EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
ANADARKO PETROLEUM CORPORATION
("Anadarko"),
DAKOTA MERGER CORP.
a wholly owned direct subsidiary of Anadarko
("Subcorp"),
and
UNION PACIFIC RESOURCES GROUP INC.
("UPR")
April 2, 2000
TABLE OF CONTENTS
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AGREEMENT AND PLAN OF MERGER............................................... 1
PRELIMINARY STATEMENTS..................................................... 1
AGREEMENT.................................................................. 1
ARTICLE I. THE MERGER..................................................... 1
1.1 THE MERGER......................................................... 1
1.2 EFFECTIVE TIME..................................................... 1
1.3 EFFECTS OF THE MERGER.............................................. 2
1.4 ARTICLES OF INCORPORATION AND BY-LAWS.............................. 2
1.5 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION................ 2
1.6 ADDITIONAL ACTIONS................................................. 2
ARTICLE II. CONVERSION OF SECURITIES...................................... 2
2.1 CONVERSION OF CAPITAL STOCK........................................ 2
2.2 EXCHANGE RATIO; FRACTIONAL SHARES; ADJUSTMENTS..................... 2
2.3 EXCHANGE OF CERTIFICATES........................................... 3
(a) EXCHANGE AGENT............................................ 3
(b) EXCHANGE PROCEDURES....................................... 3
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES.......... 4
(d) NO FURTHER OWNERSHIP RIGHTS IN UPR COMMON STOCK........... 4
(e) TERMINATION OF EXCHANGE FUND.............................. 4
(f) NO LIABILITY.............................................. 4
(g) INVESTMENT OF EXCHANGE FUND............................... 5
(h) WITHHOLDING RIGHTS........................................ 5
2.4 TREATMENT OF STOCK OPTIONS......................................... 5
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF ANADARKO AND
SUBCORP.................................................................. 6
3.1 ORGANIZATION AND STANDING.......................................... 6
3.2 SUBSIDIARIES AND INVESTMENTS....................................... 6
3.3 CORPORATE POWER AND AUTHORITY...................................... 6
3.4 CAPITALIZATION OF ANADARKO AND SUBCORP............................. 7
3.5 CONFLICTS; CONSENTS AND APPROVAL................................... 7
3.6 BROKERAGE AND FINDER'S FEES........................................ 8
3.7 REORGANIZATION..................................................... 8
3.8 NO MATERIAL ADVERSE CHANGE......................................... 8
3.9 ANADARKO SEC DOCUMENTS............................................. 8
3.10 TAXES.............................................................. 9
3.11 COMPLIANCE WITH LAW................................................ 10
3.12 REGISTRATION STATEMENT; JOINT PROXY STATEMENT...................... 10
3.13 LITIGATION......................................................... 11
3.14 ANADARKO EMPLOYEE BENEFIT PLANS.................................... 11
3.15 CONTRACTS.......................................................... 14
3.16 LABOR MATTERS...................................................... 14
3.17 UNDISCLOSED LIABILITIES............................................ 14
3.18 PERMITS; COMPLIANCE................................................ 14
3.19 ENVIRONMENTAL MATTERS.............................................. 14
3.20 OPINION OF FINANCIAL ADVISOR....................................... 15
3.21 BOARD RECOMMENDATION; REQUIRED VOTE................................ 15
3.22 STATE TAKEOVER LAWS; RIGHTS AGREEMENT.............................. 15
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF UPR......................... 16
4.1 ORGANIZATION AND STANDING.......................................... 16
4.2 SUBSIDIARIES AND INVESTMENTS....................................... 16
4.3 CORPORATE POWER AND AUTHORITY...................................... 16
4.4 CAPITALIZATION OF UPR.............................................. 17
4.5 CONFLICTS; CONSENTS AND APPROVALS.................................. 17
4.6 BROKERAGE AND FINDER'S FEES........................................ 18
4.7 REORGANIZATION..................................................... 18
4.8 NO MATERIAL ADVERSE CHANGE......................................... 18
4.9 UPR SEC DOCUMENTS.................................................. 18
4.10 TAXES.............................................................. 18
4.11 COMPLIANCE WITH LAW................................................ 19
4.12 REGISTRATION STATEMENT; JOINT PROXY STATEMENT...................... 20
4.13 LITIGATION......................................................... 20
4.14 UPR EMPLOYEE BENEFIT PLANS......................................... 20
4.15 CONTRACTS.......................................................... 23
4.16 LABOR MATTERS...................................................... 23
4.17 UNDISCLOSED LIABILITIES............................................ 23
4.18 PERMITS; COMPLIANCE................................................ 23
4.19 ENVIRONMENTAL MATTERS.............................................. 23
4.20 OPINION OF FINANCIAL ADVISOR....................................... 24
4.21 BOARD RECOMMENDATION; REQUIRED VOTE................................ 24
4.22 STATE TAKEOVER LAWS; RIGHTS AGREEMENT.............................. 24
ARTICLE V. COVENANTS OF THE PARTIES....................................... 24
5.1 MUTUAL COVENANTS................................................... 24
(a) HSR ACT FILINGS; REASONABLE EFFORTS; NOTIFICATION......... 24
(b) TAX-FREE TREATMENT........................................ 26
(c) PUBLIC ANNOUNCEMENTS...................................... 26
(d) FARMOUTS.................................................. 26
5.2 COVENANTS OF ANADARKO.............................................. 26
(a) ANADARKO STOCKHOLDERS MEETING............................. 26
(b) PREPARATION OF REGISTRATION STATEMENT..................... 26
(c) CONDUCT OF ANADARKO'S OPERATIONS.......................... 27
(d) NO SOLICITATION........................................... 29
(e) INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE....... 30
(f) NYSE LISTING.............................................. 31
(g) ACCESS.................................................... 31
(h) BOARD OF DIRECTORS OF ANADARKO............................ 31
(i) SUBSEQUENT FINANCIAL STATEMENTS........................... 31
(j) EMPLOYEES AND EMPLOYEE BENEFITS........................... 31
5.3 COVENANTS OF UPR................................................... 32
(a) UPR STOCKHOLDERS MEETING.................................. 32
(b) INFORMATION FOR THE REGISTRATION STATEMENT AND
PREPARATION OF JOINT PROXY STATEMENT.................... 32
(c) CONDUCT OF UPR'S OPERATIONS............................... 33
(d) NO SOLICITATION........................................... 35
(e) AFFILIATES OF UPR......................................... 36
(f) ACCESS.................................................... 36
(g) SUBSEQUENT FINANCIAL STATEMENTS........................... 36
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ARTICLE VI. CONDITIONS.................................................... 36
6.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY........................ 36
6.2 CONDITIONS TO OBLIGATIONS OF UPR................................... 37
6.3 CONDITIONS TO OBLIGATIONS OF ANADARKO AND SUBCORP.................. 38
ARTICLE VII. TERMINATION AND AMENDMENT.................................... 38
7.1 TERMINATION BY MUTUAL CONSENT...................................... 38
7.2 TERMINATION BY UPR OR ANADARKO..................................... 38
7.3 TERMINATION BY ANADARKO............................................ 39
7.4 TERMINATION BY UPR................................................. 39
7.5 EFFECT OF TERMINATION.............................................. 40
7.6 AMENDMENT.......................................................... 41
7.7 EXTENSION; WAIVER.................................................. 41
ARTICLE VIII. MISCELLANEOUS............................................. 41
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES......................... 41
8.2 NOTICES............................................................ 41
8.3 INTERPRETATION..................................................... 42
8.4 COUNTERPARTS....................................................... 42
8.5 ENTIRE AGREEMENT................................................... 43
8.6 THIRD-PARTY BENEFICIARIES.......................................... 43
8.7 GOVERNING LAW...................................................... 43
8.8 CONSENT TO JURISDICTION; VENUE..................................... 43
8.9 SPECIFIC PERFORMANCE............................................... 43
8.10 ASSIGNMENT......................................................... 43
8.11 EXPENSES........................................................... 43
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "AGREEMENT") is made and entered
into as of the 2nd day of April, 2000, by and among Anadarko Petroleum
Corporation, a Delaware corporation ("ANADARKO"), Dakota Merger Corp., a Utah
corporation and a wholly owned subsidiary of Anadarko ("SUBCORP"), and Union
Pacific Resources Group Inc., a Utah corporation ("UPR").
PRELIMINARY STATEMENTS
A. The Board of Directors of Anadarko has determined that the merger of
Subcorp with and into UPR, with UPR as the surviving corporation (the "MERGER"),
pursuant to which each share of UPR Common Stock (as defined in Section 4.4)
outstanding at the Effective Time (as defined in Section 1.2) will be converted
into the right to receive Anadarko Common Shares (as defined in Section 3.4(a))
as more fully provided herein, is consistent with and in furtherance of the
long-term business strategy of Anadarko and Anadarko desires to combine its
businesses with the businesses operated by UPR.
B. The Board of Directors of UPR has determined that the Merger is
consistent with and in furtherance of the long-term business strategy of UPR and
UPR desires to combine its businesses with the businesses operated by Anadarko
and for the holders of shares of UPR Common Stock ("UPR STOCKHOLDERS") to have a
continuing equity interest in the combined Anadarko/UPR businesses through the
ownership of Anadarko Common Shares.
C. The parties intend that the Merger constitute a tax-free
"reorganization" within the meaning of Section 368(a)(1)(A) of the Internal
Revenue Code of 1986, as amended (the "CODE").
D. The respective Boards of Directors of Anadarko, Subcorp and UPR have
determined the Merger in the manner contemplated herein to be desirable and in
the best interests of their respective shareholders, and, by resolutions duly
adopted, have approved and adopted this Agreement.
AGREEMENT
Now, therefore, in consideration of these premises and the mutual and
dependent promises hereinafter set forth, the parties hereto agree as follows:
ARTICLE I.
THE MERGER
1.1 THE MERGER. Upon the terms and subject to the conditions hereof, and in
accordance with the provisions of the Utah Revised Business Corporation Act (the
"UBCA"), Subcorp shall be merged with and into UPR at the Effective Time. As a
result of the Merger, the separate corporate existence of Subcorp shall cease
and UPR shall continue its existence under the laws of the State of Utah. UPR,
in its capacity as the corporation surviving the Merger, is hereinafter
sometimes referred to as the "SURVIVING CORPORATION."
1.2 EFFECTIVE TIME. As promptly as possible on the Closing Date (as defined
below), the parties hereto shall cause the Merger to be consummated by filing
with the Division of Corporations and Commercial Code of the State of Utah (the
"UTAH DIVISION") articles of merger (the "ARTICLES OF MERGER") in such form as
is required by and executed in accordance with Section 16-10a-1105 of the UBCA.
The Merger shall become effective (the "EFFECTIVE TIME") when the Articles of
Merger have been filed with the Utah Division or at such later time as shall be
agreed upon by Anadarko and UPR and specified in the Articles of Merger. Prior
to the filing referred to in this Section 1.2, a closing (the "CLOSING") shall
be held at the principal business offices of Anadarko, or such other place as
the parties hereto may agree as soon as practicable (but in any event within
three business days) following the date upon which all conditions set forth in
Article VI have been satisfied or waived, or at such other date as Anadarko and
UPR may agree; provided, that the conditions set forth in Article VI have been
satisfied or
1
waived at or prior to such date. The date on which the Closing takes place is
referred to herein as the "CLOSING DATE."
1.3 EFFECTS OF THE MERGER. From and after the Effective Time, the Merger
shall have the effects set forth in Section 16-10a-1106 of the UBCA.
1.4 ARTICLES OF INCORPORATION AND BY-LAWS. The Articles of Merger shall
provide that at the Effective Time (i) the Articles of Incorporation of the
Surviving Corporation as in effect immediately prior to the Effective Time shall
be amended as of the Effective Time so as to contain the provisions, and only
the provisions, contained immediately prior thereto in the Articles of
Incorporation of Subcorp, except for Article I thereof, which shall continue to
read "The name of the corporation is 'UNION PACIFIC RESOURCES GROUP INC.' ", and
(ii) the By-laws of Subcorp in effect immediately prior to the Effective Time
shall be the By-laws of the Surviving Corporation; in each case, until amended
in accordance with the UBCA.
1.5 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. From and after the
Effective Time, the officers of UPR shall be the officers of the Surviving
Corporation and the directors of Subcorp shall be the directors of the Surviving
Corporation, in each case, until their respective successors are duly elected
and qualified. On or prior to the Closing Date, UPR shall deliver to Anadarko
evidence satisfactory to Anadarko of the resignations of the directors of UPR,
such resignations to be effective as of the Effective Time.
1.6 ADDITIONAL ACTIONS. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any further deeds,
assignments or assurances in law or any other acts are necessary or desirable to
(a) 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 UPR, or (b) otherwise carry out the provisions of this
Agreement, UPR and its officers and directors shall be deemed to have granted to
the Surviving Corporation an irrevocable power of attorney to execute and
deliver all such deeds, assignments or assurances in law and to take all acts
necessary, proper or desirable to vest, perfect or confirm title to and
possession of such rights, properties or assets in the Surviving Corporation and
otherwise to carry out the provisions of this Agreement, and the officers and
directors of the Surviving Corporation are authorized in the name of UPR or
otherwise to take any and all such action.
ARTICLE II.
CONVERSION OF SECURITIES
2.1 CONVERSION OF CAPITAL STOCK. At the Effective Time, by virtue of the
Merger and without any action on the part of Anadarko, Subcorp or UPR or their
respective shareholders:
(a) Each share of common stock of Subcorp ("SUBCORP COMMON STOCK")
issued and outstanding immediately prior to the Effective Time shall be
converted into one share of common stock of the Surviving Corporation. Such
newly issued shares shall thereafter constitute all of the issued and
outstanding capital stock of the Surviving Corporation.
(b) Subject to the other provisions of this Article II, each share of
UPR Common Stock issued and outstanding immediately prior to the Effective
Time shall be converted into and represent a number of Anadarko Common
Shares equal to the Exchange Ratio.
(c) Each share of capital stock of UPR held by UPR shall be cancelled
and retired and no payment shall be made in respect thereof.
2.2 EXCHANGE RATIO; FRACTIONAL SHARES; ADJUSTMENTS.
(a) The "EXCHANGE RATIO" shall be equal to 0.4550.
(b) No certificates for fractional Anadarko Common Shares shall be
issued as a result of the conversion provided for in Section 2.1(b) and
such fractional share interests will not entitle the owner
2
thereof to vote or have any rights of an Anadarko Stockholder (as defined
in Section 3.3) or a holder of Anadarko Common Shares.
(c) In lieu of any such fractional Anadarko Common Shares, the holder
of a certificate previously evidencing UPR Common Stock, upon presentation
of such fractional interest represented by an appropriate certificate for
UPR Common Stock to the Exchange Agent (as defined in Section 2.3(a))
pursuant to Section 2.3, shall be entitled to receive a cash payment
therefor in an amount equal to the value (determined with reference to the
closing price of Anadarko Common Shares as reported on the New York Stock
Exchange ("NYSE") Composite Tape ("NYSE Composite Tape") on the last full
trading day immediately prior to the Closing Date) of such fractional
interest. Such payment with respect to fractional shares is merely intended
to provide a mechanical rounding off of, and is not a separately bargained
for, consideration. If more than one certificate representing shares of UPR
Common Stock shall be surrendered for the account of the same holder, the
number of Anadarko Common Shares for which certificates have been
surrendered shall be computed on the basis of the aggregate number of
shares represented by the certificates so surrendered.
(d) In the event that, prior to the Effective Time, Anadarko shall
declare a stock dividend or other distribution payable in Anadarko Common
Shares or securities convertible into Anadarko Common Shares, or effect a
stock split, reclassification, combination or other change with respect to
Anadarko Common Shares, the Exchange Ratio set forth in this Section 2.2
shall be adjusted to reflect such dividend, distribution, stock split,
reclassification, combination or other change.
2.3 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. Promptly following the Effective Time, Anadarko
shall deposit with ChaseMellon Shareholder Services, L.L.C. or such other
exchange agent as may be designated by Anadarko (the "EXCHANGE AGENT"), for
the benefit of UPR Stockholders, for exchange in accordance with this
Section 2.3, certificates representing Anadarko Common Shares issuable
pursuant to Section 2.1 in exchange for outstanding shares of UPR Common
Stock and shall from time-to-time deposit cash in an amount reasonably
expected to be paid pursuant to Section 2.2 (such Anadarko Common Shares
and cash, together with any dividends or distributions with respect
thereto, the "EXCHANGE FUND").
(b) EXCHANGE PROCEDURES. As soon as practicable after the Effective
Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates (the "CERTIFICATES") that immediately prior to
the Effective Time represented outstanding shares of UPR Common Stock whose
shares were converted into the right to receive Anadarko Common Shares
pursuant to Section 2.1(b), (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent, and shall be in such form and have such other customary
provisions as Anadarko may reasonably specify) and (ii) instructions for
effecting the surrender of the Certificates in exchange for certificates
representing Anadarko Common Shares. Upon surrender of a Certificate for
cancellation to the Exchange Agent, together with a duly executed letter of
transmittal, the holder of such Certificate shall be entitled to receive in
exchange therefor (i) a certificate or certificates representing that whole
number of Anadarko Common Shares which such holder has the right to receive
pursuant to Section 2.1 in such denominations and registered in such names
as such holder may request and (ii) a check representing the amount of cash
in lieu of fractional shares, if any, and unpaid dividends and
distributions, if any, which such holder has the right to receive pursuant
to the provisions of this Article II, after giving effect of any required
withholding tax. The shares represented by the Certificate so surrendered
shall forthwith be cancelled. No interest will be paid or accrued on the
cash in lieu of fractional shares, if any, and unpaid dividends and
distributions, if any, payable to holders of shares of UPR Common Stock. In
the event of a transfer of ownership of shares of UPR Common Stock that is
not registered on the transfer records of UPR, a certificate representing
the proper number of Anadarko Common Shares, together with a check for the
cash to be paid in lieu of fractional shares, if any, and unpaid
3
dividends and distributions, if any, may be issued to such transferee if
the Certificate representing such shares of UPR Common Stock held by such
transferee is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.3, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon
surrender a certificate representing Anadarko Common Shares and cash in
lieu of fractional shares, if any, and unpaid dividends and distributions,
if any, as provided in this Article II. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such Certificate to be lost, stolen or destroyed and,
if required by Anadarko, the posting by such person of a bond in such
reasonable amount as Anadarko may direct as indemnity against any claim
that may be made against it with respect to such Certificate, the Exchange
Agent will deliver in exchange for such lost, stolen or destroyed
Certificate, a certificate representing the proper number of Anadarko
Common Shares, together with a check for the cash to be paid in lieu of
fractional shares, if any, with respect to the shares of UPR Common Stock
formerly represented thereby, and unpaid dividends and distributions on
Anadarko Common Shares, if any, as provided in this Article II.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. Notwithstanding
any other provisions of this Agreement, no dividends or other distributions
declared or made after the Effective Time with respect to Anadarko Common
Shares having a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate, and no cash payment in lieu of
fractional shares shall be paid to any such holder, until the holder shall
surrender such Certificate as provided in this Section 2.3. Subject to the
effect of Applicable Laws (as defined in Section 3.11), following surrender
of any such Certificate, there shall be paid to the holder of the
certificates representing whole Anadarko Common Shares issued in exchange
therefor, without interest, (i) at the time of such surrender, the amount
of dividends or other distributions with a record date after the Effective
Time theretofore payable with respect to such whole Anadarko Common Shares
and not paid, less the amount of any withholding taxes that may be required
thereon, and (ii) at the appropriate payment date subsequent to surrender,
the amount of dividends or other distributions with a record date after the
Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole Anadarko Common Shares, less
the amount of any withholding taxes which may be required thereon.
(d) NO FURTHER OWNERSHIP RIGHTS IN UPR COMMON STOCK. All Anadarko
Common Shares issued upon surrender of Certificates in accordance with the
terms hereof (including any cash paid pursuant to this Article II) shall be
deemed to have been issued in full satisfaction of all rights pertaining to
such shares of UPR Common Stock represented thereby, and, as of the
Effective Time, the stock transfer books of UPR shall be closed and there
shall be no further registration of transfers on the stock transfer books
of UPR of shares of UPR Common Stock outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to
the Surviving Corporation for any reason, they shall be cancelled and
exchanged as provided in this Section 2.3. Certificates surrendered for
exchange by any person constituting an "affiliate" of UPR for purposes of
Rule 145(c) under the Securities Act of 1933, as amended (together with the
rules and regulations thereunder, the "Securities Act"), shall not be
exchanged until Anadarko has received written undertakings from such person
in the form attached as Exhibit A to this Agreement.
(e) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
that remains undistributed to UPR Stockholders six months after the date of
the mailing required by Section 2.3(b) shall be delivered to Anadarko, upon
demand thereby, and holders of Certificates previously representing shares
of UPR Common Stock who have not theretofore complied with this Section 2.3
shall thereafter look only to Anadarko for payment of any claim to Anadarko
Common Shares, cash in lieu of fractional shares thereof, or dividends or
distributions, if any, in respect thereof.
(f) NO LIABILITY. None of Anadarko, the Surviving Corporation or the
Exchange Agent shall be liable to any person in respect of any shares of
UPR Common Stock (or dividends or distributions
4
with respect thereto) or cash from the Exchange Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar
law. If any Certificates shall not have been surrendered prior to seven
years after the Effective Time (or immediately prior to such earlier date
on which any cash, any cash in lieu of fractional shares or any dividends
or distributions with respect to whole shares of UPR Common Stock in
respect of such Certificate would otherwise escheat to or become the
property of any Governmental Authority (as defined in Section 3.4(d)), any
such cash, dividends or distributions in respect of such Certificate shall,
to the extent permitted by Applicable Laws, become the property of
Anadarko, free and clear of all claims or interest of any person previously
entitled thereto.
(g) INVESTMENT OF EXCHANGE FUND. The Exchange Agent shall invest any
cash included in the Exchange Fund, as directed by Anadarko, on a daily
basis. Any interest and other income resulting from such investments shall
be paid to Anadarko upon termination of the Exchange Fund pursuant to
Section 2.3(e).
(h) WITHHOLDING RIGHTS. Each of the Surviving Corporation and Anadarko
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of UPR Common
Stock such amounts as it is required to deduct and withhold with respect to
the making of such payment under the Code and the rules and regulations
promulgated thereunder, or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by the Surviving
Corporation or Anadarko, as the case may be, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the
holder of the shares of UPR Common Stock in respect of which such deduction
and withholding was made by the Surviving Corporation or Anadarko, as the
case may be.
2.4 TREATMENT OF STOCK OPTIONS.
(a) Prior to the Effective Time, Anadarko and UPR shall take all such
actions as may be necessary to cause each unexpired and unexercised
outstanding option granted or issued under stock option plans of UPR in
effect on the date hereof (each, a "UPR OPTION") to be automatically
converted at the Effective Time into an option (a "ANADARKO EXCHANGE
OPTION") to purchase that number of Anadarko Common Shares equal to the
number of shares of UPR Common Stock subject to the UPR Option immediately
prior to the Effective Time (without regard to any actual restrictions on
exerciseability) multiplied by the Exchange Ratio (and rounded to the
nearest share), with an exercise price per share equal to the exercise
price per share that existed under the corresponding UPR Option divided by
the Exchange Ratio (and rounded to the nearest cent), and with other terms
and conditions that are the same as the terms and conditions of such UPR
Option immediately before the Effective Time PROVIDED, that Anadarko shall
equitably adjust the applicable performance target under any UPR Option
that contains performance targets; PROVIDED FURTHER that, with respect to
any UPR Option that is an "incentive stock option" within the meaning of
Section 422 of the Code, the foregoing conversion shall be carried out in a
manner satisfying the requirements of Section 424(a) of the Code.
(b) In connection with the issuance of Anadarko Exchange Options,
Anadarko shall (i) reserve for issuance the number of Anadarko Common
Shares that will become subject to Anadarko Exchange Options pursuant to
this Section 2.4 and (ii) from and after the Effective Time, upon exercise
of Anadarko Exchange Options, make available for issuance all Anadarko
Common Shares covered thereby, subject to the terms and conditions
applicable thereto.
(c) Anadarko agrees to use its reasonable efforts to file with the
Securities and Exchange Commission (the "COMMISSION") within 30 days after
the Closing Date a registration statement on Form S-8 or other appropriate
form under the Securities Act to register Anadarko Common Shares issuable
upon exercise of the Anadarko Exchange Options and to use its reasonable
efforts to cause such registration statement to remain effective until the
exercise or expiration of such options and rights. Prior to the Effective
Time, the Board of Directors of Anadarko, or an appropriate committee
5
of non-employee directors thereof, shall adopt a resolution consistent with
the interpretive guidance of the Commission so that the acquisition by any
officer or director of Anadarko who may become a covered person of UPR for
purposes of Section 16 of the Securities Exchange Act of 1934, as amended
(together with the rules and regulations thereunder, the "EXCHANGE ACT")
and the rules and regulations thereunder ("SECTION 16") of Anadarko Common
Shares or options to acquire Anadarko Common Shares pursuant to this
Agreement and the Merger shall be an exempt transaction for purposes of
Section 16.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF ANADARKO AND SUBCORP
In order to induce UPR to enter into this Agreement, Anadarko and Subcorp
hereby represent and warrant to UPR that the statements contained in this
Article III are true, correct and complete.
3.1 ORGANIZATION AND STANDING. Each of Anadarko and Subcorp is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation with full corporate power and authority to own,
lease, use and operate its properties and to conduct its business as and where
now owned, leased, used, operated and conducted. Each of Anadarko and Subcorp,
and each subsidiary of Anadarko, is duly qualified to do business and is in good
standing in each jurisdiction in which the nature of the business conducted by
it or the property it owns, leases or operates, requires it to so qualify,
except where the failure to be so qualified or in good standing in such
jurisdiction would not have a Material Adverse Effect (as defined in Section
8.3) on Anadarko or Subcorp, as the case may be. Anadarko is not in default in
the performance, observance or fulfillment of any provision of the Anadarko
Restated Certificate of Incorporation, as amended (the "ANADARKO CERTIFICATE"),
or the Anadarko By-Laws, as amended (the "ANADARKO BY-LAWS"), and Subcorp is not
in default in the performance, observance or fulfillment of any provisions of
its Articles of Incorporation or By-laws. Anadarko has heretofore furnished to
UPR a complete and correct copy of (i) the Anadarko Certificate and the Anadarko
By-Laws, each as in effect as of the date of this Agreement, and (ii) the
Articles of Incorporation of Subcorp and the By-laws of Subcorp.
3.2 SUBSIDIARIES AND INVESTMENTS. Anadarko does not own, directly or
indirectly, any equity or other ownership interest in any corporation,
partnership, joint venture or other entity or enterprise, except for the
subsidiaries, as set forth in Section 3.2 to the disclosure schedule delivered
by Anadarko to UPR and dated the date hereof (the "ANADARKO DISCLOSURE
SCHEDULE"), Anadarko owns, directly or indirectly, each of the outstanding
shares of capital stock (or other ownership interests having by their terms
ordinary voting power to elect a majority of directors or others performing
similar functions with respect to such subsidiary) of each of Anadarko's
subsidiaries. Each of the outstanding shares of capital stock of each of
Anadarko's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and is owned, directly or indirectly, by Anadarko free and clear
of all liens, pledges, security interests, claims or other encumbrances. There
are no outstanding subscriptions, options, warrants, puts, calls, agreements,
understandings, claims or other commitments or rights of any type relating to
the issuance, sale or transfer of any securities of any subsidiary of Anadarko,
nor are there outstanding any securities that are convertible into or
exchangeable for any shares of capital stock of any subsidiary of Anadarko, and
neither Anadarko nor any subsidiary of Anadarko has any obligation of any kind
to issue any additional securities or to pay for or repurchase any securities of
any subsidiary of Anadarko or any predecessor thereof.
3.3 CORPORATE POWER AND AUTHORITY. Each of Anadarko and Subcorp has all
requisite corporate power and authority to enter into and deliver this
Agreement, subject to approval of the issuance of Anadarko Common Shares
issuable in the Merger and the transactions contemplated hereby by the holders
of Anadarko Common Shares (the "ANADARKO STOCKHOLDERS") (the "SHARE ISSUANCE"),
to perform its obligations hereunder and to consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby by Anadarko and Subcorp
have been duly authorized by all necessary corporate action on the part of each
of Anadarko and Subcorp, subject to approval by the Anadarko Stockholders of the
Share Issuance. This
6
Agreement has been duly executed and delivered by each of Anadarko and Subcorp,
and constitutes the legal, valid and binding obligation of each of Subcorp and
Anadarko enforceable against each of them in accordance with its terms.
3.4 CAPITALIZATION OF ANADARKO AND SUBCORP.
(a) As of March 31, 2000, Anadarko's authorized capital stock
consisted solely of (A) 300,000,000 shares of common stock, $0.10 par value
("ANADARKO COMMON SHARES"), of which (i) 130,079,024 shares were issued and
outstanding, (ii) no shares were issued and held in treasury (which does
not include Anadarko Common Shares reserved for issuance as set forth in
clause (iii)), (iii) 26,106,400 shares were reserved for issuance upon the
exercise or conversion of options, warrants or convertible securities
granted or issuable by Anadarko and (iv) 25,885,726 Anadarko Common Shares
were reserved for future issuance under the Stock Option Agreement dated
April 2, 2000, between UPR and Anadarko (the "ANADARKO STOCK OPTION
AGREEMENT"), and (B) 2,000,000 shares of Preferred Stock, $1.00 par value,
of which (i) 200,000 shares of 5.46% Series B Cumulative Preferred Stock
were issued and outstanding and (ii) 200,000 shares have been designated as
Series C Junior Participating Preferred Stock were reserved for issuance
pursuant to the rights issued under the Agreement, dated as of October 29,
1998, between Anadarko and the Chase Manhattan Bank, as rights agent (the
"ANADARKO RIGHTS AGREEMENT"). Each outstanding share of Anadarko capital
stock is, and all Anadarko Common Shares to be issued in connection with
the Merger will be, duly authorized and validly issued, fully paid and
nonassessable, and each outstanding share of Anadarko capital stock has not
been, and all Anadarko Common Shares to be issued in connection with the
Merger will not be, issued in violation of any preemptive or similar
rights. As of the date hereof, other than as set forth in the first
sentence hereof, in Section 3.4 to the Anadarko Disclosure Schedule or as
contemplated by the Anadarko Stock Option Agreement, there are no
outstanding subscriptions, options, warrants, puts, calls, agreements,
understandings, claims or other commitments or rights of any type relating
to the issuance, sale, repurchase, transfer or registration by Anadarko of
any equity securities of Anadarko, nor are there outstanding any securities
that are convertible into or exchangeable for any shares of capital stock
of Anadarko and Anadarko has no obligation of any kind to issue any
additional securities. The issuance and sale of all of the shares of
capital stock described in this Section 3.3(a) have been in compliance with
federal and state securities laws. The Anadarko Common Shares (including
those Anadarko Common Shares to be issued in the Merger) are registered
under the Exchange Act. Other than pursuant to the Anadarko Stock Option
Agreement, Anadarko has not agreed to register any securities under the
Securities Act or under any state securities law or granted registration
rights to any person or entity (which rights are currently exercisable).
(b) Subcorp's authorized capital stock consists solely of 1,000 shares
of Subcorp Common Stock, of which, as of the date hereof, 100 shares were
issued and outstanding and none were reserved for issuance. As of the date
hereof, all of the outstanding shares of Subcorp Common Stock are owned
free and clear of any liens, claims or encumbrances by Anadarko.
3.5 CONFLICTS; CONSENTS AND APPROVAL. Neither the execution and delivery of
this Agreement by Anadarko or Subcorp, or the Anadarko Stock Option Agreement by
Anadarko, nor the consummation of the transactions contemplated hereby will:
(a) conflict with, or result in a breach of any provision of the
Anadarko Certificate or the Anadarko By-laws or the Articles of
Incorporation or By-laws of Subcorp;
(b) violate, or conflict with, or result in a breach of any provision
of, or constitute a default (or an event that, with the giving of notice,
the passage of time or otherwise, would constitute a default) under, or
entitle any party (with the giving of notice, the passage of time or
otherwise) to terminate, accelerate, modify or call a default under, or
result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of Anadarko or any of its
subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license,
7
contract, undertaking, agreement, lease or other instrument or obligation
to which Anadarko or any of its subsidiaries is a party;
(c) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Anadarko or any of its subsidiaries or any of
their respective properties or assets; or
(d) require any action or consent or approval of, or review by, or
registration or filing by Anadarko or any of its affiliates with, any third
party or any local, domestic, foreign or multi-national court, arbitral
tribunal, administrative agency or commission or other governmental or
regulatory body, agency, instrumentality or authority (a "GOVERNMENTAL
AUTHORITY"), other than (i) approval by the Anadarko Stockholders of the
Share Issuance, (ii) authorization for inclusion of the Anadarko Common
Shares to be issued in the Merger and the transactions contemplated hereby
on the NYSE, subject to official notice of issuance, (iii) actions required
by the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
(together with the rules and regulations thereunder, the "HSR ACT"), (iv)
registrations or other actions required under federal and state securities
laws as are contemplated by this Agreement, or (v) consents or approvals of
any Governmental Authority set forth in Section 3.5 to the Anadarko
Disclosure Schedule;
except in the case of clauses (b), (c) and (d) for any of the foregoing that
would not, individually or in the aggregate, have a Material Adverse Effect on
Anadarko or a material adverse effect on the ability of the parties hereto to
consummate the transactions contemplated hereby.
3.6 BROKERAGE AND FINDER'S FEES. Except as set forth in Section 3.6 to the
Anadarko Disclosure Schedule, neither Anadarko nor any stockholder, director,
officer or employee thereof has incurred or will incur on behalf of Anadarko any
financial advisory, brokerage, finder's or similar fee in connection with the
transactions contemplated by this Agreement. Copies of all agreements relating
to such obligations have been provided to UPR.
3.7 REORGANIZATION. To the knowledge of Anadarko and Subcorp, neither
Anadarko nor Subcorp, nor any of their affiliates has taken or agreed to take
any action that (without giving effect to any actions taken or agreed to be
taken by UPR or any of its affiliates) would prevent the Merger from
constituting a "reorganization" qualifying under the provisions of Section
368(a) of the Code.
3.8 NO MATERIAL ADVERSE CHANGE. Except as disclosed in the Anadarko SEC
Documents filed prior to the date of this Agreement, since January 1, 2000,
there has been no material adverse change in the business, assets, liabilities,
results of operations, financial condition or prospects of Anadarko and its
subsidiaries taken as a whole, or any event, occurrence or development that
would reasonably be expected to have a Material Adverse Effect on Anadarko or a
material adverse effect on the ability of Anadarko to consummate the
transactions contemplated hereby.
3.9 ANADARKO SEC DOCUMENTS. Anadarko has timely filed with the Commission
all forms, reports, schedules, statements and other documents required to be
filed by it since January 1, 1997 under the Exchange Act or the Securities Act
(such documents, as supplemented and amended since the time of filing,
collectively, the "ANADARKO SEC DOCUMENTS"). The Anadarko SEC Documents,
including, without limitation, any financial statements or schedules included
therein, at the time filed (and, in the case of registration statements and
proxy statements, on the dates of effectiveness and the dates of mailing,
respectively and, in the case of any Anadarko SEC Document amended or superseded
by a filing prior to the date of this Agreement, then on the date of such
amending or superseding filing) (a) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (b) complied in all material
respects with the applicable requirements of the Exchange Act and the Securities
Act, as the case may be. The financial statements of Anadarko included in the
Anadarko SEC Documents at the time filed (and, in the case of registration
statements and proxy statements, on the dates of effectiveness and the dates of
mailing, respectively, and, in the case of any Anadarko SEC Document amended or
superseded by a filing prior to the date of this Agreement, then on
8
the date of such amending or superseding filing) complied as to form in all
material respects with applicable accounting requirements and with the published
rules and regulations of the Commission with respect thereto, were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto or, in the case of unaudited statements, as permitted by Form 10-Q of
the Commission), and fairly present (subject, in the case of unaudited
statements, to normal, recurring audit adjustments) the consolidated financial
position of Anadarko and its consolidated subsidiaries as at the dates thereof
and the consolidated results of their operations and cash flows for the periods
then ended. No subsidiary of Anadarko is subject to the periodic reporting
requirements of the Exchange Act or required to file any form, report or other
document with the Commission, the NYSE, any other stock exchange or any other
comparable Governmental Authority.
3.10 TAXES.
(a) Anadarko and its subsidiaries have duly filed all material
federal, state, local and foreign income, franchise, excise, real and
personal property and other Tax Returns (as defined below) (including, but
not limited to, those filed on a consolidated, combined or unitary basis)
required to have been filed by Anadarko or its subsidiaries prior to the
date hereof. All of the foregoing Tax Returns and reports are true and
correct (except for such inaccuracies that are, individually or in the
aggregate, immaterial), and Anadarko and its subsidiaries have within the
time and manner prescribed by Applicable Law paid or, prior to the
Effective Time, will pay all Taxes (as defined below), interest and
penalties required to be paid in respect of the periods covered by such
returns or reports or otherwise due to any federal, state, foreign, local
or other taxing authority. Except as set forth in Section 3.10 to the
Anadarko Disclosure Schedule, neither Anadarko nor any of its subsidiaries
have any material liability for any Taxes in excess of the amounts so paid
or reserves so established and neither Anadarko nor any of its subsidiaries
is delinquent in the payment of any material Tax. Except as set forth in
Section 3.10 to the Anadarko Disclosure Schedule, neither Anadarko nor any
of its subsidiaries has requested or filed any document having the effect
of causing any extension of time within which to file any returns in
respect of any fiscal year which have not since been filed. No deficiencies
for any material Tax have been proposed in writing, asserted or assessed
(tentatively or definitely), in each case, by any taxing authority, against
Anadarko or any of its subsidiaries for which there are not adequate
reserves. Neither Anadarko nor any of its subsidiaries is the subject of
any currently ongoing Tax audit except for those that are, individually or
in the aggregate, immaterial. There are no pending requests for waivers of
the time to assess any material Tax, other than those made in the ordinary
course and for which payment has been made or there are adequate reserves.
Except as set forth in Section 3.10 to the Anadarko Disclosure Schedule,
neither Anadarko nor any of its subsidiaries has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency. There are no liens with respect
to material Taxes upon any of the properties or assets, real or personal,
tangible or intangible of Anadarko or any of its subsidiaries (other than
liens for Taxes not yet due). To the knowledge of Anadarko, no claim has
ever been made in writing by an authority in a jurisdiction where none of
Anadarko and its subsidiaries files Tax Returns that Anadarko or any of its
subsidiaries is or may be subject to taxation by that jurisdiction. Neither
Anadarko nor any of its subsidiaries has filed an election under Section
341(f) of the Code to be treated as a consenting corporation.
(b) Except as set forth in Section 3.10 to the Anadarko Disclosure
Schedule, neither Anadarko nor any of its subsidiaries is obligated by any
contract, agreement or other arrangement to indemnify any other person with
respect to material Taxes. Except as set forth in Section 3.10 to the
Anadarko Disclosure Schedule, neither Anadarko nor any of its subsidiaries
are now or have ever been a party to or bound by any agreement or
arrangement (whether or not written and including, without limitation, any
arrangement required or permitted by law) binding Anadarko or any of its
subsidiaries that (i) requires Anadarko or any of its subsidiaries to make
any Tax payment to or for the account of any other person, (ii) affords any
other person the benefit of any net operating loss, net capital loss,
investment Tax credit, foreign Tax credit, charitable deduction or any
other credit or Tax attribute
9
which could reduce Taxes (including, without limitation, deductions and
credits related to alternative minimum Taxes) of Anadarko or any of its
subsidiaries, or (iii) requires or permits the transfer or assignment of
income, revenues, receipts or gains to Anadarko or any of its subsidiaries,
from any other person.
(c) Anadarko and its subsidiaries have withheld and paid all material
Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor,
shareholder or other third party.
(d) Neither Anadarko nor any of its subsidiaries is responsible for
any material Taxes of any other person (other than that of Anadarko and its
subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee, by contract,
or otherwise.
(e) Neither Anadarko nor any of its subsidiaries has constituted
either a "distributing corporation" or a "controlled corporation" (within
the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock
intended to qualify for tax-free treatment under Section 355 of the Code
(i) in the two years prior to the date of this Agreement (or will
constitute such a corporation in the two years prior to the date of the
Effective Time) or (ii) in a distribution which otherwise constitutes part
of a "plan" or "series of related transactions" (within the meaning of
Section 355(e) of the Code) in conjunction with the Merger.
(f) "TAX RETURNS" means returns, reports and forms required to be
filed with any Governmental Authority of the United States or any other
jurisdiction responsible for the imposition or collection of Taxes.
(g) "TAXES" means (i) all taxes (whether federal, state, local or
foreign) based upon or measured by income and any other tax whatsoever,
including, without limitation, gross receipts, profits, sales, use,
occupation, value added, AD VALOREM, transfer, franchise, withholding,
payroll, employment, excise, or property taxes, together with any interest
or penalties imposed with respect thereto and (ii) any obligations under
any agreements or arrangements with respect to any taxes described in
clause (i) above.
3.11 COMPLIANCE WITH LAW. Anadarko is in compliance, and at all times since
January 1, 1997 has been in compliance, with all applicable laws, statutes,
orders, rules, regulations, policies or guidelines promulgated, or judgments,
decisions or orders entered by any Governmental Authority (collectively,
"APPLICABLE LAWS") relating to Anadarko or its business or properties, except
where the failure to be in compliance with such Applicable Laws, individually or
in the aggregate, would not reasonably be expected to have a Material Adverse
Effect on Anadarko. Except as set forth in Section 3.11 to the Anadarko
Disclosure Schedule, to the knowledge of Anadarko, no investigation or review by
any Governmental Authority with respect to Anadarko or its subsidiaries is
pending or threatened, nor has any Governmental Authority indicated in writing
an intention to conduct the same, other than those the outcome of which would
not reasonably be expected to have a Material Adverse Effect on Anadarko.
3.12 REGISTRATION STATEMENT; JOINT PROXY STATEMENT. None of the information
provided by Anadarko for inclusion in the registration statement on Form S-4
(such registration statement as amended, supplemented or modified, the
"REGISTRATION STATEMENT") to be filed with the Commission by Anadarko under the
Securities Act, including the prospectus relating to Anadarko Common Shares to
be issued in the Merger (as amended, supplemented or modified, the "PROSPECTUS")
and the joint proxy statement and form of proxies relating to the vote of UPR
Stockholders with respect to the Merger and the vote of Anadarko Stockholders
with respect to the Share Issuance (as amended, supplemented or modified, the
"JOINT PROXY STATEMENT"), at the time the Registration Statement becomes
effective or, in the case of the Joint Proxy Statement, at the date of mailing
and at the date of the UPR Stockholders Meeting (as defined in Section 5.3(a))
or the Anadarko Stockholders Meeting (as defined in Section 5.2(a)) to consider
the Merger and the transactions contemplated thereby, will contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make
10
the statements therein, in light of the circumstances under which they are made,
not misleading. The Registration Statement and Joint Proxy Statement, except for
such portions thereof that relate only to UPR or its subsidiaries, will each
comply as to form in all material respects with the provisions of the Securities
Act and the Exchange Act.
3.13 LITIGATION. Except as set forth in Section 3.13 to the Anadarko
Disclosure Schedule, there is no suit, claim, action, proceeding, hearing,
notice of violation, demand letter or investigation (an "ACTION") pending or, to
the knowledge of Anadarko (or its executive officers or directors), threatened
against Anadarko or any executive officer or director of Anadarko that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Anadarko or a material adverse effect on the ability
of Anadarko to consummate the transactions contemplated hereby. Anadarko is not
subject to any outstanding order, writ, injunction or decree that, individually
or in the aggregate, insofar as can be reasonably foreseen, would have a
Material Adverse Effect on Anadarko or a material adverse effect on the ability
of Anadarko to consummate the transactions contemplated hereby.
3.14 ANADARKO EMPLOYEE BENEFIT PLANS.
(a) For purposes of this Agreement, the following terms have the
definitions given below:
"ANADARKO CONTROLLED GROUP LIABILITY" means any and all liabilities
(i) under Title IV of ERISA, (ii) under section 302 of ERISA, (iii)
under sections 412 and 4971 of the Code, (iv) as a result of a failure
to comply with the continuation coverage requirements of section 601 et
seq. of ERISA and section 4980B of the Code, and (v) under corresponding
or similar provisions of foreign laws or regulations, other than such
liabilities that arise solely out of, or relate solely to, the Anadarko
Employee Benefit Plans listed in Section 3.14 of the Anadarko Disclosure
Schedule.
"ANADARKO EMPLOYEE BENEFIT PLANS" means any Anadarko Employee
Benefit Plans, program, policy, practices, or other arrangement
providing benefits to any current or former employee, officer or
director of Anadarko or any of its subsidiaries or any beneficiary or
dependent thereof that is sponsored or maintained by Anadarko or any of
its subsidiaries or to which Anadarko or any of its subsidiaries
contributes or is obligated to contribute, whether or not written,
including without limitation any employee welfare benefit plan within
the meaning of Section 3(1) of ERISA, any employee pension benefit plan
within the meaning of Section 3(2) of ERISA (whether or not such plan is
subject to ERISA) and any bonus, incentive, deferred compensation,
vacation, stock purchase, stock option, severance, employment, change of
control or fringe benefit plan, program or agreement.
"ANADARKO EMPLOYMENT AGREEMENT" means a contract, offer letter or
agreement of Anadarko or any subsidiary with or addressed to any
individual who is rendering or has rendered services thereto as an
employee or consultant pursuant to which Anadarko or any subsidiary has
any actual or contingent liability or obligation to provide compensation
and/or benefits in consideration for past, present or future services.
"ANADARKO MATERIAL EMPLOYMENT AGREEMENT" means an Anadarko
Employment Agreement pursuant to which Anadarko or any subsidiary has or
could have any obligation to provide compensation and/or benefits
(including without limitation severance pay or benefits) in an amount or
having a value in excess of $100,000 per year or $500,000 in the
aggregate.
"ANADARKO PLAN" means any Anadarko Employee Benefit Plans other
than a Multiemployer Plan.
"ERISA AFFILIATE" means, with respect to any entity, trade or
business, any other entity, trade or business that is a member of a
group described in Section 414(b), (c), (m) or (o) of the Code or
Section 4001(b)(1) of ERISA that includes the first entity, trade or
business, or that is a member of the same "controlled group" as the
first entity, trade or business pursuant to Section 4001(a)(14) of
ERISA.
11
"MULTIEMPLOYER PLAN" means any "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan,
as those terms are defined in Part I of Subtitle E of Title IV of ERISA.
(a) Section 3.14(a) to the Anadarko Disclosure Schedule includes a
complete list of all material Anadarko Employee Benefit Plans and all
Anadarko Material Employment Agreements.
(b) With respect to each Anadarko Plan, Anadarko has delivered or made
available to UPR a true, correct and complete copy of: (i) each writing
constituting a part of such Anadarko Plan, including without limitation all
plan documents, employee communications, benefit schedules, trust
agreements, and insurance contracts and other funding vehicles; (ii) the
most recent Annual Report (Form 5500 Series) and accompanying schedule, if
any; (iii) the current summary plan description and any material
modifications thereto, if any (in each case, whether or not required to be
furnished under ERISA); (iv) the most recent annual financial report, if
any; (v) the most recent actuarial report, if any; and (vi) the most recent
determination letter from the Internal Revenue Service, if any. Anadarko
has delivered or made available to UPR a true, complete and correct copy of
each Anadarko Material Employment Agreement. Except as specifically
provided in the foregoing documents delivered or made available to UPR,
there are no amendments to any Anadarko Plan or Anadarko Material
Employment Agreement that have been adopted or approved nor has Anadarko or
any of its subsidiaries undertaken to make any such amendments or to adopt
or approve any new Anadarko Plan or Anadarko Material Employment Agreement.
(c) Section 3.14(c) to the Anadarko Disclosure Schedule identifies
each Anadarko Plan that is intended to be a "qualified plan" within the
meaning of Section 401(a) of the Code ("ANADARKO QUALIFIED PLANS"). The
Internal Revenue Service has issued a favorable determination letter with
respect to each Anadarko Qualified Plan and the related trust that has not
been revoked, and there are no circumstances and, to the knowledge of
Anadarko, no events have occurred that could adversely affect the qualified
status of any Anadarko Qualified Plan or the related trust. Section 3.14(c)
to the Anadarko Disclosure Schedule identifies each Anadarko Plan which is
intended to meet the requirements of Code Section 501(c)(9), and each such
plan meets such requirements.
(d) All material contributions required to be made to any Anadarko
Plan by applicable law or regulation or by any plan document or other
contractual undertaking, and all material premiums due or payable with
respect to insurance policies funding any Anadarko Plan, for any period
through the date hereof have been timely made or paid in full or, to the
extent not required to be made or paid on or before the date hereof, either
(i) have been fully reflected on the financial statements included in the
Anadarko SEC Documents, or (ii) items omitted from the Anadarko SEC
Documents could not reasonably be expected to have a Material Adverse
Effect on Anadarko. Each Anadarko Employee Benefit Plan that is an employee
welfare benefit plan under Section 3(1) of ERISA is either (i) funded
through an insurance company contract and is not a "welfare benefit fund"
with the meaning of Section 419 of the Code or (ii) unfunded.
(e) Except as set forth in Section 3.13(e) to the Anadarko Disclosure
Schedule, with respect to each Anadarko Employee Benefit Plan, Anadarko and
its subsidiaries have complied, and are now in compliance, in all material
respects, with all provisions of ERISA, the Code and all laws and
regulations applicable to such Anadarko Employee Benefit Plans and each
Anadarko Employee Benefit Plan has been administered in all material
respects in accordance with its terms. There is not now, nor, to the
knowledge of Anadarko, do any circumstances currently exist that could give
rise to, any requirement for the posting of security with respect to an
Anadarko Plan or the imposition of any lien on the assets of Anadarko or
any of its subsidiaries under ERISA or the Code.
12
(f) With respect to each Anadarko Plan that is subject to Title IV or
Section 302 of ERISA or Section 412 or 4971 of the Code: (i) there does not
exist any accumulated funding deficiency within the meaning of Section 412
of the Code or Section 302 of ERISA, whether or not waived; (ii) no
reportable event within the meaning of Section 4043(c) of ERISA for which
the 30-day notice requirement has not been waived has occurred, and the
consummation of the transactions contemplated by this agreement will not
result in the occurrence of any such reportable event; (iii) all premiums
to the Pension Benefit Guaranty Corporation (the "PBGC") have been timely
paid in full; (iv) no liability (other than for premiums to the PBGC) under
Title IV of ERISA has been or is expected to be incurred by Anadarko or any
of its subsidiaries; and (v) the PBGC has not instituted proceedings to
terminate any such Anadarko Plan and, to Anadarko's knowledge, no condition
exists that presents a risk that such proceedings will be instituted or
which would constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any such
Anadarko Plan.
(g) (i) No Anadarko Employee Benefit Plan is a Multiemployer Plan or a
plan that has two or more contributing sponsors at least two of whom are
not under common control, within the meaning of Section 4063 of ERISA (a
"MULTIPLE EMPLOYER PLAN"); (ii) none of Anadarko and its subsidiaries nor
any of their respective ERISA Affiliates has, at any time during the last
six years, contributed to or been obligated to contribute to any
Multiemployer Plan or Multiple Employer Plan; and (iii) none of Anadarko
and its subsidiaries nor any of their respective ERISA Affiliates has
incurred any material Withdrawal Liability that has not been satisfied in
full. With respect to each Anadarko Plan that is a Multiemployer Plan: (i)
if Anadarko or any of its subsidiaries or any of their respective ERISA
Affiliates were to experience a withdrawal or partial withdrawal from such
plan, no material Withdrawal Liability would be incurred; and (ii) none of
Anadarko and its subsidiaries, nor any of their respective ERISA Affiliates
has received any notification, nor does Anadarko have any knowledge, that
any such Anadarko Plan is in reorganization, has been terminated, is
insolvent, or may reasonably be expected to be in reorganization, to be
insolvent, or to be terminated.
(h) There does not now exist, nor, to the knowledge of Anadarko, do
any circumstances exist that could reasonably be expected to result in, any
material Anadarko Controlled Group Liability that would be a liability of
Anadarko or any of its subsidiaries following the Closing. Without limiting
the generality of the foregoing, neither Anadarko nor any of its
subsidiaries, nor any of their respective ERISA Affiliates, has engaged in
any transaction described in Section 4069 or Section 4204 or 4212 of ERISA.
(i) Section 3.14(i) to the Anadarko Disclosure Schedule sets forth a
list of each Anadarko Employment Agreement under which the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby could (either alone or in conjunction with any other
event) result in, cause the accelerated vesting, funding or delivery of, or
materially increase the amount or value of, any payment or benefit to any
employee, officer or director of Anadarko or any of its subsidiaries, or
could limit the right of Anadarko or any of its subsidiaries to amend,
merge, terminate or receive a reversion of assets from any Anadarko
Employee Benefit Plan or related trust or any Anadarko Material Employment
Agreement or related trust.
(j) None of Anadarko and its subsidiaries nor, to the knowledge of
Anadarko, any other person, including any fiduciary, has engaged in any
"prohibited transaction" (as defined in Section 4975 of the Code or Section
406 of ERISA), which could subject any of the Anadarko Employee Benefit
Plans or their related trusts, Anadarko, any of its subsidiaries or any
person that Anadarko or any of its subsidiaries has an obligation to
indemnify, to any material tax or material penalty imposed under Section
4975 of the Code or Section 502 of ERISA.
(k) Except as set forth in Section 3.14(k) to the Anadarko Disclosure
Schedule, there are no pending or threatened claims (other than claims for
benefits in the ordinary course), lawsuits or arbitrations which have been
asserted or instituted, and to Anadarko's knowledge, no set of
circumstances exists which may reasonably give rise to a claim or lawsuit,
against the Anadarko
13
Plans, any fiduciaries thereof with respect to their duties to the Anadarko
Plans or the assets of any of the trusts under any of the Anadarko Plans
which could reasonably be expected to result in any material liability of
Anadarko or any of its subsidiaries to the PBGC, the Department of
Treasury, the Department of Labor, any Multiemployer Plan, any Anadarko
Plan or any participant in an Anadarko Plan.
(l) Anadarko, its subsidiaries and each member of their respective
business enterprises have in all material respects complied with the Worker
Adjustment and Retraining Notification Act and in all material respects,
with all similar state, local and foreign laws.
(m) All Anadarko Employee Benefit Plans subject to the laws of any
jurisdiction outside of the United States (i) have been maintained in
accordance with all applicable requirements, (ii) if they are intended to
qualify for special tax treatment, meet all requirements for such
treatment, and (iii) if they are intended to be funded and/or book-reserved
are funded and/or book-reserved in all material respects, as appropriate,
based upon reasonable actuarial assumptions.
3.15 CONTRACTS. All written or oral contracts, agreements, guarantees,
leases and executory commitments other than Anadarko Plans to which Anadarko or
its subsidiaries is a party or by which its assets are bound which are material
to Anadarko (each an "ANADARKO CONTRACT"), are valid and binding obligations of
Anadarko and, to the knowledge of Anadarko, the valid and binding obligation of
each other party thereto except such Anadarko Contracts that if not so valid and
binding would not, individually or in the aggregate, have a Material Adverse
Effect on Anadarko. Neither Anadarko nor, to the knowledge of Anadarko, any
other party thereto is in violation of or in default in respect of, nor has
there occurred an event or condition that with the passage of time or giving of
notice (or both) would constitute a default under or permit the termination of,
any such Anadarko Contract except such violations or defaults under or
terminations that, individually or in the aggregate, would not have a Material
Adverse Effect on Anadarko.
3.16 LABOR MATTERS. Anadarko does not have any labor contracts or
collective bargaining agreements with any persons employed by Anadarko or any
persons otherwise performing services primarily for Anadarko. There is no labor
strike, dispute or stoppage pending or, to the knowledge of Anadarko, threatened
against Anadarko, and Anadarko has not experienced any labor strike, dispute or
stoppage or other material labor difficulty involving its employees since
January 1, 1998. To the knowledge of Anadarko, since January 1, 1998, no
campaign or other attempt for recognition has been made by any labor
organization or employees with respect to employees of Anadarko or any of its
subsidiaries.
3.17 UNDISCLOSED LIABILITIES. Except (i) as and to the extent disclosed or
reserved against on the balance sheet of Anadarko as of December 31, 1999
included in the Anadarko SEC Documents, or (ii) as incurred after the date
thereof in the ordinary course of business consistent with prior practice and
not prohibited by this Agreement, Anadarko does not have any liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise
and whether due or to become due, that, individually or in the aggregate, have
had or would reasonably be expected to have a Material Adverse Effect on
Anadarko.
3.18 PERMITS; COMPLIANCE. Anadarko is in possession of all material
franchises, grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary to own, lease
and operate its properties and to carry on its business as it is now being
conducted (collectively, the "ANADARKO PERMITS"), and there is no Action pending
or, to the knowledge of Anadarko, threatened regarding any of the Anadarko
Permits. Anadarko is not in conflict with, or in default or violation of any of
the Anadarko Permits, except for any such conflicts, defaults or violations
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect on Anadarko.
3.19 ENVIRONMENTAL MATTERS. Except as disclosed in the Anadarko SEC
Documents, (i) the properties, operations and activities of Anadarko and its
subsidiaries are in compliance with all applicable Environmental Laws (as
defined below) and all past noncompliance of Anadarko or any Anadarko subsidiary
with any Environmental Laws or Environmental Permits (as defined below), has
been resolved without any pending, ongoing or future obligation, cost or
liability; (ii) Anadarko and its subsidiaries and
14
the properties and operations of Anadarko and its subsidiaries are not subject
to any existing, pending or, to the knowledge of Anadarko, threatened Action by
or before any court or Governmental Authority under any Environmental Law; (iii)
except as allowed by Environmental Permits or Environmental Laws, there has been
no release of any hazardous substance, pollutant or contaminant into the
environment by Anadarko or its subsidiaries or in connection with their
properties or operations; and (iv) except as allowed by Environmental Permits or
Environmental Laws, there has been no exposure of any person or property to any
hazardous substance, pollutant or contaminant in connection with the properties,
operations and activities of Anadarko and its subsidiaries, in each case, other
than those matters that, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect on Anadarko. The term
"ENVIRONMENTAL LAWS" means all federal, state, local or foreign laws relating to
pollution, or protection of human health from Hazardous Materials (as defined
below) or the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata), including, without
limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or industrial, toxic or
hazardous substances or wastes (collectively, "HAZARDOUS MATERIALS") into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, injunctions, judgments, licenses,
notices, orders, permits, plans or regulations issued, entered, promulgated or
approved thereunder. "ENVIRONMENTAL PERMIT" means any permit, approval, license
or other authorization required under or issued pursuant to any applicable
Environmental Law.
3.20 OPINION OF FINANCIAL ADVISOR. Anadarko has received the written
opinion of Credit Suisse First Boston Corporation, its financial advisor (the
"ANADARKO FINANCIAL ADVISOR"), to the effect that, as of the date of this
Agreement, the Exchange Ratio is fair to Anadarko from a financial point of
view. Anadarko has heretofore provided copies of such opinion to UPR and such
opinion has not been withdrawn or revoked or modified in any material respect.
3.21 BOARD RECOMMENDATION; REQUIRED VOTE. The Board of Directors of
Anadarko, at a meeting duly called and held, has by unanimous vote of those
directors present (i) determined that this Agreement and the transactions
contemplated hereby, including the Merger, and the Anadarko Stock Option
Agreement and the transactions contemplated thereby, taken together, are fair to
and in the best interests of Anadarko and the Anadarko Stockholders, and (ii)
resolved to recommend that the Anadarko Stockholders approve and authorize the
Share Issuance and the Anadarko Board Amendment (as defined in Section 5.2(h))
(the "ANADARKO BOARD RECOMMENDATION"). The affirmative vote of holders of a
majority of the Anadarko Common Shares present and voting at the Anadarko
Stockholders Meeting to approve the Share Issuance and the affirmative vote of
holders of 80% of the outstanding Anadarko Common Shares to approve the Anadarko
Board Amendment are the only votes of the Anadarko Stockholders necessary to
adopt this Agreement and approve the transactions contemplated hereby.
3.22 STATE TAKEOVER LAWS; RIGHTS AGREEMENT. Prior to the execution of this
Agreement, the Board of Directors of Anadarko has taken all action necessary to
exempt under or make not subject to any state takeover law or state law that
purports to limit or restrict business combinations or the ability to acquire or
vote shares: (i) the execution of this Agreement, and the Anadarko Stock Option
Agreement, (ii) the Merger and (iii) the transactions contemplated hereby and by
the Anadarko Stock Option Agreement. The Anadarko Rights Agreement has been
amended so that UPR is exempt from the definition of "ACQUIRING PERSON"
contained in the Anadarko Rights Agreement and no "SHARES ACQUISITION DATE" or
"DISTRIBUTION DATE" (as such terms are defined in the Anadarko Rights Agreement)
will occur as a result of the execution of the Anadarko Stock Option Agreement
or the acquisition or transfer of Anadarko Common Shares by UPR pursuant to the
Anadarko Stock Option Agreement. Copies of all such amendments to the Anadarko
Rights Agreement have been previously provided to UPR.
15
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF UPR
In order to induce Subcorp and Anadarko to enter into this Agreement, UPR
hereby represents and warrants to Anadarko and Subcorp that the statements
contained in this Article IV are true, correct and complete, subject to, in each
of the following representations to the specified section of the disclosure
schedule delivered by UPR to Anadarko and dated the date hereof (the "UPR
DISCLOSURE SCHEDULE") PROVIDED that items listed in any Section to the UPR
Disclosure Schedule shall apply only to the corresponding section of this
Agreement (except to the extent that there is a specific cross-reference to
another section of the UPR Disclosure Schedule).
4.1 ORGANIZATION AND STANDING. UPR is a corporation duly organized, validly
existing and in good standing under the laws of the State of Utah with full
corporate power and authority to own, lease, use and operate its properties and
to conduct its business as and where now owned, leased, used, operated and
conducted. Each of UPR and each subsidiary of UPR is duly qualified to do
business and in good standing in each jurisdiction in which the nature of the
business conducted by it or the property it owns, leases or operates requires it
to so qualify, except where the failure to be so qualified or in good standing
in such jurisdiction would not have a Material Adverse Effect on UPR. UPR is not
in default in the performance, observance or fulfillment of any provision of its
Amended and Restated Articles of Incorporation (the "UPR ARTICLES"), or its
By-laws, as in effect on the date hereof (the "UPR BYLAWS"). UPR has heretofore
furnished to Anadarko a complete and correct copy of the UPR Articles and the
UPR Bylaws.
4.2 SUBSIDIARIES AND INVESTMENTS. UPR does not own, directly or indirectly,
any equity or other ownership interest in any corporation, partnership, joint
venture or other entity or enterprise, except for its subsidiaries and other
entities, in each case set forth in Section 4.2 to the UPR Disclosure Schedule.
Section 4.2 of the UPR Disclosure Schedule specifically identifies each of UPR's
"significant subsidiaries" as defined in Rule 1-02(w) of Regulation S-X (the
subsidiaries so identified the "SIGNIFICANT SUBSIDIARIES"). UPR owns, directly
or indirectly, each of the outstanding shares of capital stock (or other
ownership interests having by their terms ordinary voting power to elect a
majority of directors or others performing similar functions with respect to
such subsidiary) of each of UPR's Significant Subsidiaries. Each of the
outstanding shares of capital stock of each of UPR's Significant Subsidiaries is
duly authorized, validly issued, fully paid and nonassessable, and is owned,
directly or indirectly, by UPR free and clear of all liens, pledges, security
interests, claims or other encumbrances. With respect to UPR's subsidiaries
other than the Significant Subsidiaries, to the extent the outstanding shares of
capital stock of each of such Subsidiaries are not (i) duly authorized, validly
issued, fully paid and nonassessable, or (ii) owned, directly or indirectly, by
UPR free and clear of all liens, pledges, security interests, claims or other
encumbrances, there is not, and there could not reasonably be expected to be,
any material impact on the business and operations of UPR and its subsidiaries
taken as a whole. There are no outstanding subscriptions, options, warrants,
puts, calls, agreements, understandings, claims or other commitments or rights
of any type relating to the issuance, sale or transfer of any securities of any
subsidiary of UPR, nor are there outstanding any securities that are convertible
into or exchangeable for any shares of capital stock of any subsidiary of UPR,
and neither UPR nor any subsidiary of UPR has any obligation of any kind to
issue any additional securities or to pay for or repurchase any securities of
any subsidiary of UPR or any predecessor thereof.
4.3 CORPORATE POWER AND AUTHORITY. UPR has all requisite corporate power
and authority to enter into and deliver this Agreement, to perform its
obligations hereunder and, subject to authorization of the Merger and the
transactions contemplated hereby by UPR Stockholders, to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby by UPR
have been duly authorized by all necessary corporate action on the part of UPR,
subject to authorization of the Merger and the transactions contemplated hereby
by UPR Stockholders. This Agreement has been duly executed and delivered by UPR
and constitutes the legal, valid and binding obligation of UPR enforceable
against it in accordance with its terms.
16
4.4 CAPITALIZATION OF UPR. As of March 31, 2000, UPR's authorized capital
stock consisted solely of (a) 400,000,000 shares of common stock ("UPR COMMON
STOCK"), of which (i) 251,952,336 shares were issued and outstanding, (ii)
4,277,293 shares were issued and held by UPR (which does not include shares of
UPR Common Stock reserved for issuance set forth in clause (iii) below), (iii)
11,194,329 shares were reserved for issuance upon the exercise of outstanding
UPR Options, and (iv) 50,138,515 shares of UPR Common Stock were reserved for
future issuance under the Stock Option Agreement dated April 2, 2000 between
Anadarko and UPR (the "UPR STOCK OPTION AGREEMENT"); and (b) 100,000,000 shares
of preferred stock, of which (i) none was issued and outstanding, and (ii)
3,000,000 shares have been designated as Series A Junior Participating Preferred
Stock reserved for issuance pursuant to the rights issued under the UPR Rights
Agreement (as defined in Section 4.22). Since March 31, 2000, UPR has not issued
any additional shares of capital stock except for the issuance of UPR Common
Stock in connection with the exercise of UPR Options and the issuance of UPR
Common Stock in respect of awards outstanding on the date of this Agreement
under the Executive Deferred Compensation Plan and the Deferred Compensation
Plan for the Board of Directors. Each outstanding share of UPR capital stock is
duly authorized and validly issued, fully paid and nonassessable, and has not
been issued in violation of any preemptive or similar rights. Other than as set
forth in the first sentence hereof or as contemplated by the UPR Stock Option
Agreement, there are no outstanding subscriptions, options, warrants, puts,
calls, agreements, understandings, claims or other commitments or rights of any
type relating to the issuance, sale, repurchase or transfer of any securities of
UPR, nor are there outstanding any securities which are convertible into or
exchangeable for any shares of capital stock of UPR, and neither UPR nor any
subsidiary of UPR has any obligation of any kind to issue any additional
securities or to pay for or repurchase any securities of UPR or any predecessor.
The issuance and sale of all of the shares of capital stock described in this
Section 4.4 have been in compliance with federal and state securities laws and
the UPR Common Stock is registered under the Exchange Act. UPR has previously
provided Anadarko with a schedule setting forth the number of shares of each
class (including the number of shares issuable upon exercise of UPR Options and
the exercise price and the grant date with respect thereto) held by all holders
of options to purchase UPR capital stock. Other than pursuant to the UPR Stock
Option Agreement, UPR has not agreed to register any securities under the
Securities Act or under any state securities law or granted registration rights
to any person or entity; copies of all such agreements have previously been
provided to Anadarko.
4.5 CONFLICTS; CONSENTS AND APPROVALS. Neither the execution and delivery
of this Agreement or the UPR Stock Option Agreement by UPR, nor the consummation
of the transactions contemplated hereby or thereby will:
(a) conflict with, or result in a breach of any provision of, the UPR
Articles or the UPR Bylaws;
(b) violate, or conflict with, or result in a breach of any provision
of, or constitute a default (or an event that, with the giving of notice,
the passage of time or otherwise, would constitute a default) under, or
entitle any party (with the giving of notice, the passage of time or
otherwise) to terminate, accelerate, modify or call a default under, or
result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of UPR or any of its
subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, contract, undertaking,
agreement, lease or other instrument or obligation to which UPR or any of
its subsidiaries is a party;
(c) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to UPR or any of its subsidiaries or any of their
respective properties or assets; or
(d) require any action or consent or approval of, or review by, or
registration or filing by UPR or any of its affiliates with, any third
party or any Governmental Authority, other than (i) authorization of the
Merger and the transactions contemplated hereby by UPR Stockholders, (ii)
actions required by the HSR Act, (iii) registrations or other actions
required under federal and state securities laws as are contemplated by
this Agreement and (iv) consents or approvals of any Governmental
Authority;
17
except in the case of clauses (b), (c) and (d) for any of the foregoing that
would not, individually or in the aggregate, have a Material Adverse Effect on
UPR or a material adverse effect on the ability of the parties hereto to
consummate the transaction contemplated hereby.
4.6 BROKERAGE AND FINDER'S FEES. Except for UPR's obligations to Xxxxxxx,
Xxxxx & Co. and Xxxxxxx & Company (the "UPR FINANCIAL ADVISORS") (copies of all
agreements relating to such obligations having previously been provided to
Anadarko), neither UPR nor any stockholder, director, officer or employee
thereof, has incurred or will incur on behalf of UPR, any financial advisory,
brokerage, finder's or similar fee in connection with the transactions
contemplated by this Agreement.
4.7 REORGANIZATION. To the knowledge of UPR, neither UPR nor any of its
affiliates has taken or agreed to take any action that (without giving effect to
any actions taken or agreed to be taken by Anadarko or any of its affiliates)
would prevent the Merger from constituting a "reorganization" qualifying under
the provisions of Section 368(a) of the Code.
4.8 NO MATERIAL ADVERSE CHANGE. As disclosed in the UPR SEC Documents filed
prior to the date of this Agreement, since January 1, 2000, there has been no
material adverse change in the business, assets, liabilities, results of
operations, financial condition or prospects of UPR and its subsidiaries taken
as a whole, or any event, occurrence or development that would reasonably be
expected to have a Material Adverse Effect on UPR or a material adverse effect
on the ability of UPR to consummate the transactions contemplated hereby.
4.9 UPR SEC DOCUMENTS. UPR has timely filed with the Commission all forms,
reports, schedules, statements and other documents required to be filed by it
since January 1, 1997 under the Exchange Act or the Securities Act (such
documents, as supplemented and amended since the time of filing, collectively,
the "UPR SEC DOCUMENTS"). The UPR SEC Documents, including, without limitation,
any financial statements or schedules included therein, at the time filed (and,
in the case of registration statements and proxy statements, on the dates of
effectiveness and the dates of mailing, respectively and, in the case of any UPR
SEC Document amended or superseded by a filing prior to the date of this
Agreement, then on the date of such amending or superseding filing) (a) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be. The
financial statements of UPR included in the UPR SEC Documents at the time filed
(and, in the case of registration statements and proxy statements, on the dates
of effectiveness and the dates of mailing, respectively, and, in the case of any
UPR SEC Document amended or superseded by a filing prior to the date of this
Agreement, then on the date of such amending or superseding filing) complied as
to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the Commission with respect thereto,
were prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q of the Commission), and fairly present (subject, in the
case of unaudited statements, to normal, recurring audit adjustments) the
consolidated financial position of UPR and its consolidated subsidiaries as at
the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended. No subsidiary of UPR is subject to the
periodic reporting requirements of the Exchange Act or required to file any
form, report or other document with the Commission, the NYSE, any other stock
exchange or any other comparable Governmental Authority.
4.10 TAXES.
(a) UPR and its subsidiaries have duly filed all material federal,
state, local and foreign income, franchise, excise, real and personal
property and other Tax Returns (including, but not limited to, those filed
on a consolidated, combined or unitary basis) required to have been filed
by UPR or its subsidiaries prior to the date hereof. All of the foregoing
Tax Returns and reports are true and correct (except for such inaccuracies
that are, individually or in the aggregate, immaterial), and UPR and its
subsidiaries have within the time and manner prescribed by Applicable Law
paid or, prior to the
18
Effective Time, will pay all Taxes, interest and penalties required to be
paid in respect of the periods covered by such returns or reports or
otherwise due to any federal, state, foreign, local or other taxing
authority. Neither UPR nor any of its subsidiaries have any material
liability for any Taxes in excess of the amounts so paid or reserves so
established and neither UPR nor any of its subsidiaries is delinquent in
the payment of any material Tax. Neither UPR nor any of its subsidiaries
has requested or filed any document having the effect of causing any
extension of time within which to file any returns in respect of any fiscal
year which have not since been filed. No deficiencies for any material Tax
have been proposed in writing, asserted or assessed (tentatively or
definitely), in each case, by any taxing authority, against UPR or any of
its subsidiaries for which there are not adequate reserves. Neither UPR nor
any of its subsidiaries is the subject of any currently ongoing Tax audit
except for those that are, individually or in the aggregate, immaterial.
There are no pending requests for waivers of the time to assess any
material Tax, other than those made in the ordinary course and for which
payment has been made or there are adequate reserves. Neither UPR nor any
of its subsidiaries has waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax assessment
or deficiency. There are no liens with respect to material Taxes upon any
of the properties or assets, real or personal, tangible or intangible of
UPR or any of its subsidiaries (other than liens for Taxes not yet due). To
the knowledge of UPR, no claim has ever been made in writing by an
authority in a jurisdiction where none of UPR and its subsidiaries files
Tax Returns that UPR or any of its subsidiaries is or may be subject to
taxation by that jurisdiction. Neither UPR nor any of its subsidiaries has
filed an election under Section 341(f) of the Code to be treated as a
consenting corporation.
(b) Neither UPR nor any of its subsidiaries is obligated by any
contract, agreement or other arrangement to indemnify any other person with
respect to material Taxes. Neither UPR nor any of its subsidiaries are now
or have ever been a party to or bound by any agreement or arrangement
(whether or not written and including, without limitation, any arrangement
required or permitted by law) binding UPR or any of its subsidiaries that
(i) requires UPR or any of its subsidiaries to make any Tax payment to or
for the account of any other person, (ii) affords any other person the
benefit of any net operating loss, net capital loss, investment Tax credit,
foreign Tax credit, charitable deduction or any other credit or Tax
attribute which could reduce Taxes (including, without limitation,
deductions and credits related to alternative minimum Taxes) of UPR or any
of its subsidiaries, or (iii) requires or permits the transfer or
assignment of income, revenues, receipts or gains to UPR or any of its
subsidiaries, from any other person.
(c) UPR and its subsidiaries have withheld and paid all material Taxes
required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, shareholder or
other third party.
(d) Neither UPR nor any of its subsidiaries is responsible for any
material Taxes of any other person under Treasury Regulation Section
1.1502-6 (or any similar provision of state, local, or foreign law), as a
transferee, by contract, or otherwise.
(e) Neither UPR nor any of its subsidiaries has constituted either a
"distributing corporation" or a "controlled corporation" (within the
meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock
intended to qualify for tax-free treatment under Section 355 of the Code
(i) in the two years prior to the date of this Agreement (or will
constitute such a corporation in the two years prior to the date of the
Effective Time) or (ii) in a distribution which otherwise constitutes part
of a "plan" or "series of related transactions" (within the meaning of
Section 355(e) of the Code) in conjunction with the Merger.
4.11 COMPLIANCE WITH LAW. UPR is in compliance, and at all times since
January 1, 1997 has been in compliance, with all Applicable Laws relating to UPR
or its business or properties, except where the failure to be in compliance with
such Applicable Laws, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on UPR. To the knowledge of UPR, no
investigation or review by any Governmental Authority with respect to UPR is
pending or threatened, nor
19
has any Governmental Authority indicated in writing an intention to conduct the
same, other than those the outcome of which would not reasonably be expected to
have a Material Adverse Effect on UPR.
4.12 REGISTRATION STATEMENT; JOINT PROXY STATEMENT. None of the information
provided by UPR for inclusion in the Registration Statement at the time it
becomes effective and, in the case of the Joint Proxy Statement, at the date of
mailing and at the date of the UPR Stockholders Meeting or the Anadarko
Stockholders Meeting, will contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The Registration Statement and Joint Proxy
Statement, except for such portions thereof that relate only to Anadarko or its
subsidiaries, will each comply as to form in all material respects with the
provisions of the Securities Act and the Exchange Act.
4.13 LITIGATION. There is no Action pending or, to the knowledge of UPR,
threatened against UPR or any executive officer or director of UPR that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on UPR or a material adverse effect on the ability of
UPR to consummate the transactions contemplated hereby. UPR is not subject to
any outstanding order, writ, injunction or decree that, individually or in the
aggregate, insofar as can be reasonably foreseen, would have a Material Adverse
Effect on UPR or a material adverse effect on the ability of UPR to consummate
the transactions contemplated hereby.
4.14 UPR EMPLOYEE BENEFIT PLANS
(a) For purposes of this Agreement, the following terms have the
definitions given below:
"UPR CONTROLLED GROUP LIABILITY" means any and all liabilities (i)
under Title IV of ERISA, (ii) under section 302 of ERISA (iii) under
sections 412 and 4971 of the Code, (iv) as a result of a failure to
comply with the continuation coverage requirements of section 601 et
seq. of ERISA and section 4980B of the Code, and (v) under corresponding
or similar provisions of foreign laws or regulations, other than such
liabilities that arise solely out of, or relate solely to, the UPR
Employee Benefit Plans listed in Section 4.14 of the UPR Disclosure
Schedule.
"UPR EMPLOYEE BENEFIT PLAN" means any UPR Employee Benefit Plan,
program, policy, practices, or other arrangement providing benefits to
any current or former employee, officer or director of UPR or any of its
subsidiaries or any beneficiary or dependent thereof that is sponsored
or maintained by UPR or any of its subsidiaries or to which UPR or any
of its subsidiaries contributes or is obligated to contribute, whether
or not written, including without limitation any employee welfare
benefit plan within the meaning of Section 3(1) of ERISA, any employee
pension benefit plan within the meaning of Section 3(2) of ERISA
(whether or not such plan is subject to ERISA) and any bonus, incentive,
deferred compensation, vacation, stock purchase, stock option,
severance, employment, change of control or fringe benefit plan, program
or agreement.
"UPR EMPLOYMENT AGREEMENT" means a contract, offer letter or
agreement of UPR or any subsidiary with or addressed to any individual
who is rendering or has rendered services thereto as an employee or
consultant pursuant to which UPR or any subsidiary has any actual or
contingent liability or obligation to provide compensation and/or
benefits in consideration for past, present or future services.
"UPR MATERIAL EMPLOYMENT AGREEMENT" means an UPR Employment
Agreement pursuant to which UPR or any subsidiary has or could have any
obligation to provide compensation and/or benefits (including without
limitation severance pay or benefits) in an amount or having a value in
excess of $100,000 per year or $500,000 in the aggregate.
"UPR PLAN" means any UPR Employee Benefit Plan other than a
Multiemployer Plan.
20
(a) Section 4.14(a) to the UPR Disclosure Schedule includes a complete
list of all material UPR Employee Benefit Plans and all UPR Material
Employment Agreements.
(b) With respect to each UPR Plan, UPR has delivered or made available
to Anadarko a true, correct and complete copy of: (i) each writing
constituting a part of such UPR Plan, including without limitation all plan
documents, employee communications, benefit schedules, trust agreements,
and insurance contracts and other funding vehicles; (ii) the most recent
Annual Report (Form 5500 Series) and accompanying schedule, if any; (iii)
the current summary plan description and any material modifications
thereto, if any (in each case, whether or not required to be furnished
under ERISA); (iv) the most recent annual financial report, if any; (v) the
most recent actuarial report, if any; and (vi) the most recent
determination letter from the Internal Revenue Service, if any. UPR has
delivered or made available to Anadarko a true, complete and correct copy
of each UPR Material Employment Agreement. Except as specifically provided
in the foregoing documents delivered or made available to Anadarko, there
are no amendments to any UPR Plan or UPR Material Employment Agreement that
have been adopted or approved.
(c) Section 4.14(c) to the UPR Disclosure Schedule identifies each UPR
Plan that is intended to be a "qualified plan" within the meaning of
Section 401(a) of the Code ("UPR QUALIFIED PLANS"). The Internal Revenue
Service has issued a favorable determination letter with respect to each
UPR Qualified Plan and the related trust that has not been revoked, or such
a letter will be timely applied for, and, to the knowledge of UPR, there
are no circumstances and no events have occurred that could adversely
affect the qualified status of any UPR Qualified Plan or the related trust.
Section 4.14(c) to the UPR Disclosure Schedule identifies each UPR Plan
which is intended to meet the requirements of Code Section 501(c)(9), and
each such plan meets such requirements.
(d) All material contributions required to be made to any UPR Plan by
applicable law or regulation or by any plan document or other contractual
undertaking, and all material premiums due or payable with respect to
insurance policies funding any UPR Plan, for any period through the date
hereof have been timely made or paid in full or, to the extent not required
to be made or paid on or before the date hereof, either (i) have been fully
reflected on the financial statements included in the UPR SEC Documents, or
(ii) items omitted from the UPR SEC Documents could not reasonably be
expected to have a Material Adverse Effect on UPR. Each UPR Employee
Benefit Plan that is an employee welfare benefit plan under Section 3(1) of
ERISA is either (i) funded through an insurance company contract and is not
a "welfare benefit fund" with the meaning of Section 419 of the Code or
(ii) unfunded.
(e) With respect to each UPR Employee Benefit Plan, UPR and its
subsidiaries have complied, and are now in compliance, in all material
respects, with all provisions of ERISA, the Code and all laws and
regulations applicable to such UPR Employee Benefit Plans and each UPR
Employee Benefit Plan has been administered in all material respects in
accordance with its terms. There is not now, nor, to the knowledge of UPR,
do any circumstances currently exist that could give rise to, any
requirement for the posting of security with respect to a UPR Plan or the
imposition of any lien on the assets of UPR or any of its subsidiaries
under ERISA or the Code.
(f) With respect to each UPR Plan that is subject to Title IV or
Section 302 of ERISA or Section 412 or 4971 of the Code: (i) there does not
exist any accumulated funding deficiency within the meaning of Section 412
of the Code or Section 302 of ERISA, whether or not waived; (ii) no
reportable event within the meaning of Section 4043(c) of ERISA for which
the 30-day notice requirement has not been waived has occurred, and the
consummation of the transactions contemplated by this agreement will not
result in the occurrence of any such reportable event; (iii) all premiums
to the PBGC have been timely paid in full; (iv) no liability (other than
for premiums to the PBGC) under Title IV of ERISA has been or is expected
to be incurred by UPR or any of its subsidiaries; and (v) the PBGC has not
instituted proceedings to terminate any such UPR Plan and, to UPR's
knowledge, no condition exists that presents a risk that such proceedings
will be instituted
21
or which would constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any such UPR
Plan.
(g) (i) No UPR Employee Benefit Plan is a Multiemployer Plan or a
Multiple Employer Plan; (ii) none of UPR and its subsidiaries nor any of
their respective ERISA Affiliates has, at any time during the last six
years, contributed to or been obligated to contribute to any Multiemployer
Plan or Multiple Employer Plan; and (iii) none of UPR and its subsidiaries
nor any of their respective ERISA Affiliates has incurred any material
Withdrawal Liability that has not been satisfied in full. With respect to
each UPR Plan that is a Multiemployer Plan: (i) if UPR or any of its
subsidiaries or any of their respective ERISA Affiliates were to experience
a withdrawal or partial withdrawal from such plan, no material Withdrawal
Liability would be incurred; and (ii) none of UPR and its subsidiaries, nor
any of their respective ERISA Affiliates has received any notification, nor
does UPR have any knowledge that any such UPR Plan is in reorganization,
has been terminated, is insolvent, or may reasonably be expected to be in
reorganization, to be insolvent, or to be terminated.
(h) There does not now exist, nor, to the knowledge of UPR, do any
circumstances exist that could reasonably be expected to result in, any
material UPR Controlled Group Liability that would be a liability of UPR or
any of its subsidiaries following the Closing. Without limiting the
generality of the foregoing, neither UPR nor, to the knowledge of UPR any
of its subsidiaries, nor any of their respective ERISA Affiliates, has
engaged in any transaction described in Section 4069 or Section 4204 or
4212 of ERISA.
(i) Section 4.14(i) to the UPR Disclosure Schedule sets forth a list
of each UPR Employee Benefit Plan or UPR Employment Agreement under which
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby could (either alone or in conjunction with
any other event) result in, cause the accelerated vesting, funding or
delivery of, or materially increase the amount or value of, any payment or
benefit to any employee, officer or director of UPR or any of its
subsidiaries, or could limit the right of UPR or any of its subsidiaries to
amend, merge, terminate or receive a reversion of assets from any UPR
Employee Benefit Plan or related trust or any UPR Material Employment
Agreement or related trust.
(j) None of UPR and its subsidiaries nor, to the knowledge of UPR, any
other person, including any fiduciary, has engaged in any "prohibited
transaction" (as defined in Section 4975 of the Code or Section 406 of
ERISA), which could subject any of the UPR Employee Benefit Plans or their
related trusts, UPR, any of its subsidiaries or any person that UPR or any
of its subsidiaries has an obligation to indemnify, to any material tax or
material penalty imposed under Section 4975 of the Code or Section 502 of
ERISA.
(k) There are no pending or threatened claims (other than claims for
benefits in the ordinary course), lawsuits or arbitrations which have been
asserted or instituted, and to UPR's knowledge, no set of circumstances
exists which may reasonably give rise to a claim or lawsuit, against the
UPR Plans, any fiduciaries thereof with respect to their duties to the UPR
Plans or the assets of any of the trusts under any of the UPR Plans which
could reasonably be expected to result in any material liability of UPR or
any of its subsidiaries to the PBGC, the Department of Treasury, the
Department of Labor, any Multiemployer Plan, any UPR Plan or any
participant in a UPR Plan.
(l) UPR, its subsidiaries and each member of their respective business
enterprises have, in all material respects, complied with the Worker
Adjustment and Retraining Notification Act and, in all material respects,
all similar state, local and foreign laws.
(m) All UPR Employee Benefit Plans subject to the laws of any
jurisdiction outside of the United States (i) have been maintained in
accordance with all applicable requirements, (ii) if they are intended to
qualify for special tax treatment, meet all requirements for such
treatment, and (iii) if they are intended to be funded and/or book-reserved
are funded and/or book-reserved in all material respects, as appropriate,
based upon reasonable actuarial assumptions.
22
(o) The UPR Employees Thrift Plan (the "ESOP") and the UPR TRASOP (the
"TRASOP") are each "employee stock ownership plans" within the meaning of
Section 4975(e)(7) of the Code. Each loan under which the ESOP is a
borrower (each, a "LOAN") meets the requirements of Section 4975(d)(3) of
the Code. The Securities of UPR that were acquired with such Loans are in
each case pledged as collateral for the Loan with which they were acquired,
except to the extent they have been released from such pledge and allocated
to the accounts of participants in the ESOP in accordance with the
requirements of Treasury Regulations Sections 54.4975-7 and 54.4975-11. The
TRASOP has no outstanding indebtedness.
4.15 CONTRACTS. All written or oral contracts, agreements, guarantees,
leases and executory commitments other than UPR Plans to which UPR or its
subsidiaries is a party or by which its assets are bound which are material to
UPR (each a "UPR CONTRACT"), are valid and binding obligations of UPR and, to
the knowledge of UPR, the valid and binding obligation of each other party
thereto except such UPR Contracts that if not so valid and binding would not,
individually or in the aggregate, have a Material Adverse Effect on UPR. Neither
UPR nor, to the knowledge of UPR, any other party thereto is in violation of or
in default in respect of, nor has there occurred an event or condition that with
the passage of time or giving of notice (or both) would constitute a default
under or permit the termination of, any such UPR Contract except such violations
or defaults under or terminations that, individually or in the aggregate, would
not have a Material Adverse Effect on UPR. Set forth in Section 4.15 to the UPR
Disclosure Schedule is the amount of the annual premium currently paid by UPR
for its directors' and officers' liability insurance.
4.16 LABOR MATTERS. UPR does not have any labor contracts or collective
bargaining agreements with any persons employed by UPR or any persons otherwise
performing services primarily for UPR. There is no labor strike, dispute or
stoppage pending or, to the knowledge of UPR, threatened against UPR, and UPR
has not experienced any labor strike, dispute or stoppage or other material
labor difficulty involving its employees since January 1, 1998. To the knowledge
of UPR, since January 1, 1998, no campaign or other attempt for recognition has
been made by any labor organization or employees with respect to employees of
UPR or any of its subsidiaries.
4.17 UNDISCLOSED LIABILITIES. Except (i) as and to the extent disclosed or
reserved against on the balance sheet of UPR as of December 31, 1999 included in
the UPR SEC Documents, or (ii) as incurred after the date thereof in the
ordinary course of business consistent with prior practice and not prohibited by
this Agreement, UPR does not have any liabilities or obligations of any nature,
whether, absolute, accrued, contingent or otherwise and whether due or to become
due, that, individually or in the aggregate, have had or would reasonably be
expected to have a Material Adverse Effect on UPR.
4.18 PERMITS; COMPLIANCE. UPR is in possession of all material franchises,
grants, authorizations, licenses, permits, easements, variances, exemptions,
consents, certificates, approvals and orders necessary to own, lease and operate
its properties and to carry on its business as it is now being conducted
(collectively, the "UPR Permits"), and there is no Action pending or, to the
knowledge of UPR, threatened regarding any of the UPR Permits. UPR is not in
conflict with, or in default or violation of any of the UPR Permits, except for
any such conflicts, defaults or violations which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect on
UPR.
4.19 ENVIRONMENTAL MATTERS. Except as disclosed in the UPR SEC Documents,
(i) the properties, operations and activities of UPR and its subsidiaries are in
compliance with all applicable Environmental Laws and all past noncompliance of
UPR or any UPR subsidiary with any Environmental Laws or Environmental Permits,
has been resolved without any pending, ongoing or future obligation, cost or
liability; (ii) UPR and its subsidiaries and the properties and operations of
UPR and its subsidiaries are not subject to any existing, pending or, to the
knowledge of UPR, threatened Action by or before any court or Governmental
Authority under any Environmental Law; (iii) except as allowed by Environmental
Permits or Environmental Laws, there has been no release of any hazardous
substance, pollutant or contaminant into the environment by UPR or its
subsidiaries or in connection with their properties or operations; and (iv)
except as allowed by Environmental Permits or Environmental Laws, there has been
23
no exposure of any person or property to any hazardous substance, pollutant or
contaminant in connection with the properties, operations and activities of UPR
and its subsidiaries, in each case, other than those matters that, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect on UPR.
4.20 OPINION OF FINANCIAL ADVISOR. UPR has received the written opinion of
Xxxxxxx, Xxxxx & Co., to the effect that, as of the date of this Agreement, the
Exchange Ratio is fair to the UPR Stockholders from a financial point of view.
UPR has heretofore provided copies of such opinions to Anadarko and such
opinions have not been withdrawn or revoked or modified.
4.21 BOARD RECOMMENDATION; REQUIRED VOTE. The Board of Directors of UPR, at
a meeting duly called and held, has by unanimous vote of those directors present
(i) determined that this Agreement and the transactions contemplated hereby,
including the Merger, and the UPR Stock Option Agreement and the transactions
contemplated thereby, taken together, are fair to and in the best interests of
the UPR Stockholders, and (ii) resolved to recommend that the holders of the
shares of UPR Common Stock approve this Agreement and the transactions
contemplated herein, including the Merger (the "UPR BOARD RECOMMENDATION"). The
affirmative vote of holders of a majority of the outstanding shares of UPR
Common Stock to approve the Merger is the only vote of the holders of any class
or series of UPR Common Stock necessary to adopt the Agreement and approve the
transactions contemplated hereby.
4.22 STATE TAKEOVER LAWS; RIGHTS AGREEMENT. Prior to the execution of this
Agreement, the Board of Directors of UPR has taken all action necessary to
exempt under or make not subject to any state takeover law or state law that
purports to limit or restrict business combinations or the ability to acquire or
vote shares: (i) the execution of this Agreement, and the UPR Stock Option
Agreement, (ii) the Merger and (iii) the transactions contemplated hereby and by
the UPR Stock Option Agreement. The Amended and Restated Rights Agreement, dated
as of December 1, 1998 (the "UPR RIGHTS AGREEMENT"), between UPR and Xxxxxx
Trust and Savings Bank, as Rights Agent, has been amended so that Anadarko and
Subcorp are each exempt from the definition of "Acquiring Person" contained in
the UPR Rights Agreement, no "Stock Acquisition Date" or "Distribution Date" or
"Triggering Event" (as such terms are defined in the UPR Rights Agreement) will
occur as a result of the execution of this Agreement or the UPR Stock Option
Agreement or the consummation of the Merger pursuant to this Agreement or the
acquisition or transfer of shares of UPR Common Stock by Anadarko pursuant to
the UPR Stock Option Agreement and the UPR Rights Agreement will expire
immediately prior to the Effective Time, and the UPR Rights Agreement, as so
amended, has not been further amended or modified. Copies of all such amendments
to the UPR Rights Agreement have been previously provided to Anadarko.
ARTICLE V.
COVENANTS OF THE PARTIES
The parties hereto agree that:
5.1 MUTUAL COVENANTS.
(a) HSR ACT FILINGS; REASONABLE EFFORTS; NOTIFICATION.
(i) Each of Anadarko and UPR shall (A) make or cause to be made the
filings required of such party or any of its subsidiaries or affiliates
under the HSR Act with respect to the transactions contemplated hereby
as promptly as practicable and in any event within fifteen business days
after the date of this Agreement, (B) comply at the earliest practicable
date with any request under the HSR Act for additional information,
documents, or other materials received by such party or any of its
subsidiaries from the Federal Trade Commission or the Department of
Justice or any other Governmental Authority in respect of such filings
or such transactions, and (C) cooperate with the other party in
connection with any such filing (including, with respect to the party
making a filing, providing copies of all such documents to
24
the non-filing party and its advisors prior to filing (other than
documents containing confidential business information that shall be
shared only with outside counsel to the non-filing party)). Each party
shall use its reasonable efforts to furnish to each other all
information required for any application or other filing to be made
pursuant to any Applicable Law in connection with the Merger and the
other transactions contemplated by this Agreement. Each party shall
promptly inform the other party of any substantive communication with,
and any proposed understanding, undertaking, or agreement with, any
Governmental Authority regarding any such filings or any such
transaction. The parties hereto will consult and cooperate with one
another, in connection with any analyses, appearances, presentations,
memoranda, briefs, arguments, opinions and proposals made or submitted
by or on behalf of any party hereto in connection with proceedings under
or relating to the HSR Act or other Antitrust Laws.
(ii) Each of Anadarko and UPR shall use its reasonable efforts to
resolve such objections, if any, as may be asserted by any Governmental
Authority with respect to the transaction contemplated by this Agreement
under the HSR Act, the Xxxxxxx Act, as amended, the Xxxxxxx Act, as
amended, the Federal Trade Commission Act, as amended, and any other
federal, state or foreign statutes, rules, regulations, orders, decrees,
administrative or judicial doctrines or other laws that are designed to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade (collectively, "ANTITRUST LAWS").
In connection therewith, if any administrative or judicial action or
proceeding is instituted (or threatened to be instituted) challenging
any transaction contemplated by this Agreement as violative of any
Antitrust Law, each of Anadarko and UPR shall cooperate and use its
reasonable efforts vigorously to contest and resist any such action or
proceeding, including any legislative, administrative or judicial
action, and to have vacated, lifted, reversed, or overturned any decree,
judgment, injunction or other order whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents, or restricts
consummation of the Merger or any other transactions contemplated by
this Agreement. Notwithstanding the foregoing or any other provision of
this Agreement, nothing in this Section 5.1(a) shall limit a party's
right to terminate this Agreement pursuant to Article VII, so long as
such party has up to then complied in all material respects with its
obligations under this Section 5.1(a). Each of Anadarko and UPR shall
use all reasonable efforts to take such action as may be required to
cause the expiration of the notice periods under the HSR Act or other
Antitrust Laws with respect to such transactions as promptly as possible
after the execution of this Agreement.
(iii) Each of the parties hereto agrees to use its reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, and to assist and cooperate with the other parties hereto in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger and
the other transactions contemplated by this Agreement, including (A) the
obtaining of all other necessary actions or nonactions, waivers,
consents, licenses, permits, authorizations, orders and approvals from
Governmental Authorities and the making of all other necessary
registrations and filings (including other filings with Governmental
Authorities, if any), (B) the obtaining of all consents, approvals or
waivers from third parties related to or required in connection with the
Merger that are necessary to consummate the Merger and the transactions
contemplated by this Agreement or required to prevent a Material Adverse
Effect on Anadarko or UPR from occurring prior to or after the Effective
Time, (C) the preparation of the Joint Proxy Statement, the Prospectus
and the Registration Statement, and (D) the execution and delivery of
any additional instruments necessary to consummate the transaction
contemplated by, and to fully carry out the purposes of, this Agreement.
(iv) Notwithstanding anything to the contrary in this Agreement,
(A) neither Anadarko nor any of its subsidiaries shall be required to
hold separate (including by trust or otherwise) or to divest any of
their respective businesses or assets, or to take or agree to take any
action or agree to any limitation that could reasonably be expected to
have a Material Adverse Effect on
25
Anadarko and its subsidiaries taken as a whole or a material adverse
effect on the business, assets, liabilities, results of operations,
financial condition or prospects of Anadarko combined with the Surviving
Corporation after the Effective Time, (B) prior to the Effective Time,
neither UPR nor its subsidiaries shall be required to hold separate
(including by trust or otherwise) or to divest any of their respective
businesses or assets, or to take or agree to take any other action or
agree to any limitation that could reasonably be expected to have a
Material Adverse Effect on UPR and its subsidiaries taken as a whole,
(C) neither Anadarko nor UPR nor their respective subsidiaries shall be
required to take any action that could reasonably be expected to
substantially impair the overall benefits expected, as of the date
hereof, to be realized from consummation of the Merger and (D) neither
Anadarko nor UPR shall be required to waive any of the conditions to the
Merger set forth in Article VI as they apply to such party.
(b) TAX-FREE TREATMENT. Each of the parties shall use its reasonable
efforts to cause the Merger to constitute a "reorganization" under Section
368(a) of the Code and to cooperate with one another in obtaining an
opinion to UPR from Xxxxxx Xxxxx & Xxxxxxx LLP, counsel to UPR, as provided
for in Section 6.1(g), including, but not limited to, making such filings
and maintaining such records as are required by Treasury Regulation Section
1.368-3.
(c) PUBLIC ANNOUNCEMENTS. The initial press release concerning the
Merger and the transactions contemplated hereby shall be a joint press
release. Unless otherwise required by Applicable Laws or requirements of
the NYSE (and, in that event, only if time does not permit), at all times
prior to the earlier of the Effective Time or termination of this Agreement
pursuant to Section 7.1, Anadarko and UPR shall consult with each other
before issuing any press release with respect to the Merger and the
transactions contemplated thereby and shall not issue any such press
release prior to such consultation.
(d) FARMOUTS. Except as set forth below, neither Anadarko nor UPR
shall enter into any farmouts except farmouts in accordance with the
guidelines for farmouts or similar transactions jointly developed by their
respective Chief Executive Officers. Prior to the time such guidelines are
established, neither Anadarko nor UPR shall enter into any farmouts without
first consulting with the other party.
5.2 COVENANTS OF ANADARKO.
(a) ANADARKO STOCKHOLDERS MEETING. Anadarko shall take all action in
accordance with the federal securities laws, the Delaware General
Corporation Law, the Anadarko Certificate and the Anadarko By-laws,
necessary to duly call, give notice of, convene and hold a special meeting
of Anadarko Stockholders (the "ANADARKO STOCKHOLDERS MEETING") to be held
on the earliest practical date determined in consultation with UPR, and to
obtain the consent and approval of Anadarko Stockholders with respect to
the Share Issuance, the Anadarko Board Amendment and the transactions
contemplated hereby. Anadarko shall take all lawful action to solicit the
approval of the Share Issuance and the Anadarko Board Amendment by the
Anadarko Stockholders and the Board of Directors of Anadarko shall
recommend approval of the Share Issuance and the Anadarko Board Amendment
by the Anadarko Stockholders (to the extent not previously withdrawn
pursuant to Section 5.2(d)).
(b) PREPARATION OF REGISTRATION STATEMENT. Anadarko shall, as soon as
is reasonably practicable, prepare the Joint Proxy Statement for filing
with the Commission and shall file the Joint Proxy Statement. Consistent
with the timing for the Anadarko Stockholders Meeting and the UPR
Stockholders Meeting as determined by Anadarko after consultation with UPR,
Anadarko shall prepare and file the Registration Statement with the
Commission as soon as is reasonably practicable following clearance of the
Joint Proxy Statement by the Commission and shall use its reasonable
efforts to have the Registration Statement declared effective by the
Commission as promptly as practicable and to maintain the effectiveness of
the Registration Statement through the Effective Time. If, at any time
prior to the Effective Time, Anadarko shall obtain knowledge of any
information
26
pertaining to Anadarko contained in or omitted from the Registration
Statement that would require an amendment or supplement to the Registration
Statement or the Joint Proxy Statement, Anadarko will so advise UPR in
writing and will promptly take such action as shall be required to amend or
supplement the Registration Statement and/or the Joint Proxy Statement.
Anadarko shall promptly furnish to UPR all information concerning it as may
be required for supplementing the Joint Proxy Statement. Anadarko shall
cooperate with UPR in the preparation of the Joint Proxy Statement in a
timely fashion and shall use its reasonable efforts to assist UPR in
clearing the Joint Proxy Statement with the Staff of the Commission.
Consistent with the timing of the Anadarko Stockholders Meeting and the UPR
Stockholder Meeting, Anadarko shall use all reasonable efforts to mail at
the earliest practicable date to Anadarko Stockholders the Joint Proxy
Statement, which Joint Proxy Statement shall include all information
required under Applicable Law to be furnished to Anadarko Stockholders in
connection with the Share Issuance and shall include the Anadarko Board
Recommendation to the extent not previously withdrawn in compliance with
Section 5.2(d) and the written opinion of the Anadarko Financial Advisor
described in Section 3.21. Anadarko shall also take such other reasonable
actions (other than qualifying to do business in any jurisdiction in which
it is not so qualified) required to be taken under any applicable state
securities laws in connection with the issuance of Anadarko Common Shares
in the Merger. No filing of, or amendment or supplement to, the
Registration Statement or to the Joint Proxy Statement will be made by
Anadarko without providing UPR the opportunity to review and comment
thereon. Anadarko will advise UPR, promptly after it receives notice
thereof, of the time when the Registration Statement has become effective
or any supplement or amendment has been filed, the issuance of any stop
order, the suspension of the qualification of Anadarko Common Shares
issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the Commission for amendment of the Joint
Proxy Statement or the Registration Statement or comments thereon and
responses thereto or requests by the Commission for additional information.
(c) CONDUCT OF ANADARKO'S OPERATIONS. Anadarko shall conduct its
operations in the ordinary course except as expressly contemplated by this
Agreement and the transactions contemplated hereby and shall use all
reasonable efforts to maintain and preserve its business organization and
its material rights and franchises and to retain the services of its
officers and key employees and maintain relationships with customers,
suppliers, lessees, joint venture partners, licensees and other third
parties, and to maintain all of its operating assets in their current
condition (normal wear and tear excepted), to the end that their goodwill
and ongoing business shall not be impaired in any material respect. Without
limiting the generality of the foregoing, during the period from the date
of this Agreement to the Effective Time, Anadarko shall not, except as
otherwise expressly contemplated by this Agreement and the transactions
contemplated hereby or as set forth in Section 5.2(c) to the Anadarko
Disclosure Schedule, without the prior consent of the Chief Executive
Officer of UPR (which consent shall not be unreasonably withheld):
(i) do or effect any of the following actions with respect to its
securities: (A) adjust, split, combine or reclassify its capital stock,
(B) make, declare or pay any dividend (other than regular quarterly
dividends on Anadarko Common Shares of $0.05 per share with record and
payment dates consistent with past practice) or distribution on, or,
directly or indirectly, redeem, purchase or otherwise acquire, any
shares of its capital stock or any securities or obligations convertible
into or exchangeable for any shares of its capital stock, (C) grant any
person any right or option to acquire any shares of its capital stock,
(D) issue, deliver or sell or agree to issue, deliver or sell any
additional shares of its capital stock or any securities or obligations
convertible into or exchangeable or exercisable for any shares of its
capital stock or such securities (except pursuant to the exercise of
Anadarko Options that are outstanding as of the date hereof), or (E)
enter into any agreement, understanding or arrangement with respect to
the sale, voting, registration or repurchase of its capital stock;
(ii) directly or indirectly sell, transfer, lease, pledge,
mortgage, encumber or otherwise dispose of any of its property or assets
other than: (A) dispositions of oil, gas and other minerals
27
in the ordinary course of business, consistent with past practice, (B)
pledges, mortgages or encumbrances in the ordinary course of business,
consistent with past practice, or (C) sales, leases or dispositions with
a total value not to exceed $50 million individually or in the
aggregate, it being understood that sub-clauses (A), (B) and (C) do not
apply to farmouts;
(iii) except to the extent contemplated by this Agreement, make or
propose any changes in the Anadarko Certificate or the Anadarko By-laws;
(iv) merge or consolidate with any other person (other than mergers
among wholly owned subsidiaries of Anadarko and mergers between Anadarko
and its wholly owned subsidiaries);
(v) acquire a material amount of assets or capital stock of any
other person (other than acquisition of assets in the ordinary course of
business, consistent with past practice with a total value not to exceed
$25 million individually, or in the aggregate);
(vi) amend or modify, or propose to amend or modify, the Anadarko
Rights Agreement, as amended as of the date hereof;
(vii) incur, create, assume or otherwise become liable for any
indebtedness for borrowed money or assume, guarantee, endorse or
otherwise as an accommodation become responsible or liable for the
obligations of any other individual, corporation or other entity, other
than in the ordinary course of business, consistent with past practice,
which in no event shall exceed $200 million in the aggregate;
(viii) except as may be required by Applicable Law or by the terms
of Anadarko Plans or Anadarko Employment Agreements in effect as of the
date hereof, enter into or modify any employment, severance, termination
or similar agreements or arrangements with, or grant any bonuses, salary
increases, severance or termination pay to, any officer, director,
consultant or employee, or otherwise increase, fund or accelerate the
funding of any compensation or benefits provided to any officer,
director, consultant or employee, contribute any assets to any grantor
trust, or grant, reprice, or accelerate the exercise or payment of any
Anadarko Options or other equity-based awards other than any payment of
bonuses or increases in salary that are both consistent with the past
practice of Anadarko and not material;
(ix) enter into, adopt or amend any Anadarko Employee Benefit Plan
or Anadarko Employment Agreement, except as may be required by
Applicable Law, other than amendments in the ordinary course, consistent
with past practice that do not increase, reduce or accelerate benefits,
make payout options more favorable to participants, or otherwise result
in any increased cost to Anadarko;
(x) take any action that could give rise to a right to severance
benefits pursuant to any change in control agreement;
(xi) change any method or principle of accounting in a manner that
is inconsistent with past practice except to the extent required by
United States generally accepted accounting principles as advised by
Anadarko's regular independent accountants;
(xii) settle any Actions, whether now pending or hereafter made or
brought involving, individually an amount in excess of $1 million, or in
the aggregate, an amount in excess of $20 million;
(xiii) modify, amend or terminate, or waive, release or assign any
material rights or claims with respect to any confidentiality agreement
to which Anadarko is a party;
(xiv) enter into any confidentiality agreements or arrangements
other than in the ordinary course of business consistent with past
practice (other than as permitted, in each case, by Section 5.2(d));
28
(xv) write up, write down or write off the book value of any
assets, individually or in the aggregate, in excess of $5 million except
for depreciation and amortization and provisions (E.G., surrendered
leases) in accordance with generally accepted accounting principles
consistently applied or as otherwise required by generally accepted
accounting principles;
(xvi) incur or commit to any capital expenditures not included in
the dollar limits of the Anadarko Capital Budget as in effect on the
date of this Agreement (a copy of which included in Section 5.2(c) to
the Anadarko Disclosure Schedule);
(xvii) make any payments in respect of policies of directors' and
officers' liability insurance (premiums or otherwise) other than
premiums paid in respect of its current policies and renewals thereof at
the same policy limits;
(xviii) take any action to exempt or make not subject to the
provisions of any state takeover law or state law that purports to limit
or restrict business combinations or the ability to acquire or vote
shares, any person or entity (other than UPR or its subsidiaries) or any
action taken thereby, which person, entity or action would have
otherwise been subject to the restrictive provisions thereof and not
exempt therefrom;
(xix) take any action that would likely result in the
representations and warranties set forth in Article III becoming false
or inaccurate in any material respect;
(xx) enter into or carry out any other transaction other than in
the ordinary and usual course of business;
(xxi) permit or cause any subsidiary to do any of the foregoing or
agree or commit to do any of the foregoing;
(xxii) except as otherwise required by law, make any material Tax
election, settle or compromise any material Tax claim, file any Tax
Return (other than in a manner consistent with past practice) or change
any method of Tax accounting; or
(xxiii) agree in writing or otherwise to take any of the foregoing
actions.
(d) NO SOLICITATION. Anadarko agrees that, during the term of this
Agreement, it shall not, and shall not authorize or permit any of its
subsidiaries or any of its or its subsidiaries' directors, officers,
employees, agents or representatives, directly or indirectly, to solicit,
initiate, encourage or facilitate, or furnish or disclose non-public
information in furtherance of, any inquiries or the making of any proposal
with respect to any recapitalization, merger, consolidation or other
business combination involving Anadarko, or any acquisition of 15% or more
of the capital stock (other than upon exercise of Anadarko Options that are
outstanding as of the date hereof) or 30% or more of the assets of Anadarko
and its subsidiaries, taken as a whole, in a single transaction or a series
of related transactions, or any combination of the foregoing (an "ANADARKO
COMPETING TRANSACTION"), or negotiate, explore or otherwise engage in
discussions with any person (other than UPR, Subcorp or their respective
directors, officers, employees, agents and representatives) with respect to
any Anadarko Competing Transaction or enter into any agreement, arrangement
or understanding requiring it to abandon, terminate or fail to consummate
the Merger or any other transactions contemplated by this Agreement;
PROVIDED that, at any time prior to the approval of the Share Issuance by
the Anadarko Stockholders, Anadarko may furnish information to, and engage
in discussions with, any party who delivers a written proposal for an
Anadarko Competing Transaction which was not solicited or encouraged after
the date of this Agreement in violation of this Agreement if and so long as
the Board of Directors of Anadarko determines in good faith by resolution
duly adopted after consultation with its outside counsel (who may be its
regularly engaged outside counsel) that the failure to take such action
would reasonably be expected to constitute a breach of its fiduciary duties
under Applicable Law and determines that such a proposal is, after
consulting with the Anadarko Financial Advisor, more favorable to Anadarko
Stockholders from a financial point of view than the transactions
contemplated by this Agreement (including any adjustment to the terms
29
and conditions proposed by UPR in response to such Anadarko Competing
Transaction) (an "ANADARKO SUPERIOR PROPOSAL"); PROVIDED, FURTHER, that
prior to furnishing information to, or engaging in discussions with, any
party pursuant to the foregoing proviso, Anadarko shall have received an
executed agreement from such party in the same form as the Confidentiality
Agreement (other than Section 8 thereof which shall be waived for UPR under
the Confidentiality Agreement upon the execution of such agreement).
Anadarko will immediately cease all existing activities, discussions and
negotiations with any parties conducted heretofore with respect to any
proposal for an Anadarko Competing Transaction and request the return of
all confidential information regarding Anadarko provided to any such
parties prior to the date hereof pursuant to the terms of any
confidentiality agreements or otherwise. In the event that prior to the
approval of the Share Issuance by the Anadarko Stockholders, the Board of
Directors of Anadarko receives an Anadarko Superior Proposal that was not
solicited or encouraged after the date of this Agreement in violation of
this Agreement, and the Board of Directors of Anadarko determines in good
faith by resolution duly adopted after consultation with its outside
counsel (who may be its regularly engaged outside counsel) that the failure
to take such action would reasonably be expected to constitute a breach of
its fiduciary duties under Applicable Law, the Board of Directors of
Anadarko may (subject to this and the following sentences) withdraw, modify
or change, in a manner adverse to UPR, the Anadarko Board Recommendation
and/or comply with Rule 14e-2 promulgated under the Exchange Act with
respect to an Anadarko Competing Transaction, PROVIDED that it gives UPR
three business days' prior written notice of its intention to do so
(PROVIDED that the foregoing shall in no way limit or otherwise affect
UPR's right to terminate this Agreement pursuant to Section 7.4(b)). Any
such withdrawal, modification or change of the Anadarko Board
Recommendation shall not change the approval of the Board of Directors of
Anadarko for purposes of causing any state takeover statute or other state
law to be inapplicable to the transactions contemplated hereby, including
the Merger or the Anadarko Stock Option Agreement or change the obligation
of Anadarko to present the Share Issuance for approval at a duly called
Anadarko Stockholders Meeting on the earliest practicable date determined
in consultation with UPR. From and after the execution of this Agreement,
Anadarko shall promptly (but in any event within one calendar day) advise
UPR in writing of the receipt, directly or indirectly, of any inquiries,
discussions, negotiations, or proposals relating to an Anadarko Competing
Transaction (including the specific terms thereof and the identity of the
other party or parties involved) and promptly furnish to UPR a copy of any
such written proposal in addition to any information provided to or by any
third party relating thereto. In addition, Anadarko shall promptly (but in
any event within one calendar day) advise UPR, in writing, if the Board of
Directors of Anadarko shall make any determination as to any Anadarko
Competing Transaction as contemplated by the proviso to the first sentence
of this Section 5.2(d).
(e) INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(i) From and after the Effective Time, Anadarko shall cause the
Surviving Corporation to indemnify and hold harmless (including
providing funding therefor) the present and former officers and
directors of UPR in respect of acts or omissions occurring prior to the
Effective Time to the extent provided under the UPR Articles or the UPR
Bylaws, and
(ii) Anadarko shall use all reasonable best efforts to cause the
Surviving Corporation or Anadarko to obtain and maintain in effect for a
period of six years after the Effective Time policies of directors' and
officers' liability insurance at no cost to the beneficiaries thereof
with respect to acts or omissions occurring prior to the Effective Time
with substantially the same coverage and containing substantially
similar terms and conditions as existing policies; PROVIDED, HOWEVER,
that neither the Surviving Corporation nor Anadarko shall be required to
pay an aggregate premium for such insurance coverage in excess of 200%
of the amount set forth in Section 4.15 to the UPR Disclosure Schedule;
PROVIDED, FURTHER, that if the annual premiums of such insurance
coverage exceed such amount, Anadarko shall be obligated to obtain a
policy with the best coverage available, in the reasonable judgment of
the Board of Directors of Anadarko, for a cost not exceeding such
amount.
30
(f) NYSE LISTING. Anadarko shall use its reasonable efforts to cause
the Anadarko Common Shares issuable pursuant to the Merger (including
pursuant to Anadarko Exchange Options) to be approved for listing on the
NYSE, subject to official notice of issuance, prior to the Effective Time.
(g) ACCESS. Anadarko shall permit representatives of UPR to have
access at all reasonable times to Anadarko's premises, properties, books,
records, contracts, documents, customers and suppliers. Information
obtained by UPR pursuant to this Section 5.2 shall be subject to the
provisions of the confidentiality agreement between Anadarko and UPR dated
February 22, 2000 (the "CONFIDENTIALITY AGREEMENT"), which agreement
remains in full force and effect. No investigation conducted pursuant to
this Section 5.2 shall affect or be deemed to modify any representation or
warranty made in this Agreement.
(h) BOARD OF DIRECTORS OF ANADARKO. At the Anadarko Stockholders
Meeting, Anadarko shall take all action necessary in accordance with
Applicable Law, the Anadarko Certificate and the Anadarko By-Laws to have
the Anadarko Stockholders consider and vote upon an amendment to the
Anadarko Certificate to increase the size of the Board of Directors of
Anadarko to at least 13 members (the "ANADARKO BOARD AMENDMENT"). In the
event that the Anadarko Board Amendment is approved, then the Board of
Directors of Anadarko shall take all action necessary immediately following
the Effective Time to elect as directors of Anadarko Mr. CEO, and four
other independent directors who are currently members of the Board of
Directors of UPR as may be mutually agreed by the Chief Executive Officer
of Anadarko and the Chief Executive Officer of UPR prior to the Effective
Time. In the event that the Anadarko Stockholders do not approve the
Anadarko Board Amendment, the Board of Directors of Anadarko shall take all
action necessary immediately following the Effective Time to elect as
directors of Anadarko Xx. Xxxxxx Xxxxxxx III, and two other independent
directors who are currently members of the Board of Directors of UPR as may
be mutually agreed by the Chief Executive Officer of Anadarko and the Chief
Executive Officer of UPR prior to the Effective Time. The former UPR
directors elected as directors of Anadarko shall be appointed among Classes
I, II and III with a minimum of one director per Class.
(i) SUBSEQUENT FINANCIAL STATEMENTS. Anadarko shall consult with UPR
prior to making publicly available its financial results for any period
after the date of this Agreement and prior to filing any Anadarko SEC
Documents after the date of this Agreement.
(j) EMPLOYEES AND EMPLOYEE BENEFITS.
(A) From and after the Effective Time, the Surviving Corporation shall
assume and honor all UPR Plans and UPR Employment Agreements in accordance with
their terms as in effect immediately before the Effective Time, subject to any
amendment or termination thereof that may be permitted by such terms. Until at
least the first anniversary of the Effective Time (the "BENEFITS TRANSITION
PERIOD"), Anadarko shall provide, or shall cause to be provided, to individuals
who are, immediately before the Effective Time, employees of UPR and its
subsidiaries who are not subject to collective bargaining (the "UPR EMPLOYEES"),
employee benefits, other than equity-based benefits, that are, in the aggregate,
comparable to the benefits, other than equity-based benefits, provided to UPR
Employees under the UPR Plans immediately before the Effective Time (the "UPR
BENEFITS"). Following the end of the Benefits Transition Period, or, at its
discretion, prior to the end of the Benefits Transition Period, in lieu of the
UPR Benefits, Anadarko shall provide, or cause to be provided, to UPR employees,
employee benefits that are in the aggregate comparable to those provided, to
similarly situated employees of Anadarko. The foregoing shall not be construed
to prevent the termination of employment of any UPR Employee or the amendment or
termination of any particular UPR Employee Benefit Plan to the extent permitted
by its terms as in effect immediately before the Effective Time.
(B) For all purposes under the employee benefit plans of Anadarko and its
affiliates (including the Surviving Corporation) providing benefits to any UPR
Employees after the Effective Time (the "NEW PLANS"), each UPR Employee shall be
credited with his or her years of service with UPR and its subsidiaries before
the Effective Time, to the same extent as such UPR Employee was entitled, before
the
31
Effective Time, to credit for such service under any similar UPR Employee
Benefit Plans, except for purposes of benefit accrual under defined benefit
pension plans and except as would result in a duplication of benefits. In
addition, and without limiting the generality of the foregoing: (i) each UPR
Employee shall be immediately eligible to participate, without any waiting time,
in any and all New Plans to the extent coverage under such New Plan replaces
coverage under a comparable UPR Employee Benefit Plan in which such UPR Employee
participated immediately before the Effective Time (such plans, collectively,
the "OLD PLANS"); and (ii) for purposes of each New Plan providing medical,
dental, pharmaceutical and/or vision benefits to any UPR Employee, Anadarko
shall cause all pre-existing condition exclusions and actively-at-work
requirements of such New Plan to be waived for such employee and his or her
covered dependents, and Anadarko shall cause any eligible expenses incurred by
such employee and his or her covered dependents during the portion of the plan
year of the Old Plan ending on the date such employee's participation in the
corresponding New Plan begins to be taken into account under such New Plan for
purposes of satisfying all deductible, coinsurance and maximum out-of-pocket
requirements applicable to such employee and his or her covered dependents for
the applicable plan year as if such amounts had been paid in accordance with
such New Plan.
(C) Without limiting the generality of the foregoing, following the
Effective Time, and until such time as Anadarko shall otherwise determine, the
ESOP shall continue in effect holding the Anadarko Common Shares that it
receives in the Merger, and the Loans shall continue to remain outstanding and
be repaid in accordance with their terms.
5.3 COVENANTS OF UPR.
(a) UPR STOCKHOLDERS MEETING. UPR shall take all action in accordance
with the federal securities laws, the UBCA and the UPR Articles and the UPR
Bylaws necessary to duly call, give notice of, convene and hold a special
meeting of UPR Stockholders (the "UPR STOCKHOLDERS MEETING") to be held on
the earliest practicable date determined in consultation with Anadarko to
consider and vote upon approval of the Merger, this Agreement and the
transactions contemplated hereby. UPR shall take all lawful actions to
solicit the approval of the Merger, this Agreement and the transactions
contemplated hereby, by the UPR Stockholders, and the Board of Directors of
UPR shall recommend approval of the Merger, this Agreement and the
transactions contemplated hereby by the UPR Stockholders (to the extent not
previously withdrawn pursuant to Section 5.3(d)).
(b) INFORMATION FOR THE REGISTRATION STATEMENT AND PREPARATION OF
JOINT PROXY STATEMENT. UPR shall promptly furnish Anadarko with all
information concerning it as may be required for inclusion in the Joint
Proxy Statement and the Registration Statement. UPR shall cooperate with
Anadarko in the preparation of the Joint Proxy Statement and the
Registration Statement in a timely fashion and shall use all reasonable
efforts to assist Anadarko in having the Registration Statement declared
effective by the Commission as promptly as practicable consistent with the
timing for the Anadarko Stockholders Meeting and the UPR Stockholders
Meeting as determined by Anadarko after consultation with UPR. If, at any
time prior to the Effective Time, UPR obtains knowledge of any information
pertaining to UPR that would require any amendment or supplement to the
Registration Statement or the Joint Proxy Statement, UPR shall so advise
Anadarko and shall promptly furnish Anadarko with all information as shall
be required for such amendment or supplement and shall promptly amend or
supplement the Registration Statement and/or Joint Proxy Statement. UPR
shall use all reasonable efforts to cooperate with Anadarko in the
preparation and filing of the Joint Proxy Statement with the Commission.
Consistent with the timing for the Anadarko Stockholders Meeting and the
UPR Stockholders Meeting as determined by Anadarko after consultation with
UPR, UPR shall use all reasonable efforts to mail at the earliest
practicable date to UPR Stockholders the Joint Proxy Statement, which shall
include all information required under Applicable Law to be furnished to
UPR Stockholders in connection with the Merger and the transactions
contemplated thereby and shall include the UPR Board Recommendation to the
extent not previously withdrawn in compliance with Section 5.3(d) and the
written opinion of Xxxxxxx, Xxxxx & Co. described in Section 4.21.
32
(c) CONDUCT OF UPR'S OPERATIONS. UPR shall conduct its operations in
the ordinary course except as expressly contemplated by this Agreement and
the transactions contemplated hereby and shall use all reasonable efforts
to maintain and preserve its business organization and its material rights
and franchises and to retain the services of its officers and key employees
and maintain relationships with customers, suppliers, lessees, joint
venture partners, licensees and other third parties, and to maintain all of
its operating assets in their current condition (normal wear and tear
excepted), to the end that their goodwill and ongoing business shall not be
impaired in any material respect. Without limiting the generality of the
foregoing, during the period from the date of this Agreement to the
Effective Time, UPR shall not, except as otherwise expressly contemplated
by this Agreement and the transactions contemplated hereby or as set forth
in Section 5.3(c) to the UPR Disclosure Schedule, without the prior consent
of the Chief Executive Officer of Anadarko (which consent shall not be
unreasonably withheld):
(i) do or effect any of the following actions with respect to its
securities: (A) adjust, split, combine or reclassify its capital stock,
(B) make, declare or pay any dividend (other than regular quarterly
dividends on UPR Common Stock of $0.05 per share with record and payment
dates consistent with past practice) or distribution on, or, directly or
indirectly, redeem, purchase or otherwise acquire, any shares of its
capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock, (C) grant any person
any right or option to acquire any shares of its capital stock, (D)
issue, deliver or sell or agree to issue, deliver or sell any additional
shares of its capital stock or any securities or obligations convertible
into or exchangeable or exercisable for any shares of its capital stock
or such securities (except pursuant to the exercise of UPR Options that
are outstanding as of the date hereof), or (E) enter into any agreement,
understanding or arrangement with respect to the sale, voting,
registration or repurchase of its capital stock;
(ii) directly or indirectly sell, transfer, lease, pledge,
mortgage, encumber or otherwise dispose of any of its property or assets
other than: (A) dispositions of oil, gas and other minerals in the
ordinary course of business, consistent with past practice, (B) pledges,
mortgages, encumbrances in the ordinary course of business consistent
with past practice, or (c) sales, leases or dispositions with a total
value not to exceed $50 million individually or in the aggregate, it
being understood that sub-clauses (A), (B) and (C) do not apply to
farmouts;
(iii) make or propose any changes in the UPR Articles or the UPR
Bylaws;
(iv) merge or consolidate with any other person (other than mergers
among wholly owned subsidiaries of UPR and mergers between UPR and its
wholly owned subsidiaries);
(v) acquire a material amount of assets or capital stock of any
other person; (other than acquisitions of assets in the ordinary course
of business, consistent with past practice with a total value not to
exceed $25 million individually or in the aggregate);
(vi) amend or modify, or propose to amend or modify, the UPR Rights
Agreement, as amended as of the date hereof;
(vii) incur, create, assume or otherwise become liable for any
indebtedness for borrowed money or assume, guarantee, endorse or
otherwise as an accommodation become responsible or liable for the
obligations of any other individual, corporation or other entity, other
than in the ordinary course of business, consistent with past practice,
which in no event shall exceed $200 million in the aggregate;
(viii) except as may be required by Applicable Law or by the terms
of UPR Plans or UPR Employment Agreements that are in effect as of the
date hereof, enter into or modify any employment, severance, termination
or similar agreements or arrangements with, or grant any bonuses, salary
increases, severance or termination pay to, any officer, director,
consultant or employee, or otherwise increase, fund or accelerate the
funding of any compensation or benefits provided to any officer,
director, consultant or employee, contribute any assets to any grantor
33
trust, or grant, reprice, or accelerate the exercise or payment of any
UPR Options or other equity-based awards, other than any payment of
bonuses or increases in salary that are both consistent with the past
practice of UPR and are not material;
(ix) enter into, adopt or amend any UPR Employee Benefit Plan or
UPR Employment Agreement, except as may be required by Applicable Law,
other than amendments in the ordinary course consistent with past
practice that do not increase, reduce or accelerate benefits, make
payout options more favorable to participants, or otherwise result in
any increased cost to UPR; PROVIDED, HOWEVER, that UPR may amend its
Supplemental Pension Plan for Exempt Salaried Employees to add a lump
sum distribution option if the cost of such distribution option is
determined in a manner consistent with the actuarial assumptions set
forth in Section 5.3(c)(ix) of the UPR Disclosure Schedule;
(x) take any action that could give rise to a right to severance
benefits pursuant to any Change in Control Agreement;
(xi) change any method or principle of accounting in a manner that
is inconsistent with past practice except to the extent required by
United States generally accepted accounting principles as advised by
UPR's regular independent accountants;
(xii) settle any Actions, whether now pending or hereafter made or
brought involving, individually an amount in excess of $1 million or in
the aggregate, an amount in excess of $20 million;
(xiii) modify, amend or terminate, or waive, release or assign any
material rights or claims with respect to any confidentiality agreement
to which UPR is a party;
(xiv) enter into any confidentiality agreements or arrangements
other than in the ordinary course of business consistent with past
practice (other than as permitted, in each case, by Section 5.3(d));
(xv) write up, write down or write off the book value of any
assets, individually or in the aggregate, in excess of $5 million except
for depreciation and amortization and provision (E.G., surrendered
leases) in accordance with generally accepted accounting principles
consistently applied utilizing successful efforts accounting or as
otherwise required by generally accepted accounting principles;
(xvi) incur or commit to any capital expenditures not included
within the dollar limits of the UPR Capital Budget as in effect on the
date of this Agreement (a copy of which included in Section 5.3(c) to
the UPR Disclosure Schedule);
(xvii) make any payments in respect of policies of directors' and
officers' liability insurance (premiums or otherwise) other than
premiums paid in respect of its current policies and renewals thereof at
the same policy limits;
(xviii) take any action to exempt or make not subject to the
provisions of any state takeover law or state law that purports to limit
or restrict business combinations or the ability to acquire or vote
shares, any person or entity (other than Anadarko or its subsidiaries)
or any action taken thereby, which person, entity or action would have
otherwise been subject to the restrictive provisions thereof and not
exempt therefrom;
(xix) take any action that would likely result in the
representations and warranties set forth in Article IV becoming false or
inaccurate in any material respect;
(xx) enter into or carry out any other transaction other than in
the ordinary and usual course of business;
(xxi) permit or cause any subsidiary to do any of the foregoing or
agree or commit to do any of the foregoing;
34
(xxii) except as otherwise required by law, make any material Tax
election, settle or compromise any material Tax claim, file any Tax
Return (other than in a manner consistent with past practice) or change
any method of Tax accounting; or
(xxiii) agree in writing or otherwise to take any of the foregoing
actions.
(d) NO SOLICITATION. UPR agrees that, during the term of this
Agreement, it shall not, and shall not authorize or permit any of its
subsidiaries or any of its or its subsidiaries' directors, officers,
employees, agents or representatives, directly or indirectly, to solicit,
initiate, encourage or facilitate, or furnish or disclose non-public
information in furtherance of, any inquiries or the making of any proposal
with respect to any recapitalization, merger, consolidation or other
business combination involving UPR, or any acquisition of 15% or more of
the capital stock (other than upon exercise of UPR Options that are
outstanding as of the date hereof) or 30% or more of the assets of UPR and
its subsidiaries, taken as a whole, in a single transaction or a series of
related transactions, or any combination of the foregoing (a "UPR COMPETING
TRANSACTION"), or negotiate, explore or otherwise engage in discussions
with any person (other than Anadarko, Subcorp or their respective
directors, officers, employees, agents and representatives) with respect to
any UPR Competing Transaction or enter into any agreement, arrangement or
understanding requiring it to abandon, terminate or fail to consummate the
Merger or any other transactions contemplated by this Agreement; PROVIDED
that, at any time prior to the approval of the Merger by the UPR
Stockholders, UPR may furnish information to, and engage in discussions
with, any party who delivers a written proposal for a UPR Competing
Transaction which was not solicited or encouraged after the date of this
Agreement in violation of this Agreement if and so long as the Board of
Directors of UPR determines in good faith by resolution duly adopted after
consultation with its outside counsel (who may be its regularly engaged
outside counsel) that the failure to take such action would reasonably be
expected to constitute a breach of its fiduciary duties under Applicable
Law and determines that such a proposal is, after consulting with the UPR
Financial Advisors, more favorable to UPR Stockholders from a financial
point of view than the transactions contemplated by this Agreement
(including any adjustment to the terms and conditions proposed by Anadarko
in response to such UPR Competing Transaction) (a "UPR SUPERIOR PROPOSAL");
PROVIDED, FURTHER, that prior to furnishing information to, or engaging in
discussions with, any party pursuant to the foregoing proviso, UPR shall
have received an executed agreement from such party in the same form as the
Confidentiality Agreement (other than Section 8 thereof which shall be
waived for Anadarko under the Confidentiality Agreement upon the execution
of such agreement). UPR will immediately cease all existing activities,
discussions and negotiations with any parties conducted heretofore with
respect to any proposal for a UPR Competing Transaction and request the
return of all confidential information regarding UPR provided to any such
parties prior to the date hereof pursuant to the terms of any
confidentiality agreements or otherwise. In the event that prior to the
approval of the Merger by the UPR Stockholders the Board of Directors of
UPR receives a UPR Superior Proposal that was not solicited or encouraged
after the date of this Agreement in violation of this Agreement, and the
Board of Directors of UPR determines in good faith by resolution duly
adopted after consultation with its outside counsel (who may be its
regularly engaged outside counsel) that the failure to take such action
would reasonably be expected to constitute a breach of its fiduciary duties
under Applicable Law, the Board of Directors of UPR may (subject to this
and the following sentences) withdraw, modify or change, in a manner
adverse to Anadarko, the UPR Board Recommendation and/or comply with Rule
14e-2 promulgated under the Exchange Act with respect to a UPR Competing
Transaction, PROVIDED that it gives Anadarko three business days' prior
written notice of its intention to do so (PROVIDED that the foregoing shall
in no way limit or otherwise affect Anadarko's right to terminate this
Agreement pursuant to Section 7.3(b)). Any such withdrawal, modification or
change of the UPR Board Recommendation shall not change the approval of the
Board of Directors of UPR for purposes of causing any state takeover
statute or other state law to be inapplicable to the transactions
contemplated hereby, including the Merger or the UPR Stock Option Agreement
or change the obligation of UPR to present the Merger for approval at a
duly called UPR Stockholders Meeting on the earliest practicable date
determined in
35
consultation with Anadarko. From and after the execution of this Agreement,
UPR shall promptly (but in any event within one calendar day) advise
Anadarko in writing of the receipt, directly or indirectly, of any
inquiries, discussions, negotiations, or proposals relating to a UPR
Competing Transaction (including the specific terms thereof and the
identity of the other party or parties involved) and promptly furnish to
Anadarko a copy of any such written proposal in addition to any information
provided to or by any third party relating thereto. In addition, UPR shall
promptly (but in any event within one calendar day) advise Anadarko, in
writing, if the Board of Directors of UPR shall make any determination as
to any UPR Competing Transaction as contemplated by the proviso to the
first sentence of this Section 5.3(d).
(e) AFFILIATES OF UPR. UPR shall cause each such person who may be at
the Effective Time or was on the date hereof an "affiliate" of UPR for
purposes of Rule 145 under the Securities Act, to execute and deliver to
Anadarko no less than 30 days prior to the date of the UPR Stockholders
Meeting, the written undertakings in the form attached hereto as Exhibit A
(the "UPR AFFILIATE LETTER"). No later than 45 days prior to such date,
UPR, after consultation with its outside counsel, shall provide Anadarko
with a letter (reasonably satisfactory to outside counsel to Anadarko)
specifying all of the persons or entities who, in UPR's opinion, may be
deemed to be "affiliates" of UPR under the preceding sentence. The
foregoing notwithstanding, Anadarko shall be entitled to place legends as
specified in the UPR Affiliate Letter on the certificates evidencing any of
the Anadarko Common Shares to be received by (i) any such "affiliate" of
UPR specified in such letter or (ii) any person Anadarko reasonably
identifies (by written notice to UPR) as being a person who may be deemed
an "affiliate" for purposes of Rule 145 under the Securities Act, pursuant
to the terms of this Agreement, and to issue appropriate stop transfer
instructions to the transfer agent for the Anadarko Common Shares,
consistent with the terms of the UPR Affiliate Letter, regardless of
whether such person has executed the UPR Affiliate Letter and regardless of
whether such person's name appears on the letter to be delivered pursuant
to the preceding sentence.
(f) ACCESS. UPR shall permit representatives of Anadarko to have
access at all reasonable times to UPR's premises, properties, books,
records, contracts, documents, customers and suppliers. Information
obtained by Anadarko pursuant to this Section 5.3(f) shall be subject to
the provisions of the Confidentiality Agreement, which agreement remains in
full force and effect. No investigation conducted pursuant to this Section
5.3(f) shall affect or be deemed to modify any representation or warranty
made in this Agreement.
(g) SUBSEQUENT FINANCIAL STATEMENTS. UPR shall consult with Anadarko
prior to making publicly available its financial results for any period
after the date of this Agreement and prior to filing any UPR SEC Documents
after the date of this Agreement.
ARTICLE VI.
CONDITIONS
6.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The obligations of UPR,
Anadarko and Subcorp to consummate the Merger shall be subject to the
satisfaction of the following conditions:
(a) (i) This Agreement, the Merger and the transactions contemplated
hereby shall have been approved and adopted by the UPR Stockholders in the
manner required by any Applicable Law, and (ii) the Share Issuance shall
have been approved by the Anadarko Stockholders in the manner required by
any Applicable Law and the applicable rules of the NYSE.
(b) Any applicable waiting periods under the HSR Act relating to the
Merger and the transactions contemplated by this Agreement shall have
expired or been terminated and any other approvals of any Governmental
Authority shall have been obtained.
(c) No provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit or enjoin the consummation of
the Merger or the transactions contemplated by
36
this Agreement or limiting the ownership or operation by Anadarko, UPR or
any of their respective subsidiaries of any material portion of the
business or assets of Anadarko or UPR.
(d) There shall not be pending any Action instituted by any
Governmental Authority challenging or seeking to restrain or prohibit the
consummation of the Merger or any of the other transactions contemplated by
this Agreement.
(e) The Commission shall have declared the Registration Statement
effective under the Securities Act, and no stop order or similar
restraining order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall be
pending before or threatened by the Commission or any state securities
administrator.
(f) The Anadarko Common Shares to be issued in the Merger (including
pursuant to Anadarko Exchange Options) shall have been approved for listing
on the NYSE, subject to official notice of issuance.
(g) UPR shall have received the opinion of Xxxxxx Xxxxx & Xxxxxxx LLP,
dated on or prior to the effective date of the Registration Statement, to
the effect that (i) the Merger will constitute a reorganization under
section 368(a) of the Code, and (ii) UPR, Anadarko and Subcorp will each be
a party to that reorganization. In rendering such opinion, counsel shall be
entitled to rely on customary representation letters of UPR, Anadarko,
Subcorp and others, in form and substance reasonably satisfactory to such
counsel.
6.2 CONDITIONS TO OBLIGATIONS OF UPR. The obligations of UPR to consummate
the Merger and the transactions contemplated hereby shall be subject to the
fulfillment of the following conditions unless waived by UPR:
(a) Each of the representations and warranties of each of Anadarko and
Subcorp set forth in Article III (other than the representations and
warranties of Anadarko set forth in Section 3.4) shall be true and correct
in all respects (but without regard to any materiality qualifications or
references to Material Adverse Effect contained in any specific
representation or warranty) on the date of this Agreement and on and as of
the Closing Date as though made on and as of the Closing Date (except for
representations and warranties made as of a specified date, the accuracy of
which will be determined as of the specified date), unless the failure or
failures of representations and warranties to be true and correct in all
respects, individually and taken together with all other such failures,
would not reasonably be expected to have a Material Adverse Effect on
Anadarko. The representations and warranties of Anadarko set forth in
Section 3.4 of this Agreement shall be true and correct in all respects
(other than de minimis variations) on the date of this Agreement and on and
as of the Closing Date as though made on and as of the Closing Date (except
for representations and warranties made as of a specified date, the
accuracy of which will be determined as of the specified date).
(b) Each of Anadarko and Subcorp shall have performed in all material
respects all obligations and agreements and shall have complied in all
material respects with all covenants to be performed and complied with by
it hereunder at or prior to the Effective Time.
(c) Each of Anadarko and Subcorp shall have furnished UPR with a
certificate dated the Closing Date signed on behalf of it by the Chairman
or President to the effect that the conditions set forth in Sections 6.2(a)
and (b) have been satisfied.
(d) At any time after the date of this Agreement, there shall not have
been any one or more events or occurrences that individually or in the
aggregate has had or is likely to have a Material Adverse Effect on
Anadarko.
37
6.3 CONDITIONS TO OBLIGATIONS OF ANADARKO AND SUBCORP. The obligations of
Anadarko and Subcorp to consummate the Merger and the other transactions
contemplated hereby shall be subject to the fulfillment of the following
conditions unless waived by Anadarko:
(a) Each of the representations and warranties of UPR set forth in
Article IV (other than the representations and warranties of UPR set forth
in Section 4.4) shall be true and correct in all respects (but without
regard to any materiality qualifications or references to Material Adverse
Effect contained in any specific representation or warranty) on the date of
this Agreement and on and as of the Closing Date as though made on and as
of the Closing Date (except for representations and warranties made as of a
specified date, the accuracy of which will be determined as of the
specified date), unless the failure or failures of representations and
warranties to be true and correct in all respects, individually and taken
together with all other such failures, would not reasonably be expected to
have a Material Adverse Effect on UPR. The representations and warranties
of UPR set forth in Section 4.4 of this Agreement shall be true and correct
in all respects (other than de minimis variations) on the date of this
Agreement and on and as of the Closing Date as though made on and as of the
Closing Date (except for representations and warranties made as of a
specified date, the accuracy of which will be determined as of the
specified date).
(b) UPR shall have performed in all material respects all obligations
and agreements and shall have complied in all material respects with all
covenants to be performed and complied with by it hereunder at or prior to
the Effective Time.
(c) UPR shall have furnished Anadarko with a certificate dated the
Closing Date signed on its behalf by its Chairman or President to the
effect that the conditions set forth in Sections 6.3(a) and (b) have been
satisfied.
(d) The agreement referred to in Section 6.3 to the Anadarko
Disclosure Schedule shall be in full force and effect and shall not have
been terminated.
(e) At any time after the date of this Agreement, there shall not have
been any one or more events or occurrences that individually or in the
aggregate has had or is likely to have a Material Adverse Effect on UPR.
ARTICLE VII.
TERMINATION AND AMENDMENT
7.1 TERMINATION BY MUTUAL CONSENT. This Agreement maybe terminated at any
time prior to the Effective Time by the mutual written consent of Anadarko and
UPR.
7.2 TERMINATION BY UPR OR ANADARKO. This Agreement may be terminated by
action of the Board of Directors of UPR or of Anadarko if:
(a) the Merger shall not have been consummated by December 31, 2000;
provided, however, that in the event that Section 6.1(b), Section 6.1(c) or
Section 6.1(d), or any combination thereof, are the only conditions that
are not satisfied or capable of being immediately satisfied as a result of
any action by any Governmental Authority pursuant to any Antitrust Laws,
such December 31, 2000 date shall be extended for a period not to exceed
the lesser of 90 days or the fifth business day after the entrance by the
court in which such litigation is pending of its decision (whether or not
subject to appeal or rehearing) in such litigation; and provided, further,
that the right to terminate this Agreement pursuant to this clause (a)
shall not be available to any party whose failure or whose affiliate's
failure to perform or observe in any material respect any of its
obligations under this Agreement in any manner shall have been the cause
of, or resulted in, the failure of the Merger to occur on or before such
date; or
38
(b) the Anadarko Stockholders Meeting (including adjournments and
postponements) for the purpose of approving the Share Issuance shall have
been held and such stockholder approval shall not have been obtained; or
(c) the UPR Stockholders Meeting (including adjournments and
postponements) for the purpose of approving this Agreement and the Merger
shall have been held and such stockholder approval shall not have been
obtained; or
(d) a United States federal or state court of competent jurisdiction
or United States federal or state governmental, regulatory or
administrative agency or commission shall have issued an order, decree or
ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling or other
action shall have become final and non-appealable; provided, however, that
the party seeking to terminate this Agreement pursuant to this clause (d)
shall have complied with Section 5.1(a) and with respect to other matters
not covered by Section 5.1(a) shall have used its commercially reasonable
best efforts to remove such injunction, order or decree.
7.3 TERMINATION BY ANADARKO. This Agreement may be terminated prior to the
Effective Time, by action of the Board of Directors of Anadarko after
consultation with its legal advisors, if
(a) (i) there has been a breach by UPR of any representation,
warranty, covenant or agreement set forth in this Agreement or if any
representation or warranty of UPR shall have become untrue, in either case
such that the conditions set forth in Section 6.3(a) would not be satisfied
and (ii) such breach is not curable, or, if curable, is not cured within 45
days after written notice of such breach is given to UPR by Anadarko;
provided, however, that the right to terminate this Agreement pursuant to
this Section 7.3(a) shall not be available to Anadarko if it, at such time,
is in material breach of any representation, warranty, covenant or
agreement set forth in this Agreement such that the condition set forth in
Section 6.2(a) shall not be satisfied; or
(b) the Board of Directors of UPR shall have withdrawn or modified, in
a manner adverse to Anadarko, its approval or recommendation of this
Agreement or the Merger or recommended a UPR Competing Transaction, or
resolved to do so.
7.4 TERMINATION BY UPR. This Agreement may be terminated at any time prior
to the Effective Time, by action of the Board of Directors of UPR after
consultation with its legal advisors, if:
(a) (i) there has been a breach by Anadarko or Subcorp of any
representation, warranty, covenant or agreement set forth in this Agreement
or if any representation or warranty of Anadarko or Subcorp shall have
become untrue, in either case such that the conditions set forth in Section
6.2(a) would not be satisfied and (ii) such breach is not curable, or, if
curable, is not cured within 45 days after written notice of such breach is
given by UPR to Anadarko; provided, however, that the right to terminate
this Agreement pursuant to this Section 7.4(a) shall not be available to
UPR if it, at such time, is in material breach of any representation,
warranty, covenant or agreement set forth in this Agreement such that the
conditions set forth in Section 6.3(a) shall not be satisfied; or
(b) the Board of Directors of Anadarko shall have withdrawn or
modified, in a manner adverse to UPR, its approval or recommendation of
Share Issuance or recommended a proposal relating to an Anadarko Competing
Transaction, or resolved to do so.
39
7.5 EFFECT OF TERMINATION.
(a) If this Agreement is terminated
(i) after the public announcement of a proposal relating to a UPR
Competing Transaction, by Anadarko or UPR pursuant to Section 7.2(c); or
(ii) after the public announcement or receipt by UPR's Board of
Directors of a proposal relating to a UPR Competing Transaction, by
Anadarko pursuant to Section 7.3(b);
then UPR shall pay Anadarko a fee of $25 million (subject to reduction
pursuant to Section 9 of the UPR Stock Option Agreement) at the time of
such termination in cash by wire transfer to an account designated by
Anadarko. In addition, if within one year after such termination, UPR
enters into a definitive agreement with respect to a UPR Acquisition (as
hereinafter defined) or a UPR Acquisition is consummated, then upon the
consummation of such UPR Acquisition, UPR shall pay Anadarko an additional
fee of $100 million (subject to reduction pursuant to Section 9 of the UPR
Stock Option Agreement) at the time of such consummation in cash by wire
transfer to an account designated by Anadarko. For purposes of this
Agreement, "UPR ACQUISITION" means (i) consummation of the UPR Competing
Transaction giving rise to the termination described in Section 7.5(a)(i)
or 7.5(a)(ii), (ii) a consolidation, exchange of shares or merger of UPR
with any person, other than Anadarko or one of its subsidiaries, and, in
the case of a merger, in which UPR shall not be the continuing or surviving
corporation, (iii) a merger of UPR with a person, other than Anadarko or
one of its subsidiaries, in which UPR shall be the continuing or surviving
corporation but the then outstanding shares of UPR Common Stock shall be
changed into or exchanged for stock or other securities of UPR or any other
person or cash or any other property or the shares of UPR Common Stock
outstanding immediately before such merger shall after such merger
represent less than 50% of the voting stock of UPR outstanding immediately
after the merger, (iv) the acquisition of beneficial ownership of 50% or
more of the voting stock of UPR by any person (as such term is used under
Section 13(d) of the Exchange Act), or (v) a sale, lease or other transfer
of 50% or more of the assets of UPR to any person, other than Anadarko or
one of its subsidiaries.
(b) If this Agreement is terminated
(i) after the public announcement of a proposal relating to an
Anadarko Competing Transaction, by Anadarko or UPR pursuant to Section
7.2(b); or
(ii) after the public announcement or receipt by Anadarko's Board
of Directors of a proposal relating to an Anadarko Competing
Transaction, by UPR pursuant to Section 7.4(b);
then Anadarko shall pay UPR a fee of $25 million (subject to reduction
pursuant to Section 9 of the Anadarko Stock Option Agreement) at the time
of such termination in cash by wire transfer to an account designated by
UPR. In addition, if within one year after such termination, Anadarko
enters into a definitive agreement with respect to an Anadarko Acquisition
or an Anadarko Acquisition is consummated, then upon the consummation of
such Anadarko Acquisition, Anadarko shall pay UPR an additional fee of $100
million (subject to reduction pursuant to Section 9 of the Anadarko Stock
Option Agreement) at the time of such consummation in cash by wire transfer
to an account designated by UPR. For purposes of this Agreement, "ANADARKO
ACQUISITION" means (i) consummation of the Anadarko Competing Transaction
giving rise to the termination described in Section 7.5(b)(i) or
7.5(b)(ii), (ii) a consolidation, exchange of shares or merger of Anadarko
with any person, other than UPR or one of its subsidiaries, and, in the
case of a merger, in which Anadarko shall not be the continuing or
surviving corporation, (iii) a merger of Anadarko with a person, other than
UPR or one of its Subsidiaries, in which Anadarko shall be the continuing
or surviving corporation but the then outstanding Anadarko Common Shares
shall be changed into or exchanged for stock or other securities of
Anadarko or any other person or cash or any other property or the Anadarko
Common Shares outstanding immediately before such merger shall after such
merger represent less than 50% of the voting stock of Anadarko outstanding
immediately after the merger, (iv) the acquisition of beneficial ownership
of 50% or more of the voting stock of Anadarko
40
by any person (as such term is used under Section 13(d) of the Exchange
Act), or (v) a sale, lease or other transfer of 50% or more of the assets
of Anadarko to any person, other than UPR or one of its subsidiaries.
(c) In the event of the termination of this Agreement pursuant to
Section 7.1, Section 7.2, Section 7.3 or Section 7.4, this Agreement,
except for the provisions of the second sentence of each of Section 5.2(g)
and Section 5.3(f) and the provisions of Sections 7.5 and 8.11, shall
become void and have no effect, without any liability on the part of any
party or its directors, officers or stockholders. Notwithstanding the
foregoing, nothing in this Section 7.5 shall relieve any party to this
Agreement of liability for a material breach of any provision of this
Agreement and PROVIDED, FURTHER, HOWEVER, that if it shall be judicially
determined that termination of this Agreement was caused by an intentional
breach of this Agreement, then, in addition to other remedies at law or
equity for breach of this Agreement, the party so found to have
intentionally breached this Agreement shall indemnify and hold harmless the
other parties for their respective out-of-pocket costs, fees and expenses
of their counsel, accountants, financial advisors and other experts and
advisors as well as fees and expenses incident to negotiation, preparation
and execution of this Agreement and related documentation and shareholders'
meetings and consents.
7.6 AMENDMENT. This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors, at any time
before or after adoption of this Agreement by UPR Stockholders, but after any
such approval, no amendment shall be made which by law requires further approval
or authorization by the UPR Stockholders without such further approval or
authorization. Notwithstanding the foregoing, this Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
7.7 EXTENSION; WAIVER. At any time prior to the Effective Time, Anadarko
(with respect to UPR) and UPR (with respect to Anadarko and Subcorp) by action
taken or authorized by their respective Boards of Directors, may, to the extent
legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of such party, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party.
ARTICLE VIII.
MISCELLANEOUS
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties made herein by the parties hereto shall not survive the Effective
Time. This Section 8.1 shall not limit any covenant or agreement of the parties
hereto, which by its terms contemplates performance after the Effective Time or
after the termination of this Agreement.
8.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (which is
confirmed) or dispatched by a nationally recognized overnight courier service to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Anadarko or Subcorp:
Anadarko Petroleum Corporation
00000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: J. Xxxxxxx Xxxxxx
Telecopy No.: (000) 000-0000
41
with a copy to:
Xxxxxx X. Xxxx, Esq.
Xxxxx X. Xxxx, Esq.
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
(b) if to UPR:
UPR
UPR Plaza, 000 Xxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxx Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No: (000) 000-0000
8.3 INTERPRETATION. When a reference is made in this Agreement to an
Article or Section, such reference shall be to an Article or Section of this
Agreement unless otherwise indicated. The headings and the table of contents
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. When a reference is
made in this Agreement to UPR, such reference shall be deemed to include any and
all subsidiaries of UPR, individually and in the aggregate, except for Sections
4.1, 4.2, 4.3, 4.4, 4.5, 4.8, 4.10, 4.19, 4.20, 4.21 and 4.22. When a reference
is made in this Agreement to Anadarko, such reference shall be deemed to include
any and all subsidiaries of Anadarko, individually and in the aggregate, except
for Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.8, 3.10, 3.19, 3.20, 3.21 and 3.22. For
purposes of any provision of this Agreement, references to "KNOWLEDGE" with
respect to Anadarko shall be deemed to be to the actual knowledge of persons
listed in Section 8.3 to the Anadarko Disclosure Schedule, and references to
"KNOWLEDGE" with respect to UPR shall be deemed to be to the actual knowledge of
persons listed in Section 8.3 to the UPR Disclosure Schedule. For the purposes
of any provision of this Agreement, a "MATERIAL ADVERSE EFFECT" with respect to
any party shall be deemed to occur if the aggregate consequences of all breaches
and inaccuracies of covenants and representations of such party under this
Agreement, when read without any exception or qualification for a material
adverse effect, are reasonably likely to have a material adverse effect on the
business, assets, liabilities, results of operations, financial condition or
prospects of such party and its subsidiaries taken as a whole, other than any
change, circumstance or effect relating to (x) the economy or financial markets
in general, or (y) the price of oil or gas. For purposes of this Agreement, a
"SUBSIDIARY" when used with respect to any party means any corporation or other
organization, incorporated or unincorporated, (i) of which such party or another
subsidiary of such party is a general partner or (ii) 50% or more of the
securities or other interests of which having by their terms ordinary voting
power to elect at least 50% of the Board of Directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such party or one or more of its
subsidiaries (or if there are no such voting securities or interests, 50% or
more of the equity interests of which is directly or indirectly owned or
controlled by such party or one or more of its subsidiaries).
8.4 COUNTERPARTS. This Agreement may be executed in counterparts, which
together shall constitute one and the same Agreement. The parties may execute
more than one copy of the Agreement, each of which shall constitute an original.
42
8.5 ENTIRE AGREEMENT. This Agreement (including the documents and the
instruments referred to herein), the Anadarko Stock Option Agreement, the UPR
Stock Option Agreement and the Confidentiality Agreement constitute the entire
agreement among the parties and supersede all prior agreements and
understandings, agreements or representations by or among the parties, written
and oral, with respect to the subject matter hereof and thereof.
8.6 THIRD-PARTY BENEFICIARIES. Except for the agreement set forth in
Section 5.2(e), nothing in this Agreement, express or implied, is intended or
shall be construed to create any third-party beneficiaries.
8.7 GOVERNING LAW. Except to the extent that the laws of the jurisdiction
of organization of any party hereto, or any other jurisdiction, are mandatorily
applicable to the Merger or to matters arising under or in connection with this
Agreement, this Agreement shall be governed by the laws of the State of
Delaware. All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined in any state or federal court sitting in
the City of Wilmington, Delaware.
8.8 CONSENT TO JURISDICTION; VENUE.
(a) Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the state courts of Delaware and to the jurisdiction of the
United States District Court for the District of Delaware, for the purpose
of any action or proceeding arising out of or relating to this Agreement
and each of the parties hereto irrevocably agrees that all claims in
respect to such action or proceeding may be heard and determined
exclusively in any Delaware state or federal court sitting in the City of
Wilmington, Delaware. Each of the parties hereto agrees that a final
judgment in any action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
(b) Each of the parties hereto irrevocably consents to the service of
any summons and complaint and any other process in any other action or
proceeding relating to the Merger, on behalf of itself or its property, by
the personal delivery of copies of such process to such party. Nothing in
this Section 8.8 shall affect the right of any party hereto to serve legal
process in any other manner permitted by law.
8.9 SPECIFIC PERFORMANCE. The transactions contemplated by this Agreement
are unique. Accordingly, each of the parties acknowledges and agrees that, in
addition to all other remedies to which it may be entitled, each of the parties
hereto is entitled to a decree of specific performance, provided such party is
not in material default hereunder.
8.10 ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
8.11 EXPENSES. Subject to the provisions of Section 7.5, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby and thereby shall be paid by the party incurring such
expenses, except that those expenses incurred in connection with filing,
printing and mailing the Registration Statement and the Joint Proxy Statement
(including filing fees related thereto) will be shared equally by Anadarko and
UPR.
43
IN WITNESS WHEREOF, Anadarko, Subcorp and UPR have signed this Agreement as
of the date first written above.
ANADARKO PETROLEUM CORPORATION
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: CHAIRMAN AND CHIEF EXECUTIVE OFFICER
DAKOTA MERGER CORP.
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: CHAIRMAN
UNION PACIFIC RESOURCES GROUP INC.
By: /s/ XXXXXX XXXXXXX, III
----------------------------------
Name: Xxxxxx Xxxxxxx, III
Title: CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
44
