Annex A
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AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement")
dated as of July 14, 1999 is by and among Eastern Enterprises
(the "Parent"), EE Acquisition Company, Inc., a New Hampshire
corporation ("Merger Sub"), and EnergyNorth, Inc. (the
"Company"), a New Hampshire corporation.
RECITALS
A. Upon the terms and subject to the conditions of this
Agreement and in accordance with the laws of the State of New
Hampshire, the Parent and the Company will enter into a business
combination transaction pursuant to which the Company will merge
with and into Merger Sub, a wholly-owned subsidiary of Parent.
B. The Board of Trustees of the Parent (i) has determined
that the Merger is consistent with and in furtherance of the long-
term business strategy of the Parent and fair to, and in the best
interests of, the Parent and its stockholders, and (ii) has
approved this Agreement, the Merger and the other transactions
contemplated by this Agreement.
C. The Board of Directors of the Company (i) has determined
that the Merger is consistent with and in furtherance of the long-
term business strategy of the Company and fair to, and in the
best interests of, the Company and its stockholders, and (ii) has
approved this Agreement, the Merger and the other transactions
contemplated by this Agreement, subject to approval of the Merger
by the stockholders of the Company.
D. The Parent and the Company and Merger Sub desire to make
certain representations and warranties and other agreements in
connection with the Merger.
E. The parties intend, by executing this Agreement, to adopt
a plan of reorganization within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the covenants, promises
and representations set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. THE MERGER
1. The Merger. At the Effective Time (as defined in
Section 1.2) and subject to and upon the terms and conditions of
this Agreement and the applicable provisions of New Hampshire
law, the Company shall be merged with and into Merger Sub, the
separate corporate existence of the Company shall cease and
Merger Sub shall continue as the surviving corporation. Merger
Sub as the surviving corporation after the Merger is hereinafter
sometimes referred to as the "Surviving Corporation."
2. Effective Time; Closing. Subject to the provisions of
this Agreement, the parties hereto shall cause the Merger to be
consummated by filing the Articles of merger (the "Articles of
Merger") with the Secretary of the State of New Hampshire in
accordance with the relevant provisions of New Hampshire law (the
time of such filing, or such later time as may be agreed in
writing by the parties and specified in the Articles of Merger,
being the "Effective Time," and the date on which the Effective
Time occurs being the "Effective Date") as soon as practicable on
the Closing Date (as herein defined). Unless the context
otherwise requires, the term "Agreement" as used herein refers
collectively to this Agreement and the Articles of Merger. The
closing of the Merger (the "Closing") shall take place at the
offices of Ropes & Xxxx, at a time and date to be specified by
the parties, which shall be no later than the 35th day after the
satisfaction or waiver of the conditions set forth in Article 6
(other than delivery of items to be delivered at Closing), or at
such other time, date and location as the parties hereto agree in
writing (the "Closing Date"). At the Closing, (a) the Company
shall deliver to the Parent the various Articles and instruments
required under Article 6, (b) the Parent and Merger Sub shall
deliver to the Company the various Articles and instruments
required under Article 6, and (c) the Company and Merger Sub
shall execute and file with the Secretary of the State of New
Hampshire the Articles of Merger.
3. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in this Agreement and
the applicable provisions of New Hampshire law. Without limiting
the generality of the foregoing, and subject thereto, at the
Effective Time all the estate, property, rights, privileges,
powers and franchises of the Company and Merger Sub shall vest in
the Surviving Corporation, and all debts, liabilities and
obligations of the Company and Merger Sub shall become the debts,
liabilities and obligations of the Surviving Corporation.
4. Articles of Incorporation; Bylaws.
1. At the Effective Time, the Articles of Incorporation of
Merger Sub, as in effect immediately prior to the Effective Time,
shall be the Articles of Incorporation of the Surviving
Corporation until thereafter amended as provided by law and such
Articles of Incorporation; provided, however, that at the
Effective Time the Articles of Incorporation of the Surviving
Corporation shall be amended so that the name of the Surviving
Corporation shall be "EnergyNorth, Inc." Subject to the
foregoing, the additional effects of the Merger shall be as
provided in XX XXX 000-X: 11.06 (the "NHBCA").
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2. The Bylaws of Merger Sub, as in effect immediately
prior to the Effective Time, shall be, at the Effective Time, the
Bylaws of the Surviving Corporation until thereafter amended.
5. Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation, to serve until their
respective successors are duly elected or appointed and
qualified. The officers of Merger Sub immediately prior to the
Effective Time shall be the initial officers of the Surviving
Corporation, to serve until their successors are duly elected or
appointed or qualified.
6. Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of Merger
Sub, the Company or the holders of any of the following
securities:
1. Conversion of Company Common Stock. Each share of
Common Stock, $1.00 par value, of the Company (the "Company
Common Stock") issued and outstanding immediately prior to the
Effective Time (other than any shares of Company Common Stock to
be canceled pursuant to Section 1.6(c)) will be canceled and
extinguished and automatically converted (subject to Section
1.6(f) and (h)) into the right to receive the following (the
"Merger Consideration") at the Effective Time:
1. (A) $47.00 in cash, without interest (the "Per Share
Cash Amount"), (B) a number of shares of Common Stock, $1.00 par
value, of the Parent (the "Parent Common Stock") equal to the Per
Share Cash Amount divided by the Market Value (as defined below)
of Parent Common Stock (the "Exchange Ratio"), or (C) a
combination of cash and shares of Parent Common Stock determined
in accordance with this Section 1.6. For purposes of this
Agreement, "Market Value" of Parent Common Stock means the
average of the Daily Per Share Prices (as hereinafter defined) of
Parent Common Stock for the ten consecutive trading days ending
on the third trading day prior to the Effective Date. The "Daily
Per Share Price" for any trading day means the weighted average
of the per share selling prices of the Parent Common Stock on the
New York Stock Exchange (the "NYSE"), as reported in the NYSE
Composite Transactions, for that day. Notwithstanding the
foregoing, if the Market Value of Parent Common Stock is less
than $36.00 per share, Market Value for purposes of this Section
1.6(a)(i) shall mean $36.00 and if the Market Value of Parent
Common Stock is greater than $44.00 per share, Market Value for
purposes of this Section 1.6(a)(i) shall mean $44.00.
2. The number of shares of Company Common Stock to be
converted into the right to receive cash in the Merger will,
subject to Section 1.6(a)(vii), be 49.9% of outstanding shares
(the "Cash Election Number"). The remaining shares of Company
Common Stock outstanding immediately prior to the Effective Time
(the "Stock Election Number") will be converted into the right to
receive Parent Common Stock in the Merger.
3. Subject to the allocation and election procedures set
forth in this Section 1.6, each record holder of shares of
Company Common Stock immediately
prior to the Effective Time will be entitled in respect of each
such share (i) to elect to receive cash for such share (a "Cash
Election"), (ii) to elect to receive Parent Common Stock for
such share (a "Stock Election"), or (iii) to indicate that such
record holder has no preference as to the receipt of cash or
Parent Common Stock for such share (a "Non-Election"). All such
elections will be made on a form designed for that purpose
(a "Form of Election").
4. If the aggregate number of shares covered by Cash
Elections (the "Cash Election Shares") exceeds the Cash Election
Number, all shares of Company Common Stock covered by Stock
Elections (the "Stock Election Shares") and all shares of Company
Common Stock covered by Non-Elections (the "Non-Election Shares")
will be converted into the right to receive Parent Common Stock,
and the Cash Election Shares will be converted into the right to
receive Parent Common Stock and cash in the following manner:
Each Cash Election Share will be converted into
the right to receive (A) an amount in cash,
without interest, equal to the product of (x) the
Per Share Cash Amount and (y) a fraction (the
"Cash Fraction"), the numerator of which will be
the Cash Election Number and the denominator of
which will be the total number of Cash Election
Shares, and (B) a number of shares of Parent
Common Stock equal to the product of (x) the
Exchange Ratio and (y) a fraction equal to one
minus the Cash Fraction.
5. If the aggregate number of Stock Election Shares
exceeds the Stock Election Number, all Cash Election Shares and
all Non-Election Shares will be converted into the right to
receive cash, and all Stock Election Shares will be converted
into the right to receive Parent Common Stock and cash in the
following manner:
Each Stock Election Share will be converted into
the right to receive (A) a number of shares of
Parent Common Stock equal to the product of (x)
the Exchange Ratio and (y) a fraction (the "Stock
Fraction"), the numerator of which will be the
Stock Election Number and the denominator of
which will be the total number of Stock Election
Shares, and (B) an amount in cash, without
interest, equal to the product of (x) the Per
Share Cash Amount and (y) a fraction equal to one
minus the Stock Fraction.
6. In the event that neither subparagraph (iv) nor
subparagraph (v) above is applicable, all Cash Election Shares
will be converted into the right to receive cash, all Stock
Election Shares will be converted into the right to receive
Parent Common Stock, and all Non-Election Shares will be
converted into the right to receive Parent Common Stock and the
right to receive cash on a proportionate basis so that the Stock
Election Number and the Cash Election Number equal
their respective percentages of the number of shares of Company
Common Stock outstanding as closely as possible.
7. In the event that the Parent Common Stock (excluding
fractional shares to be paid in cash pursuant to Section 1.6(f))
to be issued in the Merger in exchange for shares of Company
Common Stock, valued at the lesser of (i) the Market Value and
(ii) the average of the high and low trading prices as reported
on the NYSE for the Effective Date, minus the aggregate discount,
if any, due to trading restrictions on the Parent Common Stock to
be issued in the Merger (the "Parent Common Stock Value") is less
than 45% of the total consideration to be paid in exchange for
the shares of Company Common Stock (including without limitation
the amount of cash to be paid in lieu of fractional shares
pursuant to Section 1.6(f), plus the number of Dissenting Shares
(as defined below) multiplied by the Per Share Cash Consideration
and any other payments required to be considered in determining
whether the continuity of interest requirement applicable to
reorganizations under Section 368 of the Code has been satisfied)
(the "Total Consideration"), then the Cash Election Number shall
be reduced, and the Stock Election Number shall be
correspondingly increased, to the extent necessary so that the
Parent Common Stock Value is 45% of the Total Consideration.
2. Cash Election Procedure.
1. The Parent and the Company will each use its reasonable
best efforts to cause a Form of Election to be mailed not less
than thirty (30) days prior to the anticipated Effective Time to
all holders of record of shares of Company Common Stock as of the
record date for the Company Stockholders' Meeting (as hereinafter
defined) and to all persons who become holders of Company Common
Stock during the period between the record date for the Company
Stockholders' Meeting and 5:00 p.m., New York time, on the date
seven calendar days prior to the anticipated Effective Time and
to make the Form of Election available to all persons who become
holders of Company Common Stock subsequent to such time.
Elections will be made by holders of Company Common Stock by
mailing to the Exchange Agent a Form of Election. Holders of
record of shares of Company Common Stock who hold such shares as
nominees, trustees or in other representative capacities (a
"Representative") may submit multiple Forms of Election, provided
that such Representative certifies that each such Form of
Election covers all the shares of Company Common Stock held by
each Representative for a particular beneficial owner. To be
effective, a Form of Election must be properly completed, signed
and submitted to the Exchange Agent and accompanied by the
certificates representing the shares of Company Common Stock as
to which the election is being made (or by an appropriate
guarantee of delivery of such certificates as set forth in such
Form of Election from a member of any registered national
securities exchange or of the National Association of Securities
Dealers, Inc. ("NASD") or a bank, trust company, credit union,
savings association, broker, dealer or other entity that is a
member in good standing of the Securities Transfer Agent's
Medallion Program, the NYSE Medallion Signature Guaranty Program
or the Stock Exchange Medallion Program). The Parent will have
the discretion, which it may delegate in whole or in part to the
Exchange Agent, to determine whether Forms of Election have been
properly completed, signed and submitted or revoked and to
disregard immaterial defects in Forms of Election. The decision
of the Parent (or the Exchange Agent) in such matters will be
conclusive and binding. Neither the Parent nor the Exchange Agent
will be under any obligation to notify any person of any defect
in a Form of Election submitted to the Exchange Agent. The
Exchange Agent will also make computations contemplated by this
Section 1.6 and all such computations will be conclusive and
binding on the holders of Company Common Stock.
2. For the purposes hereof, a holder of Company Common
Stock who does not submit a Form of Election which is received by
the Exchange Agent prior to the Election Deadline (as defined
herein) will be deemed to have made a Non-Election. If the Parent
or the Exchange Agent determine that any purported Cash Election
or Stock Election was not properly made, such purported Cash
Election or Stock Election will be deemed to be of no force and
effect and the stockholder making such purported election will
for purposes hereof be deemed to have made a Non-Election.
3. A Form of Election must be received by the Exchange
Agent by the close of business on the last business day prior to
the Effective Time (the "Election Deadline") in order to be
effective. All elections may be revoked until the Election
Deadline in writing by holders submitting the Forms of Election.
3. Cancellation of Certain Shares. Each share of Company
Common Stock held in the treasury of the Company or owned by
Merger Sub, the Parent or any direct or indirect wholly owned
subsidiary of the Company or of the Parent immediately prior to
the Effective Time shall be canceled and extinguished without any
conversion thereof.
4. Capital Stock of Merger Sub. Each share of Common
Stock, no par value, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall continue to be
outstanding following, and shall be unaffected by, the Merger.
5. Adjustment of Exchange Ratio. The Exchange Ratio shall
be adjusted to reflect fully the effect of any stock split,
reverse split, stock dividend (including any dividend or
distribution of securities convertible into Parent Common Stock),
reorganization, recapitalization or other like change with
respect to Parent Common Stock, occurring after the date hereof
and having a record date prior to the Effective Time.
6. Fractional Shares. No fraction of a share of Parent
Common Stock will be issued by virtue of the Merger, but in lieu
thereof each holder of shares of Company Common Stock who would
otherwise be entitled to a fraction of a share of Parent Common
Stock (after aggregating all fractional shares of Parent Common
Stock to be received by such holder) shall receive from the
Parent an amount of cash (rounded to the nearest whole cent),
without interest thereon, equal to the product of (i) such
fraction, multiplied by (ii) the Average Closing Price. The
"Average Closing Price" shall mean the average of the per share
closing prices of Parent Common Stock as reported on the NYSE for
the ten trading days ending on and including the Effective Date.
7. At the Effective Time, all options to purchase Company
Common Stock then outstanding under the EnergyNorth, Inc. 1998
Stock Option Plan shall be assumed by Parent in accordance with
Section 5.20 hereof.
8. Dissenting Shares. Each outstanding share of Company
Common Stock the holder of which has perfected his right to
dissent under applicable law and has not effectively withdrawn or
lost such right as of the Effective Time (the "Dissenting
Shares") shall not be converted into or represent a right to
receive the Merger Consideration, and the holder thereof shall be
entitled only to such rights as are granted by applicable law;
provided, however, that any Dissenting Share held by a person at
the Effective Time who shall, after the Effective Time, withdraw
the demand for payment for shares or lose the right to payment
for shares, in either case pursuant to the NHBCA, shall be deemed
to be converted into, as of the Effective Time, the right to
receive cash pursuant to Section 1.6(a) in the same manner as if
such shares were Cash Election Shares. The Company shall give
Parent prompt notice upon receipt by the Company of any such
written demands for payment of the fair value of such shares of
Company Common Stock and of withdrawals of such notice and any
other instruments provided pursuant to applicable law. Any
payments made in respect of Dissenting Shares shall be made by
the Surviving Corporation.
7. Surrender of Certificates.
1. Exchange Agent. The Parent shall select a bank or
trust company reasonably acceptable to the Company, which may be
the Parent's existing transfer agent, to act as the exchange
agent (the "Exchange Agent") in the Merger.
2. The Parent to Provide Merger Consideration. Promptly
after the Effective Time, the Parent shall make available to the
Exchange Agent for exchange in accordance with this Article 1,
certificates for the shares of Parent Common Stock issuable, and
cash payable, pursuant to Section 1.6(a) in exchange for
outstanding shares of Company Common Stock and cash in an amount
sufficient for payment in lieu of fractional shares pursuant to
Section 1.6(f) and any dividends or distributions to which
holders of shares of Company Common Stock may be entitled
pursuant to Section 1.7(d).
3. Exchange Procedures. Promptly after the Effective
Time, the Parent shall cause the Exchange Agent to mail to each
holder of record (as of the Effective Time) of a certificate or
certificates (the "Certificates") that immediately prior to the
Effective Time represented outstanding shares of Company Common
Stock whose shares were converted into the right to receive the
Merger Consideration, together with any cash payable pursuant to
Section 1.6(f) and Section 1.7(d), (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery
of the Certificates to the Exchange Agent and shall be in such
form and have such other provisions as the Parent may reasonably
specify, provided that risk of loss and title shall already have
passed with respect to Certificates previously surrendered in
connection with Section 1.6(b)(i)) and (ii) instructions for
effecting the exchange of the Certificates for the Merger
Consideration, together with any cash payable pursuant to Section
1.6(f) and Section 1.7(d). Upon surrender of a Certificates for
cancellation to the Exchange Agent or to such other agent or
agents as may be appointed by the Parent, together with such
letter of transmittal duly completed and validly executed in
accordance with the instructions thereto, the holder of such
Certificates shall be entitled to receive in exchange therefor
the Merger Consideration, together with any cash payable pursuant
to Section 1.6(f) and Section 1.7(d), and the Certificates so
surrendered shall forthwith be canceled. Until so surrendered,
each outstanding Certificates will be deemed from and after the
Effective Time, for all corporate purposes, subject to Section
1.7(d) as to the payment of dividends, to evidence only the
ownership of the number of full shares of Parent Common Stock and
the aggregate Per Share Cash Amount into which such shares of
Company Common Stock shall have been so converted and the right
to receive an amount in cash in lieu of the issuance of any
fractional shares in accordance with Section 1.6(f) and any
dividends or distributions payable pursuant to Section 1.7(d).
4. Distributions With Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the date
of this Agreement with respect to Parent Common Stock with a
record date after the Effective Time will be paid to the holder
of any unsurrendered Certificates with respect to the shares of
Parent Common Stock represented thereby until the holder of
record of such Certificates shall surrender such Certificates.
Subject to applicable law, following surrender of any such
Certificates, there shall be delivered to the record holder
thereof Certificates representing whole shares of Parent Common
Stock and the aggregate Per Share Cash Amount issuable and
payable in exchange therefor, without interest, along with
payments of the amount of dividends or other distributions with a
record date after the Effective Time then payable with respect to
such whole shares of Parent Common Stock and cash in lieu of any
fractional shares in accordance with Section 1.6(f).
5. Transfers of Ownership. If any Certificates for shares
of Parent Common Stock is to be issued in a name other than that
in which the Certificates surrendered in exchange therefore is
registered or if any of the other Merger Consideration is
is to be payable to a person other than the person to whom
such Certificates is registered, it will be a condition of
the issuance and
payment thereof that the Certificates so surrendered will
be properly endorsed, accompanied by any documents required
to evidence and effect such transfer and otherwise in
proper form for transfer and that the person requesting
such exchange will have paid to the Parent or any agent
designated by it any applicable transfer taxes required by
reason of the issuance of a Certificates for shares of Parent
Common Stock in any name other than that of the registered holder
of the Certificates surrendered, or shall provide evidence that
any applicable transfer taxes have been paid.
6. No Liability. Notwithstanding anything to the
contrary in this Section 1.7, neither the Exchange Agent, the
Parent, the Surviving Corporation nor any other party hereto
shall be liable to a holder of shares of Parent Common Stock or
Company Common Stock for any amount properly paid to a public
official pursuant to any applicable abandoned property, escheat
or similar law.
7. Termination of Exchange Agent. Any Merger
Consideration made available to the Exchange Agent pursuant to
Section 1.7(b) and not exchanged within six months after the
Effective Time pursuant to this Section 1.7 shall be returned by
the Exchange Agent to Parent, which shall thereafter act as
Exchange Agent, and thereafter any holder of unsurrendered
Certificates shall look as a general creditor only to Parent for
payment of any funds to which such holder may be due, subject to
applicable law.
8. No Further Ownership Rights in Company Common Stock.
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The Merger Consideration, together with any cash payable pursuant
to Sections 1.6(f) and 1.7(d) issued and paid in exchange for
shares of Company Common Stock in accordance with the terms
hereof shall be deemed to have been issued and paid in full
satisfaction of all rights pertaining to such shares of Company
Common Stock, and there shall be no further registration of
transfers on the records of the Surviving Corporation of shares
of Company Common Stock that were outstanding immediately prior
to the Effective Time. If after the Effective Time, Certificates
are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided in this Article 1.
9. Lost, Stolen or Destroyed Certificates. In the event
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any Certificates shall have been lost, stolen or destroyed, the
Exchange Agent shall deliver in exchange for such lost, stolen or
destroyed Certificates, upon the making of an affidavit of that
fact by the holder thereof, the Merger Consideration; provided,
however, that the Parent may, in its discretion and as a
condition precedent to such delivery, require the owner of such
lost, stolen or destroyed Certificates to deliver a bond in such
sum as it may reasonably direct as indemnity against any claim
that may be made against the Parent or the Exchange Agent with
respect to the Certificates alleged to have been lost, stolen or
destroyed.
10. Tax Consequences. It is intended by the parties
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hereto that the Merger shall constitute a reorganization within
the meaning of Section 368 of the Code. The parties hereto adopt
this Agreement as a "plan of reorganization" within the meaning
of Sections 1.368-2(g) and 1.368-3(a) of the United States Income
Tax Regulations.
11. Taking of Necessary Action; Further Action. If, at
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any time after the Effective Time, any further action is
necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Corporation with full right,
title and possession to all assets, property, rights, privileges,
powers and franchises of the Company and Merger Sub, the officers
and directors of the Company and Merger Sub are fully authorized
in the name of their respective corporations or otherwise to
take, and will take, all such lawful and necessary action, so
long as such action is consistent with this Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent, subject
to the exceptions set forth in the disclosure schedule supplied
by the Company to the Parent (the "Company Disclosure Schedule"),
as follows:
1. Organization of the Company. The Company and each of
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its Subsidiaries and joint ventures (as defined below) is a
corporation or other legal entity duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation or organization, has the requisite corporate
or similar power to own, lease and operate its property and to
carry on its business as now being conducted, and is duly
qualified to do business and in good standing as a foreign
corporation or other legal entity in each jurisdiction in which
the failure to be so qualified, when taken with all other such
failures, would have a Company Material Adverse Effect (as
defined below). Included in the Company Disclosure Schedule is a
true and complete list of all of the Company's Subsidiaries and
joint ventures, together with the jurisdiction of incorporation
or organization of each Subsidiary and joint venture and the
Company's equity interest therein. The Company has delivered or
made available to the Parent a true and correct copy of the
Articles of Incorporation and Bylaws of the Company and similar
governing instruments of each of its Subsidiaries and joint
ventures, each as amended to date. The minute books of the
Company and its Subsidiaries and joint ventures made available to
the Parent are the only minute books of the Company and its
Subsidiaries and joint ventures in the Company's possession, and
such minutes contain a reasonably accurate record of all actions
taken in all meetings of directors (or committees thereof) and
stockholders or actions by written consent since January 1, 1994.
The term "Company Material Adverse Effect" means, for purposes of
this Agreement, any change, event or effect that is materially
adverse to the business, assets (including intangible assets),
prospects, financial condition or results of operations of the
Company and its Subsidiaries taken as a whole (other than changes
that are the effect of economic factors (other than interest rate
changes) affecting the economy as a whole or changes that are the
effect of factors generally affecting the specific markets in
which the Company and its Subsidiaries compete); provided,
however, that a Company Material Adverse Effect shall not include
any adverse effect primarily attributable to the Merger or the
announcement thereof or the transactions contemplated by this
Agreement (other than effects arising out of or resulting from
actions by any state or federal regulatory authority with respect
to this Agreement and the transactions contemplated hereby).
"Subsidiary" means, with respect to any party, any corporation or
other organization, whether incorporated or
unincorporated, of which (i) such party or any other Subsidiary
of such party is a general partner (excluding partnerships, the
general partnership interests of which held by such party or any
Subsidiary of such party do not have a majority of the voting
interest in such partnership) or (ii) at least 50% of the
securities or other interests having by their terms ordinary
voting power to elect a majority of the Board of Directors or
others performing similar functions with respect to such
corporation or other organization are directly or indirectly
owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its
Subsidiaries. The term "joint venture" of a party shall mean any
corporation or other entity (including partnerships and other
business associations) that is not a Subsidiary of such party,
in which such party or one or more of its Subsidiaries owns an
equity interest (other than money market accounts and other short
term investments), other than equity interests held for passive
investment purposes which are less than 10% of any class of the
outstanding voting securities or equity of any such entity.
Except as set forth in the Company Disclosure Schedule, none
of the Company's Subsidiaries is a "public utility company,"
a "holding company," a "subsidiary company" or an "affiliate"
of any public utility company within the meaning of Section
2(a)(5), 2(a)(7), 2(a)(8) or 2(a)(11) of the Public Utility
Holding Company Act of 1935, as amended ("PUHCA").
2. The Company Capital Structure.
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1. The authorized capital stock of the Company consists of
10,000,000 shares of Common Stock, $1.00 par value, of which, as
of June 30, 1999, there were 3,319,718 shares issued and
outstanding and no shares in treasury. No shares of Company's
capital stock have been issued since that date except shares of
Company Common Stock issued in the normal course and consistent
with past practice pursuant to the (i) 1998 Stock Option Plan,
(ii) Employee Performance and Equity Incentive Plan, (iii)
Director Incentive Compensation Plan, and (iv) Dividend
Reinvestment and Stock Purchase Plan (the "Company Stock Plans").
All outstanding shares of Company Common Stock are duly
authorized, validly issued, fully paid and non-assessable and are
not subject to preemptive rights created by statute, the Articles
of Incorporation or Bylaws of the Company or any agreement or
document to which the Company is a party or by which it is bound.
As of June 30, 1999, an aggregate of 520,000 shares of Company
Common Stock were reserved for issuance pursuant to the Company
Stock Plans. All shares of Company Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable,
would be duly authorized, validly issued, fully paid and
nonassessable.
2. The Company Disclosure Schedule includes a true and
complete list of all outstanding rights, subscriptions, warrants,
calls, preemptive rights, options or other agreements of any kind
to purchase or otherwise receive from the Company any shares of
the capital stock or any other security of the Company, and all
outstanding securities of any kind convertible into or
exchangeable for such securities. True and complete copies of all
instruments (or other forms of such instruments) referred to in
this Section 2.2(b) have been previously furnished to the Parent.
There are no stockholder agreements, voting trusts, proxies or
other agreements,
instruments or understandings with respect to the outstanding
shares of capital stock of the Company to which the Company is
a party.
3. Except for securities the Company owns directly or
indirectly through one or more Subsidiaries, there are no equity
securities of any class of any Subsidiary of the Company, or any
security exchangeable or convertible into or exercisable for such
equity securities, issued, reserved for issuance or outstanding.
3. Authority.
---------
1. Subject to approval by its stockholders, the Company
has all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of
the Company, subject only to the approval of this Agreement and
the Merger by the Company's stockholders and any necessary or
requested review or approval of this Agreement and the Merger by
the State of New Hampshire Public Utilities Commission ("NHPUC")
and the filing and recording of the Articles of Merger pursuant
to the laws of the State of New Hampshire. This Agreement has
been duly executed and delivered by the Company. Assuming the due
authorization, execution and delivery by the Parent and Merger
Sub, upon execution by the Company this Agreement constitutes the
valid and binding obligation of the Company, enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors'
rights and to general principles of equity. The execution and
delivery of this Agreement by the Company does not, and the
performance of this Agreement by the Company will not, (i)
conflict with or violate the Articles of Incorporation or Bylaws
of the Company or the equivalent organizational documents of any
of its Subsidiaries or joint venture, (ii) subject to obtaining
the approval by the Company's stockholders of this Agreement as
contemplated in Section 5.2 and of the NHPUC in accordance with
New Hampshire law and compliance with the other requirements set
forth in Section 2.3(b) below, conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to the
Company or any of its Subsidiaries or joint venture or by which
its or any of their respective properties is bound, or (iii)
subject to obtaining any third party consents referred to in the
final sentence of this Section 2.3(a), result in any breach of or
constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or impair the rights
of the Company or any Subsidiary or joint venture or alter the
rights or obligations of any third party under, or give to others
any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of the Company or
any of its Subsidiaries or joint venture pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the
Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries or its or any of their
respective properties are
bound or affected, except, with respect to clauses (ii) and
(iii), for any such conflicts, violations, defaults or other
occurrences that would not have a Company Material Adverse
Effect. The Company Disclosure Schedule lists all consents,
waivers and approvals under any of the Company's or any of its
Subsidiaries' agreements, contracts, licenses or
leases required to be obtained in connection with the
consummation of the transactions contemplated hereby,
except for those the absence of which would not have
a Company Material Adverse Effect.
2. No consent, approval, order or authorization of, or
registration, declaration or filing with any court,
administrative agency or commission or other governmental or
regulatory body or authority or instrumentality ("Governmental
Entity") is required by or with respect to the Company in
connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby, except
for (i) the filing of the Articles of Merger with the Secretary
of State of New Hampshire, (ii) the filing of the Proxy Statement
(as defined in Section 2.18) with the United States Securities
and Exchange Commission (the "SEC") in accordance with the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
(iii) the filing of a Current Report on Form 8-K with the SEC,
(iv) the filing with the Antitrust Division of the United States
Department of Justice (the "Antitrust Division") and the Federal
Trade Commission (the "FTC") of such forms as may be required by
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx
"XXX Xxx") and the termination or expiration of all applicable
waiting periods thereunder, (v) approval of the Merger and the
related transactions contemplated hereunder by NHPUC in
accordance with New Hampshire law and any required filing thereof
with the Secretary of State of New Hampshire, (vi) the approval
of the Merger by the SEC pursuant to PUHCA, (vii) such consents,
approvals, orders, authorizations, registrations, declarations
and filings as may be required under applicable federal and state
securities laws and the laws of any foreign country and (viii)
such other consents, authorizations, filings, approvals and
registrations that, if not obtained or made, would not have a
Company Material Adverse Effect or a material adverse effect on
the ability of the parties to consummate the Merger.
4. Takeover Laws; Rights Plans.
---------------------------
1. The Company has taken all action required to be taken
by it in order to exempt this Agreement and the transactions
contemplated hereby from, and this Agreement and the transactions
contemplated hereby are exempt from, the requirements of any
"moratorium," "control share," "fair price" or other anti-
takeover laws and regulations (collectively, "Takeover Laws") of
the State of New Hampshire, including XX XXX 000-X and under any
similar provisions included in the Company's charter and by-laws.
2. The Company has (1) duly entered into an appropriate
amendment to the Company's Rights Agreement dated as of June 18,
1990 (the "Rights Agreement") between the Company and State
Street Bank and Trust Company, which amendment has been provided
to Parent, and (2) taken all other action necessary or
appropriate so that the entering into of this Agreement does not
and will not result in the ability of any person to exercise any
Rights under the Rights Agreement or enable or require the Rights
issued thereunder to separate
from the shares of Company Common Stock to which they are attached
or to be triggered or become exercisable or redeemable.
3. No "Distribution Date" or "Triggering Event"
(as such terms are defined in the Rights Agreement) has
occurred.
5. SEC Filings; Company Financial Statements.
-----------------------------------------
1. Each of the Company and EnergyNorth Natural Gas, Inc.
has filed all forms, reports and documents required to be filed
by it with the SEC since January 1, 1996. All such required
forms, reports and documents (including those that the Company or
EnergyNorth Natural Gas, Inc. may file after the date hereof
until the Closing) are referred to herein as the "Company SEC
Reports." As of their respective dates, the Company SEC Reports
(i) were or will be prepared in compliance in all material
respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act") or the Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder
applicable to such Company SEC Reports, and (ii) did not or will
not at the time they were or are filed (or if amended or
superseded by a filing prior to the Closing, then on the date of
such filing) contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light
of the circumstances in which they were made, not misleading.
None of the Company's Subsidiaries, other than EnergyNorth
Natural Gas, Inc., is required to file any forms, reports or
other documents with the SEC.
2. Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in
the Company SEC Reports (the "Company Financials"), including any
Company SEC Reports filed after the date hereof until the
Closing, (i) complied or will comply as to form in all material
respects with the published rules and regulations of the SEC with
respect thereto, (ii) was or will be prepared in accordance with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved (except as may
be indicated in the notes thereto or, in the case of unaudited
interim financial statements, as may be permitted by the SEC on
Form 10-Q under the Exchange Act) and (iii) fairly presented or
will fairly present, in all material respects, the consolidated
financial position of the Company and its Subsidiaries at the
respective dates thereof and the consolidated results of its
operations and cash flows for the periods indicated, consistent
with the books and records of the Company, except that the
unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not, or are
not expected to be, material in amount. The balance sheet of the
Company contained in the Company's SEC Report as of March 31,
1999 is hereinafter referred to as the "Company Balance Sheet."
Except as disclosed in the Company Disclosure Schedule and except
for obligations under this Agreement, neither the Company nor any
of its Subsidiaries has any liabilities (absolute, accrued,
contingent or otherwise) of a nature required to be disclosed on
a balance sheet or in the related notes to the consolidated
financial statements prepared in accordance with GAAP that are,
individually or in the aggregate, material to the business,
results of operations or financial condition of the Company and
its Subsidiaries taken as a whole, except liabilities (i)
provided for in the Company Balance Sheet and the related notes
or (ii) incurred since the date of the Company Balance Sheet in
the ordinary course of business consistent with past practices or
(iii) incurred in connection with the transactions contemplated
hereby.
6. Absence of Certain Changes or Events. Since March 31,
------------------------------------
1999, there has not occurred any Company Material Adverse Effect
and there has not been, occurred or arisen any:
1. transaction by the Company or its Subsidiaries except
in the ordinary course of business as conducted on the date of
the Company Balance Sheet and consistent with past practices;
2. except as permitted by this Agreement, amendments or
changes to the Articles of Incorporation or Bylaws of the
Company;
3. individual capital expenditure or commitment, or series
of related capital expenditure or commitments, by the Company or
its Subsidiaries outside the ordinary course of business
exceeding $150,000;
4. destruction of, damage to or loss of any assets
material to the business of the Company and its Subsidiaries
taken as a whole (whether or not covered by insurance);
5. any cancellation or termination or written notice of
cancellation or termination by any customer that is material to
the Company and its Subsidiaries, taken as a whole, of its
relationship or a portion of its relationship with the Company or
any of its Subsidiaries that is material to the Company and its
Subsidiaries, taken as a whole, or any decrease, not in the
ordinary course of business, in the usage or purchase of the
products or services of the Company or any of its Subsidiaries by
any such customer that is material to the Company and its
Subsidiaries, taken as a whole, or any by-pass transaction
involving any such customer of the Company, other than any of the
foregoing that is primarily the result of weather factors;
6. labor trouble or claim of wrongful discharge or other
unlawful labor practice or action that is reasonably likely to
have a Company Material Adverse Effect;
7. material change in accounting methods or practices
(including any change in depreciation or amortization policies or
rates) by the Company;
8. material revaluation by the Company or its Subsidiaries
of any of its significant assets;
9. except as permitted by this Agreement, declaration,
setting aside or payment of a dividend or other distribution with
respect to the capital stock of the Company (other than
regular quarterly dividends in accordance with past practice),
or any direct or indirect redemption, purchase or other acquisition
by the Company of any of its capital stock;
10. except as permitted by this Agreement, increase in the
salary or other compensation payable or to become payable to any
of its officers or directors or, other than in the ordinary
course of business and consistent with past practices, any of its
employees or advisors, or the declaration, payment or
contractually binding commitment or obligation of any kind for
the payment of a bonus or other additional salary or compensation
to any such person except for increases, payments or commitments
in the ordinary course of business and consistent with past
practices;
11. sale, lease, license or other disposition of any assets
or properties material to the Company and its Subsidiaries,
taken as a whole, except in the ordinary course of business;
12. except as would not reasonably be expected to result in
a Company Material Adverse Effect, amendment or termination of
any material contract, agreement or license to which the Company
or any of its Subsidiaries is a party or by which it is bound
except for amendments in the ordinary course of business or
scheduled expiration pursuant to the terms of the contract,
agreement or license and not as a result of any breach;
13. except in the ordinary course of business and
consistent with past practices or as permitted by this Agreement,
loan by the Company or any of its Subsidiaries to any person or
entity, incurring by the Company or any Subsidiary of any
indebtedness (except for indebtedness incurred in the ordinary
course under existing credit lines or arrangements set forth in
the Company Disclosure Schedule), guaranteeing by the Company or
any Subsidiary of any indebtedness, issuance or sale of any debt
securities of the Company or any Subsidiary or guaranteeing of
any debt securities of others;
14. waiver or release of any right or claim material to the
Company and its Subsidiaries, taken as a whole, including any
write-off or other compromise of any account receivable of the
Company or any Subsidiary, other than in the ordinary course of
business and consistent with past practices;
15. adoption, material amendment or modification, or
termination of any Plan (as defined in Section 2.14) by the
Company or any of its Subsidiaries;
16. regulatory decision by the NHPUC that would have a
material adverse impact on the Surviving Corporation; or
17. contractually binding commitment, understanding or
agreement by the Company or any of its Subsidiaries thereof to do
any of the things described in the preceding clauses (a) through
(o) (other than this Agreement).
7. Tax Matters.
-----------
1. The Company and its Subsidiaries have filed all
material tax reports and returns required to be filed by them and
have paid or will timely pay all material taxes and other charges
shown as due on such reports and returns. Neither the Company nor
any of its Subsidiaries is delinquent in the payment of any
material tax assessment or other governmental charge (including
without limitation applicable withholding taxes). Any provision
for taxes reflected in the Company Balance Sheet has been
properly reflected in accordance with GAAP. There are no tax
liens on any assets of the Company or its Subsidiaries except for
current taxes not yet due and other non-material tax amounts.
2. There has not been any audit of any tax return filed by
the Company or any of its Subsidiaries for any period beginning
on or after January 1, 1994 and no audit of any tax return filed
by the Company or any of its Subsidiaries is in progress and
neither the Company nor any Subsidiary has been notified by any
tax authority that any such audit is contemplated or pending.
Neither the Company nor any Subsidiary has received any claim in
writing from any tax authority concerning any tax liability for
any period for which tax returns have been filed. No extension
of time with respect to any date on which a tax return was or is
to be filed by the Company or any of its Subsidiaries is in
force, and no waiver or agreement by the Company or any of its
Subsidiaries is in force for the extension of time for the
assessment or payment of any tax. For purposes of this Agreement,
the term "tax" includes all federal, state, local and foreign
taxes or assessments, including income, sales, gross receipts,
excise, use, value added, royalty, franchise, payroll,
withholding, property and import taxes and any interest or
penalties applicable thereto.
3. Neither the Company nor any of its Subsidiaries has any
liability for any taxes of any person other than the Company and
its Subsidiaries (i) under Treasury Regulation Section 1.1502-6
(or any similar provision of state, local or foreign law), (ii)
as a transferee or successor, (iii) by contract or (iv)
otherwise. Neither the Company nor any of its Subsidiaries has
engaged in any intercompany transactions within the meaning of
Treasury Regulations Section 1.1502-13, or its predecessors, for
which any income or gain will remain unrecognized as of the close
of the last taxable year prior to the Closing Date.
4. Neither the Company nor any of its Subsidiaries has
agreed to, or is required to, make any adjustments under Section
481(a) of the Code by reason of a change in accounting method or
otherwise.
5. Each agreement, contract or arrangement to which the
Company or any of its Subsidiaries is a party that could result,
on account of the transactions contemplated hereunder, separately
or in the aggregate, in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code is set
forth in Section 2.7 of the Company Disclosure Schedule.
6. No indebtedness of the Company or any of its
Subsidiaries is "corporate acquisition indebtedness" within the
meaning of Section 279(b) of the Code. To the best knowledge of
the Company, no foreign person owns or has owned beneficially
more than five percent of the total fair market value of Company
Common Stock during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.
7. Neither the Company nor any of its Subsidiaries has
constituted a "distributing corporation" in a distribution of
stock qualifying for tax-free treatment under Section 355 of the
Code in the past 24 month period or in a distribution which could
otherwise constitute part of a "plan" or a series of "related
transactions" (within the meaning of Code Section 355(e)).
8. Section 2.7 of the Company Disclosure Schedule lists
all examination reports and statements of deficiencies asserted,
assessed against or agreed to by or on behalf of the Company or
any Subsidiary received or agreed to with respect to any tax
period beginning on or after January 1, 1994. No claim has ever
been made by any tax authority that the Company or any Subsidiary
is or may be subject to taxation in a jurisdiction where it does
not file tax returns.
8. Regulation as a Utility.
-----------------------
1. The Company is a "holding company" exempt from
registration under Section 3(a)(1) of PUHCA.
2. The Company is not subject to regulation as a natural
gas distribution utility by the State of New Hampshire. The
Company's subsidiary, EnergyNorth Natural Gas, Inc., is subject
to regulation as a natural gas distribution utility by the XXXXX.
0. Neither the Company nor any of its Subsidiaries is
currently subject to regulation by the Federal Energy Regulation
Commission under the Federal Power Act or as a "natural gas
company" under the Natural Gas Act or is subject to regulation as
a public utility or public service company (or similar
designation) by any state in the United States other than New
Hampshire or in any foreign country.
9. Title to Properties; Absence of Liens and Encumbrances.
------------------------------------------------------
1. The Company and its Subsidiaries have good and valid
title to, or have a valid and enforceable right to use or a valid
and enforceable leasehold interest in, all real property
(including all buildings, fixtures and other improvements
thereto) owned by them and material to the conduct of the
business of the Company and its Subsidiaries, taken as a whole,
as such business is now being conducted, except for easements
granted in the ordinary course of business. Neither the Company's
nor any of its Subsidiaries' ownership of or leasehold interest
in any such property is subject to any mortgage, pledge, lien,
option, conditional sale agreement, encumbrance, security
interest, title exception or restriction or claim or charge of
any kind ("Encumbrances"), except for such Encumbrances as are
set forth in the Company Disclosure Schedule or the Company
Financials or are not in the aggregate reasonably likely to have
a Company Material Adverse Effect. Such property is, in the
aggregate, in condition and repair, normal wear and tear
excepted, adequate in all material respects for the continued
conduct of the business of the Company and its Subsidiaries,
taken as whole, in the manner in which it is currently conducted,
except to the extent that the condition of any property is not in
the aggregate reasonably likely to have a Company Material
Adverse Effect.
2. The Company and its Subsidiaries have good and valid
title to, or, in the case of leased properties and assets, valid
leasehold interests in, all of their tangible personal properties
and assets, used or held for use in their business, and such
properties and assets, as well as all other properties and assets
of the Company and its Subsidiaries, whether tangible or
intangible, are free and clear of any Encumbrances, except for
such Encumbrances as are set forth in the Company Disclosure
Schedule or the Company Financials or are not in the aggregate
reasonably likely to have a Company Material Adverse Effect. Such
property is, in the aggregate, in condition and repair, normal
wear and tear excepted, adequate in all material respects for the
continued conduct of the business of the Company and its
Subsidiaries, taken as a whole, in the manner in which it is
currently conducted, except to the extent that the condition of
any property is not in the aggregate reasonably likely to have a
Company Material Adverse Effect.
10. Intellectual Property. The Company and its
---------------------
Subsidiaries own, or are licensed or otherwise possess legally
enforceable rights to use, all patents, trademarks, trade names,
service marks, copyrights, and any applications therefor,
schematics, technology, know-how, computer software programs or
applications, and tangible or intangible proprietary information
or material that are required for the conduct of business of the
Company or its Subsidiaries as currently conducted, the absence
of which would have a Company Material Adverse Effect
(collectively, the "Company Intellectual Property Rights"). All
of the Company Intellectual Property Rights are owned or licensed
by the Company or one of its Subsidiaries, free and clear of any
and all Encumbrances, except for those Encumbrances under or set
forth in applicable license agreements or that would not,
individually or in the aggregate, have a Company Material Adverse
Effect, and, to the knowledge of the Company, neither the Company
nor any of its Subsidiaries has forfeited or otherwise
relinquished any Company Intellectual Property Rights which
forfeiture would have a Company Material Adverse Effect. To the
knowledge of the Company, the use of the Company Intellectual
Property Rights by the Company and its Subsidiaries does not, in
any material respect, conflict with, infringe upon, violate or
interfere with or constitute an appropriation of any right,
title, interest or goodwill (including, without limitation, any
intellectual property right, trademark, trade name, patent,
service xxxx, brand xxxx, brand name, computer program, database,
industrial design, copyright or any pending application therefor)
of any other person, and neither the Company nor any of its
Subsidiaries has received notice of any claim or otherwise knows
that any of the Company Intellectual Property Rights is invalid,
conflicts with the asserted rights of any other person, has not
been used or enforced or has failed to be used or enforced in a
manner that would result in the abandonment, cancellation or
unenforceability of any of the Company Intellectual Property
Rights, except for such conflicts, infringements, violations,
interferences, claims, invalidity, abandonments, cancellations or
unenforceability that would not, individually or in the
aggregate, have a Company Material Adverse Effect.
11. Compliance; Permits; Restrictions.
---------------------------------
1. Neither the Company nor any of its Subsidiaries is in
conflict with, or in default or violation of, (i) any law, rule,
regulation, order, judgment or decree applicable to the Company
or any of its Subsidiaries or by which its or any of their
respective properties is bound or affected, or (ii) any note,
bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the
Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries or its or any of their
respective properties is bound or affected, except for any
conflicts, defaults or violations that are not reasonably likely
to have a Company Material Adverse Effect.
2. The Company and its Subsidiaries hold all consents,
permits, licenses, variances, exemptions, orders and approvals
from governmental authorities that are material to the operation
of the business of the Company and its Subsidiaries taken as a
whole (collectively, the "Company Permits"). The Company and its
Subsidiaries are in compliance with the terms of the Company
Permits, except where the failure to so comply is not reasonably
likely to have a Company Material Adverse Effect.
12. Litigation. There is no action, suit or proceeding
----------
of any nature pending or to the Company's knowledge threatened
against the Company or any of its Subsidiaries, or any of their
respective properties, officers or directors, in their respective
capacities as such (i) in which injunctive or other equitable
relief or damages in excess of $150,000 are or are reasonably
likely to be sought against the Company or any Subsidiary or that
otherwise are reasonably likely to result in a Company Material
Adverse Effect or (ii) that in any manner challenges or seeks to
prevent, enjoin, alter or delay any of the transactions
contemplated by this Agreement. To the Company's knowledge, there
is no investigation pending or threatened against the Company or
any of its Subsidiaries, their respective properties or any of
their respective officers or directors by or before any
Governmental Entity that is reasonably likely to have a Company
Material Adverse Effect.
13. Brokers' and Finders' Fees. Except for fees payable
--------------------------
to Xxxxxxx Xxxxx Xxxxxx Inc. and disclosed to the Parent, the
Company has not incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with
this Agreement or any transaction contemplated hereby.
14. Employee Benefit Plans. The Company Disclosure
----------------------
Schedule sets forth a complete list of all pension, profit
sharing, retirement, deferred compensation, employment, welfare,
insurance, disability, incentive bonus, stock option, restricted
stock, stock incentive, phantom stock, vacation pay, severance
pay, fringe benefits and similar plans, programs, agreements or
arrangements, benefiting more than one individual, including
without limitation all employee benefit plans as defined in
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), maintained by the Company or its
Subsidiaries or to which Company or any of its Subsidiaries are
parties or are required to contribute or under which the Company
or any of its Subsidiaries is or may be required to provide
benefits other than any multiemployer plan as defined in Section
4001(a)(3) of ERISA or any other plans or arrangements sponsored
and maintained by a union (and not by the Company or its
Subsidiaries) (the "Plans"). The Company has delivered or made
available to the Parent current, accurate and complete copies of
(i) each Plan that has been reduced to writing, together with all
amendments; (ii) a summary of the material terms of each Plan
that has not been reduced to writing, as amended; (iii) the
summary plan description for each Plan subject to ERISA and, in
the case of each other Plan, any similar employee summary
(including employee handbook description) of the Plan; (iv) for
each Plan intended to be qualified and each Plan-related funding
arrangement intended to be exempt under Section 401(a), Section
501(a) or Section 501(c)(9) of the Code, the most recent
determination letter or exemption determination issued by the
Internal Revenue Service ("IRS"); (v) for each Plan with respect
to which a Form 5500 series annual report is required to be
filed, the most recently filed such annual report and the annual
report for the two preceding years, together with all schedules
and exhibits; (vi) all insurance contracts, administrative
services contracts, trust agreements, investment management
agreements or similar agreements maintained in connection with
the Plans or any of them; and (vii) copies of any correspondence
with the IRS, the Department of Labor ("DOL") or other U.S.
government agency or department relating to an audit or an
asserted or assessed penalty with respect to a Plan or relating
to requested relief from any liability or penalty (including, but
not limited to, any correspondence relating to the IRS's EPRSC,
VCR or CAP programs, or the DOL's amnesty programs for late
filers and non-filers). No employee benefit handbook or similar
employee communication relating to any Plan nor any communication
of benefits under such Plan from an administrator thereof
describes the terms of such Plan in a manner that is materially
inconsistent with the documents and summary plan descriptions
relating to such Plan that have been delivered pursuant to the
foregoing sentence. The Company Disclosure Schedule identifies
each "multiemployer plan" as defined in Section 4001(a)(3) of
ERISA and any arrangement sponsored and maintained by a union
(and not by the Company or its subsidiaries) which the Company or
any Subsidiary maintains or is obligated to maintain or to which
the Company or any Subsidiary contributes or is obligated to
contribute. No deficiency in funding levels or other
circumstance exists and no event has occurred that has resulted
or that could result in a liability to Company or any Subsidiary
under Subtitle E of Title IV of ERISA, except for such
liabilities which, individually and in the aggregate, would not
result in a Company Material Adverse Effect, and the consummation
of the transactions contemplated by this Agreement will not
result in any withdrawal liability under such Subtitle. Except
for PBGC premiums paid in the ordinary course, neither the
Company nor any Subsidiary has incurred any liability under Title
IV of ERISA which has not been satisfied in full nor, except for
such liabilities which, individually and in the aggregate, would
not result in a Company
Material Adverse Effect has any event occurred that could result
in any such liability. Each Plan maintained by the Company or a
Subsidiary and each related fund which is intended to be qualified
or exempt under Section 401(a), Section 501(a) or 501(c)(9) of
the Code is so qualified or exempt except where the failure to be so
qualified or exempt would not result in a Company Material Adverse
Effect. Without limiting the generality of the immediately preceding
sentence, each Plan, if any, containing an account described in Section
401(h) of the Code has been maintained in accordance with Section
401(h) of the Code and the limitations described therein and in
applicable regulations. Each Plan has been administered in all
material respects in accordance with the terms of such Plan and the
provisions of all applicable statutes, orders or governmental
rules or regulations, and nothing has been done or omitted to be
done with respect to any Plan or related fund that has resulted
or could result in any material liability on the part of the
Company or a Subsidiary under Title I of ERISA or Chapter 43 of
the Code. All reports required to be filed with respect to each
Plan, including without limitation Form 5500 series annual
reports, have been timely filed. No "reportable event" as
defined in Section 4043 of ERISA, other than any such event for
which the notice period has been waived, has occurred with
respect to any Plan subject to Title IV of ERISA. Except to the
extent specified in the Company Disclosure Schedule, each Plan
that is subject to Title IV of ERISA is fully funded on a
termination basis. All contributions required to be made to any
Plan by applicable law or regulation or by any Plan document or
other contractual undertaking, and all premiums due or payable
with respect to insurance policies funding any Plan, have been
timely made or paid in full or, to the extent not required to be
made or paid on or before the date hereof, have been fully
reflected on the Company Financials. All claims for welfare
benefits incurred by employees and their eligible dependents on
or before the Closing are or prior to the Closing will be fully
insured under fully paid up third-party insurance policies or, if
self-funded, have been adequately reserved for on the Company
Financials. Except for benefit claims in the ordinary course,
there are no pending or, to the best knowledge of the Company,
threatened claims with respect to any Plan. Except for
continuation of health coverage to the extent required under
Section 4980B of the Code or Part 6 of Subtitle B of Title I of
ERISA or applicable state law or as otherwise set forth in the
Company Disclosure Schedule, no Plan that is a "welfare plan" as
defined in Section 3(1) of ERISA provides for any benefits
following retirement or other termination of employment. Except
as set forth in the Company Disclosure Schedule, each Plan can be
amended, terminated or modified prospectively on and after the
Effective Time without advance notice to or consent by any
employee, former employee or beneficiary, except as required by
law. Except as set forth in the Company Disclosure Schedule,
neither the execution and delivery of this Agreement nor the
consummation of any of the transactions contemplated hereby will
(either alone or in conjunction with any other event) result in,
cause the accelerated funding, vesting or delivery of, or
increase the amount or value of, any payment or benefit to any
employee, officer or director of the Company or any of its
Subsidiaries.
15. Employment Matters.
------------------
1. The Company and each of its Subsidiaries (i) is in
compliance in all material respects with all applicable foreign,
federal, state and local laws, rules and regulations that are
material to the Company and its Subsidiaries, taken as a whole,
respecting employment, employment
practices, terms and conditions of employment and wages and hours,
in each case, with respect to employees; (ii) has withheld all
amounts required by law or by agreement to be withheld from the
wages, salaries and other payments to employees; (iii) is not
liable for any arrears of wages or any taxes or any penalty for
failure to comply with any of the foregoing; and (iv) is not
liable for any payment to any trust or other fund or to any
Governmental Entity, with respect to unemployment compensation
benefits, social security or other benefits or obligations for
employees (other than routine payments to be made in the normal
course of business and consistent with past practice).
2. No material work stoppage or labor strike against the
Company or any of its Subsidiaries is pending or, to the
knowledge of the Company, threatened. Neither the Company nor any
of its Subsidiaries is involved in or, to the knowledge of the
Company, threatened with, any labor dispute, grievance, or
litigation relating to labor, safety or discrimination matters
involving any employee, including without limitation charges of
unfair labor practices or discrimination complaints, that have a
Company Material Adverse Effect. Neither the Company nor any of
its Subsidiaries has engaged in any unfair labor practices within
the meaning of the National Labor Relations Act that is
reasonably likely to, in the aggregate, have a Company Material
Adverse Effect. Neither the Company nor any of its Subsidiaries
is presently a party to or bound by any collective bargaining
agreement or union contract with respect to employees other than
as set forth in the Company Disclosure Schedule and no collective
bargaining agreement is being negotiated by the Company or any of
its Subsidiaries. To the knowledge of the Company, no union
organizing campaign or activity with respect to non-union
employees of the Company or any of its Subsidiaries is ongoing,
pending or threatened.
16. Environmental Matters.
---------------------
1. Except as would not have a Company Material Adverse
Effect, no amount of any substance that has been designated by
any Governmental Entity or by applicable federal, state or local
law to be radioactive, hazardous or otherwise to pose an
unreasonable danger to human health or the environment, including
without limitation all substances listed as hazardous substances
pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, or defined
as a hazardous waste pursuant to the United States Resource
Conservation and Recovery Act of 1976, as amended, and the
regulations promulgated pursuant to said laws, (a "Hazardous
Material"), is present as a result of the actions of the Company
or any of its Subsidiaries in, on or under any property,
including the land and the improvements, ground water and surface
water thereof, that the Company or any of its Subsidiaries has at
any time owned, operated, occupied or leased, and to the
knowledge of the Company, no Hazardous Materials are present in,
on or under such property, including the improvements, ground
water and surface water thereof, as a result of the conduct of
other parties. To the knowledge of the Company, the Company
Disclosure Schedule lists all locations that the Company or any
of its Subsidiaries formerly owned or
leased where Hazardous Materials are present in a volume or
concentration that would reasonably be expected to have a Company
Material Adverse Effect.
2. Except as would not have a Company Material
Adverse Effect, (i) neither the Company nor any of its
Subsidiaries has generated, transported, stored, used,
manufactured, disposed of, released or exposed its employees or
others to Hazardous Materials in violation of, or in a manner
which could give rise to liabilities under, any law in effect
prior to or as of the date hereof, nor (ii) has the Company or
any of its Subsidiaries disposed of, transported, sold, or
manufactured any product containing a Hazardous Material
(collectively "Hazardous Materials Activities") in violation of
any rule, regulation, treaty or statute promulgated by any
Governmental Entity in effect prior to or as of the date hereof
to prohibit, regulate or control Hazardous Materials or any
Hazardous Material Activity.
3. The Company and its Subsidiaries currently hold all
environmental approvals, permits, licenses, clearances and
consents (the "Company Environmental Permits") necessary for the
conduct of the Company's and its Subsidiaries' Hazardous Material
Activities and other businesses of the Company and its
Subsidiaries, taken as a whole, as such activities and businesses
are currently being conducted, except where the failure to so
hold would not have a Company Material Adverse Effect.
4. No action, proceeding, revocation proceeding, amendment
procedure, writ, injunction or claim is pending, or to the
Company's knowledge, threatened concerning any Company
Environmental Permit, Hazardous Material in, on or under any
property owned or leased at any time by the Company or any of its
Subsidiaries or any Hazardous Materials Activity of the Company
or any of its Subsidiaries, in which injunctive or other
equitable relief or damages in excess of $150,000 is or is
reasonably likely to be sought against the Company or any
Subsidiary or that otherwise would have a Company Material
Adverse Effect.
17. Agreements, Contracts and Commitments. Except as
-------------------------------------
identified in the Company Disclosure Schedule or listed in the
Exhibit Index to the Company's Form 10-K for the year ended
September 30, 1998 (the "Company 10-K"), neither the Company nor
any of its Subsidiaries is a party to or is bound by:
1. any agreement, contract or contractually binding
commitment containing any covenant materially limiting the
freedom of the Company or any of its Subsidiaries to engage in
any line of business or compete with any person;
2. any agreement, contract or contractually binding
commitment relating to capital expenditures and involving future
obligations in excess of $150,000 and not cancelable without
penalty;
3. any agreement, contract or contractually binding
commitment currently in force relating (i) to the disposition or
acquisition of assets material to the Company and its
Subsidiaries, taken as a whole, not in the ordinary course of
business or (ii) any ownership
interest in any corporation, partnership, joint venture or
other business enterprise (other than the Company's wholly-
owned subsidiaries and money market accounts and other short
term investments);
4. any mortgages, indentures, loans or credit agreements
or security agreements relating to assets material to the Company
and its Subsidiaries, taken as a whole, or other agreements or
instruments relating to the borrowing of money or extension of
credit involving more than $150,000;
5. any other agreement, contract, binding commitment or
lease which requires annual payments by the Company or any of its
Subsidiaries of $150,000 or more in the aggregate and is not
cancelable without penalty within thirty (30) days.
6. any consulting arrangements and contracts for
professional, advisory and other services involving payments of
more than $150,000 in any year, including contracts under which
the Company or any of its Subsidiaries performs services for
others;
7. any material contracts relating to the source or supply
of gas, propane and other raw materials essential to the conduct
of the business of the Company and its Subsidiaries, taken as a
whole, and any financial derivatives master agreements,
confirmations, or futures account opening agreements and/or
brokerage statements evidencing financial hedging or other
trading activities with respect to the foregoing;
8. any contracts, agreements or contractually binding
commitments relating to the employment, engagement, compensation
or termination of directors, officers, employees or agents of the
Company or any of its Subsidiaries not included under Plans (as
defined in Section 2.14);
9. any collective bargaining agreements;
10. any agreement, contract or instrument (including
amendments thereto) to which the Company or any of its
Subsidiaries is a party or by which any of them is bound that is
required to be included in the Company 10-K; and
11. any other contracts made other than in the usual or
ordinary course of business of the Company or any of its
Subsidiaries to which the Company or any of its Subsidiaries is a
party or under which the Company or any of its Subsidiaries is
obligated and material to the Company and its Subsidiaries, taken
as a whole.
Neither the Company nor any of its Subsidiaries, nor to the
Company's knowledge any other party to a Company Contract (as
defined below), has breached, violated or defaulted under, or
received notice that it has breached violated or defaulted under,
any of the terms or conditions of any of the
agreements, contracts or commitments to which the Company or any
Subsidiary is a party or by which it is bound of the type described
in clauses (a) through (k) above (any such agreement, contract or
commitment, a "Company Contract") in such a manner as would
permit any other party to cancel or terminate any such Company
Contract, or would permit any other party to seek damages, in
either case, which would have a Company Material Adverse Effect.
18. Statements; Proxy Statement/Prospectus. The
--------------------------------------
information to be supplied by the Company for inclusion in the
Registration Statement on Form S-4 to be filed to register under
the Securities Act Parent Common Stock issuable pursuant to
Section 1.6 (the "Registration Statement") shall not at the time
the Registration Statement is filed with the SEC or at the time
it becomes effective under the Securities Act, 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. The information supplied by the
Company for inclusion in the proxy statement/prospectus to be
sent to the stockholders of the Company in connection with the
meeting of the Company's stockholders to consider the approval of
this Agreement (the "Company Stockholders' Meeting") (such proxy
statement/prospectus as amended or supplemented, including any
joint proxy statement, is referred to herein as the "Proxy
Statement") shall not, on the dates the Proxy Statement is first
mailed to the Company's stockholders and at the time of the
Company Stockholders' Meeting, 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 false or misleading, or omit to state any material fact
necessary to correct any statement in any earlier written
communication with respect to the solicitation of proxies for the
Company Stockholders' Meeting which has become false or
misleading. The Proxy Statement utilized by the Company will
comply as to form in all material respects with the provisions of
the Exchange Act and the rules and regulations thereunder. If at
any time prior to the Effective Time, any event relating to the
Company or any of its affiliates, officers or directors should be
discovered by the Company which is required to be set forth in an
amendment to the Registration Statement or a supplement to the
Proxy Statement, or which is required to be disclosed to the
Company's stockholders so that the information made available to
them in connection with electing the form of Merger Consideration
is not false or misleading in any material respect, the Company
shall promptly inform the Parent. Notwithstanding the foregoing,
the Company makes no representation or warranty with respect to
any information supplied by the Parent or Merger Sub that is
contained in any of the foregoing documents.
19. Fairness Opinion. The Company has received an opinion
----------------
from Xxxxxxx Xxxxx Xxxxxx Inc. dated as of the date hereof, to
the effect that as of the date hereof, the consideration to be
received by the Company's stockholders in the Merger is fair from
a financial point of view and will deliver to the Parent a copy
of such written opinion.
20. Insurance. The Company and each of its Subsidiaries
---------
are, and have been continuously since January 1, 1994, insured
for a minimum amount of $25,000,000 (subject to deductibles
stated in such policies) against such risks and losses as are
customary in all material
respects for companies conducting the business as conducted by the
Company and its Subsidiaries during such time period. Neither the
Company nor any of its Subsidiaries has received any notice of
cancellation or termination with respect to any insurance policy
material to the Company and its Subsidiaries, taken as a whole.
The insurance policies material to the Company and its Subsidiaries
are, taken as a whole, to the Company's knowledge, valid and
enforceable policies in all material respects.
21. Year 2000. The Company Disclosure Schedule identifies
---------
each "Year 2000" audit, report or investigation that has been
performed by or on behalf of the Company with respect to its
business and operations. Except as set forth in such audits,
reports and investigations, (i) the Company has not been informed
by any customer, vendor or service provider with which the
Company or any of its Subsidiaries transacts business of an
inability on the part of such third party to be Year 2000
Compliant and (ii) to the knowledge of the Company, there is and
will be no failure of the Company's computer hardware or software
systems to be Year 2000 Compliant, which inability or failure is
reasonably likely to have a Company Material Adverse Effect. For
purposes of this Agreement, "Year 2000 Compliant" means, with
respect to each system referred to in the prior sentence that is
intended to perform date-related functions, that such system,
when used properly in accordance with its documentation, is
capable of correctly receiving, processing and providing date
data before, on, between and after December 31, 1999 and January
1, 2000; provided that all applications, hardware and other
systems used in conjunction with such system correctly exchange
data with or provided data to such system.
22. Commodity Derivatives and Credit Exposure Matters. The
-------------------------------------------------
Company has provided the Parent copies of the Company's and its
Subsidiaries' natural gas and propane price risk management
policies listed in Schedule 2.22 of the Company Disclosure
Schedules. At all times since March 31, 1999, the Company and
its Subsidiaries taken as a whole have been in material
compliance with such policies, and no failure to comply with such
policies by the Company and its Subsidiaries taken as a whole has
resulted in a Company Material Adverse Effect.
3. REPRESENTATIONS AND WARRANTIES OF THE PARENT
The Parent represents and warrants to the Company, subject
to the exceptions set forth in the disclosure schedule supplied
by the Parent to the Company (the "Parent Disclosure Schedule"),
as follows:
1. Organization of the Parent. The Parent and each of
--------------------------
its Subsidiaries is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, has the
requisite corporate or similar power to own, lease and operate
its property and to carry on its business as now being conducted
and as proposed to be conducted, and is duly qualified to do
business and in good standing as a foreign corporation or other
legal entity in each jurisdiction in which the failure to be so
qualified would have a Parent Material Adverse Effect (as defined
below). The Parent has delivered or made
available a true and correct copy of the Declaration of Trust and
Bylaws of the Parent, each as amended to date, to the Company.
The term "Parent Material Adverse Effect" means, for purposes of
this Agreement, any change, event or effect that is materially
adverse to the business, assets (including intangible assets),
prospects, financial condition or results of operations of the
Parent and its Subsidiaries taken as a whole (other than changes
that are the effect of economic factors (other than interest rate
changes) affecting the economy as a whole or changes that are the
effect of factors generally affecting the specific markets in
which the Parent and its Subsidiaries compete); provided,
however, that a Parent Material Adverse Effect shall not include
any adverse effect primarily attributable to the Merger or the
announcement thereof or the transactions contemplated by this
Agreement (other than effects arising out of or resulting from
actions by any state or federal regulatory authority with respect
to this Agreement and the transactions contemplated hereby)..
2. The Parent Capital Structure. The authorized capital
----------------------------
stock of the Parent consists of 50,000,000 shares of Common
Stock, $1.00 par value, of which there were 22,638,996 shares
issued and outstanding as of June 30, 1999. As of the date
hereof, except for an aggregate of 1,142.410 shares of Parent
Common Stock reserved for issuance under various stock option and
other stock plans of the Parent, there is no outstanding right,
subscription, warrant, call, preemptive right, option or other
agreement of any kind to purchase or otherwise to receive from
the Parent any shares of the capital stock or any other security
of the Parent and there is no outstanding security of any kind
convertible into or exchangeable for such capital stock. Since
March 31, 1999, no shares of Parent Common Stock have been issued
except pursuant to the stock option and other stock plans of the
Parent. All outstanding shares of Parent Common Stock are duly
authorized, validly issued, and fully paid and non-assessable and
are not subject to preemptive rights created by statute, the
Declaration of Trust or Bylaws of the Parent or any agreement or
document to which the Parent is a party or by which it is bound.
All of the shares of Parent Common Stock to be issued in the
Merger will be, when issued in accordance with this Agreement,
duly authorized, validly issued, fully paid and nonassessable.
3. Merger Sub.
----------
1. Merger Sub is duly organized, validly existing and in
good standing as a New Hampshire corporation, with the requisite
corporate power to own, lease and operate the property and carry
on the business as now being conducted by the Company.
2. All of the capital stock of Merger Sub has been duly
authorized, and is validly issued, fully paid and nonassessable
and owned of record and beneficially by the Parent.
3. Merger Sub has been formed solely for the purpose of
engaging in the transactions contemplated by this Agreement and
has not engaged in any other business activities.
4. Authority.
---------
1. The Parent and Merger Sub have all requisite corporate
power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Parent and Merger
Sub, respectively. This Agreement has been duly executed and
delivered by the Parent and Merger Sub, respectively, and,
assuming the due authorization, execution and delivery of this
Agreement by the Company, this Agreement constitutes and will
constitute the valid and binding obligation of the Parent and
Merger Sub, respectively, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general principles of equity. The execution and delivery of this
Agreement by the Parent and Merger Sub do not, and the
performance of this Agreement by the Parent and Merger Sub will
not, (i) conflict with or violate the charter or bylaws of the
Parent or Merger Sub, (ii) subject to obtaining the approval of
the NHPUC in accordance with New Hampshire law and compliance
with the other requirements set forth in Section 3.4(b) below,
conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to the Parent or any of its
Subsidiaries or by which its or any of their respective
properties is bound or affected, or (iii) subject to obtaining
the third party consents referred to in the final sentence of
this Section 3.4(a), result in any breach of or constitute a
default (or an event that with notice or lapse of time or both
would become a default) under, or impair the Parent's rights or
alter the rights or obligation of any third party under, or give
to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of the Parent or
any of its Subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise
or other instrument or obligation to which the Parent or any of
its Subsidiaries is a party or by which the Parent or any of its
Subsidiaries or its or any of their respective properties are
bound or affected, except, with respect to clauses (ii) and
(iii), for any such conflicts, violations, defaults or other
occurrences that would not have a Parent Material Adverse Effect.
The Parent Disclosure Schedule lists all consents, waivers and
approvals under any of the Parent's or any of its Subsidiaries'
agreements, contracts, licenses or leases required to be obtained
in connection with the consummation of the transactions
contemplated hereby, except for those the absence of which would
not have a Parent Material Adverse Effect.
2. No consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity
is required by or with respect to the Parent or Merger Sub in
connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby, except
for (i) the filing and effectiveness of the Registration
Statement with the SEC in accordance with the Securities Act,
(ii) the filing of the Articles of Merger with the Secretary of
State of New Hampshire, (iii) the filing of a Current Report on
Form 8-K with the SEC, (iv) the filing with the Antitrust
Division and the FTC of such forms
as may be required by the HSR Act and the termination or
expiration of all applicable waiting periods thereunder,
(v) the listing of Parent Common Stock issuable pursuant
to Section 1.6 on the NYSE, the Pacific Exchange and the
Boston Stock Exchange, (vi) the approval of the Merger,
the related transactions contemplated hereunder by the
NHPUC and any required filing thereof with the Secretary
of State of New Hampshire; (vii) the approval of the Merger
by the SEC pursuant to PUHCA; (viii) such consents, approvals,
orders, authorizations, registrations, declarations and filings
as may be required under applicable federal and state securities
laws and the laws of any foreign country; and (ix) such other
consents, authorizations, filings, approvals and registrations
that, if not obtained or made, would not have a Parent Material
Adverse Effect or a material adverse effect on the ability of the P
Parent to consummate the Merger.
5. SEC Filings; the Parent Financial Statements.
--------------------------------------------
1. Each of the Parent and each of its Subsidiaries has
filed all forms, reports and documents required to be filed by it
with the SEC since January 1, 1996. All such required forms,
reports and documents (including those that the Parent or its
Subsidiaries may file after the date hereof until the Closing)
are referred to herein as the "Parent SEC Reports." As of their
respective dates, the Parent SEC Reports (i) were or will be
prepared in compliance in all material respects with the
requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations of the SEC thereunder
applicable to such Parent SEC Reports, and (ii) did not and will
not at the time they were or are filed (or if amended or
superseded by a filing prior to the date of this Agreement, then
on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
2. Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in
the Parent SEC Reports (the "Parent Financials"), including any
Parent SEC Reports filed after the date hereof until the Closing,
(i) complied or will comply as to form in all material respects
with the published rules and regulations of the SEC with respect
thereto, (ii) was or will be prepared in accordance with GAAP
applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes thereto or, in the case
of unaudited interim financial statements, as may be permitted by
the SEC on Form 10-Q under the Exchange Act) and (iii) fairly
presented or will fairly present, in all material respects, the
consolidated financial position of the Parent and its
Subsidiaries as at the respective dates thereof and the
consolidated results of its operations and cash flows for the
periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end
adjustments which were not, or are not expected to be, material
in amount. The balance sheet of the Parent contained in the
Parent SEC Reports as of March 31, 1999 is hereinafter referred
to as the "Parent Balance Sheet." Except as disclosed in the
Parent Disclosure Schedule and except for obligations under this
Agreement, neither the Parent nor
any of its Subsidiaries has any liabilities (absolute,
accrued, contingent or otherwise) of a nature required to be
disclosed on a balance sheet or in the related notes to the
consolidated financial statements prepared in accordance with
GAAP that are, individually or in the aggregate, material to
the business, results of operations or financial condition
of the Parent and its Subsidiaries taken as a whole, except
liabilities (i) provided for in the Parent Balance Sheet or
the related notes , (ii) incurred since the date of the
Parent Balance Sheet in the ordinary course of business
consistent with past practices, or (iii) incurred in connection
with the transactions contemplated hereby.
6. Absence of Certain Changes and Events. Since March
-------------------------------------
31, 1999, there has not occurred, and no fact or condition exists
which would have or, insofar as reasonably can be foreseen, could
have any Parent Material Adverse Effect and there has not been,
occurred or arisen any:
1. material damage, destruction, or loss to the business
or properties of the Parent and its Subsidiaries taken as a whole
(whether or not covered by insurance);
2. declaration, setting aside, or payment of any dividend
or other distribution in respect of the Parent's capital stock
(other than regular quarterly dividends in accordance with past
practice); or
3. change in the capital stock or in the number of shares
or classes of the Parent's authorized capital stock as described
in Section 3.2.
7. Litigation. There is no action, suit, proceeding or
----------
investigation pending or to the Parent's knowledge, threatened
against the Parent or any of its Subsidiaries that would have a
Parent Material Adverse Effect or that in any manner challenges
or seeks to prevent, enjoin, alter or delay any of the
transactions contemplated by this Agreement.
8. Registration Statement; Proxy Statement/Prospectus.
----------------------
The information supplied by the Parent for inclusion in the
Registration Statement (as defined in Section 2.18) shall not at
the time the Registration Statement is filed with the SEC and at
the time it becomes effective under the Securities Act, 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. The information
supplied by the Parent for inclusion in the Proxy Statement to be
sent to the stockholders of the Company in connection with the
Company Stockholders' Meeting, and the information made available
to the Company's stockholders in connection with their election
as to the form of Merger Consideration, shall not, on the date
the Proxy Statement is first mailed to the Company's stockholders
and at the time of the Company Stockholders' Meeting, as the case
may be, and at the time such information is made available to the
Company's stockholders in connection with such election, 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 false or misleading, or omit to
state any material fact necessary to correct any statement in any
earlier written communication with respect to the solicitation of
proxies for the Company Stockholders' Meeting which has become
false or misleading. The Registration Statement and the Proxy
Statement used by the Parent will comply as to form in all
material respects with applicable provisions of the Securities
Act and the Exchange Act, respectively, and the rules and
regulations thereunder. If at any time prior to the Effective
Time, any event relating to the Parent or any of its affiliates,
officers or directors should be discovered by the Parent that
should be set forth in an amendment to the Registration Statement
or a supplement to the Proxy Statement or as part of the
information made available to the Company's stockholders so that
the information made available to them in connection with
electing the form of Merger Consideration is not false or
misleading in any material respect, the Parent shall promptly
inform the Company. Notwithstanding the foregoing, the Parent
makes no representation or warranty with respect to any
information supplied by the Company that is contained in any of
the foregoing documents.
9. Compliance; Permits; Restrictions.
---------------------------------
1. Neither the Parent nor any of its Subsidiaries is in
conflict with, or in default or violation of, (i) any law, rule,
regulation, order, judgment or decree applicable to the Parent or
any of its Subsidiaries or by which its or any of their
respective properties is bound or affected, or (ii) any note,
bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the
Company or any of its Subsidiaries is a party or by which the
Parent or any of its Subsidiaries or its or any of their
respective properties is bound or affected, except for any
conflicts, defaults or violations that would not have a Parent
Material Adverse Effect.
2. The Parent and its Subsidiaries hold all consents,
permits, licenses, variances, exemptions, orders and approvals
from governmental authorities that are material to the operation
of the business of the Parent and its Subsidiaries taken as a
whole (collectively, the "Parent Permits"). The Parent and its
Subsidiaries are in compliance with the terms of the Parent
Permits, except where the failure to so comply would not have a
Parent Material Adverse Effect.
10. Regulation as a Utility. As of the date of this
-----------------------
Agreement, the Parent is a holding company exempt from
registration under Section 3(a)(1) of the PUHCA.
11. Ownership of the Company Common Stock. As of the date
-------------------------------------
of this Agreement, the Parent does not "beneficially own" (as
such term is defined for purposes of Section 13(d) of the
Exchange Act) any shares of Company Common Stock.
12. Environmental Matters.
---------------------
1. Except as would not have a Parent Material Adverse
Effect, no amount of any Hazardous Material is present as a
result of the actions of the Parent or any of its Subsidiaries
in, on or under any property, including the land and the
improvements, ground water and surface water thereof, that the
Parent or any of its Subsidiaries has at any time owned,
operated, occupied or leased, and the Company is not aware that
any Hazardous Materials are present in, on or under such property
as a result of the conduct of other parties. To the knowledge of
the Parent, the Parent Disclosure Schedule lists all locations
that the Parent or any Subsidiary formerly owned or leased where
Hazardous Materials are present in a volume or concentration that
would reasonably be expected to have a Parent Material Adverse
Effect.
2. Except as would not have a Parent Material Adverse
Effect, (i) neither the Parent nor any of its Subsidiaries has
generated, transported, stored, used, manufactured, disposed of,
released or exposed its employees or others to Hazardous
Materials in violation of, or in a manner which could give rise
to liabilities under, any law in effect prior to or as of the
date hereof, nor (ii) has the Parent or any of its Subsidiaries
engaged in Hazardous Materials Activities in violation of any
rule, regulation, treaty or statute promulgated by any
Governmental Entity in effect prior to or as of the date hereof
to prohibit, regulate or control Hazardous Materials or any
Hazardous Material Activity.
3. The Parent and its Subsidiaries currently hold all
environmental approvals, permits, licenses, clearances and
consents ("Parent Environmental Permits") necessary for the
conduct of the Parent's and its Subsidiaries' Hazardous Material
Activities and other businesses of the Parent and its
Subsidiaries, taken as a whole, as such activities and businesses
are currently being conducted, except where the failure to so
hold would not have a Parent Material Adverse Effect.
4. No actions, proceedings, revocation proceeding,
amendment procedure, writ, injunction or claim is pending, or to
the Parent's knowledge, threatened concerning any Parent
Environmental Permit, Hazardous Material in, and or under any
property owned or leased at any time by the Parent or any of its
Subsidiaries or any Hazardous Materials Activity of the Parent or
any of its Subsidiaries, in which injunction or other equitable
relief or damages in excess of $1,000,000 is or is reasonably
likely to be sought against the Parent or any Subsidiary or that
otherwise would have a Parent Material Adverse Effect.
4. CONDUCT PRIOR TO THE EFFECTIVE TIME
1. Conduct of Business by the Company and the Parent.
-------------------------------------------------
During the period from the date of this Agreement and continuing
until the earlier of the termination of this Agreement or the
Effective Time, the Company (which for the purposes of this
Article 4 shall include the Company and each of its Subsidiaries)
and the Parent (which for the purposes of this Article 4 shall include
the Parent and each of its Subsidiaries) agree, except (i) in the case
of the Company as provided in Article 4 of the Company Disclosure Schedule,
(ii) in the case of the Parent (x) as provided in Article 4 of the Parent
Disclosure Schedule or (y) as would not have a material adverse
effect on the ability of the Parent to consummate the Merger or
materially delay the Effective Date, (iii) as otherwise contemplated
by this Agreement, or (iv) to the extent that the other party shall
otherwise consent in writing, to carry on its business in the usual,
regular and ordinary course, in substantially the same manner as
heretofore conducted and use its commercially reasonable efforts
consistent with past practices and policies to preserve intact its
present business organization, keep available the services of its p
present officers and employees, maintain its properties and assets, in
the aggregate, in good condition and repair, normal wear and tear
excepted, and preserve its relationships with customers,
suppliers, distributors, and others with which it has business
dealings.
2. Certain Actions by the Company. In addition, except
------------------------------
as is set forth in Article 4 of the Company Disclosure Schedules
notwithstanding Section 4.1 above, without the prior written
consent of the Parent, which consent will not be unreasonably
withheld or delayed, the Company shall not do any of the
following, nor shall the Company permit its Subsidiaries to do
any of the following:
1. Enter into any partnership arrangements, joint
development agreements or strategic alliances;
2. Grant any severance or termination pay to any officer
or employee except payments pursuant to written agreements
outstanding, or policies existing, on the date hereof and as
previously disclosed in writing to the Parent, or adopt any new
severance plan;
3. Make any filings with any government authority
regarding its rates or charges, standards of service, accounting
matters or services it provides, except in the ordinary course of
business consistent with past practices or as required by law;
4. Declare or pay any dividends on or make any other
distributions (whether in cash, stock or property) in respect of
any capital stock or split, combine or reclassify any capital
stock or issue or authorize the issuance of any other securities
in respect of, in lieu of or in substitution for any capital
stock, other than the declaration and payment of regular
quarterly cash dividends on the Company Common Stock with record
and payment dates consistent with past practice and at rates not
in excess, in any fiscal year, of the dividends for the prior
fiscal year increased at a rate consistent with past practice,
and dividends payable by a Subsidiary to the Company, other than
a dividend or distribution in connection with the adoption of a
replacement shareholders rights plan or in connection with any
redemption under the Rights Plan;
5. Repurchase or otherwise acquire, directly or
indirectly, any shares of capital stock;
6. Issue, deliver, sell, authorize or propose the issuance,
delivery or sale of, any shares of Company capital stock or any
securities convertible into shares of Company capital stock, or
subscriptions, rights, warrants or options to acquire any shares
of Company capital stock or any securities convertible into shares
of Company capital stock, or enter into other agreements or
commitments of any character obligating it to issue any such
shares or convertible securities, other than pursuant to the
Company Plans consistent with past practice;
7. Cause, permit or propose any amendments to its Articles
of Incorporation or Bylaws, except as contemplated by this
Agreement and in connection with adopting a new shareholder
rights plan;
8. Acquire or agree to acquire by merging or consolidating
with, or by purchasing any equity interest (other than money
market accounts and other short-term investments) in or a
material portion of the assets of, 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 material amount of operating assets;
9. Sell, lease, encumber or otherwise dispose of any
properties or assets that are material, individually or in the
aggregate, to the business of the Company, except for easements
granted in the ordinary course of business;
10. Incur any indebtedness for borrowed money or guarantee
any such indebtedness (or enter any other guarantee, keep-well,
capital maintenance or other similar agreement) or issue or sell
any debt securities or warrants or rights to acquire debt
securities of the Company or guarantee any debt securities of
others;
11. Adopt or amend any employee benefit or stock purchase
or option plan, or enter into any employment contract, pay any
special bonus or special remuneration to any director, officer or
employee other than pursuant to existing agreements, plans and
arrangements identified in the Company Disclosure Schedule, or
increase the salaries or wage rates, other than in the ordinary
course of business and consistent in timing and amount with past
practice or as required by law, of its officers or employees;
12. Pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent
or otherwise), other than payment, discharge or satisfaction in
the ordinary course of business or in an amount, in any
individual case, of less than $150,000, other than any payments
made under any of the contracts, agreements or binding
commitments listed in the Company Disclosure Schedule, in
accordance with their respective terms;
13. Make any individual capital expenditure or commitment,
or series of related capital expenditures or commitments, outside
the ordinary course of business, exceeding $150,000;
14. Take any action that would cause the transactions
contemplated by this Agreement to be subject to requirements
imposed by any Takeover Law or fail to take all necessary steps
within its control to exempt (or ensure the exemption of) the
transactions contemplated by this Agreement from any applicable
Takeover Law, including XX XXX 000-X; or
15. Agree in writing or otherwise to take any of the
actions described in this Section.
5. ADDITIONAL AGREEMENTS
1. Proxy Statement/Prospectus; Registration Statement;
--------------------------------------------------
Other Filings. As promptly as practicable after the execution
of this Agreement, the Company will prepare and file with the SEC
the Proxy Statement, and the Parent will prepare and file with
the SEC the Registration Statement in which the Proxy Statement
will be included as a prospectus. Each of the Company and the
Parent will respond to any comments of the SEC and will use its
best efforts to have the Registration Statement declared
effective under the Securities Act as promptly as practicable
after such filing. The Company will cause the Proxy Statement to
be mailed to its stockholders at the earliest practicable time.
As promptly as practicable after the date of this Agreement, the
Company and the Parent will prepare and file any other filings
required under the Exchange Act, the Securities Act or any other
Federal, foreign or state securities laws relating to the Merger
and the transactions contemplated by this Agreement (the "Other
Filings"). Each party will notify the other party promptly upon
the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff or any other government officials
for amendments or supplements to the Registration Statement, the
Proxy Statement or any Other Filing or for additional information
and will supply the other party with copies of all correspondence
between such party or any of its representatives, on the one
hand, and the SEC or its staff or any other government officials,
on the other hand, with respect to the Registration Statement,
the Proxy Statement, the Merger or any Other Filing. From and
after the date of this Agreement until the Effective Time, the
Parent and the Company shall file with the SEC when due all
reports required to be filed pursuant to Section 13 or 15(d) of
the Exchange Act, and the Parent shall make available to the
Company's stockholders such information as may be required in
connection with their election as to the form of Merger
Consideration. Whenever any event occurs that is required to be
set forth in an amendment or supplement to the Proxy Statement,
the Registration Statement or any Other Filing or to be made
available to the Company's stockholders in connection with such
election, the Company or the Parent, as the case may be, will
promptly inform the other party of such occurrence and cooperate
in filing with the SEC or its staff or any other government
officials, and/or mailing to stockholders of the Company, such
amendment, supplement or information. The Proxy Statement will
also include the recommendations of the Board of Directors of the
Company in favor of approval of this Agreement (except that the
Board of the Company may withdraw,
modify or refrain from making such recommendation to the extent
that the Board determines in good faith, after consulting with
outside legal counsel, that the Board's fiduciary duties under
applicable law require it to do so).
2. Meetings of Stockholders.
------------------------
The Company will take all action necessary in accordance
with applicable New Hampshire law and its Articles of
Incorporation and Bylaws to convene the Company Stockholders'
Meeting to be held as promptly as practicable, and in any event
within 60 days after the declaration of effectiveness of the
Registration Statement , and in any event will use all
commercially reasonable efforts to convene the Company
Stockholders' Meeting prior to December 31, 1999, for the purpose
of considering the approval of this Agreement. Unless otherwise
required by the fiduciary duties of the Company's Board of
Directors, the Company will use its best efforts to solicit from
its stockholders proxies in favor of the approval of this
Agreement, and will take all other action necessary or advisable
to secure the vote or consent of its stockholders required to
obtain such approval.
3. Access to Information; Confidentiality.
--------------------------------------
1. Each party will afford the other party and its
accountants, counsel and other representatives reasonable access
during normal business hours to the properties, books, records
and personnel of the other party during the period prior to the
Effective Time to obtain all information concerning the business,
including properties, results of operations and personnel of such
party, as the other party may reasonably request. No information
or knowledge obtained in any investigation pursuant to this
Section 5.3 will affect or be deemed to modify or waive any
representation or warranty contained herein or the conditions to
the obligations of the parties to consummate the Merger.
2. The parties acknowledge that the Company and the Parent
have previously executed Confidentiality Agreements dated June 9
and June 11, 1999 (the "Confidentiality Agreements"), which
Confidentiality Agreements will continue in full force and effect
in accordance with its terms, except as is necessary to comply
with the terms of this Agreement.
4. No Solicitation.
---------------
1. From and after the date of this Agreement until the
earlier of the Effective Time or termination of this Agreement,
the Company and its Subsidiaries will not, and will instruct
their respective directors, officers, employees, representatives,
investment bankers, agents and affiliates not to, directly or
indirectly, (i) solicit or encourage or facilitate submission of,
any proposals or offers (or anything that is reasonably likely to
lead to a proposal or offer) by any person, entity or group
(other than the Parent and its affiliates, agents and
representatives), or (ii) participate in any discussions or
negotiations with, or disclose any non-public information
concerning the Company or any of its Subsidiaries to, or afford
any access to the properties,
books or records of the Company or any of its Subsidiaries to,
or otherwise assist or facilitate, or enter into any agreement
or understanding with, any person, entity or group (other than
the Parent and its affiliates, agents and representatives), in
connection with any Acquisition Proposal, or that constitute
or may reasonably be expected to lead to an Acquisition Proposal,
with respect to the Company. For the purposes of this Agreement,
an "Acquisition Proposal" means (x) any proposal or offer relating
to (i) any merger, consolidation, sale of substantial assets of the
Company or similar transactions involving the Company or any Subsidiary
(other than sales of assets or inventory in the ordinary course
of business or permitted under the terms of this Agreement), (ii)
sale of 20% or more of the outstanding shares of capital stock of
the Company (including without limitation by way of a tender
offer or an exchange offer), or (iii) the acquisition by any
person of beneficial ownership or a right to acquire beneficial
ownership of, or the formation of any "group" (as defined under
Section 13(d) of the Exchange Act and the rules and regulations
thereunder) that beneficially owns, or has the right to acquire
beneficial ownership of, 20% or more of the then outstanding
shares of capital stock of the Company (except for acquisitions
for passive investment purposes only in circumstances where the
person or group qualifies for and files a Schedule 13G with
respect thereto); or (y) any public announcement of a proposal,
plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing. The Company will immediately
cease any and all existing activities, discussions or
negotiations with any parties conducted heretofore with respect
to any of the foregoing and will use reasonable efforts to obtain
the return of any confidential information furnished to any such
parties. The Company will (i) notify the Parent promptly if any
inquiry or proposal is made or any information or access is
requested in connection with an Acquisition Proposal or potential
Acquisition Proposal and (ii) notify the Parent within one
business day of the receipt thereof of the identity of the person
making the Acquisition Proposal and the applicable terms and
conditions of such Acquisition Proposal and of any modification
thereof or any proposed agreement. In addition, subject to the
other provisions of this Section 5.4, from and after the date of
this Agreement until the earlier of the Effective Time and
termination of this Agreement, the Company and its Subsidiaries
will not, and will instruct their respective directors, officers,
employees, representatives, investment bankers, agents and
affiliates not to, directly or indirectly, make or authorize any
public statement, recommendation or solicitation in support of
any Acquisition Proposal made by any person, entity or group
(other than the Parent); provided, however, that nothing herein
shall prohibit the Company's Board of Directors from taking and
disclosing to the Company's stockholders a position with respect
to a tender offer pursuant to Rules 14d-9 and 14e-2 promulgated
under the Exchange Act or any other disclosure required by law.
2. Notwithstanding the provisions of paragraph (a) above
but subject to compliance with the notification requirements
thereof, the Company may, to the extent the Board of Directors of
the Company determines, in good faith, after consultation with
its outside legal counsel and financial advisors, that the
Board's fiduciary duties under applicable law require it to do
so, participate in discussions or negotiations with, and, subject
to the requirements of paragraph (c) below, furnish information
to any person, entity or group after such person, entity or group
has delivered to the Company in writing an Acquisition Proposal
that the Board of Directors of the Company determines in good
faith, (i) would result in a transaction more favorable to the
stockholders of the Company than the Merger and (ii) has been
made by a person, entity or group that is financially capable of
consummating the Acquisition Proposal. In addition,
notwithstanding the provisions of paragraph (a) above, in
connection with a possible Acquisition Proposal, the Company
shall refer any third party to this Section 5.4 or make a copy of
this Section 5.4 available to a third party. In the event the
Company receives an Acquisition Proposal, nothing contained in
this Agreement (but subject to the terms hereof) will prevent the
Board of Directors of the Company from approving such Acquisition
Proposal, or recommending such Acquisition Proposal to the
Company's stockholders, if the Board determines in good faith,
after consultation with its outside legal counsel and financial
advisors, that such action is required by its fiduciary duties
under applicable law; in such case, the Board of Directors of the
Company may withdraw, modify or refrain from making its
recommendation concerning the approval of this Agreement,
provided that the Company provides Parent with at least three
business days' prior notice thereof, during which time the Parent
may make, and in such event the Company shall consider, a
counterproposal to such Acquisition Proposal, and shall itself
and shall cause its financial and legal advisors to negotiate on
its behalf with the Parent with respect to the terms and
conditions of such counterproposal. Nothing in this Section 5.4
shall (x) permit the Company to terminate this Agreement (except
as specifically provided in Section 7.1 hereof), (y) permit the
Company to enter into any agreement with respect to an
Acquisition Proposal during the term of this Agreement (it being
agreed that during the term of this Agreement, the Company shall
not enter into any agreement with any person that provides for,
or in any way facilitates, an Acquisition Proposal (other than a
confidentiality agreement of the type referred to below)) or (z)
affect any other obligation of the Company under this Agreement.
3. Notwithstanding anything to the contrary in this
Section 5.4, the Company will not provide any non-public
information to a third party unless (i) the Company provides such
non-public information pursuant to a nondisclosure agreement with
terms comparable to the terms in the Confidentiality Agreement
dated June 9, 1999 protecting confidential information of the
Company and (ii) such non-public information has previously been
delivered or made available to the Parent.
5. Public Disclosure. The Parent will consult with the
-----------------
Company, and the Company will consult the Parent, and each will
get the approval of the other (which will not be unreasonably
withheld or delayed), before issuing any press release or
otherwise making any public statement with respect to the Merger
or this Agreement and will not issue any such press release or
make any such public statement prior to such consultation and
approval, except as may be required by law or any listing
agreement with or rule of a national securities exchange.
6. Legal Requirements.
------------------
1. Each of the Parent, Merger Sub and the Company will
take all reasonable actions necessary or desirable to comply
promptly with all legal requirements that may be imposed on them
with respect to the consummation of the transactions contemplated
by this Agreement (including furnishing all information required
in connection with approvals of or filings with any Governmental
Entity) and will promptly cooperate with and furnish information
to any party hereto necessary in connection with any such
requirements imposed upon any of them or their respective
Subsidiaries in connection with the consummation of the
transactions contemplated by this Agreement. The Parent will use
its commercially reasonable efforts to take such steps as may be
necessary to comply with the securities and blue sky laws of all
jurisdictions which are applicable to the issuance of Parent
Common Stock pursuant hereto. The Company will use its
commercially reasonable efforts to assist the Parent as may be
necessary to comply with the securities and blue sky laws of all
jurisdictions that are applicable in connection with the issuance
of Parent Common Stock pursuant hereto.
2. As soon as practicable after execution of this
Agreement or as otherwise mutually agreed by the parties, each of
the Parent and the Company shall file with the Antitrust Division
and the FTC a premerger notification form and any supplemental
information (other than privileged information) which may be
requested in connection therewith pursuant to the HSR Act, which
filings and supplemental information will comply in all material
respects with the requirements of the HSR Act. Each of the Parent
and the Company shall cooperate fully with the other in
connection with the preparation of such filings and shall use its
best efforts to respond to any requests for supplemental
information from the Antitrust Division or the FTC and to obtain
early termination of any waiting period applicable to the Merger
under the HSR Act without any materially burdensome conditions or
any divestiture. Filing fees required to be paid in connection
with the premerger notification pursuant to the HSR Act shall be
borne and paid by the Parent.
3. As soon as practicable after execution of this
Agreement, to the extent applicable, the Parent shall file with
the SEC an application for approval under Section 9(a)(2) of
PUHCA and such other applications and information (other than
privileged information) which may be requested by the SEC in
connection therewith pursuant to PUHCA and the rules of the SEC
thereunder, which filings and information will comply in all
material respects with the requirements of PUHCA and such rules.
The Parent will diligently prosecute such applications and,
subject to the understanding set forth in clause (ii) of Section
6.1(d) below, take such actions as may reasonably be necessary
to obtain the requisite SEC approval under PUHCA.
7. Third Party Consents. As soon as practicable
following the date hereof, each of the Company and the Parent
will use its commercially reasonable efforts to obtain all
material consents, waivers and approvals under any of its or its
Subsidiaries' agreements, contracts, licenses, leases or
franchises required to be obtained in connection with the
consummation of the transactions contemplated hereby, it being
understood that neither Company nor Parent shall be required to make
materially burdensome payments in connection with fulfillment
of its obligations under this Section 5.7.
8. Notification of Certain Matters. The Parent will give
-------------------------------
prompt notice to the Company, and the Company will give prompt
notice to the Parent, of the occurrence, or failure to occur, of
any event, which occurrence or failure to occur would be
reasonably likely to cause (a) any representation or warranty
contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date of this Agreement to
the Effective Time, or (b) any material failure of the Parent and
Merger Sub or the Company, as the case may be, or of any officer,
director, employee or agent thereof, to comply with or satisfy
any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement. Notwithstanding the above,
the delivery of any notice pursuant to this section will not
limit or otherwise affect the remedies available hereunder to the
party receiving such notice or the conditions to such party's
obligation to consummate the Merger.
9. Best Efforts and Further Assurances. Subject to the
-----------------------------------
respective rights and obligations of the Parent and the Company
under this Agreement, each of the parties to this Agreement will
and the Parent will cause Merger Sub to, use its best efforts to
effectuate the Merger and the other transactions contemplated
hereby and to fulfill and cause to be fulfilled the conditions to
closing under this Agreement. Each party hereto, at the
reasonable request of another party hereto, will, and the Parent
will cause Merger Sub to, execute and deliver such other
instruments and do and perform such other acts and things as may
be necessary or desirable for effecting completely the
consummation of the transactions contemplated hereby.
Notwithstanding the foregoing, nothing in this Agreement shall
require the Parent to agree to any materially burdensome
condition or any divestiture in order to obtain any clearance for
the Merger under the HSR Act or in connection with any other
regulatory order or approval.
10. Certain Employee Agreements. Parent and the Surviving
---------------------------
Corporation and its Subsidiaries shall honor in accordance with
their terms all contracts, agreements, collective bargaining
agreements and commitments of the Company and its Subsidiaries
prior to the date hereof which apply to any current or former
employee or current or former director of the Company and which
are disclosed in the Company Disclosure Schedule; provided,
however, that the foregoing shall not prevent Parent or the
Surviving Corporation from administering and enforcing such
contracts, agreements, collective bargaining agreements and
commitments in accordance with their terms, including without
limitation, any reserved right to amend, modify, suspend, revoke
or terminate any such contract, agreement, collective bargaining
agreement or commitment. It is the present intention of Parent
and the Company that following the Effective Time, if any
reductions in workforce in respect of employees of the Company or
any of its Subsidiaries become necessary they shall be made on a
fair and equitable basis, in light of the circumstances and the
objectives to be achieved, giving consideration to previous work
history, job experience, and qualifications, without regard to
whether employment prior to the Effective Time was with the
Company or its Subsidiaries or Parent or its Subsidiaries, and
that any employees whose employment is terminated or jobs are
eliminated by Parent, the Surviving Corporation or any of their
respective Subsidiaries during such period shall be
entitled to participate on a fair and equitable basis in the job
opportunity and employment placement programs offered by Parent, the
Surviving Corporation or any of their respective subsidiaries,
subject in each case to the provisions of any labor agreements
that may be applicable. Any workforce reductions carried out
following the Effective Time by Parent or the Surviving
Corporation and their respective subsidiaries shall be done in
accordance with all applicable collective bargaining agreements,
and all laws and regulations governing the employment
relationship and termination thereof including, without
limitation, the Worker Adjustment and Retraining Notification Act
and regulations promulgated thereunder, to the extent applicable,
and any comparable applicable state or local law.
11. Corporate Offices. The corporate headquarters of the
-----------------
Surviving Corporation shall initially be located in Manchester,
New Hampshire.
12. Community Involvement. Subsequent to the Effective
---------------------
Time, Parent will, or will cause the Surviving Corporation to,
continue to make charitable contributions to the communities
served by the Company and its Subsidiaries and otherwise maintain
a level of involvement in community activities in the State of
New Hampshire at a level as generous as established practice
carried on in recent years by the Company and its Subsidiaries.
13. Advisory Board. Following the Effective Time,
--------------
EnergyNorth Natural Gas, Inc. shall maintain an advisory board
(the "Advisory Board") consisting of not less than five members
and to be chaired by Xx. Xxxxxxxx, for a period of at least three
years following the Closing Date. Membership on the Advisory
Board shall be offered to Xx. Xxxxxxxx and all current members of
the Company's Board of Directors who are residents of the State
of New Hampshire and who are not employees of the Surviving
Corporation and all such persons who join the Advisory Board
shall be referred to as "Company Designees". Any vacancy on the
Advisory Board which arises after the Effective Time (including
any shortfall in Advisory Board membership arising from the
failure of at least five eligible members of the Company's Board
of Directors to elect to join the Advisory Board) shall be
filled by Parent with the advice of the then remaining Company
Designees (and such replacement person shall be deemed a "Company
Designee" for all purposes hereunder). Meetings of the Advisory
Board shall be called by EnergyNorth Natural Gas, Inc. and shall
be held no less frequently than quarterly, and EnergyNorth
Natural Gas, Inc. shall consult with the Advisory Board with
respect to regulatory and legislative matters and community
affairs of EnergyNorth Natural Gas, Inc. in EnergyNorth Natural
Gas, Inc.'s current service area (including consultations with
the Advisory Board in which the Advisory Board may review and
make recommendations consistent with Section 5.12 with respect to
the civic, charitable and business and customer development
activities of EnergyNorth Natural Gas, Inc. in such area).
Company Designees shall receive a fee of $1,500 per meeting
attended for serving on the Advisory Board, and shall be
reimbursed for reasonable out-of-pocket expenses incurred in
connection with their service on the Advisory Board. The members
of the Advisory Board shall be committed to the advancement of
the affairs of the Surviving Corporation, EnergyNorth Natural
Gas, Inc., and the Parent in the State of New Hampshire. The
Surviving Corporation shall provide to Company
Designees indemnification rights to the same extent as provided
to Surviving Corporation's directors pursuant to the Surviving
Corporation's Articles of Incorporation and bylaws.
14. Representation on Parent Board. The Parent shall
------------------------------
take such action as may be necessary to cause the number of Trustees
comprising of the Parent's Board of Trustees at the Effective
Time to be sufficient to permit one director of the Company to
serve thereon and shall elect Xxxxxx X. Xxxxx or another director
of the Company designated by the Board of Directors of the
Company who is reasonably satisfactory to the Parent. The Parent
shall, as of the Effective Time, appoint such director to serve
on the Parent 's Board of Trustees for an initial term ending at
the 2003 Annual Meeting of Shareholders of the Parent.
15. Employee Benefit Matters.
------------------------
1. For a period of 12 months after the Closing Date, and
subject to applicable law, the Parent shall provide to continuing
employees who were employees of the Company and its Subsidiaries
immediately prior to the Effective Time (for purposes of this
Section 5.15, "affected employees") benefits under welfare plans
(as that term is defined in Section 3(1) of ERISA) and tax-
qualified pension plans (as that term is defined in Section 3(2)
of ERISA) that are substantially comparable in the aggregate to
the welfare and tax-qualified pension benefits provided under the
Company's Plans (as defined in Section 2.14), other than
individual agreements, disclosed in the Company Disclosure
Schedule as in effect on the Closing Date. Such employee
benefits shall be made available to such employees without regard
to preexisting condition limitations other than any such
condition or limitation (including without limitation preexisting
condition exclusions, waiting periods, actively-at-work
requirements and other similar exclusions and conditions) as to
which the relevant corresponding Plan of the Company or its
Subsidiaries provided only a conditional waiver and as to which
the employee (or his or her spouse or dependents) had not, as of
the Closing Date, satisfied the relevant conditions for such
waiver. For purposes of each employee benefits plan of the
Parent or its Subsidiaries (a "Parent plan") that determines an
individual's eligibility to become a participant in the Parent
plan (an "eligibility requirement") or the extent of a
participant's nonforfeitable right to benefits otherwise accrued
under the Parent plan (a "vesting requirement") by reference to
service for the Parent and its Subsidiaries, the Parent plan's
eligibility and vesting requirements shall be applied to the
extent permitted by law by taking into account for each affected
employee such services of such employee for the Company or its
subsidiaries prior to the Effective Time as would have been taken
into account for purposes of the Parent's plan's eligibility and
vesting requirements had such services been performed for the
Parent and its Subsidiaries. The provisions of this Section 5.15
shall not apply to affected employees whose terms and conditions
of employment are governed by a collective bargaining agreement.
2. The Company may establish a retention pool
of up to a maximum of $650,000 in order to retain the services of
certain officers and employees through and following the
Effective Date. A listing of the individuals proposed to be
covered and their respective
retention amounts shall be provided by the Company to the Parent
for its approval within 90 days following the date of this Agreement,
such approval not to be unreasonably withheld. The amounts shall be
payable to the individuals, as approved by the Parent pursuant to the
immediately preceding sentence, 90 days following the Closing if
such individuals have remained employed with the Surviving
Corporation or its Subsidiaries through such date, except as set
forth in Schedule 5.15(b) of the Parent Disclosure Schedules.
16. Indemnification; D&O Insurance.
------------------------------
1. In the event of any threatened or actual claim, action,
suit, proceeding or investigation, whether civil, criminal or
administrative, including without limitation any such claim,
action, suit, proceeding or investigation in which any person who
is now, or has been at any time prior to the date of this
Agreement, or who becomes prior to the Effective Time, a director
or officer of the Company or any of its Subsidiaries (the
"Indemnified Parties") is, or is threatened to be, made a party
based in whole or in part on, or arising in whole or in part out
of, or pertaining to (i) the fact that he is or was a director or
officer of the Company, any of its Subsidiaries or any of their
respective predecessors or (ii) this Agreement or any of the
transactions contemplated hereby, whether in any case asserted or
arising before or after the Effective Time, the parties hereto
agree to cooperate and use their best efforts to defend against
and respond thereto. It is understood and agreed that after the
Effective Time, to the extent, if any, not provided by an
existing right of indemnification or other agreement or policy,
the Parent shall indemnify and hold harmless, as and to the
fullest extent permitted by law and the charter and by-laws of
the relevant entity, each such Indemnified Party against any
losses, claims, damages, liabilities, costs, expenses (including
reasonable attorney's fees and expenses in advance of the final
disposition of any claim, suit, proceeding or investigation to
each Indemnified Party to the fullest extent permitted by law
upon receipt of any undertaking required by applicable law),
judgments, fines and amounts paid in settlement in connection
with any such threatened or actual claim, action, suit,
proceeding or investigation. In the event of any such threatened
or actual claim, action, suit, proceeding or investigation
(whether asserted or arising before or after the Effective Time),
the Indemnified Parties may retain counsel reasonably
satisfactory to them after consultation with the Parent;
provided, however, that (i) the Parent shall have the right to
assume the defense thereof and upon such assumption the Parent
shall not be liable to any Indemnified Party in connection with
the defense thereof, except that if the Parent elects not to
assume such defense or counsel for the Indemnified Parties
reasonably advises the Indemnified Parties that there are issues
which raise conflicts of interest between the Parent and the
Indemnified Parties, the Indemnified Parties may retain counsel
reasonably satisfactory to them after consultation with the
Parent, and the Parent shall pay the reasonable fees and expenses
of such counsel for the Indemnified Parties, (ii) the Parent
shall be obligated pursuant to this paragraph to pay for only one
counsel in any jurisdiction for all Indemnified Parties, (iii)
the Parent shall not be liable for any settlement effected
without its prior written consent (which consent shall not be
unreasonably withheld) and (iv) the Parent shall have no
obligation hereunder to any Indemnified Party when and if a court
of competent jurisdiction
shall ultimately determine, and such determination shall have
become final and nonappealable, that indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited
by applicable law. Any Indemnified Party wishing to claim
indemnification under this Section 5.16 upon learning of any such
claim, action, suit, proceeding or investigation shall notify the
Parent thereof, provided that the failure to so notify shall not
affect the obligations of the Parent under this Section 5.16 except
to the extent such failure to notify materially prejudices the Parent.
The Company's obligations under this Section 5.16(a) shall continue
in full force and effect for a period of six (6) years from the
Effective Time, provided, however, that all rights to indemnification
in respect of any claim asserted or made within such period shall
continue until the final disposition of such claim.
2. From and after the Effective Time, the Surviving
Corporation will fulfill and honor in all respects the
indemnification obligations of the Company pursuant to the
provisions of the Articles of Incorporation and the Bylaws of the
Company as in effect immediately prior to the Effective Time.
3. For a period of six (6) years after the Effective Time,
the Parent shall cause the Surviving Corporation to maintain (to
the extent available in the market) in effect a directors' and
officers' liability insurance policy covering those persons who
are currently covered by the Company's directors' and officers'
liability insurance policy (a copy of which has been heretofore
delivered to the Parent) with coverage in amount and scope at
least as favorable as the Company's existing coverage (which
coverage may be an endorsement extending the period in which
claims may be made under such existing policy); provided that in
no event shall the Parent or the Surviving Corporation be
required to expend per year under this Section 5.16(c) more than
an aggregate of 150% of the current annual premium expended by
the Company to provide such coverage; and, further provided that
if the premium for such coverage exceeds such amount, the Parent
or the Surviving Corporation shall purchase a policy with the
greatest coverage available for such 150% of the current annual
premium.
4. In the event the Parent or any of its successors or
assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or conveys all or
substantially all of its assets to any person, then, and in each
such case, to the extent necessary, proper provision shall be
made so that the successors and assigns of the Parent assume the
obligations set forth in this Section 5.16.
5. The provisions of this Section 5.16 are intended to be
for the benefit of, and shall be enforceable by, each Indemnified
Party and his or her heirs and representatives, and nothing
herein shall affect any indemnification rights that any
Indemnified Party and his or her heirs and representatives may
have under the Bylaws of the Company or any of its Subsidiaries,
any contract or applicable law.
17. Tax-Free Reorganization. The Parent and the Company
-----------------------
will each use its best efforts to cause the Merger to be treated
as a reorganization within the meaning of Section 368 of the
Code, and neither party will take any action that would cause the
Merger to fail to qualify as a reorganization within the meaning
of Section 368(a) of the Code. Each of the parties shall report
the Merger for income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code (and any comparable state
or local tax statute). The Parent and the Company will each make
available to the other party and their respective legal counsel
copies of all tax returns as may be requested by the other party.
Each of the Parent and the Company will make and will use its
best efforts to obtain from its affiliates such reasonable
representations as may be requested by legal counsel for the
purpose of rendering the opinions contemplated by Section 6.1(f).
18. Listing. The Parent shall use its best efforts to
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cause the shares of Parent Common Stock to be issued in the
Merger to be approved for listing on the NYSE, the Pacific
Exchange and the Boston Stock Exchange prior to the Effective
Time.
19. Dividend Record Date. The Company agrees to
--------------------
coordinate with the Parent in establishing the record date for
the payment of any dividends on the Company Common Stock in order
to assure that the holders of record of Company Common Stock (i)
are entitled to receive a dividend on either Company Common Stock
or Parent Common Stock received in the Merger in the quarter in
which the Closing occurs, and (ii) are not entitled to receive a
dividend on both Company Common Stock and Parent Common Stock
received in the Merger in the quarter in which the Closing
occurs.
20. Stock Options and Employee Benefits.
-----------------------------------
1. At the Effective Time, each outstanding option to
purchase shares of the Company Common Stock (each a "Company
Stock Option") under the Company Stock Option Plans, whether or
not exercisable, will be assumed by Parent. Each Company Stock
Option so assumed by Parent under this Agreement will continue to
have, and be subject to, the same terms and conditions set forth
in the applicable Company Stock Option Plan and option
certificate immediately prior to the Effective Time (including,
without limitation, any existing repurchase rights or vesting
provisions other than any provision providing for accelerated
vesting in connection with the Merger, which provisions shall not
apply with respect to the Merger), except that (i) each Company
Stock Option will be exercisable for that number of whole shares
of Parent Common Stock as the holder would have been entitled to
receive pursuant to the Merger had such holder exercised such
option in full immediately prior to the Effective Time, without
taking into account whether or not such option is in fact then
exercisable and all shares of Company Common Stock issuable upon
the exercise of such option were converted into Parent Common
Stock pursuant to Section 1.6, rounded down to the nearest whole
number of shares of Parent Common Stock and (ii) the per share
exercise price for the shares of Parent Common Stock issuable
upon exercise of such assumed Company Stock Option will be equal
to the quotient determined by dividing the exercise price
per share of Company Common Stock at which such Company Stock
Option was exercisable immediately prior to the Effective Time
by the number of shares of Parent Common Stock deemed purchasable,
in accordance with the terms of this Section, pursuant to such
Company Common Stock Option, rounded up to the nearest whole
cent. Parent shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Parent
Common Stock for delivery upon exercise of options assumed by
Parent pursuant to this Section. As soon as practicable after
the Effective Time, Parent shall deliver to each holder of a
Company Stock Option an appropriate notice setting forth such
holder's rights pursuant thereto.
2. It is intended that the Company Stock Options assumed
by Parent shall qualify following the Effective Time as incentive
stock options as defined in Section 422 of the Code to the extent
the Company Stock Options qualified as incentive stock options
immediately prior to the Effective Time and the provisions of
this Section 5.20 shall be applied consistent with such intent.
3. Parent agrees to file a registration statement on Form
S-8 for the shares of Parent Common Stock issuable with respect
to assumed Company Stock Options within 10 business days after
the Effective Time and shall use its reasonable efforts to
maintain the effectiveness of such registration statement
thereafter for so long as any of such options or other rights
remain outstanding.
21. Rights Plan Redemption. Not later than immediately
----------------------
prior to the Effective Time, the Company shall redeem all
outstanding rights under the Rights Agreement so that the Rights
Agreement will not apply to the consummation of the transactions
contemplated hereby.
6. CONDITIONS TO THE MERGER
1. Conditions to Obligations of Each Party to Effect the Merger.
------------------------------------------------------------
The respective obligations of each party to this Agreement to effect the
Merger shall be subject to the satisfaction or waiver at or prior to the
Effective Time of the following conditions:
1. Stockholder Approval. This Agreement shall have been
approved by the requisite vote under the Company's charter and
bylaws, applicable laws of the State of New Hampshire and the
rules and regulations of the NYSE, as and to the extent required.
2. NHPUC Approval. The Merger, the Merger Agreement and
the related transactions contemplated hereunder shall have
received all required or requested approvals or reviews from the
NHPUC pursuant to applicable New Hampshire law on terms and
conditions which (i) with respect to rates and recovery of costs,
including without limitation transaction, premium and integration
costs, associated with the Merger, are not less favorable to the
Surviving Corporation or EnergyNorth Natural Gas, Inc. or Parent
than those contained in the order of the NHPUC, dated July 20,
1998, In Re Northern Utilities, Inc. (DF-040, Order No. 22,983),
and (ii) do not otherwise have or constitute a material adverse
effect on the business, assets (including intangible assets),
prospects, financial condition or results of operations of the
Surviving Corporation or EnergyNorth Natural Gas, Inc. or the
other gas distribution Subsidiaries of the Parent, and such
approval shall be final, nonappealable and not under appeal.
3. Registration Statement Effective. The SEC shall have
declared the Registration Statement effective, and no stop order
suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that
purpose, and no similar proceeding in respect of the Proxy
Statement, shall have been initiated or threatened in writing by
the SEC.
4. PUHCA Approval. The requisite approval of the SEC
under PUHCA shall have been obtained on terms and conditions that
(i) do not have and cannot reasonably be expected to have a
Parent Material Adverse Effect and (ii) are not otherwise
materially burdensome to the Parent, it being understood that any
requirement that the Parent register as a non-exempt "holding
company" under PUHCA or divest any of its or the Surviving
Corporation's operations shall be deemed to be materially
burdensome for purposes of this provision unless such requirement
arises as a result of any other transaction or transactions
engaged in by Parent or its Subsidiaries after the date of this
Agreement and not solely as a result of the transactions
contemplated by this Agreement.
5. No Order. No Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is in effect
and which has the effect of making the Merger illegal, otherwise
prohibiting consummation of the Merger or having a material
adverse effect on the Merger.
6. Tax Opinions. The Parent and the Company shall each
have received substantially identical written opinions from their
counsel, Ropes & Xxxx and Xxxx and Xxxx LLP, respectively, in
form and substance reasonably satisfactory to them, to the effect
that the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Code; provided that if the
respective counsel to the Parent or the Company does not render
such opinion, this condition shall nonetheless be deemed
satisfied with respect to such party if counsel to the other
party renders such opinion to such party.
7. HSR and Similar Compliance. Any applicable waiting
period relating to the consummation of Merger under the HSR Act
shall have expired or been terminated by the reviewing agency.
8. Required Approvals. All consents and approvals
referred to in Section 6.1(h) of the Company Disclosure Schedule
(or in the applicable Disclosure Schedule with respect thereto)
shall have been obtained.
2. Additional Conditions to Obligations of the Company.
---------------------------------------------------
The obligations of the Company to consummate and effect the
Merger shall be subject to the satisfaction at or prior to the
Effective Time of each of the following conditions, any of which
may be waived, in writing, exclusively by the Company:
1. Representations and Warranties. The representations
and warranties of the Parent and Merger Sub contained in this
Agreement shall be true and correct on and as of the Effective
Time (without regard to any updates to the Parent Disclosure
Schedule, unless otherwise agreed by the Company), except for
changes contemplated by this Agreement and except for those
representations and warranties that address matters only as of a
particular date (which shall remain true and correct as of such
particular date), with the same force and effect as if made on
and as of the Effective Time, except, in all such cases, where
the failure to be so true and correct (without regard to any
materiality or knowledge qualifications contained therein) would
not have a Parent Material Adverse Effect, and the Company shall
have received a certificate to such effect signed on behalf of
the Parent by the Chief Executive Officer, Chief Operating
Officer or Chief Financial Officer of the Parent.
2. Agreements and Covenants. The Parent and Merger Sub
shall have performed or complied in all material respects with
all agreements and covenants required by this Agreement to be
performed or complied with by them on or prior to the Effective
Time, and the Company shall have received a certificate to such
effect signed on behalf of the Parent by the Chief Executive
Officer, Chief Operating Officer or Chief Financial Officer of
the Parent.
3. Listing. The shares of Parent Common Stock issuable
to stockholders of the Company pursuant to this Agreement shall
have been authorized for listing on the NYSE, the Pacific
Exchange and the Boston Stock Exchange.
3. Additional Conditions to the Obligations of the Parent
------------------------------------------------------
and Merger Sub. The obligations of the Parent and Merger Sub to
--------------
consummate and effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of each of the
following conditions, any of which may be waived, in writing,
exclusively by the Parent:
1. Representations and Warranties. The representations
and warranties of the Company contained in this Agreement shall
be true and correct on and as of the Effective Time (without
regard to any updates to the Company Disclosure Schedule, unless
otherwise agreed by the Parent), except for changes contemplated
by this Agreement and except for those representations and
warranties that address matters only as of a particular date
(which shall remain true and correct as of such particular date),
with the same force and effect as if made on and as of the
Effective Time, except, in all such cases, where the failure to
be so true and correct (without regard to any materiality or
knowledge qualifications contained therein) would not have a
Company Material Adverse Effect, and the Parent and Merger Sub
shall have received a certificate to such effect signed on behalf
of the Company by the Chief Executive Officer, Chief Operating
Officer or Chief Financial Officer of the Company.
2. Agreements and Covenants. The Company shall have
performed or complied in all material respects with all
agreements and covenants required by this Agreement to be
performed or complied with by it on or prior to the Effective
Time, and the Parent shall have received a certificate to such
effect signed on behalf of the Company by the Chief Executive
Officer, Chief Operating Officer or Chief Financial Officer of
the Company.
7. TERMINATION
1. Termination. This Agreement may be terminated at any
time prior to the Effective Time of the Merger, whether before or
after approval of the Merger by the stockholders of the Company
or the NHPUC:
1. by mutual written consent duly authorized by the Board
of Trustees of the Parent and the Board of Directors of the
Company;
2. by either the Company or the Parent if the Merger shall
not have been consummated by July 14, 2000 (which date may be
extended at the written request of either the Parent or the
Company to January 14, 2001 to the extent necessary to satisfy
the condition set forth in Section 6.1(b), (d) or (g) and so long
as all other conditions have been or shall be capable of being
fulfilled); provided, however, that the right to terminate this
Agreement under this Section 7.1(b) shall not be available to any
party whose action or failure to act has been a principal cause
of or resulted in the failure of the Merger to occur on or before
such date if such action or failure to act constitutes a breach
of this Agreement;
3. by either the Company or the Parent if a court of
competent jurisdiction or governmental, regulatory or
administrative agency or commission shall have issued an order,
decree or ruling or taken any other action (an "Order"), in any
case having the effect of permanently restraining, enjoining or
otherwise prohibiting the Merger, which order is final,
nonappealable and not under appeal;
4. by either the Company or the Parent if the required
approval of the stockholders of the Company contemplated by this
Agreement shall not have been obtained on or before March 1, 2000
or by reason of the failure to obtain the required vote upon a
vote taken at a duly held meeting of the Company's stockholders
duly convened therefor or at any adjournment thereof (a "Company
Stockholder Approval Failure Event"); provided, however, that the
right to terminate this Agreement under this Section 7.1(d) shall
not be available to the Company where the failure to obtain
Company stockholder approval shall have been caused by the action
or failure to act of the Company in breach of this Agreement and
shall not be available to Parent where such failure is caused by
a breach of this Agreement by Parent;
5. by either the Company or the Parent, if the Company
shall have accepted or approved an Acquisition Proposal or if the
Company's Board of Directors recommends an Acquisition Proposal
to the stockholders of the Company as permitted by Section
5.4(b);
6. by the Parent, if the Board of Directors of the Company
shall have (i) failed to convene the Company Stockholders'
Meeting, as required by Section 5.2, (ii) failed to recommend
approval of this Agreement in the Proxy Statement or withheld,
withdrawn or modified in a manner adverse to the Parent such
recommendation or resolved to do so, or (iii) approved or
recommended an Acquisition Proposal;
7. by the Company, upon a breach of any representation,
warranty, covenant or agreement on the part of the Parent set
forth in this Agreement, if (i) as a result of such breach the
conditions set forth in Section 6.2(a) or Section 6.2(b) would
not be satisfied as of the time of such breach and (ii) such
breach shall not have been cured by the Parent within ten (10)
business days following receipt by the Parent of written notice
of such breach from the Company;
8. by the Parent, upon a breach of any representation,
warranty, covenant or agreement on the part of the Company set
forth in this Agreement, if (i) as a result of such breach the
conditions set forth in Section 6.3(a) or Section 6.3(b) would
not be satisfied as of the time of such breach and (ii) such
breach shall not have been cured by the Company within ten (10)
business days following receipt by the Company of written notice
of such breach from the Parent;
9. by the Parent, if there shall have occurred any event
or condition that constitutes a Company Material Adverse Effect
since the date of this Agreement which condition or event shall
not have been ameliorated such that it is no longer a Company
Material Adverse Effect within ten (10) business days following
receipt by the Company of notice from the Parent; or
10. by the Company, if there shall have occurred any event
or condition that constitutes a Parent Material Adverse Effect
since the date of this Agreement, which condition or event shall
not have been ameliorated such that it is no longer a Parent
Material Adverse Effect within ten (10) business days following
receipt by the Parent of notice from the Company.
2. Notice of Termination; Effect of Termination. Any
--------------------------------------------
termination of this Agreement under Section 7.1 above will be
effective immediately upon the delivery of written notice of the
terminating party to the other parties hereto. In the event of
the termination of this Agreement as provided in Section 7.1,
this Agreement shall be of no further force or effect, except (i)
as set forth in this Section 7.2, Section 7.3 and Article 8
(General Provisions), each of which shall survive the termination
of this Agreement. No termination of this Agreement shall affect
the obligations of the parties contained in the Confidentiality
Agreements, all of which obligations shall survive termination of
this Agreement in accordance with their terms.
3. Fees and Expenses.
1. Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such expenses, whether or not the Merger is
consummated; provided, however, that the Parent and the Company
shall share equally all fees and expenses, other than attorneys'
and accountants' fees and expenses, incurred in relation to the
printing and filing of the Proxy Statement (including any
preliminary materials related thereto) and the Registration
Statement (including financial statements and exhibits) and any
amendments or supplements thereto.
2. The Company shall pay to the Parent an amount equal to
all out-of-pocket expenses and fees incurred by the Parent,
including without limitation fees and expenses payable to all
legal, accounting, financial and other professional advisors,
relating to the Merger or the transactions contemplated by this
Agreement not exceeding $2,000,000 in the aggregate upon the
termination of this Agreement by the Parent pursuant to 7.1(h) or
upon any termination of this Agreement as to which subparagraph
(i), (ii) or (iii) of Section 7.3(c) is applicable.
3. The Company shall pay the Parent a termination fee of
$5,500,000 (plus all amounts payable pursuant to Section 7.3(b)),
upon the earliest to occur of the following events:
1. the termination of this Agreement pursuant to Section
7.1(e) or (f);
2. the termination of this Agreement pursuant to Section
7.1(d) if, at the time of the Seller Stockholder Approval Failure
Event;
(1) there shall have been announced, commenced or
occurred an Alternative Transaction (as defined in Section
7.3(g)) and the Company shall have either (x) executed an
agreement to engage in the same or (y) the
Company's Board of Directors shall not have recommended
against such Alternative Transaction affirmatively or,
if the Company's Board of Directors has recommended against
such Alternative Transaction, the Company's Board of
Directors shall have withdrawn such recommendation against
such Alternative Transaction or modified such recommendation
in a manner adverse to the Parent; or
(2) there shall have been announced, commenced
or occurred an Alternative Transaction with a Third Party
(as defined in Section 7.3(g)) and (x) the Company shall
have engaged in, or entered into an agreement to engage in,
an Alternative Transaction with such Third Party or any
affiliate thereof or with a Competing Party (as defined
in Section 7.3(g)) within 12 months of the date of the
Company Stockholder Approval Failure Event or (y) the
Company's Board of Directors shall have recommended an
Alternative Transaction with such Third Party or any
affiliate thereof or with a Competing Party within 12
months after the date of the Company Stockholder Approval
Failure Event; or
3. the termination of this Agreement by the Parent
pursuant to Section 7.1(h) after a willful breach by the Company
of this Agreement, if before such termination or within twelve
months thereafter the Company shall have entered into an
agreement to engage in or shall have engaged in an Alternative
Transaction.
4. The Parent shall pay to the Company an amount equal to
all out-of-pocket expenses and fees incurred by the Company,
including without limitation fees and expenses payable to all
legal, accounting, financial and other professional advisors,
relating to the Merger or the transactions contemplated by this
Agreement not exceeding $2,000,000 in the aggregate upon the
termination of this Agreement by the Company pursuant to Section
7.1(g).
5. The amounts payable pursuant to Section 7.3(b), (c) or
(d) shall be paid by wire transfer within three business days
after the event giving rise to such payment; provided that in no
event shall the Company or the Parent be required to pay any
expenses or termination fees to the other party if, immediately
prior to the termination of this Agreement, the other party was
in material breach of any of its material obligations under this
Agreement. If one party fails to promptly pay to the other any
fee due hereunder, the defaulting party shall pay the costs and
expenses (including legal fees and expenses) in connection with
any action, including the filing of any lawsuit or other legal
action, taken to collect payment, together with interest on the
amount of any unpaid fee at the publicly announced prime rate of
BankBoston, N.A. from the date such fee was required to be paid.
6. As used in this Agreement, (A) "Alternative
Transaction" means either (i) a transaction pursuant to which any
person (or group of persons) other than the Parent or its
Affiliates (a "Third Party"), acquires 33% or more of the
outstanding shares of Company Common Stock,
pursuant to a tender offer or exchange offer or otherwise, (ii)
a merger, consolidation or combination involving the Company in
which the holders of Company Common Stock do not own at least a
majority of the equity of the surviving entity, or (iii) any other
transaction pursuant to which any Third Party acquires control of
assets (including for this purpose the outstanding equity
securities of Subsidiaries of the Company, and the entity
surviving any merger or business combination including any of
them) of the Company having a fair market value (as determined by
the Board of Directors of the Company in good faith) equal to
more than 33% of the fair market value of all the assets of the
Company immediately prior to such transaction, or (iv) any public
announcement by the Company of a proposal, plan or intention to
do any of the foregoing or any agreement to engage in any of the
foregoing, and (B) "Competing Party" shall mean any person other
than the Parent or its affiliates who announces or commences an
Alternative Transaction, or with whom an Alternative Transaction
occurs, while an Alternative Transaction with a Third Party is
pending.
7. If this Agreement is terminated by a party as a result
of a willful breach by the other party (other than under the
circumstances described in Section 7.3(c)(iii) above, provided
that under such circumstances Parent may exercise and enforce its
rights and remedies under this paragraph (g) until and unless the
Company engages in an Alternative Transaction, in which event the
provisions of Section 7.3(c)(iii) shall thereupon apply), the
terminating party may pursue any remedies available to it at law
or in equity and shall, in addition to its out-of-pocket expenses
(which shall be paid as specified above and shall not be limited
to $2,000,000), be entitled to retain such additional amounts as
the terminating party may be entitled to receive at law or in
equity; provided, however, no party shall be responsible for any
special, consequential or incidental damages hereunder, it being
understood and agreed that no party shall be entitled to payment
under both this Section 7.3(g) and Section 7.3(c)(iii).
8. GENERAL PROVISIONS
1. Non-Survival of Representations and Warranties. The
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representations and warranties of the Company, the Parent and
Merger Sub contained in this Agreement shall terminate at the
Effective Time, and only the covenants that by their terms
survive the Effective Time shall survive the Effective Time.
2. Notices. All notices and other communications
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hereunder shall be in writing and shall be deemed given if
delivered personally or by commercial delivery service, or sent
via telecopy (receipt confirmed) to the parties at the following
addresses or telecopy numbers (or at such other address or
telecopy numbers for a party as shall be specified by like
notice):
1. if to the Parent or Merger Sub, to:
Eastern Enterprises
0 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: X. Xxxxxx Xxxx
Chairman and Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Eastern Enterprises
0 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: L. Xxxxxxx Xxx, Jr., Esq.
Senior Vice President and General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
2. if to the Company, to:
EnergyNorth, Inc.
0000 Xxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
3. Interpretation; Knowledge. When a reference is made
-------------------------
in this Agreement to Exhibits, such reference shall be to an
Exhibit to this Agreement unless otherwise indicated. The words
"include," "includes" and "including" when used herein shall be
deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. When
reference is made herein to "business of" an entity, such
reference shall be deemed to include the business of all direct
and indirect subsidiaries of such entity. Reference to the
Subsidiaries of an entity shall be deemed to include all direct
and indirect subsidiaries of such entity. References to the
"knowledge of the Company," or any similar expression shall mean
the actual knowledge of any executive officer of the Company.
4. Counterparts. This Agreement may be executed in one
------------
or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and
delivered to the other party, it being understood that all
parties need not sign the same counterpart.
5. Entire Agreement. This Agreement and the documents
----------------
and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Company
Disclosure Schedule and the Parent Disclosure Schedule (i)
constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with
respect to the subject matter hereof, it being understood that
the Confidentiality Agreements shall continue in full force and
effect until the Closing and shall survive any termination of
this Agreement; and (ii) are not intended to confer upon any
other person any rights or remedies hereunder, except as set
forth herein.
6. Severability. In the event that any provision
------------
of this Agreement or the application thereof, becomes or is declared
by a court of competent jurisdiction to be illegal, void or
unenforceable, the remainder of this Agreement will continue in
full force and effect and the application of such provision to
other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The
parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or
unenforceable provision.
7. Amendment. Subject to applicable law, this Agreement
---------
may be amended by the parties hereto at any time by execution of
an instrument in writing signed on behalf of each of the parties
hereto.
8. Extension; Waiver. At any time prior to the Effective
-----------------
Time any party hereto may, to the extent legally allowed, (i)
extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant
hereto and (iii) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any
agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
9. Other Remedies; Specific Performance.
------------------------------------
Except as otherwise provided herein, any and all remedies herein
expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law
or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The
parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms
and provisions hereof in any court of the United States or any
state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
10. Governing Law. This Agreement shall be governed by
-------------
and construed in accordance with the laws of the State of New
Hampshire, regardless of the laws that might otherwise govern
under applicable principles of conflicts of law thereof.
11. Assignment. No party may assign either this Agreement
----------
or any of its rights, interests, or obligations hereunder without
the prior written approval of the of the other parties.
12. Parties in Interest. Except for rights of Indemnified
-------------------
Parties as set forth in Sections 5.13, 5.14 and 5.16, nothing in
this Agreement, express or implied, is intended to confer upon
any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement.
13. Waiver of Jury Trial. EACH OF THE PARENT, MERGER SUB
--------------------
AND COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE ACTIONS OF THE PARENT, THE MERGER SUB OR THE
COMPANY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF.
14. Reference is hereby made to the declaration of trust
establishing Eastern Enterprises (formerly Eastern Gas and Fuel
Associates) dated July 18, 1929, as amended, a copy of which is
on file in the office of the Secretary of the Commonwealth of
Massachusetts. The name "Eastern Enterprises" refers to the
trustees under said declaration as trustees and not personally;
and no trustee shareholder, officer or agent of Eastern
Enterprises shall be held to any personal liability in connection
with the affairs of said Eastern Enterprises, but the trust
estate only is liable.
IN WITNESS WHEREOF, Eastern Enterprises, EE Acquisition
Company, Inc. and EnergyNorth, Inc. have caused this Agreement to
be signed as a sealed instrument by their duly authorized
respective officers, all as of the date first written above.
EASTERN ENTERPRISES
By: /s/ X. Xxxxxx Xxxx
--------------------------------------
Chairman and Chief Executive Officer
EE ACQUISITION COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
President
ENERGYNORTH, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
President and Chief Executive Officer
