries as of October 31, 1998 (the "Interim Balance Sheet")
has been prepared in accordance with GAAP and presents fairly, in all material
respects, the consolidated financial position of the Company and the Company
Subsidiaries as of such date, subject to normal quarterly adjustments and
year-end audit adjustments and subject to the lack of any accompanying notes to
the Interim Balance Sheet.
(b) Except to the extent reflected or reserved against in the Company
Financial Statements as of September 30, 1998 (and the notes thereto), the
Interim Balance Sheet, or otherwise disclosed in the Company Disclosure
Schedules, the Company and the Company Subsidiaries have no material liabilities
(including contingent liabilities and obligations) except (i) liabilities and
obligations incurred in the ordinary course of business since the date of the
most recent audited balance sheet included in the Company Financial Statements,
(ii) expenses not in excess of $8,000,000, payable to its accountants, legal and
financial advisors and other vendors of goods and services incurred in
connection with this Agreement and the transactions contemplated hereby, or
(iii) that would not be required to be reflected or reserved against in the
consolidated balance sheet of the Company and its subsidiaries prepared in
accordance with GAAP or otherwise disclosed in the footnotes to financial
statements of the Company and the Company Subsidiaries prepared in accordance
with GAAP.
(c) Part A of Company Disclosure Schedule 3.05(c) is a complete and
correct list of each Production Payment, each credit agreement, loan agreement,
indenture, purchase agreement, Guarantee,
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letter of credit or other arrangement providing for or otherwise relating to any
Indebtedness or any extension of credit (or commitment for any extension of
credit) to, or Guarantee by, the Company or any of the Company Subsidiaries
(other than loans and advances between the Company and any of the Company
Subsidiaries), outstanding on the date hereof, and the aggregate principal or
face amount outstanding or that may become outstanding under each such
arrangement is correctly described in Part A of said Company Disclosure
Schedule. Part B of such Company Disclosure Schedule is a complete and correct
list of each Lien securing Indebtedness of any Person outstanding on the date
hereof, and covering any assets of the Company or any of the Company
Subsidiaries, and the aggregate Indebtedness secured (or that may be secured) by
each such Lien and the Property covered by each such Lien is correctly described
in Part B. Except as set forth in Company Disclosure Schedule 3.05(c), the
Company is presently and at all times has been and shall be in compliance, in
all material respects, with the terms and conditions of the agreements governing
the terms and conditions of the Indebtedness listed in Part A of Company
Disclosure Schedule 3.05(c), and there has not occurred any material default by
the Company or any Company Subsidiary under such governing documents.
SECTION 3.06 Absence of Certain Changes or Events. Except as disclosed
in the Company Public Documents, the Interim Balance Sheet or in Company
Disclosure Schedule 3.06, since January 1, 1998, the Company and each Company
Subsidiary has conducted its business in the ordinary course consistent with
past practice, and there is not and has not been (a) any material adverse change
to the Company, (b) any distribution or dividend made by the Company, (c) any
material repurchase of equity securities by the Company, (d) any condition,
event or occurrence which could reasonably be expected to prevent or materially
delay the Company's consummation of the transactions contemplated by this
Agreement or (e) any material change in accounting methods, principles or
practices of the Company, except as required by law or the rules of the Nasdaq
National Market or GAAP.
SECTION 3.07 Litigation; Compliance with Law.
(a) Except as disclosed in Company Disclosure Schedule 3.07, (i) there
is no material suit, order, action or proceeding outstanding or pending (or, to
the best knowledge of the Company, threatened) against the Company, any Company
Subsidiary, any officer or director of the Company in their capacity as such,
or, to the best knowledge of the Company, the operator under the Joint Operating
Agreement in its capacity as operator thereunder or relating to its activities
thereunder, including, without limitation, any claims for indemnification, and
(ii) neither the Company, any Company Subsidiary, any officer or director of the
Company in their capacity as such, or, to the best knowledge of the Company, the
operator under the Joint Operating Agreement in its capacity as operator
thereunder or relating to its activities thereunder, is subject to any material
judgment, decree, injunction or order of any Governmental Entity outstanding
against the Company, any Company Subsidiary or such operator.
(b) Each of the Company and each Company Subsidiary and, to the best
knowledge of the Company, the operator under the Joint Operating Agreement with
respect to the operations thereunder have conducted its respective business in
compliance in all material respects with all judgments, orders, statutes, laws,
rules, and regulations (collectively, "Laws") applicable thereto including, with
limitation, the Foreign Corrupt Practices Act.
SECTION 3.08 Company Benefit Plans and Labor Relations.
(a) For purposes of this Agreement, "Compensation and Benefit Plans"
means, collectively, each bonus, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus,
incentive bonus pool, stock purchase, restricted stock, stock option,
employment, termination, severance, compensation, medical, health, or other
plan, agreement, policy or arrangement,
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whether written or oral, that covers employees, directors or consultants of the
Company or any of the Company Subsidiaries, or pursuant to which former
employees, directors or consultants of the Company or any of the Company
Subsidiaries are entitled to current or future benefits. Company Disclosure
Schedule 3.08(a) lists all Compensation and Benefit Plans maintained, or
contributed to, by the Company or any of the Company Subsidiaries or any Person
that, together with the Company or any of the Company Subsidiaries, is treated
as a single employer under Section 414(b), (c), (m) or (o) of the Code. Each
Compensation and Benefit Plan has been administered in accordance with its terms
and is in material compliance with the applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, the Code and any other
applicable law. All Compensation and Benefit Plans that are intended to be
qualified under Sections 401(a) and 501(a) of the Code are the subject of
favorable determination letters form the Internal Revenue Service, and no such
determination letter has been revoked nor has any event occurred since the date
of its most recent determination letter or application therefor that would
materially adversely affect its qualification or materially increase its costs.
(b) Except as contemplated by this Agreement or disclosed in Company
Disclosure Schedule 3.08(b), the execution of, and performance of the
transactions contemplated by, this Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) constitute an event under any
Compensation and Benefit Plan or agreement that will or may reasonably be
expected to result in any payment (whether severance pay or otherwise),
acceleration, vesting or increase in benefits with respect to any employee,
former employee, director or consultant of the Company or any of the Company
Subsidiaries whether or not any such payment would be an "excess parachute
payment" (within the meaning of Section 280G of the Code). Except as provided in
Company Disclosure Schedule 3.08(c), no payment described therein constitutes an
excess parachute payment.
(c) Neither the Company, any Company Subsidiary, nor, to the best
knowledge of the Company, the operator under the Joint Operating Agreement with
respect to the operations thereunder is a party to any collective bargaining
agreement or other labor union contract applicable to persons employed the
Company, any Company Subsidiary or any such operator, as the case may be, and,
to the best knowledge of the Company, there are no activities or proceedings of
any labor union to organize any such employees. There are no strikes, work
stoppages or other material labor disputes involving the Company, any Company
Subsidiary or, to the best knowledge of the Company, such operator pending (or,
to the best knowledge of the Company, threatened).
(d) The Board of Directors of the Company has taken all necessary
action to cause all Compensation and Benefit Plans to automatically expire and
terminate prior to the Effective Time.
SECTION 3.09 Tax Returns and Tax Payments.
(a) Except as disclosed in Company Disclosure Schedule 3.09(a), each of
the Company and the Company Subsidiaries has filed all tax returns and reports
required to be filed by it (or requests for extensions to file such returns or
reports have been timely filed and granted and have not expired) and all such
tax returns and reports were complete and accurate in all respects when filed,
except to the extent that such failures to file, to have extensions granted that
remain in effect or to be complete and accurate in all respects, as applicable,
would not, individually or in the aggregate, have a material adverse effect on
the Company and its Subsidiaries taken as a whole. Except as disclosed on
Company Disclosure Schedule 3.09(a), the Company and each Company Subsidiary has
paid (or the Company has paid on its behalf) or has accrued on its financial
statements all taxes shown as due on such tax returns and reports. The most
recent Company Financial Statements reflect an adequate reserve for all taxes
payable by the Company and Company Subsidiaries for all taxable periods and
portions thereof accrued through the date of such Company Financial Statements.
Except as disclosed on Company Disclosure Schedule 3.09(a),
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the Company has received no written notice of deficiencies for any taxes
proposed, asserted or assessed against the Company or any Company Subsidiary
that are not adequately reserved for, except for any inadequately reserved taxes
and inadequately reserved deficiencies that, individually or in the aggregate,
would not be material to the Company and its subsidiaries taken as a whole.
Except as disclosed on Company Disclosure Schedule 3.09(a), no requests for
waivers of the time to assess any taxes against the Company or any Company
Subsidiary have been granted or are pending, except for requests with respect to
such taxes that have been adequately reserved for in the most recent Company
Financial Statements or, to the extent not adequately reserved, the assessment
of which would not, individually or in the aggregate, be material to the Company
and its subsidiaries taken as a whole.
(b) The term "taxes" shall include all Federal, state, local and
foreign income, franchise, property, sales, use, excise and other taxes,
including obligations for withholding taxes from payments due or made to any
other Person and any interest, penalties or additions to tax.
SECTION 3.10 Environmental, Health and Safety Matters.
(a) Except as disclosed in Company Disclosure Schedule 3.10:
(i) each of the Company, the Company Subsidiaries and, to the
best knowledge of the Company, the operator under the Joint Operating
Agreement with respect to the operations thereunder, holds, and is in
compliance with, all material Environmental, Health and Safety Permits
and is otherwise in compliance in all material respects with all
applicable Environmental, Health and Safety Laws;
(ii) neither the Company, any Company Subsidiary nor, to the
best knowledge of the Company, the operator under the Joint Operating
Agreement with respect to the operations thereunder has received any
material Environmental, Health and Safety Claim against the Company,
any Company Subsidiary or such operator;
(iii) neither the Company, any Company Subsidiary nor, to the
best knowledge of the Company, the operator under the Joint Operating
Agreement with respect to the operations thereunder (A) has entered
into or agreed to any material consent decree or order under any
Environmental, Health and Safety Law, or (B) is subject to any material
judgment, decree or order of any Governmental Entity relating to
compliance with any Environmental, Health and Safety Law or to
investigation, cleanup, remediation or removal of Hazardous Materials
under any Environmental, Health and Safety Law (other than orders
applying generally to any industry in which the Company or any Company
Subsidiary operates); and
(iv) each of the Company and Company Subsidiaries, and, to the
best knowledge of the Company, the operator under the Joint Operating
Agreement with respect to the operations thereunder, is in compliance
in all material respects with all applicable requirements of the
Production License Applications, Environmental Impact Assessments, and
the Initial Environmental Evaluations.
(b) For purposes of this Agreement, the following terms shall have the
following meanings:
(i) "Environmental, Health and Safety Claim" means any written
notice, claim, demand, action, suit, complaint or proceeding by any
Person alleging liability or potential liability (including, without
limitation, liability or potential liability for investigatory costs,
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cleanup costs, governmental response costs, natural resource damages,
property damage, personal injury, fines or penalties) arising out of,
based on or resulting from (A) the presence, discharge, emission or
release of any Hazardous Materials or (B) any violation or alleged
violation of any Environmental, Health and Safety Law or Environmental,
Health and Safety Permit.
(ii) "Environmental, Health and Safety Permits" with respect
to any entity means all permits, licenses, registrations and other
governmental authorizations required for current operations of such
entity's business and facilities and otherwise to conduct such entity's
business in compliance with Environmental, Health and Safety Laws.
(iii) "Environmental, Health and Safety Laws" means all
applicable international, national, state and local statutes, rules,
regulations, ordinances, orders and decrees regarding contamination,
pollution or protection of natural resources, human health, safety or
the environment.
(iv) "Hazardous Materials" means all hazardous or toxic
substances, wastes, materials or chemicals, petroleum (including crude
oil or any fraction thereof) and petroleum products, asbestos and
asbestos-containing materials, pollutants, contaminants and all other
materials and substances regulated by Environmental, Health and Safety
Laws.
SECTION 3.11 Assets; Encumbrances. The Company and Company Subsidiaries
own all the assets and properties reflected as owned by the Company and the
Company Subsidiaries on the Interim Balance Sheet as of October 31, 1998, (and
any subsequent balance sheet delivered pursuant to Section 6.12) and hold valid
and subsisting leasehold interests or licenses in all properties or assets of
which either the Company or a Company Subsidiary is lessee or licensee, as the
case may be. All material tangible assets are in good operating condition,
ordinary wear and tear excepted. Except as disclosed on Company Disclosure
Schedule 3.11, all material assets and properties directly or indirectly owned
or leased by the Company and the Company Subsidiaries are free and clear of
material encumbrances other than (a) liens for current taxes not yet due, (b)
minor imperfections of title, if any, none of which materially impairs the
present use of the property subject thereto or impairs the current operations of
the Company or the Company Subsidiaries, (c) zoning laws and other use
restrictions that do not materially impair the current use of the property
subject thereto and (d) mechanic's, courier's, worker's, repairer's,
materialman's, warehouseman's and other similar liens arising or incurred in the
ordinary course of business, none of which would, individually or in the
aggregate, materially adversely affect the value of, or materially adversely
interfere with the use of, the property subject thereto. Neither the Company nor
any Company Subsidiary owns any real property other than fixtures, leasehold
improvements and property owned pursuant to the Joint Operating Agreement.
SECTION 3.12 Intellectual Property. The Company and the Company
Subsidiaries own, or have all necessary rights to use, all trademarks, trade
names, copyrights, and other intellectual property currently being used by the
Company and the Company Subsidiaries, which rights are sufficient in all
material respects to permit such current use by the Company and the Company
Subsidiaries. The Company has received no written notice of any claim of any
infringement of any trademark, trade name, copyright or other intellectual
property owned by the Company and the Company Subsidiaries.
SECTION 3.13 Books and Records. The minute books and other records of
the Company, and each of the Company Subsidiaries that have been made available
to Parent contain the records of all meetings held of, and corporate action
taken by, the stockholders, the Board of Directors, and committees of the
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Board of Directors of the Company, and each of the Company Subsidiaries, as the
case may be, and other than the meeting of the Board of Directors of the Company
held on December 15, 1998, no meeting of such stockholders, Board of Directors
or committee has been held for which minutes have not been prepared and are not
contained in such minute books. The Company has made available to Parent all
records in its possession with respect to any meetings held pursuant to the
Joint Operating Agreement.
SECTION 3.14 Brokers. The Company has not made (and is not bound by)
any agreement or arrangement under which any broker, investment banker,
financial advisor or other Person (other than Chase Securities Inc. and Bear,
▇▇▇▇▇▇▇ & Co. Inc., whose fees and expenses will be paid in full by the Company
under agreements copies of which have been previously furnished to Parent) is
entitled to any broker's, finder's or financial advisor's fee or any similar
payment in connection with the transactions contemplated by this Agreement.
SECTION 3.15 Insurance. Copies of all material insurance policies and
arrangements of the Company and each of the Company Subsidiaries have been made
available to Parent. Such insurance policies and arrangements are in full force
and effect, all premiums with respect thereto are currently paid, and the
Company and the Company Subsidiaries are in compliance in all material respects
with the terms thereof. Such insurance is sufficient for compliance by the
Company and the Company Subsidiaries with all requirements of law and all
agreements and leases to which the Company or any of the Company Subsidiaries is
a party. To the best knowledge of the Company, the operator under the Joint
Operating Agreement maintains insurance policies and arrangements in coverage
amounts sufficient to insure, at levels customary in the business of the
Company, all operations related to the Joint Operating Agreement and Concession.
SECTION 3.16 Material Contracts. (a) Company Disclosure Schedule
3.16(a) lists all contracts material to the business, assets, properties or
financial condition of the Company and its Subsidiaries, taken as a whole, which
(1) the Company or a Company Subsidiary is a party to or (2) the Company
believes or has knowledge that (x) the Company or a Company Subsidiary is a
third-party beneficiary of or (y) the operator (or any affiliate thereof) under
the Joint Operating Agreement is a party and which affects or concerns assets or
operations within the Block (any such contract, a "Material Contract"). The
Company has made available to Parent copies of all Material Contracts (and all
material correspondence related thereto) to which it or a Company Subsidiary is
a party or which otherwise are in the Company's possession. The copies of the
Material Contracts provided to Parent are true and correct, as modified to date,
and with respect to any oral Material Contracts the Company has provided true
and complete memoranda describing the terms of all such oral contracts, and all
liabilities and obligations under the Material Contracts, whether written or
oral, can be ascertained from such copies or memoranda. Each Material Contract
is a valid and binding obligation of the Company or one of the Company
Subsidiaries, to the extent either is a party thereto, and, to the extent that
the Company or one or more of its subsidiaries is a party, to the best knowledge
of the Company, each other party thereto, and is enforceable against the Company
or one or more Company Subsidiaries and, to the best knowledge of the Company,
each other party thereto, in accordance with its terms, except to the extent
that such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
generally and is subject to general principles of equity. Except in connection
with the transactions contemplated by this Agreement or as disclosed on Company
Disclosure Schedule 3.16(a), neither the Company nor any Company Subsidiary has
been involved in any discussion or received any correspondence regarding the
renegotiation, amendment or termination of any Material Contract. The Company
and the Company Subsidiaries, as the case may be, have complied in all material
respects with the Material Contracts, and there has not occurred as to any
Material Contract any material default by the Company or any Company Subsidiary
or any event that, with notice or the lapse of time or otherwise, would become a
material default by the Company or any Company Subsidiary. Neither the Company
nor
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any Company Subsidiary has granted or been granted any waiver or forbearance
with respect to any of the Material Contracts. To the best knowledge of the
Company, there has not occurred as to any Material Contract any default by
another party thereto or any event that with notice or the lapse of time or at
the election of any Person other than the Company, could become a material
default by such party.
(b) The permits, licenses, waivers or other authorizations from
Governmental Entities ("Licenses") set forth on Company Disclosure Schedule
3.16(b) are the only Licenses material to the Company and the Company
Subsidiaries. None of the Company or Company Subsidiaries has made any untrue
statement of material fact, or omitted to state a material fact, necessary to
make the statements made, in light of the circumstances under which they were
made, not misleading to any Governmental Entity or taken or failed to take any
action, which misstatements or omissions, actions or failures to act,
individually or in the aggregate, would subject or could reasonably be expected
to subject any of the material Licenses held by the Company or the Company
Subsidiaries to revocation or failure to renew. No event has occurred with
respect to any of the material Licenses which permits, or after notice or lapse
of time or both would permit, revocation or termination thereof or would result
in any other material impairment of the rights of the holder of any of the
material Licenses.
(c) The Material Contracts and the Licenses are, or provide, all of the
rights, licenses, permits and other authorizations used or necessary to lawfully
operate and conduct the business of the Company and the Company Subsidiaries as
described in the Company Public Documents and as presently conducted.
SECTION 3.17 Affiliate Transactions. Since the date of the most recent
proxy statement issued by the Company, the Company has not engaged in any
transaction with any officer, director or owner of more than 10 percent of the
equity interests of the Company which would be required to be disclosed under
Item 404 of Regulation S-K of the rules and regulations of the SEC.
SECTION 3.18 Opinion of Company's Financial Advisor. The Company has
received the opinion of Bear, ▇▇▇▇▇▇▇ & Co. Inc. to the effect that the
consideration to be received in the Merger is fair, from a financial point of
view, to the Company's public stockholders.
SECTION 3.19 Company Board Approval and Recommendation. The Board of
Directors of the Company at a meeting duly called and held, has unanimously
approved the execution of this Agreement by the Company and determined that this
Agreement and the transactions contemplated hereby are in the best interests of
the stockholders of the Company, and (b) recommended that such stockholders
approve this Agreement. The Board of Directors, other than Messrs. ▇▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇, has unanimously approved the entry of Messrs. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
into the Option and Voting Agreement. The Board of Directors of the Company has
taken all appropriate action so that neither Parent nor Merger Sub will be an
"interested stockholder" within the meaning of Section 203 of the DGCL by virtue
of the Company's entry into this Agreement or the Option and Voting Agreement
and the consummation of the transactions contemplated hereunder and thereunder.
SECTION 3.20 Company Stockholder Approval. The Company Stockholder
Approval consists of an affirmative vote of holders of a majority of the issued
and outstanding Company Stock and is the only vote of holders of any class or
series of the Company's securities necessary to approve this Agreement and the
Merger.
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SECTION 3.21 Concession and Joint Operating Agreement.
(a) Thai ▇▇▇▇ is the sole legal and beneficial owner of an undivided
46.34146% interest in the Tantawan area of the Concession as a joint
concessionaire. Thai ▇▇▇▇ is the sole legal and beneficial owner of an undivided
31.666% interest in all areas of the Concession outside the Tantawan area as a
joint concessionaire. TRH is the sole legal and beneficial owner of 46.34146% of
the capital stock of B8/32 Partners, Ltd. B8/32 Partners, Ltd. is the sole legal
and beneficial owner of an undivided 31.666% interest in all areas of the
Concession outside the Tantawan area as a joint concessionaire. Thai ▇▇▇▇ is the
sole legal and beneficial owner of an undivided 46.34146% interest in the Joint
Operating Agreement as it governs the Tantawan Area within the Block, and is the
sole legal and beneficial owner of an undivided 31.666% interest in the Joint
Operating Agreement as it governs all other areas of the Block. B8/32 Partners
is the sole legal and beneficial owner of a 31.666% interest in the Joint
Operating Agreement as it governs all areas of the Block outside the Tantawan
Area.
(b) The Concession is free from any mortgage, charge (whether fixed or
floating), pledge, material lien, equity or other material encumbrance and from
all overriding interests, royalties, deferred payments, net profit interests,
carried interests and production payments and there is no agreement or
commitment to give or create any of the same.
(c) Except as disclosed in Company Disclosure Schedule 3.21(c), neither
the Company nor any Company Subsidiary has committed any material breach of, or
is in material default under, the Concession or the Joint Operating Agreement,
and neither Company nor any Company Subsidiary has received written notice (or
is it aware) that any of the parties to the Concession or the Joint Operating
Agreement has committed any material breach of, or is in material default under,
the Concession or the Joint Operating Agreement.
(d) The Concession and the Joint Operating Agreement and all rights and
interests thereunder or deriving thereof are in full force and effect, and no
act or omission of the Company, any Company Subsidiary, or, to the best
knowledge of the Company, of any other Person has occurred, including the
consummation of the transactions contemplated herein, which would or might
entitle the Thai Government to revoke or materially alter or modify the
Concession, and no written notice has been received by the Company or any
Company Subsidiary or, to the knowledge of the Company, by any other Person, of
any intention by the Thai Government to revoke the Concession, and there are no
other grounds for rescission, avoidance, revocation, repudiation or termination
of the Concession. The Company has made all requisite filings with, and provided
all appropriate notifications to, the Thai Government, to preserve all of its
rights in the Concession.
(e) To the best knowledge of the Company, all accrued obligations and
liabilities imposed by the Concession (including, without limitation, work
obligations) have been duly fulfilled and discharged and there are no
outstanding work obligations to be fulfilled under the Concession, and the Thai
Government has not given written notice to the Company, any Company Subsidiary
or, to the best knowledge of the Company, any other Concessionaire of any
intention to require further works to be conducted (whether in relation to
exploration or development), or to call for the submission of or impose any
development program.
(f) The Company has kept proper and consistent accounts, books and
records of its activities relating to its and its subsidiaries' operations
conducted with respect to the Concession, and such accounts, books and records
have been made available to Parent and are current, and since January 1, 1998,
there has been no change in any practice or policy insofar as such change might
affect the valuation of assets or the recording of expenditures or receipts
relating to the Concession.
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(g) Except as disclosed in Company Disclosure Schedule 3.21(g), neither
the Company nor any Company Subsidiary is a party to any litigation, arbitration
or administrative proceedings or to any dispute in relation to the Concession
and there is no such litigation, arbitration or administrative proceedings
pending or, to the best knowledge of the Company, threatened either by or
against Company or any Company Subsidiary and there are no facts known to
Company, or any Company Subsidiary which are likely so to jeopardize or endanger
the Concession. To the best knowledge of the Company, none of the parties to the
Concession is involved in or threatened with any litigation, arbitration or
administrative proceedings or any dispute in relation to, or which is likely to
prejudice or endanger in any manner, the Concession.
(h) Except as disclosed in Company Disclosure Schedule 3.21(h), the
Concession and the Joint Operating Agreement provided to Parent conform to the
originals, and there are no other documents or written information relating to
either the Concession or the Joint Operating Agreement which would, taken as a
whole, render the Concession or the Joint Operating Agreement materially
inaccurate or misleading.
(i) The Concession constitutes all of the documents affecting title to
the Concession, and neither the Company nor any Company Subsidiary is a party to
and, to the best knowledge of the Company, there is no other agreement,
arrangement or undertaking relating to the creation or validity of the
Concession.
(j) Except as disclosed in Company Disclosure Schedule 3.21(j), no sole
risk operation has, since the Company or any of the Company Subsidiaries became
a party to the Concession, been carried out in relation to the Concession, nor
is any such operation in the process of being carried out and, to the best of
knowledge of the Company, since January 1, 1997, no sole risk operation has been
proposed in relation to the Concession.
(k) To the best knowledge of the Company, all ▇▇▇▇▇ located within the
Concession which have been abandoned have been abandoned in accordance with good
industry practice and in material compliance with all applicable laws, rules and
regulations thereto.
(l) Neither the Company nor any of the Concessionaires has received any
written demand, claim or notice which relates to pollution or to environmental
damage, and which requires remediation or action with respect to the Concession
or any written demand or notice with respect to the breach of any pollution or
environmental laws applicable to the Concession and to the best knowledge of the
Company, there have been no escapes of waste material, hazardous substances or
other pollution events other than what is recognized as industry practice and
within the pollution or environmental laws applicable to the Concession.
(m) The Concessionaires in their capacity as such directly or
indirectly possess or have the right to use all the Facilities, Properties and
all other leaseholds, personal property and other assets reasonably necessary to
conduct the operations under the Joint Operating Agreement as presently
conducted, and all such Facilities and other Property are in good condition,
ordinary wear and tear excepted, and suitable for the use to which they have
been put.
SECTION 3.22 No Other Agreements to Sell the Company Stock. Except for
warrants and options disclosed in Company Disclosure Schedule 3.03(a), the
Company has no commitment or legal obligation, absolute or contingent, to any
other Person other than Parent and Merger Sub to sell, assign, transfer or
effect a sale of any of the capital stock of the Company or any of its
Subsidiaries, to effect any merger, consolidation, liquidation, dissolution or
other reorganization of the Company or any of its Subsidiaries, or to enter into
any agreement or cause the entering of an agreement with respect to the
foregoing.
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SECTION 3.23 Year 2000 Compliance. Except as disclosed in the Company
Public Documents, the Company has no reason to believe any technology or systems
which are material or necessary to the operations under the Joint Operating
Agreement are not year 2000 compliant.
SECTION 3.24 Accuracy of Information. No information furnished by the
Company or its Representatives to Parent or its Representatives in connection
with Parent's investigation of the Company, which has been prepared by, or at
the direction or request of, the Company or its Representatives, contains any
material misstatement of a fact, or omits to state a material fact necessary in
order to make the information furnished (in the light of the circumstances under
which it was provided) not misleading.
ARTICLE 4
Representations and Warranties of Parent and Merger Sub
Parent and Merger Sub represent and warrant to the Company that:
SECTION 4.01 Organization, Standing and Corporate Power. Parent is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the requisite corporate power
and authority to carry on its business as now being conducted, to own or use the
properties and assets that it purports to own or use, and to perform all its
obligations under this Agreement and the transactions contemplated hereby.
Parent is duly qualified or licensed to do business and is in good standing in
each jurisdiction in which the nature of its business or its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed or to be in good standing would
not have a material adverse effect on Parent.
SECTION 4.02 Authority; Non-Contravention.
(a) When the Board of Directors of Parent approves this Agreement and
the transactions contemplated hereby, Parent will have the requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. When the Board of Directors of Parent approves
this Agreement and the transactions contemplated hereby, execution and delivery
of this Agreement by Parent and consummation by Parent of the transactions
contemplated hereby will be duly authorized by all necessary corporate action on
the part of Parent. This Agreement has been duly executed and delivered by and
(assuming this Agreement is approved by the Board of Directors of Parent, is a
valid and binding obligation of the Company) constitutes a valid and binding
obligation of Parent, enforceable against Parent in accordance with its terms
(subject in each case to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally, and to general principles of equity and the discretion of the
court before which any proceedings seeking injunctive relief or specific
performance may be brought).
(b) Notwithstanding subparagraph (a) above of this Section 4.02, except
with regard to the issuance of Parent Common Stock as contemplated by this
Agreement (which requires approval of the Board of Directors of Parent), the
Executive Committee of Parent has approved this Agreement and the transactions
contemplated hereby, and the Executive Committee is authorized to cause Parent
to enter into this Agreement and to consummate the transactions contemplated
hereby (except with respect to the issuance of Parent Common Stock). Based upon
such Executive Committee approval, the execution and delivery of this Agreement
by Parent and consummation by Parent of the transactions contemplated hereby has
been duly authorized by all necessary corporate action on the part of Parent
(other than with respect to the issuance of Parent Common Stock). Based upon
such Executive Committee approval, this
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Agreement has been duly executed and delivered by and (assuming this Agreement
is a valid and binding obligation of the Company) constitutes a valid and
binding obligation of Parent (other than with respect to the issuance of Parent
Common Stock), enforceable against Parent in accordance with its terms (subject
in each case to the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights generally,
and to general principles of equity and the discretion of the court before which
any proceedings for injunctive relief or specific performance may be brought).
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity or other third party is
required by or with respect to Parent in connection with execution and delivery
of this Agreement by Parent or consummation by Parent of the transactions
contemplated hereby, except for
(i) filing of a pre-merger notification and report form under
the HSR Act;
(ii) filing with the SEC of (A) the Form S-4 (as hereinafter
defined) and (B) such reports under the Exchange Act, as may be
required in connection with this Agreement and the transactions
contemplated hereby;
(iii) filing of the Certificates of Merger with the Secretary
of State of the State of Delaware and appropriate documents with
authorities of other states in which Parent or the Company is qualified
to do business;
(iv) the notices and approvals required pursuant to the terms
of the Joint Operating Agreement;
(v) the notices and approvals required by the Thai Government
with respect to the transactions contemplated hereby;
(vi) such other consents, approvals, orders, authorizations,
registrations, declarations, filing and notices as stated in Parent
Disclosure Schedule 4.02(c).
(d) The execution and delivery of this Agreement by Parent does not
(and consummations of the transactions contemplated hereby will not)
(i) conflict with or violate the certificate of incorporation
or bylaws of Parent, or any resolution adopted by the Board of
Directors of Parent; or
(ii) subject to the governmental filings and other matters
referred to in paragraph (c) below, violate in any material respect any
judgment, order, statute, law, rule or regulation applicable to Parent.
SECTION 4.03 Parent SEC Documents. Parent has filed all required
reports, schedules, forms, statements and other documents with the SEC since
December 31, 1996. Parent has delivered or made available to the Company all
reports, schedules, forms, statements and other documents filed with the SEC
since such date (collectively, and in each case including all exhibits and
schedules thereto and documents incorporated by reference therein, the "Parent
SEC Documents"). As of their respective dates, the Parent SEC Documents complied
in all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Parent SEC Documents. As of their
respective dates, none of the Parent SEC Documents (including any and all
financial statements therein) contained any untrue statement of a
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material fact or failed to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Parent included in the Parent SEC Documents comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP (except, in the case of unaudited consolidated
quarterly statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the period involved (except as may be indicated in the
notes thereto) and present fairly, in all material respects, the consolidated
financial position of Parent and its subsidiaries at the respective dates
thereof and the consolidated results of operations and cash flows for the
periods specified therein (subject, in the case of unaudited quarterly
statements, to normal year-end audit adjustments).
SECTION 4.04 Litigation; Compliance with Law. There is no suit, order,
action or proceeding outstanding or pending (or, to the best knowledge of
Parent, threatened) against Parent that could reasonably be expected to prevent
or materially delay Parent's consummating the transactions contemplated by this
Agreement, and Parent is not subject to any judgment, decree, injunction or
order of any Governmental Entity having any such effect.
SECTION 4.05 Organization and Authority of Merger Sub. Merger Sub is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. Execution and delivery of this Agreement by Merger Sub and
the consummation by Merger Sub of the transactions contemplated hereby have been
duly authorized by all necessary corporate action. This Agreement has been duly
executed and delivered by and constitutes a valid and binding obligation of
Merger Sub, enforceable against Merger Sub in accordance with its terms (subject
in each case to the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights generally,
and to general principles of equity).
SECTION 4.06 No Prior Activities. Merger Sub was formed solely for the
purpose of engaging in the transactions contemplated hereby and has engaged in
no business or other activities except as contemplated by this Agreement.
SECTION 4.07 Parent Common Stock. All outstanding shares of Parent
Common Stock are, and all shares of Parent Common Stock which may be issued
pursuant to this Agreement shall be when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive rights.
SECTION 4.08 Ownership of Company Capital Stock. As of the date hereof,
neither Parent nor, to the knowledge of Parent, any of its affiliates, (i)
beneficially owns (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, or (ii) other than this Agreement and the Option and Voting
Agreement, is party to any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of, in each case, shares of
the capital stock of the Company.
ARTICLE 5
Covenants Regarding Conduct of Business
SECTION 5.01 Conduct of Business by the Company. Except as otherwise
contemplated by this Agreement, during the period from the date hereof to the
earlier of (i) the exercise of the Options by Parent and (ii) the Effective
Time, the Company shall (and shall cause each Company Subsidiary to) conduct its
businesses only in the ordinary course of business in all material respects and
consistent with
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its practice since January 1, 1998 and, to the extent consistent therewith, use
reasonable best efforts to preserve intact its current business organizations,
keep available the services of its current officers and employees and preserve
its relationships with customers, suppliers and others having business dealings
with it. In addition, during the period from the date of this Agreement to the
earlier of (i) the exercise of the Options by Parent and (ii) the Effective
Time, except as contemplated by this Agreement or disclosed in Company
Disclosure Schedule 5.01, the Company shall not (and shall not permit any
Company Subsidiary to):
(a) (i) declare, set aside or pay any dividend on, or make any other
distribution in respect of, any of its capital stock, other than dividends
between the Company and its subsidiaries, (ii) split, combine or reclassify any
of its capital stock or issue or authorize the issuance of any other securities
in respect of, in lieu of or in substitution for shares of its capital stock or
make any other changes to its capital structure, or (iii) purchase, redeem or
otherwise acquire any shares of capital stock of the Company or any Company
Subsidiary or any other securities thereof or any right, warrant or option to
acquire any such shares or other securities other than the issuance of Company
Stock upon the exercise of options or warrants outstanding on the date hereof as
identified on Company Disclosure Schedule 3.03(a);
(b) issue, deliver, sell, pledge or otherwise encumber any shares of
its capital stock or the capital stock of any Company Subsidiary other than the
issuance of Company Stock or any other security which by its terms either
expires prior to the Effective Time or is converted into Company Stock at the
Effective Time;
(c) amend or propose to amend the certificate of incorporation, bylaws
or other comparable charter or organizational documents of the Company or any
Company Subsidiary;
(d) acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the stock or assets of, or by any other
manner, any business or any corporation, partnership, joint venture, association
or other business organization or division thereof;
(e) except pursuant to existing contracts previously disclosed to
Parent or with the written consent of Parent, which consent will not be
unreasonably withheld, sell, lease, license, mortgage or otherwise encumber or
subject to any Lien other than Permitted Liens or otherwise dispose of any of
its properties or assets except in the ordinary course of business consistent
with past practice and in transactions involving consideration no greater than
$10,000 in any one case or $100,000 in the aggregate;
(f) except with the written consent of Parent, which consent will not
be unreasonably withheld, (i) incur any indebtedness for borrowed money other
than pursuant to the Company's existing credit facilities or extensions of,
additions to, or replacements of such facilities on comparable terms and
conditions or intercompany loans or guarantee any such indebtedness of another
Person other than any Company Subsidiary, issue or sell any debt security or
warrant or other right to acquire any debt securities of the Company or any
Company Subsidiary, guarantee any debt security of another Person other than any
Company Subsidiary or agree to maintain the financial condition of any Person
(other than the Company or any Company Subsidiary), or (ii) make any loan,
advance or capital contribution to, or investment in, any other Person other
than any Company Subsidiary;
(g) except pursuant to existing contracts previously disclosed to
Parent or with the written consent of Parent, which consent will not be
unreasonably withheld, make any cash call or other payment or investment under
the Joint Operating Agreement that is not necessary to comply with such
agreement or preserve the Company's rights thereunder and otherwise not to
acquire any assets or make or agree to
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make any capital expenditure, except acquisitions and capital expenditures the
commitment or consideration for which do not exceed $10,000 in any one case or
$100,000 in the aggregate;
(h) adopt a plan of liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or reorganization;
(i) change any material accounting principle used by it, except for
such changes as may be required under GAAP or the rules and regulations of the
SEC;
(j) except with the written consent of Parent which consent shall not
be unreasonably withheld, make any tax election or settle or compromise any
disputed Federal, state, local or foreign income tax liability;
(k) except with the written consent of Parent which consent shall not
be unreasonably withheld, enter into any Hedging Agreement or terminate or
modify in any material respect any Hedging Agreement to which the Company or any
Company Subsidiary is a party or waive, release or assign any material rights or
claims thereunder;
(l) except with the written consent of Parent which consent shall not
be unreasonably withheld, enter into any contract which would involve the
payment by the Company or any Company Subsidiary of an amount in excess of
$10,000 in any one case or $100,000 in the aggregate;
(m) except with the written consent of Parent which consent shall not
be unreasonably withheld, amend or waive any provision of, or terminate, any
Material Contract to which the Company or any Company Subsidiary is a party, or
release or assign any rights or claims thereunder;
(n) enter into, or otherwise engage in, any transaction referred to in
Section 3.17;
(o) except with the written consent of Parent, which consent will not
be unreasonably withheld, pay, discharge, satisfy, waive, settle or release any
claim or cause of action of the Company or any Company Subsidiary which could
reasonably be disputed;
(p) accelerate any payment to any vendor of goods or services; or
(q) commit or agree to take any of the foregoing actions.
SECTION 5.02 Acts Permitted to Preserve Enterprise. Nothing in Section
5.01 of this Agreement shall prevent the Board of Directors of the Company from
causing the Company to take any action otherwise in violation of the agreements
contained in Section 5.01 hereof if the Board of Directors of the Company in
good faith reasonably determines such action to be necessary or advisable to
preserve the Company as a going concern and the value of the equity interests
held by the Company's stockholders; provided, however, that the Company shall
give Parent prompt notice of, and details concerning, any such action.
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ARTICLE 6
Additional Agreements
SECTION 6.01 Preparation of Form S-4 and Proxy Statement; Stockholder
Meetings.
(a) As promptly as practicable following execution of this Agreement,
the Company shall prepare the Proxy Statement, and the Company shall file it
with the SEC, and Parent shall prepare and file with the SEC a Form S-4 relating
to the Parent Common Stock to be issued in connection with the Merger (as
amended or supplemented from time to time, the "Form S-4"), in which the Proxy
Statement will be included. Parent shall cause the Form S-4 to comply as to form
in all material respects with the applicable provisions of the Securities Act,
the Exchange Act and the rules and regulations thereunder and shall use its
reasonable best efforts to have the Form S-4 declared effective under the
Securities Act as promptly as practicable after such filing. No filing of, or
amendment or supplement to, the Form S-4 shall be made by Parent without
providing the Company a reasonable opportunity to review and comment thereon.
The Company shall cause the Proxy Statement to comply as to form in all material
respects with the applicable provisions of the Exchange Act and the rules and
regulations thereunder and shall use its reasonable best efforts to cause the
Proxy Statement to be mailed to the Company's stockholders as promptly as
practicable after the Form S-4 is declared effective under the Securities Act.
No filing of, or amendment or supplement to, the Proxy Statement shall be made
by the Company without providing Parent a reasonable opportunity to review and
comment thereon. Parent shall take any reasonable action required to be taken
under any applicable state securities laws in connection with the issuance of
Parent Common Stock in the Merger, and the Company shall furnish all information
concerning the Company and holders of Company Stock and rights to acquire
Company Stock as may be reasonably requested in connection with any such action.
Each of Parent, Merger Sub and the Company, respectively, shall:
(i) cause all information provided (and to be provided) by it
for use in the Form S-4 to be true and correct in all material
respects;
(ii) not omit from such information any material fact required
to be stated therein or necessary in order to make such information, in
light of the circumstances under which it was provided, not misleading;
and
(iii) correct any information provided by it for use in the
Form S-4 which shall have become false or misleading.
(b) Parent shall advise the Company promptly after it receives (i)
notice that the Form S-4 or any amendment thereto has become effective, (ii) the
issuance of any stop order with respect to the Form S-4, (iii) the suspension of
the qualification of Parent Common Stock to be issued in connection with the
Merger for offering or sale in any jurisdiction, (iv) any request by the SEC or
the NYSE for amendment to the Form S-4, or (v) any comments or requests for
additional information received from the SEC with respect to the Form S-4 or the
Proxy Statement which forms a part thereof.
(c) As soon as practicable after the Form S-4 is declared effective by the
SEC, the Company shall, through its Board of Directors, duly call, give notice
of and hold a meeting of its stockholders (the "Company Stockholder Meeting")
for the purpose of approving the Merger and approving and adopting this
Agreement. The Board of Directors of the Company (i) has recommended approval of
the Merger and this Agreement, (ii) shall include, and shall not withdraw or
modify, each such recommendation in the Proxy Statement unless under applicable
law it is required to omit, withdraw or modify any such
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recommendation, and (iii) shall submit for approval of its stockholders at the
Company Stockholder Meeting the Merger and the Merger Agreement, regardless of
whether it later withdraws its recommendation that stockholders vote for the
approval of such matters. At the Company Stockholders Meeting, Parent shall, and
shall cause its subsidiaries to, cause all shares of Company Common Stock then
beneficially owned by Parent or any subsidiary of Parent to be voted in favor of
the approval of the Merger and the approval and adoption of this Agreement.
(d) The Company will cause its transfer agent to make stock-transfer
records relating to the Company available to the extent reasonably necessary to
effectuate the intent of this Agreement.
SECTION 6.02 Access to Financial and Operational Information. (a)
Subject to compliance with applicable law, upon reasonable notice, the Company
will, and will cause each of the Company Subsidiaries to, give Parent, its
directors, its counsel, financial advisors, auditors and other authorized
representatives reasonable access during normal business hours to the offices,
properties, books and records of the Company and the Company Subsidiaries
("Access"), will furnish to Parent and its authorized Representatives such
financial and operating data as such Persons may reasonably request and will
instruct the Company's Representatives to cooperate with Parent in its
investigation of the business of the Company and the Company Subsidiaries and in
the planning for the combination of the businesses of the Company and Parent
following the consummation of the Merger, provided that no investigation
pursuant to this Section shall affect any representation or warranty given by
the Company to Parent hereunder; and provided further that notwithstanding the
provision of information by Company to Parent or any investigation by Parent
prior to or after the date hereof, Company shall not be deemed to make any
representation or warranty regarding the Company except as expressly set forth
in this Agreement.
(b) Unless otherwise required by law or the applicable rules of the
NYSE or the Nasdaq National Market, the parties will hold any such information
which is nonpublic in confidence until such time as such information otherwise
becomes publicly available through no wrongful act of either party and will not
use any such nonpublic information for any purpose other than in connection with
the planning, negotiation and implementation of the transactions contemplated
hereby. In the event of the termination of this Agreement for any reason, each
party shall promptly return all nonpublic documents obtained from any other
party, and any copies made of such documents, to such other party. In addition,
in the event of such termination, all documents, memoranda, notes and other
writing whatsoever prepared by each party based on the information in such
material shall be destroyed (and each party shall use its best efforts to cause
its advisors and their representatives to similarly destroy their respective
documents, memoranda and notes), and such destruction (and best efforts) shall
be certified in writing to the other party by an authorized officer supervising
such destruction.
SECTION 6.03 Notices of Certain Events. (a) The Company shall, upon
obtaining knowledge of any of the following, promptly notify Parent in writing
of:
(i) any material notice or other material communication from
any Governmental Entity in connection with the Merger;
(ii) any actions, suits, claims, investigations or other
judicial proceedings commenced or threatened against the Company or any
of the Company Subsidiaries which, if pending on the date of this
Agreement, would have been required to have been disclosed pursuant to
Section 3.09 or which relate to the consummation of the Merger;
(iii) any representation or warranty made by the Company
contained in this Agreement becoming untrue or inaccurate in any
material respect (including in the case of any representations
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or warranties by the Company, the Company's receiving knowledge of any
fact, event or circumstance which may cause any representation
qualified as to the best knowledge of Company to be or become untrue or
inaccurate in any material respect and disregarding for such purposes
any limitation in the representations or warranties referring to
written instruments);
(iv) the failure of the Company or any Company Subsidiary to
comply with or satisfy in any material respect any covenant, condition
or agreement to be complied with or satisfied by the Company or any
Company Subsidiary under this Agreement;
(v) any material development affecting the assets,
liabilities, business, financial condition, operations, results of
operations, or future prospects of the Company or any Company
Subsidiary, or, to the best knowledge of the Company, the operator
under the Joint Operating Agreement with respect to the operations
thereunder; and
(vi) any material development affecting the ability of the
Company to effect the Merger and transactions contemplated under the
Agreement.
The Company shall promptly notify Parent in writing of any event which would
cause a previously delivered Company Disclosure Schedule to be inaccurate and
shall thereafter provide Parent with a revised Company Disclosure Schedule
reflecting such information or event. No disclosure by the Company or any
Company Subsidiary pursuant to this Section 6.03, however, shall be deemed to
amend or supplement any Company Disclosure Schedule hereto which has not been
consented to in writing by Parent.
(b) Parent shall, upon obtaining knowledge of any of the following,
promptly notify the Company in writing of:
(i) any material notice or other material communication from
any Governmental Entity in connection with the Merger;
(ii) any actions, suits, claims, investigations or other
judicial proceedings commenced or threatened against Parent or any
affiliates of Parent which relate to the consummation of the Merger;
(iii) any representation or warranty made by Parent contained
in this Agreement becoming untrue or inaccurate in any material respect
(including in the case of any representations or warranties by Parent,
Parent's receiving knowledge of any fact, event or circumstance which
may cause any representation qualified as to the best knowledge of
Parent to be or become untrue or inaccurate in any material respect);
(iv) the failure of Parent or Merger Sub to comply with or
satisfy in any material respect any covenant, condition or agreement to
be complied with or satisfied by Parent or Merger Sub under this
Agreement; and
(v) any material development affecting the ability of Parent
or Merger Sub to effect the Merger and transactions contemplated under
the Agreement.
SECTION 6.04 Mutual Best Efforts.
(a) Subject to the conditions set forth in this Agreement, each party
shall use its reasonable best efforts to (and cause each Person under its
control to) take all actions, and assist and cooperate with each
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other party in taking all actions necessary, useful or advisable to consummate
and make effective, in the most expeditious manner practicable, the Merger and
the other transactions contemplated by this Agreement. Each party shall use its
reasonable best efforts and cooperate with each other party in (i) promptly
determining whether any filings are required to be made or consents, approvals,
waivers, permits or authorizations are required to be obtained (under any
applicable law or regulation or from any Governmental Entity or third party) in
connection with the transactions contemplated by this Agreement, and (ii)
promptly making any such filings, in furnishing information required in
connection therewith and in timely seeking to obtain any such consents,
approvals, waivers, permits and authorizations.
(b) The Company shall take all reasonable actions requested by Parent
or Merger Sub in cooperation with Parent's efforts to negotiate and cause the
execution of a definitive agreement between the Company and Neutron with respect
to all the rights, duties and responsibilities as operator within the Block
pursuant to the Joint Operating Agreement ("Operatorship") on terms acceptable
to Parent.
(c) The Company shall take all reasonable actions requested by Parent
or Merger Sub in cooperation with Parent's efforts to secure waivers of any and
all preferential rights which may arise under the Joint Operating Agreement as a
result of the Merger.
(d) The Company shall take all reasonable action requested by Parent or
Merger Sub in cooperation with Parent's efforts to negotiate and execute a new
joint operating agreement ("New JOA") for the Block that shall provide for,
among other provisions, (i) control by Parent of key operating decisions, such
as budget and AFE approvals, and (ii) clarification that the area of mutual
interest is limited to the Block.
SECTION 6.05 Public Announcements. With respect to any news release or
other public announcement or statement relating to this Agreement or any
transaction contemplated hereby (each an "Announcement"), Parent, Merger Sub and
the Company will each consult with the others before issuing such Announcement,
and will provide to each other a reasonable opportunity to review and comment on
such Announcement, and shall not issue such Announcement prior to such
consultation and opportunity (except as otherwise required by applicable law or
any applicable rules of the NYSE or the Nasdaq National Market).
SECTION 6.06 Affiliate Agreements. Prior to the Closing Date, the
Company shall deliver to Parent a letter identifying each Person who is, at the
time this Agreement is submitted for Company Stockholder Approval, an
"affiliate" of the Company for purposes of Rule 145 under the Securities Act
(each a "Rule 145 Affiliate"). The Company shall use its reasonable best efforts
to cause each Rule 145 Affiliate to deliver to Parent on or prior to the Closing
Date a written agreement concerning dispositions of Parent Common Stock in form
reasonably satisfactory to both Parent and the Company.
SECTION 6.07 Stock Exchange Listing. Parent shall promptly prepare and
submit to the NYSE a listing appli cation covering the shares of Parent Common
Stock issuable in connection with the Merger and which are not treasury shares,
and shall use its best efforts to obtain, as promptly as practicable after the
date hereof, approval for listing of such shares of Parent Common Stock.
SECTION 6.08 Acquisition of 5% Interest. Parent plans to offer to
acquire at least a 5% interest in the Concession under the Joint Operating
Agreement from Sophonpanich for consideration and upon the terms and conditions
acceptable to Parent in its sole discretion.
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SECTION 6.09 No Solicitation.
(a) Prior to January 28, 1999, and at all times thereafter if the
conditions set forth in paragraphs (e), (f), and (g) of Section 8.02 hereof
shall have been satisfied or waived by Parent, the Company shall not (and shall
not permit any of its officers, directors, agents, representatives or advisors
to) solicit, initiate or knowingly encourage the submission of any proposal or
offer from any Person relating to any (A) acquisition of a substantial amount of
assets of the Company (other than in the ordinary course of business) or of more
than 15% of all outstanding Company Stock or (B) tender offer or exchange offer
that, if consummated, would result in any Person beneficially owning more than
15% of all outstanding Company Stock, or (C) merger, consolidation, business
combination, sale of substantially all assets, recapitalization, liquidation or
similar transaction involving the Company, other than the transactions
contemplated by this Agreement (each an "Alternative Proposal") or agree to or
endorse any Alternative Proposal.
(b) Notwithstanding the foregoing, however, nothing herein shall
prohibit, subject to Section 6.01(b), the Company following receipt of an
Alternative Proposal from disclosing to its stockholders such Alternative
Proposal and a position with respect to such Alternative Proposal to the extent
required by applicable law.
(c) The Company shall notify Parent promptly (and in any event no later
than 24 hours) after receipt by the Company of any Alternative Proposal or any
request for non-public information in connection with an Alternative Proposal or
for access to the Company's properties, books or records by any Person that
informs the Company that it is considering making an Alternative Proposal. Such
notification shall include the terms of any Alternative Proposal and the name of
any Person making any such proposal or requesting non-public information or
access to the Company's properties, books or records in connection with an
Alternative Proposal.
SECTION 6.10 Indemnification. Reference is hereby made to all
provisions of the certificate of incorporation, articles of organization and
bylaws of the Company and the Company Subsidiaries and all indemnification
agreements between the Company or any Company Subsidiary and any director,
officer or employee of the Company which agreements are disclosed on Company
Disclosure Schedule 3.16(a) which contemplate indemnification of directors,
officers and employees of the Company and the Company Subsidiaries (the "Company
Indemnification Provisions"). From and after the Effective Time, Parent shall
cause the Surviving Corporation to honor (or if the Surviving Corporation does
not honor, then Parent shall honor and fund) the Company's existing obligations
to indemnify all present and former directors, officers and employees of the
Company and the Company Subsidiaries to the fullest extent called for by the
Company Indemnification Provisions (in each case as the Company Indemnification
Provisions exist as of December 1, 1998. Parent shall maintain or cause to be
maintained for a period of not less than five years after the Closing Date, the
directors' and officers' liability insurance policy currently maintained by the
Company covering those persons who are currently covered by the Company's
directors' and officers' liability insurance policy on terms (including the
amounts of coverage and amounts of deductibles, if any) substantially comparable
to the terms now applicable to such persons or, if not available, comparable
policies or coverage; provided, however, that Parent shall not be obligated to
make annual premium payments for such insurance to the extent that premiums
exceed 175% of the annual premiums paid as of the date hereof by the Company for
such insurance (the "Current Premium"), and if such premiums for such insurance
would at any time exceed 175% of the Company's Current Premium, then Parent
shall cause to be maintained policies of insurance which provide the maximum
coverage available at an annual insurance premium equal to 175% of the Current
Premium. The provisions of this Section 6.10 are intended to be for the benefit
of, and shall be enforceable by, each indemnified Person, his or her heirs and
his or her representatives.
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SECTION 6.11 Insurance. The Company or its Subsidiaries shall continue
in full force and effect and shall not permit to lapse any policy or arrangement
of insurance. The Company or its Subsidiaries shall renew any such insurance
policies or arrangements which expire or lapse prior to the Effective Time on
substantially identical terms. In the event the Company or its Subsidiaries is
unable to renew such policies or arrangements on substantially identical terms,
the Company or its Subsidiaries shall use its reasonable efforts to enter into
substitute insurance policies or arrangements providing for substantially
identical coverage, on substantially identical terms.
SECTION 6.12 Financial Information. Between the date hereof and the
Closing Date, the Company shall provide Parent with monthly balance sheets and
monthly statements of income and expenses of the Company and Company
Subsidiaries on a consolidated basis for the monthly accounting periods between
the date hereof and the Closing Date, in each case no later than the thirtieth
day of each month following the month to which such interim statements relate.
The Company represents and warrants to the Parent that such balance sheets and
statements of income and expenses shall be prepared in accordance with GAAP and
present fairly, in all material respects, the consolidated financial position of
the Company and the Company Subsidiaries at the respective dates thereof and the
consolidated results of operations and cash flows for the periods specified
therein, subject to normal monthly adjustments and year-end audit adjustments
and subject to the lack of any accompanying notes thereto.
SECTION 6.13 Obligations of Merger Sub. Parent will take all action
necessary to cause Merger Sub to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set forth in this
Agreement. Prior to the Effective Time, Merger Sub will not (i) issue any shares
of capital stock, any option, warrant or other right to acquire its capital
stock to any Person other than Parent, (ii) incur directly or indirectly any
liabilities or obligations other than those incurred in connection with the
Merger and the other transactions contemplated hereby, (iii) engage directly or
indirectly in any business or activities of any type or kind and not enter into
any agreements or arrangements with any Person, or be subject to or bound by any
obligation or undertaking, which is not contemplated by this Agreement and (iv)
not create, grant or suffer to exist any Lien upon its properties or assets
which would attach to any properties or assets of the Surviving Corporation
after the Effective Time.
SECTION 6.14 Tax Treatment. The parties intend the Merger to qualify as
a reorganization under Section 368(a) of the Code. Concurrently with the
execution of this Agreement, Parent shall deliver to Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP ("▇▇▇▇▇▇▇ ▇▇▇▇") a representation letter substantially in the
form attached hereto as Exhibit B (the "Parent Tax Certificate") and the Company
shall deliver to ▇▇▇▇▇▇▇ ▇▇▇▇ a representation letter substantially in the form
attached hereto as Exhibit C (the "Company Tax Certificate"). Parent agrees that
neither it nor any of its affiliates shall take any action that would cause the
Merger not to qualify as a reorganization under Section 368(a) of the Code. The
Company agrees that neither it nor any of its affiliates shall take any action
that would cause the Merger not to qualify as a reorganization under Section
368(a) of the Code.
SECTION 6.15 HSR Act. To the extent that the transactions contemplated
hereby are not exempt from having to comply with the requirements of the HSR
Act, the Company, Parent and Merger Sub shall take all actions necessary to file
as soon as practicable after the date hereof all notifications, filings and
other documents required under the HSR Act, and to respond as promptly as
practicable to any inquiries received from the Federal Trade Commission, the
Antitrust Division of the Department of Justice and any other Governmental
Entity for additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other Governmental Entity in connection therewith.
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SECTION 6.16 Parent Board Approval. Management of Parent will present
and recommend this Agreement and the transactions contemplated hereby to its
Board of Directors for approval and authorization no later than January 27, 1999
and will promptly notify the Company of the actions taken by such Board.
SECTION 6.17 Interim Financing. If all conditions to Closing have been
met except those conditions set forth in Section 8.01(a), (b) and (e), Parent
shall, at the Company's request, either exercise the Options or, until such time
as the Options are exercised or the Merger is effective, lend the Company monies
necessary to meet its operating expenses, general administrative expenses, and
capital commitments on terms and conditions substantially similar to those on
which Parent lends monies from time to time to its wholly owned subsidiaries,
subordinate to any then existing secured credit facilities.
ARTICLE 7
Employment Matters
SECTION 7.01 Employees. Company Disclosure Schedule 7.01 contains a
list of all employees, directors and consultants of the Company and each of the
Company Subsidiaries, each such employee's title or capacity in which employed,
the date of hire of each such employee, and a description of all compensation
(including bonus arrangements and severance payments as a result of termination)
for each such employee. Except for obligations imposed under the provisions of
Section 4980B of the Code or Sections 601 to 609 of ERISA, neither the Company
nor any Company Subsidiary has any responsibility, residual or otherwise, for or
obligations to any employees or employees of the third parties other than the
persons listed in Company Disclosure Schedule 7.01. The Company shall take all
action necessary to cause all employees of the Company and the Company
Subsidiaries to be terminated immediately prior to the Effective Time. The
Company shall cooperate with Parent's efforts to cause such employees as Parent
shall designate to enter into consulting arrangements with the Company on terms
mutually agreeable to such employees and Parent.
SECTION 7.02 Conduct of Business by the Company with Respect to
Certain Employee Matters. During the period from the date of this Agreement to
the earlier of (i) the exercise of the Options by Parent and (ii) the Effective
Time, except as contemplated by this Agreement or disclosed in Company
Disclosure Schedule 7.02, the Company shall not (and shall not permit any
Company Subsidiary to), without the prior written consent of Parent:
(a) adopt, enter into, amend or terminate any bonus, profit-sharing,
compensation, severance, termination, pension, retirement, deferred
compensation, employment or other employee benefit plan, agreement, trust, fund
or other arrangement for the benefit or welfare of any individual;
(b) enter into any new employment arrangement or relationship with new
or existing employees;
(c) increase the compensation or fringe benefits of any director,
officer or management-level employee or pay any such increase to any director,
officer or management-level employee;
(d) grant any award to any director, officer or employee under any
bonus, incentive, performance or other compensation plan or arrangement
(including the removal of existing restrictions in any benefit plan or agreement
or award made thereunder); or
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(e) except as required by law or existing contract, take any action to
segregate assets for, or in any other way secure, the payment of compensation or
benefits to any employee under any employee plan, agreement, contract or
arrangement.
SECTION 7.03 Continuing COBRA Coverage. From and after the Effective
Time, Parent shall provide group health plan continuation coverage at any
employee's sole cost pursuant to Section 4980B of the Code and Sections 601
through 609 of ERISA with respect to any individual who was an employee of the
Company prior to the Effective Time and who had or has a "qualifying event"
(within the meaning of Section 4980B(f)(3) of the Code) before, on or after the
Effective Time. Parent shall be required to provide such continuation coverage
notwithstanding the fact that any group health plan maintained by the Company
prior to the Effective Time may have been eligible for an exception from such
continuation coverage requirements. As of the Effective Time, Parent shall
assume and agree to perform (i) all obligations of the Company pursuant to the
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ Incentive Bonus Plan (the "Bonus Plan"), including, without
limitation, the obligation to make any payments remaining due to any plan
participant pursuant to Section 6 of the Bonus Plan, and (ii) all obligations of
the Company pursuant to the letter, dated March 28, 1996, to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
from ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ on behalf of the Company. Parent agrees that, any
employee of the Company or a Company Subsidiary whose employment with the
Company is terminated pursuant to the provisions of Section 7.01 hereof will
nevertheless receive an award pursuant to Section 6 of the Bonus Plan, which
award shall not be reduced on account of any such termination of employment.
ARTICLE 8
Conditions Precedent to Merger
SECTION 8.01 Conditions to Each Party's Obligation. The respective
obligation of each party to effect the Merger is subject to the satisfaction or
waiver, on or prior to the Closing Date, of the following conditions:
(a) Company Stockholder Approval. The Company Stockholder Approval
shall have been obtained.
(b) Stock Exchange Listing. The shares of Parent Common Stock issuable
under this Agreement shall have been approved for listing on the NYSE, subject
only to official notice of issuance.
(c) HSR Act. To the extent that the transactions contemplated hereby
are not exempt from having to comply with the requirements of the HSR Act, the
waiting period (and each extension thereof, if any) applicable to the Merger
under the HSR Act shall have been terminated or shall have expired.
(d) No Injunction. No judgment, order, injunction, decree, statute,
law, ordinance, rule or regulation, entered, enacted, promulgated, enforced or
issued by any Governmental Entity of competent jurisdiction (collectively,
"Restraints") shall be in effect which prohibits the consummation of the Merger;
provided, however, that each of the parties shall have used their reasonable
best efforts to prevent the entry of any such Restraints and to appeal as
promptly as possible any such Restraints that may be entered.
(e) Form S-4. The Form S-4 shall have become effective under the
Securities Act and shall not be subject to any stop order and no stop order or
proceedings seeking a stop order with respect to the Form S-4 shall be
threatened by the SEC or shall have been initiated by the SEC and not
terminated.
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Parent shall use its reasonable best efforts to, but shall not otherwise be
obligated to, register on Form S-4 the shares of Parent Common Stock to be
delivered to signatories of the Option and Voting Agreement.
SECTION 8.02 Conditions to Obligations of Parent. The obligations of
Parent to effect the Merger are further subject to the satisfaction (or waiver
by Parent) of the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Company shall be true and correct in all material respects as of the date
of this Agreement and as of the Closing Date as though made on and as of the
Closing Date (other than those representations and warranties that expressly
address matters only as of a particular date or only with respect to a specific
period of time which need only be true and correct in all material respects as
of such date or with respect to such period). Parent shall have received a
certificate to such effect, signed on behalf of the Company by its chief
executive officer and its chief financial officer.
(b) Performance by Company. The Company shall have performed in all
material respects all of its obligations under this Agreement required to be
performed on or prior to the Closing Date and shall have complied in all
material respects or be in compliance in all material respects with any
agreement or covenant of the Company to be performed by it under this Agreement
on or prior to the Closing Date, and Parent shall have received a certificate to
such effect, signed on behalf of the Company by its chief executive officer and
its chief financial officer.
(c) Consents, etc. Parent shall have received satisfactory evidence
that the Company has received such licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental Entities and other
third parties as are necessary with respect to the Company or any Company
Subsidiary in connection with the transactions contemplated hereby or to the
preservation of the Company's rights under the Joint Operating Agreement or the
operations conducted thereunder (except for those the absence of which would not
have a material adverse effect on the Company or the ability of Parent or Merger
Sub to effect the Merger).
(d) Opinion. Parent shall have received an opinion of Fulbright &
▇▇▇▇▇▇▇▇ LLP, counsel to Company, dated as of the Closing Date, in form
reasonably satisfactory to Parent.
(e) Waiver of Preferential Rights. All parties to the Joint Operating
Agreement shall have waived any and all preferential rights that may have arisen
thereunder as a result of the Merger.
(f) New JOA. The Company shall have executed the New JOA on terms and
conditions acceptable to Parent in its sole discretion.
(g) Operatorship of Block. Pogo shall have executed a definitive
agreement with respect to Operatorship under the Joint Operating Agreement to
Parent on terms and conditions acceptable to Parent in its sole discretion.
(h) Expenses. The Company's expenses and costs incurred after October
1, 1998, and which are related to the transactions contemplated under this
Agreement, including, without limitation: (i) any severance payments; (ii)
investment banker or advisory fees; (iii) all registration and filing fees and
expenses; (iv) all fees and expenses of compliance with federal securities and
state blue sky or securities laws; (v) all expenses of printing; (vi) all fees
and disbursements of counsel for the Company; (vii) all fees and disbursements
of independent certified public accountants of the Company; and (viii) all
expenses related to the stockholder meeting of the Company, shall be limited to
Eight Million Dollars ($8,000,000).
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(i) Acquisition. Parent shall have acquired at least a 5% interest in
the Concession under the Joint Operating Agreement from Sophonpanich.
(j) Material Adverse Change. There shall not have been a material
adverse change in the Company.
SECTION 8.03 Conditions to Obligation of the Company. The obligation
of the Company to effect the Merger is further subject to the satisfaction (or
waiver by the Company) of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Parent and Merger Sub contained in this Agreement shall be true and correct
in all material respects as of the date of this Agreement and as of the Closing
Date (other than those representations and warranties that expressly address
matters only as of a particular date or only with respect to a specific period
of time which need only be true and correct in all material respects as of such
date or with respect to such period). The Company shall have received a
certificate to such effect, signed on behalf of Parent and Merger Sub by their
respective chief executive officers and chief financial officers.
(b) Performance by Parent and Merger Sub. Each of Parent and Merger Sub
shall have performed all of its obligations, each in all material respects,
required to be performed under this Agreement at or prior to the Closing Date
and shall have complied in all material respects or be in compliance in all
material respects with any agreement or covenant of Parent or Sub, as the case
may be, required to be performed by it under this Agreement on or prior to the
Closing Date, and the Company shall have received a certificate to such effect,
signed on behalf of Parent and Merger Sub by their respective chief executive
officers and chief financial officers.
(c) Consents, etc. The Company shall have received evidence that Parent
has received such licenses, permits, consents, approvals, authorizations,
qualifications and orders of Governmental Entities and other third parties as
are necessary with respect to Parent or Merger Sub in connection with the
transactions contemplated hereby (except for those the absence of which would
not have a material adverse effect on Merger Sub, Parent or the Company or the
ability of the Company to effect the Merger).
(d) Confirmation of Tax Certificate. The Company shall have received
from Parent a certificate to the effect that neither Parent nor any of its
affiliates has taken any action between the date hereof and the Closing Date to
cause or which is reasonably likely to cause the matters set forth in the Parent
Tax Certificate delivered pursuant to Section 6.14 hereof to be untrue in any
material respect.
SECTION 8.04 Effect of Exercise of Options. In the event Parent
exercises the Options, the conditions to Parent's obligation to effect the
Merger contained in Article 8 shall be deemed waived or satisfied, except with
respect to the conditions contained in Sections 8.01(c), (d) and (e) and except
as otherwise required by law.
ARTICLE 9
Termination, Amendment, Fees and Expenses
SECTION 9.01 Termination. This Agreement may be terminated at any time
prior to the Closing Date, whether before or after any approval by stockholders
of the Company:
(a) by mutual written consent of Parent and the Company; or
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(b) by either Parent or the Company, if any Governmental Entity shall
have issued an order, decree or ruling permanently enjoining or prohibiting the
Merger and such order, decree or ruling shall have become final and
nonappealable (but only if the party seeking to terminate pursuant to this
clause (b) shall have used its reasonable best efforts to oppose and remove such
order, decree or ruling); or
(c) by either Parent or the Company, if the Merger shall not have been
consummated on or before June 1, 1999 (other than due to failure of the party
seeking termination to perform in all material respects its obligations under
this Agreement required to be performed at or prior to the Closing Date) and
provided further that the termination right pursuant to this clause may not be
exercised by either party if the Options shall have been exercised by Parent; or
(d) by Parent, if (i) as of such time of determination, any of the
representations and warranties of the Company shall not be true and correct in
all material respects (other than those representations and warranties that
expressly address matters only as of a particular date or only with respect to a
specific period of time which need only be true and correct in all material
respects as of such date or with respect to such period) except to the extent
the effect of breaches thereof would not have a material adverse effect on the
Company, or (ii) the Company or, with respect to the Company Stockholder
Approval, its stockholders, shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any material
agreement or covenant of the Company to be performed or complied with by it or,
with respect to the Company Stockholder Approval, its stockholders, under this
Agreement or the Option Agreement and, in the case of (i), such untruth or
incorrectness cannot be or has not been cured within 30 days after the giving of
written notice to the Company by Parent, and, in the case of (ii), such failure
cannot be or has not been cured within 15 days after the giving of written
notice to the Company or the Company stockholders by Parent, as appropriate; or
(e) by the Company, if (i) as of such time of determination, any of the
representations and warranties of Parent shall not be true and correct in all
material respects (other than those representations and warranties that
expressly address matters only as of a particular date or only with respect to a
specific period of time which need only be true and correct in all material
respects as of such date or with respect to such period), except to the extent
the effect of breaches thereof would not have a material adverse effect on
Parent or (taking into account the transaction contemplated hereby) Merger Sub,
as the case may be, or (ii) Parent or Merger Sub shall have failed to perform in
any material respect any material obligation or to comply in any material
respect with any material agreement or covenant of Parent or Merger Sub to be
performed or complied with by it under this Agreement and, in the case of (i),
such untruth or incorrectness cannot be or has not been cured within 30 days
after the giving of written notice to Parent by the Company, and, in the case of
(ii), such failure cannot be or has not been cured within 15 days after the
giving of written notice to Parent by the Company; or
(f) by the Company, if the approval of the Board of Directors of Parent
is not obtained on or before January 27, 1999, provided that, at the Company's
sole option, which must be exercised on or before February 3, 1999, this
Agreement shall not be terminated but (i) section 2.01(a)(i) hereof shall be
amended to delete the words "that number of fully paid and nonassessable shares
of common stock, $1.50 par value, of Parent ("Parent Common Stock")" and to
insert in lieu thereof the word "cash", and (ii) the Agreement shall otherwise
be amended in an appropriate manner to reflect that a tax-free exchange would no
longer be contemplated; and provided, further, that if the Company shall not
have exercised such right to terminate or amend this Agreement by February 3,
1999, the Agreement may be terminated thereafter by Parent; or
(g) by the Company, if (i) the conditions to Closing set forth in
paragraphs (e), (f) and (g) of Section 8.02 have not been satisfied or waived by
Parent on or before January 27, 1999, (ii) the Company
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and a third party shall have signed an agreement on or after January 28, 1999
pursuant to which the third party is obligated to consummate an Alternative
Transaction subject only to termination of this Agreement and the satisfaction
of closing conditions, (iii) the Company shall have complied in all respects
with the provisions of Section 6.09, and (iv) the Company, after the signing of
the agreement referred to in clause (ii) of this paragraph (g), shall have
provided Parent with five (5) Business Days' advance notice of such intended
termination and Parent shall not, prior to such termination, have exercised the
Options; or
(h) by Parent, if the Company shall have taken any action or actions
pursuant to Section 5.02 that would, but for the provisions of Section 5.02,
constitute a material breach of the covenants or agreements to be performed by
the Company hereunder, provided that, for purposes of this paragraph (h) only,
Parent must effect such termination within ten (10) Business Days after the
latest notice or details it has received from the Company pursuant to Section
5.02; and provided further that no failure by Parent to have exercised such
right of termination within a particular permitted period shall act as a waiver
of its rights to terminate this Agreement with respect to any subsequent
permitted period.
SECTION 9.02 Effect of Termination. In the event of the termination of
this Agreement as provided in Section 9.01, written notice thereof shall
forthwith be given to the other party or parties specifying the provision hereof
pursuant to which such termination is made, and this Agreement shall immediately
become void and have no effect, without any liability or obligation on the part
of Merger Sub, Parent or the Company, other than the provisions of the last two
sentences of Section 6.02, this Section 9.02, and Section 9.06. Nothing in this
Section shall relieve any party for any willful breach of such party's covenants
or agreements in this Agreement.
SECTION 9.03 Amendment. Subject to Section 9.05 hereof, this Agreement
may be amended by the parties at any time before or after the Company
Stockholder Approval contemplated hereby, at any time prior to the Closing Date
with respect to any of the terms contained herein; provided, however, that after
the Company Stockholder Approval, no such amendment, modification or supplement
shall reduce or change the Merger Per Share Consideration or adversely affect
the rights of the Company's stockholders hereunder without the approval of such
stockholders. This Agreement may be amended only by a writing signed on behalf
of each party.
SECTION 9.04 Extension; Waiver. At any time prior to the Effective
Time, any party may, to the extent legally allowed, by a writing signed on
behalf of such party (a) extend the time to perform any obligation or other act
of another party, (b) waive any inaccuracy in any representation or warranty or
(c) waive compliance with any agreement or condition in this Agreement. The
failure of any party to assert any right under this Agreement or otherwise shall
not constitute a waiver of such right. The waiver by any party hereto or the
failure to insist upon strict compliance with any provision contained herein
shall not operate or be construed as a waiver of, or estoppel with respect to,
any prior or subsequent breach of the same or any other provisions hereof.
SECTION 9.05 Authorization of Termination, Amendment, Etc. A party's
termination, amendment, extension or waiver hereunder shall, in order to be
effective, require action by such party's Board of Directors or the duly
authorized designee of such Board of Directors. From and after the time, if any,
that Parent's or Merger Sub's designees constitute a majority of the Company's
Board of Directors, any amendment of this Agreement, any termination of this
Agreement by the Company, any extension of time for performance of any of the
obligations of Parent or Merger Sub hereunder, any waiver of any condition or
any of the Company's rights hereunder or other action by the Company hereunder
may be effected only by the action of a majority of the directors of the Company
then in office who were directors of the Company on the date hereof, which
action shall be deemed to constitute the action of the full Board of Directors.
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SECTION 9.06 Fees and Expenses. Except as otherwise expressly provided
herein, all fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses (whether or not the Merger is consummated).
ARTICLE 10
General Provisions
SECTION 10.01 Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time or the
termination of this Agreement. This Article 10 shall survive the Effective Time,
but shall not limit any covenant or agreement which by its terms contemplates
performance after the Effective Time including (i) the covenants and agreements
contained in Sections 6.02(b), 6.10 and 6.14, and (ii) the covenants,
agreements, representations and warranties contained in the Company Tax
Certificate and the Parent Tax Certificate, which shall survive the Effective
Time.
SECTION 10.02 Notices. All notices, requests, claims and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, by overnight courier or when successfully
transmitted by telecopier without interruption (with a confirming copy of such
transmission sent by overnight courier) to the addressee, provided that any
notice received by telecopy at the addressee's location on any Business Day
after 5:00 p.m. (addressee's local time) shall be deemed to have been received
at 9:00 a.m. (addressee's local time) on the next Business Day. All notices
shall be sent to the parties at the following addresses or telecopy numbers (or
at such other address or telecopy number for a party as shall be specified by
notice from such party pursuant to this Section 10.02):
(a) if to Parent or Merger Sub, to
Chevron Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
Pillsbury Madison & Sutro LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇
(b) if to the Company, to
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ Oil Corporation
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
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with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
SECTION 10.03 Certain Definitions. For purposes of this Agreement:
(a) "AFE" shall mean an authorization for expenditure by a party to
estimate the costs to be incurred in conducting an operation under the Joint
Operating Agreement.
(b) An "affiliate" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person.
(c) "B8/32 Partners" shall mean B8/32 Partners Ltd., a limited
liability company organized under the laws of the Kingdom of Thailand.
(d) "Bareboat Charter" shall mean the Bareboat Charter dated as of
February 9, 1996, between Tantawan Production B.V. and Tantawan Services, LLC in
connection with the charter of the "TANTAWAN EXPLORER" for use in the Tantawan
Field in the Gulf of Thailand.
(e) "Block" shall mean Block B8/32 in the Gulf of Thailand, the
geographical area subject to the Concession.
(f) "Business Day" means a day, other than a Saturday or a Sunday, on
which banking institutions in New York, Houston and San Francisco are required
to be open.
(g) "Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
(h) "Credit Agreement" shall mean that certain Second Amended and
Restated Credit Agreement dated as of September 28, 1998, and among the Company,
as Borrower, ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ Exploration Company, Thai ▇▇▇▇ Holdings, inc.,
Thai ▇▇▇▇ Limited, certain other subsidiary guarantors and The Chase Manhattan
Bank, as a lender and administrative agent.
(i) "Concession" shall mean, collectively, (i) Petroleum Concession No.
1/2534/36 dated as of August 1, 1991, whereby the Ministry of Industry of the
Kingdom of Thailand awarded to Maersk, Thaipo and Thai ▇▇▇▇ the concession to
develop hydrocarbon producing properties in Block B8/32 in the Gulf of Thailand;
(ii) Supplementary Petroleum Concession No. 1 to Petroleum Concession No.
1/2534/36 dated as of March 6, 1992, whereby Sophonpanich entered into Petroleum
Concession No. 1/2534/36; and (iii) Supplementary Petroleum Concession No. 2 to
Petroleum Concession No. 1/2534/36 dated as of September 4, 1995, whereby Maersk
transferred all of its interest in the Tantawan Field to Thaipo and whereby
Thaipo, Thai ▇▇▇▇ and Sophonpanich readjusted their respective interests in the
Tantawan Field;
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(iv) Supplementary Petroleum Concession No. 3 to Petroleum Concession 1/2534/36
dated March 6, 1998, awarded to Thai ▇▇▇▇ Limited, Thaipo Limited and B8/32
Partners, Ltd, as well as (v) any and all Production Licenses.
(j) "Concessionaire" shall mean each concessionaire under the
Concession.
(k) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor act, and the rules and regulations
thereunder or under any successor act.
(l) "Facilities Contracts" shall mean any contracts, agreements or
arrangements related to any and all equipment, fixtures and appurtenances beyond
the wellhead connections acquired for production of natural gas and oil in
connection with the operations under the Joint Operating Agreement, including,
without limitation, platforms, pipelines, fixtures and other appurtenances,
whether or not counted on a Production Area and equipment for storage, treating
compression, and production handling. Facilities shall also include pipelines,
barges, tankers, FPSOs and other vessels used for storing, offloading,
transporting and marketing Petroleum produced from a Production Area, together
with all necessary support facilities, whether or not located in the Production
Area.
(m) "Facilities" shall mean all equipment, fixtures and appurtenances
beyond the wellhead connections acquired for production of Petroleum pursuant to
this Agreement, including, without limitation, Platforms, pipelines, fixtures
and other appurtenances, whether or not located on a Production Area and
equipment for storage, treating, compression, and production handling.
(n) "Gas Sales Agreement" shall mean the Gas Sales Agreement dated as
of November 7, 1995 among the Petroleum Authority of Thailand, as gas purchaser,
and Thaipo, Thai ▇▇▇▇ and Sophonpanich, as gas sellers, as amended by the First
Amendment to Gas Sales Agreement dated as of November 12, 1997.
(o) "Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, or working capital of any Person or
any production or revenues generated by (or any capital or other expenditures
incurred in connection with the acquisition and exploitation of, or the
exploration for or development or production of) any Hydrocarbon Properties, or
a guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) Property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss, and including,
without limitation, a guarantee in favor of a bank or other financial
institution in order to cause such bank or financial institution to issue a
letter of credit or other similar instrument for the benefit of another Person,
but excluding endorsements for collection or deposit in the ordinary course of
business. The terms "Guarantee" and "Guaranteed" used as a verb shall have a
correlative meaning.
(p) "Hedging Agreement" shall mean, for any Person, an agreement or
arrangement between such Person and one or more financial institutions or other
entities providing for the transfer or mitigation of risks of fluctuations in
(x) the prices of hydrocarbons, either generally or under specific circumstances
or (y) currency exchange rates between U.S. dollars and Thai baht either
generally or under specific circumstances.
(q) "Hydrocarbon Properties" shall mean, without duplication, the
Company's and the Company's Subsidiaries' interests in hydrocarbon reserves.
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(r) "Indebtedness" shall mean, for any Person (without duplication):
(a) obligations created, issued or incurred by such Person for borrowed money
(whether by loan, the issuance and sale of debt securities or the sale of
Property to another Person subject to an understanding or agreement, contingent
or otherwise, to purchase or repurchase the same or similar Property from such
Person); (b) obligations of such Person to pay the deferred purchase or
acquisition price of Property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are payable
within 90 days after the date of receipt of the invoice therefor; (c)
obligations of others secured by a Lien on the Property of such Person, whether
or not the respective obligations so secured have been assumed by such Person;
(d) obligations of such Person in respect of letters of credit, surety bonds or
similar instruments issued or accepted by banks, surety companies and other
financial institutions for account of such Person and issued in respect of
liabilities of such Person of the type described in other clauses of this
definition; (e) Capital Lease Obligations of such Person other than any thereof
for which Thai ▇▇▇▇ is liable and which is incurred in connection with
transactions under the Operating Agreement or the Joint Operating Agreement; (f)
obligations of such Person in respect of obligations of the types specified in
other clauses of this definition as a partner or joint venturer of any
partnership or joint venture (other than in respect of obligations incurred in
the ordinary course of business); (g) obligations of such Person in respect of
Interest Rate Protection Agreements or Hedging Agreements; and (h) Indebtedness
of others Guaranteed by such Person, provided that the term "Indebtedness" shall
not include any of the foregoing which are subject to irrevocable legal
defeasance in accordance with the terms thereof. When used with respect to Thai
▇▇▇▇, "Indebtedness" shall include Thai ▇▇▇▇'▇ obligations to reimburse the
operator under the Operating Agreement or the Joint Operating Agreement for Thai
▇▇▇▇'▇ pro rata share of payments made by such operator in respect of
Indebtedness incurred by such operator in connection with transactions under
such agreements.
(s) "Interest Rate Protection Agreement" shall mean, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.
(t) "Investment" in any Person shall mean any investment, whether by
means of share purchase, loan, advance, extension of credit, capital
contribution or otherwise, in or to such Person, the Guarantee of any
Indebtedness of such Person or the subordination of any claim against such
Person to other Indebtedness of such Person; except that "Investment" shall not
include investments in inventory or trade receivables made or arising in the
ordinary course of business for the sale of goods or services; provided that
when used with respect to Thai ▇▇▇▇, "Investments" shall include any payments
made by Thai ▇▇▇▇ to the operator under the Operating Agreement in satisfaction
of Thai ▇▇▇▇"s obligations to reimburse such operator for its pro rata share of
Investments made by such operator in connection with transactions under such
agreement.
(u) "Joint Operating Agreement" shall mean, collectively, (i) the Joint
Operating Agreement dated as of August 1, 1991 between Maersk, Thai ▇▇▇▇, Thaipo
and Sophonpanich, (ii) the Transfer Agreement dated March 2, 1995 between
Maersk, Thai ▇▇▇▇, Thaipo and Sophonpanich, whereby Maersk agrees to convey its
interest and operatorship in respect of the Tantawan Area of Block B8/32 to
Thaipo, (iii) the Agreement of Operatorship and Conveyance of Interest dated as
of March 3, 1995 between Maersk and Thaipo, (iv) the Joint Operating Agreement
dated as of March 3, 1995 between Thaipo, Thai ▇▇▇▇ and Sophonpanich and (v) the
Agreement dated as of March 2, 1997, by and between Pogo Producing Company,
Thaipo, TRH, Thai ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ Limited.
(v) "knowledge" of any Person which is not an individual means such
facts and other information which as of the date of determination are actually
known to any vice president, chief financial officer,
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general counsel, chief compliance officer, controller, and any officer superior
to any of the foregoing, of the referenced Person, and with respect to the
Company or any Company Subsidiary, specifically includes Messrs. ▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇.
(w) "Lien" shall mean, with respect to any Property, any assignment in
trust, mortgage, lien, pledge, charge, fiduciary or security assignment,
security interest or encumbrance of any kind in respect of such Property
(including, without limitation, any production payment obligation, advance,
payment or similar arrangement with respect to minerals in place). For purposes
of the foregoing, a Person shall be deemed to own subject to a Lien any Property
that 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 (other than an operating lease) relating to such Property.
(x) "Maersk" shall mean Maersk Oil (Thailand) Limited, a company
organized under the laws of the Kingdom of Thailand.
(y) "Material adverse change" or "material adverse effect" means, when
used in connection with the Company, Parent or Merger Sub, any change or effect
that, either individually or in the aggregate with all other such changes or
effects, is or would reasonably be expected to be materially adverse to the
business, assets, properties, condition (financial or otherwise) or results of
operations (current and prospective) of such party and its subsidiaries taken as
a whole.
(z) "NYSE" means the New York Stock Exchange, Inc.
(aa) "Permitted Liens" means (i) liens for current taxes not yet due,
(ii) minor imperfections of title, if any, none of which materially impairs the
present use of the property subject thereto or impairs the current operations of
the Company or the Company Subsidiaries, (iii) zoning laws and other use
restrictions that do not materially impair the current use of the property
subject thereto, and (iv) and mechanic's, courier's, worker's, repairer's,
materialman's, warehouseman's and other similar liens arising or incurred in the
ordinary course of business, none of which would, individually or in the
aggregate, materially adversely affects the value of, or materially adversely
interfere with the use of, the property subject thereto.
(ab) "Person" or "Person" means an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization,
labor union, estate, limited liability company, joint stock company,
Governmental Entity or other entity.
(ac) "Petroleum" shall mean crude oil, natural gas, natural gas liquid,
by-products and other naturally occurring hydrocarbons in a free state, whether
solid, semi solid, liquid or gaseous, and it shall include all heavy
hydrocarbons which can be recovered in situ by thermal or chemical processes,
but shall not include coal, oil shale or other kinds of rocks from which oil can
be extracted by application of heat or chemical process.
(ad) "Platform" shall mean an offshore structure, including a structure
that solely supports Facilities, whether fixed, compliant or floating, and the
components of that structure, including but not limited to, caissons or well
protectors, rising above the water line and used for the exploration,
development or production of Petroleum. The term "Platform" shall also mean an
offshore subsea structure or template (excluding templates used for drilling
operations) and any component thereof (including, but not limited to, flowlines,
umbilicals and control systems, other than those installed in connection with
completion of a well) that is attached to the sea floor and used to obtain
production of Petroleum.
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(ae) "Pledge Agreements" shall mean the Borrower Pledge Agreement and
the Thai Pledge Agreements.
(af) "Pogo" shall mean Pogo Producing Company, a Delaware corporation.
(ag) "Production Area" shall mean any portion of the Concession to
which a Production License relates.
(ah) "Production License" shall mean an instrument authorizing
development, exploitation and operations within the Concession, as concluded
between the Ministry of Industry of the Kingdom of Thailand and the parties to
the Joint Operating Agreement and any extension, renewal or amendment thereof
agreed to in writing by the parties to the Joint Operating Agreement.
(ai) "Production License Application" shall mean any application for a
Production License.
(aj) "Production Payment" shall mean any production payment obligation
of the Company or the Company Subsidiaries, whether payable from a specified
share of proceeds received from production from specific Properties or payable
from a specified share of production from specific Properties.
(ak) "Property" shall mean any property of any kind whatsoever, whether
real, personal or mixed and whether tangible or intangible, including any right
or interest therein or thereto.
(al) "Representatives" means, with respect to a party, a party's
directors, officers, employees, affiliates, agents and advisors (including its
attorneys, accountants, consultants, bankers and financial advisors).
(am) "RMEC" shall mean ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ Exploration Company, a Delaware
corporation.
(an) "SBM" shall mean, collectively, SBM Bahamas Limited, a Bahamian
corporation, SBM Marine Services Thailand Ltd., a Thai corporation, and Tantawan
Production B.V., a Netherlands corporation.
(ao) "Senior Notes" shall mean the Senior Subordinated Notes due 2004
in the aggregate principal amount not to exceed $120 million issued by the
Company as governed by that certain Indenture dated as of September 27, 1997,
between the Company and the Bank of Montreal Trust Company, as trustee.
(ap) "Sophonpanich" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇ Limited, a limited
liability company organized under the laws of the Kingdom of Thailand, as
successor in interest to Sophonpanich Co., Limited.
(aq) A "subsidiary" of any Person means another Person of which the
first Person owns (directly or indirectly)
(i) an amount of voting securities or other voting interests
which is sufficient to elect at least a majority of its Board of
Directors or other governing body; or
(ii) if there are no voting interests, 50% or more of all
equity interests.
(ar) "Thai Pledge Agreements" shall mean the Pledge Agreements executed
by RMEC and TRH, respectively, in favor of the Lenders represented by the
Administrative Agent under a power of attorney, as each shall be modified and
supplemented and in effect from time to time.
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(as) "Thaipo" shall mean Thaipo Limited, a limited liability company
organized under the laws of the Kingdom of Thailand.
(at) "Thai ▇▇▇▇" shall mean Thai ▇▇▇▇ Limited, a limited liability
company organized under the laws of the Kingdom of Thailand.
(au) "TRH" shall mean Thai ▇▇▇▇ Holdings, Inc., a Delaware corporation.
SECTION 10.04 Interpretation. When a reference is made in this
Agreement to an Article, Section, Exhibit or Schedule, such reference shall be
to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the word "include,"
"includes" or "including" is used in this Agreement, it shall be deemed to be
followed by the words "without limitation." The words "hereof," "herein" and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement. All terms defined in this Agreement shall have the
defined meanings contained herein when used in any certificate, instrument or
other document made or delivered pursuant hereto unless otherwise defined
therein. The plural of any defined term shall have a meaning correlative to such
defined term, and words denoting any gender shall include all genders. Where a
word or phrase is defined herein, each of its other grammatical forms shall have
a corresponding meaning. A reference to any legislation or to any provision of
any legislation shall include any modification or re-enactment. All references
to "$" and dollars shall be deemed to refer to United States currency unless
otherwise specifically provided.
SECTION 10.05 Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
party and delivered to each other party. Delivery of an executed counterpart of
a signature page to this Agreement by telecopier shall be as effective as
delivery of a manually executed counterpart of this Agreement.
SECTION 10.06 Entire Agreement. This Agreement (including the Company
Disclosure Schedules and the Exhibits attached hereto, all of which are a part
hereof) and the Option Agreement contain the entire understanding of the parties
hereto and thereto with respect to the subject matter contained herein and
therein, supersede and cancel all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
respecting such subject matter. There are no restrictions, promises,
representations, warranties, agreements or undertakings of any party hereto with
respect to the transactions contemplated by this Agreement other than those set
forth herein or in the Option Agreement or made hereunder or thereunder.
SECTION 10.07 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
any laws that might otherwise govern under applicable principles of conflicts of
laws thereof or of any other jurisdiction.
SECTION 10.08 Assignment. Neither this Agreement nor any right,
interest or obligation hereunder shall be assigned, in whole or in part, by
operation of law or otherwise, by any party without the prior written consent of
each other party. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and permitted assigns.
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SECTION 10.09 Enforcement. The parties agree that irreparable damage
would occur if any provision of this Agreement were not performed in accordance
with its terms or were otherwise breached. Each party shall be entitled to
injunctive relief to prevent any breach of this Agreement and to enforce this
Agreement specifically (in addition to any other remedy to which such party is
entitled at law or in equity) in any court of the State of Delaware or any court
of the United States located in the State of Delaware (collectively, the
"Delaware Courts"). In addition, each party hereby
(a) submits itself to the personal jurisdiction of the Delaware Courts
with respect to any dispute arising out of this Agreement or any transaction
contemplated hereby to the extent such courts would have subject matter
jurisdiction with respect to such dispute;
(b) agrees that it will not attempt to deny or defeat such personal
jurisdiction or venue by motion or other request for leave from any Delaware
Court;
(c) waives the right to any other jurisdiction or venue for any
litigation arising out of or in connection with this Agreement or the
transactions contemplated hereby to which any of them may be entitled by reason
of its pres ent or future domicile;
(d) waives, in any action for specific performance, the defense of
adequacy of a remedy at law; and
(e) agrees that it will not bring any action relating to this Agreement
(or any transactions contemplated by this Agreement) in any court other than
such courts referred to above.
Notwithstanding the foregoing, each of the parties hereto agrees that each of
the other parties shall have the right to bring any action or proceeding for
enforcement of a judgment entered by the Delaware Courts in any other court or
jurisdiction.
SECTION 10.10 Severability. Each provision of this Agreement will be
interpreted so as to be effective and valid under applicable law, but if any
provision is held invalid, illegal or unenforceable under applicable law in any
jurisdiction, then such invalidity, illegality or unenforceability will not
affect any other provision, and if the rights or obligations of any party hereto
under this Agreement shall not be materially and adversely affected thereby, the
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been included herein.
SECTION 10.11 Service of Process. Each party irrevocably consents to
the service of process in any action or proceeding by mailing copies thereof by
registered United States mail, postage prepaid, return receipt requested, to its
address as specified in or pursuant to Section 10.2 hereof. However, the
foregoing shall not limit the right of a party to effect service of process on
the other party by any other legally available method.
SECTION 10.12 Company Disclosure Schedules. Any matter disclosed
pursuant to any Company Disclosure Schedule shall be deemed to be disclosed for
all purposes under this Agreement but such disclosure shall not be deemed to be
an admission or representation as to the materiality of the item so disclosed.
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be signed by their respective duly authorized officers, all as of
the date first written above.
CHEVRON CORPORATION
By: /s/ ▇. ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇
---------------------------------
Title: VICE PRESIDENT
---------------------------------
CHEVRON THAILAND INC.
By: /s/ ▇. ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇
---------------------------------
Title: PRESIDENT
---------------------------------
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ OIL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
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Title: CHAIRMAN
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