Exhibit 2.1
Execution Copy
================================================================================
AGREEMENT AND PLAN OF MERGER
DATED AS OF DECEMBER 12, 2005
BY AND AMONG
CONOCOPHILLIPS,
CELLO ACQUISITION CORP.,
AND
BURLINGTON RESOURCES INC.
================================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I CERTAIN DEFINITIONS..............................................1
ARTICLE II THE MERGER.......................................................9
2.1 The Merger.......................................................9
2.2 Effective Time of the Merger....................................10
2.3 Effects of the Merger...........................................10
2.4 Closing.........................................................10
2.5 Certificate of Incorporation....................................10
2.6 By-Laws.........................................................10
2.7 Directors and Officers..........................................10
2.8 Actions of ConocoPhillips as Sole Stockholder of Merger Sub.....11
ARTICLE III CONVERSION OF SECURITIES........................................11
3.1 Effect on Capital Stock.........................................11
3.2 Dissenting Shares...............................................12
3.3 Stock Options and Equity Awards.................................12
3.4 Shares Held by Burlington Affiliates............................14
3.5 Surrender and Payment...........................................14
3.6 Fractional Shares...............................................16
3.7 Lost Certificates...............................................16
3.8 Withholding Rights..............................................17
3.9 No Further Ownership Rights in Burlington Common Stock..........17
3.10 Investment of Cash by the Exchange Agent........................17
3.11 Further Assurances..............................................17
ARTICLE IV REPRESENTATIONS AND WARRANTIES..................................18
4.1 Representations and Warranties of Burlington....................18
(a) Corporate Organization...................................18
(b) Capitalization...........................................18
(c) Authority; No Violation..................................19
(d) Consents and Approvals...................................20
(e) Financial Reports and SEC Documents......................21
(f) Absence of Undisclosed Liabilities.......................22
(g) Absence of Certain Changes or Events.....................22
(h) Legal Proceedings........................................23
(i) Compliance with Applicable Law...........................23
(j) Environmental Liability..................................23
(k) Employee Benefit Plans; Labor Matters....................24
(l) Taxes....................................................25
(m) Contracts................................................26
(n) Reorganization under the Code............................27
-i-
(o) Form S-4; Proxy Statement/Prospectus.....................27
(p) State Takeover Laws; Rights Plan.........................27
(q) Opinion of Financial Advisors............................28
(r) Board Approval...........................................28
(s) Brokers' Fees............................................28
(t) Ownership of ConocoPhillips Capital Stock................28
4.2 Representations and Warranties of ConocoPhillips................28
(a) Corporate Organization...................................28
(b) Capitalization...........................................29
(c) Authority; No Violation..................................30
(d) Consents and Approvals...................................30
(e) Financial Reports and SEC Documents......................31
(f) Absence of Undisclosed Liabilities.......................32
(g) Absence of Certain Changes or Events.....................33
(h) Legal Proceedings........................................34
(i) Compliance with Applicable Law...........................34
(j) Environmental Liability..................................34
(k) Taxes....................................................34
(l) Contracts................................................34
(m) Reorganization under the Code............................35
(n) Form S-4; Proxy Statement/Prospectus.....................35
(o) State Takeover Laws; Rights Plan.........................36
(p) Opinion of Financial Advisors............................36
(q) Board Approval...........................................36
(r) Brokers' Fees............................................36
(s) Ownership of Burlington Capital Stock....................36
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS.......................36
5.1 Covenants of Burlington.........................................36
(a) Ordinary Course..........................................37
(b) Dividends; Changes in Share Capital......................37
(c) Issuance of Securities...................................37
(d) Governing Documents......................................38
(e) No Acquisitions..........................................38
(f) No Dispositions..........................................38
(g) Investments; Indebtedness................................38
(h) Tax-Free Qualification...................................39
(i) Compensation.............................................39
(j) Accounting Methods.......................................39
(k) Non-Compete..............................................39
(l) Certain Actions..........................................39
(m) Material Contracts.......................................40
(n) Claims; Litigation.......................................40
(o) Intellectual Property....................................40
(p) Agreements with Governmental Entities....................40
(q) Extraordinary Actions....................................40
-ii-
(r) Rabbi Trust Funding......................................40
(s) Related Actions..........................................40
5.2 Covenants of ConocoPhillips.....................................41
(a) Ordinary Course..........................................41
(b) Dividends, Changes in Share Capital......................41
(c) No Acquisitions..........................................41
(d) Tax-Free Qualification...................................41
(e) Related Actions..........................................42
5.3 Governmental Filings............................................42
5.4 Control of Other Party's Business...............................42
ARTICLE VI ADDITIONAL AGREEMENTS...........................................42
6.1 Preparation of Proxy Statement; Stockholders Meetings...........42
6.2 Governance Matters..............................................43
6.3 Access to Information...........................................44
6.4 Required Actions................................................44
6.5 Acquisition Proposals...........................................47
6.6 Fees and Expenses...............................................48
6.7 Directors' and Officers' Indemnification and Insurance..........49
6.8 Employee Benefits...............................................49
6.9 Public Announcements............................................51
6.10 Listing of Shares of ConocoPhillips Common Stock................51
6.11 Rights Agreement................................................51
6.12 Affiliates......................................................51
6.13 Section 16 Matters..............................................52
6.14 Dividends.......................................................52
6.15 Tax Representation Letters......................................52
ARTICLE VII CONDITIONS PRECEDENT............................................52
7.1 Conditions to Each Party's Obligation to Effect the Merger......52
(a) Stockholder Approval.....................................52
(b) No Injunctions or Restraints; Illegality.................52
(c) HSR Act; Other Approvals.................................53
(d) NYSE Listing.............................................53
(e) Effectiveness of the Form S-4............................53
7.2 Additional Conditions to Obligations of ConocoPhillips..........53
(a) Representations and Warranties...........................53
(b) Performance of Obligations of Burlington.................53
(c) Tax Opinion..............................................54
7.3 Additional Conditions to Obligations of Burlington..............54
(a) Representations and Warranties...........................54
(b) Performance of Obligations of ConocoPhillips.............54
(c) Tax Opinion..............................................54
-iii-
ARTICLE VIII TERMINATION AND AMENDMENT.......................................55
8.1 Termination.....................................................55
8.2 Effect of Termination...........................................56
8.3 Amendment.......................................................57
8.4 Extension; Waiver...............................................57
ARTICLE IX GENERAL PROVISIONS..............................................58
9.1 Non-Survival of Representations, Warranties and Agreements......58
9.2 Notices.........................................................58
9.3 Interpretation..................................................59
9.4 Counterparts....................................................59
9.5 Entire Agreement; No Third Party Beneficiaries..................59
9.6 Governing Law...................................................60
9.7 Severability....................................................60
9.8 Assignment......................................................60
9.9 Submission to Jurisdiction; Waivers.............................60
9.10 Enforcement.....................................................60
LIST OF EXHIBITS
EXHIBIT TITLE
Exhibit A Form of Affiliate Agreement
-iv-
AGREEMENT AND PLAN OF MERGER, dated as of December 12, 2005 (this
"AGREEMENT"), by and among CONOCOPHILLIPS, a Delaware corporation
("CONOCOPHILLIPS"), CELLO ACQUISITION CORP., a Delaware corporation and wholly
owned subsidiary of ConocoPhillips ("MERGER SUB"), and BURLINGTON RESOURCES
INC., a Delaware corporation ("BURLINGTON").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of ConocoPhillips and Burlington deem
it advisable and in the best interests of their respective corporations and
stockholders that ConocoPhillips and Burlington engage in a business combination
in order to advance the long term strategic interests of ConocoPhillips and
Burlington;
WHEREAS, to effect such business combination, the Boards of Directors
of ConocoPhillips, Merger Sub and Burlington have approved this Agreement and
the merger of Burlington with and into Merger Sub (the "MERGER"), upon the terms
and subject to the conditions set forth herein; and
WHEREAS, for Federal income tax purposes, it is intended that the
Merger shall qualify as a "reorganization" within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "CODE"), and the
regulations promulgated thereunder, and that this Agreement will be, and hereby
is, adopted as a plan of reorganization.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the
respective meanings set forth below:
"ACQUISITION PROPOSAL" shall have the meaning set forth in Section
6.5(a).
"AFFILIATE AGREEMENT" shall have the meaning set forth in Section
6.12.
"AGREEMENT" shall have the meaning set forth in the preamble.
"ANTITRUST LAWS" means the HSR Act, the EC Merger Regulation, the
Canadian Investment Regulations or other antitrust, competition or premerger
notification, trade regulation law, regulation or order.
"BENEFICIAL OWNERSHIP" or "BENEFICIALLY OWN" shall have the meaning
ascribed to such terms under Section 13(d) of the Exchange Act.
"BENEFIT PLAN" means any employee benefit plan, program, policy,
practice, agreement, contract or other arrangement, whether or not written,
including any "employee welfare benefit plan" within the meaning of Section 3(1)
of ERISA, any "employee pension benefit plan" within the meaning of Section 3(2)
of ERISA (whether or not such plan is subject to ERISA), any employment or
severance agreement, and any bonus, incentive, deferred compensation, vacation,
stock purchase, stock option, severance, change of control or fringe benefit
plan, program, policy, practice, agreement, contract, or other arrangement.
"BOOK ENTRY SHARES" shall have the meaning set forth in Section
3.5(a).
"BURLINGTON" shall have the meaning set forth in the preamble.
"BURLINGTON BENEFIT PLAN" means a Benefit Plan providing benefits to
any current or former employee, officer or director of Burlington or any of its
affiliates or any beneficiary or dependent thereof that is sponsored or
maintained by Burlington or any of its affiliates or to which Burlington or any
of its affiliates is party, contributes, or is obligated to contribute.
"BURLINGTON CAPITAL BUDGETS" shall have the meaning set forth in
Section 5.1(a)(ii).
"BURLINGTON CAPITAL STOCK" means the Burlington Common Stock together
with the Burlington Preferred Stock.
"BURLINGTON COMMON STOCK" means common stock, par value $0.01 per
share, of Burlington. References to "Burlington Common Stock" shall, where
appropriate, be deemed to include the Burlington Rights attached thereto or
associated therewith.
"BURLINGTON CONTRACT" shall have the meaning set forth in Section
4.1(m)(i).
"BURLINGTON DISCLOSURE SCHEDULE" means the disclosure schedule
delivered by Burlington to ConocoPhillips concurrently herewith.
"BURLINGTON EMPLOYEES" shall have the meaning set forth in Section
6.8(b).
"BURLINGTON NECESSARY CONSENTS" shall have the meaning set forth in
Section 4.1(d).
"BURLINGTON PREFERRED STOCK" means preferred stock, par value $0.01
per share, of Burlington.
"BURLINGTON RECOMMENDATION" shall have the meaning set forth in
Section 6.1(b).
"BURLINGTON RIGHTS" shall mean the rights to purchase Series A junior
participating preferred stock of Burlington in connection with the Burlington
Rights Agreement.
-2-
"BURLINGTON RIGHTS AGREEMENT" shall mean the Shareholder Rights
Agreement dated as of December 16, 1998, between Burlington and EquiServe Trust
Company, N.A, as rights agent.
"BURLINGTON SEC DOCUMENTS" shall have the meaning set forth in Section
4.1(e)(i).
"BURLINGTON SEPTEMBER 10-Q" means Burlington's Quarterly Report on
Form 10-Q for the quarter ended September 30, 2005, as filed with the SEC.
"BURLINGTON STOCK OPTION" shall have the meaning set forth in Section
3.3(a).
"BURLINGTON STOCK PLANS" shall mean the Burlington Resources Inc. 1992
Stock Option Plan for Non-employee Directors, the Burlington Resources Inc. 2000
Stock Option Plan for Non-employee Directors, the Burlington Resources Inc.,
1993 Stock Incentive Plan, the Burlington Resources Inc., 1997 Employee Stock
Incentive Plan, and the Burlington Resources Inc., 2002 Stock Incentive Plan.
"BURLINGTON STOCK UNIT" means any compensatory right measured by the
value of a number of shares of Burlington Common Stock, other than (i) the
Burlington Stock Options, (ii) restricted Burlington Common Stock or (iii)
performance units granted under Burlington's 2005 Performance Share Unit Plan.
"BURLINGTON STOCKHOLDER APPROVAL" shall have the meaning set forth in
Section 4.1(c)(i).
"BURLINGTON STOCKHOLDERS MEETING" shall have the meaning set forth in
Section 4.1(c)(i).
"BURLINGTON 2004 10-K" means Burlington's Annual Report on Form 10-K
for the fiscal year ended December 31, 2004, as filed with the SEC.
"BUSINESS DAY" means any day on which banks are not required or
authorized to close in the City of New York.
"CANADIAN INVESTMENT REGULATIONS" means the Competition Act (Canada)
and the Investment Canada Act of 1984 (Canada).
"CANCELLED SHARES" shall have the meaning set forth in Section 3.1(d).
"CERTIFICATE" shall have the meaning set forth in Section 3.1(b).
"CERTIFICATE OF MERGER" shall have the meaning set forth in Section
2.2.
"CHANGE IN THE BURLINGTON RECOMMENDATION" shall have the meaning set
forth in Section 6.1(b).
-3-
"CLOSING" shall have the meaning set forth in Section 2.4.
"CLOSING DATE" shall have the meaning set forth in Section 2.4.
"CODE" shall have the meaning set forth in the recitals.
"COMMON SHARES TRUST" shall have the meaning set forth in Section
3.6(b).
"CONFIDENTIALITY AGREEMENT" shall have the meaning set forth in
Section 6.3.
"CONOCOPHILLIPS" shall have the meaning set forth in the preamble.
"CONOCOPHILLIPS BENEFIT PLAN" means a Benefit Plan providing benefits
to any current or former employee, officer or director of ConocoPhillips or any
of its affiliates or any beneficiary or dependent thereof that is sponsored or
maintained by ConocoPhillips or any of its affiliates or to which ConocoPhillips
or any of its affiliates is party, contributes, or is obligated to contribute.
"CONOCOPHILLIPS CAPITAL STOCK" means the ConocoPhillips Common Stock
together with the ConocoPhillips Preferred Stock.
"CONOCOPHILLIPS COMMON STOCK" means common stock, par value $0.01 per
share, of ConocoPhillips. References to "ConocoPhillips Common Stock" shall,
where appropriate, be deemed to include the ConocoPhillips Rights attached
thereto.
"CONOCOPHILLIPS CONTRACT" shall have the meaning set forth in Section
4.2(l)(i).
"CONOCOPHILLIPS DISCLOSURE SCHEDULE" means the disclosure schedule
delivered by ConocoPhillips to Burlington concurrently herewith.
"CONOCOPHILLIPS NECESSARY CONSENTS" shall have the meaning set forth
in Section 4.2(d).
"CONOCOPHILLIPS PREFERRED STOCK" means preferred stock, par value
$0.01 per share, of ConocoPhillips.
"CONOCOPHILLIPS RIGHTS" shall mean the rights to purchase Series A
junior participating preferred stock of ConocoPhillips in connection with the
ConocoPhillips Rights Agreement.
"CONOCOPHILLIPS RIGHTS AGREEMENT" shall mean the Rights Agreement,
dated as of June 30, 2002, between ConocoPhillips and Mellon Investor Services
LLC, as rights agent.
"CONOCOPHILLIPS SEC DOCUMENTS" shall have the meaning set forth in
Section 4.2(e)(i).
-4-
"CONOCOPHILLIPS SEPTEMBER 10-Q" means ConocoPhillips' Quarterly Report
on Form 10-Q for the quarter ended September 30, 2005, as filed with the SEC.
"CONOCOPHILLIPS STOCK PLANS" shall have the meaning set forth in
Section 4.2(b).
"CONOCOPHILLIPS 2004 10-K" means ConocoPhillips' Annual Report on Form
10-K for the fiscal year ended December 31, 2004, as filed with the SEC.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, and the rules and regulations promulgated
thereunder.
"CONTROLLED GROUP LIABILITY" means any and all liabilities (a) under
Title IV of ERISA, other than for payment of premiums to the Pension Benefit
Guaranty Corporation, (b) under Section 302 of ERISA, (c) under Sections 412 and
4971 of the Code, (d) for violation of the continuation coverage requirements of
Section 601 ET SEQ. of ERISA and Section 4980B of the Code or the group health
requirements of Sections 9801 ET SEQ. of the Code and Sections 701 ET SEQ. of
ERISA, and (e) under corresponding or similar provisions of foreign laws or
regulations.
"CONVERTED CONOCOPHILLIPS OPTION" shall have the meaning set forth in
Section 3.3(a).
"DGCL" means the General Corporation Law of the State of Delaware.
"DISSENTING SHARES" shall have the meaning set forth in Section 3.2.
"DOJ" means the Antitrust Division of the U.S. Department of Justice.
"EC MERGER REGULATION" shall have the meaning set forth in Section
4.1(d).
"EFFECTIVE TIME" shall have the meaning set forth in Section 2.2.
"ENVIRONMENTAL CLAIMS" means, in respect of any person, (i) any and
all administrative, regulatory or judicial actions, suits, orders, decrees,
demands, directives, claims, liens, proceedings or written notices of
noncompliance or violation by any Governmental Entity, alleging potential
presence or Release of, or exposure to, any Hazardous Materials at any location,
whether or not owned, operated, leased or managed by such person, or (ii) any
and all indemnification, cost recovery, compensation or injunctive relief
resulting from the presence or Release of, or exposure to, any Hazardous
Materials.
"ENVIRONMENTAL LAWS" means all applicable federal, state, local and
foreign laws (including international conventions, protocols and treaties),
common law, rules, regulations, orders, decrees, judgments, binding agreements
or Environmental Permits issued, promulgated or entered into, by or with any
Governmental Entity, relating to pollution, Hazardous Materials, natural
resources or the protection, investigation or restoration of the environment as
in effect on the date of this Agreement.
-5-
"ENVIRONMENTAL PERMITS" means all permits, licenses, registrations and
other governmental authorizations required under applicable Environmental Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"EXCESS SHARES" shall have the meaning set forth in Section 3.6(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"EXCHANGE AGENT" shall have the meaning set forth in Section 3.5(a).
"EXCHANGE FUND" shall have the meaning set forth in Section 3.5(a).
"EXCHANGE RATIO" shall have the meaning set forth in Section 3.1(a).
"EXPENSES" means all out-of-pocket expenses (including all fees and
expenses of counsel, accountants, investment bankers, experts and consultants to
a party hereto and its affiliates) incurred by a party hereto or on its behalf
in connection with or related to the authorization, preparation, negotiation,
execution and performance of this Agreement and the transactions contemplated
hereby, including the preparation, printing, filing and mailing of the Proxy
Statement/Prospectus and the Form S-4 and the solicitation of stockholder
approval and all other matters related to the transactions contemplated hereby
and thereby.
"FOREIGN BURLINGTON PLANS" means each Burlington Benefit Plan
maintained outside the United States primarily for the benefit of employees of
Burlington and its Subsidiaries working outside of the United States.
"FOREIGN CONOCOPHILLIPS PLANS" means each ConocoPhillips Benefit Plan
maintained outside the United States primarily for the benefit of employees of
ConocoPhillips and its subsidiaries working outside of the United States.
"FORM S-4" shall have the meaning set forth in Section 4.1(d).
"FTC" means the U.S. Federal Trade Commission.
"GAAP" means U.S. generally accepted accounting principles.
"GOVERNMENTAL ENTITY" means any supranational, national, state,
municipal or local government, foreign or domestic, any instrumentality,
subdivision, court, administrative agency or commission or other authority
thereof, or any quasi-governmental or private body exercising any regulatory,
taxing, importing or other governmental or quasi-governmental authority.
-6-
"HAZARDOUS MATERIALS" means any petroleum or petroleum products,
radioactive materials or wastes, asbestos, polychlorinated biphenyls and any
chemical, material, substance or waste, in each case that is prohibited, limited
or regulated pursuant to any Environmental Law.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"IRS" means the Internal Revenue Service.
"KNOWLEDGE" or "KNOWN" means, with respect to any entity, the actual
knowledge of such entity's executive officers (as defined in the Exchange Act).
"LIENS" means liens, pledges, charges, encumbrances and security
interests of any kind.
"MATERIAL ADVERSE EFFECT" means, with respect to any entity, a
material adverse effect on (a) the business, operations, results of operations
or financial condition of such entity and its Subsidiaries taken as a whole or
(b) the ability of such entity to consummate the transactions contemplated by
this Agreement, except, in each case, for any such effect attributable to (i)
general regulatory or economic conditions (including prevailing interest rate
and stock market levels) in the United States or the other countries in which
such entity operates, (ii) changes in, or events or conditions generally
affecting the industries in which such entity operates (including changes to
commodity prices) or (iii) other than with respect to Sections 4.1(c)(ii),
4.1(d), 4.2(c)(ii) and 4.2(d), the negotiation, announcement, execution,
delivery or consummation of the transactions contemplated by, or in compliance
with, this Agreement (the exclusions set forth in (i)-(iii), the "MAE
EXCLUSIONS"). Any party seeking to claim that a Material Adverse Effect has
occurred with respect to the other party shall have the burden of proof to
establish that any adverse effect is attributable to conditions, changes or
events other than the MAE Exclusions.
"MERGER" shall have the meaning set forth in the recitals.
"MERGER CONSIDERATION" shall have the meaning set forth in Section
3.1(a).
"MERGER SUB" shall have the meaning set forth in the preamble.
"NEW PLANS" shall have the meaning set forth in Section 6.8(c).
"NYSE" means the New York Stock Exchange, Inc.
"OLD PLANS" shall have the meaning set forth in Section 6.8(c).
"OTHER PARTY" means, with respect to ConocoPhillips, Burlington, and
with respect to Burlington, ConocoPhillips.
"PBGC" means the Pension Benefit Guaranty Corporation.
-7-
"PER SHARE CASH AMOUNT" shall have the meaning set forth in Section
3.1(a).
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
group (as defined in the Exchange Act).
"PROXY STATEMENT/PROSPECTUS" shall have the meaning set forth in
Section 4.1(d).
"QUALIFYING AMENDMENT" means an amendment or supplement to the Proxy
Statement/Prospectus or Form S-4 (including by incorporation by reference) to
the extent it contains (i) a Change in the Burlington Recommendation, (ii) a
statement of the reasons of the Board of Directors of Burlington for making such
Change in the Burlington Recommendation and (iii) additional information
reasonably related to the foregoing.
"REGULATORY LAW" means the Antitrust Laws, and all other U.S. federal
and state and foreign, if any, statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines and other laws that are designed or
intended to prohibit, restrict or regulate (a) mergers, acquisitions or other
business combinations, (b) foreign investment, or (c) actions having the purpose
or effect of monopolization or restraint of trade or lessening of competition.
"RELEASE" means any actual or threatened release, spill, emission,
leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal,
leaching or migration into the environment.
"REQUIRED APPROVALS" shall have the meaning set forth in Section
6.4(a).
"XXXXXXXX-XXXXX ACT" shall have the meaning set forth in Section
4.1(e)(iv).
"SEC" means the U.S. Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SIGNIFICANT SUBSIDIARY" shall have the meaning ascribed to such term
in Rule 1-02 of Regulation S-X of the SEC.
"STOCK AWARD EXCHANGE RATIO" shall have the meaning set forth in
Section 3.3(a).
"SUBSIDIARY" shall have the meaning ascribed to such term in Rule 1-02
of Regulation S-X of the SEC.
"SUPERIOR PROPOSAL" means, with respect to Burlington a bona fide
written proposal made by a Person other than a party hereto that is (a) for an
Acquisition Proposal (except that references in the definition of "Acquisition
Proposal" to "20%" shall be "50%") involving Burlington and (b) is on terms
which its Board of Directors in good faith concludes (following receipt of the
advice of its financial advisors and outside counsel), taking into
-8-
account, among other things, legal, financial, regulatory and other aspects of
the proposal, including any conditions to consummation, as well as any revisions
to the terms of the Merger or this Agreement proposed by ConocoPhillips pursuant
to Sections 6.5(b) and 6.5(c), and the Person making the proposal, (i) would, if
consummated, result in a transaction that is more favorable to Burlington and
its stockholders (in their capacities as stockholders), from a financial point
of view, than the transactions contemplated by this Agreement and (ii) is
reasonably capable of being completed on the terms so proposed.
"SURVIVING CORPORATION" shall have the meaning set forth in Section
2.1.
"TAX RETURN" means any return, report or similar statement (including
any attached schedules) required to be filed with respect to any Tax, including
any information return, claim for refund, amended return or declaration of
estimated Tax.
"TAXES" means any and all U.S. federal, state or local, foreign or
other taxes of any kind (together with any and all interest, penalties,
additions to tax and additional amounts imposed with respect thereto) imposed by
any taxing authority, including taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth, and taxes or other charges in the
nature of excise, withholding, AD VALOREM or value added.
"TERMINATION DATE" shall have the meaning set forth in Section 8.1(b).
"TERMINATION FEE" means $1 billion.
"U.S. BURLINGTON BENEFIT PLAN" means each Burlington Benefit Plan that
is not a Foreign Burlington Benefit Plan.
"U.S. CONOCOPHILLIPS BENEFIT PLAN" means each ConocoPhillips Benefit
Plan that is not a Foreign ConocoPhillips Benefit Plan.
"VOTING DEBT" means any bonds, debentures, notes or other indebtedness
having the right to vote on any matters on which holders of capital stock of the
same issuer may vote.
ARTICLE II
THE MERGER
2.1 THE MERGER. Upon the terms and subject to the conditions herein,
at the Effective Time, Burlington shall be merged with and into Merger Sub, with
Merger Sub as the surviving corporation in the Merger (the "SURVIVING
CORPORATION"), and the separate existence of Burlington shall thereupon cease.
As a result of and immediately after the Merger, Merger Sub will remain a wholly
owned subsidiary of ConocoPhillips.
-9-
2.2 EFFECTIVE TIME OF THE MERGER. The Merger shall become effective as
set forth in the certificate of merger duly filed with the Secretary of State of
the State of Delaware (the "CERTIFICATE OF MERGER"), which filing shall be made
as soon as practicable on the Closing Date. As used in this Agreement, the term
"EFFECTIVE TIME" shall mean the date and time when the Merger becomes effective,
as set forth in the Certificate of Merger. The Certificate of Merger shall be in
such form as is required by, and executed and acknowledged in accordance with,
the DGCL, and as mutually agreed by ConocoPhillips and Burlington.
2.3 EFFECTS OF THE MERGER. The Merger shall have the effects set forth
in the applicable provisions of the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, except as otherwise
provided herein, all of the property, rights, privileges, powers and franchises
of Merger Sub and Burlington shall vest in the Surviving Corporation, and all
debts, liabilities and duties of Merger Sub and Burlington shall become the
debts, liabilities and duties of the Surviving Corporation.
2.4 CLOSING. Upon the terms and subject to the conditions set forth in
Article VII and the termination rights set forth in Article VIII, the closing of
the transactions contemplated by this Agreement (the "CLOSING") will take place
at the offices of Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000 at 10:00 A.M. on the first Business Day following the
satisfaction or waiver (subject to applicable law) of the conditions (excluding
conditions that, by their nature, cannot be satisfied until the Closing Date)
set forth in Article VII, unless this Agreement has been theretofore terminated
pursuant to its terms or unless another place, time or date is agreed to in
writing by the parties hereto (the date of the Closing being referred to herein
as the "CLOSING DATE").
2.5 CERTIFICATE OF INCORPORATION. At the Effective Time, the
certificate of incorporation of Merger Sub as in effect immediately prior to the
Effective Time shall be the certificate of incorporation of the Surviving
Corporation, until thereafter changed or amended as provided therein or by
applicable law; PROVIDED, HOWEVER, that the certificate of incorporation of the
Surviving Corporation may be amended in the Merger to provide that the Surviving
Corporation shall have a name after the Merger other than Cello Acquisition
Corp., such name as determined by ConocoPhillips.
2.6 BY-LAWS. At the Effective Time, the by-laws of Merger Sub as in
effect immediately prior to the Effective Time shall be the by-laws of the
Surviving Corporation, until thereafter changed or amended as provided therein
or by applicable law.
2.7 DIRECTORS AND OFFICERS. The directors of Merger Sub shall, from
and after the Effective Time, become the initial directors of the Surviving
Corporation until their successors shall have been duly elected, appointed or
qualified or until their earlier death, resignation or removal in accordance
with the certificate of incorporation and the by-laws of the Surviving
Corporation. The officers of Merger Sub shall, from and after the Effective
Time, become the initial officers of the Surviving Corporation until their
successors shall have been duly elected, appointed or qualified or until their
earlier death, resignation or removal in accordance with the certificate of
incorporation and the by-laws of the Surviving Corporation.
-10-
2.8 ACTIONS OF CONOCOPHILLIPS AS SOLE STOCKHOLDER OF MERGER SUB.
ConocoPhillips, as the holder of all the capital stock of Merger Sub, will,
immediately upon execution of this Agreement, approve this Agreement and the
transactions contemplated hereby and shall, as the sole stockholder of Merger
Sub, adopt this Agreement. ConocoPhillips shall take all actions necessary to
cause Merger Sub to take any actions necessary in order to consummate the Merger
and the other transactions contemplated hereby to the extent required hereunder.
ARTICLE III
CONVERSION OF SECURITIES
3.1 EFFECT ON CAPITAL STOCK. (a) At the Effective Time, subject to the
other provisions of Article 3, each share of Burlington Common Stock issued and
outstanding immediately prior to the Effective Time (other than shares of
Burlington Common Stock owned by ConocoPhillips, Merger Sub or Burlington and
except for any Dissenting Shares) shall, by virtue of this Agreement and without
any action on the part of the holder thereof, be converted into and shall
thereafter represent the right to receive the following consideration
(collectively, the "MERGER CONSIDERATION"):
Each share of Burlington Common Stock shall be converted into
the right to receive the combination of (x) $46.50 in cash
(the "PER SHARE CASH AMOUNT") and (y) 0.7214 of a share of
validly issued, fully paid and non-assessable shares of
ConocoPhillips Common Stock (the "EXCHANGE RATIO"), subject
to adjustment in accordance with Section 3.1(c).
(b) From and after the Effective Time, all of the shares of Burlington
Common Stock converted into the Merger Consideration pursuant to this Article 3
shall no longer be outstanding and shall automatically be cancelled and retired
and shall cease to exist, and each holder of a certificate (each a
"CERTIFICATE") previously representing any such shares of Burlington Common
Stock shall thereafter cease to have any rights with respect to such securities,
except the right to receive (i) the Merger Consideration, (ii) any dividends and
other distributions in accordance with Section 3.5(f), and (iii) any cash to be
paid in lieu of any fractional share of ConocoPhillips Common Stock in
accordance with Section 3.6.
(c) If at any time during the period between the date of this
Agreement and the Effective Time, any change in the outstanding shares of
capital stock of ConocoPhillips or Burlington shall occur by reason of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, or any stock dividend thereon with a record date during
such period, the Per Share Cash Amount, the Exchange Ratio and any other
similarly dependent items, as the case may be, shall be appropriately adjusted
to provide the holders of shares of Burlington Common Stock the same economic
effect as contemplated by this Agreement prior to such event.
-11-
(d) At the Effective Time, all shares of Burlington Common Stock that
are owned by ConocoPhillips, Merger Sub or Burlington (the "CANCELLED SHARES")
shall be cancelled and retired and shall cease to exist and no stock of
ConocoPhillips, cash or other consideration shall be delivered in exchange
therefor. For the avoidance of doubt, this Section 3.1(d) shall not apply to
shares of Burlington Common Stock held in trust or otherwise set aside from
shares held in Burlington's treasury pursuant to a Burlington Benefit Plan other
than a Burlington Stock Plan.
(e) Each issued and outstanding share of common stock, par value $0.01
per share, of Merger Sub issued and outstanding immediately prior to the
Effective Time shall remain outstanding as one fully paid and nonassessable
share of common stock, par value $0.01 per share, of the Surviving Corporation.
3.2 DISSENTING SHARES. Notwithstanding anything in this Agreement to
the contrary, with respect to each share of Burlington Common Stock as to which
the holder thereof has neither voted in favor of the Merger nor consented
thereto in writing and who shall have delivered a written demand for appraisal
of such shares in the manner provided by the DGCL and who, as of the Effective
Time, shall not have effectively withdrawn or lost such right to appraisal
(each, a "DISSENTING SHARE"), if any, such share will not be converted into, or
represent the right to receive, the Merger Consideration. Such holder shall be
entitled to payment, solely from the Surviving Corporation, of the appraisal
value of the Dissenting Shares held by them to the extent permitted by and in
accordance with the provisions of section 262 of the DGCL; PROVIDED, HOWEVER,
that (i) if any holder of Dissenting Shares, under the circumstances permitted
by and in accordance with the DGCL, shall have effectively withdrawn his demand
for appraisal of such Dissenting Shares or lost his right to appraisal and
payment for his shares of Burlington Common Stock under section 262 of DGCL,
(ii) if any holder of Dissenting Shares shall have failed to establish his
entitlement to appraisal rights as provided in section 262 of the DGCL or (iii)
if any holder of Dissenting Shares takes or fails to take any action the
consequence of which is that such holder is not entitled to payment for his
shares under the DGCL, such holder or holders (as the case may be) shall forfeit
the right to appraisal of such shares of Burlington Common Stock and such
Burlington Common Stock shall thereupon cease to constitute Dissenting Shares.
Burlington shall give ConocoPhillips prompt notice of any demands received by
Burlington for appraisal of shares of Burlington Common Stock, and
ConocoPhillips shall have the right to participate in all negotiations and
proceedings with respect to such demands. Burlington shall not settle, make any
payments with respect to, or offer to settle, any claim with respect to
Dissenting Shares without the written consent of ConocoPhillips.
3.3 STOCK OPTIONS AND EQUITY AWARDS. (a) The Board of Directors of
Burlington shall take such action as is necessary so that at the Effective Time,
each outstanding option to purchase shares of Burlington Common Stock (a
"BURLINGTON STOCK OPTION") granted under the Burlington Stock Plans, whether or
not vested, shall cease to represent a right to acquire shares of Burlington
Common Stock and shall thereafter constitute a fully vested option (a "CONVERTED
CONOCOPHILLIPS OPTION") to acquire (on the same terms and conditions as were
applicable to such Burlington Stock Option pursuant to the relevant Burlington
Stock Plan under
-12-
which it was issued and the agreement evidencing the grant thereof prior to the
Effective Time) the number (rounded down to the nearest whole number) of shares
of ConocoPhillips Common Stock determined by multiplying (A) the number of
shares of Burlington Common Stock subject to such Burlington Stock Option
immediately prior to the Effective Time by (B) the Stock Award Exchange Ratio.
The exercise price or base price per share of ConocoPhillips Common Stock
subject to any such Converted ConocoPhillips Option shall be an amount (rounded
up to the nearest one hundredth of a cent) equal to (A) the exercise price or
base price per share of Burlington Common Stock subject to such Burlington Stock
Option immediately prior to the Effective Time divided by (B) the Stock Award
Exchange Ratio. Notwithstanding the foregoing, any Burlington Stock Option which
is an "incentive stock option" (as defined in Section 422 of the Code) shall be
adjusted in accordance with the requirements of Section 424 of the Code. Prior
to the Effective Time, Burlington shall make any amendments to the terms of the
Burlington Stock Plans as are necessary to give effect to the transactions
contemplated by this Section 3.3(a). For purposes of this Section 3.3(a), the
"STOCK AWARD EXCHANGE RATIO" shall mean the sum of (i) the Exchange Ratio plus
(ii) the fraction resulting from dividing the Per Share Cash Amount by the
closing price per share of the ConocoPhillips Common Stock on the NYSE on the
last trading day immediately preceding the Closing Date.
(b) At the Effective Time each outstanding restricted share of
Burlington Common Stock granted pursuant to a Burlington Stock Plan shall vest.
Following the Effective Time, no holder of a Burlington incentive award or other
compensatory award shall have any right to receive shares of Burlington Common
Stock in respect of such award.
(c) At the Effective Time, each Burlington Stock Unit shall cease to
be measured by the value of a number of shares of Burlington Common Stock and
shall instead be measured by the value of a number of shares of ConocoPhillips
Common Stock determined by multiplying (x) the number of shares of Burlington
Common Stock by which such Burlington Stock Unit is measured immediately prior
to the Effective Time by (y) the Stock Award Exchange Ratio.
(d) Prior to the Effective Time, Burlington (or its Board of Directors
or the appropriate committee thereof) shall take all corporate action necessary
for the adjustment of Burlington Stock Options and Burlington Stock Units
contemplated by this Section 3.3. ConocoPhillips shall take all corporate action
necessary to assume as of the Effective Time Burlington's obligations with
respect to the Converted ConocoPhillips Options and to reserve for issuance a
sufficient number of shares of ConocoPhillips Common Stock for delivery upon the
exercise of the Converted ConocoPhillips Option pursuant to the terms set forth
in this Section 3.3. Not later than two Business Days after the Effective Time,
ConocoPhillips shall file with the SEC a registration statement on an
appropriate form or a post-effective amendment to a previously filed
registration statement under the Securities Act with respect to the
ConocoPhillips Common Stock to be issued upon the exercise of the Converted
ConocoPhillips Options, shall deliver an applicable prospectus relating to such
registration statement and shall maintain the effectiveness of such registration
statement and prospectus for so long as such options remain outstanding.
-13-
3.4 SHARES HELD BY BURLINGTON AFFILIATES. Anything to the contrary
herein notwithstanding, no shares of ConocoPhillips Common Stock (or
certificates therefor) shall be issued in exchange for any Certificate to any
"affiliate" of Burlington (identified pursuant to Section 6.12) until such
Person shall have delivered to ConocoPhillips duly executed letters as
contemplated by Section 6.12. Such Persons shall be subject to the restrictions
described in such letters.
3.5 SURRENDER AND PAYMENT. (a) Prior to the Effective Time,
ConocoPhillips shall appoint Mellon Investor Services LLC or such other exchange
agent reasonably acceptable to Burlington (the "EXCHANGE AGENT") for the purpose
of exchanging Certificates representing shares of Burlington Common Stock and
non-certificated shares represented by book entry ("BOOK-ENTRY SHARES") for the
Merger Consideration. At or prior to the Effective Time, ConocoPhillips shall
deposit with the Exchange Agent, in trust for the benefit of the holders of
shares of Burlington Common Stock, (a) certificates representing shares of
ConocoPhillips Common Stock and (b) cash, to be issued and paid pursuant to
Section 3.1(a) and Section 3.6 in respect of shares of Burlington Common Stock
converted pursuant to Section 3.1(a) in exchange for outstanding shares of
Burlington Common Stock upon due surrender of Certificates pursuant to this
Article III. Following the Effective Time, ConocoPhillips agrees to make
available to the Exchange Agent, from time to time as needed, cash sufficient to
pay any dividends and other distributions pursuant to Section 3.5(f). Any cash
and certificates representing ConocoPhillips Common Stock deposited with the
Exchange Agent (including the amount of any dividends or other distributions
payable with respect thereto and such cash in lieu of fraction shares to be paid
pursuant to Section 3.6) shall hereinafter be referred to as the "EXCHANGE
FUND"). Promptly after the Effective Time, ConocoPhillips will send, or will
cause the Exchange Agent to send, to each holder of record of shares of
Burlington Common Stock as of the Effective Time, a letter of transmittal for
use in such exchange (which shall specify that the delivery shall be effected,
and risk of loss and title shall pass, only upon proper delivery of the
Certificates to the Exchange Agent) in such form as Burlington and
ConocoPhillips may reasonably agree, for use in effecting delivery of shares of
Burlington Common Stock to the Exchange Agent. Exchange of any Book-Entry Shares
shall be effected in accordance with ConocoPhillips' customary procedures with
respect to securities represented by book entry.
(b) Each holder of shares of Burlington Common Stock that have been
converted into a right to receive the Merger Consideration, upon surrender to
the Exchange Agent of a Certificate, together with a properly completed letter
of transmittal, will be entitled to receive (A) one or more shares of
ConocoPhillips Common Stock (which shall be in non-certificated book-entry form
unless a physical certificate is requested) representing, in the aggregate, the
whole number of shares of ConocoPhillips Common Stock, if any, that such holder
has the right to receive pursuant to Section 3.1 and (B) a check in the amount
equal to the cash portion of the Merger Consideration, if any, that such holder
has the right to receive pursuant to Section 3.1 and this Article 3, including
cash payable in lieu of fractional shares pursuant to Section 3.6 and dividends
and other distributions pursuant to Section 3.5(f). No interest shall be paid or
accrued on any Merger Consideration, cash in lieu of fractional shares or on any
unpaid dividends and distributions payable to holders of Certificates. Until so
-14-
surrendered, each such Certificate shall, after the Effective Time, represent
for all purposes only the right to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be registered in
the name of a Person other than the Person in whose name the applicable
surrendered Certificate is registered, it shall be a condition to the
registration thereof that the surrendered Certificate shall be properly endorsed
or otherwise be in proper form for transfer and that the Person requesting such
delivery of the Merger Consideration shall pay to the Exchange Agent any
transfer or other similar Taxes required as a result of such registration in the
name of a Person other than the registered holder of such Certificate or
establish to the satisfaction of the Exchange Agent that such Tax has been paid
or is not payable.
(d) After the Effective Time, there shall be no further registration
of transfers of shares of Burlington Common Stock. If, after the Effective Time,
Certificates are presented to the Exchange Agent, the Surviving Corporation or
ConocoPhillips, they shall be cancelled and exchanged for the consideration
provided for, and in accordance with the procedures set forth, in this Article
3.
(e) Any portion of the Exchange Fund that remains unclaimed by the
holders of shares of Burlington Common Stock one year after the Effective Time
shall be returned to ConocoPhillips, upon demand, and any such holder who has
not exchanged his shares of Burlington Common Stock for the Merger Consideration
in accordance with this Section 3.5 prior to that time shall thereafter look
only to ConocoPhillips for delivery of the Merger Consideration in respect of
such holder's shares. Notwithstanding the foregoing, none of Burlington,
ConocoPhillips or the Exchange Agent shall be liable to any holder of shares for
any Merger Consideration from the Exchange Fund properly delivered to a public
official pursuant to applicable abandoned property laws.
(f) No dividends or other distributions with respect to shares of
ConocoPhillips Common Stock issued in the Merger shall be paid to the holder of
any unsurrendered Certificates or Book-Entry Shares until such Certificates or
Book-Entry Shares are surrendered as provided in this Section 3.5. Following
such surrender, there shall be paid, without interest, to the record holder of
the shares of ConocoPhillips Common Stock issued in exchange therefor (i) at the
time of such surrender, all dividends and other distributions payable in respect
of such shares of ConocoPhillips Common Stock with a record date after the
Effective Time and a payment date on or prior to the date of such surrender and
not previously paid and (ii) at the appropriate payment date, the dividends or
other distributions payable with respect to such shares of ConocoPhillips Common
Stock with a record date after the Effective Time but with a payment date
subsequent to such surrender. For purposes of dividends or other distributions
in respect of shares of ConocoPhillips Common Stock, all shares of
ConocoPhillips Common Stock to be issued pursuant to the Merger shall be
entitled to dividends pursuant to the immediately preceding sentence as if
issued and outstanding as of the Effective Time.
-15-
(g) Any portion of the Merger Consideration deposited with the
Exchange Agent pursuant to Section 3.5 to pay for shares of Burlington Common
Stock for which appraisal rights shall have been perfected shall be returned to
ConocoPhillips, upon demand.
3.6 FRACTIONAL SHARES. (a) No fractional shares of ConocoPhillips
Common Stock shall be issued in the Merger, but in lieu thereof each holder of
shares of Burlington Common Stock otherwise entitled to a fractional share of
ConocoPhillips Common Stock will be entitled to receive, from the Exchange Agent
in accordance with the provisions of this Section 3.6, a cash payment in lieu of
such fractional share of ConocoPhillips Common Stock representing such holder's
proportionate interest, if any, in the proceeds from the sale by the Exchange
Agent in one or more transactions of shares of ConocoPhillips Common Stock equal
to the excess of (x) the aggregate number of shares of ConocoPhillips Common
Stock to be delivered to the Exchange Agent by ConocoPhillips pursuant to
Section 3.5(a) over (y) the aggregate number of whole shares of ConocoPhillips
Common Stock to be distributed to the holders of Certificates pursuant to
Section 3.5(b) (such excess being herein called the "EXCESS SHARES"). The
parties acknowledge that payment of the cash consideration in lieu of issuing
fractional shares was not separately bargained-for consideration but merely
represents a mechanical rounding off for purposes of avoiding the expense and
inconvenience to ConocoPhillips that would otherwise be caused by the issuance
of fractional shares. As soon as practicable after the Effective Time, the
Exchange Agent, as agent for the holders of the Certificates representing shares
of Burlington Common Stock, shall sell the Excess Shares at then prevailing
prices on the NYSE in the manner provided in the following paragraph.
(b) The sale of the Excess Shares by the Exchange Agent, as agent for
the holders that would otherwise receive fractional shares, shall be executed on
the NYSE through one or more member firms of the NYSE and shall be executed in
round lots to the extent practicable. Until the proceeds of such sale or sales
have been distributed to the holders of shares of Burlington Common Stock, the
Exchange Agent shall hold such proceeds in trust for the holders of shares of
Burlington Common Stock (the "COMMON SHARES TRUST"). The Exchange Agent shall
determine the portion of the Common Shares Trust to which each holder of shares
of Burlington Common Stock shall be entitled, if any, by multiplying the amount
of the aggregate proceeds comprising the Common Shares Trust by a fraction, the
numerator of which is the amount of the fractional share interest to which such
holder of shares of Burlington Common Stock would otherwise be entitled and the
denominator of which is the aggregate amount of fractional share interests to
which all holders of shares of Burlington Common Stock would otherwise be
entitled.
(c) As soon as practicable after the determination of the amount of
cash, if any, to be paid to holders of shares of Burlington Common Stock in lieu
of any fractional shares of ConocoPhillips Common Stock, the Exchange Agent
shall make available such amounts to such holders of shares of Burlington Common
Stock without interest, subject to and in accordance with Section 3.5.
3.7 LOST CERTIFICATES. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to
-16-
be lost, stolen or destroyed and, if required by ConocoPhillips or the Surviving
Corporation, the posting by such Person of a bond, in such reasonable amount as
the Surviving Corporation may direct, as indemnity against any claim that may be
made against it with respect to such Certificate, the Exchange Agent will issue
in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration to be paid in respect of the shares of Burlington Common Stock
represented by such Certificate as contemplated by this Article 3.
3.8 WITHHOLDING RIGHTS. Each of the Surviving Corporation and
ConocoPhillips shall be entitled to deduct and withhold from the consideration
otherwise payable to any Person pursuant to Article 3 such amounts as it is
required to deduct and withhold with respect to the making of such payment under
any provision of federal, state, local or foreign Tax law. To the extent that
amounts are so deducted or withheld by the Surviving Corporation or
ConocoPhillips, as the case may be, and paid over to the applicable Governmental
Entity, such deducted or withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the shares of Burlington
Common Stock or other Person in respect of which such deduction and withholding
was made by the Surviving Corporation or ConocoPhillips, as the case may be.
3.9 NO FURTHER OWNERSHIP RIGHTS IN BURLINGTON COMMON STOCK. All shares
of ConocoPhillips Common Stock issued and cash paid upon conversion of shares of
Burlington Common Stock in accordance with the terms of this Article 3
(including any cash paid pursuant to Section 3.5 or 3.6) shall be deemed to have
been issued or paid in full satisfaction of all rights pertaining to the shares
of Burlington Common Stock.
3.10 INVESTMENT OF CASH BY THE EXCHANGE AGENT. The Exchange Agent
shall invest any cash included in the Exchange Fund as directed by
ConocoPhillips on a daily basis; PROVIDED that no such investment or loss
thereon shall affect the amounts payable or the timing of the amounts payable to
Burlington stockholders pursuant to the other provisions of this Article 3. Any
interest and other income resulting from such investments shall promptly be paid
to ConocoPhillips.
3.11 FURTHER ASSURANCES. At and after the Effective Time, the officers
and directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of the Surviving Corporation, Merger Sub or
Burlington, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of the Surviving Corporation, Merger Sub or
Burlington, any other actions and things necessary to vest, perfect or confirm
of record or otherwise in ConocoPhillips or the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets acquired or to be acquired by the Surviving Corporation as a result of,
or in connection with, the Merger.
-17-
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF BURLINGTON. Except as disclosed
in the Burlington Disclosure Schedule (subject to the last sentence of Section
9.3(a)) or in the Burlington SEC Documents filed with the SEC prior to the date
of this Agreement, Burlington hereby represents and warrants to ConocoPhillips
as follows:
(a) CORPORATE ORGANIZATION. (i) Burlington is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Burlington has the corporate power and authority to own or lease all
of its properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or qualified
would not, either individually or in the aggregate, have a Material Adverse
Effect on Burlington. True and complete copies of the Certificate of
Incorporation and By-Laws of Burlington, as in effect as of the date of this
Agreement, have previously been made available by Burlington to ConocoPhillips.
(ii) Each Subsidiary of Burlington (A) is duly organized and
validly existing under the laws of its jurisdiction of organization, (B) is duly
qualified to do business and in good standing in all jurisdictions (whether
federal, state, local or foreign) where its ownership or leasing of property or
the conduct of its business requires it to be so qualified and (C) has all
requisite corporate power and authority to own or lease its properties and
assets and to carry on its business as now conducted, in each case, except as
would not, individually or in the aggregate, have a Material Adverse Effect on
Burlington.
(b) CAPITALIZATION. (i) The authorized capital stock of Burlington
consists of (A) 650,000,000 shares of Burlington Common Stock, of which, as of
November 30, 2005, 375,360,604 shares were issued and outstanding and
107,016,266 shares were held in treasury and (B) 75,000,000 shares of Burlington
Preferred Stock, of which no shares are issued and outstanding. From November
30, 2005 to the date of this Agreement, no shares of Burlington Capital Stock
have been issued except pursuant to the Burlington Stock Plans. All issued and
outstanding shares of Burlington Common Stock have been duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive rights,
with no personal liability attaching to the ownership thereof. As of the date of
this Agreement, except pursuant to the terms of Burlington Stock Options and
other stock awards issued pursuant to Burlington Stock Plans and pursuant to the
Burlington Rights, Burlington does not have and is not bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of Burlington
Capital Stock or any other equity securities of Burlington or any securities of
Burlington representing the right to purchase or otherwise receive any shares of
Burlington Capital Stock. As of November 30, 2005, no shares of Burlington
Capital Stock were reserved for issuance, except for 17,381,746 shares of
Burlington Common Stock reserved for issuance upon the exercise of stock options
pursuant to
-18-
the Burlington Stock Plans. Burlington has no Voting Debt issued or outstanding.
As of November 30, 2005, 4,420,066 shares of Burlington Common Stock are subject
to Burlington Stock Options and 1,396,830 shares of Burlington Common Stock are
restricted shares of Burlington Common Stock. Other than such Burlington Stock
Options and restricted shares, as of November 30, 2005, no shares of Burlington
Common Stock are issuable in connection with outstanding awards under the
Burlington Stock Plans or other compensatory arrangements (other than plans
intended to be "qualified plans" within the meaning of Section 401(a) of the
Code). Since November 30, 2005, except as permitted by this Agreement, (i) no
Burlington Common Stock has been issued except in connection with the exercise
of issued and outstanding Burlington Stock Options and (ii) no options,
warrants, securities convertible into, or commitments made with respect to the
issuance of, shares of Burlington Common Stock have been issued, granted or
made.
(ii) Except for immaterial amounts of directors' qualifying
shares in foreign Subsidiaries of Burlington, as of the date hereof Burlington
owns, directly or indirectly, all of the issued and outstanding shares of
capital stock or other equity ownership interests of each Significant Subsidiary
of Burlington, free and clear of any Liens, and all of such shares or equity
ownership interests are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof. No Significant Subsidiary of Burlington has
or is bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the purchase or issuance
of any shares of capital stock or any other equity security of such Significant
Subsidiary or any securities representing the right to purchase or otherwise
receive any shares of capital stock or any other equity security of such
Significant Subsidiary. No Subsidiary of Burlington owns any shares of
Burlington Capital Stock (or any options or other interests convertible into or
measured by reference to the value of Burlington Capital Stock).
(c) AUTHORITY; NO VIOLATION. (i) Burlington has full corporate power
and authority to execute and deliver 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 and
validly approved by the Board of Directors of Burlington. The Board of Directors
of Burlington has directed that this Agreement be submitted to Burlington
stockholders at a meeting of Burlington stockholders for the purpose of adopting
this Agreement (the "BURLINGTON STOCKHOLDERS MEETING"), and, except for the
adoption of this Agreement by the affirmative vote of the holders of a majority
of the outstanding shares of Burlington Common Stock (the "BURLINGTON
STOCKHOLDER APPROVAL"), no other corporate proceedings on the part of Burlington
are necessary to approve this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Burlington and (assuming due authorization, execution and delivery
by ConocoPhillips and Merger Sub) constitutes a valid and binding obligation of
Burlington, enforceable against Burlington in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, and general equitable principles (whether considered in a proceeding
in equity or at law).
-19-
(ii) Neither the execution and delivery of this Agreement by
Burlington, nor the consummation by Burlington of the transactions contemplated
hereby, nor compliance by Burlington with any of the terms or provisions hereof,
will (A) violate any provision of the Certificate of Incorporation or By-Laws of
Burlington, or (B) assuming that the consents and approvals referred to in
Section 4.1(d) are duly obtained, (I) violate any statute, code, ordinance,
rule, regulation, judgment, order, writ, decree or injunction applicable to
Burlington or any of its Subsidiaries or any of their respective properties or
assets or (II) violate, conflict with, result in a breach of any provision of or
the loss of any benefit under, constitute a default (or an event that, with
notice or lapse of time, or both, would constitute a default) under, result in
the termination of or a right of termination or cancellation under, accelerate
the performance required by, accelerate any right or benefit provided by, or
result in the creation of any Lien upon any of the respective properties or
assets of Burlington or any of its Subsidiaries under, any of the terms,
conditions or provisions of any Burlington Contract, except (in the case of
clause (B) above) for such violations, conflicts, breaches, losses, defaults,
terminations, cancellations, accelerations or Liens that, either individually or
in the aggregate, would not have a Material Adverse Effect on Burlington or the
Surviving Corporation.
(d) CONSENTS AND APPROVALS. Except for (i) compliance with any
applicable requirements under the HSR Act, (ii) compliance with any applicable
requirements under Council Regulation (EC) No. 139/2004 of 20 January 2004 on
the control of concentrations between undertakings (published in the Official
Journal of the European Union on January 29, 2004 at L 24/1) (the "EC MERGER
REGULATION"), (iii) compliance with any applicable requirements under the
Canadian Investment Regulations, (iv) compliance with any applicable
requirements under any other Regulatory Law, (v) the filing with the SEC of a
proxy statement/prospectus relating to the matters to be submitted to Burlington
stockholders at the Burlington Stockholders Meeting (such proxy
statement/prospectus, and any amendments or supplements thereto, the "PROXY
STATEMENT/PROSPECTUS") and a registration statement on Form S-4 with respect to
the issuance of ConocoPhillips Common Stock in the Merger (such Form S-4, and
any amendments or supplements thereto, the "FORM S-4"), (vi) the filing of the
Certificate of Merger pursuant to the DGCL, (vii) any consents, authorizations,
approvals, filings or exemptions in connection with compliance with the rules of
the NYSE, (viii) such filings and approvals as are required to be made or
obtained under the securities or "Blue Sky" laws of various states in connection
with the issuance of the shares of ConocoPhillips Common Stock pursuant to this
Agreement (the consents, approvals, filings and registration required under or
in relation to clauses (ii) through (viii) above, "BURLINGTON NECESSARY
CONSENTS") and (ix) such other consents, approvals, filings and registrations
the failure of which to obtain or make would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
Burlington, no consents or approvals of or filings or registrations with any
Governmental Entity are necessary in connection with (A) the execution and
delivery by Burlington of this Agreement and (B) the consummation by Burlington
of the transactions contemplated by this Agreement.
-20-
(e) FINANCIAL REPORTS AND SEC DOCUMENTS.
(i) The Burlington 2004 10-K and all other reports, registration
statements, definitive proxy statements or information statements filed or to be
filed by Burlington or any of its Subsidiaries subsequent to December 31, 2004
under the Securities Act or under Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act in the form filed, or to be filed, with the SEC (collectively, the
"BURLINGTON SEC DOCUMENTS"), (x) complied or will comply in all material
respects as to form with the applicable requirements under the Securities Act or
the Exchange Act, as the case may be, and (y) as of their respective filing
dates (except as amended or supplemented prior to the date of this Agreement),
(A) did not or will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading; and (B) each of the balance sheets contained in or
incorporated by reference into any such Burlington SEC Document (including the
related notes and schedules thereto) fairly presents or will fairly present the
financial position of the entity or entities to which it relates as of its date,
and each of the statements of income and changes in stockholders' equity and
cash flows or equivalent statements in such Burlington SEC Documents (including
any related notes and schedules thereto) fairly presents or will fairly present
the results of operations, changes in stockholders' equity and changes in cash
flows, as the case may be, of the entity or entities to which it relates for the
periods to which it relates, in each case in accordance with GAAP consistently
applied during the periods involved, except, in each case, as may be noted
therein, subject to normal year-end audit adjustments in the case of unaudited
statements.
(ii) Except as set forth in Section 4.1(e)(ii) of the Burlington
Disclosure Schedule, the records, systems, controls, data and information of
Burlington and its respective Subsidiaries are recorded, stored, maintained and
operated under means that are under the exclusive ownership and direct control
of Burlington or its Subsidiaries or accountants, except for any non-exclusive
ownership and non-direct control that would not reasonably be expected to have a
materially adverse effect on the system of internal accounting controls
described in the following sentence. Burlington and its Subsidiaries have
devised and maintain a system of internal accounting controls sufficient to
provide reasonable assurances regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with GAAP, including that: (1) transactions are executed only in accordance with
management's authorization; (2) transactions are recorded as necessary to permit
preparation of the financial statements of Burlington and its Subsidiaries and
to maintain accountability for the assets of Burlington and its Subsidiaries;
(3) access to such assets is permitted only in accordance with management's
authorization; and (4) the reporting of such assets is compared with existing
assets at regular intervals. Each of Burlington and its Subsidiaries (1) has
designed disclosure controls and procedures (within the meaning of Rules
13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that material information
relating to such entity and its Subsidiaries is made known to the management of
such entity (or its general partner) by others within those entities as
appropriate to allow timely decisions regarding required disclosure and to make
the certifications required by the Exchange Act with respect to the Burlington
SEC Documents, and (2) has disclosed, based on its most recent evaluation prior
to the date of this Agreement, to its
-21-
auditors and the audit committee of its Board of Directors (A) any significant
deficiencies in the design or operation of internal controls which could
adversely affect in any material respect its ability to record, process,
summarize and report financial data and have disclosed to its auditors any
material weaknesses in internal controls and (B) any fraud, whether or not
material, that involves management or other employees who have a significant
role in its internal controls.
(iii) Since December 31, 2004, through the date hereof, to the
knowledge of Burlington, (x) neither Burlington nor any of its Subsidiaries nor
any director, officer, employee, auditor, accountant or representative of
Burlington or any of its Subsidiaries has received or otherwise had or obtained
knowledge of any material complaint, allegation, assertion or claim, whether
written or oral, regarding the accounting or auditing practices, procedures,
methodologies or methods of Burlington or any of its Subsidiaries or their
respective internal accounting controls, including any material complaint,
allegation, assertion or claim that Burlington or any of its Subsidiaries has
engaged in questionable accounting or auditing practices, and (y) no attorney
representing Burlington or any of its Subsidiaries, whether or not employed by
Burlington or any of its Subsidiaries, has reported evidence of a material
violation of securities laws, breach of fiduciary duty or similar violation by
Burlington or any of its officers, directors, employees or agents to the
Burlington Board of Directors or any committee thereof or to the General Counsel
or Chief Executive Officer of Burlington.
(iv) Burlington is in compliance in all material respects with
the provisions of the Xxxxxxxx-Xxxxx Act of 2002 (the "XXXXXXXX-XXXXX ACT") that
are applicable to Burlington.
(f) ABSENCE OF UNDISCLOSED LIABILITIES. Neither Burlington nor any of
its Subsidiaries had at September 30, 2005, or has incurred since that date
through the date hereof, any liabilities or obligations (whether absolute,
accrued, contingent or otherwise) of any nature, except (i) liabilities,
obligations or contingencies that (A) are accrued or reserved against in the
financial statements in the Burlington September 10-Q or reflected in the notes
thereto or (B) were incurred in the ordinary course of business, (ii)
liabilities, obligations or contingencies that (A) would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Burlington, or (B) have been discharged or paid in full prior to the date
hereof, and (iii) liabilities, obligations and contingencies that are of a
nature not required to be reflected in the consolidated financial statements of
Burlington and its Subsidiaries prepared in accordance with GAAP consistently
applied.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30, 2005,
Burlington has conducted its business only in the ordinary course, and since
such date there has not been:
(i) any event, change, effect or development that, individually
or in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect on Burlington;
-22-
(ii) prior to the date of this Agreement, any declaration,
setting aside or payment of any dividend or other distribution (whether in cash,
stock or property) with respect to any Burlington Capital Stock or any
repurchase for value by Burlington of any Burlington Capital Stock;
(iii) prior to the date of this Agreement, any split, combination
or reclassification of any Burlington Capital Stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of Burlington Capital Stock;
(iv) prior to the date of this Agreement, (A) any granting by
Burlington to any director or executive officer of Burlington of any increase in
compensation, except in the ordinary course of business consistent with prior
practice or as was required under employment agreements included in the
Burlington SEC Documents, (B) any granting by Burlington to any such director or
executive officer of any increase in severance or termination pay, except as was
required under any employment, severance or termination agreements included in
the Burlington SEC Documents, or (C) any entry by Burlington into, or any
amendment of, any employment, severance or termination agreement with any such
director or executive officer; or
(v) prior to the date of this Agreement, any change in financial
accounting methods, principles or practices by Burlington or any of its
Subsidiaries materially affecting the consolidated assets, liabilities or
results of operations of Burlington, except insofar as may have been required by
a change in GAAP.
(h) LEGAL PROCEEDINGS. There is no suit, action or proceeding or
investigation pending or, to the knowledge of Burlington, threatened, against or
affecting Burlington or any of its Subsidiaries that would, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Burlington, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Burlington or its
Subsidiaries having, or which would reasonably be expected to have, any such
effect.
(i) COMPLIANCE WITH APPLICABLE LAW. Burlington and each of its
Subsidiaries hold all licenses, franchises, permits and authorizations necessary
for the lawful conduct of their respective businesses under and pursuant to
each, and have complied in all respects with and are not in default in any
material respect under any, applicable law, statute, order, rule, regulation,
policy and/or guideline of any Governmental Entity relating to Burlington or any
of its Subsidiaries, except where the failure to hold such license, franchise,
permit or authorization or such noncompliance or default would not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Burlington.
(j) ENVIRONMENTAL LIABILITY. Except for matters that individually or
in the aggregate, would not have a Material Adverse Effect on Burlington, (i)
Burlington and each of its Subsidiaries are and have been in compliance with all
applicable Environmental Laws and have obtained or applied for all Environmental
Permits necessary for their operations as
-23-
currently conducted; (ii) there have been no Releases of any Hazardous Materials
that could be reasonably likely to form the basis of any Environmental Claim
against Burlington or any of its Subsidiaries; (iii) there are no Environmental
Claims pending or, to the knowledge of Burlington, threatened against Burlington
or any of its Subsidiaries; (iv) none of Burlington and its Subsidiaries is
subject to any agreement, order, judgment, decree, letter or memorandum by or
with any Governmental Entity or third party imposing any liability or obligation
under any Environmental Law; and (v) none of Burlington and its Subsidiaries has
retained or assumed, either contractually or by operation of law, any liability
or obligation that could reasonably be expected to have formed the basis of any
Environmental Claim against Burlington or any of its Subsidiaries.
(k) EMPLOYEE BENEFIT PLANS; LABOR MATTERS. (i) With respect to each
material U.S. Burlington Benefit Plan, Burlington has made available (or, if it
has not made available, will promptly after the date hereof make available) to
ConocoPhillips a correct and complete copy of each writing constituting such
U.S. Burlington Benefit Plan. The Internal Revenue Service has issued a
favorable determination letter with respect to each U.S. Burlington Benefit Plan
that is intended to be a "qualified plan" within the meaning of Section 401(a)
of the Code and the related trust that has not been revoked, and, to the
knowledge of Burlington, there are no existing circumstances and no events have
occurred that could result in the revocation of such favorable determination
letter.
(ii) Except as would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect on Burlington, (A) each of
the U.S. Burlington Benefit Plans has been operated and administered in all
material respects in accordance with applicable law and administrative rules and
regulations of any Governmental Entity, including, but not limited to, ERISA and
the Code, and (B) there are no pending or, to the knowledge of Burlington,
threatened claims (other than claims for benefits in the ordinary course),
lawsuits or arbitrations that have been asserted or instituted, and, to the
knowledge of Burlington, no set of circumstances exists that may reasonably give
rise to a claim or lawsuit, against the U.S. Burlington Benefit Plans, any
fiduciaries thereof with respect to their duties to the U.S. Burlington Benefit
Plans or the assets of any of the trusts under any of the U.S. Burlington
Benefit Plans that could reasonably be expected to result in any material
liability of Burlington or any of its Subsidiaries to the PBGC, the U.S.
Department of the Treasury, the U.S. Department of Labor, any U.S. Burlington
Benefit Plan, any participant in a U.S. Burlington Benefit Plan, or any other
party.
(iii) There do not now exist, and to the knowledge of Burlington,
there are no existing circumstances that could reasonably be expected to result
in, any liabilities under Title IV or Section 302 of ERISA or Section 412 or
4971 of the Code (other than for payments of premium contributions in the
ordinary course to the PBGC) that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on Burlington. Except
as would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect on Burlington, to the knowledge of Burlington,
Burlington and each of its
-24-
Subsidiaries has reserved the right to amend, terminate or modify at any time
all plans or arrangements providing for retiree health or life insurance
coverage.
(iv) As of the date of this Agreement, neither Burlington nor any
of its Subsidiaries is a party to any material collective bargaining or other
labor union contract applicable to individuals employed by Burlington or any of
its Subsidiaries, and no such collective bargaining agreement or other labor
union contract is being negotiated by Burlington or any of its Subsidiaries.
Except as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Burlington, (A) there is no labor dispute,
strike, slowdown or work stoppage against Burlington or any of its Subsidiaries
pending or, to the knowledge of Burlington, threatened against Burlington or any
of its Subsidiaries and (B) no unfair labor practice or labor charge or
complaint is pending, or to the knowledge of Burlington, threatened with respect
to Burlington or any of its Subsidiaries.
(v) Except as would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect on Burlington, Section
4.1(k)(v) of the Burlington Disclosure Schedule sets forth an accurate and
complete list of each U.S. Burlington Benefit Plan under which the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby could (either alone or in conjunction with any other event), result in,
cause the accelerated vesting, funding or delivery of, or increase the amount or
value of, any payment or benefit to any employee, officer or director of
Burlington or any of its Subsidiaries, or could limit the right of Burlington or
any of its Subsidiaries to amend, merge, terminate or receive a reversion of
assets from any U.S. Burlington Benefit Plan or related trust or any material
employment agreement or related trust. Except as set forth on Section 4.1(k)(v)
of the Burlington Disclosure Schedule, or as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on
Burlington, no amount paid or payable (whether in cash, in property, or in the
form of benefits, accelerated cash, property, or benefits, or otherwise) in
connection with the transactions contemplated hereby (either solely as a result
thereof or as a result of such transactions in conjunction with any other event)
will be an "excess parachute payment" within the meaning of Section 280G of the
Code.
(vi) All Foreign Burlington Benefit Plans comply with applicable
local law except as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect. Burlington and its subsidiaries
have no unfunded liabilities with respect to any such Foreign Burlington Benefit
Plan that are not set forth in the consolidate balance sheets included or
incorporated by reference into the company reports filed prior to the date
hereof, except as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect. As of the date of this Agreement,
there is no pending or, to the knowledge of Burlington, threatened material
litigation relating to the Foreign Burlington Benefit Plans, except as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
(l) TAXES. (i) Each of Burlington and its Subsidiaries has duly and
timely filed all Tax Returns required to be filed by it, and all such Tax
Returns are true, complete and accurate in all respects, except to the extent
that any failure to have filed or any inaccuracies in
-25-
such Tax Returns would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Burlington. Burlington and each of
its Subsidiaries has paid all Taxes required to be paid by it, and has paid all
Taxes that it was required to withhold from amounts owing to any employee,
creditor or third party, except to the extent that any failure to pay such Taxes
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Burlington. There are no pending or, to the knowledge
of Burlington, threatened audits, examinations, investigations, deficiencies,
claims or other proceedings in respect of Taxes relating to Burlington or any of
its Subsidiaries, except for those that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
Burlington. There are no Liens for Taxes upon the assets of Burlington or any of
its Subsidiaries, other than Liens for current Taxes not yet due and Liens for
Taxes that would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on Burlington. Neither Burlington nor any of
its Subsidiaries has requested any extension of time within which to file any
Tax Returns in respect of any taxable year that have not since been filed, nor
made any request for waivers of the time to assess any Taxes that are pending or
outstanding, except where such request or waiver would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Burlington. Neither Burlington nor any of its Subsidiaries has any liability for
Taxes of any Person (other than Burlington and its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any comparable provision of U.S. state or local
or foreign law), except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Burlington. Neither
Burlington nor any of its Subsidiaries is a party to any Tax sharing agreement
(with any Person other than Burlington and/or any of its Subsidiaries), except
as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Burlington.
(ii) Neither Burlington nor any of its Subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation"
within the meaning of Section 355(a)(1)(A) of the Code in a distribution of
stock intended to qualify for tax-free treatment under Section 355 of the Code
(other than a distribution of a Burlington Subsidiary by a Burlington Subsidiary
to Burlington or another Burlington Subsidiary) (A) in the two years prior to
the date of this Agreement (or will constitute such a corporation in the two
years prior to the Closing Date) or (B) in a distribution that otherwise
constitutes part of a "plan" or "series of related transactions" within the
meaning of Section 355(e) of the Code in conjunction with the Merger.
(m) CONTRACTS.
(i) As of the date of this Agreement, neither Burlington nor any
of its Subsidiaries is a party to or bound by any contract, arrangement,
commitment or understanding (whether written or oral) (A) which is a "material
contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the
SEC) to be performed after the date of this Agreement that has not been filed or
incorporated by reference in the Burlington SEC Documents, or (B) which
materially restricts the conduct of any line of business by Burlington. Each
contract, arrangement, commitment or understanding of the type described in
clause (A) of this Section
-26-
4.1(m), whether or not set forth in the Burlington Disclosure Schedule or in the
Burlington SEC Documents, is referred to herein as a "BURLINGTON CONTRACT" (for
purposes of clarification, each "material contract" (as such term is defined in
Item 601(b)(10) of Regulation S-K of the SEC) to be performed after the date of
this Agreement, whether or not filed with the SEC, is a Burlington Contract).
(ii) (A) Each Burlington Contract is valid and binding on
Burlington and any of its Subsidiaries that is a party thereto, as applicable,
and in full force and effect (subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law)), (B)
Burlington and each of its Subsidiaries has in all material respects performed
all obligations required to be performed by it to date under each Burlington
Contract, except where such noncompliance, either individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
Burlington, and (C) neither Burlington nor any of its Subsidiaries knows of, or
has received notice of, the existence of any event or condition which
constitutes, or, after notice or lapse of time or both, will constitute, a
material default on the part of Burlington or any of its Subsidiaries under any
such Burlington Contract, except where such default, either individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect on Burlington.
(n) REORGANIZATION UNDER THE CODE. As of the date of this Agreement,
neither Burlington nor any of its Subsidiaries has taken or agreed to take any
action or knows of any fact that is reasonably likely to prevent or impede (i)
the Merger from qualifying as a "reorganization" within the meaning of Section
368(a) of the Code, or (ii) the ability of counsel to render the opinions
described in Sections 7.2(c) and 7.3(c) of this Agreement.
(o) FORM S-4; PROXY STATEMENT/PROSPECTUS. None of the information to
be supplied by Burlington or its Subsidiaries in the Form S-4 or the Proxy
Statement/Prospectus will, at the time of the mailing of the Proxy
Statement/Prospectus and any amendments or supplements thereto, and at the time
of the Burlington 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 the light of the
circumstances under which they are made, not misleading. The Proxy
Statement/Prospectus will comply, as of its mailing date, as to form in all
material respects with all applicable law, including the provisions of the
Securities Act and the Exchange Act, except that no representation is made by
Burlington with respect to information supplied by ConocoPhillips for inclusion
therein.
(p) STATE TAKEOVER LAWS; RIGHTS PLAN. The Board of Directors of
Burlington has approved this Agreement and the transactions contemplated by this
Agreement as required under any applicable state takeover laws so that any such
state takeover laws will not apply to this Agreement or any of the transactions
contemplated hereby. Burlington has taken all action, if any, necessary or
appropriate so that the entering into of this Agreement, and the consummation of
the transactions contemplated hereby, do not and will not result in the ability
of any person to exercise any Burlington Rights under the Burlington Rights
Agreement or enable
-27-
or require the Burlington Rights to separate from the shares of Burlington
Common Stock to which they are attached or to be triggered or become
exercisable. No "Distribution Date" or "Stock Acquisition Date" (as such terms
are defined in the Burlington Rights Agreement) has occurred.
(q) OPINION OF FINANCIAL ADVISORS. Burlington has received the
opinions of Xxxxxx Xxxxxxx & Co. Incorporated and X.X. Xxxxxx Chase & Co., dated
the date hereof, to the effect that the Merger Consideration to be received by
holders of Burlington Common Stock in the Merger is fair to such stockholders
from a financial point of view.
(r) BOARD APPROVAL. The Board of Directors of Burlington, at a meeting
duly called and held, has by unanimous vote of those directors present (i)
determined that this Agreement and the transactions contemplated hereby are
advisable and in the best interests of Burlington stockholders, (ii) approved
this Agreement and (iii) recommended that this Agreement be adopted by the
holders of Burlington Common Stock.
(s) BROKERS' FEES. Neither Burlington nor any of its Subsidiaries nor
any of their respective officers or directors has employed any broker or finder
or incurred any liability for any brokers' fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement, excluding fees
to be paid to Xxxxxx Xxxxxxx & Co. Incorporated and X.X. Xxxxxx Chase & Co.
(t) OWNERSHIP OF CONOCOPHILLIPS CAPITAL STOCK. As of the date of this
Agreement, Burlington does not beneficially own any shares of ConocoPhillips
Capital Stock.
4.2 REPRESENTATIONS AND WARRANTIES OF CONOCOPHILLIPS. Except as
disclosed in the ConocoPhillips Disclosure Schedule (subject to the last
sentence of Section 9.3(a)) or in the ConocoPhillips SEC Documents filed with
the SEC prior to the date of this Agreement, ConocoPhillips hereby represents
and warrants to Burlington as follows:
(a) CORPORATE ORGANIZATION. (i) ConocoPhillips is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. ConocoPhillips has the corporate power and authority to own or lease
all of its properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or qualified
would not, either individually or in the aggregate, have a Material Adverse
Effect on ConocoPhillips. True and complete copies of the Restated Certificate
of Incorporation and the By-Laws of ConocoPhillips, as in effect as of the date
of this Agreement, have previously been made available by ConocoPhillips to
Burlington.
(ii) Each Subsidiary of ConocoPhillips (A) is duly organized and
validly existing under the laws of its jurisdiction of organization, (B) is duly
qualified to do business and in good standing in all jurisdictions (whether
federal, state, local or foreign) where
-28-
its ownership or leasing of property or the conduct of its business requires it
to be so qualified and (C) has all requisite corporate power and authority to
own or lease its properties and assets and to carry on its business as now
conducted, in each case, except as would not, individually or in the aggregate,
have a Material Adverse Effect on ConocoPhillips.
(iii) Merger Sub was formed by ConocoPhillips solely for the
purpose of engaging in the transactions contemplated hereby and has engaged in
no business and has incurred no liabilities other than in connection with the
transactions contemplated by this Agreement.
(b) CAPITALIZATION. (i) The authorized capital stock of ConocoPhillips
consists of (A) 2,500,000,000 shares of ConocoPhillips Common Stock, of which,
as of December 8, 2005, 1,423,689,904 shares were issued and outstanding and
32,080,000 shares were held in treasury and (B) 500,000,000 shares of
ConocoPhillips Preferred Stock, of which no shares are issued and outstanding.
From December 8, 2005 to the date of this Agreement, no shares of ConocoPhillips
Capital Stock have been issued except pursuant to the employee and director
stock plans of ConocoPhillips (the "CONOCOPHILLIPS STOCK PLANS"). All issued and
outstanding shares of ConocoPhillips Common Stock have been duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive rights,
with no personal liability attaching to the ownership thereof. As of the date of
this Agreement, except pursuant to the terms of stock options and other stock
awards issued pursuant to ConocoPhillips Stock Plans and pursuant to the
ConocoPhillips Rights, ConocoPhillips does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for the purchase or issuance of any shares of
ConocoPhillips Capital Stock or any other equity securities of ConocoPhillips or
any securities of ConocoPhillips representing the right to purchase or otherwise
receive any shares of ConocoPhillips Capital Stock. As of November 30, 2005, no
shares of ConocoPhillips Capital Stock were reserved for issuance, except for
132,170,899 shares of ConocoPhillips Common Stock reserved for issuance upon the
exercise of stock options pursuant to the ConocoPhillips Stock Plans and in
respect of the employee and director savings, compensation and deferred
compensation plans described in the ConocoPhillips 2004 10-K and 5,000,000
shares of Series A Junior Participating Preferred Stock reserved for issuance in
connection with the ConocoPhillips Rights Agreement. ConocoPhillips has no
Voting Debt issued or outstanding. As of December 3, 2005, 58,149,541 shares of
ConocoPhillips Common Stock are subject to ConocoPhillips Stock Options, and no
shares (other than those already included as issued and outstanding as per
clause (i)(A) above) of ConocoPhillips Common Stock are subject to
ConocoPhillips restricted stock awards. Since December 8, 2005, except as
permitted by this Agreement, (i) no ConocoPhillips Common Stock has been issued
except in connection with the exercise of issued and outstanding ConocoPhillips
Stock Options and (ii) no options, warrants, securities convertible into, or
commitments made with respect to the issuance of, shares of ConocoPhillips
Common Stock have been issued, granted or made. The shares of ConocoPhillips
Common Stock issued pursuant to the Merger, when issued in accordance with the
terms hereof, will be duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights.
-29-
(ii) The authorized capital stock of Merger Sub consists of 100
shares of common stock, par value $0.01 per share, all of which are validly
issued, fully paid and nonassessable, and are owned by ConocoPhillips free and
clear of any Liens.
(c) AUTHORITY; NO VIOLATION.
(i) Each of ConocoPhillips and Merger Sub has full corporate
power and authority to execute and deliver 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 and
validly approved by the Board of Directors of each of ConocoPhillips and Merger
Sub. ConocoPhillips, as sole stockholder of Merger Sub, has approved and adopted
this Agreement and the transactions contemplated hereby. No other corporate
proceedings on the part of ConocoPhillips or Merger Sub are necessary to approve
this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by each of
ConocoPhillips and Merger Sub and (assuming due authorization, execution and
delivery by Burlington) constitutes a valid and binding obligation of
ConocoPhillips and Merger Sub, enforceable against ConocoPhillips and Merger Sub
in accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law).
(ii) Neither the execution and delivery of this Agreement by
ConocoPhillips and Merger Sub nor the consummation by ConocoPhillips and Merger
Sub of the transactions contemplated hereby, nor compliance by ConocoPhillips
and Merger Sub with any of the terms or provisions hereof, will (A) violate any
provision of the Restated Certificate of Incorporation or the By-Laws of
ConocoPhillips or the Certificate of Incorporation or By-Laws of Merger Sub, or
(B) assuming that the consents and approvals referred to in Section 4.2(d) are
duly obtained, (I) violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to ConocoPhillips or any
of its Subsidiaries or any of their respective properties or assets or (II)
violate, conflict with, result in a breach of any provision of or the loss of
any benefit under, constitute a default (or an event that, with notice or lapse
of time, or both, would constitute a default) under, result in the termination
of or a right of termination or cancellation under, accelerate the performance
required by, accelerate any right or benefit provided by, or result in the
creation of any Lien upon any of the respective properties or assets of
ConocoPhillips or any of its Subsidiaries under, any of the terms, conditions or
provisions of any ConocoPhillips Contract, except (in the case of clause (B)
above) for such violations, conflicts, breaches, losses, defaults, terminations,
cancellations, accelerations or Liens that, either individually or in the
aggregate, would not have a Material Adverse Effect on ConocoPhillips or the
Surviving Corporation.
(d) CONSENTS AND APPROVALS. Except for (i) compliance with any
applicable requirements under the HSR Act, (ii) compliance with any applicable
requirements under the EC Merger Regulation, (iii) compliance with any
applicable requirements under the Canadian Investment Regulations, (iv)
compliance with any applicable requirements under any other
-30-
Regulatory Law, (v) the filing with the SEC of the Proxy Statement/Prospectus
and the Form S-4, (vi) the filing of the Certificate of Merger pursuant to the
DGCL, (vii) any consents, authorizations, approvals, filings or exemptions in
connection with compliance with the rules of the NYSE, (viii) such filings and
approvals as are required to be made or obtained under the securities or "Blue
Sky" laws of various states in connection with the issuance of the shares of
ConocoPhillips Common Stock pursuant to this Agreement (the consents, approvals,
filings and registration required under or in relation to clauses (ii) through
(viii) above, "CONOCOPHILLIPS NECESSARY CONSENTS") and (ix) such other consents,
approvals, filings and registrations the failure of which to obtain or make
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on ConocoPhillips, no consents or approvals of or
filings or registrations with any Governmental Entity are necessary in
connection with (A) the execution and delivery by ConocoPhillips of this
Agreement and (B) the consummation by ConocoPhillips and Merger Sub of the
transactions contemplated by this Agreement.
(e) FINANCIAL REPORTS AND SEC DOCUMENTS.
(i) The ConocoPhillips 2004 10-K and all other reports,
registration statements, definitive proxy statements or information statements
filed or to be filed by ConocoPhillips or any of its Subsidiaries subsequent to
December 31, 2004 under the Securities Act or under Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act in the form filed, or to be filed, with the SEC
(collectively, the "CONOCOPHILLIPS SEC DOCUMENTS"), (x) complied or will comply
in all material respects as to form with the applicable requirements under the
Securities Act or the Exchange Act, as the case may be, and (y) as of their
respective filing dates (except as amended or supplemented prior to the date of
this Agreement), (A) did not or will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading; and (B) each of the balance sheets
contained in or incorporated by reference into any such ConocoPhillips SEC
Document (including the related notes and schedules thereto) fairly presents or
will fairly present the financial position of the entity or entities to which it
relates as of its date, and each of the statements of income and changes in
stockholders' equity and cash flows or equivalent statements in such
ConocoPhillips SEC Documents (including any related notes and schedules thereto)
fairly presents or will fairly present the results of operations, changes in
stockholders' equity and changes in cash flows, as the case may be, of the
entity or entities to which it relates for the periods to which it relates, in
each case in accordance with GAAP consistently applied during the periods
involved, except, in each case, as may be noted therein, subject to normal
year-end audit adjustments in the case of unaudited statements.
(ii) Except as set forth in Section 4.1(e)(ii) of the
ConocoPhillips Disclosure Schedule, the records, systems, controls, data and
information of ConocoPhillips and its respective Subsidiaries are recorded,
stored, maintained and operated under means that are under the exclusive
ownership and direct control of ConocoPhillips or its Subsidiaries or
accountants, except for any non-exclusive ownership and non-direct control that
would not reasonably be expected to have a materially adverse effect on the
system of internal accounting
-31-
controls described in the following sentence. ConocoPhillips and its
Subsidiaries have devised and maintain a system of internal accounting controls
sufficient to provide reasonable assurances regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP, including that: (1) transactions are executed
only in accordance with management's authorization; (2) transactions are
recorded as necessary to permit preparation of the financial statements of
ConocoPhillips and its Subsidiaries and to maintain accountability for the
assets of ConocoPhillips and its Subsidiaries; (3) access to such assets is
permitted only in accordance with management's authorization; (4) the reporting
of such assets is compared with existing assets at regular intervals; and (5)
accounts, notes and other receivables and inventory are recorded accurately, and
proper and adequate procedures are implemented to effect the collection thereof
on a current and timely basis. Each of ConocoPhillips and its Subsidiaries (1)
has designed disclosure controls and procedures (within the meaning of Rules
13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that material information
relating to such entity and its Subsidiaries is made known to the management of
such entity (or its general partner) by others within those entities as
appropriate to allow timely decisions regarding required disclosure and to make
the certifications required by the Exchange Act with respect to the
ConocoPhillips SEC Documents, and (2) has disclosed, based on its most recent
evaluation prior to the date of this Agreement, to its auditors and the audit
committee of its Board of Directors (A) any significant deficiencies in the
design or operation of internal controls which could adversely affect in any
material respect its ability to record, process, summarize and report financial
data and have disclosed to its auditors any material weaknesses in internal
controls and (B) any fraud, whether or not material, that involves management or
other employees who have a significant role in its internal controls.
(iii) Since December 31, 2004, through the date hereof, to the
knowledge of ConocoPhillips, (x) neither ConocoPhillips nor any of its
Subsidiaries nor any director, officer, employee, auditor, accountant or
representative of ConocoPhillips or any of its Subsidiaries has received or
otherwise had or obtained knowledge of any material complaint, allegation,
assertion or claim, whether written or oral, regarding the accounting or
auditing practices, procedures, methodologies or methods of ConocoPhillips or
any of its Subsidiaries or their respective internal accounting controls,
including any material complaint, allegation, assertion or claim that
ConocoPhillips or any of its Subsidiaries has engaged in questionable accounting
or auditing practices, and (y) no attorney representing ConocoPhillips or any of
its Subsidiaries, whether or not employed by ConocoPhillips or any of its
Subsidiaries, has reported evidence of a material violation of securities laws,
breach of fiduciary duty or similar violation by ConocoPhillips or any of its
officers, directors, employees or agents to the ConocoPhillips Board of
Directors or any committee thereof or to the General Counsel or Chief Executive
Officer of ConocoPhillips.
(iv) ConocoPhillips is in compliance in all material respects
with the provisions of the Xxxxxxxx-Xxxxx Act that are applicable to
ConocoPhillips.
(f) ABSENCE OF UNDISCLOSED LIABILITIES. Neither ConocoPhillips nor any
of its Subsidiaries had at September 30, 2005, or has incurred since that date
through the date hereof,
-32-
any liabilities or obligations (whether absolute, accrued, contingent or
otherwise) of any nature, except (i) liabilities, obligations or contingencies
that (A) are accrued or reserved against in the financial statements in the
ConocoPhillips September 10-Q or reflected in the notes thereto or (B) were
incurred in the ordinary course of business, (ii) liabilities, obligations or
contingencies that (A) would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on ConocoPhillips, or (B) have
been discharged or paid in full prior to the date hereof, and (iii) liabilities,
obligations and contingencies that are of a nature not required to be reflected
in the consolidated financial statements of ConocoPhillips and its Subsidiaries
prepared in accordance with GAAP consistently applied.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30, 2005,
ConocoPhillips has conducted its business only in the ordinary course, and since
such date there has not been:
(i) any event, change, effect or development that, individually
or in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect on ConocoPhillips;
(ii) prior to the date of this Agreement, any declaration,
setting aside or payment of any dividend or other distribution (whether in cash,
stock or property) with respect to any ConocoPhillips Capital Stock or any
repurchase for value by ConocoPhillips of any ConocoPhillips Capital Stock
(other than 11,990,000 shares of ConocoPhillips Common Stock repurchased by
ConocoPhillips during October and November of 2005);
(iii) prior to the date of this Agreement, any split, combination
or reclassification of any ConocoPhillips Capital Stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of ConocoPhillips Capital Stock;
(iv) prior to the date of this Agreement, (A) any granting by
ConocoPhillips to any director or executive officer of ConocoPhillips of any
increase in compensation, except in the ordinary course of business consistent
with prior practice or as was required under employment agreements included in
the ConocoPhillips SEC Documents, (B) any granting by ConocoPhillips to any such
director or executive officer of any increase in severance or termination pay,
except as was required under any employment, severance or termination agreements
included in the ConocoPhillips SEC Documents, or (C) any entry by ConocoPhillips
into, or any amendment of, any employment, severance or termination agreement
with any such director or executive officer; or
(v) prior to the date of this Agreement, any change in financial
accounting methods, principles or practices by ConocoPhillips or any of its
Subsidiaries materially affecting the consolidated assets, liabilities or
results of operations of ConocoPhillips, except insofar as may have been
required by a change in GAAP.
-33-
(h) LEGAL PROCEEDINGS. There is no suit, action or proceeding or
investigation pending or, to the knowledge of ConocoPhillips, threatened,
against or affecting ConocoPhillips or any of its Subsidiaries that would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on ConocoPhillips, nor is there any judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding against
ConocoPhillips or its Subsidiaries having, or which would reasonably be expected
to have, any such effect.
(i) COMPLIANCE WITH APPLICABLE LAW. ConocoPhillips and each of its
Subsidiaries hold all licenses, franchises, permits and authorizations necessary
for the lawful conduct of their respective businesses under and pursuant to
each, and have complied in all respects with and are not in default in any
material respect under any, applicable law, statute, order, rule, regulation,
policy and/or guideline of any Governmental Entity relating to ConocoPhillips or
any of its Subsidiaries, except where the failure to hold such license,
franchise, permit or authorization or such noncompliance or default would not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on ConocoPhillips.
(j) ENVIRONMENTAL LIABILITY. Except for matters that individually or
in the aggregate, would not have a Material Adverse Effect on ConocoPhillips,
(i) ConocoPhillips and each of its Subsidiaries are and have been in compliance
with all applicable Environmental Laws and have obtained or applied for all
Environmental Permits necessary for their operations as currently conducted;
(ii) there have been no Releases of any Hazardous Materials that could be
reasonably likely to form the basis of any Environmental Claim against
ConocoPhillips or any of its Subsidiaries; (iii) there are no Environmental
Claims pending or, to the knowledge of ConocoPhillips, threatened against
ConocoPhillips or any of its Subsidiaries; (iv) none of ConocoPhillips and its
Subsidiaries is subject to any agreement, order, judgment, decree, letter or
memorandum by or with any Governmental Entity or third party imposing any
liability or obligation under any Environmental Law; and (v) none of
ConocoPhillips and its Subsidiaries has retained or assumed, either
contractually or by operation of law, any liability or obligation that could
reasonably be expected to have formed the basis of any Environmental Claim
against ConocoPhillips or any of its Subsidiaries.
(k) TAXES. Each of ConocoPhillips and its Subsidiaries has duly and
timely filed all Tax Returns required to be filed by it, and all such Tax
Returns are true, complete and accurate in all respects, except to the extent
that any failure to have filed or any inaccuracies in such Tax Returns would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on ConocoPhillips. ConocoPhillips and each of its Subsidiaries
has paid all Taxes required to be paid by it, and has paid all Taxes that it was
required to withhold from amounts owing to any employee, creditor or third
party, except to the extent that any failure to pay such Taxes would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on ConocoPhillips.
(l) CONTRACTS.
-34-
(i) As of the date of this Agreement, neither ConocoPhillips nor
any of its Subsidiaries is a party to or bound by any contract, arrangement,
commitment or understanding (whether written or oral) (A) which is a "material
contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the
SEC) to be performed after the date of this Agreement that has not been filed or
incorporated by reference in the ConocoPhillips SEC Documents, or (B) which
materially restricts the ability of ConocoPhillips or the Surviving Corporation
to engage in any line of business. Each contract, arrangement, commitment or
understanding of the type described in clause (A) of this Section 4.2(l),
whether or not set forth in the ConocoPhillips Disclosure Schedule or in the
Burlington SEC Documents, is referred to herein as a "CONOCOPHILLIPS CONTRACT"
(for purposes of clarification, each "material contract" (as such term is
defined in Item 601(b)(10) of Regulation S-K of the SEC) to be performed after
the date of this Agreement, whether or not filed with the SEC, is a
ConocoPhillips Contract).
(ii) (A) Each ConocoPhillips Contract is valid and binding on
ConocoPhillips and any of its Subsidiaries that is a party thereto, as
applicable, and in full force and effect (subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law)), (B)
ConocoPhillips and each of its Subsidiaries has in all material respects
performed all obligations required to be performed by it to date under each
ConocoPhillips Contract, except where such noncompliance, either individually or
in the aggregate, would not reasonably be expected to have a Material Adverse
Effect on ConocoPhillips, and (C) neither ConocoPhillips nor any of its
Subsidiaries knows of, or has received notice of, the existence of any event or
condition which constitutes, or, after notice or lapse of time or both, will
constitute, a material default on the part of ConocoPhillips or any of its
Subsidiaries under any such ConocoPhillips Contract, except where such default,
either individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on ConocoPhillips.
(m) REORGANIZATION UNDER THE CODE. As of the date of this Agreement,
neither ConocoPhillips nor any of its Subsidiaries has taken or agreed to take
any action or knows of any fact that is reasonably likely to prevent or impede
(i) the Merger from qualifying as a "reorganization" within the meaning of
Section 368(a) of the Code, or (ii) the ability of counsel to render the
opinions described in Sections 7.2(c) and 7.3(c) of this Agreement.
(n) FORM S-4; PROXY STATEMENT/PROSPECTUS. None of the information to
be supplied by ConocoPhillips or its Subsidiaries in the Form S-4 or the Proxy
Statement/ Prospectus will, at the time of the mailing of the Proxy
Statement/Prospectus and any amendments or supplements thereto, and at the time
of the Burlington 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 the light of the
circumstances under which they are made, not misleading. The Proxy
Statement/Prospectus will comply, as of its mailing date, as to form in all
material respects with all applicable law, including the provisions of the
Securities Act and the Exchange Act, except that no
-35-
representation is made by ConocoPhillips with respect to information supplied by
Burlington for inclusion therein.
(o) STATE TAKEOVER LAWS; RIGHTS PLAN. The Board of Directors of
ConocoPhillips has approved this Agreement and the transactions contemplated by
this Agreement as required under any applicable state takeover laws so that any
such state takeover laws will not apply to this Agreement or any of the
transactions contemplated hereby. ConocoPhillips has taken all action, if any,
necessary or appropriate so that the entering into of this Agreement, and the
consummation of the transactions contemplated hereby, do not and will not result
in the ability of any person to exercise any ConocoPhillips Rights under the
ConocoPhillips Rights Agreement or enable or require the ConocoPhillips Rights
to separate from the shares of ConocoPhillips Common Stock to which they are
attached or to be triggered or become exercisable. No "Distribution Date" or
"Shares Acquisition Date" (as such terms are defined in the ConocoPhillips
Rights Agreement) has occurred.
(p) OPINION OF FINANCIAL ADVISORS. ConocoPhillips has received the
opinions of Xxxxxxx, Xxxxx & Co. and Citigroup Global Markets Inc., dated the
date hereof, to the effect that the Merger Consideration is fair to
ConocoPhillips from a financial point of view.
(q) BOARD APPROVAL. The Board of Directors of ConocoPhillips, at a
meeting duly called and held, has by unanimous vote of those directors present
(i) determined that this Agreement and the transactions contemplated hereby are
advisable and in the best interests of ConocoPhillips stockholders and (ii)
approved this Agreement.
(r) BROKERS' FEES. Neither ConocoPhillips nor any of its Subsidiaries
nor any of their respective officers or directors has employed any broker or
finder or incurred any liability for any brokers' fees, commissions or finders'
fees in connection with the transactions contemplated by this Agreement,
excluding fees to be paid to Xxxxxxx, Xxxxx & Co. and Citigroup Global Markets
Inc.
(s) OWNERSHIP OF BURLINGTON CAPITAL STOCK. As of the date of this
Agreement, ConocoPhillips and Merger Sub do not beneficially own any shares of
Burlington Capital Stock.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 COVENANTS OF BURLINGTON. During the period from the date of this
Agreement and continuing until the Effective Time, Burlington agrees as to
itself and its Subsidiaries that (except (i) as expressly contemplated or
permitted by this Agreement or disclosed in the Burlington Disclosure Schedule
and (ii) for transactions between and among Burlington and its wholly owned
Subsidiaries), without the prior written consent of ConocoPhillips, which shall
not be unreasonably withheld or delayed:
-36-
(a) ORDINARY COURSE. (i) Burlington and its Subsidiaries shall carry
on their respective businesses in the usual, regular and ordinary course in all
material respects, in substantially the same manner as heretofore conducted, and
shall use their reasonable best efforts to keep available the services of their
respective present officers and key employees, preserve intact their present
lines of business, maintain their rights and franchises and preserve their
relationships with customers, suppliers and others having business dealings with
them to the end that their ongoing businesses shall not be impaired in any
material respect at the Effective Time.
(ii) Burlington shall not, and shall not permit any of its
Subsidiaries to, (A) enter into any new material line of business or (B) incur
or commit to any capital expenditures or any obligations or liabilities in
connection therewith other than capital expenditures and obligations or
liabilities in connection therewith incurred or committed to in the ordinary
course of business or contemplated by the 2005 and 2006 capital budgets of
Burlington and previously disclosed to ConocoPhillips and, with respect to the
period commencing January 1, 2007, a capital budget for the first six months of
2007 of $2.5 billion (the "BURLINGTON CAPITAL BUDGETS").
(b) DIVIDENDS; CHANGES IN SHARE CAPITAL. Burlington shall not, and
shall not permit any of its Subsidiaries to, and shall not propose to, (i)
declare or pay any dividends on or make other distributions in respect of any of
its capital stock, except (A) the declaration and payment of regular quarterly
cash dividends not in excess of $0.10 per share of Burlington Common Stock with
usual record and payment dates for such dividends in accordance with past
dividend practice and (B) the declaration and payment of regular dividends from
a Subsidiary of Burlington to Burlington or to another Subsidiary of Burlington
in accordance with past dividend practice, (ii) split, combine or reclassify any
of its capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for, shares of its
capital stock or (iii) repurchase, redeem or otherwise acquire any shares of its
capital stock or any securities convertible into or exercisable for any shares
of its capital stock, except for the purchase from time to time by Burlington of
Burlington Common Stock in connection with the Burlington Benefit Plans in the
ordinary course of business.
(c) ISSUANCE OF SECURITIES. Burlington shall not, and shall not permit
any of its Subsidiaries to, issue, deliver, sell, pledge or dispose of, or
authorize or propose the issuance, delivery, sale, pledge or disposition of, any
shares of its capital stock of any class, any Voting Debt or any securities
convertible into or exercisable for, or any rights, warrants, calls or options
to acquire, any such shares or Voting Debt, or enter into any commitment,
arrangement, undertaking or agreement with respect to any of the foregoing,
other than (i) the issuance of (x) Burlington Common Stock upon the exercise of
Burlington Stock Options existing as of the date hereof or permitted to be
granted after the date hereof and in accordance with their terms or (y)
restricted Burlington Common Stock permitted to be granted after the date
hereof, (ii) issuances, sales or deliveries by a wholly owned Subsidiary of
Burlington of capital stock to such Subsidiary's parent or another wholly owned
Subsidiary of Burlington, (iii) pursuant to acquisitions and investments as
disclosed in Section 5.1(e) or 5.1(g) of the Burlington Disclosure Schedule or
the financings therefor, (iv) sales or dispositions of capital stock of a
Subsidiary of
-37-
Burlington in connection with a disposition permitted pursuant to Section 5.1(f)
or (v) issuances or deliveries of capital stock of Subsidiaries of Burlington in
the ordinary course of business in connection with joint venture agreements
existing as of the date hereof.
(d) GOVERNING DOCUMENTS. Except to the extent required to comply with
its obligations hereunder or with applicable law, Burlington shall not amend or
propose to so amend its Certificate of Incorporation or By-Laws.
(e) NO ACQUISITIONS. Other than acquisitions in the ordinary course of
business that do not present a material risk of making it materially more
difficult to obtain any approval or authorization required in connection with
the Merger under Regulatory Law and that could not reasonably be expected to
prevent or materially delay or impede the consummation of the transactions
contemplated by this Agreement, Burlington shall not, and shall not permit any
of its Subsidiaries to, acquire or agree to acquire by merger or consolidation,
or by purchasing a substantial equity interest in or a substantial 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 assets, PROVIDED, HOWEVER, that any
such acquisitions permitted by this Section 5.1(e) shall be made only to the
extent contemplated by the Burlington Capital Budgets.
(f) NO DISPOSITIONS. Other than dispositions referred to in the
Burlington SEC Documents filed prior to the date of this Agreement or as
contemplated by the Burlington Capital Budgets, Burlington shall not, and shall
not permit any of its Subsidiaries to, sell, lease or otherwise dispose of, or
agree to sell, lease or otherwise dispose of, any of its assets (including
capital stock of Subsidiaries of Burlington), other than in the ordinary course
of business and dispositions in the aggregate amount of up to $50 million per
year in fair market value.
(g) INVESTMENTS; INDEBTEDNESS. Other than as contemplated by the
Burlington Capital Budgets, Burlington shall not, and shall not permit any of
its Subsidiaries to (i) enter into any material joint venture, partnership or
other similar arrangement, (ii) make any loans, advances or capital
contributions to, or investments in, any other Person, other than (A) loans or
investments by Burlington or a Subsidiary of Burlington to or in Burlington or
any Subsidiary of Burlington, (B) in the ordinary course of business (PROVIDED
that none of such transactions referred to in this clause (B) presents a
material risk of making it more difficult to obtain any approval or
authorization required in connection with the Merger under Regulatory Law) and
(C) any capital contributions to or other obligations in respect of any joint
ventures of Burlington or any of its Subsidiaries pursuant to an agreement in
existence on or prior to the date of this Agreement, or (iii) except in the
ordinary course, incur any indebtedness for borrowed money or guarantee any such
indebtedness of another Person, issue or sell any debt securities or warrants or
other rights to acquire any debt securities of Burlington or any of its
Subsidiaries, guarantee any debt securities of another Person, enter into any
"keep well" or other agreement to maintain any financial statement condition of
another Person (other than any wholly owned Subsidiary) or enter into any
arrangement having the economic effect of any of the foregoing, other than
refinancings of pre-existing indebtedness.
-38-
(h) TAX-FREE QUALIFICATION. Burlington shall use its reasonable best
efforts to, and to cause each of its Subsidiaries to, (i) cause the Merger to
qualify as a "reorganization" within the meaning of Section 368(a) of the Code
and (ii) obtain the opinions of counsel referred to in Sections 7.2(c) and
7.3(c). Burlington shall use its reasonable best efforts not to, and shall use
its reasonable best efforts not to permit any of its Subsidiaries to, take any
action (including any action otherwise permitted by this Section 5.1) that would
prevent or impede the Merger from qualifying as a "reorganization" within the
meaning of Section 368(a) of the Code. Provided the opinion conditions contained
in Sections 7.2(c) and 7.3(c) of this Agreement have been satisfied, Burlington
shall report the Merger for U.S. federal income tax purposes as a
"reorganization" within the meaning of Section 368(a) of the Code.
(i) COMPENSATION. Except as required by applicable law or by the terms
of any collective bargaining agreement or other binding agreement currently in
effect, Burlington and its Significant Subsidiaries shall not, other than in the
ordinary course of business consistent with past practice: (A) enter into,
adopt, amend or terminate any Benefit Plan, (B) increase the compensation or
benefits payable to any current or former employee, officer, director, or
consultant of Burlington and its Subsidiaries (including any such increase
pursuant to any bonus, pension, equity compensation, profit sharing or other
plan or commitment) or pay any amounts under such arrangements or Benefit Plans
(including severance arrangements) not otherwise due, (C) grant or accelerate
the vesting of any equity-based awards for the benefit of any current or former
employee, officer, director, or consultant of Burlington and its Subsidiaries,
(D) enter into any new, or amend any existing, collective bargaining agreement
or similar agreement with respect to Burlington and its Subsidiaries or any
employees thereof, (E) make contributions to tax-qualified pension plans other
than to the extent required by law or modify the actuarial assumptions in effect
with respect to any such plan or (F) provide any funding for any rabbi trust or
similar arrangement.
(j) ACCOUNTING METHODS. Except as disclosed in Burlington SEC
Documents filed prior to the date of this Agreement, or as required by a
Governmental Entity, Burlington shall not change in any material respect its
methods of financial accounting in effect at September 30, 2005, except as
required by changes in GAAP as concurred in by Burlington's independent public
accountants. Burlington shall not make any material Tax election, except for
elections in the ordinary course of business.
(k) NON-COMPETE. Except as contemplated by Section 6.4, Burlington
shall not, and shall not permit any of its Subsidiaries to, enter into any
agreement that limits (other than in an insignificant manner) the ability of
Burlington or any of its Subsidiaries, or would limit (other than in an
insignificant manner) the ability of ConocoPhillips or any Subsidiary of
ConocoPhillips after the Effective Time, to compete in or conduct any line of
business or compete with any Person in any geographic area or during any period,
it being understood that any restriction that by its terms does not extend more
than six months beyond the Effective Time shall be deemed to be insignificant.
(l) CERTAIN ACTIONS. Subject to Sections 6.5 and 8.1, Burlington and
its Subsidiaries shall not take any action or omit to take any action for the
purpose of preventing,
-39-
delaying or impeding the consummation of the Merger or the other transactions
contemplated by this Agreement.
(m) MATERIAL CONTRACTS. Burlington shall not, and shall not permit any
of its Subsidiaries to, (i) modify, amend or terminate any Burlington Contract,
(ii) waive any material rights under any Burlington Contract or (iii) enter into
any agreement that would constitute a Burlington Contract if entered into as of
the date of this Agreement other than (with respect to clauses (i) and (iii)) in
the ordinary course of business consistent with past practice.
(n) CLAIMS; LITIGATION. Burlington shall not, and shall not permit any
of its Subsidiaries to, settle or compromise any claim, demand, lawsuit or state
or federal regulatory proceeding, whether now pending or hereafter made or
brought, or waive, release or assign any rights or claims, in any such case in
an amount in excess of $10 million, PROVIDED that ConocoPhillips will not
unreasonably withhold its consent to any such settlement or compromise.
(o) INTELLECTUAL PROPERTY. Burlington shall not, and shall not permit
any of its Subsidiaries to, take any action which would limit in any material
respect Burlington's or ConocoPhillips' freedom to license, cross-license or
otherwise dispose of any material intellectual property to which Burlington has
rights as of the date of this Agreement.
(p) AGREEMENTS WITH GOVERNMENTAL ENTITIES. Burlington shall not, nor
shall it permit its Subsidiaries to, commit any act or omission which
constitutes a material breach or default by Burlington or any of its
Subsidiaries under any agreement with any Governmental Entity or under any
material contract or material license to which any of them is a party or by
which any of them or their respective properties is bound except to the extent
required by law.
(q) EXTRAORDINARY ACTION. Burlington shall not, and shall not permit
its Subsidiaries to, adopt a plan or agreement of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other reorganization of Burlington or any of its Subsidiaries.
(r) RABBI TRUST FUNDING. Burlington shall, or shall cause its
applicable Subsidiaries to, take all actions necessary to ensure that, with
respect to any future severance obligations (contingent or otherwise), no "rabbi
trust" funding, letter of credit or similar funding arrangement has been, or
shall be, required in connection with the execution of this Agreement, the
consummation of the transactions contemplated hereby, or any other event or
action related to this Agreement, or such transactions, and any Burlington
Benefit Plans, trust agreements, or documents (including the Burlington Restated
Benefits Protection Trust) that might otherwise have required such funding shall
be amended as necessary to ensure that no such requirement shall take effect.
(s) RELATED ACTIONS. Burlington shall not, and shall not permit any of
its Subsidiaries to, agree or commit to do any of the foregoing.
-40-
5.2 COVENANTS OF CONOCOPHILLIPS. During the period from the date of
this Agreement and continuing until the Effective Time, ConocoPhillips agrees as
to itself and its Subsidiaries that (except (i) as expressly contemplated or
permitted by this Agreement or disclosed in the ConocoPhillips Disclosure
Schedule and (ii) for transactions between and among ConocoPhillips and its
wholly owned Subsidiaries), without the prior written consent of Burlington,
which shall not be unreasonably withheld or delayed:
(a) ORDINARY COURSE. ConocoPhillips and its Subsidiaries shall carry
on their respective businesses in the usual, regular and ordinary course in all
material respects, in substantially the same manner as heretofore conducted, and
shall use their reasonable best efforts to preserve intact their present lines
of business, maintain their rights and franchises and preserve their
relationships with customers, suppliers and others having business dealings with
them to the end that their ongoing businesses shall not be impaired in any
material respect at the Effective Time.
(b) DIVIDENDS; CHANGES IN SHARE CAPITAL. ConocoPhillips shall not, and
shall not permit any of its Subsidiaries to, and shall not propose to, (i)
declare or pay any dividends on or make other distributions in respect of any of
its capital stock, except (A) the declaration and payment of regular quarterly
cash dividends with usual record and payment dates for such dividends in
accordance with past dividend practice and (B) the declaration and payment of
regular dividends from a Subsidiary of ConocoPhillips to ConocoPhillips or to
another Subsidiary of ConocoPhillips in accordance with past dividend practice
or (ii) repurchase, redeem or otherwise acquire any shares of its capital stock
or any securities convertible into or exercisable for any shares of its capital
stock, except for the purchase from time to time by ConocoPhillips of
ConocoPhillips Common Stock in connection with the ConocoPhillips Benefit Plans
in the ordinary course of business or pursuant to an ordinary course stock
repurchase plan in the ordinary course.
(c) NO ACQUISITIONS. Other than acquisitions that do not present a
material risk of making it materially more difficult to obtain any approval or
authorization required in connection with the Merger under Regulatory Law and
that could not reasonably be expected to prevent or materially delay or impede
the consummation of the transactions contemplated by this Agreement,
ConocoPhillips shall not, and shall not permit any of its Subsidiaries to,
acquire or agree to acquire by merger or consolidation, or by purchasing a
substantial equity interest in or a substantial 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 assets.
(d) TAX-FREE QUALIFICATION. ConocoPhillips shall use its reasonable
best efforts to, and to cause each of its Subsidiaries to, (i) cause the Merger
to qualify as a "reorganization" within the meaning of Section 368(a) of the
Code and (ii) obtain the opinions of counsel referred to in Sections 7.2(c) and
7.3(c). ConocoPhillips shall use its reasonable best efforts not to, and shall
use its reasonable best efforts not to permit any of its Subsidiaries to, take
any action (including any action otherwise permitted by this Section 5.2) that
would prevent or impede the Merger from qualifying as a "reorganization" within
the meaning of Section 368(a)
-41-
of the Code. Provided the opinion conditions contained in Sections 7.2(c) and
7.3(c) of this Agreement have been satisfied, ConocoPhillips shall report the
Merger for U.S. federal income tax purposes as a "reorganization" within the
meaning of Section 368(a) of the Code.
(e) RELATED ACTIONS. ConocoPhillips shall not, and shall not permit
any of its Subsidiaries to, agree or commit to do any of the foregoing.
5.3 GOVERNMENTAL FILINGS. ConocoPhillips and Burlington shall (a)
confer on a reasonable basis with each other and (b) report to each other (to
the extent permitted by applicable law or regulation or any applicable
confidentiality agreement) on operational matters. ConocoPhillips and Burlington
shall file all reports required to be filed by each of them with the SEC (and
all other Governmental Entities) between the date of this Agreement and the
Effective Time and shall, if requested by the other party and (to the extent
permitted by applicable law or regulation or any applicable confidentiality
agreement) deliver to the other party copies of all such reports, announcements
and publications promptly upon request.
5.4 CONTROL OF OTHER PARTY'S BUSINESS. Nothing contained in this
Agreement shall give Burlington, directly or indirectly, the right to control or
direct ConocoPhillips' operations or give ConocoPhillips, directly or
indirectly, the right to control or direct Burlington's operations prior to the
Effective Time. Prior to the Effective Time, each of ConocoPhillips and
Burlington shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over its respective operations.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 PREPARATION OF PROXY STATEMENT; STOCKHOLDERS MEETING. (a) As
promptly as reasonably practicable following the date hereof, ConocoPhillips and
Burlington shall cooperate in preparing and shall cause to be filed with the SEC
mutually acceptable proxy materials that shall constitute the Proxy
Statement/Prospectus and ConocoPhillips and Burlington shall prepare, and
ConocoPhillips shall file with the SEC, the Form S-4. The Proxy
Statement/Prospectus will be included as a prospectus in and will constitute a
part of the Form S-4 as ConocoPhillips' prospectus. Each of ConocoPhillips and
Burlington shall use reasonable best efforts to have the Proxy
Statement/Prospectus cleared by the SEC and the Form S-4 declared effective by
the SEC and to keep the Form S-4 effective as long as is necessary to consummate
the Merger and the transactions contemplated hereby. ConocoPhillips and
Burlington shall, as promptly as practicable after receipt thereof, provide the
other parties with copies of any written comments, and advise each other of any
oral comments, with respect to the Proxy Statement/Prospectus or Form S-4
received from the SEC. ConocoPhillips and Burlington shall cooperate and provide
the other parties with a reasonable opportunity to review and comment on any
amendment or supplement to the Proxy Statement/Prospectus and the Form S-4 prior
to filing such with the SEC, and each will provide each other parties with a
copy of all such filings made with the SEC. Notwithstanding any other provision
herein to the contrary, no amendment or supplement (including by incorporation
by reference) to the Proxy
-42-
Statement/Prospectus or the Form S-4 shall be made without the approval of both
ConocoPhillips and Burlington, which approval shall not be unreasonably withheld
or delayed; PROVIDED that, with respect to documents filed by a party hereto
that are incorporated by reference in the Form S-4 or Proxy
Statement/Prospectus, this right of approval shall apply only with respect to
information relating to the other party or its business, financial condition or
results of operations; and PROVIDED, FURTHER, that Burlington, in connection
with a Change in the Burlington Recommendation, may amend or supplement the
Proxy Statement/Prospectus or Form S-4 (including by incorporation by reference)
pursuant to a Qualifying Amendment to effect such a Change in the Burlington
Recommendation, and in such event, this right of approval shall apply only with
respect to information relating to the other party or its business, financial
condition or results of operations. Burlington will use reasonable best efforts
to cause the Proxy Statement/Prospectus to be mailed to Burlington stockholders
as promptly as practicable after the Form S-4 is declared effective under the
Securities Act. ConocoPhillips and Burlington will advise the other party,
promptly after it receives notice thereof, of the time when the Form S-4 has
become effective, the issuance of any stop order, the suspension of the
qualification of the ConocoPhillips Common Stock issuable in connection with the
Merger for offering or sale in any jurisdiction, or any request by the SEC for
amendment of the Proxy Statement/Prospectus or the Form S-4. If, at any time
prior to the Effective Time, any information relating to ConocoPhillips or
Burlington, or any of their respective affiliates, officers or directors, is
discovered by ConocoPhillips or Burlington and such information should be set
forth in an amendment or supplement to any of the Form S-4 or the Proxy
Statement/Prospectus so that any of such documents would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, the party hereto discovering such information shall
promptly notify the other parties and, to the extent required by law, rules or
regulations, an appropriate amendment or supplement describing such information
shall be promptly filed with the SEC and disseminated to the stockholders of
ConocoPhillips and Burlington.
(b) Burlington shall duly take all lawful action to call, give notice
of, convene and hold the Burlington Stockholders Meeting as soon as practicable
for the purpose of obtaining the Burlington Stockholder Approval and, subject to
Section 6.5, shall take all lawful action to solicit the Burlington Stockholder
Approval. The Board of Directors of Burlington shall recommend the adoption of
the plan of merger contained in this Agreement by the Burlington stockholders to
the effect as set forth in Section 4.1(r) (the "BURLINGTON RECOMMENDATION"), and
shall not (i) withdraw, modify or qualify (or propose to withdraw, modify or
qualify) in any manner adverse to ConocoPhillips the Burlington Recommendation
or (ii) take any action or make any statement in connection with the Burlington
Stockholders Meeting inconsistent with the Burlington Recommendation
(collectively, a "CHANGE IN THE BURLINGTON RECOMMENDATION"); PROVIDED, HOWEVER,
that Burlington and the Board of Directors of Burlington may take any action
permitted under Section 6.5.
6.2 GOVERNANCE MATTERS. ConocoPhillips shall take all requisite action
to, effective as of the Effective Time, (i) cause two directors nominated by
Burlington reasonably acceptable to ConocoPhillips to be appointed to
ConocoPhillips' Board of Directors and (ii)
-43-
expand, to the extent necessary in connection with appointing such two
directors, the ConocoPhillips' Board of Directors. ConocoPhillips shall use
reasonable best efforts consistent with DGCL requirements to ensure that (x) one
such nominee is a member of the class of ConocoPhillips' Board of Directors
whose term ends at the second annual meeting of ConocoPhillips stockholders
occurring after the Closing Date and (y) the other such nominee is a member of
the class of ConocoPhillips' Board of Directors whose term ends at the third
annual meeting of ConocoPhillips stockholders occurring after Closing Date.
6.3 ACCESS TO INFORMATION. Upon reasonable notice, each of
ConocoPhillips and Burlington shall (and shall cause its Subsidiaries to) afford
to the officers, employees, accountants, counsel, financial advisors and other
representatives of the other party reasonable access during normal business
hours, during the period prior to the Effective Time, to all its properties,
books, contracts, commitments, records, officers and employees and, during such
period, each of ConocoPhillips and Burlington shall (and shall cause its
Subsidiaries to) furnish promptly to the other party (a) a copy of each report,
schedule, registration statement and other document filed, published, announced
or received by it during such period pursuant to the requirements of U.S.
federal or state securities laws or the HSR Act, as applicable (other than
documents that such party hereto is not permitted to disclose under applicable
law), and (b) all other information concerning it and its business, properties
and personnel as such other party may reasonably request; PROVIDED, HOWEVER,
that any party hereto may restrict the foregoing access to the extent that (i)
any law, treaty, rule or regulation of any Governmental Entity applicable to
such party or any contract requires such party or its Subsidiaries to restrict
or prohibit access to any such properties or information, (ii) counsel for such
party advises that such information should not be disclosed in order to ensure
compliance with the Antitrust Laws, (iii) the information is subject to the
attorney-client privilege, work product doctrine or any other applicable
privilege concerning pending or legal proceedings or government investigations,
or (iv) the information is subject to confidentiality obligations to a third
party. The parties hereto shall hold any information obtained pursuant to this
Section 6.3 in confidence in accordance with, and shall otherwise be subject to,
the provisions of the confidentiality agreement dated December 5, 2005, between
ConocoPhillips and Burlington (the "CONFIDENTIALITY AGREEMENT"), which
Confidentiality Agreement shall continue in full force and effect. Any
investigation by either ConocoPhillips or Burlington shall not affect the
representations and warranties of the other party.
6.4 REQUIRED ACTIONS. (a) Subject to the terms and conditions of this
Agreement, each party hereto will use its reasonable best efforts to take, or
cause to be taken, all actions, and do, or cause to be done, all things
necessary, proper or advisable under this Agreement and applicable laws and
regulations to consummate the Merger and the other transactions contemplated by
this Agreement as soon as practicable after the date hereof, including (i)
preparing as promptly as practicable all necessary applications, notices,
petitions, filings, ruling requests, and other documents and to obtain as
promptly as practicable all Burlington Necessary Consents or ConocoPhillips
Necessary Consents, as appropriate, and all other consents, waivers, licenses,
orders, registrations, approvals, permits, rulings, authorizations and
clearances necessary or advisable to be obtained from any third party and/or any
-44-
Governmental Entity in order to consummate the Merger or any of the other
transactions contemplated by this Agreement (collectively, the "REQUIRED
APPROVALS") and (ii) taking all reasonable steps as may be necessary to obtain
all such Necessary Consents and the Required Approvals. In furtherance and not
in limitation of the foregoing, each of ConocoPhillips and Burlington agrees to
prepare, as promptly as practicable, and to make (A) an appropriate filing of a
Notification and Report Form pursuant to the HSR Act with respect to the
transactions contemplated hereby (within thirty (30) Business Days), (B)
appropriate filings with the European Commission, if required, in accordance
with applicable Regulatory Laws at such time as ConocoPhillips reasonably
determines in its judgment will permit the consummation of the transactions
contemplated hereby in a timely basis, and (C) all other necessary filings with
other Governmental Entities relating to the Merger at such time as
ConocoPhillips reasonably determines in its judgment will permit the
consummation of the transactions contemplated hereby in a timely basis, and, to
prepare to supply as promptly as practicable any additional information or
documentation that may be requested pursuant to such laws or by such
Governmental Entities, and to supply such additional information and
documentation at such time as ConocoPhillips reasonably determines in its
judgment will permit the consummation of the transactions contemplated hereby in
a timely basis and to use reasonable best efforts to cause the expiration or
termination of the applicable waiting periods under the HSR Act and the receipt
of Required Approvals under such other laws or from such authorities as soon as
practicable. In furtherance and not in limitation of the foregoing, Burlington
agrees not to extend any waiting period under the HSR Act or enter into any
agreement with the FTC or the DOJ not to consummate the transactions
contemplated by this Agreement, except with the prior written consent of
ConocoPhillips.
(b) The parties shall each cooperate and consult with each other in
connection with the actions referenced in Section 6.4(a) to obtain all Required
Approvals. In particular, Burlington shall (i) furnish as promptly as reasonably
practicable to ConocoPhillips any information concerning Burlington and its
business, properties and personnel as ConocoPhillips may reasonably request, in
connection with any filing or submission and in connection with any
investigation or other inquiry, including any proceeding initiated by a private
party, and (ii) permit ConocoPhillips to review in advance, and accept all of
ConocoPhillips' reasonable comments in connection with, any proposed written
communication between it and any Governmental Entity. In addition, each party
shall (i) promptly inform the other party of (and supply to the other party) any
communication (or other correspondence or memoranda) received by such party
from, or given by such party to, the DOJ, the FTC or any other Governmental
Entity and of any material communication received or given in connection with
any proceeding by a private party, in each case regarding any of the
transactions contemplated hereby, and (ii) consult with the other party in
advance, to the extent practicable and not prohibited by law, of any meeting or
conference with the DOJ, the FTC or any other Governmental Entity or, in
connection with any proceeding by a private party, with any other Person, and to
the extent permitted by the DOJ, the FTC or such other applicable Governmental
Entity or other Person, give the other party the opportunity to attend and
participate in such meetings and conferences. In furtherance and not in
limitation of the foregoing, Burlington agrees that notwithstanding anything to
the contrary in this Agreement, ConocoPhillips will take the lead in all
meetings and
-45-
communications with any Governmental Entity in connection with any Antitrust
Laws, including by determining the appropriate timing of any such meeting or
communication (including (x) the timing of the submission of any filing with, or
response to any request by, a Governmental Entity, and (y) the timing of any
action taken pursuant to 6.4(c)) such that the requisite approvals are obtained
prior to the Termination Date.
(c) In furtherance and not in limitation of the covenants of the
parties contained in Sections 6.4(a) and 6.4(b) but subject to Section 6.4(b),
Burlington and ConocoPhillips, as applicable, shall take all actions necessary
to:
(i) avoid the entry of, or to have vacated or terminated, any
decree, order, or judgment that would restrain, prevent or delay the Closing, on
or before the Termination Date, including without limitation defending through
litigation on the merits any claim asserted in any court by any Person; and
(ii) avoid or eliminate each and every impediment under any
Regulatory Law so as to enable the Closing to occur as soon as reasonably
possible (and in any event no later than the Termination Date), including,
without limitation, (x) proposing, negotiating, committing to and effecting, by
consent decree, hold separate order, or otherwise, the sale, divestiture or
disposition of such businesses, product lines or assets of ConocoPhillips,
Burlington and their respective Subsidiaries and (y) otherwise taking or
committing to take actions that after the Closing Date would limit
ConocoPhillips or its Subsidiaries' freedom of action with respect to, or its or
their ability to retain, one or more of the businesses, product lines or assets
of ConocoPhillips, Burlington and their respective Subsidiaries, in each case as
may be required in order to avoid the entry of, or to effect the dissolution of,
any injunction, temporary restraining order, or other order in any suit or
proceeding, which would otherwise have the effect of preventing or materially
delaying the Closing. ConocoPhillips and, if requested by ConocoPhillips,
Burlington shall agree to divest, sell, dispose of, hold separate, or otherwise
take or commit to take any action that limits its freedom of action with respect
to, or ConocoPhillips or ConocoPhillips' Subsidiaries' ability to retain, any of
the businesses, product lines or assets of ConocoPhillips, Burlington or any of
their respective Subsidiaries, provided that any such action is conditioned upon
the consummation of the Merger. Burlington agrees and acknowledges that,
notwithstanding anything to the contrary in this Section 6.4, in connection with
any filing or submission required, action to be taken or commitment to be made
by ConocoPhillips, Burlington or any of their respective Subsidiaries to
consummate the Merger or other transactions contemplated by this Agreement,
neither Burlington nor any of Burlington's Subsidiaries shall, without
ConocoPhillips' prior written consent, sell, divest, or dispose of any assets,
commit to any sale, divestiture or disposal of businesses, product lines or
assets of Burlington and Burlington's Subsidiaries or take any other action or
commit to take any action that would limit Burlington's, ConocoPhillips' or any
of their respective Subsidiaries' freedom of action with respect to, or their
ability to retain any of, their businesses, product lines or assets; provided
that the foregoing shall not relieve any party of its obligations under this
Agreement.
(d) Each party hereto and its respective Board of Directors shall, if
any state takeover statute or similar statute becomes applicable to this
Agreement, the Merger or any other
-46-
transactions contemplated hereby, take all action reasonably necessary to ensure
that the Merger and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated hereby and
otherwise to minimize the effect of such statute or regulation on this
Agreement, the Merger and the other transactions contemplated hereby.
6.5 ACQUISITION PROPOSALS. (a) Burlington agrees that neither it nor
any of its Subsidiaries nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall use its reasonable best efforts to cause
its and such Subsidiaries' employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, (i) initiate, solicit, encourage
or knowingly facilitate any inquiries or the making of any proposal or offer
with respect to, or a transaction to effect, a merger, reorganization, share
exchange, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving it, or any purchase or sale of 20%
or more of the consolidated assets (including stock of its Subsidiaries) of it
and its Subsidiaries, taken as a whole, or any purchase or sale of, or tender or
exchange offer for, its equity securities that, if consummated, would result in
any Person (or the stockholders of such Person) beneficially owning securities
representing 20% or more of its total voting power (or of the surviving parent
entity in such transaction) (any such proposal, offer or transaction (other than
a proposal or offer made by the other party or an affiliate thereof) or
announcement of an intention to make any such proposal, offer or transaction, an
"ACQUISITION PROPOSAL"), (ii) have any discussion with or provide any
confidential information or data to any Person relating to an Acquisition
Proposal, or engage in any negotiations concerning an Acquisition Proposal, or
knowingly facilitate any effort or attempt to make or implement an Acquisition
Proposal, (iii) approve or recommend, or propose publicly to approve or
recommend, any Acquisition Proposal or (iv) approve or recommend, or propose to
approve or recommend, or execute or enter into, any letter of intent, agreement
in principle, merger agreement, acquisition agreement, option agreement or other
similar agreement or propose publicly or agree to do any of the foregoing
related to any Acquisition Proposal.
(b) Notwithstanding anything in this Agreement to the contrary,
Burlington (and its Board of Directors) shall be permitted to (i) comply with
applicable law (including Rule 14d-9 and Rule 14e-2 or make any other disclosure
required by law or its fiduciary duties (subject, however to clause (B), (C) and
(E) of this Section 6.5(b)), (ii) effect a Change in the Burlington
Recommendation, or (iii) engage in discussions or negotiations with, or provide
any information to, any Person in response to an unsolicited bona fide written
Acquisition Proposal by any such Person, if and only to the extent that, in any
such case referred to in clause (ii) or (iii) above, (A) the vote at the
Burlington Stockholders Meeting on the adoption of this Agreement shall not have
been taken, (B) (I) in the case of clause (ii) above, Burlington has received an
unsolicited bona fide written Acquisition Proposal from a third party and its
Board of Directors concludes in good faith that such Acquisition Proposal
constitutes a Superior Proposal and (II) in the case of clause (iii) above,
Burlington's Board of Directors concludes in good faith that there is a
reasonable likelihood that such Acquisition Proposal would lead to a Superior
Proposal, (C) prior to providing any information or data to any Person in
connection with an
-47-
Acquisition Proposal by any such Person, Burlington's Board of Directors
receives from such Person an executed confidentiality agreement having
provisions that are at least as restrictive as the Confidentiality Agreement,
(D) prior to providing any information or data to any Person or entering into
discussions or negotiations with any Person, Burlington notifies ConocoPhillips
promptly of such inquiries, proposals or offers received by, any such
information requested from, or any such discussions or negotiations sought to be
initiated or continued with, any of Burlington's representatives indicating, in
connection with such notice, the name of such Person and the material terms and
conditions of any inquiries, proposals or offers and (E) in the case of clause
(ii) above, Burlington has given ConocoPhillips at least three Business Days
after delivery of such notice to propose revisions to the terms of this
Agreement (or to make another proposal) in response to such Acquisition Proposal
and has negotiated in good faith with ConocoPhillips with respect to such
proposed revisions or other proposal, if any. Burlington agrees that it will
promptly keep ConocoPhillips reasonably informed of the status and terms of any
inquiries, proposals or offers and the status and terms of any discussions or
negotiations, including the identity of the Person making such inquiry, proposal
or offer. Burlington agrees that it will, and will cause its officers, directors
and representatives to, immediately cease and cause to be terminated any
activities, discussions or negotiations existing as of the date of this
Agreement with any Person (other than ConocoPhillips) conducted heretofore with
respect to any Acquisition Proposal. Burlington agrees that it will use
reasonable best efforts to promptly inform its directors, officers, key
employees, agents and representatives of the obligations undertaken in this
Section 6.5. Nothing in this Section 6.5 shall (x) permit Burlington to
terminate this Agreement (except as specifically provided in paragraph (c) of
this Section 6.5 or Article VIII) or (y) affect or limit any other obligation of
Burlington under this Agreement).
(c) Notwithstanding anything in this Section 6.5 to the contrary, if,
at any time prior to the Burlington Stockholder Approval, the Board of Directors
of Burlington determines in good faith, after consultation with its financial
advisors and outside legal counsel, in response to an Acquisition Proposal that
was unsolicited and that did not otherwise result from a breach of this Section
6.5, that such proposal is a Superior Proposal, Burlington may terminate this
Agreement; PROVIDED, HOWEVER, that Burlington shall not terminate this Agreement
pursuant to this sentence, and any purported termination pursuant to this
sentence shall be void and of no force or effect, unless Burlington prior to or
concurrently with such termination pursuant to this Section 6.5(c) pays to
ConocoPhillips the fee payable pursuant to Section 8.2(b); PROVIDED, FURTHER,
HOWEVER, that Burlington shall not exercise its right to terminate this
Agreement pursuant to this Section 6.5(c) unless Burlington notifies
ConocoPhillips that Burlington intends to take such action with respect to an
Acquisition Proposal indicating, in connection with such notice, the name of the
Person making such Acquisition Proposal and the material terms and conditions of
such Acquisition Proposal and Burlington has given ConocoPhillips at least three
Business Days after delivery of such notice to propose revisions to the terms of
this Agreement (or to make another proposal) in response to such Acquisition
Proposal.
6.6 FEES AND EXPENSES. Subject to Section 8.2, whether or not the
Merger is consummated, all Expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party hereto
incurring such Expenses, except (i)
-48-
Expenses incurred in connection with the filing, printing and mailing of the
Proxy Statement/Prospectus and Form S-4 and (ii) Expenses incurred in connection
with any consultants that ConocoPhillips and Burlington shall have agreed to
retain to assist in obtaining the approvals and clearances under the Antitrust
Laws, which, in each case, shall be shared equally by ConocoPhillips and
Burlington. The parties hereto shall cooperate with each other in preparing,
executing and filing any Tax Returns relating to transfer or similar Taxes.
6.7 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE. (a)
Following the Effective Time, ConocoPhillips and the Surviving Corporation shall
(i) jointly and severally indemnify and hold harmless, and provide advancement
of Expenses to, all past and present directors, officers and employees of
Burlington and its Subsidiaries (in all of their capacities) (A) without
limitation to subclause (B) below, to the same extent such individuals are
indemnified or have the right to advancement of Expenses as of the date of this
Agreement by Burlington pursuant to its Certificate of Incorporation and By-Laws
of Burlington and indemnification agreements, if any, in existence on the date
hereof with, or for the benefit of, any such individuals and (B) without
limitation to subclause (A) above, to the fullest extent permitted by law, in
each case for acts or omissions occurring at or prior to the Effective Time
(including for acts or omissions occurring in connection with the approval of
this Agreement and the consummation of the transactions contemplated hereby) and
(ii) include and cause to be maintained in effect in the Certificate of
Incorporation and By-Laws of the Surviving Corporation (or any successor to the
Surviving Corporation) for a period of six years after the Effective Time,
provisions regarding elimination of liability of directors, indemnification of
officers, directors and employees and advancement of Expenses that are no less
advantageous to the intended beneficiaries than the corresponding provisions
contained in the current Certificate of Incorporation and By-Laws of Burlington.
Prior to the Effective Time, Burlington shall endeavor to (and if it is unable
to, ConocoPhillips shall cause the Surviving Corporation to after the Effective
Time) obtain and fully pay (up to a maximum cost of 300% of the current annual
premium paid by Burlington for its existing coverage in the aggregate) for
"tail" insurance policies (providing only for the Side A coverage for such
covered individuals where the existing policies also include coverage for
Burlington) with a claims period of at least six years from the Effective Time
from an insurance carrier with the same or better credit rating as Burlington's
current insurance carrier with respect to directors' and officers' liability
insurance in an amount and scope at least as favorable as Burlington's existing
policies with respect to matters existing or occurring at or prior to the
Effective Time.
(b) The obligations of ConocoPhillips and the Surviving Corporation
under this Section 6.7 shall not be terminated or modified in such a manner as
to adversely affect any indemnitee to whom this Section 6.7 applies without the
consent of such affected indemnitee (it being expressly agreed that the
indemnitees to whom this Section 6.7 applies shall be third-party beneficiaries
of this Section 6.7).
6.8 EMPLOYEE BENEFITS. (a) ConocoPhillips agrees that, from and after
the Effective Time, ConocoPhillips and its Subsidiaries shall assume and honor
all Burlington Benefit Plans in accordance with their terms as in effect
immediately before the Effective Time,
-49-
subject to any permitted amendment or termination thereof. Burlington and
ConocoPhillips hereby agree that the consummation of the Merger shall constitute
a "CHANGE IN CONTROL" for purposes of all Burlington Benefit Plans, pursuant to
the terms of such plans in effect on the date hereof. No provision of this
Section 6.8(a) shall be construed as a limitation on the right of ConocoPhillips
to amend or terminate any Burlington Benefit Plan which Burlington would
otherwise have under the terms of such Burlington Benefit Plan, and no provision
of this Section 6.8(a) shall be construed to create a right in any employee or
beneficiary of such employee under a Burlington Benefit Plan that such employee
or beneficiary would not otherwise have under the terms of such plan; PROVIDED,
HOWEVER, that ConocoPhillips agrees that it will respect deferrals of salary,
bonus or other compensation in place prior to the Effective Time pursuant to the
Burlington Benefit Plans.
(b) For at least 18 months following the Effective Time,
ConocoPhillips shall provide, or cause to be provided, to individuals who are
employed by Burlington or any of its Subsidiaries immediately prior to the
Effective Time (other than any such employees whose terms of employment are
governed by a collective bargaining agreement) who remain employed with
ConocoPhillips or any Subsidiary of ConocoPhillips (the "BURLINGTON EMPLOYEES"),
for so long as such Burlington Employees remain so employed, compensation (it
being understood that discretionary incentive and equity-based awards will
remain discretionary) and employee benefits (i) pursuant to Burlington's or
Burlington's Subsidiaries' compensation and employee benefit plans, programs,
policies and arrangements as provided to such employees immediately prior to the
Effective Time or (ii) pursuant to compensation and employee benefit plans,
programs, policies or arrangements maintained by ConocoPhillips or any
Subsidiary of ConocoPhillips providing coverage and benefits, which, in the
aggregate, are no less favorable than those provided pursuant to Burlington's
and Burlington's Subsidiaries' plans, programs, policies and arrangements to
such employees immediately prior to the Effective Time.
(c) For all purposes under the employee benefit plans of
ConocoPhillips and its Subsidiaries providing benefits to any Burlington
Employees after the Effective Time (the "NEW PLANS"), ConocoPhillips will, or
will cause its Subsidiaries to, give Burlington Employees full credit with his
or her years of service for purposes of eligibility, vesting and benefit accrual
(excluding benefit accrual under any defined benefit pension plans) under any
employee benefit plans or arrangements maintained by ConocoPhillips or any of
its Subsidiaries for such Burlington employee's service with Burlington or any
Burlington Subsidiary to the same extent recognized by Burlington immediately
prior to the Effective Time. In addition, and without limiting the generality of
the foregoing: (i) each Burlington Employee shall be immediately eligible to
participate, without any waiting time, in any and all New Plans to the extent
coverage under such New Plan replaces coverage under a Burlington Benefit Plan
in which such Burlington Employee participated immediately before the Effective
Time (such plans, collectively, the "OLD PLANS"); and (ii) for purposes of each
New Plan providing medical, dental, pharmaceutical and/or vision benefits to any
Burlington Employee, ConocoPhillips shall cause all pre-existing condition
exclusions and actively-at-work requirements of such New Plan to be waived for
such employee and his or her covered dependents, and ConocoPhillips shall cause
any eligible expenses incurred by such employee and his or her covered
dependents during the
-50-
portion of the plan year of the Old Plan ending on the date such employee's
participation in the corresponding New Plan begins to be taken into account
under such New Plan for purposes of satisfying all deductible, coinsurance and
maximum out-of-pocket requirements applicable to such employee and his or her
covered dependents for the applicable plan year as if such amounts had been paid
in accordance with such New Plan.
(d) Without limiting the generality of this Section 6.8,
ConocoPhillips and Burlington agree to the employee matters set forth in Section
6.8(d) of the Burlington Disclosure Schedule.
6.9 PUBLIC ANNOUNCEMENTS. ConocoPhillips and Burlington shall, unless
otherwise required by applicable law or by obligations pursuant to any listing
agreement with or rules of any securities exchange, consult with the other party
before issuing, and provide the other party the opportunity to review and
comment upon, any press release or, to the extent practical, otherwise making
any public statement with respect to this Agreement or the transactions
contemplated hereby. In addition to the foregoing, except as required by
applicable law and to the extent disclosed in or consistent with the Proxy
Statement/Prospectus in accordance with the provisions of Section 6.1, neither
ConocoPhillips nor Burlington shall issue any press release or otherwise make
any public statement or disclosure concerning the other party or the other
party's business, financial condition or results of operations without the
consent of the other party, which consent shall not be unreasonably withheld or
delayed.
6.10 LISTING OF SHARES OF CONOCOPHILLIPS COMMON STOCK. ConocoPhillips
shall cause the shares of ConocoPhillips Common Stock to be issued in the Merger
and the shares of ConocoPhillips Common Stock to be reserved for issuance upon
exercise of the Burlington Stock Options, to be approved for listing on the
NYSE, subject to official notice of issuance, prior to the Closing Date.
6.11 RIGHTS AGREEMENT. The Board of Directors of ConocoPhillips shall
take all action to the extent necessary (including amending the ConocoPhillips
Rights Agreement) in order to render the ConocoPhillips Rights inapplicable to
the Merger and the other transactions contemplated by this Agreement. The Board
of Directors of Burlington shall take all action to the extent necessary
(including amending the Burlington Rights Agreement) in order to render the
Burlington Rights inapplicable to the Merger and the other transactions
contemplated by this Agreement.
6.12 AFFILIATES. Promptly following the date of mailing of Proxy
Statement/Prospectus, Burlington shall deliver to ConocoPhillips a letter
identifying all Persons who, in the judgment of Burlington, may be deemed at the
time this Agreement is submitted for Burlington Stockholders Approval,
"affiliates" of Burlington for purposes of Rule 145 under the Securities Act and
applicable SEC rules and regulations, and such list shall be updated as
necessary to reflect changes from the date thereof. Burlington shall use
reasonable best efforts to cause each Person identified on such list to deliver
to ConocoPhillips not later than ten days prior to the Effective Time, a written
agreement in the form attached as Exhibit A hereto (an "AFFILIATE AGREEMENT").
-51-
6.13 SECTION 16 MATTERS. Prior to the Effective Time, ConocoPhillips
and Burlington shall take all such steps as may be required to cause any
dispositions of Burlington Common Stock (including derivative securities with
respect to Burlington Common Stock) or acquisitions of ConocoPhillips Common
Stock (including derivative securities with respect to ConocoPhillips Common
Stock) resulting from the transactions contemplated by Article II or Article III
by each individual who is subject to the reporting requirements of Section 16(a)
of the Exchange Act with respect to Burlington or will become subject to such
reporting requirements with respect to ConocoPhillips, to be exempt under Rule
16b-3 promulgated under the Exchange Act.
6.14 DIVIDENDS. After the date of this Agreement, each of
ConocoPhillips and Burlington shall coordinate with the other the declaration of
any dividends in respect of ConocoPhillips Common Stock and Burlington Common
Stock and the record dates and payment dates relating thereto, it being the
intention of the parties hereto that holders of Burlington Common Stock shall
not receive two dividends, or fail to receive one dividend, for any quarter,
including the quarter in which the Effective Time occurs, with respect to their
shares of Burlington Common Stock and shares of ConocoPhillips Common Stock any
such holder receives in exchange therefor in the Merger.
6.15 TAX REPRESENTATION LETTERS. ConocoPhillips shall use its
reasonable best efforts to deliver to Wachtell, Lipton, Xxxxx & Xxxx and White &
Case LLP a "Tax Representation Letter," dated as of the Closing Date and signed
by an officer of ConocoPhillips, containing representations of ConocoPhillips,
and Burlington shall use its reasonable best efforts to deliver to Wachtell,
Lipton, Xxxxx & Xxxx and White & Case LLP a "Tax Representation Letter," dated
as of the Closing Date and signed by an officer of Burlington, containing
representations of Burlington, in each case as shall be reasonably necessary or
appropriate to enable Wachtell, Lipton, Xxxxx & Xxxx to render the opinion
described in Section 7.2(c) of this Agreement and White & Case LLP to render the
opinion described in Section 7.3(c) of this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
obligations of each of ConocoPhillips and Burlington to effect the Merger are
subject to the satisfaction or waiver in writing on or prior to the Closing Date
of the following conditions:
(a) STOCKHOLDER APPROVAL. Burlington shall have obtained the
Burlington Stockholder Approval.
(b) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No law shall have been
adopted or promulgated, and no temporary restraining order, preliminary or
permanent injunction or other order issued by a court or other Governmental
Entity of competent jurisdiction shall be in effect,
-52-
having the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger.
(c) HSR ACT; OTHER APPROVALS. (i) The waiting period (and any
extension thereof) applicable to the Merger under the HSR Act shall have been
terminated or shall have expired, (ii) all required approvals in connection with
the EC Merger Regulation and the Canadian Investment Regulations (other than
approvals under the Canadian Investment Regulations which by their terms cannot
be satisfied until after the Closing) shall have been obtained and (iii) all
other approvals required under the Antitrust Laws to be obtained prior to
Closing shall have been obtained, except where the failure to obtain such
approvals would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Burlington.
(d) NYSE LISTING. The shares of ConocoPhillips Common Stock to be
issued in the Merger and such other shares of ConocoPhillips Common Stock to be
reserved for issuance in connection with the Merger shall have been approved for
listing on the NYSE, subject to official notice of issuance.
(e) EFFECTIVENESS OF THE FORM S-4. The Form S-4 shall have been
declared effective by the SEC under the Securities Act and no stop order
suspending the effectiveness of the Form S-4 shall have been issued by the SEC
and no proceedings for that purpose shall have been initiated or threatened by
the SEC.
7.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF CONOCOPHILLIPS. The
obligations of ConocoPhillips to effect the Merger are subject to the
satisfaction, or waiver in writing by ConocoPhillips, on or prior to the Closing
Date, of the following additional conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Burlington set forth in this Agreement shall be true and correct (without
giving effect to any limitation on any representation or warranty qualified as
to materiality or Material Adverse Effect) as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date (except to
the extent expressly made as of an earlier date, in which case as of such
earlier date), except where the failure of such representations and warranties
to be so true and correct (without giving effect to any limitation on any
representation or warranty qualified as to materiality or Material Adverse
Effect) would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Burlington. In addition, the representations
and warranties set forth in (i) Section 4.1(b) shall be true and correct in all
material respects as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, and (ii) Section 4.1(g)(i) shall be
true and correct in all respects as of the date of this Agreement and as of the
Closing Date, as though made on and as of the Closing Date. ConocoPhillips shall
have received a certificate of an executive officer of Burlington that the
conditions set forth in this Section 7.2(a) have been satisfied.
(b) PERFORMANCE OF OBLIGATIONS OF BURLINGTON. Burlington shall have
performed or complied with all agreements and covenants required to be performed
by it under
-53-
this Agreement at or prior to the Closing Date that are qualified as to
materiality or Material Adverse Effect and shall have performed or complied in
all material respects with all other material agreements and covenants required
to be performed by it under this Agreement at or prior to the Closing Date that
are not so qualified; and ConocoPhillips shall have received a certificate of an
executive officer of Burlington to such effect.
(c) TAX OPINION. ConocoPhillips shall have received from Wachtell,
Lipton, Xxxxx & Xxxx, counsel to ConocoPhillips, a written opinion dated the
Closing Date to the effect that for U.S. federal income tax purposes the Merger
will constitute a "reorganization" within the meaning of Section 368(a) of the
Code. In rendering such opinion, counsel to ConocoPhillips shall be entitled to
rely upon assumptions, representations, warranties and covenants, including
those contained in this Agreement and in the Tax Representation Letters
described in Section 6.15 of this Agreement.
7.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF BURLINGTON. The
obligations of Burlington to effect the Merger are subject to the satisfaction,
or waiver in writing by Burlington, on or prior to the Closing Date, of the
following additional conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of ConocoPhillips set forth in this Agreement shall be true and correct (without
giving effect to any limitation on any representation or warranty qualified as
to materiality or Material Adverse Effect) as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date (except to
the extent expressly made as of an earlier date, in which case as of such
earlier date), except where the failure of such representations and warranties
to be so true and correct (without giving effect to any limitation on any
representation or warranty qualified as to materiality or Material Adverse
Effect) would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on ConocoPhillips. In addition, the
representations and warranties set forth in (i) Section 4.2(b) shall be true and
correct in all material respects as of the Closing Date, as though made as of
the date of this Agreement and on and as of the Closing Date, and (ii) Section
4.2(g)(i) shall be true and correct in all respects as of the date of this
Agreement and as of the Closing Date, as though made on and as of the Closing
Date. Burlington shall have received a certificate of an executive officer of
ConocoPhillips that the conditions set forth in this Section 7.3(a) have been
satisfied.
(b) PERFORMANCE OF OBLIGATIONS OF CONOCOPHILLIPS. ConocoPhillips shall
have performed or complied with all agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date that are
qualified as to materiality or Material Adverse Effect and shall have performed
or complied in all material respects with all other material agreements and
covenants required to be performed by it under this Agreement at or prior to the
Closing Date that are not so qualified; and Burlington shall have received a
certificate of an executive officer of ConocoPhillips to such effect.
(c) TAX OPINION. Burlington shall have received from White & Case LLP,
counsel to Burlington, a written opinion dated the Closing Date to the effect
that for U.S. federal income tax purposes the Merger will constitute a
"reorganization" within the meaning of Section
54
368(a) of the Code. In rendering such opinion, counsel to Burlington shall be
entitled to rely upon assumptions, representations, warranties and covenants,
including those contained in this Agreement and in the Tax Representation
Letters described in Section 6.15 of this Agreement.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time and, except as specifically provided below, whether before or
after the Burlington Stockholders Meeting:
(a) by mutual written consent of ConocoPhillips and Burlington;
(b) by either ConocoPhillips or Burlington, if the Effective Time
shall not have occurred on or before the date 18 months from the date of this
Agreement (the "TERMINATION DATE"); PROVIDED, HOWEVER, that the right to
terminate this Agreement under this Section 8.1(b) shall not be available to any
party whose failure to fulfill any obligation under this Agreement (including
such party's obligations set forth in Section 6.4) has been the primary cause
of, or resulted in, the failure of the Effective Time to occur on or before the
Termination Date;
(c) by either ConocoPhillips or Burlington, if any Governmental Entity
(i) shall have issued an order, decree or ruling or taken any other action
(which the parties hereto shall have used all required efforts to resist,
resolve or lift, as applicable, in accordance with Section 6.4) permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, and such order, decree, ruling or other action shall have become
final and nonappealable or (ii) shall have failed to issue an order, decree or
ruling or to take any other action that is necessary to fulfill the conditions
set forth in Sections 7.1(c), 7.1(d) or 7.1(e), as applicable, and such denial
of a request to issue such order, decree, ruling or the failure to take such
other action shall have become final and nonappealable (which order, decree,
ruling or other action the parties hereto shall have used all required efforts
to obtain, in accordance with Section 6.4); PROVIDED, HOWEVER, that the right to
terminate this Agreement under this Section 8.1(c) shall not be available to any
party hereto whose failure to comply with Section 6.4 has been the primary cause
of, or resulted in, such action or inaction;
(d) by either ConocoPhillips or Burlington, if the Burlington
Stockholder Approval has not been obtained by reason of the failure to obtain
the required vote at the Burlington Stockholders Meeting;
(e) by ConocoPhillips, if Burlington shall have (i) failed to make the
Burlington Recommendation or effected a Change in the Burlington Recommendation,
whether or not permitted by the terms hereof, (ii) materially breached its
obligations under this Agreement by reason of a failure to call the Burlington
Stockholders Meeting or a failure to
-55-
comply with requirements with respect to the Proxy Statement/Prospectus in
accordance with Section 6.1 or (iii) materially breached its obligations under
Section 6.5;
(f) by ConocoPhillips, if Burlington shall have breached or failed to
perform any of its representations, warranties, covenants or other agreements
contained in this Agreement, such that the conditions set forth in Section
7.2(a) or 7.2(b) are not capable of being satisfied and which shall not have
been cured prior to the earlier of (i) thirty days following notice of such
breach and (ii) the Termination Date; provided, that ConocoPhillips shall not
have the right to terminate this Agreement pursuant to this clause (f) if
ConocoPhillips or Merger Sub is then in material breach of its representations,
warranties, covenants or other agreements contained in this Agreement;
(g) by Burlington, if ConocoPhillips shall have breached or failed to
perform any of its representations, warranties, covenants or other agreements
contained in this Agreement, such that the conditions set forth in Section
7.3(a) or 7.3(b) are not capable of being satisfied and which shall not have
been cured prior to the earlier of (i) thirty days following notice of such
breach and (ii) the Termination Date; provided, that Burlington shall not have
the right to terminate this Agreement pursuant to this clause (g) if Burlington
is then in material breach of its representations, warranties, covenants or
other agreements contained in this Agreement; or
(h) by Burlington, prior to the Burlington Stockholder Approval being
obtained, in accordance with and subject to the terms and conditions of Section
6.5(c).
8.2 EFFECT OF TERMINATION. (a) In the event of termination of this
Agreement by either Burlington or ConocoPhillips as provided in Section 8.1,
this Agreement shall forthwith become void and there shall be no liability or
obligation on the part of any party hereto or their respective officers or
directors, except with respect to Section 4.1(s), Section 4.2(s), the second
sentence of Section 6.3, Section 6.6, this Section 8.2 and Article IX, which
provisions shall survive such termination; PROVIDED that, notwithstanding
anything to the contrary contained in this Agreement, neither ConocoPhillips nor
Burlington shall be relieved or released from any liabilities or damages arising
out of its breach of this Agreement.
(b) (i) If Burlington terminates this Agreement pursuant to Section
8.1(h), then Burlington shall pay ConocoPhillips an amount equal to the
Termination Fee, by wire transfer of immediately available funds, prior to or
concurrently with such termination.
(ii) If (A)(x) either Burlington or ConocoPhillips terminates this
Agreement pursuant to Section 8.1(d) and at any time prior to the Burlington
Stockholders Meeting an Acquisition Proposal with respect to Burlington shall
have been publicly announced or otherwise communicated to the stockholders of
Burlington, which proposal shall not have been withdrawn prior to the Burlington
Stockholders Meeting, (y) ConocoPhillips terminates this Agreement pursuant to
Section 8.1(e) or (z) ConocoPhillips terminates this Agreement pursuant to
Section 8.1(f) and at any time prior to such termination an Acquisition Proposal
with respect to Burlington shall have been announced or otherwise communicated
to the senior management,
-56-
Board of Directors or stockholders of Burlington, which proposal shall not have
been withdrawn prior to such termination and (B) within twelve months of the
termination of this Agreement, Burlington or any of its Subsidiaries enters into
a definitive agreement with respect to, or consummates, an Acquisition Proposal
(except that for the purposes of this Section 8.2 the references in the
definition of "Acquisition Proposal" to "20%" shall be "50%") with any Person
(or an affiliate thereof), then Burlington shall promptly, but in no event later
than one Business Day after the date Burlington or its Subsidiary enters into
such agreement with respect to, or consummates, such Acquisition Proposal, pay
ConocoPhillips an amount equal to the Termination Fee, by wire transfer of
immediately available funds.
(c) The parties hereto acknowledge that the agreements contained in
this Section 8.2 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, neither ConocoPhillips or
Burlington would enter into this Agreement; accordingly, if any party fails
promptly to pay any amount due pursuant to this Section 8.2, and, in order to
obtain such payment, the other party commences a suit that results in a judgment
against such party for the fee set forth in this Section 8.2, such party shall
pay to the other party its costs and Expenses (including attorneys' fees and
Expenses) in connection with such suit, together with interest on the amount of
the fee at the prime rate of Citibank, N.A. in effect on the date such payment
was required to be made, notwithstanding the provisions of Section 6.6. The
parties hereto agree that any remedy or amount payable pursuant to this Section
8.2 shall not preclude any other remedy or amount payable hereunder, and shall
not be an exclusive remedy, for any willful and material breach of any
representation, warranty, covenant or agreement contained in this Agreement.
8.3 AMENDMENT. This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors, at any time
before or after the Burlington Stockholder Approval, but, after any such
approval, no amendment shall be made which by law or in accordance with the
rules of any relevant stock exchange requires further approval by such
stockholders without such further approval. This Agreement may not be amended,
except by an instrument in writing signed on behalf of each of the parties
hereto.
8.4 EXTENSION; WAIVER. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions 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 a written instrument signed on behalf of such party hereto. The
failure of any party hereto to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
-57-
ARTICLE IX
GENERAL PROVISIONS
9.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. None
of the representations, warranties, covenants and other agreements in this
Agreement or in any instrument delivered pursuant to this Agreement, including
any rights arising out of any breach of such representations, warranties,
covenants, agreements and other provisions, shall survive the Effective Time,
except for those covenants, agreements and other provisions contained herein
that by their terms apply or are to be performed in whole or in part after the
Effective Time and this Article IX (including without limitation Section 6.7).
9.2 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed duly given when received. All notices hereunder
shall be delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the party to receive such notice:
(i) if to ConocoPhillips:
000 Xxxxx Xxxxx Xxxxxxx Xxxx
XX 0000
Xxxxxxx, Xxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
(ii) if to Burlington to:
Burlington Resources Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxx XX
with a copy to:
-00-
Xxxxx, Xxxxx, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: 212-859-4000
Attention: Xxxxxx Xxxxxxxxx, Esq.
Xxxxxx X. xx Xxxx, Esq.
9.3 INTERPRETATION. (a) When a reference is made in this Agreement to
Articles, Sections, Exhibits or Schedules, such reference shall be to an Article
or Section of or Exhibit or Schedule to this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". The words "hereby," "herein," "hereof" or
"hereunder," and similar terms are to be deemed to refer to this Agreement as a
whole and not to any specific section. In addition, each Section of this
Agreement is qualified by the matters set forth in the related Section of the
ConocoPhillips Disclosure Schedule and the Burlington Disclosure Schedule, as
the case may be, and by such matters set forth any place else in this Agreement
or in the ConocoPhillips Disclosure Schedule or the Burlington Disclosure
Schedule where the applicability of such qualification to the Section of this
Agreement is reasonably apparent.
(b) The parties have participated jointly in negotiating and drafting
this Agreement. In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.
9.4 COUNTERPARTS. This Agreement may be executed by facsimile and 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 parties, it being
understood that all parties hereto need not sign the same counterpart.
9.5 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. (a) This
Agreement, the Confidentiality Agreement and the Exhibits and disclosure
schedules and the other agreements and instruments of the parties hereto
delivered in connection herewith constitute the entire agreement and supersede
all prior agreements and understandings, both written and oral, among the
parties hereto with respect to the subject matter hereof.
(b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement, other than
Section 6.7 (which is intended to be for the benefit of the Persons covered
thereby).
-59-
9.6 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware (without giving effect to
choice of law principles thereof).
9.7 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party hereto. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties hereto as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
9.8 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise), without
the prior written consent of the other parties hereto, and any attempt to make
any such assignment without such consent shall be null and void. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
assigns.
9.9 SUBMISSION TO JURISDICTION; WAIVERS. Each of ConocoPhillips and
Burlington irrevocably agrees that any legal action or proceeding with respect
to this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns shall be
brought and determined exclusively in the Court of Chancery or other courts of
the State of Delaware, and each of ConocoPhillips and Burlington hereby
irrevocably submits with regard to any such action or proceeding for itself and
in respect to its property, generally and unconditionally, to the exclusive
jurisdiction of the aforesaid courts (and, to the fullest extent permitted by
law, to the Court of Chancery) and to accept service of process in any manner
permitted by such courts. Each of ConocoPhillips and Burlington hereby
irrevocably waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding with respect to this
Agreement, (a) any claim that it is not personally subject to the jurisdiction
of the above-named courts for any reason other than the failure to lawfully
serve process, (b) that it or its property is exempt or immune from jurisdiction
of any such court or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise), (c) to the fullest
extent permitted by applicable law, that (i) the suit, action or proceeding in
any such court is brought in an inconvenient forum, (ii) the venue of such suit,
action or proceeding is improper and (iii) this Agreement, or the subject matter
hereof, may not be enforced in or by such courts and (d) any right to a trial by
jury.
9.10 ENFORCEMENT. 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. It is accordingly agreed that
the parties hereto shall be entitled to
-60-
specific performance of the terms hereof, this being in addition to any other
remedy to which they are entitled at law or in equity.
-61-
IN WITNESS WHEREOF, ConocoPhillips, Cello Acquisition Corp. and
Burlington Resources Inc. have caused this Agreement to be signed by their
respective officers thereunto duly authorized, all as of the date first written
above.
CONOCOPHILLIPS
By: /s/ X. X. Xxxxx
---------------------------------------
Name: X. X. Xxxxx
Title: Chairman of the Board and Chief
Executive Officer
CELLO ACQUISITION CORP.
By: /s/ X. X. Xxxxx
---------------------------------------
Name: X. X. Xxxxx
Title: Chairman of the Board
BURLINGTON RESOURCES INC.
By: /s/ Xxxxx X. Shakouls
---------------------------------------
Name: Xxxxx X. Shakouls
Title: Chairman of the Board, President
and Chief Executive Officer
-Signature Page-
