Exhibit 3
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
among
LEUCADIA NATIONAL CORPORATION,
MARIGOLD ACQUISITION CORP.
and
MK RESOURCES COMPANY
Dated as of May 2, 2005
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NY2:\1527357\06\WQ$L06!.DOC\76830.0273
TABLE OF CONTENTS
PAGE
ARTICLE I The Merger........................................................................2
Section 1.1. The Merger...............................................................2
Section 1.2. Closing..................................................................2
Section 1.3. Effective Time...........................................................3
Section 1.4. Effects of the Merger....................................................3
Section 1.5. Certificate of Incorporation and By-laws of the
Surviving Corporation....................................................3
Section 1.6. Directors and Officers of the Surviving Corporation......................3
ARTICLE II Effect of the Merger on the Capital Stock of the Company and
Merger Sub; Exchange of Certificates..............................................3
Section 2.1. Effect on Capital Stock..................................................3
Section 2.2. Exchange of Certificates.................................................4
Section 2.3. Appraisal Rights.........................................................8
Section 2.4. Adjustments..............................................................8
ARTICLE III Representations and Warranties of the Company.....................................9
Section 3.1. Organization, Standing and Corporate Power...............................9
Section 3.2. Capitalization..........................................................10
Section 3.3. Authority; Noncontravention; Voting Requirements........................11
Section 3.4. Governmental Approvals..................................................12
Section 3.5. Company SEC Documents; Undisclosed Liabilities..........................12
Section 3.6. Absence of Certain Changes or Events....................................13
Section 3.7. Information Supplied....................................................13
Section 3.8. Tax Matters.............................................................14
Section 3.9. Opinions of Financial Advisors..........................................16
Section 3.10. Brokers and Other Advisors..............................................16
Section 3.11. State Takeover Statutes.................................................16
Section 3.12. Share Purchase Agreement................................................16
ARTICLE IV Representations and Warranties of Parent and Merger Sub..........................17
Section 4.1. Organization............................................................17
Section 4.2. Authority...............................................................17
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 4.3. Consents and Approvals; No Violations...................................18
Section 4.4. Information Supplied....................................................18
Section 4.5. Capitalization..........................................................19
Section 4.6. Parent Common Stock.....................................................19
Section 4.7. SEC Documents; Undisclosed Liabilities..................................19
Section 4.8. Absence of Certain Changes or Events....................................20
Section 4.9. Ownership and Operations of Merger Sub..................................20
Section 4.10. Finders or Brokers......................................................20
Section 4.11. Share Purchase Agreement................................................20
ARTICLE V Additional Covenants and Agreements..............................................21
Section 5.1. Preparation of the Form S-4 and the Proxy Statement;
Stockholder Meetings....................................................21
Section 5.2. Conduct of Business.....................................................22
Section 5.3. No Solicitation by the Company; Etc.....................................24
Section 5.4. Reasonable Best Efforts.................................................26
Section 5.5. Public Announcements....................................................27
Section 5.6. Access to Information...................................................27
Section 5.7. Notification of Certain Matters.........................................28
Section 5.8. Indemnification and Insurance...........................................28
Section 5.9. Securityholder Litigation...............................................29
Section 5.10. Fees and Expenses.......................................................29
Section 5.11. Affiliates..............................................................29
Section 5.12. Rule 16b-3..............................................................29
ARTICLE VI Conditions Precedent.............................................................29
Section 6.1. Conditions to Each Party's Obligation to Effect the Merger..............29
Section 6.2. Conditions to Obligations of Parent and Merger Sub......................30
Section 6.3. Conditions to Obligation of the Company.................................30
Section 6.4. Frustration of Closing Conditions.......................................31
ARTICLE VII Termination......................................................................31
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 7.1. Termination.............................................................31
Section 7.2. Effect of Termination...................................................32
Section 7.3. Termination Fee.........................................................32
ARTICLE VIII Miscellaneous....................................................................33
Section 8.1. No Survival, Etc........................................................33
Section 8.2. Amendment or Supplement.................................................33
Section 8.3. Extension of Time, Waiver, Etc..........................................34
Section 8.4. Assignment..............................................................34
Section 8.5. Counterparts............................................................34
Section 8.6. Entire Agreement; No Third-Party Beneficiaries..........................34
Section 8.7. Governing Law; Jurisdiction; Waiver of Jury Trial.......................34
Section 8.8. Specific Enforcement....................................................35
Section 8.9. Notices.................................................................35
Section 8.10. Severability............................................................36
Section 8.11. Definitions.............................................................36
Section 8.12. Interpretation..........................................................38
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of May 2, 2005 (this
"AGREEMENT"), among LEUCADIA NATIONAL CORPORATION, a New York corporation
("PARENT"), MARIGOLD ACQUISITION CORP., a Delaware corporation and wholly owned
Subsidiary of Parent ("MERGER SUB"), and MK RESOURCES COMPANY, a Delaware
corporation (the "COMPANY"). Certain terms used in this Agreement are used as
defined in Section 8.11.
WHEREAS, the respective Boards of Directors of the Company and Merger
Sub have approved and declared advisable, and the Board of Directors of Parent
has approved, this Agreement and the merger of Merger Sub with and into the
Company (the "MERGER"), on the terms and subject to the conditions provided for
in this Agreement; and
WHEREAS, as a condition to, and simultaneously with, the execution of
this Agreement, the Company, Parent and Inmet Mining Corporation ("INMET") are
entering into a Share Purchase Agreement (the "SHARE PURCHASE AGREEMENT", and
the transactions contemplated thereby, the "INMET SHARE PURCHASE") pursuant to
which the Company has agreed, among other things, to sell 70% of the issued and
outstanding capital stock of MK Gold Exploration B.V., a private company with
limited liability under the laws of the Netherlands, or 70% of the equity
interests of such other entity mutually acceptable to the Company, Parent and
Inmet owning, directly or indirectly, 100% of the Material Company Subsidiaries
(as defined below) (such capital stock or equity interests, the "PURCHASED
SHARES"), and Inmet has agreed, among other things, to purchase the Purchased
Shares for the aggregate consideration of 5,600,000 Inmet common shares (subject
to adjustment as provided in the Share Purchase Agreement).
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, and intending to be
legally bound hereby, Parent, Merger Sub and the Company hereby agree as
follows:
ARTICLE I
The Merger
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SECTION 1.1. The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the General Corporation Law
of the State of Delaware (the "DGCL"), at the Effective Time Merger Sub shall be
merged with and into the Company, and the separate corporate existence of Merger
Sub shall thereupon cease, and the Company shall be the surviving corporation in
the Merger (the "SURVIVING CORPORATION").
SECTION 1.2. Closing. The closing of the Merger (the "CLOSING") shall
take place at 10:00 a.m. (New York City time) on a date to be specified by the
parties (the "CLOSING DATE"), which date shall be no later than the second
business day after satisfaction or waiver of the conditions set forth in Article
VI (other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the satisfaction or waiver of those conditions at such
time), at the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, unless another time, date or place is agreed to in writing by
the parties hereto.
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SECTION 1.3. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date the parties shall file
with the Secretary of State of the State of Delaware a certificate of merger,
executed in accordance with the relevant provisions of the DGCL (the
"CERTIFICATE OF MERGER"). The Merger shall become effective upon the filing of
the Certificate of Merger or at such later time as is agreed to by the parties
hereto and specified in the Certificate of Merger (the time at which the Merger
becomes effective is herein referred to as the "EFFECTIVE TIME").
SECTION 1.4. Effects of the Merger. The Merger shall have the effects
set forth in the DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the properties, rights, privileges,
powers and franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger Sub
shall become the debts, liabilities and duties of the Surviving Corporation.
SECTION 1.5. Certificate of Incorporation and By-laws of the
Surviving Corporation. At the Effective Time, (a) 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 amended as provided therein or by applicable Law, and (b) 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 amended as
provided therein or by applicable Law.
SECTION 1.6. Directors and Officers of the Surviving Corporation.
Each of the parties hereto shall take all necessary action to cause the
directors and officers of Merger Sub immediately prior to the Effective Time to
be the directors and officers, respectively, of the Surviving Corporation
immediately following the Effective Time, until their respective successors are
duly elected or appointed and qualified or their earlier death, resignation or
removal in accordance with the certificate of incorporation and by-laws of the
Surviving Corporation.
ARTICLE II
Effect of the Merger on the Capital Stock of the
------------------------------------------------
Company and Merger Sub; Exchange of Certificates
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SECTION 2.1. Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of common stock, par value $0.01 per share, of the Company ("COMPANY
COMMON STOCK") or the holder of any shares of capital stock of Merger Sub:
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(a) Capital Stock of Merger Sub. Each issued and outstanding share of
capital stock of Merger Sub shall be converted into and become one validly
issued, fully paid and nonassessable share of common stock, par value $0.01 per
share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Any shares
of Company Common Stock that are owned by the Company as treasury stock, and any
shares of Company Common Stock that are owned by Parent or Merger Sub, shall be
automatically canceled and shall cease to exist and no consideration shall be
delivered in exchange therefor.
(c) Conversion of Company Common Stock. Subject to Section 2.2(e),
each issued and outstanding share of Company Common Stock (other than shares to
be canceled in accordance with Section 2.1(b)) shall be converted into the right
to receive 0.0317 (the "EXCHANGE RATIO") of a validly issued, fully paid and
nonassessable common share, par value $1.00 per share, of Parent ("PARENT
COMPANY STOCK") (the "MERGER CONSIDERATION"). As of the Effective Time, all such
shares of Company Common Stock shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and each holder of a
certificate, which immediately prior to the Effective Time represented any such
shares of Company Common Stock (each, a "CERTIFICATE"), shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration, any dividends or other distributions to which such holder is
entitled pursuant to Section 2.2(c) and cash in lieu of any fractional shares of
Parent Common Stock to which such holder is entitled pursuant to Section 2.2(e),
in each case to be issued or paid in consideration therefor upon surrender of
such Certificate in accordance with Section 2.2(b), without interest.
SECTION 2.2. Exchange of Certificates.
(a) Exchange Agent. On or promptly following the Closing Date, Parent
shall deposit with American Stock Transfer & Trust Company or such bank or trust
company as may be designated by Parent (the "EXCHANGE AGENT"), for exchange in
accordance with this Article II, through the Exchange Agent, certificates
representing the shares of Parent Common Stock issuable pursuant to Section 2.1
in exchange for outstanding shares of Company Common Stock (such shares of
Parent Common Stock, together with any dividends or other distributions with
respect thereto with a record date after the Effective Time and any cash
payments in lieu of any fractional shares of Parent Common Stock, being
hereinafter referred to as the "EXCHANGE FUND").
(b) Exchange Procedures. Promptly after the Effective Time, Parent
shall cause the Exchange Agent to mail to each holder of record of a Certificate
whose shares of Company Common Stock were converted pursuant to Section 2.1(c)
into the right to receive the Merger Consideration, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the holder's Certificate(s) shall pass, only upon delivery of the
Certificate(s) to the Exchange Agent, and which shall be in such form and shall
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have such other provisions as Parent may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificate(s) in
exchange for certificates representing the Merger Consideration, any dividends
or other distributions to which holders of Certificate(s) are entitled pursuant
to Section 2.2(c) and cash in lieu of any fractional shares of Parent Common
Stock to which such holders are entitled pursuant to Section 2.2(e). Upon
surrender of a Certificate for cancellation to the Exchange Agent, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions (and such other customary documents as may reasonably be
required by the Exchange Agent), the holder of such Certificate(s) shall be
entitled to receive in exchange therefor (A) a certificate representing that
number of whole shares of Parent Common Stock that such holder has the right to
receive pursuant to the provisions of this Article II after taking into account
all the shares of Company Common Stock then held by such holder under all such
Certificate(s) so surrendered, (B) any dividends or other distributions to which
such holder is entitled pursuant to Section 2.2(c) and (C) cash in lieu of any
fractional shares of Parent Common Stock to which such holder is entitled
pursuant to Section 2.2(e), and the Certificate(s) so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of shares of
Company Common Stock that is not registered in the transfer records of the
Company, a certificate representing the proper number of shares of Parent Common
Stock may be issued to a Person other than the Person in whose name the
Certificate so surrendered is registered, if, upon presentation to the Exchange
Agent, such Certificate is properly endorsed or is otherwise in proper form for
transfer and the Person requesting such issuance shall have paid any transfer
and other Taxes required by reason of the issuance of shares of Parent Common
Stock to a Person other than the registered holder of such Certificate or shall
have established to the reasonable satisfaction of the Surviving Corporation
that such Tax either has been paid or is not applicable. Until surrendered as
contemplated by this Section 2.2(b), each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive the Merger
Consideration, any dividends or other distributions to which the holder of such
Certificate is entitled pursuant to Section 2.2(c) and cash in lieu of any
fractional shares of Parent Common Stock to which such holder is entitled
pursuant to Section 2.2(e), in each case, without interest.
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions with respect to Parent Common Stock with a record date after
the Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the shares of Parent Common Stock that the holder thereof has
the right to receive upon the surrender of such Certificate, and no cash payment
in lieu of any fractional shares of Parent Common Stock shall be paid to any
such holder pursuant to Section 2.2(e), in each case until the holder of such
Certificate shall surrender such Certificate in accordance with this Article II.
Following surrender of any Certificate in accordance with this Article II, there
shall be paid to the record holder thereof, without interest, (i) promptly
following the time of such surrender, the amount of cash payable in lieu of any
fractional shares of Parent Common Stock to which such holder is entitled
pursuant to Section 2.2(e) and the amount of dividends or other distributions,
payable with respect to that number of whole shares of Parent Common Stock
issuable in exchange for such Certificate pursuant to this Article II, with a
record date after the Effective Time and paid with respect to Parent Common
Stock prior to such surrender, and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time but prior to such surrender and a payment date subsequent to such
surrender payable with respect to such whole shares of Parent Common Stock.
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(d) Transfer Books; No Further Ownership Rights in Company Stock. All
shares of Parent Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms of this Article II (including any
dividends or other distributions paid pursuant to Section 2.2(c) and cash paid
in lieu of any fractional shares pursuant to Section 2.2(e)) shall be deemed to
have been issued (and paid) in full satisfaction of all rights pertaining to the
shares of Company Common Stock previously represented by such Certificates, and
at the close of business on the day on which the Effective Time occurs, the
stock transfer books of the Company shall be closed and thereafter there shall
be no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. From and after the
Effective Time, the holders of Certificates that evidenced ownership of shares
of Company Common Stock outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to such shares, except as otherwise
provided for herein or by applicable law. Subject to the last sentence of
Section 2.2(g), if, at any time after the Effective Time, Certificates are
presented to the Surviving Corporation or the Exchange Agent for any reason,
they shall be canceled and exchanged as provided in this Article II.
(e) No Fractional Shares. No certificates or scrip representing
fractional shares of Parent Common Stock shall be issued upon the surrender for
exchange of Certificates, no dividends or other distributions of Parent shall
relate to such fractional share interests and such fractional share interests
will not entitle the owner thereof to vote or to any rights of a stockholder of
Parent. In lieu thereof, each former holder of shares of Company Common Stock
who would otherwise have been entitled to such a fractional share interest
(after aggregating all fractional shares of Parent Common Stock that otherwise
would have been received by such holder) will be entitled to receive an amount
in cash (without interest) equal to such holder's proportionate interest in the
net proceeds from the sale or sales in the open market by the Exchange Agent, on
behalf of such holders, of the aggregated fractional shares of Parent Common
Stock issued pursuant to this Section 2.2(e). Promptly following the Effective
Time, (i) the Exchange Agent shall determine the total amount of the fractional
shares of Parent Common Stock to which all such former Company stockholders
would otherwise be entitled, and aggregate the same into whole shares of Parent
Common Stock (rounded up to the nearest whole share), (ii) Parent shall issue
such whole shares of Parent Common Stock to the Exchange Agent, as agent for
such former stockholders, and (iii) the Exchange Agent shall sell such shares of
Parent Common Stock at the then prevailing prices on the New York Stock Exchange
through one or more member firms of the New York Stock Exchange (which sales
shall be executed in round lots to the extent practicable). Until the net
proceeds of such sales have been distributed to such former stockholders, the
Exchange Agent will hold such proceeds in trust for such holders. Promptly after
the determination of the amount of cash to be paid to such former stockholders
in lieu of any fractional interests in Parent Common Stock, the Exchange Agent
shall pay such amounts to such former stockholders (subject to any required
withholding of Taxes).
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(f) Lost, Stolen or Destroyed 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 be lost, stolen or destroyed
and, if reasonably required by Parent, the posting by such Person of a bond, in
such reasonable amount as Parent may direct, as indemnity against any claim that
may be made against it with respect to such Certificate, the Exchange Agent will
issue, in exchange for such lost, stolen or destroyed Certificate, the Merger
Consideration, any dividends or other distributions to which the holder of such
Certificate would be entitled pursuant to Section 2.2(c) and cash in lieu of any
fractional shares of Parent Common Stock to which such holder would be entitled
pursuant to Section 2.2(e), in each case pursuant to this Agreement.
(g) Termination of Fund. Any portion of the Exchange Fund that
remains undistributed to the holders of the Certificates for ninety (90) days
after the Effective Time shall be delivered to Parent, upon demand, and any
holders of Certificates who have not theretofore complied with this Article II
shall thereafter look only to Parent for payment of their claim for the Merger
Consideration, any dividends or other distributions with respect to shares of
Parent Common Stock and cash in lieu of any fractional shares of Parent Common
Stock in accordance with this Article II. If any Certificate shall not have been
surrendered immediately prior to such date on which any Merger Consideration
(and all dividends or other distributions payable pursuant to Section 2.2(c) and
all cash payable in lieu of fractional shares pursuant to Section 2.2(e)) would
otherwise escheat to or become property of any Governmental Authority, any such
Merger Consideration (and all dividends or other distributions payable pursuant
to Section 2.2(c) and all cash payable in lieu of fractional shares pursuant to
Section 2.2(e)) shall become, to the extent permitted by applicable Law, the
property of Parent, free and clear of all claims or interest of any Person
previously entitled thereto.
(h) No Liability. Notwithstanding any provision of this Agreement to
the contrary, none of the parties hereto, the Surviving Corporation or the
Exchange Agent shall be liable to any Person in respect of any shares of Parent
Common Stock (or dividends or other distributions with respect thereto) or cash
in lieu of any fractional shares of Parent Common Stock or cash from the
Exchange Fund, in each case delivered to a public official pursuant to any
applicable abandoned property, escheat or similar Law.
(i) Investment of Exchange Fund. The Exchange Agent shall invest any
cash included in the Exchange Fund, as directed by Parent. Any interest and
other income resulting from such investments shall be the property of, and shall
be paid to, Parent.
(j) Withholding Taxes. Parent and the Exchange Agent shall be
entitled to deduct and withhold from the consideration otherwise payable to a
holder of shares of Company Common Stock pursuant to this Agreement such amounts
as may be required to be deducted and withheld with respect to the making of
such payment under the Code, or under any provision of state, local or foreign
Tax Law. To the extent amounts are so withheld and paid over to the appropriate
taxing authority, Parent and the Exchange Agent shall be treated as though they
withheld from the type of consideration from which withholding is required, an
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appropriate amount otherwise payable pursuant to this Agreement to any holder of
shares of Company Common Stock in order to provide for such withholding
obligation and such withheld amounts shall be treated for the purposes of this
Agreement as having been paid to the former holder of the shares of Company
Common Stock. If withholding is required from shares of Parent Common Stock,
Parent and the Exchange Agent shall be treated as having sold such consideration
for an amount of cash equal to the fair market value of such consideration at
the time of such deemed sale and paid such cash proceeds to the appropriate
taxing authority.
SECTION 2.3. Appraisal Rights. Notwithstanding anything in this
Agreement to the contrary, shares of Company Common Stock that are issued and
outstanding immediately prior to the Effective Time and which are held by a
stockholder who did not vote in favor of the Merger (or consent thereto in
writing) and who is entitled to demand and properly demands appraisal of such
shares pursuant to, and who complies in all respects with, the provisions of
Section 262 of the DGCL (the "DISSENTING STOCKHOLDERS"), shall not be converted
into or be exchangeable for the right to receive the Merger Consideration (the
"DISSENTING SHARES"), but instead such holder shall be entitled to payment of
the fair value of such shares in accordance with the provisions of Section 262
of the DGCL (and at the Effective Time, such Dissenting Shares shall no longer
be outstanding and shall automatically be canceled and shall cease to exist, and
such holder shall cease to have any rights with respect thereto, except the
right to receive the fair value of such Dissenting Shares in accordance with the
provisions of Section 262 of the DGCL), unless and until such holder shall have
failed to perfect or shall have effectively withdrawn or lost the right to
appraisal under the DGCL. If any Dissenting Stockholder shall have failed to
perfect or shall have effectively withdrawn or lost such right, such holder's
shares of Company Common Stock shall thereupon be treated as if they had been
converted into and become exchangeable for the right to receive, as of the
Effective Time, the Merger Consideration for each such share of Company Common
Stock, in accordance with Section 2.1, without any interest thereon. The Company
shall give Parent (i) prompt notice of any written demands for appraisal of any
shares of Company Common Stock, attempted withdrawals of such demands and any
other instruments served pursuant to the DGCL and received by the Company
relating to stockholders' rights of appraisal, and (ii) the opportunity to
participate in all negotiations and proceedings with respect to demands for
appraisal under the DGCL. The Company shall not, except with the prior written
consent of Parent, voluntarily make any payment with respect to, or settle, or
offer or agree to settle, any such demand for payment. Any portion of the Merger
Consideration made available to the Exchange Agent pursuant to Section 2.2 to
pay for shares of Company Common Stock for which appraisal rights have been
perfected shall be returned to Parent upon demand.
SECTION 2.4. Adjustments. Notwithstanding any provision of this
Article II to the contrary (but without in any way limiting the covenants in
Section 5.2(a)), if between the date of this Agreement and the Effective Time
the outstanding shares of Company Common Stock or Parent Common Stock shall have
been changed into a different number of shares or a different class by reason of
the occurrence or record date of any stock dividend, subdivision,
reclassification, recapitalization, split, combination, exchange of shares or
similar transaction, the Exchange Ratio shall be appropriately adjusted to
reflect such stock dividend, subdivision, reclassification, recapitalization,
split, combination, exchange of shares or similar transaction.
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ARTICLE III
Representations and Warranties of the Company
---------------------------------------------
The Company represents and warrants to Parent and Merger Sub that
except as set forth in the disclosure schedule delivered by the Company to
Parent simultaneously with the execution of this Agreement (the "COMPANY
DISCLOSURE SCHEDULE"):
SECTION 3.1. Organization, Standing and Corporate Power.
(a) Each of the Company and the Material Company Subsidiaries is a
corporation duly organized, validly existing and in good standing, if
applicable, under the Laws of the jurisdiction in which it is incorporated and
has all requisite corporate power and authority necessary to own or lease all of
its properties and assets and to carry on its business as it is now being
conducted and as currently proposed by its management to be conducted. Each of
the Company and its Subsidiaries is duly licensed or qualified to do business
and is in good standing 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, qualified or in good standing, individually or in
the aggregate, has not had and could not reasonably be expected to have a
Company Material Adverse Effect (as defined below). For purposes of this
Agreement, "COMPANY MATERIAL ADVERSE EFFECT" means a material adverse change in,
or a material adverse effect upon, the business, operations, prospects, assets,
liabilities or financial condition of the Company and the Material Company
Subsidiaries, taken as a whole, excluding any change or effect caused by or
resulting from or attributable to (i) conditions in the global economy or
securities markets in general; (ii) developments affecting the worldwide base
metal mining industry in general which do not have a materially disproportionate
effect on the Company and the Material Company Subsidiaries, taken as a whole;
(iii) changes in the price of copper; or (iv) changes in currency exchange
rates.
(b) Exhibit 21.1 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2004 (the "COMPANY 10-K") sets forth (by
incorporation by reference) all Subsidiaries of the Company together with the
jurisdiction of organization of each such Subsidiary. All the outstanding shares
of capital stock of, or other equity interests in, each Material Company
Subsidiary of the Company have been duly authorized and validly issued and are
fully paid and nonassessable and are owned directly or indirectly by the Company
free and clear of all liens, pledges, charges, mortgages, encumbrances, adverse
rights or claims and security interests of any kind or nature whatsoever
(including any restriction on the right to vote or transfer the same, except for
such transfer restrictions of general applicability as may be provided under the
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Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "SECURITIES ACT"), and the "blue sky" laws of the various States
of the United States) (collectively, "LIENS"), except for Liens in favor of
Parent. Except as disclosed in the Company 10-K, the Company does not own,
directly or indirectly, any capital stock, voting securities or equity interests
in any Person.
(c) The Company has delivered to Parent correct and complete copies
of its certificate of incorporation and by-laws (the "COMPANY CHARTER
DOCUMENTS") and correct and complete copies of the certificates of incorporation
and by-laws (or comparable organizational documents) of each of the Material
Company Subsidiaries (the "SUBSIDIARY CHARTER DOCUMENTS"), in each case as
amended to the date of this Agreement. All such Company Charter Documents and
Subsidiary Charter Documents are in full force and effect and neither the
Company nor any of the Material Company Subsidiaries is in violation of any of
their respective provisions.
SECTION 3.2. Capitalization.
(a) The authorized capital stock of the Company consists of
125,000,000 shares of Company Common Stock and 10,000,000 shares of preferred
stock, par value $0.01 per share ("COMPANY PREFERRED STOCK"). At the close of
business on April 29, 2005, (i) 37,733,359 shares of Company Common Stock were
issued and outstanding, (ii) no shares of Company Common Stock were held by the
Company in its treasury, (iii) 3,000,000 shares of Company Common Stock were
reserved for issuance under the Company Stock Plans (of which 2,105,000 shares
of Company Common Stock were subject to outstanding Company Stock Options
granted under the Company Stock Plans) and (iv) no shares of Company Preferred
Stock were issued or outstanding. All outstanding shares of Company Common Stock
have been duly authorized and validly issued and are fully paid, nonassessable
and free of preemptive rights. Included in Section 3.2(a) of the Company
Disclosure Schedule is a correct and complete list, as of April 29, 2005, of all
outstanding options or other rights to purchase or receive shares of Company
Common Stock granted under the Company Stock Plans or otherwise, and, for each
such option or other right, the number of shares of Company Common Stock subject
thereto, the terms of vesting, the grant and expiration dates and exercise price
thereof and the name of the holder thereof. Since April 29, 2005, the Company
has not issued any shares of its capital stock, voting securities or equity
interests, or any securities convertible into or exchangeable or exercisable for
any shares of its capital stock, voting securities or equity interests, other
than pursuant to the outstanding options referred to above in this Section
3.2(a). Except (A) as set forth above in this Section 3.2(a), (B) as otherwise
expressly permitted by Section 5.2 or (C) as contemplated by the terms of any
Contract with Parent, as of the date of this Agreement there are not, and as of
the Effective Time there will not be, any shares of capital stock, voting
securities or equity interests of the Company issued and outstanding or any
subscriptions, options, warrants, calls, convertible or exchangeable securities,
rights, commitments or agreements of any character providing for the issuance of
any shares of capital stock, voting securities or equity interests of the
Company, including any representing the right to purchase or otherwise receive
any Company Common Stock.
10
(b) Except for the Share Purchase Agreement, the Company Stock Plans
and any Contract with Parent, none of the Company or any of its Subsidiaries has
issued or is bound by any outstanding subscriptions, options, warrants, calls,
convertible or exchangeable securities, rights, commitments or agreements of any
character providing for the issuance or disposition of any shares of capital
stock, voting securities or equity interests of any Material Company Subsidiary
of the Company. There are no outstanding obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock, voting securities or equity interests (or any options, warrants
or other rights to acquire any shares of capital stock, voting securities or
equity interests) of the Company or any of its Subsidiaries.
SECTION 3.3. Authority; Noncontravention; Voting Requirements.
(a) The Company has all necessary corporate power and authority to
execute and deliver this Agreement and, subject to obtaining the Company
Stockholder Approval, to perform its obligations hereunder and to consummate the
Merger. The execution, delivery and performance by the Company of this
Agreement, and the consummation by it of the Merger, have been duly authorized
and approved by its Board of Directors, and except for obtaining the Company
Stockholder Approval for the adoption of this Agreement, no other corporate
action on the part of the Company is necessary to authorize the execution,
delivery and performance by the Company of this Agreement and the consummation
by it of the Merger. This Agreement has been duly executed and delivered by the
Company and, assuming due authorization, execution and delivery hereof by the
other parties hereto, constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
that such enforceability (i) may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws of
general application affecting or relating to the enforcement of creditors'
rights generally and (ii) is subject to general principles of equity, whether
considered in a proceeding at law or in equity (the "BANKRUPTCY AND EQUITY
EXCEPTION").
(b) The non-management members of the Company's Board of Directors
unaffiliated with Parent (the "INDEPENDENT DIRECTORS") have unanimously
determined that this Agreement and the Merger are advisable, fair to and in the
best interests of the Company and the stockholders of the Company (other than
Parent) and should be approved and declared advisable by the Company's Board of
Directors. The Company's Board of Directors, at a meeting duly called and held,
has unanimously (i) approved and declared advisable this Agreement and the
Merger, and (ii) resolved to recommend that stockholders of the Company adopt
this Agreement.
(c) Neither the execution and delivery of this Agreement by the
Company nor the consummation by the Company of the Merger, nor compliance by the
Company with any of the terms or provisions hereof, will (i) conflict with or
violate any provision of the Company Charter Documents or any of the Subsidiary
Charter Documents or (ii) assuming that the authorizations, consents and
approvals referred to in Section 3.4 and the Company Stockholder Approval are
obtained and the filings referred to in Section 3.4 are made, (x) violate any
11
Law, judgment, writ or injunction of any Governmental Authority applicable to
the Company or any of the Material Company Subsidiaries or any of their
respective properties or assets, or (y) violate, conflict with, result in the
loss of any benefit under, constitute a default (or an event which, 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, or result in the creation of any Lien upon any of the
respective properties or assets of, the Company or any of the Material Company
Subsidiaries under, any of the terms, conditions or provisions of any loan or
credit agreement, debenture, note, bond, mortgage, indenture, deed of trust,
license, lease, contract or other agreement, instrument or obligation (each, a
"CONTRACT") or Permit, to which the Company or any of the Material Company
Subsidiaries is a party, or by which they or any of their respective properties
or assets may be bound or affected except, in the case of clause (ii), for such
violations, conflicts, losses, defaults, terminations, cancellations,
accelerations or Liens as, (x) individually or in the aggregate, could not
reasonably be expected to have a Company Material Adverse Effect, or (y) may
result under any Contract with Parent.
(d) The affirmative vote (in person or by proxy) of the holders of a
majority of the outstanding shares of Company Common Stock at the Company
Stockholders Meeting or any adjournment or postponement thereof in favor of the
adoption of this Agreement (the "COMPANY STOCKHOLDER APPROVAL") is the only vote
or approval of the holders of any class or series of capital stock of the
Company or any of its Subsidiaries which is necessary to adopt this Agreement
and approve the Merger.
SECTION 3.4. Governmental Approvals. Except for (i) the filing with
the Securities and Exchange Commission (the "SEC") of a proxy statement relating
to the Company Stockholders Meeting (as amended or supplemented from time to
time, the "PROXY STATEMENT"), and other filings required under, and compliance
with other applicable requirements of, the Securities Act and the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the "EXCHANGE ACT"), and the rules of The New York Stock Exchange
and the NASD OTC Bulletin Board and (ii) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware pursuant to the DGCL, no
consents or approvals of, or filings, declarations or registrations with, any
Governmental Authority are necessary for the execution, delivery and performance
of this Agreement by the Company and the consummation by the Company of the
Merger, other than such other consents, approvals, filings, declarations or
registrations that, if not obtained, made or given, could not, individually or
in the aggregate, reasonably be expected to impair in any material respect the
ability of the Company to perform its obligations hereunder, or prevent or
materially impede, interfere with, hinder or delay the consummation of the
Merger.
SECTION 3.5. Company SEC Documents; Undisclosed Liabilities.
(a) The Company has filed and furnished all required reports,
schedules, forms, prospectuses, and registration, proxy and other statements
with the SEC since January 1, 2004 (as such documents have been amended since
the time of their filing, collectively and together with all documents filed on
a voluntary basis on Form 8-K, and in each case including all exhibits and
12
schedules thereto and documents incorporated by reference therein, the "COMPANY
SEC DOCUMENTS"). As of their respective effective dates (in the case of Company
SEC Documents that are registration statements filed pursuant to the
requirements of the Securities Act) and as of their respective SEC filing dates
or, if amended, as of the date of the last such amendment (in the case of all
other Company SEC Documents), the Company SEC Documents complied in all material
respects with the requirements of the Exchange Act and the Securities Act, as
the case may be, applicable to such Company SEC Documents, and none of the
Company SEC Documents as of such respective dates contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(b) The consolidated financial statements of the Company included in
the Company SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with GAAP
(except, in the case of unaudited quarterly statements, as indicated in the
notes thereto) applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and fairly present in all material
respects the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited quarterly statements, to normal year-end audit adjustments, none of
which has been or will be, individually or in the aggregate, material to the
Company and its Subsidiaries, taken as a whole).
(c) Except for (i) any trade payables and accrued Taxes in an
aggregate amount less than $500,000 owing by the Las Cruces Companies incurred
in the ordinary course of business consistent with past practice, (ii)
borrowings under the Credit Agreements or (iii) as set forth in Section 3.5(c)
of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries has any liabilities which, if known, would be required to be
reflected or reserved against on a consolidated balance sheet of the Company
prepared in accordance with GAAP or the notes thereto, except liabilities (i)
reflected or reserved against on the audited balance sheet of the Company and
its Subsidiaries as of December 31, 2004 (including the notes thereto) included
in the Company 10-K or (ii) incurred after December 31, 2004 in the ordinary
course of business consistent with past practice that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Company
Material Adverse Effect.
SECTION 3.6. Absence of Certain Changes or Events. Except for
borrowings under the Credit Agreements, since December 31, 2004, there have not
been any events, changes, occurrences or state of facts that, individually or in
the aggregate, have had or could reasonably be expected to have a Company
Material Adverse Effect.
SECTION 3.7. Information Supplied. Subject to the accuracy of the
representations and warranties of Parent and Merger Sub set forth in Section
4.4, none of the information supplied (or to be supplied) in writing by or on
behalf of the Company specifically for inclusion or incorporation by reference
in the registration statement on Form S-4 to be filed with the SEC by Parent in
13
connection with the issuance of shares of Parent Common Stock in the Merger (as
amended or supplemented from time to time, the "FORM S-4") will, at the time the
Form S-4, or any amendments or supplements thereto, are filed with the SEC or at
the time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they are made, not misleading. The Proxy
Statement will not, on the date it is first mailed to stockholders of the
Company, and at the time of the Company Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading. The Proxy
Statement will comply as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act. Notwithstanding the
foregoing, the Company makes no representation or warranty with respect to
information supplied by or on behalf of Parent or Merger Sub for inclusion or
incorporation by reference in any of the foregoing documents.
SECTION 3.8. Tax Matters.
(a) Each of the Company and its Subsidiaries has timely filed, or has
caused to be timely filed on its behalf (taking into account any extension of
time within which to file), all material Tax Returns required to be filed by it,
and all such filed Tax Returns are correct and complete in all material
respects. All Taxes required to be paid by the Company or any of its
Subsidiaries, have been timely paid.
(b) The most recent financial statements contained in the filed
Company SEC Documents reflect an adequate reserve for all Taxes payable by the
Company and its Subsidiaries for all taxable periods and portion thereof through
the date of such financial statements. No deficiency with respect to Taxes has
been proposed, asserted or assessed against the Company or any of its
Subsidiaries.
(c) The Federal income Tax Returns of the Company and each of its
Subsidiaries have been examined by and settled with the Internal Revenue Service
(or the applicable statute of limitations has expired) for all years through
December 31, 2000. All assessments for Taxes due with respect to such completed
and settled examinations or any concluded litigation have been fully paid.
(d) Neither the Company nor any of the Material Company Subsidiaries
has any outstanding agreements, waivers, or arrangements extending the statutory
period of limitations applicable to any claim for, or the period for the
collection or assessment of Taxes.
14
(e) No claim has been made by a taxing authority in a jurisdiction
where the Company or any of the Material Company Subsidiaries does not file Tax
Returns that the Company or a Subsidiary of the Company is or may be subject to
taxation in that jurisdiction.
(f) No audit or other administrative or court proceedings are pending
with any Governmental Authority with respect to Taxes of the Company or any of
its Subsidiaries and no written notice thereof has been received by the Company.
(g) Except as set forth in Section 3.8(g) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries has been a member of
an affiliated group of corporations within the meaning of Section 1504 of the
Code, other than the affiliated group of which the Company is the common parent.
(h) Except for the Company's Executive Severance Plan, neither the
Company nor any of its Subsidiaries is a party to any contract, agreement, plan
or other arrangement that, individually or collectively, could give rise to the
payment of any amount which would not be deductible by reason of Section 162(m)
or Section 280G of the Code or would be subject to withholding under Section
4999 of the Code.
(i) No Liens for Taxes exist with respect to any assets or properties
of the Company or any of its Subsidiaries, except for Liens for Taxes not yet
due.
(j) The Company has made available to Parent correct and complete
copies of (i) all income and franchise Tax Returns of the Company and its
Subsidiaries for the preceding three taxable years and (ii) any audit report
issued within the last three years (or otherwise with respect to any audit or
proceeding in progress) relating to income and franchise Taxes of the Company or
any of its Subsidiaries.
(k) To the knowledge of the Company, it has not been and will not be
a "United States real property holding corporation" within the meaning of
Section 897 of the Code during the five-year period ending on the Closing Date.
(l) The Company's existing net operating losses and other attributes
are not currently subject to material limitation under Section 382 and Section
383 of the Code, and completion of the Merger will not result in the application
of any such limitation.
For purposes of this Agreement: (x) "TAXES" means (A) all federal,
state, local or foreign taxes, charges, fees, imposts, levies or other
assessments, including all net income, gross receipts, capital, sales, use, ad
valorem, value added, transfer, franchise, profits, inventory, capital stock,
license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property and estimated taxes, customs
duties, fees, assessments and charges of any kind whatsoever, (B) all interest,
penalties, fines, additions to tax or additional amounts imposed by any
Governmental Authority in connection with any item described in clause (A), and
(C) any transferee liability in respect of any items described in clauses (A)
and/or (B) payable by reason of contract, assumption, transferee liability,
operation of Law, Treasury Regulation Section 1.1502-6(a) (or any predecessor or
successor thereof of any analogous or similar provision under Law) or otherwise;
(y) "TAX RETURNS" means any return, report, claim for refund, estimate,
15
information return or statement or other similar document relating to or
required to be filed with any Governmental Authority with respect to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof; and (z) "CODE" means the Internal Revenue Code of 1986, as amended.
SECTION 3.9. Opinions of Financial Advisors. The Independent
Directors and the Board of Directors of the Company have received the opinion of
Xxxxxxx Xxxxx Ltd., dated as of the date of this Agreement, to the effect that,
as of such date, and subject to the various assumptions and qualifications set
forth therein, the Exchange Ratio is fair from a financial point of view to the
holders of shares of Company Common Stock (other than Parent) (the "FAIRNESS
OPINION"). A correct and complete copy of the Fairness Opinion has been
delivered to Parent. The Company has been authorized by Xxxxxxx Xxxxx Ltd. to
permit the inclusion of the Fairness Opinion and/or references thereto in the
Proxy Statement, subject to prior review and consent by Xxxxxxx Xxxxx Ltd. (such
consent not to be unreasonably withheld or delayed).
SECTION 3.10. Brokers and Other Advisors. Except for Xxxxxxx Xxxxx
Ltd., Cutfield Xxxxxxx & Co. Ltd. and CIBC World Markets Corp., the fees and
expenses of which will be paid by the Company, no broker, investment banker,
financial advisor or other Person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission, or the reimbursement of
expenses, in connection with the Merger based upon arrangements made by or on
behalf of the Company or any of its Subsidiaries. The Company has heretofore
delivered to Parent a correct and complete copy of the Company's engagement
letters with Xxxxxxx Xxxxx Ltd., Cutfield Xxxxxxx & Co. Ltd. and CIBC World
Markets Corp., which letters describe all fees payable to Xxxxxxx Xxxxx Ltd.,
Cutfield Xxxxxxx & Co. Ltd. and CIBC World Markets Corp. in connection with the
Merger, all agreements under which any such fees or any expenses are payable and
all indemnification and other agreements related to the engagement of Xxxxxxx
Xxxxx Ltd., Cutfield Xxxxxxx & Co. Ltd. and CIBC World Markets Corp. (the
"ENGAGEMENT LETTERS").
SECTION 3.11. State Takeover Statutes. No "fair price", "moratorium",
"control share acquisition" or other similar antitakeover statute or regulation
enacted under state or federal laws in the United States applicable to the
Company is applicable to the Merger.
SECTION 3.12. Share Purchase Agreement. The Share Purchase Agreement
has been duly authorized and approved by the Company's Board of Directors, duly
executed and delivered by the Company and, assuming due authorization, execution
and delivery thereof by the other parties thereto, constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to the Bankruptcy and Equity Exception. The
Company is not in default under or in breach of or is otherwise delinquent in
performance under the Share Purchase Agreement, and has not exercised any
termination rights with respect thereto.
16
ARTICLE IV
Representations and Warranties of Parent and Merger Sub
-------------------------------------------------------
Parent and Merger Sub jointly and severally represent and warrant to
the Company:
SECTION 4.1. Organization. Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York
and has the requisite corporate power and authority necessary to own or lease
all of its properties and assets and to carry on its business as it is now being
conducted. Parent has heretofore made available to the Company a complete and
correct copy of its certificate of incorporation and by-laws as amended to date.
Parent is duly licensed or qualified to do business and is in good standing 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, qualified or in good standing has not had and would not reasonably be
expected to have, individually or in the aggregate, a Parent Material Adverse
Effect (as defined below). For purposes of this Agreement, "PARENT MATERIAL
ADVERSE EFFECT" means a material adverse change in, or a material adverse effect
upon, the business, operations, prospects, assets, liabilities or financial
condition of Parent and its Subsidiaries, taken as a whole, excluding any change
or effect caused by or resulting from or attributable to (i) conditions in the
global economy or securities markets in general; (ii) developments affecting the
worldwide base metal mining industry in general which do not have a materially
disproportionate effect on such party; (iii) changes in the price of copper;
(iv) changes in currency exchange rates; or (v) economic or financial effects of
SBC Communications Inc.'s proposed acquisition of AT&T Corp. Merger Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware.
SECTION 4.2. Authority. Each of Parent and Merger Sub has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform their respective obligations hereunder and to consummate the Merger.
The execution, delivery and performance by Parent and Merger Sub of this
Agreement, and the consummation by Parent and Merger Sub of the Merger, have
been duly authorized and approved by their respective Boards of Directors and
adopted by Parent as the sole stockholder of Merger Sub, and no other corporate
action on the part of Parent and Merger Sub is necessary to authorize the
execution, delivery and performance by Parent and Merger Sub of this Agreement
and the consummation by them of the Merger. This Agreement has been duly
executed and delivered by Parent and Merger Sub and, assuming due authorization,
execution and delivery hereof by the Company, constitutes a valid and binding
obligation of each of Parent and Merger Sub, enforceable against each of them in
accordance with its terms, subject to the Bankruptcy and Equity Exception.
17
SECTION 4.3. Consents and Approvals; No Violations.
(a) Except for (i) the filing with the SEC of the Form S-4 and other
filings required under, and compliance with other applicable requirements of,
the Securities Act, the Exchange Act and the rules of The New York Stock
Exchange and the NASD OTC Bulletin Board and (ii) the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware pursuant to the
DGCL, no consents or approvals of, or filings, declarations or registrations
with, any Governmental Entity are necessary for the consummation by Parent and
Merger Sub of the Merger, other than such other consents, approvals, filings,
declarations or registrations that, if not obtained, made or given, would not
reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect.
(b) Neither the execution and delivery of this Agreement by Parent or
Merger Sub, nor the consummation by Parent or Merger Sub of the Merger, nor
compliance by Parent or Merger Sub with any of the terms or provisions hereof,
will (i) conflict with or violate any provision of the certificate of
incorporation or bylaws of Parent or Merger Sub or (ii) assuming that the
authorizations, consents, approvals and filings referred to in Section 4.3(a)
are obtained and made, (x) violate any Law, judgment, writ or injunction of any
Governmental Entity applicable to Parent or any of its Subsidiaries or any of
their respective properties or assets, or (y) violate, conflict with, result in
the loss of any material benefit under, constitute a default (or an event which,
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, or result in the creation of any Lien
upon any of the respective properties or assets of, Parent or any of its
Subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, permit, lease, agreement or
other instrument or obligation to which Parent or any of its Subsidiaries is a
party, or by which they or any of their respective properties or assets may be
bound or affected, except, in the case of clause (ii), for such violations,
conflicts, losses, defaults, terminations, cancellations, accelerations or Liens
as would not reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect.
SECTION 4.4. Information Supplied. Subject to the accuracy of the
representations and warranties of the Company set forth in Section 3.7, none of
the information supplied (or to be supplied) in writing by or on behalf of
Parent or Merger Sub specifically for inclusion or incorporation by reference in
(a) the Form S-4 will, at the time the Form S-4 or any amendments or supplements
thereto are filed with the SEC or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which they
are made, not misleading, and (b) the Proxy Statement will, on the date it is
first mailed to stockholders of the Company, and at the time of the Company
Stockholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
are made, not misleading. The Form S-4 will comply as to form in all material
respects with the applicable requirements of the Securities Act. Notwithstanding
the foregoing, Parent and Merger Sub make no representation or warranty with
respect to any information supplied by or on behalf of the Company for inclusion
or incorporation by reference in any of the foregoing documents.
18
SECTION 4.5. Capitalization. The authorized capital stock of Parent
consists of 150,000,000 shares of Parent Common Stock and 6,000,000 shares of
preferred stock, par value $1.00 per share ("PARENT PREFERRED STOCK"). At the
close of business on April 28, 2005, there were 107,625,828 shares of Parent
Common Stock issued and outstanding (of which 43,374,172 shares were held by
Parent in its treasury) and no shares of Parent Preferred Stock issued and
outstanding. As of April 28, 2005, there were 1,427,580 shares of Parent Common
Stock reserved for issuance upon the exercise of outstanding options and
7,619,745 shares of Parent Common Stock reserved for issuance upon conversion of
outstanding convertible debt. The shares of issued and outstanding Parent Common
Stock have been duly authorized and validly issued and are fully paid and
nonassessable.
SECTION 4.6. Parent Common Stock. The shares of Parent Common Stock
issuable in the Merger as contemplated by this Agreement have been duly
authorized and, when issued as contemplated by this Agreement, will be validly
issued, fully paid and nonassessable (except, where applicable, as provided by
Section 630 of the New York Business Corporation Law) and not subject to
preemptive rights. Subject to the restrictions on transfer set forth in Parent's
certificate of incorporation as amended to date and those imposed by Rule 145
under the Securities Act, the shares of Parent Common Stock issuable in the
Merger as contemplated by this Agreement will be freely tradeable.
SECTION 4.7. SEC Documents; Undisclosed Liabilities.
(a) Parent has filed all required reports, schedules, forms,
prospectuses, and registration, proxy and other statements with the SEC since
January 1, 2004 (as such documents have been amended since the time of their
filing, collectively, and in each case including all exhibits and schedules
thereto and documents incorporated by reference therein, the "PARENT SEC
DOCUMENTS"). As of their respective effective dates (in the case of Parent SEC
Documents that are registration statements filed pursuant to the Securities Act)
and as of their respective SEC filing dates or, if amended, as of the date of
the last such amendment (in the case of all other Parent SEC Documents), the
Parent SEC Documents complied in all material respects with the requirements of
the Exchange Act and the Securities Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder, applicable to such Parent SEC
Documents, and none of the Parent SEC Documents as of such respective dates,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
19
(b) The consolidated financial statements of Parent included in the
Parent SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP (except, in the case
of unaudited quarterly statements, as indicated in the notes thereto) applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present in all material respects the consolidated
financial position of Parent and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited quarterly statements, to
normal year-end audit adjustments, none of which has been or will be,
individually or in the aggregate, material).
(c) Neither Parent nor any of its Subsidiaries has any liabilities
which, if known, would be required to be reflected or reserved against on a
consolidated balance sheet of Parent prepared in accordance with GAAP or the
notes thereto, except liabilities (i) reflected or reserved against on the
audited balance sheet of Parent and its Subsidiaries as of December 31, 2004
(including the notes thereto) included in Parent's Annual Report on Form 10-K
for the period then ended or (ii) incurred after December 31, 2004 in the
ordinary course of business consistent with past practice that, individually or
in the aggregate, have not had and would not reasonably be expected to have a
Parent Material Adverse Effect.
SECTION 4.8. Absence of Certain Changes or Events. Since December 31,
2004, there has not occurred any event or change that has had or would
reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect.
SECTION 4.9. Ownership and Operations of Merger Sub. Parent
beneficially owns all of the outstanding capital stock of Merger Sub. Merger Sub
was formed solely for the purpose of engaging in the Merger, has engaged in no
other business activities and had conducted its operations only as contemplated
hereby.
SECTION 4.10. Finders or Brokers. No broker, investment banker,
financial advisor or other Person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
Merger based upon arrangements made by or on behalf of Parent or any of its
Subsidiaries.
SECTION 4.11. Share Purchase Agreement. The Share Purchase Agreement
has been duly authorized and approved by Parent's Board of Directors, duly
executed and delivered by Parent and, assuming due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of Parent, enforceable against Parent in accordance with its
terms, subject to the Bankruptcy and Equity Exception. Parent is not in default
under or in breach of or is otherwise delinquent in performance under the Share
Purchase Agreement, and has not exercised any termination rights with respect
thereto.
20
ARTICLE V
Additional Covenants and Agreements
-----------------------------------
SECTION 5.1. Preparation of the Form S-4 and the Proxy Statement;
Stockholder Meetings.
(a) As soon as practicable following the date of this Agreement, the
Company shall prepare for filing with the SEC the Proxy Statement and the
Company and Parent shall prepare and Parent shall file with the SEC the Form
S-4, in which the Proxy Statement will be included as part of the prospectus.
Each of the Company and Parent shall use its reasonable best efforts to have the
Form S-4 declared effective under the Securities Act as promptly as practicable
after such filing and keep the Form S-4 effective for so long as necessary to
consummate the Merger. The Company shall use its reasonable best efforts to
cause the Proxy Statement to be mailed to the stockholders of the Company as
promptly as practicable after the Form S-4 is declared effective under the
Securities Act. Parent shall also take any action (other than qualifying to do
business in any jurisdiction in which it is not now so qualified or filing a
general consent to service of process) required to be taken under any applicable
state securities Laws in connection with the issuance of shares of Parent Common
Stock in the Merger, and the Company shall furnish all information concerning
the Company and the holders of shares of Company Common Stock as may be
reasonably requested by Parent in connection with any such action. No filing of,
or amendment or supplement to, the Form S-4 will be made by Parent, and no
filing of, or amendment or supplement to, the Proxy Statement will be made by
the Company, in each case without providing the other party a reasonable
opportunity to review and comment thereon. If at any time prior to the Effective
Time any information relating to the Company or Parent, or any of their
respective Affiliates, directors or officers, should be discovered by the
Company or Parent which should be set forth in an amendment or supplement to
either the Form S-4 or the Proxy Statement, so that either such document would
not include any misstatement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, the party which discovers such
information shall promptly notify the other parties hereto and an appropriate
amendment or supplement describing such information shall be promptly filed with
the SEC and, to the extent required by Law, disseminated to the stockholders of
the Company. The parties shall notify each other promptly of the receipt of any
comments from the SEC or the staff of the SEC and of any request by the SEC or
the staff of the SEC for amendments or supplements to the Proxy Statement or the
Form S-4 or for additional information and shall supply each other with copies
of (i) all correspondence between it or any of its Representatives, on the one
hand, and the SEC or the staff of the SEC, on the other hand, with respect to
the Proxy Statement, the Form S-4 or the Merger and (ii) all orders of the SEC
relating to the Form S-4.
(b) The Company shall, as soon as practicable following the date of
this Agreement, establish a record date for, duly call, give notice of, convene
and hold a special meeting of its stockholders (the "COMPANY STOCKHOLDERS
MEETING") solely for the purpose of obtaining the Company Stockholder Approval.
Subject to Section 5.3, the Company shall, through its Board of Directors,
recommend to its stockholders adoption of this Agreement (the "COMPANY BOARD
RECOMMENDATION"). The Proxy Statement shall include a copy of the Fairness
Opinion and (subject to Section 5.3(c)) the Company Board Recommendation.
21
SECTION 5.2. Conduct of Business.
(a) Except as expressly permitted by this Agreement or the Share
Purchase Agreement (including, as contemplated by the Interim Period Development
Plan or as authorized by the Management Committee (as such terms are defined in
the Share Purchase Agreement)), as approved by Parent or as required by
applicable Law, during the period from the date of this Agreement until the
Effective Time, the Company shall, and shall cause each of its Subsidiaries to,
(1) conduct its business in the ordinary course consistent with past practice,
(2) use commercially reasonable efforts to maintain and preserve the goodwill of
those having business relationships with it to the end that its goodwill and
ongoing business shall be unimpaired at the Effective Time, and (3) comply in
all material respects with all applicable Laws and the requirements of all
licenses, Permits, leases, agreements and other instruments that are material to
the Company and its Subsidiaries taken as a whole. Any transaction specifically
approved by Xxxxxx X. Xxxx acting in his capacity as President of the Company
shall constitute Parent approval for purposes of this Section 5.2(a). Without
limiting the generality of the foregoing, except as expressly permitted by this
Agreement or as required by applicable Law, during the period from the date of
this Agreement to the Effective Time, the Company shall not, and shall not
permit any of its Subsidiaries to:
(i) (A) issue, sell, grant, dispose of, pledge or otherwise encumber
any shares of its capital stock, voting securities or equity interests, or
any securities or rights convertible into, exchangeable or exercisable for,
or evidencing the right to subscribe for any shares of its capital stock,
voting securities or equity interests, or any rights, warrants, options,
calls, commitments or any other agreements of any character to purchase or
acquire any shares of its capital stock, voting securities or equity
interests or any securities or rights convertible into, exchangeable or
exercisable for, or evidencing the right to subscribe for, any shares of
its capital stock, voting securities or equity interests, provided that (x)
the Company may issue shares of Company Common Stock upon the exercise of
options granted under the Company Stock Plans that are outstanding on the
date of this Agreement and in accordance with the terms thereof and (y)
capital stock, voting securities or equity interests of the Company's
Subsidiaries may be issued to the Company or a direct or indirect wholly
owned Subsidiary of the Company; (B) redeem, purchase or otherwise acquire
any of its outstanding shares of capital stock, voting securities or equity
interests, or any rights, warrants, options, calls, commitments or any
other agreements of any character to acquire any shares of its capital
stock, voting securities or equity interests; (C) declare, set aside for
payment or pay any dividend on, or make any other distribution in respect
of, any shares of its capital stock or otherwise make any payments to its
stockholders in their capacity as such (other than dividends by a direct or
22
indirect wholly owned Subsidiary of the Company to its parent); (D) split,
combine, subdivide or reclassify any shares of its capital stock; or (E)
amend (including by reducing an exercise price or extending a term) or
waive any of its rights under, or accelerate the vesting under, any
provision of the Company Stock Plans or any agreement evidencing any
outstanding stock option or other right to acquire capital stock of the
Company or any restricted stock purchase agreement or any similar or
related contract;
(ii) (A) enter into, terminate or amend any agreement that is material
to the Company and its Subsidiaries taken as a whole, except in the
ordinary course of business consistent with past practice, (B) enter into
or extend the term or scope of any contract or agreement that purports to
restrict the Company, or any Subsidiary or Affiliate of the Company, from
engaging in any line of business or in any geographic area, (C) amend or
modify the Engagement Letters, (D) enter into any contract or agreement
that would be breached by, or require the consent of any third party in
order to continue in full force following, consummation of the Merger, or
(E) release any Person from, or modify or waive any provision of, any
confidentiality or similar agreement;
(iii) make any changes in financial or Tax accounting methods,
principles or practices, except insofar as may be required by a change in
GAAP or applicable Law;
(iv) make or change any material election concerning Taxes or Tax
Returns, file any amended Tax Return, enter into any closing agreement with
respect to Taxes, settle any material Tax claim or assessment or surrender
any right to claim a refund of Taxes or obtain any Tax ruling;
(v) adopt a plan or agreement of complete or partial liquidation,
dissolution, restructuring, recapitalization, merger, consolidation or
other reorganization (other than transactions exclusively between wholly
owned Subsidiaries of the Company);
(vi) settle or compromise any litigation, proceeding or investigation
material to the Company and its Subsidiaries taken as a whole (this
covenant being in addition to the Company's agreement set forth in Section
5.9); or
(vii) agree, in writing or otherwise, to take any of the foregoing
actions, or take any action or agree, in writing or otherwise, to take any
action which would (A) cause any of the representations or warranties of
the Company set forth in this Agreement (1) that are qualified as to
materiality or Material Adverse Effect to be untrue or (2) that are not so
qualified to be untrue in any material respect, or (B) in any material
respect impede or delay the ability of the parties to satisfy any of the
conditions to the Merger set forth in this Agreement.
(b) Parent agrees that, during the period from the date of this
Agreement until the Effective Time, except as expressly contemplated or
permitted by this Agreement or as required by applicable Law, or unless the
Company otherwise agrees in writing, Parent shall, and shall cause each of its
23
Subsidiaries to, conduct their business in compliance in all material respects
with all applicable Laws and regulations and shall use their commercially
reasonable efforts to preserve intact their material business organizations and
material relationships with third parties and shall not take any action or
engage in any transactions that would in any material respect impede or delay
the ability of the parties to satisfy any of the conditions to the Merger set
forth in this Agreement.
SECTION 5.3. No Solicitation by the Company; Etc.
(a) The Company shall, and shall cause its Subsidiaries and the
Company's and its Subsidiaries' respective directors, officers, employees,
investment bankers, financial advisors, attorneys, accountants, agents and other
representatives (collectively, "REPRESENTATIVES") to, immediately cease and
cause to be terminated any discussions or negotiations with any Person conducted
heretofore with respect to a Takeover Proposal, and use best efforts to obtain
the return from all such Persons or cause the destruction of all copies of
confidential information previously provided to such parties by the Company, its
Subsidiaries or Representatives. The Company shall not, and shall not authorize
or permit its Subsidiaries or Representatives to, and shall cause its
Subsidiaries and Representatives not to, directly or indirectly (i) solicit,
initiate, cause, facilitate, knowingly encourage (including by way of furnishing
information), engage in, or respond to (other than to decline) any inquiries or
proposals regarding any Takeover Proposal, (ii) knowingly encourage or
participate in any discussions or negotiations with any third party regarding
any Takeover Proposal, (iii) agree to, approve or recommend a Takeover Proposal
or (iv) enter into any agreement related to any Takeover Proposal; provided,
however, that if after the date hereof the Board of Directors of the Company
receives an unsolicited, bona fide Takeover Proposal made after the date hereof
in circumstances not involving a breach of this Agreement which is not
withdrawn, and the Board of Directors of the Company reasonably determines in
good faith that such Takeover Proposal constitutes a Superior Proposal and with
respect to which such Board determines in good faith, after considering
applicable provisions of state law and after consulting with and receiving the
advice of outside counsel, that the taking of such action is necessary in order
for such Board to comply with its fiduciary duties to the Company's stockholders
under Delaware law, then the Company may, at any time prior to obtaining the
Company Stockholder Approval (but in no event after obtaining the Company
Stockholder Approval) and after providing Parent not less than 24 hours written
notice of its intention to take such actions (A) furnish to the Person making
such Takeover Proposal information with respect to the Company and its
Subsidiaries (including non-public information), but only after such Person
enters into a customary confidentiality agreement with the Company, provided
that (1) such confidentiality agreement may not include any provision calling
for an exclusive right to negotiate with the Company and (2) a copy of all such
non-public information delivered to such Person is delivered to Parent
concurrently with its delivery to such Person if it has not previously been
furnished to Parent and (B) participate in discussions and negotiations with
such Person regarding such Takeover Proposal. Without limiting the foregoing, it
is understood that any violation of the foregoing restrictions by the Company's
Subsidiaries or Representatives shall be deemed to be a breach of this Section
5.3 by the Company. The Company shall provide Parent with a correct and complete
copy of any confidentiality agreement entered into pursuant to this paragraph
promptly after the execution thereof.
24
(b) In addition to the other obligations of the Company set forth in
this Section 5.3, the Company shall promptly advise Parent, orally and in
writing, and in no event later than 24 hours after receipt, if any proposal,
offer, inquiry or other contact is received by, any information is requested
from, or any discussions or negotiations are sought to be initiated or continued
with, the Company in respect of any Takeover Proposal, and shall, in any such
notice to Parent, indicate the identity of the Person making such proposal,
offer, inquiry or other contact and the terms and conditions of any proposals or
offers or the nature of any inquiries or contacts (and shall include with such
notice copies of any written materials received from or on behalf of such Person
relating to such proposal, offer, inquiry or request), and thereafter shall
promptly keep Parent fully informed of all material developments affecting the
status and terms of any such proposals, offers, inquiries or requests (and the
Company shall provide Parent with copies of any additional written materials
received that relate to such proposals, offers, inquiries or requests) and of
the status of any such discussions or negotiations.
(c) Except as expressly permitted by Section 5.3(e) or following the
termination of this Agreement in accordance with its terms (subject, if
applicable, to the Company's obligation to pay to Parent the full fee required
by Section 7.3), neither the Board of Directors of the Company nor any committee
thereof shall (i)(A) withdraw or modify, or propose publicly to withdraw or
modify, in a manner adverse to Parent, the Company Board Recommendation or the
approval or declaration of advisability by such Board of Directors of this
Agreement and the Merger or (B) approve or recommend, or propose publicly to
approve or recommend, any Takeover Proposal or (ii) approve or recommend, or
propose publicly to approve or recommend, or cause or authorize the Company or
any of its Subsidiaries to enter into, any letter of intent, agreement in
principle, memorandum of understanding, merger, acquisition, purchase or joint
venture agreement or other agreement related to any Takeover Proposal (other
than a confidentiality agreement in accordance with Section 5.3(a)).
(d) For purposes of this Agreement:
"TAKEOVER PROPOSAL" means any inquiry, proposal or offer from any
Person or "group" (as defined in Section 13(d) of the Exchange Act), other than
Parent and its Subsidiaries, relating to any merger, amalgamation, share
exchange, business combination, takeover bid, sale or other disposition of the
assets of the Company or the Material Company Subsidiaries, any
recapitalization, reorganization, liquidation, material sale or issue of
treasury securities of the Company or the Material Company Subsidiaries or
rights or interests therein or thereto or rights or options to acquire any
material number of treasury securities or any type of similar transaction which
would or could, in any case, constitute a transfer to any third party of any
material Asset (as defined in the Share Purchase Agreement) (other than in
accordance with the Feasibility Study, the Interim Period Development Plan or a
directive of the Management Committee (as such terms are defined in the Share
Purchase Agreement)) or any of the capital stock of the Company or a Material
Company Subsidiary, in each case, other than the Merger.
25
"SUPERIOR PROPOSAL" means an unsolicited, bona fide written Takeover
Proposal in respect of a direct or indirect interest in not less than 70% of the
Company or the Material Company Subsidiaries received after the date hereof in
circumstances which do not constitute a breach of this Agreement: (A) that is
not conditional on obtaining financing for the acquisition of the direct or
indirect interest in the Material Company Subsidiaries (although, for greater
certainty, it may be conditional on obtaining financing for the development of
the Project (as defined in the Share Purchase Agreement)), or, if conditional on
financing for such acquisition, the Independent Directors have unanimously
determined by resolution that the party making the proposal has sufficient
financial resources to effect the transaction (and in the case of consideration
comprised of stock or debt of such party, such consideration is free of
restrictions on the issuance thereof); and (B) in respect of which the Board of
Directors of the Company has determined in good faith, after consultation with,
and receiving advice (which may include a written opinion) from, as appropriate,
their financial, legal and other advisors that such Takeover Proposal would, if
consummated in accordance with its terms, result in a transaction which would be
more favorable, from a financial point of view, to the holders of the Company
Common Stock other than Parent and its Affiliates, than the Merger, taking into
account at the time of determination any changes to the terms of this Agreement
that as of that time had been proposed by Parent in writing and the ability of
the Person making such proposal to consummate the transactions contemplated by
such proposal (based upon, among other things, the availability of financing and
the expectation of obtaining required approvals).
(e) Nothing in this Section 5.3 shall prohibit the Board of Directors
of the Company from taking and disclosing to the Company's stockholders a
position contemplated by Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation
M-A promulgated under the Exchange Act if such Board determines in good faith,
after consultation with outside counsel, that failure to so disclose such
position would constitute a violation of applicable Law; provided, however, that
in no event shall the Company or its Board of Directors or any committee thereof
take, or agree or resolve to take, any action prohibited by Section 5.3(c).
SECTION 5.4. Reasonable Best Efforts.
(a) Subject to the terms and conditions of this Agreement (including
Section 5.4(d)), each of the parties hereto shall cooperate with the other
parties and use (and shall cause their respective Subsidiaries to use) their
respective reasonable best efforts to promptly (i) take, or cause to be taken,
all actions, and do, or cause to be done, all things, necessary, proper or
advisable to cause the conditions to Closing to be satisfied as promptly as
practicable and to consummate and make effective, in the most expeditious manner
practicable, the Merger, including preparing and filing promptly and fully all
documentation to effect all necessary filings, notices, petitions, statements,
registrations, submissions of information, applications and other documents, and
(ii) obtain all approvals, consents, registrations, permits, authorizations and
other confirmations from any Governmental Authority or third party necessary,
proper or advisable to consummate the Merger.
26
(b) In furtherance and not in limitation of the foregoing, the
Company shall use its reasonable best efforts to (i) take all action necessary
to ensure that no state takeover statute or similar Law is or becomes applicable
to the Merger and (ii) if any state takeover statute or similar Law becomes
applicable to the Merger, take all action necessary to ensure that the Merger
may be consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise minimize the effect of such Law on the Merger.
(c) Each of the parties hereto shall use its reasonable best efforts
to (i) cooperate in all respects with each other in connection with any filing
or submission with a Governmental Authority in connection with the Merger and in
connection with any investigation or other inquiry by or before a Governmental
Authority relating to the Merger, including any proceeding initiated by a
private party, and (ii) keep the other party informed in all material respects
and on a reasonably timely basis of any material communication received by such
party from, or given by such party to, any Governmental Authority and of any
material communication received or given in connection with any proceeding by a
private party, in each case regarding the Merger.
(d) In furtherance and not in limitation of the covenants of the
parties contained in this Section 5.4, each of the parties hereto shall use its
reasonable best efforts to resolve such objections, if any, as may be asserted
by a Governmental Authority or other Person with respect to the Merger.
SECTION 5.5. Public Announcements. The initial press release with
respect to the execution of this Agreement shall be a joint press release to be
reasonably agreed upon by Parent and the Company. Thereafter, neither the
Company nor Parent shall issue or cause the publication of any press release or
other public announcement (to the extent not previously issued or made in
accordance with this Agreement) with respect to the Merger or this Agreement
without the prior consent of the other party (which consent shall not be
unreasonably withheld or delayed), except as may be required by Law or by any
applicable listing agreement with a national securities exchange or Nasdaq as
determined in the good faith judgment of the party proposing to make such
release (in which case such party shall not issue or cause the publication of
such press release or other public announcement without prior consultation with
the other party).
SECTION 5.6. Access to Information. Upon reasonable notice and
subject to applicable Laws relating to the exchange of information, the Company
shall, and shall cause each of its Subsidiaries to, afford to Parent and
Parent's representatives reasonable access during normal business hours to all
of the Company's and its Subsidiaries' properties, commitments, books,
contracts, records and correspondence (in each case, whether in physical or
electronic form), officers, employees, accountants, counsel, financial advisors
and other Representatives and the Company shall furnish promptly to Parent (i) a
copy of each report, schedule and other document filed or submitted by it
pursuant to the requirements of Federal or state securities Laws and a copy of
any communication (including "comment letters") received by the Company from the
SEC concerning compliance with securities Laws and (ii) all other information
concerning its and its Subsidiaries' business, properties and personnel as
Parent may reasonably request; provided, that no investigation, or information
received, pursuant to this Section 5.6 will modify any of the representations
and warranties of the Company.
27
SECTION 5.7. Notification of Certain Matters. The Company shall give
prompt notice to Parent, and Parent shall give prompt notice to the Company, of
(i) any notice or other communication received by such party from any
Governmental Authority in connection with the Merger or from any Person alleging
that the consent of such Person is or may be required in connection with the
Merger, if the subject matter of such communication or the failure of such party
to obtain such consent could be material to the Company, the Surviving
Corporation or Parent, (ii) any orders, actions, suits, claims, investigations
or proceedings commenced or, to such party's Knowledge, threatened against,
relating to or involving or otherwise affecting such party or any of its
Subsidiaries which relate to the Merger, (iii) the discovery of any fact or
circumstance that, or the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which, would cause any representation or
warranty made by such party contained in this Agreement (A) that is qualified as
to materiality or Material Adverse Effect to be untrue and (B) that is not so
qualified to be untrue in any material respect, and (iv) any material failure of
such party to comply with or satisfy any covenant or agreement to be complied
with or satisfied by it hereunder; provided, however, that the delivery of any
notice pursuant to this Section 5.7 shall not (x) cure any breach of, or
non-compliance with, any other provision of this Agreement or (y) limit the
remedies available to the party receiving such notice.
SECTION 5.8. Indemnification and Insurance.
(a) From and after the Effective Time, Parent and the Surviving
Corporation shall indemnify the individuals who at or prior to the Effective
Time were directors or officers of the Company (collectively, the "INDEMNITEES")
with respect to all acts or omissions by them in their capacities as such at any
time prior to the Effective Time, to the fullest extent (A) required by the
Company Charter Documents as in effect on the date of this Agreement and (B)
permitted under applicable Law.
(b) Parent shall purchase and maintain in effect, for a three (3)
year period commencing immediately after the Effective Time, directors' and
officers' liability insurance covering acts or omissions occurring prior to the
Effective Time with respect to those persons who are currently covered by the
Company's current primary directors' and officers' liability insurance policy
(other than any such person who is an officer of Parent), for the aggregate
amount of coverage of $10 million, which shall be in addition to such coverage
otherwise available to such persons under Parent's primary directors' and
officers' liability insurance, and Parent shall continue to cover such persons
under Parent's primary directors' and officers' liability insurance until at
least three (3) years after the Effective Time.
(c) The Indemnitees to whom this Section 5.8 applies shall be third
party beneficiaries of this Section 5.8. The provisions of this Section 5.8 are
intended to be for the benefit of each Indemnitee and his or her heirs.
28
SECTION 5.9. Securityholder Litigation. The Company shall give Parent
the opportunity to participate in the defense or settlement of any
securityholder litigation against the Company and/or its directors relating to
0the Merger, and no such settlement shall be agreed to without Parent's prior
consent, which consent shall not be unreasonably withheld or delayed.
SECTION 5.10. Fees and Expenses. Except as provided in Section 7.3,
all fees and expenses incurred in connection with this Agreement or the Merger
shall be paid by the party incurring such fees or expenses, whether or not the
Merger is consummated.
SECTION 5.11. Affiliates. As soon as practicable after the date
hereof, the Company shall deliver to Parent a letter identifying all Persons who
will be, at the time this Agreement is submitted for adoption by the
stockholders of the Company, "affiliates" of the Company for purposes of Rule
145 under the Securities Act and applicable SEC rules and regulations. The
Company shall use its reasonable best efforts to cause each such Person to
deliver to Parent at least 30 days prior to the Closing a written agreement
substantially in the form attached as Exhibit A.
SECTION 5.12. Rule 16b-3. Prior to the Effective Time, the Company
and Parent shall take such steps as may be reasonably requested by any party
hereto to cause dispositions of Company equity securities (including derivative
securities) pursuant to the transactions contemplated by this Agreement by each
individual who is a director or officer of the Company to be exempt under Rule
16b-3 promulgated under the Exchange Act in accordance with that certain
No-Action Letter dated January 12, 1999 issued by the SEC regarding such
matters.
ARTICLE VI
Conditions Precedent
--------------------
SECTION 6.1. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party hereto to effect the Merger
shall be subject to the satisfaction (or waiver, if permissible under applicable
Law) on or prior to the Closing Date of the following conditions:
(a) Company Stockholder Approval. The Company Stockholder Approval
shall have been obtained in accordance with applicable Law and the certificate
of incorporation and by-laws of the Company;
(b) Share Purchase Agreement. The Share Purchase Agreement shall be
in full force and effect, and the conditions precedent to the consummation of
the Inmet Share Purchase set forth in the Share Purchase Agreement shall have
been satisfied (or waived, if permissible under applicable Law);
(c) No Injunctions or Restraints. No Law, injunction, judgment or
ruling enacted, promulgated, issued, entered, amended or enforced by any
Governmental Authority (collectively, "RESTRAINTS") shall be in effect
enjoining, restraining, preventing or prohibiting consummation of the Merger or
making the consummation of the Merger illegal, and no Governmental Authority
shall have instituted any proceeding or be threatening to institute any
proceeding seeking any such Restraint; and
29
(d) Form S-4. The Form S-4 shall have become effective under the
Securities Act and no stop order suspending the effectiveness of the Form S-4
shall have been issued and no proceedings for that purpose shall have been
initiated or threatened by the SEC.
SECTION 6.2. Conditions to Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to effect the Merger are further subject to
the satisfaction (or waiver, if permissible under applicable Law) on or prior to
the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company contained in this Agreement that are qualified as to
materiality or Company Material Adverse Effect shall be true and correct, and
the representations and warranties of the Company contained in this Agreement
that are not so qualified shall be true and correct in all material respects, in
each case as of the date of this Agreement and as of the Closing Date as though
made on the Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date, in which case as of such earlier
date, and Parent shall have received a certificate signed on behalf of the
Company by the chief executive officer and the chief financial officer of the
Company to such effect;
(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and Parent shall have
received a certificate signed on behalf of the Company by the chief executive
officer and the chief financial officer of the Company to such effect;
(c) Director Resignations. Parent shall have received written
resignation letters from each of the members of the board of directors of the
Company, effective as of the Effective Time; and
(d) Appraisal Rights. Appraisal rights shall not have been exercised
and notice of the intention to exercise such rights shall not have been given in
accordance with the provisions of Section 262(d) of the DGCL by the stockholders
of the Company with respect to, in the aggregate, more than 3% of the issued and
outstanding shares of Company Common Stock as of immediately prior to the
Effective Time.
SECTION 6.3. Conditions to Obligation of the Company. The obligation
of the Company to effect the Merger is further subject to the satisfaction (or
waiver, if permissible under applicable Law) on or prior to the Closing Date of
the following conditions:
30
(a) Representations and Warranties. The representations and
warranties of Parent and Merger Sub contained in this Agreement that are
qualified as to materiality or Parent Material Adverse Effect shall be true and
correct, and the representations and warranties of Parent and Merger Sub
contained in this Agreement that are not so qualified shall be true and correct
in all material respects, in each case as of the date of this Agreement and as
of the Closing Date as though made on the Closing Date, except to the extent
such representations and warranties expressly relate to an earlier date, in
which case as of such earlier date, and the Company shall have received a
certificate signed on behalf of Parent by an executive officer of Parent to such
effect;
(b) Performance of Obligations of Parent and Merger Sub. Parent and
Merger Sub shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior to the Closing
Date, and the Company shall have received a certificate signed on behalf of
Parent by an executive officer of Parent to such effect; and
SECTION 6.4. Frustration of Closing Conditions. None of the Company,
Parent or Merger Sub may rely on the failure of any condition set forth in
Section 6.1, 6.2 or 6.3, as the case may be, to be satisfied if such failure was
caused by such party's failure to use its reasonable best efforts to consummate
the Merger, as required by and subject to Section 5.4.
ARTICLE VII
Termination
-----------
SECTION 7.1. Termination.
(a) This Agreement shall automatically terminate if, prior to receipt
of the Company Stockholder Approval, (A) the Company receives a Superior
Proposal, (B) the Company shall have complied with the provisions of Section 7.2
of the Share Purchase Agreement and (C) the Company shall have terminated the
Share Purchase Agreement pursuant to Section 7.2(2) thereof.
(b) This Agreement may be terminated and the Merger abandoned at any
time prior to the Effective Time:
(i) by the mutual written consent of the Company and Parent duly
authorized by each of their respective Boards of Directors; or
(ii) by either of the Company or Parent:
(1) if the Merger shall not have been consummated on or before
the Walk-Away Date, provided, however, that the right to terminate
this Agreement under this Section 7.1(b)(ii)(1) shall not be available
to a party if the failure of the Merger to have been consummated on or
before the Walk-Away Date was primarily due to the failure of such
party to perform any of its obligations under this Agreement; or (2)
if any Restraint having the effect set forth in Section 6.1(c) shall
be in effect and shall have become final and nonappealable; provided,
however, that the right to terminate this Agreement under this Section
7.1(b)(ii)(2) shall not be available to a party if such Restraint was
primarily due to the failure of such party to perform any of its
obligations under this Agreement; or
31
(iii) by Parent, if the Company shall have breached or failed to
perform any of its representations, warranties, covenants or agreements set
forth in this Agreement (or if any of the representations or warranties of
the Company set forth in this Agreement shall fail to be true), which
breach or failure (A) would (if it occurred or was continuing as of the
Closing Date) give rise to the failure of a condition set forth in Section
6.2(a) or 6.2(b) and (B) is incapable of being cured, or is not cured, by
the Company within thirty (30) calendar days following receipt of written
notice from Parent of such breach or failure; or
(iv) by the Company, if Parent shall have breached or failed to
perform any of its representations, warranties, covenants or agreements set
forth in this Agreement (or if any of the representations or warranties of
Parent set forth in this Agreement shall fail to be true), which breach or
failure (A) would (if it occurred or was continuing as of the Closing Date)
give rise to the failure of a condition set forth in Section 6.3(a) or
6.3(b) and (B) is incapable of being cured, or is not cured, by Parent
within thirty (30) calendar days following receipt of written notice from
the Company of such breach or failure.
SECTION 7.2. Effect of Termination. In the event of the automatic
termination of this Agreement pursuant to Section 7.1(a), or the termination of
this Agreement as provided in Section 7.1(b) (subject to the giving of written
notice thereof to the other party or parties, specifying the provision of
Section 7.1(b) pursuant to which such termination is made), this Agreement shall
forthwith become null and void (other than the provisions of the first sentence
of Section 3.10, Sections 5.9, 5.10, 7.2 and 7.3, and Article VIII, all of which
shall survive termination of this Agreement), and there shall be no liability on
the part of Parent, Merger Sub or the Company or their respective directors,
officers and Affiliates, except (i) the Company may have liability as provided
in Section 7.3, and (ii) nothing shall relieve any party from liability for
fraud or any willful breach of this Agreement.
SECTION 7.3. Termination Fee.
(a) In the event that the Company terminates this Agreement pursuant
to Section 7.1(a) and Parent becomes obligated to pay to Inmet a fee of $3
million pursuant to Section 7.2(5) of the Share Purchase Agreement, the Company
shall pay to Parent a fee of $3 million in cash (the "TERMINATION FEE").
(b) Any payment required to be made pursuant to Section 7.3(a) shall
be made to Parent within three (3) business days of the termination of this
Agreement by the Company pursuant to Section 7.1(a). All such payments shall be
made by wire transfer of immediately available funds to an account to be
designated by Parent.
32
(c) In the event that the Company shall have insufficient funds
(after exhausting all available financing under then existing facilities) to pay
the Termination Fee required pursuant to this Section 7.3 when due and payable
pursuant to Section 7.3(b), the Termination Fee shall be due and payable upon
the consummation of the transaction contemplated by the Superior Proposal,
together with interest thereon at a rate equal to the rate of interest publicly
announced by Citibank, in the City of New York from time to time, as such bank's
Prime Lending Rate plus 3%, from the fourth business day after the termination
of this Agreement pursuant to Section 7.1(a) through and including the date of
payment. In addition, if the Company shall fail to pay such fee when due and
payable under this Section 7.3(c), the Company shall also pay to Parent all of
Parent's costs and expenses (including attorneys' fees) in connection with
efforts to collect such fee. The Company acknowledges that the fee and the other
provisions of this Section 7.3 are an integral part of the Merger and that,
without these agreements, Parent would not enter into this Agreement.
ARTICLE VIII
Miscellaneous
-------------
SECTION 8.1. No Survival, Etc. Except as otherwise provided in this
Agreement, the representations, warranties and agreements of each party hereto
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any other party hereto, any Person
controlling any such party or any of their officers, directors or
representatives, whether prior to or after the execution of this Agreement, and
no information provided or made available shall be deemed to be disclosed in
this Agreement or in the Company Disclosure Schedule, except to the extent
actually set forth herein or therein. The representations, warranties and
agreements in this Agreement shall terminate at the Effective Time or, except as
otherwise provided in Section 7.2, upon the termination of this Agreement
pursuant to Section 7.1, as the case may be, except that (i) the agreements set
forth in Article II and Sections 5.8 and 5.10 and any other agreement in this
Agreement which contemplates performance after the Effective Time shall survive
the Effective Time indefinitely, and (ii) the agreements set forth in Sections
5.9, 5.10, 7.2 and 7.3 and this Article VIII shall survive termination
indefinitely.
SECTION 8.2. Amendment or Supplement. At any time prior to the
Effective Time, this Agreement may be amended or supplemented in any and all
respects, whether before or after receipt of the Company Stockholder Approval,
by written agreement of the parties hereto, by action taken by their respective
Boards of Directors; provided, however, that following approval of the Merger by
the stockholders of the Company, there shall be no amendment or change to the
provisions hereof which by Law would require further approval by the
stockholders of the Company without such approval.
33
SECTION 8.3. Extension of Time, Waiver, Etc. At any time prior to the
Effective Time, any party may, subject to applicable Law, (a) waive any
inaccuracies in the representations and warranties of any other party hereto,
(b) extend the time for the performance of any of the obligations or acts of any
other party hereto or (c) waive compliance by the other party with any of the
agreements contained herein or, except as otherwise provided herein, waive any
of such party's conditions. Notwithstanding the foregoing, no failure or delay
by the Company, Parent or Merger Sub in exercising any right hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right hereunder. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.
SECTION 8.4. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned, in whole or in
part, by operation of Law or otherwise, by any of the parties without the prior
written consent of the other parties, except that Merger Sub may assign, in its
sole discretion, any of or all its rights, interests and obligations under this
Agreement to any direct, wholly owned Subsidiary of Parent, but no such
assignment shall relieve Merger Sub of any of its obligations hereunder. Subject
to the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the parties hereto and their respective
successors and permitted assigns. Any purported assignment not permitted under
this Section shall be null and void.
SECTION 8.5. Counterparts. This Agreement may be executed in
counterparts (each of which shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement) and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties.
SECTION 8.6. Entire Agreement; No Third-Party Beneficiaries. This
Agreement and the Company Disclosure Schedule (a) constitute the entire
agreement, and supersede all other prior agreements and understandings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof and thereof and (b) except for the provisions of Section 5.8, are
not intended to and shall not confer upon any Person other than the parties
hereto any rights or remedies hereunder.
SECTION 8.7. Governing Law; Jurisdiction; Waiver of Jury Trial.
(a) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware, applicable to contracts executed in and
to be performed entirely within that State.
(b) All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined in the Chancery Court of the State of
Delaware or any federal court sitting in the City of New York, and the parties
hereto hereby irrevocably submit to the exclusive jurisdiction of such courts
(and, in the case of appeals, appropriate appellate courts therefrom) in any
such action or proceeding and irrevocably waive the defense of an inconvenient
forum to the maintenance of any such action or proceeding. The parties hereto
agree that a final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by applicable law.
34
(c) Each of the parties hereto hereby irrevocably waives any and all
rights to trial by jury in any legal proceeding arising out of or related to
this Agreement.
SECTION 8.8. Specific Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in the Chancery Court of
the State of Delaware or any federal court sitting in the City of New York,
without bond or other security being required, this being in addition to any
other remedy to which they are entitled at law or in equity.
SECTION 8.9. Notices. All notices, requests and other communications
to any party hereunder shall be in writing and shall be deemed given if
delivered personally, facsimiled (which is confirmed) or sent by overnight
courier (providing proof of delivery) to the parties at the following addresses:
If to Parent or Merger Sub, to:
Leucadia National Corporation
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Company, to:
MK Resources Company
00 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, XX 00000
Attention: G. Xxxxx Xxxxxx
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Stoel Rives LLP
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
35
or such other address or facsimile number as such party may hereafter specify by
like notice to the other parties hereto. All such notices, requests and other
communications shall be deemed received on the date of receipt by the recipient
thereof if received prior to 5 P.M. in the place of receipt and such day is a
business day in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding business day in the place of receipt.
SECTION 8.10. Severability. If any term or other provision of this
Agreement is determined by a court of competent jurisdiction to be invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other terms, provisions and conditions of this Agreement shall nevertheless
remain in full force and effect. 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 as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the Merger
is fulfilled to the extent possible.
SECTION 8.11. Definitions.
(a) As used in this Agreement, the following terms have the meanings
ascribed thereto below:
"AFFILIATE" means, as to any Person, any other Person that, directly
or indirectly, controls, or is controlled by, or is under common control with,
such Person. For this purpose, "CONTROL" (including, with its correlative
meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") means the possession,
directly or indirectly, of the power to direct or cause the direction of
management or policies of a Person, whether through the ownership of securities
or partnership or other ownership interests, by contract or otherwise.
36
"BUSINESS DAY" means a day except a Saturday, a Sunday or other day
on which the SEC or banks in the City of New York are authorized or required by
Law to be closed.
"COMPANY STOCK OPTIONS" means all outstanding options (including any
limited stock appreciation rights relating thereto) to purchase shares of
Company Common Stock granted under the Company Stock Plans.
"COMPANY STOCK PLANS" means the MK Gold Company Stock Incentive Plan
and the MK Gold Company Stock Incentive Plan for Non-Employee Directors.
"CREDIT AGREEMENTS" means the Credit Agreement, dated as of March 1,
1998, as amended to the Effective Time, between Parent and the Company, and the
Credit Agreement, dated as of March 4, 2005, between MK Gold Exploration B.V.
and Parent.
"GAAP" means generally accepted accounting principles in the United
States.
"GOVERNMENTAL AUTHORITY" means any government, court, arbitrator,
regulatory or administrative agency, commission or authority or other
governmental instrumentality, federal, state or local, domestic, foreign or
multinational.
"KNOWLEDGE" of any Person that is not an individual means, with
respect to any matter in question, the knowledge after due inquiry of such
Person's executive officers and all other officers and managers having
responsibility relating to the applicable matter.
"LAWS" means all laws (including common law), statutes, ordinances,
codes, rules, regulations, decrees and orders of Governmental Authorities.
"MATERIAL COMPANY SUBSIDIARIES" means, MK Gold Exploration B.V. and
Cobre Las Cruces S.A.
"PERMITS" means all licenses, franchises, permits, certificates,
approvals and authorizations from Governmental Authorities, or required by
Governmental Authorities to be obtained.
"PERSON" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity, including a
Governmental Authority.
"SUBSIDIARY" when used with respect to any party, means any
corporation, limited liability company, partnership, association, trust or other
entity the accounts of which would be consolidated with those of such party in
such party's consolidated financial statements if such financial statements were
prepared in accordance with GAAP, as well as any other corporation, limited
liability company, partnership, association, trust or other entity of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power (or, in the case of a partnership,
more than 50% of the general partnership interests) are, as of such date, owned
by such party or one or more Subsidiaries of such party or by such party and one
or more Subsidiaries of such party.
37
"WALK-AWAY DATE" means December 31, 2005.
The following terms are defined on the page of this Agreement set forth after
such term below:
Agreement.......................................2 Form S-4.......................................14
Bankruptcy and Equity Exception................11 Indemnitees....................................28
Certificate.....................................4 Independent Directors..........................11
Certificate of Merger...........................3 Inmet...........................................2
Closing.........................................3 Inmet Share Purchase............................2
Closing Date....................................3 Liens..........................................10
Code...........................................16 Merger..........................................2
Company.........................................2 Merger Consideration............................4
Company 10-K...................................10 Merger Sub......................................2
Company Board Recommendation...................22 Parent..........................................2
Company Charter Documents......................10 Parent Common Stock.............................4
Company Common Stock............................4 Parent Material Adverse Effect.................17
Company Disclosure Schedule.....................9 Parent Preferred Stock.........................19
Company Material Adverse Effect.................9 Parent SEC Documents...........................19
Company Preferred Stock........................10 Proxy Statement................................12
Company SEC Documents..........................13 Purchased Shares................................2
Company Stockholder Approval...................12 Representatives................................24
Company Stockholders Meeting...................22 Restraints.....................................30
Contract.......................................12 SEC............................................12
DGCL............................................2 Securities Act.................................10
Dissenting Shares...............................8 Share Purchase Agreement........................2
Dissenting Stockholders.........................8 Subsidiary Charter Documents...................10
Effective Time..................................3 Superior Proposal..............................26
Engagement Letters.............................16 Surviving Corporation...........................2
Exchange Act...................................12 Takeover Proposal..............................25
Exchange Agent..................................4 Tax Returns....................................16
Exchange Fund...................................5 Taxes..........................................16
Exchange Ratio..................................4 Termination Fee................................33
Fairness Opinion...............................16
SECTION 8.12. Interpretation.
(a) When a reference is made in this Agreement to an Article, a
Section, Exhibit or Schedule, such reference shall be to an Article of, a
Section of, or an 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
38
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. All
terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. References to a Person
are also to its permitted successors and assigns.
(b) The parties hereto have participated jointly in the negotiation
and drafting of this Agreement and, in the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as jointly
drafted by the parties hereto 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.
[signature page follows]
39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first above written.
LEUCADIA NATIONAL CORPORATION
By: /s/ Xxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxx X. Xxxx
Title: Executive Vice President and
Treasurer
MARIGOLD ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxx X. Xxxx
Title: President
MK RESOURCES COMPANY
By: /s/ G. Xxxxx Xxxxxx
-----------------------------------------
Name: G. Xxxxx Xxxxxx
Title: Chairman and Chief Executive
Officer
40
EXHIBIT A
Form of Affiliate Letter
------------------------
Dear Sirs:
The undersigned, a holder of shares of common stock, par value $0.01 per share
("COMPANY COMMON STOCK"), of MK Resources Company (the "COMPANY"), acknowledges
that the undersigned may be deemed an "affiliate" of the Company within the
meaning of Rule 145 ("RULE 145") promulgated under the Securities Act of 1933,
as amended (the "SECURITIES ACT"), by the Securities and Exchange Commission
(the "SEC"), although nothing contained herein should be construed as an
admission of such fact. Pursuant to the terms of the Agreement and Plan of
Merger dated as of May 2, 2005, among Leucadia National Corporation ("PARENT"),
Marigold Acquisition Corp. ("MERGER SUB") and the Company, Merger Sub will be
merged with and into the Company (the "MERGER"), and in connection with the
Merger, the undersigned is entitled to receive common shares, par value $1.00
per share, of Parent ("PARENT COMMON STOCK").
If in fact the undersigned were an affiliate under the Securities Act, the
undersigned's ability to sell, assign or transfer the shares of Parent Common
Stock received by the undersigned in exchange for any shares of Company Common
Stock in connection with the Merger may be restricted unless such transaction is
registered under the Securities Act or an exemption from such registration is
available. The undersigned understands that such exemptions are limited and the
undersigned has obtained or will obtain advice of counsel as to the nature and
conditions of such exemptions, including information with respect to the
applicability to the sale of such securities of Rules 144 and 145(d) promulgated
under the Securities Act. The undersigned understands that Parent will not be
required to maintain the effectiveness of any registration statement under the
Securities Act for the purposes of resale of shares of Parent Common Stock by
the undersigned.
The undersigned hereby represents to and covenants with Parent that the
undersigned will not sell, assign or transfer any of the shares of Parent Common
Stock received by the undersigned in exchange for shares of Company Common Stock
in connection with the Merger, except (a) pursuant to an effective registration
statement under the Securities Act, (b) in conformity with the volume and other
limitations of Rule 145 or (c) in a transaction which, in the opinion of counsel
to the undersigned (such counsel to be reasonably satisfactory to Parent and
such opinion to be in form and substance reasonably satisfactory to Parent), or
as described in a "no-action" or interpretive letter from the Staff of the SEC
specifically issued with respect to a transaction to be engaged in by the
undersigned, is not required to be registered under the Securities Act.
In the event of a sale or other disposition by the undersigned of the shares of
Parent Common Stock pursuant to Rule 145, the undersigned will supply Parent
with evidence of compliance with such Rule, in the form of a letter in the form
of Annex I hereto, or the opinion of counsel or no-action letter referred to
above. The undersigned understands that Parent may instruct its transfer agent
to withhold the transfer of any shares of Parent Common Stock disposed of by the
undersigned, but that (provided such transfer is not prohibited by any other
provision of this letter agreement or applicable law) upon receipt of such
evidence of compliance, Parent shall permit the transfer agent to effectuate the
transfer of the shares of Parent Common Stock sold as indicated in such letter.
The undersigned acknowledges and agrees that the legend set forth below will be
placed on certificates representing the shares of Parent Common Stock received
by the undersigned in connection with the Merger or held by a transferee
thereof, which legend will be removed by delivery of substitute certificates
upon receipt of an opinion in form and substance reasonably satisfactory to
Parent from counsel reasonably satisfactory to Parent to the effect that such
legend is no longer required for purposes of the Securities Act.
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of
1933 applies. The shares have not been acquired by the holder with a
view to, or for resale in connection with, any distribution thereof
within the meaning of the Securities Act of 1933. The shares may not be
sold, pledged or otherwise transferred except in accordance with an
exemption from the registration requirements of the Securities Act of
1933."
The undersigned acknowledges that (a) the undersigned has carefully read this
letter and understands the requirements hereof and the limitations imposed upon
the distribution, sale, transfer or other disposition of shares of Parent Common
Stock and (b) the receipt by Parent of this letter is an inducement to Parent's
obligations to consummate the Merger.
Very truly yours,
Dated:
[Annex I]
On [ ], the undersigned sold the securities of Leucadia National
Corporation ("PARENT") described below in the space provided for that purpose
(the "SECURITIES"). The Securities were received by the undersigned in
connection with the merger of Marigold Acquisition Corp. with and into MK
Resources Company.
Based upon the most recent report or statement filed by Parent with
the Securities and Exchange Commission, the Securities sold by the undersigned
were within the prescribed limitations set forth in paragraph (e) of Rule 144
promulgated under the Securities Act of 1933, as amended (the "SECURITIES ACT").
The undersigned hereby represents that the Securities were sold in
"brokers' transactions" within the meaning of Section 4(4) of the Securities Act
or in transactions directly with a "market maker" as that term is defined in
Section 3(a)(38) of the Securities Exchange Act of 1934, as amended. The
undersigned further represents that the undersigned has not solicited or
arranged for the solicitation of orders to buy the Securities, and that the
undersigned has not made any payment in connection with the offer or sale of the
Securities to any person other than to the broker who executed the order in
respect of such sale.
Very truly yours,
[Space to be provided for description of the Securities]
