EXHIBIT 2.1
AGREEMENT
DATED AS OF MAY 2, 1995
by and between
FREEPORT-McMoRan INC.
and
FREEPORT-McMoRan COPPER & GOLD INC.,
on the one hand,
and
The RTZ CORPORATION PLC,
RTZ INDONESIA LIMITED
and
RTZ AMERICA, INC.,
on the other hand
AGREEMENT, dated as of May 2, 1995, by and between
Freeport-McMoRan Inc., a Delaware corporation ("Parent"), and
Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the
"Company"), on the one hand, and The RTZ Corporation PLC, a
company organized under the laws of England ("RTZ"), RTZ Indonesia
Limited, a company organized under the laws of England (the
"Purchaser") and a subsidiary of RTZ, and RTZ America, Inc., a
Delaware corporation ("RTZA") and a subsidiary of RTZ, on the
other hand. Capitalized terms that are used herein are defined in
this Agreement.
RECITALS
WHEREAS, the parties desire to effect certain
transactions relating to the restructuring of Parent and the
Company and to the distribution by Parent of all of the shares of
Class B Common Stock owned by Parent as of the distribution date
thereof, in the form of a stock dividend to the holders of Parent
Common Stock (the "Spin-Off").
NOW, THEREFORE, in consideration of the terms and
conditions set forth herein and other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
1.1 "ABC Debentures" means Zero Coupon
Convertible Subordinated Debentures due 2006 of Parent.
1.2 "ABC Redemption Date" shall have the
meaning set forth in Section 4.1(a).
1.3 "Additional Purchase Notice" shall have
the meaning set forth in Section 6.1(a).
1.4 "Additional Shares" shall have the meaning
set forth in Section 6.1(a).
1.5 "Additional Stock Closing" shall have the
meaning set forth in Section 6.3(a).
1.6 "Additional Stock Closing Date" shall have
the meaning set forth in Section 6.3(a).
1.7 "Affiliate" means, with respect to any
Person, any other Person controlling, controlled by or under
common control with such Person.
1
1.8 "Affiliate Agreements" shall have the
meaning set forth in Section 9.1.4.
1.9 "business day" shall mean any day other
than a Saturday, Sunday or a day which shall be in the City of
London or the City of New York a legal holiday or a day on which
banking institutions are authorized or obligated by law or other
government action to close.
1.10 "Class A Common Stock" means the Class A
Common Stock, par value $.10 per share, of the Company.
1.11 "Class A Directors" shall mean the
directors elected by the holders of Class A Common Stock.
1.12 "Class B Common Stock" means the Class B
Common Stock, par value $.10 per share, of the Company.
1.13 "Class B Directors" shall mean the
directors elected by the holders of Class B Common Stock.
1.14 "Code" means the Internal Revenue Code of
1986, as amended.
1.15 "Company" or "FCX" means Freeport-McMoRan
Copper & Gold Inc., a Delaware corporation.
1.16 "Company Common Stock" means Class A
Common Stock, Class B Common Stock and any other shares of common
equity of the Company.
1.17 "Company Material Adverse Effect" shall
mean any adverse effect or change (alone or taken together with
others) in the business, condition (financial or otherwise),
assets, Liabilities, properties, operations or results of
operations of the Company or its subsidiaries material to the
Company and its subsidiaries taken as a whole, provided that no
Company Material Adverse Effect shall be deemed to result from
general changes in economic conditions or any change affecting
copper or gold mining companies generally (including laws and
regulations applicable to such companies, other than such laws and
regulations of any governmental or regulatory authority in
Indonesia).
1.18 "Company Notice" shall have the meaning
set forth in Section 11(a).
1.19 "Company Registration Rights Agreement"
shall mean the Registration Rights Agreement substantially in the
form attached hereto as Exhibit A.
2
1.20 "Company Voting Stock" shall mean any
capital stock of the Company which is then entitled to vote for
the election of directors.
1.21 "Consent Solicitation Statement" means the
Consent Solicitation Statement of the Company, dated February 7,
1995 relating to, among other things, approval of the Merger and
New Certificate of Incorporation.
1.22 "Debt Issues" shall have the meaning set
forth in Section 4.1(a).
1.23 "Declaration Date" shall mean the date
upon which Parent shall declare the record date for the Spin-Off.
1.24 "DGCL" means the Delaware General
Corporation Law, as amended.
1.25 "Distribution Date" shall have the meaning
set forth in Section 7(a).
1.26 "Exchange Act" means the Securities
Exchange Act of 1934, as amended, or any successor federal
statute, and the rules and regulations of the SEC thereunder, all
as the same shall be in effect at the time.
1.27 "Facilitating Company" means FM
Facilitating Company, Inc., a Delaware corporation.
1.28 "$4.375 Parent Preferred Stock" means
$4.375 Convertible Exchangeable Preferred Stock, par value $1.00
per share, of Parent.
1.29 "GAAP" means United States generally
accepted accounting principles.
1.30 "governmental or regulatory authority"
means any government or political subdivision thereof, whether
Federal, state, local or foreign, or any agency or instrumentality
of any such government or political subdivision.
1.31 "including" and "including, without
limitation," and other forms of such terms, with respect to any
matter or thing, shall be construed to mean "including but not
limited to" such matter or thing.
1.32 "Indemnified Party" shall have the meaning
set forth in Section 13.4(d).
3
1.33 "Indemnifying Party" shall have the
meaning set forth in Section 13.4(d).
1.34 "Indenture" means the Indenture between
Freeport-McMoRan Inc. and Chemical Bank, as Trustee, dated as of
November 9, 1990, as supplemented by Supplemental Indenture No. 1
and Supplemental Indenture No. 2.
1.35 "IRS" means the Internal Revenue Service
of the United States of America.
1.36 "Laws" shall mean any foreign or domestic
(Federal, state or local) law, statute, ordinance, rule or
regulation or bodies of law.
1.37 "Liabilities" means any direct or indirect
indebtedness, liability, claim, loss, damage, deficiency,
obligation or responsibility, fixed or unfixed, ▇▇▇▇▇▇ or
inchoate, liquidated or unliquidated, secured or unsecured,
accrued, absolute, contingent or otherwise, of a kind required by
GAAP to be set forth on a financial statement (including the notes
thereto).
1.38 "Majority Shares" means the number of
shares of Company Voting Stock as will elect a majority of the
directors of the Company; provided that, solely for purposes of
such calculation, the shares of Company Voting Stock issuable upon
exercise of warrants, options or other rights, or upon conversion
or exchange of convertible or exchangeable securities, owned by
RTZ and its Affiliates, shall be treated as outstanding Company
Voting Stock.
1.39 "Merger" means the merger of Facilitating
Company with and into the Company pursuant to the Merger
Agreement.
1.40 "Merger Agreement" means the Agreement and
Plan of Merger, dated February 7, 1995, between the Company and
Facilitating Company.
1.41 "New By-laws" means the By-laws of the
Company substantially in the form attached as Exhibit 2 to Annex I
to the Consent Solicitation Statement.
1.42 "New Certificate of Incorporation" means
the Certificate of Incorporation of the Company substantially in
the form attached as Exhibit 1 to Annex I to the Consent
Solicitation Statement.
1.43 "NYSE" means The New York Stock Exchange,
Inc.
1.44 "Offer Price" shall have the meaning set
forth in Section 11(a).
4
1.45 "Option" shall have the meaning set forth
in Section 6.2(a).
1.46 "Option Notice" shall have the meaning set
forth in Section 6.2(a).
1.47 "Option Shares" shall have the meaning set
forth in Section 6.2(a).
1.48 "Parent" or "FTX" means Freeport-McMoRan
Inc., a Delaware corporation.
1.49 "Parent Common Stock" means the Common
Stock, par value $.10 per share, of Parent and any other shares of
common equity of Parent.
1.50 "Parent Material Adverse Effect" shall
mean any adverse effect or change (alone or taken together with
others) in the business, condition (financial or otherwise),
assets, Liabilities, properties, operations or results of
operations of Parent or its subsidiaries material to Parent and
its subsidiaries taken as a whole, provided that no Parent
Material Adverse Effect shall be deemed to result from general
changes in economic conditions or any change affecting
agrichemical or copper or gold mining companies generally
(including laws and regulations applicable to such companies,
other than such laws and regulations of any governmental or
regulatory authority in Indonesia).
1.51 "Parent Registration Rights Agreement"
shall mean the Registration Rights Agreement substantially in the
form attached hereto as Exhibit B.
1.52 "Permits" means all licenses, permits,
orders, approvals, registrations, authorizations, qualifications
and filings with and under all Federal, state, local or foreign
Laws and governmental or regulatory authorities and all industry
or other nongovernmental self-regulatory organizations that are
necessary for the conduct of the applicable Person's business and
the ownership of its properties.
1.53 "Person" means a corporation, an
association, a partnership, an organization, a business, an
individual, a governmental or political subdivision thereof or a
governmental or regulatory authority.
1.54 "Proposed Closing Date" shall have the
meaning set forth in Section 3.2(a).
1.55 "Public Offering" shall have the meaning
set forth in Section 11(b).
1.56 "Purchaser" means RTZ Indonesia Limited, a
company organized under the laws of England and a subsidiary of
RTZ.
5
1.57 "Purchaser Notice" shall have the meaning
set forth in Section 11(f).
1.58 "Related Agreements" means, individually
and collectively, the Company Registration Rights Agreement and
the Parent Registration Rights Agreement.
1.59 "RTZ" means The RTZ Corporation PLC, a
company organized under the laws of England.
1.60 "RTZA" means RTZ America, Inc., a Delaware
corporation and a subsidiary of RTZ.
1.61 "Schedule 14D-1" shall have the meaning
set forth in Section 5.1(b).
1.62 "Schedule 14D-9" shall have the meaning
set forth in Section 5.1(d).
1.63 "SEC" means the Securities and Exchange
Commission.
1.64 "SEC Reports" shall have the meaning set
forth in Section 8.1.8(a).
1.65 "Securities Act" means the Securities Act
of 1933, as amended, or any successor federal statute, and the
rules and regulations of the SEC thereunder, all as the same shall
be in effect at the time.
1.66 "6.55% Notes" means the 6.55% Convertible
Subordinated Notes due January 15, 2001, of Parent.
1.67 "6.55% Redemption Date" shall have the
meaning set forth in Section 4.1(a).
1.68 "6.55% Redemption Price" shall have the
meaning set forth in Section 6.1(b).
1.69 "6.55% Remainder" shall have the meaning
set forth in Section 6.1(b).
1.70 "Spin-Off" shall have the meaning set
forth in the Recitals.
6
1.71 "Spin-Off Private Letter Ruling" means the
private letter ruling to Parent from the IRS dated November 21,
1994 concerning the Spin-Off, together with any supplements and
amendments thereto.
1.72 "Stock Closing" shall have the meaning set
forth in Section 3.2(b).
1.73 "Stock Closing Date" shall have the
meaning set forth in Section 3.2(b).
1.74 "Supplemental Indenture No. 1" means
Freeport-McMoRan Inc. Supplemental Indenture No. 1, dated as of
February 5, 1991, relating to the Series of 6.55% Convertible
Subordinated Notes due January 15, 2001.
1.75 "Supplemental Indenture No. 2" means
Freeport-McMoRan Inc. Supplemental Indenture No. 2, dated as of
July 15, 1991, relating to the Series of Zero Coupon Convertible
Subordinated Debentures due 2006 (ABC Securities).
1.76 "Tender Offer" shall have the meaning set
forth in Section 5.1(b).
1.77 "Termination Notice" shall have the
meaning set forth in Section 6.1(c).
1.78 "Trustee" means Chemical Bank, as trustee
under the Indenture.
2. Registration Rights Agreements.
Simultaneously with the Stock Closing (i) the
Company and the Purchaser shall execute and deliver the Company
Registration Rights Agreement, and (ii) Parent and RTZA shall
execute and deliver the Parent Registration Rights Agreement.
3. Purchases of Class A Common Stock.
3.1 Sale of Shares.
Upon the terms and subject to the conditions
set forth in this Agreement, at the Stock Closing, Parent shall
sell to the Purchaser, and the Purchaser shall purchase,
21,531,100 shares of Class A Common Stock, free and clear of any
and all liens, encumbrances, equities or adverse claims, at a
purchase price per share of $20.90, the total purchase price being
rounded to $450,000,000.
7
3.2 Stock Closing.
(a) No later than 5 business days prior
to the Stock Closing, Parent shall deliver written notice to the
Purchaser stating the proposed date for the Stock Closing (the
"Proposed Closing Date").
(b) Upon the terms and subject to the
conditions of this Agreement, the closing of the transactions
contemplated by this Article 3 (the "Stock Closing") shall take
place at the offices of Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, commencing at 10:00 a.m.
(New York local time) on the Proposed Closing Date, or as soon as
possible thereafter, upon satisfaction or waiver of the applicable
conditions set forth in Article 10 hereof, or at such other time
and/or place and/or on such other date as the parties may mutually
agree (the "Stock Closing Date"). No later than 3 business days
prior to the Stock Closing Date, Parent shall provide written
notice to the Purchaser specifying the accounts to which payment
shall be made.
(c) At the Stock Closing (i) Parent
shall deliver to the Purchaser the certificates representing
21,531,100 shares of Class A Common Stock purchased in accordance
with this Article 3, duly endorsed in blank or accompanied by
stock powers or other instruments of transfer duly executed in
blank, with all necessary transfer tax and other documentary
stamps affixed thereto, (ii) the Purchaser shall pay to Parent in
consideration for the shares being purchased, by wire transfer of
immediately available funds, the aggregate purchase price equal to
$450,000,000, and (iii) the parties hereto shall execute and
deliver such certificates, documents and instruments as may be
required to be executed or delivered pursuant to the terms hereof.
4. Certain Actions by Parent.
4.1 Redemption of the 6.55% Notes and the ABC
Debentures.
(a) Parent shall redeem the 6.55% Notes
and the ABC Debentures (the "Debt Issues") as soon as is
reasonably practicable after consummation of the Stock Closing,
and in any case, prior to the Spin-Off; provided that Parent shall
give notice of the redemption of one of the Debt Issues within 24
hours after the Stock Closing and notice of the redemption of the
other Debt Issue as soon as is reasonably practicable thereafter.
The redemption date specified in such notice with respect to the
6.55% Notes is herein called the "6.55% Redemption Date" and that
with respect to the ABC Debentures is herein called the "ABC
Redemption Date".
(b) If Parent causes RTZA to commence
the Tender Offer in accordance with Section 5.1(a) hereof, the
6.55% Redemption Date shall be midnight
8
on the Sunday following the expiration of
the Tender Offer, which shall occur at 5:00 p.m. (New York City
time) on the prior Friday.
(c) Prior to mailing the notice of
redemption in respect of the 6.55% Notes and in respect of the ABC
Debentures, Parent shall have obtained, and furnished to RTZA a
copy of, the consent of the Trustee in writing that the notice to
the Trustee with respect to the 6.55% Notes and the notice to the
Trustee with respect to the ABC Debentures, respectively, as
contemplated by this Agreement, each constitutes sufficient notice
for purposes of the respective Indenture.
5. Tender Offer for, and Conversion of, 6.55%
Notes.
5.1 Tender Offer.
(a) No later than 5 business days prior
to sending a notice of redemption with respect to the 6.55% Notes,
Parent shall deliver written notice to RTZA stating whether or not
Parent elects to cause RTZA to commence the Tender Offer in
accordance with this Article 5.
(b) If Parent requests in accordance
with Section 5.1(a) hereof that RTZA commence a tender offer,
Parent and RTZA shall at such time agree on the price to be
offered in, and the conditions to, such all-cash tender offer for
all outstanding 6.55% Notes (the "Tender Offer") and, thereafter,
subject to Sections 5.1(c), (e) and (f) hereof and to the receipt
of the written consent referred to in Section 8.1.8(c), RTZA shall
commence the Tender Offer. In connection therewith, RTZA shall
take, or cause to be taken, all actions and do, or cause to be
done, all things necessary, proper or advisable to cause the
consummation of the Tender Offer, including the filing with the
SEC, the NYSE and any other applicable governmental or regulatory
authorities of a Tender Offer Statement on Schedule 14D-1 and any
amendments thereto and any other offering documents required to be
filed therewith (the "Schedule 14D-1"). The expiration of the
Tender Offer shall occur at 5:00 p.m. (New York local time) on the
twenty-first business day, or if such twenty-first business day is
not a Friday, on the first Friday following the twenty-first
business day, following the commencement thereof (unless extended
with the consent of the parties hereto), whereupon, subject to the
satisfaction of the conditions to the Tender Offer, RTZA shall
purchase the 6.55% Notes tendered therein in accordance with the
terms of the Tender Offer.
(c) RTZA shall not be obligated to
commence the Tender Offer unless prior thereto it shall have
received a certificate from the chief financial officer of Parent,
dated no earlier than the date the notice of redemption of the
6.55% Notes is mailed to the Trustee and to the holders thereof in
accordance with Article 4 hereof, to the effect that, to the best
of his knowledge, no event has occurred or is
9
contemplated by this Agreement which
causes Parent to believe that the nonrecognition provisions of
Code Section 355(a)(1) and (c) shall not apply with respect to the
Spin-Off, other than as a result of Code Section 367(e).
(d) No later than the date on which the
Schedule 14D-1 is filed with the SEC (i) Parent shall file with
the SEC, the NYSE and any other applicable governmental or
regulatory authorities a Solicitation/Recommendation Statement on
Schedule 14D-9 and any other necessary or appropriate
documentation (the "Schedule 14D-9"), and (ii) Parent shall mail
to holders of record of 6.55% Notes the Schedule 14D-1, the
Schedule 14D-9 and related documents.
(e) If Parent requests that RTZA
commence the Tender Offer, Parent and RTZA will also agree at such
time upon the terms mutually acceptable to Parent and RTZA upon
which RTZA will have the right to acquire shares of Parent Common
Stock upon conversion of the 6.55% Notes purchased in the Tender
Offer. In connection therewith, Parent shall take, or cause to be
taken, all actions and do, or cause to be done, all things
necessary, proper or advisable to permit such acquisition of
Parent Common Stock.
(f) Parent and RTZA shall enter into an
agreement with the Trustee and Mellon Securities Trust Company
pursuant to which all 6.55% Notes validly tendered and purchased
in the Tender Offer shall be converted into Parent Common Stock,
upon the terms referred to in Section 5.1(e), immediately upon
expiration of the Tender Offer and prior to the 6.55% Redemption
Date.
(g) As promptly as practicable after the
6.55% Redemption Date, Parent shall provide written notice to the
Purchaser of the aggregate principal amount of 6.55% Notes
redeemed by Parent.
5.2 Conversion of 6.55% Notes.
In accordance with the terms of Section
5.1(f), all 6.55% Notes purchased by RTZA in the Tender Offer
shall be converted into shares of Parent Common Stock upon the
terms referred to in Section 5.1(e), and, no later than the day
following the expiration of the Tender Offer, RTZA shall become
the holder of record of such shares. As soon as practicable
following expiration of the Tender Offer, Parent shall cause to be
issued and delivered to RTZA certificates representing the shares
of Parent Common Stock issuable in connection with such
conversion.
5.3 Transfer of Shares Issued Upon Conversion.
Except to the extent such sales occur on the
NYSE, RTZA shall not, prior to the Distribution Date, sell or
transfer any shares of Parent Common Stock received upon
conversion of the 6.55% Notes unless the purchaser or transferee
thereof shall have represented to RTZA in
10
writing that such purchaser or transferee (i) is
a "United States person" as defined in Code Section 7701(a)(30),
(ii) is not an entity controlled by any person other than a United
States person, (iii) has no plan or intention to sell, prior to
the Spin-Off, any shares of Parent Common Stock to a person that
is (A) not a United States person or (B) an entity controlled by a
person that is not a United States person, and (iv) if such
purchaser or transferee is or becomes, prior to the Distribution
Date, a holder of at least 5% of the Parent Common Stock, will
represent that it has no plan or intention to sell, exchange,
transfer or otherwise dispose of, following the Spin-Off, such
shares of Parent Common Stock or any shares of Class B Common
Stock which such purchaser or transferee may receive in the Spin-
Off. Notwithstanding the foregoing, RTZA shall not sell on the
public market any shares of Parent Common Stock during the period
commencing on the date on which the Parent Common Stock trades
"ex-dividend" (i.e., without the Class B Common Stock which would
be distributed to the holder of such stock pursuant to the Spin-
Off) and ending on the Distribution Date.
5.4 Code Section 367(e) Indemnification.
(a) If RTZA or any Affiliate of RTZA
owns shares of Parent Common Stock as of the Distribution Date,
RTZA will indemnify Parent for 50% of any Section 367(e) Tax Cost.
The "Section 367(e) Tax Cost" shall mean the sum of (a) any
federal, state and local income and franchise taxes based in whole
or in part on net income ("Income Tax or Income Taxes") paid by
Parent to the extent resulting from a determination by Parent
(subject to the provisions of Section 5.4(h) or (i), if
applicable) or a Taxing Authority that Code Section 367(e) applies
to any Class B Common Stock received by RTZA or any Affiliate of
RTZA in the Spin-Off and (b) any interest and penalties paid by
Parent related thereto. The amount described in (a) of the
preceding sentence shall equal the excess of (i) the sum of the
Income Taxes actually paid by Parent with respect to the taxable
year in which the Spin-Off occurred (the "Spin-Off Year"), over
(ii) the total amount of Income Taxes that would have been paid
with respect to the Spin-Off Year if there had been no
determination that Code Section 367(e) applies to any Class B
Common Stock received by RTZA or any Affiliate of RTZA in the
Spin-Off. In calculating the Section 367(e) Tax Cost, the Income
Taxes actually paid by Parent with respect to the Spin-Off Year
shall reflect such carryovers of net operating losses, tax credits
and other tax attributes as are available to Parent as of the end
of the Spin-Off Year. Notwithstanding anything to the contrary
contained in this Section 5.4, the tax attributes to which Parent
becomes entitled after the Spin-Off Year that are attributable to
taxable years after the Spin-Off Year shall not be taken into
account in calculating the Section 367(e) Tax Cost.
Notwithstanding anything contained in this Section 5.4 to the
contrary, Parent shall determine, in its reasonable good faith
discretion, the position that it shall take on its Income Taxes
returns submitted to any Taxing Authority. RTZA shall not
challenge, using the dispute resolution procedure set forth in
Section 5.4(c), the
11
appropriateness, but not the calculation
of, the filing positions adopted by Parent on its Income Taxes
returns.
(b) Parent shall provide a certificate
of its chief financial officer notifying RTZA of any obligation to
indemnify Parent pursuant to this Section 5.4 at least 30 days
prior to the date specified in such certificate on which Parent
intends to pay the Section 367(e) Tax Cost to which such
obligation to indemnify Parent relates, together with a statement
from a "Big Six" accounting firm (which may be Parent's
independent auditor) setting forth in detail a calculation of the
Section 367(e) Tax Cost. Notwithstanding anything contained in
Section 5.4(c) to the contrary, RTZA shall pay the amount shown
due on such officer's certificate no later than 5 days prior to
the date that Parent specified in such officer's certificate as
the date on which it intends to pay such Section 367(e) Tax Cost.
Within 5 days after the date of payment specified in such
officer's certificate, Parent shall provide RTZA with a second
certificate of its chief financial officer stating that payment of
the Section 367(e) Tax Cost giving rise to the indemnification
obligation has been made, specifying the date and amount of
payment, or return such indemnification payment to RTZA. If
Parent is required to make a payment to RTZA as a result of its
receipt of a refund of a previously paid Section 367(e) Tax Cost
in accordance with Section 5.4(d) or the resolution of a dispute
in RTZA's favor in accordance with Section 5.4(c), Parent shall
make such payment within 5 days of the receipt of the refund or
the resolution of the dispute.
(c) In the event that a dispute arises
as to the calculation of the Section 367(e) Tax Cost, an
independent "Big Six" accounting firm mutually acceptable to RTZA
and Parent shall be selected to resolve the dispute (the costs of
which shall be shared equally by RTZA and Parent).
(d) If, subsequent to the date on which
RTZA first indemnifies Parent, Parent is informed by a Taxing
Authority of the need to pay an additional Section 367(e) Tax Cost
or receives a refund of a previously paid Section 367(e) Tax Cost,
Parent shall promptly notify RTZA in writing, the Section 367(e)
Tax Cost shall be recomputed, any excess of the amount previously
paid by RTZA over 50% of such recomputed Section 367(e) Tax Cost
shall be repaid to RTZA, and any excess of 50% of such recomputed
Section 367(e) Tax Cost over the amount previously paid by RTZA
shall be paid by RTZA in each case in accordance with the
procedures of Section 5.4(b).
(e) Parent will notify RTZA promptly in
writing if any taxing agency makes, orally or in writing, any
assertion that Section 367(e) applies to any Class B Common Stock
received by RTZA or any Affiliate of RTZA in the Spin-Off (a
"Section 367(e) Issue"). Parent shall (i) keep RTZA fully
apprised, on a timely basis, of any developments relating to its
contest of a Section 367(e) Issue, (ii) consult RTZA with
12
respect to the contest of such issue, and
(iii) after such issue has been referred to an IRS Appeals
Officer, permit RTZA to participate, at RTZA's sole cost and
expense, in meetings (including telephonic conferences) regarding
a Section 367(e) Issue.
(f) An "Open Issue" shall mean an issue
in connection with which Parent or any Consolidated Subsidiary may
be liable for Income Taxes, interest and penalties, and which has
not been settled or otherwise resolved pursuant to a
Determination. A "Determination" shall mean, with respect to
federal income taxes, a determination under Code Section 1313,
and, with respect to Income Taxes other than federal income taxes,
any final determination of the liability in respect of an Income
Tax that, under applicable law, is not subject to further appeal,
review or modification through administrative or judicial
proceedings or otherwise. A "Material Open Issue" shall mean an
Open Issue or a number of Open Issues in the aggregate, with
respect to which the potential tax liability of Parent or any
Consolidated Subsidiary exceeds $5,000,000 exclusive of interest
and penalties, except for Section 367(e) Issues. A "Consolidated
Subsidiary" shall mean any corporation which files a consolidated
return with Parent for federal income tax purposes in the Spin-Off
Year or a Related Year. A "Related Year" shall mean any taxable
year which is audited by a governmental authority responsible for
levying, auditing or otherwise supervising the administration of
Income Taxes (a "Taxing Authority"), in conjunction with the Spin-
Off Year. A "Settling Party" shall be whichever of RTZA or Parent
is willing to settle a Section 367(e) Issue on certain terms
acceptable to a Taxing Authority and a "Contesting Party" shall be
the other party if it is unwilling to so settle.
(g) Parent shall choose the forum in
which a Section 367(e) Issue is to be contested; provided that
RTZA shall choose such forum if (i) a Taxing Authority has
proposed a settlement on certain terms, (ii) RTZA has become the
Contesting Party, (iii) Parent has become the Settling Party, and
(iv) there is no Material Open Issue for the Spin-Off Year or any
Related Year.
(h) Parent shall have the right to
settle a Section 367(e) Issue at any time; provided that in
determining whether to settle, Parent (i) shall exercise its
reasonable business judgment in good faith, taking into account
the merits of the Section 367(e) Issue, the interests of Parent
and RTZA, the risks and potential costs and benefits of further
contesting the Section 367(e) Issue, and such other criteria as
Parent shall consider to be appropriate, and (ii) shall not make a
concession on or "trade" any issue that has an effect on the
amount of the Section 367(e) Issue for a concession by a Taxing
Authority on an issue that does not affect RTZA and its
Affiliates. Notwithstanding the foregoing, Parent shall not
settle a Section 367(e) Issue if (i) RTZA has requested that
Parent not settle such issue, (ii) RTZA has become the Contesting
Party, (iii) Parent has become the Settling Party, and (iv) there
is no Material Open Issue with respect to the Spin-Off Year or any
Related Year.
13
(i) Notwithstanding anything contained
in this Section 5.4 to the contrary, the provisions of this
Section 5.4(i) shall apply if (A) either Parent or RTZA has become
the Settling Party, (B) the other party has become the Contesting
Party, and (C) Parent has not settled the Section 367(e) Issue.
If the provisions of this Section 5.4(i) apply, (i) the Contesting
Party shall thereafter pay all costs and expenses of pursuing any
courses of action in connection with the Section 367(e) Issue
(including, without limitation, the costs of participating in
administrative and judicial proceedings to challenge the Taxing
Authority's position with respect to such issue), (ii) if the
Contesting Party is RTZA, RTZA shall indemnify Parent for a total
amount equal to the RTZA Contesting Tax Cost, and (iii) if the
Contesting Party is Parent, RTZA shall indemnify Parent for a
total amount equal to the RTZA Settling Tax Cost, in each of (ii)
and (iii) with appropriate adjustment for any amounts previously
paid pursuant to Sections 5.4(b) and (d). If the provisions of
this Section 5.4(i) apply, RTZA or Parent, as the case may be,
shall promptly remit to the other party, after a Determination has
been reached, (i) an amount such that RTZA shall have indemnified
Parent in total for an amount equal to the RTZA Contesting Tax
Cost or the RTZA Settling Tax Cost, as the case may be, or (ii) if
the Parent Settling Tax Cost exceeds the Final Section 367(e) Tax
Cost, an amount such that Parent shall have paid to the Taxing
Authorities and to RTZA in the aggregate an amount equal to such
Parent Settling Tax Cost. The RTZA Contesting Tax Cost shall be
the excess, if any, of (I) the Section 367(e) Tax Cost computed on
the basis of a Determination with respect to each of the Income
Taxes (the "Final Section 367(e) Tax Cost"), over (II) the sum of
(a) 50% of the amount which the Final Section 367(e) Tax Cost
would have been if the Section 367(e) Issue had been settled on
the terms upon which, and at the time at which, Parent and the
Taxing Authority had been willing to settle and (b) interest on
the unpaid amount thereof at the rate applicable to overpayments
under Code Section 6621, calculated for the period beginning on
the date that RTZA became the Contesting Party and ending on the
date of the Determination which is the basis for indemnification
under this Section 5.4(i) (the sum described in (II) shall be
denoted as the "Parent Settling Tax Cost"). The RTZA Settling Tax
Cost shall be the sum of (a) 50% of the amount which the Final
Section 367(e) Tax Cost would have been if the Section 367(e)
Issue had been settled on the terms upon which, and at the time at
which, RTZA and the Taxing Authority had been willing to settle
and (b) interest on the unpaid amount thereof at the rate
applicable to overpayments under Code Section 6621, calculated for
the period beginning on the date that Parent became the Contesting
Party and ending on the date of the Determination which is the
basis for indemnification under this Section 5.4(i). If pursuant
to this Section 5.4(i), a Contesting Party contests a Section
367(e) Issue by paying Income Taxes and seeking a refund thereof,
it shall fund the full amount of such payment less the excess, if
any, of (i) the amount the Settling Party would have paid, had the
Section 367(e) Issue been settled on the terms upon which, and at
the time at which, the Settling Party and the Taxing Authority had
been willing to settle, over
14
(ii) the amounts already paid by the
Settling Party; provided that, if the Contesting Party is RTZA,
RTZA shall fund such payment by extending an interest-free loan to
Parent.
(j) Each of the parties hereto and their
Affiliates shall furnish or cause to be furnished to Parent or
RTZA, as the case may be, upon request, as promptly as
practicable, such reasonable information and reasonable assistance
relating to a Section 367(e) Issue as is reasonably necessary for
Parent's filing of its Income Taxes returns, provision of
information requested by a Taxing authority, preparation for any
audit covering the Spin-Off Year or a Related Year, and Parent's
or RTZA's prosecution or defense of any claim, suit or proceeding
relating to a Section 367(e) Issue. Each of the parties hereto
and their Affiliates shall cooperate with Parent or RTZA, as the
case may be, in the conduct of any audit or proceeding relating to
a Section 367(e) Issue, and shall execute and deliver such powers
of attorney and other documents as are necessary to carry out the
intent of this Section 5.4(j). Nothing in this Section 5.4(j)
shall be construed to require the parties hereto, or their
Affiliates, to make any representations or warranties not
expressly contemplated by this Agreement.
6. Purchase of Additional Shares and Option Shares.
6.1 Request to Purchase Additional Shares.
(a) Upon the terms and subject to the
conditions set forth in this Agreement, if Parent redeems any
6.55% Notes in accordance with Article 4 hereof, then (whether or
not a Tender Offer has occurred) provided that the rights granted
to holders in connection with the redemption of the 6.55% Notes
are acceptable to Purchaser, Parent may request, by the delivery
to the Purchaser of a written notice (the "Additional Purchase
Notice") or a copy of the Escrow Notice referred to in Section
6.1(d) at any time after the later of the ABC Redemption Date and
the 6.55% Redemption Date, that the Purchaser purchase, and the
Purchaser shall purchase from Parent, that number of shares of
Class A Common Stock set forth in the Additional Purchase Notice
(the "Additional Shares"), at a purchase price per share of
$20.90, on the date provided in the Additional Purchase Notice or
the Escrow Notice, but, in the case of the Additional Purchase
Notice, no earlier than the date 3 business days thereafter and no
later than the date 5 business days prior to the Distribution
Date; provided that, (x) if the 6.55% Redemption Date is scheduled
to occur prior to the ABC Redemption Date and (y) the ABC
Conversion Value is an amount which is less than 85% of the ABC
Redemption Value (the "Article 6 Event"), then the Additional
Purchase Notice or Escrow Notice, as the case may be, may be
delivered to the Purchaser at any time after the receipt by
Purchaser of the notice specified in Section 5.1(g). The "ABC
Conversion Value" means the product of the number of shares of
Parent Common Stock issuable upon conversion of $1000 principal
amount of ABC Debentures, times the Average Trading Price. The
"Average Trading Price" means the average daily stock price of
Parent Common Stock
15
for the ten trading days immediately prior
to the 6.55% Redemption Date. The "ABC Redemption Value" means
the redemption price for the ABC Debentures per $1,000 principal
amount of the ABC Debentures (including any accrued interest
component thereof).
(b) Notwithstanding anything contained
herein to the contrary, in no event shall the aggregate purchase
price paid by the Purchaser for the Additional Shares pursuant to
Section 6.1(a) exceed the amount equal to the excess of (I) the
sum of (x) the product of the 6.55% Redemption Price per $1,000 of
face value of the 6.55% Notes times the quotient of (A) the 6.55%
Remainder divided by (B) $1,000, plus (y) accrued and unpaid
interest on the 6.55% Remainder to and including the 6.55%
Redemption Date, over (II) the aggregate accreted value of ABC
Debentures, if any, surrendered for conversion by the holders
thereof; provided, that if the Article 6 Event shall have occurred
and the ABC Redemption Date shall not yet have occurred, the
aggregate accreted value of ABC Debentures surrendered for
conversion shall be deemed to be zero for purposes of this clause
(II). The term "6.55% Remainder" means the aggregate principal
amount of the 6.55% Notes redeemed by Parent in accordance with
Section 4.1 hereof. The "6.55% Redemption Price" shall mean the
redemption price for the 6.55% Notes as determined in accordance
with the Indenture, which redemption price is $912.14 per $1,000
of face value of the 6.55% Notes for the twelve-month period
commencing January 15, 1995.
(c) In the event Parent determines not
to exercise its right to cause Purchaser to purchase Additional
Shares in accordance with this Section 6.1, Parent shall deliver
written notice (the "Termination Notice") to the Purchaser of such
determination as promptly as practicable after such determination
is made, but no later than 8 business days prior to the
Distribution Date, whereupon the obligation of Purchaser to
purchase any shares of Class A Common Stock in accordance with
this Section 6.1 shall terminate.
(d) In the event the 6.55% Redemption
Date is scheduled to occur prior to the ABC Redemption Date, at
any time after receipt by the Purchaser of the notice specified in
Section 5.1(g), Parent may by written notice request (the "Escrow
Request") that Purchaser deposit with the Escrow Agent (as defined
below) the funds referred to in this Section 6.1(d) on a date no
earlier than three business days following the date of such
request. No later than such date specified in such request (i)
Purchaser shall, in accordance with an escrow agreement reasonably
acceptable to Parent and Purchaser, deposit with an Escrow Agent
(the "Escrow Agent") mutually acceptable to Purchaser and Parent
(it being agreed that the Trustee is mutually acceptable) an
amount equal to the sum of (x) the product of the 6.55% Redemption
Price times the 6.55% Remainder, plus (y) accrued and unpaid
interest on the 6.55% Remainder to and including the 6.55%
Redemption Date, and (ii) Parent shall deposit with such Escrow
16
Agent the number of shares of Class A
Common Stock, (together with stock powers duly executed in blank)
equal to the amount of funds deposited by Purchaser pursuant to
clause (i) above divided by $20.90. Such Escrow Agent shall hold
such funds and stock in escrow pending receipt of notice from
Parent (the "Escrow Notice"), pursuant to which Parent shall
instruct the Escrow Agent to transfer, and the Escrow Agent shall
transfer, to Parent from the funds deposited by Purchaser an
amount not greater than the amount calculated in accordance with
Section 6.1(b) hereof (the "Section 6.1(d) Amount"); provided
that, if the Article 6 Event has occurred, the Escrow Notice may
be delivered at any time and, if the Article 6 Event has not
occurred, the Escrow Notice may be delivered no earlier than the
next business day following the ABC Redemption Date, but in either
case, no later than the date 8 business days prior to the
Distribution Date. The escrow agreement shall provide that,
simultaneously with such transfer to Parent of such funds, the
Escrow Agent shall (I) transfer to Purchaser the excess, if any,
of the amount deposited by Purchaser (including any interest
earned) over the Section 6.1(d) Amount; (II) transfer and deliver
to Purchaser the number of shares of Class A Common Stock equal to
the Section 6.1(d) Amount divided by $20.90 (together with such
executed stock powers effecting the transfer to Purchaser of such
number of shares of Class A Common Stock); and (III) deliver to
Parent the remainder of the shares of Class A Common Stock, if
any, not transferred and delivered to Purchaser in accordance with
clause II above. The escrow agreement shall further provide for
the return to Purchaser of the funds deposited (plus any interest
earned thereon) and the return to Parent of the shares of Class A
Common Stock deposited, if the Escrow Notice has not been given
within 60 days after the date of the Escrow Request referred to in
the first sentence of this Section 6.1(d).
6.2 Option to Purchase Class A Common Stock.
(a) The Purchaser shall have the option
(the "Option") to purchase from Parent, and Parent shall sell to
the Purchaser, the number of shares of Class A Common Stock set
forth in the Option Notice (the "Option Shares"), at a purchase
price per share of $20.90, provided that the number of Option
Shares shall not exceed 3,588,517 shares of Class A Common Stock.
No later than the fifth business day following receipt of the
Additional Purchase Notice, the Escrow Notice or the Termination
Notice, as the case may be, the Purchaser shall deliver written
notice to Parent (the "Option Notice"), which shall state the
number of shares of Class A Common Stock in respect of which the
Option is being exercised or, subject to Section 6.2(b), if none,
that the Purchaser elects not to exercise the Option.
(b) If RTZA has not acquired any 6.55%
Notes pursuant to the terms hereof, and Parent has previously
delivered the Termination Notice, the Purchaser shall, in the
Option Notice, exercise the Option to purchase 3,588,517 shares of
Class A Common Stock at a purchase price per share of $20.90 in
accordance with this Article 6.
17
6.3 Purchase of Additional Shares and Option
Shares.
(a) Upon the terms and subject to the
conditions of this Agreement, the closings of the transactions
contemplated by Section 6.1 and Section 6.2 (each, an "Additional
Stock Closing") shall take place at the offices of Fried, Frank,
Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, commencing at 10:00 a.m. (New York local time), in the case
of the purchase of the Additional Shares, on the date specified in
the Additional Purchase Notice or the Escrow Notice in accordance
with Section 6.1(a) and, in the case of the purchase of the Option
Shares, on the third business day following the delivery of the
Option Notice or, in either case, at such other time and/or place
and/or on such other dates as the parties may mutually agree
(each, an "Additional Stock Closing Date"). No later than 2
business days prior to an Additional Stock Closing Date, Parent
shall provide written notice to the Purchaser and the Escrow Agent
specifying the accounts to which payment shall be made on such
Additional Stock Closing Date.
(b) At an Additional Stock Closing (i)
Parent shall deliver, or cause to be delivered, to the Purchaser
the certificates representing the number of shares of Class A
Common Stock purchased in accordance with Section 6.1 and/or
Section 6.2, as the case may be, duly endorsed in blank or
accompanied by stock powers or other instruments of transfer duly
executed in blank, with all necessary transfer tax and other
documentary stamps affixed thereto, (ii) the Purchaser shall pay,
or cause to be paid, to Parent in consideration for the shares
being purchased, by wire transfer of immediately available funds,
the aggregate purchase price equal to the sum of (x) subject to
the provisions of Section 6.1(b), the product of $20.90 times the
number of Additional Shares, if any, plus (y) the product of
$20.90 times the number of Option Shares, if any, and (iii) the
parties hereto shall execute and deliver such certificates,
documents and instruments as may be required to be executed or
delivered pursuant to the terms hereof.
7. Spin-Off and Merger.
(a) As promptly as it deems practicable after
the latest to occur of the 6.55% Redemption Date, the ABC
Redemption Date and (if (i) an Option Notice pursuant to which the
Purchaser elects to purchase shares, or (ii) an Additional
Purchase Notice or Escrow Notice, in either case, has been
delivered in accordance with Article 6) the final Additional Stock
Closing, to the extent not otherwise prohibited by applicable Law
or regulation or a judgment, injunction, order or decree of a
proper governmental or regulatory authority of competent
jurisdiction, Parent shall declare the record date for the Spin-
Off, which shall also be the date on which the shares of Class B
Common Stock will be distributed to holders of Parent Common Stock
(the "Distribution Date"); provided that,
18
(i) if Parent requests RTZA to commence the
Tender Offer and RTZA acquires any 6.55% Notes in
connection with the Tender Offer, then Parent shall
delay the Declaration Date a reasonable period of time
(it being agreed that a delay of 60 business days is
reasonable for purposes of this Section 7(a)(i)),
(ii) if the Purchaser elects not to exercise
the Option with respect to all 3,588,517 shares of
Class A Common Stock, or if Parent otherwise wishes to
sell shares of Class A Common Stock prior to the Spin-
Off, then Parent may delay the Declaration Date a
reasonable period of time in order to permit it to
sell any Class A Common Stock that it desires to sell,
and
(iii) prior to the Spin-Off, Parent shall have
received satisfactory confirmation that the
nonrecognition provisions of Code Section 355(a)(1)
and (c) shall apply, such that no gain or loss shall
be recognized to Parent or its shareholders, other
than as a result of Code Section 367(e).
(b) In accordance with the terms of the
Consent Solicitation Statement, no later than the business day
immediately preceding the Distribution Date, the Company and
Facilitating Company will file a certificate of merger with the
Secretary of State of the State of Delaware, which certificate
will state that the Merger shall become effective upon the filing
thereof with the Secretary of State of the State of Delaware, and
make all other filings or recordings required by Delaware Law in
connection with the Merger.
8. Representations and Warranties.
8.1 Representations and Warranties of Parent
and the Company
. Parent severally with respect to
representations and warranties as to Parent and its subsidiaries
and Affiliates (other than the Company and its direct and indirect
subsidiaries), and the Company severally with respect to
representations and warranties as to the Company and its direct
and indirect subsidiaries, represent and warrant to RTZ, RTZA and
the Purchaser as follows:
8.1.1 Organization and Qualifications
. Each of Parent, the Company and their
respective material subsidiaries is a corporation duly organized,
validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate
power and authority to own and operate its properties and to carry
on its business as it is now being conducted. Each of Parent, the
Company and their respective material subsidiaries is duly
qualified to do business as a foreign corporation and is in good
standing in every jurisdiction in which the nature of the business
conducted or properties owned or leased or the nature of its
activities makes
19
such qualification necessary, except for
those jurisdictions where the failure to be so qualified would
not, individually or in the aggregate, have a Parent Material
Adverse Effect or a Company Material Adverse Effect.
8.1.2 Capitalization.
(a) Schedule 8.1.2 sets forth the
authorized capital stock of each of Parent and the Company and the
number of outstanding shares of capital stock of each of Parent
and the Company as of April 30, 1995. All of the outstanding
shares of capital stock of each of Parent and the Company have
been duly authorized and validly issued and are fully paid and
non-assessable. Except as set forth on Schedule 8.1.2, there are
no shares of capital stock of either Parent or the Company
authorized, issued or outstanding, and except as set forth on
Schedule 8.1.2., there are no outstanding subscriptions, options,
warrants, rights, convertible or exchangeable securities or other
agreements or commitments of any character relating to the issued
or unissued capital stock or other securities of the Company or
Parent obligating the Company or Parent to issue, deliver or sell,
or cause to be issued, delivered or sold, or to make any payments
based upon the value of, shares of capital stock or other
securities of the Company or Parent or obligating the Company or
Parent to grant, extend or enter into any subscription, warrant,
right, convertible or exchangeable security or other similar
agreement or commitment. There are no voting trusts or other
agreements or understandings to which either Parent or the Company
is a party with respect to the voting of capital stock of Parent
or the Company. Parent and the Company have furnished to the
Purchaser and RTZA all agreements, commitments and understandings
to which any of Parent, the Company or their respective
subsidiaries is a party and which relate to the capital stock of
Parent, the Company or any of their respective subsidiaries.
(b) The shares of Class A Common
Stock purchased by the Purchaser at the Stock Closing, the shares
of Class A Common Stock purchased by the Purchaser at an
Additional Stock Closing, if any, the shares of Parent Common
Stock issued to RTZA upon conversion of the 6.55% Notes, if any,
and the shares of Class B Common Stock, if any, received by RTZA
in the Spin-Off, will have been duly authorized and, upon the
issuance thereof, will be validly issued, fully paid and non-
assessable with no personal liability attaching to the ownership
thereof. The issuance to the Purchaser of the shares of Class A
Common Stock at the Stock Closing, the issuance to the Purchaser
of the shares of Class A Common Stock at an Additional Stock
Closing, if any, the issuance to RTZA of the shares of Parent
Common Stock upon conversion of the 6.55% Notes, if any, and the
distribution of the shares of Class B Common Stock, if any, to
RTZA in the Spin-Off, is not and will not be subject to preemptive
rights of any Person.
20
8.1.3 Authority.
(a) Each of Parent and the Company
has the requisite corporate power and authority to enter into this
Agreement and the Related Agreements to which either Parent or the
Company is or will be a party and to perform its obligations
hereunder and thereunder. The execution and delivery of this
Agreement and the Related Agreements to which either Parent or the
Company is or will be a party and the consummation of the
transactions contemplated hereby and thereby have been duly
authorized and approved by each of Parent's and the Company's
Board of Directors and, except as set forth on Schedule 8.1.3, no
other corporate proceedings on the part of Parent or the Company
are necessary to authorize this Agreement or the Related
Agreements to which either of them is or will be a party or the
transactions contemplated hereby and thereby, except for the
approval of stockholders specified in paragraphs (b) and (c) of
this Section 8.1.3, which have been obtained. This Agreement has
been, and the Related Agreements, when executed and delivered by
each of Parent and the Company pursuant to Article 2 hereof, will
be, duly and validly executed and delivered by each of Parent and
the Company, respectively. This Agreement constitutes, and the
Related Agreements, when executed and delivered by each of Parent
and the Company pursuant to Article 2 hereof, will constitute, a
valid and binding agreement of Parent and the Company,
respectively, enforceable against Parent and the Company,
respectively, in accordance with their respective terms, subject
to bankruptcy, reorganization, insolvency, moratorium and other
Laws affecting the enforcement of creditors' rights generally and
subject to general equitable principles.
(b) Each of the New Certificate of
Incorporation and the New By-laws has been approved by the Board
of Directors of the Company and the New Certificate of
Incorporation has been approved by the stockholders of the
Company; and no other corporate proceedings on the part of the
Company are necessary to authorize and adopt the New Certificate
of Incorporation or the New By-laws.
(c) The Merger Agreement has been
approved by the Board of Directors of each of Parent, the Company
and Facilitating Company and the stockholders of the Company and
Facilitating Company; and no other corporate proceedings on the
part of Parent, the Company or Facilitating Company are necessary
to authorize and consummate the transactions contemplated thereby.
(d) The Spin-Off has been approved
by the Board of Directors of Parent; and, except as set forth on
Schedule 8.1.3, no other corporate proceedings on the part of
Parent or the Company are necessary to authorize and consummate
the transactions contemplated thereby.
21
(e) To the extent the transactions
contemplated by this Agreement result in RTZ or its Affiliates
becoming an "interested stockholder" (as defined in DGCL 203) of
Parent or the Company, the Board of Directors of Parent and the
Company, respectively, have approved the transactions contemplated
by this Agreement for purposes of DGCL 203. To the extent the
transactions contemplated by this Agreement result in RTZ or its
Affiliates becoming an "Interested Party" (as defined in the New
Certificate of Incorporation), the Board of Directors has approved
the transactions contemplated by this Agreement for purposes of
paragraph (a) of Article SEVENTH of the New Certificate of
Incorporation. The Board of Directors of each of Parent and the
Company have approved, for purposes of such 203 and Article
SEVENTH, any subsequent acquisitions in one or more transactions
by RTZ or its Affiliates of shares of Company Common Stock or
warrants, options or other rights to purchase shares of Company
Common Stock, or securities convertible into or exchangeable for
shares of Company Common Stock, provided that as a result of such
acquisitions the shares of Company Common Stock beneficially owned
by RTZ and its Affiliates does not equal or exceed the number of
Majority Shares.
8.1.4 Title
. Parent has good and valid title to any
shares of Class B Common Stock beneficially owned by it which
shall be exchanged pursuant to Section 9.2.2, and has good and
valid title to the shares of Class B Common Stock beneficially
owned by it which shall be distributed to RTZA in the Spin-Off, in
each case, free and clear of all liens, encumbrances, equities or
adverse claims. Parent shall have good and valid title to the
shares of Class A Common Stock received upon the exchange pursuant
to Section 9.2.2 and sold to the Purchaser pursuant to Article 3
and/or Article 6 hereof, free and clear of all liens,
encumbrances, equities or adverse claims.
8.1.5 Compliance with Other Instruments
. Neither Parent, the Company nor any of
their respective material subsidiaries is in violation of any term
of its certificate of incorporation or by-laws, as in effect on
the date hereof. None of the execution, delivery and performance
of this Agreement or any Related Agreement to which Parent, the
Company or any of their respective subsidiaries is a party or any
of the transactions contemplated hereby or thereby, does or will,
with or without the passage of time or the giving of notice or
both, (i) violate, conflict with, or result in a breach of, or
default under, any agreement, obligation or commitment to which
Parent, the Company or any of their respective subsidiaries is a
party or by which Parent, the Company or any of their respective
subsidiaries is bound, (ii) assuming the transfers, consents,
licenses, approvals, waivers, expirations of waiting periods,
authorizations, declarations and filings, if any, set forth in
Schedule 8.1.6 are obtained or made, violate any provision of any
applicable Law or Permit to which Parent, the Company or any of
their respective subsidiaries is subject, (iii) violate any order,
judgment or decree applicable to Parent, the Company or any of
their respective subsidiaries, (iv) conflict with, or result in a
breach of, or default under, any term of Parent's, the Company's
or any of their respective
22
material subsidiaries' certificate of
incorporation or by-laws in effect on the date hereof or the New
Certificate of Incorporation or New By-laws, or (v) result in the
creation of any mortgage, pledge, lien, encumbrance, or charge
upon any of the properties or assets of Parent, the Company or any
of their respective subsidiaries except, in the case of clauses
(i), (ii), (iii) and (v), for any such items which, individually
or in the aggregate, would not reasonably be expected (x) to have
or result in a Company Material Adverse Effect or a Parent
Material Adverse Effect, (y) to materially impair the ability of
the Company or Parent to consummate the transactions contemplated
by this Agreement or the Related Agreements, or (z) to materially
impair the ability of RTZ, RTZA or the Purchaser to receive the
benefits of the transactions contemplated by this Agreement or the
Related Agreements.
8.1.6 Consents
. Except as set forth on Schedule 8.1.6,
no transfer, consent, license, approval, waiver, expiration of
waiting period, authorization or declaration of, and no filing or
registration with, any governmental or regulatory authority or
other third party is required to be obtained or made by Parent,
the Company or any of their respective subsidiaries in connection
with the execution, delivery and performance of this Agreement or
any Related Agreement or the consummation of the transactions
contemplated hereby and thereby, other than such other transfers,
consents, licenses, approvals, waivers, expirations of waiting
periods, authorizations, declarations or filings, which if not
obtained or made, individually or in the aggregate, would not
reasonably be expected (x) to have or result in a Company Material
Adverse Effect or a Parent Material Adverse Effect, (y) to
materially impair the ability of the Company or Parent to
consummate the transactions contemplated by this Agreement or the
Related Agreements, or (z) to materially impair the ability of
RTZ, RTZA or the Purchaser to receive the benefits of the
transactions contemplated by this Agreement or the Related
Agreements.
8.1.7 Actions Pending
. There is no action, suit, investigation
or proceeding pending or (to the knowledge of Parent or the
Company) threatened against Parent, the Company or any of their
respective subsidiaries or any of their respective properties or
assets by or before any court, arbitrator or governmental or
regulatory authority, department, commission, board, bureau,
agency or instrumentality, which questions the validity or
enforceability of, or seeks to enjoin or invalidate, this
Agreement or any Related Agreement or any action taken or to be
taken pursuant hereto or thereto, or which has had or is
reasonably likely to have or result in a Parent Material Adverse
Effect or Company Material Adverse Effect, and neither Parent, the
Company nor any of their respective subsidiaries is in default in
any material respect with respect to any material judgment, order,
writ, injunction, decree or award.
23
8.1.8 SEC Reports.
(a) Each of Parent and the Company
has filed all registration statements, proxy statements, annual
and quarterly reports and other documents required to be filed by
it under the Securities Act or Exchange Act since December 31,
1992. Each of the Parent and the Company has delivered to the
Purchaser and RTZA its Annual Reports on Form 10-K for the year
ended December 31, 1994, and all registration statements, proxy
statements, consent solicitation statements and reports under the
Securities Act or Exchange Act filed by the Company after such
date, each as filed with the SEC (collectively, the "SEC
Reports"). Each SEC Report complied as to form in all material
respects with the requirements of its respective report form and
on the date of filing did not, and any registration statement,
report, proxy statement or information statement filed by Parent
or the Company with the SEC prior to the Distribution Date will
not, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
(b) Except as otherwise disclosed
in the SEC Reports (i) there are no material agreements,
obligations or commitments among any of Parent, the Company or any
of their respective subsidiaries, Affiliates or stockholders, (ii)
Parent, Company and their respective subsidiaries are in
compliance in all material respects with all applicable federal,
state, local and foreign laws and regulations relating to
protection of the environment and human health, and are in
compliance with all other applicable federal, state, local and
foreign laws and regulations, including, without limitation, those
relating to equal employment opportunity, employee safety and
health and welfare, except, in either case, where the failure to
comply, individually or in the aggregate, has not had or would not
reasonably be expected to have or result in a Company Material
Adverse Effect or a Parent Material Adverse Effect and (iii) there
are no claims, notices, civil, criminal or administrative actions,
suits, hearings, investigations, inquiries or proceedings pending
or, to the best knowledge of Parent or the Company, threatened,
against Parent, the Company or any of their respective
subsidiaries that are based on or related to any material
environmental matters, including any disposal of hazardous
substances at any place, or the failure to have any required
environmental permits, and there are no past or present conditions
that Parent or the Company has reason to believe are likely to
give rise to any material liability or other material obligations
of Parent, the Company or any of their respective subsidiaries
under any environmental laws.
(c) With respect solely to
information describing Parent and the Company, at the time the
Schedule 14D-1 (and any amendment thereto) is filed, if ever, the
Schedule 14D-1 (or any amendment thereto) shall not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or
24
necessary to make the statements
made therein, in light of the circumstances under which they were
made, not misleading, provided that Parent and the Company shall
have given their prior written consent to any such description
prior to the filing of the Schedule 14D-1 (or any amendment
thereto).
8.1.9 Financial Statements.
The financial statements of Parent and
the Company (including any related schedules and/or notes)
included in the SEC Reports have been prepared in accordance with
GAAP consistently followed (except as indicated in the notes
thereto) throughout the periods involved and fairly present the
consolidated financial condition, results of operations and
changes in stockholders' equity of Parent and the Company,
respectively, as of the dates thereof and for the periods ended on
such dates (in each case subject, as to interim statements, to
changes resulting from year-end adjustments, none of which will be
material in amount or effect), and neither Parent nor the Company
has any material Liabilities not reflected in Parent's or the
Company's balance sheet as of December 31, 1994, included in the
SEC Reports, other than any such liabilities incurred in the
ordinary course of business since December 31, 1994 or as set
forth on Schedule 8.1.9. Except as otherwise contemplated by this
Agreement, any Related Agreement, any Affiliate Agreement or the
Consent Solicitation Statement, since December 31, 1994, each of
Parent, the Company and their respective subsidiaries have
operated their respective businesses only in the ordinary course
and there has been no event or events which, individually or in
the aggregate, have had or would reasonably be expected to have or
result in a Parent Material Adverse Effect or a Company Material
Adverse Effect.
8.1.10 Compliance with Laws; Permits.
Except as set forth on Schedule 8.1.10,
each of Parent, the Company and their respective subsidiaries is
in compliance with all Laws, except where noncompliance,
individually or in the aggregate, has not had or would not
reasonably be expected to have or result in a Parent Material
Adverse Effect or a Company Material Adverse Effect. Except as
set forth on Schedule 8.1.10, none of Parent, the Company or any
of their respective subsidiaries has received any notice of any
alleged violation of Law applicable to it or any of their
respective Affiliates from a governmental or regulatory authority
of proper jurisdiction, or any formal notice of any alleged
violation of Law applicable to it or any of their respective
Affiliates from any other Person, other than any alleged
violation, which if proven, would not reasonably be expected to
have or result in a Company Material Adverse Effect or a Parent
Material Adverse Effect. Except as set forth on Schedule 8.1.10,
each of Parent, the Company and their respective subsidiaries has
all Permits required for the conduct of its business as presently
conducted and the ownership, maintenance or operation of its
properties and assets ("Material Permits," which shall not include
any such Permits, the failure of which to have, individually or in
the aggregate, would not reasonably be expected to have or result
in a Company Material Adverse Effect or a Parent Material Adverse
Effect). All of such Material Permits are valid and in full
25
force and effect. The holder of each
Permit has duly performed and is in compliance with all of its
obligations under such Permits, except to the extent that
noncompliance, individually or in the aggregate, would not
reasonably be expected to have or result in a Company Material
Adverse Effect or a Parent Material Adverse Effect. No event has
occurred with respect to the Material Permits which allows, or
after notice or lapse of time or both would allow, the suspension,
limitation, revocation, non-renewal or termination thereof or
would result in any other material impairment of the rights of the
holder thereof in and under any of the Material Permits, and no
terminations thereof or proceedings to suspend, limit, revoke or
terminate any Material Permit (to the knowledge of Parent or the
Company) have been threatened.
8.1.11 Books and Records.
All the books, records and accounts of
Parent, the Company and their respective subsidiaries are in all
material respects true and complete, are maintained in accordance
with good business practice and all Laws applicable to its
business, and accurately present and reflect in all material
respects all of the transactions therein described.
8.1.12 Financial Advisors and Brokers.
Other than PaineWebber Incorporated,
whose fees and expenses will be paid by Parent, none of Parent,
the Company or any of their respective subsidiaries has employed
any investment banker, broker or finder or incurred any liability
for any financial advisory fees, brokerage fees, commissions,
finders' fees or similar payment in connection with the
transactions contemplated hereby.
8.1.13 Accuracy of Information.
All documents delivered by or on behalf
of Parent, the Company or their respective subsidiaries in
connection with this Agreement are true and correct in all
material respects. To the best of the knowledge of Parent and the
Company, neither this Agreement nor any Related Agreement nor any
certificate, information, documents or other written disclosure
document referred to herein or furnished to RTZ or any of its
Affiliates pursuant to this Agreement or any Related Agreement or
in connection with the transactions contemplated hereby or thereby
contains an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary to make
the statements made, in the context in which made, not materially
false or misleading. To the best knowledge of Parent and the
Company, there is no fact that has not been disclosed to RTZ that
could reasonably be expected to impair the ability of Parent, the
Company or their respective subsidiaries to perform this Agreement
or any Related Agreement and the transactions contemplated hereby
and thereby or to materially impair the ability of RTZ, RTZA or
the Purchaser to receive the benefits of the transactions
contemplated by this Agreement or the Related Agreements.
8.1.14 Consolidated Group.
For federal income tax purposes, the
Company is not and will not be a member of a consolidated return
group of
26
which Parent is a member in the tax year
in which the Spin-Off occurs. Except as set forth on Schedule
8.1.14, which exceptions relate to (i) consolidated, combined or
unitary return positions required on audit or other administrative
review, or (ii) in the case of returns as filed in which Parent
has reported the foreign metals business as a separate line of
business, for state and local income tax purposes, the Company is
not and will not be a member of a consolidated or combined or
unitary return group of which Parent is a member in the tax year
in which the Spin-Off occurs.
8.1.15 Tax Sharing Agreement.
Except (i) as set forth on Schedule
8.1.15, which exceptions pertain solely to continuing obligations
with respect to years prior to the year in which the Spin-Off
occurs or (ii) with respect to the provisions of the Distribution
Agreement, as described in Exhibit 8.1.15, neither the Company nor
any of its subsidiaries is a party to, and neither has any rights
or obligations under, any tax sharing agreement or arrangement or
similar understanding to which Parent is a member or to any
contract which would otherwise subject the Company or any of its
subsidiaries to any liability for taxes (including interest and
penalties) of Parent or any of its Affiliates (other than the
Company and its subsidiaries).
8.2 Representations and Warranties of RTZ, the
Purchaser and RTZA.
Each of RTZ, the Purchaser and RTZA represents
and warrants to Parent and the Company as follows:
8.2.1 Organization.
Each of RTZ, RTZA and the Purchaser is a
company duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its organization.
8.2.2 Authority.
Each of RTZ, the Purchaser and RTZA has
the requisite corporate power and authority to enter into this
Agreement and the Related Agreements to which it is or will be a
party and to perform its obligations hereunder and thereunder.
The execution and delivery of this Agreement and the Related
Agreements to which it is or will be a party and the consummation
of the transactions contemplated hereby and thereby have been duly
authorized by each of RTZ's, the Purchaser's and RTZA's Board of
Directors and no other corporate proceedings on the part of RTZ,
the Purchaser or RTZA are necessary to authorize this Agreement or
the Related Agreements to which it is or will be a party or the
transactions contemplated hereby and thereby. This Agreement has
been, and the Related Agreements, when executed and delivered by
each of RTZ, the Purchaser and RTZA, as the case may be, pursuant
to Article 2 hereof, will be, duly and validly executed and
delivered by each of RTZ, the Purchaser and RTZA, respectively.
This Agreement constitutes, and the Related Agreements, when
executed and delivered by each of RTZ, the Purchaser and RTZA, as
the case may be, pursuant to Article 2 hereof, will constitute, a
valid and binding agreement of each of RTZ, the Purchaser and
RTZA, respectively, enforceable
27
against RTZ, the Purchaser and RTZA,
respectively, in accordance with their respective terms, subject
to bankruptcy, reorganization, insolvency, moratorium and other
Laws affecting the enforcement of creditors' rights generally and
subject to general equitable principles.
8.2.3 Compliance with Other Instruments.
None of the execution, delivery and
performance of this Agreement or any Related Agreement to which
RTZ, RTZA or the Purchaser or any of their respective subsidiaries
is a party or any of the transactions contemplated hereby or
thereby, does or will, with or without the passage of time or the
giving of notice or both, (i) violate, conflict with, or result in
a breach of, or default under, any agreement, obligation or
commitment to which RTZ, RTZA or the Purchaser or any of their
respective subsidiaries is a party or by which RTZ, RTZA or the
Purchaser or any of their respective subsidiaries is bound, (ii)
assuming the transfers, consents, licenses, approvals, waivers,
expirations of waiting periods, authorizations, declarations and
filings, if any, set forth in Schedule 8.2.4 are obtained or made,
violate any provision of any applicable Law or Permit to which
RTZ, RTZA or the Purchaser or any of their respective subsidiaries
is subject, (iii) violate any order, judgment, or decree
applicable to RTZ, RTZA or the Purchaser or any of their
respective subsidiaries, or (iv) conflict with, or result in a
breach of or default under, any term of RTZ's, RTZA's or the
Purchaser's or any of their respective material subsidiaries'
constituent documents in effect on the date hereof, except, in the
case of clause (i), (ii) or (iii), for any such items which,
individually or in the aggregate, would not reasonably be expected
to materially impair the ability of RTZ, RTZA or the Purchaser to
consummate the transactions contemplated by this Agreement or the
Related Agreements.
8.2.4 Consents.
Except as set forth on Schedule 8.2.4,
no transfer, consent, license, approval, waiver, expiration of
waiting period, authorization or declaration of, and no filing or
registration with, any governmental or regulatory authority is
required to be obtained or made by RTZ, the Purchaser or RTZA in
connection with the execution, delivery and performance of this
Agreement or any Related Agreement or the transactions
contemplated hereby or thereby, other than such other transfers,
consents, licenses, approvals, waivers, expirations of waiting
periods, authorizations, declarations or filings, which if not
obtained or made, individually or in the aggregate, would not
reasonably be expected to materially impair the ability of RTZ,
RTZA or the Purchaser to consummate the transactions contemplated
by this Agreement or the Related Agreements.
8.2.5 Actions Pending.
There is no action, suit, investigation
or proceeding pending or (to the knowledge of RTZ, the Purchaser
or RTZA) threatened against RTZ, the Purchaser or RTZA or any of
their respective subsidiaries by or before any court, arbitrator
or governmental or regulatory authority, department, commission,
board, bureau, agency or instrumentality, which questions the
28
validity or enforceability of, or seeks to
enjoin or invalidate, this Agreement or any Related Agreement or
any action taken or to be taken pursuant hereto or thereto.
8.2.6 Investment Representations.
The Purchaser is acquiring the shares of
Class A Common Stock pursuant to this Agreement for its own
account, solely for investment purposes and not with a view to, or
for resale in connection with, the distribution thereof in
violation of federal or applicable state securities laws.
8.2.7 Financial Advisors and Brokers.
Other than ▇▇▇▇▇▇ Brothers, Inc., whose
fees and expenses will be paid by RTZ, RTZA and/or the Purchaser,
neither the Purchaser nor RTZA has employed any investment banker,
broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions, finders' fees or
similar payment in connection with the transactions contemplated
hereby.
8.2.8 Ownership of Securities of Parent
and the Company.
As of the date of this Agreement, RTZ,
RTZA, the Purchaser and their respective Affiliates do not
together own more than 1% of the outstanding capital stock of
Parent or of the Company.
8.2.9 Accuracy of Information.
To the best of the knowledge of RTZ,
RTZA and the Purchaser, no representation or warranty of RTZ, RTZA
or the Purchaser contained in this Agreement, any Related
Agreement or in any Schedule or Exhibit hereto or thereto contains
an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make
the statements made, in the context in which made, not materially
false or misleading.
9. Covenants.
9.1 Covenants of All Parties.
Each of the parties hereto covenants and
agrees as follows:
9.1.1 Cooperation.
The parties hereto shall use their
respective reasonable efforts, and shall cooperate with each
other, to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or advisable, to
cause the conditions set forth in Article 10 to be satisfied and
to cause the consummation of the transactions contemplated by this
Agreement and the Related Agreements in accordance with the terms
and conditions hereof and thereof.
9.1.2 Breach of Representations and
Warranties.
None of the parties hereto will
knowingly or voluntarily take any action which would cause or
constitute a material breach of any of the representations or
warranties set forth in Article 8 hereof, or which would cause any
of such respective representations and
29
warranties to be materially inaccurate.
Each of the parties will, in the event of, and promptly after
becoming aware of the occurrence of, or the pending or threatened
occurrence of, such a material breach or inaccuracy, notify the
other parties of such breach or inaccuracy in reasonable detail
and will use its reasonable efforts to prevent or promptly remedy
such breach or inaccuracy.
9.1.3 Communications with Regulators.
(a) With respect to the
transactions contemplated by this Agreement and the Related
Agreements, but except with respect to the IRS, each of Parent and
the Company on the one hand, and each of the Purchaser and RTZA,
on the other hand, shall notify the other parties promptly of the
receipt by it of any comments from the SEC, the NYSE or any other
governmental or regulatory authority (other than the IRS) or their
respective staffs and of any request by the SEC, the NYSE or any
other governmental or regulatory authority (other than the IRS)
for amendments or supplements to any filings made by or on behalf
of it or for additional information and will supply the other
parties with copies of all correspondence between it and its
representatives, on the one hand, and the SEC, the NYSE or any
other governmental or regulatory authority (other than the IRS) or
the members of their respective staffs or any other governmental
officials (other than the IRS), on the other hand, with respect to
any filings made by or on behalf of it.
(b) Each of Parent and the Company
(i) shall notify RTZA promptly of the receipt by Parent or the
Company of any comments from the IRS or its staff regarding the
Spin-Off and of any request by the IRS for amendments or
supplements to the Spin-Off Private Letter Ruling or for
additional information, (ii) shall supply RTZA with draft copies
of all written correspondence from it or its representatives in
sufficient time so as to give RTZA and its representatives an
opportunity to comment on such correspondence, shall consider all
such comments in good faith and, in particular, shall not make any
representations about RTZ or its Affiliates without RTZ's written
consent, (iii) shall supply RTZA with copies of all correspondence
between it and its representatives, on the one hand, and the IRS
or the members of its staff or any other governmental officials,
on the other hand, with respect to the Spin-Off Private Letter
Ruling, and (iv) shall advise RTZA of any proposed meetings
(including telephonic conferences) with the IRS in advance thereof
and permit, to the extent practicable, determined in Parent's or
the Company's good faith judgment, as the case may be, a
representative of RTZA to attend such meetings (including
telephonic conferences) and to participate therein to the extent
such meetings discuss RTZ or any of its Affiliates; provided,
however, to the extent that it is not practicable for RTZA to
attend any such meetings, Parent or Company, as the case may be,
shall promptly notify RTZA of the content of such meetings
(including telephonic conferences).
30
9.1.4 Affiliate Agreements.
Each of Parent and the Company shall
take, or cause to be taken, all actions and do, or cause to be
done, all things, and shall cause their respective Affiliates to
take, or cause to be taken, all actions and do, or cause to be
done, all things, necessary or appropriate pursuant to any
agreement between Parent, the Company or any of their respective
Affiliates, on the one hand, and RTZ, the Purchaser, RTZA or any
of their respective Affiliates, on the other hand (collectively,
the "Affiliate Agreements"), and each of RTZ, the Purchaser and
RTZA shall take, or cause to be taken, all actions and do, or
cause to be done all things, and shall cause their respective
Affiliates to take, or cause to be taken, all actions and do, or
cause to be done, all things, necessary or appropriate pursuant to
any Affiliate Agreements.
9.1.5 Certain Specified Actions.
Each of Parent, Company, RTZ, RTZA and
the Purchaser shall not take any of the actions specified on
Schedule 9.1.5 during the periods specified therein.
9.2 Covenants of Parent and the Company.
In addition to the covenants and agreements in
Section 9.1 hereof, each of Parent and the Company covenants and
agrees as follows:
9.2.1 Conduct of Business Pending the
Spin-Off.
Except as otherwise contemplated by this
Agreement, the Consent Solicitation Statement or any Affiliate
Agreement or as specified in Schedule 9.2.1, from and after the
date hereof and prior to completion of the Spin-Off, neither
Parent nor the Company shall, without the prior written consent of
the Purchaser and RTZA, enter into any transaction, contract,
agreement, commitment, plan or arrangement which would reasonably
be expected to have or result in a Parent Material Adverse Effect
or a Company Material Adverse Effect or would materially impair or
materially adversely affect the ability of Parent, the Company or
any of their respective Affiliates or the Purchaser, RTZA or any
of their respective Affiliates to consummate the transactions
contemplated by this Agreement, the Consent Solicitation Statement
or any Affiliate Agreement or would reasonably be expected to
materially impair the ability of RTZ, RTZA or the Purchaser to
receive the benefits of the transactions contemplated by this
Agreement or any Affiliate Agreement (including any transaction,
contract, agreement, commitment, plan, arrangement or other action
which might impair or adversely affect the Spin-Off Private Letter
Ruling). As of the date of the Spin-Off, the representations
referred to in Exhibit 8.1.15 shall be reaffirmed between Parent
and the Company pursuant to the Distribution Agreement.
Subsequent to the completion of the Spin-Off, neither Parent nor
the Company shall, without the prior written consent of RTZA, take
any prohibited actions described in Exhibit 8.1.15.
Notwithstanding anything to the contrary contained in this Section
9.2.1, Parent and the Company shall have the right to take any
action described in this Section 9.2.1 (including activities
described in Exhibit 8.1.15) if they first obtain either a
31
supplemental private letter ruling from
the IRS or an opinion of nationally recognized tax counsel,
reasonably satisfactory to RTZ, that such action shall not
adversely affect the tax-free nature of the Spin-Off or the
ability of Parent to rely on the Spin-Off Private Letter Ruling.
9.2.2 Exchange of Shares.
On or prior to the Stock Closing Date
and each Additional Stock Closing Date, the Company shall issue
and deliver to Parent, in exchange for shares of Class B Common
Stock owned by Parent, a sufficient number of shares of Class A
Common Stock to permit Parent to consummate the applicable
transactions on such closing date as contemplated by Article 3 or
Article 6 hereof, as the case may be.
9.2.3 Certain Arrangements Following the
Spin-Off.
As promptly as practicable after the
date hereof, Parent and the Company shall enter into (i) a Benefit
Allocation Agreement containing substantially the same terms set
forth in Exhibit C and (ii) a Transition Management Services
Agreement containing substantially the same terms set forth in
Exhibit D.
9.3 Covenants of Parent.
In addition to the covenants and agreements in
Section 9.1 and 9.2 hereof, Parent covenants and agrees as
follows:
9.3.1 Minimum Price of Sales.
From and after the date hereof and prior
to completion of the Spin-Off, without the prior written consent
of RTZ, Parent shall not sell, transfer, assign, exchange or
otherwise dispose of any shares of Class A Common Stock or Class B
Common Stock owned by it, or grant any option or right to purchase
such shares or any legal or beneficial interest therein for a
purchase price per share of less than $20.90.
9.4 Covenants of the Company.
In addition to the covenants and agreements
set forth in Section 9.1 and 9.2, the Company covenants and agrees
as follows:
9.4.1 Right to Nominate Directors.
After completion of the Purchaser's
purchase of Class A Common Shares pursuant to Article 3, the
Purchaser and RTZA will have the right to nominate for submission
to the Company's stockholders at stockholders' meetings or in
connection with any consent solicitation for the election of
directors, the number of directors (rounded to the nearest whole
number) (which nominees may be nominees for Class A Directors or
Class B Directors) which is proportionately equal to the aggregate
percentage ownership of the Purchaser and RTZA of all outstanding
shares of Class A Common Stock and Class B Common Stock; provided,
that the percentage that the number of Class B Directors nominated
by the Purchaser and RTZA bears to the total number of Class B
Directors shall not exceed the
32
percentage that the number of shares of
Class B Common Stock owned by the Purchaser and RTZA bears to the
total number of outstanding shares of Class B Common Stock
(rounded down to the nearest whole number). The Company shall
include the directors nominated pursuant to the foregoing sentence
in the directors recommended by management, and shall not take any
actions which may be inconsistent with, conflict with, or
otherwise hinder, the election of such individuals. No later than
the earlier of 60 days after the Distribution Date or January 2,
1996, the Company shall appoint the number of persons nominated by
the Purchaser and RTZA in accordance with the foregoing sentence
as interim directors to take office until the next stockholders'
meeting or consent solicitation for the election of directors.
Notwithstanding anything contained herein to the contrary, (i) if
the number of directors of the Company is less than ten, the
Purchaser and RTZA will have the right to so nominate for
submission to the Company's stockholders, no less than one Class A
Director, provided that the Purchaser continues to hold
substantially all the shares of Class A Common Stock purchased
hereunder, and (ii) if at any time the Company shall no longer be
subject to the reporting requirements of the Exchange Act, the
Company shall cause the directors nominated by the Purchaser and
RTZA in accordance with this Section 9.4.1 to be elected as
directors.
9.5 Covenants of RTZ, RTZA and the Purchaser.
In addition to the covenants and agreements
set forth in Section 9.1, RTZA covenants and agrees as follows:
9.5.1 Lack of Certain Stock Ownership.
Except as a result of the transactions
described in this Agreement, RTZ, RTZA, the Purchaser and their
Affiliates will not acquire any shares of $4.375 Parent Preferred
Stock, Parent Common Stock or Company Voting Stock at any point
during the period from and including the date hereof to and
including the Distribution Date.
9.5.2 Certain Specified Actions.
Each of RTZ, RTZA and the Purchaser
shall not take any of the actions specified on Schedule 9.5.2
during the periods specified therein.
9.6 Additional Covenants.
9.6.1 Future Acquisitions.
RTZ and its Affiliates will not be
directly or indirectly restricted from future acquisitions of
shares of Company Voting Stock, except that approval of the
Company Board of Directors will be required for RTZ or its
Affiliates, alone or acting in concert with others, to acquire
beneficial ownership of shares of Company Voting Stock equal to
the Majority Shares. Without limiting the generality of the
foregoing, the Board of Directors of each of Parent and the
Company hereby agree that if the Company adopts a "rights plan,"
"poison pill" or other plan or arrangement which provides for the
distribution to its shareholders, by way of dividend or
33
otherwise, of shares of capital stock of
the Company, warrants, options or other rights to purchase shares
of capital stock of the Company, or securities convertible into or
exchangeable for shares of capital stock of the Company, upon the
occurrence of specified events, then any transactions between the
Company and any of its Affiliates, on the one hand, and RTZ and
any of its Affiliates, on the other hand, and any transactions by
RTZ or its Affiliates relating to shares of the capital stock of
the Company, or warrants, options or other rights to purchase
shares of capital stock of the Company, or securities convertible
into or exchangeable for shares of capital stock of the Company
shall be excluded from such specified events, unless such
transactions result in the acquisition by RTZ and its Affiliates
of beneficial ownership of shares of Company Voting Stock equal to
the Majority Shares.
9.6.2 Voting.
RTZ, RTZA and the Purchaser agree that
if at any time, and for so long as, RTZ, RTZA, the Purchaser or
their Affiliates beneficially own, in the aggregate, more than 5%
of the outstanding shares of Company Voting Stock, and directors
nominated pursuant to Section 9.4.1 (or replacements therefor)
continue to serve as directors of the Company, RTZ, RTZA and the
Purchaser (i) shall cause all such Company Voting Stock as of the
record date of each stockholder meeting or consent of stockholders
of the Company to be represented, in person or by proxy, at each
such meeting or in such consent, and (ii) shall, with respect to
any action at any stockholder meeting or by consent of the
stockholders of the Company which action relates solely to the
electing of directors, cause all such Company Voting Stock to be
voted at each such meeting or by such consent for election of the
slate of directors as affirmatively recommended by a majority of
the Board of Directors of the Company, which will include the
nominees of the Purchaser and RTZA pursuant to Section 9.4.1
hereof.
10. Conditions to Stock Closings.
10.1 Conditions to Stock Closing.
10.1.1 Conditions to the Obligations of
All Parties.
The obligations of each of the parties
hereto to consummate the Stock Closing shall be subject to the
satisfaction (or waiver by each of the parties hereto) at or prior
to the Stock Closing of each of the following conditions:
(a) The consummation of the Stock
Closing and the consummation of the other transactions
contemplated by this Agreement or any Affiliate Agreement shall
not be prohibited by any order or injunction of a United States
federal or state court of competent jurisdiction, or other
governmental or regulatory authority of competent jurisdiction of
the United States, the United Kingdom, Indonesia, or Spain, and
there shall not have been any action taken or any statute, rule or
regulation enacted, promulgated or deemed applicable to the Stock
Closing or the other transactions
34
contemplated by this Agreement or
any Affiliate Agreement by any United States federal or state
government or governmental agency or other governmental or
regulatory authority of competent jurisdiction of the United
States, the United Kingdom, Indonesia, or Spain, that makes
consummation of the Stock Closing or such transactions illegal.
(b) Each other party and its
Affiliates shall have complied in all material respects with its
agreements and covenants contained herein or in any Affiliate
Agreement to be performed on or prior to the Stock Closing, and
all representations and warranties of each other party and its
Affiliates contained herein or in any Affiliate Agreement shall be
true and correct in all material respects on and as of the Stock
Closing with the same effect as though made on and as of the Stock
Closing Date.
(c) All consents, approvals,
authorizations, exemptions and waivers from governmental agencies
as specified in Schedules 8.1.6 and 8.2.4 and required to
consummate the transactions contemplated by this Agreement and any
Affiliate Agreement shall have been obtained (except for such
consents, approvals, authorizations, exemptions and waivers, the
absence of which would not prohibit such sale or render such sale
illegal).
10.1.2 Conditions to Obligations of the
Purchaser.
The obligations of the Purchaser to
consummate the Stock Closing shall be subject to the satisfaction
(or waiver by the Purchaser) of each of the following additional
conditions:
(a) The Purchaser shall have
received the opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for Parent
and the Company, in form and substance reasonably requested by
Purchaser.
(b) Each of Parent and the Company
shall have delivered to the Purchaser a certificate of the
President and the chief financial officer of each of Parent and
the Company, dated the Stock Closing Date, satisfactory in form
and substance to the Purchaser and its counsel, certifying that
(i) each of Parent and the Company has complied in all material
respects with its agreements and covenants contained herein to be
performed on or prior to the Stock Closing, and (ii) all
representations and warranties of Parent and the Company set forth
in Article 8 hereof are true and correct in all material respects
on and as of the Stock Closing with the same effect as though made
on and as of the Stock Closing Date.
(c) Each of Parent and the Company
shall have delivered to the Purchaser resolutions of the Board of
Directors of Parent and the Company, respectively, duly certified
by the Secretary of Parent and the Company, respectively,
authorizing and approving the transactions contemplated hereby.
35
(d) No event shall have occurred
or be threatened which is reasonably likely to make impossible or
impracticable the satisfaction of any express condition to the
effectiveness of or closing under any Affiliate Agreement.
(e) Purchaser shall have received
a certificate of the chief financial officer of Parent, dated the
date of the Stock Closing, to the effect that, to the best of his
knowledge, no event has occurred or is contemplated by this
Agreement which causes Parent to believe that the nonrecognition
provisions of Code Section 355(a)(1) and (c) shall not apply with
respect to the Spin-Off, other than as a result of Code Section
367(e).
(f) Each of Parent and the Company
shall have received the consent of the banks party to Parent's
current credit facilities, in form and substance reasonably
satisfactory to Parent and the Company, and such consents shall
not have been revoked or Parent and the Company shall have
received assurances satisfactory to Parent and the Company that
such consents will be forthcoming.
10.1.3 Conditions to Obligations of
Parent.
The obligations of Parent to consummate
the Stock Closing shall be subject to the satisfaction or waiver
by Parent to each of the following additional conditions:
(a) Parent shall have received the
opinion of Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for
RTZ, the Purchaser and RTZA, and the opinion of C.H.H. ▇▇▇▇▇▇,
Esq. of RTZ, in each case, in form and substance reasonably
requested by Parent.
(b) Each of RTZ, the Purchaser and
RTZA shall have delivered to Parent a certificate of the President
and the chief financial officer of each of the Purchaser and RTZA,
dated the Stock Closing Date, satisfactory in form and substance
to Parent and its counsel, certifying that (i) each of RTZ, the
Purchaser and RTZA has complied in all material respects with its
agreements and covenants contained herein to be performed on or
prior to the Stock Closing and (ii) all representations and
warranties of each of RTZ, the Purchaser and RTZA set forth in
Article 8 hereof are true and correct in all material respects on
and as of the Stock Closing with the same effect as though made on
and as of the Stock Closing Date.
(c) No event shall have occurred
or be threatened which is reasonably likely to make impossible or
impracticable the satisfaction of any express condition to the
effectiveness of or closing under any Affiliate Agreement.
(d) Nothing shall have occurred
which causes Parent to believe that the nonrecognition provisions
of Code Section 355(a)(1) and (c) shall not apply with respect to
the Spin-Off, other than as a result of Code Section 367(e).
36
10.2 Conditions to Additional Stock Closings.
10.2.1 Conditions to the Obligations of
All Parties.
The obligations of each of the parties
hereto to consummate each Additional Stock Closing shall be
subject to the satisfaction or waiver by each of the parties
hereto of each of the following conditions:
(a) The Stock Closing shall have
been consummated.
(b) The consummation of such
Additional Stock Closing shall not be prohibited by any order or
injunction of a United States federal or state court of competent
jurisdiction, or other governmental or regulatory authority of
competent jurisdiction of the United States, the United Kingdom,
Indonesia, or Spain, and there shall not have been any action
taken or any statute, rule or regulation enacted, promulgated or
deemed applicable to such Additional Stock Closing by any United
States federal or state government or governmental agency or other
governmental or regulatory authority of competent jurisdiction of
the United States, the United Kingdom, Indonesia, or Spain, that
makes consummation of such Additional Stock Closing illegal.
10.2.2 Conditions to Obligations of the
Purchaser.
The obligations of the Purchaser
to consummate each Additional Stock Closing shall be subject to
the satisfaction (or waiver by the Purchaser) of each of the
following conditions: prior to the date the notice of redemption
of the 6.55% Notes is sent to the Trustee and the holders thereof,
(i) there shall have occurred no Company Material Adverse Effect
or Parent Material Adverse Effect and (ii) no change (or any
condition, event or development) shall have occurred which, with
or without the giving of notice or lapse of time, is reasonably
likely to result in a Company Material Adverse Effect or Parent
Material Adverse Effect.
11. Preemptive Rights; Rights of First Offer.
(a) In case of the proposed issuance, sale or
grant by the Company of shares of Company Common Stock or
securities convertible into or exchangeable for, or warrants,
options or other rights to purchase, shares of Company Common
Stock, the Company shall deliver to the Purchaser written notice
of its intent to issue, sell or grant such securities, which shall
specify the number and kind of securities proposed to be issued,
sold or granted, whether such issuance, sale or grant will be
effected through a transaction involving a Public Offering or
otherwise, and, if the transaction does not involve a Public
Offering, the amount and type of consideration which the Company
proposes to be paid for such securities (the "Offer Price"), and
the
37
other material terms and conditions of the
proposed issuance, sale or grant (the "Company Notice").
(b) In the event of any such proposed
issuance, sale or grant in any transaction involving a Public
Offering, the Purchaser shall have the right, exercisable by
written notice to the Company in accordance with Section 11(e), to
purchase up to such number of shares of Company Common Stock, or
securities, warrants, options or rights as will preserve the
Purchaser's and RTZA's then existing percentage ownership of the
outstanding shares of Company Common Stock as at a record date not
more than 30 days prior to such issuance, sale or grant; provided
that any such purchases made by the Purchaser pursuant to this
Section 11(b) shall be made (i) at the time of the closing with
respect to such Public Offering and in accordance with the
Purchaser Notice given prior to the effective date of the
registration statement related thereto, (ii) pursuant to an
exemption from the registration requirements of the Securities Act
and (iii) at a price equal to the public offering price of such
shares of Company Common Stock or such securities, warrants,
options or rights. The term "Public Offering" means an offering
of any such securities pursuant to a registration statement under
the Securities Act which results in the widespread distribution of
such securities to the public.
(c) Subject to Section 11(d), in the event of
any such proposed issuance, sale or grant in any transaction not
involving a Public Offering, the Purchaser shall have the right,
exercisable by written notice to the Company in accordance with
Section 11(e), to purchase (i) such number of shares of Company
Common Stock, or securities, warrants, options or rights, as will
preserve the Purchaser's and RTZA's then existing percentage
ownership of the outstanding shares of Company Common Stock as at
a record date not more than 30 days prior to such issuance, sale
or grant, or (ii) all of such shares of Company Common Stock,
securities, warrants, options or rights, provided that approval of
the Company Board of Directors will be required to the extent that
as a result of such purchases the shares of Company Voting Stock
beneficially owned by RTZ and its Affiliates, alone or acting in
concert with others, equals or exceeds the number of Majority
Shares.
(d) In the event of any such proposed
issuance, sale or grant of any such securities in connection with
any acquisition of securities or assets of another company or
otherwise, the Purchaser shall have the right, exercisable by
written notice to the Company in accordance with Section 11(e), to
purchase up to such number of shares of Company Common Stock, or
securities, warrants, options or rights as will preserve the
Purchaser's and RTZA's then existing percentage ownership of the
outstanding shares of Company Common Stock as at a record date not
more than 30 days prior to such issuance, sale or grant.
38
(e) Any issuance, sale or grant by the Company
to the Purchaser pursuant to this Section 11 shall be on terms no
less favorable than that of the proposed issuance, sale or grant
and for a price in cash and, with respect to securities offered
pursuant to Section 11(b) hereof, for a price equal to the public
offering price per share, and, with respect to securities offered
pursuant to Section 11(c) or Section 11(d) hereof, for a price no
greater than the Offer Price; provided that in the event of any
transaction contemplated by Section 11(b) or Section 11(c) for
consideration other than cash or any transaction contemplated by
Section 11.1(d), the purchase price per share of such securities
purchased by the Purchaser shall be in cash and shall be no
greater than the average of the closing prices of such securities
on the NYSE or other national securities exchange on which such
securities are listed or quoted for the 10 business days preceding
the announcement of such transaction, or if the security is not so
listed or authorized for quotation, the product of the average of
the closing bid and asked prices reported by the National
Association of Securities Dealers Automated Quotation System for
the ten business days preceding the announcement of such
transaction, or if not so listed or authorized for quotation, the
fair market value of the securities as agreed between the
Purchaser and the Company or, failing agreement within 10 days
from the establishment of the Offer Price, as determined by an
independent appraiser mutually acceptable to the Purchaser and the
Company.
(f) Within 10 business days after the date of
receipt by the Purchaser of the Company Notice, the Purchaser
shall send the Purchaser Notice to the Company. The term
"Purchaser Notice" means any written notice given by the
Purchaser, pursuant to which the Purchaser elects whether to
purchase securities in accordance with this Section 11 and, in the
case of a transaction contemplated by Section 11(c), which states
whether the Purchaser elects to purchase its proportionate share
or all of the securities. The Purchaser Notice shall be deemed to
be an irrevocable commitment to purchase from the Company the
number of securities which the Purchaser specifies in the
Purchaser Notice. The closing of any purchase of securities
pursuant to this Article 11 shall occur as promptly as practicable
after receipt by the Company of the Purchaser Notice, on such date
and at such time as the Purchaser and the Company shall agree;
provided that such closing will not take place earlier than the
date of the issuance, sale or grant giving rise to the Purchaser's
rights under this Article 11. Such closing shall take place at
the offices of Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, presently
at ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other
place as the Purchaser and the Company shall agree.
(g) If the Purchaser fails to deliver the
Purchaser Notice within 10 business days after receipt of the
Company Notice, or if in the Purchaser Notice the Purchaser elects
not to purchase securities in accordance with this Article 11,
then the Company (i) shall be under no obligation to sell any of
the securities proposed to be issued, sold or granted to the
Purchaser, and (ii) may, within a period of six months from
39
the date of the Company Notice, sell all the
securities proposed to be issued, sold or granted to one or more
third parties for cash at a price per share which, with respect to
shares offered pursuant to Section 11(b) hereof, shall be not less
than the public offering price per share, and, with respect to
securities offered pursuant to Section 11(c) or Section 11(d)
hereof, shall be not less than the Offer Price.
(h) The provisions of Section 11 shall not
apply to any of the following transactions: (i) the grant of
stock options to any director, officer or employee of the Company,
or any consultant or advisor who is receiving cash compensation
from the Company; (ii) the issuance of shares of Company Common
Stock upon the exercise of any of the options specified in clause
(i) above; and (iii) the issuance of shares of Company Common
Stock issued pursuant to the terms of warrants, options, rights or
convertible or exchangeable securities (x) as set forth on
Schedule 8.1.2 or (y) issued, sold or granted in compliance with
the provisions of this Article 11.
12. Termination.
12.1 Termination Prior to Stock Closing.
This Agreement may be terminated and the
transactions contemplated by this Agreement and the Related
Agreements may be abandoned at any time prior to the Stock
Closing:
(i) by the mutual written consent of the
parties hereto; or
(ii) by any party hereto, if there is a
failure of any of the conditions specified in Section 10.1.1
hereof or the Stock Closing has not taken place on or prior to
December 31, 1995.
12.2 Effect of Termination.
In the event this Agreement is terminated
pursuant to Section 12.1.1, all further obligations of the parties
hereunder shall terminate, except that nothing in this Article 12
shall relieve any party hereto of any liability for breach of this
Agreement.
13. Miscellaneous.
13.1 Transfer Taxes.
Parent and the Company jointly and severally
agree that it will pay, and will hold the Purchaser and RTZA
harmless from, any and all liability with respect to any United
States federal, state and local stamp or similar transfer taxes
which may be determined to be payable in connection with the
execution and delivery and performance of this Agreement or any
Related Agreement and the transactions described herein and
therein or any modification, amendment or alteration of the terms
or provisions of this Agreement or any Related Agreement and the
transactions described herein and therein.
40
13.2 Survival of Representations, Warranties
and Agreements, Etc.
All representations and warranties contained
herein or made in writing by any party in connection herewith
shall survive the execution and delivery of this Agreement, except
that the representations and warranties contained in Sections
8.1.7, 8.1.8, 8.1.9, 8.1.10, 8.1.11, 8.1.13, 8.2.5 and 8.2.9
hereof shall survive the execution and delivery of this Agreement
only until the date which is 2 years after the Distribution Date.
All statements contained in any certificate or other instrument
delivered by Parent or the Company pursuant to this Agreement or
any Related Agreement or in connection with the transactions
contemplated hereby or thereby shall constitute representations
and warranties by the Parent or the Company under this Agreement.
All agreements contained herein shall survive indefinitely until,
by their respective terms, they are no longer operative.
13.3 Expenses.
Except as otherwise provided herein, each of
Parent, the Company, RTZ, the Purchaser and RTZA shall pay all
costs and expenses incurred by it or on its behalf in connection
with this Agreement, any Related Agreement and the transactions
contemplated hereby and thereby, including, without limiting the
generality of the foregoing, fees and expenses of its own
financial consultants, accountants and counsel.
13.4 Indemnification.
(a) Parent shall indemnify, defend and
hold harmless RTZ, the Purchaser and RTZA against all liability,
loss or damage, together with all reasonable costs and expenses
related thereto (including reasonable legal and accounting fees
and expenses) ("RTZ Damages") incurred or suffered by RTZ, the
Purchaser or RTZA, arising from the untruth, inaccuracy or breach
of any of the representations, warranties, covenants or agreements
made by Parent herein.
(b) The Company shall indemnify,
defend and hold harmless RTZ, the Purchaser and RTZA against all
RTZ Damages incurred or suffered by RTZ, the Purchaser or RTZA,
arising from the untruth, inaccuracy or breach of any of the
representations, warranties, covenants or agreements made by the
Company herein.
(c) RTZ, the Purchaser and RTZA,
jointly and severally, shall indemnify, defend and hold harmless
Parent and the Company against all liability, loss or damage,
together with all reasonable costs and expenses related thereto
(including reasonable legal and accounting fees and expenses),
incurred or suffered by Parent or the Company arising from the
untruth, inaccuracy or breach of any of the representations,
warranties, covenants or agreements made by each of them herein.
41
(d) Any party seeking indemnification
hereunder (the "Indemnified Party") (i) shall promptly notify the
other party (the "Indemnifying Party") of the pendency of any
claim or proceeding asserted by any third party against the
Indemnified Party pursuant to which indemnity may be sought
hereunder, (ii) shall permit the Indemnifying Party to assume the
defense of the Indemnified Party with respect to any such claim or
proceeding at the Indemnifying Party's sole cost and expense, and
(iii) shall not settle any claim or proceeding for which indemnity
may be sought hereunder without the consent of the Indemnifying
Party. Except as otherwise provided for in this Agreement
(including without limitation Section 13.8 hereof), this Section
13.4 shall provide the exclusive remedy for any misrepresentation
or breach of warranty, covenant, or agreement arising out of this
Agreement or the transactions contemplated hereby.
13.5 Termination of Certain Provisions.
(a) In the event that RTZ and its
Affiliates fail to beneficially own in the aggregate, at any time
after the Stock Closing Date, at least 5% of the then outstanding
shares of the Company Common Stock, Section 9.4.1 and Article 11
hereof shall terminate and have no further force and effect and
all rights and obligations of the parties hereto under the
provisions of such sections shall thereafter cease.
(b) Notwithstanding anything herein to
the contrary, except as otherwise agreed by RTZ, RTZA and the
Purchaser, the Company and Parent will not be entitled to deliver
the notice pursuant to Section 5.1(a), the notice pursuant to
Section 6.1(c), the request pursuant to Section 6.1(d) or any
Additional Purchase Notice pursuant to Section 6.1(a) after
December 31, 1995; provided further that any such notice, whenever
given, shall not provide for, or otherwise result in, the
obligation of RTZA and/or Purchaser, as the case may be, to
commence the Tender Offer, to purchase Additional Shares or to
purchase Option Shares, in each case, after June 30, 1996.
13.6 Further Assurances.
Each party hereto shall do and perform or
cause to be done and performed all further acts and things and
shall execute and deliver all other agreements, certificates,
instruments, and documents as any other party hereto reasonably
may request in order to carry out the intent and accomplish the
purposes of this Agreement and the Related Agreements and the
consummation of the transactions contemplated hereby and thereby.
13.7 Governing Law.
This Agreement and the rights and obligations
of the parties hereto shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York,
without giving effect to the principles of conflicts of law
thereof. Each party hereto hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction (except for the
purposes
42
of or proceedings regarding enforcement) of
courts of the State of New York located in the Borough of
Manhattan in The City of New York and of the United States
District Court for the Southern District of New York (the "New
York Courts") for any litigation arising out of or relating to
this Agreement or any Related Agreement and the transactions
contemplated hereby and thereby (and agrees not to commence any
litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in the New
York Courts and agrees not to plead or claim in any New York Court
that such litigation brought therein has been brought in an
inconvenient forum.
13.8 Specific Performance.
The parties hereto agree that money damages or
other remedy at law would not be sufficient or adequate remedy for
any breach or violation of, or a default under, this Agreement by
them and that in addition to all other remedies available to them,
each of them shall be entitled to the fullest extent permitted by
law to an injunction restraining such breach, violation or default
or threatened breach, violation or default and to any other
equitable relief, including without limitation specific
performance, without bond or other security being required.
13.9 Notice.
All notices and other communications hereunder
shall be in writing and, unless otherwise provided herein, shall
be deemed to have been given when received by the party to whom
such notice is to be given at its address set forth below, or such
other address for the party as shall be specified by notice given
pursuant hereto:
(a)If to Parent or the Company, to it at:
Freeport-McMoRan
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:General Counsel
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:E. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
43
(b) If to RTZ or the Purchaser to:
The RTZ Corporation PLC
▇ ▇▇. ▇▇▇▇▇'▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Attn: The Company Secretary
with a copy to:
Fried, Frank, Harris, ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, P.C.
(c) If to RTZA to:
RTZ America, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: The Company Secretary
with a copy to:
Fried, Frank, Harris, ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, P.C.
13.10 Binding Effect; Assignment.
This Agreement shall inure to the benefit of
and shall be binding upon the parties hereto and their respective
heirs, legal representatives, successors and assigns. Neither
this Agreement nor any of the rights hereunder may be assigned by
any of the parties hereto without the consent of the other
parties.
13.11 Amendment and Modification.
This Agreement may be amended, modified,
supplemented or waived only by written agreement of the party
against whom enforcement of such amendment, modification,
supplement or waiver is sought.
13.12 Headings; References; Execution in
Counterparts; Interpretation.
The headings and captions contained herein are
for convenience only and shall not control or affect the meaning
or construction of any provision hereof. All article, section,
schedule, exhibit and paragraph references are to this Agreement,
unless otherwise expressly provided. This Agreement may be
executed in any number of counterparts, each of which shall be
deemed to be an original and which together shall constitute one
and the same instrument. In this Agreement, unless the context
otherwise requires, words in the singular number or in the plural
number shall each include the singular number and the plural
number.
13.13 Entire Agreement.
This Agreement, the Schedules and Exhibits
attached hereto, constitute the entire agreement, and supersede
all prior agreements and understandings, oral and written, between
the parties hereto with respect to the subject matter hereof.
13.14 Publicity.
Promptly following the execution and delivery
of the Agreement, the parties hereto shall issue a press release
in an agreed form. Thereafter the parties hereto shall consult
regarding the content and timing of any formal disclosure to be
made at any time after the date hereof. Notwithstanding the
foregoing, each of the parties hereto may, in documents required
to be filed by it with any governmental or regulatory authority,
make such statements with respect to the transactions contemplated
hereby as each may be advised is legally necessary upon advice of
its counsel.
44
PAGE 45 INTENTIONALLY OMITTED
45
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the date first above written.
FREEPORT-McMoRan INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board
FREEPORT-McMoRan COPPER & GOLD INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
THE RTZ CORPORATION PLC
By: /s/ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director
RTZ INDONESIA LIMITED
By /s/ ▇.▇. ▇▇▇▇▇-▇▇▇▇▇
Name: ▇.▇. ▇▇▇▇▇-▇▇▇▇▇
Title: Director, Secretary
RTZ AMERICA, INC.
By /s/ ▇. ▇▇▇▇▇
Name: ▇. ▇▇▇▇▇
Title: President
46
TABLE OF CONTENTS
Page
1. Definitions................................................1
2. Registration Rights Agreements.............................7
3. Purchases of Class A Common Stock..........................7
3.1 Sale of Shares.......................................7
3.2 Stock Closing........................................7
4. Certain Actions by Parent..................................8
4.1 Redemption of the 6.55% Notes and the ABC Debentures. 8
5. Tender Offer for, and Conversion of, 6.55% Notes...........9
5.1 Tender Offer.........................................9
5.2 Conversion of 6.55% Notes...........................10
5.3 Transfer of Shares Issued Upon Conversion...........10
5.4 Code Section 367(e) Indemnification.................11
6. Purchase of Additional Shares and Option Shares...........15
6.1 Request to Purchase Additional Shares...............15
6.2 Option to Purchase Class A Common Stock.............17
6.3 Purchase of Additional Shares and Option Shares.....17
7. Spin-Off and Merger.......................................18
8. Representations and Warranties............................19
8.1 Representations and Warranties of Parent and the
............Company.............................................19
8.1.1 Organization and Qualifications.............19
8.1.2 Capitalization..............................19
8.1.3 Authority...................................20
- i -
Page
8.1.4 Title......................................21
8.1.5...Compliance with Other Instruments..........22
8.1.6 Consents...................................22
8.1.7 Actions Pending............................23
8.1.8 SEC Reports................................23
8.1.9 Financial Statements.......................24
8.1.10 Compliance with Laws; Permits.............24
8.1.11 Books and Records.........................25
8.1.12 Financial Advisors and Brokers............25
8.1.13 Accuracy of Information...................25
8.1.14 Consolidated Group........................26
8.1.15 Tax Sharing Agreement.....................26
8.2 Representations and Warranties of RTZ, the Purchaser
and RTZA............................................26
8.2.1 Organization................................26
8.2.2 Authority...................................26
8.2.3 Compliance with Other Instruments...........27
8.2.4 Consents....................................27
8.2.5 Actions Pending.............................28
8.2.6 Investment Representations..................28
8.2.7 Financial Advisors and Brokers..............28
8.2.8 Ownership of Securities of Parent and the
Company.............................................28
8.2.9 Accuracy of Information.....................28
- ii -
Page
9. Covenants.................................................28
9.1 Covenants of All Parties............................28
9.1.1 Cooperation.................................28
9.1.2 Breach of Representations and Warranties....29
9.1.3 Communications with Regulators..............29
9.1.4 Affiliate Agreements........................30
9.1.5 Certain Specified Actions...................30
9.2 Covenants of Parent and the Company.................30
9.2.1 Conduct of Business Pending the Spin-Off....30
9.2.2 Exchange of Shares..........................31
9.2.3 Certain Arrangements Following the Spin-Off. 31
9.3 Covenants of Parent.................................31
9.3.1 Minimum Price of Sales......................31
9.4 Covenants of the Company............................31
9.4.1 Right to Nominate Directors.................31
9.5 Covenants of RTZ, RTZA and the Purchaser............32
9.5.1 Lack of Certain Stock Ownership.............32
9.5.2 Certain Specified Actions...................32
9.6 Additional Covenants................................32
9.6.1 Future Acquisitions.........................32
9.6.2 Voting......................................33
10. Conditions to Stock Closings..............................33
10.1 Conditions to Stock Closing........................33
- iii -
Page
10.1.1 Conditions to the Obligations of All
Parties....................................33
10.1.2 Conditions to Obligations of the Purchaser.34
10.1.3 Conditions to Obligations of Parent........35
10.2 Conditions to Additional Stock Closings.............35
10.2.1 Conditions to the Obligations of All
Parties....................................35
10.2.2 Conditions to Obligations of the Purchaser.36
11. Preemptive Rights; Rights of First Offer..................36
12. Termination...............................................39
12.1 Termination Prior to Stock Closing..................39
12.2 Effect of Termination...............................39
13. Miscellaneous.............................................39
13.1 Transfer Taxes.....................................39
13.2 Survival of Representations, Warranties and
Agreements, Etc....................................39
13.3 Expenses...........................................40
13.4 Indemnification....................................40
13.5 Termination of Certain Provisions..................41
13.6 Further Assurances.................................41
13.7 Governing Law......................................41
13.8 Specific Performance...............................41
13.9 Notice.............................................42
13.10 Binding Effect; Assignment........................43
13.11 Amendment and Modification........................43
13.12 Headings; References; Execution in Counterparts;
Interpretation....................................43
- iv -
Page
13.13 Entire Agreement..................................43
13.14 Publicity.........................................43
- v -
List of Exhibits
Exhibit A Form of Company Registration Rights Agreement
Exhibit B Form of Parent Registration Rights Agreement
Exhibit C Term Sheet for Benefit Allocation Agreement
Exhibit D Term Sheet for Transaction Management Services
Agreement
Exhibit 8.1.15 Certain Actions
List of Schedules
Schedule 8.1.2 -- Capitalization
Schedule 8.1.3 -- Authority
Schedule 8.1.6 -- Consents
Schedule 8.1.9 -- Financial Statements
Schedule 8.1.10 -- Compliance with Laws; Permits
Schedule 8.1.14 -- Consolidated Group
Schedule 8.1.15 -- Tax Sharing Agreements
Schedule 8.2.4 -- Consents
Schedule 9.1.5 -- Maintenance of the Voting Structure of the
Company
Schedule 9.2.1 -- Conduct of Business Pending the Spin-Off
Schedule 9.5.2 -- Certain Disallowed Transactions