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AGREEMENT AND PLAN OF MERGER
among
DLB OIL & GAS, INC.,
ACQUISITION DRILLING, INC.
and
BONRAY DRILLING CORPORATION
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January 6, 1997
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TABLE OF CONTENTS
PAGE
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ARTICLE I THE TENDER OFFER . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Offer . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Company Action . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Board of Directors of the Company . . . . . . . . . . . . . 3
ARTICLE II THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Effective Time . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Effect of the Merger . . . . . . . . . . . . . . . . . . . . 3
2.4 Certificate of Incorporation . . . . . . . . . . . . . . . . 4
2.5 By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.6 ADI Directors . . . . . . . . . . . . . . . . . . . . . . . 4
2.7 ADI Officers . . . . . . . . . . . . . . . . . . . . . . . . 4
2.8 Additional Actions . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III CONVERSION OF SECURITIES . . . . . . . . . . . . . . . . . . . . 4
3.1 Common Stock . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Dissenting Shares . . . . . . . . . . . . . . . . . . . . . 5
3.3 ADI Common Stock . . . . . . . . . . . . . . . . . . . . . . 5
3.4 Exchange of Common Stock . . . . . . . . . . . . . . . . . . 5
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF DLB AND ADI . . . . . . . . . . 7
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Authority Relative to this Agreement . . . . . . . . . . . . 7
4.3 Consents and Approvals; No Violations . . . . . . . . . . . 7
4.4 Offer Documents; Proxy Statement; Other Information . . . . 8
4.5 No Prior Activities . . . . . . . . . . . . . . . . . . . . 8
4.6 Finders and Investment Bankers . . . . . . . . . . . . . . . 8
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . 8
5.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . 8
5.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . 9
5.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 9
5.4 Authority Relative to this Agreement . . . . . . . . . . . . 9
5.5 Consents and Approvals; No Violations . . . . . . . . . . . 9
5.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.7 SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . 10
5.8 Tradenames . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.9 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . 11
5.10 Environmental Matters . . . . . . . . . . . . . . . . . . . 11
5.11 Compliance with Agreements . . . . . . . . . . . . . . . . . 13
5.12 Employee Benefit Matters . . . . . . . . . . . . . . . . . . 13
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5.13 Special Warranty of Title to Company Assets . . . . . . . . 13
5.14 Maintenance of Assets . . . . . . . . . . . . . . . . . . . 14
5.15 Absence of Certain Changes or Events . . . . . . . . . . . . 14
5.16 Governmental Authorization and Compliance with Laws . . . . 14
5.17 Offer Documents; Proxy Statement; Other Information . . . . 14
5.18 Finders and Investment Bankers . . . . . . . . . . . . . . . 15
ARTICLE VI COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.1 Conduct of Business of the Company . . . . . . . . . . . . . 15
6.2 Acquisition Proposals . . . . . . . . . . . . . . . . . . . 16
6.3 Notification of Certain Matters . . . . . . . . . . . . . . 17
6.4 Meetings of the Company's Stockholders . . . . . . . . . . . 17
6.5 Access to Information . . . . . . . . . . . . . . . . . . . 18
6.6 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . 18
6.7 Public Announcements . . . . . . . . . . . . . . . . . . . . 19
6.8 Exchange Act Compliance . . . . . . . . . . . . . . . . . . 19
6.9 Consent of DLB . . . . . . . . . . . . . . . . . . . . . . . 19
6.10 Indemnification . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII CLOSING CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . 20
7.1 Conditions to Obligations of the Company, DLB and ADI . . . 20
7.2 Conditions to Obligation of DLB and ADI . . . . . . . . . . 20
7.3 Conditions to Obligation of the Company . . . . . . . . . . 21
ARTICLE VIII CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.1 Time and Place . . . . . . . . . . . . . . . . . . . . . . . 21
8.2 Filings at the Closing . . . . . . . . . . . . . . . . . . . 21
ARTICLE IX TERMINATION AND ABANDONMENT . . . . . . . . . . . . . . . . . . . 22
9.1 Termination by Mutual Consent . . . . . . . . . . . . . . . 22
9.2 Termination by Either DLB or the Company . . . . . . . . . . 22
9.3 Termination by DLB . . . . . . . . . . . . . . . . . . . . . 22
9.4 Termination by the Company . . . . . . . . . . . . . . . . . 22
9.5 Procedure and Effect of Termination Procedure and
Effect of Termination . . . . . . . . . . . . . . . . . . . 23
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.1 Payment of Expenses . . . . . . . . . . . . . . . . . . . . 23
10.2 Amendment and Modification . . . . . . . . . . . . . . . . . 24
10.3 Waiver of Compliance; Consents . . . . . . . . . . . . . . . 24
10.4 Investigations; Survival of Warranties . . . . . . . . . . . 24
10.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.6 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 25
10.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 26
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10.9 Interpretation . . . . . . . . . . . . . . . . . . . . . . . 26
10.10 Employment Arrangements . . . . . . . . . . . . . . . . . . 26
10.11 Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.12 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 26
ANNEX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, this 6th day of January, 1997 (this
"Agreement"), is made and entered into among DLB OIL & GAS, INC., an Oklahoma
corporation ("DLB"), ACQUISITION DRILLING, INC., a Delaware corporation and a
wholly-owned subsidiary of DLB ("ADI"), and BONRAY DRILLING CORPORATION, a
Delaware corporation (the "Company"). The Company and ADI are hereinafter
sometimes collectively referred to as the "Constituent Corporations."
WHEREAS, the respective Boards of Directors of DLB, ADI and the
Company have approved the acquisition of the Company by DLB pursuant to the
terms of this Agreement; and
WHEREAS, in furtherance thereof ADI will make a tender offer for all
shares of the Company's common stock, par value $1.00 per share (the "Common
Stock"), upon the terms of and subject to the conditions set forth in this
Agreement; and
WHEREAS, the respective Boards of Directors of DLB, ADI and the
Company have approved the merger of ADI into the Company (the "Merger") upon
the terms and subject to the conditions set forth herein; and
WHEREAS, in order to induce DLB and ADI to enter into this Agreement,
certain holders of Common Stock (the "Selling Stockholders") have entered into
a Stockholder Tender Agreement with ADI (the "Stockholder Agreement"), pursuant
to which each such holder has agreed, among other things, to tender such
holder's shares of Common Stock to ADI pursuant to the Offer (hereinafter
defined) upon the terms and conditions set forth in such Stockholder Agreement.
NOW, WHEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I.
THE TENDER OFFER
1.1. The Offer. Provided that nothing shall have occurred which
would result in a failure of any of the conditions set forth in Annex A,
attached hereto and made a part hereof, as promptly as practicable, and in no
event later than the fifth (5th) business day following the date hereof, ADI
shall commence a cash tender offer (the "Offer") for all of the outstanding
shares (the "Shares") of the Common Stock at a price of Thirty and No/100
Dollars ($30.00) per share net to the seller in cash (the "Price Per Share"),
which Offer shall be subject to the conditions set forth in Annex A hereto, and
ADI shall file a Schedule 14D-1 with respect to the Offer in accordance with
Rule 14d-3(a) promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). ADI shall, subject only to the satisfaction or waiver of
the conditions set forth on Annex A hereto, accept for payment all Shares
validly tendered and not
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withdrawn pursuant to the Offer as soon as practicable after such acceptance is
legally permitted. Notwithstanding the foregoing, ADI expressly reserves the
right to increase the price per Share payable in the Offer and make any other
changes to the terms or conditions of the Offer, provided, however, that ADI
will not, without the prior written consent of the Company (such consent to be
authorized by the Board of Directors of the Company), (i) decrease the Price
Per Share, change the form of consideration payable in the Offer or decrease
the number of Shares sought, (ii) change the conditions to the Offer (other
than to waive any condition), (iii) impose additional conditions to the Offer
or (iv) amend any other term of the Offer in any manner adverse to the holders
of Shares (other than insignificant changes or amendments). The Offer shall
expire at 12:00 midnight, New York City time, on the twentieth (20th) business
day following commencement of the Offer (such date and time, as may be extended
in accordance with the terms hereof, is referred to as the "Expiration Date");
provided, however, and notwithstanding anything in the foregoing to the
contrary, it is understood and agreed that ADI may, from time to time, in its
sole discretion extend the Expiration Date, (w) to comply with applicable rules
and regulations of the Securities and Exchange Commission ("SEC"); (x) if any
of the conditions to the Offer have not been satisfied, for the minimum period
of time necessary to satisfy such condition; (y) if all of the conditions to
the Offer have been satisfied but fewer than 90% of the shares of Common Stock
outstanding (determined on a fully diluted basis) have been tendered in the
Offer, for the minimum period of time necessary until 90% of such shares have
been so tendered, but in no event later than the tenth (10th) day following the
initial Expiration Date; provided, however, that if ADI extends the Expiration
Date pursuant to the clause (y), it will be deemed upon such extension to have
waived all conditions except (c), (d)(i) and (d)(iii) set forth on Annex A
hereto; or (z) if a tender or exchange offer for shares of Common Stock or any
other proposal for a business combination involving the Company shall be
publicly disclosed or DLB or ADI shall have otherwise learned that a tender or
exchange offer for shares of Common Stock or any other proposal for a business
combination involving the Company shall have been made or publicly proposed to
be made by any person (including the Company, or any of its affiliates, or any
group (within the meaning of Section 13(d)(3) of the Exchange Act)) (a
"Competing Offer"), and all of the conditions to the Offer have not been
satisfied, until ten (10) days after the termination or publicly-announced
abandonment of such Competing Offer, but in no event later than the minimum
time necessary to satisfy all such conditions; provided, further, that in no
event shall the Expiration Date be extended without the prior written consent
of the Company beyond the 21st day of March, 1997 unless condition (d) set
forth in Annex A to this Agreement shall not then be satisfied.
1.2. Company Action. The Company hereby consents to the Offer and
represents that its Board of Directors has unanimously approved the Offer, the
Merger, this Agreement, the Stockholder Agreement and the acquisition of shares
of Common Stock pursuant thereto, and unanimously resolved to recommend
acceptance of the Offer and approval of the Merger by the stockholders of the
Company. Upon commencement of the Offer, the Company shall promptly file with
the SEC and mail to the holders of Common Stock a Solicitation/Recommendation
Statement on Schedule 14D-9 reflecting such recommendation and shall permit ADI
to include a copy of such Schedule 14D-9 in its Offering Documents, as such
phrase is hereinafter defined. The Company hereby consents to the inclusion in
the Offer of the recommendation referred to in the preceding sentence. In
connection with the Offer, the Company will furnish ADI with such
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information, including current lists of the stockholders of the Company,
mailing labels and lists of security positions, and such assistance as ADI or
its agents may reasonably request in communicating the Offer to the Company's
stockholders.
1.3. Board of Directors of the Company. Effective upon the payment
by ADI for Shares pursuant to the Offer, ADI will be entitled to designate that
number of directors of the Company, rounded up to the next whole number, that
equals the product of (x) the total number of directors on the Board of
Directors (giving effect to the election or appointment of any additional
directors pursuant to this Section 1.3) and (y) the percentage that the number
of Shares owned by DLB and ADI (including Shares accepted for payment) bears to
the total number of outstanding Shares. The Board of Directors of the Company
will at all relevant times be composed of a sufficient number of directors so
that the right of ADI under this Section 1.3 will not be impaired. The Company
will at such time cause the designees of ADI to be elected to or appointed by
the Board of Directors, including, without limitation, increasing the number of
directors, amending its Bylaws, using its reasonable best efforts to obtain
resignations of incumbent directors, and, to the extent necessary, filing with
the SEC and mailing to its stockholders the information required by Section
14(f) of the Exchange Act and the rules promulgated thereunder, as promptly as
possible. DLB and ADI will supply any information with respect to themselves
and their respective nominees, officers, directors, and affiliates required by
Section 14(f) of the Exchange Act and such Bylaws of the Company.
ARTICLE II.
THE MERGER
2.1. The Merger. Subject to the terms and conditions hereof, the
Merger shall be consummated in accordance with the Delaware General Corporation
law (the "DGCL") as soon as practicable following the latest of (i) the
expiration or termination of the Offer, (ii) the satisfaction or waiver of the
conditions set forth in Article VII of this Agreement, (iii) the expiration or
termination of all required waiting periods with respect to the acquisition of
the Company by DLB pursuant to the Merger under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx"), if applicable, and (iv) the receipt
of any required approvals from the stockholders of the Company. At the
Effective Time (as hereinafter defined), subject to the terms and conditions of
this Agreement and in accordance with the laws of the State of Delaware, ADI
shall be merged with and into the Company, which shall be the surviving
corporation. The Company hereinafter is sometimes referred to as the
"Surviving Corporation."
2.2. Effective Time. The Merger shall become effective at the date
and time of filing of a certificate of merger with the Secretary of State of
the State of Delaware in accordance with the provisions of the DGCL (the
"Certificate of Merger"), which shall be so filed as provided in Section 8.2 of
this Agreement. The date and time when the Merger shall become effective is
herein referred to as the "Effective Time."
2.3. Effect of the Merger. The Merger shall have the effects set
forth in Section 259 of the DGCL.
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2.4. Certificate of Incorporation. The Certificate of
Incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be the Certificate of Incorporation of the Surviving Corporation
until thereafter amended as provided by law; provided that effective upon the
Merger, the Certificate of Incorporation of the Company shall be amended so
that it shall be identical in all respects to the Certificate of Incorporation
of ADI as in effect immediately prior to the Effective Time except that the
name of the Surviving Corporation shall be "Bonray Drilling Corporation".
2.5. By-Laws. The By-Laws of ADI, as in effect immediately prior
to the Effective Time, shall be the By-Laws of the Surviving Corporation until
thereafter amended as provided by law.
2.6. ADI Directors. The directors of ADI at the Effective Time
shall be the directors of the Surviving Corporation and will hold office from
the Effective Time until their respective successors are duly elected or
appointed and qualified in the manner provided in the Certificate of
Incorporation and By-Laws of the Surviving Corporation, or as otherwise
provided by law.
2.7. ADI Officers. The officers of ADI at the Effective Time shall
be the officers of the Surviving Corporation and will hold office from the
Effective Time until their respective successors are duly elected or appointed
and qualified in the manner provided in the Certificate of Incorporation and
By-Laws of the Surviving Corporation, or as otherwise provided by law.
2.8. Additional Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Constituent Corporations acquired or to
be acquired by the Surviving Corporation as a result of, or in connection with,
the Merger or otherwise to carry out this Agreement, the officers and directors
of the Surviving Corporation shall be authorized to execute and deliver, in the
name and on behalf of each of the Constituent Corporations or otherwise, all
such deeds, bills of sale, assignments and assurances and to take and do, in
the name and on behalf of each of the Constituent Corporations or otherwise,
all such other actions and things as may be necessary or desirable to vest,
perfect or confirm any and all right, title and interest in, to and under such
rights, properties or assets in the Surviving Corporation or otherwise to carry
out this Agreement.
ARTICLE III.
CONVERSION OF SECURITIES
3.1. Common Stock.
(i) Each share of the Common Stock issued and
outstanding immediately prior to the Effective Time (except for shares of
Common Stock then owned beneficially or of record by DLB, ADI or any subsidiary
of DLB and except for Dissenting Shares (as hereinafter
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defined) in respect of which appraisal rights are perfected) shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into the right to receive the Price Per Share in cash payable to the
holder thereof, without interest thereon, upon surrender of the certificate
representing such share of Common Stock.
(ii) Each share of Common Stock issued and outstanding
immediately prior to the Effective Time which is then owned beneficially or of
record by DLB, ADI or any subsidiary of DLB shall, by virtue of the Merger and
without any action on the part of the holder thereof, be canceled and retired
and cease to exist, without any conversion thereof.
(iii) Each share of Common Stock held in the Company's
treasury immediately prior to the Effective Time shall, by virtue of the
Merger, be canceled and retired and cease to exist, without any conversion
thereof.
3.2. Dissenting Shares. Notwithstanding anything in this Agreement
to the contrary, shares of Common Stock which are issued and outstanding
immediately prior to the Effective Time and which are held by stockholders who
have not voted such shares in favor of the approval and adoption of the Merger
and shall have delivered a written demand for appraisal of such shares in the
manner (including the time of delivery) provided in Section 262 of the DGCL
(the "Dissenting Shares") shall not be converted into or be exchangeable for
the right to receive the consideration provided in Section 3.1, but shall be
entitled to receive such consideration as shall be determined pursuant to
Section 262 of the DGCL; provided, however, that, if such holder shall have
failed to perfect or shall have effectively withdrawn or lost his right to
appraisal and payment under the DGCL, such holder's shares of Common Stock
shall thereupon be deemed to have been converted into and to have become
exchangeable for, as of the Effective Time, the right to receive the
consideration provided for in Section 3.1, without any interest thereon, in
accordance with Section 3.4, and such shares shall no longer be Dissenting
Shares.
3.3. ADI Common Stock. Each share of common stock, par value $.01
per share, of ADI issued and outstanding immediately prior to the Effective
Time shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into and exchangeable for one share of common
stock of the Surviving Corporation.
3.4. Exchange of Common Stock.
(i) At the Effective Time, ADI (or the Company, as the
Surviving Corporation) shall deposit in trust with a bank or trust company
designated by DLB (the "Exchange Agent") cash, a letter of credit or a
combination thereof issued by a commercial bank selected by DLB which
irrevocably commits the issuer to provide the Exchange Agent from time to time
with the funds necessary to make the payments required hereunder in an
aggregate amount equal to the product of (i) the number of shares of Common
Stock issued and outstanding at the Effective Time (other than any such shares
owned beneficially or of record by DLB, ADI or any subsidiary of DLB or held in
the Company's treasury and other than Dissenting Shares in respect of which
appraisal rights are perfected), and (ii) the Price Per Share (such product
being hereinafter referred to as the "Exchange Fund"). The Exchange Agent
shall, pursuant to
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irrevocable instructions, make the payments provided for in Section 3.1(i) out
of the Exchange Fund. The Exchange Agent may invest all or portions of the
Exchange Fund as the Surviving Corporation shall direct. Any net profit
resulting from, or interest or income produced by the investment of the
Exchange Fund, shall be paid to the Surviving Corporation.
(ii) Promptly after the Effective Time, the Exchange
Agent shall mail to each record holder (other than DLB, ADI or any subsidiary
of DLB), as of the Effective Time, of an outstanding certificate or
certificates which immediately prior to the Effective Time represented shares
of Common Stock (the "Certificates") a form letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Exchange Agent) and instructions for use in effecting the surrender of the
Certificates for payment therefor. Upon surrender by such holder to the
Exchange Agent of a Certificate, together with such letter of transmittal duly
executed, the holder of such Certificate shall be entitled to receive in
exchange therefor cash in an amount equal to the product of the number of
shares of Common Stock represented by such Certificate and the Price Per Share,
and such Certificate shall forthwith be canceled. No interest will be paid or
accrued on the cash payable upon the surrender of the Certificates. If payment
is to be mailed to a person other than the person in whose name a Certificate
surrendered is registered, it shall be a condition of payment that (a) the
Certificate so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that (b) the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a person other
than the registered holder of the Certificate surrendered or establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered in accordance with the provisions of this
Section 3.4, each Certificate (other than Certificates representing shares
owned beneficially or of record by DLB, ADI or any subsidiary of DLB and other
than Dissenting Shares in respect of which appraisal rights are perfected)
shall represent for all purposes whatsoever only the right to receive the Price
Per Share in cash multiplied by the number of shares evidenced by such
Certificate, without any interest thereon.
(iii) After the Effective Time there shall be no transfers
on the stock transfer books of the Surviving Corporation of the shares of
Common Stock which were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Certificates are presented to the Surviving
Corporation for transfer or for any other reason, they shall be canceled and
exchanged for cash as provided in this Article III.
(iv) Any portion of the Exchange Fund which remains
unclaimed by the stockholders of the Company for six (6) months after the
Effective Time shall be repaid to the Surviving Corporation, upon demand, and
any stockholders of the Company who have not theretofore complied with Section
3.4(ii) shall thereafter look only to the Surviving Corporation for payment of
their claim for the Price Per Share for each share of Common Stock, without any
interest thereon.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF DLB AND ADI
DLB and ADI each jointly and severally represent and warrant to the
Company as follows:
4.1. Organization. Each of DLB and ADI is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and each has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to be so existing and
in good standing would not affect materially and adversely the business,
assets, prospects, condition (financial or otherwise) or the results of
operations of DLB and ADI.
4.2. Authority Relative to this Agreement. Each of DLB and ADI has
full corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by the Boards of Directors of DLB and ADI
and by DLB as the sole stockholder of ADI, and no other corporate proceedings
on the part of DLB or ADI are necessary to authorize this Agreement and the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of DLB and ADI, and constitutes a valid and
binding agreement of DLB and ADI, enforceable against DLB and ADI in accordance
with its terms, except to the extent that enforceability thereof may be limited
by applicable bankruptcy, insolvency, reorganization or other laws affecting
the enforcement of creditors' rights generally and by principles of equity
regarding the availability of remedies.
4.3. Consents and Approvals; No Violations. Except for applicable
requirements of the Exchange Act, the HSR Act and filing and recordation of
appropriate merger documents as required by the DGCL, no filing with, and no
permit, authorization, consent or approval of, any public body is necessary for
the consummation by DLB and ADI of the transactions contemplated by this
Agreement, the absence of which would or might result in the divestiture of any
assets which are material to DLB and ADI taken as a whole or would otherwise
have a material adverse effect on the business of DLB and ADI taken as a whole.
Neither the execution and delivery of this Agreement nor the compliance by DLB
and ADI with any of the provisions hereof will (i) conflict with or result in
any breach of any provision of the Articles or Certificate of Incorporation or
By-Laws of DLB or ADI, (ii) require any consent, approval or notice under or
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, or change the rights or obligations of any
party under, or trigger any obligation or payment by DLB or ADI under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, agreement or other instrument or obligation to which DLB or ADI is a
party or by which either of them or any of their properties or assets may be
bound, or (iii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to DLB or ADI or any of their properties or assets.
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4.4. Offer Documents; Proxy Statement; Other Information. None of
the information supplied by DLB or ADI for inclusion in the Offer (together
with the related letter of transmittal, the "Offer Documents") (including any
amendments or supplements thereto and including Statements on Schedules 14D-1
and 14D-9) will, at the respective times the Offer Documents or any amendments
or supplements thereto are filed with the SEC, contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. None of the information relating to DLB or ADI supplied
for inclusion in the proxy statement which is to be mailed to the stockholders
of the Company in connection with any meeting of stockholders convened in
accordance with Section 6.4 or any information statement which is to be mailed
to the stockholders of the Company in connection with any action taken without
solicitation of proxies or consents (such proxy statement or information
statement is herein referred to as the "Proxy Statement") will, at the time the
Proxy Statement is mailed, be false or misleading with respect to any material
fact, or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading or, at the
time of the meeting of stockholders to which any such Proxy Statement relates,
as then amended or supplemented, necessary to correct any statement which has
become false or misleading in any earlier communication with respect to the
solicitation of any proxy for such meeting. The Statement on Schedule 14D-1
will comply in all material respects as to form with the requirements of the
Exchange Act and the rules and regulations thereunder.
4.5. No Prior Activities. ADI has not engaged, directly or through
any subsidiary, in any business or activity of any type or kind whatsoever, or
entered into any agreements or arrangements with any person or entity, or is
subject to or bound by any liability, obligation or undertaking, which is not
in connection with its organization, this Agreement and the transactions
contemplated hereby (including the financing necessary to consummate the Offer
and the Merger).
4.6. Finders and Investment Bankers. Neither DLB, ADI nor any of
their officers or directors has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated herein.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to DLB and ADI as follows:
5.1. Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. The
Company is duly qualified or licensed and in good standing to do business in
each jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so duly qualified or licensed and in
good standing would not individually or in the
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aggregate affect materially and adversely the business, assets, properties,
condition (financial or otherwise) or the results of operations of the Company.
The Company has heretofore made available to DLB accurate and complete copies
of the Certificate of Incorporation and By-Laws, as currently in effect, of the
Company.
5.2. Capitalization. The authorized capital stock of the Company
consists of 800,000 shares of Common Stock, of which on December 31, 1996 there
were 423,540 shares issued and outstanding and less than 10,000 shares held in
the Company's treasury. No other capital stock of the Company is authorized.
All issued and outstanding shares of capital stock of the Company are validly
issued, fully paid, non-assessable and free of preemptive rights. There are
not, and at the Effective Time there will not be, any existing options,
warrants, calls, subscriptions, stock appreciation rights, or other rights or
other agreements, arrangements or commitments obligating the Company to issue,
transfer or sell, or securities or rights convertible or exchangeable for, any
shares of capital stock of the Company.
5.3. Subsidiaries. The Company has no subsidiaries. The Company
does not own any equity interest in any corporation or other entity.
5.4. Authority Relative to this Agreement. The Company has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by the Company's Board of Directors and
no other corporate proceedings on the part of the Company are necessary to
authorize the execution and delivery of this Agreement or to consummate the
transactions so contemplated (other than the adoption of this Agreement by the
stockholders of the Company in accordance with the DGCL and the Certificate of
Incorporation and By-Laws of the Company). This Agreement has been duly and
validly executed and delivered by the Company, and, subject insofar as Article
II of this Agreement is concerned to the approval and adoption of this
Agreement by the stockholders of the Company, constitutes the valid and binding
agreement of the Company, enforceable against the Company in accordance with
its terms, except to the extent that enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally and by principles of equity
regarding the availability of remedies. The Company and its Board of Directors
have approved this Agreement and the Stockholder Agreement and the transactions
contemplated hereby and thereby, including, without limitation, the Offer, the
Merger and the agreements by the Selling Stockholders to tender their Shares,
and the Company and the Board of Directors have taken all steps necessary to
render Section 203 of the DGCL inapplicable to this Agreement, the Stockholder
Agreement and the transactions contemplated hereby and thereby, including
without limitation, the Merger, the Offer (regardless of whether this Agreement
is terminated) and the agreements by the Selling Stockholders to tender their
Shares (regardless of whether this Agreement is terminated).
5.5. Consents and Approvals; No Violations. Except for applicable
requirements of the Exchange Act, the HSR Act and the filing and recordation of
appropriate merger documents as required by the DGCL, no filing with, and no
permit, authorization, consent or approval of, any
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public body, domestic or foreign, is necessary for the consummation by the
Company of the transactions contemplated by this Agreement, the absence of
which would or might result in the divestiture of any assets which are material
to the Company or would otherwise affect materially and adversely the business,
assets, prospects, condition (financial or otherwise) or the results of
operations of the Company. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby nor
compliance by the Company with any of the provisions hereof will (i) conflict
with or result in any breach of any provision of the Certificate of
Incorporation or By-Laws of the Company, (ii) except as is disclosed in
paragraph 5.5 of the Disclosure Letter delivered by the Company to DLB
concurrently with the execution of this Agreement (the "Disclosure Letter"),
require any consent, approval or notice under or result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both)
a material default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any material
note, bond, mortgage, indenture, license, agreement or other instrument or
obligation to which the Company is a party or by which it or any material
portion of its properties or assets may be bound or (iii) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Company
or any material portion of its properties or assets.
5.6. Litigation. Except as may be disclosed in the SEC filings
referred to in Section 5.7 or as otherwise disclosed in paragraph 5.6 of the
Disclosure Letter, as of the date hereof there are no claims, actions,
proceedings or, to the best knowledge of the Company, investigations pending
or, to the best knowledge of the Company, threatened against the Company or any
properties or rights of the Company before any court, administrative,
governmental or regulatory authority or body which, if decided adversely, would
materially and adversely affect the business, assets, prospects, condition
(financial or otherwise) or the results of operations of the Company. As of
the date hereof, neither the Company nor any of its property is subject to any
order, judgment, injunction or decree which might affect materially and
adversely the business, assets, prospects, condition (financial or otherwise)
or the results of operations of the Company.
5.7. SEC Filings. The Company has heretofore made available to DLB
its (i) Annual Report on Form 10-K for the fiscal year ended June 30, 1996 as
filed with the SEC, (ii) Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1996, (iii) proxy statements relating to the Company's
meetings of stockholders (whether annual or special) since June 30, 1996 and
(iv) all other reports, filings or registration statements filed by the Company
with the SEC since June 30, 1996. As of their respective dates, such reports
and statements (including all exhibits and schedules thereto and documents
incorporated by reference therein) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The audited financial statements and
unaudited interim financial statements of the Company included or incorporated
by reference in such reports and in the Company's Annual Reports on Form 10-K
for the fiscal years ended June 30, 1996 and June 30, 1995 heretofore made
available to DLB have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly present the
assets, liabilities and financial position of the Company as of the dates
thereof and the results of its operations and
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changes in financial position for the periods then ended (subject, in the case
of any unaudited interim financial statements, to normal year-end adjustments).
5.8. Tradenames. To the Company's knowledge, no other person, firm
or corporation is presently using or claiming, or has the right to use or to
claim the tradename: "Bonray Drilling Corporation".
5.9. Tax Matters.
(i) The Company has filed when due (taking into account
extensions) with the appropriate federal, state, local, foreign and other
governmental agencies, all tax returns, estimates and reports required to be
filed by it with respect to its tax obligations and has paid when due all
required taxes and has established sufficient reserves to pay taxes when due
through the Closing Date.
(ii) Except as is disclosed in paragraph 5.9(ii) of the
Disclosure Letter, there are no taxes assessed or asserted in writing with
respect to any tax return filed by the Company or claimed in writing to be due
by a taxing authority or otherwise. No tax return of the Company is currently
being audited by the Internal Revenue Service ("IRS") or any other taxing
authority having jurisdiction over the Company. The Company has not executed
any agreement or other document extending or having the effect of extending the
period of assessment or collection of any taxes. All final adjustments made by
the IRS with respect to any Federal tax return of the Company have been
reported to the relevant state, local or foreign taxing authority to the extent
required by law. No request by the Company for any rulings or any
determination letters are pending with any taxing authority.
(iii) The Company will deliver to DLB at Closing, all tax
files currently being maintained or stored by the Company.
5.10. Environmental Matters.
(i) Except as is disclosed in paragraph 5.10(i) of the
Disclosure Letter, all real property owned, leased or operated by the Company
(the "Property"), the operations conducted thereon and all operations of the
Company conducted off of the Property are not in material violation of any
order or requirement of any court or Governmental Authority or any
Environmental Laws (as such terms are defined herein).
(ii) Except as is disclosed in paragraph 5.10(ii) of the
Disclosure Letter, the Property and the operations conducted thereon by the
Company or the operations conducted by any prior owner or operator of the
Property are not subject to any existing, pending or threatened action, suit,
investigation, inquiry or proceeding by or before any court or Governmental
Authority.
(iii) Except as is disclosed in paragraph 5.10(iii) of the
Disclosure Letter, all notices, permits, licenses or similar authorizations, if
any, required to be obtained or filed in connection with the current operation
or use of the Property, including without limitation
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authorizations related to the treatment, storage, disposal or release of any
hazardous substances or solid waste have been duly obtained or filed, and the
Company is in material compliance with the terms and conditions of all such
notices, permits, licenses and similar authorizations.
(iv) Except as is disclosed in paragraph 5.10(iv) of the
Disclosure Letter, there are no leaking or deteriorating above ground or below
ground storage tanks or containers on the Property and no hazardous substance
or solid waste is known to have been disposed of or otherwise released on or to
the property except in compliance with Environmental Laws.
(v) The Company is not subject to any contingent
liability in connection with any release or threatened release of any hazardous
substance or solid waste into the environment or on or at the Property or from
the operations conducted thereon other than minor instances, the clean-up of
which will exceed the sum of Ten Thousand Dollars ($10,000) per occurrence
based upon standard industry practices as of the Closing Date.
(vi) For purposes of this Section 5.10, "Environmental
Laws" shall mean any and all laws, statutes, ordinances, rules, regulations,
orders, or determinations by any Governmental Authority pertaining to health or
the environment in effect in any and all jurisdictions in which the Property is
located, including without limitation, the Clean Air Act, as amended, the
Comprehensive Environmental, Response, Compensation, and Liability Act of 1980
("CERCLA"), as amended, the Federal Water Pollution Control Act, as amended,
the Operational Safety and Health Act of 1970 ("OSHA"), as amended, the
Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, the Safe
Drinking Water Act, as amended, the Toxic Substances Control Act, as amended,
the Superfund Amendments and the Reauthorization Act of 1986, as amended, the
Hazardous Materials Transportation Act, as amended, and other environmental,
conservation or protection laws. The terms "hazardous substance" and "release"
(or "threatened release") have the meanings specified in CERCLA, and the term
"solid waste" and "disposal" (or "disposed") have the meanings specified in
RCRA; provided, however, that the terms "hazardous substance" and "solid waste"
shall include all oil and gas exploration and production wastes that may
present an endangerment to public health or welfare or the environment, even if
such wastes are specifically exempt from classification as hazardous substances
or solid wastes pursuant to CERCLA or RCRA or the state analogues to those
statutes.
(vii) For purposes of this Section 5.10, "Governmental
Authority" shall mean the United States, the state, county, city and political
subdivisions in which the Property is located or which exercises jurisdiction
over any such Property and any agency, department, commission, board, bureau or
instrumentality which exercises jurisdiction over such Property.
(viii) Except as is disclosed in paragraph 5.10(viii) of
the Disclosure Letter, there have been no environmental investigations,
studies, audits, reviews or other analyses conducted by, or which are in the
possession of the Company regarding any facility or property now or previously
owned, leased or operated by the Company or upon which the Company has
performed any operations.
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5.11. Compliance with Agreements. The Company has complied in all
material respects with all terms and conditions of its agreements and contracts
with third parties.
5.12. Employee Benefit Matters.
(i) Paragraph 5.12(i) of the Disclosure Letter provides
a description of each "employee benefit plan", as such term is defined in the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Other
than as is disclosed in paragraph 5.12 of the Disclosure Letter, there are no
stock option plans, collective bargaining agreements, bonus plans, incentive
award plans, vacation policies, severance pay plans, deferred compensation
agreements, medical or disability insurance plans, executive compensation or
supplemental income plans, or any other employee benefit plans, agreements or
programs.
(ii) True, correct and complete copies of each of the
plans disclosed in paragraph 5.12(i) of the Disclosure Letter have been
furnished to DLB.
(iii) The Company has substantially performed all
obligations, whether arising by operation of law or by contract, required to be
performed by it in connection with said employee benefit plans.
(iv) Any employee benefit plan intended to be qualified
under Section 401 of the Internal Revenue Code of 1986, as amended, satisfies
the requirements of such Section and has received a favorable determination
letter from the IRS regarding such qualification status.
(v) Except as is disclosed in paragraph 5.12(v) of the
Disclosure Letter, there are no actions, suits, unfunded obligations or claims
pending (other than routine claims for benefits involving less than Ten
Thousand Dollars ($10,000) in the aggregate) with respect to any of the
employee benefit plans.
(vi) Paragraph 5.12(vi) of the Disclosure Letter sets
forth by number and employment classification the approximate number of
employees employed by the Company as of the date of this Agreement and the
employee benefit plans to which such employee is entitled.
5.13. Special Warranty of Title to Company Assets. Disclosed in
paragraph 5.13 of the Disclosure Letter is a list of all of the Company's real
and tangible personal property and assets owned or leased (the "Assets"). The
Company has prepared paragraph 5.13 on a best efforts basis and hereby
specifically disclaims the completeness of paragraph 5.13. As to the title to
the Assets, as specifically set forth and described in paragraph 5.13, the
Company does hereby represent, warrant and covenant with DLB that the Company
has not made, done, executed or permitted any act or thing whatsoever, whereby
any of the Assets, or any part thereof, now or at any time hereafter through
the Closing Date shall have become impaired, charged or encumbered in any
manner whatsoever, except as is specifically indicated in paragraph 5.13, and
that the Company will warrant and defend the title to the Assets to be free and
clear against the lawful claims and demands of all persons claiming by, through
or under the Company from events, transactions, actions or failures to act
prior to the Closing Date, but not otherwise.
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5.14. Maintenance of Assets. Except as is disclosed in paragraph
5.14 of the Disclosure Letter, the Company's Assets currently used by the
Company in the ordinary course of business have been maintained in accordance
with customary industry maintenance practices and are in a state of repair
(normal wear and tear excepted) which the Company believes to be adequate for
the normal use of such Assets in the ordinary course of business.
5.15. Absence of Certain Changes or Events. Except as contemplated
by this Agreement, or reflected in any financial statement or notes thereto
referred to in Section 5.7, or reflected in the monthly financial statements of
the Company for the months of October and November 1996, previously furnished
to DLB, or disclosed in paragraph 5.15 of the Disclosure Letter or in SEC
filings made prior to the date hereof, since June 30, 1996 there has not been:
(i) any material adverse change in the business, Assets, customer relations,
condition (financial or other) or the results of operations of the Company;
(ii) any damage, destruction or loss, whether covered by insurance or not,
having a material adverse effect upon the properties or business of the
Company; (iii) any change by the Company in accounting principles or methods
except insofar as may be required by a change in generally accepted accounting
principles; (iv) any declaration, payment or setting aside for payment of any
dividend or any redemption, purchase or other acquisition of any shares of
capital stock or securities of the Company; (v) a grant of any general increase
in the compensation of its officers or employees (including any such increase
pursuant to any bonus, pension, profit-sharing or other plan or commitment) or
any increase in the compensation payable or to become payable to any such
officer or employee.
5.16. Governmental Authorization and Compliance with Laws. The
business of the Company has been operated in compliance with all laws,
ordinances, regulations and orders of all governmental entities, domestic or
foreign, except for violations which do not affect and will not affect
materially and adversely the business, assets, prospects, condition (financial
or otherwise) or the results of operations of the Company or, as the case may
be, the Surviving Corporation. The Company has all permits, certificates,
licenses, approvals and other authorizations required in connection with the
operation of their business, except those the absence of which does not affect
and will not affect materially and adversely the business, assets, prospects,
condition (financial or otherwise) or the results of operations of the Company
or the Surviving Corporation.
5.17. Offer Documents; Proxy Statement; Other Information. None of
the information supplied by the Company for inclusion in the Offer Documents
(including any amendments or supplements thereto and including Statements on
Schedules 14D-1 and 14D-9) will, at the respective times the Offer Documents or
any amendments or supplements thereto are filed with the SEC, contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information relating to the Company included in the Proxy Statement, at the
time it is mailed, or as amended or supplemented, will contain any statement
which, at the time and in light of the circumstances under which it is made, is
false or misleading with respect to any material fact, or which omits to state
any material fact necessary in order to make the statements therein not
misleading or necessary to correct any statement in an earlier communication
with respect to the solicitation of a proxy for the same meeting or
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subject matter which has become misleading. The Statement on Schedule 14D-9
and the Proxy Statement each will comply in all material respects as to form
with the requirements of the Exchange Act and the rules and regulations
thereunder.
5.18. Finders and Investment Bankers. Neither the Company nor any
of its officers or directors has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated herein.
ARTICLE VI.
COVENANTS
6.1. Conduct of Business of the Company. Except as contemplated by
this Agreement, during the period from the date of this Agreement to the
Effective Time, the Company shall conduct its operations according to its
ordinary course of business and consistent with past practice, and the Company
shall use its best efforts to preserve intact its business organization as a
going concern, to keep available the services of its officers, employees and
other work force and to maintain satisfactory relationships with licensors,
licensees, suppliers, contractors, distributors, oil and gas operators and
other customers and others having business relationships with it. Without
limiting the generality of the foregoing, and except as otherwise expressly
provided in this Agreement, prior to the Effective Time, the Company will not,
without the prior written consent of DLB:
(i) Amend or propose to amend its Certificate of
Incorporation or By-Laws;
(ii) Authorize for issuance, issue, sell, pledge, deliver
or agree or commit to issue, sell, pledge or deliver (whether through the
issuance or granting of any options, warrants, commitments, subscriptions,
rights to purchase, awards or otherwise) any stock of any class or any
securities convertible into or exchangeable for shares of stock of any class of
the Company;
(iii) Split, combine or reclassify any shares of its
capital stock or declare, pay or set aside any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock, or redeem, purchase or otherwise acquire or offer to acquire
any shares of its capital stock;
(iv) (a) Except as contemplated in this Agreement or in
the ordinary course of business consistent with past practice, create, incur,
assume, maintain or permit to exist any short-term or long-term debt (including
obligations in respect of capital leases) in excess of the amount currently
outstanding; (b) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, indirectly, contingently or otherwise) for the
obligations of any other person; (c) make any loans, advances or capital
contributions to, or investments in, any other person; or (d) incur any
material liability or obligation (absolute, accrued, contingent or otherwise)
other than in the ordinary and usual course of business and consistent with
past practice; or (e) change any assumption underlying, or methods of
calculating, any bad debt, contingency or other reserve;
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(v) (a) Increase in any manner the compensation of any
of its directors, officers or employees; (b) pay or agree to pay any pension,
retirement allowance or other employee benefit not required or permitted by any
existing plan, agreement or arrangement to any such director, officer or
employee, whether past or present; (c) commit itself to any additional pension,
profit-sharing, bonus, incentive, deferred compensation, stock purchase, stock
option, stock appreciation right, group insurance, severance pay, retirement or
other employee benefit plan, agreement or arrangement, or to any employment or
consulting agreement with or for the benefit of any person, or to amend any of
such plans or any of such agreements in existence on the date hereof or (d)
make any payment or award under any executive compensation plan of the Company
except in the ordinary course of business consistent with past practice;
(vi) Except in the ordinary course of business consistent
with past practice, sell, transfer, mortgage, or otherwise dispose of, or
encumber, or agree to sell, transfer, mortgage or otherwise dispose of or
encumber, any assets or properties, real, personal or mixed, which have a value
on the Company's books, either individually or in the aggregate, in excess of
$10,000;
(vii) Enter into any other agreements, commitments or
contracts which, individually or in the aggregate, are material to the Company,
except agreements, commitments or contracts for the purchase, sale or lease of
goods or services, consistent with past practice and not in excess of current
requirements, or otherwise make any material change in the conduct of the
business or operations of the Company;
(viii) Make any change in the Company's accounting
principles, practices or methods;
(ix) Make any tax election or permit any insurance policy
naming the Company as a beneficiary or a loss payable payee to be canceled or
terminated without providing for substitute coverage which is the same in all
material respects;
(x) Enter into any agreement or amend any existing
agreement with any affiliate of the Company;
(xi) Enter into any agreement or commitment that
restricts or limits the Company's ability to compete with or conduct any
business in any geographic area; or
(xii) Agree, commit or arrange to do any of the foregoing.
6.2. Acquisition Proposals. Neither the Company nor any of its
officers and directors shall, and the Company will cause its employees, agents
and representatives (including, without limitation, any investment banker,
attorney or accountant retained by the Company) not to, initiate or solicit,
directly or indirectly, encourage, initiate or solicit any inquiries or the
making of any proposal with respect to a merger, consolidation or similar
transaction involving, or any purchase of all or any significant portion of the
Assets of, or any equity interest in, the Company (an "Acquisition Proposal")
or, except to the extent required for the discharge by the Board of Directors
of its fiduciary duties as advised by counsel in writing, engage in any
negotiations
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concerning, or provide any confidential information or data to, or have any
discussions with, any person relating to an Acquisition Proposal, or otherwise
assist or facilitate any effort or attempt by any person or entity (other than
DLB and ADI, or their officers, directors, representatives, agents, affiliates
or associates) to make or implement an Acquisition Proposal. The Company will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. The Company will notify DLB promptly if any such
inquiries or proposals are received by, any such information is requested from,
or any such negotiations or discussions are sought to be instituted or
continued with, the Company, such notice to include the material terms
communicated to the Company.
6.3. Notification of Certain Matters. The Company shall give
prompt notice to DLB and ADI of: (i) any notice of, or other communication
relating to, a default or event which, with notice or lapse of time or both,
would become a default, received by the Company subsequent to the date of this
Agreement and prior to the Effective Time, under any agreement, indenture or
instrument material to the business, Assets, property, condition (financial or
otherwise) or the results of operations of the Company to which the Company is
a party or is subject; (ii) any notice or other communication from any third
party alleging that the consent of such third party is or may be required in
connection with the transactions contemplated by this Agreement; and (iii) any
material adverse change in the business, Assets, prospects, condition
(financial or otherwise) or results of operations of the Company, or the
occurrence of an event which, so far as reasonably can be foreseen at the time
of its occurrence, could result in any such change (except for such changes
that are caused by the Company's compliance with the terms of this Agreement
and the Offer and are contemplated hereby) and except as otherwise disclosed to
DLB in writing.
6.4. Meetings of the Company's Stockholders. If required to
consummate the Merger, following expiration of the Offer, the Company will take
all action necessary in accordance with applicable law and its Certificate of
Incorporation and By-Laws to convene a meeting of holders of Shares as promptly
as practicable to consider and vote upon the approval of this Agreement and the
Merger. The Board of Directors of the Company shall recommend unanimously such
approval and the Company shall take all lawful action to solicit such approval.
At any such meeting of the Company all of the Shares then owned by DLB or ADI,
or any of their affiliates (collectively, the "Purchaser Companies") will be
voted in favor of this Agreement and the Merger. The Company hereby
represents, warrants and covenants that the proxy or information statement with
respect to such meeting of shareholders (the "Proxy Statement"), at the date
thereof and at the date of such meeting, will not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
the foregoing shall not apply to the extent that any such untrue statement of a
material fact or omission to state a material fact was made by the Company in
reliance upon and in conformity with written information concerning the
Purchaser Companies furnished to the Company by DLB specifically for use in the
Proxy Statement. The Proxy Statement shall not be filed, and no amendment or
supplement to the Proxy Statement will be made by the Company, without
consultation with DLB and its counsel. In the event the Purchaser Companies
acquire
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at least 90% of the outstanding Shares pursuant to the Offer or otherwise, DLB,
ADI and the Company shall take all necessary and appropriate action to cause
the Merger to become effective as soon as practicable after such acquisition,
without a meeting of the stockholders of the Company, in accordance with the
DGCL.
6.5. Access to Information.
(i) Between the date of this Agreement and the Effective
Time, the Company will give DLB and its authorized representatives at all
reasonable times access to all drilling rigs, offices, warehouses, shops,
storage yards and other facilities and to all its books and records, will
permit DLB to make such inspections as it may require and will cause its
officers to furnish DLB with such financial and operating data and other
information with respect to the business and properties of the Company as DLB
may from time to time request in its due diligence investigation.
(ii) DLB and ADI and their affiliates will each hold and
will each cause its respective employees, representatives, consultants and
advisors to hold in strict confidence, unless compelled to disclose by judicial
or administrative process, or, in the opinion of its counsel, by other
requirements of law, all documents and information concerning the Company
furnished to DLB or ADI or their affiliates in connection with the transactions
contemplated by this Agreement (except to the extent that such information can
be shown to have been (a) previously known by DLB or ADI, (b) in the public
domain through no fault of DLB or ADI or their affiliates, or (c) later
lawfully acquired by DLB or ADI from other sources unless DLB and ADI knew such
information was obtained in violation of an agreement of confidentiality) and
will not release or disclose such information to any other person, except its
auditors, attorneys, financial advisors and other consultants and advisors and
lending institutions (including banks) in connection with this Agreement (it
being understood that such persons shall be informed by DLB or ADI of the
confidential nature of such information and shall be directed by DLB or ADI to
treat such information confidentially). If the transactions contemplated by
this Agreement are not consummated, such confidence shall be maintained except
to the extent such information comes into the public domain under requirements
of law or through no fault of DLB or ADI or their affiliates and, if requested
by the Company, DLB or ADI will destroy or return to the Company all copies of
written information furnished by the Company to DLB or ADI, or their
affiliates, agents, representatives or advisors. If DLB or ADI shall be
required to make disclosure of any such information by operation of law, DLB or
ADI shall give the Company prior notice of the making of such disclosure and
shall use all reasonable efforts to afford the Company an opportunity to
contest the making of such disclosure.
6.6. Best Efforts. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its best efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including without
limitation making filings under the HSR Act, if applicable, and obtaining any
necessary third party consents. In case at any time after the Effective Time
any further action is necessary or
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desirable to carry out the purposes of this Agreement, the proper officers and
directors of each corporation which is a party to this Agreement shall take all
such necessary action.
6.7. Public Announcements. DLB and the Company will consult with
each other before issuing any press release or otherwise making any public
statements with respect to the Offer or the Merger and shall not issue any such
press release or make any such public statement prior to such consultation,
except as may be required by law.
6.8. Exchange Act Compliance. In making the Offer and in
consummating the Merger, DLB, ADI and the Company shall comply in all material
respects with the provisions of the Exchange Act and the rules and regulations
thereunder.
6.9. Consent of DLB. DLB, as the sole stockholder of ADI, by
executing this Agreement consents to the execution, delivery and performance of
this Agreement by ADI, and such consent shall be treated for all purposes as a
vote duly adopted at a meeting of the stockholders of ADI held for such
purpose.
6.10. Indemnification.
(i) As provided in Section 145 of the DGCL and as
implemented pursuant to Article VII of the Company's By-Laws, the Company shall
indemnify and, after the Effective Time, the Surviving Corporation shall
indemnify each present and former director and officer (the "Indemnified Party
or Parties") against any expenses, including attorneys' fees, fines, judgments
and amounts paid in settlement actually and reasonably incurred by it in
connection with any threatened, pending or completed action or suit to which it
is a party or is threatened to be made a party by reason of such relationship
with the Company and arising out of or pertaining to any action or omission
occurring prior to the Effective Time (including, without limitation, any which
arise out of or relate to the transactions contemplated by this Agreement) to
the fullest extent permitted or required under Section 145 of the DGCL or the
Company's By-Laws; provided, however, that any determination required to be
made pursuant to Section 145(d) of the DGCL with respect to whether an
Indemnified Party's conduct complied with the standards set forth in Delaware
law or the Company's By-Laws shall be made by independent legal counsel
selected by the Company or the Surviving Corporation, as the case may be.
(ii) This Section 6.10 shall survive the closing of the
transactions contemplated hereby, is intended to benefit the Company and each
of the Indemnified Parties (each of whom shall be entitled to enforce this
Section 6.10 against the Company or the Surviving Corporation, as the case may
be) and shall be binding on all successors and assigns of the Surviving
Corporation. In the event the Surviving Corporation or any of its successors
or assigns (i) consolidates with or merges into any other person and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers all or substantially all of its properties and assets
to any person, then, and in each such case, proper provisions shall be made so
that the successors and assigns of the Surviving Corporation assume the
obligations set forth in this Section 6.10.
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(iii) Each of the parties hereto agrees vigorously to
defend against any actions, suits or proceedings in which such party is named
as a defendant which seeks to enjoin, restrain or prohibit the transactions
contemplated hereby or seeks damages with respect to such transactions.
ARTICLE VII.
CLOSING CONDITIONS
7.1. Conditions to Obligations of the Company, DLB and ADI. The
obligations of the Company, DLB and ADI to consummate the Merger are subject to
the fulfillment of each of the following conditions, any or all of which may be
waived in whole or in part by the Company, DLB or ADI, as the case may be, to
the extent permitted by applicable law:
(a) Shareholder Approval. Unless no shareholder
approval is required by applicable law to effect the Merger, this Agreement
shall have been duly approved by the holders of a majority of the outstanding
Shares, in accordance with applicable law and the Certificate of Incorporation
and By-Laws of the Company;
(b) Government and Regulatory Consent. All filings
required to be made prior to the Effective Time by the Company, DLB or ADI
with, and all consents, approvals and authorizations required to be obtained
prior to the Effective Time by the Company, DLB or ADI from, governmental and
regulatory authorities in connection with the execution and delivery of this
Agreement by the Company, DLB or ADI and the consummation of the transactions
contemplated hereby by the Company, DLB or ADI shall have been made or obtained
(as the case may be); and
(c) Statutes; Injunctions. No United States or state
court or governmental or regulatory authority of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order, whether temporary,
preliminary or permanent (collectively, an "Order"), which is in effect and
prohibits consummation of the transactions contemplated by this Agreement.
7.2. Conditions to Obligation of DLB and ADI. The obligation of
DLB and ADI to effect the Merger shall be subject to the fulfillment at or
prior to the Effective Time of the following conditions, any one or more of
which may be waived by DLB and ADI:
(i) ADI shall have purchased pursuant to the Offer all
shares of Common Stock duly tendered and not withdrawn; provided that this
condition will be deemed to have been met if ADI fails to purchase such shares
pursuant to the Offer in violation of the terms of the Offer or this Agreement;
(ii) The Company shall have performed in all material
respects its obligations under this Agreement required to be performed on or
prior to the Effective Time pursuant to the terms hereof;
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(iii) The representations and warranties of the Company
contained in this Agreement that are qualified as to materiality shall be true
and correct and all such representations and warranties that are not so
qualified shall be true and correct in all material respects, in each case, on
the date when made and on and as of the Effective Time as if made on and as of
such date;
(iv) There shall not have occurred after the date hereof
any material adverse change in the business, Assets, prospects, condition
(financial or otherwise) or the results of operations of the Company.
7.3. Conditions to Obligation of the Company. The obligation of
the Company to effect the Merger shall be subject to the fulfillment at or
prior to the Effective Time of the following conditions, any one or more of
which may be waived by the Company:
(i) DLB and ADI shall have performed in all material
respects their obligations under this Agreement required to be performed on or
prior to the Effective Time pursuant to the terms hereof; and
(ii) The representations and warranties of DLB and ADI
contained in this Agreement that are qualified as to materiality shall be true
and correct and all such representations and warranties that are not so
qualified shall be true and correct in all material respects, in each case, on
the date when made and on and as of the Effective Time as if made on and as of
such date.
ARTICLE VIII.
CLOSING
8.1. Time and Place. Subject to the provisions of Article VII, the
closing of the Merger (the "Closing") shall take place in Oklahoma City,
Oklahoma, at the offices of McAfee & Xxxx, as soon as practicable but in no
event later than 10:00 A.M., local time, on the first business day after the
latest to occur of:
(i) the day the Merger is approved and adopted by the
stockholders of the Company pursuant to Section 6.4 or as may otherwise be
effected pursuant to this Agreement; or
(ii) the date on which each of the conditions set forth in
Article VII have been satisfied or waived by the party or parties entitled to
the benefit of such conditions;
or at such other place, at such other time, or on such other date as DLB and
the Company may mutually agree. The date on which the Closing actually occurs
is herein referred to as the "Closing Date."
8.2. Filings at the Closing. Subject to the provisions of Article
VII, on the Closing Date, the Company shall execute the Certificate of Merger
and cause it to be filed in accordance
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with the provisions of Sections 103 and 251(c) of the DGCL and shall take any
and all other lawful actions and do any and all lawful things necessary to
cause the Merger to become effective.
ARTICLE IX.
TERMINATION AND ABANDONMENT
9.1. Termination by Mutual Consent. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, before or after the approval by holders of Shares, by the mutual consent
of DLB and the Company by action of their respective Boards of Directors.
9.2. Termination by Either DLB or the Company. This Agreement may
be terminated and the Merger may be abandoned by action of the Board of
Directors of either DLB or the Company if (i) the Merger shall not have been
consummated by the 30th day of June, 1997 (unless the failure to consummate the
Merger by such date is due to the action or failure to act of the party seeking
to terminate), or (iii) if an Order pursuant to Section 7.1(c) shall have
become final and non-appealable.
9.3. Termination by DLB. This Agreement may be terminated and the
Merger may be abandoned by action of the Board of Directors of DLB if (i) ADI
(or any Purchaser Company) shall have terminated the Offer without purchasing
any Shares pursuant thereto; provided, such termination of the Offer is not in
violation of the terms of the Offer, as provided and permitted by this
Agreement, and DLB and ADI have not failed to perform its or their obligations
under this Agreement and shall not have breached any representation or warranty
contained herein in any material respect; or (ii) if the Board of Directors of
the Company shall have withdrawn or modified in a manner adverse to DLB or ADI
its approval or recommendation of the Offer, this Agreement or the Merger, or
the Board of Directors of the Company, upon request by DLB, shall fail to
reaffirm such approval or recommendation, or shall have resolved to do any of
the foregoing; provided, however, DLB shall not be entitled to terminate this
Agreement or abandon the Merger pursuant to this Section 9.3(ii) so long as DLB
shall have the right to acquire a majority of the issued and outstanding Shares
of the Company pursuant to the Offer.
9.4. Termination by the Company. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time, before
or after the approval by holders of Shares, by action of the Board of Directors
of the Company, (a) if DLB or ADI (or another Purchaser Company) shall have
failed to commence the Offer within the time required in Section 1.1; (b) after
the later of (i) ten (10) business days following commencement of the Offer or
(ii) five (5) business days following notice to DLB by the Company of the terms
of any of the following offers, if the Board of Directors of the Company
receives an unsolicited written offer at a higher dollar value per Share with
respect to a merger, consolidation or sale of all or substantially all of the
Company's assets, or if an unsolicited tender or exchange offer for the Shares
at a higher dollar value per Share is commenced, and the Board of Directors of
the Company determines to accept such merger, consolidation or sale of all or
substantially all of the
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Company's assets or recommend that its stockholders accept such tender or
exchange offer, but only after receipt by the Board of Directors of (x) a
written opinion to such effect from a recognized national investment banking
firm that such transaction is more favorable to the stockholders from a
financial point of view than the Offer and the transactions contemplated hereby
and (y) a written opinion of counsel that approval, acceptance or
recommendation of such transaction is required by fiduciary obligations under
applicable law; or (c) DLB or ADI shall have violated the terms of the Offer or
breached any of their representations, warranties or covenants under this
Agreement which breach shall have caused a reasonable likelihood that DLB or
ADI will not be able to consummate the Offer or Merger.
9.5. Procedure and Effect of Termination Procedure and Effect of
Termination. In the event of termination and abandonment of the Merger by DLB
or by the Company pursuant to this Article IX, written notice thereof shall
forthwith be given to the other and this Agreement shall terminate and the
Merger shall be abandoned without further action by any of the parties hereto.
ADI agrees that any termination by DLB shall be conclusively binding upon it,
whether given expressly on its behalf or not, and the Company shall have no
further notice obligation with respect to it. In the event of termination of
this Agreement and abandonment of the Merger pursuant to this Article IX, no
party hereto (or any of its directors or officers) shall have any liability or
further obligation to any other party to this Agreement, except that nothing
will relieve any party from liability for any breach of this Agreement. No
termination of this Agreement shall result in the termination of the
obligations of the parties under Section 6.5 (respecting confidentiality) or
Section 10.1(b) (respecting the payment of expenses).
ARTICLE X.
MISCELLANEOUS
10.1. Payment of Expenses.
(a) Whether or not the Merger shall be consummated, each
party hereto shall pay its own expenses incident to preparing for, entering
into and carrying out this Agreement and the consummation of the Merger. Any
separate counsel fees and other expenses incurred by the stockholders executing
the Stockholder Agreement shall not be borne by the Company.
(b) If (A) (x) any person, entity or group (other than
DLB or any subsidiary or affiliate of DLB or any group including DLB or any
subsidiary or affiliate of DLB) (i) shall have become beneficial owner of 25%
or more of the outstanding Shares or (ii) shall have publicly proposed (1) any
merger or consolidation with or acquisition of all or substantially all of the
assets of the Company or other similar business combination involving the
Company, (2) that any change be made in the composition of the Board of
Directors of the Company and such person, entity or group shall file proxy
materials with the SEC in respect of such proposal or (3) the purchase of 50%
or more of the total voting power of the Company, including by tender or
exchange offer, or (y) this Agreement is terminated pursuant to Section 9.3(ii)
or 9.4(b), and (B) this Agreement is terminated in accordance with its terms
without ADI having purchased any Shares pursuant to the Offer, then the Company
shall immediately pay DLB all actual,
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documented out-of-pocket expenses of DLB and ADI relating to the transaction
contemplated by this Agreement.
10.2. Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified or supplemented only by written agreement of
DLB, ADI and the Company at any time prior to the Effective Time with respect
to any of the terms contained herein; provided, however, that, after this
Agreement is adopted by the Company's stockholders pursuant to Section 6.4, no
such amendment or modification shall alter the amount or change the form of the
consideration to be delivered to the stockholders of the Company or alter or
change any of the terms or conditions of this Agreement if such alteration or
change would adversely affect the stockholders of the Company.
10.3. Waiver of Compliance; Consents. Any failure of DLB or ADI, on
the one hand, or the Company, or the other hand, to comply with any obligation,
covenant, agreement or condition herein may be waived by the Company or DLB,
respectively, only by a written instrument signed by the party granting such
waiver, but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 10.3. ADI hereby
agrees that any consent or waiver of compliance given by DLB hereunder shall be
conclusively binding upon it, whether given expressly on its behalf or not.
10.4. Investigations; Survival of Warranties. The respective
representations and warranties of DLB, ADI and the Company contained herein or
in the certificates or other documents delivered prior to or at the Closing
shall not be deemed waived or otherwise affected by any investigation made by
any party hereto. Each and every such representation and warranty shall expire
with, and be terminated and extinguished by, the Merger, and thereafter neither
DLB, ADI nor the Company, nor any officer or director thereof shall be under
any liability whatsoever with respect to any such representation or warranty.
This Section 10.4 shall have no effect upon any other obligation of the parties
hereto, whether to be performed before or after the Closing.
10.5. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given when delivered in
person, by cable, telegram or telex or registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified by like
notice);
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(i) If to DLB or ADI, to
DLB Oil & Gas, Inc.
0000 X.X. Xxxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to
Xxxxx X. Xxxxx, XX, Esq.
Fellers, Snider, Xxxxxxxxxxx, Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) If to the Company, to
Bonray Drilling Corporation
0000 X.X. 00xx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
With a copy to
Xxxx X. Xxxxxx, Esq.
McAfee & Xxxx
Two Leadership Square, 10th Floor
000 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
10.6. Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties, nor,
except for Section 6.10 (which may be enforced solely by the Indemnified
Parties), is this Agreement intended to confer upon any other person except the
parties hereto any rights or remedies hereunder.
10.7. Governing Law. This Agreement shall be governed by the laws
of the State of Delaware (regardless of the laws that might otherwise govern
under applicable Delaware principles of conflict of law) as to all matters,
including but not limited to, matters of validity, construction, effect,
performance and remedies.
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10.8. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.9. Interpretation. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, (i) the term
"person" shall mean and include an individual, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization and a government or any
department or agency thereof; (ii) the term "affiliate" shall have the meaning
set forth in Rule 12b-2 promulgated under the Exchange Act; and (iii) the term
"subsidiary" of any specified corporation shall mean any corporation 50 percent
or more of whose outstanding voting securities, or any partnership, joint
venture or other entity 50 percent or more of whose total equity interest, is
directly or indirectly owned by such specified corporation.
10.10. Employment Arrangements. Prior to the acceptance of Shares
pursuant to the Offer, DLB and ADI will make a good faith attempt to enter into
employment agreements with Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx, Xxx X. Xxxx
and Xxxxxx Xxxxxxx substantially in the form of the drafts of January 4, 1997,
furnished to the Company.
10.11. Entire Agreement. This Agreement, including all exhibits
attached hereto and the documents and instruments referred to herein, embodies
the entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
agreements and the understandings between the parties with respect to such
subject matter.
IN WITNESS WHEREOF, DLB, ADI and the Company have caused this
Agreement to be signed by their respective duly authorized officers on the date
first above written.
DLB OIL & GAS, INC.
By /S/Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
ACQUISITION DRILLING, INC.
By: /S/Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
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BONRAY DRILLING CORPORATION
By: /S/Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
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ANNEX A
Certain Conditions Of The Offer
Notwithstanding any other provision of the Offer, Acquisition
Drilling, Inc. ("ADI") shall not be required to accept for payment or pay for,
or may delay the acceptance for payment of or payment for, any tendered Shares,
or may, in its sole discretion, terminate or amend the Offer as to any Shares
not then paid for if (x) a majority of the Shares outstanding on a fully
diluted basis shall not have been validly tendered pursuant to the Offer and
not withdrawn prior to the expiration of the Offer (the "Minimum Condition"),
(y) the Agreement shall have been terminated in accordance with its terms, or
(z) on or after the date of the Agreement, and at or before the time of payment
for any such Shares, any of the following events shall occur:
(a) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New
York Stock Exchange or on NASDAQ, (ii) a declaration of a
banking moratorium or any suspension of payments in respect of
banks in the United States, (iii) a commencement of a war,
armed hostilities or other international or national calamity
directly involving the armed forces of the United States, (iv)
any general limitation (whether or not mandatory) by any
governmental authority on the extension of credit by banks or
other lending institutions, (v) in the case of any of the
foregoing existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof, (vi) a
decline of at least thirty percent (30%) in the Dow Xxxxx
Industrial Average or (vii) a change in general financial,
bank or capital market conditions which materially and
adversely affects the ability of financial institutions in the
United States to extend credit or syndicate loans;
(b) any of the representations and warranties of the Company set
forth in the Agreement, or of the Selling Stockholders set
forth in the Stockholder Agreement, that are qualified as to
materiality shall not be true and correct or any such
representations and warranties that are not so qualified shall
not be true and correct in any material respect, in each case,
on the date when made and at the Expiration Date, or in the
case of any representations and warranties that are made as of
a different date, as of that date; or
(c) the Company shall have breached or failed to comply in any
material respect with any of its obligations under the
Agreement and such failure continues for two (2) days after
receipt by the Company of notice from DLB specifying such
failure or any Selling Stockholder shall have breached or
failed to comply in any material respect with any of its
obligations under the Stockholder Agreement and such failure
continues for two (2) days after receipt by the Selling
Stockholder of notice from DLB specifying such failure; or
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(d) any statute, rule, regulation, order or injunction shall be
enacted, promulgated, entered, enforced or deemed applicable
to the Offer or the Merger or any other action shall have been
taken by any United States governmental authority or court (i)
which prohibits the consummation of the transactions
contemplated by the Offer or the Merger; (ii) which prohibits
DLB's or ADI's ownership or operation of all or any material
portion of their or the Company's business or assets, or which
compels DLB or ADI to dispose of or hold separate all or any
material portion of DLB's or ADI's or the Company's business
or assets as a result of the transactions contemplated by the
Offer or the Merger, (iii) which makes the acceptance for
payment, purchase of, or payment for, some or all of the
Shares illegal; (iv) which imposes material limitations on the
ability of DLB or ADI to acquire or hold or to exercise
effectively all rights of ownership of Shares including,
without limitation, the right to vote any Shares purchased by
ADI or DLB on all matters properly presented to the
stockholders of the Company, or (v) which imposes any
limitations on the ability of DLB or ADI, or any of their
respective subsidiaries, effectively to control in any
material respect the business or operations of the Company;
(e) DLB or ADI shall have reached an agreement or understanding in
writing with the Company providing for termination of the
Offer;
(f) any filing required to be made by the Company with, or any
consent, approval or authorization required to be obtained
prior to the Effective Time by the Company from, any
governmental or regulatory authority in connection with the
execution and delivery of the Agreement by the Company or the
consummation of the Offer or the transactions contemplated by
the Agreement, shall not have been made or obtained;
(g) there shall have occurred any material adverse change in the
business, assets, conditions (financial or otherwise), results
of operations or prospects of the Company,
which, in the reasonable judgment of DLB and ADI, in any such case, and
regardless of the circumstances giving rise to any such conditions, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment
of or payment for Shares.
The foregoing conditions are for the sole benefit of DLB and ADI and
may be asserted by DLB or ADI regardless of the circumstances or may be waived
by DLB or ADI in whole or in part at any time and from time to time in its sole
discretion.
29
