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Exhibit 2.1
PURCHASE AGREEMENT
(CONTACT ENERGY LIMITED)
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PURCHASE AGREEMENT
This PURCHASE AGREEMENT (including the Exhibits and Schedules hereto, this “ Agreement ”) is made as of July 20, 2004 (the “ Effective Date ”), by and among Edison Mission Energy, a Delaware corporation (“ EME ”), as principal for itself and as agent on behalf of each of the other Sellers, and Origin Energy New Zealand Limited, a New Zealand corporation (the “ Purchaser ”) and each of the other Persons executing this Agreement who are identified as Purchaser Parents on the signature page(s) to this Agreement (the “ Purchaser Parents ”).
WITNESSETH:
WHEREAS, EME is the indirect owner of all of the issued and outstanding shares of MEC International BV, a Netherlands company, having its registered office at De Lairessestraat 111-115, 1075 HH, Amsterdam, The Netherlands (“ MEC BV ”);
WHEREAS, EME, either through its ownership of MEC BV or otherwise, is the direct or indirect parent entity of each of the other Sellers, and each Seller (other than EME) is or will be as of the Project Closing a direct or indirect Wholly Owned Subsidiary of EME;
WHEREAS, each Seller of Project Securities owns direct or indirect equity interests in the respective Acquired Companies listed opposite such Seller’s name on Schedule A ;
WHEREAS, the Sellers collectively own directly or indirectly 100% of EME’s and MEC BV’s record and beneficial ownership in the Acquired Companies;
WHEREAS, the Purchaser Parents collectively own 100% of the direct equity interests in the Purchaser;
WHEREAS, EME desires to sell and to cause to be sold to the Purchaser, and the Purchaser desires to purchase from the Sellers, all of the Sellers’ direct or indirect equity interests in the Acquired Companies; and
WHEREAS, capitalized terms used in this Agreement have the meanings given them in Article X of this Agreement;
NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:
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ARTICLE I .
1.1 Sale and Purchase of Project Securities . Upon the terms and subject to the conditions contained in this Agreement, on the Project Closing Date, EME will, and it will cause each of the other Sellers to, sell and deliver to the Purchaser, and the Purchaser agrees that it will purchase from EME and the other pertinent Sellers, the Project Securities that are listed opposite the name of each Seller of Project Securities on Schedule A .
1.2 Takeover Offer .
(a) The Purchaser will (i) on the first Business Day after the Effective Date, together with EME cause to be delivered to the Takeovers Panel a request for exemption from certain rules of the Takeovers Code in substantially the form attached hereto as Schedule 1.2(a)(i) (“ Exemption Request ”), and (ii) provided the Takeovers Panel issues an exemption notice in substantially the form attached to the Exemption Request (the “Proposed Exemption Notice”) or an exemption notice not adverse to EME or the Purchaser as compared to the Proposed Exemption Notice (in either case, upon issuance, an “ Exemption Notice ”), on the third Business Day after request is made by EME to Purchaser (which request shall be made in sufficient time such that the Project Closing can occur prior to the expiration of the Exemption Notice but shall not be made later than October 11, 2004) give notice to Contact pursuant to rule 41 of the Takeovers Code (the “Company Notice” ) of the Purchaser’s intention to make the Takeover Offer in substantially the form of Schedule 1.2(a)(ii) . EME and the Purchaser shall each use its Commercially Reasonable Efforts to obtain the Exemption Notice and shall act reasonably in considering whether or not to accept any changes to the Proposed Exemption Request or the Contemplated Transactions required by the Takeovers Panel or requested by EME for the purpose of enhancing the likelihood of the Takeovers Panel issuing an Exemption Notice not adverse to EME or the Purchaser as compared to the Proposed Exemption Notice. If the Takeovers Panel denies the Exemption Request (or issues an exemption notice other than the Proposed Exemption Notice or as is not adverse to EME or the Purchaser as compared to the Proposed Exemption Notice), or fails to issue an Exemption Notice within thirty (30) Business Days of the making of the Exemption Request (subject to reasonable extension by EME upon written notice to Purchaser based on EME’s reasonable judgment that an extension of such period will increase the likelihood that an acceptable Exemption Notice will be issued), then (A) EME will, within ten (10) Business Days after the expiration of such thirty (30) Business Day (or longer) period, or notice from the Takeovers Panel of such denial, notify the Purchaser whether EME elects to terminate this Agreement, or to accept the Takeover Offer by causing the Sellers to deliver the Seller-Owned Contact Shares in lieu of the Project Securities (a “ Contact Shares Delivery Transaction ”), and (B) if EME elects a Contact Shares Delivery Transaction then, within three (3) Business Days after request is made by EME to Purchaser (which request shall be made not later than October 11, 2004), the Purchaser will give to Contact the Company Notice, except that the Takeover Offer shall be exclusively for Contact Shares and shall be unconditional except for the condition that Purchaser obtain greater than 50% of the outstanding Contact Shares in such Takeover Offer. If EME fails to make an election within the ten (10) Business Day period referred to in Section 1.2(a)(A), EME shall be deemed to have elected a Contact Shares Delivery Transaction. If the Parties agree to a change to the Contemplated Transactions pursuant to this Section 1.2(a) in order to obtain an acceptable Exemption Notice, the Parties shall execute an appropriate amendment to this Agreement.
(b) The Per-Contact Share Price will be the price per Contact Share offered in the Takeover Offer.
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(c) The Purchaser will send the Takeover Offer in accordance with rule 43 of the Takeovers Code, subject to any amendments agreed to in writing by EME, as soon as reasonably possible during the period beginning 14 days and ending 30 days after the Purchaser has sent the Company Notice to Contact, or such other date permitted under the Takeovers Code as may be agreed between EME and the Purchaser. In considering whether or not to consent to proposed amendments to the Takeover Offer, EME will act reasonably and without undue delay. It will be unreasonable for EME to withhold its consent to a proposed amendment to the Takeover Offer that does not adversely affect EME or the Contemplated Transactions or if such amendment is to be made after the Project Closing Date, so long as such amendment is in accordance with Applicable Law and the Exemption Notice.
(d) The Purchaser will ensure that the Takeover Offer complies with the Exemption Notice and with the Takeovers Code and is open for acceptance by all holders of Contact Shares, including Universal Holdings and Pacific Holdings if and to the extent required by the absence of an exemption sought by the Purchaser in the Proposed Exemption Notice. If for any reason, other than a failure by EME to comply with this Agreement, the Project Closing cannot occur before the end of the period of the Takeover Offer or the Takeovers Panel requires any amendment to the Takeover Offer or Takeover Offer documents, the Purchaser will consult with EME and will use its Commercially Reasonable Efforts to enable the Project Closing to occur without violation of the Takeovers Code, including extending the period of the Takeover Offer so that the Project Closing can occur prior to the expiration of such Takeover Offer.
(e) If the Takeovers Panel grants an exemption permitting Sellers to accept the Takeover Offer by delivering the Project Securities instead of the Seller-Owned Contact Shares, but does not grant an exemption permitting the Project Closing to occur separate from the Takeover Offer, such change to the Proposed Exemption Notice will be accepted by EME and Sellers will accept the Takeover Offer by delivering the Project Securities in acceptance of the Takeover Offer. If the Takeovers Panel does not grant an exemption permitting acceptance by Sellers of the Takeover Offer by delivery of the Project Securities, then Sellers shall accept by delivery of the Seller-Owned Contact Shares, if EME so elects the Contact Shares Delivery Transaction. If EME elects to terminate the Agreement under Section 1.2(a)(A), (i) EME must, within five (5) Business Days of that election, pay the Purchaser US$10,000,000 as liquidated damages and not as a penalty and (ii) EME shall cause (A) any Seller Party (as that expression is defined in relation to a Contact Shares Delivery Transaction) that intends to sell its Seller-Owned Contact Shares (or any of them) within 12 months of the date EME elects to terminate this Agreement, to first offer the Purchaser the right to purchase all, but not less than all, of those Seller-Owned Contact Shares at the Per-Contact Share Price before they are offered to any other prospective purchaser and must provide the Purchaser with a minimum of fifteen (15) Business Days in which to elect whether or not to purchase those Contact Shares and (B) if EME or any of its Affiliates intends to enter into a transaction that would result in the Seller-Owned Contact Shares being owned by an entity other than EME or a Subsidiary of EME, EME must first offer the Purchaser the right to purchase all, but not less than all, of the Seller-Owned Contact Shares (or such of those Contact Shares as are still owned, directly or indirectly, by EME) at the Per-Contact Share Price and must provide the Purchaser with a minimum of fifteen (15) Business Days in which to elect whether or not to purchase those Seller-Owned Contact Shares, provided, however, that this sentence shall not apply to any direct or indirect sale or transfer as a result of which the Seller-Owned Contact Shares remain owned by EME or any Wholly Owned Subsidiary of EME. If Purchaser elects to purchase the Seller-Owned Contact Shares in accordance with the preceding sentence, it shall close such purchase promptly, but in any case within twenty (20) Business Days of electing to purchase such Seller-Owned Contact Shares. If Purchaser fails to make an election within the fifteen (15) Business Day period referred to above, Purchaser shall be deemed to have elected not to purchase such Seller-Owned Contact Shares.
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(f) The Sellers will not deliver the Project Securities and the Purchaser shall not be required to give the Company Notice to Contact if (i) Contact has suffered or announced a change or matter since the Effective Date that has had or would reasonably be expected to have a Material Adverse Effect on Contact and its Subsidiaries taken as a whole, other than as a result of facts or circumstances disclosed in a report filed by Contact with the New Zealand Exchange Limited or in an announcement made by Contact generally to the public, in either case before the Effective Date and (ii) the Purchaser gives notice thereof to the Sellers before (x) Project Closing, in the case of delivery of Project Securities or (y) the commencement of the Takeover Offer, if a Contact Shares Delivery Transaction.
1.3 Contact Shares Delivery Transaction . Notwithstanding the provisions of Sections 1.1 and 2.1 , in the event EME elects the Contact Shares Delivery Transaction; (a) the amount payable by the Purchaser for each of the Seller-Owned Contact Shares in the Takeover Offer shall be the Per-Contact Share Price; (b) EME and the Controlled Acquired Companies shall be required to satisfy, through payment, defeasance or otherwise, the Pacific Holdings Leverage at or prior to the Project Closing; (c) the “Sellers” shall be Universal Holdings and Pacific Holdings and the Seller-Owned Contact Shares shall be regarded as “Project Securities” for purposes only of Sections 1.1 , 2.2 , 3.1 , 3.4 , 3.5 , 4.5(a) , 5.10(b) , 6.6 , 6.7 , 6.23 , Article VII , and Section 11.2 ; and (d) for purposes of Section 8.2(a), only the representations and warranties set forth in Sections 4.1 through 4.5 , 4.18(b) , and 4.18(c) , 4.22 and 4.25 shall be considered. Notwithstanding the remaining terms and conditions of this Agreement, and for the avoidance of doubt, the Parties agree and acknowledge that, in the event EME elects the Contact Shares Delivery Transaction, the Seller Parties shall not sell, and the Purchaser Parties shall not obtain or incur, any interest in or Liabilities of or for the Controlled Acquired Companies.
1.4 Confidentiality Agreements . On the Project Closing Date, EME shall designate the Purchaser Parties as intended third party beneficiaries under the confidentiality agreements entered into between EME and certain third party prospective bidders in connection with the Auction Process (collectively, the “ Auction Confidentiality Agreements ”), insofar as such Auction Confidentiality Agreements pertain to (a) any Review Material (as defined in such Auction Confidentiality Agreements) or other confidential or proprietary information of, involving or otherwise related to any Acquired Company, (b) any employees of any Acquired Company, or (c) any covenants, agreements or indemnities set forth in such Auction Confidentiality Agreements involving or otherwise related to, any Acquired Company or potential transaction pertaining thereto and covered by such Auction Confidentiality Agreements.
1.5 [ Intentionally omitted. ]
1.6 Assignments Among Seller Parties . This Agreement shall not constitute an agreement to assign any asset or to assume any liability between or among any Seller Parties.
1.7 Excluded Items . Notwithstanding anything in Article I to the contrary, the assets set forth on Schedule 1.7 and any and all Liabilities related thereto (the “ Excluded Items ”) are excluded from this Agreement and from the Contemplated Transactions and the Seller Parties shall sell, transfer or otherwise dispose of the Excluded Items prior to the Project Closing Date so that none of the Controlled Acquired Companies shall have any direct or indirect ownership interest in, or any other Liability for, the Excluded Items as of the Project Closing Date, except for such Liabilities that are the subject of EME’s indemnification in Section 11.3(a) .
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ARTICLE II.
2.1 Purchase Price
(a) The purchase price to be paid for the Project Securities shall be the amount calculated on Schedule 2.1(a) (as it may be adjusted pursuant to this Agreement, the “Project Purchase Price” ).
(b) EME, on behalf of itself and the other Sellers, and the Purchaser, on behalf of itself and the other Purchaser Parties, acknowledge and agree that (i) the Project Purchase Price equals the aggregate net equity value for the Seller-Owned Contact Shares as of the Effective Date, as agreed between EME and the Purchaser as a result of arms’ length bargaining in good faith, (ii) the Pacific Holdings Leverage Amount equals the aggregate principal and redemption amount payable in NZ$ by Pacific Holdings with respect to the Pacific Holdings Leverage, (iii) the Purchaser Parties are paying to the Sellers no consideration for the Seller-Owned Contact Shares other than the Per-Contact Share Price that the Purchaser Parties will offer for the remaining Contact Shares in the Takeover Offer, and (iv) each of the Sellers and the Purchaser Parties shall be bound by the foregoing for all purposes related to the Takeover Offer.
2.2 Payment of Purchase Price . On the Project Closing Date, the Purchaser will, and each Purchaser Parent will cause the Purchaser to, pay the Project Purchase Price to such Sellers or other Subsidiaries or designees of EME by wire transfer of immediately available funds in New Zealand Dollars into such accounts as EME shall direct in a written notice delivered at least five (5) Business Days prior to the Project Closing Date and in such respective amounts as are designated in such notice by EME. The Project Purchase Price shall be paid without reduction or offset for any transfer, documentary, sales, value-added, goods and services, use, stamp, registration and other similar Taxes, or for any Taxes withheld, deducted from, or paid with respect to, the Project Purchase Price, other than Taxes required by Law to be withheld from the Project Purchase Price, in which case the Purchaser shall withhold such Taxes and pay them to the appropriate tax authority by the required date for payment, subject however to Section 7.8 . If the Purchaser believes it is required by Law to withhold any such Tax, the Purchaser shall deliver to the Sellers, as soon as practicable after becoming aware of such a requirement, a schedule specifying the amount of Tax required to be withheld in each jurisdiction and the basis therefor. The Purchaser shall promptly deliver to the Sellers any withheld Taxes subsequently refunded to the Purchaser. To the extent any Tax refund under this section is subject to Tax to the recipient, the amount payable to EME will be the after-Tax amount of such a Tax refund amount, provided that if any such Tax is refunded to or otherwise recovered by the recipient, such refund shall be for the account of and paid over to EME. If there is a Contact Shares Delivery Transaction, EME shall be paid in the same manner as holders of Contact Shares that sell in the Takeover Offer. The Parties agree that for the purposes of the accrual rules in the Income Tax Act 1994 (New Zealand), the Project Purchase Price is the lowest price they would have agreed for the Project Securities if payment would have been required in full at the time the first right in the Project Securities passed.
2.3 Adjustments .
(a) The Per-Contact Share Price and the Project Purchase Price shall be subject to adjustment as follows:
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(i) The Per-Contact Share Price shall be decreased by the amount of Contact Dividends paid per share on or after the Effective Date, other than any Contact Dividend declared before the Effective Date;
(ii) The Project Purchase Price shall be increased by any reduction in the Pacific Holdings Leverage Balance since the Effective Date; and
(iii) The Project Purchase Price shall be increased or decreased, as the case may be, by the sum of the Net Operating Capital, as of Project Closing, of all Controlled Acquired Companies (based, if any amounts are expressed in US Dollars, on the Currency Exchange Rate in effect as of the Project Closing Date).
(b) With respect to Section 2.3(a)(i) , the Parties intend that any such decrease shall treat the Seller Parties and the other holders of Contact Shares equally, and thus:
(i) If Contact pays a Contact Dividend during the period from the Effective Date to the Project Closing Date, other than any Contact Dividend declared before the Effective Date, the Per-Contact Share Price will be reduced by the amount of the Contact Dividend paid per share; and
(ii) If for any reason the Project Closing Date occurred before the date of payment for some or all other Contact Shares purchased in the Takeover Offer and Contact pays a Contact Dividend during that interim period, the Per-Contact Share Price for such Contact Shares will be reduced by the amount of the Contact Dividend paid per share (such that the holders of Contact Shares other than Universal Holdings and Pacific Holdings that have not then been paid will, by receiving the combination of the amount of the Contact Dividend and the reduced Per-Contact Share Price, receive the same consideration for Contact Shares as Sellers received through the unreduced Project Purchase Price and other holders of Contact Shares previously paid received through the unreduced Per-Contact Share Price).
(c) With respect to Section 2.3(a)(iii) , the term “Net Operating Capital” shall mean cash and cash equivalents, plus current accounts receivable of such Controlled Acquired Company from Persons other than EME or a Wholly-Owned Subsidiary thereof, minus current accounts payable and current accrued liabilities of such Controlled Acquired Company to Persons other than EME or a Wholly-Owned Subsidiary thereof (provided that, for the avoidance of doubt, “current accrued liabilities” shall include unpaid interest and preferred dividends accrued on the Pacific Holdings Leverage Amount to the Project Closing as if the Project Closing Date was the date of payment of such amounts), but excluding from any such current accounts receivable or payable or accrued liabilities, Taxes (which are governed by Article VII and Section 11.5 ); provided, however, “ Net Operating Capital ” does not include any assets and liabilities from price risk management activities determined in accordance with Statement of Financial Accounting Standards No. 133, “Accounting for Derivatives Instruments and Hedging Activities” and shall be based solely upon the internal records of, and the valuation and accounting methods customarily used by, the Sellers, absent manifest error, it being understood that under no circumstances shall an audit be required as between the Sellers and the Purchaser Parties. In no event will any adjustment for Net Operating Capital reflect any economic value of the Contact Shares, but will reflect only the economic value of the cash, cash equivalents, current accounts receivable and payable, and current liabilities of the Controlled Acquired Companies.
(d) No less than ten (10) nor more than twenty (20) Business Days before the Project Closing, EME shall deliver to the Purchaser a certificate executed on EME’s behalf by a
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responsible officer setting forth EME’s estimate, in reasonable detail, of the adjustment to the Project Purchase Price arising under this Section, and, for purposes of payments to be made at the Project Closing, the Project Purchase Price shall be adjusted by one hundred percent (100%) of such estimate.
(e) Within four (4) months after the Project Closing, the Purchaser shall provide a certificate to EME, and EME may provide a certificate to the Purchaser, executed on the delivering Party’s behalf by a responsible officer setting forth any proposed modifications to EME’s original estimate of the adjustments to the Project Purchase Price arising under Sections 2.3(a)(ii) and (iii), which proposed modifications shall be limited to (i) errors claimed by the Purchaser or EME to exist in EME’s estimate, setting forth in reasonable detail the basis for same, and (ii) the inability of Purchaser (or the applicable Controlled Acquired Company) to collect any accounts receivable that were included in EME’s estimate of Net Operating Capital. Purchaser and EME shall attempt to resolve any disagreement regarding such proposed modifications within thirty (30) days after the Purchaser’s submission of same to EME, and disputes that are unresolved for more than thirty (30) days shall be subject to arbitration in accordance with Section 12.4 . Within five (5) Business Days following determination of such modifications, if any, either EME (as principal and as agent for the other Sellers) shall pay to the Purchaser, or the Purchaser shall pay to EME, as the case may be, in immediately available funds, the amount of any such modification, provided that the pendency of a dispute shall not affect the payment obligation hereunder of either EME or the Purchaser to the extent such payment is not disputed. In the event that the inability of Purchaser (or a Controlled Acquired Company) to collect an account receivable is included in any such modification, the Purchaser shall arrange to have such account assigned to EME (as principal and as agent for the other Sellers), and the assignee shall be free to collect the same.
ARTICLE III.
3.1 Time and Place of Project Closing . Subject to the provisions of Section 3.3 below, the closing of the sale, purchase, and delivery of the Project Securities provided for in Articles I and II (the “ Project Closing ”) will take place at or be directed from the offices of Munger, Tolles & Olson LLP located at 355 S. Grand Avenue, 35th Floor, Los Angeles, California (and/or at such other place in Los Angeles as EME shall designate in writing at least five (5) Business Days before Project Closing), at a mutually convenient time and on a mutually convenient date that is on or before the tenth (10th) Business Day after the date on which all of the respective conditions to the Project Closing set forth in Article VIII (excluding conditions that, by their terms, cannot be satisfied until the Project Closing) have been satisfied (or waived by the Party entitled to waive such condition) but not later than the Outside Date, provided that the Project Closing will not occur before the first Business Day on which the Purchaser Parties may purchase the Project Securities without violating the Takeovers Code; or on such other date as EME and the Purchaser may agree in writing. The date on which the Project Closing occurs is referred to herein as the “ Project Closing Date .”
3.2 [ Intentionally Omitted ].
3.3 Postponement of Project Closing Date. Notwithstanding any provision of Section 3.1 to the contrary, EME shall have the right, upon three (3) Business Days’ prior notice to the Purchaser, to postpone the Project Closing, but not beyond the Outside Date and, if Purchaser has previously given the Company Notice to Contact, not beyond the last date for payments to be made to holders of Contact Shares in the Takeover Offer (without any extension of the offer period pursuant to Section 1.2(d)).
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3.4 Documents to Be Delivered by EME . At the Project Closing, EME will deliver, or cause to be delivered, to the Purchaser the following:
(a) duly executed transfers of the Project Securities and certificates or other evidence representing the Project Securities, and, if requested by Purchaser, a proxy or proxies to convey any and all rights to vote such Project Securities;
(b) written resignations of the members of each of the boards of directors, management committees or equivalent managing bodies of the Acquired Companies set forth on Schedule 3.4(b) and such resignation, notice of termination of secondment agreement, or other document as may be necessary and appropriate in connection with the treatment of seconded personnel under Section 6.20 ;
(c) a certificate of EME, executed on its behalf by one of its officers, stating that the conditions with respect to the Purchaser Parties’ obligations hereunder in connection with the Project Closing set forth in Sections 8.2(a) and 8.2(b) have been satisfied;
(d) each of the Related Agreements duly executed by EME and any other applicable Seller Party relating to such Project Closing;
(e) Foreign Implementing Agreements, if applicable;
(f) those books and records, if any, or pertinent portions thereof, that are in the possession of a Seller Party or a Subsidiary of a Seller Party (other than an Acquired Company), of which no Acquired Company has a complete duplicate, and that relate exclusively to the Controlled Acquired Companies or relate partially to a Controlled Acquired Company and which are required by that Controlled Acquired Company, it being understood that EME and its Subsidiaries may retain copies thereof for its own records and to disclose such information to its Representatives and as required by Law;
(g) such other duly executed instruments of transfer, assignment or assumption as may be reasonably requested by any Purchaser Party in connection with the sale and delivery of the Project Securities pursuant to this Agreement;
(h) certified copies of the Governing Documents of each Controlled Acquired Company;
(i) evidence that the directors of each Controlled Acquired Company have held the necessary meetings to approve the transfer of the Project Securities, appoint nominees of the Purchaser set forth on Schedule 3.4(i) as directors of that company and to accept the resignations referred to in Section 3.4(b); and
(j) a copy of Intralinks to the extent it relates to the Acquired Companies, other than confidential EME information that is “read-only” (not copyable) on Intralinks.
3.5 Documents to Be Delivered by the Purchaser Parties . At the Project Closing, each Purchaser Party, jointly and severally with each other Purchaser Party, will deliver to EME (or its designees) the following:
(a) evidence of one or more wire transfers that total the Project Purchase Price;
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(b) a certificate of the Purchaser Party, executed on its behalf by one of its officers, stating that the Seller Parties’ obligations hereunder in connection with the conditions with respect to the Project Closing set forth in Sections 8.3(a) and 8.3(b) have been satisfied;
(c) each of the Related Agreements duly executed by each Purchaser Party relating to the Project Closing;
(d) Foreign Implementing Agreements, if applicable; and
(e) such other duly executed instruments of transfer, assignment or assumption as may be reasonably requested by EME in connection with the sale and delivery of the Project Securities pursuant to this Agreement.
ARTICLE IV.
Each representation and warranty contained in this Article IV is qualified by disclosures made with respect to such representation and warranty in Schedule 4 (the “ EME Disclosure Schedule ”). Except as set forth in the EME Disclosure Schedule, the numbered Sections of which correspond to Sections of this Agreement, EME (as principal for itself and as agent for the other Sellers) hereby represents and warrants to the Purchaser Parties, as of the Effective Date and the Project Closing Date (unless expressly stated otherwise in the relevant representation or warranty), that:
4.1 Organization .
(a) The EME Disclosure Schedule contains a complete and accurate list of the jurisdiction of incorporation or organization of each Seller Party. Each Seller Party is an entity duly incorporated or organized and validly existing under the laws of its jurisdiction of incorporation or organization and has the requisite corporate or similar power and authority to own, lease and operate its properties and to carry on its business as now conducted and to perform its part in the Contemplated Transactions.
(b) The EME Disclosure Schedule contains a complete and accurate list of the jurisdiction of incorporation or organization of each Acquired Company (excluding Subsidiaries of Contact). Each Controlled Acquired Company is an entity duly incorporated or organized and validly existing under the laws of its jurisdiction of incorporation or organization and has the requisite corporate or similar power and authority to own, lease and operate its properties and to carry on its business as now conducted. Each Controlled Acquired Company is duly qualified to do business as a foreign entity and is in good standing under the laws of each jurisdiction in which either the ownership or use of the properties or assets owned or used by it, or the nature of the activities conducted by it, requires such qualification.
4.2 Authority and Enforceability . The execution and delivery by EME of this Agreement and the Related Agreements and the performance and consummation by the Seller Parties of the Contemplated Transactions have been duly authorized by all necessary corporate or similar action on the part of EME and the Seller Parties. EME has been duly appointed as an agent, to the extent necessary for the purposes of this Agreement, for Pacific Holdings and Universal Holdings with full power and authority to act in their names and on their respective behalves in connection with the execution and performance of the Contemplated Transactions. EME has full power and authority to act in the name of and on behalf of EME Precision in connection with the execution and performance of the Contemplated Transactions. This Agreement has been, and each of the Related Agreements, as of the Project Closing,
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will have been, duly executed and delivered by EME and, assuming due execution and delivery by all other parties to this Agreement or each such Related Agreement, as applicable, this Agreement constitutes, and each of the Related Agreements when duly executed and delivered will constitute, a valid and binding obligation of EME and the Seller Parties, enforceable against EME and the Seller Parties in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, preference, moratorium or other similar Laws now or hereafter in effect relating to creditors’ rights generally and that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding may be brought.
4.3 No Breach or Conflict . Subject to the provisions of Sections 4.4(a) and 4.4(b) regarding consents from private parties and Governmental Authorities, and except for compliance with the requirements of applicable merger control, antitrust, competition, foreign ownership or investment or similar Laws (collectively, the “ Merger Control Laws ”) and any regulatory or licensing Laws applicable to the Acquired Companies, the execution and delivery by EME of this Agreement and the Related Agreements and performance and consummation of the Contemplated Transactions by the Seller Parties do not and will not:
(a) violate any provision of the Governing Documents of any Seller Party or Controlled Acquired Company;
(b) violate or result in a breach of or default (with or without notice or lapse of time or both), in any material respect, under any Major Contract to which any Seller Party or Controlled Acquired Company is a party or to which any such entity or its properties or assets may be bound;
(c) violate any Law or Order of any Governmental Authority applicable to any Seller Party or Controlled Acquired Company;
(d) result in the imposition or creation of any Lien upon or with respect to any of the properties or assets owned or used by the Controlled Acquired Companies, other than Permitted Exceptions; or
(e) result in the cancellation, modification, revocation or suspension of any License held by a Controlled Acquired Company.
4.4 Consents .
(a) The execution and delivery by EME of this Agreement and the Related Agreements and the performance and consummation by the Seller Parties of the Contemplated Transactions do not require any authorization, consent or approval of any non-governmental third party, pursuant to any Contract with a Seller Party or any Controlled Acquired Company.
(b) Except for compliance with the Merger Control Laws, the execution and delivery by EME of this Agreement and the Related Agreements and the performance and consummation by the Seller Parties of the Contemplated Transactions do not require any authorization, consent, approval, certification, license or order of, or any filing with, any court or Governmental Authority, insofar as concerns the Controlled Acquired Companies, other than an exemption required from the Takeovers Panel relating to the transfer of Mission Contact Finance Limited as part of the Contemplated Transactions.
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4.5 Ownership Interests .
(a) Each Seller of Project Securities is or will be on the Project Closing Date the sole record owner and holder of the Project Securities listed opposite such Seller’s name on Schedule A, free and clear of all Liens. Except for this Agreement and Permitted Exceptions, there are no agreements relating to the issuance, sale or transfer of any of the Project Securities or any other shares of capital stock or any other ownership interests of the Controlled Acquired Companies to the extent they are owned, either directly or indirectly, by any Seller. At Project Closing, the Purchaser will receive good and unencumbered title to the Project Securities, free and clear of all Liens (other than any Liens created or granted by the Purchaser).
(b) The EME Disclosure Schedule provides a materially accurate description of the ownership structure (including the identity of and the amount and percentage of ownership held by each member, partner, stockholder or other owner) that will exist for each Controlled Acquired Company as of the Project Closing. All of the outstanding capital stock or other ownership interests of each Controlled Acquired Company are (or as of the Project Closing will be) owned of record and beneficially by a Seller or a Controlled Acquired Company free and clear of all Liens, and where transfer restrictions existing under any shareholder or similar agreement apply, waivers of these restrictions have been or will be obtained. All of the outstanding capital stock or other ownership interests of each Controlled Acquired Company held by a Seller or a Controlled Acquired Company have been fully paid, duly authorized and validly issued. All of the outstanding capital stock or other ownership interests of each Controlled Acquired Company are not subject to options or warrant obligations, pre-emptive rights, securities convertible into shares or voting agreements.
(c) All of the Seller-Owned Contact Shares are owned of record and beneficially by Universal Holdings and Pacific Holdings free and clear of all Liens, other than Permitted Exceptions.
4.6 Financial Information . Set forth on the EME Disclosure Schedule is a list of certain financial schedules that have been posted to Intralinks for the Controlled Acquired Companies (each, a “ Controlled Acquired Company Financial Schedule ”), which Controlled Acquired Company Financial Schedules represent their unconsolidated financial position and results of operations as of April 30, 2004. Such Controlled Acquired Company Financial Schedules were derived from and are materially in accordance with the internal books and records of such Controlled Acquired Companies. Such Controlled Acquired Company Financial Schedules were prepared in accordance with the accounting practices of the Controlled Acquired Companies as of April 30, 2004, and such accounting practices were consistent with the accounting practices of the Controlled Acquired Companies as of December 31, 2003.
4.7 No Undisclosed Liabilities . The Controlled Acquired Companies do not have any Liabilities of the type required to be reflected or reserved against on a balance sheet prepared in accordance with US GAAP or Local GAAP, whichever was used by such Controlled Acquired Company as of April 30, 2004 to prepare its financial statements, except for Liabilities:
(a) disclosed in the Controlled Acquired Company Financial Schedules or in the notes thereto (collectively, the “ Financial Information ”);
(b) that were incurred after April 30, 2004 in the Ordinary Course of Business;
(c) disclosed in this Agreement or in the Confidential Information Memorandum; or
(d) permitted to be incurred pursuant to Section 6.3 .
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4.8 Absence of Certain Developments . Since April 30, 2004, no Controlled Acquired Company has taken any action of the type prohibited by Section 6.3 , and there has occurred no event or circumstance that, individually or in the aggregate of all such events or circumstances, has resulted in a Material Adverse Effect on the Controlled Acquired Companies.
4.9 Title to Properties . Except for Permitted Exceptions and Liens granted in the Ordinary Course of Business to financiers and lenders, the Controlled Acquired Companies have good and defensible title, or valid and effective leasehold, license, easement, contractual or statutory rights in the case of leased or licensed or other property, to all material tangible personal and material real property owned or used by them in the conduct of their businesses.
4.10 Material Contracts .
(a) No Controlled Acquired Company is a party to, or otherwise bound by, a Contract of the type described in clauses (i) through (ix) below (together with the collective bargaining agreements referred to in Section 4.19(a) , the “ Major Contracts ”), unless such Contract has been included on Intralinks:
(i) the Governing Documents of each Controlled Acquired Company, as currently in effect, and any Contract relating to the issuance, sale or transfer of any capital stock, ownership interests or other securities of any Controlled Acquired Company that are owned, directly or indirectly, by a Seller Party;
(ii) any Contract between a Seller Party or one or more of its Affiliates (other than a Controlled Acquired Company), on the one hand, and a Controlled Acquired Company, on the other hand (the “ Affiliate Contracts ”);
(iii) any Contract that was not entered into in the Ordinary Course of Business and that involves annual expenditures or receipts of any Controlled Acquired Company in excess of US$250,000 (or its equivalent as of the Effective Date in foreign currency if such Contract is denominated in foreign currency);
(iv) except for Contracts between or among Controlled Acquired Companies, any Contract by which any Controlled Acquired Company has indebtedness for borrowed money or has guaranteed the indebtedness of others, and each Contract by which any Person is indebted to any Controlled Acquired Company for borrowed money;
(v) any lease or license under which any Controlled Acquired Company is the lessor or lessee of real or personal property;
(vi) any Operating Contract providing for the payment by or to any Controlled Acquired Company in excess of US$250,000 per year (or its equivalent as of the Effective Date in foreign currency if such Operating Contract is denominated in foreign currency);
(vii) any Contract that is not terminable without material penalty providing for the employment or compensation of any current employee, officer, manager or director of any Controlled Acquired Company that involves annual salary and cash bonus in excess of US$250,000 (or its equivalent as of the Effective Date in foreign currency if such Contract is denominated in foreign currency);
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(viii) any interest rate swap or electricity hedging instrument of any type with respect to which any Controlled Acquired Company is currently bound and which (i) has a notional amount in excess of US$250,000 (or its equivalent as of the Effective Date in foreign currency if such Contract is denominated in foreign currency) or (ii) has a term extending for a period longer than two (2) years after the Effective Date; and
(ix) any Contract under which a Controlled Acquired Company has undertaken not to compete with any other entity.
(b) EME has made available to the Purchaser by posting to Intralinks or otherwise has used Commercially Reasonable Efforts to make accurate, complete and correct copies of all Major Contracts available to the Purchaser, in each case subject to EME’s confidentiality obligations to third parties and any restrictions on disclosure required by such third parties.
(c) Except for any Major Contracts that have expired in accordance with their terms or terminated for any reason other than a default by any Seller Party or Controlled Acquired Company, all of the Major Contracts to which any Seller Party or Controlled Acquired Company is a party and are in full force and effect and none of the Seller Parties or Controlled Acquired Companies is in default under any Major Contract to which it is a party, which default has not been excused or waived.
4.11 Intellectual Property .
(a) With respect to each Intellectual Property Asset owned or used by a Controlled Acquired Company, one or more of the Acquired Companies is, to the Knowledge of EME, either (i) the owner of all material right, title and interest in and to such Intellectual Property Asset, free and clear of any Liens, or (ii) has the right to use the same without material payment to a third party.
(b) No Intellectual Property Asset of any Controlled Acquired Company is subject to any pending or threatened Action. To the Knowledge of EME, no Intellectual Property Asset of any Controlled Acquired Company infringes any intellectual property right of any other Person.
4.12 Taxes . Except as otherwise set forth in the EME Disclosure Schedule, to the Knowledge of EME:
(a) (i) All Tax Returns showing Taxes to be due and payable that were required to be filed on or before the Effective Date by or on behalf of the Controlled Acquired Companies have been filed, (ii) all such Tax Returns were correct and complete in all respects when filed, (iii) all Taxes shown to be due and payable on such Tax Returns have been paid, and (iv) there are no Liens for Taxes (other than Taxes not yet due and payable or Taxes that are being contested in good faith for which adequate reserves have been established) upon any of the assets of any of the Controlled Acquired Companies.
(b) There is no dispute or claim or pending or anticipated dispute or claim concerning any Tax liability of any of the Controlled Acquired Companies, which dispute or claim has been raised by any Tax authority or pursuant to any contractual obligation to indemnify Taxes to any Person in writing or otherwise, and would reasonably be expected to result in material Taxes.
(c) There is no claw back provision (as a result of any claimed exemptions) concerning Dutch Capital Tax applicable regarding any of the Controlled Acquired Companies.
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(d) The participation exemption applies to Universal Holdings’ shareholdings in the Acquired Companies and, consequently, any dividend distributions from, and any accretion in, those shareholdings may be received or realized, as the case may be, free of Dutch Corporate Income Tax. Any profit distributions may be made by Universal Holdings free of Dutch Dividend Withholding Tax.
(e) All Controlled Acquired Companies have paid all Taxes due and owing by them (whether or not such Taxes are required to be shown on a Tax Return) and have withheld and when due paid over to the appropriate taxing authority all Taxes which they are required to withhold from amounts paid or owing to any employee, shareholder, creditor or other party.
(f) To the extent that imputation credit accounts, dividend withholding payment accounts, branch equivalent taxation accounts, conduit tax relief accounts, policyholder credit accounts and other tax memorandum accounts have been or should have been maintained by any Controlled Acquired Company;
(i) those tax memorandum accounts have been correctly maintained as required by the relevant legislation;
(ii) no Controlled Acquired Company is liable for any taxation payable as a result of there having been a debit balance in any of its tax memorandum accounts at the end of an earlier imputation year; and
(iii) none of those tax memorandum accounts will have a debit balance on the Project Closing Date.
(iv) no Controlled Acquired Company is precluded from maintaining an imputation credit account by the relevant legislation.
(g) No joint elections have been made under Section 171A of the U.K. Taxation of Chargeable Gains Act 1992 (“TCGA”) in relation to the Controlled Acquired Companies.
(h) No amount owing by a Controlled Acquired Company has or will on or before the Project Closing Date be forgiven, assigned, or otherwise dealt with in circumstances which would cause a gain to arise to the Controlled Acquired Company or Purchaser Parties for taxation purposes or would be treated as forgiveness for taxation purposes.
(i) Universal Holdings has at all times been Tax resident in New Zealand and is Tax resident in the Netherlands under Article 4.1 Dutch General Tax Act and is deemed to be Tax resident in the Netherlands under Article 4(3) of the Netherlands/New Zealand Double Tax Agreement.
(j) None of the Controlled Acquired Companies has acquired assets from the EME group companies under Section 171 of the TCGA or paragraph 55 of Schedule 29 of the Finance Act 2002 (United Kingdom) within the 6 years immediately preceding the date this Agreement becomes unconditional.
4.13 Licenses . Each Controlled Acquired Company possesses all Licenses necessary for its operation in the manner presently operated.
4.14 Compliance with Law . Except for the matters that are the subject of Sections 4.11 , 4.12 , 4.13 , 4.15 , 4.18 , 4.19 and 4.20 , which are controlled by such Sections without duplication in
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this Section 4.14 , each Controlled Acquired Company is, and at all times since January 1, 2002, has been in compliance in all respects with all pertinent Laws, Orders and Licenses.
4.15 Environmental Matters .
(a) Each Controlled Acquired Company has complied with all pertinent Environmental Laws.
(b) To the Knowledge of EME, there are no circumstances involving any Controlled Acquired Company that are reasonably expected to result in a violation of any Environmental Law that would give rise to any Liabilities, costs or restrictions on the ownership, use or transfer of any property of the Acquired Companies.
4.16 Continuous Disclosure Obligation . To the knowledge of EME, the board of directors of Contact has not at any time knowingly violated Contact’s continuous disclosure obligation under Applicable Law.
4.17 [ Intentionally omitted .]
4.18 Litigation .
(a) Except for (i) ordinary and routine claims and litigation incidental to the business of each Controlled Acquired Company (including, without limitation, Actions for negligence, workers’ compensation claims, so-called “slip and fall” claims and the like), (ii) inspections and reviews customarily made by any Governmental Authority of such Controlled Acquired Company, (iii) matters that are the subject of Sections 4.11 , 4.12 , 4.13 , 4.14 , 4.15 , 4.19 and 4.20 , which are controlled by such Sections without duplication in this Section, or (iv) matters posted on Intralinks in connection with the Auction, there are no Actions pending against any Controlled Acquired Company, at law or in equity, or before or by any Governmental Authority.
(b) There are no Actions pending, or to the Knowledge of EME, threatened against a Seller Party or a Controlled Acquired Company which would effect the validity of the Contemplated Transactions or the ability of the Seller Parties to consummate them.
(c) No Seller Party or Controlled Acquired Company is subject to any Order involving, affecting or relating to the Contemplated Transactions.
4.19 Labor Matters .
(a) Except for agreements included on Intralinks in connection with the Auction, no Controlled Acquired Company is a party to any labor or collective bargaining agreement, and there are no labor or collective bargaining agreements that pertain to employees of any Controlled Acquired Company.
(b) There are no pending or, to the Knowledge of EME, threatened strikes, work stoppages, slowdowns or lockouts against any Controlled Acquired Company and no pending material unfair labor practice charges, grievances or complaints filed or, to the Knowledge of EME, threatened to be filed with any Governmental Authority based on the employment or termination by any Controlled Acquired Company of any individual which would have a Material Adverse Effect on the Acquired Companies.
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4.20 Employee Benefits . Neither EME nor its Affiliates maintains or sponsors, or contributes or is required to contribute to, or participates in any written plan, fund, agreement, arrangement or program providing medical, hospital care, dental, sickness, accident, disability or life insurance, pension, retirement savings, deferred compensation, severance, incentive compensation, or bonus, and which currently apply to any current or former employees, officers, directors or consultants of any Acquired Company with respect to their employment by the Acquired Company other than any social security or similar arrangements or programs maintained by a Governmental Authority (the “ Benefit Plans ”).
4.21 Insurance . Except for documents included on Intralinks, the EME Disclosure Schedule contains a current list of all material policies of insurance exclusively covering the assets or business activities of any Controlled Acquired Company.
4.22 Financial Advisors . No broker, finder or investment banker will be entitled to any brokerage, finder’s or other fee or commission from any Purchaser Party or, after the Project Closing with respect thereto, any Acquired Company, in connection with this Agreement or the Contemplated Transactions based upon any agreements, arrangements or commitments, written or oral, made by or on behalf of EME.
4.23 Receivables and Payables . At Project Closing, there will be no accounts receivable, accounts payable or accrued liabilities between a Seller Party or one or more of its Affiliates (other than a Controlled Acquired Company), on the one hand, and a Controlled Acquired Company, on the other hand.
4.24 Employees . None of the Controlled Acquired Companies has any employees.
4.25 Limitation of Representations and Warranties . EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE IV , NEITHER EME NOR ANY SELLER IS MAKING ANY OTHER REPRESENTATION OR WARRANTY, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, CONCERNING THE PROJECT SECURITIES, THE BUSINESS, ASSETS OR LIABILITIES OF ANY ACQUIRED COMPANY, THE CONTEMPLATED TRANSACTIONS OR ANY OTHER MATTER. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE PURCHASER PARTIES ACKNOWLEDGE THAT NEITHER EME NOR ANY SELLER HAS MADE, AND EME AND THE SELLERS HEREBY EXPRESSLY DISCLAIM AND NEGATE, AND THE PURCHASER PARTIES HEREBY EXPRESSLY WAIVE, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO, AND THE PURCHASER PARTIES HEREBY EXPRESSLY WAIVE AND RELINQUISH ANY AND ALL RIGHTS, CLAIMS AND CAUSES OF ACTION AGAINST EME, THE SELLERS AND THEIR RESPECTIVE AFFILIATES AND REPRESENTATIVES (INCLUDING EMPLOYEES) IN CONNECTION WITH, THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) HERETOFORE FURNISHED TO THE PURCHASER PARTIES OR ITS AFFILIATES OR REPRESENTATIVES BY OR ON BEHALF OF EME OR ANY SELLER. NEITHER EME NOR ANY SELLER IS MAKING ANY REPRESENTATION OR WARRANTY TO THE PURCHASER PARTIES WITH RESPECT TO (A) THE INFORMATION SET FORTH IN INTRALINKS, (B) ANY FINANCIAL PROJECTIONS OR FORECASTS RELATING TO THE BUSINESS, ASSETS OR LIABILITIES OF ANY ACQUIRED COMPANY, OR (C) ANY OTHER FORWARD LOOKING STATEMENTS INCLUDING THOSE RELATING TO THE BUSINESS, ASSETS OR LIABILITIES OF ANY ACQUIRED COMPANY. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, REPRESENTATIONS, WARRANTIES AND
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COVENANTS CONTAINED HEREIN MADE BY OR ON BEHALF OF A PARTY ARE MADE SOLELY AND EXCLUSIVELY BY OR ON BEHALF OF SUCH PARTY AND NOT BY OR ON BEHALF OF SUCH PARTY’S REPRESENTATIVES (INCLUDING EMPLOYEES) OR ANY OTHER PERSON.
ARTICLE V .
Each representation and warranty contained in this Article V is qualified by disclosures made with respect to such representation and warranty in Schedule 5 (the “ Purchaser Disclosure Schedule ”). Except as set forth in the Purchaser’s Disclosure Schedule, the numbered sections of which correspond to the Sections of this Agreement, the Purchaser Parties, jointly and severally, hereby represent and warrant to EME and the other Sellers, as of the Effective Date and the Project Closing Date (unless expressly stated otherwise in the relevant representation or warranty), that:
5.1 Organ ization . The Purchaser Disclosure Schedule contains a complete and accurate list of the jurisdiction of organization of each Purchaser Party. Each Purchaser Party is an entity duly organized and validly existing under the laws of its jurisdiction of organization and has the requisite corporate or similar power and authority to own, lease and operate its properties and to carry on its business as now conducted and to perform its part in the Contemplated Transactions.
5.2 Authorization of Agreement . The execution and delivery by each Purchaser Party of this Agreement and the Related Agreements and the performance and consummation by the Purchaser Parties of the Contemplated Transactions have been duly authorized by all necessary corporate or similar action on the part of each Purchaser Party. This Agreement has been, and each of the Related Agreements, as of the Project Closing, will have been duly executed and delivered by each Purchaser Party and, assuming due execution and delivery by all other parties to this Agreement or each Related Agreement, as applicable, this Agreement constitutes, and each of the Related Agreements when duly executed and delivered will constitute, a valid and binding obligation of each Purchaser Party thereto, enforceable against each such Purchaser Party in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, preference, moratorium or other similar Laws now or hereafter in effect relating to creditors’ rights generally and that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding may be brought.
5.3 No Breach or Conflict . Subject to the provisions of Sections 5.4(a) and 5.4(b) regarding consents from private parties and Governmental Authorities, and except for compliance with the requirements of the Merger Control Laws and any regulatory or licensing Laws applicable to the Acquired Companies, the execution and delivery by each Purchaser Party of this Agreement or any Related Agreement and performance and consummation of the Contemplated Transactions by the Purchaser Parties do not and will not:
(a) violate any provision of the Governing Documents of any Purchaser Party; and
(b) assuming that the consents of Governmental Authorities referred to in this Section 5.3 are obtained and assuming compliance with all Merger Control Laws, violate any Law or Order of any Governmental Authority applicable to any Purchaser Party.
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5.4 Consents .
(a) The execution and delivery by the Purchaser Parties of this Agreement and the Related Agreements and the performance and consummation by the Purchaser Parties of the Contemplated Transactions do not require the authorization, consent or approval of any non-governmental third party.
(b) Except for compliance with the Merger Control Laws, the execution and delivery by the Purchaser Parties of this Agreement and the Related Agreements and the performance and consummation by the Purchaser Parties of the Contemplated Transactions do not require any authorization, consent, approval, certification, license or order of, or any filing with, any court or Governmental Authority, other than an exemption required from the Takeovers Panel relating to the transfer of Mission Contact Finance Limited as part of the Contemplated Transactions.
5.5 Litigation . There are no Actions pending, or to the Knowledge of the Purchaser, threatened against any Purchaser Party which if decided against any such Purchaser Party would effect the validity of the Contemplated Transactions or on the ability of the Purchaser Parties to consummate them. No Purchaser Party is subject to any Order involving, affecting or relating to the Contemplated Transactions.
5.6 Investment Intention .
(a) The Purchaser Parties are purchasing the Project Securities for investment for their own accounts, and not with a view to, or for the offer or sale in connection with, any distribution thereof in violation of any securities Laws. The Purchaser Parties acknowledge that the Project Securities and Seller-Owned Contract Shares have not been registered for offer or sale under the Securities Act of 1933 (United States of America), as amended (the “ Securities Act ”), or other applicable securities Laws (including state or foreign securities Laws), and that the Project Securities and Seller-Owned Contract Shares may not be transferred or sold except pursuant to the registration provisions of the Securities Act and other applicable securities Laws or pursuant to an applicable exemption therefrom.
(b) Each Purchaser Party is an “accredited investor” within the meaning of Rule 501(a) under the Securities Act. The Purchaser Parties confirm that EME has made available to the Purchaser Parties and their respective Representatives the opportunity to ask questions of the officers and management-level employees of the Seller Parties and the Acquired Companies and to request additional information about the business and financial condition of the Acquired Companies.
5.7 Financial Capability . At the Effective Date, the Purchaser has access to sufficient committed financing facilities and at the Project Closing Date will have access to sufficient liquid funds to enable the Purchaser to consummate the Contemplated Transactions and to permit the Purchaser to timely perform all of its obligations under this Agreement, including its obligations under this Agreement and the Takeovers Code with respect to the Takeover Offer.
5.8 No Knowledge of Breach . No Purchaser Party or Affiliate of such Purchaser Party has any Knowledge of any breach by EME of any representation or warranty made by EME in this Agreement or any Related Agreement or of any condition or circumstance that would excuse any Purchaser Party from its timely performance of its obligations hereunder. The Purchaser shall promptly notify EME if any such information comes to its attention on or prior to the Project Closing Date.
5.9 Qualified for Licenses . The Purchaser is qualified to obtain any Licenses necessary for the operation by the Purchaser of the Acquired Companies as of the Project Closing in the same manner as such Acquired Companies are currently operated, except where the failure to be so
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qualified would not affect the validity or enforceability of this Agreement or the Related Agreements or the validity of the Contemplated Transactions or any Purchaser Party’s ability to consummate the Contemplated Transactions.
5.10 [ Intentionally Omitted .]
5.11 Financial Advisors . No broker, finder or investment banker will be entitled to any brokerage, finder’s or other fee or commission from any Seller Party in connection with this Agreement or the Contemplated Transactions based upon any agreements, arrangements or commitments, written or oral, made by or on behalf of any Purchaser Party.
ARTICLE VI .
6.1 Access to Information . Between the Effective Date and the Project Closing Date, EME will, and will cause each other Seller Party and each Controlled Acquired Company to, afford the Purchaser Parties and their respective Representatives reasonable access, during normal business hours and upon reasonable advance notice, to the properties, books, records and personnel of such Controlled Acquired Companies for the purposes of consummating the Contemplated Transactions and transitioning ownership of such Controlled Acquired Company and EME will use Commercially Reasonable Efforts to obtain the permission and cooperation of Contact and its Subsidiaries to afford the Purchaser Parties and their respective Representatives reasonable access, during normal business hours and upon reasonable advance notice, to the properties, books, records and personnel of Contact and its Subsidiaries for the purposes of consummating the Contemplated Transactions; provided that in no event shall any Controlled Acquired Company be obligated, nor will Contact or its Subsidiaries be asked, as applicable, to provide (a) access or information in violation of Applicable Law, (b) bids, letters of intent, expressions of interest, proposals, agreements, documents or other communications received from or communicated to other parties in connection with the Auction Process or information or analysis relating to any of the foregoing, (c) any information the disclosure of which would (in EME’s reasonable judgment) jeopardize any privilege or confidentiality available to any Seller Party, any Acquired Company or any of their respective Affiliates relating to such information (including Tax workpapers) or would jeopardize the breach by any Seller Party, any Acquired Company or any of their respective Affiliates of a confidentiality obligation to which it is bound or (d) any access or information in violation of any rights of any Seller Party’s partners, joint venturers, customers, vendors or other counterparties in or with respect to any Acquired Company.
6.2 Purchaser Diligence Obligations. In connection with the access provided in Section 6.1 , the Purchaser Parties and their respective Representatives shall cooperate with the Representatives of the Seller Parties and such Acquired Companies and shall use Commercially Reasonable Efforts to minimize any disruption of the business of any Seller Party or such Acquired Company, including providing EME with at least three (3) Business Days’ prior notice of any desire for access to the personnel, properties, Contracts, books or records of any such Acquired Company and shall permit EME and Contact, at its request, to have a Representative present with any Purchaser Party or its Representatives at all times that such Purchaser Party or its Representatives is on any such premises or with any such personnel. The Purchaser Parties will abide, and will cause their respective Representatives to abide, by the terms of the Confidentiality Agreements and any safety rules or rules of conduct reasonably imposed by any Seller Party or any such Acquired Company with respect to such access and any information furnished to it or its Representatives pursuant to Section 6.1 .
6.3 Negative Operating Covenants . Between the Effective Date and the Project Closing Date, except (i) as otherwise contemplated or permitted by this Agreement, (ii) as set forth in the EME Disclosure Schedule, (iii) as required by Applicable Law or (iv) as required by Contract in existence
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as of the Effective Date, unless EME has received the prior written consent of the Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), EME shall cause the Controlled Acquired Companies to carry on their businesses and affairs solely in the Ordinary Course of Business, and shall not permit any Seller Party or any Controlled Acquired Company to, and with respect to Contact, if any of the following actions require the approval of the holders of Contact Shares and the Contact Independent Directors decide that Contact should seek such approval, EME shall cause the Seller-Owned Contact Shares to be voted against any such proposal to:
(a) transfer, issue, sell or dispose of any shares of capital stock or other securities of any Acquired Company or grant options, warrants, calls, convertible securities or other rights to purchase or otherwise acquire shares of the capital stock or other securities of any Acquired Company except to a Controlled Acquired Company;
(b) effect any recapitalization, reclassification, stock split or like change in the capitalization of any Acquired Company that reduces the percentage of the equity or voting power therein that the Purchaser will acquire therein, directly or indirectly, when they acquire the Project Securities;
(c) amend any of the respective Governing Documents of any Acquired Company except in a manner reasonably calculated to facilitate closing of the Contemplated Transactions or to achieve the purposes of Section 6.9 or in connection with a transaction not prohibited by Section 6.3(a) ;
(d) incur any indebtedness by the Acquired Company (i) for money borrowed except for (A) refinancings of existing indebtedness, (B) drawings under existing lines of credit or under new working capital or revolving lines of credit in the Ordinary Course of Business, (C) indebtedness to another Acquired Company, or (D) other planned indebtedness in the Ordinary Course of Business under existing credit lines or (ii) that would increase the Pacific Holdings Leverage Balance;
(e) enter into or terminate any Major Contract by which the Acquired Company is bound, or waive any material right under, or enter into a material amendment of, any existing Major Contract of such Acquired Company, except in the Ordinary Course of Business;
(f) make any change in any method of accounting for financial reporting with respect to any Acquired Company except for any such change after the Effective Date required by reason of a concurrent change in or interpretation of US GAAP or Local GAAP, whichever is used by the Acquired Company as of the Effective Date to prepare its financial statements;
(g) enter into any Affiliate Contracts, or amend, modify or change in any material respect any outstanding Affiliate Contract or waive any material rights thereunder;
(h) purchase or sell any asset that is material to the Acquired Company outside the Ordinary Course of Business except for transactions with another Acquired Company that is a Wholly-Owned Subsidiary of EME.
6.4 Foreign Implementing Agreements . As promptly as practicable after the Effective Date, EME and the Purchaser shall cause the Foreign Implementing Agreements to be prepared and executed by their applicable Affiliates.
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6.5 Appropriate Actions .
(a) Through the Project Closing Date, subject to the terms and conditions herein provided, including Article VIII , Section 1.2 and Section 3.3 , the Parties will, and will cause the respective Subsidiaries within their control to, use Commercially Reasonable Efforts to take all reasonable actions and to do all reasonable things necessary, proper or advisable under Applicable Laws, Contract or otherwise to consummate and make effective, as soon as reasonably practicable, the Contemplated Transactions, including the satisfaction of all conditions thereto set forth herein. Such actions shall include using their Commercially Reasonable Efforts to obtain the consents, authorizations and approvals of all non-governmental third parties and Governmental Authorities whose consent is reasonably necessary to effectuate the Contemplated Transactions (including the Governmental Conditions and Third-Party Conditions) and to reasonably promptly make all necessary filings, and thereafter make any other required submissions, with respect to this Agreement, any Related Agreement and the Contemplated Transactions required under any Contract or Applicable Law.
(b) All filings, applications, notices, analyses, appearances, presentations, memoranda, submissions, briefs, arguments, opinions and proposals made or submitted by or on behalf of any Party before any regulatory authority in connection with the approval of the Contemplated Transactions (except with respect to Taxes) shall require the joint approval and be under the joint control of EME and the Purchaser, acting with the advice of their respective counsel, it being the intent that EME (on behalf of all Seller Parties) and the Purchaser (on behalf of all Purchaser Parties) will consult and cooperate with one another, and consider in good faith the views of one another, in connection with any such filing, application, notice, analysis, appearance, presentation, memorandum, submission, brief, argument, opinion and proposal; provided that in the event of a disagreement concerning any such filing, application, notice, analysis, appearance, presentation, memorandum, brief, argument, opinion or proposal, the determinations of EME shall be controlling; and provided , further , that nothing will prevent a Party from responding to or complying with a subpoena or other legal process as required by Applicable Law or submitting factual information in response to a request therefor. EME shall provide to the Purchaser, and the Purchaser shall provide to EME, copies of all written communications with Governmental Authorities relating to the approval or disapproval of such Contemplated Transactions.
6.6 Post-Closing Cooperation . After the Project Closing, upon prior reasonable written request, all of the Parties and their respective Affiliates shall cooperate reasonably with the other, at the requesting Party’s expense (which shall be limited to out-of-pocket costs and expenses to third parties), in furnishing records, information, testimony and other assistance in connection with any inquiries, Actions, audits or disputes involving any of the Parties and their respective Affiliates (other than in connection with disputes between th | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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