SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 1998
FREEPORT-McMoRan SULPHUR INC.
(Exact name of registrant as specified in its charter)
Delaware 1-13617 72-1392855
(State of incorporation) (Commission (IRS Employer
File Number) Identification
Number)
1615 Poydras Street, New Orleans, Louisiana 70112
(Address of principal executive officers)
(504) 582-4000
(Registrant's telephone number, including area code)
Item 5. Other Events.
------------------
The following news release was made by Freeport-McMoRan Sulphur
Inc. on August 3, 1998:
McMoRan OIL & GAS CO. AND FREEPORT-McMoRan SULPHUR INC.
ANNOUNCE AGREEMENT TO MERGE
NEW ORLEANS, LA., August 3, 1998 - McMoRan Oil & Gas Co. (NASDAQ:
MOXY) and Freeport-McMoRan Sulphur Inc. (NYSE: FSC) announced
today that they have signed a definitive agreement to combine
their operations. In the proposed transaction, a new holding
company, NEWCO (expected to be named McMoRan Exploration Co.),
would issue approximately 6.1 million NEWCO common shares in
exchange for all of FSC's common shares and approximately 8.6
million NEWCO common shares in exchange for all of MOXY's common
shares. FSC shareholders would receive 0.625 NEWCO shares for
each common share of FSC outstanding and MOXY shareholders would
receive 0.20 NEWCO shares for each common share of MOXY
outstanding. Immediately following the transaction, NEWCO would
have approximately 14.7 million common shares outstanding that
would be owned approximately 58.5 percent by MOXY's existing
common shareholders and approximately 41.5 percent by FSC's
existing common shareholders. The transaction would be tax-free
with respect to both MOXY and FSC shareholders. Application
will be made to list NEWCO's shares on the New York Stock
Exchange.
The Board of Directors of NEWCO would include the current
members of the Boards of Directors of MOXY and FSC. Mr. James R.
Moffett, currently Co-Chairman of both FSC and MOXY, would become
Chairman of NEWCO's Board. Mr. Richard C. Adkerson, currently
Co-Chairman and CEO of MOXY and Vice Chairman of FSC, and Mr.
Rene L. Latiolais, Co-Chairman of FSC, would become Vice Chairmen
of NEWCO's Board. Mr. Adkerson would also serve as President and
Chief Executive Officer of NEWCO. Mr. Robert M. Wohleber, FSC's
President and Chief Executive Officer, would become Executive
Vice President and Chief Financial Officer of NEWCO, and serve as
President and Chief Operating Officer of Freeport-McMoRan
Sulphur, which would be a wholly owned subsidiary of NEWCO. Mr.
C. Howard Murrish, currently President of MOXY, would continue as
President and Chief Operating Officer of McMoRan Oil & Gas, which
would also be a wholly owned subsidiary of NEWCO.
The completion of the merger transaction is subject to the
approval by MOXY and FSC shareholders and applicable regulatory
approvals.
Mr. Wohleber, Chief Executive Officer of FSC, said, "Since
FSC was formed in December 1997, we have analyzed numerous growth
opportunities for the investment of the cash flow generated by
our sulphur and oil production operations and by our sulphur
services business. We believe this merger provides FSC
shareholders with an attractive opportunity to benefit from
MOXY's oil and gas exploration activities and we look forward to
integrating our technical expertise with that of MOXY's. In
addition, our operations at Main Pass Block 299 make this merger
attractive to us since FSC already is a significant oil producer
and a significant consumer of natural gas in our sulphur
production operations. We will achieve cost savings through
operating synergies as well as lower administrative costs as we
combine two publicly owned companies into a single company."
Mr. Adkerson, Co-Chairman and Chief Executive Officer of
MOXY, said, "We are extremely pleased to have the opportunity to
combine with FSC in creating NEWCO, a natural resource company
with substantial financial resources and cash flows to fund
future investments in our oil and gas exploration and development
activities. Many of the technical operations involved in Frasch
sulphur production and in oil and gas production in the offshore
Gulf of Mexico are similar, which will benefit the combined
businesses. The combined company with its larger base of
operations and financial resources will be better positioned to
achieve future growth which will be a major goal of our company."
MOXY's proved reserves at December 31, 1997, totaled 40.2
billion cubic feet (BCF) of gas and 463,300 barrels of oil and
condensate, or 43 BCF equivalents. MOXY's production in 1997
totaled 4.1 BCF of gas and 34,000 barrels of oil and condensate
and for the six months ended June 30, 1998 totaled 5.0 BCF of gas
and 62,600 barrels of oil. At December 31, 1997, FSC's proved
reserves at its Main Pass Block 299 sulphur/oil operation were
53.6 million long tons of sulphur and 5.3 million barrels of oil.
FSC's sales in 1997 totaled 2.9 million long tons of sulphur and
1.6 million barrels of oil and for the six months ended June 30,
1998 were 1.7 million long tons of sulphur and 0.9 million
barrels of oil. The transaction will be reported on the basis of
purchase accounting.
The transaction was negotiated and recommended to the MOXY
Board of Directors by a special committee of independent
directors, consisting of Messrs. Robert A. Day and Gerald J.
Ford. The committee received an opinion from the investment
banking firm of Bear, Stearns & Co. Inc that the MOXY exchange
ratio is fair to the shareholders of MOXY from a financial point
of view. The transaction was negotiated and recommended to the
FSC Board of Directors by a special committee of independent
directors, consisting of Messrs. J. Terrell Brown and Thomas D.
Clark, Jr. The committee received an opinion from the investment
banking firm of Lehman Brothers Inc. that the FSC exchange ratio
is fair to the shareholders of FSC from a financial point of
view.
FSC is engaged in the mining, purchasing, transporting,
terminaling and marketing of sulphur, and the production of
related oil and gas reserves.
MOXY is an independent oil and gas company engaged in the
exploration, development and production of oil and natural gas
offshore in the Gulf of Mexico and onshore in the Gulf Coast
area.
Item 7. Financial Statements and Exhibits.
(c) Exhibit 2.1 Agreement and Plan of Mergers dated August 1, 1998. <PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
FREEPORT-McMoRan SULPHUR INC.
By: \s\ C. Donald Whitmire, Jr.
--------------------------
C. Donald Whitmire, Jr.
Vice President and Controller -
Financial Reporting
Date: August 4, 1998
Freeport-McMoRan Sulphur Inc.
Exhibit Index
Exhibit
Number
2.1 Agreement and Plan of Mergers dated August 1, 1998
by and among McMoRan Exploration Co., McMoRan Oil
& Gas Co., Freeport-McMoRan Sulphur Inc., MOXY LLC
and Brimstone LLC
Exhibit 2.1
Execution Copy
AGREEMENT AND PLAN OF MERGERS
by and among
McMoRan Exploration Co.,
McMoRan Oil & Gas Co.,
Freeport-McMoRan Sulphur Inc.
MOXY LLC
and
Brimstone LLC
August 1, 1998
TABLE OF CONTENTS
Page
ARTICLE 1 The Mergers...........................................2
Section 1.01. The MOXY Merger.............................2
Section 1.02. The FSC Merger..............................3
Section 1.03. Cancellation of Parent Stock................4
Section 1.04. Exchange Agent; Payment of Merger
Consideration. . . . . . . . . . . . . . . . . . 4
Section 1.05. Closing of MOXY and FSC Transfer Books......5
Section 1.06. Withholding.................................5
Section 1.07. Fractional Shares...........................5
Section 1.08. Stock-Based Awards..........................6
Section 1.09. Adjustments.................................6
ARTICLE 2 The Surviving Entities................................7
Section 2.01. MOXY Surviving LLC and FSC Surviving LLC....7
ARTICLE 3 Stockholder Approval; Effective Time; Closing.........7
Section 3.01. Stockholder Approval........................7
Section 3.02. Closing; Effective Time.....................7
ARTICLE 4 Representations and Warranties of MOXY................8
Section 4.01. Organization, Standing and Power............8
Section 4.02. Corporate Authorization.....................8
Section 4.03. Governmental Authorization..................9
Section 4.04. Non-Contravention...........................9
Section 4.05. Capitalization..............................9
Section 4.06. SEC Documents..............................10
Section 4.07. Compliance with Laws.......................11
Section 4.08. No Undisclosed Liabilities.................11
Section 4.09. Litigation.................................11
Section 4.10. Environmental Matters......................11
Section 4.11. ERISA......................................12
Section 4.12. Joint Proxy Statement; Registration
Statements...........................................14
Section 4.13. Absence of Certain Changes.................14
Section 4.14. Taxes......................................16
Section 4.15. Fairness Opinion...........................17
Section 4.16. Takeover Statutes; Charter Provisions; Rights
Plan.................................................17
Section 4.17. Finders' Fees..............................17
Section 4.18. Contracts..................................17
Section 4.19. Transactions with Affiliates...............18
ARTICLE 5 Representations and Warranties of FSC................18
Section 5.01. Organization, Standing and Power...........18
Section 5.02. Corporate Authorization....................18
Section 5.03. Governmental Authorization.................19
Section 5.04. Non-Contravention..........................19
Section 5.05. Capitalization.............................19
Section 5.06. SEC Documents..............................20
Section 5.07. Compliance with Laws.......................20
Section 5.08. Undisclosed Liabilities . . . . . . . . . 20
Section 5.09. Litigation . . . . . . . . . . . . . . . . 21
Section 5.10. Environmental Matters......................21
Section 5.11. ERISA......................................21
Section 5.12. Joint Proxy Statement; Registration
Statements...........................................23
Section 5.13. Absence of Certain Changes.................23
Section 5.14. Taxes......................................25
Section 5.15. Fairness Opinion...........................26
Section 5.16. Takeover Statutes; Charter Provisions; Rights
Plan.................................................26
Section 5.17. Finders' Fees..............................26
Section 5.18. Contracts..................................26
Section 5.19. Transactions with Affiliates...............27
ARTICLE 6 Covenants............................................27
Section 6.01. Conduct of Business........................27
Section 6.02. Investigation..............................29
Section 6.03. Special Meetings; Proxy Material...........30
Section 6.04. Cooperation................................30
Section 6.05. Affiliates.................................31
Section 6.06. Insurance Extension........................31
Section 6.07. Filings; Other Action......................31
Section 6.08. Further Assurances.........................31
Section 6.09. Takeover Statutes..........................32
Section 6.10. No Solicitation............................32
Section 6.11. Public Announcements.......................34
Section 6.12. Indemnification and Insurance..............34
Section 6.13. Accountants' "Comfort" Letters.............35
Section 6.14. Additional Reports.........................35
Section 6.15. No Purchase................................36
Section 6.16. Notice of Certain Events...................36
Section 6.17. Certain Litigation.........................36
ARTICLE 7 Conditions to the Mergers............................36
Section 7.01. Conditions to Both Mergers. ..............36
Section 7.02. Additional Conditions to the MOXY Merger...37
Section 7.03. Additional Conditions to the FSC Merger....38
ARTICLE 8 Termination, Waiver and Amendment....................39
Section 8.01. Termination or Abandonment.................39
Section 8.02. Amendment .................................40
Section 8.03. Extension of Time, Waiver, Etc.............40
ARTICLE 9 Miscellaneous........................................41
Section 9.01. No Survival of Representations and Warranties
.....................................................41
Section 9.02. Expenses...................................41
Section 9.03. Counterparts; Effectiveness................42
Section 9.04. Governing Law; Consent to Jurisdiction.....42
Section 9.05. WAIVER OF JURY TRIAL.......................42
Section 9.06. Notices....................................42
Section 9.07. Assignment; Binding Effect.................43
Section 9.08. Severability...............................43
Section 9.09. Entire Agreement: Benefits . . . . . . . . 43
Section 9.10. Headings...................................44
TABLE OF DEFINED TERMS
Affiliate . . . . . . . 4.19 Mergers ...............1.02(a)
Affiliate Agreement . . . 6.05 Merger Shares . . . . .1.04(a)
Agreement.............Preamble MOXY . . . . . . . . .Preamble
Bear Stearns . . . .1.01(c) MOXY Benefit Arangements.4.11(e)
Closing . . . . . . . . . 3.02 MOXY Board of
Closing Date..............3.02 Directors.............Preamble
Code......................1.06 MOXY Common Stock......1.01(b)
Confidentiality Agreement.6.02 MOXY Conversion
Delaware Law ..........1.01(a) Ratio..................1.01(b)
Effective Time ...........3.02 MOXY Employee Plans....4.11(a)
Environmental Claims...4.10(b) MOXY Merger ...........1.01(a)
Environmental Laws.....4.10(a) MOXY Merger Sub ......Preamble
ERISA .................4.11(a) MOXY Preferred Stock...4.05(a)
ERISA Affiliate .......4.11(a) MOXY SEC Documents .......4.06
Exchange Act...........4.03(c) MOXY Special Meeting......3.01
Exchange Agent ........1.04(a) MOXY Surviving LLC ....1.01(a)
FSC...................Preamble Multiemployer Plan.....4.11(b)
FSC Benefits Arrangements5.11(e) NYSE .....................1.07
FSC Board of DirectorsPreamble Old Certificate .......1.04(b)
FSC Common Stock ......1.02(b) Parent ...............Preamble
FSC Conversion Ratio...1.02(b) Parent Common Stock ...1.01(b)
FSC Employee Plans.....5.11(a) Person ................4.01(b)
FSC Merger.............1.02(a) Registration
FSC Merger Sub........Preamble Statement..............6.04(a)
FSC Preferred Stock ...5.05(a) SEC....................1.08(e)
FSC SEC Documents.........5.06 Securities Act.........1.08(e)
FSC Special Meeting.......3.01 Special Committees....Preamble
FSC Surviving LLC......1.02(a) Special Meeting...........3.01
GAAP ..................4.06(f) Stock-Based Awards.....1.08(a)
Holders ...............1.04(a) Subject Entity............6.05
HSR Act ...............4.03(b) Subsidiary.............4.01(b)
Indemnified Party(ies) 6.12(b) Substitute Option......1.08(a)
Indemnified Person. . 6.12(a) Taxes..................4.14(a)
Taxing Authorities.....4.14(a)
Tax Return.............4.14(a)
Joint Proxy Statement.....3.01 Termination Date..........6.01
Lehman . . . . . . . . Third Party
. . . . . . 1.02(c) Acquisition Proposal......6.10
Lien...................4.04(d)
Losses.................4.10(c)
Material Adverse Effect4.01(b)
Merger Consideration ..1.04(a)
AGREEMENT AND PLAN OF MERGERS
This Agreement and Plan of Mergers (the "Agreement"), dated
as of August 1, 1998, is by and among McMoRan Exploration Co., a
Delaware corporation ("Parent"), McMoRan Oil & Gas Co., a
Delaware corporation ("MOXY"), Freeport-McMoRan Sulphur Inc., a
Delaware corporation ("FSC"), MOXY LLC, a Delaware limited
liability company and a wholly owned subsidiary of Parent ("MOXY
Merger Sub"), and Brimstone LLC, a Delaware limited liability
company and a wholly owned subsidiary of Parent ("FSC Merger
Sub").
W I T N E S S E T H
WHEREAS, the respective boards of directors of MOXY and FSC
(the "MOXY Board of Directors" and the "FSC Board of Directors,"
respectively, and, collectively, the "Boards of Directors") have
established special committees (the "MOXY Special Committee" and
the "FSC Special Committee," respectively, and, collectively, the
"Special Committees"), and charged them with considering a
possible business combination between MOXY and FSC and making
recommendations to their respective Boards of Directors with
respect thereto;
WHEREAS, the Special Committees deem it advisable and in the
best interests of MOXY and FSC, respectively, and of their
respective stockholders, that such corporations become
subsidiaries of Parent pursuant to mergers of MOXY and FSC into
MOXY Merger Sub and FSC Merger Sub, respectively;
WHEREAS, the Boards of Directors, acting on the
recommendations of their respective Special Committees, deem it
advisable and in the best interests of MOXY and FSC,
respectively, and of their respective stockholders, that such
corporations become subsidiaries of Parent pursuant to mergers of
MOXY Merger Sub and FSC Merger Sub, respectively, as set forth
herein;
WHEREAS, in such mergers the stockholders of MOXY and FSC
would become stockholders of Parent based on the conversion
ratios provided for herein; and
WHEREAS, Parent is a newly-formed corporation, 50% of the
capital stock of which is owned by MOXY and 50% of the capital
stock of which is owned by FSC;
NOW THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements,
and subject to the conditions specified herein, the parties
hereto agree as follows:
ARTICLE 1
The Mergers
Section 1.01. The MOXY Merger.
(a) At the Effective Time, MOXY shall be merged (the "MOXY
Merger") with and into MOXY Merger Sub in accordance with the
General Corporation Law and the Limited Liability Company Act of
the State of Delaware ("Delaware Law"), whereupon the separate
existence of MOXY shall cease, and MOXY Merger Sub shall be the
surviving limited liability company (the "MOXY Surviving LLC").
From and after the Effective Time, the MOXY Surviving LLC shall
possess all the rights, privileges, powers and franchises, and
shall be subject to all of the restrictions and duties, of MOXY
and MOXY Merger Sub, all as provided under Delaware Law.
(b) Pursuant to the MOXY Merger, at the Effective Time:
(i) each share of common stock, par value $0.01 per
share, of MOXY ("MOXY Common Stock") outstanding immediately
prior to the Effective Time shall, except as otherwise
provided in Section 1.01(b)(ii) or Section 1.07, be
converted into 0.200 (the "MOXY Conversion Ratio") shares of
common stock, par value $0.01 per share, of Parent ("Parent
Common Stock");
(ii) each share of MOXY Common Stock held by MOXY as
treasury stock or owned by MOXY or FSC or any Subsidiary of
MOXY or FSC immediately prior to the Effective Time shall be
canceled, and no payment shall be made with respect thereto;
and
(iii) each membership interest of MOXY Merger Sub
shall remain outstanding as a membership interest of MOXY
Surviving LLC and shall constitute the only membership
interests of the MOXY Surviving LLC outstanding as of such
time.
Each share of Parent Common Stock issued pursuant to this
Agreement shall be accompanied by a right issued pursuant to a
rights plan substantially comparable to the FSC rights plan,
subject to such changes as shall be approved by the Board of
Directors of Parent.
(c) MOXY hereby represents that (i) the MOXY Special
Committee has unanimously (A) determined that the terms of this
Agreement and the MOXY Merger are fair to and in the best
interests of MOXY's stockholders and (B) recommended that this
Agreement and the MOXY Merger be approved by the full MOXY Board
of Directors, and (ii) the MOXY Board of Directors, at a meeting
duly called and held, and acting on such unanimous recommendation
of the MOXY Special Committee, has unanimously (A) determined
that this Agreement and the MOXY Merger are fair to and in the
best interests of MOXY's stockholders, (B) approved this
Agreement and the MOXY Merger, which approval satisfies in full
the requirements of Delaware Law that the Agreement be approved
by MOXY's Board of Directors and (C) resolved to recommend
approval and adoption of this Agreement and the MOXY Merger by
its stockholders; provided, that such recommendation may be
withdrawn, modified or amended to the extent the MOXY Board of
Directors has made a good faith, reasonable judgment to do so in
the exercise of its fiduciary duties under applicable law, after
consultation with its legal counsel. MOXY further represents
that Bear, Stearns & Co. Inc. ("Bear Stearns") has delivered to
the MOXY Special Committee its written opinion that, as of the
date of such opinion, the MOXY Conversion Ratio is fair to the
holders of MOXY Common Stock from a financial point of view.
MOXY has been advised that all of its directors and executive
officers who hold MOXY Common Stock intend to vote in favor of
the MOXY Merger.
Section 1.02. The FSC Merger.
(a) At the Effective Time, FSC shall be merged (the "FSC
Merger" and, together with the MOXY Merger, the "Mergers") with
and into FSC Merger Sub in accordance with Delaware Law,
whereupon the separate existence of FSC shall cease, and FSC
Merger Sub shall be the surviving limited liability company (the
"FSC Surviving LLC"). From and after the Effective Time, the FSC
Surviving LLC shall possess all the rights, privileges, powers
and franchises, and shall be subject to all of the restrictions
and duties, of FSC and FSC Merger Sub, all as provided under
Delaware Law.
(b) Pursuant to the FSC Merger, at the Effective Time:
(i) each share of common stock, par value $0.01 per
share, of FSC ("FSC Common Stock") outstanding immediately
prior to the Effective Time shall, except as otherwise
provided in Section 1.02(b)(ii) or in Section 1.07, be
converted into 0.625 (the "FSC Conversion Ratio") shares of
Parent Common Stock;
(ii) each share of FSC Common Stock held by FSC as
treasury stock or owned by FSC or MOXY or any Subsidiary of
FSC or MOXY immediately prior to the Effective time shall be
canceled, and no payment shall be made with respect thereto;
and
(iii) each membership interest of FSC Merger Sub
shall remain outstanding as a membership interest of FSC
Surviving LLC and shall constitute the only membership
interests of FSC Surviving LLC outstanding as of such time.
Each share of Parent Common Stock issued pursuant to this
Agreement shall be accompanied by a right issued pursuant to a
rights plan substantially comparable to the FSC rights plan,
subject to such changes as shall be approved by the Board of
Directors of Parent.
(c) FSC hereby represents that (i) the FSC Special
Committee has unanimously (A) determined that the terms of this
Agreement and the FSC Merger are fair to and in the best
interests of FSC's stockholders and (B) recommended that this
Agreement and the FSC Merger be approved by the full FSC Board of
Directors, and (ii) the FSC Board of Directors, at a meeting duly
called and held, and acting on such unanimous recommendation of
the FSC Special Committee, has unanimously (A) determined that
this Agreement and the FSC Merger are fair to and in the best
interests of FSC's stockholders, (B) approved this Agreement and
the FSC Merger, which approval satisfies in full the requirements
of Delaware Law that the Agreement be approved by FSC's Board of
Directors and (C) resolved to recommend approval and adoption of
this Agreement and the FSC Merger by its stockholders; provided,
that such recommendation may be withdrawn, modified or amended to
the extent the FSC Board of Directors has made a good faith,
reasonable judgment to do so in the exercise of its fiduciary
duties under applicable law, after consultation with its legal
counsel. FSC further represents that Lehman Brothers Inc.
("Lehman") has delivered to the FSC Special Committee its written
opinion that, as of the date of such opinion, the FSC Conversion
Ratio is fair to the holders of FSC Common Stock from a financial
point of view. FSC has been advised that all of its directors
and executive officers who hold FSC Common Stock intend to vote
in favor of the FSC Merger.
Section 1.03.Cancellation of Parent Stock. The shares of capital
stock of Parent owned by MOXY and FSC immediately prior to the
Effective Time shall be canceled immediately upon consummation of
the MOXY Merger and the FSC Merger, respectively.
Section 1.04. Exchange Agent; Payment of Merger
Consideration.
(a) As soon as reasonably practicable after the Effective
Time, Parent shall deposit or cause to be deposited with Chase
Mellon Shareholder Services, L.L.C. or such other institution as
may be designated by Parent, as exchange agent ("Exchange
Agent"), for the benefit of the holders of MOXY Common Stock and
FSC Common Stock (collectively, the "Holders"), (i) certificates
representing the number of whole shares of Parent Common Stock
(the "Merger Shares") to which each Holder has become entitled
pursuant to Section 1.01 or 1.02, as the case may be, and (ii)
the cash in lieu of any fractional shares to which a Holder is
entitled as provided in Section 1.07 (such cash and the Merger
Shares, together, the "Merger Consideration").
(b) As soon as reasonably practicable after the Effective
Time, and in any event within 30 days after the Effective Time,
the Exchange Agent shall mail to each Holder of record as of the
Effective Time, a form of letter of transmittal and instructions
for use in effecting the surrender of the certificates
representing MOXY Common Stock or FSC Common Stock, as the case
may be (each such certificate, an "Old Certificate"), in exchange
for the Merger Consideration. Upon the proper delivery and
surrender to the Exchange Agent of an Old Certificate, together
with a duly completed and executed letter of transmittal, the
record Holder of the Old Certificate shall be entitled to
receive, and the Exchange Agent (pursuant to irrevocable
instructions from Parent) shall deliver to such record Holder, in
exchange therefor (i) a certificate representing the Merger
Shares to which such Holder shall have become entitled pursuant
to Section 1.01 or 1.02, as the case may be, and (ii) if
applicable, cash in lieu of fractional shares as provided in
Section 1.07. Any Old Certificate delivered to the Exchange
Agent with a duly completed and executed letter of transmittal
shall be canceled. Until so delivered, each Old Certificate
shall, after the Effective Time, represent for all purposes only
the right to receive the Merger Consideration as set forth in
this Agreement. No interest will accrue or be paid on any
portion of the Merge Consiideration payable upon the surrender of
an Old Certificate. Any Holder whose Old Certificate has been
lost or destroyed may obtain the Merger Consideration into which
the MOXY Common Stock or FSC Common Stock, as the case may be,
represented by the lost Old Certificate has been converted
pursuant to Section 1.01 or 1.02, as the case may be, provided
such Holder delivers to Parent and the Exchange Agent a statement
certifying to the fact of such loss or destruction and posts a
bond in such amount as Parent may reasonably direct as indemnity
against any loss or expense that either Parent or the Exchange
Agent may incur as a result of the lost or destroyed Old
Certificate being thereafter surrendered to Parent or the
Exchange Agent. In the event of a transfer of ownership of any
MOXY Common Stock or FSC Common Stock prior to the Effective Time
that is not registered in the transfer records of MOXY or FSC, as
the case may be, the Merger Consideration may be delivered to a
transferee if the Old Certificate representing the stock so
transferred is presented to the Exchange Agent, accompanied by
all documents required to evidence and effect such transfer and
by evidence that any applicable transfer taxes have been paid or
are not payable. All deliveries and payments that are made in
accordance with the terms hereof shall be deemed to have been
made in full satisfaction of all rights pertaining to such
securities, except as may be required otherwise by law.
(c) No dividends payable with respect to any Merger Shares
shall be paid to persons entitled to receive such Merger Shares
until such persons have surrendered their Old Certificates (or
required documentation with respect to lost or destroyed Old
Certificates) to the Exchange Agent in accordance with Section
1.04(b). As soon as practicable after such surrender, there
shall be paid to the person in whose name the Merger Shares shall
be issued any dividends on such Merger Shares that have a record
date prior to the date of such surrender. If the payment date
for such dividend is after the date of such surrender, payment
shall be made on such payment date. In no event will any person
entitled to receive Merger Shares be entitled to interest on any
dividend declared or paid with respect to Merger Shares.
(d) Any Old Certificates that have not been surrendered to
the Exchange Agent or properly certified as lost or destroyed
within one year after the Effective Time shall be delivered to
Parent, upon demand, and any Holder who has not theretofore
complied with Section 1.04(b) shall thereafter look only to
Parent for payment of the Merger Consideration. Notwithstanding
the foregoing, neither the Exchange Agent nor any party hereto
shall be liable for any cash or securities delivered to a public
official pursuant to applicable abandoned property, escheat or
similar laws.
Section 1.05. Closing of MOXY and FSC Transfer Books. At
the Effective Time, the stock transfer books of MOXY and FSC
shall be closed and no transfers of MOXY Common Stock or FSC
Common Stock shall thereafter be made.
Section 1.06. Withholding. Parent shall be entitled to
deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any Holder such amounts as Parent
may be required to deduct and withhold with respect to the making
of such payment under the Internal Revenue Code of 1986, as amended
(the "Code"),or any provision of state, local or foreign tax law.
To the extent that such amounts are so withheld by Parent, such withheld
amounts shall be treated for all purposes of this Agreement as
having been paid to the Holder in respect of whom such deduction
and withholding were made.
Section 1.07. Fractional Share. No fractional shares of
Parent Common Stock shall be issued in connection with the MOXY
Merger or FSC Merger, but in lieu thereof each holder of MOXY
Common Stock or FSC Common Stock otherwise entitled to a
fractional share of Parent Common Stock (considering all Old
Certificates held of record by such holder together) shall be
entitled to receive a cash payment in an amount equal to such
fraction of a share of Parent Common Stock multiplied by the
closing price of a share of Parent Common Stock on the New York
Stock Exchange (the "NYSE") or Nasdaq National Market, as the
case may be, on the first trading day following the date on
which the Effective Time shall occur.
Section 1.08. Stock-Based Awards.
(a) At the Effective Time, each outstanding option to
purchase shares of MOXY Common Stock or FSC Common Stock and each
outstanding stock appreciation right and stock incentive unit
with respect to MOXY Common Stock or FSC Common Stock granted
under any of MOXY's or FSC's incentive plans (the "Stock-Based
Awards"), whether vested or unvested, shall be canceled, and, in
substitution therefor, Parent shall issue an option to purchase
Parent Common Stock on the terms and conditions described herein
(each such replacement option, a "Substitute Option").
Substitute Options shall be issued under a Parent incentive plan
to be adopted at or prior to the Effective Time.
(b) The number of shares of Parent Common Stock subject to
each Substitute Option shall equal the number of shares subject
to the original Stock-Based Award multiplied by the MOXY
Conversion Ratio for each MOXY Stock-Based Award, and the FSC
Conversion Ratio for each FSC Stock-Based Award. The exercise
price of each Substitute Option shall equal the exercise price of
each original Stock-Based Award divided by the MOXY Conversion
Ratio for each MOXY Stock-Based Award and the FSC Conversion
Ratio for each FSC Stock-Based Award.
(c) Each Substitute Option will have the same vesting
schedule as that of the related Stock-Based Award. Each
Substitute Option will have the same term and substantially the
same other conditions as that of the related Stock-Based Award.
(d) Prior to the Effective Time, each of MOXY and FSC shall
(i) use commercially reasonable efforts to obtain consents from
holders of any Stock-Based Awards to the extent Parent determines
such consents to be advisable and (ii) make any amendments to the
terms of any of its incentive plans or arrangements, in each case
as necessary to give effect to the transactions contemplated by
this Section 1.08.
(e) As soon as practicable after the Effective Time, Parent
shall file with the Securities and Exchange Commission (the
"SEC") a registration statement on Form S-8 with respect to the
shares of Parent Common Stock underlying the Substitute Options
and shall use its reasonable best efforts to have such
registration statement declared effective under the Securities
Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act").
Section 1.09. Adjustments. If, prior to the Effective Time,
any change in the outstanding shares of capital stock of MOXY or FSC
shall occur, including by reason of any reclassification, stock split,
stock dividend, combination, exchange or adjustment of shares, or a
record date for any of the foregoing shall be etaablished, then
the MOXY Conversion Raattiio or the FSC Conversion Ratio, as the
case may be sshall be appropriately and proportionally adjusted.
ARTICLE 2
The Surviving Entities
Section 2.01. MOXY Surviving LLC and FSC Surviving LLC
(a) At the Effective Time, the respective certificates of
incorporation and by-laws of MOXY and FSC shall be canceled.
(b) The respective certificates of formation and operating
agreements of the MOXY Surviving LLC and the FSC Surviving LLC in
effect at the Effective Time shall continue to be the
certificates of formation and operating agreements of the MOXY
Surviving LLC and the FSC Surviving LLC, respectively, after the
Effective Time, until amended in accordance with applicable law.
(c) From and after the Effective Time, until successors are
duly elected or appointed and qualified in accordance with
applicable law, (i) the officers of MOXY and FSC at the Effective
Time shall be the officers of the MOXY Surviving LLC and the FSC
Surviving LLC, respectively, and (ii) the Board of Directors of
Parent shall consist of all of the members of the Boards of
Directors of MOXY and FSC at the Effective Time.
ARTICLE 3
Stockholder Approval; Effective Time; Closing
Section 3.01. Stockholder Approval. Subject to the terms and conditions
contained herein, this Agreement and the transactions
contemplated hereby shall be submitted for approval (i) to the
holders of shares of MOXY Common Stock at a special meeting of
stockholders to be duly held for such purpose by MOXY (the "MOXY
Special Meeting") and (ii) to the holders of shares of FSC Common
Stock at a special meeting of stockholders to be duly held for
such purpose by FSC (the "FSC Special Meeting" and, together with
the MOXY Special Meeting, the "Special Meetings"). MOXY and FSC
shall coordinate and cooperate with respect to the timing of the
Special Meetings and shall endeavor to hold such meetings on the
same day and as soon as practicable after the date hereof. Each
of MOXY and FSC shall recommend that their respective
stockholders approve and adopt this Agreement and the
transactions contemplated hereby and such recommendations shall
be contained in the Joint Proxy Statement (defined below);
provided, that nothing herein shall prevent the Board of
Directors of either MOXY or FSC from withdrawing or modifying its
recommendation if such Board of Directors has made a good faith,
reasonable judgment, after consultation with its, or its Special
Committee's, legal counsel, that the failure to do so would
violate applicable law or its fiduciary duties under applicable
law. The letters to stockholders, notices of meeting, joint
proxy statement and prospectus and forms of proxies to be
distributed to stockholders of MOXY and FSC in connection with
the Mergers, and any schedules required to be filed with the SEC
in connection therewith, are collectively referred to herein as
the "Joint Proxy Statement."
Section 3.02. Closing; Effective Time. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place
at the offices of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P., 201 St. Charles Avenue, New Orleans, Louisiana
70170 at 10:00 a.m., local time, on the second business day after
satisfaction or waiver of the conditions set forth in Article 7,
or at such other time and place as MOXY and FSC may agree (the
"Closing Date"). On the Closing Date, Certificates of Merger
relating to the MOXY Merger and the FSC Merger, each specifying
that the Merger to which it relates shall become effective at
such date and time as are specified therein (which date and time
shall be the same for each Merger), shall be filed with the
Delaware Secretary of State by MOXY and FSC, respectively, in
accordance with Delaware Law, and the Mergers shall become
effective simultaneously in accordance with the terms of such
Certificates of Merger (such time and date being referred to as
the "Effective Time").
ARTICLE 4
Representations and Warranties of MOXY
MOXY represents and warrants to FSC as follows:
Section 4.01. Organization, Standing and Power
(a) Each of MOXY and its Subsidiaries is a corporation,
partnership or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction
of organization and has all requisite power and authority to
carry on its business as now conducted. Each of MOXY and its
Subsidiaries is duly qualified to do business and is in good
standing in each jurisdiction in which the business it is
conducting, or other operation, ownership or leasing of its
properties, makes such qualification necessary, other than
jurisdictions where the failure to so qualify would not,
individually or in the aggregate, have a Material Adverse Effect
on MOXY. MOXY has previously made available to FSC complete and
correct copies of its certificate of incorporation and by-laws.
(b) As used in this Agreement:
(i) "Subsidiary" means, as to any Person, any
corporation, partnership, limited liability company or other
entity in which such Person holds, directly or indirectly,
more than 50% of the securities or other ownership interests
the holders of which are generally entitled to vote with
respect to the election of the members of the board of
directors or other governing body thereof or such Person
otherwise possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies
thereof;
(ii) "Person" means an individual, corporation,
partnership, limited liability company, association, trust
or other entity or organization, including a government or
political subdivision or an agency or instrumentality
thereof; and
(iii) "Material Adverse Effect" means, as to any
Person, a material adverse change in the business, assets,
condition (financial or otherwise) or results of operations
of such Person and its Subsidiaries, taken as a whole.
Section 4.02. Corporate Authorization. The execution, delivery and
performance by MOXY of this Agreement and the consummation by
MOXY of the transactions contemplated hereby are within MOXY's
corporate powers and, except for approval of this Agreement and
the MOXY Merger by MOXY's stockholders, have been duly authorized
by all necessary corporate action. Without limiting the
generality of the foregoing, the Board of Directors of MOXY has
unanimously adopted a resolution adopting and approving this
Agreement. The affirmative vote of a majority of the outstanding
shares of MOXY Common Stock is the only vote of any class or
series of MOXY's capital stock necessary to approve and adopt
thhiiss Agreement and the transactions contemplated hereby. This
Agreement has been duly executed and delivered by MOXY and
constitutes a valid and binding agreement of MOXY, enforceable
against MOXYY in accordance with its terms, subject to (a)
bankruptcy, insolvency, moratorium and other similar laws and
court decisions now or hereafter in effect relating to or
affecting creditors' rights generally and (b) general principles
of equity (regardless of whether considered in a proceeding at
law or in equity).
Section 4.03. Governmental Authorization. The execution, delivery and
performance by MOXY of this Agreement and the consummation of the
MOXY Merger by MOXY require no action by or in respect of, or
filing with, any governmental body, agency, official or authority
other than (a) the filing of a Certificate of Merger in
accordance with Delaware Law, (b) compliance with any applicable
requirements of the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), (c) compliance with any
applicable requirements of the Securities Act, the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act") and any applicable
Blue Sky laws; and (d) compliance with such other applicable
regulatory requirements as would not have a Material Adverse
Effect on MOXY.
Section 4.04. Non-Contravention. Except as disclosed in Schedule 4.04, the
execution, delivery and performance by MOXY of this Agreement and
the consummation by MOXY of the transactions contemplated hereby
do not and will not (a) contravene or conflict with the
certificate of incorporation or by-laws of MOXY, (b) assuming
compliance with the matters referred to in Section 4.03,
contravene, conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or
decree binding upon or applicable to MOXY or any of its
Subsidiaries, (c) constitute a default (or an event that with
notice, the lapse of time or both would become a default), or
give rise to a right of termination, cancellation or acceleration
of any right or obligation, under any provision of any agreement,
contract or other instrument binding upon MOXY or any of its
Subsidiaries, or (d) result in the creation or imposition of any
Lien on any asset of MOXY or any of its Subsidiaries, except for
such contraventions, conflicts or violations referred to in
clause (b), (c) or (d) that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect on MOXY. For purposes of this Agreement, "Lien" means,
with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such
asset.
Section 4.05. Capitalization.
(a) As of the date hereof, the authorized capital
stock of MOXY consists of 150,000,000 shares of MOXY Common
Stock, and 50,000,000 shares of preferred stock, par value $0.01
per share (the "MOXY Preferred Stock"). At the close of business
on June 30, 1998, (i) 42,887,380 shares of MOXY Common Stock
were issued and outstanding and no shares were held in its
treasury, (ii) 5,196,792 shares of MOXY Common Stock were
reserved for issuance pursuant to outstanding options to acquire
MOXY Common Stock (of which options to purchase an aggregate of
2,304,053 shares of MOXY Common Stock were exercisable), and
(iii) no shares of MOXY Preferred Stock were issued or
outstanding. All outstanding shares of MOXY Common Stock have
been validly issued and are fully paid and nonassessable. Except
for the outstanding stock options covering 5,196,792 shares of
MOXY Common Stock, as of the date hereof, there are no options,
warrants, calls, rights, commitments or agreements to which MOXY
or any of its Subsidiaries is a party, or by which it is bound,
obligating MOXY or any of its Subsidiaries to issue, deliver,
sell, purchase, redeem or acquire, or cause to be issued,
delivered, sold, purchased, redeemed or acquired, any shares of
capital stock or other voting securities of MOXY or any of its
Subsidiaries or obligating MOXY or any of its Subsidiaries to
grant, extend or enter into any such option, warrant, call right,
commitment or agreement.
(b) Except as disclosed in any of the MOXY SEC Documents,
all of the outstanding capital stock of, or other ownership
interests in, each Subsidiary of MOXY is owned by MOXY, directly
or indirectly, free and clear of any Lien and free of any other
limitation or restriction (including any restriction on the right
to vote, sell or otherwise dispose of such capital stock or other
ownership interests).
Section 4.06.SEC Documents. MOXY has previously furnished to FSC true and
complete copies of the following (collectively, the "MOXY SEC
Documents"):
(a) MOXY's Annual Reports on Form 10-K filed with the SEC
for each of the years ended December 31, 1995 through 1997;
(b) MOXY's Quarterly Reports on Form 10-Q filed with the
SEC for the quarter ended March 31, 1998;
(c) each definitive proxy statement filed by MOXY with the
SEC since December 31, 1995;
(d) each final prospectus filed by MOXY with the SEC since
December 31, 1995, except any final prospectus included in a
registration statement on Form S-8;
(e) all Current Reports on Form 8-K filed by MOXY with the
SEC since December 31, 1995; and
(f) all of its other reports, statements, schedules and
registration statements filed with the SEC since December 31,
1995.
As of their respective dates, such MOXY SEC Documents (i)
complied as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and (ii)
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 consolidated financial statements and unaudited
consolidated interim financial statements included in the MOXY
SEC Documents (including any related notes and schedules) present
fairly the financial position of MOXY and its consolidated
Subsidiaries as of the dates thereof and the results of
operations and cash flows for the periods covered thereby
(subject, in the case of unaudited interim period statements, to
normal year-end adjustments), in each case in accordance with
past practice and generally accepted accounting principles
("GAAP") consistently applied during the periods involved (except
as otherwise disclosed in the notes thereto). Since December 31,
1995, MOXY has timely filed all reports, registration statements
and other filings required to be filed by it with the SEC.
Section 4.07. Compliance with Laws. Since December 31, 1995, the businesses
of MOXY and its Subsidiaries have not and are not being conducted
in violation of, nor were they conducted in violation of, any
law, ordinance or regulation of any governmental entity (provided
that no representation or warranty is made in this ecction 4.07
with respect to Environmental Laws), except as disclosed in any
of the MOXY SEC Documents and except for such violations as would
not, individually or in the aggregate, have a Material Adverse
Effect on MOXY.
Section 4.08. No Undisclosed Liabilities. As of March 31, 1998,
neither MOXY nor any of its Subsidiaries had any liabilities or
obligations of any nature, whether absolute, accrued, contingent,
determined, determinable or otherwise, that would be required by
GAAP to be reflected on a consolidated balance sheet of MOXY and
its Subsidiaries (or in the notes thereto) and there is no
existing condition, situation or set of circumstances that could
reasonably be expected to result in such a liability, except (a)
liabilities or obligations reflected in the financial statements
included in the MOXY SEC Documents, (b) liabilities or
obligations incurred in the ordinary course of business
consistent with past practice that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect on MOXY, and (c) liabilities and obligations under this
Agreement.
Section 4.09. Litigation.
As of the date of this Agreement, except as
disclosed in any of the MOXY SEC Documents, there is no (i) class
action litigation pending or, to the best knowledge of MOXY,
threatened against or affecting MOXY or any of its Subsidiaries,
(ii) other suit, action or proceeding pending (or any known basis
therefor) or, to the best knowledge of MOXY, threatened against
or affecting MOXY or any of its Subsidiaries or any of their
respective properties that could reasonably be expected to have a
Material Adverse Effect on MOXY or that in any manner challenges
or seeks to prevent, enjoin, alter or materially delay the
Mergers or any of the other transactions contemplated hereby, or
(iii) judgment, decree, injunction, rule or order of any court,
governmental entity or arbitrator outstanding against MOXY or any
of its Subsidiaries, if determined adversely to MOXY, that is
reasonably likely to have a Material Adverse Effect on MOXY or
that in any manner challenges or seeks to prevent, enjoin, alter
or materially delay the Mergers or any of the other transactions
contemplated hereby.
Section 4.10. Environmental Matters. Except as previously disclosed in
writing to FSC or described in the MOXY SEC Documents, (a) each
of MOXY and its Subsidiaries is in material compliance with all
applicable federal, state, local and foreign laws, regulations,
rules, orders, decrees, treaties, judicial decisions, judgments,
injunctions, permits and governmental restrictions relating to
pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) (collectively,
"Environmental Laws"), except for such non-compliance as would
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on MOXY, and, to the best
knowledge of MOXY, there are no circumstances that are reasonably
likely to materially prevent or interfere with such compliance in
the next three years, (b) neither MOXY nor any of its
Subsidiaries has received written notice of or, to the best
knowledge of MOXY, is the subject of, any actions, causes of
action, claims, investigations, demands, notices, requests for
information, complaints, suits or proceedings by any Person
alleging liability under or non-compliance with any Environmental
Law ("Environmental Claims") that are reasonably likely,
individually or in the aggregate, to have a Material Adverse
Effect on MOXY; and (c) as of March 31, 1998, neither MOXY nor
any of its Subsidiaries had any liabilities or obligations of any
nature whether absolute, accrued, contingent or otherwise, and
whether relating to MOXY, any of its Subsidiaries or any
predecessor entities of MOXY or any of its Subsidiaries, arising
under or relating to any Environmental Law, except for
liabilities or obligations that would not, (i) individually or in
the aggregate, be reasonably expected to result in liabilities,
losses, damages or expenses of any kind, including without
limitation capital expenditures ("Losses"), in excess of $5.0
million during the five-year period beginning on the date hereof
or (ii) individually or in the aggregate, have a Material Adverse
Effect on MOXY (taking into account any applicable reserves).
Section 4.11. ERISA.
(a) Schedule 4.11 contains a list identifying each
"employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974 ("ERISA"), that
is (i) subject to any provision of ERISA and (ii) maintained,
administered or contributed to by MOXY or any ERISA Affiliate and
covers any employee or former employee of MOXY or any Subsidiary
of MOXY or under which MOXY or any Subsidiary of MOXY has or may
have any liability. Copies of such plans (and if applicable,
related trust agreements) and all amendments thereto and written
interpretations thereof have been made available to FSC together
with (A) any recent annual reports (Form 5500 including, if
applicable, Schedule B thereto) prepared in connection with any
such plan and (B) the most recent actuarial valuation report
prepared in connection with any such plan. Such plans are
referred to collectively herein as the "MOXY Employee Plans."
For purposes of this Agreement, an "ERISA Affiliate" of any
Person means any other Person which, together with such Person,
would be treated as a single employer under Section 414 of the
Code.
(b) Except as set forth in Schedule 4.11, no MOXY Employee
Plan (i) constitutes a "multiemployer plan," as defined in
Section 3(37) of ERISA (a "Multiemployer Plan"), (ii) is
maintained in connection with any trust described in Section
501(c)(9) of the Code or (iii) is subject to Title IV of ERISA.
Neither MOXY nor any ERISA Affiliate of MOXY has (A) engaged in,
or is a successor or parent corporation to an entity that has
engaged in, a transaction of a type described in Sections 4069 or
4212(c) of ERISA or (B) incurred, or reasonably expects to incur
prior to the Effective Time, (1) any liability under Title IV of
ERISA arising in connection with the termination of, or a
complete or partial withdrawal from, any plan covered or
previously covered by Title IV of ERISA or (2) any liability
under Section 4971 of the Code that in either case could become a
liability of Parent or any of its Subsidiaries after the
Effective Time. Nothing done or omitted to be done, and no
transaction or holding of any asset under or in connection with
any MOXY Employee Plan, has made or will make MOXY or any
Subsidiary of MOXY, or any officer or director of MOXY or any
Subsidiary of MOXY, subject to any liability under Title I of
ERISA or liable for any tax pursuant to Section 4975 of the Code
that individually or in the aggregate could have a Material
Adverse Effect on MOXY.
(c) With respect to each MOXY Employee Plan that is
intended to be qualified under Section 401(a) of the Code, MOXY
has received a favorable determination letter that the plan is so
qualified and that each trust forming a part thereof is exempt
from tax pursuant to Section 501(a) of the Code and, to the best
knowledge of MOXY, no event has occurred since the date of such
determination that would adversely affect such qualification and
exception. MOXY has made available to FSC copies of the most
recent Internal Revenue Service determination letters with
respect to each such Plan. Each MOXY Employee Plan has been
maintained in all material respects in compliance with its terms
and with the requirements prescribed by any and all statutes,
orders, rules and regulations, that are applicable to such Plan
including but not limited to ERISA and the Code.
(d) Except as set forth in Schedule 4.11, there is no
contract, agreement, plan or arrangement covering any employee or
former employee of MOXY or any of its Subsidiaries that,
individually or collectively, could give rise to the payment of
any amount that would not be deductible pursuant to the terms of
Sections 162(a)(1), 162(m) or 280G of the Code.
(e) MOXY has provided FSC with a list of each employment,
severance and other similar contract, arrangement or policy, and
each plan or arrangement (whether written or oral but excluding
any state mandated program or policy) providing for insurance
coverage (including any self-insured arrangements), with respect
to workers' compensation benefits, disability benefits,
supplemental unemployment benefits, vacation benefits, retirement
benefits or deferred compensation, profit-sharing, bonuses, stock
options, stock appreciation rights or other forms of incentive
compensation or post-retirement insurance, compensation or
benefits which (i) is not a MOXY Employee Plan, (ii) has been
entered into, maintained or contributed to, as the case may be,
by MOXY or any of its ERISA Affiliates and (iii) covers any
employee or former employee of MOXY or any of its Subsidiaries.
Such contracts, plans and arrangements as are described above,
copies or descriptions of all of which have been furnished or
made available previously to FSC, are referred to collectively
herein as the "MOXY Benefit Arrangements." Each MOXY Benefit
Arrangement has been maintained in substantial compliance with
its terms and with the requirements prescribed by any and all
applicable statutes, orders, rules and regulations.
(f) Except as set forth in Schedule 4.11, neither MOXY nor
any Subsidiary of MOXY has any current or projected liability in
respect of post-employment or post-retirement health or medical
or life insurance benefits for retired, former or current
employees of MOXY or any Subsidiary of MOXY, except as required
to avoid excise taxes under Section 4980B of the Code. No
condition exists that would prevent MOXY or any Subsidiary of
MOXY from amending or terminating any MOXY Employee Plan or MOXY
Benefit Arrangement providing health or medical benefits in
respect of any active, former or retired employee of MOXY or any
of its Subsidiaries.
(g) Except as set forth in Schedule 4.11, there has been no
amendment to, written interpretation or announcement (whether or
not written) by MOXY or any of its Subsidiaries relating to, or
change in employee participation or coverage under, any MOXY
Employee Plan or MOXY Benefit Arrangement that would increase
materially the expense of maintaining such MOXY Employee Plan or
MOXY Benefit Arrangement above the level of the expense incurred
in respect thereof for the fiscal year ended on December 31,
1997.
(h) There is no unfair labor practice complaint pending or,
to the best knowledge of MOXY, threatened against MOXY or any of
its Subsidiaries before the National Labor Relations Board that
would reasonably be expected to have a Material Adverse Effect on
MOXY.
(i) Except as set forth in Schedule 4.11, there is no issue
with respect to any MOXY Employee Plan or MOXY Benefit
Arrangement that is now, or within the last twelve months has
been, under examination by the Internal Revenue Service or the
Department of Labor. There is no (i) pending investigation by
any governmental or regulatory agency or authority involving or
relating to any MOXY Employee Plan or MOXY Benefit Arrangement,
or (ii) threatened or pending claim (except for claims for
benefits payable in the normal operations of the MOXY Employee
Plans or MOXY Benefit Arrangement), suit or proceeding against
any MOXY Employee Plan or MOXY Benefit Arrangement or asserting
any rights or claims to benefits under any MOXY Employee Plan or
MOXY Benefit Arrangement that could reasonably be expected to
have a Material Adverse Effect on MOXY.
Section 4.12. Joint Proxy Statement; Registration
Statements. None of the information with respect
to MOXY or its Subsidiaries or the MOXY Merger to be included in
the Joint Proxy Statement or the Registration Statement will, in
the case of the Joint Proxy Statement or any amendments thereof
or supplements thereto, at the time of the mailing of the Joint
Proxy Statement or any amendments or supplements thereto, and at
the time of the MOXY Special Meeting, or, in the case of the
Registration Statement, at the time it becomes effective, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no
representation is made by MOXY with respect to information
relating to FSC or its Subsidiaries. The Joint Proxy Statement
will comply as to form in all material respects with the
provisions of the Exchange Act.
Section 4.13. Absence of Certain Changes. Since March 31, 1998, each
of MOXY and its Subsidiaries has conducted its business in the
ordinary course consistent with past practice and has not, except
as set forth on Schedule 4.13:
(a) declared, set aside or paid any dividend or other
distribution with respect to any shares of capital stock of MOXY
or any of its Subsidiaries or repurchased, redeemed or acquired
any outstanding shares of capital stock or other securities of,
or other ownership interests in, MOXY or any of its Subsidiaries;
(b) amended any term of any of its outstanding securities;
(c) incurred, assumed or guaranteed any indebtedness from
any third party for borrowed money other than in the ordinary
course of business;
(d) created or assumed any Lien on any material asset,
other than in the ordinary course of business consistent with
past practices;
(e) loaned, advanced or contributed to, or invested in, any
Person other than (i) loans, advances or capital contributions to
or investments in wholly owned Subsidiaries of MOXY, (ii)
investments in securities consistent with past practice or (iii)
other loans, advances, capital contributions or investments in an
aggregate amount not exceeding $1.0 million;
(f) incurred any damage, destruction or other casualty loss
(whether or not covered by insurance) affecting its business or
assets that, individually or in the aggregate, has had or may
reasonably be expected to have a Material Adverse Effect on MOXY;
(g) engaged in any transaction or entered into or amended
any agreement relating to its assets or businesses (including,
without limitation, the acquisition or disposition of any assets)
or relinqished any contract, license or other right that, in
any such case, individually or in the aggregate, has had or my
reasonably be expected to have a Material Adverse Effect on MOXY,
other than transactions or agreements contemplated by this
Agreement;
(h) changed any method of accounting or accounting
principle or practice, except for any such change required by
reason of a concurrent change in GAAP;
(i) except in the ordinary course of business consistent
with past practices, (A) granted any severance or termination pay
to, or entered into any employment, termination, severance,
deferred compensation or other similar arrangement with, any of
its directors, officers or employees; (B) amended in any material
respect any employment, termination, severance, deferred
compensation or other similar arrangement with any of its
directors, officers or employees (it being understood that any
increase or acceleration of benefits under any such agreement or
arrangement shall be deemed material); (C) established, adopted,
entered into, amended or otherwise accelerated or enhanced any
rights or benefits under, (i) any plan providing for options,
stock, performance awards or other forms of incentive or deferred
compensation or (ii) any bonus, profit sharing, compensation,
restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any of its
directors, officers or employees; or (D) increased the
compensation or benefits of any other employees or payment of any
benefit not required by any plan or arrangement as in effect on
March 31, 1998;
(j) except such contracts as would not be material to MOXY
and its Subsidiaries as a whole, entered into any contract
limiting the right of MOXY or any of its Subsidiaries at any time
on or after the date of this Agreement or Parent or any of its
Subsidiaries at or after the Effective Time, to engage in, or to
compete with any Person in, any business;
(k) entered into any acquisition or joint venture that is
material to MOXY and its Subsidiaries, taken as a whole;
(l) amended its articles of incorporation, by-laws or
similar organizational documents;
(m) been the subject of any labor dispute, other than
routine individual grievances, or any activity or proceeding by a
labor union or representative thereof to organize any of its
employees, which employees were not subject to a collective
bargaining agreement at March 31, 1998, or any lockouts, strikes,
slowdowns, work stoppages or threats thereof by or with respect
to such employees; or
(n) been subject to any event, occurrence or development
that, individually or in the aggregate, has had or would be
reasonably likely to have a Material Adverse Effect on MOXY,
except for general economic changes, changes that affect the
industry of MOXY or any of its Subsidiaries generally, and
changes in MOXY's business after the date hereof attributable
solely to the execution of this Agreement or actions taken by
Parent.
Section 4.14. Taxes.
(a) For purposes of this Agreement, "Taxes" means all
United States Federal, state, local and foreign taxes, levies and
other assessments, including, without limitation, all income,
sales, use, goods and services, value added, capital, capital
gains, net worth, transfer, profits, withholding, payroll,
employer health, unemployment insurance payments, excise, real
property and personal property taxes, any other taxes,
assessments or similar charges in the nature of a tax, including
without limitation, interest, additions to tax, fines and
penalties, imposed by a governmental or public body, agency,
official or authority (the "Taxing Authorities"). For purposes
of this Agreement, "Tax Return" shall mean any return, report,
information return or other document (including any related or
supporting information) required to be filed with any Taxing
Authority in connection with the determination, assessment,
collection, administration or imposition of any Taxes.
(b) All Tax Returns required to be filed (taking into
account all extensions heretofore granted) on or before the date
hereof or the Effective Time by or on behalf of MOXY or any of
its Subsidiaries have been filed within the time and in the
manner prescribed by law, other than those Tax Returns the
failure of which to file would not have a Material Adverse Effect
on MOXY.
(c) As of the time of filing, all such Tax Returns
correctly reflected in all material respects all facts regarding
the income, business, assets, operations, activities and status
of MOXY and its Subsidiaries and any other information required
to be shown therein.
(d) All Taxes shown to be due and payable by MOXY and any
of its Subsidiaries on all such Tax Returns have been timely
paid, or withheld and remitted to the appropriate Taxing
Authoritie
(e) Except as set forth on Schedule 4.14, all applicable
statutes of limitations for the assessment of material Taxes
against MOXY and any of its Subsidiaries have expired. No
deficiency payment of any Taxes for any period has been asserted
by any Taxing Authority which remains unsettled at the date
hereof except for deficiencies which would not have a Material
Adverse Effect on MOXY.
(f) Except for Tax Returns required to be filed with
respect to the 1997 taxable year, neither MOXY nor any of its
Subsidiaries has requested any extension of time within which to
file any Tax Return which has not yet been filed.
(g) There are no material Liens upon any property or assets
of MOXY or any of its Subsidiaries for Taxes, except for Tax
liens in respect of Taxes not yet due or which are being
contested in good faith and by appropriate proceedings (and for
the payment of which adequate reserves have been provided) and
reflected in the MOXY SEC Documents.
(h) Except as set forth on Schedule 4.14, there is no
claim, audit, action, suit, proceeding or investigation now
pending or threatened against or with respect to MOXY or any of
its Subsidiaries in respect of any Taxes.
(i) Except as set forth on Schedule 4.14, neither MOXY nor
any of its Subsidiaries has any contractual obligations under any
tax sharing agreement or similar agreement or tax indemnity
agreement with any corporation which is not a member of the
affiliated group of corporations of which MOXY is the common
parent.
(j) There are no requests for rulings or determinations in
respect of any Tax pending between MOXY or any of its
Subsidiaries and any Taxing Authorities.
(k) Neither MOXY nor any of its Subsidiaries own any
interest in real property in the State of New York or in any
other jurisdiction in which a Tax is imposed on the transfer of a
controlling interest in an entity that owns any interest in real
property.
Section 4.15. Fairness Opinion.The MOXY Special Committee has
received the opinion of Bear Stearns to the effect that, as of
the date thereof, the MOXY Conversion Ratio is fair to the holders
of MOXY Common Stock from a financial point of view.
Section 4.16. Takeover Statutes; Charter Provisions; Rights
Plan. The Board of Directors of MOXY has
approved this Agreement, the MOXY Merger and the other
transactiions contemplated hereby and has taken such action as is
necessary to (i) satisfy any applicable restrictions on business
combinations contained in Section 203 of the Delaware General
Corporation Law and Article Ninth of the certificate of
incorporation of MOXY and (ii) eliminate the applicability of
MOXY's Rights Agreement dated as of May 14, 1992, as amended, to
this Agreement, the Mergers and the other transactions
contemplated hereby. No other state takeover statutes are
applicable to the Mergers or the other transactions contemplated
hereby.
Section 4.17. Finders' Fees. Except for Bear Stearns, which
has been retained by the MOXY Special Committee and whose fees will
be paid by MOXY, there is no investment banker, broker, finder or
other intermediary who might be entitled to any fee or commission
from MOXY or any of its affiliates (other than FSC) upon
consummation of the transactions contemplated by this Agreement.
Section 4.18. Contracts.
All material contracts of MOXY and its Subsidiaries that are
required to be described in the MOXY SEC Documents or to be filed
as exhibits thereto have been described or filed as required.
Neither MOXY nor any of its Subsidiaries nor, to the knowledge of
MOXY, any other party is in breach of or default under any such
contracts that are currently in effect, except for such breaches
and defaults as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on
MOXY. Except as set forth in the MOXY SEC Documents, neither
MOXY nor any of its Subsidiaries is a party to or bound by any
noncompetition agreement or any other agreement or obligation
that purports to limit in any material respect the manner in
which, or the localities in which, MOXY or any such Subsidiary is
entitled to conduct all or any material portion of the business
of MOXY and its Subsidiaries taken as a whole.
Section 4.19. Transactions with Affiliates. Except to the extent
disclosed in the MOXY SEC Documents filed prior to the date of
this Agreement, from December 31, 1995 through the date of this
Agreement and except for the transactions contemplated hereby,
there have been no transactions, agreements, arrangements or
understandings between MOXY or its Subsidiaries, on the one hand,
and MOXY's Affiliates (other than wholly owned Subsidiaries of
MOXY) or other Persons, on the other hand, that would be required
to be disclosed under Item 404 of Regulation S-K under the
Securities Act. For purposes of this Agreement, the term
"Affiliate," when used with respect to any Person, means any
other Person directly or indirectly controlling, controlled by,
or under common control with such Person. As used in the
definition of "Affiliate," the term "control" means possession,
directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise.
ARTICLE 5
Representations and Warranties of FSC
FSC represents and warrants to MOXY as follows:
Section 5.01. Organization, Standing and Power. Each of FSC
and its Subsidiaries is a corporation, partnership or limited
liability company duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and
has all requisite power and authority to carry on its business as
now conducted. Each of FSC and its Subsidiaries is duly
qualified to do business and is in good standing in each
jurisdiction in which the business it is conducting, or other
operation, ownership or leasing of its properties, makes such
qualification necessary, other than jurisdictions where the
failure to so qualify would not, individually or in the
aggregate, have a Material Adverse Effect on FSC. FSC has
previously made available to MOXY complete and correct copies of
its certificate of incorporation and by-laws.
Section 5.02. Corporate Authorization. The execution, delivery and
performance by FSC of this Agreement and the consummation by FSC
of the transactions contemplated hereby are within FSC's
corporate powers and, except for approval of this Agreement and
the FSC Merger by FSC's stockholders, have been duly authorized
by all necessary corporate action. Without limiting the
generality of the foregoing, the Board of Directors of FSC has
unanimously adopted a resolution adopting and approving this
Agreement. The affirmative vote of a majority of the outstanding
shares of FSC Common Stock is the only vote of any class or
series of FSC's capital stock necessary to approve and adopt this
Agreement and the transactions contemplated hereby. This
Agreement has been duly executed and delivered by FSC and
constitutes a valid and binding agreement of FSC, enforceable
against FSC in accordance with its terms, subject to (a)
bankruptcy, insolvency, moratorium and other similar laws and
court decisions now or hereafter in effect relating to or
affecting creditors' rights generally and (b) general principles
of equity (regardless of whether considered in a proceeding at
law or in equity),
Section 5.03. Governmental Authorization. The execution, delivery and
performance by FSC of this Agreement and the consummation of the
FSC Merger by FSC require no action by or in respect of, or
filing with, any governmental body, agency, official or authority
other than (a) the filing of a Certificate of Merger in
accordance with Delaware Law; (b) compliance with any applicable
requirements of the HSR Act; (c) compliance with any applicable
requirements of the Securities Act, the Exchange Act and
applicable Blue Sky laws; and (d) compliance with such other
applicable regulatory requirements as would not have a Material
Adverse Effect on FSC.
Section 5.04 Non-Contravention. Except as disclosed in Schedule 5.04,
execution, delivery and performance by FSC of this Agreement and
the consummation by FSC of the transactions contemplated hereby
do not and will not (a) contravene or conflict with the
certificate of incorporation or by-laws of FSC, (b) assuming
compliance with the matters referred to in Section 5.03,
contravene, conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or
decree binding upon or applicable to FSC or any of its
Subsidiaries, (c) constitute a default (or an event that with
notice, the lapse of time or both would become a default), or
give rise to a right of termination, cancellation or acceleration
of any right or obligation, under any provision of any agreement,
contract or other instrument binding upon FSC or any of its
Subsidiaries, or (d) result in the creation or imposition of any
Lien on any asset of FSC or any of its Subsidiaries, except for
such contraventions, conflicts or violations referred to in
clause (b), (c) or (d) that would not, individually or in the
aggregate, have a Material Adverse Effect on FSC.
Section 5.05. Capitalization.
(a) As of the date hereof, the authorized capital stock of
FSC consists of 150,000,000 shares of FSC Common Stock, and
50,000,000 shares of preferred stock, par value $0.01 per share
(the "FSC Preferred Stock"). At the close of business on June
30, 1998, (i) 9,740,603 shares of FSC Common Stock were issued
and outstanding and 646,100 were held in its treasury, (ii)
756,408 shares of FSC Common Stock were reserved for issuance
pursuant to options to acquire FSC Common Stock (of which options
to purchase an aggregate of 381,408 shares of FSC Common Stock
were exercisable), and (iii) no shares of FSC Preferred Stock
were issued or outstanding. All outstanding shares of FSC Common
Stock have been validly issued and are fully paid and
nonassessable. Except for the outstanding Stock Options covering
756,408 shares of FSC Common Stock, as of the date hereof, there
are no options, warrants, calls, rights, commitments or
agreements to which FSC or any of its Subsidiaries is a party or
by which it is bound, obligating FSC or any of its Subsidiaries
to issue, deliver, sell, purchase, redeem or acquire, or cause to
be issued, delivered, sold, purchased, redeemed or acquired, any
shares of capital stock or other voting securities of FSC or any
of its Subsidiaries or obligating FSC or any of its Subsidiaries
to grant, extend or enter into any such option, warrant, call,
right, commitment or agreement.
(b) Except as disclosed in any of the FSC SEC
Documents, all of the outstanding capital stock of, or other
ownership interests in, each Subsidiary of FSC is owned by FSC,
directly or indirectly, free and clear of any Lien and free of
any other limitation or restriction (including any restriction on
the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests).
Section 5.06.SEC Documents. FSC has previously furnished to MOXY
true and complete copies of the following (collectively, the "FSC SEC
Documents"):
(a) FSC's Annual Report on Form 10-K filed with the SEC for
the year ended December 31, 1997;
(b) FSC's Quarterly Reports on Form 10-Q filed with the SEC
for the quarter ended March 31, 1998;
(c) each definitive proxy statement filed by FSC with the
SEC since December 22, 1997;
(d) each final prospectus filed by FSC with the SEC since
December 22, 1997, except any final prospectus included in a
registration statement on Form S-8;
(e) all Current Reports on Form 8-K filed by FSC with the
SEC since December 22, 1997; and
(f) all of its other reports, statements, schedules and
registration statements filed with the SEC since December 22,
1997.
As of their respective dates, such FSC SEC Documents (i)
complied as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and (ii)
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 consolidated financial statements and unaudited
consolidated interim financial statements included in the FSC SEC
Documents (including any related notes and schedules) present
fairly the financial position of FSC and its consolidated
Subsidiaries as of the dates thereof and the results of
operations and cash flows for the periods covered thereby
(subject, in the case of unaudited interim period statements, to
normal year-end adjustments), in each case in accordance with
past practice and GAAP consistently applied during the periods
involved (except as otherwise disclosed in the notes thereto).
Since December 31, 1997, FSC has timely filed all reports,
registration statements and other filings required to be filed by
it with the SEC.
Section 5.07. Compliance with Laws. Since December 22, 1997,
the businesses of FSC and its Subsidiaries have not and are not
being conducted in violation of, nor were they conducted in
violation of, any law, ordinance or regulation of any governmental
entity (provided that no representation or warranty is made in this
Section 5.07 with respect to Environmental Laws), except as disclosed
in any of the FSC SEC Documents and except for such violations as would
not, individually or in the aggregate, have a Material Adverse
Effect on FSC.
Section 5.08. Undisclosed Liabilities. As of March 31,
1998 neither FSC nor any of its Subsidiaries had any liabilities
or obligations of any nature, whether absolute, accrued,
contingent, determined, determinable or otherwise, that would be
required by GAAP to be reflected on a consolidated balance sheet
of FSC and its Subsidiaries (or in the notes thereto) and there
is no existing condition, situation or set of circumstances that
could reasonably be expected to result in such a liability,
except (a) liabilities or obligations reflected in the financial
statements included in the FSC SEC Documents, (b) liabilities or
obligations incurred in the ordinary course of business
consistent with past practice that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect on FSC, and (c) liabilities and obligations under this
Agreement.
Section 5.09. Litigation. As of the date of this
Agreement, except as disclosed in any of the FSC SEC Documents,
there is no (i) class action litigation pending or, to the best
knowledge of FSC, threatened against or affecting FSC or any of
its Subsidiaries, (ii) other suit, action or proceeding (or any
known basis therefor) pending or, to the best knowledge of FSC,
threatened against or affecting FSC or any of its Subsidiaries or
any of their respective Properties that could reasonably be
expected to have a Material Adverse Effect on FSC or that in any
manner challenges or seeks to prevent, enjoin, alter or
materially delay the Mergers or any of the other transactions
contemplated hereby, or (iii) judgment, decree, injunction, rule
or order of any court, governmental entity or arbitrator
outstanding against FSC or any of its Subsidiaries that, if
determined adversely to FSC, is reasonably likely to have a
Material Adverse Effect on FSC or that in any manner challenges
or seeks to prevent, enjoin, alter or materially delay the
Mergers or any other transactions contemplated hereby.
Section 5.10. Environmental Matters. Except as previously disclosed in
writing to MOXY or described in the FSC SEC Documents, (a) each
of FSC and its Subsidiaries is in material compliance with all
applicable Environmental Laws except for such non-compliance as
would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on FSC, and, to the
best knowledge of FSC, there are no circumstances that are
reasonably likely to materially pevvent or interfere with such
compliancee in the next three years, (b) neither FSC nor any of
its Subsidiaries has received written notice of, or to the
knowledge of FSC, is the subject of, any Environmental Claims
that are reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect on FSC; and (c) as of March 31,
1998, neither FSC nor any of its Subsidiaries had any liabilities
or obligations of any nature, whether or not accrued, contingent
or otherwise, and whether relating to FSC, any of its
Subsidiaries or any predecessor entities of FSC or any of its
Subsidiaries, arising under or relating to any Environmental Law,
except for liabilities or obligations that would not, (i)
individually or in the aggregate, be reasonably expected to
result in Losses in excess of $5.0 million during the five-year
period beginning on the date hereof or (ii) individually or in
the aggregate, have a Material Adverse Effect on FSC (taking into
account any applicable reserves).
Section 5.11. ERISA.
(a) Schedule 5.11 contains a list identifying each
"employee benefit plan," as defined in Section 3(3) of ERISA,
that is (i) subject to any provision of ERISA and (ii)
maintained, administered or contributed to by FSC or any
Subsidiary of FSC and covers any employee or former employee of
FSC or any ERISA Affiliate of FSC or under which FSC or any
Subsidiary of FSC has or may have any liability. Copies of such
plans (and, if applicable, related trust agreements) and all
amendments thereto and written interpretations thereof have been
made available to MOXY together with (A) any annual reports (Form
5500 including, if applicable, Schedule B thereto) prepared in
connection with any such plan and (B) the most recent actuarial
valuation report prepared in connection with any such plan. Such
plans are referred to collectively herein as the "FSC Employee
Plans."
(b) Except as set forth in Schedule 5.11, no FSC Employee
Plan (i) constitutes a Multiemployer Plan, or (ii) is maintained
in connection with any trust described in Section 501(c)(9) of
the Code. Neither FSC nor any ERISA Affiliate of FSC has (A)
engaged in, or is a successor or parent corporation to an entity
that has engaged in, a transaction of a type described in
Sections 4069 or 4212(c) of ERISA or (B) incurred, or reasonably
expects to incur prior to the Effective Time, (1) any liability
under Title IV of ERISA arising in connection with the
termination of, or a complete or partial withdrawal from, any
plan covered or previously covered by Title IV of ERISA or (2)
any liability under Section 4971 of the Code that in either case
could become a liability of Parent or any of its Subsidiaries
after the Effective Time. Nothing done or omitted to be done,
and no transaction or holding of any asset under or in connection
with any FSC Employee Plan, has made or will make FSC or any
Subsidiary of FSC, or any officer or director of FSC or any
Subsidiary of FSC, subject to any liability under Title I of
ERISA or liable for any tax pursuant to Section 4975 of the Code
that individually or in the aggregate could have a Material
Adverse Effect on FSC (c) With respect to each FSC Employee
Plan that is intended
to be qualified under Section 401(a) of the Code, FSC intends to
request within the next twelve months a favorable determination
letter from the Internal Revenue Service that each plan is so
qualified and that each trust forming a part thereof is exempt
from tax pursuant to Section 501(a) of the Code. To the best
knowledge of FSC, no event has occurred that would adversely
effect such qualification and exception. Each FSC Employee Plan
has been maintained in all material respects in compliance with
its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations, that are applicable to
such Plan including but not limited to ERISA and the Code.
(d) Except as set forth in Schedule 5.11, there is no
contract, agreement, plan or arrangement covering any employee or
former employee of FSC or any of its Subsidiaries that,
individually or collectively, could give rise to the payment of
any amount that would not be deductible pursuant to the terms of
Sections 162(a)(1), 162(m) or 280G of the Code.
(e) FSC has provided MOXY with a list of each employment,
severance and other similar contract, arrangement or policy, and
each plan or arrangement (written or oral but excluding any state
mandated program or policy) providing for insurance coverage
(including any self-insured arrangements), with respect to
workers' compensation benefits, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement benefits or
deferred compensation, profit-sharing, bonuses, stock options,
stock appreciation rights or other forms of incentive
compensation or post-retirement insurance, compensation or
benefits that (i) is not an FSC Employee Plan, (ii) has been
entered into, maintained or contributed to, as the case may be,
by FSC or any of its ERISA Affiliate and (iii) covers any
employee or former employee of FSC or any of its Subsidiaries.
Such contracts, plans and arrangements as are described above,
copies or descriptions of all of which have been furnished or
made available previously to MOXY, are referred to collectively
herein as the "FSC Benefit Arrangements." Each FSC Benefit
Arrangement has been maintained in substantial compliance with
its terms and with the requirements prescribed by any and all
applicable statues, orders, rules and regulations.
(f) Except as set forth in Schedule 5.11, neither FSC nor
any Subsidiary of FSC has any current or projected liability in
respect of post-employment or post-retirement health or medical
or life insurance benefits for retired, former or current
employees of FSC or any Subsidiary of FSC, except as required to
avoid excise taxes under Section 4980B of the Code. No condition
exists that would prevent FSC or any Subsidiary of FSC from
amending or terminating any FSC Employee Plan or FSC Benefit
Arrangement providing health or medical benefits in respect of
any active, former or retired employee of FSC or any of its
Subsidiaries.
(g) Except as set forth in Schedule 5.11, there has been no
amendment to, written interpretation or announcement (whether or
not written) by FSC or any of its Subsidiaries relating to, or
change in employee participation or coverage under, any FSC
Employee Plan or FSC Benefit Arrangement that would increase
materially the expense of maintaining such FSC Employee Plan or
FSC Benefit Arrangement above the level of the expense
anticipated when each FSC Employee Plan or FSC Benefit
Arrangement was adopted after December 22, 1997.
(h) There is no unfair labor practice complaint pending or,
to the best knowledge of FSC, threatened against FSC or any of
its Subsidiaries before the National Labor Relations Board that
would reasonably be expected to have a Material Adverse Effect on
FSC.
(i) Except as set forth on Schedule 5.11, there is no issue
with respect to any FSC Employee Plan or FSC Benefit Arrangement
that is now, or since December 22, 1997, has been, under
examination by the Internal Revenue Service or the Department oof
Labor. There is no (i) pending investigation by any governmental
or regulatory agency or authority involving o relating to any
FSC Employee Plan or FSC Benefit Arrangement, or (ii) threatened
or pending claim (except for claims for benefits payable in the
normal operations of the FSC Employee Plans or FSC Benefit
Arrangement), suit or proceeding against any FSC Employee Plan or
FSC Benefit Arrangement or asserting any rights or claims to
benefits under any FSC Employee Plan or FSC Benefit Arrangement
that could reasonably be expected to have a Material Adverse
Effect on FSC.
Section 5.12. Joint Proxy Statement; Registration
Statements. None of the information with respect
to FSC or its Subsidiaries or the FSC Merger to be included in
the Joint Proxy Statement or the Registration Statement will, in
the case of the Joint Proxy Statement or any amendments thereof
or supplements thereto, at the time of the mailing of the Joint
Proxy Statement or any amendments or supplements thereto, and at
the time of the FSC Special Meeting, or, in the case of the
Registration Statement, at the time it becomes effective, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances
uunder which they were made, not misleading, except that no
representation is made by FSC with respect to information
relating to MOXY or its Subsidiaries. The Joint Proxy Statement
will comply as to form in all material respects with the
provisions of the Exchange Act.
Section 5.13. Absence of Certain Changes. Since March 31, 1998, each
of FSC and its Subsidiaries has conducted its business in the
ordinary course consistent with past practice and has not, except
as set forth on Schedule 5.13:
(a) declared, set aside or paid any dividend or other
distribution with respect to any shares of capital stock of FSC
or any of its Subsidiaries or repurchased, redeemed or acquired
any outstanding shares of capital stock or other securities of,
or other ownership interests in, FSC or any of its Subsidiaries;
(b) amended any term of any of its outstanding securities;
(c) incurred, assumed or guaranteed any indebtedness from
any third party for borrowed money other than in the ordinary
course of business and in amounts and on terms consistent with
past practices;
(d) created or assumed any Lien on any material asset,
other than in the ordinary course of business consistent with
past practices;
(e) loaned, advanced or contributed to, or invested in, any
Person other than (i) loans, advances or capital contributions to
or investments in wholly owned Subsidiaries of FSC, (ii)
investments in securities consistent with past practice or (iii)
other loans, advances, capital contributions or investments in an
aggregate amount not exceeding $1.0 million;
(f) incurred any damage, destruction or other casualty loss
(whether or not covered by insurance) affecting its business or
assets that, individually or in the aggregate, has had or may
reasonably be expected to have a Material Adverse Effect on FSC;
(g) engaged in any transaction or entered into or amended
any agreement relating to its assets or businesses (including,
without limitation, the acquisition or disposition of any assets)
or relinquished any contract, license or other right that, in any
such case, individually or in the aggregate, has had or may
reasonably be expected to have a Material Adverse Effect on FSC,
other than transactions or agreements contemplated by this
Agreement;
(h) changed any method of accounting or accounting
principle or practice, except for any such change required by
reason of a concurrent change in GAAP;
(i) except in the ordinary course of business consistent
with past practices, (A) granted any severance or termination pay
to, or entered into any employment, termination, severance,
deferred compensation or other similar arrangement with, any of
its directors, officers or employees; (B) amended in any material
respect any employment, termination, severance, deferred
compensation or other similar arrangement with any of its
directors, officers or employees (it being understood that any
increase or acceleration of benefits under any such agreement or
arrangement shall be deemed material); (C) established, adopted,
entered into, amended or otherwise accelerated or enhanced
rights or benefits under, (i) any plan providing for options,
stock, performance awards or other forms of incentive or deferred
compensation or (ii) any bonus, profit sharing, compensation,
restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any of its
directors, officers or employees; or (D) increased the
compensation or benefits of any other employees or payment of any
benefit not required by any plan or arrangement as in effect on
March 31, 1998;
(j) except such contracts as would not be material to FSC
and its Subsidiaries as a whole, entered into any contract
limiting the right of FSC or any of its Subsidiaries at any time
on or after the date of this Agreement or Parent or any of its
Subsidiaries at or after the Effective Time, to engage in, or to
compete with any Person in, any business;
(k) entered into any acquisition or joint venture that is
material to FSC and its Subsidiaries, taken as a whole;
(l) amended its articles of incorporation, by-laws or
similar organizational documents;
(m) been the subject of any labor dispute, other than
routine individual grievances, or any activity or proceeding by a
labor union or representative thereof to organize any of its
employees, which employees were not subject to a collective
bargaining agreement at March 31, 1998, or any lockouts, strikes,
slowdowns, work stoppages or threats thereof by or with respect
to such employees; or
(n) been subject to any event, occurrence or development
that, individually or in the aggregate, has had or would be
reasonably likely to have a Material Adverse Effect on FSC,
except for general economic changes, changes that affect the
industry of FSC or any of its Subsidiaries generally, and changes
in FSC's business after the date hereof attributable solely to
the execution of this Agreement or actions taken by Parent.
Section 5.14. Taxes.
(a) All Tax Returns required to be filed (taking into
account all extensions heretofore granted) on or before the date
hereof or the Effective Time by or on behalf of FSC or any of its
Subsidiaries have been filed within the time and in the manner
prescribed by law, other than those Tax Returns the failure of
which to file would not have a Material Adverse Effect on FSC.
(b) As of the time of filing, all such Tax Returns
correctly reflected in all material respects all facts regarding
the income, business, assets, operations, activities and status
of FSC and its Subsidiaries and any other information required to
be shown therein.
(c) All Taxes shown to be due and payable by FSC and any of
its Subsidiaries on all such Tax Returns have been timel paid,
or withheld and remitted to the appropriate Taxing Authorities.
(d) Except as set forth on Schedule 5.14, all applicable
statutes of limitations for the assessment of material Taxes
against FS and any of its Subsidiaries have expired. No
deficiency payment of any Taxes for any period has been asserted
by any Taxing Authority which remains unsettled at the date
hereof except for deficiencies which would not have a Material
Adverse Effect on FSC.
(e) Except for Tax Returns required to be filed with
respect to the 1997 taxable year, neither FSC nor any of its
Subsidiaries has requested any extension of time within which to
file any Tax Return which has not yet been filed.
(f) There are no material Liens upon any property or assets
of FSC or any of its Subsidiaries for Taxes, except for Tax liens
in respect of Taxes not yet due or which are being contested in
good faith and by appropriate proceedings (and for the payment of
which adequate reserves have been provided) and reflected in the
FSC SEC Documents.
(g) Except as set forth on Schedule 5.14, there is no
claim, audit, action, suit, proceeding or investigation now
pending or threatened against or with respect to FSC or any of
its Subsidiaries in respect of any Taxes.
(h) Except as set forth on Schedule 5.14, neither FSC nor
any of its Subsidiaries has any contractual obligations under any
tax sharing agreement or similar agreement or tax indemnity
agreement with any corporation which is not a member of the
affiliated group of corporations of which FSC is the common
parent.
(i) There are no requests for rulings or determinations in
respect of any Tax pending between FSC or any of its Subsidiaries
and any Taxing Authorities.
(j) Neither FSC nor any of its Subsidiaries own any
interest in real property in the State of New York or in any
other jurisdiction in which a Tax is imposed on the transfer of a
controlling interest in an entity that owns any interest in real
property.
Section 5.15. Fairness Opinion. The FSC Special Committee
has received the opinion of Lehman to the effect that, as of the date
thereof, the FSC Conversion Ratio is fair to the holders of FSC Common
Stock from a financial point of view.
Section 5.16. Takeover Statutes; Charter Provisions; Rights
Plan. The Board of Directors of FSC has approved this Agreement,
the FSC Merger and the other transactions contemplated hereby and
has taken such action as is necessary to (i) satisfy
applicable restrictions on business combinations contained in
Section 203 of the Delaware General Corporation Law and Article
VIII of the certificate of incorporation of FSC and (ii)
eliminate the applicability of FSC's Stockholder Protection
Rights Agreement to this Agreement, the Mergers and the other
transactions contemplated hereby. No other state takeover
statutes are applicable to the Mergers or the other transactions
contemplated hereby. The Board of Directors of FSC
has approved this Agreement, the FSC Merger and the other
transactions contemplated hereby and has taken such action as is
necessary to (i) satisfy any applicable restrictions on business
combinations contained in Section 203 of the Delaware General
Corporation Law and Article VIII of the certificate of
incorporation of FSC and (ii) eliminate the applicability of
FSC's Stockholder Protection Rights Agreement to this Agreement,
the Mergers and the other transactions contemplated hereby. No
other state takeover statutes are applicable to the Mergers or
the other transactions contemplated hereby. }
Section 5.17. Finders' Fees. Except for Lehman, which has been retained by
the FSC Special Committee and whose fees will be paid by FSC, there is no
investment banker, broker, finder or other intermediary who might
be entitled to any fee or commission from FSC or any of its
affiliates (other than MOXY) upon consummation of the
transactions contemplated by this Agreement.
Section 5.18. Contracts.
All material contracts of FSC and its Subsidiaries that are
required to be described in the FSC SEC Documents or to be filed
as exhibits thereto have been described or filed as required.
Neither FSC nor any of its Subsidiaries nor, to the knowledge of
FSC, any other party is in breach of or default under any such
contracts which are currently in effect, except for such breaches
and defaults t would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on
FSC. Except as set forth in the FSC SEC Documents, neither FSC
nor any of its Subsidiaries is a party to or bound by any
noncompetition agreement or any other agreement or obligation
which purports to limit in any material respect the manner in
which, or the localities in which, FSC or any such Subsidiary is
entitled to conduct all or any material portion of the business
of FSC and its Subsidiaries taken as a whole.
Section 5.19. Transactions with Affiliates. Except to the extent
disclosed in the FSC SEC Documents filed prior to the date
this Agreement and except for the transactions contemplated
hereby, from December 22, 1997 through the date of this
Agreement, there have been no transactions, agreements,
arrangements or understandings between FSC or its Subsidiaries,
on the one hand, and FSC's Affiliates (other than wholly owned
Subsidiaries of FSC) or other Persons, on the other hand, that
would be required to be disclosed under Item 404 of Regulation S-
K under the Securities Act.
ARTICLE 6
Covenants
The parties further agree as follows:
Section 6.01. Conduct of Business.Each of MOXY and FSC
covenants and agrees that, from the date hereof until the
Effective Time or the date,if any, on which this Agreement is
earlier terminated pursuant to Section 8.01 (the "Termination
Date"), except as expressly provided otherwise in this Agreement,
or as reasonably necessary for MOXY or FSC, respectively,
to fulfill its obligations hereunder, each of MOXY and FSC and
their respective Subsidiaries shall conduct their business in the
ordinary course consistent with past practice and shall use their
reasonable best efforts to preserve intact their business organizations
and relationships with customers, suppliers, creditors and business
partners and shall use their reasonable best efforts to keep available
the services of their present officers and employees. Without
limiting the generality of the foregoing, MOXY and FSC, except as
set forth on Schedule 6.01:
(a) shall, and shall cause their respective Subsidiaries
to, conduct their respective operations in their ordinary and
usual course of business in substantially the same manner as
heretofore conducted;
(b) shall use their reasonable best efforts, and cause each
of their respective Subsidiaries to use its reasonable best
efforts, to preserve intact their respective business
organizations and goodwill in all material respects, keep
available the services of their respective officers and emplyeees
as a group (subject to changes in the ordinary course), and
maintain attisfactory relationships with suppliers, distributors,
cuscustomers and others having business relationships with them;
(c) shall confer on a regular and frequent basis with one
or more representatives of one another to report on material
operational developments and the general status of ongoing
operations, subject to the limitations contained in Section 6.02;
(d) shall notify one another of any emergency or other
material change in the normal course of their or their
Subsidiaries' respective businesses or in the operation of their
or their Subsidiaries' respective properties and of any
governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated) if
such emergency, change, complaint, investigation or hearing would
reasonably be expected to have a Material Adverse Effect on MOXY
or FSC, as the case may be;
(e) except as expressly permitted by this Agreement, shall
not, and shall not permit any of their respective Subsidiaries
which is not wholly owned to, declare or pay any dividends on or
make any distribution with respect to their outstanding shares of
capital stock;
(f) except in the ordinary course of business, and as
disclosed in Schedule 6.01, shall not (i) grant or permit any of
its Subsidiaries to grant any severance or termination pay to, or
enter into any employment, termination or severance arrangement
with, its officers, employees or directors, (ii) amend in any
material respect any employment, termination or severance
arrangement with any directors, officers or employees (it being
understood that any increase in or acceleration of benefits under
any such agreement or arrangement shall be deemed material);
(iii) establish, adopt, enter into, or amend or take action to
accelerate or enhance any rights or benefits under, (A) any plan
providing for options, stock, performance awards or other forms
of incentive or deferred compensation or (B) any collective
bargaining, bonus, profit sharing, thrift, compensation,
restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any of its
directors, officers or employees; or (iv) increase the
compensation or benefits of any other employees or pay any
benefit not required by any plan or arrangement as in effect on
March 31, 1998;
(g) shall not, and shall not permit any of their respective
Subsidiaries to, authorize, propose or announce an intention to
authorize, propose, or enter into an agreement with respect to,
any merger, consolidation or business combination (other than the
Mergers and any partnership or joint venture arrangements entered
into in the ordinary course of business consistent with past
practice), any acquisition or disposition of a material amount of
assets or securities not in the ordinary course of business, or
any release or relinquishment of any material contract rights not
in the ordinary course of business;
(h) shall not propose or adopt any amendments to their
respective certificates of incorporation or by-laws;
(i) shall not, and shall not permit any of their respective
Subsidiaries to, issue any shares of capital stock, except upon
exercise of rights or options outstanding on the date hereof or
issued in the ordinary course of business after the date hereof
pursuant to existing employee incentive and benefit plans,
programs or arrangements, or effect any stock split not
previously announced or otherwise change its capitalization as it
existed on March 31, 1998 (except as contemplated herein);
(j) shall not, and shall not permit any of their respective
Subsidiaries to, grant, confer or award any options, warrants,
conversion rights or other rights to acquire any shares of its
capital stock, except grants of options pursuant to employee
incentive and benefit plans, programs or arrangements in
existence on the date hereof in the ordinary course of business
and consistent with past granting practices and policies;
(k) shall not, and shall not permit any of their respective
Subsidiaries to, except in the ordinary course of business
pursuant to existing employee incentive and benefit plans,
programs or arrangements in existence on the date hereof,
purchase or redeem any shares of their capital stock; provided
that nothing in this Agreement shall restrict MOXY or FSC from
repurchasing MOXY Common Stock or FSC Common Stock, respectively,
in accordance with previously announced repurchase programs;
(l) shall not, and shall not permit any of their respective
Subsidiaries to, incur, assume or guarantee any indebtedness for
borrowed money from any third party, other than pursuant to
existing credit facilities or otherwise in the ordinary course of
business consistent with past practices;
(m) shall not, and shall not permit any of their respective
Subsidiaries to, amend any term of any of their outstanding
securities;
(n) shall not, and shall not permit any of their respective
Subsidiaries to, create or assume any Lien on any material asset
other than in the ordinary course of business consistent with
past practices;
(o) shall not, and shall not permit any of their respective
Subsidiaries to, make any loan, advance or capital contribution
to or investment in any Person other than (i) loans, advances or
capital contributions to or investments in their respective
wholly owned Subsidiaries, (ii) investments in securities
consistent with past practices or (iii) other loans, advances,
capital contributions or investments in an aggregate amount for
each of MOXY and FSC not exceeding $50.0 million since March 31,
1998;
(p) shall not, and shall not permit any of their respective
Subsidiaries to, enter into any transaction, commitment, contract
or agreement relating to such Person's assets or businesses
(including, without limitation, the acquisition or disposition of
any assets) or relinquish any contract, license or other right
that individually or in the aggregate would reasonably be
expected to have a Material Adverse Effect on MOXY or FSC, as the
case may be, other than in the ordinary course of business
consistent with past practices and transactions, commitments,
contracts or agreements contemplated by this Agreement;
(q) shall not, and shall not permit any of their respective
Subsidiaries to, change any of their respective methods of
accounting or accounting principles or practices, except for any
such change required by reason of a concurrent change in
generally accepted accounting principles;
(r) shall not, and shall not permit any of their respective
Subsidiaries to, enter into any contract limiting the right of
MOXY or FSC, as the case may be, or any of their respective
Subsidiaries at any time on or after the date of this Agreement,
or Parent or any of its Subsidiaries at or after the Effective
Time, to engage or compete with any Person in any business,
except such contracts as would not be material to MOXY or FSC, as
the case may be, and its Subsidiaries, taken as a whole; and
(s) shall not, and shall not permit any of their respective
Subsidiaries to, agree, in writing or otherwise,too take any of
the actions described in this Section 6.01 or any action that
would mke any representation or warranty in Articles 4 or 5
hereof, as the case may be, untrue or incorrect.
Section 6.0 Investigation. Each of MOXY and FSC shall afford the other and
each other's officers, employees, accountants, counsel and other
authorized representatives reasonable access during normal
business hours, throughout the period prior to the earlier of the
Effective Time or the Termination Date, to its and its
Subsidiaries' plants, properties, personnel, contracts, books and
records (including without limitation its tax returns) and every
report, schedule or other document filed or received by it
pursuant to the requirements of federal or state securities laws,
and each shall use its reasonable best efforts to cause its
representatives to furnish promptly to the other such additional
financial and operating data and other information relating to
its and its Subsidiaries' respective businesses and properties as
the other or its duly authorized representatives may from time to
time reasonably request; provided, that nothing herein shall
require either MOXY or FSC or any of their respective
Subsidiaries to disclose any information to the other that would
cause significant competitive harm to the disclosing party or its
Subsidiaries if the transactions contemplated by this Agreement
are not consummated; and provided further, that no investigation
pursuant to this section shall affect any representation or
warranty given by MOXY to FSC or by FSC to MOXY, hereunder. The
pparties hereby agree that each of them will treat any such
information in accordance with the Confidentiality Agreement
dated as of June 4, 1998 (the "Confidentiality Agreement").
Notwithstanding any provision of this Agreement to the contrary,
no party shall be obligated to make any disclosure in violation
of applicable laws or regulations.
Section 6.03. Special Meetings; Proxy Material. In connection
with the Special Meetings, each of MOXY and FSC will (a) promptly
prepare and file with the SEC as soon as is reasonably
practicable a registration statement on Form S-4 under the
Securities Act (the 'Registration Statement"), which shall
contain the Joint Proxy Statement, with respect to the matters to
be voted on at the Special Meetings and the Parent Common Stock
issuable in the Mergers, and use its reasonable best efforts to
have the Joint Proxy Statement cleared by the SEC staff under the
Exchange Act and the Registration Statement declared effective by
the SEC under the Securities Act, (b) thereafter mail to its
stockholders as promptly as practicable the Joint Proxy Statement
and all other proxy materials for the Special Meetings, (c) use
its reasonable best efforts to obtain the necessary approvals by
its stockholders of this Agreement and the transactions
contemplated hereby and (d) otherwise comply with all legal
requirements applicable to such meeting.
Section 6.04. Cooperation. MOXY and FSC shall together, or
pursuant to an allocation of responsibility to be agreed upon among them:
(a) as soon as is reasonably practicable take all such
action as may be required under state Blue Sky or securities laws
in connection with the transactions contemplated by this
Agreement;
(b) promptly prepare and file with the NYSE or Nasdaq
National Market (as shall be agreed upon) listing applications
covering the shares of Parent Common Stock issuable in the
Mergers and use their reasonable best efforts to obtain, prior to
the Effective Time, approval for the listing of such Parent
Common Stock, subject only to official notice of issuance;
(c) cooperate with each other and use their reasonable best
efforts to (i) receive all necessary and appropriate consents of
third parties to the transactions contemplated hereunder, (ii)
satisfy all requirements prescribed by law for, and all
conditions set forth in this Agreement to, the consummation of
the Mergers, and (iii) effect the Mergers in accordance with this
Agreement at the earliest practicable date; and
(d) cooperate with one another to lift any injunctions or
remove any other impediments to the consummation of the
transactions contemplated herein.
Subject to the limitations contained in Section 6.02, each
of MOXY and FSC shall furnish to the other and to the other's
counsel all such information as may be required in order to
effect the foregoing actions.
Section 6.05. Affiliates. Each of MOXY and FSC (each of which is referred to
in this Section 6.05 as a "Subject Entity") shall, prior to the
Effective Time, deliver to the other a list, reviewed by its
counsel, setting forth the names and addresses of all Persons are,
in its opinion, at the time of the Special Meeting of the
Subject Entity, "affiliates" of the Subject Entity for purposes
of Rule 145 under the Securities Act. Each Subject Entity shall
furnish to the other such information and documents as the other
may reasonably request for the purpose of reviewing such list.
Each Subject Entity shall use its reasonable best efforts to
cause each Person who is identified as an "affiliate" in the list
so furnished by it to execute a written agreement on or prior to
the Effective Time, in a form satisfactory to the other (an
"Affiliate Agreement"), that such person will not offer, sell or
otherwise dispose of any of the shares of Parent Common Stock
issued to such Person in the Mergers in violation of the
Securities Act or the rules and regulations promulgated by the
SEC thereunder.
Section 6.06. Insurance Extension. MOXY and FSC shall cooperate to extend,
renew or otherwise continue any existing insurance coverage (or
to provide new insurance coverage) on and after the Effective
Time with respect to claims arising from acts or omissions that
occurred on or before the Effective Time.
Section 6.07. Filings; Other Action. Subject to the terms and conditions
herein provided, MOXY and FSC shall (a) promptly make their
respective filings and thereafter make any other required
submissions under the HSR Act, (b) use their respective
reasonable best efforts to cooperate with one another in (i)
determining whether any filings are required to be made with, or
consents, permits, authorizations or approvals are required to be
obtained from, any third party, the United States government or
any agencies, departments or instrumentalities thereof or
governmental or regulatory authorities of the several states and
foreign jurisdictions in connection with the execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby and (ii) timely making all such
filings and timely seeking all such consents, permits,
authorizations or approvals, and (c) use reasonable best efforts
to take, or cause to be taken, all other actions and do, or cause
to be done, all other things necessary, proper or advisable to
consummate and make effective the transactions contemplated
hereby, including, without limitation, taking all such further
actin as reasonably may be necessary to resollve such objections,
if any, as the Federal Trade Commission, the Antitrust Division
of the Department of Justice, state antitrust enforcement
authorities or competition authorities of any other nation or
other jurisdiction or any other Person may assert under relevant
antitrust or competition laws with respect to the transactions
contemplated hereby.
Section 6.08. Further Assurances. In case at any time after
the Effective Time any further action is necessary or desirable to carry out
the purposes of this Agreement, the proper officers or directors
of each of MOXY and FSC shall take all such necessary action. At
and after the Effective Time, the officers of Parent (in its
capacity as sole member of each of MOXY Surviving LLC and FSC
Surviving LLC), will be authorized to execute and deliver, in the
name and on behalf of MOXY, MOXY Merger Sub, FSC and FSC Merger
Sub, any deeds, bills of sale, assignments or assurances and to
take and do, in the name and on behalf of such entities, any
other actions and things to vest, perfect or confirm of record or
otherwise in MOXY Surviving LLC or FSC Surviving LLC any and all
right, title and interest in, to and under any of the rights,
properties or assets of MOXY or FSC acquired or to be acquired by
MOXY Surviving LLC or FSC Surviving LLC as a result of, or in
connection with, the Mergers.
Section 6.09. Takeover Statutes. If any state takeover statute shall become
applicable to the transactions contemplated hereby, each of MOXY
and FSC and the members of their respective Boards of Directors
shall grant such approvals and take such actions as are
reasonably necessary so that the transactions contemplated hereby
may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize
the effects of such statute or regulation on the transactions
contemplated hereby.
Section 6.10. No Solicitation
(a) From the date hereof until the earlier to
occur of (i) the termination hereof or (ii) the Effective Time,
MOXY will not, and will cause its Subsidiaries and its
Subsidiaries' officers, directors, employees, investment bankers,
consultants and other agents and its Affiliates not to, directly
or indirectly, take any action to solicit, initiate, encourage or
facilitate the making of any Third Party Acquisition Proposal or
any inquiry with respect thereto, or engage in discussions or
negotiations with any Person with respect thereto, or disclose
any non-public information relating to it or any of its
Subsidiaries or afford access to its or any of its Subsidiaries'
properties, books or records to any Person that has made or is
considering making any Third Party Acquisition Proposal; provided
that nothing contained in this Section 6.10(a) shall prevent MOXY
from furnishing non-public information to, or entering into
discussions or negotiations with, any Person in connection with
an unsolicited bona fide Third Party Acquisition Proposal
received from such Person so long as prior to furnishing non-
public information to, or entering into discussions or
negotiations with, such Person, (i) the Board of Directors of
MOXY (and/or its Special Committee), by a majority vote
determines in its good faith judgment that it is necessary to do
so to comply with its fiduciary duty to stockholders under
applicable law, as advised by such Board's or Special Committee's
legal counsel, and (ii) MOXY receives from such Person an
executed confidentiality agreement with terms no less favorable
to MOXY than those contained in the Confidentiality Agreement.
Nothing contained in this Agreement shall prevent the Board of
Directors of MOXY (and/or its Special Committee), from complying
with Rule 14e-2 under the Exchange Act with regard to a Third
Party Acquisition Proposal; provided that the Board of Directors
of MOXY (and/or its Special Committee), shall not recommend that
the stockholders of MOXY tender their shares in connection with a
tender offer except to the extent that such Board or Special
Committee determines by majority vote in its good faith judgment
that such a recommendation is required to comply with the
fiduciary duties of such Board of Directors (and/or such Special
Committee) to stockholders under applicable law, as advised by
such Board's or Special Committee's legal counsel. MOXY will
promptly (and in no event later than 24 hours after receipt of
any Third Party Acquisition Proposal) notify (which notice shall
be provided orally and in writing and shall identify the Person
making such Third Party Acquisition Proposal and set forth the
material terms thereof) FSC after receipt of any Third Party
Acquisition Proposal, indication that any Person is considering
making a Third Party Acquisition Proposal or any request for
nonpublic information relating to MOXY or any of its Subsidiaries
or for access to the properties, books or records of MOXY or any
of its Subsidiaries by any Person that may be considering making,
or has made, a Third Party Acquisition Proposal. MOXY will keep
FSC fully informed of the status and material terms of any such
Third Party Acquisition Proposal or request. In furtherance and
not in limitation of the foregoing, MOXY shall give FSC at least
24 hours' advance notice of any information to be supplied to any
Person making such Third Party Acquisition Proposal. MOXY will,
and will cause its Subsidiaries and the officers, directors,
employees and other agents of it and its Subsidiaries and its
Affiliates to, immediately cease and cause to be terminated all
discussions and negotiations, if any, that have taken place prior
to the date hereof with any parties with respect to any Third
Party Acquisition Proposal.
(b) From the date hereof until the earlier to occur of (i)
the termination hereof or (ii) the Effective Time, FSC will not,
and will cause its Subsidiaries and its Subsidiaries' officers,
directors, employees, investment bankers, consultants and other
agents and its Affiliates not to, directly or indirectly, take
any action to solicit, initiate, encourage or facilitate the
making of any Third Party Acquisition Proposal or any inquiry
with respect thereto, or engage in discussions or negotiations
with any Person with respect thereto, or disclose any non-public
information relating to it or any of its Subsidiaries or afford
access to its or any of its Subsidiaries' properties, books or
records to any Person that has made or is considering making any
Third Party Acquisition Proposal; provided that nothing contained
in this Section 6.10(b) shall prevent FSC from furnishing non-
public information to, or entering into discussions or
negotiations with, any Person in connection with an unsolicited
bona fide Third Party Acquisition Proposal received from such
Person so long as prior to furnishing non-public information to,
or entering into discussions or negotiations with, such Person,
(i) the Board of Directors of FSC (and/or its Special Committee),
by a majority vote determines in its good faith judgment that it
is necessary to do so to comply with its fiduciary duty to
stockholders under applicable law, as advised by such Board's or
Special Committee's legal counsel, and (ii) FSC receives from
such Person an executed confidentiality agreement with terms no
less favorable to FSC than those contained in the Confidentiality
Agreement. othing contained in this Agreement shall prevent the
Board of Directors of FSC (and/or its Special Committee), from
complying with Rule 14e-2 under the Exchange Act with regard to a
Third Party Acquisition Proposal; provided that the Board of
Directors of FSC (and/or its Special Committee), shall not
recommend that the stockholders of FSC tender their shares in
connection with a tender offer except to the extent that such
Board or Special Committee determines by majority vote in its
good faith judgment that such a recommendation is required to
comply with the fiduciary duties of such Board of Directors
(and/or such Special Committee) to stockholders under applicable
law, as advised by such Board's or Special Committee's legal
counsel. FSC will promptly (and in no event later than 24 hours
after receipt of any Third Party Acquisition Proposal) notify
(which notice shall be provided orally and in writing and shall
identify the Person making such Third Party Acquisition Proposal
and set forth the material terms thereof) MOXY after receipt of
any Third Party Acquisition Proposal, indication that any Person
is considering making a Third Party Acquisition Proposal or any
request for nonpublic information relating to FSC or any of its
Subsidiaries or for access to the properties, books or records of
FSC or any of its Subsidiaries by any Person that may be
considering making, or has made, a Third Party Acquisition
Proposal. FSC will keep MOXY fully informed of the status and
material terms of any such Third Party Acquisition Proposal or
request. In furtherance and not in limitation of the foregoing,
FSC shall give MOXY at least 24 hours' advance notice of any
information to be supplied to any Person making such Third Party
Acquisition Proposal. FSC will, and will cause its Subsidiaries
and the officers, directors, employees and other agents of it and
its Subsidiaries and its Affiliates to, immediately cease and
cause to be terminated all discussions and negotiations, if any,
that have taken place prior to the date hereof with any parties
with respect to any Third Party Acquisition Proposal.
(c) For purposes of this Agreement, "Third Party
Acquisition Proposal" means any offer or proposal for, or any
indication of interest in, a merger, share exchange,
reorganization, recapitalization action or other business
combination involving MOXY or FSC or any of their respective
Subsidiaries or the acquisition of any equity interest in, or a
substantial portion of the assets of, MOXY or FSC, respectively,
or any of their respective Subsidiaries, other than the
transactions contemplated by this Agreement and other than an
offer for a bona fide de minimis equity interest, or for an
amount of assets not material to MOXY or FSC, as appropriate, and
its respective Subsidiaries taken as a whole, that MOXY or FSC,
as appropriate, has no reason to believe would lead to a change
of control of MOXY or FSC, as appropriate (or to the acquisition
of a substantial portion of the assets of MOXY or FSC, as
appropriate, and its respective Subsidiaries).
Section 6.11. Public Announcements. MOXY and FSC will consult with each
other before issuing any press release relating to this Agreement
or the transactions contemplated herein and shall not issue any
such press release prior to such consultation except as may be
required by law or by obligations pursuant to any listing
agreement with any national securities exchange.
Section 6.12. Indemnification and Insurance(a) All rights to
indemnification and exculpation existing in favor of a director,
officer, employee or agent (an "Indemnified Person") of MOXY or
FSC or any of their respective Subsidiaries (including, without
limitation, any indemnification rights to which such persons are
entitled because they are serving as a director, officer, agent
or employee of another entity at the request of MOXY or FSC or
any of their respective Subsidiaries), as provided in MOXY's or
FSC's certificate of incorporation or by-laws as in effect on the
date of this Agreement and relating to actions or events up to
the Effective Time (including without limitation the Mergers and
the other transactions contemplated by this Agreement) shall
survive the Mergers and shall continue in full force and effect,
without any amendment thereto; provided, however, that any
determination required to be made with respect to whether an
Indemnified Person's conduct complies with the standards set
forth under Delaware Law, MOXY's or FSC's certificate of
incorporation or by-laws or any such agreement, as the case may
be, shall be made by independent legal counsel selected by such
Indemnified Person and reasonably acceptable to Parent; and
provided further, that nothing in this Section 6.12 shall impair
any rights or obligations of any current or former director or
officer of MOXY or FSC. For a period of six years after the
Effective Time, Parent shall cause to be maintained in effect (i)
the current provisions regarding indemnification of officers and
directors contained in the certificate of incorporation and by-
laws of MOXY and FSC, and (ii) if available, the current policies
of directors' and officers' liability insurance and fiduciary
liability insurance maintained by MOXY and FSC (provided, that
Parent may substitute therefor policies containing at least the
same coverage amounts and containing terms and conditions that
are, in the aggregate, no less advantageous to the insureds) with
respect to claims arising from acts or omissions which occurred
on or before the Effective Time; provided, that Parent shall not
be obligated to pay aggregate annual premiums for such insurance
during such six-year period in excess of 200% of the per annum
rate of the aggregate premium currently paid by MOXY and FSC and
their respective Subsidiaries for such insurance on the date of
this Agreement, it being understood that Parent shall
nevertheless be obligated to provide such coverage that shall
then be available at an annual premium equal to 200% of such
rate. Parent agrees to pay all expenses (including fees and
expenses of counsel) that may be incurred by any Indemnified
Party in successfully enforcing the indemnity or other
obligations under this Section 6.12. The rights under this
Section 6.12 are in addition to rights that an Indemnified Party
may have under the certificate of incorporation, by-laws, or
other similar organizational documents of MOXY or FSC or any of
their respective Subsidiaries or Delaware Law. The rights under
this Section 6.12 shall survive consummation of the Mergers and
are expressly intended to benefit each Indemnified Party.
(b) Parent agrees that at all times after the Effective
Time, it shall indemnify each Person who is now, or has been at
any time prior to the date hereof, a director or officer of MOXY
or FSC or any of their respective Subsidiaries, their successors
and assigns (individually an "Indemnified Party" and collectively
the "Indemnified Parties"), to the fullest extent permitted by
law, with respect to any claim, liability, loss, damage,
judgment, fine, penalty, amount paid in settlement or compromise,
cost or expense (including reasonable fees and expenses of legal
counsel), whenever asserted or claimed, based in whole or in part
on, or arising in whole or in part out of this Agreemntt, the
Mrggers, the other transactions contemplated hereby, or any other
facts or circumstances occurring at or prior to the Effective
Time whether commenced, asserted or claimed before or after the
Effective Time, including liability arising under the Securities
Act, the Exchange Act or state law and including any liability
for which an Indemnified Party is entitled to indemnification
from MOXY or FSC. In the event of any claim, liability, loss,
damage, judgment, fine, penalty, amount paid in settlement or
compromise, cost or expense described in the preceding sentence,
Parent shall pay the reasonable fees and expenses of counsel
selected by the Indemnified Parties promptly after statements are
received and otherwise advance to such Indemnified Party upon
request reimbursement of documented expenses reasonably incurred.
Section 6.13. Accountants'"Comfort" Letters.Each of MOXY and
FSC shall use its reasonable best efforts to cause to be
delivered to the other a letter from its independent accountants,
dated a date within two business days before the date of the
Registration Statement, in form and substance reasonably
satisfactory to the recipient and customary in scope and
substance for comfort letters delivered by independent
accountants in connection with registration statements on Form S-
4 under the Securities Act.
Section 6.14. Additional Reports. Each of MOXY and FSC shall furnish to
the other copies of any reports of the type referred to in
Sections 4.06 and 5.06 that it files with the SEC on or after the
date hereof, and each represents and warrants that as of the
respective dates thereof, such reports filed by it will 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. Any unaudited consolidated
interim financial statements included in such reports (including
any related notes and schedules) will present fairly the
financial position of MOXY or FSC, as the case may be, and its
consolidated Subsidiaries, as of the dates thereof and the
results of operations and changes in financial position or other
information included therein for the periods covered thereby
(subject, in the case of unaudited interim period statements to
normal year-end adjustments), in each case in accordance with
past practices and GAAP consistently applied during the periods
involved (except as otherwise disclosed in the notes thereto).
Section 6.15. No Purchase. Except for the transactions contemplated by this
Agreement, without the prior written consent of the other, from
the date hereof until the Effective Time, neither MOXY nor FSC
shall, directly or indirectly, (a) acquire, offer to acquire or
agree to acquire, by purchase or otherwise, any securities or
direct or indirect rights to acquire any securities of the other
or the other's Subsidiaries, or any of their respective assets,
operations or divisions; or (b) except as contemplated by this
Agreement, make, or in any way participate in, any "solicitation"
of "proxies" (as such terms are used in the rules of the SEC) to
vote, or seek to advise or influence any Person with respect to
the voting of, any voting securities of the other or the other's
Subsidiaries. Each party shall promptly advise the other of any
inquiry or proposal made to it with respect to any of the
foregoing. Notwithstanding clauses (a) and (b) of this Section
6.15, MOXY and FSC may make any proposals or communications to
each other that do not require public disclosure.
Section 6.16. Notice of Certain Events (a) Each of MOXY and FSC
shall promptly notify each other of:
(i) any notice or other communication from any Person
alleging that the consent of such Person is or may be
required in connection with the transactions contemplated by
this Agreement; and
(ii) any notice or other communication from any
governmental or regulatory agency or authority in connection
with the transactions contemplated by this Agreement.
(b) MOXY shall promptly notify FSC of any actions, suits,
claims, investigations or proceedings commenced or, to the best
of its knowledge threatened against, relating to or involving or
otherwise affecting MOXY or any of its Subsidiaries that, if
pending on the date of this Agreement, would have been required
to have been disclosed pursuant to Section 4.09 or that relate to
the consummation of the transactions contemplated by this
Agreement.
(c) FSC shall promptly notify MOXY of any actions, suits,
claims, investigations or proceedings commenced or, to the best
of its knowledge threatened against, relating to or involving
otherwise affecting FSC or any of its Subsidiaries that, if
pending on the date of this Agreement, would have been required
to have been disclosed pursuant to Section 5.09 or that relate to
the consummation of the transactions contemplated by this
Agreement.
Section 6.17. Certain Litigation. Neither MOXY nor FSC shall settle any
litigation commenced after the date hereof against MOXY, FSC or
any of their respective directors by any stockholder of MOXY or
FSC, respectively, relating to the Mergers or this Agreement
without the prior written consent of the other party, which
consent shall not be unreasonably withheld.
ARTICLE 7
Conditions to the Mergers
Section 7.01. Conditions to Both Mergers. The respective obligations
of MOXY and FSC to effect the MOXY Merger and the FSC Merger
shall be subject to the simultaneous completion by the other of
the Merger to which the other is a party and to the following
additional conditions:
(a) Stockholder Approvals. The MOXY stockholders shall
have duly adopted and approved this Agreement and the MOXY
Merger, and the FSC stockholders shall have duly adopted and
approved this Agreement and the FSC Merger.
(b) Registration Statement. The Registration Statement
shall have become effective in accordance with the provisions of
the Securities Act and shall be effective at the Effective Time.
No stop order suspending the effectiveness of the Registration
Statement shall have been issued by the SEC and no proceedings
for that purpose shall have been initiated, or to the knowledge
of MOXY or FSC, threatened by the SEC. All necessary state
securities authorizations (including such filings,
authorizations, orders and approvals, if any, as may be required
by state takeover laws) shall have been received and shall be in
full force and effect.
(c) Stock Listing. The shares of Parent Common Stock
issuable in the Mergers shall have been approved for listing on
either the NYSE or Nasdaq National Market, subject only to
official notice of issuance.
(d) HSR and Other Approvals. The waiting period (and any
extension thereof) applicable to the onnsummation of the Mergers
under the HSR Act shall have expired or been terminated and all
authorizations, consents, orders, declarations or approvals of,
or filings with, or terminations or expirations of waiting
periods imposed by, any governmental entity, shall have been made
or shall have occurred.
(e) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order,
judgment or decree shall have been issued or rendered (and remain
in effect) by any court of competent jurisdiction to restrain or
prohibit the consummation of the Mergers or any of the other
transactions described in this Agreement; provided, however, that
each of the parties shall have used its reasonable best efforts
to prevent the entry of any such injunction or other order,
judgment or decree and to appeal as promptly as possible any such
injunction or other order, judgment or decree that may be
entered.
(f) Litigation. There shall not have been instituted or be
pending, or threatened, any suit, action or proceeding by any
governmental entity as a result of this Agreement or any of the
transactions contemplated hereby that could reasonably be
expected, in the good faith opinion of MOXY or FSC, to have a
Material Adverse Effect on MOXY or FSC.
Section 7.02. Additional Conditions to the MOXY Merger
The obligation of MOXY to effect the MOXY Merger shall be subject
to the fulfillment at or prior to the Effective Time of the
following additional conditions:
(a) Performance of Obligations; Representations and
Warranties. FSC shall have performed in all material respects
each of its agreements contained in this Agreement required to be
performed at or prior to the Effective Time, each of the
representations and warranties of FSC contained in this Agreement
that is qualified by materiality shall be true and correct at and
as of the Effective Time as if made at and as of the Effective
Time and each of such representations and warranties that is not
so qualified shall be true and correct in all material respects
at and as of the Effective Time as if made at and as of the
Effective Time, in each case except as contemplated or permitted
by this Agreement; and MOXY shall have received a certificate
signed on behalf of FSC by its Chief Executive Officer to such
effect.
(b) Tax Opinion. MOXY shall have received an opinion of
Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P. in
form and substance reasonably satisfactory to MOXY, dated the
Effective Time, substantially to the effect that, on the basis of
facts, representations and assumptions set forth in such opinion
that are consistent with the state of facts existing as of the
Effective Time, for federal income tax purposes:
(i) The MOXY Merger will constitute a "reorganization"
within the meaning of Section 368(a) of the Code, and MOXY
and Parent each will be a party to the reorganization;
(ii) No gain or loss will be recognized by MOXY or
Parent as a result of the Mergers; and
(iii) No gain or loss will be recognized by
stockholders of MOXY who are United States persons (within
the meaning of the Code) to the extent that they exchange
MOXY Common Stock solely for shares of Parent Common Stock
pursuant to the MOXY Merger.
Such opinion shall also address the tax basis and holding period
of the shares of Parent Common Stock received by MOXY
stockholders in exchange for MOXY Common Stock pursuant to the
MOXY Merger, and the treatment of the receipt of cash in lieu of
a fractional share of Parent Common Stock. In rendering such
opinion, Jones, Walker, Waechter, Poitevent, Carrere & Denegre,
L.L.P. may receive and rely upon representations contained in (A)
a certificate of MOXY substantially in the form attached as
Schedule 7.02A, and (B) a certificate of Parent substantially in
the form attached as Schedule 7.02B.
(c) No Material Adverse Effect. Since the date of this
Agreement, there shall have been no event that has resulted or
could reasonably be expected to result in a Material Adverse
Effect on FSC; and MOXY shall have received a certificate signed
on behalf of FSC by its Chief Executive Officer to such effect.
Section 7.03. Additional Conditions to the FSC Merger
The obligation of FSC to effect the FSC Merger shall be subject
to the fulfillment at or prior to the Effective Time of the
following additional conditions:
(a) Performance of Obligations; Representations and
Warranties. MOXY shall have performed in all material respects
each of its agreements contained in this Agreement required to be
performed at or prior to the Effective Time, each of the
representations and warranties of MOXY contained in this
Agreement that is qualified by materiality shall be true and
correct at and as of the Effective Time as if made at and as of
the Effective Time and each of such representations and
warranties that is not so qualified shall be true and correct in
all material respects at and as of the Effective Time as if made
at and as of the Effective Time, in each case except as
contemplated or permitted by this Agreement; and FSC shall have
received a certificate signed on behalf of MOXY by its Chief
Executive Officer to such effect.
(b) Tax Opinion. FSC shall have received an opinion of
Miller & Chevalier, Chartered in form and substance reasonably
satisfactory to FSC, dated the Effective Time, substantially to
the effect that, on the basis of facts, representations and
assumptions set forth in such opinion that are consistent with
the state of facts existing as of the Effective Time, for federal
income tax purposes:
(i) The FSC Merger will constitute a "reorganization"
within the meaning of Section 368(a) of the Code, and FSC
and Parent each will be a party to the reorganization;
(ii) No gain or loss will be recognized by FSC or
Parent as a result of the Merger; and
(iii) No gain or loss will be recognized by
stockholders of FSC who are United States persons (within
the meaning of the Code) to the extent that they exchange
FSC Common Stock solely for shares of Parent Common Stock
pursuant to the FSC Merger.
Such opinion shall also address the tax basis and holding period
of the shares of Parent Common Stock received by FSC stockholders
in exchange for FSC Common Stock pursuant to the FSC Merger, and
the treatment of the receipt of cash in lieu of a fractional
share of Parent Common Stock. In rendering such opinion, Miller
& Chevalier, Chartered may receive and rely upon representations
contained in (A) a certificate of FSC substantially in the form
attached as Schedule 7.03A, and (B) a certificate of Parent
substantially in the form attached as Schedule 7.03B.
(c) No Material Adverse Effect. Since the date of this
Agreement, there shall have been no event that has resulted or
would reasonably be expected to result in a Material Adverse
Effect on MOXY; and FSC shall have received a certificate signed
on behalf of MOXY by its Chief Executive Officer to such effect.
ARTICLE 8
Termination, Waiver and Amendment
Section 8.01. Termination or Abandonment. This Agreement may be
terminated, and the Mergers and other transactions contemplated
by this Agreement may be abandoned at any time prior to the
Effective Time, notwithstanding any approval of this Agreement
and the Mergers by the respective stockholders of MOXY and FSC:
(a) by the mutual written consent of MOXY and FSC;
(b) by either MOXY or FSC if the Effective Time shall not
have occurred on or before December 31, 1998; provided, that the
party seeking to terminate this Agreement pursuant to this
Section 8.01(b) shall not have breached in any material respect
its obligations under this Agreement in any manner that shall
have proximately contributed to the failure to consummate the
Mergers on or before such date;
(c) by either MOXY or FSC if a United States federal or
state court of competent jurisdiction or a United States federal
or state governmental, regulatory or administrative agency or
commission shall have issued an order, decree or ruling or taken
any other action permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement on
substantially the terms contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and
non-appealable; provided, that the party seeking to terminate
this Agreement pursuant to this Section 8.01(c) shall have used
its reasonable best efforts to remove such restraint, injunction
or prohibition;
(d) by either MOXY or FSC if (i) the approval of the
stockholders of MOXY contemplated by this Agreement shall not
have been obtained at a meeting of stockholders duly convened
therefor or at any adjournment thereof or (ii) the approval of
the stockholders of FSC contemplated by this Agreement shall not
have been obtained at a meeting of stockholders duly convened
therefor or at any adjournment thereof;
(e) by MOXY if prior to the FSC Special Meeting, the
Special Committee or Board of Directors of FSC shall have
withdrawn or modified, or resolved to withdraw or modify, in a
manner adverse to MOXY its approval or recommendation of this
Agreement;
(f) by FSC if prior to the MOXY Special Meeting, the
Special Committee or Board of Directors of MOXY shall have
withdrawn or modified, or resolved to withdraw or modify, in a
manner adverse to FSC its approval or recommendation of this
Agreement;
(g) by either MOXY or FSC if there has been a breach by the
other of any representation, warranty or covenant contained in
this Agreement, which breach (i) would have a Material Adverse
Effect on the party committing such breach and (ii) cannot be,
or has not been, cured within 15 days after written notice
thereof has been given to the party committing such breach,
provided that the right to effect such cure shall not extend
beyond the date set forth in subparagraph (b) above.
In the event of a termination of this Agreement pursuant to
this Section 8.01, there shall be no other liability under this
Agreement on the part of either party to the other party, except
that (i) the agreements contained in Article 9 and in the
Confidentiality Agreement shall survive the termination hereof
and (ii) no such termination shall relieve either party of any
liability or damages arising out of a breach of this Agreement by
such party
Section 8.02. Amendment. At any time before or after
approval of this Agreement by the respective stockholders of MOXY
and FSC and prior to the Effective Time, any provision of this
Agreement may be amended if, and only if, such amendment is in
writing and signed by MOXY and FSC; provided, however, that
following approval of this Agreement by the stockholders of MOXY
or FSC there shall be no amendment to the provisions hereof with
respect to the MOXY Conversion Ratio or FSC Conversion Ratio nor
any amendment not permitted under applicable law, without further
approval by the stockholders of MOXY and FSC.
Section 8.03. Extension of Time, Waiver, Etc. At any time
prior to the Effective Time, either MOXY or FSC may:
(a) extend the time for the performance of any of the
obligations or acts of the other;
(b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document
delivered pursuant hereto; or
(c) waive compliance with any of the agreements or
conditions of the other party contained herein.
Notwithstanding the foregoing, no failure or delay by MOXY
or FSC in exercising any right hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of
any other right hereunder. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party.
ARTICLE 9
Miscellaneous
Section 9.01. No Survival of Representations and
Warranties. None of the representations, warranties and
agreements in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Mergers, except for
the agreements set forth in Article 1, the Affiliate Agreements
to be delivered pursuant to Section 6.05, the provisions of
Sections 6.06, 6.08 and 6.12 and this Article 9.
Section 9.02. Expenses.
(a) Except as provided in this Section 9.02, whether or not
the Mergers are consummated, all costs and expenses incurred in
connection with this Agreement, and the transactions contemplated
hereby shall be paid by the party incurring such expenses, except
that the filing fee in connection with any HSR Act filing, the
commissions, transfer taxes and other out-of-pocket transaction
costs, including the expenses and compensation of the Exchange
Agent, and the expenses incurred in connection with the printing
and mailing of the Joint Proxy Statement, filing the Registration
Statement with the SEC and any expenses incurred by Parent
relating to the issuance, registration and listing of the Parent
Common Stock and the qualification thereof under state blue sky
or securities laws, shall be shared equally by MOXY and FSC.
(b) If this Agreement shall be terminated by FSC pursuant
to Section 8.01(f) or 8.01(g), MOXY shall reimburse FSC for all
out-of-pocket expenses incurred by FSC in connection with this
Agreement, the Mergers and all related transactions. Such
payment shall be made by wire transfer of immediately available
funds promptly, but in no event later than two business days,
after receipt by MOXY of a written notice given by FSC setting
forth the amount of such expenses.
(c) If this Agreement shall be terminated by MOXY pursuant
to Section 8.01(e) or 8.01(g), FSC shall reimburse MOXY for all
out-of-pocket expenses incurred by MOXY in connection with this
Agreement, the Mergers and all related transactions. Such
payment shall be made by wire tranfeer of immediately available
funds promptly, but in no event later than two business days,
after receipt by FSC of a written notice given by MOXY setting
forth the amount of such expenses.
Section 9.03. Counterparts; Effectiveness. This Agreement may be
executed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were
upon the same instrument, and shall become effective when one or
more counterparts have been signed by each of the parties and
delivered (by telecopy or otherwise) to the other parties.
Section 9.04. Governing Law; Consent to Jurisdiction. This
Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware without regard to the
principles of conflicts of laws thereof. Each party hereto
irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of Delaware or
any United States district court located in the State of Delaware
for any litigation arising out of or relating to this Agreement
and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts),
waives any objection to the laying of venue of any such
litigation in such courts and agrees not to plead or claim in any
such court that such litigation brought therein has been brought
in an inconvenient forum.
Section 9.05. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
ACTIONS OF ANY OF THEM IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT THEREOF.
Section 9.06. Notices.
All notices hereunder must be in writing and will be deemed to have
been duly given upon receipt of hand delivery; certified or
registered mail, return receipt requested; or telecopy
transmission with confirmation of receipt:
To MOXY:
McMoRan Oil & Gas Co.
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: Richard C. Adkerson
Telecopy: 504-582-4290
With copies to:
Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P.
201 St. Charles Avenue
New Orleans, Louisiana 70170
Attention: L. R. McMillan, II
Telecopy: 504-582-8012
To FSC:
Freeport-McMoRan Sulphur Inc.
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: Robert M. Wohleber
Telecopy: 504-582-1611
With copies to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: David W. Ferguson
Telecopy: 212-450-4800
To Parent, MOXY Merger Sub or
FSC Merger Sub:
McMoRan Exploration Co.
MOXY LLC
Brimstone LLC
c/o McMoRan Exploration Co.
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: Chief Executive Officer
Telecopy: (504) 582-4290
Section 9.07. Assignment; Binding Effect. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of
law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement shall
be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
Section 9.08. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision
shall be interpreted to be only so broad as is enforceable.
Section 9.09. Entire Agreement; Benefits. This Agreement
(i) along with the Confidentiality Agreement constitutes the
entire agreement, and supersedes all other prior agreements and
understandings, both written and oral, between the parties with
respect to the subject matter hereof and thereof; and (ii) except
for the provisions of Section 6.12, is not intended to and shall
not confer upon any Person other than the parties hereto any
rights or remedies hereunder.
Section 9.10. Headings.
Headings of the Articles and Sections of this Agreement are for
the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
McMoRan Exploration Co.
By:/s/Richard C. Adkerson
----------------------
Richard C. Adkerson
President and Chief Executive Officer
McMoRan Oil & Gas Co.
By:/s/Richard C. Adkerson
----------------------
Richard C. Adkerson
Co-Chairman and Chief Executive Officer
Freeport-McMoRan Sulphur Inc.
By:/s/Robert M. Wohleber
---------------------
Robert M. Wohleber
President and Chief Executive Officer
MOXY LLC
By: McMoRan Exploration Co.,
its sole member
By:/s/Richard C. Adkerson
----------------------
Richard C. Adkerson
President and Chief Executive Officer
Brimstone LLC
By: McMoRan Exploration Co.,
its sole member
By:/s/Richard C. Adkerson
----------------------
Richard C. Adkerson
President and Chief Executive Officer
