AGREEMENT AND PLAN OF MERGER
TPC CORPORATION,
PACIFICORP HOLDINGS, INC.
AND
POWER ACQUISITION COMPANY
EXECUTED ON MARCH 11, 1997
TABLE OF CONTENTS
ARTICLE I THE OFFER................................................... 2
1.1. The Offer................................................... 2
1.2. Company Action.............................................. 3
ARTICLE II THE MERGER.................................................. 4
2.1. The Merger.................................................. 4
2.2. Effective Time; Closing..................................... 4
2.3. Effect of the Merger........................................ 5
2.4. Certificate of Incorporation; Bylaws........................ 5
2.5. Directors and Officers.................................... 5
2.6. Conversion of Securities.................................. 5
2.7. Employee Stock Options.................................... 6
2.8. Dissenting Shares......................................... 6
2.9. Surrender of Shares; Stock Transfer Books ................ 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF TPC..................... 8
3.1. Organization and Qualification; Subsidiaries.............. 8
3.2. Charter and Bylaws........................................ 9
3.3. Capitalization............................................ 9
3.4. Authority; Due Authorization; Binding Agreement........... 10
3.5. No Violation; Consents.................................... 10
3.6. Compliance................................................ 11
3.7. SEC Filings; Financial Statements ........................ 11
3.8. Absence of Certain Changes or Events...................... 12
3.9. Litigation................................................ 12
3.10. Employee Benefit Plans.................................... 12
3.11. Offer Documents; Schedule 14D-9........................... 14
3.12. Properties................................................ 14
3.13. Taxes..................................................... 15
3.14. Environmental Matters..................................... 16
3.15. Brokers................................................... 17
3.16. Regulatory Status......................................... 17
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PHI AND ACo............. 17
4.1. Corporate Organization.................................... 17
4.2. Authority; Due Authorization; Binding Agreement........... 18
4.3. No Violation; Consents.................................... 18
4.4. Offer Documents; Proxy Statement.......................... 19
4.5. Brokers................................................... 19
4.6. Financing................................................. 19
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4.7. Regulatory Status......................................... 19
4.8. Ownership of Shares....................................... 19
4.9. Financial Statements...................................... 19
ARTICLE V CONDUCT OF BUSINESS PENDING THE EFFECTIVE TIME............ 20
ARTICLE VI ADDITIONAL AGREEMENTS..................................... 22
6.1. Stockholders Meeting...................................... 22
6.2. Proxy Statement........................................... 22
6.3. Access to Information; Confidentiality.................... 23
6.4. Alternative Proposals..................................... 24
6.5. Directors' and Officers' Indemnification and Insurance.... 25
6.6. Notification of Certain Matters........................... 27
6.7. Further Action; Best Efforts.............................. 27
6.8. Public Announcements...................................... 28
6.9. PHI Guarantee............................................. 28
6.10. Employee Matters.......................................... 28
6.11. Directors................................................. 30
ARTICLE VII CONDITIONS TO THE MERGER.................................. 31
7.1. Conditions to the Obligations of Each Party to Effect
the Merger.............................................. 31
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER......................... 32
8.1. Termination............................................... 32
8.2. Effect of Termination..................................... 33
8.3. Fees and Expenses......................................... 33
8.4. Amendment................................................. 33
8.5. Waiver.................................................... 33
ARTICLE IX GENERAL PROVISIONS........................................ 34
9.1. Survival.................................................. 34
9.2. Scope of Representations and Warranties................... 34
9.3. Notices................................................... 34
9.4. Certain Definitions ...................................... 36
9.5. Severability.............................................. 37
9.6. Entire Agreement; Assignment.............................. 38
9.7. Parties in Interest....................................... 38
9.8. Specific Performance...................................... 38
9.9. Governing Law............................................. 38
9.10. Headings.................................................. 38
9.11. Counterparts.............................................. 38
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SCHEDULES
Schedule 2.7.............. Stock Option Loans
Schedule 3.1.............. Subsidiaries
Schedule 3.3.............. Capitalization
Schedule 3.5.............. No Conflict
Schedule 3.6.............. Compliance
Schedule 3.7.............. SEC Reporting Requirements
Schedule 3.8.............. Absence of Certain Changes or Events
Schedule 3.9.............. Litigation
Schedule 3.10............. Employee Benefit Plans
Schedule 3.13............. Tax Matters
Schedule 3.14............. Environmental Matters
Schedule 3.15............. Brokers
Schedules 3.16 and 4.7.... Regulatory Status
Schedule 5................ Conduct of Business
Schedule 9.4(h)........... Permitted Encumbrances
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SCHEDULE OF DEFINED TERMS
DEFINED TERM SECTION OR EXHIBIT
1935 Act................................................. Section 3.16
affiliate................................................ Section 9.4(a)
Agreement................................................ Preamble
Alternative Proposal..................................... Section 6.4(b)
Alternative Transaction.................................. Section 6.4(a)
beneficial owner......................................... Section 9.4(c)
best efforts............................................. Section 9.4(b)
business day............................................. Section 9.4(d)
Certificate of Merger.................................... Section 2.2
Certificates............................................. Section 2.9(b)
Closing ................................................. Section 2.2
Confidentiality Agreement................................ Section 6.3(c)
Contamination............................................ Section 9.4(e)
control.................................................. Section 9.4(f)
controlled by............................................ Section 9.4(f)
Delaware Law............................................. Section 2.1
Dissenting Share......................................... Section 2.8(a)
Effective Time........................................... Section 2.2
Environmental Laws....................................... Section 3.14(a)
ERISA.................................................... Section 3.10(a)
Exchange Act............................................. Section 1.2(b)
GAAP..................................................... Section 3.7(b)
HSR Act.................................................. Section 3.5(b)
Hazardous Substances..................................... Section 9.4(g)
Indemnified Parties...................................... Section 6.5(b)
Independent Directors.................................... Section 6.11
IRS...................................................... Section 3.13(b)
▇▇▇▇▇▇ Brothers.......................................... Section 1.2(a)
Material Adverse Effect.................................. Section 3.1
Material Subsidiaries.................................... Section 3.1
Merger................................................... Recitals
Merger Consideration..................................... Section 2.6(a)
Minimum Condition........................................ Section 1.1(a)
Offer.................................................... Recitals
Offer Documents.......................................... Section 1.1(b)
Offer to Purchase........................................ Section 1.1(b)
Option................................................... Section 2.7
Parent................................................... Preamble
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DEFINED TERM SECTION OR EXHIBIT
Parent Parties........................................... Preamble
Paying Agent............................................. Section 2.9(a)
Per Share Amount......................................... Section 1.1(a)
Permitted Encumbrances................................... Section 9.4(h)
person................................................... Section 9.4(i)
Proxy Statement.......................................... Section 4.4
Returns.................................................. Section 3.13(a)
Schedule 14D-1........................................... Section 1.1(b)
Schedule 14D-9........................................... Section 1.2(b)
SEC...................................................... Section 1.1(b)
Securities Act........................................... Section 3.7(a)
Shares................................................... Recitals
Stockholders Meeting..................................... Section 6.1(a)
ACo...................................................... Preamble
Subsidiaries............................................. Section 9.4(i)
Subsidiaries............................................. Section 3.1
Subsidiary............................................... Section 9.4(i)
Subsidiary............................................... Section 3.1
Surviving Corporation.................................... Section 2.1
Taxes.................................................... Section 3.13(f)
Tender Offer Acceptance Date............................. Section 2.7
TPC...................................................... Preamble
TPC 401(k) Plan.......................................... Section 3.10(a)
TPC Board of Directors................................... Recitals
TPC Common Stock......................................... Recitals
TPC Employee Benefit Plans............................... Section 3.10(c)
TPC ESOP................................................. Section 3.10(a)
TPC ERISA Affiliate...................................... Section 3.10(a)
TPC Preferred Stock...................................... Section 3.3
TPC SEC Reports.......................................... Section 3.7(a)
TPC Stockholder Approval................................. Section 6.1
Transactions............................................. Section 1.2(a)
under common control with................................ Section 9.4(f)
ANNEX A
Conditions to the Offer
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, executed this 11th day of March,
1997 (this "AGREEMENT"), is by and among PacifiCorp Holdings, Inc, a Delaware
corporation ("PHI") and a wholly owned subsidiary of PacifiCorp, an Oregon
corporation ("Parent"), Power Acquisition Company, a Delaware corporation and a
direct or indirect wholly owned subsidiary of PHI ("ACO," and together with PHI,
the "PHI PARTIES"), and TPC Corporation, a Delaware corporation ("TPC").
RECITALS:
A. The boards of directors of PHI, ACo and TPC have each determined
that it is in the best interests of their respective stockholders for ACo to
acquire TPC upon the terms and subject to the conditions set forth herein.
B. In furtherance of such acquisition, it is proposed that ACo shall
make a cash tender offer (the "OFFER") to acquire all the issued and outstanding
shares (the "SHARES") of Class A Common Stock, par value $.01 per share, and
Class B Common Stock, par value $.01 per share of TPC (collectively, "TPC COMMON
STOCK"), for $13.41 per Share net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions of this Agreement and the
Offer.
C. The boards of directors of PHI and ACo have each approved the
making of the Offer and the transactions relating thereto.
D. The board of directors of TPC (the "TPC BOARD OF DIRECTORS") has
approved the making of the Offer and resolved, subject to the terms and
conditions contained herein, to recommend that holders of Shares tender their
Shares pursuant to the Offer.
E. The boards of directors of PHI, ACo and TPC have each approved
the merger (the "MERGER") of ACo with and into TPC in accordance with applicable
Delaware law following the consummation of the Offer and upon the terms and
subject to the conditions set forth herein.
F. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇ and J. ▇▇▇▇▇ ▇▇▇▇▇, stockholders
of TPC, have agreed to tender all of their TPC Common Stock pursuant to the
Offer.
AGREEMENT:
In consideration of the mutual promises contained herein, the benefits
to be derived by each party hereunder and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, PHI, ACo and TPC
agree as follows:
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ARTICLE I
THE OFFER
1.1. THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 8.1 and none of the events set forth in ANNEX A shall
have occurred or be existing (unless such event shall have been waived by ACo),
PHI shall cause ACo to commence, and ACo shall commence, the Offer at the amount
per Share specified in the recitals of this Agreement or such greater amount per
share paid pursuant to the Offer (the "PER SHARE AMOUNT") as promptly as
reasonably practicable after the date hereof, but in no event later than five
business days after the public announcement of ACo's intention to commence the
Offer. The Offer shall expire 20 business days after it is commenced, shall be
extended for an aggregate of up to 10 business days from the initial expiration
date if requested by TPC and may be extended by ACo for an aggregate of up to 20
business days from the initial expiration date (but not more than 20 business
days therefrom) without the written consent of TPC, except that (i) the Offer
may be extended without such consent for up to an aggregate of 30 days from the
initial expiration date until the expiration or termination of the waiting
period, if applicable, under the HSR Act (as defined in Section 3.5(b)) and (ii)
ACo may extend the Offer, if, at the time the Offer would otherwise expire, a 5
day cure period under clause (f) or (g) of Annex A is in effect, to a date 5
days after the end of such 5 day cure period. The obligation of ACo to accept
for payment and pay for Shares tendered pursuant to the Offer shall be subject
only to (i) the condition (the "MINIMUM CONDITION") that at least the number of
Shares that, when combined with the Shares already owned by Parent and its
wholly owned Subsidiaries, constitute a majority of the then outstanding Shares
on a fully diluted basis (including, without limitation, all Shares issuable
upon the conversion of any convertible securities or upon the exercise of any
options, warrants or rights, whether or not vested or exercisable) shall have
been validly tendered and not withdrawn prior to the expiration of the Offer and
(ii) the satisfaction or waiver of the other conditions set forth in ANNEX A.
ACo expressly reserves the right to change or waive any such condition, to
increase the Per Share Amount, and to make any other changes in the terms and
conditions of the Offer; PROVIDED, HOWEVER, that (notwithstanding Section 8.4)
no change may be made which (A) decreases the Per Share Amount, (B) reduces the
maximum number of Shares to be purchased in the Offer, (C) imposes conditions to
the Offer in addition to those set forth in ANNEX A, (D) changes or waives the
Minimum Condition, (E) extends the Offer, except as expressly provided above,
(F) provides for a different Per Share Amount in respect of Class A Common Stock
than in respect of Class B Common Stock, or (G) waives or changes the terms of
the Offer in any manner adverse to the holders of Shares (other than PHI and its
Subsidiaries). The Per Share Amount shall, subject to applicable withholding of
taxes, be net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions of the Offer. Subject to the terms and conditions
of the Offer (including, without limitation, the Minimum Condition), ACo shall
accept for payment and pay, as promptly as practicable after expiration of the
Offer, for all Shares validly tendered and not withdrawn.
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(b) As soon as reasonably practicable on the date of commencement of
the Offer, ACo shall file with the Securities and Exchange Commission (the
"SEC") and disseminate to holders of Shares to the extent required by law a
Tender Offer Statement on Schedule 14D-1 (together with all amendments and
supplements thereto, the "SCHEDULE 14D-1") with respect to the Offer and the
other Transactions (as defined below). The Schedule 14D-1 shall contain or
shall incorporate by reference an offer to purchase (the "OFFER TO PURCHASE")
and forms of the related letter of transmittal and any related summary
advertisement (the Schedule 14D-1, the Offer to Purchase and such other
documents, together with all supplements and amendments thereto, being referred
to herein collectively as the "OFFER DOCUMENTS"). PHI, ACo and TPC agree to
correct promptly any information provided by any of them for use in the Offer
Documents which shall have become false or misleading, and PHI and ACo further
agree to take all steps necessary to cause the Schedule 14D-1 as so corrected to
be filed with the SEC and the other Offer Documents as so corrected to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable federal securities laws. TPC and its counsel shall be given an
opportunity to review and comment on the Offer Documents and any amendments
thereto prior to the filing thereof with the SEC. PHI and ACo will provide TPC
and its counsel with a copy of any written comments or telephonic notification
of any oral comments PHI or ACo may receive from the SEC or its staff with
respect to the Offer Documents promptly after the receipt thereof and will
provide TPC and its counsel with a copy of any written responses and telephonic
notification of any oral response of PHI, ACo or their counsel. In the event
that the Offer is terminated or withdrawn by ACo, PHI and ACo shall cause all
tendered Shares to be returned to the registered holders of the Shares
represented by the certificate or certificates surrendered to the Paying Agent
(as defined in Section 2.9).
1.2. COMPANY ACTION.
(a) TPC hereby approves of and consents to the Offer and represents
that (i) the TPC Board of Directors, at a meeting duly called and held, has (A)
determined that this Agreement and the transactions contemplated hereby,
including, without limitation, each of the Offer and the Merger (the
"TRANSACTIONS"), are fair to and in the best interests of the holders of Shares
(other than Parent and its Subsidiaries), (B) approved and adopted this
Agreement and the Transactions and (C) resolved to recommend, subject to the
conditions set forth herein, that the stockholders of TPC accept the Offer and
approve and adopt this Agreement and the Transactions; and (ii) ▇▇▇▇▇▇ Brothers,
Inc. ("▇▇▇▇▇▇ BROTHERS") has delivered to the TPC Board of Directors a written
opinion that the consideration to be received by the holders of Shares pursuant
to each of the Offer and the Merger is fair to such holders from a financial
point of view. TPC has been authorized by ▇▇▇▇▇▇ Brothers, subject to prior
review by such financial advisor, to include the fairness opinion of ▇▇▇▇▇▇
Brothers (or references thereto) in the Offer Documents and in the Schedule 14D-
9 (as defined in Section 1.2(b)) and the Proxy Statement referred to in Section
4.4. Subject to the fiduciary duties of the TPC Board of Directors under
applicable law, TPC hereby consents to the inclusion in the Offer Documents of
the recommendation of the TPC Board of Directors described above.
(b) As soon as reasonably practicable on the date of commencement of
the Offer, TPC shall file with the SEC a Solicitation/Recommendation Statement
on Schedule 14D-9 (together with all amendments and supplements thereto, the
"SCHEDULE 14D-9") containing, subject only to the
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fiduciary duties of the TPC Board of Directors under applicable law, the
recommendation of the TPC Board of Directors described in Section 1.2(a) and
shall disseminate the Schedule 14D-9 to the extent required by Rule 14d-9
promulgated under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), and any other applicable federal securities laws. TPC, PHI
and ACo agree to correct promptly any information provided by any of them for
use in the Schedule 14D-9 which shall have become false or misleading, and TPC
further agrees to take all steps necessary to cause the Schedule 14D-9 as so
corrected to be filed with the SEC and disseminated to holders of Shares, in
each case as and to the extent required by applicable federal securities laws.
PHI, ACo and their counsel shall be given an opportunity to review and
comment on the Schedule 14D-9 and any amendments thereto prior to the filing
thereof with the SEC. TPC will provide PHI and ACo and their counsel with a
copy of any written comments or telephonic notification of any oral comments
TPC may receive from the SEC or its staff with respect to Schedule 14D-9
promptly after the receipt thereof and will provide PHI and ACo and their
counsel with a copy of any written responses and telephonic notification of
any oral response of TPC or its counsel.
(c) TPC shall promptly furnish ACo with mailing labels containing the
names and addresses of all record holders of Shares and with security position
listings of Shares held in stock depositories, each as of the most recent date
reasonably practicable, together with all other available listings and computer
files containing names, addresses and security position listings of record
holders and non-objecting beneficial owners of Shares as of the most recent date
reasonably practicable. TPC shall furnish ACo with such additional information,
including, without limitation, updated listings and computer files of
stockholders, mailing labels and security position listings, and such other
assistance as PHI, ACo or their agents may reasonably request in connection with
the Transactions. Subject to the requirements of applicable law, and except for
such steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer or the Merger, PHI and ACo shall
hold in confidence the information contained in such labels, listings and files,
shall use such information only in connection with the Transactions, and, if
this Agreement shall be terminated in accordance with Section 8.1, shall deliver
promptly to TPC all copies of such information then in their possession and
shall certify in writing to TPC its compliance with this Section 1.2(c).
ARTICLE II
THE MERGER
2.1. THE MERGER. Upon the terms and subject to the conditions set
forth in Article VII, and in accordance with the Delaware General Corporation
Law ("DELAWARE LAW"), at the Effective Time (as defined in Section 2.2), ACo
shall be merged with and into TPC. As a result of the Merger, the separate
corporate existence of ACo shall cease and TPC shall continue as the surviving
corporation of the Merger (the "SURVIVING CORPORATION").
2.2. EFFECTIVE TIME; CLOSING. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VII, the parties hereto shall cause the
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Merger to be consummated by filing this Agreement or a certificate of merger
(in either case, the "CERTIFICATE OF MERGER") with the Secretary of State of
the State of Delaware in such form as is required by, and executed in
accordance with the relevant provisions of, Delaware Law (the date and time of
such filing being the "EFFECTIVE TIME"). Prior to such filing, a closing (the
"CLOSING") shall be held at the offices of ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P. in Houston,
Texas, or such other place as the parties shall agree, for the purpose of
confirming the satisfaction or waiver, as the case may be, of the conditions
set forth in Article VII. The date of the closing is herein called the
"CLOSING DATE."
2.3. EFFECT OF THE MERGER. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of Delaware Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the property, rights, privileges, powers and franchises of
TPC and ACo shall vest in the Surviving Corporation, and all debts, liabilities,
obligations, restrictions, disabilities and duties of TPC and ACo shall become
the debts, liabilities, obligations, restrictions, disabilities and duties of
the Surviving Corporation.
2.4. CERTIFICATE OF INCORPORATION; BYLAWS.
(a) Subject to the requirements of Section 6.5, at the Effective
Time, the Certificate of Incorporation of ACo shall be the Certificate of
Incorporation of the Surviving Corporation, and Article I of the Certificate of
the Surviving Corporation shall be amended to read as follows:
"The name of the corporation is TPC Corporation."
(b) Subject to the requirements of Section 6.5, the Bylaws of ACo, as
in effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation until thereafter amended as provided by law, the
Certificate of Incorporation of the Surviving Corporation and such Bylaws.
2.5. DIRECTORS AND OFFICERS. The directors of ACo immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation, and the officers of TPC
immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation, in each case until their respective successors are duly
elected or appointed and qualified.
2.6. CONVERSION OF SECURITIES. At the Effective Time, by virtue of
the Merger and without any action on the part of ACo, TPC or the holders of any
of the Shares:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be canceled pursuant to Section 2.6(b)
and any Dissenting Shares (as defined in Section 2.8)) shall be canceled and
shall be converted automatically into the right to receive an amount equal to
the Per Share Amount in cash (the "MERGER CONSIDERATION") payable, without
interest, to the holder of such Share, upon surrender, in the manner provided in
Section 2.9, of the certificate that formerly evidenced such Share;
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(b) Each Share held in the treasury of TPC and each Share owned by
ACo or PHI, or any direct or indirect wholly owned Subsidiary of PHI or of TPC
immediately prior to the Effective Time shall be canceled without any conversion
thereof and no payment or distribution shall be made with respect thereto; and
(c) Each share of common stock, par value $.01 per share, of ACo
issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one validly issued, fully paid and
nonassessable share of common stock, par value $.01 per share, of the Surviving
Corporation.
2.7. EMPLOYEE STOCK OPTIONS. (a) TPC shall use its best efforts to
enter into an agreement with each holder of an employee or director stock option
to purchase Shares (in each case, an "OPTION") that provides that, immediately
after the date on which ACo shall have accepted for payment all Shares validly
tendered and not withdrawn prior to the expiration date with respect to the
Offer (the "TENDER OFFER ACCEPTANCE DATE"), each Option that is then
outstanding, whether or not then exercisable or vested, shall be canceled by
TPC, and each holder of a canceled Option shall be entitled to receive from ACo
at the same time as payment for Shares is made by ACo in connection with the
Offer, in consideration for the cancellation of such Option, an amount in cash
equal to the product of (i) the number of Shares previously subject to such
Option, whether or not then exercisable or vested, and (ii) the excess, if any,
of the Per Share Amount over the exercise price per Share previously subject to
such Option, reduced by any applicable withholding.
(b) If the Tender Offer Acceptance Date has not occurred by May 1,
1997 TPC may, upon approval of its Board of Directors, enter into loan
arrangements with any employee of TPC and its Subsidiaries who is a holder of an
Option that would expire on or prior to May 8, 1997 and who elects to exercise
that Option prior to the Tender Offer Acceptance Date to provide the option
holder with a loan amount sufficient to satisfy the exercise price and
applicable federal income taxes payable as a result of the exercise. The terms
of the loan arrangements made available to holders of Options shall be no more
favorable to the holders than those approved by the Board of Directors of TPC
and set forth in SCHEDULE 2.7.
2.8. DISSENTING SHARES. (a) Notwithstanding anything in this Agreement
to the contrary, no Share, the holder of which shall not have voted in favor of
the Merger and shall have properly complied with the provisions of Section 262
of the Delaware Law as to appraisal rights (a "DISSENTING SHARE"), shall be
deemed converted into and to represent the right to receive Merger Consideration
hereunder; and the holders of Dissenting Shares, if any, shall be entitled to
payment, solely from the Surviving Corporation, of the appraised value of such
Dissenting Shares to the extent permitted by and in accordance with the
provisions of Section 262 of the Delaware Law; PROVIDED, HOWEVER, that (i) if
any holder of Dissenting Shares shall, under the circumstances permitted by the
Delaware Law, subsequently deliver a written withdrawal of his or her demand for
appraisal of such Dissenting Shares, (ii) if any holder fails to establish his
or her entitlement to rights to payment as provided in such Section 262 or (iii)
if neither any holder of Dissenting Shares nor the Surviving Corporation has
filed a petition demanding a determination of the value of all Dissenting Shares
within the time provided in such Section 262, such holder or holders (as the
case may be) shall
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forfeit such right to payment for such Dissenting Shares pursuant to such
Section 262 and each such Dissenting Share shall thereupon be deemed to have
been converted into and to have become exchangeable for, as of the Effective
Time, the right to receive the Merger Consideration, without any interest
thereon, upon surrender, in the manner provided in Section 2.9, of the
certificate or certificates that formerly evidenced such Shares.
(b) TPC shall give PHI (i) prompt notice of any written demands for
appraisal of any TPC Common Stock, attempted withdrawals of such demands and any
other instruments received by TPC relating to stockholders' rights of appraisal
and (ii) the opportunity to direct all negotiations and proceedings with respect
to demands for appraisal under the Delaware Law. TPC shall not, except with the
prior written consent of PHI, voluntarily make any payment with respect to any
demands for appraisal of TPC Common Stock, offer to settle or settle any such
demands or approve any withdrawal of any such demands.
2.9. SURRENDER OF SHARES; STOCK TRANSFER BOOKS. (a) Prior to the
Effective Time, ACo shall designate a bank or trust company reasonably
satisfactory to TPC to act as agent (the "PAYING AGENT") for the holders of
Shares in connection with the Merger to receive the funds to which holders of
Shares shall become entitled pursuant to Section 2.6(a). Immediately prior to
the Effective Time, PHI shall cause ACo to have sufficient funds to deposit, and
shall cause ACo to deposit in trust with the Paying Agent, cash in the aggregate
amount equal to the product of (i) the number of shares outstanding immediately
prior to the Effective Time (other than Shares owned by PHI or ACo and
Dissenting Shares) and (ii) the Per Share Amount. Such funds shall be invested
by the Paying Agent as directed by the Surviving Corporation, PROVIDED, HOWEVER,
that such investments shall be in obligations of or guaranteed by the United
States of America or of any agency thereof and backed by the full faith and
credit of the United States of America, in commercial paper obligations rated
A-1 or P-1 or better by ▇▇▇▇▇'▇ Investors Services, Inc. or Standard & Poor's
Corporation, respectively, or in deposit accounts, certificates of deposit or
banker's acceptances of, repurchase or reverse repurchase agreements with, or
Eurodollar time deposits purchased from, commercial banks with capital, surplus
and undivided profits aggregating in excess of $100 million (based on the most
recent financial statements of such bank which are then publicly available at
the SEC or otherwise); PROVIDED, HOWEVER, that no loss on any investment made
pursuant to this Section 2.9 shall relieve PHI or the Surviving Corporation of
its obligation to pay the Per Share Amount for each Share outstanding
immediately prior to the Effective Time.
(b) Promptly after the Effective Time, PHI shall cause the Surviving
Corporation to mail to each person who was, at the Effective Time, a holder of
record of Shares entitled to receive the Merger Consideration pursuant to
Section 2.6(a) a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
evidencing such Shares (the "CERTIFICATES") shall pass, only upon proper
delivery of the Certificates to the Paying Agent) and instructions for use in
effecting the surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a Certificate, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other documents as may be required
pursuant to such instructions, the holder of such Certificate shall be entitled
to receive in exchange therefor the Merger Consideration for each Share formerly
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evidenced by such Certificate, and such Certificate shall then be canceled. No
interest shall accrue or be paid on the Merger Consideration payable upon the
surrender of any Certificate for the benefit of the holder of such Certificate.
If payment of the Merger Consideration is to be made to a person other than the
person in whose name the surrendered Certificate is registered on the stock
transfer books of TPC, it shall be a condition of payment that the Certificate
so surrendered shall be endorsed properly or otherwise be in proper form for
transfer and that the person requesting such payment shall have paid all
transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such taxes either have been paid or are not applicable. The
Surviving Corporation shall pay all charges and expenses, including those of the
Paying Agent, in connection with the distribution of the Merger Consideration.
(c) At any time following the third month after the Effective Time,
the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of Shares (including, without limitation, all interest
and other income received by the Paying Agent in respect of all funds made
available to it) and, thereafter, such holders shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat and other similar
laws) only as general creditors thereof with respect to any Merger Consideration
that may be payable upon due surrender of the Certificates held by them.
Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying
Agent shall be liable to any holder of a Share for any Merger Consideration
delivered in respect of such Share to a public official pursuant to any
abandoned property, escheat or other similar law.
(d) At the close of business on the day of the Effective Time, the
stock transfer books of TPC shall be closed and, thereafter, there shall be no
further registration of transfers of Shares on the records of TPC. From and
after the Effective Time, the holders of Shares outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such Shares
except as otherwise provided herein or by applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TPC
TPC hereby represents and warrants to PHI and ACo that:
3.1. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of TPC and
each entity in which TPC has an direct or indirect, equity or ownership interest
which represents twenty percent (20%) or more of the aggregate equity or
ownership interest in such entity (each, a "SUBSIDIARY," and collectively, the
"SUBSIDIARIES") has been duly organized and is validly existing and in good
standing under the laws of the jurisdiction of its organization and has the
requisite power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as it is now being
conducted, except where the failure to be so organized, existing or in good
standing or to have such power, authority and governmental approvals would not,
individually
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or in the aggregate, have a Material Adverse Effect (as defined below). TPC
and each Subsidiary is duly qualified or licensed as a foreign corporation or
limited partnership to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated
by it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed and in good
standing that would not, individually or in the aggregate, have a Material
Adverse Effect. When used in connection with TPC or any Subsidiary, the term
"MATERIAL ADVERSE EFFECT" means any change or effect that is reasonably likely
to be materially adverse to the business, operations, properties, financial
condition, assets or liabilities (including, without limitation, contingent
liabilities) of TPC and the Subsidiaries taken as a whole. A true and
complete list of all the Subsidiaries, together with the jurisdiction of
incorporation of each Subsidiary and the percentage of the outstanding capital
stock of each Subsidiary owned by TPC and each other Subsidiary, is set forth
in SCHEDULE 3.1. Except as disclosed in SCHEDULE 3.1, TPC does not directly
or indirectly own any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for, any equity or similar
interest in, any corporation, partnership, joint venture or other business
association or entity, other than indirect equity and similar interests held
for investment which are not, in the aggregate, material to TPC. The term
"MATERIAL SUBSIDIARIES" means those Subsidiaries indicated as material on
SCHEDULE 3.1. Except for the Material Subsidiaries, no Subsidiary is material
to the business, operations or financial condition of TPC or has any material
assets or liabilities.
3.2. CHARTER AND BYLAWS. TPC has heretofore furnished to PHI a
complete and correct copy of the charter and the bylaws or equivalent
organizational documents, each as amended to date, of TPC and each Material
Subsidiary. Such charter, bylaws and equivalent organization documents are in
full force and effect. Neither TPC nor any Material Subsidiary is in violation
of any provision of its charter, bylaws or equivalent organizational documents.
3.3. CAPITALIZATION. The authorized capital stock of TPC consists of
25,000,000 shares of Class A Common Stock, par value $.01 per share, 5,000,000
shares of Class B Common Stock, par value $.01 per share, and 26,000 shares of
Preferred Stock, par value $.01 per share ("TPC PREFERRED STOCK"). As of
December 31, 1996, (i) 17,424,252 shares of Class A Common Stock and 579,963
shares of Class B Common Stock were issued and outstanding, all of which were
validly issued, fully paid and nonassessable, (ii) 470,000 shares of Class A
Common Stock were held in treasury, (iii) 3,800,479 shares of Common Stock were
reserved for issuance pursuant to Options and (iv) 579,963 shares of Common
Stock were reserved for issuance as shares of Class A Common Stock upon
conversion of shares of Class B Common Stock. As of the date hereof, no shares
of TPC Preferred Stock were issued and outstanding. As of December 31, 1996,
options covering 3,508,818 shares of Common Stock were outstanding. Since
December 31, 1996 to the date of this Agreement, TPC has not issued any shares
of capital stock or granted any options covering, or other rights to purchase
directly or indirectly, shares of capital stock. Except as set forth in this
Section 3.3 or on SCHEDULE 3.3, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character obligating TPC or any
Subsidiary to issue or sell any shares of capital stock of, or other equity
interests in, TPC or any Subsidiary. All shares subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. Except as
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set forth in SCHEDULE 3.3, there are no outstanding contractual obligations of
TPC or any Subsidiary to repurchase, redeem or otherwise acquire any shares of
capital stock of TPC or any Subsidiary or to provide funds to, or make any
investment, (in the form of a loan, capital contribution or otherwise) in, any
Subsidiary or any other person. Each outstanding share of capital stock of
each Material Subsidiary that is a corporation is duly authorized, validly
issued, fully paid and nonassessable and, except as set forth in SCHEDULE 3.3,
each such share and the partnership interests owned by TPC or any Subsidiary
are owned free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on TPC's or such
other Subsidiary's voting rights, charges and other encumbrances of any nature
whatsoever, except for Permitted Encumbrances (as defined in Section 9.4).
3.4. AUTHORITY; DUE AUTHORIZATION; BINDING AGREEMENT.
(a) TPC has all requisite corporate power and authority to carry on
its business as presently conducted, to enter into this Agreement and to perform
its obligations under this Agreement subject, with respect to the Merger, to
stockholder approval if required under applicable law.
(b) The execution, delivery and performance of this Agreement and the
consummation of the Transactions have been duly and validly authorized by all
requisite corporate action on the part of TPC (other than, with respect to the
Merger, the approval and adoption of this Agreement by the affirmative vote of
the stockholders of TPC to the extent required by Delaware Law and the filing
and recordation of appropriate merger documents as required by Delaware Law).
(c) This Agreement has been duly executed and delivered by TPC and
all documents and instruments required hereunder to be executed and delivered by
TPC at the Closing will be duly executed and delivered by TPC. This Agreement
and all such documents and instruments constitute legal, valid and binding
obligations of TPC enforceable in accordance with their terms, subject, however,
to the effects of bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors' rights generally and to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
3.5. NO VIOLATION; CONSENTS.
(a) Except as set forth on SCHEDULE 3.5, the consummation of the
Transactions will not violate or cause a default under (i) any provision of the
governing documents of TPC or a Subsidiary, (ii) any provision of any material
contract or agreement or of any bank loan, indenture or credit agreement, in
each case to which TPC or a Subsidiary is a party, (iii) assuming the
governmental filings, approvals, consents and authorizations referred to in
Section 3.5(b) are duly and timely made or obtained and that the approval of the
Merger and this Agreement by the stockholders of TPC in accordance with Delaware
law is duly obtained, any applicable law, ordinance, rule or regulation of any
governmental authority or (iv) any applicable order, writ, judgment or decree of
any court or other competent authority, except for such violations, defaults or
other occurrences which do not, individually or in the aggregate, have a
Material Adverse Effect.
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(b) Except for (i) any required filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder (the "HSR ACT"), and filing and recordation of appropriate merger
documents as required by Delaware Law, (ii) any governmental consents necessary
for transfers of permits and licenses, and (iii) as otherwise set forth on
SCHEDULE 3.5, no authorization, consent or approval of or filing with any
governmental authority is required to be obtained or made by TPC or a Subsidiary
for the execution and delivery by TPC of this Agreement or the consummation by
TPC of the Transactions. Except as set forth in SCHEDULE 3.5, no authorization,
consent or approval of any nongovernmental third party is required to be
obtained by TPC or any Subsidiary for the execution and delivery by TPC of this
Agreement or the consummation by TPC of the Transactions, except where failure
to obtain such consents, approvals or authorizations would not prevent or delay
consummation of the Offer or the Merger, or otherwise prevent TPC from
performing its obligations under this Agreement, and would not, individually or
in the aggregate, have a Material Adverse Effect.
3.6. COMPLIANCE. Neither TPC nor any Subsidiary is in conflict with,
or in default or violation of, (a) except with respect to Environmental Laws,
which are addressed exclusively in Section 3.14, any applicable law, rule,
regulation, order, judgment or decree or (b) except as set forth in SCHEDULE
3.6, any material note, bond, mortgage, indenture, contract, or agreement to
which TPC or any Subsidiary is a party, except for any such conflicts, defaults
or violations that do not, individually or in the aggregate, have a Material
Adverse Effect. TPC and each of the Subsidiaries has all permits, licenses,
certificates of authority, orders and approvals of, and has made all filings,
applications, and registrations with, federal, state, local or foreign
government or regulatory bodies that are required in order to permit it to carry
on its business as presently conducted, the absence of which individually or in
the aggregate would reasonably be expected to have a Material Adverse Effect.
3.7. SEC FILINGS; FINANCIAL STATEMENTS. (a) TPC has filed in a timely
manner all forms, reports and documents required to be filed by it with the SEC
since January 1, 1995 (collectively, the "TPC SEC REPORTS"). The TPC SEC
Reports were prepared in all material respects in accordance with the
requirements of the Securities Act of 1933, as amended (the "SECURITIES ACT"),
or the Exchange Act, as the case may be, and the rules and regulations
thereunder, and none of the TPC SEC Reports, as of the date it was filed with
the SEC, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No Subsidiary is currently required to file any form, report or
other document with the SEC under Section 12 of the Exchange Act.
(b) The consolidated financial statements (including, any notes
thereto) contained in the TPC SEC Reports were prepared in accordance with
United States generally accepted accounting principles applied on a consistent
basis ("GAAP") throughout the periods indicated (except as may be indicated in
the notes thereto and except that financial statements included with quarterly
reports on Form 10-Q do not contain all GAAP notes to such financial statements)
and each fairly presented the consolidated financial position, results of
operations and changes in stockholders' equity and cash flows of TPC and the
consolidated Subsidiaries as at the respective
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dates thereof and for the respective periods indicated therein (subject, in
the case of unaudited statements, to normal and recurring year-end
adjustments). The financial statements of TPC and its Subsidiaries as of and
for the month ended January 31, 1997 heretofore delivered to PHI were prepared
in accordance with TPC's past practices and procedures for monthly financial
statements, consistent with the accounting methods, principles and practices
in effect at December 31, 1996.
3.8. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1996,
TPC and the Subsidiaries have conducted their businesses only in the ordinary
course and in a manner consistent with past practice and, since such date,
except as expressly contemplated by this Agreement or disclosed in any TPC SEC
Report filed since such date and prior to the date of this Agreement or as set
forth in SCHEDULE 3.8, there has not been (a) any event having, individually or
in the aggregate, a Material Adverse Effect except for changes that affect the
industries in which TPC and the Subsidiaries operate generally, (b) any change
by TPC in its accounting methods, principles or practices, (c) any declaration,
setting aside or payment of any dividend or distribution in respect of any
capital stock of TPC or any redemption, purchase or other acquisition of any of
its securities, or (d) any increase in or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing, stock
option (including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan, or any other increase in the
compensation payable or to become payable to any officers or key employees of
TPC or any Subsidiary.
3.9. LITIGATION. Except as disclosed in SCHEDULE 3.9, (a) there is
no action, administrative proceeding, lawsuit or governmental inquiry directed
against TPC or any Subsidiary pending and publicly filed, or, to TPC's
knowledge, threatened, except for such matters as individually or in the
aggregate if determined adversely to TPC and the Subsidiaries, would not have
a Material Adverse Effect, (b) there is no action, administrative proceeding,
lawsuit or governmental inquiry pending and publicly filed or, to TPC's
knowledge, threatened against TPC or any Subsidiary that could materially
hinder or impede the consummation of the Transactions, and (c) there is no
judgment or settlement obligation outstanding that is directed specifically
against TPC or the Subsidiaries that would have the effect referred to in
clauses (a) or (b).
3.10. EMPLOYEE BENEFIT PLANS.
(a) Except for the plan (the "TPC 401(k) PLAN") maintained by TPC
pursuant to Section 401(k) of the Internal Revenue Code of 1986 (the "Code") and
the employee stock ownership plan maintained by TPC (the "TPC ESOP"), neither
TPC nor any Subsidiary or any trade or business (whether or not incorporated)
which is under common control, or which is treated as a single employer, with
TPC under 414(b), (c), (m) or (o) of the Code ("TPC ERISA AFFILIATE") maintains
any "employee pension plan" as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). The TPC 401(k)
Plan and the TPC ESOP have been determined by the IRS to be exempt from federal
income taxation under Section 501 of the Code, and nothing has occurred with
respect to the operation of the TPC 401(k) Plan or the TPC ESOP that could
reasonably be expected to cause the loss of such qualification or exemption or
the imposition of any material liability, penalty, or tax under ERISA or the
Code.
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(b) Neither TPC nor any Subsidiary nor any TPC ERISA Affiliate
maintains or contributes to any plan that is (i) covered by Title IV of ERISA,
(ii) subject to the minimum funding requirements of Section 412 of the Code,
(iii) a "multi-employer plan" as defined in Section 3(37) of ERISA, (iv) subject
to Section 4063 OR 4064 of ERISA, or (v) funded by a voluntary employees'
beneficiary association within the meaning of Code Section 501(c)(9).
(c) SCHEDULE 3.10(c) lists all the "employee benefit plans," as
defined in Section 3(3) of ERISA and all other material employee compensation
and benefit arrangements or payroll practices, including, without limitation,
severance pay, sick leave, vacation pay, salary continuation for disability,
consulting or other compensation agreements, retirement, deferred compensation,
bonus, long-term incentive, stock option, stock purchase, hospitalization,
medical insurance, life insurance and scholarship programs maintained by TPC or
any Subsidiary or to which TPC or any Subsidiary has contributed or is obligated
to contribute thereunder (all such plans, other than the TPC 401(k) Plan and the
TPC ESOP, being hereinafter referred to as the "TPC EMPLOYEE BENEFIT PLANS").
SCHEDULE 3.10(c) also lists all Options outstanding as of the date hereof,
together with the names of the holders thereof and the exercise prices thereof.
(d) The TPC Employee Benefit Plans, the TPC 401(k) Plan and the TPC
ESOP have been maintained, in all material respects, in accordance with their
terms and with all provisions of ERISA (including rules and regulations
thereunder) and other applicable federal and state law, and neither TPC nor any
Subsidiary nor any "party in interest" or "disqualified person" with respect to
the TPC Employee Benefit Plans, the TPC 401(k) Plan or the TPC ESOP has engaged
in a "prohibited transaction" within the meaning of Section 4975 of the Code or
Section 406 of ERISA, except where any of the foregoing would not reasonably be
expected to have a Material Adverse Effect.
(e) Except as disclosed in SCHEDULE 3.10(e) or set forth in Sections
2.7 or 6.10, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to any employee or group of employees of TPC; (ii) increase
any benefits otherwise payable under any TPC Employee Benefit Plan, the TPC
401(k) Plan or the TPC ESOP or (iii) result in the acceleration of the time of
payment, accrual or vesting of any such benefits. Except as disclosed on
SCHEDULE 3.10(e), there are no severance agreements or employment agreements
between TPC or any Subsidiary and any employee of TPC or such Subsidiary.
(f) No stock or other security issued by TPC or any Subsidiary forms
or has formed a material part of the assets of the TPC 401(k) Plan or any TPC
Employee Benefit Plan.
(g) TPC and the Subsidiaries have not incurred any liability under,
and have complied in all respects with, the Worker Adjustment Retraining
Notification Act and the regulations promulgated thereunder and do not
reasonably expect to incur any such liability as a result of actions taken or
not taken prior to the consummation of the Offer.
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(h) Except as disclosed in SCHEDULE 3.10(h), neither TPC nor any of
the Subsidiaries is a party to an agreement that provides for the payment of any
amount that would constitute an "excess parachute payment" within the meaning of
Section 280G of the Code.
3.11. OFFER DOCUMENTS; SCHEDULE 14D-9. Neither the Schedule 14D-9
nor any information supplied by TPC for inclusion in the Offer Documents shall,
at the respective times the Schedule 14D-9, the Offer Documents, or any
amendments or supplements thereto are filed with the SEC or are first published,
sent or given to stockholders of TPC, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they are made, not misleading, except
that no representation or warranty is made by TPC with respect to information
supplied by ACo or PHI for inclusion in the Schedule 14D-9. The Schedule 14D-9
shall comply in all material respects as to form with the requirements of the
Exchange Act and the rules and regulations thereunder.
3.12. PROPERTIES.
(a) TPC and the Subsidiaries have sufficient title or leasehold
interests to all properties and assets which they purport to own, including,
without limitation, all assets and properties reflected in the December 31, 1996
financial statements and TPC SEC Reports, to conduct their respective businesses
as currently conducted, and hold such properties and assets free and clear of
all liens and encumbrances except for Permitted Encumbrances or except where the
failure so to have such title or interests or so to hold such properties and
assets would not, individually or in the aggregate, have a Material Adverse
Effect. Without limiting the generality of the foregoing, TPC and the
Subsidiaries own sufficient title or leasehold interests in real property free
and clear of liens and encumbrances except for Permitted Encumbrances, to (i)
expand the ▇▇▇▇ Storage facility to a total working storage Capacity of 12BCF of
gas, (ii) expand the ▇▇▇▇ Bluff storage facility to a total working storage
capacity of 10BCF of gas, and (iii) develop the proposed Tioga storage facility
with a total working storage capacity of 10BCF of gas.
(b) With respect to any water rights owned by TPC or any Subsidiary
which are material to operations or development of the property of TPC and the
Subsidiaries, such water rights are adequate to continue operations as presently
conducted.
(c) All personal property of TPC or any Subsidiary has been
maintained in an operable state of repair adequate to maintain normal operations
in a manner consistent with past practices, except such failures to maintain as
would not, individually or in the aggregate, have a Material Adverse Effect.
Except as provided in this Section 3.12 or in Section 3.14, TPC MAKES NO AND
DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AND
WHETHER BY COMMON LAW, STATUTE OR OTHERWISE, AS TO (I) THE QUALITY, CONDITION OR
OPERABILITY OF ANY PERSONAL PROPERTY OR EQUIPMENT, (II) ITS MERCHANTABILITY,
(III) ITS FITNESS FOR ANY PARTICULAR PURPOSE OR (IV) ITS CONFORMITY TO MODELS OR
SAMPLES OF MATERIALS AND, EXCEPT AS PROVIDED IN THIS SECTION 3.12 OR IN SECTION
3.14, ALL PERSONAL
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PROPERTY AND EQUIPMENT IS DELIVERED "AS IS, WHERE IS" IN THE CONDITION IN
WHICH THE SAME EXISTS.
3.13. TAXES.
(a) Except as set forth on SCHEDULE 3.13(a), (i) each of TPC, each of
the Subsidiaries and any affiliated, combined or unitary group of which any such
entity is or was a member has timely (taking into account any extensions) filed
all federal and all material state, local and foreign returns, declarations,
reports, estimates, information returns and statements ("RETURNS") required to
be filed in respect of any Taxes (as defined below), and has timely paid all
Taxes that are shown by such Returns to be due and payable, (ii) each of TPC and
the Subsidiaries has established reserves that are adequate in the aggregate for
the payment of all material Taxes not yet due and payable with respect to the
results of operations of TPC and the Subsidiaries through the date hereof, and
complied in all material respects with all applicable laws, rules and
regulations relating to the payment and withholding of Taxes.
(b) SCHEDULE 3.13(b) sets forth the last taxable period through which
the federal income Tax Returns of TPC and the Subsidiaries have been examined by
the Internal Revenue Service ("IRS") or otherwise closed. Except to the extent
being contested in good faith, all material deficiencies asserted as a result of
such examinations and any examination by any applicable state or local taxing
authority have been paid, fully settled or adequately provided for in TPC's most
recent audited financial statements. Except as provided for in the TPC SEC
Reports, no material federal, state or local income or franchise tax audits or
other administrative proceedings or court proceedings are presently pending with
regard to any Taxes for which TPC or any of the Subsidiaries would be liable,
and no material deficiency which has not yet been paid for any such Taxes has
been proposed, asserted or assessed against TPC or any of the Subsidiaries with
respect to any period other than as set forth in SCHEDULE 3.13(b).
(c) Except as disclosed on SCHEDULE 3.13(c), neither TPC nor any of
the Subsidiaries has executed or entered into (or prior to the close of business
on the Closing Date will execute or enter into) with the IRS or any taxing
authority (i) any agreement or other document extending or having the effect of
extending the period for assessment or collection of any Tax for which TPC or
any of the Subsidiaries would be liable or (ii) a closing agreement pursuant to
Section 7121 of the Code or any similar provision of state or local income tax
law that relates to TPC or any of the Subsidiaries.
(d) Neither TPC nor any of the Subsidiaries has made an election
under Section 341(f) of the Code or has agreed to have Section 341(f)(2) of the
Code apply to any disposition of a subsection (f) asset (as such term is defined
in Section 341(f)(4) of the Code) owned by TPC or any of the Subsidiaries.
(e) Except as set forth in TPC SEC Reports or as disclosed on
SCHEDULE 3.13(e), neither TPC nor any of the Subsidiaries is a party to, is
bound by or has any obligation under any tax sharing agreement or similar
agreement or arrangement.
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For purposes of this Agreement, "Taxes" shall mean all federal, state,
local, foreign and other taxes, charges, fees, levies, imposts, duties, licenses
or other assessments, together with any interest, penalties, additions to tax or
additional amounts imposed by any taxing authority.
3.14. ENVIRONMENTAL MATTERS. Except as described in SCHEDULE 3.14:
(a) Each of TPC and the Subsidiaries is in compliance with all
applicable federal, state and local laws (including common law), ordinances,
rules and regulations relating to the environment including, without limitation,
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, 42 U.S.C. Section 9601, ET SEQ., as amended, the Resource Conservation and
Recovery Act of 1976, as amended, 42 U.S.C. Section 6901, ET SEQ., the Clean Air
Act, 42 U.S.C. Section 7401, ET SEQ., as amended, the Federal Water Pollution
Control Act, 33 U.S.C. Section 1251, ET SEQ., as amended, and the Oil Pollution
Act of 1990, 33 U.S.C. Section 2701, ET SEQ. (collectively, the "ENVIRONMENTAL
LAWS"), except for such instances of noncompliance that individually or in the
aggregate do not have a Material Adverse Effect.
(b) Each of TPC and the Subsidiaries has obtained all permits,
licenses, franchise authorities, consents and approvals, made all filings and
maintained all material data, documentation and records necessary for owning and
operating its assets and business as it is presently conducted under all
applicable Environmental Laws, and all such permits, licenses, franchises,
authorities, consents, approvals and filings remain in full force and effect,
except for such matters that individually or in the aggregate do not have a
Material Adverse Effect.
(c) There are no pending or, to TPC's knowledge, threatened claims,
demands, actions, administrative proceedings, lawsuits or, to TPC's knowledge,
investigations against TPC or the Subsidiaries under any Environmental Laws.
(d) TPC has provided access to PHI to complete copies of any and all
environmental reports prepared by third parties for TPC or its Subsidiaries
whether or not such reports are otherwise subject to an applicable privilege.
(e) None of TPC or the Subsidiaries has transported or arranged for
the transportation of any Hazardous Substances to any location which is: (i)
listed on the EPA's National Priorities List of Hazardous Waste Sites (the
"National Priorities List") or on any similar state list; (ii) listed for
possible inclusion on the National Priorities List or on any similar state list;
or (iii) to the knowledge of TPC, the subject of any regulatory action which may
lead to claims against TPC or any of the Subsidiaries under any Environmental
Law which could in the case of clauses (i), (ii) or (iii), individually or in
the aggregate, a Material Adverse Effect.
(f) None of the real property owned or operated by TPC or any
Subsidiary is: (i) listed on the National Priorities List or on any similar
state list; (ii) listed for possible inclusion on the National Priorities list
or on any similar state list; or (iii) to the knowledge of TPC, the subject of
any regulatory action which may lead to claims against TPC or any of the
Subsidiaries under any Environmental Law.
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(g) No part of any of the real property owned or operated by TPC or
any Subsidiary is now being used, or has been used, by TPC or any Subsidiaries,
as a landfill, dump or other disposal, storage, transfer or handling area for
Hazardous Substances, excepting, however, for the storage, transfer, handling
and use of Hazardous Substances, and the disposal of brine, in the ordinary
course of business of TPC and its Subsidiaries and in material compliance with
Environmental Laws.
(h) There is not now present any Contamination of any of the real
property owned or operated by TPC or any Subsidiary which could have a Material
Adverse Effect.
TPC makes no representation in this Agreement regarding any compliance
or failure to comply with, or any actual or contingent liability under, any
Environmental Law, except as set forth in this Section 3.14.
3.15. BROKERS. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of TPC, except for the
fees of ▇▇▇▇▇▇ Brothers, Inc. specified on Schedule 3.15.
3.16. REGULATORY STATUS. Except as set forth on SCHEDULE 3.16,
neither TPC nor any Subsidiary is (a) a "public utility company," a "holding
company," a "Subsidiary company" or an "affiliate" of any public utility company
within the meaning of Section 2(a)(5), 2(a)(7), 2(a)(8) or 2(a)(11) of the
Public Utility Holding Company Act of 1935, as amended (the "1935 ACT") or
(b) subject to regulation as a natural gas company, public utility company or
public service company (or similar designation) by the Federal Energy Regulatory
Commission or any other federal, state or foreign governmental agency or
authority.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PHI AND ACO
PHI and ACo hereby, jointly and severally, represent and warrant to
TPC that:
4.1. CORPORATE ORGANIZATION. (a) Each of Parent, PHI and ACo is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to have such power, authority and governmental approvals would
not, individually or in the aggregate, have a material adverse effect on the
ability of PHI and ACo to perform their obligations hereunder and to consummate
the Transactions.
(b) The authorized capital stock of ACo consists of 100 shares of
common stock, per value $.01 per share, 100 shares of which are issued and
outstanding. All of such issued and
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outstanding shares are owned by PHI or by a wholly owned Subsidiary of PHI. All
issued and outstanding capital stock of PHI is owned by Parent.
4.2. AUTHORITY; DUE AUTHORIZATION; BINDING AGREEMENT.
(a) Each of PHI and ACo has all requisite corporate power and
authority to carry on its business as presently conducted, to enter into this
Agreement and to perform its obligations under this Agreement.
(b) The execution, delivery and performance of this Agreement and the
consummation of the Transactions have been duly and validly authorized by all
requisite corporate action on the part of each of Parent, PHI and ACo (other
than, with respect to the Merger, the filing and recordation of appropriate
merger documents as required by Delaware Law).
(c) This Agreement has been duly executed and delivered by each of
PHI and ACo. This Agreement and all such documents and instruments delivered in
connection herewith constitute legal, valid and binding obligations of each of
PHI and ACo enforceable in accordance with their terms, subject, however, to the
effects of bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting creditors' rights generally and to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
4.3. NO VIOLATION; CONSENTS.
(a) The consummation of the Transactions will not violate, or cause a
default under (i) any provision of the governing documents of Parent, PHI or
ACo, (ii) any material provision of any material contract or agreement or of any
bank loan, indenture or credit agreement, in each case to which Parent, PHI or
ACo is a party, (iii) assuming the governmental filings, approvals, consents and
authorizations referred to Section 4.3(b) are duly and timely made or obtained,
any applicable law, ordinance, rule or regulation of any governmental authority
or (iv) any applicable order, writ, judgment or decree of any court or other
competent authority, except for such defaults or other occurrences which,
individually or in the aggregate, would not prevent PHI and ACo from performing
their respective obligations under this Agreement and consummating the
Transactions.
(b) Except for (i) any required filings under the HSR Act and the
Exchange Act and filing and recordation of appropriate merger documents as
required by Delaware Law, and (ii) any governmental consents necessary for
transfers of permits and licenses, no authorization, consent or approval of or
filing with any governmental authority is required to be obtained or made by
Parent, PHI or ACo for the execution and delivery by PHI and ACo of this
Agreement or the consummation by PHI and ACo of the Transactions. No
authorization, consent or approval of any nongovernmental third party is
required to be obtained by Parent, PHI or ACo for the execution and delivery by
PHI and ACo of this Agreement or the consummation by PHI and ACo of the
Transactions, except where failure to obtain such consents, approvals or
authorizations would not
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prevent or delay consummation of the Offer or the Merger, or otherwise prevent
PHI or ACo from performing its obligations under this Agreement.
4.4. OFFER DOCUMENTS; PROXY STATEMENT. The Offer Documents will not,
at the time the Offer Documents are filed with the SEC or are first published,
sent or given to stockholders of TPC, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they are made, not misleading. The
information supplied by PHI for inclusion in the proxy statement to be sent to
the stockholders of TPC in connection with the Stockholders Meeting (as defined
below) (such proxy statement, as amended and supplemented, being referred to
herein as the "PROXY STATEMENT") and Schedule 14D-9 will not, on the date the
Proxy Statement or Schedule 14D-9 (or any amendment or supplement thereto) is
first mailed to stockholders of TPC, at the time of the Stockholders Meeting,
contain any statement which, at such time and in light of the circumstances
under which it is made, is false or misleading with respect to any material
fact, or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not false or misleading or
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Stockholders Meeting which shall have become
false or misleading; PROVIDED, HOWEVER, that PHI or ACo makes no representation
or warranty with respect to information supplied by TPC for inclusion in any of
the foregoing documents or the Offer Documents. The Offer Documents shall
comply in all material respects as to form with the requirements of the Exchange
Act and the rules and regulations thereunder.
4.5. BROKERS. No broker, finder or investment banker (other than New
Harbor, Incorporated) is entitled to any brokerage, finder's or other fee or
commission in connection with the Transactions based upon arrangements made by
or on behalf of Parent, PHI or ACo.
4.6. FINANCING. PHI has, or will have available to it at the time
ACo is required to pay for Shares under the terms of the Offer, and will make
available to ACo, sufficient funds to permit ACo to acquire all the
outstanding Shares in the Offer and the Merger. PHI has obtained commitments
for such funds to the extent available cash is not expected to be sufficient.
4.7. REGULATORY STATUS. Parent is not a "holding company" within the
meaning of Section 2(a)(7) of the 1935 Act. Neither PHI nor ACo is (a) a
"public utility company," a "holding company," or a "subsidiary company" within
the meaning of Section 2(a)(5), 2(a)(7) or 2(a)(8) of the 1935 Act or
(b) subject to regulation as a public utility company or public service company
(or similar designation) by the Federal Energy Regulatory Commission or any
other federal, state or foreign governmental agency or authority.
4.8. OWNERSHIP OF SHARES. Neither Parent, PHI, ACo nor any of the
other subsidiaries of Parent beneficially owns any Shares.
4.9. FINANCIAL STATEMENTS. The consolidated financial statements
(including, any notes thereto) of PHI as of and for the period ended September
30, 1996, heretofore delivered to TPC, were prepared in accordance with GAAP
throughout the periods indicated (except as may be
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indicated in the notes thereto and except that such financial statements do
not contain all GAAP notes to such financial statements) and fairly present
the consolidated financial position, results of operations and changes in
stockholders' equity and cash flows of PHI and its consolidated Subsidiaries
as at the dates thereof and for the periods indicated therein (subject to
normal and recurring year-end adjustments).
ARTICLE V
CONDUCT OF BUSINESS PENDING THE EFFECTIVE TIME
TPC covenants and agrees that, between the date of this Agreement and
the Effective Time, unless PHI shall otherwise agree in writing: (a) the
businesses of TPC and the Subsidiaries shall be conducted only in, and TPC and
the Subsidiaries shall not take any action except in, the ordinary course of
business and in a manner consistent with past practice; (b) TPC shall use its
best efforts to preserve substantially intact the business organization of TPC
and the Subsidiaries, to keep available the services of the current officers,
employees and consultants of TPC and the Subsidiaries and to preserve the
current relationships of TPC and the Subsidiaries with customers, suppliers and
other persons with which TPC or any Subsidiary has significant business
relations; and (c) TPC shall maintain the assets of TPC and the Subsidiaries in
good condition and repair, reasonable wear and tear accepted, and in material
compliance with applicable governmental and regulatory agency requirements, and
shall use its best efforts to maintain insurance with respect thereto of the
same types and amounts currently in force. By way of amplification and not
limitation, except as expressly contemplated or permitted by this Agreement or
SCHEDULE 5, or to the extent that PHI shall otherwise consent in writing,
neither TPC nor any Material Subsidiary shall, between the date of this
Agreement and the Effective Time, directly or indirectly do, or propose to do,
any of the following:
(a) amend or otherwise change its charter or bylaws or equivalent
organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize
the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares
of capital stock of any class of TPC or any Subsidiary, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest (including,
without limitation, any phantom interest), of TPC or any Subsidiary (except for
the issuance of Shares issuable pursuant to stock options outstanding on the
date hereof or upon conversion of shares of Class B Common Stock) or (ii) any
assets and properties material to TPC and the Subsidiaries, taken as a whole,
except for (i) sales of natural gas, in the ordinary course of business and in a
manner consistent with past practice, by the marketing business of TPC or (ii)
pledges of assets and properties required by any financing document to which TPC
or a Subsidiary is a party on the date hereof;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock (except for such declarations, set-asides, dividends and
other distributions made from any Subsidiary to TPC);
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(d) reclassify, combine, split or subdivide, or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e)(i) acquire (including, without limitation, by merger,
consolidation or acquisition of stock or assets) any corporation, partnership or
other business organization or any division thereof or any material amount of
assets, except for acquisitions of natural gas, in the ordinary course of
business, by the marketing business of TPC; (ii) incur any indebtedness for
borrowed money or issue any debt securities or assume, guarantee or endorse, or
otherwise as an accommodation become responsible for, the obligations of any
person, or make any loans or advances, except borrowing in the ordinary course
of business pursuant to any existing revolving credit agreement of TPC; or (iii)
enter into or amend any contract, agreement, commitment or arrangement with
respect to any matter set forth in this paragraph (e);
(f) increase the compensation payable or to become payable to, or
grant any severance or termination pay to, its officers, employees, directors or
consultants, except pursuant to existing contractual arrangements, or enter into
any employment, consulting or severance agreement with, any director, officer or
other employee or consultant of TPC or any Subsidiary, or establish, adopt,
enter into or amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any director, officer,
employee or consultant;
(g) pay, discharge or satisfy any claim, liability or obligation
(absolute or accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction, in the ordinary course of business
and consistent with past practice, of liabilities reflected or reserved against
in the consolidated balance sheet of TPC and the consolidated Subsidiaries as at
December 31, 1996, including the notes thereto, or subsequently incurred in the
ordinary course of business and consistent with past practice; or
(h) enter into any collective bargaining agreements or change
accounting practices;
(i) make any contribution to the TPC ESOP in excess of the amount
necessary to amortize existing loans from TPC over the remaining portion of the
original seven year period of such loans;
(j) amend in any material respect any contract or agreement material
to TPC and the Subsidiaries, taken as a whole, or terminate any such material
contract or agreement prior to the expiration of the term thereof; or
(k) agree to take in writing, or otherwise, any of the actions
described in paragraphs (a) through (j) of this Article V or any action which
would result in any of the conditions to the Offer not being satisfied (other
than as contemplated by this Agreement).
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ARTICLE VI
ADDITIONAL AGREEMENTS
6.1. STOCKHOLDERS MEETING. If TPC Stockholder Approval (as
hereinafter defined) is required by law, then, subject to the fiduciary duties
of the TPC Board of Directors under applicable law, TPC, acting through the TPC
Board of Directors, shall, in accordance with applicable law and TPC's
Certificate of Incorporation and Bylaws, (a) duly call, give notice of, convene
and hold an annual or special meeting of its stockholders (the "STOCKHOLDERS
MEETING") as soon as practicable following consummation of the Offer for the
purpose of approving and adopting this Agreement and the Transactions,
including, without limitation, the Merger (the "TPC STOCKHOLDER APPROVAL") and
(b) include in the Proxy Statement the recommendation of the TPC Board of
Directors that the stockholders of TPC approve and adopt this Agreement and the
Transactions, including, without limitation, the Merger, and use its best
efforts to obtain such approval and adoption. Notwithstanding the foregoing, if
ACo or any other Subsidiary of Parent shall acquire at least 90% of the
outstanding Shares, the parties shall, at PHI's request, take all necessary and
appropriate actions to cause the Merger to become effective as soon as
practicable after the consummation of the Offer without a Stockholders Meeting
in accordance with Section 253 of Delaware Law. PHI agrees to cause all Shares
purchased pursuant to the Offer and all other Shares beneficially owned by
Parent, ACo or any other Subsidiary of Parent, to be voted in favor of the TPC
Stockholder Approval.
6.2. PROXY STATEMENT. If TPC Stockholder Approval is required by
law, then as soon as practicable following the purchase of all Shares validly
tendered and not withdrawn pursuant to the Offer, TPC shall file the Proxy
Statement with the SEC under the Exchange Act, and shall use its best efforts
to have the Proxy Statement cleared by the SEC. PHI, ACo and TPC shall
cooperate with each other in the preparation of the Proxy Statement, and TPC
shall notify PHI of the receipt of any comments of the SEC with respect to the
Proxy Statement and of any requests by the SEC for any amendment or supplement
thereto or for additional information and shall provide to Parent promptly
copies of all correspondence between TPC or any representative of TPC and the
SEC. TPC shall give PHI and its counsel the opportunity to review the Proxy
Statement prior to its being filed with the SEC and shall give PHI and its
counsel the opportunity to review all amendments and supplements to the Proxy
Statement and all responses to requests for additional information and replies
to comments prior to their being filed with, or sent to, the SEC, and shall
make any revisions to such documents reasonably requested by PHI. Each of
TPC, PHI and ACo agrees to use its best efforts, after consultation with the
other parties hereto, to respond promptly to all such comments of and requests
by the SEC and to cause the Proxy Statement and all required amendments and
supplements thereto to be mailed to the holders of Shares entitled to vote at
the Stockholders Meeting at the earliest practicable time with the intent
being to complete the Merger as soon as practicable following consummation of
the Offer.
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6.3. ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) To the extent not restricted by third-party agreement or
applicable law, the PHI Parties and their employees, representatives,
consultants, attorneys, agents, lenders and other advisors shall, subject to any
necessary third-party approvals, and at their sole risk and expense, be given
reasonable access during normal business hours to all facilities, properties,
personnel, books and records of TPC and the Subsidiaries. The PHI Parties'
investigation shall be conducted in a manner that minimizes any interference
with TPC's or the Subsidiaries' operations. The PHI Parties may photocopy
information they review at their own expense, subject to applicable third- party
approvals. The PHI Parties agree to indemnify and hold TPC and the Subsidiaries
harmless from any and all claims and liabilities, including costs and expenses
for loss, injury to or death of any representative of the PHI Parties, and any
loss, damage to or destruction of any property owned by TPC or the Subsidiaries
or others (including claims or liabilities for loss of use of any property)
resulting directly or indirectly from the action or inaction of any of the PHI
Parties' representatives during any visit to the business or property sites of
TPC or the Subsidiaries prior to the completion of the Offer, whether pursuant
to this Section 6.3 or otherwise. None of the PHI Parties nor any of their
employees, representatives, consultants, attorneys, agents, lenders or other
advisors, shall conduct any environmental testing or sampling on any of the
business or property sites of TPC or the Subsidiaries prior to the completion of
the Offer without the prior written consent of TPC.
(b) To the extent permitted by applicable law, in order to facilitate
the continuing operation of TPC by PHI and ACo without disruption and to assist
in an achievement of an orderly transition in the ownership and management of
TPC, after completion of the Offer and until the Effective Time, TPC, PHI and
ACo shall cooperate reasonably with each other to effect an orderly transition
including, without limitation, with respect to communications with employees.
(c) TPC shall, between the date hereof and the Effective Date,
deliver to PHI complete copies of internal monthly financial and management
report packages as published by TPC to include, but not limited to, statement of
income, cash flow, balance sheet, capital expenditures, and administrative
expenses. These statements are to be provided for TPC on a "consolidated basis"
and for Market Hub Partners on a "combined basis." These statements shall be
provided as soon as practicable, but no later than the 30th working day after
the end of the reporting month.
(d) TPC shall notify PHI in advance of TPC or its Subsidiaries
entering into any material transactions, contracts or commitments (regardless of
whether such transactions, contracts or commitments are otherwise permitted by
this Agreement), and consult with PHI with regard to such transactions,
contracts or commitments.
(e) Any information obtained by the PHI Parties or their employees,
representatives, consultants, attorneys, agents, lenders and other advisors
under this Section 6.3 shall be subject to the confidentiality and use
restrictions contained in that certain letter agreement between TPC and
PacifiCorp Power Marketing dated October 23, 1996 (the "CONFIDENTIALITY
AGREEMENT").
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6.4. ALTERNATIVE PROPOSALS.
(a) After the date hereof and prior to the Effective Time or earlier
termination of this Agreement, TPC shall not, and shall not permit any of its
Subsidiaries to, initiate, solicit or encourage, and TPC shall, and shall cause
each of its Subsidiaries to, cause any officer, director or employee of, or any
attorney, accountant, investment banker, financial advisor or other agent
retained by it, not to initiate, solicit or encourage, any proposal or offer to
acquire all or any substantial part of the business and properties of TPC or any
capital stock of TPC whether by merger, purchase of assets, tender offer or
otherwise, whether for cash, securities or any other consideration or
combination thereof (any such transaction being referred to herein as an
"Alternative Transaction"), or any inquiries with respect to an Alternative
Transaction. TPC will immediately cease and cause to be terminated any existing
discussions or negotiations with parties other than PHI and ACo commenced
heretofore with respect to Alternative Transactions. Except to the extent
permitted by Section 6.4(b) or 8.1(d) of this Agreement, TPC will not (i) grant
its consent to any party other than PHI and ACo to take any action such party
has agreed not to take pursuant to any "standstill" restrictions applicable to
such party that are equivalent to the standstill provisions set forth in the
second full paragraph on page 3 of the Confidentiality Agreement, or
(ii) provide any confidential or non-public information concerning TPC or its
Subsidiaries to, or have any discussions with, any person relating to an
Alternative Transaction.
(b) Notwithstanding the provisions of paragraph (a) above, in
response to an unsolicited proposal or indication of interest for or with
respect to a potential or proposed Alternative Transaction (an "Alternative
Proposal"), (i) TPC may (x) engage in discussions or negotiations regarding such
Alternative Proposal with the person who makes such Alternative Proposal, and
(y) furnish to any such person (subject to the execution of a confidentiality
agreement containing confidentiality provisions substantially similar to those
of the Confidentiality Agreement), confidential or non-public information
concerning TPC or its Subsidiaries if, in any such case described in clause (x)
or (y), in the reasonable, good faith judgment of the TPC Board of Directors,
taking into account the advice of outside counsel, the failure to do so would
violate its fiduciary duties to the holders of TPC Common Stock under applicable
law and (ii) if such Alternative Proposal is a tender offer, the TPC Board of
Directors may take and disclose to TPC's stockholders a position contemplated by
Rule 14e-2 under the Exchange Act.
(c) TPC shall immediately notify PHI of receipt of any Alternative
Proposal or any request for confidential or nonpublic information relating to
TPC or its Subsidiaries in connection with an Alternative Proposal or for access
to the properties, books or records of TPC or any Subsidiary by any person or
entity that informs the TPC Board of Directors that it is considering making, or
has made, an Alternative Proposal, and (unless the TPC Board of Directors
concludes that it is inconsistent with its fiduciary duties under applicable
law) shall keep PHI fully informed of the status and details of any such
Acquisition Proposal, indication or request.
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6.5. DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) The Certificate of Incorporation of the Surviving Corporation and
each of its Subsidiaries shall contain provisions no less favorable with respect
to indemnification and advancement of expenses than are set forth in the
Certificate of Incorporation of TPC as of the date of this Agreement, which
provisions shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would affect adversely the
rights thereunder of individuals who at any time from and after the date of this
Agreement and to and including the Effective Time were directors, officers,
employees, fiduciaries or agents of TPC or any of its Subsidiaries in respect of
actions or omissions occurring at or prior to the Effective Time (including,
without limitation, the matters contemplated by this Agreement), unless such
modification is required by law.
(b) TPC shall, to the fullest extent permitted under applicable law
and regardless of whether the Merger becomes effective, indemnify and hold
harmless, and, after the Effective Time, the Surviving Corporation shall, to the
fullest extent permitted under applicable law, indemnify and hold harmless, each
present and former director, officer, employee, fiduciary and agent of TPC and
each Subsidiary (collectively, the "INDEMNIFIED PARTIES") against all costs and
expenses (including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and settlement amounts paid in connection with any threatened or
actual claim, action, suit, proceeding or investigation (whether arising before
or after the Effective Time), whether civil, criminal, administrative or
investigative, arising out of or pertaining to any action or omission in their
capacity as an officer, director, employee, fiduciary or agent (including,
without limitation, any claim arising out of this Agreement or any of the
transactions contemplated hereby), whether occurring before or after the
Effective Time, whether asserted or claimed prior to, at or after the Effective
Time, for a period of six years after the later of the date of this Agreement or
the Effective Time, in each case to the fullest extent permitted under Delaware
Law (and shall pay any expenses in advance of the final disposition of any such
action or proceeding to each Indemnified Party to the fullest extent permitted
under Delaware Law, upon receipt from the Indemnified Party to whom expenses are
advanced of any undertaking to repay such advances required under Delaware Law);
provided, however, that neither TPC nor the Surviving Corporation shall be
liable for any indemnification hereunder if the costs, expenses, judgment,
fines, losses, claims, damages, liabilities or settlement amounts paid by an
Indemnified Party arise out of or relate to (i) a situation in which the
Indemnified Party did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of TPC or the Subsidiary,
(ii) intentional misconduct or (iii) with respect to any criminal action or
proceeding, the Indemnified Party had no reasonable cause to believe his conduct
was unlawful. In the event of any such claim, action, suit, proceeding or
investigation with respect to which indemnification is provided under the
previous sentence, (i) the Indemnified Parties may retain counsel (including
local counsel) satisfactory to them and TPC or the Surviving Corporation, as the
case may be, shall pay the reasonable fees and expenses of such counsel,
promptly after statements therefor are received and (ii) TPC and the Surviving
Corporation shall use all reasonable efforts in the vigorous defense of any such
matter; PROVIDED, HOWEVER, that neither TPC nor the Surviving Corporation shall
be liable for any settlement effected without its written consent; and PROVIDED
FURTHER that neither TPC nor the Surviving Corporation shall be obligated
pursuant to this
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Section 6.5(b) to pay the fees and expenses of more than one counsel (plus
appropriate local counsel) for all Indemnified Parties in any single action
unless there is, as determined by counsel to the Indemnified Parties, under
applicable standards of professional conduct, a conflict or a reasonable
likelihood of a conflict on any significant issue between the positions of any
two or more Indemnified Parties, in which case such additional counsel
(including local counsel) as may be required to avoid any such conflict or
likely conflict may be retained by the Indemnified Parties at the expense of
TPC or the Surviving Corporation; and PROVIDED FURTHER that, in the event that
any claim for indemnification is asserted or made within such six-year period,
all rights to indemnification in respect of such claim shall continue until
the disposition of such claim.
(c) TPC shall, from and after the date of this Agreement and to and
including the Effective Time, and the Surviving Corporation shall, for six years
from the Effective Time, maintain in effect the current directors' and officers'
liability insurance policies maintained by TPC (PROVIDED that the Surviving
Corporation may substitute therefor policies of at least the same coverage and
amounts containing terms and conditions which are no less advantageous to such
officers and directors so long as substitution does not result in gaps or lapses
in coverage) with respect to matters occurring prior to the Effective Time;
PROVIDED, HOWEVER, that in no event shall the Surviving Corporation be required
to expend pursuant to this Section 6.5(c) more than an amount per year equal to
200% of current annual premiums paid by TPC for such insurance and, in the event
the cost of such coverage shall exceed that amount, the Surviving Corporation
shall purchase as much coverage as possible for such amount.
(d) In the event TPC or the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then, and in each such case, proper
provision shall be made so that the successors and assigns of TPC or the
Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 6.5.
(e) The Bylaws of the Surviving Corporation and each of its
Subsidiaries shall contain the provisions with respect to indemnification and
advancement of expenses at least as favorable, from the point of view of the
indemnified parties, set forth in the Bylaws of TPC on the date of this
Agreement, and such provisions shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time in any manner that
would affect adversely the rights thereunder of individuals who at any time from
and after the date of this Agreement and to and including the Effective Time
were directors, officers, employees, fiduciaries or agents of TPC or any of its
Subsidiaries in respect of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions contemplated by
this Agreement), unless such modification is required by law.
(f) The Surviving Corporation shall pay all reasonable expenses,
including attorneys' fees, that may be incurred by any Indemnified Party in
enforcing the indemnity and other obligations provided in this Section 6.5.
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(g) In the event that TPC or the Surviving Corporation should fail,
at any time from and after the Effective Time, to comply with any of the
foregoing obligations set forth in this Section 6.5, for any reason, PHI shall
be responsible therefor and hereby agrees to perform such obligations
unconditionally without regard to any defense or other basis for nonperformance
which TPC or the Surviving Corporation may have or claim (except as would be
prohibited by applicable Delaware Law), it being the intention of this
subsection (g) that the officers, directors, employees, fiduciaries and agents
of TPC and its Subsidiaries shall be fully indemnified, to the extent provided
in this Section 6.5, and that the provisions of this subsection (g) be a primary
obligation of PHI and not merely a guarantee by PHI of the obligations of TPC or
ACo.
(h) The obligations of TPC, PHI and/or the Surviving Corporation
under this Section 6.5 shall not be terminated or modified in such a manner as
to adversely affect any director, officer, employee, fiduciary and agent to whom
this Section 6.5 applies without the consent of each affected director, officer,
employee, fiduciary and agent (it being expressly agreed that the directors,
officers, employees, fiduciaries and agents to whom this Section 6.5 applies
shall be third-party beneficiaries of this Section 6.5). The rights of each
Indemnified Party hereunder shall be in addition to any other rights such
Indemnified Party may have under the charter or bylaws of TPC, under the
Delaware Law or otherwise.
6.6. NOTIFICATION OF CERTAIN MATTERS. TPC shall give prompt notice to
PHI, and PHI shall give prompt notice to TPC, of (i) the occurrence, or
nonoccurrence, of any event the occurrence, or nonoccurrence, of which would be
likely to cause any representation or warranty contained in this Agreement to be
materially untrue or inaccurate and (ii) any failure of TPC, PHI or ACo, as the
case may be, to comply with or satisfy in any material respect any covenant,
condition or agreement required to be complied with or satisfied by it
hereunder; PROVIDED, HOWEVER, that the delivery of any notice pursuant to this
Section 6.6 shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
6.7. FURTHER ACTION; BEST EFFORTS. Upon the terms and subject to the
conditions hereof, and subject, in the case of TPC, to the fiduciary duties of
its Board of Directors, each of the parties hereto shall (i) make promptly its
respective filings, and thereafter make any other required submissions, under
the HSR Act with respect to the Transactions, (ii) use its best efforts to take,
or cause to be taken, all appropriate action, and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the Transactions, including, without
limitation, using its best efforts to obtain all licenses, permits, consents,
approvals, authorizations, qualifications and orders of governmental authorities
and parties to contracts with TPC and the Subsidiaries as are necessary for the
consummation of the Transactions and to fulfill the conditions to the Offer and
the Merger and (iii) except as contemplated by this Agreement, use its best
efforts not to take any action, or enter into any transaction, that would cause
any of its representations or warranties contained in this Agreement to be
untrue or result in a breach of any covenant made by it in this Agreement. In
addition, TPC will use its best efforts to obtain prior to Closing all consents
and waivers of the lenders under the loans referenced on Schedule 3.5 that are
necessary to avoid the consummation of the Transactions (i) triggering an
acceleration of such loans or a default under such loans or (ii) causing a
breach of the covenants in
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the agreements governing such loans. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement, the proper officers and directors of each party to this
Agreement then in office shall use their best efforts to take all such action.
6.8. PUBLIC ANNOUNCEMENTS. PHI and TPC shall consult with each other
before issuing any press release or otherwise making any public statements with
respect to this Agreement or the Transactions and shall not issue any such press
release or make any such public statement prior to such consultation, except as
may be required by law or any listing agreement with a national securities
exchange to which Parent, PHI or TPC is a party.
6.9. PHI GUARANTEE. PHI agrees to take all action necessary to cause
ACo to perform all of ACo's, and the Surviving Corporation to perform all of the
Surviving Corporation's, agreements, covenants and obligations under this
Agreement and to consummate the Offer and the Merger on the terms and subject to
the conditions set forth in this Agreement. PHI shall be liable for any breach
of any representation, warranty, covenant or agreement of ACo and for any breach
of this covenant.
6.10. EMPLOYEE MATTERS.
(a) PHI and TPC agree that all employees of TPC and its Subsidiaries
immediately prior to the Effective Time shall be employed by the Surviving
Corporation immediately after the Effective Time, it being understood that PHI
and the Surviving Corporation shall have no obligations to continue employing
such employees for any length of time thereafter except pursuant to any
agreements disclosed on SCHEDULE 3.10(e). PHI shall deem, and shall cause the
Surviving Corporation to deem, the period of employment with TPC and
Subsidiaries (and with predecessor employers with respect to which TPC and its
Subsidiaries shall have granted service credit) to have been employment and
service with PHI and the Surviving Corporation for benefit plan eligibility and
vesting purposes for all of PHI's and the Surviving Corporation's employee
benefit plans, programs, policies or arrangements to the extent service with PHI
or the Surviving Corporation is recognized under any such plan, program, policy
or arrangement.
(b) For one year after the Effective Time, PHI will cause the
Surviving Corporation to continue or cause to be continued without significant
adverse change to any employee or former employee of TPC and its Subsidiaries
all TPC Employee Benefit Plans and the TPC 401(k) Plan, except that PHI or the
Surviving Corporation may, during such period, replace any of the TPC Employee
Benefit Plans or the TPC 401(k) Plan with a plan that is substantially
equivalent to or more favorable than the plan it replaces. The use of a
matching contribution feature through the TPC ESOP as provided in (c) below
shall be deemed to satisfy the requirement for continuation of the matching
contribution feature of the TPC 401(k) Plan without adverse change. If the TPC
and Subsidiary employees are covered by medical and dental plans of PHI or the
Surviving Corporation, PHI shall waive, or cause the Surviving Corporation to
waive, and shall cause the relevant insurance carriers and other third parties
to waive, all restrictions and limitations for any medical condition existing as
of the Effective Time of any of such employees and their eligible dependents for
the
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purpose of any such plans, but only to the extent that such condition would
be covered by the relevant TPC Employee Benefit Plan if it were not a pre-
existing condition and only to the extent of comparable coverage in effect
immediately prior to the Effective Time. Further, PHI shall offer to each TPC
and Subsidiary employee coverage under a group health plan which credits such
employee towards the deductibles imposed under the group medical and dental plan
of PHI or the Surviving Corporation, for the year during which the Effective
Time occurs, with any deductibles already incurred during such year under the
relevant TPC Employee Benefit Plan.
(c) To the extent permitted under Sections 401(a) and 410(b)(1)(A) or
(B) of the Code, PHI shall maintain or shall cause Parent or an affiliate of
Parent to maintain the TPC ESOP as a separate qualified plan or a separate
benefit feature in a qualified plan solely for the benefit of TPC ESOP
participants and the employees of the business (the "TPC BUSINESS") that is
conducted by TPC before the Effective Time as follows:
(i) The separate plan or feature shall be maintained until the
notes issued by the TPC ESOP (the "ESOP NOTES") are paid in full. Parent or a
delegate may designate contributions to the separate plan or feature to be used
to prepay the ESOP Notes in full or in part from time to time before maturity.
(ii) The accounts of participants in the TPC ESOP or ESOP feature
and the TPC ESOP suspense account shall be invested in employer securities
within the meaning of Section 409(l) of the Code; provided, however that the
participants in the TPC ESOP or ESOP feature shall be given a one-time election
to redirect the investment of their accounts to investments other than employer
securities, effective during the period beginning on the date all shares from
the TPC ESOP suspense account have been allocated and ending on the date six
months thereafter.
(iii) Persons hired in normal course by the TPC Business
after the Effective Time shall participate under substantially the same terms as
employees of TPC before the Effective Time, except that (iv) below shall not
apply to new hires.
(iv) Participants before the Effective Time whose employment by
the TPC Business and its affiliates is involuntarily terminated after the
Effective Time for any reason other than for cause (as defined in Section
6.10(d)), (a) shall become fully vested on termination, and (b) shall be
entitled to an allocation for the year of termination notwithstanding the hours
of service requirement.
(v) Parent or a delegate may elect to use matching contributions
for the benefit of employees of the TPC Business under a qualified plan feature
subject to section 401(m) of the Code to repay the ESOP Notes. Shares released
from the ESOP suspense account relating to such matching contributions shall be
allocated to matching contribution accounts of the employees of the TPC
Business. If matching contributions are used to repay ESOP notes, the Parent or
an affiliate shall make an additional contribution of not less than two percent
of eligible compensation of employees of the TPC Business for the plan year.
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If the requirements of section 401(a) or section 410(b)(1)(A) or (B) of the Code
prevent Parent or an affiliate from maintaining the TPC ESOP as a separate
qualified plan or a separate benefit feature in a qualified plan solely for the
benefit of TPC ESOP participants and the employees of the TPC Business, PHI
shall or shall cause Parent or an affiliate to effect the matching contribution
and minimum two percent of eligible compensation contribution described in
clause (v) above prior to the last date that the separate qualified plan or
benefit feature may be maintained and as soon as practicable after Parent
determines that the TPC ESOP cannot be maintained solely for the benefit of
employees of the TPC Business. Parent shall determine annually whether the ESOP
feature may continue to be maintained under section 410(b)(1)(A) or (B). In
lieu of making the matching contributions, Parent or a delegate may elect to
prepay the ESOP Notes in full on or before the end of the last year that the
ESOP feature can be maintained solely for the benefit of the employees of the
TPC business.
(d) PHI agrees that, if any of the employees of TPC or its
Subsidiaries is terminated from employment by the Surviving Corporation within
12 months after the Effective Time for any reason other than cause, or is
required to transfer to a job location that is more than 50 miles from his or
her current job location or to take a reduction in base rate of pay, but refuses
such transfer or reduction and terminates his or her employment with the
Surviving Corporation, then Parent shall provide, or shall cause the Surviving
Corporation to provide, the employee with (i) a lump sum cash severance payment
equal to two weeks' base pay in lieu of notice, plus three weeks' base pay for
each year of service with TPC and its Subsidiaries (taking into account all
service with predecessor employers that is considered by TPC and its
Subsidiaries under its existing severance programs and rounding up any partial
year of at least six months to one full year of service), with a total severance
payment of not less than 12 weeks' base pay, and (ii) continued health insurance
coverage for the employee and his or her dependents under Part 6 of Title I of
ERISA (COBRA) at a cost to the employee that is not in excess of the cost of
coverage for active employees of the Surviving Corporation who were formerly
employed by TPC or its Subsidiaries. Such severance benefits may be conditioned
on receipt of such forms, waivers and releases as PHI normally applies in such
circumstances. Severance benefits under this Section 6.10(d) shall be in lieu
of, and not in addition to, any severance benefits under existing TPC severance
packages for employees attached as EXHIBIT 3.10(c)(1) to SCHEDULE 3.10(c), but
shall not apply to employees that have severance benefits under individual
agreements with TPC disclosed on SCHEDULE 3.10(e). For purposes of this
Section 6.10(d), termination shall be for cause if it is for conduct such as
fraud, embezzlement, theft, commission of a felony, or any other criminal act
against PHI or the Surviving Corporation, or deliberate and substantial
disregard of assigned duties and responsibilities.
6.11. DIRECTORS. Promptly upon the acceptance for payment of, and
payment for, Shares by ACo pursuant to the Offer, ACo shall be entitled to
designate such number of directors on the TPC Board of Directors as will give
ACo, subject to compliance with Section 14(f) of the Exchange Act, a majority of
such directors, and TPC shall, at such time, cause ACo's designees to be so
elected by its existing Board of Directors; PROVIDED, HOWEVER, that in the event
that ACo's designees are elected to the TPC Board of Directors, until the
Effective Time such Board of Directors shall have at least three directors who
are directors of TPC on the date of this Agreement (the "INDEPENDENT
DIRECTORS"); and PROVIDED FURTHER that, in such event, if the number of
Independent
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Directors shall be reduced below three for any reason whatsoever,
the remaining Independent Directors or Director shall designate a person to fill
such vacancy who shall be deemed to be an Independent Director for purposes of
this Agreement or, if no Independent Directors then remain, the other directors
shall designate three persons to fill such vacancies who shall not be officers
or affiliates of TPC or any of its Subsidiaries or of PHI or any of its
Subsidiaries, and such persons shall be deemed to be Independent Directors for
purposes of this Agreement. Subject to applicable law, TPC shall take all
action requested by PHI necessary to effect any such election, including mailing
to its stockholders an Information Statement containing the information required
by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and
TPC agrees to make such mailing with the mailing of the Schedule 14D-9 (provided
that ACo shall have provided to the Company on a timely basis all information
required to be included in the Information Statement with respect to ACo's
designees). In connection with the foregoing, TPC will promptly, at the option
of PHI, either increase the size of TPC's Board of Directors and/or obtain the
resignation of such number of its current directors as is necessary to enable
ACo's designees to be elected or appointed to TPC's Board of Directors as
provided above.
ARTICLE VII
CONDITIONS TO THE MERGER
7.1. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) STOCKHOLDER APPROVAL. This Agreement and the Merger shall have
been approved and adopted by the affirmative vote of the stockholders of TPC to
the extent required by Delaware Law and the Certificate of Incorporation of TPC;
(b) HSR ACT. Any waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated;
(c) NO ORDER. No foreign, United States or state governmental
authority or other agency or commission or foreign, United States or state court
of competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any law, rule, regulation, executive order, decree, injunction or other
order (whether temporary, preliminary or permanent) which is then in effect and
has the effect of making the acquisition of Shares by PHI or ACo or any
affiliate of either of them illegal or otherwise preventing or prohibiting
consummation of the Transactions; and
(d) OFFER. ACo or its permitted assignee shall have purchased all
Shares validly tendered and not withdrawn pursuant to the Offer; PROVIDED,
HOWEVER, that neither PHI nor ACo shall be entitled to assert the failure of
this condition if, in breach of this Agreement or the terms of the Offer, ACo
fails to purchase any Shares validly tendered and not withdrawn pursuant to the
Offer.
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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1. TERMINATION. This Agreement may be terminated and the Merger and
the other Transactions may be abandoned at any time prior to the Effective Time,
notwithstanding any requisite approval and adoption of this Agreement and the
transactions contemplated hereby by the stockholders of TPC:
(a) by mutual agreement of PHI, ACo and TPC;
(b) by the PHI Parties or TPC if the Effective Time shall not have
occurred on or before the first anniversary of the date hereof; PROVIDED,
HOWEVER, that no party shall be entitled to terminate this Agreement under this
Section 8.1(b) if the Effective Time has failed to occur on or before such date
because such party negligently or willfully failed or refused to perform or
observe in any material respect its covenants and agreements hereunder;
(c) by PHI if (i) due to an occurrence or circumstance that results
in a failure to satisfy any condition set forth in ANNEX A hereto, ACo shall
have (A) failed to commence the Offer within ten days following the date of this
Agreement, (B) terminated the Offer without having accepted any Shares for
payment thereunder or (C) failed to pay for Shares pursuant to the Offer within
90 days following the commencement of the Offer, unless any such failure listed
above shall have been caused by or resulted from the failure of PHI or ACo to
perform in any material respect any material covenant or agreement of either of
them contained in this Agreement or the material breach by PHI or ACo of any
material representation or warranty of either of them contained in this
Agreement or (ii) prior to the purchase of Shares pursuant to the Offer, the TPC
Board of Directors or any committee thereof shall have withdrawn or modified in
a manner adverse to ACo or PHI its approval or recommendation of the Offer, this
Agreement or the Merger or shall have recommended another merger, consolidation,
business combination with, or acquisition of, TPC or all or substantially all
its assets or another tender offer or exchange offer for Shares, or shall have
resolved to do any of the foregoing; or
(d) by TPC, upon approval of the TPC Board of Directors, if (i) ACo
shall have (A) failed to commence the Offer within ten days following the date
of this Agreement, (B) terminated the Offer without having accepted any Shares
for payment thereunder or (C) failed to pay for Shares pursuant to the Offer
within 90 days following the commencement of the Offer, unless such failure to
pay for Shares shall have been caused by or resulted from the failure of TPC to
satisfy the conditions set forth in paragraph (f) or (g) of ANNEX A or (ii)
prior to the purchase of Shares pursuant to the Offer, the TPC Board of
Directors shall have withdrawn or modified in a manner adverse to ACo or PHI its
approval or recommendation of the Offer, this Agreement or the Merger in order
to approve the execution by TPC of a definitive agreement providing for an
Alternative Transaction or in order to approve a tender offer or exchange offer
for Shares by a third party, in either case on terms more favorable to TPC's
stockholders from a financial point of view than the Offer and the Merger taken
together, as determined by the TPC Board of Directors in the
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exercise of its good faith judgment and after consultation with its legal
counsel and financial advisors; PROVIDED, HOWEVER, that such termination
under this clause (ii) shall not be effective until TPC has made payment to
PHI of the fee required to be paid pursuant to Section 8.3(a).
8.2. EFFECT OF TERMINATION. In the event that the Effective Time does
not occur as a result of any party hereto exercising its rights to terminate
pursuant to this Article VIII, then this Agreement shall be null and void and,
except as provided in Sections 8.3 and 9.1 or as otherwise expressly provided
herein, no party shall have any rights or obligations under this Agreement,
except that nothing herein shall relieve any party from liability for any
willful or negligent failure or refusal to perform or observe in any material
respect any agreement or covenant contained herein. In the event the
termination of this Agreement results from the willful or negligent failure or
refusal of any party to perform in any material respect any agreement or
covenant herein or in the Offer, then the other party shall be entitled to all
remedies available at law or in equity and shall be entitled to recover court
costs and reasonable attorneys' fees in addition to any other relief to which
such party may be entitled.
8.3. FEES AND EXPENSES.
(a) If this Agreement is terminated pursuant to Section 8.1(c)(ii) or
8.1(d)(ii) then, in any such event, TPC shall pay PHI a fee of $9 million. Any
such amount shall be paid in cash by wire transfer in immediately available
funds not later than one business day after the occurrence of the termination
event giving rise thereto.
(b) All costs and expenses incurred in connection with this Agreement
and the Transactions shall be paid by the party incurring such expenses, whether
or not any Transaction is consummated.
8.4. AMENDMENT. This Agreement may be amended by the parties hereto
by action taken by or on behalf of their respective Boards of Directors at any
time prior to the Effective Time. After the election or appointment of ACo's
designees to the TPC Board of Directors pursuant to Section 6.11 and prior to
the Effective Time, the affirmative vote of a majority of the Independent
Directors then in office shall be required to (i) amend or terminate this
Agreement by TPC, (ii) exercise or waive any of TPC's rights or remedies
hereunder or (iii) waive or extend the time for performance of any obligation of
PHI or ACo hereunder. This Agreement may not be amended except by an instrument
in writing signed by the parties hereto.
8.5. WAIVER. At any time prior to the Effective Time, any party
hereto may (i) extend the time for the performance of any obligation or other
act of any other party hereto, (ii) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any agreement or condition contained herein. Any
such extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
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ARTICLE IX
GENERAL PROVISIONS
9.1. SURVIVAL. The agreements in Articles II and IX and Section 6.5
and 6.10 of this Agreement shall survive the Effective Time indefinitely. The
agreements made by the parties in Sections 6.3(e) and 8.3 of this Agreement
shall survive termination indefinitely. The remainder of the representations,
warranties and agreements in this Agreement shall terminate at the Effective
Time or upon termination of this Agreement pursuant to Section 8.1.
9.2. SCOPE OF REPRESENTATIONS AND WARRANTIES.
(a) Except as and to the extent expressly set forth in this
Agreement, TPC makes no, and disclaims any, representations or warranties
whatsoever, whether express or implied. TPC disclaims all liability or
responsibility for any other statement or information made or communicated
(orally or in writing) to ACo, PHI, their affiliates or any stockholder,
officer, director, employee, representative, consultant, attorney, agent, lender
or other advisor of ACo, PHI or their affiliates (including, but not limited to,
any opinion, information or advice which may have been provided to any such
person by any representative of TPC or any other person or contained in the
files or records of TPC), wherever and however made.
(b) Except as and to the extent expressly set forth in this
Agreement, neither ACo nor PHI makes, and each disclaims, any representations or
warranties whatsoever, whether express or implied. Each of ACo and PHI
disclaims all liability and responsibility for any other statement or
information made or communicated (orally or in writing) to TPC, its affiliates
or any stockholder, officer, director, employee, representative, consultant,
attorney, agent, lender or other advisor of TPC or its affiliates (including,
but not limited to, any opinion, information or advice which may have been
provided to any such person by any representative of ACo or Parent, PHI or any
other person), wherever and however made.
(c) Any representation "to the knowledge" or "to the best knowledge"
of a party or phrases of similar wording shall be limited to matters within the
actual conscious awareness of the executive officers of such party and any
manager or managers of such party who have primary responsibility for the
substantive area or operations in question and who report directly to such
executive officers.
9.3. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, facsimile, telegram or telex or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 9.3):
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if to PHI or ACo:
PacifiCorp Holdings, Inc.
▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy, which shall not constitute notice, to:
Stoel Rives LLP
▇▇▇ ▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
if to TPC:
TPC Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇ ▇▇▇▇▇, Senior Vice President
and Chief Operating Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy, which shall not constitute notice, to:
▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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9.4. CERTAIN DEFINITIONS. For purposes of this Agreement:
(a) "AFFILIATE" of a specified person means a person who directly or
indirectly through one or more intermediaries controls, is controlled by, or is
under common control with, such specified person;
(b) "BEST EFFORTS" means a party's efforts in accordance with
reasonable commercial practice and without incurrence of unreasonable expense;
(c) a person shall be the "BENEFICIAL OWNER" of Shares (i) which such
person or any of its affiliates or associates (as such term is defined in Rule
12b-2 promulgated under the Exchange Act) beneficially owns, directly or
indirectly, (ii) which such person or any of its affiliates or associates has,
directly or indirectly, (A) the right to acquire (whether such right is
exercisable immediately or subject only to the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of consideration
rights, exchange rights, warrants or options, or otherwise, or (B) the right to
vote pursuant to any agreement, arrangement or understanding or (iii) which are
beneficially owned, directly or indirectly, by any other persons with whom such
person or any of its affiliates or associates or person with whom such person or
any of its affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
Shares;
(d) "BUSINESS DAY" means any day on which the principal offices of
the SEC in Washington, D.C. are open to accept filings, or, in the case of
determining a date when any payment is due, any weekday other than Saturday or
Sunday on which banking institutions in Houston, Texas are required to be open;
(e) "CONTAMINATION" shall mean the presence on, under, from or to any
of the real property owned or operated by TPC or any Subsidiary of any Hazardous
Substance, except the storage, transport, handling and use of Hazardous
Substances, or the disposal of brine, in the ordinary course of business and in
material compliance with Environmental Laws.
(f) "CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities, as
trustee or executor, by contract or credit arrangement or otherwise;
(g) "HAZARDOUS SUBSTANCE(S)" shall mean any dangerous, toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous substance in quantity or concentration which is
regulated by any Environmental Law, including, but not limited to, petroleum and
its fractions.
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(h) "PERMITTED ENCUMBRANCES" means:
(i) preferential purchase rights, rights of first refusal and
similar rights which are not triggered by the Transactions;
(ii) mechanics' and materialmens' liens and liens for Taxes or
assessments that are not yet delinquent or, if delinquent, that are being
contested in good faith in the ordinary course of business;
(iii) liens arising under operating agreements, sales,
processing, gathering, storage and transportation contracts securing amounts not
yet delinquent, or if delinquent, that are being contested in good faith in the
ordinary course of business;
(iv) easements, rights-of-way, servitudes, permits, surface
leases and other rights in respect of surface operations which do not materially
interfere with the use of the property in the manner in which TPC or the
Subsidiaries have historically used, or intended to use, the property or assets;
(v) such title defects as PHI may have expressly waived in
writing;
(vi) rights reserved to or vested in any governmental, statutory,
municipal or public authority to control or regulate any of TPC's or any
Subsidiary's properties or assets in any manner, and all applicable laws, rules
and orders of any governmental authority; and
(vii) liens, charges and encumbrances listed on Schedule 9.4(h);
(viii) all other liens, charges, encumbrances, defects and
irregularities that individually or in the aggregate are not such as to
materially interfere with the operation, value or use of the property or asset
affected;
(i) "PERSON" means an individual, corporation, partnership, limited
partnership, syndicate, person (including, without limitation, a "person" as
defined in Section 13(d)(3) of the Exchange Act), trust, association or entity
or government, political subdivision, agency or instrumentality of a government;
and
(j) "SUBSIDIARY" or "SUBSIDIARIES" of TPC, the Surviving Corporation,
PHI or any other person means an entity in which such person, directly or
indirectly, has a direct or indirect equity or ownership interest which
represents twenty percent (20%) or more of the aggregate equity or ownership
interest in such entity.
9.5. SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the Transactions is not affected in any manner materially adverse to
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any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner
in order that the Transactions be consummated as originally contemplated to
the fullest extent possible.
9.6. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
the parties, or any of them, with respect to the subject matter hereof, except
that the Confidentiality Agreement shall remain in full force and effect. This
Agreement shall not be assigned by operation of law or otherwise, except that
PHI and ACo may assign all or any of their rights and obligations hereunder to
any wholly owned Subsidiary of Parent; PROVIDED, HOWEVER, that no such
assignment shall relieve the assigning party of its obligations hereunder if
such assignee does not perform such obligations.
9.7. PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, other than Sections 2.7, 6.5 and 6.10 (which are intended to be for
the benefit of the persons covered thereby and may be enforced by such persons).
9.8. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
9.9. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware.
9.10. HEADINGS. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
9.11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, PHI, ACo and TPC have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
PACIFICORP HOLDINGS, INC.
By:
-----------------------------------
Name:
Title:
POWER ACQUISITION COMPANY
By:
-----------------------------------
Name:
Title:
TPC CORPORATION
By:
-----------------------------------
Name:
Title:
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ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, ACo shall not be
required to accept for payment or pay for any Shares tendered pursuant to the
Offer unless (i) the Minimum Condition shall have been satisfied and (ii) any
applicable waiting period under the HSR Act shall have expired or been
terminated. Furthermore, ACo may terminate or amend the Offer and may
postpone the acceptance for payment of and payment for Shares tendered, if at
any time on or after the date of this Agreement, and prior to the acceptance
for payment of Shares, any of the following conditions shall exist:
(a) there shall have been issued and shall remain in effect any
injunction, order or decree by any court or governmental, administrative or
regulatory authority or agency, domestic or foreign, which (i) restrains or
prohibits the making of the Offer or the consummation of the Merger, (ii)
prohibits or limits ownership or operation by TPC, PHI or ACo of all or any
material portion of the business or assets of TPC and its Subsidiaries, taken
as a whole, or PHI and its Subsidiaries, taken as a whole, or compels TPC,
PHI or any of their Subsidiaries to dispose of or hold separate all or any
material portion of the business or assets of TPC and its Subsidiaries, taken
as a whole, or PHI and its Subsidiaries, taken as a whole, in each case as a
result of the Transactions; (iii) imposes material limitations on the ability
of PHI or ACo to exercise effectively full rights of ownership of any Shares,
including, without limitation, the right to vote any Shares acquired by ACo
pursuant to the Offer, or otherwise on all matters properly presented to
TPC's stockholders, including, without limitation, the approval and adoption
of this Agreement and the Transactions; or (iv) requires divestiture by PHI
or ACo of any material portion of the Shares;
(b) there shall have been any action taken, or any statute, rule,
regulation, order or injunction enacted, entered, enforced, promulgated,
amended, issued or deemed applicable to (i) PHI, TPC or any Subsidiary or
affiliate of PHI or TPC or (ii) any Transaction, by any legislative body,
court, government or governmental, administrative or regulatory authority or
agency, domestic or foreign (other than, in the case of both (i) and (ii),
the application of the waiting period provisions of the HSR Act to the Offer
or the Merger), which results in any of the consequences referred to in
clauses (i) through (iv) of paragraph (a) above;
(c) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on the New
York Stock Exchange or in the over-the-counter market, (ii) a declaration of
a banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) a commencement of a war or armed hostilities involving
the United States, (iv) any limitation (whether or not mandatory) by any
governmental authority on the extension of credit by banks or other financial
institutions, (v) in the case of any of the foregoing existing at the time of
the commencement of the Offer, in the reasonable judgment of PHI, a material
worsening thereof;
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(d) a tender offer or exchange offer for more than fifty percent
(50%) of the Shares shall have been made or publicly proposed by a third party
for a price in excess of the Per Share Amount;
(e) the TPC Board of Directors or any committee thereof shall have
withdrawn or modified in a manner adverse to PHI or ACo its approval or
recommendation of the Offer, the Merger or this Agreement or shall have approved
or recommended another merger, consolidation, business combination with, or
acquisition of TPC or all or substantially all its assets or another tender
offer or exchange offer for Shares, or shall have resolved to do any of the
foregoing;
(f) TPC shall have failed to perform in any material respect any of
its covenants in this Agreement and shall not have cured such default (provided
5 days written notice of such default shall have been given to TPC by PHI);
(g) the representations and warranties of TPC shall fail to be true
and correct in all material respects on and as of the date made or, except as
otherwise expressly contemplated hereby, on and as of any subsequent date as if
made at and as of such subsequent date and such failure shall not have been
cured in all material respects (provided 5 days written notice of such failure
shall have been given to TPC by PHI);
(h) this Agreement shall have been terminated in accordance with its
terms;
(i) ACo and TPC shall have agreed that ACo shall terminate the Offer
or postpone the acceptance for payment of or payment for Shares thereunder; or
(j) since December 31, 1996, except as (i) expressly contemplated by
the Agreement, (ii) disclosed in any TPC SEC Report filed since such date and
prior to the date of the Agreement or (iii) set forth in SCHEDULE 3.8 to the
Agreement, there shall have been any event having, individually or in the
aggregate, a change or effect that is reasonably likely to be materially
adverse to the business, operations, properties, financial condition, assets or
liabilities (including, without limitation, contingent liabilities) of TPC and
the Subsidiaries taken as a whole, except for changes that affect the industries
in which TPC and the Subsidiaries operate generally.
The foregoing conditions are for the sole benefit of ACo and PHI and
may be asserted by ACo or PHI regardless of the circumstances giving rise to any
such condition or may be waived by ACo or PHI in whole or in part at any time
and from time to time in its sole discretion. The failure by PHI or ACo at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right; the waiver of any such right with respect to particular facts and
other circumstances shall not be deemed a waiver with respect to any other facts
and circumstances; and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time.
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