EXHIBIT 2
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
▇▇▇▇▇▇ INTERNATIONAL HOLDINGS PTY LTD.
▇▇▇▇▇▇ ACQUISITION CO.
AND
TIPPERARY CORPORATION
DATED AS OF
JULY 4, 2005
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TABLE OF CONTENTS
Page
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ARTICLE I [RESERVED].............................................................. 1
ARTICLE II THE MERGER............................................................. 2
2.1 The Merger............................................................ 2
2.2 Effective Time........................................................ 2
2.3 Effects of the Merger................................................. 2
2.4 Articles of Incorporation and Bylaws.................................. 2
2.5 Directors and Officers of the Surviving Corporation................... 3
2.6 The Shareholders' Meeting............................................. 3
2.7 Board of Directors.................................................... 4
ARTICLE III CONVERSION OF SECURITIES.............................................. 6
3.1 Effect on Capital Stock............................................... 6
3.2 Surrender and Payment................................................. 7
3.3 Treatment of Stock Options and Warrants............................... 10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................... 10
4.1 Organization.......................................................... 10
4.2 Capitalization........................................................ 11
4.3 Authorization; Validity of Agreement.................................. 12
4.4 No Violations; Approvals.............................................. 13
4.5 SEC Reports and Financial Statements.................................. 14
4.6 Absence of Certain Changes............................................ 15
4.7 Absence of Undisclosed Liabilities.................................... 15
4.8 Information to Be Supplied............................................ 16
4.9 Employee Benefit Plans; ERISA......................................... 16
4.10 Litigation; Compliance with Law....................................... 20
4.11 Intellectual Property................................................. 21
4.12 Material Contracts.................................................... 21
4.13 Properties............................................................ 22
4.14 Taxes................................................................. 23
4.15 Environmental Matters................................................. 24
4.16 Investment Company.................................................... 26
4.17 Public Utility Holding Company Act.................................... 26
4.18 Required Vote by Company Shareholders................................. 26
4.19 Brokers............................................................... 26
4.20 Article 13.03 of the TBCA............................................. 27
4.21 Oil and Gas........................................................... 27
4.22 Recommendation of Company Board of Directors; Opinion of Financial ... 28
4.23 Affiliate Transactions................................................ 28
4.24 Derivative Transactions and Hedging................................... 29
4.25 Insurance............................................................. 29
4.26 No Other Representations or Warranties................................ 29
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MERGER SUB.............. 29
5.1 Organization.......................................................... 29
5.2 Authorization; Validity of Agreement.................................. 30
5.3 Consents and Approvals; No Violations................................. 30
5.4 Information to be Supplied............................................ 31
5.5 Interim Operations of Merger Sub...................................... 31
5.6 Financing............................................................. 31
5.7 Beneficial Ownership of Shares........................................ 31
5.8 Brokers............................................................... 32
5.9 No Other Representations or Warranties................................ 32
ARTICLE VI COVENANTS.............................................................. 32
6.1 Interim Operations of the Company..................................... 32
6.2 Acquisition Proposals................................................. 34
6.3 Access to Information................................................. 38
6.4 Further Action; Reasonable Best Efforts............................... 38
6.5 Directors' and Officers' Insurance and Indemnification................ 39
6.6 Publicity............................................................. 40
6.7 Merger Sub............................................................ 40
6.8 Employee Benefits..................................................... 40
6.9 Other Covenants of Purchaser and Merger Sub........................... 41
ARTICLE VII CONDITIONS TO MERGER.................................................. 42
7.1 Conditions to Each Party's Obligation To Effect the Merger............ 42
ARTICLE VIII TERMINATION.......................................................... 43
8.1 Termination........................................................... 43
8.2 Effect of Termination................................................. 44
ARTICLE IX MISCELLANEOUS.......................................................... 45
9.1 Fees and Expenses..................................................... 45
9.2 Amendment; No Waiver.................................................. 45
9.3 Survival.............................................................. 46
9.4 Notices............................................................... 46
9.5 Interpretation; Definitions........................................... 47
iii
9.6 Headings; Schedules................................................... 52
9.7 Counterparts.......................................................... 52
9.8 Entire Agreement...................................................... 52
9.9 Severability.......................................................... 52
9.10 Governing Law......................................................... 52
9.11 Assignment............................................................ 52
9.12 Parties in Interest................................................... 53
iv
TABLE OF DEFINED TERMS
Acceptable Confidentiality Agreement...... 48
Acquisition Agreement..................... 35
Acquisition Proposal...................... 37
affiliates................................ 48
Agreement................................. 1
Applicable Laws........................... 9
Article 5.12.............................. 6
Articles of Incorporation................. 3
Articles of Merger........................ 2
beneficial ownership...................... 48
Board..................................... 1
Business Day.............................. 48
Bylaws.................................... 3
Certificate............................... 6
Certificate of Merger..................... 2
Closing................................... 2
Closing Date.............................. 2
COBRA..................................... 18
Code...................................... 48
Comet Ridge Joint Venture................. 48
Company................................... 1
Company Adverse Recommendation Change..... 36
Company Articles.......................... 3
Company Assets............................ 49
Company Balance Sheet..................... 16
Company Bylaws............................ 3
Company Common Stock...................... 1
Company Cumulative Preferred Stock........ 11
Company Disclosure Letter................. 10
Company Employee.......................... 41
Company Material Contracts................ 22
Company Non-Cumulative Preferred Stock.... 11
Company Notice............................ 36
Company Preferred Stock................... 11
Company Properties........................ 23
Company Property.......................... 23
Company SEC Documents..................... 14
Confidentiality Agreement................. 49
Cut-Off Time.............................. 11
Derivative Transaction.................... 49
Dissenting Shares......................... 7
Effective Time............................ 2
Environmental Claim....................... 49
Environmental Laws........................ 49
ERISA..................................... 17
ERISA Affiliate........................... 17
ERISA Plan................................ 17
Exchange Act.............................. 14
Exchange Fund............................. 8
Form 15 Date.............................. 42
GAAP...................................... 15
Governmental Entity....................... 13
Hazardous Substance....................... 50
HLHZ...................................... 27
Hydrocarbons.............................. 27
Indemnitees............................... 39
Independent Directors..................... 5
Intellectual Property..................... 21
IPA....................................... 1
knowledge................................. 50
Leased Properties......................... 23
Leased Property........................... 23
Liens..................................... 12
Litigation................................ 50
Material Adverse Effect................... 50
Merger.................................... 1
Merger Consideration...................... 7
Merger Sub................................ 1
Merger Sub Common Stock................... 6
▇▇▇▇▇▇▇................................... 32
Oil and Gas Properties.................... 51
Outside Date.............................. 44
Owned Properties.......................... 23
Owned Property............................ 22
Parent.................................... 2
Paying Agent.............................. 7
PBGC...................................... 17
Permitted Exceptions...................... 51
Person.................................... 51
Plans..................................... 17
Proxy Statement........................... 3
Purchaser................................. 1
Release................................... 51
Required Vote............................. 26
Reserve Report............................ 27
Return.................................... 51
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SEC....................................... 3
SEC Staff................................. 3
Secretary of State........................ 2
Securities Act............................ 14
SGAA...................................... 19
Shareholders' Meeting..................... 3
SIS....................................... 19
Specified Company SEC Documents........... 15
Stock Option Agreements................... 10
Stock Options............................. 10
Subsidiary................................ 51
Superior Proposal......................... 37
Surviving Corporation..................... 2
SUSA...................................... 1
Tax....................................... 52
Taxes..................................... 52
TBCA...................................... 1
Termination Fee........................... 45
Third Party Acquisition Event............. 52
TOGA...................................... 52
TOGA Credit Facility...................... 52
Unit...................................... 52
Warrant Agreements........................ 10
Warrants.................................. 10
Well...................................... 52
vi
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of
July 4, 2005 (this "Agreement"), by and among Tipperary Corporation, a Texas
corporation (the "Company"), ▇▇▇▇▇▇ International Holdings Pty Ltd., a
corporation incorporated under the laws of the Australian Capital Territory
A.B.N. 57 057 585 869 ("Purchaser"), and ▇▇▇▇▇▇ Acquisition Co., a Texas
corporation and wholly-owned Subsidiary of Purchaser ("Merger Sub"), and amends
and restates in entirety the Agreement and Plan of Merger, dated as of July 1,
2005, by and among the Company, Purchaser and Merger Sub.
WHEREAS, the Boards of Directors of each of the Company, Purchaser
and Merger Sub have each approved this Agreement and the merger of the Company
with and into Merger Sub (the "Merger "), upon the terms and subject to the
conditions set forth in this Agreement and in accordance with the Texas Business
Corporation Act, as amended (the "TBCA";
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that the Merger is fair to, and in the best interest of, its
shareholders; and
WHEREAS, on July 4, 2005, Slough Estates USA, Inc., a Delaware
corporation ("SUSA"), the beneficial owner of approximately 53.64% of the issued
and outstanding common stock, U.S.$0.02 par value, of the Company (the "Company
Common Stock"), simultaneously with the execution and delivery of this
Agreement, and as a condition and inducement to Purchaser's willingness to enter
into this Agreement, Slough Estates plc, a public limited company organized
under the laws of England and Wales and the ultimate parent of SUSA, entered
into an Amended and Restated Interest Purchase Agreement (the "IPA") with
Purchaser providing for certain matters with respect to its shares of Company
Common Stock and certain other actions relating to the Merger and the other
transactions contemplated by this Agreement, and this IPA amended and restated
in its entirety the Interest Purchase Agreement, dated as of July 1, 2005, by
and between Slough Estates plc and Purchaser.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
[RESERVED]
1
ARTICLE II
THE MERGER
2.1 The Merger.
Upon the terms and subject to the conditions of this Agreement, and
in accordance with the provisions of the TBCA, ▇▇▇▇▇▇ Ltd., a corporation
incorporated under the laws of South Australia ("Parent"), shall cause Merger
Sub to be merged with and into the Company at the Effective Time. As a result of
the Merger, the separate corporate existence of Merger Sub shall cease and the
Company shall continue its existence as a wholly owned Subsidiary of Purchaser.
The Company, in its capacity as the corporation surviving the Merger, is
hereinafter sometimes referred to as the "Surviving Corporation". Without
limiting the generality of the foregoing, upon the Merger, all the rights,
privileges, immunities, powers and franchises of the Company and Merger Sub
shall vest in the Surviving Corporation and all the obligations, duties, debts
and liabilities of the Company and Merger Sub shall be the obligations, duties,
debts and liabilities of the Surviving Corporation.
2.2 Effective Time.
As promptly as possible on the Closing Date, the parties hereto
shall cause the Merger to be consummated by delivering to the Secretary of State
of the State of Texas (the "Secretary of State") articles of merger (the
"Articles of Merger") in such form as is required by and executed in accordance
with Article 5.04 of the TBCA. The Merger shall become effective when a
certificate of merger (the "Certificate of Merger") is issued to the Surviving
Corporation by the Secretary of State or at such later time as shall be agreed
upon by Purchaser and the Company and specified in the Articles of Merger (the
"Effective Time"). Prior to the filing referred to in this Section 2.2 and
unless this Agreement shall have been terminated and the transactions
contemplated herein abandoned pursuant to Section 8.1, a closing (the "Closing")
shall be held at 10:00 a.m., Houston time, on a date to be specified by the
parties hereto, which shall be no later than the Business Day after satisfaction
or waiver (by the party entitled to waive the condition) of all of the
conditions set forth in Article VII (except for those conditions that can by
their nature be satisfied only at the time of the Closing), but subject to the
satisfaction or waiver of those conditions) (the "Closing Date"), at the offices
of Chamberlain, Hrdlicka, White, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, unless another date and/or place is agreed to in
writing by the parties hereto.
2.3 Effects of the Merger.
From and after the Effective Time, the Merger shall have the effects
set forth in Article 5.06 of the TBCA.
2.4 Articles of Incorporation and Bylaws.
Pursuant to the Merger, (a) the Company's Articles of Incorporation,
as in effect on the date of this Agreement (the "Company Articles"), shall be
the Articles of
2
Incorporation of the Surviving Corporation (the "Articles of Incorporation")
until thereafter changed or amended as provided therein or by Applicable Law,
and (b) the Company's Bylaws, as in effect on the date of this Agreement (the
"Company Bylaws"), shall be the Bylaws of the Surviving Corporation (the
"Bylaws") until thereafter changed or amended as provided therein or by
Applicable Law.
2.5 Directors and Officers of the Surviving Corporation.
From and after the Effective Time, (a) the directors of Merger Sub
immediately prior to the Effective Time shall, from and after the Effective
Time, be the directors of the Surviving Corporation until their successors shall
have been duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Articles of Incorporation and the
Bylaws and (b) the officers of Merger Sub immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation and shall hold
office until their respective successors are duly elected and qualified, or
their earlier death, resignation or removal.
2.6 The Shareholders' Meeting.
(a) As promptly as practicable after the execution of this
Agreement, the Company shall, in accordance with Applicable Law and the Company
Articles and the Company Bylaws:
(i) duly call, give notice of, convene and hold a
special meeting of the holders of shares of Company Common Stock for the
sole purpose of considering and voting upon approval of the Merger, this
Agreement and the transactions contemplated by this Agreement (such
meeting, including any postponement or adjournment thereof, is referred to
as the "Shareholders' Meeting"), and shall use its reasonable best efforts
to hold the Shareholders' Meeting no later than 45 days after such date;
and
(ii) prepare and file with the Securities and Exchange
Commission (the "SEC") a preliminary proxy or information statement
relating to this Agreement, and take all lawful actions to obtain and
furnish the information required to be included by the SEC in the Proxy
Statement, and, after consultation with Purchaser, to respond promptly to
any comments made by the SEC or the staff of the SEC (the "SEC Staff")
with respect to the preliminary proxy or information statement and cause a
definitive proxy or information statement (together with any amendments or
supplements thereto, the "Proxy Statement") to be mailed to the holders of
shares of Company Common Stock as soon as practicable, which Proxy
Statement shall include all information required under Applicable Laws to
be furnished to the holders of shares of Company Common Stock in
connection with the Merger and the transactions contemplated by this
Agreement; and
3
(iii) include in the Proxy Statement the recommendation
of the Board to the extent not previously withdrawn in compliance with
Section 6.2(e).
(b) The Company shall promptly notify Purchaser of any
comments from the SEC Staff with respect to the Proxy Statement or any request
of the SEC Staff for additional information and shall supply Purchaser with
copies of all correspondence between the Company or its representatives, on the
one hand, and the SEC Staff, on the other hand, with respect to the Proxy
Statement.
(c) Except as otherwise provided in Section 6.2, the Company,
acting through the its board of directors, shall (i) recommend adoption of this
Agreement and include in the Proxy Statement such recommendation and (ii) use
its reasonable best efforts to solicit and obtain such adoption. Notwithstanding
any Company Adverse Recommendation Change or the commencement, public proposal,
public disclosure or communication to the Company of any Acquisition Proposal
with respect to the Company or any of its Subsidiaries, or any other fact or
circumstance, the Company shall submit this Agreement to the shareholders of the
Company at the Shareholders' Meeting for the purpose of adopting this Agreement,
with such disclosures as shall be required by Applicable Law. At any such
Shareholders' Meeting following any such withdrawal, amendment or modification
of the recommendation of this Agreement by the Company's board of directors, the
Company may submit this Agreement to its shareholders without a recommendation
or with a negative recommendation (although the approval of this Agreement by
the Company's board of directors may not be rescinded or amended), in which
event the Company's board of directors may communicate the basis for its lack of
a recommendation or negative recommendation to its shareholders in the Proxy
Statement or an appropriate amendment or supplement thereto.
(d) Purchaser and Merger Sub hereby agree to vote all shares
of Company Common Stock held by them in favor of the Merger at the Shareholders
Meeting.
2.7 Board of Directors.
(a) Promptly following the closing of the Transfer (as defined
in the IPA) and for so long thereafter as Purchaser and/or Merger Sub own in
aggregate more than fifty percent (50%) of the Company Common Stock, and subject
to Section 2.7(c), Merger Sub shall be entitled to designate up to such number
of directors, rounded up to the nearest whole number constituting at least a
majority of the directors, on the Board (and on each board or other governing
body of the Company's Subsidiaries) as will give Merger Sub representation on
the Board (and on each board or other governing body of the Company's
Subsidiaries) equal to the product of the number of directors on the Board (and
on each board or other governing body of the Company's Subsidiaries) (giving
effect in the case of the Board to any increase in the number of directors
pursuant to this Section 2.3) and the percentage that such number of shares of
Company Common Stock so purchased bears to the total number of outstanding
shares of Company Common Stock, and the Company shall use all reasonable efforts
to, upon Merger Sub's request,
4
promptly, at Merger Sub's election, in accordance with Article 2.34 of the TBCA,
increase the size of the Board (and each board or other governing body of the
Company's Subsidiaries) and/or secure the resignation of such number of
directors as is necessary to enable Merger Sub's designees to be elected to the
Board (and to each board or other governing body of the Company's Subsidiaries)
and to cause Merger Sub's designees to be so elected. At such times, subject to
Section 2.7(c), the Company will cause individuals designated by Merger Sub to
constitute a majority of each committee of the Board (and each board or other
governing body of the Company's Subsidiaries), other than the special committee
of the Board established to take action under this Agreement which committee
shall be composed only of Independent Directors (as defined below). The
provisions of this Section 2.7(a) are in addition to and not in limitation of
any rights which Merger Sub, Purchaser or any of their affiliates may otherwise
have, subject to the terms of this Section 2.7, as a holder or beneficial owner
of shares of Company Common Stock.
(b) The Company's obligation to appoint designees to the Board
shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder.
The Company promptly shall take all action required pursuant to Section 14(f) of
the Exchange Act and Rule 14f-1 thereunder in order to fulfill its obligations
under this Section 2.7, provided, that, Merger Sub shall have timely provided to
the Company the information and consents with respect to Merger Sub and its
designees, officers, directors and affiliates required by Section 14(f) of the
Exchange Act and Rule 14f-1 thereunder. Merger Sub will supply to the Company in
writing any information with respect to itself and its nominees, officers,
directors and affiliates required under the Exchange Act pursuant to Section
14(f) of the Exchange Act and Rule 14f-1 thereunder.
(c) In the event that Merger Sub's designees are elected or
designated to the Board, then, until the Effective Time, the Company shall cause
the Board to have at least seven directors, including at least three directors
who are directors on the date of this Agreement and who are not officers of the
Company or any of its Subsidiaries (such directors, the "Independent
Directors"); provided, however, that, if any Independent Director is unable to
serve due to death or disability or any other reason, the remaining Independent
Directors shall be entitled to elect or designate another individual (or
individuals) who serve(s) as a director (or directors) on the date of this
Agreement (provided that no such individual is an employee of the Company or its
Subsidiaries) to fill the vacancy, and such director (or directors) shall be
deemed to be an Independent Director (or Independent Directors) for purposes of
this Agreement. If no Independent Director then remains, the other directors
shall designate three individuals who are directors on the date of this
Agreement, provided that such individuals shall not be employees, officers or
affiliates of the Company, Purchaser or Merger Sub (or, in the event there shall
be less than two directors available to fill the vacancies as a result of such
individuals' deaths, disabilities or refusals to serve, such smaller number of
individuals who are directors on the date of this Agreement) to fill the
vacancies and such directors shall be deemed Independent Directors for purposes
of this Agreement. Prior to the Effective Time, Purchaser and Merger Sub shall
cause any amendment of this Agreement, any termination of this Agreement by the
Company, any extension by the Company of the time for the performance of any of
the obligations or other acts of
5
Merger Sub or Purchaser or waiver of any of the Company's rights under this
Agreement, not to be effected without the affirmative vote of a majority of the
Independent Directors; provided, however, that if there shall be no Independent
Directors then in office, such actions may be authorized by a majority vote of
the Board in accordance with the terms and conditions of this Agreement.
ARTICLE III
CONVERSION OF SECURITIES
3.1 Effect on Capital Stock.
At the Effective Time, by virtue of the Merger and without any
action on the part of Purchaser, Merger Sub or the Company or their respective
shareholders and shareholders, as applicable:
(a) Each share of common stock, par value U.S.$1.00 per share,
of Merger Sub ("Merger Sub Common Stock") issued and outstanding immediately
prior to the Effective Time shall be converted into one fully paid and
nonassessable share of common stock, par value U.S.$0.02 per share, of the
Surviving Corporation. Such newly issued shares shall thereafter constitute all
of the issued and outstanding Surviving Corporation capital stock.
(b) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time, excluding any shares of Company Common
Stock owned by Purchaser, Merger Sub or the Company or any of their respective
Subsidiaries or any shareholders properly exercising rights to dissent pursuant
to Article 5.12 of the TBCA ("Article 5.12"), as provided in Section 3.1(d),
shall be converted into and represent the right to receive in cash, without
interest, an amount equal to the Merger Consideration. At the Effective Time,
all shares of Company Common Stock shall no longer be outstanding and
automatically shall be cancelled and shall cease to exist, and each holder of a
certificate that immediately prior to the Effective Time represented any shares
of Company Common Stock (a "Certificate") shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration or in the
case of holders of Dissenting Shares the right to receive the applicable
payments set forth in Section 3.1(d).
(c) Each share of the Company capital stock held in the
treasury of the Company automatically shall be cancelled and retired and no
payment shall be made in respect thereof. Each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time that is owned by
Purchaser or any of its Subsidiaries shall be cancelled and retired and no
payment shall be made in respect thereof.
(d) Notwithstanding anything in this Agreement to the
contrary, the shares of Company Common Stock issued and outstanding immediately
prior to the Effective Time that are held by any holder of Company Common Stock
that is entitled to
6
demand and properly demands payment of the fair value of such shares of Company
Common Stock pursuant to, and that complies in all respects with, the provisions
of Article 5.12 (the "Dissenting Shares") shall not be converted into the right
to receive the Merger Consideration as provided in Section 3.1(b), but, instead,
such holder of Company Common Stock shall be entitled to such rights (but only
such rights) as are granted by Article 5.12. At the Effective Time, all
Dissenting Shares shall no longer be outstanding and automatically shall be
cancelled and shall cease to exist, and, except as otherwise provided by
Applicable Laws, each holder of Dissenting Shares shall cease to have any rights
with respect to the Dissenting Shares, other than such rights as are granted by
Article 5.12. Notwithstanding the foregoing, if any such holder of shares of
Company Common Stock (i) shall have failed to establish entitlement to relief as
a dissenting shareholder as provided in Article 5.12, (ii) shall have
effectively withdrawn demand for relief as a dissenting shareholder with respect
to such Dissenting Shares or lost the right to relief as a dissenting
shareholder and payment for such Dissenting Shares under Article 5.12, or (iii)
shall have failed to file a complaint with the appropriate court seeking relief
as to the determination of the value of all such Dissenting Shares within the
time provided in Article 5.12, such holder of Company Common Stock shall forfeit
or, in the event a court of competent jurisdiction shall determine that holder
of Company Common Stock is not entitled to the relief provided by Article 5.12,
lose the right to relief as a dissenting shareholder with respect to such
Dissenting Shares, and such Dissenting Shares shall be deemed to have been
converted at the Effective Time into, and shall have become, the right to
receive the Merger Consideration as provided in Section 3.1(b) without interest.
The Company shall give prompt notice to Purchaser of any demands for appraisal
of any shares of Company Common Stock and any attempted withdrawals of such
demands and any other instruments served pursuant to the TBCA and received by
the Company relating to shareholder dissent rights, and Purchaser shall have the
opportunity to participate in all negotiations and proceedings with respect to
such demands. Prior to the Effective Time, the Company shall not, without the
prior written consent of Purchaser, make any payment with respect to, or settle
or offer to settle, any such demands, or agree to do any of the foregoing.
(e) The "Merger Consideration" shall be an amount equal to
$7.43 cash per share of Company Common Stock.
3.2 Surrender and Payment.
(a) Paying Agent and Exchange Fund. Prior to the Effective
Time, on behalf of the holders of shares of Company Common Stock, Purchaser
shall designate, or shall cause to be designated ▇▇▇▇▇▇ Guaranty & Trust Co. or
another bank or trust company reasonably acceptable to the Company to act as
agent for the payment of the Merger Consideration in respect of Certificates,
upon surrender of such Certificates in accordance with this Article III from
time to time after the Effective Time (the "Paying Agent"). Prior to the
Effective Time, Parent shall deposit, or cause Purchaser or Merger Sub to
deposit, with the Paying Agent cash in amounts sufficient for the payment of the
Merger Consideration pursuant to Section 3.1(b) upon surrender of such
Certificates (such cash, the "Exchange Fund"). The Paying Agent shall invest any
cash included in the Exchange Fund, as directed by Purchaser, on a daily basis,
provided that no such
7
investment shall affect Purchaser's obligation to pay the Merger Consideration
in accordance with the terms of this Agreement. Any portion of the Exchange Fund
(including any interest and other income resulting from investments of the
Exchange Fund) that remains undistributed to the holders of shares of Company
Common Stock one year after the date of the mailing required by Section 3.2(b)
shall be delivered to Purchaser, upon demand by Purchaser, and holders of
Certificates that have not theretofore complied with this Section 3.2 shall
thereafter look only to Purchaser for payment of any claim to the Merger
Consideration.
(b) Exchange Procedure. As soon as reasonably practicable
after the Effective Time, Purchaser shall instruct the Paying Agent to mail to
each holder of record of a Certificate which immediately prior to the Effective
Time represented outstanding shares of Company Common Stock (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates held by such holder of Company Common Stock
shall pass, only upon proper delivery of the Certificates to the Paying Agent
and shall be in such form and have such other provisions as Purchaser may
reasonably specify), and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be reasonably appointed by Purchaser, together with such letter of
transmittal, duly completed and validly executed, and such other documents as
may reasonably be required by the Paying Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor the amount of cash into which
the shares of Company Common Stock formerly represented by the Certificate shall
have been converted pursuant to Section 3.1(b), and the Certificate so
surrendered shall be cancelled. In the event of a transfer of ownership of
Company Common Stock that is not registered in the stock transfer books of the
Company, the proper amount of cash may be paid in exchange therefor to a Person
other than the Person in whose name the Certificate so surrendered is registered
if the Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the Person requesting such payment shall pay any transfer or other
Taxes required by reason of the payment to a Person other than the registered
holder of the Certificate or establish to the reasonable satisfaction of
Purchaser that the Tax has been paid or is not applicable. No interest shall be
paid or shall accrue on any Merger Consideration, cash in lieu of fractional
shares or on any unpaid dividends and distributions payable to holders of
Certificates. In the event of a transfer of ownership of shares of Company
Common Stock that is not registered in the transfer records of the Company, the
Merger Consideration payable in respect of such shares of Company Common Stock
may be paid to a transferee if the Certificate representing such shares of
Company Common Stock is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and the Person
requesting such exchange shall pay to the Exchange Agent in advance any transfer
or other Taxes required by reason of the delivery of the Merger Consideration in
any name other than that of the registered holder of the Certificate
surrendered, or required for any other reason, or shall establish to the
satisfaction of the Exchange Agent that such Tax has been paid or is not
payable. Until surrendered as contemplated by this Section 3.1, each Certificate
shall be deemed at any time after the Effective Time to represent only the right
to receive upon such surrender
8
the Merger Consideration payable in respect of the shares of Company Common
Stock represented by such Certificate.
(c) Stock Transfer Books. At the close of business on the day
on which the Effective Time occurs, the stock transfer books of the Company
shall be closed, and there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the shares of Company
Common Stock that were outstanding immediately prior to the Effective Time. If,
after the Effective Time, any Certificates are presented to the Surviving
Corporation or the Paying Agent for transfer or any other reason, they shall be
converted into the Merger Consideration payable in respect of the shares of
Company Common Stock previously represented by such Certificates and any
dividends or other distributions to which the holders thereof are entitled
pursuant to Section 3.1(g), without any interest thereon.
(d) No Liability; Termination of Exchange Fund. None of
Purchaser, Merger Sub, the Surviving Corporation or the Paying Agent shall be
liable to any Person in respect of any cash delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. All funds
held by the Paying Agent for payment to the holders of unsurrendered
Certificates and unclaimed one year after the Effective Time shall be returned
to Purchaser, after which time any holder of unsurrendered Certificates shall
look as a general creditor only to Purchaser for payment of the funds to which
the holder of unsurrendered Certificates may be due, subject to Applicable Laws.
If any Certificates shall not have been surrendered prior to five years after
the Effective Time (or immediately prior to such earlier date on which any
Merger Consideration in respect of such Certificate would otherwise escheat to
or become the property of any Governmental Entity), any such cash, dividends or
distributions in respect of such Certificate shall, to the extent permitted by
all applicable laws, statutes, orders, rules, regulations, policies or
guidelines promulgated, or judgments, decisions or orders entered by any
Governmental Entity (collectively, "Applicable Laws"), become the property of
the Surviving Corporation, free and clear of all claims or interest of any
Person previously entitled thereto.
(e) Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming a Certificate to be lost, stolen or destroyed, the Paying Agent
will issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration deliverable in respect thereof as determined in accordance with
Section 3.1(b) if the Person to whom the Merger Consideration is paid shall, as
a condition precedent to the payment thereof, provide the Surviving Corporation
a bond in such sum as the Surviving Corporation may reasonably direct or
otherwise indemnify the Surviving Corporation in a manner reasonably
satisfactory to it against any claim that may be made against the Surviving
Corporation with respect to the Certificate claimed to have been lost, stolen or
destroyed.
(f) No Further Ownership Rights in Company Common Stock. The
Merger Consideration paid in accordance with the terms of this Article III in
respect of Certificates that have been surrendered in accordance with the terms
of this Agreement
9
shall be deemed to have been paid in full satisfaction of all rights pertaining
to the shares of Company Common Stock represented thereby.
3.3 Treatment of Stock Options and Warrants.
The Company, the Board and each relevant committee of the Board
shall, effective immediately prior to the consummation of the Merger, cause each
option to purchase shares of Company Common Stock (collectively, the "Stock
Options") and each warrant to purchase shares of Company Common Stock
(collectively, the "Warrants") that is outstanding immediately prior to the
consummation of the Merger, whether granted under the 1987 Employee Stock Option
Plan or the 1997 Long-Term Incentive Plan, each as amended to date
(collectively, the "Stock Option Agreements"), or under the Warrants set forth
on Schedule 2.3(a) attached hereto (collectively, the "Warrant Agreements"), or
otherwise, to become fully vested and/or exercisable. Immediately prior to the
Effective Time, the Company shall cause each then outstanding Stock Option, to
be cancelled in exchange for an amount in cash (less any applicable
withholding), payable at the Effective Time, equal to the product of (i) the
number of unexercised shares of Company Common Stock subject to such Stock
Option and (ii) the excess, if any, of the Merger Consideration over the per
share exercise price of such Stock Option. Immediately prior to the Effective
Time, the Company shall cause each then outstanding Warrant, to be cancelled in
exchange for an amount in cash (less any applicable withholding), payable at the
Effective Time, equal to the product of (i) the number of shares of Company
Common Stock subject to such Warrant and (ii) the excess, if any, of the Merger
Consideration over the per share exercise price of such Warrant.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure letter delivered by the Company to
Purchaser prior to the execution and delivery of this Agreement (the "Company
Disclosure Letter") (each section of which qualifies the correspondingly
numbered representation, warranty or covenant to the extent specified therein
and such other representations, warranties or covenants to the extent a matter
in such section is disclosed in such a way as to make its relevance to such
other representation, warranty or covenant reasonably apparent), the Company
hereby represents and warrants to Purchaser and Merger Sub as follows:
4.1 Organization.
Each of the Company and its Subsidiaries is a corporation or other
entity duly incorporated or formed, as the case may be, validly existing, and in
good standing, where applicable, under the laws of the jurisdiction of its
incorporation or formation, has all requisite corporate or other power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, and is
qualified or licensed to do business as a foreign corporation or other entity
and is in good standing, where applicable, in each jurisdiction in which the
nature of the business conducted by it makes such qualification or licensing
necessary,
10
except where the failure to be so qualified or licensed individually or in the
aggregate has not had, and would not be reasonably likely to have or result in,
a Material Adverse Effect on the Company. The Company has previously made
available to Purchaser a complete and correct copy of each of the Company
Articles and the Company Bylaws, as currently in effect.
4.2 Capitalization.
(a) The authorized capital stock of the Company consists of
100,000,000 shares of Company Common Stock, 10,000,000 shares of cumulative
preferred stock, par value U.S. $1.00 per share (the "Company Cumulative
Preferred Stock") and 10,000,000 shares of non-cumulative preferred stock, par
value U.S. $1.00 per share (the "Company Non-Cumulative Preferred Stock" and
together with the Company Cumulative Preferred Stock, the "Company Preferred
Stock"). As of the close of business on June 29, 2005 (the "Cut-Off Time"), (i)
41,360,994 shares of Company Common Stock are issued and outstanding, (ii) 9,600
shares of Company Common Stock are issued and held in the treasury of the
Company, (iii) no shares of Preferred Stock are issued and outstanding, (iv)
249,000 shares of Company Common Stock are reserved for issuance upon exercise
of Stock Options under the Stock Option Plans, and (v) 3,579,900 shares of
Company Common Stock are reserved for issuance under the Warrants. From the
Cut-Off Time to the date of this Agreement, no additional shares of Company
Common Stock have been issued (other than pursuant to Company Options and
Company Warrants which were outstanding as of the Cut-Off Time and are disclosed
in Section 4.2(a) of the Company Disclosure Letter), no additional Company
Options or Company Warrants have been issued or granted, and there has been no
increase in the number of shares of Company Common Stock issuable upon exercise
of the Company Options and Company Warrants from those issuable under such
Company Options and Company Warrants as of the Cut-Off Time. No bonds,
debentures, notes or other indebtedness having the right to vote (or convertible
into or exchangeable for securities having the right to vote) on any matters on
which shareholders of the Company may vote are issued or outstanding. All the
outstanding shares of the Company's capital stock are, and all shares that may
be issued or granted pursuant to the exercise of the Stock Options will be, when
issued or granted in accordance with the respective terms thereof, duly
authorized, validly issued, fully paid and non-assessable and free of preemptive
rights, with no personal liability attaching to ownership thereof. Except as set
forth above or in Section 4.2(a) of the Company Disclosure Letter, there are no
outstanding or authorized (i) options, warrants, calls, pre-emptive rights,
subscriptions or other rights, convertible securities, agreements, claims or
commitments of any character obligating the Company or any of its Subsidiaries
to issue, transfer or sell any shares of capital stock or other equity interest
in, the Company or any of its Subsidiaries or securities convertible into or
exchangeable for such shares or equity interests, (ii) contractual obligations
of the Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any capital stock of the Company or any Subsidiary of the Company or any
such securities or agreements listed in clause (i) of this sentence or (iii)
voting trusts or similar agreements to which the Company or any of its
Subsidiaries is a party with respect to the voting of the capital stock of the
Company. Section 4.2(a) of the Company Disclosure Letter sets forth the
following information with respect to each Company Option and Company
11
Warrant outstanding as of the Cut-Off Time: (i) name of the holder; (ii) number
of shares of Company Common Stock issuable upon exercise thereof; (iii) exercise
price; and (iv) issue date. At the Effective Time, there will not be any
outstanding subscriptions, options, warrants, calls, preemptive rights,
subscriptions, or other rights, convertible or exchangeable securities,
agreements, claims or commitments of any character by which the Company or any
of its Subsidiaries will be bound calling for the purchase or issuance of any
shares of the capital stock of the Company or any of its Subsidiaries or
securities convertible into or exchangeable for such shares or any other such
securities or agreements.
(b) (i) Except as set forth in Section 4.2(b) of the Company
Disclosure Letter, all of the outstanding shares of capital stock (or equivalent
equity interests of entities other than corporations) of each of the Company's
Subsidiaries are beneficially owned, directly or indirectly, by the Company free
and clear of any mortgage, lien, pledge, charge, encumbrance or other security
interest (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or ownership interests) (collectively, "Liens"),
other than such restrictions as may exist under Applicable Law, and all such
shares or other ownership interests have been duly authorized and validly issued
and are fully paid and non-assessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof, and (ii) neither the
Company nor any of its Subsidiaries owns any shares of capital stock or other
securities of, or interest in, any other Person, except for (A) shares of
capital stock or other securities of non-affiliates that (x) do not constitute
more than a 5% interest in such non-affiliates or (y) have an aggregate value
(per issuer) that does not exceed U.S.$100,000, and (B) the securities of the
Subsidiaries of the Company or any Subsidiary of the Company, or is obligated to
make any capital contribution to or other investment in any other Person.
(c) Except as set forth in Section 4.2(c) of the Company
Disclosure Letter, no material indebtedness of the Company or any of its
Subsidiaries contains any restriction upon (i) the prepayment of any
indebtedness of the Company or any of its Subsidiaries, (ii) the incurrence of
indebtedness by the Company or any of its Subsidiaries, or (iii) the ability of
the Company or any of its Subsidiaries to grant any Lien on the properties or
assets of the Company or any of its Subsidiaries.
4.3 Authorization; Validity of Agreement.
The Company has the requisite corporate power and authority to
execute and deliver this Agreement and, subject to approval of its shareholders
as contemplated by Section 2.6 hereof if required by Applicable Law, to
consummate the transactions contemplated hereby. The execution and delivery by
the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby have been duly approved and authorized by the
Board and, other than approval and adoption of this Agreement and the Merger by
the requisite vote of the holders of the outstanding shares of Company Common
Stock, no other corporate proceedings on the part of the Company are necessary
to approve and authorize the execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the
12
Company, and assuming due authorization, execution and delivery of this
Agreement by each of Purchaser and Merger Sub, is a valid and binding obligation
of the Company enforceable against the Company in accordance with its terms,
except that such enforcement may be subject to or limited by (a) bankruptcy,
insolvency or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (b) the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity).
4.4 No Violations; Approvals.
(a) Neither the execution and delivery of this Agreement by
the Company nor the consummation by the Company of the transactions contemplated
hereby will (i) violate any provision of the Company Articles or Company Bylaws,
or any provision of the certificate of incorporation, bylaws or similar
governing documents of any of its Subsidiaries, (ii) violate, conflict with,
result in a breach of any provision of or the loss of any benefit under,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of or a right of
termination, cancellation or amendment under, accelerate the performance
required by, or result in the creation of any Lien upon any of the respective
properties or assets of the Company or any of its Subsidiaries under, or result
in the acceleration or trigger of any payment, time of payment, vesting or
increase in the amount of any compensation or benefit payable pursuant to, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
guarantee, other evidence of indebtedness, lease, license, contract, collective
bargaining agreement, agreement or other legally binding instrument or
obligation to which the Company or any of its Subsidiaries is a party or by
which any of them or any of their respective assets or properties may be bound,
or (iii) violate any federal, state, local or foreign order, writ, injunction,
decree, statute, rule or regulation applicable to the Company, any of its
Subsidiaries or any of their assets; except in the case of clause (ii) for such
violations, breaches, defaults, Liens or failure to obtain consents which would
not have a Material Adverse Effect on the Company.
(b) Except as set forth in Section 4.4(b) of the Company
Disclosure Letter, no material filing or registration with, notification to, or
authorization, consent or approval of, any federal, state, local or foreign
court, arbitral, legislative, executive or regulatory authority or agency (a
"Governmental Entity") or any third party is legally required to be made by the
Company in connection with the execution and delivery of this Agreement by the
Company or the consummation by the Company of the transactions contemplated
hereby, except for (i) the filing with the SEC of a proxy statement in
definitive form relating to the meeting of the Company's shareholders to be held
in connection with this Agreement and the transactions contemplated hereby, (ii)
the approval and adoption of this Agreement and the Merger by the requisite vote
of the shareholders of the Company, (iii) such filings, authorizations or
approvals as may be required under any foreign competition laws, rules or
regulations, and (iv) the filing of the Articles of Merger with the Secretary of
State.
13
4.5 SEC Reports and Financial Statements.
(a) The Company has filed with the SEC all forms and documents
required to be filed by it since January 1, 2002 under the Securities Exchange
Act of 1934, as amended (together with the rules and regulations thereunder, the
"Exchange Act"), including (a) its Annual Reports on Form 10-K for the years
ended December 31, 2004, December 31, 2003 and December 31, 2002, respectively,
(b) its Quarterly Report on Form 10-Q for the period ended March 31, 2005, (c)
all proxy statements relating to meetings of shareholders of the Company since
January 1, 2002 (in the form mailed to shareholders) and (d) all other forms,
reports and registration statements filed by the Company with the SEC since
January 1, 2002 (other than registration statements on Form S-8 or preliminary
materials and registration statements in forms not declared effective). The
documents described in clauses (a)-(c) above, as amended (whether filed before,
on or after the date hereof), are referred to in this Agreement collectively as
the "Company SEC Documents". Except as corrected in subsequent Company SEC
Documents filed prior to the date hereof, the Company SEC Documents, including
the financial statements and schedules included therein and the documents
incorporated by reference therein, (x) did not contain any untrue statement of a
material fact or omit to state a 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 and (y) complied in all material
respects with the applicable requirements of the Exchange Act and the Securities
Act of 1933, as amended (together with the rules and regulations thereunder, the
"Securities Act") as the case may be, and the applicable rules and regulations
of the SEC thereunder.
(b) The December 31, 2004 consolidated balance sheet of the
Company and the related consolidated statements of income, changes in
shareholders' equity and cash flows (including, in each case, the related notes,
where applicable), as reported in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2004 filed with the SEC under the Exchange
Act, and the unaudited consolidated balance sheets of the Company and its
Subsidiaries (including the related notes, where applicable) as of March 31,
2005 and the related (i) unaudited consolidated statements of income for the
three-month period then ended and (ii) unaudited consolidated statements of cash
flows and changes in shareholders' equity for the three-month period then ended
(in each case including the related notes, where applicable), as reported in the
Company's Quarterly Report on Form 10-Q for the period ended March 31, 2005
filed with the SEC under the Exchange Act, fairly present, and the financial
statements to be filed by the Company with the SEC after the date of this
Agreement will fairly present (subject, in the case of unaudited statements, to
recurring audit adjustments normal in nature and amount), in all material
respects, the consolidated financial position and the results of the
consolidated operations, cash flows and changes in shareholders' equity of the
Company and its Subsidiaries as of the respective dates or for the respective
fiscal periods therein set forth; each of such statements (including the related
notes, where applicable) complies, and the financial statements to be filed by
the Company with the SEC after the date of this Agreement will comply, with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto; and each of such statements (including the
related notes, where applicable) has been, and
14
the financial statements to be filed by the Company with the SEC after the date
of this Agreement will be, prepared in accordance with generally accepted
accounting principles ("GAAP") consistently applied during the periods involved,
except as indicated in the notes thereto or, in the case of unaudited
statements, as permitted by Form 10-Q. The books and records of the Company and
its Subsidiaries have been, and are being, maintained in accordance with GAAP
and any other applicable legal and accounting requirements and reflect only
actual transactions. PricewaterhouseCoopers LLP is an independent public
accounting firm with respect to the Company and has not resigned or been
dismissed as independent public accountants of the Company.
4.6 Absence of Certain Changes.
(a) Except as disclosed in the Company SEC Documents filed by
the Company with the SEC prior to the date of this Agreement (the "Specified
Company SEC Documents"), to the extent that it is reasonably apparent that the
disclosure in the Specified Company SEC Documents is responsive to the matters
set forth in this Section 4.6(a) or except as set forth in Section 4.6 of the
Company Disclosure Letter, since March 31, 2005 until the date of this
Agreement, (a) the Company and its Subsidiaries have conducted their respective
operations only in the ordinary course consistent with past practice, (b) there
has not occurred or continued to exist any event, change, occurrence, effect,
fact, circumstance or condition which, individually or in the aggregate, has
had, or would be reasonably likely to have or result in, a Material Adverse
Effect on the Company, (c) neither the Company nor any of its Subsidiaries has
(i) increased the wages, salaries, compensation, pension, or other fringe
benefits or perquisites payable to any executive officer, employee, or director
from the amount thereof in effect as of March 31, 2005, granted any severance or
termination pay, entered into any contract to make or grant any severance or
termination pay, made any loans or paid any bonus (except for salary increases,
bonus payments and severance or termination payments made in the ordinary course
of business consistent with past practices), (ii) suffered any strike, work
stoppage, slow-down or other labor disturbance, (iii) been a party to a
collective bargaining agreement, contract or other agreement or understanding
with a labor union or organization, (iv) had any union organizing activities, or
(v) revalued, or had knowledge of any reason that required revaluing, any of the
Company Assets in any material respect, including writing down the value of any
of the Company Assets or writing off notes or accounts receivable, in each case
in any material respect and other than in the ordinary course of business
consistent with past practice.
(b) The indebtedness outstanding under the TOGA Credit
Facility as of the date of this Agreement is set forth on Section 4.6(b) of the
Company Disclosure Letter.
4.7 Absence of Undisclosed Liabilities.
Except as disclosed in the Specified Company SEC Documents,
including as reflected or reserved against in the balance sheet dated as of
March 31, 2005 constituting a portion of the financial statements included in
the Company's Quarterly Report on Form 10-Q for the term ended March 31, 2005
(the "Company Balance Sheet")
15
or in the notes thereto, to the extent that it is reasonably apparent that the
disclosure in the Specified Company SEC Documents is responsive to the matters
set forth in this Section 4.7, and except for liabilities in respect of
Litigation (which are the subject of Section 4.10) and liabilities under
Environmental Laws (which are the subject of Section 4.15), neither the Company
nor any of its Subsidiaries had as of that date or would not be reasonably
likely to have or result in any liabilities that were material to the Company
and its Subsidiaries taken as a whole and that were required to be set forth in
the Company Balance Sheets or the notes thereto in accordance with GAAP. Except
as disclosed in the Specified Company SEC Documents, since the date of the
Company Balance Sheet, neither the Company nor its Subsidiaries has incurred any
liabilities that would be required to be reflected or reserved against in a
consolidated balance sheet of the Company and its Subsidiaries prepared in
accordance with GAAP, except for (a) liabilities incurred in the ordinary course
of business, (b) liabilities that have not had a Material Adverse Effect on the
Company, (c) liabilities resulting from the execution and delivery of this
Agreement or relating to the transactions contemplated hereby, (d) liabilities
in respect of Litigation (which are the subject of Section of 4.10), and (e)
liabilities under Environmental Laws (which are the subject of Section 4.15).
4.8 Information to Be Supplied.
(a) The Proxy Statement and the other documents required to be
filed by the Company with the SEC in connection with the Merger and the other
transactions contemplated hereby will comply as to form in all material respects
with the requirements of the Exchange Act and will not, on the date of its
filing or, in the case of the Proxy Statement, on the date it is mailed to
shareholders of the Company and at the time of the Shareholders' Meeting, and
none of the written information supplied or to be supplied by the Company
expressly for inclusion or incorporation by reference in the Proxy Statement or
other documents required to be filed by the Company with the SEC will at the
time the same are filed with the SEC and first published, sent or given to the
Company's shareholders, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which
they are made, not misleading.
(b) Notwithstanding the foregoing provisions of this Section
4.8, no representation or warranty is made by the Company with respect to
statements made or incorporated by reference in the Proxy Statement based on
information supplied by Purchaser or Merger Sub expressly for inclusion or
incorporation by reference therein or based on information which is not included
in or incorporated by reference in such documents but which should have been
disclosed pursuant to Section 5.4.
4.9 Employee Benefit Plans; ERISA.
(a) Section 4.9(a) of the Company Disclosure Letter contains a
true and complete list of each "employee benefit plan" as defined in Section
3(3) of ERISA (defined below) ("ERISA Plan") and each bonus, deferred
compensation, incentive compensation, stock purchase, stock option, stock award,
severance or
16
termination benefit, hospitalization or other medical, life or other insurance,
supplemental unemployment benefits, profit-sharing, pension, or retirement plan,
program, agreement or arrangement, each employment, retention or severance
agreement or arrangement which cannot be terminated in fewer than three months
without liability or without liability exceeding the greater of or one week of
salary for each year of service or one month of salary and each other material
employee benefit plan, program, agreement or arrangement, currently or within
the preceding 5 years sponsored, maintained or contributed to by the Company or
by any trade or business, whether or not incorporated (an "ERISA Affiliate"),
that together with the Company would be deemed a "single employer" for purposes
of Section 4001 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), for the benefit of any employee or former employee or
director of the Company or any ERISA Affiliate employed in the United States
(the "Plans").
(b) With respect to each Plan, the Company has heretofore
delivered or made available to Purchaser true and complete copies of each of the
following documents:
(i) the Plan;
(ii) the most recent annual report and actuarial report;
(iii) the most recent Summary Plan Description required
under ERISA with respect thereto;
(iv) if the Plan is funded through a trust or third
party funding vehicle, the trust or other funding agreement and the latest
financial statements thereof; and
(v) the most recent determination letter received from
the Internal Revenue Service with respect to each Plan intended to qualify
under Section 401(a) of the Code and each voluntary employees' benefit
association intended to qualify under Section 501(c)(9) of the Code.
(c) No liability under Title IV of ERISA has been incurred by
the Company or any ERISA Affiliate that has not been satisfied in full, and no
condition exists (or would exist in the case of any Plan termination or
withdrawal by any employer from the Plan) that presents a material risk to the
Company or any ERISA Affiliate of incurring a liability under such Title, other
than liability for contributions due in the ordinary course and premiums due the
Pension Benefit Guaranty Corporation ("PBGC") (which contributions and premiums
have been paid when due), except for such liabilities that would not have a
Material Adverse Effect on the Company.
(d) No "ERISA Plan", is a "multiemployer pension plan," as
defined in Section 3(37) of ERISA, nor is any ERISA Plan a plan described in
Section 4063(a) of ERISA.
17
(e) No ERISA Plan or any trust established thereunder has
incurred any "accumulated funding deficiency" as defined in Section 302 of ERISA
and Section 412 of the Code, whether or not waived, or any liens under those
sections of ERISA and the Code, as of the last day of the most recent fiscal
year of each ERISA Plan ended prior to the Closing Date or with respect to the
year following such fiscal year. Each ERISA Plan intended to be "qualified"
within the meaning of Section 401(a) of the Code has been determined by the
Internal Revenue Service to be so qualified (or timely application has been made
therefor); no event has occurred before or since the date of such determination
that would materially adversely affect such qualification; and each trust
maintained thereunder has been determined by the Internal Revenue Service to be
exempt from taxation under Section 501(a) of the Code. All contributions or
other payments required to have been made by Company and its Subsidiaries to or
under any Plan by Applicable Law or the terms of such Plan have been timely and
properly made. Each Plan has been operated and administered in all material
respects in accordance with its terms and Applicable Law, including but not
limited to ERISA and the Code except where a failure to so operate or administer
would not have a Material Adverse Effect on the Company. There are no pending,
or to the knowledge of the Company, threatened, material claims by or on behalf
of any Plan, by any employee or beneficiary covered under any such Plan, or
otherwise involving any such Plan (other than routine claims for benefits).
(f) With respect to each Plan, on or following the Effective
Date, the Surviving Corporation or the Purchaser or both shall have the right to
terminate and amend the Plan at any time, and any such termination or amendment
shall not result in any material increased cost.
(g) With respect to each Plan, all required filings with the
government and all required notices to the participants of the Plan have been
timely made.
(h) With respect to each Plan, there has been no violation of
Sections 401 through 412 of ERISA, and no violation that would result in tax or
penalties under Section 502 of ERISA or Section 4975 of the Code.
(i) The consummation of the transaction contemplated in this
Agreement will not result in the payment, vesting or acceleration of any
benefit.
(j) With respect to each Plan, no reportable event (as defined
in Section 4043 of ERISA) has occurred.
(k) Except to the extent required under Sections 601 et seq.
of ERISA and Section 4980B of the Code ("COBRA") no Plan provides for health or
welfare benefits to any retired or former employee and there is no such benefit
or payment to any such employee of the Company and its Subsidiaries or
obligation to pay such benefit or make such payment.
(l) The Company and its Subsidiaries have complied with COBRA
and the Health Insurance Portability and Accountability Act of 1996.
18
(m) No payment that is owed or may become due to any director,
officer, employee, or agent of the Company or its Subsidiaries will be
non-deductible to them or subject to tax under Section 280G or Section 4999 of
the Code, and no requirement to "gross up" or otherwise compensate any such
individual exists because of such a tax.
(n) The Company and its Subsidiaries have not violated the
Worker Adjustment and Retraining Notification Act or any similar law.
(o) Each Subsidiary of the Company that employs personnel in
Australia:
(i) is not a party to any agreement or arrangement with
any union or industrial organization in respect of superannuation benefits
for any of its employees or sub-contractors;
(ii) has complied with its obligations under agreements
with its employees and sub-contractors in respect of superannuation
benefits in all material respects;
(iii) is only obliged to make employer contributions to
the funds to which the employee contributions are made on behalf of each
of its employees and sub-contractors at the relevant statutory rate per
annum of their respective superannuation salaries in accordance with the
Superannuation Guarantee (Administration) Act 1992 (Cth) ("SGAA") and
other associated Applicable Laws;
(iv) only contributes to, and only has an obligation to
make payments to superannuation funds which only provide accumulation
benefits to its employees and sub-contractors;
(v) confirms that to the knowledge of the Company, the
funds to which the employee contributions are made by such Subsidiary have
satisfied all relevant Applicable Laws governing superannuation funds in
all material respects, and in particular, have been complying
superannuation funds within the meaning of the Superannuation Industry
(Supervision) ▇▇▇ ▇▇▇▇ (Cth) ("SIS") and have otherwise been administered
and managed by the trustee company in a manner that complies with the SIS
in all material respects;
(vi) has complied in all material respects with all of
its obligations, duties and liabilities under the governing rules of the
funds to which employee contributions are made by such Subsidiary
including making all contributions to the funds required to be made under
their rules; and
(vii) has in all material respects made contributions to
superannuation funds as required by any Applicable Law or agreement in
respect of all employees (and anyone considered an employee for the
purposes of the
19
SGAA, including contributions required to be made in accordance with the
SGAA to ensure that it incurs no liability for superannuation guarantee
charge.
4.10 Litigation; Compliance with Law.
(a) Except as disclosed in Section 4.10(a) of the Company
Disclosure Letter and except for claims under Environmental Laws (which are the
subject of Section 4.15), (a) there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of the Company, threatened, against
the Company or any of its Subsidiaries , any of their respective properties or
assets or any of the Company's officers or directors (in their capacities as
such), (b) there is no agreement, order, judgment, decree, injunction or award
of any Governmental Entity against and/or binding upon the Company, any of its
Subsidiaries or any of the Company's officers or directors (in their capacities
as such) that, in the case of either clause (a) or (b), individually or in the
aggregate has had, or would be reasonably likely to have or result in, a
Material Adverse Effect on the Company, and (c) there is no Litigation that the
Company or any of its Subsidiaries has pending against other parties, where such
Litigation is intended to enforce or preserve material rights of the Company or
any of its Subsidiaries which would have a Material Adverse Effect on the
Company.
(b) Except for ERISA (which is the subject of Section 4.9),
Tax laws (which are the subject of Section 4.14), and Environmental Laws (which
are the subject of Section 4.15), each of the Company and its Subsidiaries has
complied, and is in compliance, in all material respects with all Applicable
Laws and all licenses, permits, variances and approvals of Governmental Entities
necessary for the lawful conduct of their respective businesses as currently
conducted which affect the respective businesses of the Company or any of its
Subsidiaries, the Company Real Property and/or the Company Assets, and the
Company and its Subsidiaries have not been and are not in violation in any
material respect of any such Law or any licenses, permits, variances or
approvals of Governmental Entities necessary for the lawful conduct of their
respective businesses as currently conducted; nor has any notice, charge, claim
or action has been received by the Company or any of its Subsidiaries or been
filed, commenced, or to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries alleging any violation of the foregoing,
except in each case as would not be reasonably likely to have or result in a
Material Adverse Effect on the Company.
(c) The Company and its Subsidiaries hold all licenses,
permits, variances and approvals of Governmental Entities necessary for the
lawful conduct of their respective businesses as currently conducted, except for
licenses, permits, variances or approvals under Environmental Laws (which are
the subject of Section 4.15) and except where the failure to hold such licenses,
permits, variances or approvals has not had, or would not be reasonably likely
to have or result in a Material Adverse Effect on the Company. Neither the
Company nor any of its Subsidiaries has received notice that any license,
permit, variance or approvals of Governmental Entities will be terminated or
modified or cannot be renewed in the ordinary course of business, and the
Company has no knowledge of any reasonable basis for any such termination,
modification or nonrenewal, in each case except for any such terminations,
modifications or nonrenewals
20
that individually or in the aggregate have not had, and would not be reasonably
likely to have or result in, a Material Adverse Effect on the Company. The
execution, delivery and performance of this Agreement and the consummation of
the merger or any other transactions contemplated hereby do not and will not
violate any license, permit, variance or approvals of Governmental Entities, or
result in any termination, modification or nonrenewal thereof, except in each
case for any such violations, terminations, modifications or nonrenewals that
individually or in the aggregate have not had, and would not be reasonably
likely to have or result in, a Material Adverse Effect on the Company.
4.11 Intellectual Property.
(a) The Company and its Subsidiaries own free and clear of any
Lien or possess licenses or other valid rights to use, all patents, patent
rights, domain names, trademarks (registered or unregistered), trade dress,
trade names, copyrights (registered or unregistered), service marks, trade
secrets, know-how and other confidential or proprietary rights and information,
inventions (patentable or unpatentable), processes, formulae, as well as all
goodwill symbolized by any of the foregoing (collectively, "Intellectual
Property") necessary in connection with the business of the Company and its
Subsidiaries as currently conducted, except where the failure to possess such
rights or licenses would not have a Material Adverse Effect on the Company.
(b) To the knowledge of the Company, except as disclosed in
Section 4.11 of the Company Disclosure Letter, (i) the conduct, products or
services of the business of the Company and its Subsidiaries as currently
conducted do not infringe upon any Intellectual Property of any third party
except where such infringement would not have a Material Adverse Effect on the
Company, (ii) there are no claims or suits pending or, to the knowledge of the
Company, threatened (x) alleging that the Company's or its Subsidiaries'
conduct, products or services infringe upon any Intellectual Property of any
third party except where such infringement would not have a Material Adverse
Effect on the Company, or (y) challenging the Company's or its Subsidiaries'
ownership of, right to use, or the validity or enforcement of any license or
other agreement relating to the Company's and its Subsidiaries' Intellectual
Property except where such challenge would not have a Material Adverse Effect on
the Company, and (iii) no Person is infringing upon any Intellectual Property of
the Company or its Subsidiaries except where such infringement would not have a
Material Adverse Effect on the Company. Except as set forth in Section 4.4 or
4.11 of the Company Disclosure Letter, the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby will not
result in the loss of, or any encumbrance on, the rights of the Company or any
Subsidiary with respect to the Intellectual Property owned or used by them,
except where such loss or encumbrance would not have a Material Adverse Effect
on the Company.
4.12 Material Contracts.
(a) Except as disclosed in the Specified Company SEC
Documents, to the extent that it is reasonably apparent that the disclosure in
the Specified
21
Company SEC Documents is responsive to the matters set forth in this Section
4.12(a), as of the date of this Agreement, neither the Company nor any of its
Subsidiaries is a party to or bound by any contract, arrangement, commitment or
understanding (whether written or oral) (i) which is a material contract (as
defined in Item 601(b)(10) of Regulation S-K of the SEC) to be performed after
the date of this Agreement, (ii) which materially restrains, limits or impedes
the Company's or any of its Subsidiaries', or will materially restrain, limit or
impede the Surviving Corporation's, ability to compete with or conduct any
business or any line of business, including geographic limitations on the
Company's or any of its Subsidiaries' or the Surviving Corporation's activities,
(iii) which is a material production sharing agreement, joint venture or
operating agreement, balancing agreement, farm-out or farm-in agreement,
enhanced oil recovery agreement, unitization and pooling agreement or other
similar contract or agreement relating to the exploration, development and
production of oil and natural gas, (iv) which is a material take-or-pay
agreement or other similar agreement that entitles purchasers of production to
receive delivery of Hydrocarbons without paying therefor, or (v) which is
otherwise material to the Company and its Subsidiaries taken as a whole. Each
contract, arrangement, commitment or understanding of the type described in this
Section 4.12(a), whether or not set forth in Section 4.12(a) of the Company
Disclosure Letter or disclosed in the Specified Company SEC Documents, is
referred to herein as a "Company Material Contract." Except for the Gas Sales
Agreement with OERL (a summary of which has been provided to Purchaser), the
Company has previously made available to Purchaser true, complete and correct
copies of each Company Material Contract.
(b) (i) Each Company Material Contract is valid and binding
and in full force and effect, (ii) the Company and each of its Subsidiaries has
performed all obligations required to be performed by it to date under each
Company Material Contract, (iii) no event or condition exists which constitutes
or, after notice or lapse of time or both, would constitute a default on the
part of the Company or any of its Subsidiaries under any such Company Material
Contract and (iv) to the knowledge of the Company, no other party to such
Company Material Contract is in default in any respect thereunder, except in
each case where there has not been, and would not be reasonably likely to be,
individually or in the aggregate, a material adverse effect on the rights or
remedies of the Company or its Subsidiaries under such Company Material
Contracts.
4.13 Properties.
(a) Section 4.13(a) of the Company Disclosure Letter sets
forth a complete and correct list of (i) all real property and interests in real
property owned in fee by the Company or any its Subsidiaries (individually, an
"Owned Property" and collectively, the "Owned Properties"), and (ii) all real
property and interests in real property leased, subleased, or otherwise occupied
by the Company or any of its Subsidiaries as lessee (individually, a "Leased
Property" and collectively, the "Leased Properties") setting forth information
sufficient to specifically identify such Owned Real Property and Leased
Properties, as the case may be, and the legal owner thereof. Such Leased
Properties, together with the Owned Properties, are referred to herein
individually as a "Company Property" and collectively as the "Company
Properties."
22
(b) Except as set forth in Section 4.13(b) of the Company
Disclosure Letter, each of the Company and its Subsidiaries has good, marketable
and insurable fee simple title to all of its respective Owned Properties and all
buildings, structures and other improvements located thereon, free and clear of
all Liens, except for Permitted Exceptions.
(c) Except as set forth in Section 4.13(c) of the Company
Disclosure Letter, the Company or one of its Subsidiaries is in possession of
the Leased Properties leased pursuant to each lease or sublease, and each such
lease or sublease grants to the Company or its Subsidiary, as the case may be,
the exclusive right to possess, without disruption, the Leased Property pursuant
thereto. Each of the Company and its Subsidiaries has good and valid title to
the leasehold estate or other interest created under its respective Company
Leases, free and clear of any liens, claims or encumbrances, except where the
failure to have such good and valid title would not have a Material Adverse
Effect.
(d) Except as set forth in Section 4.13(d) of the Company
Disclosure Letter, each of the Company and its Subsidiaries has good and valid
title to all its assets reflected on the Company Balance Sheet or acquired after
the date thereof, except for (i) assets sold or otherwise disposed of in the
ordinary course of business since the date of such balance sheet, (ii)
properties and assets the loss of which would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, (iii) assets reflected
on the Company Balance Sheet that are subject to a capital lease where the
Company or any of its Subsidiaries is the lessee, and (iv) Permitted Exceptions.
4.14 Taxes.
(a) All material Returns required to be filed with any taxing
authority by the Company and its Subsidiaries have been filed in accordance with
all Applicable Laws;
(b) the Company and its Subsidiaries have timely paid all
material Taxes shown as due and payable on the Returns, other than those which
are being contested in good faith by appropriate proceedings;
(c) as of the time of filing all such Returns were true and
correct in all material respects;
(d) the Company has set up an adequate reserve for the payment
of all Taxes anticipated to be payable in respect of the period subsequent to
the last period when returns were filed;
(e) neither the Company nor any Subsidiary will have any
liability for any Taxes in excess of the amounts paid or the reserves so
established except to the extent that any such liability would not have a
Material Adverse Effect;
(f) as of the date of this Agreement, there is no action,
suit, proceeding, investigation, audit or claim pending against or with respect
to the Company
23
or any of its Subsidiaries in respect of any Tax where there is a reasonable
possibility of a determination or decision against the Company or any of its
Subsidiaries that would result in a Material Adverse Effect;
(g) there are no Tax sharing, allocation, indemnification or
similar agreements or arrangements, whether written or unwritten, in effect
under which the Company or any of its Subsidiaries will be liable for any
material Taxes of any Person other than the Company or any Subsidiary of the
Company;
(h) neither the Company nor any of its Subsidiaries has
entered into an agreement or waiver extending any statute of limitations
relating to the payment or collection of a material amount of Taxes, nor is any
request for such a waiver or extension pending;
(i) there are no Liens (subject to Permitted Exceptions) for
Taxes on any asset of the Company or its Subsidiaries;
(j) neither the Company nor any of its Subsidiaries has
entered into, has any liability in respect of, or has any filing obligations
with respect to, any "listed transactions," as defined in Section 1.6011-4(b)(2)
of the treasury regulations;
(k) neither the Company nor any of its Subsidiaries will be
required to include any material item of income in, or exclude any material item
of deduction from, taxable income for any taxable period (or portion thereof)
ending after the Closing Date as a result of any voluntary change in method of
accounting initiated by the Company or any of its Subsidiaries for a taxable
period ending on or prior to the Closing Date under Section 481(c) of the Code
(or any corresponding or similar provisions of Applicable Law relating to state,
local or foreign Tax); and
(l) no jurisdiction where the Company or any of its
Subsidiaries does not file a Return has made a claim in writing that the Company
or any of its Subsidiaries is required to file a Return for a material amount of
Taxes for such jurisdiction.
4.15 Environmental Matters.
(a) Except as disclosed in Section 4.15(a) of the Disclosure
Letter, and except for such matters that individually or in the aggregate have
not had, and would not be reasonably likely to have or result in, a Material
Adverse Effect on the Company, the Company and its Subsidiaries have complied,
and are in compliance, with all applicable Environmental Laws, which compliance
includes the possession of all permits required under applicable Environmental
Laws and compliance with the terms and conditions thereof and the making and
filing with all applicable Governmental Entities of all reports, forms and
documents and the maintenance of all records required to be made, filed or
maintained by it under any Environmental Law. Neither the Company nor any of its
Subsidiaries has received any communication (written or, if oral, would be
reasonably likely to result in a formal claim) from any Person, whether a
Governmental Entity, citizens group, employee or otherwise, that alleges that
the
24
Company or any of its Subsidiaries is not in compliance with Environmental Laws
and that has not been resolved in all material respects.
(b) Except as disclosed in Section 4.15(a) of the Disclosure
Letter, and for such matters that individually or in the aggregate have not had,
and would not be reasonably likely to have or result in, a Material Adverse
Effect on the Company, there are no Environmental Claims pending or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries or, to the knowledge of the Company, against any Person whose
liability for any Environmental Claim the Company or any of its Subsidiaries has
retained or assumed either contractually or by operation of law.
(c) Except for such matters that individually or in the
aggregate have not had, and would not be reasonably likely to have or result in,
a Material Adverse Effect on the Company, neither the Company nor any of its
Subsidiaries is subject to any liability or obligation (accrued, contingent or
otherwise) to cleanup, correct, ▇▇▇▇▇ or to take any response, remedial or
corrective action under or pursuant to any Environmental Laws, relating to (i)
environmental conditions on, under, or about any of the properties or assets
owned, leased, operated or used by the Company or any of its Subsidiaries or any
predecessor thereto at the present time or in the past, including the air, soil,
surface water and groundwater conditions at, on, under, from or near such
properties, or (ii) the past or present use, management, handling, transport,
treatment, generation, storage, disposal or Release of any Hazardous Substances,
whether on-site at any Company Real Property, or at any off-site location. The
Company has provided or made available to Purchaser all material studies,
assessments, reports, data, results of investigations or audits, analyses and
test results, in the possession, custody or control of the Company or any of its
Subsidiaries relating to (x) the environmental conditions on, under or about any
of the properties or assets owned, leased, operated or used by any of the
Company and its Subsidiaries or any predecessor in interest thereto at the
present time or in the past and (y) any Hazardous Substances used, managed,
handled, transported, treated, generated, stored or Released by any Person on,
under, about or from, any of the properties, assets and businesses of the
Company or any of its Subsidiaries.
(d) Except for such matters that individually or in the
aggregate have not had, and would not be reasonably likely to have or result in,
a Material Adverse Effect on the Company, to the knowledge of the Company, there
are no past or present actions, activities, circumstances, conditions, events or
incidents, including the release, emission, discharge, presence or disposal of
any Hazardous Substance, that would be reasonably likely to form the basis of
any Environmental Claim against the Company or any of its Subsidiaries or
against any Person whose liability for such Environmental Claim the Company or
any of its Subsidiaries has retained or assumed either contractually or by
operation of law.
(e) Without in any way limiting the generality of the
foregoing, there are no underground storage tanks located at any property
currently owned, leased or operated by the Company or any of its Subsidiaries.
25
(f) Neither the Company nor any of its Subsidiaries is
required by virtue of the transactions contemplated by this Agreement, or as a
condition to the effectiveness of any transactions contemplated by this
Agreement, (i) to perform a site assessment for Hazardous Substances at any
Company Real Property or (ii) to remove or remediate any Hazardous Substances
from any Company Real Property.
(g) Purchaser and Merger Sub acknowledge that the
representations and warranties contained in this Section 4.15 are the only
representations and warranties being made by the Company with respect to
compliance with, or liability or claims under, Environmental Laws or with
respect to permits, licenses or governmental authorizations issued or required
under Environmental Laws, that no other representation by the Company contained
in this Agreement shall apply to any such matters and that no other
representation or warranty, express or implied, is being made with respect
thereto.
4.16 Investment Company.
Neither the Company nor any of its Subsidiaries is an "investment
company," a company "controlled" by an "investment company," or an "investment
adviser" within the meaning of the Investment Company Act of 1940, as amended,
or the Investment Advisers Act of 1940, as amended.
4.17 Public Utility Holding Company Act.
Neither the Company nor any of its Subsidiaries is a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.
4.18 Required Vote by Company Shareholders.
The affirmative vote of the holders of at least two-thirds of the
outstanding shares of the Company Common Stock entitled to vote hereon is the
only vote of the Company required by the TBCA, the Company Articles or the
Company Bylaws to approve this Agreement and the transactions contemplated
hereby (the "Required Vote").
4.19 Brokers.
Except for ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ ("HLHZ"), no broker, finder
or investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company. The Company is
solely responsible for the fees and expenses of HLHZ which fees and expenses
shall be paid by the Company at the Closing; provided that, in the absence of
sufficient cash, Purchaser shall fund the payment of such fees or expenses at
closing without any reduction in the Merger Consideration. The Company's
arrangements with HLHZ have been disclosed to Purchaser prior to the date
hereof.
26
4.20 Article 13.03 of the TBCA.
Prior to the date of this Agreement, the Board has taken all action
necessary to exempt under or make not subject to (a) the provisions of Article
13.03 of the TBCA or (b) any "fair price," "moratorium," "control share
acquisition" or other state takeover law or state law that purports to limit or
restrict business combinations or the ability to acquire or vote shares: (a) the
execution of this Agreement, (b) the Merger and (c) the transactions
contemplated by this Agreement.
4.21 Oil and Gas.
(a) The Company has furnished Purchaser prior to the date of
this Agreement with the report of Data Consulting Services, a division of
Schlumberger Technology Corporation, estimating the Company's and its
Subsidiaries' proved oil and gas reserves as of December 31, 2004 (the "Reserve
Report"). The factual, non-interpretive data on which the Reserve Report was
based for purposes of estimating the oil and gas reserves set forth in the
Reserve Report was accurate in all material respects.
(b) All operated producing oil and gas ▇▇▇▇▇ included in the
Reserve Report have been operated and produced and, to the knowledge of the
Company, drilled, in accordance in all material respects with generally accepted
oil and gas field practices and in compliance in all material respects with
applicable oil and gas leases and Applicable Law.
(c) All material proceeds from the sale of crude oil, natural
gas liquids and other hydrocarbons produced from crude oil or natural gas
("Hydrocarbons") produced from the Oil and Gas Properties are being received by
the Company and its Subsidiaries in a timely manner and are not being held in
suspense for any reason (except in the ordinary course of business).
(d) Except as disclosed in the Specified Company SEC
Documents, neither the Company nor any of its Subsidiaries has received any
material advance, take-or-pay or other similar payments that entitles purchasers
of production to receive deliveries of Hydrocarbons without paying therefor,
and, on a net, company-wide basis, the Company is neither underproduced nor
overproduced, in either case, to any material extent, under gas balancing or
similar arrangements.
(e) The Company and its Subsidiaries have good and defensible
title to all oil and gas properties forming the basis for the reserves reflected
in the Reserve Report as attributable to interests owned by the Company and its
Subsidiaries, except for those defects in title that do not have a Material
Adverse Effect on the Company, and are free and clear of all Liens, except for
(i) Permitted Exceptions and (ii) Liens associated with obligations reflected in
the Reserve Report. The oil and gas leases and other agreements that provide the
Company and its Subsidiaries with operating rights in the Oil and Gas Properties
are legal, valid and binding and in full force and effect, and the rentals,
royalties and other payments due thereunder have been properly and timely paid
and there is no existing default (or event that, with notice or lapse of time or
both, would
27
become a default) under any of such oil and gas leases or other agreements,
except, in each case, as individually or in the aggregate has not had, and would
not be reasonably likely to have or result in, a Material Adverse Effect on the
Company.
(f) Section 4.21(f) of the Company Disclosure Letter sets
forth the working interest and net revenue interest in the Comet Ridge Joint
Venture of each of the parties to the Comet Ridge Joint Venture in respect of
(i) production, (ii) leasehold ownership and leasehold operating expenses, and
(iii) acquisition, drilling, development, workover and capital costs (both
before and after project payout).
4.22 Recommendation of Company Board of Directors; Opinion of
Financial Advisor.
(a) The Board, at a meeting duly called and held, duly adopted
resolutions (i) determining that this Agreement and the transactions
contemplated hereby are fair to, and in the best interests of, the shareholders
of the Company, (ii) approving this Agreement and the transactions contemplated
hereby, (iii) resolving to recommend adoption of this Agreement and approval of
the Merger and the other transactions contemplated hereby by the shareholders of
the Company and (iv) directing that the adoption of this Agreement and the
approval of the Merger and the other transactions contemplated hereby be
submitted to the Company's shareholders for consideration in accordance with
this Agreement, which resolutions, as of the date of this Agreement, have not
been subsequently rescinded, modified or withdrawn in any way.
(b) The Company has received an opinion of HLHZ to the effect
that, as of the date of this Agreement, the Merger Consideration to be received
by the holders of shares of Company Common Stock (other than Purchaser, Merger
Sub or the Company) in the Merger is fair, from a financial point of view, to
such holders, a signed copy of which has been, or will promptly be, delivered to
Purchaser. The Company has received the approval of HLHZ to permit the inclusion
of a copy of its written opinion in its entirety in the Proxy Statement, subject
to HLHZ's review of the Proxy Statement.
4.23 Affiliate Transactions.
The Specified SEC Company Documents sets forth all agreements,
contracts, transfers of assets or liabilities or other commitments or
transactions, whether or not entered into in the ordinary course of business, to
or by which the Company or any of its Subsidiaries, on the one hand, and any of
their respective officers or directors (or any of their respective Affiliates,
other than the Company or any of its direct or indirect wholly owned
Subsidiaries) on the other hand, are or have been a party or otherwise bound or
affected, and that (a) are currently pending, in effect or have been in effect
during the past 12 months, (b) involve continuing liabilities and obligations
that, individually or in the aggregate, have been, are or will be material to
the Company and its Subsidiaries, taken as a whole and (c) are not Company Plans
disclosed in Section 4.9(a) of the Company Disclosure Letter.
28
4.24 Derivative Transactions and Hedging.
No Derivative Transactions (including each outstanding Hydrocarbon
or financial hedging position attributable to the Hydrocarbon production of the
Company and its Subsidiaries) have been entered into by the Company or any of
its Subsidiaries or for the account of any of its customers as of the date of
this Agreement.
4.25 Insurance.
Section 4.26 of the Company Disclosure Letter contains a complete
and correct list of all material insurance policies maintained by or on behalf
of any of the Company and its Subsidiaries as of the date of this Agreement.
Such policies are, and at the Closing policies or replacement policies having
substantially similar coverages will be, in full force and effect, and all
premiums due thereon have been or will be paid. The Company and its Subsidiaries
have complied in all material respects with the terms and provisions of such
policies. With respect to any material insurance claim submitted by the Company
or any of its Subsidiaries since January 1, 2004, neither the Company nor any of
its Subsidiaries has received any refusal of coverage, reservation of rights or
other notice that the issuer of the applicable insurance policy or policies is
not willing or able to perform its obligations thereunder.
4.26 No Other Representations or Warranties.
Except for the representations and warranties contained in this
Article IV, neither the Company nor any other Person makes any other express or
implied representation or warranty on behalf of the Company or any of its
Affiliates.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MERGER SUB
Parent, Purchaser and Merger Sub, jointly and severally, represent and
warrant to the Company as follows:
5.1 Organization.
Each of Parent, Purchaser, Merger Sub and each of their respective
Subsidiaries is a corporation or other entity duly incorporated or formed, as
the case may be, validly existing, and in good standing, where applicable, under
the laws of the jurisdiction of its incorporation or formation, has all
requisite corporate or other power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as it is now being conducted, and is qualified or licensed to do business as a
foreign corporation or other entity and is in good standing, where applicable,
in each jurisdiction in which the nature of the business conducted by it makes
such qualification or licensing necessary, except where the failure to be so
organized, existing and in good standing or to have such power and authority, or
to be so qualified or licensed would not have a Material Adverse Effect on
Purchaser. Each of
29
Purchaser and Merger Sub has previously made available to the Company a complete
and correct copy of each of its certificate of incorporation and bylaws, as
currently in effect.
5.2 Authorization; Validity of Agreement.
Each of Parent, Purchaser and Merger Sub has the requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery by Purchaser and
Merger Sub of this Agreement and the consummation by Purchaser and Merger Sub of
the transactions contemplated hereby have been duly authorized by the respective
boards of directors of Purchaser and Merger Sub, Purchaser has approved and
adopted this Agreement and the Merger and has caused the sole shareholder of
Merger Sub to approve and adopt this Agreement, and no other corporate
proceedings on the part of Purchaser or Merger Sub are necessary to authorize
the execution and delivery of this Agreement by Purchaser or Merger Sub and the
consummation of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by each of Purchaser and Merger Sub and, assuming
due authorization, execution and delivery of this Agreement by the Company, is a
valid and binding obligation of each of Purchaser and Merger Sub enforceable
against each of them in accordance with its terms, except that such enforcement
may be subject to or limited by (i) bankruptcy, insolvency or other similar
laws, now or hereafter in effect, affecting creditors' rights generally, and
(ii) the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
5.3 Consents and Approvals; No Violations.
(a) Neither the execution and delivery of this Agreement by
Parent, Purchaser and Merger Sub nor the consummation by Parent, Purchaser and
Merger Sub of the transactions contemplated hereby will (i) violate any
provision of the respective certificate of incorporation or bylaws or similar
governmental documents of Parent or Purchaser or any of its Subsidiaries,
including Merger Sub, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any material note, bond, mortgage, indenture,
guarantee, other evidence of indebtedness, license, lease, contract, agreement
or other instrument or obligation to which Parent or Purchaser or any of its
Subsidiaries, including Merger Sub, is a party or by which any of them or any of
their assets may be bound or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Parent or Purchaser or any of its
Subsidiaries, including Merger Sub, or any of their assets; except in the case
of clauses (ii) and (iii) for violations, breaches or defaults which would not
have a Material Adverse Effect on Purchaser or Merger Sub.
(b) No material filing or registration with, notification to,
or authorization, consent or approval of any Governmental Entity or any third
party is legally required to be made by Parent, Purchaser or Merger Sub in
connection with the execution and delivery of this Agreement by Parent,
Purchaser or Merger Sub or the consummation by Purchaser or Merger Sub of the
transactions contemplated hereby,
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except for (i) the filing with the SEC of the Proxy Statement, (ii) the filing
of the Articles of Merger with the Secretary of State, and (iii) the lodgement
of an announcement to the Australian Stock Exchange.
5.4 Information to be Supplied.
(a) Each of the Proxy Statement and the other documents
required to be filed by Purchaser with the SEC in connection with the Merger and
the other transactions contemplated hereby will comply as to form, in all
material respects, with the requirements of the Exchange Act and will not, on
the date of its filing, and none of the information supplied or to be supplied
by Parent, Purchaser and Merger Sub expressly for inclusion or incorporation by
reference in the Proxy Statement will, in the case of the Proxy Statement on the
dates the Proxy Statement is mailed to shareholders of the Company and at the
time of the Shareholders' Meeting will not, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(b) Notwithstanding the foregoing provisions of this Section
5.4, no representation or warranty is made by Parent or Purchaser with respect
to statements made or incorporated by reference in the Proxy Statement based on
information supplied by the Company expressly for inclusion or incorporation by
reference therein or based on information which is not made in or incorporated
by reference in such documents but which should have been disclosed pursuant to
Section 4.8.
5.5 Interim Operations of Merger Sub.
Merger Sub was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement and has engaged in no business other
than in connection with entering into this Agreement and engaging in the
transactions contemplated by this Agreement.
5.6 Financing.
Parent shall cause Purchaser and Merger Sub to have as of the date
of this Agreement and immediately prior to the consummation of the Merger
sufficient funds to enable Merger Sub to consummate the Merger on the terms
contemplated by this Agreement.
5.7 Beneficial Ownership of Shares.
Neither Purchaser nor any of its Affiliates or Associates
beneficially owns more than 5% of the outstanding shares of capital stock of the
Company or is a party to any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any capital stock of the
Company, other than as contemplated by this Agreement.
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5.8 Brokers.
Except for ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. ("Merrill"), no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Purchaser or Merger Sub.
Purchaser is solely responsible for the fees and expenses of Merrill, which fees
and expenses shall be paid by Purchaser at the Closing.
5.9 No Other Representations or Warranties.
Except for the representations and warranties contained in this
Article V, none of Parent, Purchaser, Merger Sub or any other Person makes any
other express or implied representation or warranty on behalf of Purchaser,
Merger Sub or any of their respective Affiliates.
ARTICLE VI
COVENANTS
6.1 Interim Operations of the Company.
During the period from the date of this Agreement and continuing
until the Effective Time, except as expressly contemplated or permitted by this
Agreement or with the prior written consent of Purchaser (which consent shall
not be unreasonably withheld, conditioned or delayed), the Company and its
Subsidiaries shall carry on their respective businesses in the ordinary course
consistent with past practice and in a manner not involving the entry by the
Company or any Subsidiary into businesses that are materially different from the
businesses of the Company and its Subsidiaries on the date hereof, and shall use
reasonable best efforts to preserve their business organizations and goodwill
intact, and maintain existing relations with suppliers, customers, employees,
officers and directors. Without limiting the generality of the foregoing or as
otherwise contemplated by this Agreement or consented to in writing by Purchaser
(which consent shall not be unreasonably withheld, conditioned or delayed), the
Company shall not, and shall not permit any of its Subsidiaries to:
(a) declare or pay any dividends on, or make other
distributions in respect of, any of its capital stock;
(b) (i) repurchase, redeem or otherwise acquire any shares of
the capital stock of the Company or any Subsidiary of the Company, or any
securities convertible into or exercisable for any shares of the capital stock
of the Company or any Subsidiary of the Company, (ii) split, combine or
reclassify any shares of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock, or (iii) authorize, issue, deliver, sell,
hypothecate or pledge or authorize or propose the issuance, delivery, sale,
hypothecation or pledge of, any shares of its capital stock or any securities
convertible into or exercisable for, or any rights, warrants or options to
acquire, any such shares, or enter
32
into any agreement with respect to any of the foregoing, except, in the case of
clauses (ii) and (iii), for the issuance of Company Common Stock upon the
exercise or fulfillment of rights or options issued or existing pursuant to
employee benefit plans, programs or arrangements or upon exercise of the
Warrants, all to the extent outstanding and in existence on the date of this
Agreement and in accordance with their present terms and in each case to the
extent the same are disclosed to the Purchaser on Section 4.2(a) of the Company
Disclosure Schedule;
(c) amend the Company Articles, the Company Bylaws, the
certificate of incorporation, bylaws or other organizational documents of any
Subsidiary, or other similar governing documents of the Company or any
Subsidiary;
(d) make any capital expenditures in excess of U.S.$125,000 in
the aggregate, other than those which are made in the ordinary course of
business and in accordance with the Company's capital budget previously provided
to Purchaser, or which are necessary to maintain existing assets in good repair
or to maintain operations as currently conducted;
(e) acquire or agree to acquire, by merging or consolidating
with, or by purchasing a substantial equity interest in or a substantial portion
of the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof;
(f) change its methods of accounting in effect at December 31,
2004, except as required by changes in GAAP as concurred to by the Company's
independent auditors;
(g) (i) fail to cause TOGA to operate the Comet Ridge Joint
Venture and other TOGA operated permits in accordance with the terms of the
applicable joint venture operating agreements and the relevant petroleum
legislation and regulations in all material respects, or to maintain
operatorship of the same, (ii) fail to cause TOGA to consult with Purchaser
before it exercises any voting right it may have under the Comet Ridge Joint
Venture and to take account of Purchaser's reasonable representations, (iii)
fail to cause TOGA to provide Purchaser with production reports and management
accounts and authorizations for expenditures in relation to the Comet Ridge
Joint Venture, (iv) fail to cause TOGA to provide Purchaser with copies of all
minutes of meetings of the Comet Ridge Joint Venture parties or use its
reasonable best efforts to facilitate Purchaser's attendance at such meetings,
(v) cause TOGA to enter into any new gas supply agreements or amend any existing
gas supply agreement without first consulting Purchaser, except in each case to
the extent that it would violate Applicable Law to do so;
(h) (i) except as required by Applicable Law or as required to
maintain qualification pursuant to the Code, adopt, amend, or terminate any
employee benefit plan (including any Plan) or any agreement, arrangement, plan
or policy between the Company or any Subsidiary of the Company and one or more
of its current or former directors, officers or employees, or (ii) except for
normal increases in the ordinary course of business consistent with past
practice as set forth in Section 6.1(h) of the Company
33
Disclosure Letter, or except as required by Applicable Law, increase in any
manner the compensation or fringe benefits of any director, officer or employee
or pay any benefit not required by any Plan or agreement as in effect as of the
date hereof (including the granting of stock options, stock appreciation rights,
restricted stock, restricted stock units or performance units or shares);
(i) other than activities in the ordinary course of business
consistent with past practice, sell, lease, encumber, assign or otherwise
dispose of, or agree to sell, lease, encumber, assign or otherwise dispose of,
any of its material assets, properties or other rights or agreements;
(j) other than in the ordinary course of business consistent
with past practice, incur any indebtedness for borrowed money or assume,
guarantee, endorse or otherwise as an accommodation become responsible for the
obligations of any other individual, corporation or other entity;
(k) create, renew, amend or terminate or give notice of a
proposed renewal, amendment or termination of, any material contract, agreement
or lease for goods, services or office space to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries or
their respective properties is bound, other than the renewal in the ordinary
course of business of any lease the term of which expires prior to the Closing
Date;
(l) fail to provide Purchaser with any details relating to any
proposed acquisition of or application for Oil and Gas Properties, including
full details of any minimum exploration commitment in connection therewith,
except to the extent it would violate Applicable Law to do so;
(m) fail to maintain its insurance policies in full force and
effect, except to the extent such policies cease to be available on commercially
reasonable terms, and in such event the Company shall notify Purchaser of such
non-renewal or termination of policy; or
(n) or agree to do any of the foregoing.
6.2 Acquisition Proposals.
(a) The Company agrees that, except as expressly contemplated
by this Agreement, neither it nor any of its Subsidiaries shall, and the Company
shall, and shall cause its Subsidiaries and affiliates (as such term in used in
Rule 12b-2 under the Exchange Act) to, cause their respective officers,
directors, investment bankers, attorneys, accountants, financial advisors,
agents and other representatives not to (i) directly or indirectly initiate,
solicit, knowingly encourage or facilitate (including by way of furnishing
information) any inquiries or the making or submission of any proposal that
constitutes, or could reasonably be expected to lead to, an Acquisition
Proposal, (ii) participate or engage in discussions or negotiations with, or
disclose any non-public information or data relating to the Company or any of
its Subsidiaries or afford access to the properties, books or records of the
Company or any of its Subsidiaries to any Person
34
that has made an Acquisition Proposal or to any person in contemplation of an
Acquisition Proposal, or (iii) accept an Acquisition Proposal or enter into any
agreement, including any letter of intent, memorandum of understanding,
agreement in principle, merger agreement, acquisition agreement, option
agreement, joint venture agreement, partnership agreement or other similar
agreement, arrangement or understanding, (A) constituting or related to, or that
is intended to or could reasonably be expected to lead to, any Acquisition
Proposal (other than an Acceptable Confidentiality Agreement permitted pursuant
to this Section 6.2) or (B) requiring, intended to cause, or which could
reasonably be expected to cause the Company to abandon, terminate or fail to
consummate the merger or any other transaction contemplated by this Agreement
(each an "Acquisition Agreement"). Any violation of the foregoing restrictions
by any of the Company's Subsidiaries or by any representatives of the Company or
any of its Subsidiaries, whether or not such representative is so authorized and
whether or not such representative is purporting to act on behalf of the Company
or any of its Subsidiaries or otherwise, shall be deemed to be a breach of this
Agreement by the Company. Notwithstanding anything to the contrary in this
Agreement, the Company and its board of directors may take any actions described
in clause (ii) of this Section 6.2(a) with respect to a third party if at any
time prior to the Effective Time (x) the Company receives a written Acquisition
Proposal from such third party (and such Acquisition Proposal was not initiated,
solicited, knowingly encouraged or facilitated by the Company or any of its
Subsidiaries or any of their respective officers, directors, investment bankers,
attorneys, accountants, financial advisors, agents or other representatives) and
(y) such proposal constitutes, or the Company's board of directors determines in
good faith (after consultation with its financial advisors and outside legal
counsel) that such proposal could reasonably be expected to lead to, a Superior
Proposal, provided that the Company shall not deliver any information to such
third party without entering into an Acceptable Confidentiality Agreement.
Notwithstanding the foregoing, the Company shall be entitled to waive any
"standstill" or similar provision in any Acceptable Confidentiality Agreement
which would preclude such Person from making an Acquisition Proposal to the
Company, provided that such waiver is for the limited purpose of enabling such
Person to make an Acquisition Proposal to the Company during the 45-day period
following execution of such Acceptable Confidentiality Agreement, and any such
waiver shall not constitute a breach of this Section 6.2. Nothing contained in
this Section 6.2 shall prohibit the Company or its board of directors from
taking and disclosing to the Company's shareholders a position with respect to
an Acquisition Proposal to the extent required by Applicable Law.
(b) Neither (i) the Company's board of directors nor any
committee thereof shall directly or indirectly (A) withdraw (or amend or modify
in a manner adverse to Purchaser or Merger Sub), or publicly propose to withdraw
(or amend or modify in a manner adverse to Purchaser or Merger Sub), the
approval, recommendation or declaration of advisability by the Company's board
of directors or any such committee thereof of this Agreement, the merger or the
other transactions contemplated by this Agreement or (B) recommend, adopt or
approve, or propose publicly to recommend, adopt or approve, any Acquisition
Proposal (any action described in this clause (i) being referred to as a
"Company Adverse Recommendation Change") nor (ii) shall the Company or any of
its Subsidiaries execute or enter into an Acquisition
35
Agreement. Notwithstanding the foregoing, at any time prior to the Effective
Time, and subject to the Company's compliance at all times with the provisions
of this Section 6.2 and Section 2.6, in response to a Superior Proposal, the
Company Board may make a Company Adverse Recommendation Change; provided,
however, that the Company shall not be entitled to exercise its right to make a
Company Adverse Recommendation Change in response to a Superior Proposal (X)
until three Business Days after the Company provides written notice to Purchaser
(a "Company Notice") advising Purchaser that the Company's board of directors or
a committee thereof has received a Superior Proposal, specifying the material
terms and conditions of such Superior Proposal, and identifying the Person or
group making such Superior Proposal and (Y) if during such three Business Day
period, Purchaser proposes any alternative transaction (including any
modifications to the terms of this Agreement), unless the Company's board of
directors determines in good faith (after consultation with its financial
advisors and outside legal counsel, and taking into account all financial,
legal, and regulatory terms and conditions of such alternative transaction
proposal) that such alternative transaction proposal is not at least as
favorable to the Company and its shareholders from a financial point of view as
the Superior Proposal (it being understood that any change in the financial or
other material terms of a Superior Proposal shall require a new Company Notice
and a new three Business Day period under this Section 6.2(b)).
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 6.2, as promptly as practicable after
receipt thereof, the Company shall advise Purchaser in writing of any request
for information or any Acquisition Proposal received from any Person, or any
inquiry, discussions or negotiations with respect to any Acquisition Proposal,
and the terms and conditions of such request, Acquisition Proposal, inquiry,
discussions or negotiations, and the Company shall promptly provide to Purchaser
copies of any written materials received by the Company in connection with any
of the foregoing, and the identity of the Person or group making any such
request, Acquisition Proposal or inquiry or with whom any discussions or
negotiations are taking place. The Company agrees that it shall simultaneously
provide to Purchaser any non-public information concerning the Company or its
Subsidiaries provided to any other Person or group in connection with any
Acquisition Proposal which was not previously provided to Purchaser. The Company
and shall keep Purchaser fully informed of the status of any Acquisition
Proposals (including the identity of the parties and price involved and any
changes to any material terms and conditions thereof). The Company agrees not to
release any third party from, or waive any provisions of, any confidentiality or
standstill agreement to which it is a party.
(d) Immediately after the execution and delivery of this
Agreement, the Company will, and will cause its Subsidiaries and their
respective officers, directors, employees, investment bankers, attorneys,
accountants and other agents to, cease and terminate any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any possible Acquisition Proposal. The Company agrees that it shall (i) take
the necessary steps to promptly inform its officers, directors, investments
bankers, attorneys, accountants, financial advisors, agents or other
representatives involved in the transactions contemplated by this Agreement of
the obligations undertaken in this Section 6.2 and (ii) request each Person who
has heretofore
36
executed a confidentiality agreement in connection with such Person's
consideration of acquiring the Company or any portion thereof to return or
destroy (which destruction shall be certified in writing by an executive officer
of such Person) all confidential information heretofore furnished to such Person
by or on the Company's behalf.
(e) For purposes of this Section 6.2:
(i) For purposes of this Agreement, "Acquisition
Proposal" shall mean any bona fide proposal, whether or not in writing,
for the (i) direct or indirect acquisition or purchase of a business or
assets that constitutes 10% or more of the net revenues, net income or the
assets (based on the fair market value thereof) of the Company and its
Subsidiaries, taken as a whole, (ii) direct or indirect acquisition or
purchase of 10% or more of any class of equity securities or capital stock
of the Company or any of its Subsidiaries whose business constitutes 10%
or more of the net revenues, net income or assets of the Company and its
Subsidiaries, taken as a whole, or (iii) merger, consolidation,
restructuring, transfer of assets or other business combination, sale of
shares of capital stock, tender offer, exchange offer, recapitalization,
stock repurchase program or other similar transaction that if consummated
would result in any Person or Persons beneficially owning 10% or more of
any class of equity securities of the Company or any of its Subsidiaries
whose business constitutes 10% or more of the net revenues, net income or
assets of the Company and its Subsidiaries, taken as a whole, other than
the transactions contemplated by this Agreement.
(ii) The term "Superior Proposal" shall mean any bona
fide written Acquisition Proposal made by a third party to acquire (which
term shall include a parent to parent merger or other business combination
with a similar result), directly or indirectly, pursuant to a tender
offer, exchange offer, merger, share exchange, consolidation or other
business combination, (A) 50% or more of the assets of the Company and its
Subsidiaries, taken as a whole, or (B) 50% or more of the equity
securities of the Company, in each case on terms which the Company's board
of directors determines in good faith (after consultation with its
financial advisors and outside legal counsel, and taking into account all
financial, legal and regulatory terms and conditions of the Acquisition
Proposal and this Agreement, including any alternative transaction
(including any modifications to the terms of this Agreement) proposed by
Purchaser in response to such Superior Proposal, including any conditions
to and expected timing of consummation, and any risks of non-consummation,
of such Acquisition Proposal) to be superior to the Company and its
shareholders (in their capacity as shareholders) from a financial point of
view as compared to the transactions contemplated hereby and to any
alternative transaction (including any modifications to the terms of this
Agreement) proposed by Purchaser hereto pursuant to this Section 6.2.
37
(f) Any references to the "Board" or the "Board of Directors
of the Company" in this Section 6.2 shall mean the Independent Directors, acting
in good faith and in accordance with their fiduciary obligations under
Applicable Law.
6.3 Access to Information.
From the date of this Agreement until the Effective Time, the
Company shall, and shall cause each of its Subsidiaries to, afford to Purchaser
and to its officers, employees, accountants, counsel and its authorized
representatives (including environmental consultants) reasonable access during
normal business hours upon reasonable prior notice all of its properties,
contracts, books, commitments, records, data and books and personnel and, during
such period, the Company shall furnish to Purchaser upon request (a) a copy of
each report, letter, registration statement and other document filed or received
by it during such period pursuant to the requirements of the Exchange Act and
(b) such other information used in the operation of its business as Purchaser
may reasonably request and the provision of which is not inconsistent with
Applicable Laws or would represent a material breach of any agreements.
Purchaser and its authorized representatives will conduct all such inspections
in a manner which will minimize any disruptions of the business and operations
of the Company and its Subsidiaries. Until the Effective Time, Purchaser will
hold any such information in accordance with the provisions of the
Confidentiality Agreement and will cause such information to be so held by their
Representatives (as defined in the Confidentiality Agreement). Upon a
termination of this Agreement pursuant to Section 8.1, Purchaser and its
Representatives shall return (and hold confidential) all information provided
pursuant to this Section 6.3 and all other Information (as defined in the
Confidentiality Agreement) pursuant to the procedures set forth in the
Confidentiality Agreement.
6.4 Further Action; Reasonable Best Efforts.
(a) Upon the terms and subject to the conditions herein
provided, each of the parties hereto agrees to use its reasonable best efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under Applicable Laws to consummate and
make effective the transactions contemplated by this Agreement, including using
reasonable best efforts to satisfy the conditions precedent to the obligations
of any of the parties hereto, to obtain all necessary authorizations, consents
and approvals, and to effect all necessary registrations and filings. Each of
the parties hereto will furnish to the other parties such necessary information
and reasonable assistance as such other parties may reasonably request in
connection with the foregoing and will provide the other parties with copies of
all filings made by such party with any Governmental Entity or any other
information supplied by such party to a Governmental Entity in connection with
this Agreement and the transactions contemplated hereby.
(b) The Company shall (i) take all actions necessary to ensure
that no Applicable Law relating to state takeover or business combination
matters or any similar Applicable Law is or becomes applicable to this
Agreement, the merger or any of the other transactions contemplated by this
Agreement and (ii) if any such Applicable
38
Law or similar Applicable Law becomes applicable to this Agreement, the merger
or any of the other transactions contemplated by this Agreement, take all action
necessary to ensure that the merger and the other transactions contemplated by
this Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such
Applicable Law on this Agreement, the Merger and the other transactions
contemplated by this Agreement.
(c) In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and/or directors of the Surviving Corporation shall take or
cause to be taken all such necessary action.
(d) Each of the parties hereto shall use reasonable best
efforts to prevent the entry of, and to cause to be discharged or vacated, any
order or injunction of a Governmental Entity precluding, restraining, enjoining
or prohibiting consummation of the Merger or any of the other transactions
contemplated by this Agreement.
6.5 Directors' and Officers' Insurance and Indemnification.
(a) For six years after the Effective Time, Purchaser shall
cause the Surviving Corporation to indemnify and hold harmless, to the greatest
extent permitted by law as of the date of this Agreement, the individuals who on
or prior to the Effective Time were officers, directors and employees of the
Company or its Subsidiaries (collectively, the "Indemnitees") with respect to
all acts or omissions by them in their capacities as such or taken at the
request of the Company or any of its Subsidiaries at any time prior to the
Effective Time. Purchaser shall cause the Surviving Corporation to honor all
indemnification agreements with Indemnitees (including under the Company's
by-laws) in effect as of the date hereof in accordance with the terms thereof.
The Company has disclosed to Purchaser all such indemnification agreements prior
to the date of this Agreement.
(b) For six years after the Effective Time, Purchaser shall
procure the provision of officers' and directors' liability insurance in respect
of acts or omissions occurring prior to the Effective Time covering each such
Person currently covered by the Company's officers' and directors' liability
insurance policy on terms with respect to coverage and in amounts no less
favorable than those of such policy in effect on the date hereof; provided,
however, that if the annual aggregate premiums for such insurance at any time
during such period shall exceed 200% of the per annum rate of premium paid by
the Company and its Subsidiaries as of the date hereof for such insurance, then
the Purchaser shall solely be obligated to provide such officers' and directors'
liability insurance as may be obtained for 200% of such per annum rate of
premium.
(c) The obligations of Purchaser under this Section 6.5 shall
not be terminated or modified in such a manner as to adversely affect any
Indemnitee to whom this Section 6.5 applies without the consent of such affected
Indemnitee (it being
39
expressly agreed that the Indemnitees to whom this Section 6.5 applies shall be
third party beneficiaries of this Section 6.5).
(d) The provisions of this Section 6.5 are intended to be for
the benefit of, and shall be enforceable by, each Indemnitee and his or her
heirs and representatives.
6.6 Publicity.
Neither the Company, Purchaser, Merger Sub nor any of their
respective affiliates shall issue or cause the publication of any press release
or other announcement with respect to the Merger, this Agreement or the other
transactions contemplated by this Agreement without the prior consultation of
the other party, except as may be required by law or by any listing agreement
with a national securities exchange if all reasonable efforts have been made to
consult with the other party.
6.7 Merger Sub.
Purchaser will take all action necessary (a) 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 and, to the extent permitted by
the TBCA, in accordance with Article 5.16 of the TBCA, as soon as reasonably
practicable following the completion of the Shareholders' Meeting and (b) to
ensure that, prior to the Effective Time, Merger Sub shall not conduct any
business or make any investments other than as specifically contemplated by this
Agreement. Purchaser shall not, and shall not permit Merger Sub to take, any
action that would result in the breach of any representation of Purchaser
hereunder (except for representations and warranties made as of a specific date)
such that the Company would have the right to terminate this Agreement pursuant
to Section 8.1.
6.8 Employee Benefits.
(a) Purchaser hereby agrees to, and agrees to cause the
Surviving Corporation to, honor, and to make required payments when due under,
all contracts, agreements, arrangements, policies, plans and commitments of the
Company and its Subsidiaries in effect as of the date hereof that are applicable
with respect to any employee, officer, director or executive or former employee,
officer, director or executive of the Company or any Subsidiary thereof,
including the Plans in existence as of the date hereof, and that are disclosed
in Section 4.9 of the Company Disclosure Letter. Nothing herein shall be
construed to prohibit the Surviving Corporation from amending or terminating
such contracts, agreements, arrangements, policies, plans and commitments in
accordance with the terms thereof and with Applicable Law.
(b) In addition to the foregoing, Purchaser hereby agrees
that, for a period of six months after the Effective Time, it shall continue to
maintain benefits for the employees and former employees of the Company and its
Subsidiaries which in the aggregate are no less favorable taken as a whole (on a
value or cost basis) than those provided to them under the Plans on the date
hereof.
40
(c) For purposes of all employee benefit plans, programs and
arrangements maintained by or contributed to by Surviving Corporation and its
Subsidiaries, Purchaser shall cause the Surviving Corporation to cause each such
plan, program or arrangement to treat the prior service with the Company and its
Affiliates of each person who is an employee or former employee of the Company
or its Subsidiaries immediately prior to the Effective Time (a "Company
Employee") (to the same extent such service is recognized under analogous plans,
programs or arrangements of the Company or its Affiliates prior to the Effective
Time) as service rendered to the Surviving Corporation, for purposes of
eligibility to participate and vesting (and only for purposes of benefit accrual
and determination of benefit levels solely with respect to service awards,
vacation and severance); provided, however, that any benefits provided by the
Surviving Corporation under any (i) ERISA Plans, (ii) nonqualified employee
benefit or deferred compensation plans, stock option, bonus or incentive plans
or (iii) other employee benefit or fringe benefit programs, that may be in
effect generally for employees of the Surviving Corporation or its Subsidiaries
from time to time, shall be reduced by benefits in respect of the same years of
service under analogous plans, programs and arrangements maintained by or
contributed to by the Company, the Surviving Corporation or their Subsidiaries.
Surviving Corporation shall (x) waive all limitations as to preexisting
conditions exclusions and waiting periods with respect to participation and
coverage requirements applicable to the Company Employees under any welfare
benefit plans that such Company Employees may be eligible to participate in
after the Effective Time, other than limitations or waiting periods that are
already in effect with respect to such employees and that have not been
satisfied as of the Effective Time under any welfare benefit plan maintained for
the Company Employees immediately prior to the Effective Time and (y) provide
each Company Employee with credit for any co-payments and deductibles paid prior
to the Effective Time in satisfying any applicable deductible or out-of-pocket
requirements under any welfare plans that such employees are eligible to
participate in after the Effective Time.
(d) Nothing in this Agreement shall be construed as requiring
Purchaser or any of its Affiliates to employ any Company Employee for any length
of time following the Effective Time. Nothing in this Agreement, express or
implied, shall be construed to prevent Purchaser or its Affiliates from (i)
terminating, or modifying the terms of employment of, any Company Employee
following the Effective Time or (ii) terminating or modifying to any extent in
accordance with its terms any Company benefit plan or any other employee benefit
plan, program, agreement or arrangement that Purchaser or its Affiliates may
establish or maintain; provided, however, that to the extent that, and for so
long as, a Company Employee remains employed by Purchaser or any of its
Subsidiaries during the six month period following the Effective Time, the
compensation and benefits payable to such employee during such period shall be
subject to Section 6.8(b).
6.9 Other Covenants of Purchaser and Merger Sub.
(a) Other than with respect to the transactions contemplated
specifically by the IPA, prior to the earlier to occur of the Effective Time or
the date that is one year after the Shareholders Meeting, none of Purchaser,
Merger Sub or their
41
respective affiliates (which, for this purpose, shall include the Company and
its Subsidiaries) shall, except as may be required by currently existing
contractual requirements (whether contingent or otherwise) of the Company and
its Subsidiaries, purchase, redeem or otherwise acquire any shares of the
capital stock of the Company (other than Dissenting Shares) or any securities
convertible into or exercisable for any shares of the capital stock of the
Company (or enter into any agreement or tender offer therefor) for an effective
price per share (on a Company Common Stock equivalent basis) that is less than
the Merger Consideration.
(b) Prior to the Form 15 Date, none of Purchaser, Merger Sub
or their respective affiliates shall cause or permit the Company to file a Form
15 (or successor form) with the SEC to de-register the Company with respect to
its reporting obligations regarding the Company Common Stock. "Form 15 Date"
means the earliest to occur of (i) the Effective Date, (ii) the two year
anniversary of the Shareholders Meeting, or (iii) the date that Purchaser,
Merger Sub and/or their respective affiliates own at least 90% of the
then-outstanding shares of Company Common Stock.
(c) Prior to the date of the Shareholders Meeting, none of
Purchaser, Merger Sub or their current affiliates (as in existence prior to
taking into effect the transactions contemplated by this Agreement and the
Interest Purchase Agreement) shall, other than entering into this Agreement and
the Interest Purchase Agreement or consummating the transactions contemplated
hereby (including, without limitation, any alternative transaction by Purchaser
in accordance with Section 6.2(e) hereof) and thereby, enter into any
transaction with the Company or its affiliates (as in existence prior to taking
into effect the transactions contemplated by this Agreement and the Interest
Purchase Agreement) unless such transaction is approved by a majority of the
Independent Directors.
ARTICLE VII
CONDITIONS TO MERGER
7.1 Conditions to Each Party's Obligation To Effect the Merger The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction on or prior to the Closing Date of each of the following conditions
(any or all of which may be waived by the parties hereto in writing, in whole or
in part, to the extent permitted by Applicable Law):
(a) This Agreement and the Merger shall have been adopted and
approved by the Required Vote;
(b) No statute, rule, order, decree or regulation shall have
been enacted or promulgated, and no action shall have been taken, by any
Governmental Entity of competent jurisdiction which temporarily, preliminarily
or permanently restrains, precludes, enjoins or otherwise prohibits the
consummation of the Merger or makes the Merger illegal; and
42
(c) Other than filing the Articles of Merger in accordance
with the TBCA, all authorizations, consents and approvals of all Governmental
Entities required to be obtained prior to consummation of the Merger shall have
been obtained, except for such authorizations, consents, and approvals the
failure of which to be obtained individually or in the aggregate has not had,
and would not be reasonably likely to have or result in, a Material Adverse
Effect on any party to this Agreement.
(d) All material consents and approvals of any Person that the
Company or any of its Subsidiaries are required to obtain in connection with the
consummation of the Merger, including consents and approvals from parties to
loans, contracts, leases or other agreements, shall have been obtained, and a
copy of each such consent and approval shall have been provided to Purchaser at
or prior to the Closing, except for such consents and approvals the failure of
which to be obtained individually or in the aggregate would not be reasonably
likely to have or result in a Material Adverse Effect on the Company; provided,
however, that with respect to any required consent that is not obtained, this
condition will be deemed to be satisfied unless Purchaser and Merger Sub shall
have used their respective best efforts to have caused the Company to have
obtained such consent.
(e) All of the closing conditions under the Interest Purchase
Agreement, dated as of the date hereof, by and among the Purchaser and Slough
Estates plc (the "IPA") (other than those conditions which relate to actions to
be taken at the closing of the Transfer (as defined in the IPA) and the other
transactions contemplated by the IPA) have been satisfied or waived (subject to
Applicable Law and in accordance with the terms of the IPA) and the consummation
of the Transfer and the other transactions contemplated by the IPA shall have
occurred; provided that this condition shall be deemed satisfied if the
Effective Time occurs simultaneously with the closing of the Transfer and the
other transaction contemplated by the IPA.
ARTICLE VIII
TERMINATION
8.1 Termination.
Notwithstanding anything herein to the contrary, this Agreement may
be terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after shareholder adoption of this Agreement:
(a) By the mutual consent of Purchaser and the Company in a
written instrument.
(b) By either the Company or Purchaser upon written notice to
the other, if:
43
(i) the Effective Time shall not have been occurred on
or before December 31, 2005 (the "Outside Date"); provided that the right
to terminate this Agreement pursuant to this Section 8.1(b)(i) shall not
be available to a party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the
Effective Time to have occurred on or before such date;
(ii) any Governmental Entity shall have issued a
statute, rule, order, decree or regulation or taken any other action
(which statute, rule, order, decree, regulation or other action the
parties hereto shall have used their reasonable best efforts to lift), in
each case permanently restraining, enjoining or otherwise prohibiting
consummation of the Merger or making the Merger illegal and such statute,
rule, order, decree, regulation or other action shall have become final
and nonappealable (provided that the terminating party is not then in
breach of Section 6.4); or
(iii) the IPA terminates in accordance with its terms.
(c) By Purchaser:
(i) at any time prior to the Effective Time upon written
notice to the Company, if there shall have been a material breach by the
Company of any representations, warranty, covenant or agreement set forth
in this Agreement, which breach would reasonably be expected to result in
any condition set forth in Section 7.1 not being satisfied and such breach
is not reasonably capable of being cured and such condition is not
reasonably capable of being satisfied within 30 days following the receipt
by the Company of written notice of such breach from Purchaser (provided
that Purchaser is not then in material breach of any representation,
warranty, covenant or other agreement contained herein and provided
further that with respect to any uncured breach, Purchaser and Merger Sub
shall have used their respective best efforts to have caused the Company
to cure such breach within such timeframe); or
(ii) if, prior to the Effective Time upon written notice
to the Company, the Board shall have withdrawn, modified or changed in a
manner adverse to Purchaser or Merger Sub its approval or recommendation
of this Agreement or the Merger or shall have recommended an Acquisition
Proposal or shall have executed a definitive agreement relating to an
Acquisition Proposal with a Person other than Purchaser or Merger Sub.
8.2 Effect of Termination.
In the event of the termination of this Agreement as provided in
Section 8.1, written notice thereof shall forthwith be given by the terminating
party to the other parties specifying the provision of this Agreement pursuant
to which such termination is made, and except as provided in this Section 8.2,
this Agreement shall forthwith become null and void after the expiration of any
applicable period following such notice. In the
44
event of such termination, there shall be no liability on the part of Parent,
Purchaser, Merger Sub or the Company, except (a) as set forth in Section 9.1 of
this Agreement and (b) with respect to the requirement to comply with the
Confidentiality Agreement; provided that nothing herein shall relieve any party
from any liability or obligation with respect to any willful breach of this
Agreement.
ARTICLE IX
MISCELLANEOUS
9.1 Fees and Expenses.
(a) All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs or expenses, except as provided in Sections 9.1(b) and
9.1(c).
(b) If this Agreement is terminated by Purchaser pursuant to
Section 8.1(c)(ii), then the Company shall pay to Purchaser in immediately
available funds a termination fee in an amount equal to U.S.$12.0 million (the
"Termination Fee").
(c) If (i) this Agreement is terminated by Purchaser or the
Company pursuant to Section 8.1(b)(i) or 8.1(b)(iii) and (ii)(A) an Acquisition
Proposal has been made and publicly announced or communicated to the Company's
shareholders after the date of this Agreement and prior to the effective date of
such termination and (B) concurrently with or within 9 months of the date of
such termination a Third Party Acquisition Event occurs, then the Company shall
within one Business Day of the occurrence of such a Third Party Acquisition
Event (including any revisions or amendments thereto), if any, pay to Purchaser
the Termination Fee.
(d) Any payment of the Termination Fee pursuant to this
Section 9.1 shall be made within one Business Day after termination of this
Agreement (or as otherwise expressly set forth in this Agreement) by wire
transfer of immediately available funds. If the Company fails to pay to
Purchaser the Termination Fee when due hereunder, the Company shall pay the
costs and expenses (including legal fees and expenses) in connection with any
action, including the filing of any lawsuit or other legal action, taken to
collect payment, together with interest on the amount of any unpaid fee and/or
expense at the publicly announced prime rate for leading money center banks as
published in The Wall Street Journal from the date such fee was required to be
paid to the date it is paid.
9.2 Amendment; No Waiver.
(a) Any provision of this Agreement may be amended or waived
prior to the Effective Time if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by the Company, Purchaser and
Merger Sub or, in the case of a waiver, by the party against whom the waiver is
to be effective; provided that (i) any waiver or amendment shall be effective
against a party only if the board of directors of such party approves such
waiver or amendment and (ii) after the adoption of this Agreement by the
shareholders of the Company, no such amendment or waiver shall,
45
without the further approval of such shareholders and each party's board of
directors, alter or change (x) the amount or kind of consideration to be
received in exchange for any shares of capital stock of the Company, (y) prior
to the Effective Time, any term of the Company Articles or (z) any of the terms
or conditions of this Agreement if such alteration or change would adversely
affect the holders of any shares of capital stock of the Company.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by Applicable Law.
9.3 Survival.
The representations and warranties contained in this Agreement or in
any certificates or other documents delivered prior to or as of the Effective
Time shall survive until (but not beyond) the Effective TIME. The covenants and
agreements of the parties hereto (including the Surviving Corporation after the
Merger) shall survive the Effective Time without limitation (except for those
which, by their terms, contemplate a shorter survival period).
9.4 Notices.
All notices and other communications hereunder shall be in writing
and shall be deemed given upon (a) transmitter's confirmation of a receipt of a
facsimile transmission, (b) confirmed delivery by a standard overnight carrier
or when delivered by hand, (c) the expiration of five Business Days after the
day when mailed in the United States by certified or registered mail, postage
prepaid, or (d) delivery in Person, addressed at the following addresses (or at
such other address for a party as shall be specified by like notice):
(a) if to the Company, to:
Tipperary Corporation
▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with copies to:
46
▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
c/o PIRINATE Consulting Group, LLC
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to Purchaser or Merger Sub, to:
Santos International Holdings Pty Ltd.
Ground Floor ▇▇▇▇▇▇ House
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇ ▇ ▇▇▇▇ ▇▇▇▇
Facsimile: 61 8 8218 5287
Attention: Company Secretary
with a copy to:
Chamberlain, Hrdlicka, White, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇-▇▇▇▇
Facsimile: 713 658-2553
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
9.5 Interpretation; Definitions.
When a reference is made in this Agreement to Sections, such
reference shall be to a Section of this Agreement unless otherwise indicated.
Whenever the words "include", "includes" or "including" are used in this
Agreement they shall be deemed to be followed by the words "without limitation".
The phrase "made available" when used in this Agreement shall mean that the
information referred to has been made available to the party to whom such
information is to be made available. The word "affiliates" when
47
used in this Agreement shall have the respective meanings ascribed to them in
Rule 12b-2 under the Exchange Act. The phrase "beneficial ownership" and words
of similar import when used in this Agreement shall have the meaning ascribed to
it in Rule 13d-3 under the Exchange Act.
The following terms have the following definitions:
(a) "Acceptable Confidentiality Agreement" means an agreement
that imposes obligations and restrictions on the counterparty thereto which are
substantially similar to the terms that are binding on the other party to this
Agreement, as applicable, under the Confidentiality Agreement.
(b) "Business Day" means any day other than Saturday and
Sunday and any day on which banks are not required or authorized to close in the
State of New York.
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Comet Ridge Joint Venture" means each of the
unincorporated joint ventures between: (i) the current parties to the Model Form
Operating Agreement dated 15 May 1992 between Tri-Star Petroleum Company, ▇▇▇▇
▇▇▇▇▇▇▇, Tipperary Oil and Gas Corporation, Piper Petroleum Company, Amerind Oil
Co. Ltd, Nations Bank of Texas NA (Trustee for Trust #1190, 1191, 1362, 1363 and
1364), ▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇ ▇▇▇ ▇▇▇▇ (Co-Trustees of the ▇▇▇▇▇ ▇. ▇▇▇▇ and
▇▇▇▇ ▇▇▇ ▇▇▇▇ Revocable Trust Agreement dated 3/18/88), Curbstone Ltd, ▇▇▇▇ ▇.
▇▇▇▇▇ and Clovelly Oil Company, Inc; (ii) the current parties to the Model Form
Operating Agreement dated 17 December 2002 between Tipperary Oil & Gas
(Australia) Pty Ltd, ▇▇▇▇▇ Ltd, the Estate of ▇.▇. ▇▇▇▇▇▇▇, Origin Energy CSG
Limited, Oil Company of Australia (Moura) Pty Ltd, OCA (CSG) Pty Limited,
Tipperary CSG Inc, Tipperary Corporation, Tipperary Queensland Inc and ▇▇▇▇▇▇▇▇
Pecos County Production Company Inc; and (iii) the current parties to the Model
Form Operating Agreement dated 25 November 2003 between Tipperary Oil & Gas
(Australia) Pty Ltd (as Operator) and ▇▇▇▇▇ Ltd, The Estate of ▇.▇. ▇▇▇▇▇▇▇,
Origin Energy CSG Limited, Oil Company of Australia (Moura) Pty Ltd, OCA (CSG)
Pty Limited, Tipperary CSG Inc, Tipperary Corporation, Tipperary Queensland Inc
and ▇▇▇▇▇▇▇▇ Pecos County Production Company Inc.
(e) "Company Assets" means all of the properties and assets
(real, personal or mixed, tangible or intangible) of the Company and its
Subsidiaries.
(f) "Confidentiality Agreement" means that certain
confidentiality agreement, dated April 11, 2005, by and among the Company, TOGA,
Purchaser and Slough Estates plc.
(g) "Derivative Transaction" means any swap transaction,
option, warrant, forward purchase or sale transaction, futures transaction, cap
transaction, floor transaction or collar transaction relating to one or more
currencies, commodities, bonds, equity securities, loans, interest rates,
catastrophe events, weather-related events, credit-
48
related events or conditions or any indexes, or any other similar transaction
(including any option with respect to any of these transactions) or combination
of any of these transactions, including collateralized mortgage obligations or
other similar instruments or any debt or equity instruments evidencing or
embedding any such types of transactions, and any related credit support,
collateral or other similar arrangements related to such transactions; provided,
however, that no Australian gas sales contract entered into in the ordinary
course of business consistent with past practice shall constitute a "Derivative
Transaction."
(h) "Environmental Claim" means any claim, lien, action,
demand, proceeding, investigation or written notice to the Company or its
Subsidiaries by any Person or entity alleging non-compliance with or potential
liability (including potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resource damages, personal injuries or
penalties) arising out of, based on, or resulting from (a) the presence, or
release into the environment, of any Hazardous Substance at any location,
whether or not owned, leased, operated or used by the Company or its
Subsidiaries or (b) circumstances forming the basis of any violation, or alleged
violation of any applicable Environmental Law.
(i) "Environmental Laws" means all Applicable Laws, including
common law, relating to pollution, cleanup, restoration or protection of the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata and natural resources) or to the protection of flora or fauna
or their habitat or to human or public health or safety, including (i)
Applicable Laws relating to emissions, discharges, Releases or threatened
Releases of Hazardous Substances, or otherwise relating to the manufacture,
generation, processing, distribution, use, sale, treatment, receipt, storage,
disposal, transport or handling of Hazardous Substances, including the
Comprehensive Environmental Response, Compensation, and Liability Act and the
Resource Conservation and Recovery Act, and (ii) the Occupational Safety and
Health Act.
(j) "Hazardous Substance" means (i) chemicals, pollutants,
contaminants, wastes, toxic and hazardous substances, and oil and petroleum
products, (ii) any substance that is or contains asbestos, urea formaldehyde
foam insulation, polychlorinated biphenyls, petroleum or petroleum-derived
substances or wastes, radon gas or related materials or lead or lead-based paint
or materials, (iii) any substance, material or waste that requires
investigation, removal or remediation under any Environmental Law, or is
defined, listed or identified as hazardous, toxic or otherwise dangerous under
any Environmental Laws or (iv) any substance that is toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or
otherwise hazardous.
(k) "knowledge" means, with respect to the Company, the actual
knowledge of the individuals listed in Section 9.5(j) of the Company Disclosure
Letter, after due inquiry.
(l) "Litigation" means any action, claim, suit, proceeding,
citation, summons, subpoena, inquiry or investigation of any nature, civil,
criminal or
49
regulatory, in law or in equity, by or before any Governmental Entity or
arbitrator (including worker's compensation claims).
(m) "Material Adverse Effect" means with respect to the
Company (i) a material adverse effect on the business, results of operations or
financial condition of the Company and its Subsidiaries taken as a whole;
provided, that none of the following shall be deemed, either alone or in
combination, to constitute, and none of the following shall be taken into
account in determining whether there has been or will be, a Material Adverse
Effect: (A) changes and effects attributable to changes in Laws of general
applicability or interpretations thereof by courts or governmental authorities,
(B) any change in GAAP, (C) changes and effects attributable to or resulting
from changes in general industry conditions or general economic conditions,
including changes in commodity prices, (D) national or international political
conditions, including any engagement in hostilities, whether or not pursuant to
the declaration of a national emergency or war, or the occurrence of any
military or terrorist attack occurring prior to, on or after the date of this
Agreement, (E) any action or omission of the Company or Purchaser or any
Subsidiary of any of them taken with the prior written consent of the other
party hereto, and (F) with respect to Purchaser or Merger Sub, any circumstance,
change, event or effect which materially impairs the ability of Purchaser or
Merger Sub to consummate the transactions contemplated hereby, and (G) changes
and effects attributable to the announcement or pendency of this Agreement or
the Merger; or (ii) any change or effect that prevents or materially impedes or
delays the consummation by the Company of the Merger and the other transactions
contemplated hereby.
(n) "Oil and Gas Properties" means all of the Company's or any
of its Subsidiaries' right, title and interest in, to and under, or derived from
oil and gas leases, licenses, authorities to prospect and rights, ▇▇▇▇▇ and
Units, including all land, facilities, personal property and equipment,
contracts and information pertaining or relating thereto.
(o) "Permitted Exceptions" means (i) statutory Liens for
current taxes, assessments or other governmental charges not yet delinquent (or
that may subsequently be paid without penalty) or the amount or validity of
which is being contested in good faith; (ii) mechanics', carriers', workers',
repairers' and similar Liens arising or incurred in the ordinary course of
business; (iii) zoning, entitlement and other land use and environmental
regulations by any Governmental Entity; (iv) Liens relating to purchase money
security interests entered into in the ordinary course of business consistent
with past practice; (v) Liens relating to lessors' interests in leased tangible
personal property; (vi) with respect to real property, the standard exceptions
to title which appear as part of Chicago Title Insurance Company's printed form
of title insurance policy; (vii) any other covenants, conditions, restrictions,
reservations, rights, claims, rights-of-ways, easements and other encumbrances
or matters of record affecting title which do not, individually or in the
aggregate, have a material adverse effect on the value or current use of the
assets of the party subject to such Lien, taken as a whole; (ix) Liens incurred
in the ordinary course of business to secure the performance of bids, tenders,
trade contracts, leases, statutory obligations, surety and appeal bonds,
performance and
50
repayment bonds and other similar obligations; and (x) Liens securing
obligations reflected on the Company Balance Sheet.
(p) "Person" means any natural Person, firm, individual,
partnership, joint venture, business trust, trust, association, corporation,
company, unincorporated entity or Governmental Entity.
(q) "Release" means any release, spill, emission, migration,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, or
leaching into the environment.
(r) "Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes or any amendment
thereto, and including any schedule or attachment thereto.
(s) "Subsidiary" means with respect to any Person, any other
Person of which 50% or more of the securities or other interests having by their
terms ordinary voting power for the election of directors or others performing
similar functions are directly or indirectly owned by such Person; and in
addition, with respect to any representation and warranty of the Company, the
term Subsidiary shall mean any such other Persons of which 50% or more of such
securities or other interests are or were at any time directly or indirectly
owned by the Company, provided that the Company's representation and warranty
with respect to such Subsidiary shall only relate to the period during which the
Company directly or indirectly owned such Subsidiary.
(t) "Tax" or "Taxes" mean all federal, state, local or foreign
taxes, assessments, duties, levies or similar charges of any kind including,
without limitation, all income, payroll, withholding, unemployment insurance,
social security, sales, use, service, leasing, excise, goods and services,
franchise, gross receipts, value added, alternative or add-on minimum,
estimates, occupation, real and personal property, stamp, duty, transfer,
workers' compensation, severance, windfall profits, or other Tax, charge, fee,
levy or assessment of the same or of a similar nature, including any interest,
penalty or addition thereto, whether disputed or not.
(u) "Third Party Acquisition Event" means the consummation of
an Acquisition Proposal involving the purchase of at least 2/3rds of the equity
securities of the Company or all or substantially all of the consolidated assets
of the Company and its Subsidiaries, taken as a whole.
(v) "TOGA" means Tipperary Oil and Gas Australia Pty Ltd.
(w) "TOGA Credit Facility" means that certain senior credit
facility of AUS$150,000,000 with the Australia and New Zealand Banking Group
Ltd. and BOS International (Australia), Ltd.
(x) "Unit" means the area covered by a unitization,
communitization or pooling agreement or order applicable to ▇▇▇▇▇, but only as
to those
51
formations in which a Well or ▇▇▇▇▇ are currently completed and producing
Hydrocarbons.
(y) "Well" means a well for the purpose of producing
Hydrocarbons or disposing of fluids produced in connection with the production
of Hydrocarbons.
9.6 Headings; Schedules.
The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Disclosure of any matter pursuant to any Section of the Company
Disclosure Letter, the Slough Disclosure Letter or Merger Sub Disclosure Letter
shall not be deemed to be an admission or representation as to the materiality
of the item so disclosed.
9.7 Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall be considered one and
the same agreement.
9.8 Entire Agreement.
This Agreement and the Confidentiality Agreement constitute the
entire agreement, and supersede all prior agreements and understandings (written
and oral), among the parties with respect to the subject matter of this
Agreement.
9.9 Severability.
If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid,
void, unenforceable or against its regulatory policy, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
9.10 Governing Law.
This Agreement shall be governed, construed and enforced in
accordance with the laws of the State of Texas without giving effect to the
principles of conflicts of law thereof.
9.11 Assignment.
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties. 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 assigns.
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9.12 Parties in Interest.
This Agreement shall be binding upon and inure solely to the benefit
of each party to this Agreement and their permitted assignees, and (other than
Sections 6.5 and 9.11) nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement. Without
limiting the foregoing, no direct or indirect holder of any equity interests or
securities of any party to this Agreement (whether such holder is a limited or
general partner, member, shareholder or otherwise), nor any affiliate of any
party to this Agreement, nor any director, officer, employee, representative,
agent or other controlling Person of each of the parties to this Agreement and
their respective affiliates shall have any liability or obligation arising under
this Agreement or the transactions contemplated hereby.
******
53
IN WITNESS WHEREOF, Purchaser, Merger Sub and the Company have
caused this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
Signed for and on behalf of ▇▇▇▇▇▇
INTERNATIONAL HOLDINGS PTY LTD.
A.B.N. 57 057 585 869 by its duly
appointed Attorney in the presence of:
___________________________________
Witness
Printed Name:______________________
___________________________________
Attorney
Printed Name:______________________
▇▇▇▇▇▇ ACQUISITION CO.
By:________________________________
Name:______________________________
Title:_____________________________
TIPPERARY CORPORATION
By:________________________________
Name:______________________________
Title:_____________________________
▇▇▇▇▇▇ Ltd. joins in the execution and delivery of this Amended and Restated
Agreement and Plan of Merger dated July 4, 2005 by and among ▇▇▇▇▇▇
International Holdings Pty Ltd, Santos Acquisition Co. and Tipperary Corporation
for the limited purpose of evidencing the agreement of ▇▇▇▇▇▇ Ltd. to be bound
by and subject to the provisions of Sections 2.1, 3.2(a), 5.1, 5.2, 5.3, 5.4,
5.6 and 5.9 of said Agreement.
Signed for and on behalf of ▇▇▇▇▇▇ LTD.
A.B.N. 80 007 550 923 by its duly
appointed Attorney in the presence of:
__________________________________
Witness
Printed Name:_____________________
__________________________________
Attorney
Printed Name:_____________________