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EXHIBIT 10.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of February 27, 1998 (this
"Agreement"), among El Paso Natural Gas Company, a Delaware corporation
("Parent"), El Paso Acquisition Company, a Delaware corporation ("Merger Sub"),
and DeepTech International Inc., a Delaware corporation (the "Company").
WITNESSETH:
WHEREAS the respective Boards of Directors of Parent and the Company have
approved the merger of the Company with and into Parent (the "Merger") or with
or into Merger Sub if the Merger is restructured as provided herein, upon the
terms and subject to the conditions set forth herein, whereby each issued and
outstanding share of Common Stock, par value $0.01 per share, of the Company
("Company Common Stock"), not owned by Parent, the Company or their respective
Subsidiaries (as defined in Section 8.4) will be converted into shares of common
stock, par value $3.00 per share, of Parent ("Parent Common Stock"), and/or
cash;
WHEREAS the respective Boards of Directors of each of Parent and the
Company have determined that the Merger is in furtherance of and consistent with
their respective long-term business strategies and is in the best interest of
their respective stockholders; and
WHEREAS under certain circumstances the Merger may be restructured as
provided herein to merge the Company with or into Merger Sub, and accordingly
the Board of Directors of Merger Sub and Parent as sole stockholder have
approved such merger, upon the terms and subject to the condition set forth
herein.
NOW, THEREFORE, in consideration of the premises, representations,
warranties and agreements herein contained, the parties agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the Delaware General Corporation Law (the
"DGCL"), the Company shall be merged with and into Parent at the Effective Time
(as defined in Section 1.2). Following the Merger, the separate corporate
existence of the Company shall cease and Parent shall continue as the surviving
corporation (the "Surviving Corporation") and shall succeed to and assume all
the rights and obligations of the Company in accordance with the DGCL.
Section 1.2 Effective Time. The Merger shall become effective when the
Certificate of Merger (the "Certificate of Merger"), executed in accordance with
the relevant provisions of the DGCL, is filed with the Secretary of State of the
State of Delaware or such later time which the parties hereto shall have agreed
upon and designated in such filing as the effective time of the Merger. When
used in this Agreement, the term "Effective Time" shall mean the date and time
at which the Certificate of Merger is accepted for record or such later time
established by the Certificate of Merger. The filing of the Certificate of
Merger shall be made on the date of the Closing (as defined in Section 1.10).
Section 1.3 Effects of the Merger. The Merger shall have the effects set
forth in the applicable provisions of the DGCL.
Section 1.4 Charter and By-laws; Directors. (a) At the Effective Time,
the Restated Certificate of Incorporation of Parent, as in effect immediately
prior to the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law. At the Effective Time, the By-laws of Parent, as in effect
immediately prior to the Effective Time, shall be the By-laws of the Surviving
Corporation until thereafter changed or amended as provided therein or in the
Certificate of Incorporation or by applicable law.
(b) The directors of Parent at the Effective Time shall be the directors of
the Surviving Corporation until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case
may be.
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Section 1.5 Conversion of Securities. As of the Effective Time, by virtue
of the Merger and without any action on the part of Parent, the Company or the
holders of any securities of Parent:
(a) Each issued and outstanding share of Parent Common Stock shall
remain outstanding and shall represent one validly issued, fully paid and
nonassessable share of Parent Common Stock.
(b) All shares of Company Common Stock that are held in the treasury
of the Company and shares of Company Common Stock owned by Parent or any
Subsidiary of Parent shall be canceled and no cash, capital stock of Parent
or other consideration shall be delivered in exchange therefor.
(c) Subject to Sections 1.5(b), 1.6 and 1.7, at the Effective Time
each issued and outstanding share of Company Common Stock shall be
converted into, at the election of the holder thereof, one of the following
(as adjusted pursuant to this Article I, the "Merger Consideration"):
(i) for each such share of Company Common Stock (other than shares
as to which a Cash Election (as defined in Section 1.6(a)) has been
effectively made and not revoked or lost pursuant to Section 1.6, the
right to receive a number of shares of Parent Common Stock, including
the associated Parent Rights (as defined in Section 2.2) (collectively,
the "Stock Consideration") equal to the result (calculated to four
decimal places) obtained by multiplying (x) $14.00 by (y) a fraction,
the numerator of which shall equal 29,291,594.5 and the denominator of
which shall equal the sum of (i) the aggregate number of shares of
Company Common Stock outstanding immediately prior to the Effective Time
and (ii) the aggregate number of shares of Company Common Stock which
could be acquired upon the exercise in full of all options and warrants
to purchase Company Common Stock outstanding immediately prior to the
Effective Time (after giving effect to any anti-dilution adjustments, if
any, applicable to such options and warrants in connection with the
Rights Offering (as defined in Section 5.11(a)) (such fraction is
referred to herein as the "Multiplier"), and dividing the result
(rounded up to the nearest full cent) by the average (calculated to four
decimal places) of the closing sales prices of a share of Parent Common
Stock on the New York Stock Exchange (the "NYSE") Composite Tape, as
reported in The Wall Street Journal, during the ten consecutive trading
days ending on and including the trading day immediately prior to the
Effective Time (the "Average Price") (provided that if the Average Price
is more than $75.00, the Average Price shall be deemed for purposes of
this paragraph to be $75.00, and if the Average Price is less than
$50.00, the Average Price shall be deemed for purposes of this paragraph
to be $50.00) (the "Exchange Ratio"); and
(ii) for each such share of Company Common Stock as to which a Cash
Election has been made, the right to receive an amount in cash, without
interest (the "Cash Consideration"), equal to the result (rounded up to
the nearest full cent) obtained by multiplying (a) $14.00 by (b) the
Multiplier.
(d) (i) Each of the Company's Equity Incentive Plan, as amended, and
Non-Employee Director Stock Option Plan (collectively, the "Company Stock
Plans"), and each outstanding stock option held by any current or former
employee or director (an "Option") thereunder, (A) shall be assumed by
Parent at the Effective Time, and each such Option shall become an option
to purchase a number of shares of Parent Common Stock (a "Substitute
Option") equal to the number of shares of Company Common Stock subject to
such Option multiplied by the Exchange Ratio (rounded to the nearest whole
share, with 0.5 shares being rounded up) or (B) at the option of the holder
of such Option exercisable by written notice to the Company prior to the
Effective Time, shall be cancelled immediately prior to the Effective Time
in exchange for a payment in cash as provided below (a "Cash-out Option").
The per share exercise price for each Substitute Option shall be the
current exercise price per share of Company Common Stock divided by the
Exchange Ratio (rounded up to the nearest full cent), and each Substitute
Option otherwise shall be subject to all of the other terms and conditions
of the original Option to which it relates. The cash payment for each
Cash-out Option shall be equal to the product of (x) the number of shares
of Company Common Stock subject to such Option and (y) the excess of the
Cash Consideration over the exercise price per share of Company Common
Stock subject to such Option. Parent shall provide to the Company at the
Effective Time funds to make the payments provided in the
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preceding sentence. Prior to the Effective Time, the Company shall take
such additional actions as are necessary under applicable law and the
applicable agreements and Company Stock Plans to effect the transactions
contemplated by this paragraph.
(ii) As soon as practicable after the Effective Time, Parent shall
cause to be included under a registration statement on Form S-8 of
Parent all shares of Parent Common Stock which are subject to Substitute
Options and all shares of Parent Common Stock which were issued in
exchange for Company Common Stock which constituted performance shares
or restricted stock of the Company to the extent such registration is
legally required for such Parent Common Stock to be freely tradable by
such holder, and shall maintain the effectiveness of such registration
statement until all Substitute Options have been exercised, expired or
forfeited.
(e) (i) At the Effective Time, each warrant (a "Warrant") to purchase
shares of Company Common Stock outstanding immediately prior to the
Effective Time pursuant to any of the warrant agreements listed in Section
3.2 of the Company Disclosure Schedule (as defined in Article III) (the
"Warrant Agreements") shall remain outstanding and shall thereafter
represent the right to receive, upon exercise of such Warrant, solely the
Merger Consideration receivable by a holder of the number of shares of
Company Common Stock for which such Warrant is exercisable immediately
prior to the Merger. For the purpose of determining the form of Merger
Consideration receivable in respect of any such Warrant, such Warrant shall
be treated in the same manner as any share of Company Common Stock as to
which a Stock Election (as defined in Section 1.6(a)) has been made. Parent
as the Surviving Corporation in the Merger hereby assumes the due and
punctual observance and performance of each and every covenant and
condition of such Warrant Agreement to be performed and observed by the
Company and all the obligations and liabilities thereunder, subject to the
provisions of this paragraph, which, to the extent required by the terms of
any Warrant Agreement, have been deemed appropriate by resolution of the
Board of Directors of the Company.
(ii) Parent shall take all such further actions as may be required
as of or after the Effective Time in order to comply with the
obligations and liabilities of the Company under each Warrant Agreement.
(f) As a result of the Merger and without any action on the part of
the holder thereof, at the Effective Time, all shares of Company Common
Stock shall, pursuant to Section 1.5(c), cease to be outstanding and the
certificates representing such shares shall be canceled and retired and
shall cease to exist, and each holder of such shares of Company Common
Stock shall thereafter cease to have any rights with respect to such shares
of Company Common Stock, except the right to receive, without interest, the
Merger Consideration and cash for fractional shares of Parent Common Stock
in accordance with Section 1.9 upon the surrender of a certificate
representing such shares of Company Common Stock (a "Certificate").
Section 1.6 Company Common Stock Elections. Each holder of shares of
Company Common Stock (other than holders of shares to be canceled as set forth
in Section 1.5(b)) shall have the right to submit a request specifying the
number of shares of Company Common Stock which such holder desires to have
converted into the right to receive either (i) the Cash Consideration or (ii)
the Stock Consideration in accordance with the following procedures:
(a) Each holder of shares of Company Common Stock may specify in a
request made in accordance with the provisions of this Section 1.6 (an
"Election") (i) the number of such shares which such holder desires to have
converted into the right to receive the Cash Consideration in the Merger (a
"Cash Election") and (ii) the number of such shares which such holder
desires to have converted into the Stock Consideration in the Merger (a
"Stock Election"). Each holder of shares of Company Common Stock may
specify, by completion of the box provided therefor on the Form of Election
(as defined in subsection (c) below), that (x) in the event the Average
Price is less than $50.00, such share of Company Common Stock shall be
converted into the right to receive the Cash Consideration, notwithstanding
such holder's Stock Election, and (y) in the event the Average Price is
greater than $75.00, such share of Company Common Stock shall be converted
into the right to receive the Stock
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Consideration, notwithstanding such holder's Cash Election. Each share of
Company Common Stock as to which no Election is in effect at the Election
Record Date (as defined in Section 1.6(e)) or for which an Election has
been made but has been revoked or withdrawn or is otherwise no longer
effective shall be called a "Non-Electing Share." Subject to Section 1.7,
the Non-Electing Shares of each holder of shares of Company Common Stock
shall be treated for purposes of this Agreement as if such shares were
covered by a Stock Election.
(b) Parent shall authorize Parent's Transfer Agent or such other
person as shall be reasonably acceptable to the Company to receive
Elections and to act as Exchange Agent hereunder (the "Exchange Agent").
(c) Parent shall prepare, for use by stockholders of the Company in
surrendering Certificates, a form (the "Form of Election") pursuant to
which each holder of Company Common Stock may make Elections. The Form of
Election shall be mailed to stockholders of record of the Company on the
earliest practicable date on or after the latest to occur of (i) the
expiration or termination of the waiting period applicable to the
consummation of the Merger under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (ii) the mailing of
the Information Statement/Prospectus (as defined in Section 5.2) to
stockholders of the Company and (iii) the mailing of the Rights Offering
Prospectuses (as defined in Section 5.11(a)) to stockholders of the
Company.
(d) The Company shall use all reasonable efforts to make the Form of
Election available to all persons who become stockholders of record of the
Company during the period between such record date and the Election Record
Date (as defined in Section 1.6(e)).
(e) An Election shall have been properly made only if the Exchange
Agent shall have received, by 5:00 p.m., New York City time, on the
twentieth day following the date of mailing of the Form of Election (such
time on such day being referred to herein as the "Election Record Date"), a
properly completed and signed Form of Election accompanied by the
Certificate or Certificates representing the shares of Company Common Stock
to which such Form of Election relates (or by an appropriate guarantee of
delivery of such Certificate or Certificates as set forth in such Form of
Election from a member of any registered national securities exchange or of
the National Association of Securities Dealers, Inc. or a commercial bank
or trust company having an office or correspondent in the United States,
provided such Certificate or Certificates are in fact delivered by the time
set forth in such guarantee of delivery).
(f) Any holder of record of shares of Company Common Stock may at any
time prior to the Election Record Date change such holder's Election by
written notice received by the Exchange Agent at or prior to the Election
Record Date accompanied by a properly completed Form of Election. Parent
shall have the right in its sole discretion to permit changes in Elections
after the Election Record Date.
(g) Any holder of record of shares of Company Common Stock may at any
time prior to the Election Record Date revoke such holder's Election by
written notice received by the Exchange Agent at or prior to the Election
Record Date or by withdrawal prior to the Election Record Date of such
holder's Certificates previously deposited with the Exchange Agent. Any
revocation of an Election may be withdrawn by notice of such withdrawal
delivered at or prior to the Election Record Date. Any stockholder of the
Company who shall have deposited Certificates with the Exchange Agent shall
have the right to withdraw such Certificates by written notice received by
the Exchange Agent at or prior to the Election Record Date. Parent shall
obtain from the Exchange Agent an agreement to return all Forms of Election
and accompanying Certificates to the stockholders submitting the same in
the event this Agreement shall be terminated in accordance with its terms.
(h) Parent shall have the right to make rules, not inconsistent with
the terms of this Agreement, governing the validity of Forms of Election,
the manner and extent to which Elections are to be taken into account in
making the determinations prescribed by Section 1.7, the issuance and
delivery of certificates for Parent Common Stock into which shares of
Company Common Stock are converted in the Merger
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and the payment for shares of Company Common Stock converted into the right
to receive the Cash Consideration in the Merger.
Section 1.7 Special Cash Rights; Restructuring of Merger. (a)
Notwithstanding any provision of Section 1.5 or 1.6, in the event that the
portion of the aggregate consideration paid or deemed paid with respect to the
Company Common Stock pursuant to the Merger (including the Aggregate Cash
Consideration (as defined below)) (the "Aggregate Merger Consideration") which
shall be paid or deemed paid other than in the form of Parent Common Stock
(which shall be deemed to include, without limitation, cash paid upon the
acquisition by Parent or any of its Subsidiaries of Company Common Stock,
Options or Warrants, whether pursuant to the Merger, the Stockholder Agreements
(as hereinafter defined in Section 3.11) or otherwise, the fair market value of
the Rights (as defined in Section 5.11(a)) distributed to holders of Company
Common Stock pursuant to the Rights Offering, any Excess Proceeds (as defined in
the Contribution and Distribution Agreement) transferred to Xxxxxx Offshore,
Inc. ("Offshore") pursuant to the Contribution and Distribution Agreement (as
defined in Section 5.11(a)), and cash paid in lieu of fractional shares) (the
"Aggregate Cash Consideration") shall exceed 50% of the Aggregate Merger
Consideration (the "Tax-Free Merger Maximum Cash Consideration"), no share of
Company Common Stock shall be converted into the right to receive the Stock
Consideration in the Merger unless (i) a valid Stock Election is in effect with
respect to such share of Company Common Stock at the Election Record Date and
(ii) such Stock Election expressly specifies, by completion of the box provided
therefor on the Form of Election, that such share of Company Common Stock shall
be converted into the right to receive the Stock Consideration in the Merger
notwithstanding that the receipt of Parent Common Stock in the Merger may be
taxable to the holder of such share of Company Common Stock. For the purpose of
determining the Aggregate Merger Consideration and the Tax-Free Merger Maximum
Cash Consideration, a share of Parent Common Stock shall be valued at the lowest
of (x) the closing trading price of a share of Parent Common Stock on the NYSE
Composite Tape on the date of the Effective Time, (y) the median, rounded to
four decimal places, of the high and low trading price of a share of Parent
Common Stock on the NYSE Composite Tape on the date of the Effective Time and
(z) the Average Price.
(b) If the Aggregate Cash Consideration shall exceed the Tax-Free Merger
Maximum Cash Consideration, (i) the Merger shall be restructured as a merger of
Merger Sub with and into the Company, and (ii) without any further action by the
Board of Directors or stockholders of Parent or the Company, the provisions set
forth in Section 1.12 hereof shall be applicable to the Merger.
Section 1.8 Parent to Make Cash and Certificates Available; Transfer Taxes;
Withholding. (a) As soon as practicable after the Effective Time, Parent shall
deposit with the Exchange Agent, in trust for the holders of shares of Company
Common Stock, certificates for shares of Parent Common Stock and cash
representing the Merger Consideration payable pursuant to Sections 1.5, 1.6, 1.7
and 1.9 (such certificates and cash, together with any dividends or
distributions with respect thereto, being hereinafter referred to as the
"Exchange Fund"). The Exchange Agent shall invest any cash included in the
Exchange Fund as directed by Parent, on a daily basis. Any interest or other
income resulting from such investments shall be paid to Parent. As soon as
practicable after the Effective Time, the Exchange Agent shall distribute to
each holder of shares of Company Common Stock converted into the right to
receive the Cash Consideration or the Stock Consideration pursuant to Sections
1.5, 1.6, 1.7 and 1.9, upon surrender to the Exchange Agent (to the extent not
previously surrendered with a Form of Election) of one or more Certificates for
cancellation, a check for the amount of cash to which such holder is entitled
under such sections and certificates representing the shares of Parent Common
Stock to which such holder is entitled under such sections. As soon as
practicable after the Effective Time, the Exchange Agent shall mail to each
holder of record of a Certificate or Certificates whose shares were converted
pursuant to this Article I (other than any holder who previously surrendered all
its Certificates with a Form of Election or pursuant to a guarantee of delivery
set forth in a Form of Election) (A) a letter of transmittal in form reasonably
acceptable to Parent (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon actual delivery
of the Certificates to the Exchange Agent) and (B) instructions for use in
effecting the surrender of the Certificates.
(b) Upon surrender for cancellation to the Exchange Agent of a Certificate,
together with such letter of transmittal, duly executed, the holder of such
Certificate shall be entitled to receive in exchange therefor a
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certificate representing that number of whole shares of Parent Common Stock
issuable and the cash payable to such holder pursuant to Sections 1.5, 1.6, 1.7
and 1.9 of this Agreement. Each share of Parent Common Stock into which a share
of Company Common Stock shall be converted shall be deemed to have been issued
at the Effective Time. If any certificate representing shares of Parent Common
Stock or cash or other property is to be issued or delivered in a name other
than that in which the Certificate surrendered in exchange therefor is
registered, it shall be a condition of such exchange that the Certificate so
surrendered shall be properly endorsed and otherwise in proper form for transfer
and that the person requesting such exchange shall pay to the Exchange Agent any
transfer or other taxes required by reason of the issuance of certificates for
such shares of Parent Common Stock in a name other than that of the registered
holder of the Certificate surrendered or shall establish to the satisfaction of
the Exchange Agent that such tax has been paid or is not applicable. Parent or
the Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
shares of Company Common Stock such amounts as Parent or the Exchange Agent is
required to deduct and withhold with respect to the making of such payment under
the Internal Revenue Code of 1986, as amended (the "Code"), or under any
provision of state, local or foreign tax law. To the extent that amounts are so
withheld by Parent or the Exchange Agent, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of the
shares of Company Common Stock in respect of which such deduction and
withholding was made by Parent or the Exchange Agent.
Section 1.9 Dividends, Fractional Shares, etc. (a) Notwithstanding any
other provisions of this Agreement, no dividends or other distributions declared
after the Effective Time on Parent Common Stock shall be paid with respect to
any shares of Company Common Stock represented by a Certificate, until such
Certificate is surrendered for exchange as provided herein. Subject to the
effect of applicable laws, following surrender of any such Certificate, there
shall be paid to the holder of certificates for Parent Common Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of dividends or other distributions with a record date after the
Effective Time theretofore payable with respect to such whole shares of Parent
Common Stock and not paid, less the amount of any withholding taxes that may be
required thereon, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time but
prior to surrender and a payment date subsequent to surrender payable with
respect to such whole shares of Parent Common Stock, less the amount of any
withholding taxes that may be required thereon.
(b) At or after the Effective Time, there shall be no transfer on the stock
transfer books of the Company of the shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, certificates representing any such shares are presented to the Surviving
Corporation, they shall be canceled and exchanged for the Merger Consideration,
if any, deliverable in respect thereof pursuant to this Agreement.
(c) No fractional shares of Parent Common Stock shall be issued pursuant to
the Merger. In lieu of the issuance of any fractional share of Parent Common
Stock pursuant to the Merger, cash adjustments shall be paid to holders in
respect of any fractional share of Parent Common Stock that could otherwise be
issuable, and the amount of such cash adjustment shall be equal to the product
of such fractional amount and the Average Price.
(d) Any portion of the Exchange Fund (including the proceeds of any
investments thereof and any shares of Parent Common Stock) that remains
unclaimed by the former stockholders of the Company six months after the
Effective Time or for such longer time as Parent shall determine shall be
delivered to Parent. Any former stockholder of the Company who has not
theretofore complied with this Article I shall thereafter look only to the
Surviving Corporation and Parent for payment of the applicable Merger
Consideration, cash in lieu of fractional shares and unpaid dividends and
distributions on Parent Common Stock deliverable in respect of each share of
Company Common Stock such stockholder holds as determined pursuant to this
Agreement, in each case without any interest thereon.
(e) To the fullest extent permitted by law, none of Parent, the Company,
the Surviving Corporation, the Exchange Agent or any other person shall be
liable to any former holder of shares of Company Common
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Stock for any amount properly delivered to a public official pursuant to
applicable or unclaimed property, escheat or similar laws.
(f) In the event that any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by Parent, the
posting by such person of a bond in such reasonable amount as Parent may direct
as indemnity against any claim that may be made against it with respect to such
Certificate, the Exchange Agent shall issue in exchange for such lost, stolen or
destroyed Certificate the applicable Merger Consideration, cash in lieu of
fractional shares, and unpaid dividends and distributions on shares of Parent
Common Stock, as provided in this Section 1.9, deliverable in respect thereof
pursuant to this Agreement.
(g) In the event of any change in the Parent Common Stock between the date
of this Agreement and the Effective Time by reason of any stock split, stock
dividend, subdivision, reclassification, combination, exchange of Parent Common
Stock or the like, the Merger Consideration, the maximum and minimum prices of
the Parent Common Stock used to determine the Average Price, and other terms set
forth in this Agreement shall be appropriately adjusted.
Section 1.10 Closing. The closing of the Merger (the "Closing") and all
actions contemplated by this Agreement to occur at the Closing shall take place
at the offices of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., 0000 Xxxxxxxx
Xxxxx, Xxxxx Tower, 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx, at 10:00
a.m., local time, on a date to be specified by the parties, which (subject to
fulfillment or waiver of the conditions set forth in Article VI) shall be no
later than the second business day following the day on which the last of the
conditions set forth in Article VI shall have been fulfilled or waived, or at
such other time and place as Parent and the Company shall agree.
Section 1.11 Transfer Taxes. Parent and the Company shall cooperate in
the preparation, execution and filing of all returns, applications or other
documents regarding any real property transfer, stamp, recording, documentary or
other taxes and any other fees and similar taxes which become payable in
connection with the Merger other than transfer or other taxes described in
Section 1.8(b) (collectively, "Transfer Taxes"). From and after the Effective
Time, Parent shall pay or cause to be paid, without deduction or withholding
from any amounts payable to the holders of Company Stock, all Transfer Taxes.
Section 1.12 Restructuring. If the Aggregate Cash Consideration exceeds
the Tax-Free Merger Maximum Cash Consideration, Parent, Merger Sub and the
Company agree as follows:
(a) As promptly as practicable after the Election Record Date, the
Merger shall be restructured as provided in this Section 1.12 (the
"Alternative Taxable Merger").
(b) The following provisions shall apply to the Alternative Taxable
Merger:
(i) Section 1.1 of this Agreement shall be deemed to read as
follows:
Section 1.1 The Merger. Upon the terms and subject to the
conditions hereof, and in accordance with the Delaware General
Corporation Law (the "DGCL"), Merger Sub shall be merged with and
into the Company at the Effective Time (as defined in Section 1.2).
Following the Merger, the separate corporate existence of Merger Sub
shall cease and the Company shall continue as the surviving
corporation (the "Surviving Corporation") and shall succeed to and
assume all the rights and obligations of the Company in accordance
with the DGCL.
(ii) Section 1.4 of this Agreement shall be deemed to read as
follows:
Section 1.4 Charter and By-laws; Directors. (a) At the
Effective Time, the Certificate of Incorporation of the Company shall
be amended to read in its entirety as set forth in Exhibit A. At the
Effective Time, the By-laws of Merger Sub, as in effect immediately
prior to the Effective Time, shall be the Bylaws of the Surviving
Corporation until thereafter changed or amended as provided therein
or in the Certificate of Incorporation or by applicable law.
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(b) The directors of Merger Sub at the Effective Time shall be
the directors of the Surviving Corporation until the earlier of their
resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
(iii) The introductory paragraph of Section 1.5 and Section 1.5(a)
of this Agreement shall be deemed to read as follows:
Section 1.5 Conversion of Securities. As of the Effective
Time, by virtue of the Merger and without any action on the part of
Parent, Merger Sub, the Company or the holders of any securities of
Parent:
(a) Each issued and outstanding share of common stock of Merger
Sub shall be converted into and become one validly issued, fully paid
and nonassessable share of common stock of the Surviving Corporation.
(iv) All references in this Agreement to the Surviving Corporation
shall be deemed references to the Company as the Surviving Corporation
in the Alternative Taxable Merger.
(v) The condition set forth in Section 6.1(e) of this Agreement
shall not be applicable to the Alternative Taxable Merger.
(vi) References to Parent in Sections 6.2(a) and (b) of this
Agreement shall be deemed to include references to Merger Sub.
Section 1.13 Alternative Restructuring. (a) At the option of Parent,
exercisable by written notice to the Company, the Merger shall be restructured
as provided in this Section 1.13 (the "Alternative Tax-Free Merger"); provided,
however, that if Parent makes such election, Parent shall not be permitted to
assert, and shall be deemed to have waived, each condition to its obligation to
close the Merger, which condition would be satisfied, if such alternative
structure were not used.
(b) The following provisions shall apply to the Alternative Tax-Free
Taxable Merger:
(i) Section 1.1 of this Agreement shall be deemed to read as follows:
Section 1.1 The Merger. Upon the terms and subject to the
conditions hereof, and in accordance with the Delaware General
Corporation Law (the "DGCL"), the Company shall be merged with and into
Merger Sub at the Effective Time (as defined in Section 1.2). Following
the Merger, the separate corporate existence of the Company shall cease
and Merger Sub shall continue as the surviving corporation (the
"Surviving Corporation") and shall succeed to and assume all the rights
and obligations of the Company in accordance with the DGCL.
(ii) Section 1.4 of this Agreement shall be deemed to read as follows:
Section 1.4 Charter and By-laws; Directors. (a) At the Effective
Time, the Certificate of Incorporation of Merger Sub as in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation. At the Effective Time, the
By-laws of Merger Sub, as in effect immediately prior to the Effective
Time, shall be the By-laws of the Surviving Corporation until thereafter
changed or amended as provided therein or in the Certificate of
Incorporation or by applicable law.
(b) The directors of Merger Sub at the Effective Time shall be the
directors of the Surviving Corporation until the earlier of their
resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
(iii) The introductory paragraph of Section 1.5 and Section 1.5(a) of
this Agreement shall be deemed to read as follows:
Section 1.5 Conversion of Securities. As of the Effective Time,
by virtue of the Merger and without any action on the part of Parent,
Merger Sub, the Company or the holders of any securities of Parent:
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(a) Each issued and outstanding share of common stock of Merger Sub
shall remain outstanding and shall represent one validly issued, fully
paid and nonassessable share of common stock of the Surviving
Corporation.
(iv) All references in this Agreement to the Surviving Corporation
shall be deemed references to Merger Sub as the Surviving Corporation in
the Alternative Tax-Free Merger.
Section 1.14. Guarantee. Parent hereby absolutely and unconditionally
guarantees the performance by Merger Sub of all of its obligations under this
Agreement. The liability of Parent hereunder shall be primary and not as a
surety, and shall not be affected by the bankruptcy of Merger Sub or any failure
or delay by the Company in exercising any right or remedy. Parent hereby waives
notice or demand of performance in the acceptance of its obligations hereunder.
Section 1.15. Dissenting Shares. Notwithstanding Section 1.5(c), if the
Merger is restructured in the form of the Alternative Taxable Merger as provided
in Section 1.12, any shares of Company Common Stock outstanding immediately
prior to the Effective Time and held by a holder who (i) has not executed a
written consent in favor of the Merger, (ii) is required by the terms of this
Agreement to accept consideration for shares of Company Common Stock owned by
such holder other than in the form of Parent Common Stock and cash in lieu of
fractional shares, and (iii) has demanded appraisal for such shares of Company
Common Stock in accordance with the DGCL (the "Dissenting Shares") shall not be
converted into a right to receive the Merger Consideration, unless such holder
fails to perfect or withdraws or otherwise loses its right to appraisal or it is
determined that such holder does not have appraisal rights in accordance with
the DGCL. If, after the Effective Time, such holder fails to perfect or
withdraws or loses its right to appraisal, or if it is determined that such
holder does not have an appraisal right, such shares of Company Common Stock
shall be treated as if they had been converted as of the Effective Time into a
right to receive in exchange for each share of Company Common Stock the Merger
Consideration. The Company shall give Parent prompt notice of any demands
received by the Company for appraisal of any shares of Company Common Stock, and
Parent shall have the right to control all negotiations and proceedings with
respect to such demands except as required by applicable law. The Company shall
not, except with the prior written consent of Parent, make any payment with
respect to, or settle or offer to settle, any such demands.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company as follows (such
representations and warranties (as well as other provisions of this Agreement)
are qualified by the matters identified on a disclosure schedule (the "Parent
Disclosure Schedule") delivered by Parent to the Company prior to execution of
this Agreement):
Section 2.1 Organization and Qualification. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the corporate power to carry on its business as it is now being
conducted or currently proposed to be conducted. Parent is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities make such qualification necessary, except where the
failure to be so qualified will not, alone or in the aggregate, have a Parent
Material Adverse Effect. For the purposes of this Agreement, a "Parent Material
Adverse Effect" means any state of facts, event, change or effect which,
individually or in the aggregate, (i) has a material adverse effect on the
business, properties, assets, condition (financial or otherwise), liabilities or
results of operations of Parent and its Subsidiaries taken as a whole, other
than effects arising out of or resulting from changes in general economic
conditions, stock or financial market fluctuations, or oil and gas industry
conditions, or (ii) would prevent the consummation of the material transactions
contemplated hereby. Complete and correct copies as of the date hereof of the
Restated Certificate of Incorporation and By-laws of Parent have been delivered
to the Company as part of the Parent Disclosure Schedule.
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Section 2.2 Capitalization. The authorized capital stock of Parent
consists of 100,000,000 shares of Parent Common Stock, and 25,000,000 shares of
Preferred Stock, par value $.01 per share (the "Parent Preferred Stock"). As of
February 26, 1998, (a) 60,773,150 shares of Parent Common Stock were validly
issued and outstanding, fully paid, and nonassessable, (b) no shares of Parent
Preferred Stock were issued and outstanding and (c) 4,284,773 shares of Parent
Common Stock were reserved for issuance pursuant to stock options ("Parent Stock
Options") of Parent. As of the date of this Agreement, there are no bonds,
debentures, notes or other indebtedness issued or outstanding having the right
to vote with Parent's stockholders, whether together or as a separate class, on
any matters on which Parent's stockholders may vote. As of the date of this
Agreement, except for Parent Stock Options and rights ("Parent Rights") issued
pursuant to the Amended and Restated Shareholder Rights Agreement, dated July
23, 1997 between Parent and The First National Bank of Boston, there are no
options, warrants, calls, convertible securities or other rights, agreements or
commitments presently outstanding obligating Parent to issue, deliver or sell
shares of its capital stock, or obligating Parent to grant, extend or enter into
any such option, warrant, call or other such right, agreement or commitment. All
of the shares of Parent Common Stock issuable in accordance with this Agreement
in exchange for Company Common Stock at the Effective Time in accordance with
this Agreement will be, when so issued, duly authorized, validly issued, fully
paid, nonassessable and free of preemptive rights and shall be delivered free
and clear of all liens, claims, charges and encumbrances of any kind or nature
whatsoever.
Section 2.3 Subsidiaries. Each Subsidiary of Parent is a corporation,
partnership or other entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization (except where the
failure to be validly existing and in good standing would not be material to the
business of such Subsidiary) and has the corporate or similar power to carry on
its business as it is now being conducted or currently proposed to be conducted.
Each Subsidiary of Parent is duly qualified to do business, and is in good
standing, in each jurisdiction where the character of its properties owned or
held under lease or the nature of its activities makes such qualification
necessary except where the failure to be so qualified, when taken together with
all such failures, has not had, and would not reasonably be expected to have, a
Parent Material Adverse Effect. Section 2.3 of the Parent Disclosure Schedule
contains, with respect to each Subsidiary of Parent, its name and jurisdiction
of organization and, with respect to each Subsidiary that is not wholly owned,
the percentage of outstanding capital stock or equity capital owned by Parent or
a Subsidiary. All the outstanding shares of capital stock or equity capital of
each Subsidiary of Parent are validly issued, fully paid and nonassessable, and,
to the extent owned by Parent or by a Subsidiary of Parent, are owned free and
clear of any liens, claims or encumbrances. There are no existing options,
warrants, calls, convertible securities or other rights, agreements or
commitments of any character relating to the issued or unissued capital stock or
other securities of any of the Subsidiaries of Parent. Except as set forth in
Parent's Annual Report on Form 10-K for the fiscal year ended December 31, 1996,
Parent does not directly or indirectly own any interest in any other
corporation, partnership, joint venture or other business association or entity
or have any obligation, commitment or undertaking to acquire any such interest.
Section 2.4 Authority Relative to this Agreement. Parent has the
corporate power to enter into this Agreement and each other agreement executed
and delivered in connection with the material transactions contemplated hereby
(the "Related Agreements") to which Parent is a party and to carry out its
obligations hereunder and thereunder. The execution and delivery of this
Agreement and the Related Agreements to which Parent is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by Parent's Board of Directors. This Agreement and each Related
Agreement to which Parent is a party constitutes a valid and binding obligation
of Parent enforceable against Parent in accordance with its terms except as
enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and except that the
availability of equitable remedies, including specific performance, is subject
to the discretion of the court before which any proceeding therefor may be
brought. No other corporate proceedings on the part of Parent are necessary to
authorize this Agreement or any Related Agreement to which Parent is a party and
the transactions contemplated hereby or thereby. Parent is not subject to or
obligated under (i) any charter, by-law, indenture or other loan or credit
document provision or (ii) any other contract, license, franchise, permit,
order, decree, concession, lease, instrument or judgment or any statute, law,
ordinance, rule or regulation applicable to Parent or any of its Subsidiaries or
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their respective properties or assets, which would be breached or violated, or
under which there would be a default (with or without notice or lapse of time,
or both), or under which there would arise a right of termination, cancellation,
modification or acceleration of any obligation, or any right to payment or
compensation, or the loss of a material benefit, by its executing and carrying
out this Agreement or any Related Agreement to which Parent is a party other
than, in the case of clause (ii) only, (A) any breaches, violations, defaults,
terminations, cancellations, modifications, accelerations, rights to payment or
compensation, or losses which, either alone or in the aggregate, have not had,
and would not reasonably be expected to have, a Parent Material Adverse Effect
and (B) the laws and regulations referred to in the next sentence. Except as
required by the HSR Act, the Securities Act of 1933, as amended (the "Securities
Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the corporation, securities or blue sky laws or regulations of the various
states, no filing or registration with, or authorization, consent or approval
of, any court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (each, a "Governmental
Entity"), is necessary for the consummation by Parent of the Merger or the other
transactions contemplated by this Agreement or any Related Agreement to which
Parent is a party, other than filings, registrations, authorizations, consents
or approvals the failure to make or obtain which has not had, and would not
reasonably be expected to have, a Parent Material Adverse Effect.
Section 2.5 Reports and Financial Statements. Parent has previously
furnished the Company with true and complete copies of its (i) Annual Reports on
Form 10-K for the fiscal years ended December 31, 1995 and December 31, 1996, as
filed with the Securities and Exchange Commission (the "Commission"), (ii)
Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and
September 30, 1997, as filed with the Commission, (iii) proxy statements related
to all meetings of its stockholders (whether annual or special) since December
31, 1995, and (iv) all other reports or registration statements filed by Parent
with the Commission since December 31, 1995, except for preliminary material (in
the case of clauses (iii) and (iv) above) and except for registration statements
on Form S-8 relating to employee benefit plans and annual reports on Form 11-K
with respect to such plans, which are all the documents that Parent was required
to file with the Commission since that date (the documents in clauses (i)
through (iv) being referred to herein collectively as the "Parent SEC Reports").
As of their respective dates, the Parent SEC Reports complied as to form in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the Commission
thereunder applicable to such Parent SEC Reports. As of their respective dates,
the Parent SEC Reports did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The audited consolidated financial statements and
unaudited interim financial statements of Parent included in the Parent SEC
Reports comply as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the Commission with
respect thereto. The financial statements included in the Parent SEC Reports
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except as may be indicated therein or in the
notes thereto); present fairly, in all material respects, the financial position
of Parent and its Subsidiaries as at the dates thereof and the results of their
operations and cash flows for the periods then ended subject, in the case of the
unaudited interim financial statements, to normal year-end adjustments, any
other adjustments described therein and the fact that certain information and
notes have been condensed or omitted in accordance with the Exchange Act and the
rules promulgated thereunder; and are in all material respects in accordance
with the books of account and records of Parent and its Subsidiaries.
Section 2.6 Absence of Certain Changes or Events. Except as disclosed in
the Parent SEC Reports filed and delivered to the Company prior to the date of
this Agreement, since September 30, 1997, there has not been any transaction,
commitment, dispute or other event or condition (financial or otherwise) of any
character (whether or not in the ordinary course of business) which, alone or in
the aggregate, has had, or would reasonably be expected to have, a Parent
Material Adverse Effect.
Section 2.7 Litigation. Except as disclosed in the Parent SEC Reports
filed prior to the date of this Agreement, there is no suit, action or
proceeding to which Parent or any of its Subsidiaries is a party pending or, to
the actual knowledge of the individuals listed in Section 2.7 of the Parent
Disclosure Schedule ("Parent
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Knowledge"), threatened against Parent or any of its Subsidiaries which, alone
or in the aggregate, has had or would reasonably be expected to have, a Parent
Material Adverse Effect, nor is there any judgment, decree, injunction, rule or
order of any Governmental Entity or arbitrator outstanding against Parent or any
of its Subsidiaries which, alone or in the aggregate, has had, or would
reasonably be expected to have, any such Parent Material Adverse Effect.
Section 2.8 Compliance with Applicable Laws. Parent and each of its
Subsidiaries holds all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary or appropriate for the
operation of its respective business, except for such permits, licenses,
variances, exemptions, orders and approvals the failure to hold which, alone or
in the aggregate, has not had, and would not reasonably be expected to have, a
Parent Material Adverse Effect (the "Parent Permits"). Parent and each of its
Subsidiaries is in compliance with the terms of the Parent Permits, except for
any failure to comply which, alone or in the aggregate, has not had, and would
not reasonably be expected to have, a Parent Material Adverse Effect. Except as
disclosed in the Parent SEC Reports filed and delivered to the Company prior to
the date of this Agreement, the businesses of Parent and its Subsidiaries are
not being conducted in violation of any law, ordinance or regulation of any
Governmental Entity, except for possible violations which, alone or in the
aggregate, have not had, and would not reasonably be expected to have, a Parent
Material Adverse Effect.
Section 2.9 Tax Matters. To the Parent Knowledge, Parent has not taken
any action which would prevent the Merger from constituting a reorganization
within the meaning of Section 368(a) of the Code.
Section 2.10 Parent Action. The Board of Directors of Parent (at a
meeting duly called and held) has by the requisite vote of all directors present
(a) determined that the Merger is advisable and fair to and in the best
interests of Parent and its stockholders and (b) approved the Merger and the
transactions contemplated thereby in accordance with the DGCL and Parent's
Restated Certificate of Incorporation.
Section 2.11 Public Utility. Parent is not a "holding company," a
"subsidiary company" of a "holding company," an affiliate of a "holding
company," or a "public utility company," as such terms are defined in the Public
Utility Holding Company Act of 1935, as amended (the "Holding Company Act").
Section 2.12 Representations and Warranties Regarding Merger Sub. Parent
and Merger Sub jointly and severally represent and warrant to the Company as
follows:
(A) Merger Sub is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. Merger Sub has
not engaged in any business since it was incorporated other than in
connection with its organization and the transactions contemplated by this
Agreement.
(B) The authorized capital stock of Merger Sub consists of 1,000
shares of common stock, par value $.01 per share, all of which are validly
issued and outstanding, fully paid and nonassessable and are directly owned
by Parent free and clear of all liens, claims and encumbrances.
(C) Merger Sub has the corporate power to enter into this Agreement
and to carry out its obligations hereunder. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by the Board of Directors and sole stockholder of
Merger Sub. This Agreement constitutes a valid and binding obligation of
Merger Sub enforceable against Merger Sub in accordance with its terms
except as enforcement may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before which any
proceeding therefor may be brought. No other corporate proceedings on the
part of Merger Sub are necessary to authorize this Agreement and the
transactions contemplated hereby. Except as required by the HSR Act, the
Securities Act (as defined in Section 2.4), the Exchange Act (as defined in
Section 2.4) and the corporation, securities or blue sky laws or
regulations of the various states, no filing or registration with, or
authorization, consent or approval of, any Governmental Entity (as defined
in Section 2.4) is necessary for the consummation by Merger Sub of the
Merger or the transactions contemplated by this Agreement, other than
filings, registrations, authoriza-
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tions, consents or approvals the failure to make or obtain which would not
prevent the consummation of the transactions contemplated this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent as follows (such
representations and warranties (as well as other provisions of this Agreement)
are qualified by the matters identified on a disclosure schedule (the "Company
Disclosure Schedule") delivered by the Company to Parent prior to execution of
this Agreement):
Section 3.1 Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the corporate power to carry on its business as it is
now being conducted or currently proposed to be conducted. The Company is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or held under
lease or the nature of its activities makes such qualification necessary, except
where the failure to be so qualified will not, alone or in the aggregate, have a
Company Material Adverse Effect. For the purposes of this Agreement, a "Company
Material Adverse Effect" means any state of facts, event, change or effect
which, individually or in the aggregate, (i) has a material adverse effect on
the business, properties, assets, condition (financial or otherwise),
liabilities or results of operations of the Company and the Company Subsidiaries
(as defined below) taken as a whole, other than effects arising out of or
resulting from changes in general economic conditions, stock or financial market
fluctuations, or oil and gas industry conditions, or (ii) would prevent the
consummation of the material transactions contemplated hereby. Complete and
correct copies as of the date hereof of the Certificate of Incorporation and
By-laws of the Company have been delivered to Parent as part of the Company
Disclosure Schedule. The term "Company Subsidiary" shall mean each Subsidiary of
the Company other than any member of the Offshore Group. The term "Offshore
Group" means Offshore, DeepFlex Production Services, Inc. ("Deepflex") and their
Subsidiaries, other than Xxxxxx Offshore Development, Inc. The term "MSG
Entities" shall mean Deepflex and its Subsidiaries.
Section 3.2 Capitalization. The authorized capital stock of the Company
consists of 100,000,000 shares of Company Common Stock and 10,000,000 shares of
Preferred Stock, $.01 par value (the "Company Preferred Stock"). As of February
27, 1998, 24,708,807 shares of Company Common Stock were validly issued and
outstanding, fully paid and nonassessable, and no shares of Company Preferred
Stock were issued and outstanding. As of the date of this Agreement, there are
no bonds, debentures, notes or other indebtedness issued or outstanding having
the right to vote with Company's stockholders, whether together or as a separate
class, on any matters on which the Company's stockholders may vote. As of the
date of this Agreement, except for (a) Options issued pursuant to the Company
Stock Plans which are listed in Section 3.2 of the Company Disclosure Schedule
(which contains the name of the Option holder, the date of grant, the exercise
price, the vesting and expiration dates and the number of shares of Company
Common Stock covered by each such Option) and (b) Warrants issued pursuant to
the Warrant Agreements listed in Section 3.2 of the Company Disclosure Schedule
(which contains the name of the Warrantholder, the exercise price, the
expiration dates and the number of shares of Company Common Stock covered by
each such Warrant), such options and warrants covering not in excess of
4,582,787.5 shares of Company Common Stock, there are no options, warrants,
calls, convertible securities or other rights, agreements or commitments
presently outstanding obligating the Company to issue, deliver or sell shares of
its capital stock or debt securities, or obligating the Company to grant, extend
or enter into any such option, warrant, call or other such right, agreement or
commitment. After the Effective Time, except for obligations in respect of the
Options and Warrants, the Surviving Corporation will have no obligation to
issue, transfer or sell any shares of stock of the Company or the Surviving
Corporation pursuant to any Company Employee Benefit Plan (as defined in Section
3.10).
Section 3.3 Subsidiaries. Each Company Subsidiary is a corporation,
partnership or other entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization (except where the
failure to be validly existing and in good standing would not be material to the
business of such Company
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Subsidiary) and has the corporate or similar power to carry on its business as
it is now being conducted or currently proposed to be conducted. Each Company
Subsidiary is duly qualified to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary except where the
failure to be so qualified, when taken together with all such failures, has not
had, and would not reasonably be expected to have, a Company Material Adverse
Effect. Section 3.3 of the Company Disclosure Schedule contains, with respect to
each Company Subsidiary, its name and jurisdiction of organization and, with
respect to each Company Subsidiary that is not wholly owned, the number of
issued and outstanding shares of capital stock or equity capital and the number
of shares of capital stock or equity capital owned by the Company or a Company
Subsidiary. Except as set forth in Section 3.3 of the Company Disclosure
Schedule, all the outstanding shares of capital stock or equity capital of each
Company Subsidiary are validly issued, fully paid and nonassessable, and those
owned by the Company or by a Company Subsidiary are owned free and clear of any
liens, claims or encumbrances. There are no existing options, warrants, calls,
convertible securities or other rights, agreements or commitments of any
character relating to the issued or unissued capital stock or other securities
of any of the Subsidiaries of the Company. Except as set forth in Section 3.3 of
the Company Disclosure Schedule, the Company does not directly or indirectly own
any interest in any other corporation, partnership, joint venture or other
business association or entity or have any obligation, commitment or undertaking
to acquire any such interest.
Section 3.4 Authority Relative to this Agreement. The Company and its
Subsidiaries have the corporate power to enter into this Agreement and each
Related Agreement to which the Company or any of its Subsidiaries is a party and
to carry out their obligations hereunder and thereunder. The execution and
delivery of this Agreement and each Related Agreement to which the Company or
any of its Subsidiaries is a party and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the Board of
Directors of the Company or the Board of Directors and, if required, the
stockholders of the relevant Subsidiary, and this Agreement and the Merger have
been duly authorized by the written consent (the "Consent") of the holders of a
majority of the shares of the Company outstanding as of the record date therefor
determined in accordance with Section 228 of the DGCL (the "Consent Date"). This
Agreement and each Related Agreement to which the Company or any of its
Subsidiaries is a party constitutes a valid and binding obligation of the
Company or such Subsidiary enforceable against the Company or such Subsidiary in
accordance with its terms except as enforcement may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
generally and except that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before which any
proceeding therefor may be brought. No other corporate proceedings on the part
of the Company or any of its Subsidiaries are necessary to authorize this
Agreement or any Related Agreement to which the Company or any of its
Subsidiaries is a party and the transactions contemplated hereby or thereby.
Except as set forth in Section 3.4 of the Company Disclosure Schedule, neither
the Company nor any of its Subsidiaries is subject to or obligated under (i) any
charter, by-law, indenture or other loan or credit document or (ii) any other
contract (other than Options and Warrants set forth in Section 3.2 of the
Company Disclosure Schedule), license, franchise, permit, order, decree,
concession, lease, instrument or judgment or any statute, law, ordinance, rule
or regulation applicable to the Company or any of its Subsidiaries or their
respective properties or assets which would be breached or violated, or under
which there would be a default (with or without notice or lapse of time, or
both), or under which there would arise a right of termination, cancellation,
modification or acceleration of any obligation, or any right to payment or
compensation, or the loss of a material benefit, by its executing and carrying
out this Agreement or any Related Agreement to which the Company or any of its
Subsidiaries is a party, other than, in the case of clause (ii) only, (A) any
breaches, violations, defaults, terminations, cancellations, modifications,
accelerations, rights to payment or compensation, or losses which, either alone
or in the aggregate, have not had, and would not reasonably be expected to have,
a Company Material Adverse Effect and (B) the laws and regulations referred to
in the next sentence. Except as required by the HSR Act, the Securities Act, the
Exchange Act, and the corporation, securities or blue sky laws or regulations of
the various states, no filing or registration with, or authorization, consent or
approval of, any Governmental Entity is necessary for the consummation by the
Company and its Subsidiaries of the Merger or the other transactions
contemplated by this Agreement or any Related Agreement to which the Company or
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any of its Subsidiaries is a party, other than filings, registrations,
authorizations, consents or approvals the failure to make or obtain which has
not had, and would not reasonably be expected to have, a Company Material
Adverse Effect.
Section 3.5 Reports and Financial Statements. The Company has previously
furnished Parent with true and complete copies, for each of the Company and
Leviathan Gas Pipeline Partners, L.P. ("Leviathan"), of its (i) Annual Reports
on Form 10-K for the fiscal years ended June 30, 1996 and June 30, 1997 (in the
case of the Company) and for the fiscal years ended December 31, 1996 and
December 31, 1995 (in the case of Leviathan), in each case, as filed with the
Commission, (ii) Quarterly Report on Form 10-Q for the quarters ended September
30, 1997 and December 31, 1997, as filed with the Commission, (iii) proxy
statements related to all meetings of its stockholders or to the extent
applicable, limited partners (whether annual or special) since December 31, 1995
and (iv) all other reports or registration statements filed by the Company or
Leviathan with the Commission since June 30, 1996 (in the case of the Company)
and since December 31, 1995 (in the case of Leviathan), except for preliminary
material (in the case of clauses (iii) and (iv) above) and except for
registration statements on Form S-8 relating to employee benefit plans and
annual reports on Form 11-K with respect to such plans, which are all the
documents that the Company or Leviathan were required to file with the
Commission since that date (the documents in clauses (i) through (iv) being
referred to herein collectively as the "Company Group SEC Reports"). As of their
respective dates, the Company Group SEC Reports complied as to form in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the Commission
thereunder applicable to such Company Group SEC Reports. As of their respective
dates, the Company Group SEC Reports did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The audited consolidated financial
statements and unaudited interim financial statements of the Company or
Leviathan, as the case may be, included in the Company Group SEC Reports comply
as to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the Commission with respect thereto.
The financial statements included in the Company Group SEC Reports have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as may be indicated therein or in the notes thereto);
present fairly, in all material respects, the financial position of the Company
or Leviathan, and their respective Subsidiaries, as the case may be, as at the
dates thereof and the results of their operations and cash flows for the periods
then ended subject, in the case of the unaudited interim financial statements,
to normal year-end adjustments and any other adjustments described therein and
the fact that certain information and notes have been condensed or omitted in
accordance with the Exchange Act and the rules promulgated thereunder; and are
in all material respects in accordance with the books of account and records of
the Company or Leviathan and their respective Subsidiaries.
Section 3.6 Absence of Certain Changes or Events. Except as disclosed in
the Company Group SEC Reports filed and delivered to Parent prior to the date of
this Agreement or in Section 3.6 of the Company Disclosure Schedule, since
December 31, 1997, the Company and the Company Subsidiaries have operated their
respective businesses in the ordinary course of business consistent with past
practice and there has not been (i) any transaction, commitment, dispute or
other event or condition (financial or otherwise) of any character (whether or
not in the ordinary course of business) which, alone or in the aggregate, has
had, or would reasonably be expected to have, a Company Material Adverse Effect;
(ii) any damage, destruction or loss, whether or not covered by insurance, which
has had, or would reasonably be expected to have, a Company Material Adverse
Effect; (iii) any declaration, setting aside or payment of any dividend or
distribution (whether in cash, stock or property) with respect to the capital
stock of the Company or any of the Company Subsidiaries (other than (x)
dividends or distributions between the Company and wholly owned Company
Subsidiaries, (y) regular quarterly cash dividends by Leviathan, Leviathan Gas
Pipeline Company ("LGPC") and Leviathan Holdings Company ("Holdings") declared
and paid in amounts (including any increases thereof) and at times consistent
with past practice and (z) the distribution of Offshore capital stock to the
Company and the holders of Company Common Stock in accordance with the terms of
the Contribution and Distribution Agreement and the Tax Sharing Agreement (each
as defined in Section 5.11(a)); (iv) any material change in the Company's
accounting principles, practices or methods;
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(v) any repurchase or redemption with respect to its capital stock; (vi) any
stock split, combination or reclassification of any of the Company's capital
stock or the issuance or authorization of any issuance of any other securities
in respect of, in lieu of or in substitution for, shares of the Company's stock;
(vii) any grant of or any amendment (other than (A) to accelerate vesting or (B)
to waive an anti-dilution adjustment in connection with the Contribution and the
Rights Offering (as defined in Section 5.11(a)) in exchange for a proportionate
number of shares of Offshore capital stock) of the terms of any warrant or
option to purchase shares of capital stock of the Company other than pursuant to
the Company Option Plans; (viii) any granting by the Company or any of the
Company Subsidiaries to any director, officer or employee of the Company or any
of the Company Subsidiaries of (A) any increase in compensation (other than in
the case of employees in the ordinary course of business consistent with past
practice), (B) any increase in severance or termination pay, or (C) acceleration
of compensation or benefits; (ix) any entry by the Company or any of the Company
Subsidiaries into any employment, severance, bonus or termination agreement with
any director, officer or employee of the Company or any of the Company
Subsidiaries; or (x) any agreement (whether or not in writing), arrangement or
understanding to do any of the foregoing. The Company has exercised the option
under the Restructuring Option Agreement dated September 22, 1997, between the
Company and Offshore (the "Restructuring Agreement"), to exchange the
$60,000,000 Subordinated Convertible Promissory Note of Offshore held by the
Company for 26,666,667 shares of common stock of Offshore (the "Exchange").
Section 3.7 Litigation. Except as disclosed in the Company Group SEC
Reports filed and delivered to Parent prior to the date of this Agreement, there
is no suit, action or proceeding to which the Company or any Company Subsidiary
is a party pending or, to the actual knowledge of Xxxxxx X. Xxxxxx, Xxxxxxx X.
Xxxxxxx XX, Xxxxxx X. Xxxx, Xxxxx X. Xxxx, Xxxx X. Xxxx or Xxxxxxx X. Xxxxxxxx
("Company Knowledge"), threatened against the Company or any of its Subsidiaries
which, alone or in the aggregate, has had or would reasonably be expected to
have, a Company Material Adverse Effect, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator outstanding
against the Company or any of the Company Subsidiaries which, alone or in the
aggregate, has had, or would reasonably be expected to have, any such Company
Material Adverse Effect.
Section 3.8 Compliance with Applicable Laws. The Company and each of the
Company Subsidiaries holds all permits, licenses, variances, exemptions, orders
and approvals of all Governmental Entities necessary or appropriate for the
operation of its respective business, except for such permits, licenses,
variances, exemptions, orders and approvals the failure to hold which, alone or
in the aggregate, has not had, and would not reasonably be expected to have a
Company Material Adverse Effect (the "Company Permits"). The Company and each of
the Company Subsidiaries is in compliance in all material respects with the
terms of the Company Permits. Except as disclosed in the Company Group SEC
Reports filed and delivered to Parent prior to the date of this Agreement, the
businesses of the Company and the Company Subsidiaries are not being conducted
in violation of any law, ordinance or regulation of any Governmental Entity,
except for possible violations which alone or in the aggregate have not had, and
would not reasonably be expected to have, a Company Material Adverse Effect. To
the Company Knowledge, during the past five years, none of the Company's or any
of the Company Subsidiaries' officers, employees or agents, nor any other person
acting on behalf of any of them or the Company or any of the Company
Subsidiaries, has, directly or indirectly, given or agreed to give any gift or
similar benefit to any customer, supplier, governmental employee or other person
in violation of any law, ordinance or regulation of any Governmental Entity,
including, without limitation, the Foreign Corrupt Practices Act, except for
violations or penalties which could not reasonably be expected to cost the
Company more than $500,000 individually or in the aggregate.
Section 3.9 Tax Matters. To the Company Knowledge, the Company has not
taken any action which would prevent the Merger from constituting a
reorganization within the meaning of Section 368(a) of the Code.
Section 3.10 Employee Benefit Plans. (a) Section 3.10(a) of the Company
Disclosure Schedule hereto sets forth a list of all "employee benefit plans," as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and all other material employee benefit or compensation
arrangements, including, without limitation, any such arrangements providing
severance pay, sick leave, vacation pay, salary continuation for disability,
retirement benefits, deferred compensation, bonus
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pay, incentive pay, stock options (including those held by directors, employees,
and consultants), hospitalization insurance, medical insurance, life insurance,
scholarships or tuition reimbursements, that are maintained by the Company, any
Company Subsidiary or any Company ERISA Affiliate (as defined in Section
3.10(g)) or to which the Company, any Company Subsidiary or any Company ERISA
Affiliate is obligated to contribute thereunder for current or former directors,
employees, independent contractors, consultants and leased employees of the
Company, any Company Subsidiary or any Company ERISA Affiliate (the "Company
Employee Benefit Plans").
(b) None of the Company Employee Benefit Plans is a "multiemployer plan,"
as defined in Section 4001(a)(3) of ERISA (a "Multiemployer Plan"), and neither
the Company nor any Company ERISA Affiliate presently maintains or has
maintained such a plan.
(c) Except as provided in Part 6 of Title I of ERISA, the Company does not
maintain or contribute to any plan or arrangement which provides or has any
liability to provide life insurance or medical or other employee welfare
benefits to any employee or former employee upon his retirement or termination
of employment, and the Company has never represented, promised or contracted
(whether in oral or written form) to any employee or former employee that such
benefits would be provided.
(d) Except as provided in the Options and Warrants, the execution of, and
performance of the transactions contemplated in, this Agreement will not, either
alone or upon the occurrence of subsequent events, result in any payment
(whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any employee. The only severance agreements or
severance policies applicable to the Company or the Company Subsidiaries in the
event of a change of control of the Company are the agreements and policies
specifically referred to in Section 3.10(d) of the Company Disclosure Schedule.
Except as disclosed in Section 3.10(d) of the Company Disclosure Schedule, no
payment or benefit which will or may be made by the Company, Parent or any of
their Subsidiaries or affiliates with respect to any employee of the Company or
any Company Subsidiary will be characterized as an "excess parachute payment"
within the meaning of Section 280G(b)(1) of the Code.
(e) Each Company Employee Benefit Plan that is intended to qualify under
Section 401 of the Code, and each trust maintained pursuant thereto, has been
determined to be exempt from federal income taxation under Section 501 of the
Code by the IRS, and, to the Company's knowledge, nothing has occurred with
respect to the operation or organization of any such Company Employee Benefit
Plan that would cause the loss of such qualification or exemption or the
imposition of any material liability, penalty or tax under ERISA or the Code.
With respect to any Company Employee Benefit Plan or other employee benefit plan
which is a "defined benefit plan" within the meaning of Section 3(35) of ERISA,
(i) the Company has not incurred and is not reasonably likely to incur any
liability under Title IV of ERISA (other than for the payment of premiums, all
of which have been paid when due), (ii) the Company has not incurred any
accumulated funding deficiency within the meaning of Section 412 of the Code and
has not applied for or obtained a waiver of any minimum funding standard or an
extension of any amortization period under Section 412 of the Code, (iii) no
"reportable event" (as such term is defined in Section 4043 of ERISA but
excluding any event for which the provision for 30-day notice to the Pension
Benefit Guaranty Corporation has been waived by regulation) has occurred or is
expected to occur and (iv) since December 31, 1996, no material adverse change
in the financial condition of any such plan has occurred.
(f) (i) All contributions (including all employer contributions and
employee salary reduction contributions) required to have been made under any of
the Company Employee Benefit Plans to any funds or trusts established thereunder
or in connection therewith have been made by the due date thereof, (ii) the
Company has complied in all material respects with any notice, reporting and
documentation requirements of ERISA and the Code, (iii) there are no pending
actions, claims or lawsuits which have been asserted, instituted or, to the
Company's knowledge, threatened, in connection with the Company Employee Benefit
Plans, and (iv) the Company Employee Benefit Plans have been maintained, in all
material respects, in accordance with their terms and with all provisions of
ERISA and the Code (including rules and regulations thereunder) and other
applicable federal and state laws and regulations.
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(g) Section 3.10(g) of the Company Disclosure Schedule sets forth a
complete list of all amounts outstanding relating to bonuses payable to
employees and any obligation to pay bonuses to employees relating to the
Company's performance, the employee's performance or the transactions
contemplated hereby.
For purposes of this Agreement, "Company ERISA Affiliate" means any
business or entity which is a member of the same "controlled group of
corporations," under "common control" or an "affiliated service group" with the
Company within the meanings of Sections 414(b), (c) or (m) of the Code, or
required to be aggregated with the Company under Section 414(o) of the Code, or
is under "common control" with the Company, within the meaning of Section
4001(a)(14) of ERISA, or any regulations promulgated or proposed under any of
the foregoing Sections.
Section 3.11 Company Action. The Board of Directors of the Company (at a
meeting duly called and held) has by the requisite vote of all directors present
(a) determined that the Merger is advisable and fair to and in the best
interests of the Company and its stockholders, (b) approved the Merger and the
transactions contemplated by this Agreement and the Stockholder Agreements dated
the date hereof between Parent and each of Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxx,
Xxxxxxx X. Xxxxxxx XX, Xxxxx X. Xxxx, Xxxxxx Brothers Holdings, Inc., Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation, as custodian, and DLJ Capital Corp.
(collectively, the "Stockholder Agreements") and the transactions contemplated
thereby in accordance with the DGCL and the Company's Certificate of
Incorporation, and (c) approved the Consent for the purposes of Article VIII of
the Company's Certificate of Incorporation. The Company is not subject to
Section 203 of the DGCL.
Section 3.12 Taxes. (a) The term "Tax" as used herein means any federal,
state, local, or foreign income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Code sec. 59A), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not. The term "Tax Return" as used herein means any return,
declaration, report, claim for refund, or information return or statement
relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof. All citations to the Code, or the Treasury Regulations
promulgated thereunder, shall include any amendments or any substitute or
successor provisions thereto. Leviathan has been validly characterized as a
partnership for Tax purposes at all times throughout its existence.
(b) Each of the Company and the Company Subsidiaries has filed all material
Tax Returns required to be filed by any of them and has paid (or the Company has
paid on its behalf), or has set up an adequate reserve for the payment of, all
Taxes required to be paid in respect of the periods covered by such Tax Returns.
The information contained in such Tax returns is true, complete and accurate in
all material respects. Neither the Company nor any Company Subsidiary is
delinquent in the payment of any material Tax, assessment or governmental
charge. No material deficiencies for any Taxes have been proposed, asserted or
assessed against the Company or any of the Company Subsidiaries that have not
been finally settled or paid in full, and no requests for waivers of the time to
assess any such Tax are pending. None of the Company and the Company
Subsidiaries is obligated, or is reasonably expected to be obligated, to make
any payments, or is a party to any agreement that on account of the transactions
contemplated by this Agreement would obligate it, or reasonably be expected to
obligate it, to make any payments that will not be deductible under Section 280G
of the Code. Each of the Company and the Company Subsidiaries has withheld and
paid all material Taxes required to be withheld and paid and has complied with
all information and backup withholding requirements, including maintaining all
necessary records in connection with amounts paid or owing to any employee,
creditor, independent contractor or other third party.
(c) Except as set forth in Section 3.12(c) of the Company Disclosure
Schedule, none of Company or the Company Subsidiaries has, since December 31,
1994, been a member of an affiliated group, within the meaning of Code sec.
1504, filing a consolidated income Tax Return other than a group the common
parent of which is the Company. None of the Company and its Subsidiaries has any
material liability for the Taxes of any Person other than the Company and its
Subsidiaries (A) under Reg. sec.1.1502-6 (or any similar provision
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xx xxxxx, xxxxx, xx xxxxxxx xxx), (X) as a transferee or successor, (C) by
contract, or (D) otherwise. For this purpose, "Person" shall mean an individual,
a partnership, a corporation, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental entity.
(d) Section 3.12(d) of the Company Disclosure Schedule sets forth the
following information as of December 31, 1997 (as well as on an estimated pro
forma basis as of the Effective Time giving effect to the consummation of the
transactions contemplated hereby): (A) the Tax basis of the Company and each
Company Subsidiary in its assets; (B) the Tax basis of the stockholder(s) of the
MSG Entities in the stock of each such entity (or the amount of any excess loss
account, as that term is defined in Reg. sec. 1.1502-19); (C) the amount of any
net operating loss, net capital loss, unused investment or other credit, unused
foreign tax, or excess charitable contribution allocable to the Company or any
Company Subsidiary; and (D) the amount of any deferred gain or loss allocable to
the Company or any Company Subsidiary arising out of any deferred intercompany
transaction, as that term is defined in Reg. sec. 1.1502-13.
Section 3.13 Certain Agreements. (a) Neither the Company nor any of the
Company Subsidiaries is in default (or would be in default with notice or lapse
of time, or both) under any indenture, note, credit agreement, loan document,
lease, license, concession or other agreement including, but not limited to, any
Company Employee Benefit Plan, whether or not such default has been waived,
which default, alone or in the aggregate with other such defaults, has had, or
would reasonably be expected to have, a Company Material Adverse Effect.
(b) Section 3.13(b) of the Company Disclosure Schedule describes all
contracts, agreements and transactions, involving consideration of more than
$100,000 for any individual contract, agreement or transaction or series of
related contracts, agreements or transactions, between the Company or any of the
Company Subsidiaries, on the one hand, and any Related Party (as defined below),
on the other hand, which are currently in effect or which were in effect or were
consummated at any time on or after January 1, 1995 and sets forth all current
balances payable to or receivable from such Related Party related thereto as of
the date of this Agreement. For the purpose of this Agreement, "Related Party"
means (i) any officer or director of the Company, Offshore or Leviathan or any
of their respective Subsidiaries, (ii) any spouse, former spouse, child, parent,
parent of a spouse, sibling or grandchild of any of the persons listed in clause
(i), (iii) any Affiliate (as defined in Section 5.3) of any of the persons
listed in clauses (i) and (ii) (other than the Company or any Company
Subsidiary), and (iv) any member of the Offshore Group.
Section 3.14 Compliance with Worker Safety and Environmental Laws. (a)
The properties, assets and operations of the Company and the Company
Subsidiaries and their predecessors are and have been in compliance with all
applicable federal, state, local, and foreign laws, rules and regulations,
orders, decrees, common law, judgments, permits and licenses relating to public
and worker health and safety (collectively, "Worker Safety Laws") and the
protection, regulation and clean-up of the indoor and outdoor environment and
activities or conditions related thereto, including, without limitation, those
relating to the generation, handling, disposal, transportation or release of
hazardous or toxic materials, substances, wastes, pollutants and contaminants
including, without limitation, asbestos, petroleum, radon and polychlorinated
biphenyls (collectively, "Environmental Laws"), except for any violations that,
individually or in the aggregate, have not had, and would not reasonably be
expected to have, a Company Material Adverse Effect. With respect to such
properties, assets and operations, including any previously owned, leased or
operated properties, assets or operations, there are no past, present or
reasonably anticipated future events, conditions, circumstances, activities,
practices, incidents, actions or plans of the Company or any of the Company
Subsidiaries and their predecessors that may interfere with or prevent
compliance or continued compliance with applicable Worker Safety Laws and
Environmental Laws, other than any such interference or prevention that,
individually or in the aggregate, has not had, and would not reasonably be
expected to have, a Company Material Adverse Effect.
(b) The Company and the Company Subsidiaries and their predecessors have
not caused or permitted any property, asset, operation, including any previously
owned property, asset or operation, to use, generate, manufacture, refine,
transport, treat, store, handle, dispose, transfer or process hazardous or toxic
materials, substances, wastes, pollutants or contaminants, except in material
compliance with all Environmental Laws
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and Worker Safety Laws, other than any such activity that, individually or in
the aggregate, has not had, and would not reasonably be expected to have, a
Company Material Adverse Effect. The Company and the Company Subsidiaries have
not reported to any Governmental Entity any material violation of an
Environmental Law or any release, discharge or emission of any hazardous or
toxic materials, substances, wastes, pollutants or contaminants, other than any
such violation, release, discharge or emission that, individually or in the
aggregate, has not had, and would not reasonably be expected to have, a Company
Material Adverse Effect. To the Company Knowledge, there are no pending,
threatened or asserted claims or liabilities under CERCLA, 42 U.S.C. sec.9601 et
seq., RCRA, 42 U.S.C. sec.6901 et seq., or equivalent state law provisions and
no current or former property, asset or operation of the Company or any Company
Subsidiary is identified or currently proposed for the National Priorities List
at 40 CFR sec.300, Appendix B, or the CERCLIS or equivalent state lists or
hazardous substances release sites.
Section 3.15 Financial Advisor. The Company's Board of Directors has
received the opinion of Chase Securities Inc. to the effect that, as of the date
hereof, the Merger Consideration, together with the Rights to be distributed to
the holders of Company Common Stock in the Rights Offering, is fair from a
financial point of view to the holders of Company Common Stock. Except for Chase
Securities, Inc., no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the Merger or
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of the Company. The Company has previously delivered to Parent
copies of the engagement letter, dated February 4, 1998, from Chase Securities
Inc. to the Company.
Section 3.16 Public Utility. The Company is not a "holding company," a
"subsidiary company" of a "holding company," an affiliate of a "holding
company," or a "public utility company," as such terms are defined in the
Holding Company Act.
Section 3.17 Offshore Group. (a) Except as disclosed in the Company Group
SEC Reports filed and delivered to Parent prior to the date of this Agreement or
in Section 3.17(a) of the Company Disclosure Schedule or as does not otherwise
have, and would not reasonably be expected to have, a Company Material Adverse
Effect, neither the Company nor any Company Subsidiary has any joint and several
liabilities or obligations arising out of the assets, business, operations,
debts or liabilities of the Offshore Group.
(b) Neither the Company nor any Company Subsidiary is contractually liable,
either primarily or contingently, for any liability or obligation of any member
of the Offshore Group under any indenture or other loan or credit document or
any other contract, license, lease or instrument to which any member of the
Offshore Group is a party, except for liabilities or obligations set forth in
Section 3.17(b) of the Company Disclosure Schedule which will be released prior
to the Effective Time.
(c) Since December 31, 1997, except as permitted by this Agreement or any
Related Agreement or as otherwise set forth in Section 3.17(c) of the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary has made any
investment, loan, payment, advance or contribution of funds or property to any
member of the Offshore Group or forgiven or capitalized any amounts owed by any
member of the Offshore Group to the Company or any Company Subsidiary (other
than the Exchange).
(d) The assets owned or leased by the MSG Entities are used in connection
with the ownership or operation of such entities' semi-submersible drilling rigs
and are not used in connection with the business of the Company and the Company
Subsidiaries.
Section 3.18 Limitation on Company Representations and Warranties. Except
as set forth in Section 3.4, 3.5, 3.13(b) or 3.17, no representations or
warranties delivered by the Company in this Agreement shall cover, apply to, or
otherwise pertain to any member of the Offshore Group or any assets, business,
operations or information related thereto.
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ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1 Conduct of Business by the Company Pending the Merger. Except
as contemplated by the Company Disclosure Schedule, this Agreement and the
Related Agreements during the period from the date of this Agreement to the
Effective Time, the Company shall, and shall cause each of the Company
Subsidiaries to, (i) carry on its business in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted and, to the
extent consistent therewith, use all reasonable efforts to keep available the
services of its current officers and employees and preserve its relationships
with customers, suppliers, licensors, lessors and others having business
dealings with it to the end that its goodwill and ongoing business shall be
unimpaired at the Effective Time and (ii) prepare and timely file all Tax
Returns and amendments required to be filed by any of the Company and the
Company Subsidiaries prior to the Effective Time and pay all Taxes relating to
such Tax Returns before they shall become delinquent. Except as otherwise
expressly permitted or contemplated by this Agreement, the Related Agreements or
the Company Disclosure Schedule, the Company shall not, and shall not permit any
of the Company Subsidiaries to, without the prior written consent of Parent:
(a) (i) declare, set aside or pay any dividends on, or make any other
actual, constructive or deemed distributions in respect of, any of its
capital stock, or otherwise make any payments to its stockholders in their
capacity as such (other than (x) dividends and other distributions by
direct or indirect wholly owned Subsidiaries, (y) regular quarterly cash
dividends by Leviathan, LGPC and Holdings declared and paid in amounts
(including any increases thereof) and at times consistent with past
practice and (z) the distribution of Offshore capital stock to the holders
of Company Common Stock in accordance with the terms of the Contribution
and Distribution Agreement and the Tax Sharing Agreement), (ii) other than
in the case of any direct or indirect wholly owned Company Subsidiary,
split, combine or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, or (iii) purchase, redeem or
otherwise acquire any shares of capital stock of the Company or any of its
Subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities (other than a
purchase or an acquisition resulting from a required repurchase offer by
the Company pursuant to the Indenture dated as of March 21, 1994 between
the Company and the Bank of New York, successor in interest to the First
Interstate Bank of Texas, N.A. and the related loan and security documents
(collectively, as amended, the "Company Indenture") and the Company's
Senior Subordinated Promissory Note dated January 23, 1997 payable to Hare
& Co. (the "Subordinated Note") as a consequence of any of the Company's
election under the Restructuring Agreement, the Contribution and the Rights
Offering (as defined in Section 5.11(a)) or the transactions contemplated
by the Contribution and Distribution Agreement);
(b) issue, deliver, sell, pledge, dispose of or otherwise encumber
(other than the pledges or other encumbrances described in Section 4.1(e))
any shares of its capital stock, any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options to acquire any such shares, voting securities, equity equivalent or
convertible securities, other than the issuance of shares of Company Common
Stock upon the exercise of Options (whether or not presently exercisable)
outstanding on the date of this Agreement or upon the exercise of Warrants
outstanding on the date of this Agreement, in each case in accordance with
their current terms;
(c) amend its articles or certificate of incorporation or by-laws or
other comparable organizational documents;
(d) acquire or agree to acquire (i) by merging or consolidating with,
or by purchasing a substantial portion of the assets of or equity in, or by
any other manner, any business or any corporation, partnership, association
or other business organization or division thereof or (ii) any assets
except, in the case of clauses (i) and (ii), for transactions not exceeding
$100,000 individually or $1,000,000 for all transactions pursuant to
clauses (i) and (ii) in the aggregate;
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(e) except for Permitted Encumbrances or as required by contracts and
agreements set forth in the Company Disclosure Schedule, sell, lease,
license, mortgage or otherwise encumber or subject to any lien, charge or
encumbrance or otherwise dispose of, or agree to sell, lease, license,
mortgage or otherwise encumber or subject to any lien, charge or
encumbrance or otherwise dispose of, any of its assets, other than
transactions that are in the ordinary course of business consistent with
past practice and not material to the Company and the Company Subsidiaries
taken as a whole; when used in this Agreement, the term "Permitted
Encumbrances" shall include any liens, title defects, preferential rights
or other encumbrances upon any of the relevant individual's or entities'
property, assets or revenues, whether now owned or hereafter acquired, that
are (i) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like liens arising in the ordinary course of business which are
not overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceeding, (ii) pledges or deposits in
connection with workers' compensation, unemployment insurance and other
social security legislation and deposits securing liability to insurance
carriers under insurance or self-insurance arrangements, (iii) for taxes
not yet due or which are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto are
maintained on the books of the Company or the Company Subsidiaries, as the
case may be, in conformity with GAAP, (iv) deposits to secure the
performance of bids, trade contracts (other than for borrowed money),
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of
business, (v) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Company or such Company Subsidiary, (vi) created pursuant to construction,
operating and maintenance agreements, space lease agreements and other
similar agreements, in each case having ordinary and customary terms and
entered into in the ordinary course of business by the Company and the
Company Subsidiaries and (vii) created pursuant to or arising under the
Company Indenture, the Subordinated Note or the Second Amended and Restated
Credit Agreement dated as of March 23, 1995 between Leviathan, Chase
Manhattan Bank, as administrative agent, and the lenders thereto and the
related loan and security documents (collectively, as amended, the
"Leviathan Credit Agreement");
(f) incur any indebtedness for borrowed money, guarantee any such
indebtedness, issue or sell any debt securities or warrants or other rights
to acquire any debt securities, guarantee any debt securities or make any
loans, advances or capital contributions to, or other investments in, any
other person, or enter into any arrangement having the economic effect of
any of the foregoing, other than indebtedness incurred in the ordinary
course of business consistent with past practice which is prepayable at any
time without premium or penalty;
(g) alter (through merger, liquidation, reorganization, restructuring
or in any other fashion) the corporate structure or ownership of the
Company or any Company Subsidiary other than as contemplated by this
Agreement and the Related Agreements;
(h) except as required under any collective bargaining agreement,
enter into or adopt any new, or amend any existing, severance plan,
agreement or arrangement or enter into any new or amend any existing
Company Employee Benefit Plan or employment or consulting agreement, other
than as required by law;
(i) increase the compensation payable or to become payable to its
officers or employees, except for (i) increases in the ordinary course of
business consistent with past practice in salaries or wages of employees of
the Company or any of its Subsidiaries and (ii) to the extent required
under the terms of any applicable incentive plan or arrangement set forth
in the Company Disclosure Schedule, the payment of annual incentive bonuses
relating to the fiscal year ending June 30, 1998;
(j) grant or award any stock options, restricted stock, performance
shares, stock appreciation rights or other equity-based incentive awards;
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(k) take any action with respect to accounting policies or procedures
for Tax or accounting purposes (other than actions required to be taken by
Tax laws or generally accepted accounting principles) or make or change any
election with respect to Taxes (except that the Company can elect to forgo
the carryback of net operating losses existing as of June 30, 1997);
(l) except as disclosed in the Company's or Leviathan's capital
expenditure plan which has been disclosed to Parent prior to the date of
this Agreement or in the Company Disclosure Schedule or for maintenance
capital expenditures in the ordinary course of business consistent with
past practice or capital expenditures to repair or replace casualty losses,
make or agree to make any new capital expenditure or expenditures in excess
of $100,000 individually or $1,000,000 in the aggregate;
(m) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction, in the ordinary course of
business consistent with past practice or in accordance with their terms,
of liabilities reflected or reserved against in, or contemplated by, the
most recent consolidated financial statements (or the notes thereto) of the
Company included in the Company Group SEC Reports or incurred in the
ordinary course of business consistent with past practice or as required by
law;
(n) settle or compromise any material federal, state, local or foreign
Tax liability;
(o) except as expressly provided in this Agreement, enter into, amend,
terminate or waive any provision of, any agreement or arrangement with any
Related Party or enter into any transaction with any Related Party;
(p) take any action which would prevent the Merger from constituting a
reorganization within the meaning of Section 368(a) of the Code; or
(q) enter into any contract, agreement, commitment or arrangement to
do any of the foregoing.
Section 4.2 Partnerships and Joint Ventures. Notwithstanding anything in
this Agreement to the contrary, (i) the Company shall have the right to take all
such actions it reasonably deems necessary or appropriate to cause LGPC,
Leviathan and applicable Subsidiaries of Leviathan to perform their obligations
under contracts to which they are parties, (ii) nothing in this Agreement shall
restrict LGPC and its Subsidiaries from taking such actions as they reasonably
deem necessary or appropriate by reason of any capital calls or equity issuances
by any entities (partnerships, limited liability companies or other joint
ventures) in which Leviathan or Subsidiaries of Leviathan own an interest as of
the date of this Agreement in order to maintain their proportionate equity
interest in such entities and (iii) to the extent that the Company and the
Company Subsidiaries are required to take any action or are precluded from
taking any action with respect to Viosca Xxxxx Gathering Company pursuant to any
provision of this Agreement and Parent declines a request by the Company to
waive the restrictions in this Agreement with respect to any such action, Parent
shall be deemed to have waived any and all fiduciary duties and obligations owed
to Parent or any Subsidiary thereof, in its capacity as a partner in Viosca
Xxxxx Gathering Company, in connection with any such action by the Company, VK
Deepwater Gathering Company, L.L.C., or any other Company Subsidiaries.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Access and Information. The Company and the Company
Subsidiaries shall afford to Parent and to Parent's accountants, counsel and
other representatives reasonable access during normal business hours (and at
such other times as the parties may mutually agree) throughout the period prior
to the Effective Time to all of its properties, books, contracts, commitments,
records and personnel, and, during such period, shall furnish promptly to Parent
(i) a copy of each report, schedule and other document filed or received by it
pursuant to the requirements of federal or state securities laws, and (ii) all
other information concerning its business, properties and personnel as Parent
may reasonably request.
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Section 5.2 Registration Statement/Information Statement. Parent and the
Company shall cooperate and promptly prepare, and Parent shall file with the
Commission as soon as practicable, a Registration Statement on Form S-4 (the
"Form S-4") under the Securities Act, with respect to the Parent Common Stock
issuable in the Merger, a portion of which Registration Statement shall also
serve as the information statement of the Company with respect to the Merger
(the "Information Statement/Prospectus"). Notwithstanding the foregoing, Parent
may elect to cause the Company to file the Information Statement/Prospectus as
confidential proxy material and to defer the filing of the Form S-4 until the
Commission has provided written comments with respect thereto or has indicated
that the Information Statement/Prospectus will not be reviewed, and shall
thereafter file the Form S-4 as promptly as reasonably practicable. The
respective parties will cause the Information Statement/Prospectus and the Form
S-4 to comply as to form in all material respects with the applicable provisions
of the Securities Act, the Exchange Act and the rules and regulations
thereunder. Parent shall use all reasonable efforts, and the Company will
cooperate with Parent, to have the Form S-4 declared effective by the Commission
as promptly as practicable after the filing thereof (including without
limitation, responding to any comments received from the Commission with respect
thereto) and to keep the Form S-4 effective as long as is necessary to
consummate the Merger. Each of Parent and the Company shall, as promptly as
practicable, provide to the other copies of any written comments received from
the Commission with respect to the Information Statement/Prospectus or the Form
S-4 and advise the other of any oral comments with respect to the Information
Statement/Prospectus or the Form S-4 received from the Commission. Parent shall
use its best efforts to obtain, prior to the effective date of the Form S-4, all
necessary state securities law or "Blue Sky" permits or approvals required to
carry out the transactions contemplated by this Agreement and will pay all
expenses incident thereto. Parent agrees that none of the information supplied
or to be supplied by Parent for inclusion or incorporation by reference in the
Form S-4 or the Information Statement/Prospectus (i) in the case of the
Information Statement/Prospectus and each amendment or supplement thereto, at
the time of mailing thereof, or (ii) in the case of the Form S-4 and each
amendment or supplement thereto, at the time it is filed or becomes effective,
will contain an untrue statement of a material fact or omit 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. The
Company agrees that none of the information supplied or to be supplied by the
Company for inclusion or incorporation by reference in the Form S-4 or the
Information Statement/Prospectus (i) in the case of the Information
Statement/Prospectus and each amendment or supplement thereto, at the time of
mailing thereof, or, (ii) in the case of the Form S-4 or any amendment or
supplement thereto, at the time it is filed or becomes effective, will contain
an untrue statement of a material fact or omit 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. For purposes of
the foregoing, it is understood and agreed that information concerning or
related to Parent will be deemed to have been supplied by Parent and information
concerning or related to the Company shall be deemed to have been supplied by
the Company. No amendment or supplement to the Information Statement/Prospectus
will be made by Parent or the Company without the approval (not to be
unreasonably delayed or withheld) of the other party. Parent will advise the
Company, promptly after it receives notice thereof, of the time when the Form S4
has become effective or any supplement or amendment has been filed, the issuance
of any stop order, or the suspension of the qualification of Parent Common Stock
issuable in connection with the Merger for offering or sale in any jurisdiction.
Section 5.3 Compliance with the Securities Act. At least 30 days prior to
the Effective Time, the Company shall deliver to Parent a list of names and
addresses of those persons who were, in the Company's reasonable judgment, at
the date of this Agreement, "affiliates" (each such person, an "Affiliate") of
the Company within the meaning of Rule 145 of the rules and regulations
promulgated under the Securities Act. The Company shall deliver or cause to be
delivered to Parent, prior to the Effective Time, from each of the Affiliates of
the Company identified in the foregoing list, an Affiliate Letter in the form
attached hereto as Exhibit B (an "Affiliate Letter"). Parent shall be entitled
to place legends as specified in such Affiliate Letters on the certificates
evidencing any Parent Common Stock to be received by such Affiliates pursuant to
the terms of the Agreement, and to issue appropriate stop transfer instructions
to the transfer agent for the Parent Common Stock, consistent with the terms of
such Affiliate Letters.
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Section 5.4 Stock Exchange Listing. Parent shall use its best efforts to
list on the NYSE, upon official notice of issuance, the Parent Common Stock to
be issued pursuant to the Merger.
Section 5.5 Employee Matters. As of the Effective Time, the employees of
the Company and each Company Subsidiary listed in Section 5.5(a) of the Company
Disclosure Schedule shall continue employment with the Surviving Corporation and
its Subsidiaries, respectively, in the same positions and at the same level of
wages and/or salary and without having incurred a termination of employment or
separation from service; provided, however, except as may be specifically
required by applicable law or any contract, neither the Surviving Corporation
and its Subsidiaries, on the one hand, nor any employee, on the other hand,
shall be obligated to continue any employment relationship or any specific terms
of employment for any specific period of time. The Company has agreed to make
certain severance payments to terminated employees as provided in the
Contribution and Distribution Agreement (as defined in Section 5.11(a)). At the
request of Parent, the Company shall terminate immediately prior to the
Effective Time any employee of the Company and the Company Subsidiaries listed
in Section 5.5(b) of the Company Disclosure Schedule. As of the Effective Time,
Parent shall be the sponsor of the Company Employee Benefit Plans sponsored by
the Company immediately prior to the Effective Time, and Parent shall and shall
cause its Subsidiaries to satisfy all obligations and liabilities under such
Company Employee Benefit Plans; provided, however, that, except as hereafter
provided in this Section 5.5 or in the Company Disclosure Schedule, nothing
contained in this Agreement shall limit or restrict Parent's or its
Subsidiaries' right on or after the Effective Time to amend, modify or terminate
any of the Company Employee Benefit Plans. To the extent any employee benefit
plan, program or policy of Parent or their affiliates is made available to any
person who is an employee of the Company or any of the Company Subsidiaries
immediately prior to the Effective Time: (i) service with the Company and the
Company Subsidiaries by any employee prior to the Effective Time shall be
credited for eligibility and vesting purposes and for purposes of qualifying for
any additional benefits tied to periods of service (such as higher rates of
matching contributions and eligibility for early retirement) under such plan,
program or policy, but not for benefit accrual purposes; and (ii) with respect
to any welfare benefit plans to which such employees may become eligible, Parent
shall cause such plans to provide credit for any co-payments or deductibles by
such employees and waive all pre-existing condition exclusions and waiting
periods, other than limitations or waiting periods that have not been satisfied
under any welfare plans maintained by the Company and the Company Subsidiaries
for their employees prior to the Effective Time. At the reasonable request of
Parent, the Company shall amend, modify or terminate any of the Company Employee
Benefit Plans at or immediately prior to the Effective Time (whichever the
Parent may request) and shall take such other steps as Parent may reasonably
request to facilitate the administration after the Effective Time of the
compensation and benefit plans, programs and arrangements of the Surviving
Corporation.
Section 5.6 Indemnification. (a) From and after the Effective Date, the
Surviving Corporation shall indemnify, defend and hold harmless the officers,
directors and employees of the Company and the Company Subsidiaries (except to
the extent such persons are liable due to performance in the capacity as an
officer, director or employee of any Subsidiary of the Company other than a
Company Subsidiary) who were such at any time prior to the Effective Time (the
"Indemnified Parties") from and against all losses, expenses, claims, damages or
liabilities arising out of the transactions contemplated by this Agreement to
the fullest extent permitted or required under applicable law, and the
Indemnified Parties shall be advanced expenses subject to a customary
reimbursement agreement. All rights to indemnification existing in favor of the
directors, officers or employees of the Company and the Company Subsidiaries as
provided in the Company's certificate of incorporation or By-laws, as in effect
as of the date hereof, with respect to matters occurring through the Effective
Time, shall survive the Merger and shall continue in full force and effect
thereafter. Parent shall maintain in effect for not less than six years after
the Effective Time the current policies of directors' and officers' liability
insurance maintained by the Company with respect to matters occurring on or
prior to the Effective Time; provided, however, that Parent may substitute
therefor policies of at least the same coverage (with carriers comparable to the
Company's existing carriers) containing terms and conditions which are no less
advantageous to the Indemnified Parties; and provided, further, that Parent
shall not be required in order to maintain or procure such coverage to pay an
annual premium in excess of 150% of the current annual premium paid by the
Company for its existing coverage (the "Cap"); and provided, further, that if
equivalent
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coverage cannot be obtained, or can be obtained only by paying an annual premium
in excess of the Cap, Parent shall only be required to obtain as much coverage
as can be obtained by paying an annual premium equal to the Cap.
(b) In the event that any action, suit, proceeding or investigation
relating hereto or to the transactions contemplated by this Agreement is
commenced, whether before or after the Effective Time, the parties hereto agree
to cooperate and use their respective reasonable efforts to vigorously defend
against and respond thereto.
(c) Any Indemnified Party, upon learning of any claim, action, suit,
proceeding or investigation for which such party may seek indemnification under
this Section 5.6, shall promptly notify Parent.
Section 5.7 HSR Act. The Company and Parent shall file as soon as
practicable notifications under the HSR Act in connection with the Merger and
the transactions contemplated hereby, and shall respond as promptly as
practicable to any inquiries received from the Federal Trade Commission and the
Antitrust Division of the Department of Justice for additional information or
documentation.
Section 5.8 Additional Agreements. (a) Subject to the terms and
conditions herein provided, each of the parties hereto agrees diligently to use
all commercially reasonable efforts to take, or cause to be taken, all actions
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 contemplated by this Agreement as soon as reasonably practical,
including using all commercially reasonable efforts to (i) obtain all necessary
waivers, consents and approvals, (ii) effect all necessary registrations and
filings, (iii) lift any injunction to the Merger (and, in such case, to proceed
with the Merger as expeditiously as possible), (iv) work diligently in
cooperation with the other party in connection with the consummation of any
repurchase offer or consent solicitation required pursuant to the Company's
Indenture or the Subordinated Note as a consequence of the Contribution and the
Rights Offering, the Merger, the Company's disposition of Deepflex or the
Company's election made pursuant to the Restructuring Agreement and the
obtaining of the consent of the holders of the notes issued pursuant to the
Company Indenture and the Subordinated Note to the amendments described in
Appendix A, provided that Parent shall control any solicitation of consents
contemplated by this clause (iv) and shall be responsible for all costs and
expenses incurred by any party hereto in connection with such solicitation of
consents, (v) to the extent deemed desirable by the Company, obtain waivers from
holders of applicable Options and Warrants with respect to any antidilution
adjustment, if any, in connection with the Contribution and the Rights Offering
in exchange for a proportionate share of the Offshore stock, and (vi) otherwise
promptly satisfy the conditions set forth in Article VI.
(b) In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and/or directors of Parent and the Company shall take all such
necessary action.
(c) Following the Effective Time, Parent shall use all reasonable efforts
to conduct the business and otherwise act in a manner which would not jeopardize
the characterization of the Merger as a reorganization within the meaning of
Section 368(a) of the Code.
Section 5.9 No Shop. The Company agrees (a) that neither it nor any of
its Subsidiaries or affiliates shall, and it shall direct and use its best
efforts to cause its officers, directors, employees, agents and representatives
(including, without limitation, any investment banker, attorney or accountant
retained by it or any of its Subsidiaries or affiliates) not to, initiate,
solicit or encourage, directly or indirectly, any inquiries or the making or
implementation of any proposal or offer (including, without limitation, any
proposal or offer to its stockholders) with respect to a merger, acquisition,
consolidation or similar transaction involving, or any purchase of all or any
significant portion of the assets or any equity securities of, the Company and
the Company Subsidiaries, taken as a whole (any such proposal or offer being
hereinafter referred to as an "Alternative Proposal"), or engage in any
negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any person relating to an Alternative Proposal, or
release any third party from any obligations under any existing standstill
agreement or arrangement, or enter into any agreement with respect to an
Alternative Proposal, or otherwise facilitate any effort or attempt to make or
implement an Alternative Proposal; (b) that it will immediately cease and cause
to be terminated any existing activities,
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discussions or negotiations with any parties with respect to any of the
foregoing, and it will take the necessary steps to inform the individuals or
entities referred to above of the obligations undertaken in this Section 5.9;
and (c) that it will notify Parent immediately if any such inquiries or
proposals are received by, any such information is requested from, or any such
negotiations or discussions are sought to be initiated or continued with, it.
Notwithstanding the foregoing, prior to the Consent Date, the Company may,
directly or indirectly, furnish information and access to, and may participate
in discussions and negotiate with, any person, if (i) such person has submitted
an unsolicited written proposal to the Board of Directors of the Company
relating to an Alternative Proposal, (ii) the Board of Directors of the Company
believes, after consultation with its financial advisor, that such Alternative
Proposal is superior from a financial point of view to the transactions
contemplated by this Agreement and the Related Agreements and (iii) the Board of
Directors of the Company determines in its good faith judgment that it is
required to take such action to comply with the Board of Directors' fiduciary
duty imposed by law (a "Superior Proposal"). Such Board of Directors shall
provide a copy of any such written proposal to Parent immediately after receipt
thereof and thereafter keep Parent promptly advised of any development with
respect thereto and any revision of the terms of such Superior Proposal. Nothing
in this Section 5.9 shall (x) permit the Company to terminate this Agreement,
(y) permit the Company or any Company Subsidiary to enter into any agreement or
arrangement with respect to an Alternative Proposal during the term of this
Agreement (it being agreed that during the term of this Agreement, neither the
Company nor any Company Subsidiary shall enter into any agreement or arrangement
with any person that provides for, or in any way facilitates, an Alternative
Proposal (other than a confidentiality agreement in customary form)), or (z)
affect any other obligation of the Company under this Agreement.
Section 5.10 Advice of Changes; SEC Filings. The Company shall confer on
a regular basis with Parent on operational matters. Parent and the Company shall
promptly advise each other orally and in writing of any change or event that has
had, or could reasonably be expected to have, a Company Material Adverse Effect
or a Parent Material Adverse Effect, as the case may be. The Company and Parent
shall promptly provide each other (or their respective counsel) copies of all
filings made by such party with the SEC or any other Governmental Entity in
connection with this Agreement and the transactions contemplated hereby other
than any filing by the Company pursuant to the HSR Act.
Section 5.11 Certain Additional Matters. (a) Prior to the Closing, the
Company shall (i) contribute to Offshore all of the outstanding shares of
capital stock of Deepflex owned by the Company (the "Contribution") and (ii)
distribute pro rata to the holders of Company Common Stock rights (the "Rights")
to purchase all of the common and preferred stock and/or units representing the
same (the "Offshore Shares") owned or to be acquired by the Company in Offshore
(the "Rights Offering") as provided in the Contribution and Distribution
Agreement attached as Exhibit C (the "Contribution and Distribution Agreement").
The Company and Offshore will also execute and deliver a Tax Sharing Agreement
in the form attached as Exhibit D (the "Tax Sharing Agreement") immediately
prior to the Contribution and will execute and deliver such other definitive
documentation necessary to effectuate the Contribution and the Rights Offering
and document the contractual relationship between Offshore and the Company
(collectively, the "Offshore Documentation") as Parent, the Company and Offshore
shall in reasonable good faith mutually agree on. The Company shall cause
Offshore to execute and deliver the Offshore Documentation. The Company and
Offshore shall not amend, modify or waive any provisions of the Contribution and
Distribution Agreement or the Tax Sharing Agreement without the consent of
Parent. The Company shall, and shall cause Offshore, promptly to prepare and to
file with the Commission as soon as practical and in no event later than March
31, 1998, a Registration Statement under the Securities Act, with respect to the
Offshore Shares issuable or deliverable upon exercise of the Rights (the "Rights
Offering Registration Statements"), a portion of which shall also serve as the
prospectus of the Company and Offshore with respect to the offering and sale of
the Offshore Shares (the "Rights Offering Prospectuses"). The Company will, and
will cause Offshore to, use all reasonable efforts, and Parent and the Company
will cooperate with Offshore, to have the Rights Offering Registration
Statements declared effective by the Commission as promptly as practical after
the filing thereof, and to mail to stockholders of the Company in connection
with the Contribution and the Rights Offering the Rights Offering Prospectuses.
The Company shall, and shall cause Offshore to, perform its obligations required
to be performed prior to the Effective Time under the Contribution and
Distribution
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Agreement, the Offshore Documentation and any other agreements executed in
connection with this Agreement.
(b) Between the date hereof and the Closing, except as contemplated by
this Agreement and the Related Agreements (i) the Company and the Company
Subsidiaries shall not invest, loan, pay or otherwise advance or contribute any
funds or property to any member of the Offshore Group or pay any Taxes (as
defined in the Tax Sharing Agreement) relating to the assets, business or
operations of any member of the Offshore Group or forgive or capitalize any
amounts owed by any member of the Offshore Group to the Company or any of the
Company Subsidiaries, (ii) immediately prior to the Effective Time, the Company
shall cause the members of the Offshore Group to (and the members of the
Offshore Group shall) pay in cash all amounts owed by them to the Company or any
of the Company Subsidiaries (except (x) if the transactions contemplated by the
Redemption Agreement attached as Exhibit E (the "Redemption Agreement") are
consummated, the management fees under the First Amended and Restated Management
Agreement dated November 10, 1993 between Offshore and the Company will be
reduced by 50% effective retroactively to January 1, 1998, (y) management fees
under the Management Agreement dated November 10, 1993 between the Company and
Deepflex, as amended, dated January 19, 1995 that accrue from December 19, 1997
through the Closing, will be contributed or forgiven at or prior to the Closing,
and (z) as otherwise provided in the Contribution and Distribution Agreement))
and (iii) immediately prior to the Effective Time, the Company shall cause the
members of the Offshore Group to (and the members of the Offshore Group shall)
reimburse the Company for any payments of Taxes made by the Company or any
Company Subsidiaries after January 1, 1998 and prior to the Effective Time which
relate to the assets, business or operations of any member of the Offshore
Group.
(c) Contemporaneously with the execution and delivery of this Agreement,
each of Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxx, Xxxxxxx X. Xxxxxxx XX, Xxxx X. Xxxx,
Xxxxx X. Xxxx, Xxxxx X. Xxxxx, Xxxxxx X. Xxxxxxx, Xxx X. Xxxxxx and Xxxxxxx X.
Xxxxxx and Parent have entered into agreements (the "Subsidiaries Agreements")
pursuant to which Parent will acquire all outstanding interests in Holdings,
Offshore Gas Marketing, Inc. and Offshore Gas Processors, Inc. (the
"Subsidiaries Securities") not owned by the Company concurrently with the
Closing.
(d) Contemporaneously with the execution and delivery of this Agreement,
Leviathan and Offshore are entering into an agreement (the "Leviathan Purchase
Agreement") pursuant to which Offshore will purchase the shares of capital stock
of Offshore held by Leviathan in exchange for Offshore's interests in certain
oil and gas properties. The Company shall cause Offshore to perform its
obligations to be performed prior to the Effective Time under the Leviathan
Purchase Agreement.
Section 5.12 Confidentiality Agreement. Each party shall keep all
information received pursuant to this Agreement confidential in accordance with
the confidentiality provisions of the offer letter executed December 19, 1997
between Parent and the Company.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) The waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated.
(b) The Form S-4 shall have become effective in accordance with the
provisions of the Securities Act. No stop order suspending the
effectiveness of the Form S-4 shall have been issued by the Commission and
remain in effect and all necessary approvals under state securities laws
relating to the issuance or trading of the Parent Common Stock to be issued
to stockholders of the Company in connection with the Merger shall have
been obtained.
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(c) No preliminary or permanent injunction or other order by any
federal or state court in the United States of competent jurisdiction which
prevents the consummation of the Merger shall have been issued and remain
in effect (each party agreeing to use all commercially reasonable efforts
to have any such injunction lifted).
(d) The Parent Common Stock to be issued to Company stockholders in
connection with the Merger shall have been approved for listing on the
NYSE, subject only to official notice of issuance.
(e) On the Closing Date, the opinion of Fried, Frank, Harris, Xxxxxxx
& Xxxxxxxx, counsel to Parent, shall have been delivered to the Company and
Parent in form and substance reasonably satisfactory to the Company and
Parent to the effect that the Merger or, if applicable, the Alternative Tax
Free Merger, will qualify as a reorganization within the meaning of Section
368(a) of the Code, if applicable. In rendering such opinion, such counsel
shall be entitled to rely upon representations made by Parent and the
Company in certificates in the forms attached hereto as Exhibits F and G.
(f) The Contribution and the Rights Offering as provided in Section
5.11(a) hereof shall have occurred (including the effectiveness of the
Rights Offering Registration Statements and the consummation of the
transactions contemplated therein) and the Offshore Documentation shall
have been executed and delivered and be in full force and effect.
(g) The holders of notes issued pursuant to the Company Indenture and
the Subordinated Note shall have consented to the transactions related to
the Contribution and the Rights Offering and the holders of notes issued
pursuant to the Company Indenture and the Subordinated Note shall have
consented to the amendments described in Appendix A; provided that if such
note holders elect to exercise their rights under any repurchase offer
related to the transactions contemplated by the Merger Agreement and the
Related Agreements, Parent shall finance the Company's repurchase thereof
concurrently with the Closing or the consummation of such repurchase offer,
if later.
Section 6.2 Conditions to Obligation of the Company to Effect the
Merger. The obligation of the Company to effect the Merger shall be subject to
the fulfillment (or waiver by the Company) at or prior to the Effective Time of
the following additional conditions:
(a) Performance of Obligations; Representations and
Warranties. Parent and Merger Sub shall have performed in all material
respects each of its agreements contained in this Agreement required to be
performed at or prior to the Effective Time, each of the representations
and warranties of Parent and Merger Sub contained in this Agreement that is
qualified as to materiality shall be true and correct at and as of the
Effective Time as if made at and as of such time (other than
representations and warranties which address matters only as of a certain
date, which shall be true and correct as of such certain date) and each of
the representations and warranties that is not so qualified shall be true
and correct in all material respects at and as of the Effective Time as if
made on and as of such date (other than representations and warranties
which address matters only as of a certain date, which shall be true and
correct in all material respects as of such certain date), in each case
except as contemplated or permitted by this Agreement, and the Company
shall have received certificates signed on behalf of Parent by an executive
officer of Parent to such effect.
(b) Consents and Authorizations. All consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required
to be made, by Parent and Merger Sub for the consummation by it of the
transactions contemplated by this Agreement shall have been obtained and
made by Parent and Merger Sub, except for those consents, waivers,
approvals, authorizations, orders and filings the failure of which to
obtain would not and would not reasonably be expected to adversely affect
the Closing.
(c) Subsidiaries Agreements. Parent shall have complied in all
material respects with its obligations to be performed prior to the
Effective Time under the Subsidiaries Agreements.
Section 6.3 Conditions to Obligations of Parent to Effect the Merger. The
obligations of Parent to effect the Merger shall be subject to the fulfillment
(or waiver by Parent) at or prior to the Effective Time of the following
additional conditions:
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(a) Performance of Obligations; Representations and Warranties. The
Company shall have performed in all material respects each of its
agreements contained in this Agreement required to be performed at or prior
to the Effective Time, (i) each of the representations and warranties of
the Company contained in this Agreement that is qualified as to materiality
shall be true and correct at and as of the Effective Time as if made at and
as of such time (other than representations and warranties which address
matters only as of a certain date, which shall be true and correct as of
such certain date) and (ii) each of the representations and warranties that
is not so qualified shall be true and correct in all material respects at
and as of the Effective Time as if made on and as of such date (other than
representations and warranties which address matters only as of a certain
date, which shall be true and correct in all material respects as of such
certain date) except for such inaccuracies or breaches which either (a) do
not adversely affect the Company or any Company Subsidiary or the value of
the Merger to Parent or Parent's ability to operate the businesses of the
Company and the Company Subsidiaries after the Effective Time or (b) have
been cured by the Company within ten days after Parent's delivery to the
Company of written notice of each such inaccuracy or breach; in the case of
(i) and (ii), except as contemplated or permitted by this Agreement, and
Parent shall have received a certificate signed on behalf of the Company by
an executive officer of the Company to such effect.
(b) Consents Under Agreements. The Company shall have obtained the
consent or approval of each person that is not a Governmental Entity whose
consent or approval shall be required in connection with the transactions
contemplated hereby under any loan or credit agreement, note, mortgage,
indenture, lease, or other agreement or instrument of the Company and the
Company Subsidiaries, except as to which the failure to obtain such
consents and approvals, individually or in the aggregate, would not be
expected, in the reasonable opinion of Parent, to have a Company Material
Adverse Effect or to have a material adverse effect upon the consummation
of the transactions contemplated in this Agreement.
(c) No Litigation. There shall not be pending any suit, action or
proceeding by any domestic Governmental Entity (i) challenging the
acquisition by Parent of any shares of Company Common Stock, seeking to
restrain or prohibit the consummation of the Merger or seeking to obtain
from Parent or the Company any damages that are material in relation to the
Company and the Company Subsidiaries taken as a whole, (ii) seeking to
prohibit or limit the ownership, operation or control by the Company,
Parent or any of their respective Subsidiaries of any portion of the
business or assets of the Company or Parent and their respective
Subsidiaries, or to compel the Company or Parent and their respective
Subsidiaries to dispose of or hold separate any portion of the combined
business or assets of the Company or Parent and their respective
Subsidiaries, as a result of the Merger, which in either case, is material
in relation to the Company and the Company Subsidiaries taken as a whole,
or (iii) seeking to impose limitations on the ability of Parent to acquire
or hold, or exercise full rights of ownership of, any shares of Company
Common Stock.
(d) Subsidiaries Agreements. Each party selling Subsidiaries
Securities pursuant to the Subsidiaries Agreements shall have complied in
all material respects with its obligations to be performed prior to the
Effective Time under the Subsidiaries Agreements.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of any matters
presented in connection with the Merger by the stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either the Company or Parent if there has been a breach of the
representations, warranties, covenants or agreements on the part of the
other set forth in this Agreement, which breach would result in the
condition set forth in Section 6.2(a), in the case of a breach by Parent or
Merger Sub, or
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Section 6.3(a), in the case of a breach by the Company, not being
satisfied, and such breach has not been cured within ten business days
following receipt by the breaching party of notice of such breach from the
non-breaching party;
(c) by either Parent or the Company if any permanent order, decree,
ruling or other action of a court or other competent authority restraining,
enjoining or otherwise preventing the consummation of the Merger shall have
become final and non-appealable;
(d) by either Parent or the Company if the Merger shall not have been
consummated on or before June 30, 1998, unless the failure to consummate
the Merger is the result of a material breach of any covenant or agreement
contained in this Agreement by the party seeking to terminate this
Agreement which has not been cured within ten business days following
receipt by the breaching party of notice of such breach from the
non-breaching party; provided that, at the option of Parent, exercisable by
notice in writing to the Company on or prior to June 30, 1998, the earliest
date on which this Agreement may be terminated under this paragraph (d)
shall be extended to September 30, 1998; and provided, further, that Parent
shall have the right to exercise such option only if in the exercise notice
Parent agrees that Parent shall permanently waive and be deemed to have
waived all of its conditions to Closing except for the following: (x)
Sections 6.1(a)-(f) and 6.3(d) (other than with respect to the Subsidiaries
Agreements relating to each of Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx and Xxx
X. Xxxxxx), (y) Section 6.3(a) with respect to covenants and agreements,
and (z) Section 6.3(a) with respect to representations or warranties of the
Company only to the extent Parent has given at least five days notice of
its non binding intent to exercise Parent's right to extend and either (i)
the Company has not delivered an officer's certificate with respect to the
matters provided for in Section 6.3(a) (substituting the date of the
certificate for the Effective Time in such certificate) or (ii) the
officer's certificate was not to the Company's knowledge true and accurate.
(e) by the Company, prior to the date on which the Consent has been
executed by the holders of a majority of the shares of Company Common Stock
outstanding as of the Consent Date, if the Board of Directors of the
Company has received a Superior Proposal which the Board of Directors has
resolved to accept; provided that concurrently with, and as a condition to
the validity of, any such purported termination, the Company shall pay to
Parent the sum of $20,000,000 in cash; provided that upon the tender of
such $20,000,000 payment by the Company, Parent shall be deemed to have
waived any and all claims Parent may have at law or in equity against the
Company, its Subsidiaries or their respective officers, directors or
employees arising out of or relating to this Agreement or Related
Agreements; and provided, further, that nothing in this paragraph (e) shall
constitute a waiver of any claim Parent may have at law or in equity
against a third party for tortious interference with contract arising out
of or relating to any Alternative Proposal.
Section 7.2 Effect of Termination. (a) In the event of termination of
this Agreement by either Parent or the Company, as provided in Section 7.1, this
Agreement shall forthwith become void and there shall be no liability hereunder
on the part of the Company, Parent or their respective officers or directors
(except for Section 5.12, Section 7.1(e), which liability on the part of the
Company thereunder shall be limited to $20,000,000, this Section 7.2 and Article
VIII, which shall survive the termination); provided, however, that nothing
contained in this Section 7.2 shall relieve any party hereto from any liability
for any willful breach of a representation or warranty contained in this
Agreement or the breach of any covenant or agreement contained in this
Agreement.
(b) If either the Company or Parent has willfully breached a
representation, warranty, covenant or agreement set forth in this Agreement that
results in the other party terminating this Agreement pursuant to Section
7.1(c), then, in addition to any other remedies available to the non-breaching
party, the breaching party shall promptly reimburse the non-breaching party for
all substantiated out-of-pocket costs and expenses incurred by the non-breaching
party in connection with this Agreement and the transactions contemplated
hereby, including, without limitation, costs and expenses of accountants,
attorneys and financial advisors, up to an aggregate of $5,000,000 (the
"Expenses Fee"). Each of Parent and the Company acknowledges that the agreements
contained in this Section 7.2(b) are an integral part of the transactions
contemplated in this
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Agreement, and that, without these agreements, Parent and the Company would not
enter into this Agreement; accordingly, if the breaching party fails to promptly
pay the amount due pursuant to this Section 7.2(b), and, in order to obtain such
payment, the non-breaching party commences a suit which results in a judgment
for the Expenses Fee, the breaching party shall pay to the non-breaching party
its costs and expenses (including attorney's fees) in connection with such suit.
Section 7.3 Amendment. This Agreement may be amended by the parties
hereto, by or pursuant to action taken by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of the Company, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing duly executed by each of the parties hereto.
Section 7.4 Waiver. At any time prior to the Effective Time, the parties
hereto may (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions contained herein which may legally be waived. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing duly executed by such party. The failure
of any party to this Agreement to assert any of its rights under this Agreement
or otherwise shall not constitute a waiver of such rights.
Section 7.5 Exclusive Remedy for Inaccuracy or Breach of Representation or
Warranty. Except as expressly provided in Section 7.2(a) and (b) hereof, a
party's sole and exclusive remedy with respect to the inaccuracy or breach of
any representation or warranty provided by the other party shall be to (i) elect
not to close the Merger and the other transactions contemplated by this
Agreement to the extent permitted by Article VI and (ii) elect to terminate this
Agreement to the extent permitted by Article VII.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Non-Survival of Representations and Warranties. Except to the
extent expressly set forth in Articles II and III, the parties hereto have not
made and expressly negate and waive any representations or warranties (express,
implied, statutory or otherwise) with respect to this Agreement or the title,
condition or quality of any rights or assets of the Company or any Company
Subsidiary or the accuracy or completeness of any information provided or
obtained. The representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall terminate at the Effective
Time or, if sooner, the termination of this Agreement.
Section 8.2 Disclosure Schedules. Each disclosure identified in the
Parent Disclosure Schedule and the Company Disclosure Schedule or elsewhere in
this Agreement constitutes a disclosure by the disclosing party with respect to
all applicable Sections of this Agreement, regardless of any reference to a
particular Section or subsection.
Section 8.3 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given when delivered personally, one day after
being delivered to a nationally recognized overnight courier or when telecopied
(with a confirmatory copy sent by such overnight courier) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to Parent or Merger Sub, to
El Paso Natural Gas Company
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxx
X-00
00
Xxxxxxxxx No.: (000) 000-0000
and
Attention: Xxxxxxx Xxxxx, Xx.
Facsimile No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxxxx
Facsimile No.: (000) 000-0000
(b) if to the Company, to
DeepTech International Inc.
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
Section 8.4 Interpretation. When a reference is made in this Agreement to
a Section or Article, such reference shall be to a Section or Article of this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The phrase "the date
hereof" in this Agreement means the date of this Agreement. As used in this
Agreement, the word "Subsidiary" when used with respect to any relevant
individual or entity, means any other individual or entity that directly or
indirectly is controlled by such relevant individual or entity in question. As
used herein, the term "control" (including its derivatives and similar terms)
means the power to, directly or indirectly, direct or cause the direction of the
management and policies of such relevant individual or entity.
Section 8.5 Counterparts. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties.
Section 8.6 Entire Agreement; No Third-Party Beneficiaries. This
Agreement and the other written agreements executed by the parties in connection
herewith constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement and there are no promises, undertakings,
representations or warranties by the Company or Parent relative to the subject
matter of this Agreement not expressly set forth or referred to herein. This
Agreement, except for the provisions of Section 5.6, is not intended to confer
upon any person other than the parties hereto any rights or remedies hereunder.
Section 8.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
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Section 8.8 Assignment. Except as contemplated by Sections 1.11 and 1.12,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned, transferred, disposed of or otherwise alienated by either of
the parties hereto (whether voluntarily or involuntarily, with or without
consideration, by operation of law or otherwise) without the prior written
consent of the other party (which consent may be granted or withheld in such
party's sole discretion). An attempted assignment, transfer, disposition or
alienation in violation of this Agreement shall be null, void and ineffective.
Subject to the two preceding sentences, this Agreement will be binding upon,
inure to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
Section 8.9 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 terms, conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic and
legal substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
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 contemplated by this Agreement may be
consummated as originally contemplated to the fullest extent possible.
Section 8.10 Enforcement of this Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific wording or were
otherwise breached. It is accordingly agreed that the parties hereto shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, such remedy being in addition to
any other remedy to which any party is entitled at law or in equity.
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
all as of the date first written above.
DEEPTECH INTERNATIONAL INC.
By:
--------------------------------------
Name:
Title:
EL PASO ACQUISITION COMPANY
By:
--------------------------------------
Name:
Title:
EL PASO NATURAL GAS COMPANY
By:
--------------------------------------
Name:
Title:
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CERTIFICATE OF CORPORATE SECRETARY
The undersigned hereby certifies that he is the duly elected, qualified,
and acting Corporate Secretary of Parent, and that, as such, he is familiar with
the facts herein certified and is duly authorized to certify the same and does
hereby certify and resolve on behalf of Parent that: (i) this Agreement has been
adopted by Parent pursuant to Section 251(f) of the Delaware General Corporation
Law, (ii) Parent's Restated Certificate of Incorporation does not require a vote
of its stockholders for the adoption of this Agreement, (iii) this Agreement
does not amend in any respect Parent's Restated Certificate of Incorporation,
(iv) each share of stock of Parent outstanding immediately prior to the
effective date of the Merger is to be an identical outstanding or treasury share
of the Surviving Corporation after the Effective Time, and (v) the authorized
unissued shares or the treasury shares of common stock of Parent to be issued or
delivered under this Agreement plus those initially issuable upon conversion of
any other shares, securities or obligations to be issued or delivered under this
Agreement do not exceed 20% of the shares of common stock of Parent outstanding
immediately prior to the Effective Time.
IN WITNESS WHEREOF, I hereunder subscribe my name effective as of the 27th
day of February, 1998.
By:
--------------------------------------
Name:
Title: Corporate Secretary of El
Paso Natural Gas Company
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CERTIFICATE OF SECRETARY
The undersigned hereby certifies that he is the duly elected, qualified,
and acting Secretary of the Company, and that, as such, he is familiar with the
facts herein certified and is duly authorized to certify the same and does
hereby certify and resolve on behalf of the Company that this Agreement has been
adopted by written consent of the holders of a majority of the outstanding
shares of capital stock of the Company entitled to vote thereon.
IN WITNESS WHEREOF, I hereunder subscribe my name effective as of the 27th
day of February, 1998.
By:
--------------------------------------
Name:
Title: Secretary of DeepTech
International Inc.
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