EXHIBIT 99.2
AMENDMENT NO. 2 TO THE
AGREEMENT AND PLAN OF MERGER AND SCHEME OF ARRANGEMENT
Amendment No. 2, dated as of January 28, 2000 (the "Amendment"), to the
Agreement and Plan of Merger and Scheme of Arrangement, dated as of August 15,
1999, as amended (the "Merger Agreement"), by and between ▇▇▇▇▇▇ Corporation, a
Virginia corporation ("VA") and Terra Nova (Bermuda) Holdings Ltd., a Bermuda
corporation ("BB").
WHEREAS, VA and BB have heretofore entered into the Merger Agreement; and
WHEREAS, VA and BB have agreed to further amend certain provisions of the
Merger Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, VA and BB do hereby agree as
follows:
1. Definitions. Unless otherwise defined herein, capitalized terms that
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are defined in the Merger Agreement and used herein shall have the respective
meanings set forth in the Merger Agreement.
2. Amendments to, Additions to, and Deletions From Section 1.1.
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(A) Section 1.1 of the Merger Agreement is hereby amended and restated
with respect to the following defined terms to read as follows:
"Form S-4" means the registration statement on Form S-4 filed
with the SEC relating to the issuance of MINT Common Shares and CVRs in the
Merger and Scheme.
"Material Adverse Effect" or "Material Adverse Change" means as
to any Person any material adverse effect on or change with respect to (A) the
business, operations, assets, liabilities, condition (financial or otherwise) or
results of operations of such Person and its Subsidiaries, taken as a whole, or
(B) the right or ability of such Person or any of its Subsidiaries to consummate
the transactions contemplated hereby, other than any such effect or change
resulting from this Agreement or the announcement of the transactions
contemplated hereby; provided that neither term shall include any effect on or
change in the business, operations, assets, liabilities, condition (financial or
otherwise) or results of operations of BB and its Subsidiaries taken as a whole
reflected
in the information contained in Schedule 6.2 of the BB Amendment No. 2
Disclosure Letter.
(B) The following defined terms are hereby added to Section 1.1 of the
Merger Agreement:
"BB Amendment No. 2 Disclosure Letter" means the BB Amendment No. 2
Disclosure Letter, dated as of January 28, 2000, delivered to VA.
"CVR" means a contingent value right of MINT having the principal
terms set forth in Exhibit I hereto.
"Option Units" means as to each holder of BB Options (x) the sum of
the Option Values in respect of all of such holder's BB Options divided by (y)
$26.00.
"Option Value" means as to each BB Option the excess, if any, of
$26.00 over the exercise price applicable to such option.
"Voting Securities" has the meaning set forth in Section 9.3(b).
(C) The following defined terms are hereby deleted in their entirety from
Section 1.1 of the Merger Agreement:
"BB Exchange Ratio"
"Cash Consideration"
"Cash Election"
"Cashout Election"
"Common Stock Consideration"
"Conversion Election"
"Election"
"Election Deadline"
"Election Form"
"Mailing Date"
"Maximum Cash Consideration"
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"Maximum Cash Conversion Number"
"Maximum Stock Consideration"
"Maximum Stock Conversion Number"
"Non-Electing BB Options"
"Non-Electing Shares"
"Option Cash Consideration"
"Option Stock Consideration"
"Stock Election"
3. Amendment to Section 2.8(a). Section 2.8(a) of the Merger Agreement is
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hereby amended and restated to read in its entirety as follows:
"(a) Each BB Common Share outstanding immediately prior to the Effective
Time (except for 2,069 BB Common Shares held by VA or its transferee) shall, by
virtue of the Scheme and without any action on the part of the holder thereof,
automatically be cancelled, and the holder thereof shall be entitled to receive
(i) $13.00 in cash, without any interest thereon, (ii) 0.07027 of a MINT Common
Share, and (iii) 0.07027 of a CVR (collectively, the "Scheme Consideration").
The 2,069 BB Common Shares held by VA or its transferee referred to in the
preceding sentence shall not be cancelled and shall remain outstanding. All
references to "outstanding" BB Common Shares in this Section 2.8(a) shall mean
all BB Common Shares outstanding immediately prior to the Effective Time, other
than BB Common Shares owned by VA, MINT, Sub or BB or any direct or indirect
wholly owned Subsidiary of VA, MINT, Sub or BB."
4. Deletion of Section 2.11. Section 2.11 of the Merger Agreement,
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"Election Procedure," is hereby deleted in its entirety.
5. Deletion of Section 2.12. Section 2.12 of the Merger Agreement,
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"Issuance of MINT Common Stock and Payment of Cash and Stock Consideration;
Proration," is hereby deleted in its entirety.
6. Amendments to Section 2.14. The following subsections of section 2.14
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of the Merger Agreement are hereby amended and restated to read in their
entirety as follows:
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"(a) Each BB Option outstanding as of the Effective Time shall be treated
as fully exercisable in accordance with the terms of the applicable BB Option
Plan and stock option agreement. Each holder of any such BB Option may exercise
any such BB Option by delivering a notice of exercise (a "Notice of Exercise"),
the form of which shall be mutually agreeable to VA and BB and which shall
contain a waiver or acknowledgement of full satisfaction of all rights in
respect of such BB Options, the BB Option Plans and the Employee Plan Grantor
Trust, to BB and which shall acknowledge that, in the Scheme, he or she will
receive the consideration in respect of such BB Options (the "Option Scheme
Consideration") set forth in the following sentence. As Option Scheme
Consideration, a holder of BB Options shall receive (i) for each whole Option
Unit the Scheme Consideration and (ii) for the remaining fractional amount of an
Option Unit cash in an amount equal to such fractional amount multiplied by
$26.00, but subject, in each case, to reduction for all applicable withholding
taxes."
"(b) At the Effective Time, BB shall take such action as may be necessary
so that each participant in the BB Directors Unit Plan receives (i) for each
whole Share Unit credited to such participant's account under the Plan the
Scheme Consideration and (ii) the amount of any other cash credited to such
participant's account in accordance with the terms of such Plan. BB shall,
immediately after the Effective Time and the receipt of such Scheme
Consideration and amounts, cause the termination of the Directors Plan Grantor
Trust and obtain a waiver or acknowledgement of full satisfaction of all rights
in respect of such Plan and the Directors Plan Grantor Trust from each
participant receiving such Scheme Consideration and amounts."
"(d) Prior to the Effective Time, BB and VA shall use commercially
reasonable efforts to procure that (i) the Octavian Plan be terminated in
consideration of the payment of such consideration as the participants in such
Plan and VA shall mutually agree or (ii) if the Octavian Plan is not terminated
pursuant to clause (i), the terms of the Octavian Plan be amended such that (x)
the book value of BB for purposes of determining the option grants for the year
2000 be set as at December 31, 1999 and (y) the participants in such Plan will,
from and after the Effective Time, be entitled to receive, in lieu of options
with respect to BB Common Shares, options to purchase a number of MINT Common
Shares equal to the product of the number of BB Common Shares subject to such
options multiplied by 0.14054; provided that MINT shall in no event be obligated
to issue options in respect of MINT Common Shares in excess of 600,000 BB Common
Shares multiplied by 0.14054 in the aggregate. The exercise price or prices for
such replacement options will be set such that the aggregate price payable in
respect of the options on BB Common Shares will equal the aggregate price
payable in respect of the exercise of such replacement options."
7. Amendment to Section 2.18(a). Section 2.18(a) of the Merger Agreement
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is hereby amended and restated to read in its entirety as follows:
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"At the Effective Time, the Articles of Incorporation and By-laws of MINT
shall be substantially in the form described in the Proxy Statement/Prospectus."
8. Amendment to Section 3.3. The following sentence is hereby added to
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the end of Section 3.3 of the Merger Agreement and shall read as follows:
"Schedule 3.3.2 of the BB Amendment No. 2 Disclosure Letter sets forth, as
of the date hereof, the outstanding options of BB, which options do not include
any options granted in 1999 which, by their terms, could have been exercised
based on BB performance prior to the Effective Time."
9. Amendment to Section 3.4. Clause (B) of the fifth sentence of Section
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3.4(a) is hereby amended to read as follows:
"(B) the filing with the SEC of (1) the Form S-4, (2) a proxy statement
relating to the BB Shareholders Meeting (such proxy statement, together with the
proxy statement relating to the VA Shareholders Meeting and the prospectus
relating to the issuance of the MINT Common Shares and the CVRs, in each case as
amended or supplemented from time to time, the "Proxy Statement/Prospectus") and
(3) such reports under the Exchange Act as may be required in connection with
this Agreement, the Other Agreements to which it is a party and the transactions
contemplated hereby and thereby;"
10. Amendment to Section 4.17. Section 4.17 of the Merger Agreement is
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hereby amended and restated to read in its entirety as follows:
"The affirmative vote at the VA Shareholders Meeting (the "VA Shareholder
Approval") of the holders of at least two-thirds of the voting power of all
outstanding shares of VA's capital stock at the VA Shareholders Meeting to adopt
this Agreement is the only vote of the holders of any class or series of VA's
capital stock necessary to approve and adopt this Agreement, the Other
Agreements to which it is a party, and the transactions contemplated hereby and
thereby."
11. Amendments to Section 5.1. Section 5.1(i) and (ii) of the Merger
--------------------------
Agreement are hereby amended and restated to read in their entirety as follows:
"(i) (A) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of their capital stock, other than (x)
dividends and distributions by their direct or indirect wholly owned
Subsidiaries to them and (y) regular quarterly dividends payable by BB in an
amount not to exceed $.06 per share, except that no such dividend may be paid in
the year 2000 having a record date prior to June 1, 2000, (B) split, combine or
reclassify any of their capital stock or issue or authorize the
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issuance of any other securities in respect of, in lieu of or in substitution
for shares of their capital stock, or (C) purchase, redeem or otherwise acquire
any shares of their respective capital stock or any of their Subsidiaries or any
other securities thereof or any rights, warrants or options to acquire any such
shares or other securities, except, in the case of clause (C), for the
acquisition of shares of capital stock from holders of options in full or
partial payment of the exercise price payable by such holder or tax liability
arising in connection therewith (including by way of exercise of cash settlement
rights pursuant to the terms of any stock option), upon exercise of stock
options outstanding on the date of this Agreement in accordance with their
present terms;"
"(ii) authorize for issuance, issue, deliver, sell, pledge or otherwise
encumber any shares of their capital stock or the capital stock of any of their
Subsidiaries, any other voting securities or any securities convertible into, or
any rights, warrants or options to acquire, any such shares, voting securities
or convertible securities or any other securities or equity equivalents
(including without limitation stock appreciation rights), or contractual
obligation valued or measured by the value or market price of such capital stock
(other than the issuance of capital stock upon the exercise of stock options
outstanding on the date of this Agreement and in accordance with their present
terms, such issuance, together with the acquisitions of shares of capital stock
permitted under clause (i) above, being referred to herein as "Permitted
Changes");"
12. Amendments to Section 5.10.
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(A) The second sentence of Section 5.10(a) is hereby amended to read:
"MINT shall prepare and file with the SEC the Form S-4, in which the Proxy
Statement/Prospectus will be included as a prospectus of MINT with respect to
the MINT Common Shares and CVRs to be issued in the Merger and the Scheme."
(B) The fourth sentence of Section 5.10(a) is hereby amended to read:
"MINT shall also take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified or filing a general consent to
service of process) required to be taken under any applicable state securities
laws in connection with the issuance of MINT Common Shares and CVRs in the
Merger and Scheme, VA shall furnish all information concerning VA and the
holders of VA Common Shares as may be reasonably requested in connection with
any such action and BB shall furnish all information concerning BB and the
holders of BB Common Shares as may be reasonably requested in connection with
any such action."
(C) The sixth sentence of Section 5.10(a) is hereby amended to read:
"VA will advise BB, promptly after it receives notice thereof, of the time when
the Form S-4 has become effective or any supplement or amendment has been filed,
the issuance of any stop order, the suspension or qualification of the MINT
Common Shares or CVRs issuable in connection with the Merger and the Scheme for
offering or sale in any jurisdiction, or any request by the SEC for amendment of
the Proxy Statement/Prospectus
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or the Form S-4 or comments thereon and responses thereto or requests by the SEC
for additional information."
(D) The first sentence of Section 5.10(b) is hereby amended to read:
"VA (i) shall, as soon as practicable following the Form S-4 being declared
effective by the SEC, duly call, give notice of, convene and hold (or reconvene)
a meeting of its shareholders (the "VA Shareholders Meeting") for the purpose of
obtaining the VA Shareholder Approval and (ii) shall, through its Board of
Directors, recommend to its shareholders the approval and adoption of this
Agreement, the issuance of MINT Common Shares and CVRs in the Merger and the
Scheme and the other transactions contemplated hereby unless, in the case of
this clause (ii), in the good faith judgment of the Board of Directors of VA,
after consultation with outside counsel, the taking of any of the foregoing
actions would be inconsistent with its obligations under applicable law."
(E) The first sentence of Section 5.10(c) is hereby amended to read:
"BB (i) shall, as soon as practicable following the Form S-4 being declared
effective by the SEC, duly call, give notice of, convene and hold (or reconvene)
a meeting of its shareholders (the "BB Shareholders Meeting") for the purpose of
obtaining the BB Shareholder Approval and (ii) shall, through its Board of
Directors, recommend to its shareholders the approval and adoption of this
Agreement, the Scheme and the other transactions contemplated hereby unless, in
the case of this clause (ii), in the good faith judgment of the Board of
Directors of BB, after consultation with outside counsel, the taking of any of
the foregoing actions would be inconsistent with its obligations under
applicable law."
(F) Section 5.10(e) is hereby added to the Merger Agreement and shall
read in its entirety: "(e) Promptly after the Effective Time, BB and VA will
send or cause to be sent transmittal materials to each holder of BB Common
Shares for use in exchanging those certificates for the Scheme Consideration to
which such holder is entitled pursuant to the Merger and Scheme. MINT shall
thereafter cause the Scheme Consideration to be delivered upon surrender to the
Exchange Agent of certificates representing such BB Common Shares. After the
Effective Time, no dividend or other distribution payable with respect to MINT
Common Shares will be paid to the holder of any unsurrendered BB certificate,
and no such unsurrendered shares will be entitled to vote, until the holder duly
surrenders such certificate. Upon such surrender, all undelivered dividends and
other distributions and, if applicable, a check for the amount to be paid in
respect of any fractional interests will be delivered to such shareholder, in
each case without interest."
13. Amendment to Section 5.17(a). Section 5.17(a) of the Merger Agreement
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is hereby amended and restated to read in its entirety as follows:
"(a) As soon as practicable following the date of this Agreement, (i) VA
shall cause MINT to be formed as a Virginia corporation and shall cause MINT to
adopt its Articles of Incorporation and Bylaws in accordance with the VSCA and
the terms hereof,
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which Articles and Bylaws shall be substantially as described in the Proxy
Statement/Prospectus and (ii) MINT shall cause Sub to be formed as a Virginia
corporation and shall cause Sub to adopt its Articles of Incorporation and its
Bylaws in accordance with the VSCA and the terms hereof, which Articles of
Incorporation and Bylaws shall be reasonably satisfactory to BB and VA."
14. Amendment to Section 6.2. Section 6.2 of the Merger Agreement is
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hereby amended and restated to read in its entirety as follows:
"There shall not have been any material adverse change in the assets,
liabilities, condition (financial or otherwise), results of operations or
business of BB and its Subsidiaries taken as a whole since June 30, 1999, nor
any occurrence or circumstance that with the passage of time would result in
such material adverse change; provided that a material adverse change shall not
include (i) changes solely in the market price of VA Common Shares or BB Common
Shares; (ii) any change resulting from (x) changes in general economic
conditions, (y) changes in the market level of investment portfolios, or (z)
changes affecting the property-casualty insurance industry generally; or (iii)
any effect on or change in the business, operations, assets, liabilities,
condition (financial or otherwise) or results of operations of BB and its
Subsidiaries taken as a whole reflected in the information contained in Schedule
6.2 of the BB Amendment No. 2 Disclosure Letter."
15. Amendment to Section 6.9. Section 6.9 of the Merger Agreement is
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hereby amended and restated to read in its entirety as follows:
"The Form S-4 shall have become effective under the Securities Act and
shall not be the subject of any stop order or proceedings seeking a stop order,
and any material "blue sky" or other state securities laws applicable to the
issuance of the MINT Common Shares and the CVRs to be issued in connection with
the Merger and the Scheme shall have been complied with."
16. Amendment to Section 7.9. Section 7.9 of the Merger Agreement is
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hereby amended and restated to read in its entirety as follows:
"The Form S-4 shall have become effective under the Securities Act and
shall not be the subject of any stop order or proceedings seeking a stop order,
and any material "blue sky" or other state securities laws applicable to the
issuance of the MINT Common Shares and the CVRs to be issued in connection with
the Merger and the Scheme shall have been complied with."
17. Amendment to Section 9.3. The following subsection 9.3(b) is hereby
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added to the Merger Agreement and shall read in its entirety as follows:
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"(b) VA and BB agree that, for a period of one (1) year from the
termination, if any, of this Agreement pursuant to Article IX, except pursuant
to the terms of a specific written request from the other party hereto that has
been approved by such party's Board of Directors, neither VA, BB, nor any of
their Affiliates, will (or will assist or encourage others to):
(1) propose or publicly announce or otherwise disclose an intent to
propose, or enter into or agree to enter into, singly or with any other person
or directly or indirectly, any form of business combination, acquisition,
restructuring, recapitalization or other similar transaction relating to the
other party hereto or any majority-owned Affiliate thereof;
(2) acquire, or offer, propose, seek or agree to acquire, by purchase
or otherwise, ownership (including as a beneficial owner) of any securities
entitled to be voted generally in the election of directors of the other party
hereto or any direct or indirect options or other rights to acquire any such
securities ("Voting Securities") or any other securities, assets or businesses
of the other party hereto or any of its majority owned Affiliates or any of
their respective successors, or any options or other rights to acquire any such
ownership from a third party or otherwise;
(3) make, or in any way participate in, any solicitation of proxies
with respect to any Voting Securities (including by the execution of action by
written consent) or take any similar action with respect to any Voting
Securities, become a participant in any election contest with respect to the
other party hereto, seek to advise or influence any Person with respect to any
Voting Securities, or demand a copy of the list of the other party hereto of its
stockholders or other books and records;
(4) participate in or encourage the formation of any group that owns
or seeks or offers to acquire beneficial ownership of any Voting Securities or
seeks to affect control of the other party hereto or for the purpose of
circumventing any provision of this Agreement;
(5) otherwise act, alone or in concert with others (including by
providing financing for another person), to seek, offer or propose to control or
influence, in any manner, the Board of Directors, management or policies of the
other party hereto;
(6) publicly make or announce, or otherwise disclose an intent to
propose, any demand, request or proposal to amend, waive or terminate any
provision of this Section 9.3(b);
(7) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to an action contemplated by
the foregoing provisions of this Section 9.3(b); or
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(8) take any action that might require either party hereto to make a
public announcement regarding a possible transaction involving the other party
hereto and an action contemplated by the foregoing provisions of this Section
9.3(b).
This Section 9.3 shall survive the termination of this Agreement."
18. Amendment to Section 10.10. Section 10.10 of the Merger Agreement is
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hereby amended and restated to read in its entirety as follows:
"Except for Article II in so far as it relates to the Merger, including
issuance of the MINT Common Shares to holders of VA Common Shares and the
issuance of MINT Common Shares and CVRs to holders of BB Common Shares, which
shall be governed by the laws of Virginia, or the Scheme, which shall be
governed by the laws of Bermuda, this Agreement shall be governed in all
respects by the laws of the State of New York without regard to any laws or
regulations relating to choice of laws (whether of the State of New York or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York."
19. Authorization, etc., of this Amendment. VA represents and warrants to
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the following matters set forth in this Paragraph. VA has all requisite
corporate power and authority to enter into this Amendment, and, subject to
receipt of VA Shareholder Approval, to consummate the transactions contemplated
by this Amendment. The execution and delivery of this Amendment by VA, and the
consummation of the transactions contemplated by this Amendment, have been duly
authorized by all necessary corporate action on the part of VA, subject, in the
case of the Merger, to receipt of VA Shareholder Approval. This Amendment has
been duly executed and delivered by VA, and, assuming the due execution and
delivery of this Amendment by BB, constitutes a legal, valid and binding
obligation of VA, enforceable against it in accordance with its terms, subject
to (i) applicable bankruptcy, insolvency, fraudulent transfer and conveyance,
moratorium, reorganization, receivership and similar laws relating to or
affecting the enforcement of the rights and remedies of creditors generally,
(ii) principles of equity (regardless of whether considered and applied in a
proceeding in equity or at law) and (iii) the discretion of the court before
which any proceeding in respect of this Amendment or the transactions
contemplated hereby may be brought.
20. Authorization, etc., of this Amendment. BB represents and warrants to
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the following matters set forth in this Paragraph. BB has all requisite
corporate power and authority to enter into this Amendment, and, subject to
receipt of BB Shareholder Approval, to consummate the transactions contemplated
by this Amendment. The execution and delivery of this Amendment by BB, and the
consummation of the transactions contemplated by this Amendment, have been duly
authorized by all necessary corporate action on the part of BB, subject, in the
case of the Scheme, to receipt of BB Shareholder Approval. This Amendment has
been duly executed and
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delivered by BB, and, assuming the due execution and delivery of this Amendment
by VA, constitutes a legal, valid and binding obligation of BB, enforceable
against it in accordance with its terms, subject to (i) applicable bankruptcy,
insolvency, fraudulent transfer and conveyance, moratorium, reorganization,
receivership and similar laws relating to or affecting the enforcement of the
rights and remedies of creditors generally, (ii) principles of equity
(regardless of whether considered and applied in a proceeding in equity or at
law) and (iii) the discretion of the court before which any proceeding in
respect of this Amendment or the transactions contemplated hereby may be
brought.
21. Full Force and Effect. The Merger Agreement, as amended by this
----------------------
Amendment, the BB Disclosure Letter, as amended by the BB Amendment No. 2
Disclosure Letter, and the VA Disclosure Letter are and shall continue to be in
full force and effect and are in all respects ratified and confirmed hereby.
22. Counterparts. This Amendment may be executed in any number of
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counterparts each of which shall be an original and all of which taken together
shall constitute one and the same Amendment.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and their corporate seals to be hereto affixed and attested by
their duly authorized officers.
▇▇▇▇▇▇ Corporation
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman
Terra Nova (Bermuda) Holdings Ltd.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman
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EXHIBIT I
PRINCIPAL TERMS OF CONTINGENT VALUE RIGHTS ("CVRS")
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Exhibit I to Amendment ▇▇. ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ /▇▇▇▇▇ ▇▇▇▇
(▇▇▇▇▇▇▇) Holdings Ltd. Term Sheet
PRINCIPAL TERMS OF CONTINGENT VALUE RIGHTS
--------------------------------------------------------------------------------
Issuer ▇▇▇▇▇▇ Holdings Inc.
Payment at Promptly following the Maturity Date of the CVR, Issuer will pay each
Maturity holder of a CVR (the "CVR Holder") the amount, if any, by which the Target
Price exceeds the greater of the Current Market Value and the Minimum
Price (each as defined below).
Form of ▇▇▇▇▇▇ Holdings, at its option, may pay any amount due under the terms of
Payment the CVRs to the CVR Holders in cash or in ▇▇▇▇▇▇ Holding Shares (valued at
the Current Market Value on the date preceding the date the amount is due).
Target Price "Target Price" means $ 185.00. The Target Prices shall be adjusted upon
the occurrence of any event described in the Section entitled
"Antidilution" set forth below.
Current Market "Current Market Value" shall be the mean of the averages of the high and
Value low and opening and closing prices on the New York Stock Exchange (or such
other exchange on which such shares are then listed, hereinafter referred
to as the "Exchange") of ▇▇▇▇▇▇ Holdings Shares on each trading day during
the 20 consecutive trading days in the Valuation Period which yield the
highest such averages for any such 20 consecutive trading day period
within the Valuation Period. "Valuation Period" means (i) with respect to
a payment at the Maturity Date, the 60-day trading period preceding the
Maturity Date, and (ii) with respect to an Automatic Extinguishment of the
CVRs or an Early Redemption, the period of time after the effective time
(the "Effective Time") of the merger and scheme of arrangement (the
"Merger") between ▇▇▇▇▇▇ and Terra Nova, and the Maturity Date.
Notwithstanding the foregoing, in computing Current Market Value for
purposes of an Early Redemption or the Automatic Extinguishment, no such
20 consecutive day period may be included in which ▇▇▇▇▇▇ Holdings or
certain of its affiliates purchased ▇▇▇▇▇▇ Holdings Shares (other
than with respect to employee benefit plans and other
incentive arrangements in the ordinary course of business
and other
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than purchases in compliance with Rule 10b-18 promulgated under the
Securities Exchange Act of 1934, as amended).
Minimum Price "Minimum Price" means $ 140.00. In each case, subject to the adjustment
upon the occurrence of any event described in the Section entitled
"Antidilution" set forth below.
Maturity Date "Maturity Date" means the date thirty (30) months after the Effective Time.
No Interest Other than in the case of interest on the Default Amount (as defined
below), no interest shall accrue on any amounts payable to the CVR Holders
pursuant to the terms of the CVRs.
Disposition Following the consummation of a Disposition (as defined below), ▇▇▇▇▇▇
Payment Holdings shall pay to each CVR Holder for each CVR held by such CVR Holder
an amount, if any, by which the Discounted Target Price (as defined below)
exceeds the greater of (a) the fair market value (as determined by an
independent nationally recognized investment banking firm) of the
consideration, if any, received by holders of ▇▇▇▇▇▇ Holdings Shares for
each ▇▇▇▇▇▇ Holdings Share held by such holder as a result of such
Disposition and (b) the Minimum Price.
Disposition "Disposition" means (a) a merger, consolidation or other business
combination involving ▇▇▇▇▇▇ Holdings as a result of which no ▇▇▇▇▇▇
Holdings Shares shall remain outstanding (b) a sale, transfer or other
disposition, in one or a series of transactions, of all or substantially
all of the assets of ▇▇▇▇▇▇ Holdings, or (c) a reclassification of ▇▇▇▇▇▇
Holdings Shares as any other capital stock of ▇▇▇▇▇▇ Holdings or any other
person, unless in the case of clauses (a) and (b) such transaction is in
connection with a transaction in which ▇▇▇▇▇▇ Holding Shares are exchanged
for other publicly traded equity securities of ▇▇▇▇▇▇ Holdings or another
entity, the successor assumes the obligations of ▇▇▇▇▇▇ Holdings relating
to the CVRs, and appropriate adjustments are made to the Target Price, the
Minimum Price, the Discounted Price and the other terms hereof to reflect
such transaction.
Acceleration If an Event of Default (as defined below) occurs and is continuing, either
Upon Event of the bank or trust company acting as the trustee (the "Trustee") or CVR
Default Holders holding at least 25% of the outstanding CVRs, by notice to ▇▇▇▇▇▇
Holdings (and to the Trustee if given by CVR Holders), may declare the
CVRs to be due and payable, and upon any such declaration, the Default
Amount shall become due and payable and, thereafter, shall bear interest
at an interest rate of 6% per annum until payment is made to the Trustee.
"Default Amount" means the amount, if any, by which the Discounted Target
Price exceeds the Minimum Price.
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Discounted "Discounted Target Price" means $185.00, discounted from the Maturity Date
Target Price to the Disposition Payment Date (as defined below) or the Default Payment
Date (as defined below), as the case may be, at a per annum rate of 6%.
The Discounted Target Price and the Minimum Price shall be adjusted upon
the occurrence of any event described in the Section entitled
"Antidilution" set forth below. "Disposition Payment Date", with respect
to a Disposition, means the date established by ▇▇▇▇▇▇ Holdings for
payment of the amount due on the CVRs in respect of such Disposition,
which in no event shall be more than 30 days after the date on which such
Disposition was consummated. "Default Payment Date" means the date on
which the CVRs become due and payable upon the declaration thereof
following an Event of Default. Early Redemption Date means the date
established by ▇▇▇▇▇▇ Holdings for redemption of the CVRs upon an Early
Redemption.
Events of Default "Event of Default", with respect to the CVRs, means any of the following
which shall have occurred and be continuing: (a) default in the payment
of all or any part of the amounts payable in respect of any of the CVRs as
and when the same shall become due and payable following the Maturity
Date, the Disposition Payment Date, the Early Redemption Date, or
otherwise; (b) material default in the performance, or material breach, of
any material covenant or warranty of ▇▇▇▇▇▇ Holdings relating to the CVRs,
and continuance of such material default or breach for a period of 90 days
after written notice has been given to ▇▇▇▇▇▇ Holdings by the Trustee or
to ▇▇▇▇▇▇ Holdings and the Trustee by CVR Holders holding at least 25% of
the outstanding CVRs; or (c) certain events of bankruptcy, insolvency,
reorganization or other similar events in respect of ▇▇▇▇▇▇ Holdings.
Antidilution If ▇▇▇▇▇▇ Holdings shall in any manner subdivide (by stock split, stock
dividend or otherwise) or combine (by reverse stock split or otherwise)
the number of outstanding ▇▇▇▇▇▇ Holdings Shares, ▇▇▇▇▇▇ Holdings shall
correspondingly subdivide or combine the CVRs and shall appropriately
adjust the Target Price, the Minimum Price and the Discounted Target Price.
Automatic If the Current Market Value of ▇▇▇▇▇▇ Holdings Shares during any 20
Extinguishment consecutive trading days in the Valuation Period is greater than or equal
to $185.00 per ▇▇▇▇▇▇ Holdings Share, the CVRs will automatically be
extinguished without further consideration or action by ▇▇▇▇▇▇ Holdings or
the CVR Holders (the "Automatic Extinguishment").
Early ▇▇▇▇▇▇ Holdings may redeem all, but not less than all, of the CVRs at any
Redemption time upon not less than 30 days notice at a price equal to the difference
between the Target Price and the Current Market Value of the ▇▇▇▇▇▇
Holdings Shares as at five business days prior to the notice of
redemption, discounted from the Maturity Date to the Early Redemption
Payment Date at a per annum rate of 6% (an "Early Redemption").
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Trading Neither ▇▇▇▇▇▇ Holdings nor certain of its affiliates shall purchase
▇▇▇▇▇▇ Holdings Shares during the period commencing ten trading days
before the Valuation Period with respect to the Maturity Date and ending
on the Maturity Date, except with respect to employee benefit plans and
other incentive compensation arrangements in the ordinary course of
business and except for purchases in compliance with Rule 10b-18
promulgated under the Securities Exchange Act of 1934, as amended.
No Fractional No fraction of a CVR will be issued in the Merger. In lieu thereof, a
CVRs cash payment will be made in an amount equivalent to the fair market value
of the fraction of the CVR as agreed by ▇▇▇▇▇▇ and Terra Nova.
CVR Agreement The CVRs will be issued pursuant to a CVR Agreement between ▇▇▇▇▇▇
Holdings and a Trustee. ▇▇▇▇▇▇ Holdings shall use its reasonable best
efforts to cause the CVR Agreement to be qualified under the Trust
Indenture Act of 1939, as amended.
Registration The CVRs will be issued in registered form. The CVRs need not be listed
on any exchange.
Nature and The CVRs are unsecured obligations of ▇▇▇▇▇▇ Holdings and will rank
Ranking of equally with all other unsecured obligations of ▇▇▇▇▇▇ Holdings.
CVRs
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