AGREEMENT AND PLAN OF MERGER
among
DLB OIL & GAS, INC.,
ACQUISITION DRILLING, INC.
and
BONRAY DRILLING CORPORATION
TABLE OF CONTENTS
Page
ARTICLE I THE TENDER OFFER . . . . . . . . . . . . . . . . . . .1
1.1 The Offer. . . . . . . . . . . . . . . . . . . . . . .1
1.2 Company Action . . . . . . . . . . . . . . . . . . . .2
1.3 Board of Directors of the Company. . . . . . . . . . .3
ARTICLE II THE MERGER. . . . . . . . . . . . . . . . . . . . .3
2.1 The Merger . . . . . . . . . . . . . . . . . . . . . .3
2.2 Effective Time . . . . . . . . . . . . . . . . . . . .3
2.3 Effect of the Merger . . . . . . . . . . . . . . . . .3
2.4 Certificate of Incorporation . . . . . . . . . . . . .4
2.5 By-Laws. . . . . . . . . . . . . . . . . . . . . . . .4
2.6 ADI Directors. . . . . . . . . . . . . . . . . . . . .4
2.7 ADI Officers . . . . . . . . . . . . . . . . . . . . .4
2.8 Additional Actions . . . . . . . . . . . . . . . . . .4
ARTICLE III CONVERSION OF SECURITIES. . . . . . . . . . . . . 4
3.1 Common Stock . . . . . . . . . . . . . . . . . . . . .4
3.2 Dissenting Shares. . . . . . . . . . . . . . . . . . .5
3.3 ADI Common Stock . . . . . . . . . . . . . . . . . . .5
3.4 Exchange of Common Stock . . . . . . . . . . . . . . .5
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF DLB AND ADI. . . .7
4.1 Organization . . . . . . . . . . . . . . . . . . . . .7
4.2 Authority Relative to this Agreement . . . . . . . . .7
4.3 Consents and Approvals; No Violations. . . . . . . . .7
4.4 Offer Documents; Proxy Statement; Other Information. .8
4.5 No Prior Activities. . . . . . . . . . . . . . . . . .8
4.6 Finders and Investment Bankers . . . . . . . . . . . .8
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . .8
5.1 Organization . . . . . . . . . . . . . . . . . . . . .8
5.2 Capitalization . . . . . . . . . . . . . . . . . . . .9
5.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . .9
5.4 Authority Relative to this Agreement . . . . . . . . .9
5.5 Consents and Approvals; No Violations. . . . . . . . .9
5.6 Litigation . . . . . . . . . . . . . . . . . . . . . 10
5.7 SEC Filings. . . . . . . . . . . . . . . . . . . . . 10
5.8 Tradenames . . . . . . . . . . . . . . . . . . . . . 11
5.9 Tax Matters. . . . . . . . . . . . . . . . . . . . . 11
5.10 Environmental Matters. . . . . . . . . . . . . . . . 11
5.11 Compliance with Agreements . . . . . . . . . . . . . 13
5.12 Employee Benefit Matters . . . . . . . . . . . . . . 13
5.13 Special Warranty of Title to Company Assets. . . . . 13
5.14 Maintenance of Assets. . . . . . . . . . . . . . . . 14
5.15 Absence of Certain Changes or Events . . . . . . . . 14
5.16 Governmental Authorization and Compliance with Laws. 14
5.17 Offer Documents; Proxy Statement; Other Information. 14
5.18 Finders and Investment Bankers . . . . . . . . . . . 15
ARTICLE VI COVENANTS. . . . . . . . . . . . . . . . . . . . . 15
6.1 Conduct of Business of the Company . . . . . . . . . 15
6.2 Acquisition Proposals. . . . . . . . . . . . . . . . 16
6.3 Notification of Certain Matters. . . . . . . . . . . 17
6.4 Meetings of the Company's Stockholders . . . . . . . 17
6.5 Access to Information. . . . . . . . . . . . . . . . 18
6.6 Best Efforts . . . . . . . . . . . . . . . . . . . . 18
6.7 Public Announcements . . . . . . . . . . . . . . . . 19
6.8 Exchange Act Compliance. . . . . . . . . . . . . . . 19
6.9 Consent of DLB . . . . . . . . . . . . . . . . . . . 19
6.10 Indemnification. . . . . . . . . . . . . . . . . . . 19
ARTICLE VII CLOSING CONDITIONS. . . . . . . . . . . . . . . . 20
7.1 Conditions to Obligations of the Company, DLB and ADI20
7.2 Conditions to Obligation of DLB and ADI. . . . . . . 20
7.3 Conditions to Obligation of the Company. . . . . . . 21
ARTICLE VIII CLOSING. . . . . . . . . . . . . . . . . . . . . 21
8.1 Time and Place . . . . . . . . . . . . . . . . . . . 21
8.2 Filings at the Closing . . . . . . . . . . . . . . . 21
ARTICLE IX TERMINATION AND ABANDONMENT. . . . . . . . . . . . 22
9.1 Termination by Mutual Consent. . . . . . . . . . . . 22
9.2 Termination by Either DLB or the Company . . . . . . 22
9.3 Termination by DLB . . . . . . . . . . . . . . . . . 22
9.4 Termination by the Company . . . . . . . . . . . . . 22
9.5 Procedure and Effect of Termination Procedure and
Effect of Termination. . . . . . . . . . . . . . . . 23
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 23
10.1 Payment of Expenses. . . . . . . . . . . . . . . . . 23
10.2 Amendment and Modification . . . . . . . . . . . . . 24
10.3 Waiver of Compliance; Consents . . . . . . . . . . . 24
10.4 Investigations; Survival of Warranties . . . . . . . 24
10.5 Notices. . . . . . . . . . . . . . . . . . . . . . . 24
10.6 Assignment . . . . . . . . . . . . . . . . . . . . . 25
10.7 Governing Law. . . . . . . . . . . . . . . . . . . . 25
10.8 Counterparts . . . . . . . . . . . . . . . . . . . . 26
10.9 Interpretation . . . . . . . . . . . . . . . . . . . 26
10.10 Employment Arrangements . . . . . . . . . . . . 26
10.11 Exhibits. . . . . . . . . . . . . . . . . . . . 26
10.12 Entire Agreement. . . . . . . . . . . . . . . . 26
ANNEX A. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, this 6th day of January,
1997 (this "Agreement"), is made and entered into among DLB OIL &
GAS, INC., an Oklahoma corporation ("DLB"), ACQUISITION DRILLING,
INC., a Delaware corporation and a wholly-owned subsidiary of DLB
("ADI"), and BONRAY DRILLING CORPORATION, a Delaware corporation
(the "Company"). The Company and ADI are hereinafter sometimes
collectively referred to as the "Constituent Corporations."
WHEREAS, the respective Boards of Directors of DLB, ADI and
the Company have approved the acquisition of the Company by DLB
pursuant to the terms of this Agreement; and
WHEREAS, in furtherance thereof ADI will make a tender offer
for all shares of the Company's common stock, par value $1.00 per
share (the "Common Stock"), upon the terms of and subject to the
conditions set forth in this Agreement; and
WHEREAS, the respective Boards of Directors of DLB, ADI and
the Company have approved the merger of ADI into the Company (the
"Merger") upon the terms and subject to the conditions set forth
herein; and
WHEREAS, in order to induce DLB and ADI to enter into this
Agreement, certain holders of Common Stock (the "Selling
Stockholders") have entered into a Stockholder Tender Agreement
with ADI (the "Stockholder Agreement"), pursuant to which each such
holder has agreed, among other things, to tender such holder's
shares of Common Stock to ADI pursuant to the Offer (hereinafter
defined) upon the terms and conditions set forth in such
Stockholder Agreement.
NOW, WHEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
THE TENDER OFFER
1.1. The Offer. Provided that nothing shall have occurred
which would result in a failure of any of the conditions set forth
in Annex A, attached hereto and made a part hereof, as promptly as
practicable, and in no event later than the fifth (5th) business day
following the date hereof, ADI shall commence a cash tender offer
(the "Offer") for all of the outstanding shares (the "Shares") of
the Common Stock at a price of Thirty and No/100 Dollars ($30.00)
per share net to the seller in cash (the "Price Per Share"), which
Offer shall be subject to the conditions set forth in Annex A
hereto, and ADI shall file a Schedule 14D-1 with respect to the
Offer in accordance with Rule 14d-3(a) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
ADI shall, subject only to the satisfaction or waiver of the
conditions set forth on Annex A hereto, accept for payment all
Shares validly tendered and not withdrawn pursuant to the Offer as
soon as practicable after such acceptance is legally permitted.
Notwithstanding the foregoing, ADI expressly reserves the right to
increase the price per Share payable in the Offer and make any
other changes to the terms or conditions of the Offer, provided,
however, that ADI will not, without the prior written consent of
the Company (such consent to be authorized by the Board of
Directors of the Company), (i) decrease the Price Per Share, change
the form of consideration payable in the Offer or decrease the
number of Shares sought, (ii) change the conditions to the Offer
(other than to waive any condition), (iii) impose additional
conditions to the Offer or (iv) amend any other term of the Offer
in any manner adverse to the holders of Shares (other than
insignificant changes or amendments). The Offer shall expire at
12:00 midnight, New York City time, on the twentieth (20th) business
day following commencement of the Offer (such date and time, as may
be extended in accordance with the terms hereof, is referred to as
the "Expiration Date"); provided, however, and notwithstanding
anything in the foregoing to the contrary, it is understood and
agreed that ADI may, from time to time, in its sole discretion
extend the Expiration Date, (w) to comply with applicable rules and
regulations of the Securities and Exchange Commission ("SEC");
(x) if any of the conditions to the Offer have not been satisfied,
for the minimum period of time necessary to satisfy such condition;
(y) if all of the conditions to the Offer have been satisfied but
fewer than 90% of the shares of Common Stock outstanding
(determined on a fully diluted basis) have been tendered in the
Offer, for the minimum period of time necessary until 90% of such
shares have been so tendered, but in no event later than the tenth
(10th) day following the initial Expiration Date; provided, however,
that if ADI extends the Expiration Date pursuant to the clause (y),
it will be deemed upon such extension to have waived all conditions
except (c), (d)(i) and (d)(iii) set forth on Annex A hereto; or
(z) if a tender or exchange offer for shares of Common Stock or any
other proposal for a business combination involving the Company
shall be publicly disclosed or DLB or ADI shall have otherwise
learned that a tender or exchange offer for shares of Common Stock
or any other proposal for a business combination involving the
Company shall have been made or publicly proposed to be made by any
person (including the Company, or any of its affiliates, or any
group (within the meaning of Section 13(d)(3) of the Exchange Act))
(a "Competing Offer"), and all of the conditions to the Offer have
not been satisfied, until ten (10) days after the termination or
publicly-announced abandonment of such Competing Offer, but in no
event later than the minimum time necessary to satisfy all such
conditions; provided, further, that in no event shall the
Expiration Date be extended without the prior written consent of
the Company beyond the 21st day of March, 1997 unless condition (d)
set forth in Annex A to this Agreement shall not then be satisfied.
1.2. Company Action. The Company hereby consents to the Offer
and represents that its Board of Directors has unanimously approved
the Offer, the Merger, this Agreement, the Stockholder Agreement
and the acquisition of shares of Common Stock pursuant thereto, and
unanimously resolved to recommend acceptance of the Offer and
approval of the Merger by the stockholders of the Company. Upon
commencement of the Offer, the Company shall promptly file with the
SEC and mail to the holders of Common Stock a Solicitation/Recommendation
Statement on Schedule 14D-9 reflecting such recommendation and shall permit
ADI to include a copy of such Schedule 14D-9 in its Offering Documents,
as such phrase is hereinafter defined. The Company hereby consents to the
inclusion in the Offer of the recommendation referred to in the preceding
sentence. In connection with the Offer, the Company will furnish
ADI with such information, including current lists of the
stockholders of the Company, mailing labels and lists of security
positions, and such assistance as ADI or its agents may reasonably
request in communicating the Offer to the Company's stockholders.
1.3. Board of Directors of the Company. Effective upon the
payment by ADI for Shares pursuant to the Offer, ADI will be
entitled to designate that number of directors of the Company,
rounded up to the next whole number, that equals the product of
(x) the total number of directors on the Board of Directors (giving
effect to the election or appointment of any additional directors
pursuant to this Section 1.3) and (y) the percentage that the
number of Shares owned by DLB and ADI (including Shares accepted
for payment) bears to the total number of outstanding Shares. The
Board of Directors of the Company will at all relevant times be
composed of a sufficient number of directors so that the right of
ADI under this Section 1.3 will not be impaired. The Company will
at such time cause the designees of ADI to be elected to or
appointed by the Board of Directors, including, without limitation,
increasing the number of directors, amending its Bylaws, using its
reasonable best efforts to obtain resignations of incumbent
directors, and, to the extent necessary, filing with the SEC and
mailing to its stockholders the information required by
Section 14(f) of the Exchange Act and the rules promulgated
thereunder, as promptly as possible. DLB and ADI will supply any
information with respect to themselves and their respective
nominees, officers, directors, and affiliates required by
Section 14(f) of the Exchange Act and such Bylaws of the Company.
ARTICLE II.
THE MERGER
2.1. The Merger. Subject to the terms and conditions hereof,
the Merger shall be consummated in accordance with the Delaware
General Corporation law (the "DGCL") as soon as practicable
following the latest of (i) the expiration or termination of the
Offer, (ii) the satisfaction or waiver of the conditions set forth
in Article VII of this Agreement, (iii) the expiration or
termination of all required waiting periods with respect to the
acquisition of the Company by DLB pursuant to the Merger under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX
Xxx"), if applicable, and (iv) the receipt of any required
approvals from the stockholders of the Company. At the Effective
Time (as hereinafter defined), subject to the terms and conditions
of this Agreement and in accordance with the laws of the State of
Delaware, ADI shall be merged with and into the Company, which
shall be the surviving corporation. The Company hereinafter is
sometimes referred to as the "Surviving Corporation."
2.2. Effective Time. The Merger shall become effective at the
date and time of filing of a certificate of merger with the
Secretary of State of the State of Delaware in accordance with the
provisions of the DGCL (the "Certificate of Merger"), which shall
be so filed as provided in Section 8.2 of this Agreement. The date
and time when the Merger shall become effective is herein referred
to as the "Effective Time."
2.3. Effect of the Merger. The Merger shall have the effects
set forth in Section 259 of the DGCL.
2.4. Certificate of Incorporation. The Certificate of
Incorporation of the Company, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter amended as provided by law;
provided that effective upon the Merger, the Certificate of
Incorporation of the Company shall be amended so that it shall be
identical in all respects to the Certificate of Incorporation of
ADI as in effect immediately prior to the Effective Time except
that the name of the Surviving Corporation shall be "Bonray
Drilling Corporation".
2.5. By-Laws. The By-Laws of ADI, as in effect immediately
prior to the Effective Time, shall be the By-Laws of the Surviving
Corporation until thereafter amended as provided by law.
2.6. ADI Directors. The directors of ADI at the Effective
Time shall be the directors of the Surviving Corporation and will
hold office from the Effective Time until their respective
successors are duly elected or appointed and qualified in the
manner provided in the Certificate of Incorporation and By-Laws of
the Surviving Corporation, or as otherwise provided by law.
2.7. ADI Officers. The officers of ADI at the Effective Time
shall be the officers of the Surviving Corporation and will hold
office from the Effective Time until their respective successors
are duly elected or appointed and qualified in the manner provided
in the Certificate of Incorporation and By-Laws of the Surviving
Corporation, or as otherwise provided by law.
2.8. Additional Actions. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that
any deeds, bills of sale, assignments, assurances or any other
actions or things are necessary or desirable to vest, perfect or
confirm of record or otherwise in the Surviving Corporation its
right, title or interest in, to or under any of the rights,
properties or assets of either of the Constituent Corporations
acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger or otherwise to carry out
this Agreement, the officers and directors of the Surviving
Corporation shall be authorized to execute and deliver, in the name
and on behalf of each of the Constituent Corporations or otherwise,
all such deeds, bills of sale, assignments and assurances and to
take and do, in the name and on behalf of each of the Constituent
Corporations or otherwise, all such other actions and things as may
be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, properties
or assets in the Surviving Corporation or otherwise to carry out
this Agreement.
ARTICLE III.
CONVERSION OF SECURITIES
3.1. Common Stock.
(i) Each share of the Common Stock issued and
outstanding immediately prior to the Effective Time (except for
shares of Common Stock then owned beneficially or of record by DLB,
ADI or any subsidiary of DLB and except for Dissenting Shares (as
hereinafter defined) in respect of which appraisal rights are
perfected) shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted into the right to
receive the Price Per Share in cash payable to the holder thereof,
without interest thereon, upon surrender of the certificate
representing such share of Common Stock.
(ii) Each share of Common Stock issued and outstanding
immediately prior to the Effective Time which is then owned
beneficially or of record by DLB, ADI or any subsidiary of DLB
shall, by virtue of the Merger and without any action on the part
of the holder thereof, be canceled and retired and cease to exist,
without any conversion thereof.
(iii) Each share of Common Stock held in the
Company's treasury immediately prior to the Effective Time shall,
by virtue of the Merger, be canceled and retired and cease to
exist, without any conversion thereof.
3.2. Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, shares of Common Stock which are issued
and outstanding immediately prior to the Effective Time and which
are held by stockholders who have not voted such shares in favor of
the approval and adoption of the Merger and shall have delivered a
written demand for appraisal of such shares in the manner
(including the time of delivery) provided in Section 262 of the
DGCL (the "Dissenting Shares") shall not be converted into or be
exchangeable for the right to receive the consideration provided in
Section 3.1, but shall be entitled to receive such consideration as
shall be determined pursuant to Section 262 of the DGCL; provided,
however, that, if such holder shall have failed to perfect or shall
have effectively withdrawn or lost his right to appraisal and
payment under the DGCL, such holder's shares of Common Stock shall
thereupon be deemed to have been converted into and to have become
exchangeable for, as of the Effective Time, the right to receive
the consideration provided for in Section 3.1, without any interest
thereon, in accordance with Section 3.4, and such shares shall no
longer be Dissenting Shares.
3.3. ADI Common Stock. Each share of common stock, par value
$.01 per share, of ADI issued and outstanding immediately prior to
the Effective Time shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into and
exchangeable for one share of common stock of the Surviving
Corporation.
3.4. Exchange of Common Stock.
(i) At the Effective Time, ADI (or the Company, as the
Surviving Corporation) shall deposit in trust with a bank or trust
company designated by DLB (the "Exchange Agent") cash, a letter of
credit or a combination thereof issued by a commercial bank
selected by DLB which irrevocably commits the issuer to provide the
Exchange Agent from time to time with the funds necessary to make
the payments required hereunder in an aggregate amount equal to the
product of (i) the number of shares of Common Stock issued and
outstanding at the Effective Time (other than any such shares owned
beneficially or of record by DLB, ADI or any subsidiary of DLB or
held in the Company's treasury and other than Dissenting Shares in
respect of which appraisal rights are perfected), and (ii) the
Price Per Share (such product being hereinafter referred to as the
"Exchange Fund"). The Exchange Agent shall, pursuant to
irrevocable instructions, make the payments provided for in Section
3.1(i) out of the Exchange Fund. The Exchange Agent may invest all
or portions of the Exchange Fund as the Surviving Corporation shall
direct. Any net profit resulting from, or interest or income
produced by the investment of the Exchange Fund, shall be paid to
the Surviving Corporation.
(ii) Promptly after the Effective Time, the Exchange
Agent shall mail to each record holder (other than DLB, ADI or any
subsidiary of DLB), as of the Effective Time, of an outstanding
certificate or certificates which immediately prior to the
Effective Time represented shares of Common Stock (the
"Certificates") a form letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent) and instructions for use in
effecting the surrender of the Certificates for payment therefor.
Upon surrender by such holder to the Exchange Agent of a
Certificate, together with such letter of transmittal duly
executed, the holder of such Certificate shall be entitled to
receive in exchange therefor cash in an amount equal to the product
of the number of shares of Common Stock represented by such
Certificate and the Price Per Share, and such Certificate shall
forthwith be canceled. No interest will be paid or accrued on the
cash payable upon the surrender of the Certificates. If payment is
to be mailed to a person other than the person in whose name a
Certificate surrendered is registered, it shall be a condition of
payment that (a) the Certificate so surrendered shall be properly
endorsed or otherwise in proper form for transfer and that (b) the
person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the
registered holder of the Certificate surrendered or establish to
the satisfaction of the Surviving Corporation that such tax has
been paid or is not applicable. Until surrendered in accordance
with the provisions of this Section 3.4, each Certificate (other
than Certificates representing shares owned beneficially or of
record by DLB, ADI or any subsidiary of DLB and other than
Dissenting Shares in respect of which appraisal rights are
perfected) shall represent for all purposes whatsoever only the
right to receive the Price Per Share in cash multiplied by the
number of shares evidenced by such Certificate, without any
interest thereon.
(iii) After the Effective Time there shall be no
transfers on the stock transfer books of the Surviving Corporation
of the shares of Common Stock which were outstanding immediately
prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for
transfer or for any other reason, they shall be canceled and
exchanged for cash as provided in this Article III.
(iv) Any portion of the Exchange Fund which remains
unclaimed by the stockholders of the Company for six (6) months
after the Effective Time shall be repaid to the Surviving
Corporation, upon demand, and any stockholders of the Company who
have not theretofore complied with Section 3.4(ii) shall thereafter
look only to the Surviving Corporation for payment of their claim
for the Price Per Share for each share of Common Stock, without any
interest thereon.
ARTICLE IV.REPRESENTATIONS AND WARRANTIES OF DLB AND ADI
DLB and ADI each jointly and severally represent and warrant
to the Company as follows:
4.1. Organization. Each of DLB and ADI is a corporation duly
organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation and each has all requisite
corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted,
except where the failure to be so existing and in good standing
would not affect materially and adversely the business, assets,
prospects, condition (financial or otherwise) or the results of
operations of DLB and ADI.
4.2. Authority Relative to this Agreement. Each of DLB and
ADI has full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by the Boards of Directors of DLB and ADI
and by DLB as the sole stockholder of ADI, and no other corporate
proceedings on the part of DLB or ADI are necessary to authorize
this Agreement and the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by each
of DLB and ADI, and constitutes a valid and binding agreement of
DLB and ADI, enforceable against DLB and ADI in accordance with its
terms, except to the extent that enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization or
other laws affecting the enforcement of creditors' rights generally
and by principles of equity regarding the availability of remedies.
4.3. Consents and Approvals; No Violations. Except for
applicable requirements of the Exchange Act, the HSR Act and filing
and recordation of appropriate merger documents as required by the
DGCL, no filing with, and no permit, authorization, consent or
approval of, any public body is necessary for the consummation by
DLB and ADI of the transactions contemplated by this Agreement, the
absence of which would or might result in the divestiture of any
assets which are material to DLB and ADI taken as a whole or would
otherwise have a material adverse effect on the business of DLB and
ADI taken as a whole. Neither the execution and delivery of this
Agreement nor the compliance by DLB and ADI with any of the
provisions hereof will (i) conflict with or result in any breach of
any provision of the Articles or Certificate of Incorporation or
By-Laws of DLB or ADI, (ii) require any consent, approval or notice
under or result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give
rise to any right of termination, cancellation or acceleration)
under, or change the rights or obligations of any party under, or
trigger any obligation or payment by DLB or ADI under, any of the
terms, conditions or provisions of any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to
which DLB or ADI is a party or by which either of them or any of
their properties or assets may be bound, or (iii) violate any
order, writ, injunction, decree, statute, rule or regulation
applicable to DLB or ADI or any of their properties or assets.
4.4. Offer Documents; Proxy Statement; Other
Information. None of the information supplied by DLB or ADI for
inclusion in the Offer (together with the related letter of
transmittal, the "Offer Documents") (including any amendments or
supplements thereto and including Statements on Schedules 14D-1 and
14D-9) will, at the respective times the Offer Documents or any
amendments or supplements thereto are filed with the SEC, contain
any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading. None of the information relating to DLB or ADI
supplied for inclusion in the proxy statement which is to be mailed
to the stockholders of the Company in connection with any meeting
of stockholders convened in accordance with Section 6.4 or any
information statement which is to be mailed to the stockholders of
the Company in connection with any action taken without
solicitation of proxies or consents (such proxy statement or
information statement is herein referred to as the "Proxy
Statement") will, at the time the Proxy Statement is mailed, be
false or misleading with respect to any material fact, or omit to
state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading or, at the
time of the meeting of stockholders to which any such Proxy
Statement relates, as then amended or supplemented, necessary to
correct any statement which has become false or misleading in any
earlier communication with respect to the solicitation of any proxy
for such meeting. The Statement on Schedule 14D-1 will comply in
all material respects as to form with the requirements of the
Exchange Act and the rules and regulations thereunder.
4.5. No Prior Activities. ADI has not engaged, directly or
through any subsidiary, in any business or activity of any type or
kind whatsoever, or entered into any agreements or arrangements
with any person or entity, or is subject to or bound by any
liability, obligation or undertaking, which is not in connection
with its organization, this Agreement and the transactions
contemplated hereby (including the financing necessary to
consummate the Offer and the Merger).
4.6. Finders and Investment Bankers. Neither DLB, ADI nor any
of their officers or directors has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated
herein.
ARTICLE V.REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to DLB and ADI as follows:
5.1. Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on
its business as now being conducted. The Company is duly qualified
or licensed and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it
or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to
be so duly qualified or licensed and in good standing would not
individually or in the aggregate affect materially and adversely
the business, assets, properties, condition (financial or
otherwise) or the results of operations of the Company. The
Company has heretofore made available to DLB accurate and complete
copies of the Certificate of Incorporation and By-Laws, as
currently in effect, of the Company.
5.2. Capitalization. The authorized capital stock of the
Company consists of 800,000 shares of Common Stock, of which on
December 31, 1996 there were 423,540 shares issued and outstanding
and less than 10,000 shares held in the Company's treasury. No
other capital stock of the Company is authorized. All issued and
outstanding shares of capital stock of the Company are validly
issued, fully paid, non-assessable and free of preemptive rights.
There are not, and at the Effective Time there will not be, any
existing options, warrants, calls, subscriptions, stock
appreciation rights, or other rights or other agreements,
arrangements or commitments obligating the Company to issue,
transfer or sell, or securities or rights convertible or
exchangeable for, any shares of capital stock of the Company.
5.3. Subsidiaries. The Company has no subsidiaries. The
Company does not own any equity interest in any corporation or
other entity.
5.4. Authority Relative to this Agreement. The Company has
full corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by the Company's Board of Directors and no other
corporate proceedings on the part of the Company are necessary to
authorize the execution and delivery of this Agreement or to
consummate the transactions so contemplated (other than the
adoption of this Agreement by the stockholders of the Company in
accordance with the DGCL and the Certificate of Incorporation and
By-Laws of the Company). This Agreement has been duly and validly
executed and delivered by the Company, and, subject insofar as
Article II of this Agreement is concerned to the approval and
adoption of this Agreement by the stockholders of the Company,
constitutes the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
except to the extent that enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally and by
principles of equity regarding the availability of remedies. The
Company and its Board of Directors have approved this Agreement and
the Stockholder Agreement and the transactions contemplated hereby
and thereby, including, without limitation, the Offer, the Merger
and the agreements by the Selling Stockholders to tender their
Shares, and the Company and the Board of Directors have taken all
steps necessary to render Section 203 of the DGCL inapplicable to
this Agreement, the Stockholder Agreement and the transactions
contemplated hereby and thereby, including without limitation, the
Merger, the Offer (regardless of whether this Agreement is
terminated) and the agreements by the Selling Stockholders to
tender their Shares (regardless of whether this Agreement is
terminated).
5.5. Consents and Approvals; No Violations. Except for
applicable requirements of the Exchange Act, the HSR Act and the
filing and recordation of appropriate merger documents as required
by the DGCL, no filing with, and no permit, authorization, consent
or approval of, any public body, domestic or foreign, is necessary
for the consummation by the Company of the transactions
contemplated by this Agreement, the absence of which would or might
result in the divestiture of any assets which are material to the
Company or would otherwise affect materially and adversely the
business, assets, prospects, condition (financial or otherwise) or
the results of operations of the Company. Neither the execution
and delivery of this Agreement nor the consummation of the
transactions contemplated hereby nor compliance by the Company with
any of the provisions hereof will (i) conflict with or result in
any breach of any provision of the Certificate of Incorporation or
By-Laws of the Company, (ii) except as is disclosed in paragraph
5.5 of the Disclosure Letter delivered by the Company to DLB
concurrently with the execution of this Agreement (the "Disclosure
Letter"), require any consent, approval or notice under or result
in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a material default (or give rise
to any right of termination, cancellation or acceleration) under
any of the terms, conditions or provisions of any material note,
bond, mortgage, indenture, license, agreement or other instrument
or obligation to which the Company is a party or by which it or any
material portion of its properties or assets may be bound or
(iii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company or any material portion of its
properties or assets.
5.6. Litigation. Except as may be disclosed in the SEC
filings referred to in Section 5.7 or as otherwise disclosed in
paragraph 5.6 of the Disclosure Letter, as of the date hereof there
are no claims, actions, proceedings or, to the best knowledge of
the Company, investigations pending or, to the best knowledge of
the Company, threatened against the Company or any properties or
rights of the Company before any court, administrative,
governmental or regulatory authority or body which, if decided
adversely, would materially and adversely affect the business,
assets, prospects, condition (financial or otherwise) or the
results of operations of the Company. As of the date hereof,
neither the Company nor any of its property is subject to any
order, judgment, injunction or decree which might affect materially
and adversely the business, assets, prospects, condition (financial
or otherwise) or the results of operations of the Company.
5.7. SEC Filings. The Company has heretofore made available
to DLB its (i) Annual Report on Form 10-K for the fiscal year ended
June 30, 1996 as filed with the SEC, (ii) Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 1996, (iii) proxy
statements relating to the Company's meetings of stockholders
(whether annual or special) since June 30, 1996 and (iv) all other
reports, filings or registration statements filed by the Company
with the SEC since June 30, 1996. As of their respective dates,
such reports and statements (including all exhibits and schedules
thereto and documents incorporated by reference therein) did not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading. The audited financial statements
and unaudited interim financial statements of the Company included
or incorporated by reference in such reports and in the Company's
Annual Reports on Form 10-K for the fiscal years ended June 30,
1996 and June 30, 1995 heretofore made available to DLB have been
prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and
fairly present the assets, liabilities and financial position of
the Company as of the dates thereof and the results of its
operations and changes in financial position for the periods then
ended (subject, in the case of any unaudited interim financial
statements, to normal year-end adjustments).
5.8. Tradenames. To the Company's knowledge, no other person,
firm or corporation is presently using or claiming, or has the
right to use or to claim the tradename: "Bonray Drilling
Corporation".
5.9. Tax Matters.
(i) The Company has filed when due (taking into account
extensions) with the appropriate federal, state, local, foreign and
other governmental agencies, all tax returns, estimates and reports
required to be filed by it with respect to its tax obligations and
has paid when due all required taxes and has established sufficient
reserves to pay taxes when due through the Closing Date.
(ii) Except as is disclosed in paragraph 5.9(ii) of the
Disclosure Letter, there are no taxes assessed or asserted in
writing with respect to any tax return filed by the Company or
claimed in writing to be due by a taxing authority or otherwise.
No tax return of the Company is currently being audited by the
Internal Revenue Service ("IRS") or any other taxing authority
having jurisdiction over the Company. The Company has not executed
any agreement or other document extending or having the effect of
extending the period of assessment or collection of any taxes. All
final adjustments made by the IRS with respect to any Federal tax
return of the Company have been reported to the relevant state,
local or foreign taxing authority to the extent required by law.
No request by the Company for any rulings or any determination
letters are pending with any taxing authority.
(iii) The Company will deliver to DLB at Closing, all
tax files currently being maintained or stored by the Company.
5.10. Environmental Matters.
(i) Except as is disclosed in paragraph 5.10(i) of the
Disclosure Letter, all real property owned, leased or operated by
the Company (the "Property"), the operations conducted thereon and
all operations of the Company conducted off of the Property are not
in material violation of any order or requirement of any court or
Governmental Authority or any Environmental Laws (as such terms are
defined herein).
(ii) Except as is disclosed in paragraph 5.10(ii) of the
Disclosure Letter, the Property and the operations conducted
thereon by the Company or the operations conducted by any prior
owner or operator of the Property are not subject to any existing,
pending or threatened action, suit, investigation, inquiry or
proceeding by or before any court or Governmental Authority.
(iii) Except as is disclosed in paragraph 5.10(iii)
of the Disclosure Letter, all notices, permits, licenses or similar
authorizations, if any, required to be obtained or filed in
connection with the current operation or use of the Property,
including without limitation authorizations related to the
treatment, storage, disposal or release of any hazardous substances
or solid waste have been duly obtained or filed, and the Company is
in material compliance with the terms and conditions of all such
notices, permits, licenses and similar authorizations.
(iv) Except as is disclosed in paragraph 5.10(iv) of the
Disclosure Letter, there are no leaking or deteriorating above
ground or below ground storage tanks or containers on the Property
and no hazardous substance or solid waste is known to have been
disposed of or otherwise released on or to the property except in
compliance with Environmental Laws.
(v) The Company is not subject to any contingent
liability in connection with any release or threatened release of
any hazardous substance or solid waste into the environment or on
or at the Property or from the operations conducted thereon other
than minor instances, the clean-up of which will exceed the sum of
Ten Thousand Dollars ($10,000) per occurrence based upon standard
industry practices as of the Closing Date.
(vi) For purposes of this Section 5.10, "Environmental
Laws" shall mean any and all laws, statutes, ordinances, rules,
regulations, orders, or determinations by any Governmental
Authority pertaining to health or the environment in effect in any
and all jurisdictions in which the Property is located, including
without limitation, the Clean Air Act, as amended, the
Comprehensive Environmental, Response, Compensation, and Liability
Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution
Control Act, as amended, the Operational Safety and Health Act of
1970 ("OSHA"), as amended, the Resource Conservation and Recovery
Act of 1976 ("RCRA"), as amended, the Safe Drinking Water Act, as
amended, the Toxic Substances Control Act, as amended, the
Superfund Amendments and the Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended,
and other environmental, conservation or protection laws. The
terms "hazardous substance" and "release" (or "threatened release"
have the meanings specified in CERCLA, and the term "solid waste"
and "disposal" (or "disposed") have the meanings specified in RCRA;
provided, however, that the terms "hazardous substance" and "solid
waste" shall include all oil and gas exploration and production
wastes that may present an endangerment to public health or welfare
or the environment, even if such wastes are specifically exempt
from classification as hazardous substances or solid wastes
pursuant to CERCLA or RCRA or the state analogues to those
statutes.
(vii) For purposes of this Section 5.10,
"Governmental Authority" shall mean the United States, the state,
county, city and political subdivisions in which the Property is
located or which exercises jurisdiction over any such Property and
any agency, department, commission, board, bureau or
instrumentality which exercises jurisdiction over such Property.
(viii) Except as is disclosed in paragraph 5.10(viii)
of the Disclosure Letter, there have been no environmental
investigations, studies, audits, reviews or other analyses
conducted by, or which are in the possession of the Company
regarding any facility or property now or previously owned, leased
or operated by the Company or upon which the Company has performed
any operations.
5.11. Compliance with Agreements. The Company has
complied in all material respects with all terms and conditions of
its agreements and contracts with third parties.
5.12. Employee Benefit Matters.
(i) Paragraph 5.12(i) of the Disclosure Letter provides
a description of each "employee benefit plan", as such term is
defined in the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). Other than as is disclosed in paragraph 5.12 of
the Disclosure Letter, there are no stock option plans, collective
bargaining agreements, bonus plans, incentive award plans, vacation
policies, severance pay plans, deferred compensation agreements,
medical or disability insurance plans, executive compensation or
supplemental income plans, or any other employee benefit plans,
agreements or programs.
(ii) True, correct and complete copies of each of the
plans disclosed in paragraph 5.12(i) of the Disclosure Letter have
been furnished to DLB.
(iii) The Company has substantially performed all
obligations, whether arising by operation of law or by contract,
required to be performed by it in connection with said employee
benefit plans.
(iv) Any employee benefit plan intended to be qualified
under Section 401 of the Internal Revenue Code of 1986, as amended,
satisfies the requirements of such Section and has received a
favorable determination letter from the IRS regarding such
qualification status.
(v) Except as is disclosed in paragraph 5.12(v) of the
Disclosure Letter, there are no actions, suits, unfunded
obligations or claims pending (other than routine claims for
benefits involving less than Ten Thousand Dollars ($10,000) in the
aggregate) with respect to any of the employee benefit plans.
(vi) Paragraph 5.12(vi) of the Disclosure Letter sets
forth by number and employment classification the approximate
number of employees employed by the Company as of the date of this
Agreement and the employee benefit plans to which such employee is
entitled.
5.13. Special Warranty of Title to Company Assets.
Disclosed in paragraph 5.13 of the Disclosure Letter is a list of
all of the Company's real and tangible personal property and assets
owned or leased (the "Assets"). The Company has prepared paragraph
5.13 on a best efforts basis and hereby specifically disclaims the
completeness of paragraph 5.13. As to the title to the Assets, as
specifically set forth and described in paragraph 5.13, the Company
does hereby represent, warrant and covenant with DLB that the
Company has not made, done, executed or permitted any act or thing
whatsoever, whereby any of the Assets, or any part thereof, now or
at any time hereafter through the Closing Date shall have become
impaired, charged or encumbered in any manner whatsoever, except as
is specifically indicated in paragraph 5.13, and that the Company
will warrant and defend the title to the Assets to be free and
clear against the lawful claims and demands of all persons claiming
by, through or under the Company from events, transactions, actions
or failures to act prior to the Closing Date, but not otherwise.
5.14. Maintenance of Assets. Except as is disclosed in
paragraph 5.14 of the Disclosure Letter, the Company's Assets
currently used by the Company in the ordinary course of business
have been maintained in accordance with customary industry
maintenance practices and are in a state of repair (normal wear and
tear excepted) which the Company believes to be adequate for the
normal use of such Assets in the ordinary course of business.
5.15. Absence of Certain Changes or Events. Except as
contemplated by this Agreement, or reflected in any financial
statement or notes thereto referred to in Section 5.7, or reflected
in the monthly financial statements of the Company for the months
of October and November 1996, previously furnished to DLB, or
disclosed in paragraph 5.15 of the Disclosure Letter or in SEC
filings made prior to the date hereof, since June 30, 1996 there
has not been: (i) any material adverse change in the business,
Assets, customer relations, condition (financial or other) or the
results of operations of the Company; (ii) any damage, destruction
or loss, whether covered by insurance or not, having a material
adverse effect upon the properties or business of the Company;
(iii) any change by the Company in accounting principles or methods
except insofar as may be required by a change in generally accepted
accounting principles; (iv) any declaration, payment or setting
aside for payment of any dividend or any redemption, purchase or
other acquisition of any shares of capital stock or securities of
the Company; (v) a grant of any general increase in the
compensation of its officers or employees (including any such
increase pursuant to any bonus, pension, profit-sharing or other
plan or commitment) or any increase in the compensation payable or
to become payable to any such officer or employee.
5.16. Governmental Authorization and Compliance with
Laws. The business of the Company has been operated in compliance
with all laws, ordinances, regulations and orders of all
governmental entities, domestic or foreign, except for violations
which do not affect and will not affect materially and adversely
the business, assets, prospects, condition (financial or otherwise)
or the results of operations of the Company or, as the case may be,
the Surviving Corporation. The Company has all permits,
certificates, licenses, approvals and other authorizations required
in connection with the operation of their business, except those
the absence of which does not affect and will not affect materially
and adversely the business, assets, prospects, condition (financial
or otherwise) or the results of operations of the Company or the
Surviving Corporation.
5.17. Offer Documents; Proxy Statement; Other
Information. None of the information supplied by the Company for
inclusion in the Offer Documents (including any amendments or
supplements thereto and including Statements on Schedules 14D-1 and
14D-9) will, at the respective times the Offer Documents or any
amendments or supplements thereto are filed with the SEC, contain
any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading. None of the information relating to the Company
included in the Proxy Statement, at the time it is mailed, or as
amended or supplemented, will contain any statement which, at the
time and in light of the circumstances under which it is made, is
false or misleading with respect to any material fact, or which
omits to state any material fact necessary in order to make the
statements therein not misleading or necessary to correct any
statement in an earlier communication with respect to the
solicitation of a proxy for the same meeting or subject matter
which has become misleading. The Statement on Schedule 14D-9 and
the Proxy Statement each will comply in all material respects as to
form with the requirements of the Exchange Act and the rules and
regulations thereunder.
5.18. Finders and Investment Bankers. Neither the
Company nor any of its officers or directors has employed any
broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the transactions
contemplated herein.
ARTICLE VI.
COVENANTS
6.1. Conduct of Business of the Company. Except as
contemplated by this Agreement, during the period from the date of
this Agreement to the Effective Time, the Company shall conduct its
operations according to its ordinary course of business and
consistent with past practice, and the Company shall use its best
efforts to preserve intact its business organization as a going
concern, to keep available the services of its officers, employees
and other work force and to maintain satisfactory relationships
with licensors, licensees, suppliers, contractors, distributors,
oil and gas operators and other customers and others having
business relationships with it. Without limiting the generality of
the foregoing, and except as otherwise expressly provided in this
Agreement, prior to the Effective Time, the Company will not,
without the prior written consent of DLB:
(i) Amend or propose to amend its Certificate of
Incorporation or By-Laws;
(ii) Authorize for issuance, issue, sell, pledge,
deliver or agree or commit to issue, sell, pledge or deliver
(whether through the issuance or granting of any options, warrants,
commitments, subscriptions, rights to purchase, awards or
otherwise) any stock of any class or any securities convertible
into or exchangeable for shares of stock of any class of the
Company;
(iii) Split, combine or reclassify any shares of its
capital stock or declare, pay or set aside any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of its capital stock, or redeem, purchase or
otherwise acquire or offer to acquire any shares of its capital
stock;
(iv) (a) Except as contemplated in this Agreement or in
the ordinary course of business consistent with past practice,
create, incur, assume, maintain or permit to exist any short-term
or long-term debt (including obligations in respect of capital
leases) in excess of the amount currently outstanding; (b) assume,
guarantee, endorse or otherwise become liable or responsible
(whether directly, indirectly, contingently or otherwise) for the
obligations of any other person; (c) make any loans, advances or
capital contributions to, or investments in, any other person; or
(d) incur any material liability or obligation (absolute, accrued,
contingent or otherwise) other than in the ordinary and usual
course of business and consistent with past practice; or (e) change
any assumption underlying, or methods of calculating, any bad debt,
contingency or other reserve;
(v) (a) Increase in any manner the compensation of any
of its directors, officers or employees; (b) pay or agree to pay
any pension, retirement allowance or other employee benefit not
required or permitted by any existing plan, agreement or
arrangement to any such director, officer or employee, whether past
or present; (c) commit itself to any additional pension, profit-sharing, bonus,
incentive, deferred compensation, stock purchase,
stock option, stock appreciation right, group insurance, severance
pay, retirement or other employee benefit plan, agreement or
arrangement, or to any employment or consulting agreement with or
for the benefit of any person, or to amend any of such plans or any
of such agreements in existence on the date hereof or (d) make any
payment or award under any executive compensation plan of the
Company except in the ordinary course of business consistent with
past practice;
(vi) Except in the ordinary course of business
consistent with past practice, sell, transfer, mortgage, or
otherwise dispose of, or encumber, or agree to sell, transfer,
mortgage or otherwise dispose of or encumber, any assets or
properties, real, personal or mixed, which have a value on the
Company's books, either individually or in the aggregate, in excess
of $10,000;
(vii) Enter into any other agreements, commitments or
contracts which, individually or in the aggregate, are material to
the Company, except agreements, commitments or contracts for the
purchase, sale or lease of goods or services, consistent with past
practice and not in excess of current requirements, or otherwise
make any material change in the conduct of the business or
operations of the Company;
(viii) Make any change in the Company's accounting
principles, practices or methods;
(ix) Make any tax election or permit any insurance
policy naming the Company as a beneficiary or a loss payable payee
to be canceled or terminated without providing for substitute
coverage which is the same in all material respects;
(x) Enter into any agreement or amend any existing
agreement with any affiliate of the Company;
(xi) Enter into any agreement or commitment that
restricts or limits the Company's ability to compete with or
conduct any business in any geographic area; or
(xii) Agree, commit or arrange to do any of the
foregoing.
6.2. Acquisition Proposals. Neither the Company nor any of
its officers and directors shall, and the Company will cause its
employees, agents and representatives (including, without
limitation, any investment banker, attorney or accountant retained
by the Company) not to, initiate or solicit, directly or
indirectly, encourage, initiate or solicit any inquiries or the
making of any proposal with respect to a merger, consolidation or
similar transaction involving, or any purchase of all or any
significant portion of the Assets of, or any equity interest in,
the Company (an "Acquisition Proposal") or, except to the extent
required for the discharge by the Board of Directors of its
fiduciary duties as advised by counsel in writing, engage in any
negotiations concerning, or provide any confidential information or
data to, or have any discussions with, any person relating to an
Acquisition Proposal, or otherwise assist or facilitate any effort
or attempt by any person or entity (other than DLB and ADI, or
their officers, directors, representatives, agents, affiliates or
associates) to make or implement an Acquisition Proposal. The
Company will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing. The
Company will notify DLB promptly if any such inquiries or proposals
are received by, any such information is requested from, or any
such negotiations or discussions are sought to be instituted or
continued with, the Company, such notice to include the material
terms communicated to the Company.
6.3. Notification of Certain Matters. The Company shall give
prompt notice to DLB and ADI of: (i) any notice of, or other
communication relating to, a default or event which, with notice or
lapse of time or both, would become a default, received by the
Company subsequent to the date of this Agreement and prior to the
Effective Time, under any agreement, indenture or instrument
material to the business, Assets, property, condition (financial or
otherwise) or the results of operations of the Company to which the
Company is a party or is subject; (ii) any notice or other
communication from any third party alleging that the consent of
such third party is or may be required in connection with the
transactions contemplated by this Agreement; and (iii) any material
adverse change in the business, Assets, prospects, condition
(financial or otherwise) or results of operations of the Company,
or the occurrence of an event which, so far as reasonably can be
foreseen at the time of its occurrence, could result in any such
change (except for such changes that are caused by the Company's
compliance with the terms of this Agreement and the Offer and are
contemplated hereby) and except as otherwise disclosed to DLB in
writing.
6.4. Meetings of the Company's Stockholders. If required to
consummate the Merger, following expiration of the Offer, the
Company will take all action necessary in accordance with
applicable law and its Certificate of Incorporation and By-Laws to
convene a meeting of holders of Shares as promptly as practicable
to consider and vote upon the approval of this Agreement and the
Merger. The Board of Directors of the Company shall recommend
unanimously such approval and the Company shall take all lawful
action to solicit such approval. At any such meeting of the
Company all of the Shares then owned by DLB or ADI, or any of their
affiliates (collectively, the "Purchaser Companies") will be voted
in favor of this Agreement and the Merger. The Company hereby
represents, warrants and covenants that the proxy or information
statement with respect to such meeting of shareholders (the "Proxy
Statement"), at the date thereof and at the date of such meeting,
will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, the
foregoing shall not apply to the extent that any such untrue
statement of a material fact or omission to state a material fact
was made by the Company in reliance upon and in conformity with
written information concerning the Purchaser Companies furnished to
the Company by DLB specifically for use in the Proxy Statement.
The Proxy Statement shall not be filed, and no amendment or
supplement to the Proxy Statement will be made by the Company,
without consultation with DLB and its counsel. In the event the
Purchaser Companies acquire at least 90% of the outstanding Shares
pursuant to the Offer or otherwise, DLB, ADI and the Company shall
take all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after such acquisition,
without a meeting of the stockholders of the Company, in accordance
with the DGCL.
6.5. Access to Information.
(i) Between the date of this Agreement and the
Effective Time, the Company will give DLB and its authorized
representatives at all reasonable times access to all drilling
rigs, offices, warehouses, shops, storage yards and other
facilities and to all its books and records, will permit DLB to
make such inspections as it may require and will cause its officers
to furnish DLB with such financial and operating data and other
information with respect to the business and properties of the
Company as DLB may from time to time request in its due diligence
investigation.
(ii) DLB and ADI and their affiliates will each hold and
will each cause its respective employees, representatives,
consultants and advisors to hold in strict confidence, unless
compelled to disclose by judicial or administrative process, or, in
the opinion of its counsel, by other requirements of law, all
documents and information concerning the Company furnished to DLB
or ADI or their affiliates in connection with the transactions
contemplated by this Agreement (except to the extent that such
information can be shown to have been (a) previously known by DLB
or ADI, (b) in the public domain through no fault of DLB or ADI or
their affiliates, or (c) later lawfully acquired by DLB or ADI from
other sources unless DLB and ADI knew such information was obtained
in violation of an agreement of confidentiality) and will not
release or disclose such information to any other person, except
its auditors, attorneys, financial advisors and other consultants
and advisors and lending institutions (including banks) in
connection with this Agreement (it being understood that such
persons shall be informed by DLB or ADI of the confidential nature
of such information and shall be directed by DLB or ADI to treat
such information confidentially). If the transactions contemplated
by this Agreement are not consummated, such confidence shall be
maintained except to the extent such information comes into the
public domain under requirements of law or through no fault of DLB
or ADI or their affiliates and, if requested by the Company, DLB or
ADI will destroy or return to the Company all copies of written
information furnished by the Company to DLB or ADI, or their
affiliates, agents, representatives or advisors. If DLB or ADI
shall be required to make disclosure of any such information by
operation of law, DLB or ADI shall give the Company prior notice of
the making of such disclosure and shall use all reasonable efforts
to afford the Company an opportunity to contest the making of such
disclosure.
6.6. Best Efforts. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its best efforts
to take, or cause to be taken, all action, and to do, or cause to
be done, all things necessary, proper or advisable to consummate
and make effective as promptly as practicable the transactions
contemplated by this Agreement, including without limitation making
filings under the HSR Act, if applicable, and obtaining any
necessary third party consents. In case at any time after the
Effective Time any further action is necessary or desirable to
carry out the purposes of this Agreement, the proper officers and
directors of each corporation which is a party to this Agreement
shall take all such necessary action.
6.7. Public Announcements. DLB and the Company will consult
with each other before issuing any press release or otherwise
making any public statements with respect to the Offer or the
Merger and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be
required by law.
6.8. Exchange Act Compliance. In making the Offer and in
consummating the Merger, DLB, ADI and the Company shall comply in
all material respects with the provisions of the Exchange Act and
the rules and regulations thereunder.
6.9. Consent of DLB. DLB, as the sole stockholder of ADI, by
executing this Agreement consents to the execution, delivery and
performance of this Agreement by ADI, and such consent shall be
treated for all purposes as a vote duly adopted at a meeting of the
stockholders of ADI held for such purpose.
6.10. Indemnification.
(i) As provided in Section 145 of the DGCL and as
implemented pursuant to Article VII of the Company's By-Laws, the
Company shall indemnify and, after the Effective Time, the
Surviving Corporation shall indemnify each present and former
director and officer (the "Indemnified Party or Parties") against
any expenses, including attorneys' fees, fines, judgments and
amounts paid in settlement actually and reasonably incurred by it
in connection with any threatened, pending or completed action or
suit to which it is a party or is threatened to be made a party by
reason of such relationship with the Company and arising out of or
pertaining to any action or omission occurring prior to the
Effective Time (including, without limitation, any which arise out
of or relate to the transactions contemplated by this Agreement) to
the fullest extent permitted or required under Section 145 of the
DGCL or the Company's By-Laws; provided, however, that any
determination required to be made pursuant to Section 145(d) of the
DGCL with respect to whether an Indemnified Party's conduct
complied with the standards set forth in Delaware law or the
Company's By-Laws shall be made by independent legal counsel
selected by the Company or the Surviving Corporation, as the case
may be.
(ii) This Section 6.10 shall survive the closing of the
transactions contemplated hereby, is intended to benefit the
Company and each of the Indemnified Parties (each of whom shall be
entitled to enforce this Section 6.10 against the Company or the
Surviving Corporation, as the case may be) and shall be binding on
all successors and assigns of the Surviving Corporation. In the
event the Surviving Corporation or any of its successors or assigns
(i) consolidates with or merges into any other person and shall not
be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers all or substantially all
of its properties and assets to any person, then, and in each such
case, proper provisions shall be made so that the successors and
assigns of the Surviving Corporation assume the obligations set
forth in this Section 6.10.
(iii) Each of the parties hereto agrees vigorously to
defend against any actions, suits or proceedings in which such
party is named as a defendant which seeks to enjoin, restrain or
prohibit the transactions contemplated hereby or seeks damages with
respect to such transactions.
ARTICLE VII.
CLOSING CONDITIONS
7.1. Conditions to Obligations of the Company, DLB and ADI.
The obligations of the Company, DLB and ADI to consummate the
Merger are subject to the fulfillment of each of the following
conditions, any or all of which may be waived in whole or in part
by the Company, DLB or ADI, as the case may be, to the extent
permitted by applicable law:
(a) Shareholder Approval. Unless no shareholder
approval is required by applicable law to effect the Merger, this
Agreement shall have been duly approved by the holders of a
majority of the outstanding Shares, in accordance with applicable
law and the Certificate of Incorporation and By-Laws of the
Company;
(b) Government and Regulatory Consent. All filings
required to be made prior to the Effective Time by the Company, DLB
or ADI with, and all consents, approvals and authorizations
required to be obtained prior to the Effective Time by the Company,
DLB or ADI from, governmental and regulatory authorities in
connection with the execution and delivery of this Agreement by the
Company, DLB or ADI and the consummation of the transactions
contemplated hereby by the Company, DLB or ADI shall have been made
or obtained (as the case may be); and
(c) Statutes; Injunctions. No United States or state
court or governmental or regulatory authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, judgment, decree, injunction
or other order, whether temporary, preliminary or permanent
(collectively, an "Order"), which is in effect and prohibits
consummation of the transactions contemplated by this Agreement.
7.2. Conditions to Obligation of DLB and ADI. The obligation
of DLB and ADI to effect the Merger shall be subject to the
fulfillment at or prior to the Effective Time of the following
conditions, any one or more of which may be waived by DLB and ADI:
(i) ADI shall have purchased pursuant to the Offer all
shares of Common Stock duly tendered and not withdrawn; provided
that this condition will be deemed to have been met if ADI fails to
purchase such shares pursuant to the Offer in violation of the
terms of the Offer or this Agreement;
(ii) The Company shall have performed in all material
respects its obligations under this Agreement required to be
performed on or prior to the Effective Time pursuant to the terms
hereof;
(iii) The representations and warranties of the
Company contained in this Agreement that are qualified as to
materiality shall be true and correct and all such representations
and warranties that are not so qualified shall be true and correct
in all material respects, in each case, on the date when made and
on and as of the Effective Time as if made on and as of such date;
(iv) There shall not have occurred after the date hereof
any material adverse change in the business, Assets, prospects,
condition (financial or otherwise) or the results of operations of
the Company.
0.1. Conditions to Obligation of the Company. The obligation
of the Company to effect the Merger shall be subject to the
fulfillment at or prior to the Effective Time of the following
conditions, any one or more of which may be waived by the Company:
(i) DLB and ADI shall have performed in all material
respects their obligations under this Agreement required to be
performed on or prior to the Effective Time pursuant to the terms
hereof; and
(ii) The representations and warranties of DLB and ADI
contained in this Agreement that are qualified as to materiality
shall be true and correct and all such representations and
warranties that are not so qualified shall be true and correct in
all material respects, in each case, on the date when made and on
and as of the Effective Time as if made on and as of such date.
ARTICLE VIII.
CLOSING
8.1. Time and Place. Subject to the provisions of
Article VII, the closing of the Merger (the "Closing") shall take
place in Oklahoma City, Oklahoma, at the offices of McAfee & Xxxx,
as soon as practicable but in no event later than 10:00 A.M., local
time, on the first business day after the latest to occur of:
(i) the day the Merger is approved and adopted by the
stockholders of the Company pursuant to Section 6.4 or as may
otherwise be effected pursuant to this Agreement; or
(ii) the date on which each of the conditions set forth
in Article VII have been satisfied or waived by the party or
parties entitled to the benefit of such conditions;
or at such other place, at such other time, or on such other date
as DLB and the Company may mutually agree. The date on which the
Closing actually occurs is herein referred to as the "Closing
Date."
8.2. Filings at the Closing. Subject to the provisions of
Article VII, on the Closing Date, the Company shall execute the
Certificate of Merger and cause it to be filed in accordance with
the provisions of Sections 103 and 251(c) of the DGCL and shall
take any and all other lawful actions and do any and all lawful
things necessary to cause the Merger to become effective.
ARTICLE IX.
TERMINATION AND ABANDONMENT
9.1. Termination by Mutual Consent. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the
Effective Time, before or after the approval by holders of Shares,
by the mutual consent of DLB and the Company by action of their
respective Boards of Directors.
9.2. Termination by Either DLB or the Company. This Agreement
may be terminated and the Merger may be abandoned by action of the
Board of Directors of either DLB or the Company if (i) the Merger
shall not have been consummated by the 30th day of June, 1997
(unless the failure to consummate the Merger by such date is due to
the action or failure to act of the party seeking to terminate), or
(iii) if an Order pursuant to Section 7.1(c) shall have become
final and non-appealable.
9.3. Termination by DLB. This Agreement may be terminated and
the Merger may be abandoned by action of the Board of Directors of
DLB if (i) ADI (or any Purchaser Company) shall have terminated the
Offer without purchasing any Shares pursuant thereto; provided,
such termination of the Offer is not in violation of the terms of
the Offer, as provided and permitted by this Agreement, and DLB and
ADI have not failed to perform its or their obligations under this
Agreement and shall not have breached any representation or
warranty contained herein in any material respect; or (ii) if the
Board of Directors of the Company shall have withdrawn or modified
in a manner adverse to DLB or ADI its approval or recommendation of
the Offer, this Agreement or the Merger, or the Board of Directors
of the Company, upon request by DLB, shall fail to reaffirm such
approval or recommendation, or shall have resolved to do any of the
foregoing; provided, however, DLB shall not be entitled to
terminate this Agreement or abandon the Merger pursuant to this
Section 9.3(ii) so long as DLB shall have the right to acquire a
majority of the issued and outstanding Shares of the Company
pursuant to the Offer.
9.4. Termination by the Company. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the
Effective Time, before or after the approval by holders of Shares,
by action of the Board of Directors of the Company, (a) if DLB or
ADI (or another Purchaser Company) shall have failed to commence
the Offer within the time required in Section 1.1; (b) after the
later of (i) ten (10) business days following commencement of the
Offer or (ii) five (5) business days following notice to DLB by the
Company of the terms of any of the following offers, if the Board
of Directors of the Company receives an unsolicited written offer
at a higher dollar value per Share with respect to a merger,
consolidation or sale of all or substantially all of the Company's
assets, or if an unsolicited tender or exchange offer for the
Shares at a higher dollar value per Share is commenced, and the
Board of Directors of the Company determines to accept such merger,
consolidation or sale of all or substantially all of the Company's
assets or recommend that its stockholders accept such tender or
exchange offer, but only after receipt by the Board of Directors of
(x) a written opinion to such effect from a recognized national
investment banking firm that such transaction is more favorable to
the stockholders from a financial point of view than the Offer and
the transactions contemplated hereby and (y) a written opinion of
counsel that approval, acceptance or recommendation of such
transaction is required by fiduciary obligations under applicable
law; or (c) DLB or ADI shall have violated the terms of the Offer
or breached any of their representations, warranties or covenants
under this Agreement which breach shall have caused a reasonable
likelihood that DLB or ADI will not be able to consummate the Offer
or Merger.
9.5. Procedure and Effect of Termination Procedure and Effect
of Termination. In the event of termination and abandonment of the
Merger by DLB or by the Company pursuant to this Article IX,
written notice thereof shall forthwith be given to the other and
this Agreement shall terminate and the Merger shall be abandoned
without further action by any of the parties hereto. ADI agrees
that any termination by DLB shall be conclusively binding upon it,
whether given expressly on its behalf or not, and the Company shall
have no further notice obligation with respect to it. In the event
of termination of this Agreement and abandonment of the Merger
pursuant to this Article IX, no party hereto (or any of its
directors or officers) shall have any liability or further
obligation to any other party to this Agreement, except that
nothing will relieve any party from liability for any breach of
this Agreement. No termination of this Agreement shall result in
the termination of the obligations of the parties under Section 6.5
(respecting confidentiality) or Section 10.1(b) (respecting the
payment of expenses).
ARTICLE X.
MISCELLANEOUS
10.1. Payment of Expenses.
(a) Whether or not the Merger shall be consummated, each
party hereto shall pay its own expenses incident to preparing for,
entering into and carrying out this Agreement and the consummation
of the Merger. Any separate counsel fees and other expenses
incurred by the stockholders executing the Stockholder Agreement
shall not be borne by the Company.
(b) If (A) (x) any person, entity or group (other than
DLB or any subsidiary or affiliate of DLB or any group including
DLB or any subsidiary or affiliate of DLB) (i) shall have become
beneficial owner of 25% or more of the outstanding Shares or
(ii) shall have publicly proposed (1) any merger or consolidation
with or acquisition of all or substantially all of the assets of
the Company or other similar business combination involving the
Company, (2) that any change be made in the composition of the
Board of Directors of the Company and such person, entity or group
shall file proxy materials with the SEC in respect of such proposal
or (3) the purchase of 50% or more of the total voting power of the
Company, including by tender or exchange offer, or (y) this
Agreement is terminated pursuant to Section 9.3(ii) or 9.4(b), and
(B) this Agreement is terminated in accordance with its terms
without ADI having purchased any Shares pursuant to the Offer, then
the Company shall immediately pay DLB all actual, documented out-of-pocket
expenses of DLB and ADI relating to the transaction
contemplated by this Agreement.
10.2. Amendment and Modification. Subject to applicable
law, this Agreement may be amended, modified or supplemented only
by written agreement of DLB, ADI and the Company at any time prior
to the Effective Time with respect to any of the terms contained
herein; provided, however, that, after this Agreement is adopted by
the Company's stockholders pursuant to Section 6.4, no such
amendment or modification shall alter the amount or change the form
of the consideration to be delivered to the stockholders of the
Company or alter or change any of the terms or conditions of this
Agreement if such alteration or change would adversely affect the
stockholders of the Company.
10.3. Waiver of Compliance; Consents. Any failure of DLB
or ADI, on the one hand, or the Company, or the other hand, to
comply with any obligation, covenant, agreement or condition herein
may be waived by the Company or DLB, respectively, only by a
written instrument signed by the party granting such waiver, but
such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as
a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or
on behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver
of compliance as set forth in this Section 10.3. ADI hereby agrees
that any consent or waiver of compliance given by DLB hereunder
shall be conclusively binding upon it, whether given expressly on
its behalf or not.
10.4. Investigations; Survival of Warranties. The
respective representations and warranties of DLB, ADI and the
Company contained herein or in the certificates or other documents
delivered prior to or at the Closing shall not be deemed waived or
otherwise affected by any investigation made by any party hereto.
Each and every such representation and warranty shall expire with,
and be terminated and extinguished by, the Merger, and thereafter
neither DLB, ADI nor the Company, nor any officer or director
thereof shall be under any liability whatsoever with respect to any
such representation or warranty. This Section 10.4 shall have no
effect upon any other obligation of the parties hereto, whether to
be performed before or after the Closing.
10.5. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly
given when delivered in person, by cable, telegram or telex or
registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or
at such other address for a party as shall be specified by like
notice);
(i) If to DLB or ADI, to
DLB Oil & Gas, Inc.
0000 X.X. Xxxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to
Xxxxx X. Xxxxx, XX, Esq.
Fellers, Snider, Xxxxxxxxxxx, Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) If to the Company, to
Bonray Drilling Corporation
0000 X.X. 00xx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
With a copy to
Xxxx X. Xxxxxx, Esq.
McAfee & Xxxx
Two Leadership Square, 10th Floor
000 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
10.6. Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other
parties, nor, except for Section 6.10 (which may be enforced solely
by the Indemnified Parties), is this Agreement intended to confer
upon any other person except the parties hereto any rights or
remedies hereunder.
10.7. Governing Law. This Agreement shall be governed by
the laws of the State of Delaware (regardless of the laws that
might otherwise govern under applicable Delaware principles of
conflict of law) as to all matters, including but not limited to,
matters of validity, construction, effect, performance and
remedies.
10.8. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
10.9. Interpretation. The article and section headings
contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and shall
not in any way affect the meaning or interpretation of this
Agreement. As used in this Agreement, (i) the term "person" shall
mean and include an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a
government or any department or agency thereof; (ii) the term
"affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under the Exchange Act; and (iii) the term "subsidiary"
of any specified corporation shall mean any corporation 50 percent
or more of whose outstanding voting securities, or any partnership,
joint venture or other entity 50 percent or more of whose total
equity interest, is directly or indirectly owned by such specified
corporation.
10.10. Employment Arrangements. Prior to the acceptance of
Shares pursuant to the Offer, DLB and ADI will make a good faith
attempt to enter into employment agreements with Xxxxxxx X. Xxxxxx,
Xxxxxx X. Xxxxxxx, Xxx X. Xxxx and Xxxxxx Xxxxxxx substantially in
the form of the drafts of January 4, 1997, furnished to the
Company.
10.11. Entire Agreement. This Agreement, including all
exhibits attached hereto and the documents and instruments referred
to herein, embodies the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein.
There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or
referred to herein. This Agreement supersedes all prior agreements
and the understandings between the parties with respect to such
subject matter.
IN WITNESS WHEREOF, DLB, ADI and the Company have caused this
Agreement to be signed by their respective duly authorized officers
on the date first above written.
DLB OIL & GAS, INC.
By XXXX XXXXXXX
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
ACQUISITION DRILLING, INC.
By: XXXX XXXXXXX
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
BONRAY DRILLING CORPORATION
By: XXXXXXX X. XXXXXX
Name: Xxxxxxx X. Xxxxxx
Title: President
ANNEX A
Certain Conditions Of The Offer
Notwithstanding any other provision of the Offer, Acquisition
Drilling, Inc. ("ADI") shall not be required to accept for payment
or pay for, or may delay the acceptance for payment of or payment
for, any tendered Shares, or may, in its sole discretion, terminate
or amend the Offer as to any Shares not then paid for if (x) a
majority of the Shares outstanding on a fully diluted basis shall
not have been validly tendered pursuant to the Offer and not
withdrawn prior to the expiration of the Offer (the "Minimum
Condition"), (y) the Agreement shall have been terminated in
accordance with its terms, or (z) on or after the date of the
Agreement, and at or before the time of payment for any such
Shares, any of the following events shall occur:
(a) there shall have occurred (i) any general suspension of,
or limitation on prices for, trading in securities on the
New York Stock Exchange or on NASDAQ, (ii) a declaration
of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) a
commencement of a war, armed hostilities or other
international or national calamity directly involving the
armed forces of the United States, (iv) any general
limitation (whether or not mandatory) by any governmental
authority on the extension of credit by banks or other
lending institutions, (v) in the case of any of the
foregoing existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof, (vi)
a decline of at least thirty percent (30%) in the Dow
Xxxxx Industrial Average or (vii) a change in general
financial, bank or capital market conditions which
materially and adversely affects the ability of financial
institutions in the United States to extend credit or
syndicate loans;
(b) any of the representations and warranties of the Company
set forth in the Agreement, or of the Selling
Stockholders set forth in the Stockholder Agreement, that
are qualified as to materiality shall not be true and
correct or any such representations and warranties that
are not so qualified shall not be true and correct in any
material respect, in each case, on the date when made and
at the Expiration Date, or in the case of any
representations and warranties that are made as of a
different date, as of that date; or
(c) the Company shall have breached or failed to comply in
any material respect with any of its obligations under
the Agreement and such failure continues for two (2) days
after receipt by the Company of notice from DLB
specifying such failure or any Selling Stockholder shall
have breached or failed to comply in any material respect
with any of its obligations under the Stockholder
Agreement and such failure continues for two (2) days
after receipt by the Selling Stockholder of notice from
DLB specifying such failure; or
(d) any statute, rule, regulation, order or injunction shall
be enacted, promulgated, entered, enforced or deemed
applicable to the Offer or the Merger or any other action
shall have been taken by any United States governmental
authority or court (i) which prohibits the consummation
of the transactions contemplated by the Offer or the
Merger; (ii) which prohibits DLB's or ADI's ownership or
operation of all or any material portion of their or the
Company's business or assets, or which compels DLB or ADI
to dispose of or hold separate all or any material
portion of DLB's or ADI's or the Company's business or
assets as a result of the transactions contemplated by
the Offer or the Merger, (iii) which makes the acceptance
for payment, purchase of, or payment for, some or all of
the Shares illegal; (iv) which imposes material
limitations on the ability of DLB or ADI to acquire or
hold or to exercise effectively all rights of ownership
of Shares including, without limitation, the right to
vote any Shares purchased by ADI or DLB on all matters
properly presented to the stockholders of the Company, or
(v) which imposes any limitations on the ability of DLB
or ADI, or any of their respective subsidiaries,
effectively to control in any material respect the
business or operations of the Company;
(e) DLB or ADI shall have reached an agreement or
understanding in writing with the Company providing for
termination of the Offer;
(f) any filing required to be made by the Company with, or
any consent, approval or authorization required to be
obtained prior to the Effective Time by the Company from,
any governmental or regulatory authority in connection
with the execution and delivery of the Agreement by the
Company or the consummation of the Offer or the
transactions contemplated by the Agreement, shall not
have been made or obtained;
(g) there shall have occurred any material adverse change in
the business, assets, conditions (financial or
otherwise), results of operations or prospects of the
Company,
which, in the reasonable judgment of DLB and ADI, in any such case,
and regardless of the circumstances giving rise to any such
conditions, makes it inadvisable to proceed with the Offer and/or
with such acceptance for payment of or payment for Shares.
The foregoing conditions are for the sole benefit of DLB and
ADI and may be asserted by DLB or ADI regardless of the
circumstances or may be waived by DLB or ADI in whole or in part at
any time and from time to time in its sole discretion.
