ACQUISITION AGREEMENT
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THIS AGREEMENT made this 1st day of March, 2000.
B E T W E E N:
CANADIAN OCCIDENTAL PETROLEUM LTD., a corporation
governed by the laws of Canada,
("CANOXY")
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OCCIDENTAL PETROLEUM CORPORATION, a corporation
governed by the laws of the State of Delaware,
("OCCIDENTAL")
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ONTARIO TEACHERS' PENSION PLAN BOARD, a corporation
without share capital governed by the laws of Ontario
("TEACHERS'")
WHEREAS:
A. CanOxy is a corporation governed by the Canada Business Corporations
Act;
B. The authorized capital of CanOxy consists of an unlimited number of
common shares, of which approximately 138,293,572 common shares are outstanding;
C. OCI 1 and OCI 2, which are indirect, wholly-owned subsidiaries of
Occidental, own, in the aggregate, 40,223,620 (approximately 29% of the
outstanding) common shares of CanOxy;
D. Teachers' wishes to purchase from OCI 1, OCI 2 and, if applicable,
OxyChem (Canada) an aggregate of 20,223,620 common shares of CanOxy; and
E. CanOxy wishes to purchase for cancellation from OCI 1 and, if
applicable, OCI 2, an aggregate of 20,000,000 common shares of CanOxy.
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NOW THEREFORE in consideration of the mutual covenants set out in this
agreement and other good and valuable consideration, the receipt and sufficiency
of which are acknowledged, the parties agree that:
1. DEFINITIONS
In this agreement, and any amendments hereto, the following terms
shall have the following meanings:
"AGENCY" means any domestic or foreign court or tribunal or government
agency or other regulatory authority or administrative agency or
commission or any elected or appointed public official.
"BUSINESS DAY" means any day other than Saturday, Sunday, a federal
holiday in Canada or a day on which banks are not open for business in
Toronto or Calgary.
"CANOXY DISCLOSURE DOCUMENTS" means the CanOxy Annual Report on Form
10-K filed with the Ontario Securities Commission and the United
States Securities and Exchange Commission in respect of the year ended
December 31, 1998 and all audited and interim financial statements,
reports to shareholders and other non-confidential reports and
documents filed by CanOxy with the Ontario Securities Commission and
the United States Securities and Exchange Commission from January 1,
1999 to the date of this agreement.
"CANOXY PURCHASED SHARES" means the 20,000,000 common shares of CanOxy
to be purchased for cancellation by CanOxy, subject to the terms and
conditions of this agreement.
"CLOSING" means the closing of the transactions contemplated by this
agreement occurring on the Closing Date.
"CLOSING DATE" means the business day following the approval referred
to in section 3.A(b) or such other date as may be mutually agreed by
the parties, but in any event no later than May 16, 2000.
"CONFIDENTIALITY AGREEMENT" means the confidentiality agreement
between CanOxy and Teachers' dated February 18, 2000.
"CPEL" means Canadian Petroleum Ecuador Limited, a Jersey corporation.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"LAW" means all laws, by-laws, rules, regulations, orders, ordinances,
protocols, codes, guidelines, policies, notices, directions and
judgments or other requirements of any Agency which are binding on a
person.
"OCC" means Occidental Chemical Corporation, a New York corporation.
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"OCI 1" means Occidental Chemical Investment 1 Inc., a Delaware
corporation owning 35,764,388 common shares of CanOxy.
"OCI 2" means Occidental Chemical Investment 2 Inc., a Delaware
corporation owning 4,459,232 common shares of CanOxy.
"OPSA" means Occidental Petroleum (South America), Inc., a Delaware
corporation.
"OXYCHEM (CANADA)" means OxyChem (Canada), Inc., an Alberta
corporation, owning limited partnership interests in CXY Chemicals
Canada Limited Partnership, a limited partnership formed under the
Laws of the Province of British Columbia.
"PERSON" means an individual, corporation, incorporated or
unincorporated association, syndicate or organization, partnership,
trust, trustee, executor, administrator or other legal representative.
"TAX ACT" means the Income Tax Act (Canada).
"TEACHERS' PURCHASED SHARES" means the 20,223,620 common shares of
CanOxy to be purchased by Teachers', subject to the terms and
conditions of this agreement.
2. PURCHASE AND SALE
A. PURCHASE AND SALE OF THE CANOXY PURCHASED SHARES.
Subject to the terms and conditions of this agreement, on the Closing
Date and immediately prior to the purchase by Teachers' of the Teachers'
Purchased Shares pursuant to section 2.B Occidental shall cause OCI 1 and, if
notified by Occidental not less than 5 business days prior to the Closing Date,
OCI 2, to sell to CanOxy the CanOxy Purchased Shares free and clear of all
liens, charges, encumbrances and rights of others and CanOxy shall purchase for
cancellation the CanOxy Purchased Shares from OCI 1 and, if applicable, OCI 2.
The consideration to be paid by CanOxy for the CanOxy Purchased Shares shall be
$29.61 per share, which shall be paid by wire transfer to an account to be
specified in writing by Occidental at least one business day prior to the
Closing Date upon delivery by Occidental to CanOxy of certificates evidencing
the CanOxy Purchased Shares, duly endorsed in blank for transfer. In no event
shall CanOxy have any obligation to purchase the CanOxy Purchased Shares unless
Teachers' and Occidental have taken all steps necessary to effect the purchase
and sale of the Teachers' Purchased Shares pursuant to section 2.B immediately
after the purchase and sale pursuant to this section 2.A. CanOxy shall withhold,
and remit in accordance with Part XIII of the Tax Act and the Canada/United
States Tax Convention, all applicable withholdings in respect of the dividend
deemed to be paid by CanOxy on the disposition of the CanOxy Purchased Shares.
If the Canada Customs and Revenue Agency should later determine that a different
amount should have been withheld and remitted and requires the payment of
additional amounts by (or rebates a portion of
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the amounts paid to) CanOxy, Occidental and CanOxy, as the case may be, shall
make such payments as are necessary to reflect the additional payment or rebate.
B. PURCHASE AND SALE OF TEACHERS' PURCHASED SHARES.
Subject to the terms and conditions of this agreement, on the Closing
Date and immediately after the purchase by CanOxy of the CanOxy Purchased Shares
pursuant to section 2.A, Occidental shall cause OCI 1, OCI 2 and OxyChem
(Canada), as the case may be, to sell to Teachers' the Teachers' Purchased
Shares free and clear from all liens, charges, encumbrances and rights of others
and Teachers' shall purchase the Teachers' Purchased Shares from OCI 1, OCI 2
and OxyChem (Canada), as the case may be. The consideration to be paid by
Teachers' for the Teachers' Purchased Shares shall be $29.61 per share, which
shall be paid by wire transfer to an account to be specified in writing by
Occidental at least one business day prior to the Closing Date upon delivery by
Occidental to Teachers' of one or more share certificates evidencing the
Teachers' Purchased Shares duly endorsed for transfer to a person or persons
designated by Teachers' in writing prior to the Closing Date. CanOxy shall
immediately thereafter cause its transfer agent to issue one or more share
certificates registered in the name of such person or persons designated by
Teachers', representing the Teachers' Purchased Shares.
C. DISTRIBUTIONS.
Concurrently with the delivery of the certificates referred to in
sections 2.A and B, Occidental shall cause OCI 1, OCI 2 and OxyChem (Canada), as
the case may be, to deliver to CanOxy and Teachers', as the case may be, all
right, title and interest they may have in and to any and all securities,
rights, warrants or other interests or amounts accrued, declared, paid, issued,
transferred, made or distributed on or in respect of the CanOxy Purchased Shares
and the Teachers' Purchased Shares, respectively, on or after February 16, 2000.
D. EXCHANGE OF PROPERTIES.
(a) On the Closing Date, Occidental shall:
(i) effective February 1, 2000, cause OxyChem (Canada) to transfer
free and clear from all liens, charges, encumbrances or rights
of others all of its right, title and interest in CXY Chemicals
Canada Limited Partnership, a British Columbia limited
partnership, to an entity designated by CanOxy for value as
agreed between Occidental and CanOxy; and
(ii) effective January 1, 2000, cause OCC to transfer free and clear
from all liens, charges, encumbrances or rights of others, all
of its right, title and interest in CXY Chemicals U.S.A., a
Delaware general partnership, to an entity designated by CanOxy
for value as agreed between Occidental and CanOxy.
(b) On the Closing Date, CanOxy, as duly authorized agent of CPEL, will
take such steps as are necessary to transfer effective January 1, 2000
free and clear from all liens, charges, encumbrances or rights of
others, all of its right, title and interest in
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and to 150 shares of Class B Common Stock, $1.00 par value per share,
of OPSA to an entity designated by Occidental for value as agreed
between Occidental and CanOxy.
(c) No adjustments shall be made in connection with the transfer of
interests and shares described in this section 2.D(a) except those
certain advanced dividends relating to the OPSA shares made subsequent
to January 1, 2000.
(d) The respective obligations of CanOxy and Occidental to complete the
transfers contemplated by sections 2.D(a) and (b) above (the "Asset
Swap") shall be subject to the fulfilment, or the waiver by each of
them, at or prior to the Closing Date of the condition that any
applicable waiting periods under the HSR Act shall have expired or
been earlier terminated.
(e) Each of CanOxy and Occidental shall promptly prepare and submit all
necessary applications, notices and other documents required to be
filed by and in connection with the transactions contemplated by
section 2.D(a)(ii) above pursuant to the HSR Act and shall promptly
file such additional information as may be properly requested pursuant
to the HSR Act and take such other reasonable action as may be
required to terminate the waiting period under the HSR Act.
(f) If the applicable waiting period under the HSR Act has not expired or
been earlier terminated by the Closing Date, the parties shall
complete the transactions contemplated by sections 2.A, B and C above
in accordance with the terms of the agreement and shall defer
completion of the Asset Swap until such time as such applicable
waiting periods have expired or been earlier terminated. Prior to
December 31, 2000 each of Occidental and CanOxy shall use their
reasonable commercial efforts to complete the Asset Swap but if it has
not been completed by December 31, 2000 then the obligations of CanOxy
and Occidental hereunder with respect to the Asset Swap shall
terminate.
(g) Each entity designated by CanOxy or Occidental, as the case may be,
shall itself be solely responsible for any transfer tax applicable in
respect of such entity in relation to the transactions contemplated by
this section 2.D and, for greater certainty, the applicable purchase
price is exclusive of any such taxes. Under no circumstances shall
Teachers' be responsible for any such taxes.
E. TIME AND PLACE OF CLOSING.
Closing shall take place at 8:00 am on the Closing Date at the offices
of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Calgary, or at such time and place as the
parties may agree.
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3. CONDITIONS TO THIS AGREEMENT
A. MUTUAL CONDITIONS.
The respective obligations of CanOxy, Occidental and Teachers' to
complete the transactions contemplated by this agreement shall be subject to the
fulfilment, or the waiver by each of them, of the following conditions on or
prior to the Closing Date:
(a) no judgment or order shall have been issued by any of the Agencies, no
action, suit or proceedings shall have been threatened or taken by any
of the Agencies, and no Law shall have been proposed, enacted, or
promulgated or applied, to cease trade, enjoin, or prohibit the
completion of the transactions contemplated in this agreement; and
(b) CanOxy shall have received discretionary relief from the Alberta
Securities Commission such that the purchase by CanOxy of the CanOxy
Purchased Shares shall not be subject to the issuer bid requirements
of the Securities Act (Alberta), and the acquisition by CanOxy of the
CanOxy Purchased Shares and, if necessary, the transfers referred to
in section 2.D shall have been approved by a majority of the votes
cast by holders of common shares of CanOxy (disregarding any votes
cast by Teachers' and Occidental) at the Annual and Special Meeting of
CanOxy to be held on or before May 15, 2000.
B. CONDITIONS IN FAVOUR OF CANOXY.
The obligations of CanOxy to complete the transactions contemplated by
this agreement shall be subject to the fulfilment, or the waiver by CanOxy, of
the following conditions at or prior to the Closing Date, each of which is for
the exclusive benefit of CanOxy and may be waived by CanOxy at any time, in
whole or in part, in its sole discretion without prejudice to any other rights
that it may have:
(a) neither Teachers' nor Occidental shall have failed to perform or
comply with any of the material obligations, covenants and agreements
to be performed by it under this agreement on or prior to the Closing
Date;
(b) the representations and warranties of Teachers' and Occidental,
respectively, set forth in this agreement shall be true and correct in
all material respects on and as of the Closing Date (as if made on and
as of that date);
(c) Dr. ▇▇▇ ▇▇▇▇▇ and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have resigned as directors
of CanOxy; and
(d) CanOxy shall have received a certificate from each of Occidental and
Teachers', in each case signed by two senior officers and dated the
Closing Date, to the effect that, to the best of the knowledge,
information and belief of each such officer (without personal
liability), each of the foregoing conditions (as it relates to
Occidental or Teachers', as the case may be) has been fulfilled.
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C. CONDITIONS IN FAVOUR OF OCCIDENTAL
The obligations of Occidental to complete the transactions
contemplated by this agreement shall be subject to the fulfilment, or the waiver
by Occidental, of the following conditions at or prior to the Closing Date, each
of which is for the exclusive benefit of Occidental and may be waived by
Occidental at any time, in whole or in part, in its sole discretion without
prejudice to any other rights that it may have:
(a) neither Teachers' nor CanOxy shall have failed to perform or comply
with any of the material obligations, covenants and agreements to be
performed by it under this agreement on or prior to the Closing Date;
(b) the representations and warranties of Teachers' and CanOxy,
respectively, set forth in this agreement shall be true and correct in
all material respects on and as of the Closing Date (as if made on and
as of that date, except the representations and warranties provided in
sections 4.A(d) and (f), which are given as of the date of this
agreement and shall have been true and correct on and as of that
date); and
(c) Occidental shall have received a certificate from each of CanOxy and
Teachers', in each case signed by two senior officers and dated the
Closing Date, to the effect that, to the best of the knowledge,
information and belief of each such officer (without personal
liability), each of the foregoing conditions (as it relates to CanOxy
or Teachers', as the case may be) has been fulfilled.
D. CONDITIONS IN FAVOUR OF TEACHERS'.
The obligations of Teachers' to complete the transactions contemplated
by this agreement shall be subject to the fulfilment, or the waiver by
Teachers', of the conditions at or prior to the Closing Date, each of which is
for the exclusive benefit of Teachers' and may be waived by Teachers' at any
time, in whole or in part, in its sole discretion without prejudice to any other
rights that it may have:
(a) neither Occidental nor CanOxy shall have failed to perform or comply
with any of the material obligations, covenants and agreements to be
performed by it under this agreement on or prior to the Closing Date;
(b) the representations and warranties of Occidental and CanOxy set forth
in this agreement shall be true and correct in all material respects
on and as of the Closing Date (as if made on and as of that date,
except the representations and warranties provided in sections 4.A(d)
and (f), which are given as of the date of this agreement and shall
have been true and correct on and as of that date);
(c) no changes shall have occurred in the share capital of CanOxy that
would cause the 2,234,798 common shares of CanOxy currently held by
Teachers' together with the 1,500 common shares that Teachers' is
entitled to acquire pursuant to options that it currently holds and
the Teachers' Purchased Shares to represent
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20% or more than the outstanding common shares of CanOxy, after giving
effect to the purchase and cancellation by CanOxy of the CanOxy
Purchased Shares;
(d) Dr. ▇▇▇ ▇▇▇▇▇ and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have resigned as directors
of CanOxy; and
(e) Teachers' shall have received a certificate from each of Occidental
and CanOxy, in each case signed by two senior officers and dated the
Closing Date, to the effect that, to the best of the knowledge,
information and belief of each such officer (without personal
liability), each of the foregoing conditions (as it relates to
Occidental or CanOxy, as the case may be) has been fulfilled.
E. SATISFACTION, WAIVER AND RELEASE OF CONDITIONS.
The conditions provided for in this section 3 shall be deemed
conclusively to have been satisfied, waived or released on the Closing of the
purchases and sales pursuant to section 2.
4. REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF CANOXY.
CanOxy represents and warrants to Occidental and Teachers' that:
(a) ORGANIZATION AND QUALIFICATION.
(i) CanOxy is a corporation validly existing under the Canada
Business Corporations Act and has full corporate power and
authority to own its own property and conduct its businesses as
currently owned and conducted.
(ii) CPEL is a corporation validly existing under the Laws of Jersey
and has full power and authority to own its own property and
conduct its businesses as currently owned and conducted.
(b) CAPITALIZATION. The authorized capital of CanOxy consists of an
unlimited number of common shares, of which approximately 138,293,572
shares are issued and outstanding. Except for the rights of persons
created pursuant to this agreement, CanOxy's stock option plan,
CanOxy's dividend reinvestment plan or as disclosed in the CanOxy
Disclosure Documents, there are no options, warrants, conversion
privileges, calls or other rights, agreements, arrangements,
commitments or obligations of CanOxy to issue, sell or acquire any
CanOxy common shares or securities or obligations of any kind
convertible into or exchangeable for any CanOxy common shares, nor are
there outstanding any stock appreciation rights, phantom equity or
similar rights, agreements, arrangements or commitments based upon the
book value, income or any other attribute of CanOxy.
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(c) AUTHORITY RELATIVE TO THIS AGREEMENT. CanOxy has the requisite
corporate power and authority to enter into this agreement and to
perform CanOxy's obligations under this agreement for itself, and as
agent for CPEL. The execution and delivery of this agreement by and
the completion by CanOxy for itself, and as agent for CPEL, of the
transactions contemplated by this agreement have been duly authorized
by the boards of directors of CanOxy and CPEL and no other proceedings
on the part of CanOxy or CPEL are necessary to authorize this
agreement and the transactions contemplated hereby, other than
receiving the approval set out in section 3.A(b). This agreement has
been duly executed and delivered by CanOxy and constitutes a valid and
binding obligation of CanOxy, enforceable by Occidental and Teachers'
against CanOxy in accordance with its terms, subject to the
availability of equitable remedies and the enforcement of creditors'
rights generally. The execution and delivery by CanOxy of this
agreement and the performance by each of CanOxy and CPEL of the
obligations of CanOxy hereunder will not result in a violation or
breach of any provision of or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of or under:
(i) the constitutional documents (including articles or other
organization documents or by-laws) of CanOxy or CPEL;
(ii) any applicable Law; or
(iii) any agreement, arrangement or understanding to which CanOxy or
CPEL is a party or by which either of them or their properties
is bound or affected.
(d) FINANCIAL STATEMENTS AND DISCLOSURE DOCUMENTS. The audited financial
statements of CanOxy prepared on a consolidated basis for and as at
the year ended December 31, 1998 and the unaudited interim financial
statements of CanOxy prepared on a consolidated basis for and as at
the periods ended March 31, 1999, June 30, 1999 and September 30, 1999
have been prepared in accordance with generally accepted accounting
principles and fairly present the consolidated financial position of
CanOxy as at the respective dates thereof and consolidated results of
their operations and cash flows for the periods indicated therein. The
CanOxy Disclosure Documents include all the documents that CanOxy was
required to file with the Ontario Securities Commission or the United
States Securities and Exchange Commission on or after December 31,
1998. As of their respective dates, none of the CanOxy Disclosure
Documents or the draft Form 10-K provided by CanOxy to Teachers'
(including all exhibits and schedules to those documents and documents
incorporated by reference) contained any untrue statement of fact or
omitted to state a fact in either case material to CanOxy and which
was required to be stated therein or was necessary in order to make
the statements contained therein with respect to CanOxy, in light of
the circumstances under which they were made, not misleading, and each
of
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those documents was in compliance in all respects material to CanOxy
with applicable Laws.
(e) OWNERSHIP OF SHARES OF OCCIDENTAL PETROLEUM (SOUTH AMERICA), INC. CPEL
is the legal and beneficial owner of the Class B shares of OPSA, free
and clear of any liens, charges, encumbrances or rights of others
(other than the rights of Occidental under this agreement). CPEL is an
indirect wholly-owned subsidiary of CanOxy. There is no contract,
option or other right of another Person binding upon or which at any
time in the future may become binding upon CanOxy or CPEL in relation
to the shares of OPSA (other than the rights of Occidental under this
agreement). The shares of OPSA are not "taxable Canadian property" for
purposes of the Tax Act.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. From December 31, 1998 to the
date of this agreement, except as disclosed in the CanOxy Disclosure
Documents:
(i) none of CanOxy or its subsidiaries has declared or made any
distributions (in cash, securities or other property) to
securityholders (other than dividends declared and paid by
CanOxy in accordance with established dividend policy) or
entered into any agreement, disposed of any their assets or
incurred any indebtedness which, either individually or in the
aggregate, is materially adverse to CanOxy and its subsidiaries,
taken as a whole, other than in the ordinary course of business;
(ii) no liability or obligation of any nature (whether absolute,
accrued, contingent or otherwise) that is materially adverse to
CanOxy and its subsidiaries, taken as a whole, has been incurred
other than in the ordinary course of business; and
(iii) there has not been any change that, individually or in the
aggregate, is or has been materially adverse to CanOxy and its
subsidiaries, taken as a whole (including any decision to
implement such a change made by a board of directors or senior
management of a company who believe that confirmation of the
decision by the relevant board of directors is probable).
B. REPRESENTATIONS AND WARRANTIES OF OCCIDENTAL.
Occidental represents and warrants to CanOxy and Teachers' that:
(a) ORGANIZATION AND QUALIFICATION.
(i) Occidental is a corporation validly existing under the Laws of
the State of Delaware and has full power and authority to own
its property and conduct its businesses as currently owned and
conducted.
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(ii) OCI 1 is a corporation validly existing under the Laws of the
State of Delaware and has full power and authority to own its
property and conduct its businesses as currently owned and
conducted.
(iii) OCI 2 is a corporation validly existing under the Laws of the
State of Delaware and has full power and authority to own its
property and conduct its businesses as currently owned and
conducted.
(iv) OCC is a corporation validly existing under the Laws of the
State of New York and has full power and authority to own its
property and conduct its businesses as currently owned and
conducted.
(v) OxyChem (Canada) is a corporation validly existing under the
Laws of Alberta and has full power and authority to own its
property and conduct its businesses as currently owned and
conducted. OxyChem (Canada) is not a non-resident for purposes
of the Tax Act.
(b) AUTHORITY RELATIVE TO THIS AGREEMENT. Occidental has the requisite
corporate power and authority to enter into this agreement and to
perform, or cause OCI 1, OCI 2, OCC and OxyChem (Canada) to perform,
Occidental's obligations under this agreement. The execution and
delivery of this agreement by Occidental have been duly authorized by
the board of directors (directly or by a duly authorized committee of
the board of directors) and/or, if applicable, the shareholders of
Occidental, OCI 1, OCI 2, OCC and OxyChem (Canada) and no other
corporate proceedings on the part of Occidental, OCI 1, OCI 2, OCC or
OxyChem (Canada) are necessary to authorize this agreement and the
transactions contemplated hereby. This agreement has been duly
executed and delivered by Occidental and constitutes a legal, valid
and binding obligation of Occidental, enforceable by Teachers' and
CanOxy against Occidental in accordance with its terms, subject to the
availability of equitable remedies and the enforcement of creditors'
rights generally. The execution and delivery by Occidental of this
agreement and the performance by it (and OCI 1, OCI 2, OCC and OxyChem
(Canada)) of its obligations hereunder will not result in a violation
or breach of any provision of or constitute a default (or an event
that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment,
acceleration or cancellation of or under,
(i) the constitutional documents (including articles or other
organizational documents or by-laws) of Occidental, OCI 1,
OCI 2, OCC or OxyChem (Canada);
(ii) any applicable Law; or
(iii) any agreement, arrangement or understanding to which Occidental,
OCI 1, OCI 2, OCC or OxyChem (Canada) is a party or by which
any of them or their properties is bound or affected.
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(c) OWNERSHIP OF PURCHASED SHARES. As at the date hereof, OCI 1 and OCI 2
are the legal and beneficial owners of the Teachers' Purchased Shares
and the CanOxy Purchased Shares, free and clear of any liens, charges,
encumbrances or rights of others (other than the rights of Teachers'
and CanOxy under this agreement). OCI 1 and OCI 2 are wholly-owned
subsidiaries of Occidental. There is no contract, option or other
right of another Person binding upon or which at any time in the
future may become binding upon Occidental, OCI 1 or OCI 2 in relation
to the Teachers' Purchased Shares or the CanOxy Purchased Shares
(other than the rights of Teachers' and CanOxy under this agreement).
(d) OWNERSHIP OF PARTNERSHIP INTERESTS. OCC is the legal and beneficial
owner of a 15% general partnership interest in CXY Chemicals U.S.A.,
and OxyChem (Canada) is the legal and beneficial owner of a 15%
limited partnership interest in CXY Chemicals Canada Limited
Partnership, in each case, free and clear of any liens, charges,
encumbrances or rights of others (other than the rights of CanOxy
under this agreement). There is no contract, option or other right of
another Person binding upon or which at any time in the future may
become binding upon Occidental or OCC in relation to the interest in
CXY Chemicals U.S.A., or Occidental or OxyChem (Canada) in relation to
the interest in CXY Chemicals Canada Limited Partnership (other than
the interest of CanOxy under this agreement).
(e) DISCLOSURE. Occidental has no reason to believe that, as of their
respective dates, any of the CanOxy Disclosure Documents (including
all exhibits and schedules to these documents and documents
incorporated by reference) contained any untrue statement of fact or
omitted to state any fact, in either case, material to CanOxy and
which was required to be stated therein or was necessary in order to
make the statements contained therein with respect to CanOxy, in light
of the circumstances under which they were made, not misleading, or
that any of those documents was not in compliance in all respects
material to CanOxy with applicable Laws. Occidental has no knowledge
of any other material adverse information with respect to the current
and prospective business operations of CanOxy that has not been
generally disclosed.
C. REPRESENTATIONS AND WARRANTIES OF TEACHERS'.
Teachers' represents and warrants to Occidental and CanOxy that:
(a) ORGANIZATION AND QUALIFICATION. Teachers' is a corporation validly
existing under the Teachers' Pension Act (Ontario) and has full power
and authority to own its assets and conduct its businesses as
currently owned and conducted.
(b) AUTHORITY RELATIVE TO THIS AGREEMENT. Teachers' has the requisite
power and authority to enter into this agreement and to perform its
obligations under this agreement. The execution and delivery of this
agreement by Teachers' and the completion by Teachers' of the
transactions contemplated by this agreement have been duly authorized
by the Teachers' Pension Plan Board and no other
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proceedings on the part of Teachers' are necessary to authorize this
agreement and the transactions contemplated hereby. This agreement has
been duly executed and delivered by Teachers' and constitutes a legal,
valid and binding obligation of Teachers', enforceable by CanOxy and
Occidental against Teachers' in accordance with its terms, subject to
the availability of equitable remedies and the enforcement of
creditors' rights generally. The execution and delivery by Teachers'
of this agreement and the performance by it of its obligations
hereunder will not result in a violation or breach of any provision of
or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of or under:
(i) its constitutional documents (including articles or other
organizational documents or by-laws);
(ii) any applicable Law; or
(iii) any agreement, arrangement or understanding by which it is a
party or by which it is bound or affected.
(c) SHAREHOLDINGS. Teachers' beneficially owns (within the meaning of Part
XX of the Securities Act (Ontario)) only 2,234,798 common shares of
CanOxy (excluding the Teachers' Purchased Shares and 1,500 common
shares that are subject to an option in favour of Teachers').
(d) PURCHASER EXPERIENCE. Teachers' is an institutional investor and has
such knowledge and experience in financial and business matters as to
be capable of evaluating independently the merits, risks and
suitability of entering into this agreement and purchasing the
Teachers' Purchased Shares. Teachers' has made an independent
investigation into the business and financial condition of CanOxy,
and, other than the representations and warranties expressly provided
in this agreement, has not relied, and will not hereafter rely, on
Occidental or any of its affiliates (other than CanOxy and CanOxy's
officers, directors, employees, representatives and agents),
controlling persons, officers, directors, employees, representatives
or agents (collectively, "Representatives") with respect to such
matters or to update Teachers' with respect to such matters.
(e) REPRESENTATIVES. One or more of the Representatives are members of the
Board of Directors of CanOxy. Occidental and such Representatives may
have received, or may in the future receive, material non-public
information regarding CanOxy and its condition (financial and
otherwise), results of operations, businesses, properties, plans and
prospects, which Occidental and such Representatives are not permitted
to disclose. Teachers' acknowledges and agrees that neither Occidental
nor any of its Representatives have any obligation to disclose any
such information to Teachers'. Teachers' waives and releases, to the
fullest extent permitted by law, any and all claims, causes of action
and remedies Teachers' has or may have against Occidental and its
Representatives based upon, relating to or
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arising out of nondisclosure of such information. Provided that
nothing in this section 4.C(e) shall limit or qualify any
representation or warranty given by Occidental to Teachers' in the
agreement or affect any rights of Teachers' pursuant to this agreement
or to take any action in respect of this agreement.
(f) RESTRICTED SECURITIES. Teachers' acknowledges that if Occidental is an
affiliate of CanOxy for the purposes of the U.S. Securities Act of
1933, as amended (the "Securities Act"), on the Closing Date, the
Teachers' Purchased Shares are restricted securities under the
Securities Act and the rules and regulations promulgated thereunder,
and are being acquired from Occidental in a transaction not involving
any public offering. Teachers' is acquiring the Teachers' Purchased
Shares as principal, for investment purposes, and not with a view to,
or for resale in connection with, any distribution of the CanOxy
Shares, other than resales contemplated by this agreement. Teachers'
agrees not to resell the Teachers' Purchased Shares except pursuant to
registration under the Securities Act or an applicable exemption
therefrom (including Rule 144 and Regulation S).
D. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
The representations, warranties, covenants and agreements of CanOxy,
Occidental and Teachers' contained in this agreement shall merge upon, and shall
not survive, the closing of the acquisitions contemplated in section 2, except
for:
(a) the representations and warranties in sections 4.A(b), (c) and (e),
sections 4.B(b), (c), (d) and (e) and section 4.C(b), which shall
survive indefinitely, and the representations and warranties in
sections 4.A(d) and (f) and section 4.C(d), (e) and (f) which shall
survive for one year after the Closing; and
(b) the covenants contained in section 5.A and section 6, which shall
survive indefinitely.
5. IMPLEMENTATION
A. GENERAL.
Each of CanOxy, Occidental and Teachers' shall use all reasonable
efforts to satisfy each of the conditions precedent to be satisfied by it, as
soon as practical and in any event before the Closing Date, and to take, or
cause to be taken, all other action and to do, or cause to be done, all other
things necessary, proper or advisable to permit the completion of the
transactions contemplated in this agreement in accordance with this agreement,
and applicable Law and to co-operate with each other in connection therewith,
including using all reasonable efforts to effect or cause to be effected all
necessary registrations and filings and submissions of information requested of
it by Agencies, the failure of which to effect would prevent the completion of
this agreement or could reasonably be expected to be materially adverse to
CanOxy, Occidental or Teachers'.
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B. ACCESS TO INFORMATION.
Until the Closing Date, CanOxy shall continue to afford to Teachers'
and its representatives and its officers, employees and agents, access to the
businesses, properties, assets, officers, employees, agents, books and records
of CanOxy and its subsidiaries relevant to the transactions contemplated by this
agreement in a manner consistent with the access afforded to Teachers' in the
period between that date of the Confidentiality Agreement and the date of this
agreement.
C. SHAREHOLDER MEETING.
CanOxy will duly call and hold a meeting of its shareholders for the
purpose of obtaining the approval referred to in section 3.A(b) as soon as
practicable (and in any event not later than May 15, 2000) and in connection
therewith the directors of CanOxy will recommend, and the management of CanOxy
will solicit proxies in favour of, such approval.
6. ONGOING OBLIGATIONS
A. BOARD OF DIRECTORS.
From the Closing Date, so long as Teachers' continuously holds
(directly and indirectly) at least 10% of the outstanding common shares of
CanOxy, Teachers' shall be allowed one board member's position on the CanOxy
board. If, immediately after the time any person is to be elected or appointed
as a director of CanOxy the person last nominated by Teachers' to serve as a
member of the board would not be a director of CanOxy, at least 20 business days
before the date of notice of the meeting at which a director is to be elected or
appointed, CanOxy shall deliver to Teachers' a list of those directors who are
proposed for election or appointment. Teachers' shall, in its sole discretion,
have the right (by delivery of a written notice to CanOxy within 10 business
days of receipt from CanOxy of the proposed list) to designate one individual to
the list of persons to be nominated by CanOxy (or its management, as the case
may be) to serve as a member of the board of directors of CanOxy upon completion
of that process of election or appointment. CanOxy shall use all reasonable
efforts (including naming that nominee in the slate of directors proposed in
materials sent by CanOxy to its shareholders) to cause the nominee of Teachers'
to be elected or appointed to the board of directors.
B. REGISTRATION RIGHTS.
CanOxy shall afford Teachers' registration rights on the basis set out
in Schedule "A" commencing on the Closing Date.
C. OCCIDENTAL STANDSTILL.
During the period of one year following the Closing Date, Occidental
and its Affiliates (including any person or entity, directly or indirectly,
through one or more intermediaries, controlled by or under common control with
Occidental and any other person or
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entity formed or organized for the purpose of a transaction described below in
which Occidental or its affiliates participate) shall not, without the prior
written authorisation of Teachers':
(a) acquire, agree to acquire, make any proposal to acquire or assist any
person in acquiring, in any manner, any common shares of CanOxy or any
securities convertible into or exchangeable for common shares of
CanOxy in an amount that would require disclosure pursuant to Section
13d of the United States Securities Exchange Act of 1934, as amended;
or
(b) solicit proxies of CanOxy's shareholders, or form, join or in any way
participate in a proxy group.
D. USE OF NAME AND MARKS
CanOxy agrees to: (a) use its commercially reasonable efforts to
eliminate the name "Occidental" from its name and the names of its subsidiaries
as promptly as practicable after the Closing Date; (b) cease using the
"Occidental" and "Oxy" names and marks within eighteen months after the Closing;
and (c) use the "Occidental" and "Oxy" names and marks during the period
specified in section 6.D(b) only in the manner in which they were used by CanOxy
immediately prior to the Closing.
CanOxy further agrees that all uses of the "Occidental" and "Oxy"
names and marks by CanOxy shall be controlled by and inure to the benefit of
Occidental and that Occidental shall retain sole and exclusive ownership rights
in the names and marks.
7. TERMINATION AND AMENDMENT OF AGREEMENT
A. TERMINATION.
The provisions of this agreement may be terminated at any time before
the Closing:
(a) by agreement in writing executed by CanOxy, Occidental and Teachers';
(b) by CanOxy, at any time after May 16, 2000, if the conditions provided
in sections 3.A and B have not been satisfied on or before that date;
(c) by Occidental, at any time after May 16, 2000, if the conditions
provided in sections 3.A and C have not been satisfied on or before
that time; and
(d) by Teachers', at any time after May 16, 2000, if the conditions
provided in sections 3.A and D have not been satisfied on or before
that date.
B. AMENDMENT.
This agreement and any rights under Schedule "A" may be amended only
by written agreement of the parties at any time.
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8. CONFIDENTIALITY AND PUBLIC DISCLOSURE
Prior to the first public announcement of this agreement and the
transactions that it contemplates, disclosure of this agreement, its terms and
conditions and the transactions that it contemplates shall be made only:
(a) with the approval of CanOxy, Occidental and Teachers', which approval
shall not be withheld unreasonably, may be oral, and may be given on
behalf of a party by its counsel;
(b) as required by any Law or Agency; or
(c) as may be necessary to implement this agreement.
9. ONGOING CONSULTING
The parties shall at all times consult with the others as to the
timing and wording of press releases and other public disclosure of or relating
to this agreement or the transactions that it contemplates; provided however
that each of the parties acknowledges and agrees that no such consultation shall
delay or otherwise restrict any other party's obligation under applicable Law to
file this agreement and disclose its contents in filings with securities or
other applicable regulatory authorities or stock exchanges.
10. GENERAL
A. ASSIGNMENT.
This agreement and any rights under Schedule "A" shall not be
assignable by any party; provided this shall not in any way limit the rights of
nominees of Teachers' under Schedule "A" as provided in that Schedule.
B. BINDING EFFECT.
This agreement shall be binding upon and shall enure to the benefit of
and be enforceable by the parties hereto and their respective successors and
permitted assigns.
C. RESPONSIBILITY FOR EXPENSES.
Except as otherwise expressly provided in this agreement, each party
to this agreement shall pay its own expenses incurred in connection with this
agreement and the completion of the transactions that it contemplates including,
but not limited to, the fees and expenses of its legal and financial advisors,
and any commission, fee or other remuneration payable by such party or any of
its subsidiaries to any broker or agent who purports or may purport to act or
have acted for such party or any of its subsidiaries in connection with the
transactions contemplated in this agreement.
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D. TIME.
Time shall be of the essence of this agreement in each and every
matter or thing herein provided.
E. NOTICES.
Any notice or other communications required or permitted to be given
hereunder shall be sufficiently given if delivered in person or if sent by
facsimile transmission (provided such transmission is recorded as being
transmitted successfully):
(i) in the case of CanOxy, to the following address:
Canadian Occidental Petroleum Ltd.
▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
(ii) in the case of Occidental, to the following address:
Occidental Petroleum Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
With a copy to: Occidental Petroleum Corporation
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(iii) in the case of Teachers', to the following address:
Ontario Teachers' Pension Plan Board
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
or at such other address as the party to which such notice or other
communication is to be given has last notified the party giving the same in the
manner provided in this section, and if so given the same shall be deemed to
have been received on the date of such delivery or sending.
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F. GOVERNING LAW.
This agreement and the rights, obligations and relations of the
parties shall be governed by and construed in accordance with the Laws of the
Province of Alberta (but without giving effect to the conflict of laws rules
thereof) and the Laws of Canada applicable therein. Each party hereto agrees
that the courts of the Province of Alberta shall have jurisdiction to entertain
any action or other legal proceedings based on any provisions of this agreement.
Each party does irrevocably attorn to the jurisdiction of the courts of the
Province of Alberta.
G. CURRENCY.
Except as expressly indicated otherwise, all sums of money referred to
in this agreement are expressed and shall be paid in Canadian dollars.
H. ENTIRE AGREEMENT.
With respect to the subject matter of this agreement, this agreement
and the Confidentiality Agreement:
(a) set forth the entire agreement between the parties.
(b) supersede all prior understandings and communications between the
parties, oral or written.
I. COUNTERPARTS.
This agreement may be signed in any number of counterparts (by
facsimile or otherwise), each of which shall be deemed to be original and all of
which, when taken together, shall be deemed to constitute one and the same
instrument. It shall not be necessary in making proof of this agreement to
produce more than one counterpart.
J. WAIVER.
The failure of either party to enforce at any time any of the
provisions of this agreement or any of its rights in respect thereto or to
insist upon strict adherence to any term of this agreement shall not be
considered to be a waiver of such provision, right or term or in any way to
affect the validity of this agreement or deprive the applicable party of the
right thereafter to insist upon strict adherence to that term or any other term
of this agreement. The exercise by either party of any of its rights provided by
this agreement shall not preclude or prejudice such party from exercising any
other right it may have under this agreement, irrespective of any previous
action or proceeding taken by it hereunder. Any waiver by either party of the
performance of any of the provisions of this agreement shall be effective only
if in writing and signed by a duly authorized representative of such party.
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K. SEVERABILITY.
If any provision of this agreement is invalid or unenforceable, such
provision shall be severed and the remainder of this agreement shall be
unaffected thereby, but shall continue to be valid and enforceable to the
fullest extent permitted by law.
L. WAIVER OF CONFIDENTIALITY AGREEMENT.
CanOxy and Teachers' hereby agree to waive section 13 of the
Confidentiality Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF the parties have hereunto duly executed this
agreement on the date first above written.
CANADIAN OCCIDENTAL PETROLEUM LTD.
Per: ▇. ▇. ▇▇▇▇▇
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Authorized Signatory
Per:
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Authorized Signatory
OCCIDENTAL PETROLEUM CORPORATION
Per: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Authorized Signatory
ONTARIO TEACHERS' PENSION PLAN BOARD
Per: ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Authorized Signatory