Exhibit 2.1
MERGER AGREEMENT
by and among
ENSCO International Incorporated
Chore Acquisition, Inc.
and
Xxxxxx Offshore Inc.
May 14, 2002
TABLE OF CONTENTS
Page
ARTICLE 1 DESCRIPTION OF TRANSACTION............................................................................1
1.1 MERGER OF COMPANY INTO MERGER SUB.......................................................................1
1.2 EFFECTS OF THE MERGER...................................................................................1
1.3 CLOSING; EFFECTIVE TIME.................................................................................2
1.4 CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS AND OFFICERS.........................................2
1.5 CONVERSION OF SHARES....................................................................................2
1.6 CLOSING OF COMPANY'S TRANSFER BOOKS.....................................................................3
1.7 EXCHANGE OF CERTIFICATES................................................................................4
1.8 STOCK OPTIONS...........................................................................................5
1.9 TAX CONSEQUENCES........................................................................................6
1.10 FURTHER ACTION..........................................................................................6
1.11 DISSENTING SHARES.......................................................................................7
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF COMPANY.............................................................7
2.1 ORGANIZATION AND GOOD STANDING..........................................................................7
2.2 ENFORCEABILITY; NO CONFLICT.............................................................................8
2.3 CAPITALIZATION AND OWNERSHIP............................................................................9
2.4 SEC FILINGS; FINANCIAL STATEMENTS......................................................................10
2.5 BOOKS AND RECORDS......................................................................................11
2.6 ACCOUNTS RECEIVABLE....................................................................................11
2.7 NO UNDISCLOSED LIABILITIES.............................................................................12
2.8 NO MATERIAL ADVERSE EFFECT.............................................................................12
2.9 ABSENCE OF CERTAIN CHANGES AND EVENTS..................................................................12
2.10 PROPERTIES.............................................................................................13
2.11 INTELLECTUAL PROPERTY..................................................................................14
2.12 CONTRACTS; NO DEFAULTS.................................................................................14
2.13 INSURANCE..............................................................................................16
2.14 TAXES..................................................................................................16
2.15 EMPLOYEE BENEFITS......................................................................................18
2.16 LABOR RELATIONS; EMPLOYMENT LAW COMPLIANCE.............................................................19
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2.17 ENVIRONMENTAL, HEALTH AND SAFETY MATTERS...............................................................20
2.18 COMPLIANCE WITH LAWS; GOVERNMENTAL AUTHORIZATIONS......................................................21
2.19 LEGAL PROCEEDINGS; ORDERS..............................................................................21
2.20 RELATIONSHIPS WITH RELATED PERSONS.....................................................................22
2.21 VOTE REQUIRED..........................................................................................22
2.22 BROKERS FINDERS........................................................................................22
2.23 OPINION OF COMPANY'S FINANCIAL ADVISOR.................................................................22
2.24 PARACHUTE PAYMENTS.....................................................................................23
2.25 CERTAIN BUSINESS PRACTICES.............................................................................23
2.26 CHANGE IN CONTROL......................................................................................23
2.27 COMPANY DRILLING RIGS..................................................................................23
2.28 DISCLOSURE.............................................................................................24
2.29 FINANCIAL AND COMMODITY HEDGING........................................................................24
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB..............................................25
3.1 ORGANIZATION...........................................................................................25
3.2 ENFORCEABILITY; NO CONFLICT............................................................................25
3.3 CAPITALIZATION.........................................................................................26
3.4 SEC FILINGS; FINANCIAL STATEMENTS......................................................................26
3.5 COMPLIANCE WITH LAWS...................................................................................27
3.6 LEGAL PROCEEDINGS; ORDERS..............................................................................28
3.7 VALID ISSUANCE.........................................................................................28
3.8 DISCLOSURE.............................................................................................28
3.9 CASH CONSIDERATION.....................................................................................28
3.10 NO PRIOR ACTIVITIES....................................................................................28
3.11 NO MATERIAL ADVERSE EFFECT.............................................................................28
3.12 ABSENCE OF CERTAIN CHANGES AND EVENTS..................................................................29
3.13 GOVERNMENT AUTHORIZATION...............................................................................29
3.14 TAXES..................................................................................................30
3.15 BROKERS; FINDERS.......................................................................................30
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TABLE OF CONTENTS
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ARTICLE 4 CERTAIN COVENANTS OF COMPANY AND PARENT..............................................................30
4.1 ACCESS AND INVESTIGATION BY PARENT.....................................................................30
4.2 OPERATION OF COMPANY'S BUSINESS........................................................................31
4.3 NO SOLICITATION........................................................................................32
4.4 OPERATION OF PARENT'S BUSINESS.........................................................................33
ARTICLE 5 ADDITIONAL COVENANTS OF THE PARTIES..................................................................34
5.1 REGISTRATION STATEMENT; PROXY STATEMENT................................................................34
5.2 COMPANY STOCKHOLDERS' MEETING..........................................................................35
5.3 CONSENTS; REGULATORY APPROVALS.........................................................................36
5.4 EMPLOYEE BENEFITS......................................................................................37
5.5 INDEMNIFICATION OF DIRECTORS AND OFFICERS..............................................................38
5.6 DISCLOSURE.............................................................................................39
5.7 AFFILIATES AND AFFILIATE AGREEMENTS....................................................................39
5.8 RESIGNATIONS...........................................................................................39
5.9 LISTING................................................................................................39
5.10 SECTION16b-3...........................................................................................39
5.11 TAXES..................................................................................................40
ARTICLE 6 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES...................................................40
6.1 EFFECTIVENESS OF FORM S-4 REGISTRATION STATEMENT.......................................................40
6.2 COMPANY STOCKHOLDER APPROVAL...........................................................................40
6.3 HSR ACT................................................................................................40
6.4 LISTING................................................................................................40
6.5 NO RESTRAINTS..........................................................................................41
ARTICLE 7 CONDITIONS PRECEDENT TO PARENT'S AND MERGER SUB'S OBLIGATION TO CLOSE................................41
7.1 ACCURACY OF REPRESENTATIONS............................................................................41
7.2 COMPANY'S PERFORMANCE..................................................................................41
7.3 CONSENTS...............................................................................................41
7.4 NO MATERIAL ADVERSE CHANGE.............................................................................41
7.5 OFFICER'S CERTIFICATE..................................................................................42
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7.6 AFFILIATE AGREEMENTS...................................................................................42
7.7 DISSENTING SHARES......................................................................................42
7.8 TAX OPINION............................................................................................42
ARTICLE 8 CONDITIONS PRECEDENT TO COMPANY'S OBLIGATION TO CLOSE................................................42
8.1 ACCURACY OF REPRESENTATIONS............................................................................42
8.2 PARENT'S AND MERGER SUB'S PERFORMANCE..................................................................43
8.3 NO MATERIAL ADVERSE CHANGE.............................................................................43
8.4 OFFICER'S CERTIFICATE..................................................................................43
8.5 TAX OPINION............................................................................................43
ARTICLE 9 TERMINATION..........................................................................................43
9.1 TERMINATION............................................................................................43
9.2 EFFECT OF TERMINATION..................................................................................45
9.3 EXPENSES; TERMINATION FEES.............................................................................45
ARTICLE 10 GENERAL PROVISIONS..................................................................................46
10.1 CONFIDENTIALITY........................................................................................46
10.2 NOTICES................................................................................................46
10.3 FURTHER ACTIONS........................................................................................47
10.4 INCORPORATION OF SCHEDULES AND EXHIBITS................................................................47
10.5 ENTIRE AGREEMENT AND MODIFICATION......................................................................47
10.6 DRAFTING AND REPRESENTATION............................................................................48
10.7 SEVERABILITY...........................................................................................48
10.8 ASSIGNMENT; SUCCESSORS; NO THIRD-PARTY RIGHTS..........................................................48
10.9 ENFORCEMENT OF AGREEMENT...............................................................................48
10.10 WAIVER.................................................................................................49
10.11 GOVERNING LAW..........................................................................................49
10.12 JURISDICTION; SERVICE OF PROCESS.......................................................................49
10.13 COUNTERPARTS...........................................................................................49
EXHIBIT A CONSTRUCTION AND DEFINITIONS..........................................................................1
EXHIBIT B VOTING AGREEMENTS.....................................................................................0
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Voting Agreement - Xxxx Xxxxxxx Morphy...........................................................................1
Voting Agreement - Xxxxxx Xxxxxxx Morphy.........................................................................2
Voting Agreement - Xxxxxxxx Xxxxxxx Morphy.......................................................................3
Voting Agreement - SEACOR SMIT, Inc..............................................................................4
EXHIBIT C AMENDED CERTIFICATE OF INCORPORATION OF SURVIVING CORPORATION........................................1
EXHIBIT D AFFILIATE AGREEMENT...................................................................................1
EXHIBIT E CERTAIN COMPENSATION ARRANGEMENTS.....................................................................1
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MERGER AGREEMENT
This Merger Agreement ("Agreement") is made as of May 14, 2002 by and
among ENSCO International Incorporated, a Delaware corporation ("Parent"), Chore
Acquisition, Inc., a Delaware corporation ("Merger Sub"), and Xxxxxx Offshore
Inc., a Delaware corporation ("Company"). Certain capitalized terms used in this
Agreement are defined in Exhibit A.
PRELIMINARY STATEMENTS
A. Parent, Merger Sub and Company intend to effect a merger of Company
into Merger Sub in accordance with this Agreement and the Delaware General
Corporation Law ("Merger"). Upon consummation of the Merger, Company will cease
to exist, and Merger Sub will continue as a direct wholly owned Subsidiary of
Parent.
B. It is intended that the Merger qualify as a tax-free reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended ("Code").
C. The respective boards of directors of Parent, Merger Sub and Company
have approved this Agreement and approved the Merger.
D. In order to induce Parent and Merger Sub to enter into this
Agreement, certain stockholders of Company have executed the Voting Agreements
("Voting Agreements") in the forms attached as Exhibit B.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
ARTICLE 1
DESCRIPTION OF TRANSACTION
1.1 MERGER OF COMPANY INTO MERGER SUB
Upon the terms and subject to the conditions set forth in this
Agreement, at the Effective Time (as defined in Section 1.3), Company shall be
merged with and into Merger Sub, and the separate existence of Company shall
cease. Following the Effective Time, Merger Sub shall continue as the surviving
corporation ("Surviving Corporation"). The name of the Surviving Corporation
shall be Xxxxxx Offshore Inc.
1.2 EFFECTS OF THE MERGER
The Merger shall have the effects set forth in this Agreement and in
the applicable provisions of the Delaware General Corporation Law.
1.3 CLOSING; EFFECTIVE TIME
The consummation of the Contemplated Transactions ("Closing") shall
take place at the offices of Xxxxx & XxXxxxxx, 0000 Xxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx, at 10:00 a.m. (or such other place and time as the parties may
agree) on a date to be specified by the parties ("Closing Date"), which shall be
no later than the third business day after the satisfaction or waiver of the
last to be satisfied or waived of the conditions set forth in Articles 6, 7 and
8 (other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the satisfaction or waiver of such conditions). Subject
to the provisions of this Agreement, a certificate of merger satisfying the
applicable requirements of the Delaware General Corporation Law ("Certificate of
Merger") shall be duly executed by Merger Sub and, simultaneously with or as
soon as practicable following the Closing, filed with the Secretary of State of
the State of Delaware ("Secretary of State"). The Merger shall become effective
upon the later of: (a) the date and time of the filing of the Certificate of
Merger with the Secretary of State, or (b) such later date and time as may be
specified in the Certificate of Merger with the consent of Parent ("Effective
Time").
1.4 CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS AND OFFICERS
At the Effective Time:
(a) the Certificate of Incorporation of Merger Sub, as amended at the
Effective Time as set forth in Exhibit C, shall be the Certificate of
Incorporation of the Surviving Corporation until amended in accordance with
applicable Law;
(b) the Bylaws of Merger Sub in effect at the Effective Time shall be
the Bylaws of the Surviving Corporation until amended in accordance with
applicable Law; and
(c) the directors and officers of the Surviving Corporation immediately
after the Effective Time shall be the respective individuals who are directors
and officers of Merger Sub immediately prior to the Effective Time.
1.5 CONVERSION OF SHARES
(a) At the Effective Time, by virtue of the Merger and without any
further action on the part of Parent, Merger Sub, Company or any stockholder of
Company:
(i) any shares of Company Common Stock held immediately prior
to the Effective Time by Company or any wholly owned Subsidiary of Company (or
held in Company's treasury) shall be canceled and retired and shall cease to
exist, and no consideration shall be delivered in exchange therefor;
(ii) any shares of Company Common Stock held immediately prior
to the Effective Time by Parent, Merger Sub or any other wholly owned Subsidiary
of Parent shall be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor;
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(iii) except as provided in clauses (i) and (ii) of this
Section 1.5(a) and subject to Sections 1.5(b) and 1.5(c), each share of Company
Common Stock outstanding immediately prior to the Effective Time shall be
converted into the right to receive (A) 0.6575 (the "Exchange Ratio") of a share
of Parent Common Stock (the "Common Stock Consideration") and (B) $5.25 in cash
(the "Cash Consideration" and, together with the Common Stock Consideration, the
"Merger Consideration"); and
(iv) each share of the common stock, $0.001 par value per
share, of Merger Sub outstanding immediately prior to the Effective Time shall
remain outstanding as a share of common stock of the Surviving Corporation.
(b) If, between the date of this Agreement and the Effective Time,
the outstanding shares of Company Common Stock or Parent Common Stock are
changed into a different number or class of shares by reason of any stock split,
stock dividend, reverse stock split, combination, reclassification,
recapitalization or other similar transaction, then the Exchange Ratio and the
Cash Consideration shall be appropriately adjusted.
(c) No fractional shares of Parent Common Stock shall be issued in
connection with the Merger, and no certificates or scrip for any such fractional
shares shall be issued. Any holder of shares of Company Common Stock who would
otherwise be entitled to receive a fraction of a share of Parent Common Stock
(after aggregating all fractional shares of Parent Common Stock issuable to such
holder) shall, in lieu of such fraction of a share and, upon surrender of such
holder's Company Stock Certificate(s) (as defined in Section 1.6), be paid in
cash the dollar amount (rounded to the nearest whole cent), without interest,
determined by multiplying such fraction by the closing price of a share of
Parent Common Stock on the NYSE on the date on which the Effective Time occurs.
1.6 CLOSING OF COMPANY'S TRANSFER BOOKS
At the Effective Time:
(a) all certificates for shares of Company Common Stock outstanding
immediately prior to the Effective Time (a "Company Stock Certificate") shall
automatically be canceled and retired and shall cease to exist, and all holders
of certificates representing shares of Company Common Stock that were
outstanding immediately prior to the Effective Time shall cease to have any
rights as stockholders of Company except as set forth in Sections 1.7 and 1.11;
and
(b) the stock transfer books of Company shall be closed with respect to
all shares of Company Common Stock outstanding immediately prior to the
Effective Time. No further transfer of any such shares of Company Common Stock
shall be made on such stock transfer books after the Effective Time. If, after
the Effective Time, a valid Company Stock Certificate is presented to the
Exchange Agent (as defined in Section 1.7(a)) or to the Surviving Corporation or
Parent, such Company Stock Certificate shall be canceled and shall be exchanged
as provided in Section 1.7.
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1.7 EXCHANGE OF CERTIFICATES
(a) Prior to the Closing Date, Parent shall select a reputable bank or
trust company reasonably acceptable to Company to act as exchange agent in
respect of the Merger (the "Exchange Agent"). Prior to or at the Effective Time,
Parent shall deposit with the Exchange Agent, in trust for the benefit of
holders of Company Common Stock, (i) certificates representing the shares of
Parent Common Stock issuable as the Common Stock Consideration pursuant to
Section 1.5(a)(iii)(A) and (ii) the amount of cash sufficient to pay the
aggregate amount of the Cash Consideration to be paid pursuant to Section
1.5(a)(iii)(B) and the aggregate amount of cash sufficient to make payments in
lieu of fractional shares in accordance with Section 1.5(c) and any dividends or
other distributions declared or made with respect to Parent Common Stock with a
record date after the Effective Time to which holders of Company Stock
Certificates exchangeable for Parent Common Stock pursuant to this Agreement are
entitled. The shares of Parent Common Stock and cash amounts so deposited with
the Exchange Agent, together with any dividends or distributions received by the
Exchange Agent with respect to such shares, are referred to collectively as the
"Exchange Fund."
(b) As soon as reasonably practicable after the Effective Time, Parent
shall cause the Exchange Agent to mail to the record holders of Company Stock
Certificates (i) a letter of transmittal in customary form and containing such
provisions as Parent may reasonably specify (including a provision confirming
that delivery of Company Stock Certificates shall be effected, and risk of loss
and title to Company Stock Certificates shall pass, only upon delivery of such
Company Stock Certificates to the Exchange Agent) and (ii) instructions for use
in effecting the surrender of Company Stock Certificates in exchange for Merger
Consideration. Upon surrender of a Company Stock Certificate to the Exchange
Agent for exchange, together with a duly executed letter of transmittal and such
other documents as may be reasonably required by the Exchange Agent or Parent,
(x) the holder of such Company Stock Certificate shall be entitled to receive in
exchange therefor (i) a certificate representing the number of whole shares of
Parent Common Stock that such holder has the right to receive pursuant to the
provisions of Section 1.5 and (ii) a check in the amount equal to the cash that
such holder has a right to receive pursuant to Section 1.5 (including any cash
in lieu of any fractional share of Parent Common Stock to which such holder is
entitled and any dividends or other distributions to which such holder is
entitled as contemplated by this Section 1.7) and (y) each Company Stock
Certificate so surrendered shall be canceled. Until surrendered as contemplated
by this Section 1.7, each Company Stock Certificate shall be deemed, from and
after the Effective Time, to represent only the right to receive Merger
Consideration (and cash in lieu of any fractional share of Parent Common Stock)
as contemplated by Article 1 (including any dividends or other distributions as
contemplated by Section 1.7(d)). If any Company Stock Certificate shall have
been lost, stolen or destroyed, Parent may, in its discretion and as a condition
precedent to the payment of any Merger Consideration, require the owner of such
lost, stolen or destroyed Company Stock Certificate to provide an appropriate
affidavit and to deliver a bond (in such sum as Parent may reasonably direct) as
indemnity against any claim that may be made against the Exchange Agent, Parent
or the Surviving Corporation with respect to such Company Stock Certificate.
(c) Notwithstanding anything to the contrary contained in this
Agreement, no Merger Consideration shall be paid in exchange for any Company
Stock Certificate to any Person who may be an "affiliate" (as that term is used
in Rule 145 under the Securities Act) of Company until such Person shall have
4
delivered to Parent and Company a duly executed Affiliate Agreement as
contemplated by Section 5.7.
(d) No dividends or other distributions declared or made with respect
to Parent Common Stock with a record date after the Effective Time shall be paid
to the holder of any unsurrendered Company Stock Certificate with respect to the
shares of Parent Common Stock that such holder has the right to receive in the
Merger until such holder surrenders such Company Stock Certificate in accordance
with this Section 1.7 (at which time such holder shall be entitled, subject to
the effect of applicable escheat or similar Laws, to receive all such dividends
and distributions, without interest).
(e) Any portion of the Exchange Fund that remains undistributed to
holders of Company Stock Certificates as of the date one year after the date on
which the Effective Time occurs shall be delivered to Parent upon demand, and
any holders of Company Stock Certificates who have not theretofore surrendered
their Company Stock Certificates in accordance with this Section 1.7 shall
thereafter look only to Parent for satisfaction of their claims for Merger
Consideration, cash in lieu of fractional shares of Parent Common Stock and any
dividends or distributions with respect to Parent Common Stock.
(f) Each of the Exchange Agent, Parent and the Surviving Corporation
shall be entitled to deduct and withhold from any consideration payable or
otherwise deliverable pursuant to this Agreement to any holder or former holder
of Company Common Stock such amounts as may be required to be deducted or
withheld therefrom under the Code or any provision of state, local or foreign
Tax Law or under any other applicable Law. To the extent such amounts are so
deducted or withheld, such amounts shall be treated for all purposes under this
Agreement as having been paid to the Person to whom such amounts would otherwise
have been paid.
(g) Neither Parent nor the Surviving Corporation shall be liable to any
holder or former holder of Company Common Stock or to any other Person with
respect to any shares of Parent Common Stock (or dividends or distributions with
respect thereto), or for any cash amounts, delivered to any public official
pursuant to any applicable abandoned property Law, escheat Law or similar Law.
1.8 STOCK OPTIONS
(a) As soon as practicable following the date of this Agreement, Parent
and Company (or, if appropriate, any committee of the board of directors of
Company administering the Company Stock Option Plan) shall take such action as
may be required to effect the following provisions of this Section 1.8(a).
Subject to the provisions of Section 16 of the Exchange Act, as of the Effective
Time each option to purchase Company Common Stock pursuant to the Company Stock
Option Plan (a "Company Stock Option") that is then outstanding shall be assumed
by Parent and converted into an option (or a new substitute option shall be
granted) (an "Assumed Stock Option") exercisable for such amount of cash and
shares of Parent Company Stock as would have been received in respect of Company
Common Stock subject to such Company Stock Option had such Company Stock Option
been exercised in full immediately prior to the Effective Time (such that,
immediately after the Effective Time, (i) a Company Stock Option for one share
of Company Common Stock shall be converted into an Assumed Stock Option
5
exercisable for the Merger Consideration at the exercise price in effect
immediately prior to the Effective Time and (ii) any restriction on the exercise
of any such Company Stock Option and other provisions of such Company Stock
Option in effect at the Effective Time (after taking into account any vesting
that may result from the approval or consummation of the Merger) shall otherwise
remain unchanged; provided, however, that each Company Option assumed by Parent
in accordance with this Section 1.8 (and the cash to be received by the holder
upon exercise thereof) shall, in accordance with its terms, be subject to
further adjustment as appropriate to reflect any stock split, stock dividend,
reverse stock split, reclassification, recapitalization or other similar
transaction.
(b) As soon as practicable after the Effective Time, Parent shall
deliver to the holders of Company Stock Options appropriate notices setting
forth such holders' rights pursuant to the Company Option Plan and the
agreements evidencing the grants of such Company Stock Options and that such
Company Stock Options and agreements have been assumed by Parent and shall
continue in effect on the same terms and conditions as in effect immediately
prior to the Effective Time (subject to the provisions of this Section 1.8).
Parent shall comply with the terms of the Company Option Plan and ensure, to the
extent required by, and subject to the provisions of, the Company Option Plan,
that the Company Stock Options which qualified as qualified stock options prior
to the Effective Time continue to qualify as qualified stock options after the
Effective Time.
(c) Parent shall take such actions as are reasonably necessary for the
assumption of the Company Option Plan pursuant to this Section 1.8, including
the reservation, issuance and using its Reasonable Efforts to provide for the
listing of Parent Common Stock as is necessary to effectuate the transactions
contemplated by this Section 1.8. Parent shall use its Reasonable Efforts to
prepare and file with the SEC a registration statement on Form S-8 or other
appropriate form with respect to shares of Parent Common Stock subject to the
Assumed Stock Options and to maintain the effectiveness of such registration
statement or registration statements covering such Assumed Stock Options (and
maintain the current status of the prospectus or prospectuses contained therein)
for so long as such Assumed Stock Options remain outstanding. With respect to
those individuals, if any, who subsequent to the Effective Time will be subject
to the reporting requirements under Section 16(a) of the Exchange Act, where
applicable, Parent shall use all Reasonable Efforts to administer the Company
Option Plans assumed pursuant to this Section 1.8 in a manner that complies with
Rule 16b-3 promulgated under the Exchange Act to the extent the Company Option
Plan complied with such rule prior to the Merger.
1.9 TAX CONSEQUENCES
For federal income tax purposes, the Merger is intended to constitute a
reorganization within the meaning of Section 368 of the Code. The parties to
this Agreement hereby adopt this Agreement as a "plan of reorganization" within
the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury
Regulations.
1.10 FURTHER ACTION
If, at any time after the Effective Time, any further action is
determined by Parent to be necessary or desirable to carry out the purposes of
this Agreement or to vest the Surviving Corporation with full right, title and
6
possession of and to all rights and property of Merger Sub and Company, the
officers and directors of the Surviving Corporation and Parent shall be fully
authorized (in the name of Merger Sub, in the name of Company and otherwise) to
take such action.
1.11 DISSENTING SHARES
Notwithstanding anything in this Agreement to the contrary, Company
Common Stock outstanding immediately prior to the Effective Time and held by a
holder who has delivered a written demand for appraisal of such shares in
accordance with Section 262 of the Delaware General Corporation Law ("Dissenting
Shares") shall not be converted as provided in Section 1.5 of this Agreement,
unless and until such holder fails to perfect or effectively withdraws or loses
his right to appraisal and payment under the Delaware General Corporation Law.
If, after the Effective Time, any such holder fails to perfect or effectively
withdraws or loses his right to appraisal, such Dissenting Shares shall
thereupon be treated as if they had been converted as of the Effective Time into
the right to receive the Merger Consideration as provided in Section 1.5(a)(iii)
hereof, together with any dividends or distributions payable thereon or cash in
lieu of fractional shares, and to which such holder is entitled, without
interest thereon. Company shall give Parent prompt notice of any demands
received by Company for appraisal of Company Common Stock, and prior to the
Effective Time, Parent shall have the right to participate in all negotiations
and proceedings with respect to such demands. Prior to the Effective Time,
Company shall not, except with the prior written consent of Parent, make any
payment with respect to, or offer to settle, any such demands. Parent covenants
and agrees that, in the event any cash payment is to be made following the
Effective Time in respect of Dissenting Shares (as a result of a judgment,
settlement or otherwise), Parent shall contribute to the capital of the
Surviving Corporation an amount sufficient to make such payment, and no funds or
other assets of the Surviving Corporation shall, directly or indirectly, be used
for such purpose.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants to Parent and Merger Sub that, except
as set forth in the Company Disclosure Schedule:
2.1 ORGANIZATION AND GOOD STANDING
(a) Company has no Subsidiaries, except for the Entities identified in
Section 2.1(a) of the Company Disclosure Schedule, and neither Company nor any
of the other Entities identified in Section 2.1(a) of the Company Disclosure
Schedule owns any capital stock of, or any equity interest of any nature in, any
other Entity, other than the Entities identified in Section 2.1(a) of the
Company Disclosure Schedule. (Company and each of the Entities identified on
Section 2.1(a) of the Company Disclosure Schedule are referred to collectively
in this Agreement as the "Acquired Companies.") None of the Acquired Companies
has agreed or is obligated to make, or is bound by any Contract under which it
may become obligated to make, any future investment in or capital contribution
to any other Entity. None of the Acquired Companies has, at any time, been a
general partner of any general partnership, limited partnership or other Entity.
7
Section 2.1(a) of the Company Disclosure Schedule contains a list of the
jurisdiction of formation of each of the Acquired Companies and other
jurisdictions in which each Acquired Company is authorized to do business.
(b) Company is a corporation, and each Subsidiary is a corporation or a
limited liability company, in each case duly organized, validly existing and in
good standing under the Laws of its jurisdiction of organization, with full
corporate or other power and authority to conduct its business as presently
conducted, to own or use the properties and assets that it purports to own or
use, and to perform all its obligations under all Company Contracts to which it
is a party. Each Acquired Company is duly qualified to do business as a foreign
entity and is in good standing in each jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, except where the
failure to be so qualified or to be in good standing does not and is not
reasonably likely to have a Company Material Adverse Effect.
(c) Company has delivered to Parent copies of the Governing Documents
of each of the Acquired Companies, as currently in effect. Neither Company nor
any Subsidiary is in violation of any provision of its Governing Documents.
2.2 ENFORCEABILITY; NO CONFLICT
(a) Assuming due authorization, execution and delivery of this
Agreement by Parent and Merger Sub, this Agreement constitutes the legal, valid
and binding obligation of Company, enforceable against Company in accordance
with its terms. Other than the approval contemplated by Section 2.21, Company
has the power and authority to execute and deliver this Agreement and to perform
its obligations under this Agreement, which actions have been duly authorized
and approved by all necessary corporate action of Company.
(b) Except as set forth in Section 2.2(b) of the Company Disclosure
Schedule or as may be required by the Securities Act, the Exchange Act, state
securities or "blue sky" Laws, the Delaware General Corporation Law, the HSR
Act, MARAD and the rules and regulations promulgated thereunder, any Antitrust
Law, and the ASE rules (as they relate to the Form S-4 Registration Statement
and the Proxy Statement), none of the Acquired Companies is or will be required
to make any filing with or give any notice to, or to obtain any Consent from,
any Governmental Body or other Person in connection with (i) the execution,
delivery or performance of this Agreement or any of the other agreements
referred to in this Agreement by Company, or (ii) the consummation by Company of
the Merger or any of the Contemplated Transactions, except where the failure to
make any such filing, give such notice or obtain the Consent is not reasonably
likely to have, individually or in the aggregate, a Company Material Adverse
Effect.
(c) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will (i)
Contravene any provision of the Governing Documents of Company, or any
resolution adopted in connection with the Contemplated Transactions by the
stockholders or board of directors of Company, (ii) Contravene any Company
Contract, Governmental Authorization, Law or Order to which Company, or any of
the assets owned or used by the Acquired Companies, may be subject, except where
8
such Contravention does not and is not reasonably likely to have, individually
or in the aggregate, a Company Material Adverse Effect, or (iii) result in the
imposition or creation of any Encumbrance upon or with respect to any of the
assets owned or used by the Acquired Companies, except where such Encumbrance
does not and is not reasonably likely to have, individually or in the aggregate,
a Company Material Adverse Effect.
(d) The board of directors of Company (at a meeting duly called and
held) has by a unanimous vote of those present duly and validly authorized the
execution, delivery and performance of this Agreement and approved the
consummation of the Contemplated Transactions, and taken all corporate actions
required to be taken by the board of directors of Company for the consummation
of the Contemplated Transactions and has resolved (i) that this Agreement and
the Contemplated Transactions are advisable and fair to, and in the best
interests of, Company and its stockholders and (ii) to recommend that the
stockholders of Company approve and adopt this Agreement. The board of directors
of Company has directed that this Agreement be submitted to the stockholders of
Company for their approval. Company has taken all action required to be taken by
it in order to exempt this Agreement and the Contemplated Transactions from, and
this Agreement and the Contemplated Transactions are exempt from, the
requirements of any "moratorium," "control share," "fair price," "affiliate
transaction," "business combination" or other antitakeover Laws of any state
including, without limitation, Section 203 of the Delaware General Corporation
Law, or any antitakeover provision in Company's certificate of incorporation and
bylaws. No provision of the Governing Documents of any of the Acquired Companies
or any Contract of Company would, directly or indirectly, materially restrict or
impair (x) the ability of Parent to vote, or otherwise to exercise the rights of
a stockholder with respect to, securities of the Acquired Companies that may be
acquired or controlled by Parent by virtue of this Agreement or the Voting
Agreements, the Contemplated Transactions or (y) the rights granted hereunder
and thereunder, or permit any stockholder to acquire securities of Company or
Parent, or any of their respective Subsidiaries on a basis not available to
Parent in the event that Parent were to acquire securities of Company.
2.3 CAPITALIZATION AND OWNERSHIP
(a) The authorized capital stock of Company consists of: (i)
100,000,000 shares of Company Common Stock, of which 20,293,732 shares have been
issued and are outstanding as of the date of this Agreement, (ii) 10,000,000
shares of Company Preferred Stock, of which no shares are outstanding and (iii)
109,000 shares of Company Common Stock are held by Company in its treasury. All
of the outstanding shares of Company Common Stock have been duly authorized and
validly issued, and are fully paid and nonassessable. As of the date of this
Agreement, there are no shares of Company Common Stock held by any of the other
Acquired Companies. None of the outstanding shares of Company Common Stock is
entitled or subject to any preemptive right, right of participation, right of
maintenance or any similar right created by a Company Contract, none of the
outstanding shares of Company Common Stock is subject to any right of first
refusal under a Company Contract, and except as set forth on Schedule 2.3(b) of
the Company Disclosure Schedule or in the Voting Agreements, there is no Company
Contract relating to the voting or registration of, or restricting any Person
from purchasing, selling, pledging or otherwise disposing of (or granting any
option or similar right with respect to), any shares of Company Common Stock.
None of the Acquired Companies is under any obligation, or is bound by any
9
Contract pursuant to which it may become obligated, to repurchase, redeem or
otherwise acquire any outstanding shares of Company Common Stock.
(b) As of the date of this Agreement, (i) 971,667 shares of Company
Common Stock are reserved for future issuance pursuant to stock options (each, a
"Company Option") and restricted stock awards, of which 736,911 shares of
Company Common Stock are subject to Company Stock Options that have been granted
and are outstanding under the Company Stock Option Plan. Section 2.3(b) of the
Company Disclosure Schedule sets forth the following information with respect to
each Company Option outstanding as of the date of this Agreement: (i) the name
of the optionee, (ii) the number of shares of Company Common Stock subject to
such Company Option, (iii) the exercise price of such Company Option, (iv) the
date on which such Company Option was granted, (v) the applicable vesting
schedules, and the extent to which such Company Option is vested and exercisable
as of the date of this Agreement, and (vi) the date on which such Company Option
expires. Company has made available to Parent accurate and complete copies of
all stock option plans pursuant to which Company has ever granted stock options,
and the forms of all stock option agreements evidencing such options.
(c) Except as set forth in Section 2.3(b) of the Company Disclosure
Schedule, there is no: (i) Company Contract in respect of any outstanding
subscription, option, call, warrant or right (whether or not currently
exercisable) to acquire any shares of the capital stock or other securities of
Company, (ii) Company Contract in respect of any outstanding security,
instrument or obligation that is or may become convertible into or exchangeable
for any shares of the capital stock or other securities of Company, or (iii)
stockholder rights plan (or similar plan commonly referred to as a "poison
pill") or Contract under which Company is or may become obligated to sell or
otherwise issue any shares of its capital stock or any other securities.
(d) All outstanding shares of Company Common Stock, all outstanding
Company Options and all outstanding shares of capital stock or membership
interests, as applicable, of each Subsidiary of Company have been issued and
granted in compliance with (i) all applicable securities Laws and other
applicable Law and (ii) all requirements set forth in applicable Contracts,
except, in each case, where non-compliance does not have, and is not reasonably
likely to have, a Company Material Adverse Effect.
(e) All of the outstanding shares of capital stock or membership
interests, as applicable, of the companies identified in Section 2.1(a) of the
Company Disclosure Schedule have been duly authorized, validly issued, and, with
respect to shares of capital stock, are fully paid and nonassessable, and are
owned beneficially and of record by Company, free and clear of any Encumbrances.
2.4 SEC FILINGS; FINANCIAL STATEMENTS
(a) Company has made available to Parent accurate and complete copies
of all annual reports on Form 10-K, registration statements, definitive proxy
statements relating to meetings of Company's stockholders and other registration
statements and reports filed by Company with the SEC, and all amendments thereto
("Company SEC Documents"). All Company SEC Documents have been filed by Company
with the SEC on timely basis. As of the time it was filed with the SEC (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
10
the date of such filing): (i) each of Company SEC Documents complied in all
material respects with the applicable requirements of the Securities Act or the
Exchange Act (as the case may be), and (ii) none of Company SEC Documents or any
statements, schedules or other documents included or incorporated by reference
therein contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. No Company Subsidiary is currently required to file any
form, report or other document with the SEC.
(b) The consolidated financial statements (including any related notes)
contained in Company SEC Documents: (i) complied as to form in all material
respects with the published rules and regulations of the SEC applicable thereto,
(ii) fairly present in accordance with GAAP applied on a consistent basis
throughout the periods covered (except as may be indicated in the notes to such
financial statements or, in the case of unaudited statements, as permitted by
Form 10-Q of the SEC, and except that the unaudited financial statements need
not contain footnotes and are subject to normal year-end adjustments) and (iii)
fairly present the consolidated financial position of Company and its
consolidated Subsidiaries as of the respective dates thereof and the
consolidated results of operations and changes in the financial position of
Company and its consolidated Subsidiaries as at the respective dates thereof and
for the respective periods covered thereby.
(c) Except (i) to the extent set forth on the balance sheet of Company
and its consolidated Subsidiaries as at December 31, 2001, including the notes
thereto (the "2001 Balance Sheet"), (ii) as set forth in Section 2.4(c) of the
Company Disclosure Schedule or (iii) as disclosed in any Company SEC Document
filed by Company after December 31, 2001, neither Company nor any Subsidiary has
any Liability of any nature (whether accrued, absolute, contingent or otherwise)
which would be required by GAAP to be reflected on a balance sheet, or in the
notes thereto, prepared in accordance with GAAP, except for Liabilities which
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
(d) Company has heretofore made available to Parent complete and
correct copies of all amendments and modifications (if any) that have not been
filed by Company with the SEC to all agreements, documents and other instruments
that previously had been filed by Company as exhibits to the Company SEC
Documents and are currently in effect.
2.5 BOOKS AND RECORDS
The minute books of Company contain accurate and complete records of
all meetings held of, and corporate action taken by, Company's stockholders and
directors. At the time of the Closing, all of those books and records will be in
the possession of Company.
2.6 ACCOUNTS RECEIVABLE
All Accounts Receivable that are reflected in the financial statements
contained in the Company SEC Documents or the accounting records of Company as
of the Closing Date represent or will represent valid obligations arising from
sales actually made or services actually performed in the Ordinary Course of
11
Business. All of the Accounts Receivable reflected in the 2001 Balance Sheet or
created thereafter are, to the Company's Knowledge, (i) valid receivables
subject to no setoffs or counterclaims and (ii) current and collectible in
accordance with their terms at their recorded amounts, subject in each case only
to the reserve for bad debts set forth in the 2001 Balance Sheet as such
reserves may thereafter be adjusted for operations and transactions through the
Effective Time in accordance with the past custom and practice of the Acquired
Companies.
2.7 NO UNDISCLOSED LIABILITIES
Except as would not be reasonably likely to have a Company Material
Adverse Effect, the Acquired Companies have no Liabilities that would be
required by GAAP to be included in a reserve amount or reserve described in the
consolidated balance sheet of Company, including the notes thereto, except for
Liabilities disclosed in the Company SEC Documents and current Liabilities
incurred in the Ordinary Course of Business since the respective dates thereof.
2.8 NO MATERIAL ADVERSE EFFECT
Since the date of the most recent Company SEC Document, no event has
occurred or circumstance has arisen that, in combination with any other events
or circumstances, would reasonably be expected to have a Company Material
Adverse Effect.
2.9 ABSENCE OF CERTAIN CHANGES AND EVENTS
From and after December 31, 2001 through and including the date hereof,
except as disclosed in any Company SEC Document or Section 2.9 of the Company
Disclosure Schedule, each Acquired Company has conducted its business only in
the Ordinary Course of Business and there has not been any:
(a) except for grants of stock options or restricted stock under the
Company Stock Option Plan, (i) change in the authorized or issued shares or
membership interests, as applicable, of any of the Acquired Companies, grant of
any equity option or right to purchase shares or membership interests, as
applicable, of any of the Acquired Companies; issuance of any security
convertible into such equity; (ii) grant of any registration rights; purchase,
redemption, retirement or other acquisition by any of the Acquired Companies of
any shares or membership interests, as applicable, or securities or obligations
convertible into or exchangeable or exercisable for such capital stock or
membership interests; declaration or payment of any dividend or other
distribution or payment with respect to any shares or membership interests, as
applicable (other than to Company from its Subsidiaries); or (iii) sale, pledge,
disposal, Encumbrance, or the authorization of the sale, pledge, disposal or
Encumbrance by any of the Acquired Companies of any shares of their capital
stock of any class or any membership interests;
(b) any reclassification, combination, split or division by any of the
Acquired Companies of their capital stock or membership interests;
(c) amendment or other modification to the Governing Documents of any
of the Acquired Companies;
12
(d) except in the Ordinary Course of Business, any payment or increase
by any of the Acquired Companies of any bonuses, salaries or other compensation
to any stockholder, member, director or officer, or entry into any employment,
severance or similar Contract with any stockholder, member, director, officer,
employee, consultant or advisor;
(e) adoption of or amendment to any Plan or material Other Benefit
Obligation of any of the Acquired Companies;
(f) damage to or destruction or loss with an aggregate value in excess
of $500,000 of any asset or property of any of the Acquired Companies, whether
or not covered by insurance;
(g) entry into, material modification, cancellation or termination of
or receipt of notice of termination of (i) any material license,
distributorship, dealer, sales representative, joint venture, credit, guaranty
or similar Company Contract, or (ii) any Contract or transaction involving a
total remaining commitment by or to any of the Acquired Companies of at least
$500,000;
(h) mobilization of, or any agreement entered into by any of the
Acquired Companies which provides for the mobilization of, any Company Drilling
Rig to any area of the world other than such area in which such Company Drilling
Rig was located on December 31, 2001;
(i) Contract that provides for contract drilling services (each, a
"Drilling Contract") entered into by any of the Acquired Companies or any
material amendment or modification thereto;
(j) sale, lease or other disposition of any asset or property of any of
the Acquired Companies with an aggregate value in excess of $2,500,000, or the
creation of any material Encumbrance on any material asset of any of the
Acquired Companies;
(k) settlement, cancellation or waiver of any claims or rights in
excess of $500,000, or which relate to any of the Contemplated Transactions;
(l) material acceleration or delay in the payment of accounts payable
or in the collection of Accounts Receivable;
(m) material change in the accounting methods, principles or practices
used by any of the Acquired Companies; or
(n) Contract by any of the Acquired Companies to do any of the
foregoing.
2.10 PROPERTIES
None of the Acquired Companies owns any Real Property. Section 2.10 of
the Company Disclosure Schedule contains a list of all leases of Real Property
in which any Acquired Company has a leasehold estate.
13
2.11 INTELLECTUAL PROPERTY
(a) Except as does not have and would not be reasonably likely to have
a Company Material Adverse Effect, (i) the Acquired Companies own or have the
right to use pursuant to a valid Contract all material items of Intellectual
Property necessary for the operation of the Acquired Companies as presently
conducted, (ii) each item of Intellectual Property owned or used by the Acquired
Companies as of the date of this Agreement will be owned or available for use by
the Acquired Companies on substantially identical terms immediately subsequent
to the Closing, and (iii) to Company's Knowledge, no Intellectual Property owned
by and/or licensed to the Acquired Companies is being used or enforced in a
manner that would result in the abandonment, cancellation or unenforceability of
such Intellectual Property.
(b) To the Knowledge of Company, none of the Acquired Companies has
interfered with, infringed upon, misappropriated or otherwise Contravened any
intellectual property rights of third parties, and none of the Acquired
Companies has received any written notice regarding any such actual, alleged or
potential interference, infringement, misappropriation or Contravention, except
where such interference, infringement, misappropriation or Contravention does
not have, and is not reasonably likely to have, a Company Material Adverse
Effect. No event has occurred or circumstance exists that may (with or without
notice or lapse of time) constitute or result, nor will the continued operation
of the Acquired Companies after the Closing as presently conducted result,
directly or indirectly, in any such interference, infringement, misappropriation
or Contravention, except where such interference, infringement, misappropriation
or Contravention does not have, and is not reasonably likely to have, a Company
Material Adverse Effect. To Company's Knowledge, no third party has interfered
with, infringed upon, misappropriated or otherwise Contravened any Intellectual
Property rights of any of the Acquired Companies, except where such
interference, infringement, misappropriation or Contravention does not have, and
is not reasonably likely to have, a Company Material Adverse Effect.
(c) None of the Acquired Companies owns any material patent, registered
trademark, service xxxx or copyright or has pending any material patent
application or application for registration that has been made with respect to
any Intellectual Property owned by the Acquired Companies.
2.12 CONTRACTS; NO DEFAULTS
(a) Except as set forth on Section 2.12(a) of the Company Disclosure
Schedule or filed as an exhibit to the Company SEC Documents, there is no:
(i) Company Contract that involves performance of services or
delivery of goods or materials by any of the Acquired Companies of an amount or
value in excess of $500,000;
(ii) Company Contract that involves performance of services or
delivery of goods or materials to any of the Acquired Companies of an amount or
value in excess of $500,000;
14
(iii) Company Contract that was not entered into in the
Ordinary Course of Business and that involves the expenditure or receipt by any
of the Acquired Companies of an amount or value in excess of $500,000;
(iv) Company Contract that is a (A) mortgage, indenture, note,
installment obligation or other instrument relating to the borrowing of money or
(B) letter of credit, bond or other indemnity (including letters of credit,
bonds or other indemnities as to which Company is the beneficiary but excluding
endorsements of instruments for collection in the Ordinary Course of Business);
(v) Company Contract affecting the ownership of, leasing of,
title to, use of, or any other interest in any real or personal property (except
personal property leases and installment and conditional sales agreements having
a value per item or aggregate payments of less than $500,000);
(vi) material Company Contract with respect to Intellectual
Property (including Contracts with current or former employees, consultants or
contractors regarding the appropriation or the non-disclosure of any of the
Intellectual Property) except for any license implied by the sale of a product
and perpetual, paid-up licenses for commonly available software programs with a
value of less than $500,000 under which any of the Acquired Companies is the
licensee, and the list identifies those pursuant to which an Acquired Company
uses Intellectual Property owned by a third party;
(vii) material Company Contract with any labor union or other
employee representative of a group of employees;
(viii) Company Contract other than Company Plans involving a
sharing of profits, losses, costs or Liabilities by any of the Acquired
Companies with any other Person;
(ix) Company Contract containing covenants that in any way
purport to restrict the business activity of Company or limit the freedom of any
of the Acquired Companies to engage in any line of business or to compete with
any Person; and
(x) Company Contract for capital expenditures in excess of
$2,500,000.
(b) Company has made available to Parent a copy of each Company
Contract listed on Section 2.12(a) of the Company Disclosure Schedule or filed
as an exhibit to the Company SEC Documents.
(c) Each Company Contract set forth in Section 2.12(a) of the Company
Disclosure Schedule or filed as an exhibit to the Company SEC Documents and
material to Company's business is in full force and effect and is valid and
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar Laws of general applicability relating to or
affecting creditors' rights or by general equity principles), except where
failure to be in full force and effect or failure to be valid and enforceable
does not have, and is not reasonably likely to have, a Company Material Adverse
Effect. Except where such Contravention does not have, and is not reasonably
likely to have, a Company Material Adverse Effect: (i) none of the Acquired
15
Companies nor, to Company's Knowledge any other party to a Company Contract has
Contravened any of the applicable terms of a Company Contract, (ii) no event has
occurred or circumstance exists that (with or without notice or lapse of time)
would constitute or result directly or indirectly in Contravention of any
Company Contract by Company or, to Company's Knowledge any other party thereto,
and (iii) to Company's Knowledge, none of the Acquired Companies has given or
received any written notice or other communication alleging Contravention of any
Company Contract.
(d) Each Drilling Contract or each Company Contract that provides for
the construction of a Company Drilling Rig a ("Rig Contract") is in full force
and effect and is valid and enforceable in accordance with its terms and (i)
none of the Acquired Companies nor, to Company's Knowledge, any other party to a
Drilling Contract or Rig Contract has Contravened any of the applicable terms of
a Drilling Contract or Rig Contract, (ii) to Company's Knowledge, no event has
occurred or circumstance exists that (with or without notice or lapse of time)
may constitute or result directly or indirectly in Contravention of any Drilling
Contract or Rig Contract, and (iii) none of the Acquired Companies has given or
received written notice or other communication regarding any actual, alleged or
potential Contravention of any Drilling Contract or Rig Contract.
(e) To Company's Knowledge, as of the date of this Agreement, no party
to a Company Contract listed on Section 2.12(a) of the Company Disclosure
Schedule or filed as an exhibit to the Company SEC Documents and material to
Company's business has repudiated it. As of the date of this Agreement, there
currently are no renegotiations of, to Company's Knowledge, attempts to
renegotiate or outstanding material rights to renegotiate any Company Contracts
listed on Section 2.12(a) of the Company Disclosure Schedule or filed as an
exhibit to the Company SEC Documents and material to Company's business, nor has
any written demand for renegotiation been made.
2.13 INSURANCE
Section 2.13 of the Company Disclosure Schedule sets forth a list of
each material (a) insurance policy issued to each Acquired Company as a "named
insured" or otherwise providing insurance to such company as an insured party or
additional insured party, or on any other basis, and (b) self-insurance program,
retrospective premium program or captive insurance program in which each
Acquired Company participates. Each Acquired Company has complied with each such
insurance policy and program and to Company's Knowledge, has not failed to give
any notice or present any claim thereunder in a due and timely manner which
failure would reasonably be expected to result in a loss or forfeiture of any
material right thereunder, except where such loss or forfeiture of a material
right thereunder does not have, and is not reasonably likely to have, a Company
Material Adverse Effect.
2.14 TAXES
Except as set forth in Section 2.14 of the Company Disclosure Schedule:
(a) Each Acquired Company has filed (or has had filed on its behalf) on
a timely basis all Tax Returns as required by applicable Laws, except where
16
failure to file a Tax Return does not have, and is not reasonably likely to
have, a Company Material Adverse Effect. Each such Tax Return is accurate and
complete in all material respects. There are no material Encumbrances for any
Taxes on any of the assets of any of the Acquired Companies.
(b) The amounts reflected as Liabilities in the financial statements
contained in the Company SEC Documents for all Taxes are adequate in all
material respects to cover any and all Liabilities for all Taxes, whether or not
disputed, that have been accrued with respect to, should have been accrued with
respect to, or are applicable to the period ended on and including the date of
such financial statements, or to any years and periods prior thereto and for
which any of the Acquired Companies may be directly, indirectly or contingently
liable in its own right or as a transferee of the assets of, or successor to,
any Person.
(c) No federal, state, local or foreign audits or other Proceedings
exist with regard to any material Taxes or Tax Returns of any of the Acquired
Companies. None of the Acquired Companies has received any written notice that
an audit or other Proceeding is pending or threatened with respect to any Taxes
due from or with respect to such company or any Tax Return filed by or with
respect to such company. None of the Acquired Companies has granted or been
requested to grant any waiver of any statutes of limitations applicable to any
claim for Taxes.
(d) All Tax deficiencies that have been claimed, proposed or asserted
in writing against any of the Acquired Companies have been fully paid or finally
settled. There are no pending Tax examinations as of the date of this Agreement.
(e) There are no outstanding requests for rulings with any Governmental
Body with respect to Taxes that would materially affect the operations of any of
the Acquired Companies after the Closing Date. None of the Acquired Companies
has any pending application with any Governmental Body requesting permission for
any change in accounting method or tax year.
(f) None of the Acquired Companies has filed a consent under Code
Section 341(f) concerning collapsible corporations.
(g) None of the Acquired Companies is or has been in the past five (5)
years a United States real property holding company within the meaning of Code
Section 897(c)(2) .
(h) None of the Acquired Companies has in the past three (3) years been
a member of an affiliated group (within the meaning of Code Section 1504 or any
similar group defined under a similar provision of state, local or foreign Law)
filing a consolidated Tax Return (other than a group of which the Company is the
common parent) nor has any liability for Taxes of any other person under
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local
or foreign Law).
(i) In the two-year period ending with the Closing Date, none of the
Acquiring Companies has distributed the stock of any corporation in a
distribution of stock qualifying for tax-free treatment under Section 355 of the
Code or has been distributed in such a distribution, and prior to such period,
no such distribution was made with the plan or intent of facilitating the
Merger.
17
2.15 EMPLOYEE BENEFITS
(a) Section 2.15(a) of the Company Disclosure Schedule contains a list
of all material Company Plans. Except as set forth in Section 2.15(a) of the
Company Disclosure Schedule and the Company SEC Documents, to Company's
Knowledge, there are no material Liabilities, including fines and penalties of
any Acquired Company, with respect to any plans, arrangements or practices of
the type that would constitute a Company Plan that were terminated or
discontinued prior to the date of this Agreement and previously maintained or
contributed to by any Acquired Company, or to which any Acquired Company
previously had an obligation to contribute.
(b) Company has delivered or made available to Parent current and
complete copies of (i) each Company Plan and any related trust, including all
summary plan descriptions, (ii) all insurance policies purchased by or to
provide benefits under any Company Plan which are available to pay current
benefits and any other funding arrangements with respect to any Company Plan,
(iii) the most recent Form 5500 filed with respect to each Company Plan,
including all schedules thereto and the opinions of independent accountants and
(iv) with respect to Company Plans that are Qualified Plans, the most recent
determination letter for each such Plan.
(c) The Acquired Companies have timely performed all of their
respective obligations under all Company Plans, except where non-compliance does
not and is not reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect. Except as set forth in Section 2.15(c) of the
Company Disclosure Schedule and, in each case, where non-compliance does not and
is not reasonably likely to have, individually or in the aggregate, a Company
Material Adverse Effect, the Acquired Companies, with respect to all Company
Plans, are and each Company Plan is in compliance with ERISA, the Code and other
applicable Laws, including the provisions of such Laws expressly mentioned in
this Section and, including but not limited, to the Age Discrimination in
Employment Act, as amended, and Title X of the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended, and with any applicable collective
bargaining agreement. Except as set forth in Section 2.15(c) of the Company
Disclosure Schedule or does not and is not reasonably likely to have,
individually or in the aggregate, a Company Material Adverse Effect, no
transaction prohibited by ERISA Section 406 and no "prohibited transaction"
under Code Section 4975(c) has occurred with respect to any Company Plan or
breaches of any of the duties imposed on "fiduciaries" (within the meaning of
Section 3(21) of ERISA) by ERISA with respect to the Company Plans that could
result in any Acquired Company becoming liable directly or indirectly (by
indemnification or otherwise) for any material Liability for any excise tax,
penalty or other liability under ERISA or the Code. Other than routine claims
for benefits submitted by participants or beneficiaries, no material written
claim against, or Proceeding involving, any Company Plan is pending or, to
Company's Knowledge, is threatened as of the date hereof, except any claim or
Proceeding which does not and is not reasonably likely to have individually or
in the aggregate, a Company Material Adverse Effect. To Company's Knowledge,
there is no basis to anticipate any such action, suit, arbitration or claim
exists (other than routine claims for benefits) with respect to any Company
Plan, and there are no investigations or audits of any Company Plan by any
governmental authority currently pending and there have been no such
investigations or audits that have been concluded, in any such case which has or
is reasonably likely to have, individually or in the aggregate, a Company
18
Material Adverse Effect or resulted in any material Liability of any Acquired
Company or ERISA Affiliate that has not been fully discharged.
(d) Each Qualified Plan of the Acquired Companies has received a
favorable determination letter from the IRS that it is qualified under Code
Section 401(a) and that its related trust is exempt from federal income tax
under Code Section 501(a), and each such Plan and trust complies in form and in
operation with the requirements of the Code and meets the requirements of a
"qualified plan" under Code Section 401(a) and a tax-exempt trust under Code
Section 501(a), except where non-compliance does not and is not reasonably
likely to have, individually or in the aggregate, a Company Material Adverse
Effect.
(e) Except to the extent required under ERISA Section 601 et seq. and
Code Section 4980B, none of the Acquired Companies has any material Liability to
provide health benefits coverage for any retired employee or to provide health
benefits coverage to any active employee following such employee's retirement.
(f) Except as set forth in Section 2.15(f) of the Company Disclosure
Schedule, there are no overdue (i) insurance premiums required to be paid with
respect to any Company Plan and, (ii) to Company's Knowledge, no insurance
company issuing any such policy is in receivership, conservatorship, liquidation
or similar Proceeding and no such Proceedings with respect to any insurer are
imminent.
(g) The Acquired Companies shall reasonably cooperate with Parent with
any reasonably necessary action to ensure compliance with any federal or state
Law applicable to the Company Plans, whether such action occurs prior to, on, or
after the Effective Time.
(h) Except as set forth in Section 2.15(h) of the Company Disclosure
Schedule, the Acquired Companies have not agreed or committed (orally or in
writing) to make any amendments to any Company Plan not already embodied in the
documents comprising the Company Plans, other than any amendments required by
Law, or to establish or implement any other employee or retiree benefit or
compensation arrangement.
(i) Except as set forth in Section 2.15(i) of the Company Disclosure
Schedule, the consummation of the Contemplated Transactions will not result in
the payment, vesting or acceleration of any benefit under or in connection with
any Company Plan or constitute a "deemed severance" or "deemed termination"
under any Company Plan or under any applicable Law.
2.16 LABOR RELATIONS; EMPLOYMENT LAW COMPLIANCE
(a) The Acquired Companies have complied in all respects with all Laws
relating to employment practices, terms and conditions of employment, equal
employment opportunity, nondiscrimination, immigration, wages, hours, benefits,
collective bargaining and plant closing, except where non-compliance does not
have, and is not reasonably likely to have, a Company Material Adverse Effect.
(b) None of the Acquired Companies has been, and is not now, a party to
any collective bargaining agreement or other labor Contract. To Company's
Knowledge, no application or petition is pending for an election of or for
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certification of a collective bargaining agent representing employees of any of
the Acquired Companies.
2.17 ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
(a) The Acquired Companies are, and at all times have been, in full
compliance with, and have not been and are not in Contravention of or liable
under, any Environmental Law or Occupational Safety and Health Law, except where
failure to comply with, Contravention of or Liability under such Environmental
Law or Occupational Safety and Health Law does not have, and is not reasonably
likely to have, a Company Material Adverse Effect. None of the Acquired
Companies has any basis to expect, nor has any of them or any other Person for
whose conduct they are or may be held responsible received, any actual or
threatened Order, notice or other communication from (i) any Governmental Body
or other Person acting in the public interest, or (ii) the current or prior
owner or operator of any Facility, of any actual or potential violation or
failure to comply with any Environmental Law, or of any actual or threatened
obligation to undertake or bear the cost of any Environmental, Health and Safety
Liabilities with respect to any Facility or other property or asset (whether
real, personal or mixed) in which any of the Acquired Companies has had an
interest, or with respect to any property or Facility at or to which Hazardous
Materials were generated, manufactured, refined, transferred, imported, used or
processed by any of the Acquired Companies or any other Person for whose conduct
they are or may be held responsible, or from which Hazardous Materials have been
transported, treated, stored, handled, transferred, disposed, recycled or
received, except where such violation or failure to comply with any
Environmental Law, or such obligation to undertake or bear the cost of any
Environmental, Health and Safety Liabilities does not have, and is not
reasonably likely to have, a Company Material Adverse Effect.
(b) There are no pending or, to Company's Knowledge, threatened,
claims, Encumbrances or other restrictions of any nature, resulting from any
Environmental, Health and Safety Liabilities or arising under any Environmental
Law or Occupational Safety and Health Law, with respect to or affecting any
Facilities or any other properties and assets (whether real, personal or mixed)
in which any of the Acquired Companies has or had an interest, except where such
claims, Encumbrances or other restrictions, either individually or in the
aggregate, do not have and are not reasonably likely to have a Company Material
Adverse Effect.
(c) Company has no Knowledge of or any basis to expect, nor has any of
the Acquired Companies or any other Person for whose conduct they are or may be
held responsible, received, any citation, directive, inquiry, notice, Order,
summons, warning or other communication (i) that relates to Hazardous Activity,
Hazardous Materials or any actual, alleged or potential Contravention of or
failure to comply with any Environmental Law or Occupational Safety and Health
Law, or (ii) of any actual, alleged or potential obligation to undertake or bear
the cost of any Environmental, Health and Safety Liabilities with respect to any
Facility or other property or asset (whether real, personal or mixed) in which
any of the Acquired Companies had an interest, or with respect to any property
or facility to or by which Hazardous Materials generated, manufactured, refined,
transferred, imported, used or processed by any of the Acquired Companies, or
any other Person for whose conduct they are or may be held responsible, have
been transported, treated, stored, handled, transferred, disposed, recycled or
20
received, except for any such matters as do not and are not reasonably likely to
have a Company Material Adverse Effect.
2.18 COMPLIANCE WITH LAWS; GOVERNMENTAL AUTHORIZATIONS
(a) Except for such matters as, individually or in the aggregate, do
not have, or are not reasonably likely to have, a Company Material Adverse
Effect: (i) each of the Acquired Companies is in full compliance with each Law
that is applicable to it or to the conduct of its business or the ownership or
use of any of its assets, and (ii) to Company's Knowledge, no event has occurred
or circumstance exists that (with or without notice or lapse of time) would
cause any of the Acquired Companies to Contravene any Law or may give rise to
any obligation on the part of any of the Acquired Companies to undertake, or to
bear all or any portion of the cost of, any remedial action of any nature. None
of the Acquired Companies has received at any time since January 1, 2000 any
written notice or other communication from any Governmental Body or any other
Person regarding any alleged Contravention of any Law or any actual, alleged or
potential obligation on the part of such company to undertake, or to bear all or
any portion of the cost of, any remedial action of any nature.
(b) Section 2.18(b) of the Company Disclosure Schedule contains an
accurate and complete list of each material Governmental Authorization that is
held by the Acquired Companies, all of which are valid and in full force and
effect and will remain so following the Closing, except where the failure of
such Governmental Authorization to be valid or in full force and effect prior to
or following the Closing does not have, and is not reasonably likely to have, a
Company Material Adverse Effect. Each of the Acquired Companies is in full
compliance with all of the terms and requirements of each such Governmental
Authorization, except where failure to comply with such terms and requirements
does not have, and is not reasonably likely to have, a Company Material Adverse
Effect. Except where such Contravention does not have, and is not reasonably
likely to have, a Company Material Adverse Effect: (i) to Company's Knowledge,
no event has occurred or circumstance exists that may (with or without notice or
lapse of time) constitute or result directly or indirectly in Contravention of
any Governmental Authorization, and (ii) none of the Acquired Companies has
received at any time since January 1, 2000 any written notice or other
communication from any Governmental Body or any other Person alleging any
Contravention of any Governmental Authorization.
(c) The Governmental Authorizations listed in Section 2.18(b) of the
Company Disclosure Schedule collectively constitute all of the Governmental
Authorizations necessary to permit each of the Acquired Companies to conduct its
business lawfully in the manner in which it currently conducts such business and
to permit each of the Acquired Companies to own and use its assets in the manner
in which it owns and uses such assets currently, except, in each case, where the
failure to hold a Governmental Authorization does not have, and is not
reasonably likely to have, a Company Material Adverse Effect.
2.19 LEGAL PROCEEDINGS; ORDERS
(a) Section 2.19(a) of the Company Disclosure Schedule lists any
pending Proceedings not disclosed in the Company SEC Documents (i) by or against
any of the Acquired Companies or any of their respective properties, assets,
officers or directors, and none of such Proceedings are reasonably likely to
21
have, individually or in the aggregate, a Material Adverse Effect on any of the
Acquired Companies, (ii) that challenge, or that may have the effect of
preventing, delaying, making illegal or otherwise interfering with, any of the
Contemplated Transactions or (iii) in which any Acquired Company indemnifies any
third party. To Company's Knowledge, no other such Proceeding has been
threatened in writing.
(b) Section 2.19(b) of the Company Disclosure Schedule lists each
material Order not disclosed in the Company SEC Documents to which each of the
Acquired Companies, or any of the material assets owned or used by it is
subject. To Company's Knowledge, no officer, director, agent or key employee of
any of the Acquired Companies is subject to any Order that prohibits such
officer, director, agent or key employee from engaging in or continuing any
conduct, activity or practice relating to the business of any of the Acquired
Companies.
2.20 RELATIONSHIPS WITH RELATED PERSONS
Except as set forth in the Company SEC Documents, no Person has, or
since January 1, 2000 has had, any interest in any property (whether real,
personal or mixed and whether tangible or intangible), used in or pertaining to
the business of any of the Acquired Companies, or any other business
relationship, that would require disclosure under Item 404 of Regulation S-K.
Except as set forth in the Company SEC Documents, no Person is a party to any
Contract with, or has any claim or right against, Company that would require
disclosure under Item 404 of Regulation S-K.
2.21 VOTE REQUIRED
The affirmative vote of the holders of not less than 66-2/3% of the
then outstanding shares of Company Common Stock is the only vote of the holders
of any class or series of capital stock of Company necessary to approve the
Merger.
2.22 BROKERS FINDERS
Except for Credit Suisse First Boston Corporation, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the Contemplated Transactions based upon
arrangements made by or on behalf of any of the Acquired Corporations. Company
has furnished to Parent a copy of all Contracts related to such engagement of
Credit Suisse First Boston Corporation.
2.23 OPINION OF COMPANY'S FINANCIAL ADVISOR
Company's board of directors has received the written opinion of Credit
Suisse First Boston Corporation, financial advisor to Company, dated May 14,
2002, to the effect that as of the date of the opinion the Merger Consideration
to be received by the holders of Company Common Stock in the Merger, other than
those Persons executing Voting Agreements and their respective affiliates, is
fair, from a financial point of view, to such holders.
22
2.24 PARACHUTE PAYMENTS
Except as disclosed in Section 2.24 of the Company Disclosure Schedule,
or resulting from the acceleration of vesting of Company Stock Options under the
terms of the Company Stock Option Plan, the matters described in Section 5.4 and
the Severance Benefits Agreement dated June 12, 2000, none of the Acquired
Companies has made or become obligated to make, and will not as a result of any
Contemplated Transaction become obligated to make, any payments defined in Code
Sections 280G or 162(m). None of the Acquired Companies is required to "gross
up" or otherwise make any payment resulting from the imposition of any excise
tax on such payments.
2.25 CERTAIN BUSINESS PRACTICES
As of the date of this Agreement, none of the Acquired Companies, nor,
to the Knowledge of Company, any agent or employee of Acquired Companies acting
on behalf of the Acquired Companies has (a) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (b) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, (c) made any other unlawful payment, or (d) violated any of
the provisions of Section 999 of the Code or Section 8 of the Export
Administration Act, as amended.
2.26 CHANGE IN CONTROL
Except as set forth in Section 2.26 of the Company Disclosure Schedule
or contained in a Company Contract included in a Company SEC Document, the
consummation of the Contemplated Transactions will not (either alone or upon the
occurrence of any additional acts or events) result in (a) any payment (whether
of severance pay or otherwise) becoming due from Company or any Subsidiary to
any Person, (b) the termination of, or provide the right of any Person to
terminate, any material Company Contract, or (c) the acceleration of any
material benefits of any Person under any material Company Contract.
2.27 COMPANY DRILLING RIGS
(a) Section 2.27(a) of the Company Disclosure Schedule sets forth a
list of Company Drilling Rigs and, if applicable, the name of the nation under
which each Company Drilling Rig is documented and flagged and indicates all
Company Drilling Rigs that are laid up or being held for sale on the date
hereof. With respect to Company Drilling Rigs, with the exception of any Company
Drilling Rig not yet delivered to Company, Company or a Subsidiary has good
title to each such Company Drilling Rig, free and clear of all liens or
Encumbrances except for such as are disclosed in Section 2.27(a) of the Company
Disclosure Schedule or in the Company SEC Documents.
(b) Section 2.27(b) of the Company Disclosure Schedule contains a list
of all leases or charters in effect as of the date of this Agreement providing
for the use by Company or any Subsidiary of a Company Drilling Rig. Complete and
correct copies of each lease or charter (including material amendments or
modifications thereto) have been delivered or made available to Parent.
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(c) With respect to each Company Drilling Rig with the exception of any
Company Drilling Rig not yet delivered to Company: (i) such Company Drilling Rig
is lawfully documented under the flag of the nation listed on Section 2.27(a) of
the Company Disclosure Schedule for such Company Drilling Rig, (ii) such Company
Drilling Rig is afloat and in satisfactory operating condition for charter hire,
(iii) such Company Drilling Rig holds in full force and effect all certificates,
licenses, permits and rights required for operation in the manner drilling rigs
of its kind are being operated in the geographical area in which such Company
Drilling Rig is presently being operated which the failure to hold would
reasonably be expected to have a Company Material Adverse Effect, (iv) to the
Knowledge of Company, no event has occurred and no condition exists as of the
date of this Agreement that would endanger the maintenance of the classification
of such Company Drilling Rig, (v) such Company Drilling Rig is a xxxx-up
drilling rig and is considered by the American Bureau of Shipping to be in class
as a Maltese Cross A1 Self-Elevating Drilling Unit and free of any
recommendations affecting class and (vi) there exists no outstanding
requirements or recommendations resulting from any inspections by, or rules or
regulations of, any Governmental Body, including without limitation, the
American Bureau of Shipping, the U.S. Coast Guard, the U.S. Minerals Management
Service, the U.S. Occupational Safety and Health Administration, or the Laws of
any nation under which any of the Company Drilling Rigs are flagged.
(d) Section 2.27(d) of the Company Disclosure Schedule contains a list
of the geographical location in which each Company Drilling Rig, with the
exception of any Company Drilling Rig not yet delivered to Company, is being
operated as of the date hereof. Each Company Drilling Rig can be removed from
such geographical location and transported to the United States without the
material payment, Liability or imposition of any Tax or other payment of any
kind to any Governmental Body.
2.28 DISCLOSURE
None of the information to be supplied by Company for inclusion in the
Form S-4 Registration Statement will, at the time the Form S-4 Registration
Statement becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. None of the information to be supplied by Company for inclusion in
the Proxy Statement will, at the time the Proxy Statement is mailed to the
stockholders of Company or at the time of the Company Stockholders' Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
promulgated by the SEC thereunder, except that no representation or warranty is
made by Company with respect to statements made or incorporated by reference
therein based on information supplied by Parent for inclusion or incorporation
by reference in the Proxy Statement.
2.29 FINANCIAL AND COMMODITY HEDGING
Section 2.29 of the Company Disclosure Schedule sets forth a list of
each Company Contract providing for a hedging or derivative transaction of a
nature described in Financial Accounting Standards Board Release No. 133
24
outstanding as of the date of this Agreement, including the fair market value of
each such outstanding hedging or derivative transaction. As of the date of this
Agreement, the cost to Company to close all of its outstanding hedging or
derivative transactions would not exceed an aggregate amount of $1.7 million.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to Company that, except as
set forth in the Parent Disclosure Schedule or Parent SEC Documents:
3.1 ORGANIZATION
Each of Parent and Merger Sub is a corporation duly organized, validly
existing and in good standing under the Laws of its jurisdiction of
organization.
3.2 ENFORCEABILITY; NO CONFLICT
(a) Assuming due authorization, execution and delivery of this
Agreement by Company, this Agreement constitutes the legal, valid and binding
obligation of each of Parent and Merger Sub, enforceable against each of Parent
and Merger Sub in accordance with its terms. Each of Parent and Merger Sub has
the power and authority to execute and deliver this Agreement and to perform its
obligations under this Agreement, which actions have been duly authorized and
approved by all necessary corporate action of each of Parent and Merger Sub.
(b) Except as may be required by the Securities Act, the Exchange Act,
state securities or "blue sky" Laws, the Delaware General Corporation Law, the
HSR Act, MARAD and the rules and regulations promulgated thereunder, any
Antitrust Law and the NYSE rules (as they relate to the Form S-4 Registration
Statement and the Proxy Statement), neither Parent nor Merger Sub is or will be
required to make any filing with or give any notice to, or obtain any Consent
from, any Governmental Body or other Person in connection with the execution and
delivery of this Agreement or any other agreements referred to in this Agreement
by Parent, or the consummation or performance of any of the Contemplated
Transactions, except where the failure to make such filing, give such notice or
obtain the Consent is not reasonably likely to have, individually or in the
aggregate, a Parent Material Adverse Effect.
(c) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will (i)
Contravene any provision of the Governing Documents of Parent or Merger Sub, or
any resolution adopted in connection with the Contemplated Transactions by the
stockholders or board of directors of Parent or Merger Sub, (ii) Contravene any
Parent or Merger Sub Contract, Governmental Authorization, Law or Order to which
Parent or Merger Sub, or any of the assets owned or used by Parent and its
Subsidiaries, collectively, may be subject, except where such Contravention does
not, and is not reasonably likely to have, individually or in the aggregate, a
Parent Material Adverse Effect, or (iii) result in the imposition or creation of
any Encumbrance upon or with respect to any of the assets owned or used by
Parent and its Subsidiaries, except where such Encumbrance does not and is not
reasonably likely to have, individually or in the aggregate, a Parent Material
Adverse Effect.
25
(d) The board of directors of Parent (at a meeting duly called and
held) has, by unanimous vote, duly and validly authorized the execution,
delivery and performance of this Agreement by Parent and unanimously approved
the consummation of the Contemplated Transactions.
3.3 CAPITALIZATION
(a) The authorized capital stock of Parent consists of: (i) 250,000,000
shares of Parent Common Stock, (ii) 5,000,000 shares of Parent First Preferred
Stock, and (iii) 15,000,000 shares of Parent Preferred Stock, of which 1,250,000
have been designated as Series A Junior Participating Preferred Stock. As of the
date of this Agreement, (i) 135,399,864 shares of Parent Common Stock are issued
and outstanding, (ii) no shares of Parent First Preferred Stock are issued and
outstanding, and (iii) no shares of Parent Preferred Stock are issued and
outstanding. All of the outstanding shares of Parent Common Stock have been duly
authorized and validly issued, and are fully paid and nonassessable.
(b) As of the date of this Agreement, (i) 23,548,127 shares of Parent
Common Stock are held in the treasury of Parent, (ii) 10,552,304 shares of
Parent Common Stock are reserved for future issuance pursuant to the Parent
Incentive Plans, of which 3,762,633 shares of Parent Common Stock are subject to
stock options that have been granted and are outstanding under the Parent
Incentive Plans, (iii) 492,000 shares of Parent Common stock are reserved for
future issuance pursuant to the Parent Directors Plan, of which 114,000 shares
of Parent Common Stock are subject to stock options that have been granted and
are outstanding under the Parent Directors Plan, (iv) 1,000,000 shares of Parent
Common Stock are reserved for future issuance as matching contributions under
the Parent Savings Plan, and (v) no shares of Parent Common Stock are reserved
for issuance as matching contributions under the Parent SERP.
(c) Except as contemplated by this Agreement or as set forth in the
Parent SEC Documents, as of the date of this Agreement there is no: (i)
outstanding subscription, option, call, warrant or right (whether or not
currently exercisable) to acquire any shares of the capital stock or other
securities of Parent or any Parent Subsidiary, (ii) outstanding security,
instrument or obligation that is or may become convertible into or exchangeable
for any shares of the capital stock or other securities of Parent or any Parent
Subsidiary, or (iii) stockholder rights plan (or similar plan common referred to
as a "poison pill") or Contract under which Parent or any Parent Subsidiary is
or may become obligated to sell or otherwise issue any shares of its capital
stock or any other securities.
(d) The authorized capital stock of Merger Sub consists of 1,000 shares
of Merger Sub Common Stock, of which, as of the date of this Agreement, 100
shares are issued and outstanding and held by Parent.
3.4 SEC FILINGS; FINANCIAL STATEMENTS
(a) Parent has made available to Company accurate and complete copies
of all annual reports on Form 10-K, registration statements, definitive proxy
statements relating to meetings of Parent's stockholders and other registration
statements and reports filed by Parent with the SEC since January 1, 1999, and
all amendments thereto ("Parent SEC Documents"). All Parent SEC Documents have
26
been filed by Parent with the SEC on a timely basis. As of the time it was filed
with the SEC (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing): (i) each of the Parent SEC
Documents complied in all material respects with the applicable requirements of
the Securities Act or the Exchange Act (as the case may be), and (ii) none of
the Parent SEC Documents or any statements, schedules or other documents
included or incorporated by reference therein contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(b) The consolidated financial statements (including any related notes)
contained in the Parent SEC Documents: (i) complied as to form in all material
respects with the published rules and regulations of the SEC applicable thereto,
(ii) fairly present in accordance with GAAP applied on a consistent basis
throughout the periods covered (except as may be indicated in the notes to such
financial statements or, in the case of unaudited statements, as permitted by
Form 10-Q of the SEC, and except that the unaudited financial statements need
not contain footnotes and are subject to normal year-end adjustments) and (iii)
fairly present the consolidated financial position of Parent and its
consolidated Subsidiaries as of the respective dates thereof and the
consolidated results of operations and changes in the financial position of
Parent and its consolidated Subsidiaries as at the respective dates thereof and
for the respective periods covered thereby.
(c) Except (i) to the extent set forth on the balance sheet of Parent
and its consolidated Subsidiaries as at December 31, 2001, including the notes
thereto (the "2001 Parent Balance Sheet") or (ii) as disclosed in any Parent SEC
Document filed by Parent after December 31, 2001, neither Parent nor any
Subsidiary has any Liability of any nature (whether accrued, absolute,
contingent or otherwise) which would be required by GAAP to be reflected on a
balance sheet, or in the notes thereto, prepared in accordance with GAAP, except
for Liabilities, which would not, individually or in the aggregate, reasonably
be expected to have a Parent Material Adverse Effect.
(d) Parent has heretofore made available to Company complete and
correct copies of all amendments and modifications (if any) that have not been
filed by Parent with the SEC to all agreements, documents and other instruments
that previously had been filed by Parent as exhibits to the Parent SEC Documents
and are currently in effect.
3.5 COMPLIANCE WITH LAWS
Except for such matters as, individually or in the aggregate, do not
have, or are not reasonably likely to have, a Parent Material Adverse Effect:
(a) Parent is in full compliance with each Law that is applicable to it or to
the conduct of its business or the ownership or use of any of its assets, and
(b) to Parent's Knowledge no event has occurred or circumstance exists that
(with or without notice or lapse of time) may cause Parent to Contravene any Law
or may give rise to any obligation on the part of Parent to undertake, or to
bear all or any portion of the cost of, any remedial action of any nature.
Parent has not received at any time since January 1, 2000 any written notice or
other communication from any Governmental Body or any other Person regarding any
alleged Contravention of any Law or any actual, alleged or potential obligation
27
on the part of such company to undertake, or to bear all or any portion of the
cost of, any remedial action of any nature.
3.6 LEGAL PROCEEDINGS; ORDERS
There are no pending Proceedings not disclosed in the Parent SEC
Documents (a) by or against Parent or that otherwise relate to or may affect the
business of, or any of the assets owned or used by, Parent that are reasonably
likely to have, individually or in the aggregate, a Parent Material Adverse
Effect, or (b) that challenge, or that may have the effect of preventing,
delaying, making illegal or otherwise interfering with, any of the Contemplated
Transactions. To Parent's Knowledge, no other such Proceeding has been
threatened, and no event has occurred or circumstance exists that may give rise
to or serve as a basis for the commencement of any such Proceeding.
3.7 VALID ISSUANCE
The Parent Common Stock to be issued in the Merger will, when issued in
accordance with the provisions of this Agreement, be validly issued, fully paid
and nonassessable.
3.8 DISCLOSURE
None of the information to be supplied by Parent or Merger Sub for
inclusion in the Form S-4 Registration Statement will, at the time the Form S-4
Registration Statement becomes effective under the Securities Act, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, not
misleading. None of the information to be supplied by Parent or Merger Sub for
inclusion in the Proxy Statement will, at the time the Proxy Statement is mailed
to the stockholders of Company or at the time of the Company Stockholders'
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading.
3.9 CASH CONSIDERATION
Parent has available to it, and at the Closing will have available to
it, all funds necessary to pay the Cash Consideration and to satisfy its
obligations hereunder.
3.10 NO PRIOR ACTIVITIES
Except for obligations incurred in connection with its incorporation or
organization or the negotiation and consummation of this Agreement and the
Contemplated Transactions, Merger Sub has neither incurred any obligation or
liability nor engaged in any business or activity of any type or kind
whatsoever, or entered into any agreement or arrangement with any Person.
3.11 NO MATERIAL ADVERSE EFFECT
Since the date of the most recent Parent SEC Document no event has
occurred or circumstance has arisen that, in combination with any other events
or circumstances, would reasonably be expected to have a Parent Material Adverse
Effect.
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3.12 ABSENCE OF CERTAIN CHANGES AND EVENTS
From and after December 31, 2001 through and including the date hereof,
except as disclosed in any Parent SEC Document, Parent has conducted its
business only in ordinary course of business and there has not been any:
(a) material change in the authorized or issued shares of Parent, other
than grants of stock options under any Parent option plan or Parent Other
Benefit Obligation, grant of any right to purchase shares of Parent; issuance of
any security convertible into such equity; grant of any registration rights;
purchase, redemption, retirement or other acquisition by Parent of any shares or
securities or obligations convertible into or exchangeable or exercisable for
such capital stock, except pursuant to any Parent Plan; declaration or payment
of any dividend or other distribution or payment with respect to any shares;
other than in the ordinary course of business.
(b) any reclassification, combination, split or division of Parent
Common Stock;
(c) amendment or other modification to the Governing Documents of
Parent;
(d) damage to or destruction or loss with an aggregate value in excess
of $5 million of any asset or property of Parent;
(e) sale, lease or other disposition of any asset or property of Parent
with an aggregate value in excess of $5 million, or the creation of any material
Encumbrance on any material asset of Parent;
(f) settlement, cancellation or waiver of any claims or rights in
excess of $5 million, or which relates to any of the Contemplated Transactions;
(g) material change in the accounting methods, principles or practices
used by Parent; or
(h) Contract by Parent to do any of the foregoing.
3.13 GOVERNMENT AUTHORIZATION
(a) Each material Governmental Authorization that is held by Parent is
valid and in full force and effect and will remain so following the Closing,
except where the failure of such Governmental Authorization to be valid or in
full force and effect prior to or following the Closing does not have, and is
not reasonably likely to have, a Parent Material Adverse Effect. Parent is in
full compliance with all of the terms and requirements of each such Governmental
Authorization, except where failure to comply with such terms and requirements
does not have, and is not reasonably likely to have, a Parent Material Adverse
Effect. Except where such Contravention does not have, and is not reasonably
likely to have, a Parent Material Adverse Effect: (i) to Parent's Knowledge, no
event has occurred or circumstance exists that may (with or without notice or
lapse of time) constitute or result directly or indirectly in Contravention of
any Governmental Authorization, and (ii) Parent has not received at any time
since January 1, 2000 any written notice or other communication from any
Governmental Body or any other Person alleging any Contravention of any
Governmental Authorization.
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(b) All such Governmental Authorizations constitute all of the
Governmental Authorizations necessary to permit the Parent to conduct its
business lawfully in the manner in which it currently conducts such business and
to permit Parent to own and use its assets in the manner in which it owns and
uses such assets currently, except, in each case, where the failure to hold a
Governmental Authorization does not have, and is not reasonably likely to have,
a Parent Material Adverse Effect.
3.14 TAXES
(a) Parent has filed (or has had filed on its behalf) on a timely basis
all material Tax Returns as required by applicable Laws. Each such Tax Return is
accurate and complete in all material respects. There are no material
Encumbrances for any Taxes on any of the assets of Parent.
(b) The amounts reflected as Liabilities in the financial statements
contained in the Parent SEC Documents for all Taxes are adequate in all material
respects to cover any and all Liabilities for all Taxes, whether or not
disputed, that have been accrued with respect to, should have been accrued with
respect to, or are applicable to the period ended on and including the date of
such financial statements, or to any years and periods prior thereto and for
which Parent may be directly, indirectly or contingently liable in its own right
or as a transferee of the assets of, or successor to, any Person.
(c) No federal, state, local or foreign audits or other Proceedings
exist with regard to any material Taxes or Tax Returns of Parent. Parent has not
received any written notice that an audit or other Proceeding is pending or
threatened with respect to any Taxes due from or with respect to such company or
any Tax Return filed by or with respect to such company. Parent has not granted
or been requested to grant any waiver of any statutes of limitations applicable
to any claim for Taxes.
3.15 BROKERS; FINDERS
No broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the Contemplated
Transactions based upon arrangements made by or on behalf of Parent or Merger
Sub.
ARTICLE 4
CERTAIN COVENANTS OF COMPANY AND PARENT
4.1 ACCESS AND INVESTIGATION BY PARENT
(a) Between the date hereof and the Effective Time (the "Pre-Closing
Period"), Company will give Parent and Merger Sub and their authorized
Representatives reasonable access during normal business hours to all employees,
plants, offices, drilling rigs and other facilities and to all books and records
of the Acquired Companies, will permit Parent and Merger Sub to make such
inspections as Parent and Merger Sub may reasonably require and will cause the
Acquired Companies' officers to furnish Parent and Merger Sub with such
financial and operating data and other information with respect to the business,
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properties and personnel of the Acquired Companies as Parent or Merger Sub may
from time to time reasonably request, provided that no investigation pursuant to
this Section 4.1 shall affect or be deemed to modify any of the representations
or warranties made by Company or be deemed a waiver of any breach thereof.
(b) During the Pre-Closing Period, Company shall furnish to Parent and
Merger Sub: (i) promptly after the delivery thereof to management, such monthly
financial statements, data and operating reports as are regularly prepared for
distribution to Company management, and (ii) at the earliest time they are
available, such quarterly and annual financial statements as are prepared for
the Company SEC Documents, which (in the case of this clause (ii)), shall be in
accordance with the books and records of Company.
(c) Each of Parent and Merger Sub will hold and will cause its
authorized Representatives to hold in confidence all documents and information
concerning Company and its Subsidiaries furnished to Parent or Merger Sub in
connection with the Contemplated Transactions pursuant to the terms of the
Confidentiality Agreement.
4.2 OPERATION OF COMPANY'S BUSINESS
(a) During the Pre-Closing Period, except as set forth in Section
4.2(a) of the Company Disclosure Schedule or as contemplated by any other
provision of this Agreement: (i) Company shall ensure that each of the Acquired
Companies conducts its business and operations (A) in the Ordinary Course of
Business, and (B) in material compliance with all applicable Laws and the
requirements of all Company Contracts that constitute Material Contracts, (ii)
Company shall use its Reasonable Efforts to ensure that each of the Acquired
Companies preserves intact its current business organization, keeps available
the services of its current officers and employees and maintains its relations
and goodwill with all suppliers, customers, landlords, creditors, licensors,
licensees, employees and other Persons having business relationships with the
respective Acquired Companies and (iii) without the prior written consent of
Parent, which shall not be unreasonably withheld, (A) Company shall not, and
shall cause each of the other Acquired Companies not to, take any affirmative
action, or fail to take any reasonable action within its control, which action
or failure to act is reasonably likely to result in any of the changes or events
described in clauses (a) - (n) of Section 2.9 (other than those specified in
Section 2.9(f) resulting from inaction), (B) Company shall keep in full force
and effect, and without modification or amendment, or any lapse of coverage
under, all insurance policies referred to in Section 2.13 of the Company
Disclosure Schedule, (C) Company shall promptly notify Parent of (1) any written
notice or other communication in writing from any Person alleging that the
Consent of such Person is or may be required in connection with the Contemplated
Transactions and (2) any Proceeding commenced or, to the best of its Knowledge
threatened against, relating to or involving or otherwise affecting any of the
Acquired Companies that relates to the consummation of the Contemplated
Transactions, (D) Company shall not enter into any Contract providing for a
hedging or derivative transaction of a nature described in Financial Accounting
Standards Board Release No. 133 and (E) Company shall not grant any Company
Options or restricted stock awards under the Company Stock Option Plan.
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(b) During the Pre-Closing Period, Company shall promptly notify Parent
in writing of: (i) the discovery by Company of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this Agreement
and that caused or constitutes a material inaccuracy or breach in any
representation or warranty made by Company in this Agreement, (ii) any event,
condition, fact or circumstance that occurs, arises or exists after the date of
this Agreement, and that causes or constitutes a material inaccuracy or breach
in any representation or warranty made by Company in this Agreement if (A) such
representation or warranty had been made as of the time of the occurrence,
existence or discovery of such event, condition, fact or circumstance, or (B)
such event, condition, fact or circumstance had occurred, arisen or existed on
or prior to the date of this Agreement, (iii) any material breach of any
covenant or obligation of any of the Acquired Companies, and (iv) any event,
condition, fact or circumstance that would make the timely satisfaction of any
of the conditions set forth in Articles 6, 7 and 8 impossible or unlikely or
that has had or could reasonably be expected to have a Company Material Adverse
Effect. Without limiting the generality of the foregoing, Company shall promptly
advise Parent in writing of any Proceeding or material claim or Contract dispute
threatened, commenced or asserted against or with respect to any of the Acquired
Companies. No notification given to Parent pursuant to this Section 4.2(b) shall
limit or otherwise affect any of the representations, warranties, covenants or
obligations of Company contained in this Agreement.
4.3 NO SOLICITATION
(a) Company shall not directly or indirectly, and shall not authorize
or permit any of the other Acquired Companies or any Representative of any of
the Acquired Companies directly or indirectly to, (i) solicit, initiate,
encourage, induce or facilitate the making, submission or announcement of any
Acquisition Proposal or take any action that could reasonably be expected to
lead to an Acquisition Proposal, (ii) furnish any information regarding any of
the Acquired Companies to any Person in connection with or in response to an
Acquisition Proposal, (iii) engage in discussions or negotiations with any
Person with respect to any Acquisition Proposal, (iv) approve, endorse or
recommend any Acquisition Proposal (except pursuant to Section 5.2(c)) or (v)
enter into any Contract contemplating or otherwise relating to any Acquisition
Transaction (except pursuant to Section 9.1(f)); provided, however, that prior
to the adoption of this Agreement by the Required Company Stockholder Vote, this
Section 4.3(a) shall not prohibit Company from furnishing information regarding
the Acquired Companies to, or entering into discussions or negotiations with,
any Person in response to an Acquisition Proposal that is submitted to Company
by such Person (and not withdrawn) and that is a Superior Proposal (determined
based on facts known at the time of such proposal) if (i) neither Company nor
any Representative of any of the Acquired Companies shall have violated in any
material respect any of the restrictions set forth in this Section 4.3, (ii) the
board of directors of Company concludes in good faith, after having taken into
account the advice of its outside legal counsel, that such action is required in
order for the board of directors of Company to comply with its fiduciary
obligations to Company's stockholders under applicable Law, (iii) within two
business days after furnishing any such information to, or entering into
discussions or negotiations with, such Person, Company gives Parent written
notice of the identity of such Person and the fact that the Company furnished
information to, or entered into discussions or negotiations with, such Person,
and (iv) Company receives from such Person an executed confidentiality agreement
containing customary limitations on the use and disclosure of all information
furnished to such Person by or on behalf of Company. Without limiting the
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generality of the foregoing, Company acknowledges and agrees that any violation
of or the taking of any action inconsistent with any of the restrictions set
forth in the preceding sentence by any Representative of any of the Acquired
Companies, whether or not such Representative is purporting to act on behalf of
any of the Acquired Companies, shall be deemed to constitute a breach of this
Section 4.3 by Company.
(b) Company shall promptly advise Parent orally and in writing of any
Acquisition Proposal, any inquiry or indication of interest that is reasonably
likely to lead to an Acquisition Proposal (including the identity of the Person
making or submitting such Acquisition Proposal, inquiry, or indication of
interest, and the terms of any such Acquisition Proposal) that is made or
submitted by any Person during the Pre-Closing Period. Company shall keep Parent
informed with respect to the status of any such Acquisition Proposal, inquiry or
indication of interest.
(c) Company shall immediately cease and cause to be terminated any
existing discussions as of the date of this Agreement with any Person that
relate to any Acquisition Proposal.
(d) Company agrees not to release or permit the release of any Person
from, or to waive or permit the waiver of any provision of, any confidentiality
or similar agreement to which any of the Acquired Companies is a party, and will
use its Reasonable Efforts to enforce or cause to be enforced each such
agreement at the request of Parent.
4.4 OPERATION OF PARENT'S BUSINESS
(a) During the Pre-Closing Period, except as contemplated by any other
provision of this Agreement: (i) Parent shall conduct its business and
operations in the ordinary course of business, (ii) Parent shall use its
Reasonable Efforts to preserve intact its current business organization, (iii)
without the prior written consent of Company, which shall not be unreasonably
withheld, Parent shall not, and shall cause its Subsidiaries not to, take any
affirmative action, or fail to take any reasonable action within its control,
which action or failure to act is reasonably likely to result in any of the
changes or events described in clauses (a), (b), (c) or (g) (or (h) as it
relates to the foregoing) of Section 3.12, (iv) acquire or enter into any
Contract to acquire (by means of acquisition of capital stock, assets, merger,
other business combination or otherwise) any businesses or assets, if the
aggregate amount of consideration (whether comprised of cash, securities or
other property) paid or payable by Parent or its Subsidiaries in respect of any
and all such acquisitions would exceed, in the aggregate, $400 million (with any
Parent Common Stock issued or to be issued as consideration to be valued based
upon the closing price of Parent Common Stock on the date of this Agreement),
and (v) Parent shall promptly notify Company of (A) any written notice or other
communication in writing from any Person alleging that the Consent of such
Person is or may be required in connection with the Contemplated Transactions
and (B) any Proceeding commenced or, to the best of its Knowledge threatened
against, relating to or involving or otherwise affecting Parent that relates to
the Contemplated Transactions.
(b) During the Pre-Closing Period, Parent shall promptly notify Company
in writing of: (i) the discovery by Parent of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this Agreement
and that caused or constitutes a material inaccuracy or breach in any
representation or warranty made by Parent in this Agreement, (ii) any event,
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condition, fact or circumstance that occurs, arises or exists after the date of
this Agreement, and that causes or constitutes a material inaccuracy or breach
in any representation or warranty made by Parent in this Agreement if (A) such
representation or warranty had been made as of the time of the occurrence,
existence or discovery of such event, condition, fact or circumstance, or (B)
such event, condition, fact or circumstance had occurred, arisen or existed on
or prior to the date of this Agreement, (iii) any material breach of any
covenant or obligation of Parent, and (iv) any event, condition, fact or
circumstance that would make the timely satisfaction of any of the conditions
set forth in Articles 6, 7 and 8 impossible or unlikely or that has had or could
reasonably be expected to have a Parent Material Adverse Effect. Without
limiting the generality of the foregoing, Parent shall promptly advise Company
in writing of any Proceeding or material claim threatened, commenced or asserted
against or with respect to it. No notification given to Company pursuant to this
Section 4.4(b) shall limit or otherwise affect any of the representations,
warranties, covenants or obligations of Parent contained in this Agreement.
ARTICLE 5
ADDITIONAL COVENANTS OF THE PARTIES
5.1 REGISTRATION STATEMENT; PROXY STATEMENT
(a) As promptly as practicable after the date of this Agreement,
Company shall prepare and cause to be filed with the SEC the Proxy Statement and
Parent shall prepare and cause to be filed with the SEC the Form S-4
Registration Statement, in which the Proxy Statement will be included as a
prospectus, with respect to the issuance of Parent Common Stock in the Merger.
Each of Parent and Company shall furnish all information concerning it and the
holders of its capital stock as the other may reasonably request in connection
with the preparation of the Form S-4 Registration Statement and Proxy Statement.
Each of Parent and Company shall use its Reasonable Efforts to cause the Form
S-4 Registration Statement and the Proxy Statement to comply with the rules and
regulations promulgated by the SEC, to respond promptly to any comments of the
SEC or its staff and to have the Form S-4 Registration Statement declared
effective under the Securities Act as promptly as practicable after it is filed
with the SEC. Company will cause the Proxy Statement to be mailed to Company's
stockholders as promptly as practicable after the Form S-4 Registration
Statement is declared effective under the Securities Act. Each of Parent and
Company shall also promptly file, use its Reasonable Efforts to cause to become
effective as promptly as possible and, if required, mail to Company's
stockholders any amendment to the Form S-4 Registration Statement or Proxy
Statement that becomes necessary after the date the S-4 Registration Statement
is declared effective.
(b) If at any time prior to the Effective Time any event or
circumstance relating to Parent or its directors or officers is discovered by
Parent which is required to be set forth in an amendment or supplement to the
Form S-4 Registration Statement or Proxy Statement, Parent shall promptly inform
Company. All documents that Parent is responsible for filing with the SEC in
connection with the Contemplated Transactions will comply as to form and
substance in all material respects with the applicable requirements of the
Securities Act and the Exchange Act.
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(c) If at any time prior to the Effective Time any event or
circumstance relating to any of the Acquired Companies or their respective
directors or officers is discovered by Company which is required to be set forth
in an amendment or supplement to the Form S-4 Registration Statement or Proxy
Statement, Company shall promptly inform Parent. All documents that Company is
responsible for filing with the SEC in connection with the Contemplated
Transactions will comply as to form and substance in all material respects with
the applicable requirements of the Securities Act and the Exchange Act.
(d) Each of Parent and Company will advise the other, promptly after it
receives notice thereof, of the time when the Form S-4 Registration Statement
has become effective or any supplement or amendment thereto has been filed, the
issuance of any stop order, or any request by the SEC for amendment of the Proxy
Statement or Form S-4 Registration Statement or comments thereon or responses
thereto.
(e) Prior to the Effective Time, Parent shall use Reasonable Efforts to
obtain all regulatory approvals needed to ensure that the Parent Common Stock to
be issued in the Merger will be registered or qualified under the securities law
of every jurisdiction of the United States in which any registered holder of
Company Common Stock has an address of record on the record date for determining
the stockholders entitled to notice of and to vote at Company Stockholders'
Meeting (as defined in Section 5.2); provided, however, that Parent shall not be
required (i) to qualify to do business as a foreign corporation in any
jurisdiction in which it is not now qualified or (ii) to file a general consent
to service of process in any jurisdiction.
5.2 COMPANY STOCKHOLDERS' MEETING
(a) Company shall take all action necessary under all applicable Laws
to call, give notice of and hold a meeting of the holders of Company Common
Stock to vote on a proposal to adopt this Agreement ("Company Stockholders'
Meeting"). The Company Stockholders' Meeting shall be held (on a date selected
by Company in consultation with Parent) as promptly as practicable after the
Form S-4 Registration Statement is declared effective under the Securities Act.
Company shall ensure that all proxies solicited in connection with the Company
Stockholders' Meeting are solicited in compliance with all applicable Laws.
(b) Subject to Section 5.2(c): (i) the Proxy Statement shall include a
statement to the effect that the board of directors of Company recommends that
Company's stockholders vote to adopt this Agreement at the Company Stockholders'
Meeting (the recommendation of Company's board of directors that Company's
stockholders vote to adopt this Agreement being referred to as the "Company
Board Recommendation"), and (ii) except as permitted by Section 5.2(c), the
Company Board Recommendation shall not be withdrawn or modified in a manner
adverse to Parent, and no resolution by the board of directors of Company or any
committee thereof to withdraw or modify the Company Board Recommendation in a
manner adverse to Parent shall be adopted or proposed.
(c) Notwithstanding anything to the contrary contained in Section
5.2(b), at any time prior to the adoption of this Agreement by the Required
Company Stockholder Vote, the Company Board Recommendation may be withdrawn or
modified in a manner adverse to Parent if: (i) a proposal to acquire (by merger
or otherwise) all of the outstanding shares of Company Common Stock is made to
35
Company and is not withdrawn, (ii) Company provides Parent with at least three
business days prior notice of any meeting of Company's board of directors at
which such board of directors will consider and determine whether such offer is
a Superior Proposal, (iii) Company's board of directors determines in good faith
that such offer constitutes a Superior Proposal, (iv) Company's board of
directors determines in good faith, after having taken into account the advice
of Company's outside legal counsel, that, in light of such Superior Proposal,
the withdrawal or modification of the Company Board Recommendation is required
in order for Company's board of directors to comply with its fiduciary duties to
Company's stockholders under applicable Law, and (v) none of the Acquired
Companies nor any of their Representatives shall have violated in any material
respect any of the restrictions set forth in Section 4.3.
(d) Company's obligation to call, give notice of and hold the Company
Stockholders' Meeting in accordance with Section 5.2(a) shall not be limited or
otherwise affected by the commencement, disclosure, announcement or submission
of any Superior Proposal or other Acquisition Proposal, or by any withdrawal or
modification of the Company Board Recommendation.
5.3 CONSENTS; REGULATORY APPROVALS
(a) Subject to Section 5.3(c), each of Parent and Company shall use its
Reasonable Efforts to take, or cause to be taken, all actions necessary to
consummate the Merger and make effective the other Contemplated Transactions.
Without limiting the generality of the foregoing, but subject to Section 5.3(c),
Parent and Company shall (i) make all filings (if any) and give all notices (if
any) required to be made and given by such party in connection with the Merger
and the Contemplated Transactions and to submit promptly any additional
information requested in connection with such filings and notices, (ii) use its
Reasonable Efforts to obtain each Consent (if any) required to be obtained
(pursuant to any applicable Laws or Contract, or otherwise) by such party in
connection with any of the Contemplated Transactions and (iii) use its
Reasonable Efforts to lift any restraint, injunction or other legal bar to the
Merger. Company shall promptly deliver to Parent a copy of each such filing
made, each such notice given and each such Consent obtained by Company during
the Pre-Closing Period.
(b) Without limiting the generality of Section 5.3(a), each of Company
and Parent shall, promptly after the date of this Agreement, prepare and file
the notifications required under the HSR Act and any applicable Antitrust Laws
in connection with the Merger. Company and Parent shall respond as promptly as
practicable to any inquiries or requests received from any Governmental Body in
connection with antitrust or related matters and supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act and use its Reasonable Efforts to take or
cause to be taken, all other actions consistent with this Section 5.3(b)
reasonably necessary to cause the expiration or termination of the applicable
waiting periods under the HSR Act as soon as practicable. Each of Company and
Parent shall (i) give the other party prompt notice of the commencement or
threat of commencement of any Proceeding by or before any Governmental Body with
respect to the Merger or any of the Contemplated Transactions, (ii) keep the
other party informed as to the status of any such Proceeding or threat and (iii)
promptly inform the other party of any material communication concerning
Antitrust Laws to or from any Governmental Body regarding the Merger. Except as
may be prohibited by any Governmental Body or by any Law, Company and Parent
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will consult and cooperate with one another, and will consider in good faith the
views of one another, in connection with any analysis, appearance, presentation,
memorandum, brief, argument, opinion or proposal made or submitted in connection
with any Proceeding under or relating to the HSR Act or any other Antitrust Law.
(c) Notwithstanding anything to the contrary contained in this
Agreement, Parent shall not have any obligation under this Agreement to: (i)
dispose or transfer or cause any of the Acquired Companies to dispose of or
transfer any assets, or to commit to cause any of the Acquired Companies to
dispose of any assets, (ii) discontinue or cause any of Acquired Companies to
discontinue offering any product or service, or to commit to cause any of the
Acquired Companies to discontinue offering any product or service, (iii) hold
separate or cause any of the Acquired Companies to hold separate any assets or
operations (either before or after the Closing Date), or to commit to cause any
of the Acquired Companies to hold separate any assets or operations, (iv) make
or cause any of the Acquired Companies to make any commitment (to any
Governmental Body or otherwise) regarding its future operations or the future
operations of any of the Acquired Companies, or (v) contest any Proceeding
relating to the Merger if Parent determines in good faith that contesting such
Proceeding might not be advisable.
5.4 EMPLOYEE BENEFITS
(a) Parent agrees to provide to former employees of the Acquired
Companies under the plans continued or to be established by Parent continuation
group health coverage under Code Section 4980B of the Code and ERISA Section 601
et seq. ("COBRA Coverage") for any individuals receiving COBRA Coverage under
the Xxxxxx Offshore Health Care Benefits Plan (the "Medical Plan") as of the
Effective Time and for any employees of the Acquired Companies and their
dependents who become eligible for and elect COBRA Coverage as a result of the
Contemplated Transactions; provided, however, nothing contained herein shall
obligate Parent to extend COBRA Coverage beyond its normal expiration period. As
soon as practicable after the Effective Time, the Acquired Companies shall
transfer to Parent or, if directed by Parent, to the Surviving Corporation, any
assets, including any insurance policies, held by the Acquired Companies
supporting the payment of benefits under the Medical Plan, the Xxxxxx Offshore
Inc. group vision plan, the Xxxxxx Offshore Inc. group life insurance plan, the
Xxxxxx Offshore Inc. long-term disability plan and the Xxxxxx Offshore Inc.
cafeteria plan (collectively, the "Group Insurance Plans"). Parent and the
Acquired Companies agree that any Acquired Company shall take such action as
appropriate to merge or terminate as of any date determined by Parent on or
after the Effective Time the Xxxxxx Offshore Inc. 401(k) Retirement Savings Plan
(the "401(k) Plan") or any Group Insurance Plan, liquidate the assets of any
trust or funding arrangement for any such plan and settle all claims for
benefits under any such plan, in each case conditioned upon the occurrence of
the Merger.
(b) Parent and the Surviving Corporation shall cause all of their
respective employee benefit and compensation plans (including, without
limitation, pension, profit-sharing, retirement, savings, 401(k), vacation, paid
time-off, employee, and other employee financial, welfare or other benefit
plans) covering or otherwise benefiting any of the employees of Company who are
employed by the Surviving Corporation on or after the Effective Time (the
"Assumed Employees") to count any actual service performed for any Acquired
Company as recognized by any Acquired Company under the terms of the Company
37
Plans, without duplication of benefits, for purposes of eligibility to
participate, vesting and benefit accrual to the same extent such service was
recognized under the Company Plans. If Parent determines to terminate or merge
the 401(k) Plan or any Group Insurance Plan into its plans, the Assumed
Employees who are then employed by the Surviving Corporation shall be eligible
to participate immediately in the similar plans sponsored and maintained by
Parent for its employees and Parent and the Surviving Corporation shall also
cause all waiting periods under each such plan of Parent to be waived, to the
extent necessary, with respect to such Assumed Employees.
(c) Parent and the Surviving Corporation shall give Assumed Employees
credit, for purposes of Parent's and the Surviving Corporation's vacation and/or
other paid leave benefit programs, for such employees accrued and unpaid
vacation and/or paid leave balance as of the Effective Time.
(d) Parent agrees to the terms and conditions of the compensation
arrangements specified in Exhibit E.
(e) Nothing contained in this Agreement is intended to (i) confer upon
any Assumed Employee any right to continued employment after the Effective Time
or (ii) prevent Parent or the Surviving Corporation from reserving or exercising
the right to amend, modify, change or terminate or otherwise alter any of the
provisions of, or benefits provided under, any of the Company Plans, that are
assumed by Parent or the Surviving Corporation.
5.5 INDEMNIFICATION OF DIRECTORS AND OFFICERS
(a) All rights to indemnification existing in favor of those Persons
who are, or were, directors and officers of Company at or prior to the date of
this Agreement ("Indemnified Persons") shall survive the Merger and shall be
observed by the Surviving Corporation to the fullest extent permitted by
Delaware Law for a period of six years from the Effective Time, and Parent
hereby guarantees the performance of such obligations, it being understood that
any Person entitled to the benefits thereof may proceed directly against Parent
without first proceeding against the Surviving Corporation.
(b) From the Effective Time until September 18, 2006, the Surviving
Corporation shall maintain in effect, for the benefit of the Indemnified Persons
with respect to acts or omissions occurring prior to the Effective Time, the
existing policy of directors' and officers' liability insurance maintained by
Company as of the date of this Agreement in the form disclosed by Company to
Parent prior to the date of this Agreement ("Existing Policy"); provided,
however, that (i) the Surviving Corporation may substitute for the Existing
Policy a policy or policies of comparable coverage and (ii) the Surviving
Corporation shall not be required to pay annual premiums for the Existing Policy
(or for any substitute policies) in excess of $200,000 in the aggregate. In the
event any future annual premiums for the Existing Policy (or any substitute
policies) exceeds $200,000 in the aggregate, the Surviving Corporation shall be
entitled to reduce the amount of coverage of the Existing Policy (or any
substitute policies) to the amount of coverage that can be obtained for a
premium equal to $200,000.
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5.6 DISCLOSURE
Parent and Company shall consult with each other before issuing any
press release or otherwise making any public statement with respect to the
Merger or any of the other Contemplated Transactions. Without limiting the
generality of the foregoing, Company shall not, and shall not permit any of its
Representatives to, make any disclosure regarding the Merger or any of the other
Contemplated Transactions unless (a) Parent shall have approved such disclosure
or (b) Company shall have been advised by its outside legal counsel that such
disclosure is required by applicable Law or the rules and regulations of any
applicable securities exchanges.
5.7 AFFILIATES AND AFFILIATE AGREEMENTS
(a) Company shall use its Reasonable Efforts to cause each Person
identified in Section 5.7(a) of the Company Disclosure Schedule and each other
Person who is or becomes (or may be deemed to be) an "affiliate" (as that term
is used in Rule 145 under the Securities Act) of Company to execute and deliver
to Parent, prior to the date of the mailing of the Proxy Statement to Company's
stockholders, an Affiliate Agreement in the form of Exhibit D (each, an
"Affiliate Agreement").
(b) Company shall terminate the agreements identified in Section 5.7(b)
of the Company Disclosure Schedule, with termination to be effective as of the
Effective Time. Company shall not incur any Liability in connection with such
termination of such agreements and none of the Acquired Companies shall have any
Liability under such agreements from and after the Effective Time.
5.8 RESIGNATIONS
Company shall use its Reasonable Efforts to obtain and deliver to
Parent the resignation of each officer and director of each of the Acquired
Companies prior to Closing.
5.9 LISTING
Parent shall use Reasonable Efforts to cause the shares of Parent
Common Stock being issued in the Merger to be approved for listing at or prior
to the Closing Date (subject to notice of issuance) on the NYSE.
5.10 SECTION 16b-3
Parent, Merger Sub, and Company shall use its Reasonable Efforts as may
be required to cause the Contemplated Transactions and any other dispositions of
equity securities of Company (including derivative securities) or acquisitions
of equity securities of Parent by each individual who (a) is a director or
officer of Company, or (b) at the Effective Time will become a director or
officer of Parent, to be exempt under Rule 16b-3 promulgated under the Exchange
Act.
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5.11 TAXES
Company, Parent and Merger Sub shall execute and deliver to Weil,
Gotshal & Xxxxxx LLP, counsel to Company, and Xxxxx & XxXxxxxx, counsel to
Parent, certificates at such time or times as reasonably requested by such law
firms in connection with their respective deliveries of opinions to the effect
that the Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368 of the Code. Prior to the
Effective Time, none of Company, Parent or Merger Sub shall take or cause to be
taken any action which would cause to be untrue (or fail to take or cause not to
be taken any action which would cause to be untrue) any of the representations
in such previously-agreed certificates.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
The obligation of each party to effect the Merger and otherwise
consummate the Contemplated Transactions is subject to the satisfaction, at or
prior to Closing, of each of the following conditions:
6.1 EFFECTIVENESS OF FORM S-4 REGISTRATION STATEMENT
The Form S-4 Registration Statement shall have become effective in
accordance with the provisions of the Securities Act, and no stop order
suspending the effectiveness of the Form S-4 Registration Statement shall have
been issued by the SEC, and no Proceeding for that purpose shall have been
initiated by the SEC and all necessary approvals under state securities Laws or
the Securities Act or the Exchange Act relating to the issuance of the Parent
Common Stock shall have been received.
6.2 COMPANY STOCKHOLDER APPROVAL
This Agreement shall have been duly adopted by the Required Company
Stockholder Vote.
6.3 HSR ACT
The waiting period applicable to the consummation of the Merger under
the HSR Act shall have expired or been terminated and, on the Closing Date,
there shall not be in effect any voluntary agreement between Parent and the
Federal Trade Commission or the Department of Justice pursuant to which Parent
has agreed not consummate the Merger for a period of time (it being understood
that no such agreement will be entered into without Company's consent); any
similar waiting period under any applicable Antitrust Law shall have expired or
been terminated and any Consent required under any applicable Antitrust Law
shall have been obtained.
6.4 LISTING
The shares of Parent Common Stock to be issued in the Merger pursuant
to this Agreement shall have been approved for listing (subject to notice of
issuance) on the NYSE.
40
6.5 NO RESTRAINTS
No temporary restraining order, preliminary or permanent injunction or
other order preventing the consummation of the Merger shall have been issued by
any court of competent jurisdiction or any other Governmental Body and shall
remain in effect, and there shall not be any Law enacted, adopted or deemed
applicable to the Merger that makes consummation of the Merger illegal;
provided, however, that, prior to invoking this condition, each party agrees to
comply with Section 5.3, and with respect to other matters not covered by
Section 5.3, to use its Reasonable Efforts to have any such order or injunction
lifted or vacated.
ARTICLE 7
CONDITIONS PRECEDENT TO PARENT'S AND MERGER SUB'S OBLIGATION TO CLOSE
The obligations of Parent and Merger Sub to effect the Merger and to
take the other actions required to be taken by Parent and Merger Sub at the
Closing is subject to the satisfaction, on or before the Closing Date, of each
of the following conditions (any of which may be waived by Parent and Merger
Sub, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS
The representations and warranties of Company contained in this
Agreement shall be true and correct in all respects as of the Closing Date
(without taking into account any qualification as to materiality or Company
Material Adverse Effect), except to the extent such representations and
warranties expressly relate to an earlier date (in which case as of such earlier
date), and except for such breaches of representations and inaccuracies in
warranties that do not have, and are not reasonably likely to have, individually
or in the aggregate, a Company Material Adverse Effect.
7.2 COMPANY'S PERFORMANCE
Company shall have performed, in all material respects, its covenants
and agreements contained in this Agreement required to be performed on or prior
to the Closing Date.
7.3 CONSENTS
Each of the Governmental Authorizations and Consents identified in
Section 2.2(b) of the Company Disclosure Schedule must have been obtained and
must be in full force and effect, in each case, without limitation or condition
that has had or would reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect or a Parent Material Adverse
Effect.
7.4 NO MATERIAL ADVERSE CHANGE
At any time after the date of this Agreement, there shall not have been
any event or occurrence, or series of events or occurrences, that has had or is
41
reasonably likely to have, individually or in the aggregate with all other
events or occurrences since the date of this Agreement, a Company Material
Adverse Effect.
7.5 OFFICER'S CERTIFICATE
Company shall have delivered to Parent and Merger Sub a certificate,
executed on behalf of Company by an executive officer of Company, and dated as
of the Closing Date that the conditions set forth in Sections 7.1, 7.2, 7.3 and
7.4 have been duly satisfied.
7.6 AFFILIATE AGREEMENTS
Parent shall have received Affiliate Agreements from each Person
identified in Section 5.7(a) of the Company Disclosure Schedule.
7.7 DISSENTING SHARES
The number of Dissenting Shares (if any) with respect to which the
holders thereof shall have properly demanded appraisal in accordance with the
Delaware General Corporation Law before the taking of a vote on the Merger at
the Company Stockholders' Meeting or any adjournment thereof, the holders of
which shall not have withdrawn such demand as of the Closing Date, shall not
exceed ten percent (10%) of the issued and outstanding Company Common Stock
entitled to vote thereon.
7.8 TAX OPINION
Parent shall have received an opinion of Xxxxx & XxXxxxxx, in customary
form, dated the Effective Time, that the Merger constitutes a reorganization
within the meaning of Section 368 of the Code.
ARTICLE 8
CONDITIONS PRECEDENT TO COMPANY'S OBLIGATION TO CLOSE
Company's obligation to effect the Merger and to take the other actions
required to be taken by Company at the Closing is subject to the satisfaction,
on or before the Closing Date, of each of the following conditions (any of which
may be waived by Company, in whole or in part):
8.1 ACCURACY OF REPRESENTATIONS
The representations and warranties of Parent and Merger Sub contained
in this Agreement shall be true and correct in all respects as of the Closing
Date (without taking into account any qualifications to materiality or Parent
Material Adverse Effect), except to the extent such representations and
warranties expressly relate to an earlier date (in which case as of such earlier
date), and except for such breaches of representations and inaccuracies in
warranties that do not have, and are not reasonably likely to have, individually
or in the aggregate, a Parent Material Adverse Effect.
42
8.2 PARENT'S AND MERGER SUB'S PERFORMANCE
Parent and Merger Sub shall have performed, in all material respects,
their respective covenants and agreements contained in this Agreement required
to be performed on or prior to the Closing Date.
8.3 NO MATERIAL ADVERSE CHANGE
At any time after the date of this Agreement, there shall not have been
any event or occurrence, or series of events or occurrences, that has had or is
reasonably likely to have, individually or in the aggregate with all other
events or occurrences since the date of this Agreement, a Parent Material
Adverse Effect.
8.4 OFFICER'S CERTIFICATE
Parent shall have delivered to Company a certificate, executed on
behalf of Parent and Merger Sub by an executive officer of Parent, and dated as
of the Closing Date that the conditions set forth in Sections 8.1, 8.2 and 8.3
have been duly satisfied.
8.5 TAX OPINION.
Company shall have received an opinion of Weil, Gotshal & Xxxxxx LLP,
in customary form, dated the Effective Time, that the Merger constitutes a
reorganization within the meaning of Section 368 of the Code.
ARTICLE 9
TERMINATION
9.1 TERMINATION
This Agreement may be terminated prior to the Effective Time:
(a) by mutual written consent of Parent and Company;
(b) by either Parent or Company if the Merger shall not have been
consummated by December 15, 2002 (unless the failure to consummate the Merger is
attributable to a failure on the part of the party seeking to terminate this
Agreement to perform any material obligation required to be performed by such
party at or prior to the Effective Time);
(c) by either Parent or Company if a court of competent jurisdiction or
other Governmental Body shall have issued a final and non-appealable order,
decree or ruling, or shall have taken any other action, having the effect of
permanently restraining, enjoining or otherwise prohibiting the Merger;
(d) by either Parent or Company if (i) the Company Stockholders'
Meeting (including any adjournments and postponements thereof) shall have been
held and completed and Company's stockholders shall have voted on a proposal to
adopt this Agreement, and (ii) this Agreement shall not have been adopted at
43
such meeting (and shall not have been adopted at any adjournment or postponement
thereof) by the Required Company Stockholder Vote; provided, however, that
Company shall not be permitted to terminate this Agreement pursuant to this
Section 9.1(d) unless Company shall contemporaneously make the payment(s)
required to be made to Parent pursuant to Section 9.3(a);
(e) by Parent (at any time prior to the adoption of this Agreement by
the Required Company Stockholder Vote) if a Company Triggering Event shall have
occurred;
(f) by Company, if prior to the adoption of this Agreement by the
Required Company Stockholder Vote (i) the board of directors of Company has
received a Superior Proposal, (ii) in light of such Superior Proposal the board
of directors of Company shall have determined in good faith, after consultation
with its outside legal advisors, that termination is required in order for the
board of directors of the Company to comply with its fiduciary obligations to
Company's stockholders under applicable Law, (iii) Company has complied in all
material respects with Section 4.3, (iv) Company contemporaneously pays the fee
provided for under Section 9.3(b) and (v) the board of directors of Company
concurrently approves, and Company concurrently enters into, a binding
definitive written agreement providing for the implementation of such Superior
Proposal; provided that Company may not effect such termination pursuant to this
Section 9.1(f) unless and until (i) Parent receives at least three business
days' prior written notice from Company of its intention to effect such
termination pursuant to this Section 9.1(f); and (ii) during such three business
day period, Company shall, and shall cause its respective financial and legal
advisors to, consider any adjustment in the terms and conditions of this
Agreement that Parent may propose;
(g) by Parent (i) if any of Company's representations and warranties
shall have been inaccurate as of the date of this Agreement, such that the
condition set forth in Section 7.1 would not be satisfied, or (ii) if (A) any of
Company's representations and warranties become inaccurate as of a date
subsequent to the date of this Agreement (as if made on such subsequent date),
such that the condition set forth in Section 7.1 would not be satisfied and (B)
such inaccuracy has not been cured by Company within 10 business days after its
receipt of written notice thereof and remains uncured at the time notice of
termination is given, or (iii) any of Company's covenants contained in this
Agreement shall have been breached, such that the condition set forth in Section
7.2 would not be satisfied;
(h) by Company (i) if any of Parent's representations and warranties
shall have been inaccurate as of the date of this Agreement, such that the
condition set forth in Section 8.1 would not be satisfied, or (ii) if (A) any of
Parent's representations and warranties shall have become inaccurate as of a
date subsequent to the date of this Agreement (as if made on such subsequent
date), such that the condition set forth in Section 8.1 would not be satisfied
and (B) such inaccuracy has not been cured by Parent within 10 business days
after its receipt of written notice thereof and remains uncured at the time
notice of termination is given, or (iii) if any of Parent's covenants contained
in this Agreement shall have been breached such that the condition set forth in
Section 8.2 would not be satisfied;
(i) by Parent if, since the date of this Agreement, there shall have
occurred any event or occurrence such that the condition set forth in Section
7.4 would not be satisfied; or
44
(j) by Company if, since the date of this Agreement, (i) there shall
have occurred any event or occurrence such that the condition set forth in
Section 8.3 would not be satisfied or (ii) a Company Material Adverse Effect
within the meaning of the last sentence of such definition shall have occurred.
9.2 EFFECT OF TERMINATION
If this Agreement is terminated as provided in Section 9.1, this
Agreement shall be of no further force or effect; provided, however, that (a)
this Section 9.2, Section 9.3 and Article 10 shall survive the termination of
this Agreement and shall remain in full force and effect, and (b) the
termination of this Agreement shall not relieve any party from any Liability for
any material inaccuracy in or breach of any representation or any material
breach of any warranty, covenant or other provision contained in this Agreement.
9.3 EXPENSES; TERMINATION FEES
(a) Except as set forth in this Section 9.3, all fees and expenses
incurred in connection with this Agreement and the Contemplated Transactions
shall be paid by the party incurring such expenses (including, for the avoidance
of doubt payment by Parent of any fees payable pursuant to the HSR Act), whether
or not the Merger is consummated; provided, however, that:
(i) Parent and Company shall share equally all fees and
expenses, other than attorneys' fees, incurred in connection with the filing,
printing and mailing of the Form S-4 Registration Statement and the Proxy
Statement and any amendments or supplements thereto; and
(ii) If this Agreement is terminated by Parent or Company
pursuant to Section 9.1(d), then (without limiting any obligation of Company to
pay any fee payable pursuant to Section 9.3(b)) Company shall make a
nonrefundable cash payment to Parent, at the time specified below, in an amount
equal to the aggregate amount of all fees and expenses (including all attorneys'
fees, accountants' fees and filing fees) that have been paid or that may become
payable by or on behalf of Parent in connection with the preparation and
negotiation of this Agreement and otherwise in connection with the Merger or any
other Contemplated Transaction; provided, in no event shall the amount of such
fees and expenses exceed $1,000,000. In the case of termination of this
Agreement by Company pursuant to Section 9.1(d) any nonrefundable payment
required to be made pursuant to this clause (ii) shall be paid by Company
contemporaneously with such termination; and in the case of termination of this
Agreement by Parent pursuant to Section 9.1(d), any nonrefundable payment
required to be made pursuant this clause (ii) shall be paid by Company within
two business days after such termination.
(b) If this Agreement is terminated by (i) Parent or Company pursuant
to Section 9.1(d) and at the time of the Company Stockholders' Meeting an
Acquisition Proposal shall have been disclosed, announced, commenced, submitted
or made and such Acquisition Proposal is consummated within 12 months of such
termination, (ii) Parent pursuant to Section 9.1(e) or (iii) Company pursuant to
Section 9.1(f), then Company shall pay to Parent, in cash at the time specified
45
in the next sentence (and less the amounts paid, if any pursuant to Section
9.3(a)(ii)), a nonrefundable fee in the amount equal to $22,500,000. In the case
of termination of this Agreement by Company pursuant to Section 9.1(d), the fee
referred to in the preceding sentence shall be paid by Company on the date of
consummation of the Acquisition Transaction provided such consummation occurs
within 12 months from the date of termination. In the case of termination of
this Agreement by Parent pursuant to Section 9.1(e), the fee referred to in the
preceding sentence shall be paid by Company within two business days after such
termination. In the case of termination of this Agreement by Company pursuant to
Section 9.1(f), the fee referred to in the preceding sentence shall be paid by
Company contemporaneously with such termination.
(c) If Company fails to pay when due any amount payable under this
Section 9.3, then Company shall reimburse Parent for all costs and expenses
(including attorney's fees) incurred in connection with the collection of such
overdue amount and the enforcement by Parent of its rights under this Section
9.3.
ARTICLE 10
GENERAL PROVISIONS
10.1 CONFIDENTIALITY
This Agreement is not intended to supersede or replace the
Confidentiality Agreement dated as of May 6, 2002 between Company and Parent
(the "Confidentiality Agreement"). The Confidentiality Agreement will remain in
full force and effect in accordance with its terms and Parent will continue to
be obligated to perform and comply with its obligations under the
Confidentiality Agreement until the Closing, after which the Confidentiality
Agreement will terminate in full at the Effective Time and Parent will have no
further obligations thereunder.
10.2 NOTICES
All notices, consents, waivers and other communications under this
Agreement must be in writing and will be deemed given to a party when (a)
delivered to the appropriate address by hand or by nationally recognized
overnight courier service (costs prepaid), (b) sent by facsimile or e-mail with
confirmation of transmission by the transmitting equipment, or (c) received or
rejected by the addressee, if sent by certified mail, return receipt requested;
in each case to the following addresses, facsimile numbers or e-mail addresses
and marked to the attention of the individual (by name or title) designated
below (or to such other address, facsimile number, e-mail address or individual
as a party may designate by notice to the other parties):
If to Company:
Xxxxxx Offshore Inc.
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxx Xxxxxxxxx
Facsimile: 000-000-0000
E-mail Address: xxxxxxxxxx@xxxxxxxxxxxxxx.xxx
46
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
E-mail Address: xxxxx.xxxxxxx@xxxx.xxx
If to Parent or Merger Sub:
ENSCO International Incorporated
Attention: C. Xxxxxxxxxxx Xxxx
Address: 0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile No.: 000-000-0000
E-mail Address: xxxxx@xxxxxxx.xxx
with a copy (which will not constitute notice) to:
Xxxxx & XxXxxxxx
Attention: Xxxxxx X. Xxxxx
Address: 0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile No.: 000-000-0000
E-mail Address: xxxxxx.x.xxxxx@xxxxxxxx.xxx
10.3 FURTHER ACTIONS
Upon the request of any party to this Agreement, the other parties will
(a) furnish to the requesting party any additional information, (b) execute and
deliver, at their own expense, any other documents and (c) take any other
actions as the requesting party may reasonably require to more effectively carry
out the intent of this Agreement and the Contemplated Transactions.
10.4 INCORPORATION OF SCHEDULES AND EXHIBITS
The Schedules and Exhibits identified in this Agreement, including the
Company Disclosure Schedule and the Parent Disclosure Schedule and any
supplements thereto, are incorporated herein by reference and made a part of
this Agreement.
10.5 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements among the parties with
respect to its subject matter and constitutes (along with the documents
delivered pursuant to this Agreement) a complete and exclusive statement of the
47
terms of the agreement between the parties with respect to its subject matter.
Without limiting the foregoing, no party makes any representation, warranty or
covenant not expressly set forth in this Agreement. This Agreement may be
amended with the approval of the respective boards of directors of Company,
Parent and Merger Sub at any time (whether before or after adoption of this
Agreement by the stockholders of Company); provided, however, that after any
such adoption of this Agreement by Company's stockholders, no amendment shall be
made which by Law requires further approval of the stockholders of Company
without the further approval of the stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties.
10.6 DRAFTING AND REPRESENTATION
The parties have participated jointly in the negotiation and drafting
of this Agreement. No provision of this Agreement will be interpreted for or
against any party because that party or its legal representative drafted the
provision.
10.7 SEVERABILITY
If a court of competent jurisdiction holds any provision of this
Agreement invalid or unenforceable, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
10.8 ASSIGNMENT; SUCCESSORS; NO THIRD-PARTY RIGHTS
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 (including, but not limited to, by merger or consolidation) or otherwise,
without the prior written consent of the other parties. Any assignment in
violation of the preceding sentence shall be void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns. Nothing
expressed or referred to in this Agreement will be construed to give any Person,
other than the parties to this Agreement, any legal or equitable right, remedy
or claim under or with respect to this Agreement or any provision of this
Agreement except such rights as may inure to a successor or permitted assignee
under this Section and for the provisions of Article 1, Section 5.4 and Section
5.5 (collectively, the "Third-Party Provisions"). The Third-Party Provisions may
be enforced by the beneficiaries thereof.
10.9 ENFORCEMENT OF AGREEMENT
The parties agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement, in addition to any other remedy to which they are entitled at
Law or in equity.
48
10.10 WAIVER
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither any failure nor any delay by any party in
exercising any right, power or privilege under this Agreement or any of the
documents referred to in this Agreement will operate as a waiver of such right,
power or privilege, and no single or partial exercise of any such right, power
or privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege. To the maximum
extent permitted by applicable Law, (a) no claim or right arising out of this
Agreement or any of the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in a written document signed by the other party, (b) no
waiver that may be given by a party will be applicable except in the specific
instance for which it is given and (c) no notice to or demand on one party will
be deemed to be a waiver of any obligation of that party or of the right of the
party giving such notice or demand to take further action without notice or
demand as provided in this Agreement or the documents referred to in this
Agreement.
10.11 GOVERNING LAW
This Agreement will be governed by and construed under the Laws of the
State of Delaware without regard to conflicts of Laws principles that would
require the application of any other Law.
10.12 JURISDICTION; SERVICE OF PROCESS
Any action, hearing, suit or proceeding arising out of or relating to
this Agreement or any Contemplated Transaction must be brought in the courts of
the State of Delaware, County of New Castle, or, if it has or can acquire
jurisdiction, in the United States District Court for the District of Delaware.
Each of the parties irrevocably submits to the exclusive jurisdiction of each
such court in any such Proceeding and waives any objection it may now or
hereafter have to venue or to convenience of forum. The parties agree that any
or all of them may file a copy of this Section with any court as written
evidence of the knowing, voluntary and bargained agreement between the parties
irrevocably to waive any objections to venue or to convenience of forum. Process
in any Proceeding referred to in this Section may be served on any party
anywhere in the world.
10.13 COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same Agreement and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other parties.
49
The parties have executed and delivered this Agreement as of the date
indicated in the first sentence of this Agreement.
ENSCO INTERNATIONAL INCORPORATED
By: /s/ Xxxx X. Xxxxxx
------------------------------------------------
Xxxx X. Xxxxxx
Chairman of the Board and Chief Executive Officer
CHORE ACQUISITION, INC.
By: /s/ C. Xxxxxxxxxxx Xxxx
------------------------------------------------
C. Xxxxxxxxxxx Xxxx
President
XXXXXX OFFSHORE INC.
By: /s/ Xxxx Xxxxxxxxx
------------------------------------------------
Xxxx Xxxxxxxxx
Senior Vice President and Chief Financial Officer
50
EXHIBIT A
---------
CONSTRUCTION AND DEFINITIONS
----------------------------
1. CONSTRUCTION
Any reference in the Agreement (as defined below) to an "Article,"
"Section" or "Schedule" refers to the corresponding Article, Section or Schedule
of or to the Agreement, unless the context indicates otherwise. The headings of
Articles and Sections are provided for convenience only and should not affect
the construction or interpretation of the Agreement. All words used in the
Agreement should be construed to be of such gender or number as the
circumstances require. The terms "include" and "including" indicate examples of
a foregoing general statement and not a limitation on that general statement.
Any reference to a statute refers to the statute, any amendments or successor
legislation, and all regulations promulgated under or implementing the statute,
as in effect at the relevant time. Any reference to a Contract or other document
as of a given date means the Contract or other document as amended, supplemented
and modified from time to time through such date.
2. DEFINITIONS
For the purposes of the Agreement, the following terms and variations
on them have the meanings specified in this Section:
"401(k) Plan" is defined in Section 5.4.
"Accounts Receivable" means (a) all trade accounts receivable and other
rights to payment from customers of the Acquired Companies and the full benefit
of all security for such accounts or rights to payment, including all trade
accounts receivable representing amounts receivable in respect of goods shipped,
products sold or services rendered to customers of the Acquired Companies, (b)
all other accounts or notes receivable of the Acquired Companies and the full
benefit of all security for such accounts or notes and (c) any claim, remedy or
other right related to any of the foregoing.
"Acquired Companies" is defined in Section 2.1(a).
"Acquisition Proposal" means any offer, proposal, inquiry or indication
of interest (other than an offer, proposal, inquiry or indication of interest by
Parent) contemplating or otherwise relating to any Acquisition Transaction.
"Acquisition Transaction" means any transaction or series of
transactions involving:
(a) any merger, consolidation, share exchange, business combination,
issuance of securities, acquisition of securities, tender offer, exchange offer
or other similar transaction (i) in which any of the Acquired Companies is a
constituent corporation, (ii) in which a Person or "group" (as defined in the
Exchange Act) of Persons directly or indirectly acquires beneficial or record
ownership of securities representing more than 15% of the outstanding securities
of any class of voting securities of any of the Acquired Companies, or (iii) in
which any of the Acquired Companies issues or sells securities representing more
A-1
than 20% of the outstanding securities of any class of voting securities of any
of the Acquired Companies; or
(b) any sale (other than sales of inventory in the Ordinary Course of
Business), lease (other than in the Ordinary Course of Business), exchange,
transfer (other than sales of inventory in the Ordinary Course of Business),
license (other than nonexclusive licenses in the Ordinary Course of Business),
acquisition or disposition of any business or businesses or assets that
constitute or account for 20% or more of the consolidated net revenues, net
income or assets of the Acquired Companies.
"Adverse Consequence" means any Liability, loss, damage (including
incidental and consequential damages), claim, cost, deficiency, diminution of
value or expense (including costs of investigation and defense, penalties and
reasonable attorney's fees and costs), whether or not involving a third-party
claim.
"Affiliate Agreement" is defined in Section 5.7.
"Agreement" is defined in the first paragraph of the Agreement.
"Antitrust Laws" means United States federal and state statutes and
foreign statutes, and the rules and regulations promulgated thereunder, to
protect trade and commerce from unlawful restraints, price discriminations,
price fixing and monopolies.
"ASE" means the American Stock Exchange.
"Assumed Employees" is defined in Section 5.4(b).
"Assumed Stock Option" is defined in Section 1.8(a).
"Cash Consideration" is defined in Section 1.5(a).
"Certificate of Merger" is defined in Section 1.3.
"Cleanup" means any investigative, monitoring, cleanup, removal,
containment or other remedial or response action required by any Environmental
Law or Occupational Safety and Health Law. The terms "removal," "remedial" and
"response action" include the types of activities covered by the Comprehensive
Environmental Response, Compensation, and Liability Act.
"Closing" is defined in Section 1.3.
"Closing Date" is defined in Section 1.3.
"COBRA Coverage" is defined in Section 5.4(a).
"Code" is defined in the Preliminary Statements.
"Common Stock Consideration" is defined in Section 1.5(a).
A-2
"Company" is defined in the first paragraph of the Agreement.
"Company Board Recommendation" is defined in Section 5.2(b).
"Company Common Stock" means the common stock, par value $0.01 per
share, of Company.
"Company Contract" means any Contract (a) under which any Acquired
Company has or may acquire rights, (b) under which any Acquired Company is or
may become subject to Liability or (c) by which any Acquired Company or any of
its assets is or may become bound.
"Company Disclosure Schedule" means the Disclosure Schedule delivered
pursuant to Article 2 by Company to Parent concurrently with the execution and
delivery of the Agreement, together with any updates to it permitted by the
Agreement.
"Company Drilling Rigs" means the drilling rigs owned by Company
described in Company SEC Documents.
"Company Material Adverse Effect" means an event, violation,
inaccuracy, circumstance or other matter (considered together with all other
matters that would constitute exceptions to the representations and warranties
set forth in the Agreement but for the presence of "Material Adverse Effect" or
other materiality qualifications, or any similar qualifications, in such
representations and warranties) that has had or would reasonably be expected to
have a material adverse effect on (a) the business, condition, capitalization,
assets, Liabilities, operations or financial performance of the Acquired
Companies taken as a whole, (b) the ability of Company to consummate any of the
Contemplated Transactions or to perform any of its obligations under the
Agreement, or (c) Parent's ability to vote, receive dividends with respect to or
otherwise exercise ownership rights with respect to the stock of the Surviving
Corporation; provided, however, that the following shall not be deemed to
constitute, create or cause a Material Adverse Effect: any changes,
circumstances or effects that (i) affect generally the drilling services
industry, and do not disproportionately affect such Persons, and that result
from national, regional, state or local economic conditions, from general
developments or conditions in the industry in which the Company conducts
business, from acts of war or terrorism, from changes in laws, rules or
regulations applicable to such party or its subsidiaries or from other general
economic conditions, facts or circumstances that are not subject to the control
or such party, or (ii) that result from the Contemplated Transactions and public
announcement thereof. A Company Material Adverse Effect shall also be deemed to
have occurred in the event that prior to the Effective Time any of the Company
Drilling Rigs is lost (including, without limitation, as a result of any
condemnation, confiscation, requisition or other taking of title, seizure or
forfeiture), totally destroyed or damaged to such an extent that the cost of
repairs and/or reconstruction constitutes a constructive, arranged or total loss
regardless of the amount of any insurance coverage.
"Company Option" is defined in Section 2.3(b).
"Company Plan" means any Plan as to which any Acquired Company has
Liability (contingent or otherwise).
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"Company Preferred Stock" means the preferred stock, par value $0.01
per share, of Company.
"Company SEC Documents" is defined in Section 2.4(a).
"Company Stock Certificate" is defined in Section 1.6(a).
"Company Stockholders' Meeting" is defined in Section 5.2(a).
"Company Stock Option Plan" means the Xxxxxx 2000 Stock Option Plan, as
amended.
"Company Triggering Event" means (a) the failure of the board of
directors of Company to make the Company Board Recommendation, or the withdrawal
or modification of the board of directors' approval of the Contemplated
Transactions or the Company Board Recommendation in a manner adverse to the
Parent, (b) the failure of Company to include in the Proxy Statement the Company
Board Recommendation or a statement to the effect that the board of directors of
Company has determined and believes that the Merger is advisable and in the best
interests of Company's stockholders; (c) approval, endorsement or recommendation
by the board of directors of Company of any Acquisition Proposal; or (d)
commencement of a tender or exchange offer relating to securities of Company and
the failure of Company to send to its stockholders, within ten business days
after the commencement of such tender or exchange offer, a statement disclosing
that the board of directors of Company recommends rejection of such tender or
exchange offer.
"Confidentiality Agreement" is defined in Section 10.1.
"Consent" means any approval, consent, ratification, waiver or other
authorization.
"Contemplated Transactions" means all of the transactions to be carried
out pursuant to the Agreement, including the Merger, the performance by the
parties of their other obligations under the Agreement and the execution,
delivery and performance of any ancillary agreements.
"Contract" means any (i) contract, agreement, commitment,
understanding, lease, license, franchise, warranty, guaranty, mortgage, note,
bond or other instrument or consensual obligation (whether written or oral and
whether express or implied) that is legally binding, or (ii) any letter of
intent or expression of interest that evidences an intent or desire to enter
into an arrangement described in clause (i).
"Contravene" or "Contravention" -- an act or omission would
"Contravene" something if, as the context requires:
(a) the act or omission would conflict with it, violate it, result in a
breach or violation of or failure to comply with it, or constitute a default
under it;
(b) the act or omission would give any Governmental Body or other
Person the right to challenge, revoke, withdraw, suspend, cancel, terminate or
modify it, to exercise any remedy or obtain any relief under it, or to declare a
default or accelerate the maturity of any obligation under it; or
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(c) the act or omission would result in the creation of an Encumbrance
on the stock or any of the assets of any of the Acquired Companies.
"Dissenting Shares" is defined in Section 1.11.
"Drilling Contract" is defined in Section 2.9(i).
"Effective Time" is defined in Section 1.3.
"Encumbrance" means any charge, claim, mortgage, servitude, easement,
right of way, community or other marital property interest, covenant, equitable
interest, license, lease or other possessory interest, lien, option, pledge,
security interest, preference, priority, right of first refusal or similar
restriction; provided, however, that the term "Encumbrance" does not include (a)
mechanic's, materialman's or similar liens with respect to amounts arising or
incurred in the ordinary course of business, (b) statutory liens for current
Taxes, not yet delinquent or the amount or validity of which is being contested
in good faith by appropriate Proceedings, (c) liens securing rental payments
under capital lease arrangements, (d) defects, exceptions, restrictions,
easements, rights of way and encumbrances disclosed in policies of title
insurance or zoning, entitlement and other land use and environmental
regulations by any Governmental Body, and (e) such other imperfections in title,
charges, easements, restrictions and encumbrances which do not materially
detract from the value of or materially interfere with the present use of any
property subject thereto or affected thereby.
"Entity" means any corporation, general partnership, limited liability
company, limited partnership, limited liability partnership, joint venture,
estate, trust, company, firm, society or other enterprise, association or
organization.
"Environment" means soil, land surface or subsurface strata, surface
waters (including navigable water and ocean waters), groundwaters, drinking
water supply, stream sediments, ambient air (including indoor air), plant life,
animal life and any other similar medium or natural resource.
"Environmental, Health and Safety Liabilities" means any Adverse
Consequence or other responsibility arising from or under an Environmental Law
or Occupational Safety and Health Law, including those consisting of or relating
to (a) any environmental, health or safety matter or condition (including
on-site or off-site contamination, occupational safety and health, and
regulation of any chemical substance or product), (b) any fine, penalty,
judgment, award, settlement, Proceeding, damages, loss, claim, demand and
response, investigative, monitoring, remedial or inspection cost or expense
arising under Environmental Law or Occupational Safety and Health Law, (c)
financial responsibility under any Environmental Law or Occupational Safety and
Health Law for Cleanup costs or corrective action, (whether or not such Cleanup
has been required or requested by any Governmental Body or other Person) and for
any natural resource damage, or (d) any other compliance, corrective or remedial
measures required under any Environmental Law or Occupational Safety and Health
Law.
"Environmental Law" means any Law that requires or relates to (a)
advising appropriate Governmental Bodies, employees or the public of intended or
actual Releases of pollutants or hazardous substances or materials, violations
of discharge limits or other prohibitions and the commencement of activities,
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such as resource extraction or construction, that could have significant impact
on the Environment, (b) preventing or reducing to acceptable levels the Release
of pollutants or hazardous substances or materials into the Environment, (c)
reducing the quantities, preventing the Release or minimizing the hazardous
characteristics of wastes that are generated, (d) assuring that products are
designed, formulated, packaged and used so that they do not present unreasonable
risks to human health or the Environment when used or disposed of, (e)
protecting resources, species or ecological amenities, (f) reducing to
acceptable levels the risks inherent in the transportation of hazardous
substances, pollutants, oil or other potentially harmful substances, (g) Cleanup
of pollutants that have been Released, preventing the threat of Release, or
paying the costs of such Cleanup or prevention, or (h) making responsible
parties pay private parties, or groups of them, for damages done to their health
or the Environment, or permitting self-appointed representatives of the public
interest to recover for injuries done to public assets.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any other Person that, together with any
Acquired Company, is or would have been at any date of determination occurring
within the preceding six years treated as a single employer under Code Section
414 or ERISA Section 4001(b)(1).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agent" is defined in Section 1.7(a).
"Exchange Fund" is defined in Section 1.7(a).
"Exchange Ratio" is defined in Section 1.5(a).
"Existing Policy" is defined in Section 5.5(b).
"Facility" means any Real Property or any equipment (including motor
vehicles, tank cars and rolling stock) owned or operated by any of the Acquired
Companies, including the Real Property and equipment used or operated by the
Acquired Companies at the respective locations of the Real Property listed in
Section 2.10 of Company Disclosure Schedule. For purposes of Section 2.17 and
the definition of "Hazardous Activity," the term also includes any Real Property
or equipment formerly owned or operated by any of the Acquired Companies or any
predecessor Person.
"Form S-4 Registration Statement" means the registration statement on
Form S-4 to be filed with the SEC by Parent in connection with issuance of
Parent Common Stock in the Merger, as said registration statement may be amended
prior to the time it is declared effective by the SEC.
"GAAP" means generally accepted accounting principles for financial
reporting in the United States.
"Governing Document" means any charter, articles, bylaws, certificate,
statement, statutes or similar document adopted, filed or registered in
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connection with the creation, formation or organization of an entity, and any
Contract among all equityholders, partners or members of an entity.
"Governmental Authorization" means any Consent, license, permit or
registration issued, granted, given or otherwise made available by or under the
authority of any Governmental Body or pursuant to any Law.
"Governmental Body" means any (a) nation, region, state, county, city,
town, village, district or other jurisdiction, (b) federal, state, local,
municipal, foreign or other government, (c) governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department
or other entity and any court or other tribunal), (d) multinational
organization, (e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, policy, regulatory or taxing authority or
power of any nature, or (f) official of any of the foregoing.
"Group Insurance Plan" is defined in Section 5.4.
"Hazardous Activity" means the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about or from any of the Facilities or any part thereof into the Environment,
and any other act, business, operation or thing that increases the danger, or
risk of danger, or poses an unreasonable risk of harm to individuals or property
on or off the Facilities, or that may affect the value of any of the Facilities
or the Acquired Companies.
"Hazardous Material" means any waste or other substance that is listed,
defined, designated or classified as, or otherwise determined to be, hazardous,
radioactive or toxic or a pollutant or a contaminant under any Environmental
Law, including any admixture or solution thereof, and specifically including
petroleum and all derivatives thereof or synthetic substitutes therefor and
asbestos or asbestos-containing materials.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Improvements" means all buildings, structures, fixtures and other
improvements located on the Real Property.
"Indemnified Persons" is defined in Section 5.5(a).
"Intellectual Property" means any intellectual property owned, used or
licensed (as licensor or licensee) by the Acquired Companies, including (a)
Company's name, assumed business names and corporate names, (b) patents, patent
disclosures, trademarks, service marks, trade dress, trade names, logos,
copyrights and mask works, and all registrations, applications and goodwill
associated with the foregoing, (c) all computer software (including source and
object codes), databases, data models or structures, algorithms, system
architectures and related documentation, data and manuals, (d) trade secrets,
know-how and confidential business information (including information concerning
products, product specifications, data, formulae, compositions, designs,
sketches, photographs, graphs, drawings, samples, inventions, discoveries,
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ideas, past, current, and planned research and development, current and planned
methods and processes, client and customer lists and files, current and
anticipated client and customer requirements, vendor and supplier lists and
files, price lists, market studies, business plans, business opportunities and
financial data), (e) rights in Internet web sites and domain names used by the
Acquired Companies and (f) rights in electronic mail addresses and in telephone,
facsimile, cable or similar numbers used by the Acquired Companies.
"IRS" means the Internal Revenue Service or any successor agency and,
to the extent relevant, the Department of Treasury.
"Knowledge" means, with respect to a Person, the actual knowledge after
reasonable investigation of any of such Person's directors, officers and senior
managerial employees.
"Law" means any constitution, law, statute, treaty, rule, regulation,
ordinance, code, binding case law, principle of common law or notice of any
Governmental Body.
"Liabilities" includes liabilities or obligations of any nature,
whether known or unknown, whether absolute, accrued, contingent, xxxxxx,
inchoate or otherwise, whether due or to become due, and whether or not required
to be reflected on a balance sheet prepared in accordance with GAAP.
"MARAD" means the United States Maritime Administration.
"Medical Plan" is defined in Section 5.4.
"Merger" is defined in the Preliminary Statements.
"Merger Consideration" is defined in Section 1.5(a).
"Merger Sub" is defined in the first paragraph of the Agreement.
"Merger Sub Common Stock" means the common stock, par value $0.001 per
share, of Merger Sub.
"Multiemployer Plan" has the meaning specified in ERISA Section
3(37)(A).
"NYSE" means the New York Stock Exchange.
"Occupational Safety and Health Law" means any Law designed to provide
safe and healthful working conditions and to reduce occupational safety and
health hazards, and any program, whether governmental or private (such as those
promulgated or sponsored by industry associations and insurance companies),
designed to provide safe and healthful working conditions.
"Order" means any order, injunction, judgment, decree, ruling,
assessment or arbitration award of any Governmental Body or arbitrator, and any
Contract with any Governmental Body pertaining to compliance with Law.
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"Ordinary Course of Business" refers to actions taken in Company's
normal operation, consistent with its past practice and having no Company
Material Adverse Effect.
"Other Benefit Obligation" means any obligation, arrangement or
customary practice owed, adopted or followed by any of the Acquired Companies or
any ERISA Affiliate, whether or not legally enforceable, to provide benefits,
other than salary, as compensation for services rendered, to present or former
directors, officers, employees or agents, other than obligations, arrangements
and practices that are Plans. Other Benefit Obligations include consulting
agreements under which the compensation paid does not depend upon the amount of
service rendered, sabbatical policies, severance payment policies and fringe
benefits within the meaning of Code Section 132.
"Parent" is defined in the first paragraph of the Agreement.
"Parent Common Stock" means the common stock, par value $0.10 per
share, of Parent (including associated preferred stock purchase rights).
"Parent Directors Plan" means the ENSCO 1996 Non-Employee Directors
Stock Option Plan.
"Parent Disclosure Schedule" means the Disclosure Schedule delivered
pursuant to Article 3 by Parent to Company concurrently with the execution and
delivery of the Agreement, together with any updates to it permitted by the
Agreement.
"Parent First Preferred Stock" means the first preferred stock, par
value $1.00 per share, of Parent.
"Parent Incentive Plans" means the ENSCO Incentive Plan, as amended,
the ENSCO International Incorporated 1998 Incentive Plan, and the ENSCO
International Incorporated Key Employees' Incentive Compensation Plan, as
revised and restated.
"Parent Material Adverse Effect" means an event, violation, inaccuracy,
circumstance or other matter (considered together with all other matters that
would constitute exceptions to the representations and warranties set forth in
the Agreement but for the presence of "Material Adverse Effect" or other
materiality qualifications, or any similar qualifications, in such
representations and warranties) that has had or would reasonably be expected to
have a material adverse effect on (a) the business, condition, capitalization,
assets, Liabilities, operations or financial performance of Parent and its
Subsidiaries taken as a whole; provided, however, that a decline in Parent's
stock price shall not, in and of itself, be deemed to constitute a Parent
Material Adverse Effect, or (b) the ability of Parent to consummate the
Contemplated Transactions or to perform any of its obligations under the
Agreement.
"Parent Preferred Stock" means the preferred stock, par value $1.00 per
share, of Parent.
"Parent Savings Plan" means the ENSCO Savings Plan.
"Parent SEC Documents" is defined in Section 3.4(a).
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"Parent SERP" means the ENSCO Supplemental Executive Retirement Plan.
"Person" refers to an individual or an Entity.
"Plan" means all "employee benefit plans" as defined in ERISA Section
3(3)., whether or not subject to ERISA, and any other employee profit-sharing,
bonus, incentive or deferred compensation, welfare, pension, retirement,
termination, retention, change in control, stock option, stock appreciation,
stock purchase, phantom stock or other equity-based, performance, group
insurance or other employee benefit plan, retiree benefit plan, program,
arrangement, agreement, policy, practice or understanding, whether written or
unwritten, that provides or may provide benefits or compensation with respect to
any employee or former employee employed or formerly employed by any Acquired
Company, or the beneficiaries or dependents of any such employee or former
employee, or to any director, officer, stockholder or consultant of any Acquired
Company, or under which any such individual is or may become eligible to
participate or derive a benefit (excluding social security, Medicare, Medicaid,
national health care or any similar or analogous program or plan sponsored by a
Governmental Body).
"Plan Sponsor" has the meaning specified in ERISA Section 3(16)(B).
"Pre-Closing Period" is defined in Section 4.1.
"Proceeding" means any action, arbitration, audit, examination,
investigation, hearing, litigation or suit (whether civil, criminal,
administrative, judicial or investigative, whether formal or informal, and
whether public or private) commenced, brought, conducted or heard by or before,
or otherwise involving, any Governmental Body or arbitrator.
"Proxy Statement" means the proxy statement/prospectus to be sent to
Company's stockholders in connection with the Company Stockholders' Meeting.
"Qualified Plan" means any Plan that meets or purports to meet the
requirements of Code Section 401(a).
"Real Property" means all real property interests of the Acquired
Companies, including all parcels and tracts of land in which an Acquired Company
has a fee simple estate or a leasehold estate and all real property operated by
the Acquired Companies, and all Improvements, easements and appurtenances
thereto.
"Reasonable Efforts" means the efforts that a prudent Person desirous
of achieving a result would use in similar circumstances to achieve that result
as expeditiously as possible.
"Release" means any release, spill, emission, leaking, pumping,
pouring, dumping, emptying, injection, deposit, disposal, discharge, dispersal,
leaching or migration on or into the Environment, or into or out of any
property.
"Representative" means, with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, legal counsel,
accountant or other representative of that Person.
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"Required Company Stockholder Vote" means the affirmative vote in favor
of adoption of the Agreement by 66-2/3% of the issued and outstanding shares of
Company Common Stock entitled to vote on the matter.
"Rig Contract" is defined in Section 2.12(d).
"SEC" means the United States Securities and Exchange Commission.
"Secretary of State" is defined in Section 1.3.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means all of the issued and outstanding shares of Company
Common Stock or Parent Common Stock, as the case may be.
"Subsidiary" of any Entity means any Entity of which such Entity either
alone or through or together with any other Subsidiary owns or has a right to
acquire, beneficially or of record, (a) an amount of voting securities of other
interests in such Entity that is sufficient to enable the Entity owning the
securities to elect at least a majority of the members of such Entity's board of
directors or other governing body, or (b) at least 50% of the outstanding equity
or financial interests of such Entity.
"Superior Proposal" means an unsolicited, bona fide written offer made
by a third party to purchase all of the outstanding Company Common Stock on
terms that the board of directors of Company determines, in its reasonable
judgment, (a) after consultation with an independent financial advisor of
nationally recognized reputation, to be more favorable from a financial point of
view to Company's stockholders than the terms of the Merger and (b) is
reasonably capable of being consummated; provided, however, that any such offer
shall not be deemed to be a "Superior Proposal" if any financing required to
consummate the transactions contemplated by such offer is not committed and is
not reasonably capable of being obtained by such third party.
"Surviving Corporation" is defined in Section 1.1.
"Tax" or "Taxes" means all federal, state, local, foreign and other
taxes, charges, fees, duties (including customs duties), levies or assessments,
including income, gross receipts, net proceeds, alternative or add-on minimum,
ad valorem, turnover, real and personal property (tangible and intangible),
sales, use, franchise, excise, value added, stamp, leasing, lease, user,
transfer, fuel, excess profits, occupational, interest equalization, windfall
profits, severance, license, payroll, environmental, capital stock, disability,
employee's income withholding, other withholding, unemployment and social
security taxes, that are imposed by any Governmental Body, and including any
interest, penalties or additions to tax attributable thereto.
"Tax Return" means any report, return or other information required to
be supplied to a Governmental Body in connection with any Taxes.
"Third-Party Provisions" is defined in Section 10.8.
"Voting Agreement" is defined in the Preliminary Statements.
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