AGREEMENT AND PLAN OF MERGER BETWEEN
IMC GLOBAL INC.
AND
FREEPORT-McMoRan INC.
Dated as of August 26, 1997
TABLE OF CONTENTS
ARTICLE I
THE MERGER
Section 1.1 The Merger . . . . . . . . . . . . . . . . . .- 2 -
Section 1.2 Effective Time . . . . . . . . . . . . . . . .- 3 -
Section 1.3 Effects of the Merger. . . . . . . . . . . . .- 3 -
Section 1.4 Certificate of Incorporation and By-laws;
Officers and Directors. . . . . . . . . . .- 3 -
Section 1.5 Effect on Stock. . . . . . . . . . . . . . . .- 4 -
Section 1.6 IGL to Make Stock and Warrant Certificates
Available. . . . . . . . . . . . . . . . . .- 6 -
Section 1.7 Dividends; Transfer Taxes; Withholding . . . .- 7 -
Section 1.8 No Fractional Shares or Fractional
Warrants . . . . . . . . . . . . . . . . . .- 8 -
Section 1.9 Return of Exchange Fund. . . . . . . . . . . .- 9 -
Section 1.10 Adjustment of Conversion Number. . . . . . . .- 9 -
Section 1.11 No Further Ownership Rights in FTX Common
Shares . . . . . . . . . . . . . . . . . . .- 9 -
Section 1.12 Closing of FTX Transfer Books. . . . . . . . - 10 -
Section 1.13 Further Assurances . . . . . . . . . . . . . - 10 -
Section 1.14 Closing. . . . . . . . . . . . . . . . . . . - 10 -
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF IGL
Section 2.1 Organization, Standing and Power . . . . . . - 11 -
Section 2.2 Capital Structure. . . . . . . . . . . . . . - 12 -
Section 2.3 Authority. . . . . . . . . . . . . . . . . . - 13 -
Section 2.4 Consents and Approvals; No Violation . . . . - 14 -
Section 2.5 SEC Documents and Other Reports. . . . . . . - 15 -
Section 2.6 Registration Statement and Joint Proxy
Statement. . . . . . . . . . . . . . . . . - 16 -
Section 2.7 Absence of Certain Changes or Events . . . . - 16 -
Section 2.8 No Existing Violation, Default, Etc. . . . . - 17 -
Section 2.9 Licenses and Permits . . . . . . . . . . . . - 18 -
Section 2.10 Environmental Matters. . . . . . . . . . . . - 18 -
Section 2.11 Tax Matters. . . . . . . . . . . . . . . . . - 19 -
Section 2.12 Actions and Proceedings. . . . . . . . . . . - 20 -
Section 2.13 Labor Matters. . . . . . . . . . . . . . . . - 20 -
Section 2.14 Contracts. . . . . . . . . . . . . . . . . . - 21 -
Section 2.15 ERISA. . . . . . . . . . . . . . . . . . . . - 21 -
Section 2.16 Liabilities. . . . . . . . . . . . . . . . . - 24 -
Section 2.17 Opinions of Financial Advisors . . . . . . . - 24 -
Section 2.18 Brokers. . . . . . . . . . . . . . . . . . . - 25 -
Section 2.19 Ownership of FTX Capital Stock . . . . . . . - 25 -
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FTX
Section 3.1 Organization, Standing and Power . . . . . . - 25 -
Section 3.2 Capital Structure. . . . . . . . . . . . . . - 25 -
Section 3.3 Authority. . . . . . . . . . . . . . . . . . - 26 -
Section 3.4 Consents and Approvals; No Violation . . . . - 27 -
Section 3.5 SEC Documents and Other Reports. . . . . . . - 28 -
Section 3.6 Registration Statement and Joint Proxy
Statement; Newco Form S-1. . . . . . . . . - 29 -
Section 3.7 Absence of Certain Changes or Events . . . . - 30 -
Section 3.8 No Existing Violation, Default, Etc. . . . . - 30 -
Section 3.9 Licenses and Permits . . . . . . . . . . . . - 31 -
Section 3.10 Environmental Matters. . . . . . . . . . . . - 31 -
Section 3.11 Tax Matters. . . . . . . . . . . . . . . . . - 32 -
Section 3.12 Actions and Proceedings. . . . . . . . . . . - 32 -
Section 3.13 Labor Matters. . . . . . . . . . . . . . . . - 33 -
Section 3.14 Contracts. . . . . . . . . . . . . . . . . . - 33 -
Section 3.15 ERISA. . . . . . . . . . . . . . . . . . . . - 34 -
Section 3.16 Liabilities. . . . . . . . . . . . . . . . . - 37 -
Section 3.17 Opinion of Financial Advisor . . . . . . . . - 38 -
Section 3.18 State Takeover Statutes and Charter
Provisions; Absence of Stockholder
Rights Plan. . . . . . . . . . . . . . . . - 38 -
Section 3.19 Brokers. . . . . . . . . . . . . . . . . . . - 38 -
Section 3.20 Ownership of IGL Capital Stock . . . . . . . - 38 -
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1 Conduct of Business Pending the Merger. . . . - 39 -
Section 4.2 No Solicitation . . . . . . . . . . . . . . . - 45 -
Section 4.3 Third Party Standstill Agreements . . . . . . - 46 -
Section 4.4 Reorganization. . . . . . . . . . . . . . . . - 47 -
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Stockholder Meetings . . . . . . . . . . . . - 47 -
Section 5.2 Preparation of the Registration Statement
and the Joint Proxy Statement and the
Newco Form S-1 . . . . . . . . . . . . . . - 47 -
Section 5.3 Comfort Letters. . . . . . . . . . . . . . . - 48 -
Section 5.4 Access to Information. . . . . . . . . . . . - 49 -
Section 5.5 Compliance with the Securities Act . . . . . - 49 -
Section 5.6 Stock Exchange Listings. . . . . . . . . . . - 50 -
Section 5.7 Fees and Expenses. . . . . . . . . . . . . . - 50 -
Section 5.8 FTX Incentive Plans. . . . . . . . . . . . . - 50 -
Section 5.10 Public Announcements . . . . . . . . . . . . - 51 -
Section 5.11 Real Estate Transfer and Gains Tax . . . . . - 51 -
Section 5.12 State Takeover Laws. . . . . . . . . . . . . - 52 -
Section 5.13 Indemnification; Directors and Officers
Insurance. . . . . . . . . . . . . . . . . - 52 -
Section 5.14 Notification of Certain Matters. . . . . . . - 53 -
Section 5.15 Treatment of FTX $4.375 Preferred
Shares . . . . . . . . . . . . . . . . . . - 54 -
Section 5.16 Certain Litigation . . . . . . . . . . . . . - 54 -
Section 5.17 Employee Benefits. . . . . . . . . . . . . . - 54 -
Section 5.18 Board of Directors . . . . . . . . . . . . . - 57 -
Section 5.19 Services Agreement . . . . . . . . . . . . . - 57 -
Section 5.20 Distribution Agreement . . . . . . . . . . . - 57 -
Section 5.21 IGL/FTX Standstill Agreement . . . . . . . . - 58 -
ARTICLE VI
CONDITIONS PRECEDENT TO THE MERGER
Section 6.1 Conditions to Each Party's Obligation to
Effect the Merger. . . . . . . . . . . . . - 59 -
Section 6.2 Conditions to Obligation of FTX to Effect
the Merger . . . . . . . . . . . . . . . . - 60 -
Section 6.3 Conditions to Obligations of IGL to Effect
the Merger . . . . . . . . . . . . . . . . - 62 -
ARTICLE VII
TERMINATION; AMENDMENT AND WAIVER
Section 7.1 Termination . . . . . . . . . . . . . . . . . - 65 -
Section 7.2 Effect of Termination . . . . . . . . . . . . - 68 -
Section 7.3 Amendment . . . . . . . . . . . . . . . . . . - 68 -
Section 7.4 Waiver. . . . . . . . . . . . . . . . . . . . - 68 -
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Non-Survival of Representations and
Warranties . . . . . . . . . . . . . . . . - 69 -
Section 8.2 IMC-Agrico Entities . . . . . . . . . . . . . - 69 -
Section 8.3 Notices . . . . . . . . . . . . . . . . . . . - 69 -
Section 8.4 Interpretation. . . . . . . . . . . . . . . . - 71 -
Section 8.5 Counterparts. . . . . . . . . . . . . . . . . - 71 -
Section 8.6 Entire Agreement; No Third-Party
Beneficiaries. . . . . . . . . . . . . . . - 71 -
Section 8.7 Governing Law . . . . . . . . . . . . . . . . - 71 -
Section 8.8 Assignment. . . . . . . . . . . . . . . . . . - 71 -
Section 8.9 Severability. . . . . . . . . . . . . . . . . - 71 -
Section 8.10 Enforcement of this Agreement. . . . . . . . - 72 -
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of August 26, 1997
(this "Agreement") between IMC GLOBAL INC., a Delaware corporation
("IGL"), and FREEPORT-McMoRan INC., a Delaware corporation ("FTX")
(IGL and FTX being hereinafter collectively referred to as the
"Constituent Corporations").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of IGL and
FTX have approved and declared advisable the merger of FTX into
IGL (or, alternatively, the merger of FTX into a subsidiary of
IGL; either such merger being referred to herein as the "Merger"),
upon the terms and subject to the conditions herein set forth,
whereby the issued and outstanding shares of Common Stock, $.01
par value, of FTX ("FTX Common Shares"), not owned directly or
indirectly by IGL or FTX and other than Dissenting Shares (as
defined in Section 1.5(c)), will be converted into
(i) shares of Common Stock, $1.00 par value, of IGL ("IGL Common
Stock"), (ii) warrants ("IGL Warrants") exercisable for shares of
IGL Common Stock and (iii) shares of Common Stock, $.01 par value
("Newco Common Stock"), of a new company ("Newco") comprised of
the existing sulphur assets and liabilities and certain oil and
gas interests identified in the Main Pass Agreements (as defined
below) currently held by subsidiaries of FTX and IGL;
WHEREAS, immediately prior to the Merger, (i) IGL will
cause its wholly owned subsidiary, IMC Global Operations Inc.
("Global Operations"), and FTX will cause Freeport-McMoRan
Resource Partners, Limited Partnership ("FRP"), a Delaware limited
partnership of which FTX is the Administrative Managing General
Partner, to contribute to Newco, a wholly owned subsidiary of FRP,
certain assets and liabilities used in connection with the
production, sale and distribution of sulphur, including the
interests held by Global Operations and FRP in Main Pass Block 299
pursuant to the Joint Operating Agreement dated May 1, 1988 and
the Operating Agreement (Oil and Gas) Lease
No. OCS-G 1316-A dated June 5, 1990, and other related agreements,
each among FRP, Global Operations and Homestake Mining Company, as
amended, (collectively, the "Main Pass Agreements") and (ii) FRP
shall distribute to the partners of FRP (including FTX) the Newco
Common Stock;
WHEREAS, in connection with the Merger and
simultaneously with the execution hereof, IGL and FTX shall enter
into an agreement, which shall be effective at the Effective Time
(as hereinafter defined) with Freeport-McMoRan Copper and Gold
Inc. ("FCX") providing for FTX to convey certain FTX assets to FCX
and for FCX to indemnify IGL (as the successor to FTX) with
respect to certain liabilities associated with the operations of
FCX (the "FCX Indemnity Letter");
WHEREAS, in connection with the Merger, IGL and FTX
shall enter into an agreement, which shall be effective at the
Effective Time, with FM Properties Inc. ("FMP") or an affiliate of
FMP with respect to (i) the sale by FTX of its partnership
interest in FM Properties Operating Co. ("FMPO"), (ii) the sale by
FTX of its interest in FM Properties Holding Company and (iii)
FTX's guarantee of outstanding debt and certain other contingent
liabilities of FMPO;
WHEREAS, in connection with the Merger and
simultaneously with the execution hereof, IGL, FTX, FRP and Newco
shall enter into a Contribution and Distribution Agreement (the
"Distribution Agreement") with respect to Newco and the
distribution of Newco Common Stock to the holders of partnership
interests of FRP (including FTX);
WHEREAS, in connection with the Merger, at the Effective
Time, IGL shall enter into a letter agreement with FM Services
Company ("FMS") as contemplated by Section 5.19 of this Agreement
with respect to certain commitments of FTX being assumed by IGL in
the Merger;
WHEREAS, the respective Boards of Directors of IGL and
FTX have determined that the Merger is in furtherance of and
consistent with their respective long-term business strategies and
is fair to and in the best interests of their respective
stockholders;
WHEREAS, for United States income tax purposes, it is
intended that the Merger shall qualify as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of
1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the premises,
representations, warranties and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to
the conditions herein set forth, and in accordance with the
General Corporation Law of the State of Delaware (the "DGCL"), FTX
shall be merged with and into IGL at the Effective Time (as
hereinafter defined). Following the Merger, the separate
corporate existence of FTX shall cease and IGL shall continue as
the surviving corporation (the "Surviving Corporation") and shall
succeed to and assume all the rights and obligations of FTX in
accordance with the DGCL. Notwithstanding any provision of this
Agreement to the contrary, at the election of IGL, any direct
wholly-owned corporate Subsidiary (as hereinafter defined) of IGL
may be substituted for IGL as a constituent corporation to be
merged with and into FTX in the Merger, in which case IGL shall
cause such Subsidiary to be bound by the terms and conditions of
and to make the representations and warranties contained in this
Agreement, provided that any such substitution of an IGL
Subsidiary shall not relieve or discharge IGL from any of its
obligations or commitments set forth in this Agreement. In such
event, the parties hereto agree to execute an appropriate
amendment to this Agreement, in form and substance reasonably
satisfactory to IGL and FTX, in order to reflect such
substitution.
Section 1.2 Effective Time. The Merger shall become
effective when a Certificate of Merger (the "Certificate of
Merger"), executed in accordance with the relevant provisions of
the DGCL, has been filed with the Secretary of State of the State
of Delaware; provided, however, that, upon the mutual consent of
the Constituent Corporations, the Certificate of Merger may
provide for a later date of effectiveness of the Merger, but not
to exceed 30 days after the date that the Certificate of Merger
has been filed. When used in this Agreement, the term "Effective
Time" means the later of the date and time at which the
Certificate of Merger has been filed or such later date and time
as is established by the Certificate of Merger. The filing of the
Certificate of Merger shall be made as soon as practicable after
the satisfaction or waiver of the conditions to the Merger herein
set forth.
Section 1.3 Effects of the Merger. At the Effective
Time, the effect of the Merger shall be as provided in the
applicable provisions of the DGCL and as set forth in this
Agreement. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, except as otherwise
provided herein, all of the property, rights, privileges, powers
and franchises of FTX shall vest in the Surviving Corporation, and
all debts, liabilities and duties of FTX shall become the debts,
liabilities and duties of the Surviving Corporation. In addition,
at the Effective Time, the Surviving Corporation shall assume the
rights, duties and obligations of the administrative managing
general partner under the Amended and Restated Agreement of
Limited Partnership of Freeport-McMoRan Resource Partners, Limited
Partnership.
Section 1.4 Certificate of Incorporation and By-laws;
Officers and Directors. (a) The Restated Certificate of
Incorporation of IGL, as in effect prior to the Effective Time,
shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided therein or by
applicable law.
(b) The By-Laws of IGL, as in effect immediately prior
to the Effective Time, shall be the By-laws of the Surviving
Corporation until thereafter amended as provided therein or by
applicable law.
(c) Subject to Section 5.18, the directors of IGL
immediately prior to the Effective Time shall be the directors of
the Surviving Corporation until the next annual meeting of
stockholders (or the earlier of their resignation or removal) and
until their respective successors are duly elected and qualified,
as the case may be.
(d) The officers of IGL immediately prior to the
Effective Time shall be the officers of the Surviving Corporation
until the earlier of their resignation or removal and until their
respective successors are duly elected and qualified, as the case
may be.
Section 1.5 Effect on Stock. As of the Effective Time,
by virtue of the Merger and without any action on the part of any
stockholder of either of the Constituent Corporations:
(a) FTX Common Shares in Treasury or Owned by IGL. All
FTX Common Shares that are held in the treasury of FTX or by
any wholly-owned Subsidiary of FTX and any FTX Common Shares
owned by IGL or by any wholly-owned Subsidiary of IGL shall
be canceled and no capital stock of IGL or other
consideration shall be delivered in exchange therefor.
(b) Conversion of FTX Common Shares. Subject to the
provisions of Sections 1.5(c), 1.8 and 1.10, each FTX Common
Share issued and outstanding immediately prior to the
Effective Time (including any FTX Common Shares issued by
FTX upon conversion of FTX $4.375 Preferred Shares (as
defined herein) prior to the Effective Time, but not
including shares to be canceled in accordance with Section
1.5(a)) shall be converted into:
(i) 0.90 (such number being hereinafter
referred to as the "IGL Conversion Number")
of a validly issued, fully paid and
nonassessable share of IGL Common Stock; and
(ii) of a IGL Warrant, each such IGL
Warrant to be issued pursuant to the Warrant
Agreement between IGL and The Bank of New
York, as Warrant Agent, in the form attached
hereto as Exhibit A; and
(iii) in addition, each holder of FTX
Common Shares immediately prior to the
Effective Time shall, by virtue of the Merger,
have the right to receive that number (the
"Newco Conversion Number") of validly issued,
fully paid and nonassessable shares of Newco
Common Stock that bears the same proportion to
the total number of shares of Newco Common
Stock held by FTX immediately prior to the
Effective Time as the number of FTX Common
Shares held by such holder bears to the total
issued and outstanding shares of FTX Common
Stock immediately prior to the Effective Time.
All such FTX Common Shares, when so converted, shall no
longer be outstanding and shall automatically be canceled and
retired; and each holder of a certificate representing prior to
the Effective Time any such FTX Common Shares shall cease to
have any rights with respect thereto, except the right to
receive (i) certificates representing the shares of IGL Common
Stock and Newco Common Stock and IGL Warrants into which such
FTX Common Shares have been converted, (ii) any dividends and
other distributions in accordance with Section 1.7 and (iii) any
cash, without interest, to be paid in lieu of any fractional
share of IGL Common Stock or Newco Common Stock or in lieu of
any fractional IGL Warrant in accordance with Section 1.8.
(c) Shares of Dissenting Stockholders. Notwith-standing
anything in this Agreement to the contrary, any
issued and outstanding FTX Common Shares held by a person (a
"Dissenting Stockholder") who has not voted in favor of or
consented to the Merger and complies with Section 262 and
all other provisions of Delaware law concerning the right of
holders of FTX Common Shares to require appraisal of their FTX
Common Shares ("Dissenting Shares") shall not be converted in the
manner provided in Section 1.5(b), but shall become the right to
receive such consideration as may be determined to be due to such
Dissenting Stockholder pursuant to Delaware law. If, after the
Effective Time, such Dissenting Stockholder withdraws his demand
for appraisal or fails to perfect or otherwise loses his right of
appraisal, in any case pursuant to the DGCL, the FTX Common Shares
owned by such stockholders shall be deemed to be canceled as of
the Effective Time and become the right to receive, in respect of
each such canceled FTX Common Share, the consideration set forth
in Section 1.5(b) to be delivered in exchange for a FTX Common
Share pursuant to the Merger. FTX shall give IGL (i) prompt
notice of any demands
for appraisal of shares received by FTX and (ii) the
opportunity to participate in and direct all negotiations and
proceedings with respect to any such demands. FTX shall not,
without the prior written consent of IGL, make any payment
with respect to, or settle, offer to settle or otherwise
negotiate, any such demands.
Section 1.6 IGL to Make Stock and Warrant Certificates
Available. (a) Exchange of Certificates. IGL shall authorize
American Stock Transfer & Trust Company (or such other person or
persons as shall be acceptable to IGL and FTX) to act as exchange
agent hereunder (the "Exchange Agent"). As soon as practicable
after the Effective Time, IGL shall, on its own behalf, and with
respect to (iii) below, on behalf of FTX, deposit with the
Exchange Agent, in trust for the holders of certificates (the "FTX
Certificates") which immediately prior to the Effective Time
represented FTX Common Shares converted in the Merger,
(i) certificates (the "IGL Stock Certificates") representing the
shares of IGL Common Stock, (ii) certificates (the "IGL Warrant
Certificates") representing the IGL Warrants, and (iii)
certificates (the "Newco Stock Certificates") representing the
shares of Newco Common Stock issuable pursuant to Section 1.5(b)
in exchange for the outstanding FTX Common Shares (such shares of
IGL Common Stock, IGL Warrants and shares of Newco Common Stock,
together with any dividends or distributions with respect thereto
deposited in accordance with Section 1.7, being hereinafter
referred to as the "Exchange Fund"). The Exchange Fund shall not
be used for any other purpose.
(b) Exchange Procedures. As soon as practicable after
the Effective Time, the Exchange Agent shall mail to each record
holder of a FTX Certificate at the Effective Time a letter of
transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to FTX Certificates shall pass, only
upon actual delivery thereof to the Exchange Agent and shall
contain instructions for use in effecting the surrender of FTX
Certificates in exchange for the property described in the next
sentence). Upon surrender for cancellation to the Exchange Agent
of FTX Certificate(s) held by any record holder of a FTX
Certificate, together with such letter of transmittal duly
executed, such holder shall be entitled to receive in exchange
therefor a IGL Stock Certificate, a Newco Stock Certificate and a
IGL Warrant Certificate representing, respectively, the number of
whole shares of IGL Common Stock, the number of whole shares of
Newco Common Stock and the number of whole IGL Warrants into which
FTX Common Shares represented by the surrendered FTX
Certificate(s) shall have been converted at the Effective Time
pursuant to this Article I, cash in lieu of any fractional share
of IGL Common Stock or Newco Common Stock or any fractional IGL
Warrant in accordance with Section 1.8 and any dividends and other
distributions in accordance with Section 1.7; and FTX
Certificate(s) so surrendered shall forthwith be canceled.
In the event any FTX Certificate(s) shall have been
lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming such Certificate(s) to be lost, stolen
or destroyed and, if reasonably required by IGL or the Surviving
Corporation, upon the posting by such person of a bond in such
amount as IGL or the Surviving Corporation may reasonably direct
as indemnity against any claim that may be made against it with
respect to such Certificate(s), the Exchange Agent will issue in
respect to such lost, stolen or destroyed Certificate(s), the
consideration to be received by virtue of the Merger with respect
to FTX Common Shares represented thereby.
(c) Status of FTX Certificates. Subject to the
provisions of Sections 1.5(c), 1.7 and 1.8, each FTX Certificate
which immediately prior to the Effective Time represented FTX
Common Shares shall, from and after the Effective Time until
surrendered in exchange for IGL Certificate(s) in accordance with
this Section 1.6, be deemed for all purposes to represent the
number of shares of IGL Common Stock and Newco Common Stock and
the number of IGL Warrants into which such FTX Common Shares shall
have been so converted.
Section 1.7 Dividends; Transfer Taxes; Withholding. No
dividends or other distributions that are declared on or after the
Effective Time on IGL Common Stock or Newco Common Stock, as the
case may be, or are payable to the holders of record thereof who
became such on or after the Effective Time, shall be paid to any
person entitled by reason of the Merger to receive IGL Stock
Certificates representing IGL Common Stock and Newco Stock
Certificates representing Newco Common Stock, and no cash payment
in lieu of any fractional share of IGL Common Stock or Newco
Common Stock or any fractional IGL Warrant shall be paid to any
such person pursuant to Section 1.8, until such person shall have
surrendered its FTX Certificate(s) as provided in Section 1.6.
Subject to applicable law, there shall be paid to each person
receiving a IGL Stock Certificate or Newco Stock Certificate, as
the case may be, representing such shares of IGL Common Stock or
Newco Common Stock: (i) at the time of such surrender or as
promptly as practicable thereafter, the amount of any dividends or
other distributions theretofore paid with respect to the shares of
IGL Common Stock or Newco Common Stock represented by such IGL
Stock Certificate or Newco Stock Certificate, as the case may be,
and having a record date on or after the Effective Time and a
payment date prior to such surrender; and (ii) at the appropriate
payment date or as promptly as practicable thereafter, the amount
of any dividends or other distributions payable with respect to
such shares of IGL Common Stock or Newco Common Stock and having a
record date on or after the Effective Time but prior to such
surrender and a payment date on or subsequent to such surrender.
In no event shall the person entitled to receive such dividends or
other distributions be entitled to receive interest on such
dividends or other distributions. If any cash or IGL Stock
Certificate or Newco Stock Certificate, as the case may be,
representing shares of IGL Common Stock or Newco Common Stock is
to be paid to or issued in a name other than that in which an FTX
Certificate surrendered in exchange therefor is registered, it
shall be a condition of such exchange that the FTX 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 such IGL Stock Certificate
or Newco Stock Certificate, as the case may be, and the
distribution of such cash payment in a name other than that of the
registered holder of FTX Certificate so surrendered, or shall
establish to the satisfaction of the Exchange Agent that such tax
has been paid or is not applicable. IGL or the Exchange Agent
shall be entitled to deduct and withhold from the consideration
otherwise payable to any holder of FTX Common Shares pursuant to
this Agreement such amounts as IGL or the Exchange Agent are
required to deduct and withhold, with respect to such payment,
under the Code or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by IGL or the
Exchange Agent, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of
FTX Common Shares in respect of whom such deduction and
withholding was made.
Section 1.8 No Fractional Shares or Fractional
Warrants. No certificates or scrip representing fractional
shares of IGL Common Stock or Newco Common Stock or fractional IGL
Warrants shall be issued upon the surrender for exchange of FTX
Certificates pursuant to this Article I; no dividend or other
distribution by IGL or Newco, as the case may be, and no stock
split, combination or reclassification shall relate to any such
fractional share; and no such fractional share shall entitle the
record or beneficial owner thereof to vote or to any other rights
of a stockholder of IGL or Newco. In lieu of any such fractional
share, each holder of FTX Common Shares who would otherwise have
been entitled thereto upon the surrender of FTX Certificate(s) for
exchange pursuant to this Article I will be paid (a), with respect
to any fractional interest in a share of IGL Common Stock, an
amount in cash (without interest) rounded to the nearest whole
cent, determined by multiplying (i) the per share closing price on
the New York Stock Exchange, Inc. (the "NYSE") of IGL Common Stock
(as reported in the NYSE Composite Transactions) on the last
trading day immediately preceding the date on which the Effective
Time shall occur (or, if the IGL Common Stock shall not trade on
the NYSE on such date, the next immediately preceding day of
trading in IGL Common Stock on the NYSE thereafter) by (ii) the
fractional share to which such holder would otherwise be entitled
plus (b), with respect to any fractional interest in a share of
Newco Common Stock, an amount in cash (without interest), rounded
to the nearest cent, determined by multiplying (i) the per share
closing price of one share of Newco Common Stock, as reported on
the NYSE on the first trading day following the Effective Time by
(ii) the fractional interest in a share of Newco Common Stock to
which such holder would otherwise be entitled plus (c), with
respect to any fractional interest in a IGL Warrant, an amount in
cash (without interest) rounded to the nearest cent, determined by
multiplying (i) the fair market value of one IGL Warrant, as
determined in the reasonable judgment of the IGL Board of
Directors (by reference to Black-Scholes valuation methodology or,
in the event that a trading market has developed for the IGL
Warrant, to the last reported trading price thereof on the first
trading day following the Effective Time) by (ii) the fractional
interest in a IGL Warrant to which such holder would otherwise be
entitled. IGL shall make available to the Exchange Agent the cash
necessary for this purpose.
Section 1.9 Return of Exchange Fund. Any portion of
the Exchange Fund which remains undistributed to the former
holders of FTX Common Shares for one year after the Effective Time
shall be delivered to IGL, upon its request, and any such former
holders who have not theretofore surrendered to the Exchange Agent
their FTX Certificates in compliance with this Article I shall
thereafter look only to IGL for payment of their claim for shares
of IGL Common Stock and Newco Common Stock and IGL Warrants, any
cash in lieu of fractional shares of IGL Common Stock and Newco
Common Stock and fractional interest in IGL Warrants and any
dividends or distributions with respect to such shares of IGL
Common Stock and Newco Common Stock. Neither IGL nor FTX shall be
liable to any former holder of FTX Common Shares for any such
shares of IGL Common Stock or Newco Common Stock or any IGL
Warrant held in the Exchange Fund (and any such cash, dividends
and distributions payable in respect thereof) which is delivered
to a public official pursuant to any applicable abandoned
property, escheat or similar law.
Section 1.10 Adjustment of Conversion Number. In the
event of any stock split, combination, reclassification or stock
dividend with respect to IGL Common Stock or Newco Common Stock,
any change or conversion of IGL Common Stock or Newco Common Stock
into other securities or any other dividend or distribution with
respect to IGL Common Stock (other than quarterly cash
dividends permitted by Section 4.1(a)(i)(A)) or Newco Common
Stock, or if a record date with respect to any of the foregoing
should occur, prior to the Effective Time, appropriate and
proportionate adjustments shall be made to the IGL Conversion
Number, the Newco Conversion Number or the IGL Warrant exercise
price, as the case may be, and thereafter all references in this
Agreement to the IGL Conversion Number, the Newco Conversion
Number or the IGL Warrant exercise price, as the case may be,
shall be deemed to be to the IGL Conversion Number, the Newco
Conversion Number or the IGL Warrant exercise price, as the case
may be, as so adjusted.
Section 1.11 No Further Ownership Rights in FTX Common
Shares. All certificates representing shares of IGL Common Stock,
Newco Common Stock and IGL Warrants delivered upon the surrender
for exchange of any FTX Certificate in accordance with the terms
hereof (including any cash paid pursuant to Section 1.7 or 1.8)
shall be deemed to have been delivered (and paid) in full
satisfaction of all rights pertaining to FTX Common Shares
represented by such FTX Certificate.
Section 1.12 Closing of FTX Transfer Books. At the
Effective Time, the stock transfer books of FTX shall be closed,
and no transfer of FTX Common Shares shall thereafter be made.
Subject to the last sentence of Section 1.9, if, after the
Effective Time, FTX Certificates are presented to the Surviving
Corporation, they shall be canceled and exchanged as provided in
this Article I.
Section 1.13 Further Assurances. If, at any time after
the Effective Time, the Surviving Corporation shall consider or be
advised that any deeds, bills of sale, assignments or assurances
or any other acts or things are necessary, desirable or proper (i)
to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation its right, title and interest in, to or
under any of the rights, privileges, powers, franchises,
properties or assets of either of the Constituent Corporations or
(ii) otherwise to carry out the purposes of this Agreement, the
Surviving Corporation and its proper officers and directors or
their designees shall be authorized to execute and deliver, in the
name and on behalf of either Constituent Corporation, all such
deeds, bills of sale, assignments and assurances and to do, in the
name and on behalf of either Constituent Corporation, all such
other acts and things as may be necessary, desirable or proper to
vest, perfect or confirm the Surviving Corporation's right, title
and interest in, to and under any of the rights, privileges,
powers, franchises, properties or assets of such Constituent
Corporation and otherwise to carry out the purposes of this
Agreement.
Section 1.14 Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at
the offices of Sidley & Austin, Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx at 10:00 A.M., local time, on the day on which the last
of the conditions set forth in Article VI shall have been (and
continue to be) fulfilled or waived, or at such other time and
place as IGL and FTX may agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF IGL
IGL represents and warrants, to FTX as follows:
Section 2.1 Organization, Standing and Power. IGL is
a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware; and IGL has the requisite
corporate power and authority to carry on its business as now being
conducted. Each Subsidiary (as defined below) of IGL is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated and
has the requisite corporate power and authority to carry on its
business as now being conducted. IGL and each of its Subsidiaries
are duly qualified to do business, and are in good standing, in
each jurisdiction where the character of their properties owned or
held under lease or the nature of their activities makes such
qualification necessary, except where the failure to be so
qualified would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect (as defined below) on
IGL. For purposes of this Agreement: (i) "Material Adverse Change"
or "Material Adverse Effect" means, when used with respect to IGL
or FTX, as the case may be, any change or effect that is materially
adverse to the business, operations, prospects, properties, assets,
liabilities, condition (financial or otherwise) or results of
operations of IGL and its Subsidiaries taken as a whole, or FTX and
its Subsidiaries taken as a whole, as the case may be, except, in
the case of a Material Adverse Change, for any change resulting
from conditions or circumstances generally affecting the businesses
in which IGL or FTX, as the case may be, carry on their respective
businesses; and (ii) "Subsidiary" means any corporation,
partnership, joint venture or other legal entity and of which IGL
or FTX, as the case may be (either alone or through or together
with any other Subsidiary), owns, directly or indirectly, 50% or
more of the capital stock or other equity interests the holders of
which are generally entitled to vote with respect to matters to be
voted on in such corporation, partnership, joint venture or other
legal entity, or any other entity as to which IGL or FTX, as the
case may be, possesses, directly or indirectly, the power to direct
or cause the direction of the management and policies thereof,
whether through ownership of voting securities, by contract or
otherwise; provided, however, that, for purposes of the
representations and warranties contained in Article II and Article
III, respectively, of this Agreement, neither IMC-Agrico Company
nor IMC-Agrico MP, Inc. (collectively, the "IMC-Agrico Entities")
shall be included within the definition of "Subsidiary" of either
IGL or FTX or any Subsidiary of either of them. Except as
disclosed in the IGL SEC Documents or the IGL Letter (as
hereinafter defined), IGL and its Subsidiaries are not subject to
any material joint venture, joint operating or similar arrangement
or any material shareholders agreement relating thereto nor does it
own or possess more than 5% of the outstanding equity interests of
any other entity.
Section 2.2 Capital Structure. As of the date hereof,
the authorized capital stock of IGL consists of: 250,000,000
shares of IGL Common Stock and 12,000,000 shares of Series
Preferred Stock, $1.00 par value (the "IGL Preferred Stock"), of
which 3,000,000 shares have been designated as "Junior
Participating Preferred Stock, Series C" (the "IGL Series C
Preferred Stock"). At the close of business on June 30, 1997,
approximately 93,600,000 shares of IGL Common Stock were issued and
outstanding, all of which were validly issued, are fully paid and
nonassessable and are free of preemptive rights. No shares of IGL
Preferred Stock have been issued, and there has been no increase of
more than 1% in the number of issued and outstanding shares of IGL
Common Stock between June 30 and the date hereof. All of the shares
of IGL Common Stock issuable in exchange for FTX Common Shares at
the Effective Time in accordance with this Agreement will be, when
so issued, duly authorized, validly issued, fully paid and
nonassessable and free of preemptive
rights. If and when the Warrants are exercised for IGL Common
Stock in accordance with the terms of the IGL Warrants, such shares
of IGL Common Stock issued upon such exercise will be duly
authorized, validly issued, fully paid and non-assessable, and the
holders of outstanding shares of capital stock of IGL are not
entitled to any preemptive or other rights with respect to the
IGL Warrants or the IGL Common Stock issuable upon such exercise.
As of the date of this Agreement, except as contemplated by this
Agreement, except for the rights ("IGL Rights") to purchase
shares of IGL Series C Preferred Stock pursuant to the Rights Agreement
(the "IGL Rights Agreement") dated June 21, 1989 between IGL and the
First National Bank of Chicago, as Rights Agent, as amended, and except
for stock options covering not in excess of 4,637,788 shares of IGL
Common Stock (collectively, the "IGL Stock Options"), there are no
options, warrants, calls, rights or agreements to which IGL or any of
its Subsidiaries is a party or by which any of them is bound obligating
IGL or any of its Subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock of IGL or
any such Subsidiary or obligating IGL or any such Subsidiary to grant,
extend or enter into any such option, warrant, call, right or agreement.
Each outstanding share of capital stock of each Subsidiary of IGL is
duly authorized, validly issued, fully paid and nonassessable and,
except as disclosed in the IGL SEC Documents or the IGL Letter, each
such share, and all of the equity interests in the IMC-Agrico Entities
described in the IGL SEC Documents as being owned by IGL, are
beneficially owned by IGL or another Subsidiary of IGL, free and clear
of all security interests, liens, claims, pledges, options, rights of
first refusal, agreements, limitations on voting rights, charges and
other encumbrances of any nature whatsoever. As of the date of its
filing, Exhibit 21.1 to IGL's Annual Report on Form 10-K for the year
ended June 30, 1996, as filed with the United States Securities and
Exchange Commission (the "SEC") (the "IGL Annual Report"), is a true,
accurate and correct statement in all material respects of all of the
information required to be set forth therein by the regulations of the
SEC. Pursuant to the IGL Rights Agreement, all shares of IGL Common
Stock are issued with Rights attached thereto.
Section 2.3 Authority. The Board of Directors of IGL (a) has
declared as advisable and fair to and in the best interests of the
stockholders of IGL (and has resolved to recommend to such stockholders
for approval) (i) the Merger, (ii) an amendment to the Restated
Certificate of Incorporation of IGL to increase the number of authorized
shares of IGL Common Stock to 300,000,000 (the "Charter Amendment") and
(iii) the issuance (the "IGL Share Issuance") of shares of IGL Common
Stock and IGL Warrants in accordance with the Merger and (b) has
approved this Agreement. IGL has all requisite corporate power and
authority to enter into this Agreement and (subject to (x) approval of
the IGL Share Issuance by a majority of the votes cast at the IGL
Stockholder Meeting (as hereinafter defined) by the holders of the
shares of IGL Common Stock, provided that the total number of votes cast
on the IGL Share Issuance represents more than 50% of the shares of IGL
Common Stock entitled to vote thereon at the IGL Stockholder Meeting,
and (y) approval of the Merger and adoption of the Charter Amendment by
the holders of a majority of the outstanding shares of IGL Common Stock)
to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by IGL and the consummation by IGL of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of IGL, subject, in the case of
this Agreement, to (x) approval of the IGL Share Issuance by a majority
of the votes cast at the IGL Stockholder Meeting by the holders of the
shares of IGL Common Stock, provided that the
total number of votes cast on the IGL Share Issuance represents more
than 50% of the shares of IGL Common Stock entitled to vote thereon at
the IGL Stockholder Meeting, and (y) approval of the Merger by the
holders of a majority of the outstanding shares of IGL Common Stock
entitled to vote thereon. This Agreement has been duly executed and
delivered by IGL and (assuming the valid authorization, execution and
delivery hereof by FTX and the validity and binding effect hereof on
FTX) constitutes the valid and binding obligation of IGL enforceable
against IGL in accordance with its terms. The IGL Share Issuance and
the preparation of a registration statement on Form S-4 to be filed with
the SEC by IGL under the Securities Act of 1933, as amended (together
with the rules and regulations promulgated thereunder, the "Securities
Act"), for the purpose of registering the shares of IGL Common Stock and
the IGL Warrants to be issued in connection with the Merger and the
Shares of IGL Common Stock to be issued upon exercise, if any, of the
IGL Warrants and the IGL Rights attached to the IGL Common Stock
(together with any amendments or supplements thereto, whether prior to
or after the effective date thereof, the "Registration Statement"),
including the Joint Proxy Statement (as hereinafter defined), have been
duly authorized by IGL's Board of Directors.
Section 2.4 Consents and Approvals; No Violation. Except as
set forth in the letter dated and delivered to FTX on the date hereof
(the "IGL Letter"), which relates to this Agreement and is designated
therein as being the IGL Letter, the execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated
hereby and compliance with the provisions hereof will not, result in any
violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to the loss of a material right or
benefit under, or result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of IGL or any
of its Subsidiaries under: (i) any provision of the Restated Certificate
of Incorporation or By-laws of IGL or the comparable charter or
organization documents or by-laws of any of its Subsidiaries, (ii) any
loan or credit agreement, note, bond, mortgage, indenture, lease,
agreement, instrument, permit, concession, franchise or license
applicable to IGL or any of its Subsidiaries or (iii) any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
IGL or any of its Subsidiaries or any of their respective properties or
assets, other than, in the case of clauses (ii) and (iii), any such
violations, defaults, rights, liens, security interests, charges or
encumbrances that, individually or in the aggregate, would reasonably be
expected not to have a Material Adverse Effect on IGL and would not
materially impair the ability of IGL to perform its obligations
hereunder or prevent the consummation of any of the transactions
contemplated hereby. No filing or registration with, or authorization,
consent or approval of, any domestic (federal and state), foreign
(including provincial) or supranational court, commission, governmental
body, regulatory agency, authority or tribunal (a "Governmental Entity")
is required by or with respect to IGL or any of its Subsidiaries in
connection with the execution and delivery of this Agreement by IGL, or
is necessary for the consummation of the Merger and the other
transactions contemplated by this Agreement, except: (i) in connection,
or in compliance, with the provisions of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the Securities Act
and the Securities Exchange Act of 1934, as amended (together with the
rules and regulations promulgated thereunder, the "Exchange Act"), (ii)
for the filing and recordation requirements of the DGCL with respect to
the
Certificate of Merger and the filing of appropriate documents with the
relevant authorities of other states in which FTX or any of its
Subsidiaries is qualified to do business, (iii) for such filings and
consents as may be required under any environmental, health or safety
law or regulation pertaining to any notification, disclosure or required
approval triggered by the Merger or the transactions contemplated by
this Agreement and set forth in the IGL Letter, except where the failure
to obtain or make any such consent or filing would, individually or in
the aggregate, reasonably be expected not to have a Material Adverse
Effect, (iv) for such filings, authorizations, orders and approvals, if
any, as may be required by state takeover laws (the "State Takeover
Approvals"), (v) for such filings as may be required in connection with
the taxes described in Section 5.11, (vi) for such consents, approvals,
orders, authorizations, registrations, declarations and filings as may
be required under the laws of any foreign country (including, without
limitation, any political subdivision thereof) in which IGL or FTX or
any of their respective Subsidiaries conducts any business or owns any
property or assets and (vii) for such other consents, orders,
authorizations, registrations, declarations and filings the failure of
which to obtain or make would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on IGL and
would not materially impair the ability of IGL to perform its
obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby.
Section 2.5 SEC Documents and Other Reports. IGL has filed
all documents required to be filed by it with the SEC since June 30,
1995. As of their respective filing dates, all documents filed by IGL
with the SEC since June 30, 1995 (the "IGL SEC Documents") complied in
all material respects with the applicable requirements of the Securities
Act or the Exchange Act, as the case may be, and none of the IGL SEC
Documents contained any untrue statement of a material fact or omitted
to state any 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 consolidated financial statements
of IGL included in the IGL SEC Documents complied at the time of filing
with the SEC (and, with respect to any registration statement, at the
time it was declared effective) as to form in all material respects with
the applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, were prepared in accordance
with generally accepted accounting principles applied on a consistent
basis during the periods involved (except as may be indicated therein or
in the notes thereto) and fairly present the consolidated financial
position of IGL and its consolidated Subsidiaries as at the respective
dates thereof and the consolidated results of their operations and their
consolidated cash flows for the respective periods then ended (subject,
in the case of the unaudited statements, to normal, recurring year-end
audit adjustments and to any other adjustments described therein).
Except as set forth in the IGL SEC Documents or the IGL Letter, since
June 30, 1996 IGL has not made any change in the accounting practices or
policies applied in the preparation of its financial statements. IGL's
public accountants have not issued any audit reports or other reports on
internal controls which indicate that the internal controls associated
with or otherwise covering IGL have or had any material weaknesses or
that the accounting records associated with or otherwise covering IGL
contained or could contain any material errors.
Section 2.6 Registration Statement and Joint Proxy Statement.
None of the information (other than information provided for inclusion
therein by FTX) included or incorporated -
by reference in the Registration Statement or the joint proxy
statement/prospectus included therein relating to the Stockholder
Meetings (as defined in Section 5.1) (together with any amendments or
supplements thereto, the "Joint Proxy Statement") will (i) in the case
of the Registration Statement, at the time it becomes effective, contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading or (ii) in the case of the Joint Proxy Statement,
at the time of the mailing thereof, at the time of each of the
Stockholder Meetings and at the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time any event with
respect to IGL, its directors and officers or any of its Subsidiaries
shall occur which is required to be described in the Joint Proxy
Statement or the Registration Statement, such event shall be so
described, and an appropriate amendment or supplement shall be promptly
filed with the SEC and, to the extent required by law, disseminated to
the stockholders of IGL. The Registration Statement will comply as to
form in all material respects with the provisions of the Securities Act,
and the Joint Proxy Statement will comply as to form in all material
respects with the provisions of the Exchange Act, in each case other
than as to information provided for inclusion therein by FTX.
Section 2.7 Absence of Certain Changes or Events. Except as
set forth in the IGL SEC Documents filed prior to the date hereof or the
IGL Letter, since June 30, 1996: (i) IGL and its Subsidiaries have not
incurred any material liability or obligation (indirect, direct or
contingent), or entered into any material oral or written agreement or
other transaction, that is not in the ordinary course of business or
that has resulted or would reasonably be expected to result in a
Material Adverse Effect; (ii) IGL and its Subsidiaries have not
sustained any loss or interference with their business or properties
from fire, flood, windstorm, accident or other calamity (whether or not
covered by insurance) that has had or that would reasonably be expected
to have a Material Adverse Effect; (iii) there has been no material
change in the indebtedness of IGL and its Subsidiaries (other than
changes in the ordinary course of business), no increase in the
outstanding shares of capital stock of IGL except for the issuance of
shares of IGL Common Stock pursuant to the IGL Stock Options and no
dividend or distribution of any kind declared, paid or made by IGL on
any class of its capital stock except for regular quarterly dividends of
not more than $0.08 per share on IGL Common Stock and (iv) there has
been no Material Adverse Change, nor any event or development that
would, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Change.
Section 2.8 No Existing Violation, Default, Etc. Neither IGL
nor any of its Subsidiaries is in violation of (i) its charter or other
organization documents or by-laws, (ii) any applicable law, ordinance or
administrative or governmental rule or regulation or (iii) any order,
decree or judgment of any Governmental Entity having jurisdiction over
IGL or any of its Subsidiaries, except for any violations that,
individually or in the aggregate, would reasonably be expected not to
have a Material Adverse Effect. The properties, assets and operations
of IGL and its Subsidiaries are in compliance with all applicable
federal, state, local and foreign laws, rules and regulations, orders,
decrees, judgments, permits and licenses, relating to
public and worker health and safety (collectively, "Worker Safety Laws")
and the protection and clean-up of the environment and activities or
conditions related thereto, including, without limitation, those
relating to the generation, handling, disposal, transportation or
release of hazardous materials (collectively, "Environmental Laws"),
except for any violations that, individually or in the aggregate, would
reasonably be expected not to have a 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 or current events, conditions, circumstances,
activities, practices, incidents, actions or plans of IGL or any of its
Subsidiaries that may interfere with or prevent compliance or continued
compliance in all material respects with applicable Worker Safety Laws
and Environmental Laws, other than any such interference or prevention
as, individually or in the aggregate with any such other interference or
prevention, has not had and would not reasonably be expected to have a
Material Adverse Effect. The term "hazardous materials" shall mean
those substances that are regulated by or form the basis for liability
under any applicable Environmental Laws.
Except as may be set forth in the IGL SEC Documents or the IGL
Letter: (i) there is no existing event of default or event that, but for
the giving of notice or lapse of time, or both, would constitute an
event of default under any loan or credit agreement, note, bond,
mortgage, indenture or guarantee of indebtedness for borrowed money and
(ii) there is no existing event of default or event that, but for the
giving of notice or lapse of time, or both, would constitute an event of
default under any lease, other agreement or instrument to which IGL or
any of its Subsidiaries is a party or by which IGL or any such
Subsidiary or any of their respective properties, assets or business is
bound, which, individually or in the aggregate, has had or would
reasonably be expected to have a Material Adverse Effect.
Section 2.9 Licenses and Permits. IGL and its Subsidiaries
have received such certificates, permits, licenses, franchises,
consents, approvals, orders, authorizations and clearances from
appropriate Governmental Entities (the "IGL Licenses") as are necessary
to own or lease and operate their respective properties and to conduct
their respective businesses substantially in the manner described in the
IGL SEC Documents and as currently owned or leased and conducted, and
all such IGL Licenses are valid and in full force and effect, except for
any such certificates, permits, licenses, franchises, consents,
approvals, orders, authorizations and clearances which the failure to
have or to be in full force and effect would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.
IGL and its Subsidiaries are in compliance in all material respects with
their respective obligations under the IGL Licenses, with only such
exceptions as, individually or in the aggregate, have not had and would
not reasonably be expected to have a Material Adverse Effect, and no
event has occurred that allows, or after notice or lapse of time, or
both, would allow, revocation or termination of any material IGL
License.
Section 2.10 Environmental Matters. Except as set forth in
the IGL SEC Documents or the IGL Letter, (i) neither IGL nor any of its
Subsidiaries is the subject of any federal, state, local, foreign or
provincial investigation, and neither IGL nor any of its Subsidiaries
has received any notice or claim (or is aware of any facts that would
form a reasonable basis for any claim), or entered into any negotiations
or agreements with any
other person, relating to any material liability or obligation or
material remedial action or potential material liability or obligation
or material remedial action under any Environmental Law; and (ii) there
are no pending, reasonably anticipated or, to the knowledge of IGL,
threatened actions, suits or proceedings against IGL, any of its
Subsidiaries or any of their respective properties, assets or operations
asserting any such material liability or obligation or seeking any
material remedial action in connection with any Environmental Laws.
Section 2.11 Tax Matters. Except as otherwise set forth in
the IGL Letter: (i) IGL and each of its Subsidiaries have filed all
federal, and all material state, local, foreign and provincial, Tax
Returns (as hereinafter defined) required to have been filed on or prior
to the date hereof, or appropriate extensions therefor have been
properly obtained, and such Tax Returns are correct and complete, except
to the extent that any failure to be correct and complete would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; (ii) all Taxes (as hereinafter defined) shown
to be due on such Tax Returns have been timely paid or extensions for
payment have been duly obtained, or such Taxes are being timely and
properly contested, and IGL and each of its Subsidiaries have complied
in all material respects with all rules and regulations relating to the
withholding of Taxes, except to the extent that any failure to comply
with such rules and regulations would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
(iii) neither IGL nor any of its Subsidiaries has waived any statute of
limitations in respect of its Taxes; (iv) such Tax Returns relating to
federal and state income Taxes have been examined by the Internal
Revenue Service or the appropriate state taxing authority or the period
for assessment of the Taxes in respect of which such Tax Returns were
required to be filed has expired; (v) no material issues that have been
raised in writing by the relevant taxing authority in connection with
the examination of such Tax Returns are currently pending; and (vi) all
deficiencies asserted or assessments made as a result of any examination
of such Tax Returns by any taxing authority have been paid in full or
are being timely and properly contested. The charges, accruals and
reserves on the books of IGL and its Subsidiaries in respect of Taxes
have been established and maintained in accordance with generally
accepted accounting principles. For purposes of this Agreement: (i)
"Taxes" means any federal, state, local, foreign or provincial income,
gross receipts, property, sales, use, license, excise, franchise,
employment, payroll, withholding, alternative or added minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty, imposed by any
Governmental Entity; and (ii) "Tax Return" means any return, report or
similar statement (including any attached schedules) required to be
filed with respect to any Tax, including, without limitation, any
information return, claim for refund, amended return or declaration of
estimated Tax.
Section 2.12 Actions and Proceedings. Except as set forth in
the IGL SEC Documents or the IGL Letter, there are no outstanding
orders, judgments, injunctions, awards or decrees of any Governmental
Entity against IGL or any of its Subsidiaries, any of its or their
properties, assets or businesses, any IGL Plan (as defined in Section
2.15) or, to the knowledge of IGL, any of its or their current or former
directors or officers, as such, that would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
Except as set forth in the IGL SEC Documents or the IGL Letter, there
are no actions, suits or claims or legal, administrative or arbitration
proceedings or investigations pending or, to the knowledge of IGL,
threatened against IGL or any of its Subsidiaries, any of its or their
properties, assets or business, any IGL Plan or, to the knowledge of
IGL, any of its or their current or former directors or officers, as
such, that would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Except as set forth in the IGL
SEC Documents or the IGL Letter, as of the date hereof, there are no
actions, suits or claims or legal, administrative or arbitration
proceedings or investigations pending or, to the knowledge of IGL,
threatened against IGL or any of its Subsidiaries, any of its or their
properties, assets or business, any IGL Plan or, to the knowledge of
IGL, any of its or their current or former directors or officers, as
such, relating to the transactions contemplated by this Agreement.
Section 2.13 Labor Matters. Except as disclosed in the IGL
SEC Documents or the IGL Letter, neither IGL nor any of its Subsidiaries
has any labor contracts, collective bargaining agreements or material
employment or consulting agreements with any persons employed by or
otherwise performing services primarily for IGL or any of its
Subsidiaries (the "IGL Business Personnel") or any representative of any
IGL Business Personnel. Except as set forth in the IGL SEC Documents or
the IGL Letter, neither IGL nor any of its Subsidiaries has engaged in
any unfair labor practice with respect to IGL Business Personnel, and
there is no unfair labor practice complaint pending against IGL or any
of its Subsidiaries with respect to IGL Business Personnel, which, in
either case, would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect. Except as set forth in the
IGL SEC Documents or the IGL Letter, there is no material labor strike,
dispute, slowdown or stoppage pending or, to the knowledge of IGL,
threatened against IGL or any of its Subsidiaries, and neither IGL nor
any of its Subsidiaries has experienced any material primary work
stoppage or other material labor difficulty involving its employees
during the last three years. Except as disclosed in the IGL SEC
Documents or the IGL Letter, neither IGL nor any of its Subsidiaries
has, as of the date of this Agreement, any material pending grievance,
claim or arbitration involving discrimination or harassment based upon
sex, age, marital status, race, religion, color, sexual preference or
handicap, including but not limited to any proceedings before the Equal
Employment Opportunity Commission, or any federal, state or local agency
or court.
Section 2.14 Contracts. All of the material contracts of IGL
and its Subsidiaries that are required to be described in the IGL SEC
Documents or to be filed as exhibits thereto have been described or
filed as required. Neither IGL or any of its Subsidiaries nor, to the
knowledge of IGL, any other party is in breach of or default under any
such contracts which are currently in effect, except for such breaches
and defaults which are described in the IGL Letter or which would
reasonably be expected not to have, individually or in the aggregate, a
Material Adverse Effect. Except as set forth in the IGL SEC Documents
or the IGL Letter, neither IGL nor any of its Subsidiaries is a party to
or bound by any non-competition agreement or any other agreement or
obligation which purports to limit in any material respect the manner in
which, or the localities in which, IGL or any such Subsidiary is
entitled to conduct all or any material portion of the business of IGL
and its Subsidiaries taken as whole.
Section 2.15 ERISA. As used herein: (i) "IGL Plan" means a
"pension plan" (as defined in Section 3(2) of ERISA, other than a IGL
Multiemployer Plan), a "welfare plan" (as
defined in Section 3(1) of ERISA) and any Code Section 501(c)(9) trust
maintained by IGL or any of its ERISA Affiliates at any time during the
six-year period prior to the Effective Time or to which IGL or any of
its ERISA Affiliates has at any time during such time period contributed
or otherwise may have any liability; (ii) "IGL Multiemployer Plan" means
a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) to
which IGL or any of its ERISA Affiliates is or has at any time during
the six-year period prior to the Effective Time been obligated to
contribute or otherwise may have any liability;(iii) with respect to any
person, "ERISA Affiliate" means any trade or business (whether or not
incorporated) which is under common control or would be considered a
single employer with such person pursuant to Section 414(b), (c), (m) or
(o) of the Code and the regulations promulgated thereunder or pursuant
to Section 4001(b) of ERISA and the regulations promulgated thereunder;
and (iv)"IGL Benefit Arrangements" means each employment, severance,
termination, consulting, retirement Plan or similar contract,
arrangement or policy, and each Plan or arrangement (written or oral)
providing
for severance benefits, insurance coverage (including any self-insured
arrangement), workers compensation, disability benefits,
supplemental unemployment benefits, vacation benefit, retirement
benefits, deferred compensation, profit sharing, bonuses, stock
options, stock appreciation rights, or other forms of incentive
compensation, or post-retirement insurance, compensation, or
benefits which (a) is not an IGL Plan, (b) is entered into,
maintained, or contributed to, as the case may be, by IGL or any
Subsidiary, and (c) covers any employee or former employee of IGL
or any Subsidiary.
The IGL Letter sets forth the name of (a) each IGL Plan
which is a single-employer plan as defined in Section 4001(a)(15)
of ERISA and (b) each employment, severance, termination,
consulting or retirement plan or agreement, excluding any such
payments required under any domestic or foreign law.
Except as provided in the IGL Letter, true copies of
each IGL Plan and IGL Benefit Arrangement have be made available
to FTX. In the case of any such IGL Plan or IGL Benefit
Arrangement that is not in written form, FTX has been provided
accurate descriptions of such IGL Plan or IGL Benefit Arrangement
as well as copies of the most recent Internal Revenue Service
determination letters with respect to each IGL Plan that is a
single employer plan as defined in Section 4001(a)(15) of ERISA.
Each IGL Plan complies in all material respects with the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), the Code and all other applicable laws and
administrative or governmental rules and regulations. No
"reportable event" (within the meaning of Section 4043 of ERISA)
has occurred with respect to any IGL Plan subject to Title IV of
ERISA for which the 30-day notice requirement has not been waived
(other than with respect to the transactions contemplated by this
Agreement), and no condition exists which would subject IGL or any
of its ERISA Affiliates (as hereinafter defined) to any fine under
Section 4071 of ERISA; except as disclosed in the IGL Letter,
neither IGL nor any of its ERISA Affiliates has withdrawn from any
IGL Plan subject to Title IV of ERISA or IGL Multiemployer Plan
(as hereinafter defined) or has taken, or is currently considering
taking, any action to do so; and no action has been taken, or is
currently being considered, to terminate any IGL Plan subject to
Title IV of ERISA. No IGL Plan subject to Section 302 of ERISA,
nor any trust created thereunder, has incurred any "accumulated
funding deficiency" (as defined in Section 302 of ERISA), whether
or not waived. To the knowledge of IGL, there are no actions,
suits or claims pending or
threatened (other than routine claims for benefits) with respect
to any IGL Plan which would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
Neither IGL nor any of its ERISA Affiliates has incurred or would
reasonably be expected to incur any material liability under or
pursuant to Title IV of ERISA. No prohibited transactions
described in Section 406 of ERISA or Section 4975 of the Code have
occurred which would reasonably be expected to result in material
liability to IGL or its Subsidiaries. Except as set forth in the
IGL Letter, all IGL Plans that are intended to be qualified under
Section 401(a) of the Code have received a favorable determination
letter as to such qualification from the Internal Revenue Service,
no event has occurred, either by reason of any action or failure
to act, which would cause the loss of any such qualification, and
IGL is not aware of any reason why any such IGL Plan is not so
qualified in operation. Neither IGL nor any of its ERISA
Affiliates has been notified by any IGL Multiemployer Plan that
such IGL Multiemployer Plan is currently in reorganization or
insolvency under and within the meaning of Section 4241 or 4245 of
ERISA or that such IGL Multiemployer Plan intends to terminate or
has been terminated under Section 4041A of ERISA.
Each IGL Plan and each IGL Benefit Arrangement has been
maintained in substantial compliance with its terms and with the
requirements prescribed by and all statutes, orders, rules, and
regulations that are applicable to such IGL Plan and such IGL
Benefit Arrangement. Except under plans disclosed in Schedule
2.15, neither IGL nor any of its ERISA Affiliates have any current
or projected liability in respect of post-employment or post-
retirement health, medical, or life insurance benefits for
retired, former, or current employees of IGL or any of its ERISA
Affiliates, except as required to avoid excise tax under Code
Section 4980B. No condition exists that would prevent IGL or any
of its ERISA Affiliates from amending or terminating any IGL Plan
or IGL Benefit Arrangement providing health or medical benefits in
respect of any active employee of IGL or any of its ERISA
Affiliates other than limitations imposed under the terms of a
collective bargaining agreement. Except as set forth in the IGL
Letter, there is no issue with respect to any IGL Plan or IGL
Benefit Arrangement that is now, or within the last 12 months has
been, under examination by the Internal Revenue Service or the
Department of Labor, and no audit with respect to any IGL Plan or
IGL Benefit Arrangement by either the Internal Revenue Service or
the Department Labor has occurred. There are no pending
investigations by any governmental or regulatory agency or
authority involving or relating to any IGL Plan or IGL Benefit
Arrangement, no threatened or pending claims (except for claims
for benefits payable in the normal operation of the IGL Plans or
IGL Benefit Arrangements), suits or proceedings against any IGL
Plan or IGL Benefit Arrangement, or asserting any rights or claims
to benefits under any IGL Plan or IGL Benefit Arrangement which
could reasonably be expected to have a Material Adverse Effect on
IGL. Except as disclosed in writing to FTX, there have been no
acts or omissions by IGL or any Subsidiary of IGL which have given
rise to or could reasonably be expected to give rise to fines,
penalties, taxes, or related charges under Section 502 of ERISA or
Chapters 43, 47, or 68 of the Code for which IGL or any Subsidiary
of IGL may be liable. Each IGL plan which constitutes a "group
health plan" (as defined in ERISA Sections 607(1) or 733(a) or
Code Section 5000(b)(1)), including any plans of current and
former IGL Subsidiaries which must be taken into account under
Code Sections 4980B or 414(t) or under Parts 6 and 7 of Title I of
ERISA, has been operated in compliance with applicable law. All
contributions or payments owed with respect to any period prior to
the Effective Time under any IGL Plan or
IGL Benefit Arrangement have been made and all accruals which
relate to any IGL Plan have been made in accordance with
applicable Statement of Financial Accounting Standards issued by
the Financial Account Standard Board. Except as set forth in the
IGL Letter, none of the assets of any IGL Plan is invested in any
property constituting employer real property or employer
securities within the meaning of ERISA Section 407(d). With
respect to any IGL Plan that is subject to Title IV of ERISA: (a)
no steps has been taken to terminate any such Plan; (b) there has
been no withdrawal (within the meaning of ERISA Section 4063) of a
"substantial employer" (as defined in ERISA Section 4001(a)(2));
and (c) no event or condition has occurred which could reasonably
be expected to constitute grounds under ERISA Section 4042 for the
termination of or the appointment of a trustee to administer any
such plan. Neither IGL nor any of its ERISA Affiliates has
engaged in or are successors or parent corporations to an entity
that has engaged in a transaction described in ERISA Sections 4069
or 4212(c).
Section 2.16 Liabilities. Except as fully reflected or
reserved for in the most recent audited consolidated financial
statements included in the IGL SEC Documents filed prior to the
date hereof, or disclosed in the footnotes thereto, or set forth
in the IGL Letter, IGL and its Subsidiaries had no liabilities
(including, without limitation, Tax liabilities) at the date of
such consolidated financial statements, absolute or contingent, of
a nature which are required by generally accepted accounting
principles to be reflected in such consolidated financial
statements or disclosed in the footnotes thereto, that were
material, either individually or in the aggregate, to IGL and its
Subsidiaries taken as a whole. In addition, as of the date of
this Agreement, IGL has no knowledge of any other liabilities,
contingent or absolute, determined or otherwise, other than
liabilities that in the aggregate would reasonably be expected not
to have a Material Adverse Effect. Except as so reflected,
reserved, disclosed or set forth, IGL and its Subsidiaries have no
commitments which are reasonably expected to be materially
adverse, either individually or in the aggregate, to IGL and its
Subsidiaries taken as a whole.
Section 2.17 Opinions of Investment Bankers. IGL has
received the opinions of Xxxxxx Xxxxxxx & Co. Incorporated and
Lazard Freres & Co. LLC, dated the date hereof, to the effect
that, as of the date hereof, the aggregate consideration to be
paid by IGL in the Merger is fair to IGL from a financial point of
view, a copy of which opinions have been delivered to FTX.
Section 2.18 Brokers. No broker, investment banker or
other person, other than Xxxxxx Xxxxxxx & Co. Incorporated and
Lazard Freres & Co. LLC, the fees and expenses of which will be
paid by IGL, is entitled to any broker's, finder's or other
similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or
on behalf of IGL.
Section 2.19 Ownership of FTX Capital Stock. None of
IGL or any of IGL's Subsidiaries owns any shares of the capital
stock of FTX.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FTX
FTX represents and warrants to IGL as follows:
Section 3.1 Organization, Standing and Power. FTX is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has the requisite corporate power
and authority to carry on its business as now being conducted. Each
Subsidiary of FTX is a corporation, partnership or other legal entity
duly organized, validly existing and in good standing under the laws of
the jurisdiction in which it is incorporated or organized and has the
requisite corporate power and authority to carry on its business as now
being conducted. FTX and each of its Subsidiaries are duly qualified to
do business, and are in good standing, in each jurisdiction where the
character of their properties owned or held under lease or the nature of
their activities makes such qualification necessary, except where the
failure to be so qualified would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Except as
disclosed in the FTX SEC Documents or the FTX Letter, FTX and its
Subsidiaries are not subject to any material joint venture, joint
operating or similar arrangement or any material shareholders agreement
relating thereto nor does it own or possess more than 5% of the
outstanding equity interests of any other entity.
Section 3.2 Capital Structure. As of the date hereof, the
authorized capital stock of FTX consists of: 100,000,000 FTX Common
Shares and 50,000,000 shares of Preferred Stock, $100 par value ("FTX
Preferred Shares"), of which 5,000,000 shares have been designated as
"$4.375 Convertible Exchangeable Preferred Stock" (the "FTX $4.375
Preferred Shares"). At the close of business on August 21, 1997: (i)
23,302,866 FTX Common Shares were issued and outstanding, all of which
were validly issued, are fully paid and nonassessable and are free of
preemptive rights; and (ii) 1,001,690 FTX $4.375 Preferred Shares were
issued and outstanding, all of which were validly issued, are fully paid
and nonassessable and are free of preemptive rights. As of the date of
this Agreement, except for FTX $4.375 Preferred Shares and except for
stock options covering not in excess of 1,829,677 FTX Common Shares
(collectively, the "FTX Stock Options"), there are no options, warrants,
calls, rights or agreements to which FTX or any of its Subsidiaries is a
party or by which any of them is bound obligating FTX or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of capital stock of FTX or any such
Subsidiary or obligating FTX or any such Subsidiary to grant, extend or
enter into any such option, warrant, call, right or agreement. Each
outstanding share of capital stock and all equity interests of each
Subsidiary of FTX is duly authorized, validly issued, fully paid and
nonassessable and, except as disclosed in the FTX SEC Documents or the
FTX Letter (as such terms are hereinafter defined), each such share and
all equity interests, and all of the equity interests in the IMC-Agrico
Entities described in FTX SEC Documents as being owned by FTX, are
beneficially owned by FTX or another Subsidiary of FTX, free and clear
of all security interests, liens, claims, pledges, options, rights of
first refusal, agreements, limitations on voting rights, charges and
other encumbrances of any nature whatsoever. As of the date of its
filing, Exhibit 21.1 to FTX's Annual Report on Form 10-K for the year
ended December 31, 1996, as filed with the SEC (the "FTX Annual
Report"), is a true, accurate and correct statement in all material
respects of all of the information required to be set forth therein by
the regulations of the SEC.
Section 3.3 Authority. The Board of Directors of FTX has
declared as advisable and fair to and in the best interests of the
stockholders of FTX (and has resolved to recommend to stockholders for
approval) the Merger and has approved this
Agreement, and FTX has all requisite corporate power and authority to
enter into this Agreement and (subject to approval of the Merger by a
majority of the outstanding stock of FTX entitled to vote thereon) to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by FTX and the consummation by FTX of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of FTX, subject to the approval
of the Merger by a majority of the outstanding stock of FTX entitled to
vote thereon. The holders of FTX $4.375 Preferred Shares, and the
holders of any partnership interests of FRP, are not entitled to vote on
the Merger. This Agreement has been duly executed and delivered by FTX
and (assuming the valid authorization, execution and delivery hereof by
IGL and the validity and binding effect hereof on IGL and Sub)
constitutes the valid and binding obligation of FTX enforceable against
FTX in accordance with its terms. The preparation of the Joint Proxy
Statement to be filed with the SEC has been duly authorized by FTX's
Board of Directors.
Section 3.4 Consents and Approvals; No Violation. Except as
set forth in the letter dated and delivered to IGL on the date hereof
(the "FTX Letter"), which relates to this Agreement and is designated
therein as being FTX Letter, the execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated
hereby and compliance with the provisions hereof will not, result in any
violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to the loss of a material right or
benefit under, or result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of FTX or any
of its Subsidiaries under: (i) any provision of the Restated Certificate
of Incorporation or By-Laws of FTX or the comparable charter or
organization documents or by-laws of any of its Subsidiaries, (ii) any
loan or credit agreement, note, bond, mortgage, indenture, lease,
agreement, instrument, permit, concession, franchise or license
applicable to FTX or any of its Subsidiaries or (iii) any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
FTX or any of its Subsidiaries or any of their respective properties or
assets, other than, in the case of clauses (ii) and (iii), any such
violations, defaults, rights, liens, security interests, charges or
encumbrances that, individually or in the aggregate, would reasonably be
expected not to have a Material Adverse Effect on FTX and would not
materially impair the ability of FTX to perform its obligations
hereunder or prevent the consummation of any of the transactions
contemplated hereby. No filing or registration with, or authorization,
consent or approval of, any Governmental Entity is required by or with
respect to FTX or any of its Subsidiaries in connection with the
execution and delivery of this Agreement by FTX or is necessary for the
consummation of the Merger and the other transactions contemplated by
this Agreement, except: (i) in connection, or in compliance, with the
provisions of the HSR Act, the Securities Act and the Exchange Act, (ii)
for the filing and recordation requirements of the DGCL with respect to
the Certificate of Merger and the filing of appropriate documents with
the relevant authorities of other states in which FTX or any of its
Subsidiaries is qualified to do business, (iii) for such filings and
consents as may be required under any environmental, health or safety
law or regulation pertaining to any notification, disclosure or required
approval triggered by the Merger or the transactions contemplated by
this Agreement set forth in the FTX Letter, except where the failure to
obtain or make any such consent or filing would, individually or in the
aggregate, reasonably be expected not to have a Material Adverse Effect,
(iv) for such filings, authorizations, orders and approvals, if any, as
may be required to obtain the State Takeover Approvals, (v) for such
filings as may be required in connection with the taxes described in
Section 5.11, (vi) for such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under the
laws of any foreign country (including, without limitation, any
political subdivision thereof) in which IGL or FTX or any of their
respective Subsidiaries conducts any business or owns any property or
assets, (vii) for consent of the Minerals Management Service of the
United States Department of the Interior, and (viii) for such other
consents, orders, authorizations, registrations, declarations and
filings the failure of which to obtain or make would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect on FTX and would not materially impair the ability of FTX to
perform its obligations hereunder or prevent the consummation of any of
the transactions contemplated hereby.
Section 3.5 SEC Documents and Other Reports. FTX has filed
all documents required to be filed by it with the SEC since June 30,
1995. As of their respective filing dates, all documents filed by FTX
with the SEC since June 30, 1995 (the "FTX SEC Documents") complied in
all material respects with the applicable requirements of the Securities
Act or the Exchange Act, as the case may be, and none of FTX SEC
Documents contained any untrue statement of a material fact or omitted
to state any 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 consolidated financial statements
of FTX included in FTX SEC Documents complied, at the time of filing
with the SEC (and, with respect to any registration statement, at the
time it was declared effective), as to form in all material respects
with the applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, were prepared in accordance
with generally accepted accounting principles applied on a consistent
basis during the periods involved (except as may be indicated therein or
in the notes thereto) and fairly present the consolidated financial
position of FTX and its consolidated Subsidiaries as at the respective
dates thereof and the consolidated results of their operations and their
consolidated cash flows for the respective periods then ended (subject,
in the case of the unaudited statements, to normal, recurring year-end
audit adjustments and to any other adjustments described therein).
Except as set forth in FTX SEC Documents, since December 31, 1996, FTX
has not made any change in the accounting practices or policies applied
in the preparation of its financial statements. FTX's public
accountants have not issued any audit reports or other reports on
internal controls which indicate that the internal controls associated
with or otherwise covering FTX have or had any material weaknesses or
that the accounting records associated with or otherwise covering FTX
contained or could contain any material errors.
Section 3.6 Registration Statement and Joint Proxy Statement;
Newco Form S-1. (a) None of the information (other than information
provided by IGL or Sub) included or incorporated by reference in the
Registration Statement will (i) in the case of the Registration
Statement, at the time it becomes effective, contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein, in light of the circumstances under which they
were made, or necessary in order to make the statements therein not
misleading or (ii) in the case of the Joint Proxy Statement, at the time
of the mailing thereof,
at the time of each of the Stockholder Meetings and at the Effective
Time, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they are made, not misleading. If at any time prior to the Effective
Time any event with respect to FTX, its directors and officers or any of
its Subsidiaries shall occur which is required to be described in the
Joint Proxy Statement or the Registration Statement, such event shall be
so described, and an appropriate amendment or supplement shall be
promptly filed with the SEC and, to the extent required by law,
disseminated to the stockholders of FTX. With respect to information
relating to FTX, the Registration Statement will comply as to form in
all material respects with the provisions of the Securities Act, and the
Joint Proxy Statement will comply (with respect to FTX) as to form in
all material respects with the provisions of the Exchange Act.
(b) None of the information (other than information provided
for inclusion therein by IGL) included or incorporated by reference in
the registration statement on Form S-1 to be filed with the SEC by Newco
under the Securities Act for the purpose of registering the shares of
Newco Common Stock to be distributed to FTX stockholders (the "Newco
Form S-1") will (i) at the time it becomes effective, contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading or (ii) at the time of each of the Stockholder Meetings and
at the Effective Time, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. If at any time
prior to the Effective Time any event with respect to Newco, its
directors and officers or any of its Subsidiaries shall occur which is
required to be described in the Newco Form S-1, such event shall be so
described, and an appropriate amendment or supplement shall be promptly
filed with the SEC and, to the extent required by law, disseminated to
the stockholders of FTX. The Newco Form S-1 will comply as to form in
all material respects with the provisions of the Securities Act.
Section 3.7 Absence of Certain Changes or Events. Except as
set forth in FTX SEC Documents filed prior to the date hereof or the FTX
Letter, since December 31, 1996: (i) FTX and its Subsidiaries have not
incurred any material liability or obligation (indirect, direct or
contingent), or entered into any material oral or written agreement or
other transaction, that is not in the ordinary course of business or
that has resulted or would reasonably be expected to result in a
Material Adverse Effect; (ii) FTX and its Subsidiaries have not
sustained any loss or interference with their business or properties
from fire, flood, windstorm, accident or other calamity (whether or not
covered by insurance) that has had or that would reasonably be expected
to have a Material Adverse Effect; (iii) there has been no material
change in the indebtedness of FTX and its Subsidiaries (other than
changes in the ordinary course of business), no change in the
outstanding shares of capital stock of FTX except for the issuance of
FTX Common Shares pursuant to FTX Stock Options and no dividend or
distribution of any kind declared, paid or made by FTX on any class of
its capital stock except for regular quarterly dividends of not more
than $1.09375 per FTX $4.375 Preferred Share and of not more than $.09
per FTX Common Share; and (iv) there has been no Material Adverse Change
with respect to FTX, nor any event or development that would,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change.
Section 3.8 No Existing Violation, Default, Etc. Neither FTX
nor any of its Subsidiaries is in violation of (i) its charter or other
organization documents or by-laws, (ii) any applicable law, ordinance or
administrative or governmental rule or regulation or (iii) any order,
decree or judgment of any Governmental Entity having jurisdiction over
FTX or any of its Subsidiaries, except for any violations that,
individually or in the aggregate, would reasonably be expected not to
have a Material Adverse Effect. The properties, assets and operations
of FTX and its Subsidiaries are in compliance with all applicable Worker
Safety Laws and Environmental Laws, except for any violations that,
individually or in the aggregate, would reasonably be expected not to
have a 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 or current events,
conditions, circumstances, activities, practices, incidents, actions or
plans of FTX or any of its Subsidiaries that may interfere with or
prevent compliance or continued compliance in all material respects with
applicable Worker Safety Laws and Environmental Laws, other than any
such interference or prevention as, individually or in the aggregate
with any such other interference or prevention, has not had and would
reasonably be expected not to have a Material Adverse Effect.
Except as may be set forth in FTX SEC Documents or FTX Letter:
(i) there is no existing event of default or event that, but for the
giving of notice or lapse of time, or both, would constitute an event of
default under any loan or credit agreement, note, bond, mortgage,
indenture or guarantee of indebtedness for borrowed money and (ii) there
is no existing event of default or event that, but for the giving of
notice or lapse of time, or both, would constitute an event of default
under any lease, other agreement or instrument to which FTX or any of
its Subsidiaries is a party or by which FTX or any such Subsidiary or
any of their respective properties, assets or business is bound, which,
individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect.
Section 3.9 Licenses and Permits. FTX and its Subsidiaries
have received such certificates, permits, licenses, franchises,
consents, approvals, orders, authorizations and clearances from
appropriate Governmental Entities (the "FTX Licenses") as are necessary
to own or lease and operate their respective properties and to conduct
their respective businesses substantially in the manner described in FTX
SEC Documents and as currently owned or leased and conducted, and all
such FTX Licenses are valid and in full force and effect, except for any
such certificates, permits, licenses, franchises, consents, approvals,
orders, authorizations and clearances which the failure to have or to be
in full force and effect would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. FTX and
its Subsidiaries are in compliance in all material respects with their
respective obligations under FTX Licenses, with only such exceptions as,
individually or in the aggregate, have not had or would not reasonably
be expected to have a Material Adverse Effect, and no event has occurred
that allows, or after notice or lapse of time, or both, would allow,
revocation or termination of any material FTX License.
Section 3.10 Environmental Matters. Except as set
forth in the FTX SEC Documents or the FTX Letter, (i) neither FTX nor
any of its Subsidiaries is the subject of any federal, state, local,
foreign or provincial investigation, and neither FTX nor any of its
Subsidiaries has received any notice or claim (or is aware of any facts
that would form a reasonable basis for any claim), or entered into any
negotiations or agreements with any other person, relating to any
material liability or obligation or material remedial action or
potential material liability or obligation or material remedial action
under any Environmental Law; and (ii) there are no pending, reasonably
anticipated or, to the knowledge of FTX, threatened actions, suits or
proceedings against FTX, any of its Subsidiaries or any of their
respective properties, assets or operations asserting any such material
liability or obligation or seeking any material remedial action in
connection with any Environmental Laws.
Section 3.11 Tax Matters. Except as otherwise set forth in
FTX Letter: (i) FTX and each of its Subsidiaries have filed all
federal, and all material state, local, foreign and provincial, Tax
Returns required to have been filed on or prior to the date hereof, or
appropriate extensions therefor have been properly obtained, and such
Tax Returns are correct and complete, except to the extent that any
failure to be correct and complete would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
(ii) all Taxes shown to be due on such Tax Returns have been timely paid
or extensions for payment have been duly obtained, or such Taxes are
being timely and properly contested, and FTX and each of its
Subsidiaries have complied in all material respects with all rules and
regulations relating to the withholding of Taxes, except to the extent
that any failure to comply with such rules and regulations would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; (iii) neither FTX nor any of its Subsidiaries
has waived any statute of limitations in respect of its Taxes; (iv) such
Tax Returns relating to federal and state income Taxes have been
examined by the Internal Revenue Service or the appropriate state taxing
authority or the period for assessment of the Taxes in respect of which
such Tax Returns were required to be filed has expired; (v) no material
issues that have been raised in writing by the relevant taxing authority
in connection with the examination of such Tax Returns are currently
pending; (vi) all deficiencies asserted or assessments made as a result
of any examination of such Tax Returns by any taxing authority have been
paid in full or are being timely and properly contested; and (vii) FTX
has complied with all covenants made by it in Article V of the
Distribution Agreement dated as of July 5, 1995, between FTX and
Freeport-McMoRan Copper and Gold Inc. ("FCX") and, to the knowledge of
FTX, FCX has also so complied. The charges, accruals and reserves on
the books of FTX and its Subsidiaries in respect of Taxes have been
established and maintained in accordance with generally accepted
accounting principles.
Section 3.12 Actions and Proceedings. Except as set forth
in FTX SEC Documents or FTX Letter, there are no outstanding orders,
judgments, injunctions, awards or decrees of any Governmental Entity
against FTX or any of its Subsidiaries, any of its or their properties,
assets or businesses, any FTX Plan (as defined in Section 3.15) or, to
the knowledge of FTX, any of its or their current or former directors or
officers, as such, that would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Except as
set forth in FTX SEC Documents or FTX Letter, there are no actions,
suits or claims or legal, administrative or arbitration proceedings or
investigations pending or, to the knowledge of FTX, threatened against
FTX or any of its Subsidiaries, any of its or their
properties, assets or business, any FTX Plan or, to the knowledge of
FTX, any of its or their current or former directors or officers, as
such, that would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Except as set forth in FTX SEC
Documents or FTX Letter, as of the date hereof, there are no actions,
suits or claims or legal, administrative or arbitration proceedings or
investigations pending or, to the knowledge of FTX, threatened against
FTX or any of its Subsidiaries, any of its or their properties, assets
or business, any FTX Plan or, to the knowledge of FTX, any of its or
their current or former directors or officers, as such, relating to the
transactions contemplated by this Agreement.
Section 3.13 Labor Matters. Except as disclosed in FTX SEC
Documents or FTX Letter, neither FTX nor any of its Subsidiaries has any
labor contracts, collective bargaining agreements or material employment
or consulting agreements with any persons employed by or otherwise
performing services primarily for FTX or any of its Subsidiaries (the
"FTX Business Personnel") or any representative of any FTX Business
Personnel. Except as set forth in FTX SEC Documents or FTX Letter,
neither FTX nor any of its Subsidiaries has engaged in any unfair labor
practice with respect to FTX Business Personnel, and there is no unfair
labor practice complaint pending against FTX or any or its Subsidiaries
with respect to FTX Business Personnel, which, in either case, would
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. Except as set forth in FTX SEC Documents or
FTX Letter, there is no material labor strike, dispute, slowdown or
stoppage pending or, to the knowledge of FTX, threatened against FTX or
any of its Subsidiaries, and neither FTX nor any of its Subsidiaries has
experienced any material primary work stoppage or other material labor
difficulty involving its employees during the last three years. Except
as disclosed in the FTX SEC Documents or the FTX Letter, neither FTX nor
any of its Subsidiaries has, as of the date of this Agreement, any
material pending grievance, claim or arbitration involving
discrimination or harassment based upon sex, age, marital status, race,
religion, color, sexual preference or handicap, including but not
limited to any proceeding before the Equal Employment Opportunity
Commission or any federal, state or local agency or court.
Section 3.14 Contracts. All of the material contracts of FTX
and its Subsidiaries that are required to be described in FTX SEC
Documents or to be filed as exhibits thereto have been described or
filed as required. Neither FTX or any of its Subsidiaries nor, to the
knowledge of FTX, any other party is in breach of or default under any
such contracts which are currently in effect, except for such breaches
and defaults which are described in FTX Letter or which would reasonably
be expected not to have, individually or in the aggregate, a Material
Adverse Effect. Except as set forth in FTX SEC Documents or FTX Letter,
neither FTX nor any of its Subsidiaries is a party to or bound by any
non-competition agreement or any other agreement or obligation which
purports to limit in any material respect the manner in which, or the
localities in which, FTX or any such Subsidiary is entitled to conduct
all or any material portion of the business of FTX and its Subsidiaries
taken as a whole.
Section 3.15 ERISA. As used herein: (i) "FTX Plan" means a
"pension plan" (as defined in Section 3(2) of ERISA, other than a FTX
Multiemployer Plan), a "welfare plan" (as defined in Section 3(1) of
ERISA) and any Code Section 501(c)(9) trust maintained by FTX or any of
its ERISA Affiliates at any time during the six-year period prior to the
Effective Time or to which FTX or any of its ERISA Affiliates has at any
time during
such period contributed or otherwise may have any liability; and (ii)
"FTX Multiemployer Plan" means a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA) to which FTX or any of its ERISA Affiliates
is or has at any time during the six-year period prior to the Effective
Time been obligated to contribute or otherwise may have any
liability;(iii) with respect to any person, "ERISA Affiliate" means any
trade or business (whether or not incorporated) which is under common
control or would be considered a single employer with such person
pursuant to Section 414(b), (c), (m) or (o) of the Code and the
regulations promulgated thereunder or pursuant to Section 4001(b) of
ERISA and the regulations promulgated thereunder; and (iv)"FTX Benefit
Arrangements" means each employment, severance, termination, consulting,
retirement Plan or similar contract, arrangement or policy, and each
Plan or arrangement (written or oral) providing
for severance benefits, insurance coverage (including any self-insured
arrangement), workers compensation, disability benefits,
supplemental unemployment benefits, vacation benefit, retirement
benefits, deferred compensation, profit sharing, bonuses, stock
options, stock appreciation rights, or other forms of incentive
compensation, or post-retirement insurance, compensation, or
benefits which (a) is not an FTX Plan, (b) is entered into,
maintained, or contributed to, as the case may be, by FTX or any
Subsidiary, and (c) covers any employee or former employee of FTX
or any Subsidiary.
Schedule A to the FTX Letter sets forth the name of (a)
each FTX Plan which is a single-employer plan as defined in
Section 4001(a)(15) of ERISA and (b) each employment, severance,
termination, consulting or retirement plan or agreement, excluding
any such payments required under any domestic or foreign law.
Except as provided in Schedule A to the FTX Letter, true
copies of each FTX Plan and FTX Benefit Arrangement have be made
available to IGL. In the case of any such FTX Plan or FTX Benefit
Arrangement that is not in written form, IGL has been provided
accurate descriptions of such FTX Plan or FTX Benefit Arrangement
as well as copies of the most recent Internal Revenue Service
determination letters with respect to each Plan that is a single
employer plan as defined in Section 4001(a)(15) of ERISA.
Each FTX Plan complies in all material respects with ERISA,
the Code and all other applicable laws and administrative or
governmental rules and regulations. Except as set forth in
Schedule A to the FTX Letter, no "reportable event" (within the
meaning of Section 4043 of ERISA) has occurred with respect to any
FTX Plan subject to Title IV of ERISA for which the 30-day notice
requirement has not been waived (other than with respect to the
transactions contemplated by this Agreement), and no condition
exists which would subject FTX or any of its ERISA Affiliates to
any fine under Section 4071 of ERISA; except as disclosed in FTX
Letter, neither FTX nor any of its ERISA Affiliates has withdrawn
from any FTX Plan subject to Title IV of ERISA or FTX
Multiemployer Plan (as hereinafter defined) or has taken, or is
currently considering taking, any action to do so; and no action
has been taken, or is currently being considered, to terminate any
FTX Plan subject to Title IV of ERISA. No FTX Plan subject to
Section 302 of ERISA, nor any trust created thereunder, has
incurred any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived. To the knowledge of
FTX, there are no actions, suits or claims pending or threatened
(other than routine claims for benefits) with respect to any FTX
Plan which would reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. Neither FTX nor any
of its ERISA Affiliates has incurred
or would reasonably be expected to incur any material liability
under or pursuant to Title IV of ERISA. No prohibited
transactions described in Section 406 of ERISA or Section 4975 of
the Code have occurred which would reasonably be expected to
result in material liability to FTX or its Subsidiaries. Except
as set forth in the FTX Letter, all FTX Plans that are intended to
be qualified under Section 401(a) of the Code have received a
favorable determination letter as to such qualification from the
Internal Revenue Service, no event has occurred, either by reason
of any action or failure to act, which would cause the loss of any
such qualification, and FTX is not aware of any reason why any
such FTX Plan is not so qualified in operation. Neither FTX nor
any of its ERISA Affiliates has been notified by any FTX
Multiemployer Plan that such FTX Multiemployer Plan is currently
in reorganization or insolvency under and within the meaning of
Section 4241 or 4245 of ERISA or that such FTX Multiemployer Plan
intends to terminate or has been terminated under Section 4041A of
ERISA.
Except as disclosed in FTX SEC Documents, Schedule A to the
FTX Letter, Section 5.17, or the Employee Benefits Agreement,
since January 1, 1997, neither FTX or any Subsidiary of FTX has
entered into or adopted any FTX Plan other than a FTX Plan which
is not material in the ordinary course of business consistent with
past practices or amended in any material respect any existing FTX
Plan, except as required by law or in the ordinary course of
business consistent with past practices nor has FTX or any
Subsidiary of FTX materially increased the compensation payable or
to become payable to its officers or employees, except for
increases in the ordinary course of business and consistent with
past practice, or granted any severance or termination pay to, or
entered into, or amended or modified, any employment, severance or
consulting agreement with, any director or officer of FTX or any
of its Subsidiaries, or, except in the ordinary course of business
consistent with past practices, established, adopted, entered into
or, except as may be required to comply with applicable law,
amended in any material respect or taken action to enhance in any
material respect or accelerate any rights or benefits under, any
collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the
benefit of any director, officer or employee.
Each FTX Plan and each FTX Benefit Arrangement has been
maintained in substantial compliance with its terms and with the
requirements prescribed by and all statutes, orders, rules, and
regulations that are applicable to such FTX Plan and such FTX
Benefit Arrangement. Except under plans disclosed in Schedule
3.15, neither FTX nor any of its ERISA Affiliates have any current
or projected liability in respect of post-employment or post-
retirement health, medical, or life insurance benefits for
retired, former, or current employees of FTX or any of its ERISA
Affiliates, except as required to avoid excise tax under Code
Section 4980B. No condition exists that would prevent FTX or any
of its ERISA Affiliates from amending or terminating any FTX Plan
or FTX Benefit Arrangement providing health or medical benefits in
respect of any active employee of FTX or any of its ERISA
Affiliates other than limitations imposed under the terms of a
collective bargaining agreement. Except as set forth in the FTX
Letter, there is no issue with respect to any FTX Plan or FTX
Benefit Arrangement that is now, or within the last 12 months has
been, under examination by the Internal Revenue Service or the
Department of Labor, and no audit with respect to any FTX Plan or
FTX Benefit Arrangement by either the Internal Revenue Service or
the Department Labor has occurred. There are no pending
investigations by any governmental or regulatory agency or
authority involving or relating to any FTX Plan or FTX Benefit
Arrangement, no threatened or pending claims (except for claims
for benefits payable in the normal operation of the FTX Plans or
FTX Benefit Arrangements), suits or proceedings against any FTX
Plan or FTX Benefit Arrangement, or asserting any rights or claims
to benefits under any FTX Plan or FTX Benefit Arrangement which
could reasonably be expected to have a Material Adverse Effect on
FTX. Except as disclosed in writing to IGL, there have been no
acts or omissions by FTX or any Subsidiary of FTX which have given
rise to or could reasonably be expected to give rise to fines,
penalties, taxes, or related charges under Section 502 of ERISA or
Chapters 43, 47, or 68 of the Code for which FTX or any Subsidiary
of FTX may be liable. Each FTX plan which constitutes a "group
health plan" (as defined in ERISA Sections 607(1) or 733(a) or
Code Section 5000(b)(1)), including any plans of current and
former FTX Subsidiaries which must be taken into account under
Code Sections 4980B or 414(t) or under Parts 6 and 7 of Title I of
ERISA, has been operated in compliance with applicable law. All
contributions or payments owed with respect to any period prior to
the Effective Time under any FTX Plan or FTX Benefit Arrangement
have been made and all accruals which relate to any FTX Plan have
been made in accordance with applicable Statement of Financial
Accounting Standards issued by the Financial Account Standard
Board. Except as set forth in the FTX Letter, none of the assets
of any FTX Plan is invested in any property constituting employer
real property or employer securities within the meaning of ERISA
Section 407(d). With respect to any FTX Plan that is subject to
Title IV of ERISA: (a) no steps has been taken to terminate any
such Plan; (b) there has been no withdrawal (within the meaning of
ERISA Section 4063) of a "substantial employer" (as defined in
ERISA Section 4001(a)(2)); and (c) no event or condition has
occurred which could reasonably be expected to constitute grounds
under ERISA Section 4042 for the termination of or the appointment
of a trustee to administer any such plan. Neither FTX nor any of
its ERISA Affiliates has engaged in or are successors or parent
corporations to an entity that has engaged in a transaction
described in ERISA Sections 4069 or 4212(c).
Section 3.16 Liabilities. Except as fully reflected or
reserved for in the most recent audited consolidated financial
statements included in FTX SEC Documents filed prior to the date
hereof, or disclosed in the footnotes thereto, or set forth in FTX
Letter, FTX and its Subsidiaries had no liabilities (including,
without limitation, Tax Liabilities) at the date of such
consolidated financial statements, absolute or contingent, of a
nature which are required by generally accepted accounting
principles to be reflected in such consolidated financial
statements or disclosed in the footnotes thereto, that were
material, either individually or in the aggregate, to FTX and its
Subsidiaries taken as a whole. In addition, as of the date of
this Agreement, FTX has no knowledge of any other liabilities,
contingent or absolute, determined or otherwise, other than
liabilities that in the aggregate would reasonably be expected not
to have a Material Adverse Effect. Except as so reflected,
reserved, disclosed or set forth, FTX and its Subsidiaries have no
commitments which are reasonably expected to be materially
adverse, either individually or in the aggregate, to FTX and its
Subsidiaries taken as a whole.
Section 3.17 Opinion of Financial Advisor. FTX has
received the opinion of Salomon Brothers Inc, dated the date
hereof, to the effect that as of the date hereof, the con-
sideration to be received in the Merger by FTX's stockholders is
fair to FTX's stockholders from a financial point of view, a copy
of which opinion has been delivered to IGL.
Section 3.18 State Takeover Statutes and Charter
Provisions; Absence of Stockholder Rights Plan. The restrictions
on business combinations contained in Section 203 of the DGCL and
ARTICLE NINTH of the Restated Certificate of Incorporation of FTX
will not apply with respect to or as a result of the Merger or
this Agreement, or the transactions contemplated hereby. No other
state takeover statutes are applicable to the Merger, this
Agreement and the transactions contemplated hereby. FTX has not
adopted or executed, and is not a party or subject to, any
"Shareholder Rights Plan" or similar instrument, plan or
agreement.
Section 3.19 Brokers. No broker, investment banker or
other person, other than Salomon Brothers Inc and Goodyear Capital
Corporation, the fees and expenses of which will be paid by FTX,
is entitled to any broker's, finder's or other similar fee or
commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of
FTX.
Section 3.20 Ownership of IGL Capital Stock. Neither
FTX nor any of its Subsidiaries owns any shares of the capital
stock of IGL.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1 Conduct of Business Pending the Merger. (a)
Actions by FTX. During the period from the date
of this Agreement through the Effective Time, except as otherwise
expressly permitted or required by this Agreement or expressly
contemplated by the terms of the Distribution Agreement in
connection with the capitalization of Newco and the Newco
Distribution (as defined as Section 5.20), FTX shall, and shall
cause each of its Subsidiaries to, in all material respects carry
on its business in, and not enter into any material transaction
other than in accordance with, the ordinary course of its business
as currently conducted and, to the extent consistent therewith,
use its reasonable best efforts to preserve intact its current
business organization, keep available the services of its current
officers and employees and preserve its relationships with
customers, suppliers and others having business dealings with it,
all to the end that its goodwill and ongoing business shall be
unimpaired at the Effective Time. Without limiting the generality
of the foregoing, and except as otherwise expressly contemplated
by this Agreement or as set forth in FTX Letter (with specific
reference to the applicable subsection below), FTX shall not, and
shall not permit any of its Subsidiaries to, without the prior
written consent of IGL:
(i) (A) 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 regular quarterly dividends of not more than than
$1.09375 per FTX $4.375 Preferred Share and of not more than
$.09 per FTX Common Share (it being the express understanding
of IGL and FTX that the stockholders of FTX shall be entitled
to either a dividend on FTX Common Shares or shares of IGL
Common Stock, but not both, for the
calendar quarter in which the Closing shall occur, and the Board of
Directors of FTX shall not declare any dividend or fix any record date
therefor which would have such effect), cash distributions declared by
FTX on FRP partnership interests and units in accordance with the
Amended and
Restated Agreement of Limited Partnership of Freeport-McMoRan Resource
Partners, Limited Partnership and dividends
paid by Subsidiaries of FTX in the ordinary course of
business and consistent with past practice); (B) 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 (C) purchase, redeem or otherwise acquire any
shares of its capital stock or those of any Subsidiary or any
other securities thereof or any rights, warrants or options
to acquire any such shares or other securities (other than
the redemption of FTX $4.375 Preferred Shares in connection
with this Agreement or, with respect to those FTX Stock
Options described in Schedule 4.1(a) of the FTX Letter, as
such terms may be modified to permit early vesting thereof);
(ii) issue, deliver, sell, pledge, dispose of or
otherwise encumber 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 FTX Common Shares upon the exercise of FTX Stock Options
or the conversion of FTX $4.375 Preferred Shares, in each
case outstanding on the date of this Agreement in accordance
with their current terms);
(iii) amend its charter or organization documents or
by-laws;
(iv) except as set forth on Schedule 4.1(a) of the FTX
Letter, acquire or agree to acquire, by merging or
consolidating with, 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 otherwise
acquire or agree to acquire any assets, other than
transactions that are in the ordinary course of business and
consistent with past practice and not material to FTX and its
Subsidiaries taken as a whole;
(v) except as set forth on Schedule 4.1(a) of the FTX
Letter, sell, lease or otherwise dispose of, or agree to
sell, lease or otherwise dispose of, any of its assets, other
than transactions that are in the ordinary course of business
and consistent with past practice and not material to FTX and
its Subsidiaries taken as a whole;
(vi) except as set forth on Schedule 4.1(a) of the FTX
Letter, incur any indebtedness for borrowed money or
guarantee any such indebtedness, or make any loans, advances
or capital contributions to, or other investments in, any
other person, or retire any outstanding indebtedness for
borrowed money, other than (A) borrowings or guarantees
incurred in the ordinary course of business and consistent
with past practice and (B) any loans, advances or capital
contributions to, or other investments in, FTX or, subject to
clause (xvi) below, any majority-owned Subsidiary of FTX;
(vii) alter (through merger, liquidation,
reorganization, restructuring or in any other fashion) the
corporate structure or ownership of FTX or, except as
expressly contemplated by the terms of the Distribution
Agreement in connection with the capitalization of Newco and
the Newco Distribution, any Subsidiary;
(viii) except as set forth in Section 5.8 and Section
5.17 hereof or the Employee Benefits Agreement attached as
Exhibit B to the Distribution Agreement (the "Employee
Benefits Agreement"), enter into or adopt any FTX Plan, or
amend any existing FTX Plan, other than as required by law;
(ix) except as set forth on Schedule 4.1(a) of the FTX
Letter or as contemplated and described in Schedule 5.8 to
this Agreement, increase the compensation payable or to
become payable to its officers or employees, or the officers
or employees of FMS except for increases in the ordinary
course of business and consistent with past practice in
salaries or wages of employees of FTX or any of its
Subsidiaries who are not officers of FTX or any of its
Subsidiaries, or grant any severance or termination pay to,
or enter into, or amend or modify, any employment, severance
or consulting agreement with, any director or officer of FTX
or any of its Subsidiaries, or establish, adopt, enter into
or, except as may be required to comply with applicable law,
amend in any material respect or take action to enhance in
any material respect or accelerate any rights or benefits
under, any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any director,
officer or employee;
(x) violate or fail to perform any material obligation
or duty imposed upon FTX or any Subsidiary by any applicable
federal, state, local, foreign or provincial law, rule,
regulation, guideline or ordinance;
(xi) take any action, other than reasonable and usual
actions in the ordinary course of business consistent with
past practice, with respect to accounting policies or
procedures (other than actions required to be taken by
generally accepted accounting principles);
(xii) prepare or file any Tax Return inconsistent with
past practice or, on any such Tax Return, take any position,
make any election, or adopt any method that is inconsistent
with positions taken, elections made or methods used in
preparing or filing similar Tax Returns in prior periods or
settle or compromise any material federal, state, local or
foreign income tax liability;
(xiii) authorize, recommend, propose or announce an
intention to do any of the foregoing, or enter into any
contract, agreement, commitment or arrangement to do any of
the foregoing;
(xiv) acquire any shares of capital stock of IGL;
(xv) except as set forth in Schedule 4.1(a) of the
FTX Letter, enter into any transaction with any person or
entity controlling, controlled by or under common control
with FTX or any of its Subsidiaries; or
(xvi) make any capital expenditure, enter into any
agreement with any third party, incur any indebtedness for
borrowed money or guarantee any such indebtedness or make any
loan or advance, in each case where such action is for the
primary benefit of Newco or any subsidiary of Newco;
provided, however, that (a) any such expenditure or action
may be taken if expressly provided for in the Distribution
Agreement or if it is in the ordinary course of business and
in the amounts consistent with the schedule of proposed
expenditures attached to the FTX Letter as Schedule
4.1(a)(xvi) and (b) any liability, cost or expense to be
incurred or associated with such action is assumed by Newco
to the extent not paid or discharged prior to the
Distribution.
FTX shall promptly advise IGL orally and in writing of
any change or event having, or which would reasonably be expected
to have, a Material Adverse Effect.
(b) Actions by IGL. During the period from the date of
this Agreement through the Effective Time, except as otherwise
expressly required by this Agreement, IGL shall, and shall cause
each of its Subsidiaries to, in all material respects carry on its
business in, and not enter into any material transaction other
than in accordance with, the ordinary course of its business as
currently conducted and, to the extent consistent therewith, use
its reasonable best efforts to preserve intact its current
business organization, keep available the services of its current
officers and employees and preserve its relationships with
customers, suppliers and others having business dealings with it,
all to the end that its goodwill and ongoing business shall be
unimpaired at the Effective Time. Without limiting the generality
of the foregoing, and except as otherwise expressly contemplated
by this Agreement or as set forth in the IGL Letter (with specific
reference to the applicable subsection below), IGL shall not, and
shall not permit any of its Subsidiaries to, without the prior
written consent of FTX:
(i) (A) 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 regular quarterly dividends of not more than
$0.08 per share of IGL Common Stock and dividends paid by
Subsidiaries of IGL in the ordinary course of business and
consistent with past practice); or (B) split, combine or
reclassify IGL Common Stock or issue or authorize the
issuance of any other securities in respect of, in lieu of,
or in substitution for shares of IGL Common Stock;
(ii) issue, deliver, sell, pledge, dispose of or
otherwise encumber 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
distribution of the IGL Rights in accordance with the IGL
Rights Agreement and the issuance of any securities upon the
exercise thereof, the issuance of IGL Common Stock during the
period from the date of this Agreement through the Effective
Time upon the exercise of IGL Stock Options outstanding on
the date of this Agreement under IGL's existing stock option
plans, the grant of options for IGL Common Stock and the
issuance of IGL Common Stock upon the exercise of IGL Stock
Options which may be granted pursuant to IGL's existing stock
option plans in the ordinary course of business consistent
with past practice, and other than
issuances or sales of any of the foregoing securities at a
price or for consideration not less than the fair market
value thereof in an amount in the aggregate, pursuant to one
or more transactions, not exceeding 5% of the shares of IGL
Common Stock outstanding as of the date hereof);
(iii) amend its charter or organization documents or
by-laws;
(iv) acquire or agree to acquire, by merging or
consolidating with, 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 otherwise
acquire or agree to acquire any assets, other than
transactions that are in the ordinary course of business and
consistent with past practice and not material to IGL and its
Subsidiaries taken as a whole;
(v) sell, lease or otherwise dispose of, or agree to
sell, lease or otherwise dispose of, any of its assets, other
than transactions that are in the ordinary course of business
and consistent with past practice and not material to IGL and
its Subsidiaries taken as a whole;
(vi) incur any indebtedness for borrowed money or
guarantee any such indebtedness, or make any loans, advances
or capital contributions to, or other investments in, any
other person, or retire any outstanding indebtedness for
borrowed money, other than (A) borrowings or guarantees
incurred in the ordinary course of business and consistent
with past practice and (B) any loans, advances or capital
contributions to, or other investments in, IGL or any
majority-owned Subsidiary of IGL;
(vii) alter (through merger, liquidation,
reorganization, restructuring or in any other fashion) the
corporate structure or ownership of IGL or any Subsidiary;
(viii) violate or fail to perform any material
obligation or duty imposed upon IGL or any Subsidiary of IGL
by any applicable federal, state, local, foreign or
provincial law, rule, regulation, guideline or ordinance;
(ix) take any action, other than reasonable and usual
actions in the ordinary course of business consistent with
past practice, with respect to accounting policies or
procedures (other than actions required to be taken by
generally accepted accounting principles);
(x) prepare or file any Tax Return inconsistent with
past practice or, on any such Tax Return, take any position,
make any election, or adopt any method that is inconsistent
with positions taken, elections made or methods used in
preparing or filing similar Tax Returns in prior periods or
settle or compromise any material federal, state, local or
foreign income tax liability;
(xi) authorize, recommend, propose or announce an
intention to do any of the foregoing, or enter into any
contract, agreement, commitment or arrangement to do any of
the foregoing; or
(xii) acquire any shares of capital stock of FTX.
IGL shall promptly advise FTX orally and in writing of
any change or event having, or which would reasonably be expected
to have, a Material Adverse Effect on IGL.
Section 4.2 No Solicitation. (a) From and after the
date hereof, FTX shall not, and shall not permit any of its
directors, officers, employees, attorneys, financial advisors,
agents or other representatives or those of any of its
Subsidiaries to, directly or indirectly, solicit, initiate or
knowingly encourage (including by way of furnishing information)
any FTX Takeover Proposal (as hereinafter defined) from any
person, or engage in or continue discussions or negotiations
relating to any FTX Takeover Proposal; provided, however, that FTX
may engage in discussions or negotiations with, or furnish
information concerning FTX and its properties, assets and business
to, any person which makes, or indicates in writing an intention
to make, a FTX Superior Proposal (as hereinafter defined) if the
Board of Directors of FTX shall conclude in good faith, after
consultation with its outside counsel, that the failure to take
such action would violate the fiduciary obligations of such Board
of Directors under applicable law. FTX shall promptly notify IGL
of any FTX Takeover Proposal received by it or any of its
directors, officers, employees, attorneys, financial advisors,
agents or other representatives or those of any of its
Subsidiaries or the receipt by FTX or any of the foregoing of any
notice of any intention to make a FTX Superior Proposal, including
the material terms and conditions thereof and the identity of the
person (or group) making such FTX Takeover Proposal or indicating
such intention. As used in this Agreement: (i) "FTX Takeover
Proposal" means any proposal or offer, or any expression of
interest by any person relating to FTX's willingness or ability to
receive or discuss any proposal or offer (other than a proposal or
offer by IGL or any of its Subsidiaries), for any tender or
exchange offer, any merger, consolidation or other business
combination involving FTX or any of its Subsidiaries or any
acquisition in any manner of a substantial equity interest in, or
a substantial portion of the assets of, FTX or any of its
Subsidiaries; and (ii) "FTX Superior Proposal" means a bona fide
proposal or offer made by any person to acquire FTX pursuant to
any tender or exchange offer, any merger, consolidation or other
business combination or any acquisition of all or substantially
all of the assets of FTX and its Subsidiaries on terms which a
majority of the members of the Board of Directors of FTX
determines in good faith, and in the exercise of sound and
reasonable judgment (based on the advice of independent financial
advisors), to be more favorable to FTX and its stockholders than
the transactions contemplated hereby.
(b) From and after the date hereof, IGL shall not, and
shall not permit any of its directors, officers, employees,
attorneys, financial advisors, agents or other representatives or
those of any of its Subsidiaries to, directly or indirectly,
solicit, initiate or knowingly encourage (including by way of
furnishing information) any IGL Takeover Proposal (as hereinafter
defined) from any person, or engage in or continue discussions or
negotiations relating to any IGL Takeover Proposal; provided,
however, that IGL may engage in discussions or negotiations with,
or furnish information concerning IGL and its properties, assets
and business to, any person which makes, or indicates in writing
an intention to make, a IGL Superior Proposal (as hereinafter
defined) if the Board of Directors of IGL shall conclude in good
faith, after consultation with its outside counsel, that the
failure to take such action would violate the fiduciary
obligations of such Board of Directors under applicable law. IGL
shall promptly notify FTX of any IGL Takeover Proposal received by
it or any of its directors, officers, employees, attorneys,
financial advisors, agents or other representatives or those of
any of its Subsidiaries or the receipt by IGL or any of the
foregoing of any notice of any intention to make a IGL Superior
Proposal, including the material terms and conditions thereof and
the identity of the person (or group) making such IGL Takeover
Proposal or indicating such intention. As used in this Agreement:
(i) "IGL Takeover Proposal" means any proposal or offer, or any
expression of interest by any person relating to IGL's willingness
or ability to receive or discuss any proposal or offer (other than
a proposal or offer by IGL or any of its Subsidiaries), for any
tender or exchange offer, any merger, consolidation or other
business combination involving IGL or any of its Subsidiaries or
any acquisition in any manner of a substantial equity interest in,
or a substantial portion of the assets of, IGL or any of its
Subsidiaries; and (ii) "IGL Superior Proposal" means a bona fide
proposal or offer made by any person to acquire IGL pursuant to
any tender or exchange offer, any merger, consolidation or other
business combination or any acquisition of all or substantially
all of the assets of IGL and its Subsidiaries on terms which a
majority of the members of the Board of Directors of IGL
determines in good faith, and in the exercise of sound and
reasonable judgment (based on the advice of independent financial
advisors), to be more favorable to IGL and its stockholders than
the transactions contemplated hereby.
Section 4.3 Third Party Standstill Agreements. Except
as set forth in Section 5.21, during the period from the date of
this Agreement through the Effective Time, neither IGL nor FTX
shall terminate, amend, modify or waive any provision of any
confidentiality or standstill agreement to which it or any of its
Subsidiaries is a party (other than, in the case of FTX, any
involving IGL or its Subsidiaries or, in the case of IGL,
involving FTX or its Subsidiaries). During such period, each of
IGL and FTX shall authorize the other to enforce, on its behalf,
to the fullest extent permitted under applicable law, the
provisions of any such agreement, including, but not limited to,
by obtaining injunctions to prevent any breaches of such
agreements and to enforce specifically the terms and provisions
thereof in any court of the United States of America or of any
state having jurisdiction.
Section 4.4 Reorganization. During the period from the
date of this Agreement through the Effective Time, unless the
other parties hereto shall otherwise agree in writing, none of
IGL, FTX or any of their respective Subsidiaries shall knowingly
take or fail to take any action which action or failure would
jeopardize qualification of the Merger as a reorganization within
the meaning of Section 368(a) of the Code.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Stockholder Meetings. FTX and IGL shall
each call a meeting of its stockholders (respectively, the "FTX
Stockholder Meeting" and the "IGL Stockholder Meeting" and,
collectively, the "Stockholder Meetings") to be held as promptly
as practicable for the purpose of voting upon the Merger and, in
the case of IGL, the Charter Amendment and the IGL Share Issuance.
FTX and IGL shall, through their respective Boards of Directors,
recommend to their respective stockholders approval of such
matters and shall not withdraw such recommendation; provided,
however, that neither such Board of Directors shall be required to
make, and each such Board shall be entitled to withdraw, such
recommendation if such Board of Directors concludes in good faith,
after consultation with its outside
counsel, that the making of, or the failure to withdraw, such
recommendation would violate the fiduciary obligations of such
Board of Directors under applicable law. The respective Boards of
Directors of FTX and IGL shall not rescind their respective
declarations that the Merger is advisable unless, in any such
case, any such Board of Directors concludes in good faith, after
consultation with its outside counsel, that the failure to rescind
such determination would violate the fiduciary obligations of such
Board of Directors under applicable law. FTX and IGL shall
coordinate and cooperate with respect to the timing of such
meetings and shall use their reasonable best efforts to hold such
meetings on the same day.
Section 5.2 Preparation of the Registration Statement
and the Joint Proxy Statement and the Newco Form S-1. (a) FTX and
IGL shall promptly prepare and file with the SEC the Joint Proxy
Statement and IGL shall prepare and file with the SEC the
Registration Statement for the purpose of registering the IGL
Common Stock, the IGL Warrants, shares of IGL Common Stock
issuable upon the exercise of the IGL Warrants and any IGL Rights
associated with the foregoing, in which the Joint Proxy Statement
will be included as a prospectus. IGL shall use its reasonable
best efforts, and FTX shall reasonably cooperate with IGL, to have
the Registration Statement declared effective under the Securities
Act as promptly as practicable after such filing. IGL shall also
take any action (other than qualifying to do business in any
jurisdiction in which it is now not so qualified) required to be
taken under any applicable state securities laws in connection
with the issuance of IGL Common Stock or the IGL Warrants in
connection with the Merger and upon any exercise of the IGL
Warrants or, with respect to any FTX Stock Option, stock
appreciation right or stock incentive unit (collectively, the "FTX
Stock-Based Awards") which is outstanding immediately prior to the
Effective Time pursuant to any stock option or stock-based
incentive plan (other than any "stock purchase plan" within the
meaning of Section 423 of the Code) of FTX in effect on the date
hereof (the "FTX Stock Plans") which, by application of the
procedures set forth in Section 5.8 and Schedule 5.8 becomes and
represents an option to purchase shares of IGL Common Stock or a
stock appreciation right or stock incentive unit based on IGL
Common Stock ("Substitute Options"). FTX shall furnish all
information concerning FTX and the holders of FTX Common Shares as
may be reasonably requested by IGL in connection with any such
action.
(b) FTX shall promptly cause to be prepared and filed
with the SEC the Newco Form S-1, and FTX shall, in its capacity as
Administrative Managing General Partner of FRP, cause to be
prepared and filed with the SEC an information statement related
to the distribution of the Newco Common Stock to holders of units
and partnership interests of FRP. FTX shall use its reasonable
best efforts to cause the Newco Form S-1 to be declared effective
under the Securities Act as promptly as practicable after such
filing. FTX shall also take and cause to be taken any action
(other than qualifying to do business in any jurisdiction in which
it is now not so qualified) required to be taken under any
applicable state securities laws in connection with the issuance
of Newco Common Stock in connection with the Merger.
Section 5.3 Comfort Letters. (a) FTX shall use its
reasonable best efforts to cause to be delivered to IGL "comfort"
letters of Xxxxxx Xxxxxxxx L.L.P., FTX's independent public
accountants, dated the date on which the Registration Statement
shall become effective and as of the Effective Time (provided that
such accountants need only conduct their procedures through a date
not earlier than three days before the date of such
letters), and addressed to IGL and FTX, in form and substance
reasonably satisfactory to IGL and as is reasonably customary in
scope and substance for letters delivered by independent public
accountants in connection with transactions such as those
contemplated by this Agreement.
(b) IGL shall use its reasonable best efforts to cause
to be delivered to FTX "comfort" letters of Ernst & Young LLP,
IGL's independent public accountants, dated the date on which the
Registration Statement shall become effective and as of the
Effective Time, and addressed to FTX and IGL, in form and
substance reasonably satisfactory to FTX and as is reasonably
customary in scope and substance for letters delivered by
independent public accountants in connection with transactions
such as those contemplated by this Agreement.
Section 5.4 Access to Information. Subject to
currently existing contractual and legal restrictions applicable
to IGL (which IGL represents and warrants do not require it to
withhold information which is material and adverse to IGL and its
Subsidiaries taken as a whole) or to FTX (which FTX represents and
warrants do not require it to withhold information which is
material and adverse to FTX and its Subsidiaries taken as a
whole), IGL and FTX shall, and shall cause each of its respective
Subsidiaries to, afford, during normal business hours during the
period from the date of this Agreement through the Effective Time,
to the accountants, counsel, financial advisors, officers and
other representatives of the other reasonable access to, and
permit them to make such inspections as may reasonably be
requested of, its properties, books, contracts, commitments and
records (including, without limitation, the work papers of
independent public accountants), and also permit such interviews
with its officers and employees as may be reasonably requested;
and, during such period, IGL and FTX shall, and shall cause each
of its respective Subsidiaries to, furnish promptly to the other
(i) a copy of each report, schedule, registration statement and
other document filed by it during such period pursuant to the
requirements of federal or state securities laws and (ii) all
other information concerning its properties, assets, business and
personnel as the other may reasonably request. From the date of
this Agreement through the Effective Time, IGL and FTX shall
consult with each other regarding any inquiries made by antitrust
regulatory authorities, including as to any issues raised by such
authorities and the possible resolutions thereof. No
investigation pursuant to this Section 5.4 shall affect any
representation or warranty in this Agreement of any party hereto
or any condition to the obligations of the parties hereto. All
information obtained by IGL or FTX pursuant to this Section 5.4
shall be kept confidential in accordance with the Confidentiality
Agreement dated July 30, 1997 among IGL, FTX and FRP.
Section 5.5 Compliance with the Securities Act. Prior
to the Effective Time, FTX shall cause to be prepared and
delivered to IGL a list (reasonably satisfactory to counsel for
IGL) identifying each person who, at the time of FTX Stockholder
Meeting, is or may reasonably be deemed to be an "affiliate" of
FTX, as such term is used in paragraphs (c) and (d) of Rule 145
under the Securities Act (the "FTX Rule 145 Affiliates"). FTX
shall use its reasonable best efforts to cause each person who is
identified as a FTX Rule 145 Affiliate in such list to deliver to
IGL on or prior to the Effective Time a written agreement, in the
form previously approved by the parties hereto, that such FTX Rule
145 Affiliate will not sell, transfer or otherwise dispose of any
FTX Common Shares, the IGL Warrants or any shares of IGL Common
Stock or Newco Common Stock issued to such FTX Rule 145 Affiliate
in connection with the Merger, except pursuant to an
effective registration statement or in compliance with such
Rule 145 or another exemption from the registration requirements
of the Securities Act.
Section 5.6 Stock Exchange Listings. IGL shall use its
reasonable best efforts to list on the NYSE, subject to official
notice of issuance, the IGL Warrants and the shares of IGL Common
Stock to be issued in connection with the Merger and upon any
exercise of the IGL Warrants or the Substitute Options. FTX shall
use its reasonable best efforts to list on the NYSE, subject to
official notice of issuance, the shares of Newco Common Stock to
be issued in connection with the Merger.
Section 5.7 Fees and Expenses. (a) Except as otherwise
provided in Section 5.11, whether or not the Merger shall be
consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby,
including, without limitation, the fees and disbursements of
counsel, financial advisors, accountants, actuaries and
consultants, shall be paid by the party incurring such costs and
expenses, provided that all printing expenses and filing fees
shall be divided equally between IGL and FTX.
(b) Nothing contained in this Section 5.7 shall be
deemed to limit any remedies available to a party for any breach
of this Agreement by the other party.
Section 5.8 FTX Incentive Plans. IGL agrees to take any and all
such action as is contemplated to be taken by it in Schedule
5.8 to this Agreement. IGL further acknowledges and
agrees that it has reviewed and approved the actions contemplated
to be taken at or prior to the Effective Time by FTX in Schedule
5.8 and IGL specifically consents to such actions by FTX.
Section 5.9 Reasonable Best Efforts. (a) Upon the
terms and subject to the conditions set forth in this Agreement,
each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other party
in doing, all things necessary, proper or advisable, to consummate
and make effective, as soon as reasonably practicable, the Merger
and the other transactions contemplated by this Agreement,
including, but not limited to: (i) the obtaining of all necessary
actions or non-actions, waivers, consents and approvals from all
Governmental Entities and the making of all necessary
registrations and filings with, and the taking of all other
reasonable steps as may be necessary to obtain an approval or
waiver from, or to avoid an action or proceeding by, any
Governmental Entity (including those in connection with the HSR
Act and any State Takeover Approvals); (ii) the obtaining of all
necessary consents, approvals or waivers from persons other than
Governmental Entities; (iii) the defending of any lawsuits or
other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions
contemplated hereby, including seeking to have any stay or
temporary restraining order entered by any court or other
Governmental Entity vacated or reversed; and (iv) the execution
and delivery of any additional instruments necessary to consummate
the transactions contemplated by this Agreement.
(b) Each party hereto shall refrain from taking any
action, or entering into any transaction, which would cause any of
its representations or warranties contained in this Agreement to
be untrue or to result in a breach of any of its representations,
warranties or covenants in this Agreement.
(c) Notwithstanding any provision in this Agreement to
the contrary: (i) neither IGL nor FTX shall be obligated to use
its reasonable best efforts or to take any action (or omit to take
any action) pursuant to this Agreement if the Board of Directors
of IGL or FTX, as the case may be, shall conclude in good faith,
after consultation with its outside counsel, that such action
would violate the fiduciary obligations of such Board of Directors
under applicable law; and (ii) in connection with any filing or
submission or other action required to be made or taken by either
IGL or FTX to effect the Merger and to consummate the other
transactions contemplated hereby, FTX shall not, without IGL's
prior written consent, commit to any divestiture transaction, and
neither IGL nor any of its Affiliates shall be required to divest
or hold separate or otherwise take or commit to take any action
that limits its freedom of action with respect to, or its ability
to retain, FTX or any material portions thereof or any of the
business, product lines, properties or assets of IGL or any of its
Affiliates.
Section 5.10 Public Announcements. IGL and FTX shall
consult with each other before issuing any press release or
otherwise making any public statement with respect to the
transactions contemplated by this Agreement and shall not issue
any such press release or make any such public statement prior to
such consultation and without the written approval (which shall
not unreasonably be withheld) of the other, except as may be
required by applicable law or by existing obligations pursuant to
any listing agreement with any national securities exchange.
Section 5.11 Real Estate Transfer and Gains Tax. Either
FTX or the Surviving Corporation shall pay all state, local or
foreign taxes, if any (collectively, the "Gains Taxes"),
attributable to the transfer of the beneficial ownership of FTX's
and its Subsidiaries' real properties, and any penalties or
interest with respect thereto, payable in connection with the
consummation of the Merger. FTX shall cooperate with IGL in the
filing of any returns with respect to the Gains Taxes, including
supplying in a timely manner a complete list of all real property
interests held by FTX and its Subsidiaries and any information
with respect to such properties that is reasonably necessary to
complete such returns. The portion of the consideration allocable
to the real properties of FTX and its Subsidiaries shall be
determined by IGL in its reasonable discretion. The stockholders
of FTX shall be deemed to have agreed to be bound by the
allocation established pursuant to this Section 5.11 in the
preparation of any return with respect to the Gains Taxes.
Section 5.12 State Takeover Laws. If any "fair price"
or "control share acquisition" statute or other similar statute or
regulation shall become applicable to the transactions contem-
plated hereby, IGL and FTX and their respective Boards of
Directors shall use their reasonable best efforts to grant such
approvals and to take such other actions as are necessary so that
the transactions contemplated hereby may be consummated as
promptly as practicable on the terms contemplated hereby and shall
otherwise act to eliminate the effects of any such statute or
regulation on the transactions contemplated hereby.
Section 5.13 Indemnification; Directors and Officers
Insurance. (a) All rights to indemnification or exculpation, and
all limitations with respect thereto, existing in favor of a
director, officer, employee or agent (an "Indemnified Person") of
FTX or any of its Subsidiaries (including, without limitation, any
indemnification rights to which such persons are entitled because
they are serving as a director, officer, agent or employee of
another entity at the request of FTX or any of its
Subsidiaries), as provided in FTX's Restated Certificate of
Incorporation or By-laws as in effect on the date of this
Agreement and relating to actions or events up to the Effective
Time (including without limitation the Merger, the Newco
Distribution and the other transactions contemplated by this
Agreement) shall survive the Merger and shall continue in full
force and effect, without any amendment thereto; provided,
however, that the Surviving Corporation shall not be required to
indemnify any Indemnified Person in connection with any proceeding
(or portion thereof) to the extent involving any Claim initiated
by such Indemnified Person unless the initiation of such
proceeding (or portion thereof) was authorized by the Board of
Directors of IGL or unless such proceeding is brought by an
Indemnified Person to enforce rights under this Section 5.13;
provided further that any determination required to be made with
respect to whether an Indemnified Person's conduct complies with
the standards set forth under the DGCL, FTX's Restated Certificate
of Incorporation or By-laws or any such agreement, as the case may
be, shall be made by independent legal counsel selected by such
Indemnified Person and reasonably acceptable to IGL; and provided
further that nothing in this Section 5.13 shall impair any rights
or obligations of any current or former director or officer of
FTX.
(b) Prior to the Effective Time, FTX shall have the
right, upon consultation with IGL, to obtain and pay for in full a
"tail" coverage directors' and officers' liability insurance
policy ("D&O Insurance") covering a period of not less than six
years after the Effective Time and providing coverage in amounts
and on terms consistent with FTX's existing D&O Insurance. In the
event FTX is unable to obtain such insurance, IGL or the Surviving
Corporation agrees to maintain FTX's D&O Insurance for a period of
not less than six years after the Effective Time; provided, that
IGL may substitute therefor policies of substantially similar
coverage and amounts containing terms no less advantageous to such
former directors or officers; provided further that if the
existing D&O Insurance expires or is canceled during such period,
IGL or the Surviving Corporation shall use their best efforts to
obtain substantially similar D&O Insurance; and provided further
that FTX shall not, without IGL's consent, expend an amount in
excess of $1,010,000 to procure the above described "tail"
coverage and neither IGL nor the Surviving Corporation shall be
required to expend, in order to maintain or procure an annual D&O
Insurance policy, in lieu of a tail policy, an amount in excess of
200% of the aggregate premiums paid by FTX in 1997 on an
annualized basis for such purpose (it being understood that such
1997 aggregate premium was $505,000), but in such case shall
purchase as much coverage as possible for such amount.
(c) The provisions of this Section 5.13 are intended to
be for the benefit of, and shall be enforceable by, each
Indemnified Person, his or her heirs and his or her personal
representatives.
Section 5.14 Notification of Certain Matters. IGL
shall give prompt notice to FTX, and FTX shall give prompt notice
to IGL, of: (i) the occurrence, or non-occurrence, of any event
the occurrence, or non-occurrence, of which does or would be
likely to cause (A) any representation or warranty of such party
contained in this Agreement to be untrue or inaccurate in any
material respect or (B) any covenant, condition or agreement of
such party contained in this Agreement not to be complied with or
satisfied; and (ii) any failure of IGL or FTX, as the case may be,
to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this
Section 5.14 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
Section 5.15 Treatment of FTX $4.375 Preferred Shares.
As soon as practicable, but in any event no later than 15 days
after the execution of this Agreement, FTX shall fix a date
(which shall be not more than 60 days after the date of this
Agreement) for the redemption of all of the outstanding FTX $4.375
Preferred Shares (the "Redemption Date") and shall mail a notice
of such redemption to the holders thereof. FTX shall take all
actions necessary to redeem the FTX $4.375 Preferred Shares on or
prior to FTX Stockholder Meeting and shall comply with the
applicable provisions of the Certificate of Correction to
Certificate of Designations of $4.375 Convertible Exchangeable
Preferred Stock of FTX, as filed in the office of the Secretary of
State of Delaware on March 2, 1992 (the "Certificate of
Designations"), relating to the redemption of FTX $4.375 Preferred
Shares.
Section 5.16 Certain Litigation. Neither IGL nor FTX
shall settle any litigation commenced after the date hereof
against IGL, FTX or any of their respective directors by any
stockholder of IGL, FTX or unitholder of FRP relating to the
Merger or this Agreement without the prior written consent of the
other party, which consent shall not be unreasonably withheld.
Section 5.17 Employee Benefits. (a) Except as provided
herein, from and after the Effective Time IGL shall comply with
all FTX Plans that are in effect as of the date hereof. Except
for the Substitute Options and except as provided in this Section,
Section 5.8, Schedule A to the FTX Letter, and the Employee
Benefits Agreement described in Paragraph (c) of this Section
("Employee Benefits Agreement"), IGL shall not have any obligation
to provide benefits based on equity securities or any equivalent
thereof, and IGL may amend or terminate any FTX Plan in accordance
with its terms and applicable law. For all purposes of
eligibility to participate in and vesting in benefits provided
under employee benefits plans maintained by IGL and its
Subsidiaries (but not for purposes of determining benefits (or
accruals thereof) under such plans) which employees and former
employees of FTX become eligible to participate in after the
Effective Time, all persons previously employed by FTX and its
Subsidiaries and then employed by IGL or its Subsidiaries as a
result of the transactions contemplated under this Agreement shall
be credited with their years of service with FTX and its
Subsidiaries and years of service with prior employers to the
extent service with prior employers is taken into account under
FTX Plans.
(b) The foregoing shall not constitute any commitment,
contract, understanding or guarantee (express or implied) on the
part of IGL of a post-Effective Time employment relationship of
any term of duration or on any terms other than those that IGL may
establish. Employment of any of the employees by IGL will be "at
will" and may be terminated by IGL at any time for any reason
(subject to any legally binding agreement other than this
Agreement, or any applicable laws or collective bargaining
agreement, or any other arrangement or commitment). Except as
provided in this Section, Section 5.8, and the Employee Benefits
Agreement, nothing in this Agreement shall be interpreted as
limiting the power of the Surviving Corporation to amend or
terminate any particular FTX Plan or any other employee benefit
plan, program, agreement or policy or as requiring the Surviving
Corporation or IGL to offer to continue (other than as required by
its terms) any written employment contract.
(c) Prior to the Effective Time, FTX is authorized to
enter into the Employee Benefits Agreement and shall be permitted
to take any and all actions, including the adoption of new plans
or amendment of existing plans, as are contemplated to be taken by
FTX under the Employee Benefits Agreement. To the extent that the
Employee Benefits Agreement requires or calls for the performance
of any obligations or the taking of any acts by FTX on or after
the Effective Time, the Surviving Corporation shall honor and
fully perform such acts or obligations. Capitalized terms used in
the remainder of this Section 5.17 that are not defined in this
Agreement are defined in the Employee Benefits Agreement.
(d) With respect to retiree medical, retiree dental,
and retiree group life insurance benefits for FTX Retired
Employees, IGL, as the Surviving Corporation, agrees to: (1)
maintain until the later of one year after the Effective time or
December 31, 1998 the same level of benefits, and at the same
level of Company premium cost sharing, as in effect at the
Effective Time and (2) give notice to affected FTX Retired
Employees and their beneficiaries at least six months before
making any changes in either such premiums or such benefits,
including any termination of such benefits.
(e) Prior to the Effective Time, FTX will amend the
Freeport-McMoRan Inc. Retiree Benefit Plan if needed to allow
certain employees, other than Transferred Employees, who are under
age 55 to receive post-retirement benefits under such
plan if their employment with FTX is terminated in connection with the
transactions contemplated herein.
(f) Prior to the Effective Time, FTX may (i)
transfer to FCX or FMS (the "Transferee Company") the liabilities under
the Freeport-McMoRan Inc. Excess Benefits Plan and the Freeport-McMoRan
Inc. Grandfathered Retirement Benefit Plan relating to some or all of the
employees who terminate or have terminated employment with FTX and who are
thereafter employed by the Transferee Company, and (ii) transfer to the
Transferee Company an amount in cash equal to the present value of any
such transferred liabilities, determined in the same manner as provided
with respect to transfers under Paragraph 3(d) of the Employee Benefits
Agreement. Any such liabilities that are not otherwise transferred to FCX
or FMS shall remain liabilities of FTX, and IGL shall make all payments
that are required to be made after the Effective Time in accordance with
the terms of the current provisions of the applicable plan.
(g) Prior to the Effective Time, FTX will amend the SECAP to
permit it to distribute each SECAP account (other than accounts that are
to be transferred to the Company's SECAP pursuant to the Employee Benefits
Agreement) to the participant
for whom the account is maintained or to the comparable plan of FMS or
FCX if the participant is employed there.
(h) FTX shall provide FTX employees who have a
qualifying event (as that term is defined in Code section 4980B(f)(3)),
irrespective of the time of the qualifying event, notice of their rights
to continue coverage under the FTX Flexible Spending Account, Medical,
Dental, or any other group health plan as defined in Code section
4980D(f)(1). Further, FTX will provide each FTX employee written
certification of his or her creditable coverage as required under the
Health Insurance Portability and Accountability Act of 1996.
(i) Prior to the Effective Time, FTX shall have the right,
subject to the rules of Code Section 401, to amend the FTX Pension Plan,
the FTX EBP, the FTX Grandfathered Plan, the FTX ECAP, and the FTX SECAP,
if needed to assure that a participant who has reached the age of 55 will
be able to receive the vested benefits he has accrued under such plans
even if such participant is still employed by FCX, FMS, or any other
company. IGL specifically acknowledges and consents to the distribution of
any and all such benefits to such participants on or before the Effective
Time. IGL also specifically acknowledges that neither this Agreement nor
such plan amendments will require the distribution of such benefits prior
to the Effective Time, that payment of a participant's plan benefits may
be deferred beyond the Effective Time to a time selected by the
participant, that payment after the Effective Time will be the
responsibility of IGL, that IGL will not amend the plans to require
acceleration of receipt of benefits and that, to the extent that a Plan
participant makes a request for the distribution of his Plan benefits
following the Effective Time, IGL shall take all actions necessary to pay
or arrange for timely payment of such benefits. IGL acknowledges that the
total amount payable under the FTX EBP and FTX Grandfathered Plan to each
of the two most-senior executives of FTX, if they should retire and demand
their benefits at this time, is as set forth on Schedule 5.17(i).
(j) The Freeport-McMoRan Inc. Severance Plan will be amended or
terminated if necessary to eliminate any obligation
of FTX to pay severance benefits.
Section 5.18 Board of Directors. IGL shall take such action as
shall be necessary to cause the number of directors comprising the full
Board of Directors of IGL at the Effective Time to be increased by three
directors (or, in the event that immediately prior the Effective Time
there shall exist one or more vacancies in the Board of Directors of IGL,
such lesser number that, when added to the number of such vacancies then
existing, shall equal three) and the three vacancies thus created to be
filled by the election as directors of IGL, effective at the Effective
Time, of Xxxxx X. Xxxxxxx, Xxxx X. Xxxxxxxxx and Xxxxxx X. Xxxxx III
(collectively, the "New Directors"). The allocation of the New Directors
among the three classes of the Board of Directors of IGL shall be as
follows: Xxxxxx X.
Xxxxx III shall be added to the class of IGL directors whose term is
scheduled to expire at the 1998 annual meeting of stockholders of IGL;
Xxxx X. Xxxxxxxxx shall be added to the class of IGL directors whose term
is scheduled to expire at the 1999 annual meeting of stockholders of IGL;
and Xxxxx X. Xxxxxxx shall be added to the class of IGL directors whose
term is scheduled to expire at the 2000 annual meeting of stockholders of
IGL.
Section 5.19 Services Agreement. At or prior to the Effective
Time, (i) FTX shall sell, transfer and convey to FMS and Newco for an
aggregate consideration not exceeding $250,000, all of FTX's right, title
and interest in and to the common stock of FMS owned by FTX, (ii) IGL
shall enter into a letter agreement in the form attached as Exhibit B with
FMS related to certain commitments and obligations of FTX assumed by IGL
as a result of the Merger and (iii) FMS shall enter into a letter
agreement providing for the assumption by FMS of the obligation of FTX to
provide certain administrative services relating to the Freeport-McMoRan
Oil and Gas Royalty Trust.
Section 5.20 Distribution Agreement. (a)
Simultaneously with the execution hereof, IGL and FTX shall
execute, and FTX shall cause FRP and Newco to execute, the
Distribution Agreement. True and complete copies of the
Certificate of Incorporation and By-laws of Newco as in effect on
the date hereof are set forth in Exhibit D and Exhibit E,
respectively, attached hereto. Prior to the Effective Time, FTX
shall not permit the Distribution Agreement to be amended or
modified without the prior written consent of IGL. Prior to the
Effective Time, FTX shall not permit the Certificate of
Incorporation or By-laws of Newco to be amended or modified
without the prior written consent of IGL, provided that such
consent shall not be unreasonably withheld.
(b) Prior to the Effective Time, (i) IGL and FTX shall,
and FTX shall cause FRP and Newco to, (A) contribute to Newco, in
accordance with the Distribution Agreement, certain assets used in
connection with the production, sale and distribution of sulphur,
oil and gas, and certain other assets including the interests held
indirectly by IGL and FRP in Main Pass Block 299 pursuant to the
Main Pass Agreements, (B) distribute, prior to the Effective Time,
to the unitholders of FRP (including FTX) all of the issued and
outstanding shares of Newco Common Stock as contemplated by the
Distribution Agreement and (C) file with the SEC the Newco Form S-
1 (the contribution and distribution transactions contemplated by
clauses (A) and (B) above being herein collectively referred to as
the "Newco Distribution") and (ii) IGL and Newco shall execute an
Assignment and Assumption Agreement in the form of Exhibit A to
the Distribution Agreement. IGL and FTX shall, and FTX shall cause
FRP and Newco to, take all actions contemplated by or arising in
connection with the Newco Distribution, including causing Newco to
indemnify and hold harmless IGL, FTX and their respective
officers, directors, affiliates and Subsidiaries from and against
any and all liabilities and obligations (express or implied, known
or unknown) arising out of the ownership, operation or control,
on, prior to or after the Effective Time, of the sulphur-related
business and assets contributed to Newco as contemplated above.
Section 5.21 IGL/FTX Standstill Agreement. (a) Upon
the determination by the Board of Directors of FTX that a FTX
Takeover Proposal constitutes a FTX Superior Proposal, IGL and its
Subsidiaries shall be relieved of the standstill obligations
contained in Section 5.0 of the Amended and Restated Parent
Agreement dated as of July 1, 1993, as amended and restated May
26, 1995, as further amended.
(b) Upon the determination by the Board of Directors of
IGL that a IGL Takeover Proposal constitutes a IGL Superior
Proposal, FTX and its Subsidiaries shall be relieved of the
standstill obligations contained in Section 6.0 of the Amended and
Restated Parent Agreement dated as of July 1, 1993, as amended and
restated May 26, 1995, as further amended.
Section 5.22 Use of Name. As soon as practicable
following the Merger, the Surviving Corporation, in its capacity
as the successor Administrative Managing General Partner of FRP,
shall change the name of FRP to eliminate all references to
Freeport-McMoRan, Freeport or McMoRan. In addition, IGL covenants
that from and after the Effective Time neither it nor any of its
Subsidiaries shall use the name, business name or logo Freeport-
McMoRan, Freeport, McMoRan or any other name, logo, trade or
service xxxx which is or might be confusingly similar thereto;
provided, however, that IGL and its Subsidiaries may continue to
use such names, business names or logos, without charge, for a
period not to exceed 120 days after the Merger to the extent such
names, business names or logos appear on stationary, office
supplies, signs, business cards or other documents of FTX or its
subsidiaries existing as of the date of
the Merger.
ARTICLE VI
CONDITIONS PRECEDENT TO THE MERGER
Section 6.1 Conditions to Each Party's Obligation to
Effect the Merger. The respective obligations of each party
hereto to effect the Merger shall be subject to the fulfillment at
or prior to the Effective Time of the following conditions:
(a) Stockholder Approval. The Merger shall have been
duly approved by a majority of the outstanding stock of each of
FTX and IGL entitled to vote thereon, in accordance with
applicable law and the Certificate of Incorporation and By-laws of
each of FTX and IGL, and the IGL Share Issuance shall have been
duly approved in accordance with the applicable requirements of
the New York Stock Exchange, provided, that the total number of
votes cast on the IGL Share Issuance represents more than 50% of
the shares of IGL Common Stock entitled to vote thereon at the IGL
Stockholder Meeting.
(b) Stock Exchange Listings. The shares of IGL Common
Stock and the IGL Warrants issuable in accordance with the Merger
and the IGL Common Stock issuable upon exercise of the IGL
Warrants or the Substitute Options shall have been authorized for
listing on the NYSE, subject to official notice of issuance.
(c) HSR and Other Approvals. (i) The waiting period
(and any extension thereof) applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.
(ii) All authorizations, consents, orders, declarations
or approvals of, or filings with, or terminations or expirations
of waiting periods imposed by, any Governmental Entity, in each
case which are listed on Schedule 6.1(c) of the FTX Letter and the
IGL Letter, shall have been made or shall have occurred.
(d) Registration Statement. The Registration Statement
and the Newco Form S-1 shall have become effective in accordance
with the provisions of the Securities Act. No stop order
suspending the effectiveness of the Registration Statement and the
Newco Form S-1 shall have been issued by the SEC and no
proceedings for that purpose shall have been initiated or, to the
knowledge of IGL or FTX, threatened by the SEC. All necessary
state securities authorizations (including State Takeover
Approvals) shall have been received and shall be in full force and
effect.
(e) No Order. No court or other Governmental Entity
having jurisdiction over FTX or IGL, or any of their respective
Subsidiaries, shall have enacted, issued, promulgated, enforced or
entered any law, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or
permanent) which is then in effect and has the effect of making
illegal or prohibiting the Merger or any of the transactions
contemplated hereby.
(f) Consummation of Newco Distribution. The Newco
Distribution shall have been consummated in accordance with the
terms and provisions of the Distribution Agreement.
(g) Solvency of Newco; Ability to Make Distribution.
IGL and FTX shall have received opinions of value, solvency and
other appropriate factual information and advice in form and
substance satisfactory to them from Valuation Research supporting
the conclusions that, after giving effect to the Distribution
Agreement, the Newco Distribution and the transactions
contemplated thereby, (A) Newco (i) is solvent and will be solvent
subsequent to the Newco Distribution and after taking into account
the liabilities and obligations undertaken in connection with and
as a result of the Distribution Agreement and Newco Distribution,
(ii) will be able to pay its debts and liabilities as they become
due and (iii) will not be left with unreasonably small capital
with which to engage in its businesses and (B) FRP and FTX will
not violate the provisions of Section 17-607 of the Delaware
Revised Uniform Limited Partnership Act regarding the making of
distributions.
(h) Distribution. The actions contemplated by Section
5.20(b) shall have been taken.
(i) Litigation. There shall not have been instituted
or be pending, or threatened, any suit, action or proceeding by
any Governmental Entity as a result of this Agreement or any of
the transactions contemplated hereby which, if such Governmental
Entity were to prevail, would reasonably be expected, in the good
faith opinion of FTX or IGL, to have a Material Adverse Effect on
IGL.
Section 6.2 Conditions to Obligation of FTX to Effect
the Merger. The obligation of FTX to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of
the following additional conditions:
(a) Performance of Obligations; Representations and
Warranties. IGL 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 IGL contained in this Agreement
that is qualified by materiality shall be true and correct at and
as of the Effective Time as if made at and as of the Effective
Time and each of such 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 at and as of the Effective
Time, in each case except as contemplated or permitted by this
Agreement; and FTX shall have received a certificate signed on
behalf of IGL by its Chief Executive Officer and its Chief
Financial Officer to such effect.
(b) Tax Opinion. FTX shall have received an opinion of
Xxxxxx & Xxxxxxxxx, Chartered in form and substance reasonably
satisfactory to FTX, dated the Effective Time, substantially to
the effect that, on the basis of facts, representations and
assumptions set forth in such opinion which are consistent with
the state of facts existing as of the Effective Time, for federal
income tax purposes:
(i) The Merger will constitute a "reorganization"
within the meaning of Section 368(a) of the Code, and FTX and
IGL will each be a party to such reorganization within the
meaning of Section 368(b) of the Code;
(ii) Except for gain, if any, to FTX in connection with
the formation of Newco and the disposition of Newco Common
Stock, no gain or loss will be recognized by IGL or FTX as a
result of the Merger;
(iii) No gain or loss will be recognized by non-
dissenting stockholders of FTX who are United States
persons
(within the meaning of the Code) to the extent that they
exchange FTX Common Shares solely for shares of IGL Common
Stock pursuant to the Merger.
Such opinion shall also address: (a) the tax consequences of the
receipt by non-dissenting stockholders of FTX who are United
States persons (within the meaning of the Code) of (i) IGL
Warrants and Newco Common Stock in exchange for FTX Common Shares
pursuant to the Merger and (ii) cash in lieu of fractional shares
of IGL Common Stock or Newco Common Stock or in lieu of fractional
interests in IGL Warrants, and (b) the tax basis and holding
period for the shares of IGL Common Stock, Newco Common Stock and
IGL Warrants received by such stockholders in exchange for FTX
Common Shares pursuant to the Merger. In rendering such opinion,
Xxxxxx & Xxxxxxxxx, Chartered may receive and rely upon
representations contained in a certificate of FTX substantially in
the form of the FTX Tax Certificate attached to the FTX Letter and
a certificate of IGL substantially in the form of the IGL Tax
Certificate attached to the IGL Letter. To the extent that such
counsel also requests other appropriate certificates from
stockholders of FTX holding a substantial amount of FTX Common
Shares ("Major Stockholders") verifying that such Major
Stockholders have no intention as of the Effective Time to sell
the shares of IGL Common Stock to be distributed to them in the
Merger, FTX shall cooperate with such counsel in seeking such
certificates.
(c) Consents Under Agreements. IGL shall have
obtained the consent or approval of each person (other than the
Governmental Entities referred to in Section 6.1(c)) whose consent
or approval shall be required in connection with the transactions
contemplated hereby under any indenture, mortgage, evidence of
indebtedness, IGL License, lease or other agreement or instrument,
except where the failure to obtain the same would not reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect on IGL or upon the consummation of the transactions
contemplated hereby.
(d) Material Adverse Change. Since the date of this
Agreement, there shall have been no Material Adverse Change with
respect to IGL; and FTX shall have received a certificate signed
on behalf of IGL by its Chief Executive Officer and its Chief
Financial Officer to such effect.
(e) Consent Under Bank Facilities. Each of (i) the
$350,000,000 Amended and Restated Credit Agreement, originally
dated as of June 30, 1995 and amended and restated as of November
14, 1996, among FTX, FRP, certain banks that are signatories
thereto, and The Chase Manhattan Bank, as Agent, (ii) the
$10,000,000 Amended and Restated Credit Agreement dated as of June
30, 1995 and amended and restated as of December 20, 1996, among
FTX, FM Properties Operating Co., certain banks that are
signatories thereto and The Chase Manhattan Bank, as Agent, and
(iii) the Second Amended and Restated Note Agreement, originally
dated as of June 30, 1995, as amended, among FTX, FM Properties
Operating Co., The Chase Manhattan Bank and Hibernia National Bank
individually and as Agent, shall have been terminated or amended
to permit the transactions contemplated by this Agreement and the
Distribution Agreement.
(f) Opinion and Certification. In accordance with Section
11.2(d) of the FRP Amended and Restated Agreement of
Limited Partnership, FTX shall have received each of the
following: (i) a certification from IGL that IGL is a United
States Citizen (as defined in the FRP Amended and Restated Limited
Partnership Agreement), and (ii) an opinion of Sidley & Austin
that the Merger will not result in a loss of limited
liability of any limited partner of FRP or result in FRP being
treated as an association taxable as a corporation for federal
income tax purposes.
Section 6.3 Conditions to Obligations of IGL to Effect
the Merger. The obligation of IGL to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of
the following additional conditions:
(a) Performance of Obligations; Representations and
Warranties. FTX 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 repre-
sentations and warranties of FTX contained in this Agreement that
is qualified by materiality shall be true and correct at and as of
the Effective Time as if made at and as of the Effective Time and
each of such 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 at and as of the Effective
Time, in each case except as contemplated or permitted by this
Agreement; and IGL shall have received a certificate signed on
behalf of FTX by its Chief Executive Officer and its Chief
Financial Officer to such effect.
(b) Tax Opinion. IGL shall have received an opinion of
Sidley & Austin, in form and substance reasonably satisfactory to
IGL, dated the Effective Time, substantially to the effect that,
on the basis of facts, representations and assumptions set forth
in such opinion which are consistent with the state of facts
existing as of the Effective Time, for federal income tax
purposes:
(i) The Merger will constitute a "reorganization"
within the meaning of Section 368(a) of the Code, and FTX and
IGL will each be a party to such reorganization within the
meaning of Section 368(b) of the Code;
(ii) Except for gain, if any, to FTX in connection with
the formation of Newco and the disposition of Newco Common
Stock, no gain or loss will be recognized by IGL or FTX as a
result of the Merger;
(iii) No gain or loss will be recognized by the
stockholders of FTX who are United States persons (within the
meaning of the Code) to the extent that they exchange FTX
Common Shares solely for shares of IGL Common Stock pursuant
to the Merger.
Such opinion shall also address: (a) the tax consequences of the
receipt by non-dissenting stockholders of FTX who are United
States persons (within the meaning of the Code) of (i) IGL
Warrants and Newco Common Stock in exchange for FTX Common Shares
pursuant to the Merger and (ii) cash in lieu of fractional shares
of IGL Common Stock or Newco Common Stock or in lieu of fractional
interests in IGL Warrants, and (b) the tax basis and holding
period for the shares of IGL Common Stock, Newco Common Stock and
IGL Warrants received by such stockholders in exchange for FTX
Common Shares pursuant to the Merger. In rendering such opinion,
Sidley & Austin may receive and rely upon representations
contained in a certificate of IGL substantially in the form of the
IGL Tax Certificate attached to the IGL Letter and a certificate
of FTX substantially in the form of the FTX Tax Certificate
attached to the FTX Letter. To the extent that such counsel also
requests other appropriate certificates from Major Stockholders
verifying that such Major Stockholders have no intention as of the
Effective Time to sell the shares of IGL
Common Stock to be distributed to them in the Merger, FTX shall
cooperate with such counsel in seeking such certificates.
(c) Consents Under Agreements. FTX shall have
obtained the consent or approval of each person (other than the
Governmental Entities referred to in Section 6.1(c)) whose consent
or approval shall be required in connection with the transactions
contemplated hereby under any indenture, mortgage, evidence of
indebtedness, FTX License, lease or other agreement or instrument,
except where the failure to obtain the same would not reasonably
be expected, in the good faith opinion of IGL, individually or in
the aggregate, to have a Material Adverse Effect on FTX or IGL or
upon the consummation of the transactions contemplated hereby.
(d) FTX Affiliate Agreements. IGL shall have received
the written agreements from FTX Rule 145 Affiliates described in
Section 5.5.
(e) Treatment of FTX $4.375 Preferred Shares. All of
the outstanding FTX $4.375 Preferred Shares shall have been either
(i) redeemed by FTX in accordance with the Certificate of
Designations or (ii) converted into FTX Common Shares in
accordance with the Certificate of Designations.
(f) Material Adverse Change. Since the date of this
Agreement, there shall have been no Material Adverse Change with
respect to FTX; and IGL shall have received a certificate signed
on behalf of FTX by its Chief Executive Officer and its Chief
Financial Officer to such effect.
(g) Transfer of FMS Stock. FTX shall have sold,
transferred and conveyed the common stock of FMS to FCX.
(h) FMS Letter Agreement. IGL and FMS shall have
entered into that certain letter agreement as contemplated by
Section 5.19 of this Agreement.
(i) FCX Indemnity Letter. The FCX Indemnity Letter
shall remain in full force and effect, and no breach shall have
occurred thereunder or with respect thereto.
(j) FMPO Partnership. FTX shall have sold its interest
in FMPO and FM Properties Holding Company to FMP or one of its
affiliates.
ARTICLE VII
TERMINATION; AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be ter-
minated at any time prior to the Effective Time, whether before or
after any approval by the stockholders of IGL or FTX of the
matters presented in connection with the Merger:
(a) by mutual written consent of IGL and FTX, which
termination shall be approved by the Board of Directors of
IGL and FTX, respectively;
(b) by IGL, by written notice to FTX, if (i) FTX shall
have failed to comply in any material respect with any of its
covenants or agreements contained in this Agreement required
to be complied with prior to the date of such termination,
which failure to comply has not been cured within 20 business
days after receipt by FTX of notice of
such failure to comply, provided that FTX continually
exercises its reasonable best efforts to effect such cure
during such 20 business day period, (ii) the stockholders of
FTX shall not have approved the Merger at the FTX Stockholder
Meeting or any adjournment thereof or (iii) the stockholders
of IGL shall not have approved the Merger or the IGL Share
Issuance at the IGL Stockholder Meeting or any adjournment
thereof;
(c) by FTX, by written notice to IGL, if (i) IGL
shall have failed to comply in any material respect
with any of its covenants or agreements contained in this
Agreement required to be complied with prior to the date of
such termination, which failure to comply has not been cured
within 20 business days after receipt by IGL of notice of
such failure to comply, provided that IGL continually
exercises its reasonable best efforts to effect such cure
during such 20 business day period, (ii) the stockholders of
FTX shall not have approved the Merger at the FTX Stockholder
Meeting or any adjournment thereof or (iii) the stockholders
of IGL shall not have approved the Merger or the IGL Share
Issuance at the IGL Stockholder Meeting or any adjournment
thereof;
(d) by either IGL or FTX, by written notice from the
terminating party to the other party, if there has been (i) a
material breach by the other of any representation or
warranty that is not qualified as to materiality or (ii) a
breach by the other of any representation or warranty that is
qualified as to materiality, in each case which breach has
not been cured within 20 business days after receipt by the
breaching party of notice thereof through the continuous
exercise of its reasonable best efforts;
(e) by either IGL or FTX, by written notice from the
terminating party to the other parties, if: (i) the Merger
has not been effected on or prior to the close of business on
March 31, 1998; provided, however, that the right to
terminate this Agreement pursuant to this clause (e) shall
not be available to any party whose failure to fulfill any
obligation of this Agreement has been the cause of, or re-
sulted in, the failure of the Merger to have occurred on or
prior to such date; or (ii) any court or other Governmental
Entity having jurisdiction over a party hereto shall have
issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting
the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final
and nonappealable;
(f) by FTX, by written notice to IGL, if the Board of
Directors of FTX shall reasonably determine in good faith in
accordance with Section 4.2(a) hereof (i) that a FTX Takeover
Proposal constitutes a FTX Superior Proposal, and (ii) after
consultation with its outside counsel, that the failure to
accept such FTX Superior Proposal would violate the fiduciary
obligations of such Board of Directors under applicable law;
provided, however, that FTX may not terminate this Agreement
pursuant to this clause (f) unless (i) 10 business days shall
have elapsed after delivery to IGL of a written notice of
such determination by such Board of Directors and during such
10 business-day period FTX shall have fully cooperated with
IGL, including, without limitation, informing IGL of the
terms and conditions of such FTX Takeover Proposal and the
identity of the person or
group making such FTX Takeover Proposal, with the objective
of providing IGL a reasonable opportunity to propose a
modification of the terms and conditions of this Agreement so
that the transactions contemplated hereby may be effected,
and (ii) at the end of such 10 business-day period such Board
of Directors shall continue reasonably to believe in good
faith that such FTX Takeover Proposal constitutes a FTX
Superior Proposal and simultaneously therewith FTX shall
enter into a definitive acquisition, merger or similar
agreement to effect such FTX Superior Proposal;
(g) by IGL, by written notice to FTX, if the Board of
Directors of IGL shall reasonably determine in good faith in
accordance with Section 4.2(b) hereof (i) that a IGL Takeover
Proposal constitutes a IGL Superior Proposal, and (ii) after
consultation with its outside counsel, the failure to accept
such IGL Superior Proposal would violate the fiduciary
obligations of such Board of Directors under applicable law;
provided, however, that IGL may not terminate this Agreement
pursuant to this clause (g) unless (i) 10 business days shall
have elapsed after delivery to FTX of a written notice of
such determination by such Board of Directors and during such
10 business-day period IGL shall have fully cooperated with
FTX, including, without limitation, informing FTX of the
terms and conditions of such IGL Takeover Proposal and the
identity of the person or group making such IGL Takeover
Proposal, with the objective of providing FTX a reasonable
opportunity to propose a modification of the terms and
conditions of this Agreement so that the transactions
contemplated hereby may be effected, and (ii) at the end of
such 10 business-day period such Board of Directors shall
continue reasonably to believe in good faith that such IGL
Takeover Proposal constitutes a IGL Superior Proposal and
simultaneously therewith IGL shall enter into a definitive
acquisition, merger or similar agreement to effect such IGL
Superior Proposal;
(h) by IGL, by written notice to FTX, if: (i) the
Board of Directors of FTX shall not have recommended the
Merger to FTX's stockholders, or shall have resolved not to
make such recommendation, or shall have modified or rescinded
its recommendation of the Merger to FTX's stockholders as
being advisable and fair to and in the best interests of FTX
and its stockholders, or shall have modified or rescinded its
approval of this Agreement, or shall have resolved to do any
of the foregoing, (ii) the Board of Directors of FTX shall
have recommended to the stockholders of FTX any FTX Takeover
Proposal or shall have resolved to do so or (iii) a tender
offer or exchange offer for 30% or more of the outstanding
shares of capital stock of FTX is commenced, and the Board of
Directors of FTX fails to recommend against acceptance of
such tender offer or exchange offer by its stockholders
(including by taking no position with respect to the
acceptance of such tender offer or exchange offer by its
stockholders);
(i) by FTX if the Board of Directors of IGL shall
not have recommended the Merger or the IGL Share
Issuance to IGL's stockholders, or shall have resolved not to make
such recommendation, or shall have modified or rescinded its
recommendation of the Merger or the IGL Share Issuance to IGL's
stockholders as being advisable and fair to and in the best
interests of IGL and its stockholders, or shall have modified or
rescinded its approval of this Agreement, or shall have resolved
to do any of the foregoing; or
(j) by either IGL or FTX, by written notice from the
terminating party to the other party, if the other party
shall breach any of its covenants or agreements in Section
4.2.
The right of IGL or FTX to terminate this Agreement
pursuant to this Section 7.1 shall remain operative and in full
force and effect regardless of any investigation made by or on
behalf of such party, whether prior to or after the execution of
this Agreement.
Section 7.2 Effect of Termination. In the event of the
termination of this Agreement by either IGL or FTX as provided in
Section 7.1, this Agreement shall forthwith become void without
any liability hereunder on the part of FTX, IGL or their
respective directors or officers, except for the last sentence of
Section 5.4 and the entirety of Section 5.7, which shall survive
any such termination; provided, however, that nothing contained in
this Section 7.2 shall relieve any party hereto from any liability
for any breach of this Agreement.
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 by the stockholders of IGL and FTX of the matters
presented to them in connection with the Merger; provided,
however, that after any such approval, no amendment shall be made
if applicable law would require further approval by such
stockholders, unless such further approval shall be obtained. This
Agreement shall not be amended except by an instrument in writing
signed on behalf of 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
party hereto, (ii) waive any inaccuracies in the representations
and warranties contained herein or in any instrument 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 any party hereto to any such
extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Non-Survival of Representations and War-
ranties. None of the representations and warranties in this
Agreement or in any instrument delivered pursuant hereto shall
survive the Effective Time.
Section 8.2 IMC-Agrico Entities. IGL and FTX
acknowledge that each is thoroughly familiar with the business,
properties, assets, liabilities, condition (financial or
otherwise) and results of operations of the IMC-Agrico Entities.
Accordingly, the IMC-Agrico Entities have been expressly directly
excluded from the definition of Subsidiary for purpose of the
representations and warranties contained in Article II and Article
III of this Agreement and have been expressly indirectly excluded
from the definition of Material Adverse Change and Material
Adverse Effect. IGL and FTX agree that, except as provided in
Sections 2.2 and 3.2 hereof, neither party is making any
representation or warranty with respect to the IMC-Agrico
Entities. Without limiting the generality of the foregoing, any
representations or warranties which of necessity contain an
implied reference to the IMC-Agrico Entities (such as those
contained in Sections 2.5 and 3.5) shall not be deemed to be
breached if and to the extent that a misstatement or omission
relates to the IMC-Agrico Entities.
Section 8.3 Notices. All notices and other communica-
tions hereunder shall be in writing and shall be deemed given when
delivered personally, one day after being delivered to an
overnight courier or when telecopied (with a confirmatory copy
sent by overnight courier) to the other party hereto at the
following address (or at such other address for any party as shall
be specified by like notice):
(a) if to IGL, to
IMC Global Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
Telecopy: (000) 000-0000
with a copy to:
IMC Global Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
and
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx and
Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
(b) if to FTX, to
Freeport-McMoRan Inc.
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Telecopy: (000) 000-0000
with a copy to:
Freeport-McMoRan Inc.
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
and
Jones, Walker, Waechter, Poitevent,
Carrere & Xxxxxxx, L.L.P.
Place Street Xxxxxxx 000 Xx.
Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000-0000 Attention:
Xxxxxxx X. Xxxxx Telecopy: (000) 000-0000
and
Xxxxxx & Xxxxxxxxx, Chartered
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
Section8.4 Interpretation. When reference is made
in
this Agreement to a Section, such reference shall be to a
Section of this Agreement unless otherwise indicated. The
table of contents and headings contained in this Agreement
are for convenience of reference 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."
Section 8.5 Counterparts. This Agreement may be
executed in any number of counterparts, all of which shall be
considered one and the same agreement, and shall become
effective when one or more counterparts shall have been
signed by each of the parties hereto and delivered to the
other party.
Section8.6 Entire Agreement; No Third-Party
Benefi-
ciaries. This Agreement, except as provided in the last
sentence of Section 5.4, constitutes the entire agreement of
the parties hereto and supersedes all prior agreements and
understandings, both written and oral, among such parties
with respect to the subject matter hereof. This Agreement,
except for the provisions of Section 5.13, 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 conflict of
laws of such state.
Section 8.8 Assignment. Except as provided in the
last sentence of Section 1.1, neither this Agreement nor any
of the rights, interests or obligations hereunder shall be
assigned by any party hereto without the prior written
consent of the other party.
Section8.9 Severability. If any term or provision
of
this Agreement is invalid, illegal or incapable of being
enforced by any rule of law, or public policy, all other
terms, provisions and conditions 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 hereto. Upon any determination that any term or
other provision hereof is invalid, illegal or incapable of
being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original
intent of such 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 terms or provisions of this
Agreement were not performed in accordance with their
specific wording or were otherwise breached. It is
accordingly agreed that each of 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 of America or any state having
jurisdiction, such remedy being in addition to any other
remedy to which any party may be entitled at law or in
equity.
IN WITNESS WHEREOF, IGL and FTX have caused this
Agreement to be executed and attested by their respective
officers thereunto duly authorized, all as of the date first
written above.
IMC GLOBAL INC.
By: /s/ XXXXXX X. XXXXXX, XX.
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President and Chief
Executive Officer
FREEPORT-McMoRan INC.
By: /s/ XXXX X. XXXXXXXXX
Name: Xxxx X. Xxxxxxxxx Title:
President and Chief
Executive Officer
SCHEDULE 5.8
TREATMENT OF FTX STOCK OPTIONS AND OTHER FTX INCENTIVE BENEFITS
A. FTX Stock Based Plans.
FTX has outstanding non-qualified stock options, stock appreciation
rights, and stock incentive units ("FTX Stock-Based Awards") under
several benefit plans. Some of the non-qualified stock options
contain "tax-offset" payment rights. All the non-qualified stock
options held by non-employee directors have in tandem "option
cancellation gain payments," and all the non-qualified stock options
held by the other participants have in tandem "limited rights."
1. In connection with the distribution of the shares of Newco,
all FTX Stock-Based Awards that are held by persons other than
employees of IMC-Agrico Company, IGL, or a subsidiary of IGL
shall be adjusted as set forth in (a) and (b) below.
(a) The exercise price of each of those FTX Stock-Based Awards
(including, in the case of SARs and SIUs, the exercise or base
price by which gain is measured) will be reduced effective as
of the distribution by multiplying the exercise price by the
following factor:
FTX Distribution Value - (Distribution Ratio x Newco Distribution
Value)
FTX Distribution Value
As used in this Schedule 5.8, the "Newco Distribution Value"
shall mean the weighted average per share price of Newco shares
on the New York Stock Exchange on the first day that Newco
shares are traded on the New York Stock Exchange after the
effective date of the Merger; the "FTX Distribution Value"
shall mean the weighted average per share price of FTX shares
on the New York Stock Exchange on the last day that FTX shares
are traded on the New York Stock Exchange before the effective
date of the Merger; the "FTX Net Distribution Value" shall mean
(i) the FTX Distribution Value minus (ii) the product of the
Distribution Ratio, as hereinafter defined, and the Newco
Distribution Value; and the "Distribution Ratio" shall mean the
number of Newco shares distributed per FTX share in the
distribution of Newco shares by FTX, rounded to the nearest
one-millionth (.000001) of a Newco share.
No adjustment will be made to the number of FTX shares subject
to each such FTX Stock-Based Award.
(b) Under a new adjusted stock award plan, Newco will grant
effective as of the distribution a non-qualified stock option
with in tandem "limited rights" for each such FTX Stock-Based
Award, the exercise price of which will be calculated by
multiplying the exercise price of the FTX Stock-Based Award to
which such Newco non-qualified stock option relates by the
following factor:
Newco Distribution Value
FTX Distribution Value
The number of Newco shares subject to such Newco non-qualified
stock option will be equal to the number of Newco shares that
a record holder of the number of shares of FTX common stock
underlying the related FTX Stock-Based Award would have
received in the distribution. If, however, an FTX stock
option contains "tax-offset" payment rights, the number of
Newco shares subject to the related Newco non-qualified stock
option shall be equal to the number of Newco shares as
calculated in the preceding sentence multiplied by 1.6556.
2. In connection with the distribution of the shares of Newco,
all FTX Stock-Based Awards held by employees of IMC-Agrico
Company, IGL, or a subsidiary of IGL shall be adjusted as set
forth below.
The exercise price of each of those FTX Stock-Based Awards
(including, in the case of any SARs and SIUs, the exercise or
base price by which gain is measured) will be reduced
effective as of the distribution by multiplying the exercise
price by the following factor:
FTX Distribution Value - (Distribution Ratio x Newco Distribution
Value)
FTX Distribution Value
The number of FTX shares subject to each of those FTX Stock-Based Awards
will be increased effective as of the
distribution by multiplying such number of FTX shares by the
following factor:
FTX
Distribution Value
FTX Distribution Value - (Distribution Ratio x Newco Distribution
Value)
No grants of non-qualified stock options with in tandem
"limited rights" will be made by Newco to holders of FTX
Stock-Based Awards who are employees of IGL, a subsidiary of
IGL, or IMC-Agrico Company.
3. In connection with the merger of FTX and IGL, all FTX Stock-Based Awards
regardless of the holder, shall be further adjusted as set forth in
(a) and (b) below.
(a) Under a new or an amended plan, IGL will provide in
substitution for each FTX Stock-Based Award, as previously
adjusted under (1) or (2) above, an IGL award (the "IGL Stock-Based
Award") of the same kind and with the same adjusted
exercise price and the same cash payment features as the
respective adjusted FTX Stock-Based Award that it replaces.
(b) The number of shares of IGL common stock subject to an IGL
Stock-Based Award shall be equal to the product of (i) .90
multiplied by (ii) the number of shares of FTX common stock
underlying the related FTX Stock-Based Award. In addition, the
exercise price with respect to the IGL Stock-Based Award issued
with respects hereto shall be reduced by $1.75 from the then
current exercise price (as adjusted to reflect the adjustments
in paragraph A.1 of this Schedule5.8) of the FTX Stock-Based
Award in exchange therefore.
(c) No options or other awards with respect to IGL warrants
will be granted.
(d) All IGL Stock-Based Awards will be fully exercisable upon grant
because, as a result of the applicable FTX change in control provisions and
the action intended to be taken by the FTX Corporate Personnel Committee
prior to the merger but in connection therewith concerning awards of
certain employees, all FTX Stock-Based Awards will be or will become fully
exercisable upon the merger with IGL.
(e) (i) The term of each IGL Stock-Based Award will be the same as that of
the related FTX Stock-Based Award, except that any requirement that the
holder thereof render services to FTX shall be deemed to be satisfied as
long as the holder thereof is rendering services, whether as a director,
officer, employee, or otherwise to any of the following entities
(collectively, the "Freeport Entities"): Newco; any subsidiary of Newco;
Freeport-McMoRan Copper & Gold Inc.; any subsidiary of Freeport-McMoRan
Copper & Gold Inc.; McMoRan Oil & Gas Co.; any subsidiary of McMoRan Oil &
Gas Co.; FM Properties Inc.; any subsidiary of FM Properties Inc.; FM
Services Company; any corporation or other entity in which any two or more
of the aforementioned entities collectively possess, directly or
indirectly, equity interests representing at least 50% of the total
ordinary voting power or at least 50% of the total value of all classes of
equity interests of such corporation or other entity; and any entity with
which any of the foregoing entities has contracted to receive executive,
management, or legal services if the holder of such IGL Stock-Based Award
provides services to any of the foregoing entities through such
arrangement.
(ii) If the holder of an IGL Stock-Based Award ceases to provide such
services to any and all of the Freeport Entities
for any reason other than death or retirement, such IGL Stock-Based Award
shall remain exercisable within three months after
the date of such cessation, but no later than its original
term.
(iii) If the holder of an IGL Stock-Based Award ceases to
provide such services to any and all of the Freeport Entities
by reason of retirement, such IGL Stock-Based Award shall
remain exercisable within three years after the date of such
cessation, but no later than its original term.
(iv) If the holder of an IGL Stock-Based Award ceases to
provide such services to any and all of the Freeport Entities
because of such holder's death, such IGL Stock-Based Award
shall remain exercisable by such holder's designated
beneficiary or estate within one year after the date of death,
but no later than its original term.
(v) If the holder of an IGL Stock-Based Award dies after
having ceased to provide such services to any and all of the
Freeport Entities and such IGL Stock-Based Award is exercisable
pursuant to the provisions of paragraphs (ii), (iii), or (iv)
of this item 5(e), such IGL Stock-Based Award shall remain
exercisable by such holder's designated beneficiary or estate
within one year after the date of death, but no later than its
original term.
(vi) Notwithstanding anything in this item 5(e) to the
contrary, the term of each IGL Stock-Based Award made to Xxxxx
X. Xxxxxxx and Xxxx X. Xxxxxxxxx shall be the same as the
original term of the related FTX Stock-Based Award without any
requirement that the holder thereof render any services to FTX
or any of the Freeport Entities.
(f) Appropriate amendments will be made by FTX prior to the
merger to prevent the triggering of the in tandem "option
cancellation gain payments" upon the merger.
(g) The offering of IGL shares under such new or amended plan
will be registered under the Securities Act of 1933 by means of
a shelf registration statement on an appropriate form to be
effective upon consummation of the Merger.
B. Long-Term Performance Incentive Plans.
FTX has outstanding performance units under long-term performance
incentive plans, which generally entitle each holder thereof to be
paid, on the award valuation date after the conclusion of the
applicable four-year performance period for such units, the earnings
per share for each of those years on the number of FTX shares equal
to the number of such units.
1. Before the merger, FTX will credit each performance unit with
the FTX projected 1997 earnings per share of $5.18 for such
year and each subsequent year through 2000 remaining in the
performance period for such unit and amend such long-term
performance incentive plans to permit the immediate payment, on
or before the Effective Time, of such amounts and all amounts
credited thus far under such plans.
2. IGL will have no responsibility for payments under such long-term
performance incentive plans.
C. Annual Incentive Plans.
FTX gives annual cash bonuses to certain employees, including
persons who will be employed by Newco, under several benefit plans,
including a benefit plan of its affiliate, FM Services Company.
1. Prior to the merger FTX will determine the aggregate amount of
bonuses and other amounts to be paid or contributed by it under
such plans for 1997, which shall not exceed $7,500,000, and
prior to the merger FTX will either pay such amounts or
transfer the obligation to pay such amounts to FM Services
Company and Newco for payment under their annual incentive
plans, accordingly.
2. IGL will have no responsibility for the payment of such 1997
bonuses.
D. Directors' Deferral Plan.
An FTX director may defer the payment of fees for services as a
member of the FTX board of directors under an FTX deferral plan, and
the payment of those fees, including earnings thereon, are made over
a period of time commencing after termination of services and
continuing for up to ten years, as elected by the participant.
1. Prior to the merger, FTX will amend such FTX deferral plan
with the consent of all the participants to provide for the
immediate payment of all deferred amounts irrespective of
previous participant elections.
2. IGL will have no responsibility for payments under the FTX
deferral plan.
References made herein to payments to be made by FTX hereunder may
be made by FTX or FRP under applicable provisions of the Plans in
accordance with past practice.
