Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
DATED AS OF
JUNE 29, 1994,
AS AMENDED AS OF OCTOBER 26, 1994
AND AS OF DECEMBER 18, 1994,
BETWEEN
BURLINGTON NORTHERN INC.
AND
SANTA FE PACIFIC CORPORATION
TABLE OF CONTENTS(/1/)
PAGE
ARTICLE I
THE MERGER
1.1.The Merger........................................................... A-1
1.2.Conversion of Shares................................................. A-1
1.3.Surrender and Payment................................................ A-2
1.4.Stock Options........................................................ A-3
1.5.Adjustments.......................................................... A-3
1.6.Closing.............................................................. A-3
1.7.Fractional Shares.................................................... A-4
1.8.Alternative Transaction Structure ................................... A-4
ARTICLE II
CERTAIN MATTERS RELATING TO BNI
AND THE SURVIVING CORPORATION
2.1.Directors of the Surviving Corporation............................... A-7
2.2.Certificate of Incorporation and Bylaws of the Surviving Corporation.. A-7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SFP
3.1. Corporate Existence and Power...................................... A-7
3.2. Corporate Authorization............................................ A-8
3.3. Governmental Authorization......................................... A-8
3.4. Non-Contravention.................................................. A-8
3.5. Capitalization..................................................... A-8
3.6. Material Subsidiaries.............................................. A-9
3.7. SEC Filings........................................................ A-9
3.8. Financial Statements............................................... A-10
3.9. Disclosure Documents............................................... A-10
3.10. Information Supplied............................................... A-11
3.11. No Material Adverse Changes........................................ A-11
3.12. Undisclosed Material Liabilities................................... A-11
3.13. Litigation......................................................... A-11
3.14. Taxes.............................................................. A-12
3.15. ERISA.............................................................. A-12
3.16. Finders' Fees...................................................... A-14
3.17. Environmental Matters.............................................. A-14
3.18. Takeover Statutes.................................................. A-14
3.19. Compliance With Laws.............................................. A-14
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(/1/)The Table of Contents is not a part of this Agreement.
i
3.20. Spinoff Dividend................................................... A-14
3.21. Private Letter Ruling.............................................. A-15
3.22. Excess Loss Accounts............................................... A-15
3.23. SFP Rights Agreement............................................... A-15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BNI
4.1. Corporate Existence and Power....................................... A-15
4.2. Corporate Authorization............................................. A-15
4.3. Governmental Authorization.......................................... A-15
4.4. Non-Contravention................................................... A-15
4.5. Capitalization...................................................... A-16
4.6. Material Subsidiaries............................................... A-16
4.7. SEC Filings......................................................... A-17
4.8. Financial Statements................................................ A-17
4.9. Disclosure Documents................................................ A-17
4.10. Information Supplied............................................... A-18
4.11. No Material Adverse Changes........................................ A-18
4.12. Undisclosed Material Liabilities................................... A-18
4.13. Litigation......................................................... A-19
4.14. Taxes.............................................................. A-19
4.15. ERISA.............................................................. A-19
4.16. Finders' Fees...................................................... A-21
4.17. Environmental Matters.............................................. A-21
4.18. Takeover Statutes.................................................. A-21
4.19. Compliance with Laws............................................... A-21
4.20. BNI Rights Agreement............................................... A-21
ARTICLE V
COVENANTS OF SFP
5.1. Conduct of SFP...................................................... A-22
5.2. Stockholder Meeting................................................. A-23
5.3. Access to Information............................................... A-23
5.4. Notices of Certain Events........................................... A-23
5.5. Tax Matters......................................................... A-24
5.6. Rule 145 Affiliates................................................. A-24
5.7. The Spinoff......................................................... A-24
5.8. No Solicitations.................................................... A-24
5.9. Registration Rights................................................. A-25
ARTICLE VI
COVENANTS OF BNI
6.1. Conduct of BNI...................................................... A-25
6.2. Stockholder Meeting................................................. A-26
6.3. Access to Information............................................... A-26
6.4. Notices of Certain Events........................................... A-27
6.5. Tax Matters......................................................... A-27
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6.6. Director and Officer Liability...................................... A-27
6.7. No Solicitations.................................................... A-28
ARTICLE VII
COVENANTS OF BNI AND SFP
7.1. Reasonable Best Efforts............................................. A-28
7.2. ICC Approval........................................................ A-28
7.3. Certain Filings; Proxy Materials.................................... A-28
7.4. Public Announcements................................................ A-29
7.5. Further Assurances.................................................. A-29
7.6. Antitakeover Statutes............................................... A-29
7.7. Cooperation......................................................... A-29
7.8. Dividends........................................................... A-29
ARTICLE VIII
THE OFFER
8.1 The Offer............................................................ A-30
8.2. Action by SFP and BNI............................................... A-30
ARTICLE IX
CONDITIONS TO THE MERGER
9.1. Conditions to the Obligations of Each Party......................... A-31
9.2. Conditions to the Obligations of BNI................................ A-31
9.3. Conditions to the Obligations of SFP................................ A-32
ARTICLE X
TERMINATION
10.1. Termination......................................................... A-32
10.2. Effect of Termination............................................... A-33
ARTICLE XI
MISCELLANEOUS
11.1. Notices............................................................. A-33
11.2. Entire Agreement; Survival of Representations and Warranties......... A-34
11.3. Amendments; No Waivers.............................................. A-34
11.4. Expenses............................................................ A-34
11.5. Successors and Assigns.............................................. A-35
11.6. Governing Law....................................................... A-35
11.7. Jurisdiction........................................................ A-35
11.8. Counterparts; Effectiveness......................................... A-35
EXHIBIT A Form of Affiliate Letter
ANNEX I Conditions to the Offer
ANNEX II Registration Rights
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TABLE OF DEFINITIONS
TERM SECTION
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1933 Act............................................................... 1.4(c)
1933 Act Affiliates.................................................... 5.6
6- 1/4% Convertible Preferred Stock.................................... 4.5(a)
Agreement.............................................................. Recitals
Acquiring Person....................................................... 4.20
Balance Sheet Date..................................................... 3.8
BNI.................................................................... Recitals
BNI Balance Sheet...................................................... 4.8
BNI Benefit Arrangements............................................... 4.16(e)
BNI Common Stock....................................................... 1.2(a)
BNI Disclosure Documents............................................... 4.9
BNI Employee Plans..................................................... 4.15(a)
BNI Form 10-K.......................................................... 4.7(a)
BNI Form 10-Q.......................................................... 4.7(a)
BNI Material Subsidiary................................................ 4.6(a)
BNI Offer Documents.................................................... 8.1(d)
BNI Option............................................................. 1.4(a)
BNI Pension Plans...................................................... 4.15(b)
BNI Post-Signing Returns............................................... 6.5
BNI Proxy Statement.................................................... 4.9
BNI Returns............................................................ 4.14
BNI Rights Agreement................................................... 4.20
BNI Securities......................................................... 4.5(a)
BNI Stockholder Meeting................................................ 6.2
BNI Subsidiary Securities.............................................. 4.6(b)
BNI Voting Debt........................................................ 4.5(b)
Class A Preferred Stock................................................ 4.5(a)
Closing................................................................ 1.6
Closing Date........................................................... 1.6
Code................................................................... Recitals
Common Shares Trust.................................................... 1.7
Confidentiality Agreement.............................................. 11.2
Customary Action....................................................... 5.1
Distribution Date...................................................... 4.20
DGCL................................................................... 3.18
Effective Time......................................................... 1.1(b)
Environmental Laws..................................................... 3.17(b)
Environmental Liabilities.............................................. 3.17(b)
ERISA.................................................................. 3.15(a)
ERISA Affiliate........................................................ 3.15(a)
Excess Shares.......................................................... 1.7
Exchange Act........................................................... 1.2(d)
Exchange Agent......................................................... 1.3(a)
Exchange Ratio......................................................... 1.2(a)
Form 10................................................................ 3.9(b)
Form S-1............................................................... 3.9(b)
Form S-4............................................................... 7.3(a)
Hazardous Substances................................................... 3.17(b)
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TERM SECTION
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HSR Act................................................................ 3.3
ICC.................................................................... 3.3
Indemnified Parties.................................................... 6.6
Indemnity Agreements................................................... 6.6
Lien................................................................... 3.4
Liquidation............................................................ 3.21
Material............................................................... 6.1(h)
Material Adverse Effect................................................ 3.1
Merger................................................................. 1.1(a)
Merger Consideration................................................... 1.2(b)
Multiemployer Plan..................................................... 3.16(b)
NYSE................................................................... 1.4(c)
Offer.................................................................. 8.1(a)
PBGC................................................................... 3.16(b)
Person................................................................. 1.2(d)
Private Letter Ruling.................................................. 3.21
Properties............................................................. 3.21
Schedule 14D-9......................................................... 8.2(b)
SEC.................................................................... 1.4(c)
SFP.................................................................... Recitals
SFP Balance Sheet...................................................... 3.8
SFP Common Stock....................................................... 1.2(a)
SFP Disclosure Documents............................................... 3.9(a)
SFP Employee Plans..................................................... 3.15(a)
SFP Form 10-K.......................................................... 3.7(a)
SFP Form 10-Q.......................................................... 3.7(a)
SFP Material Subsidiary................................................ 3.6(a)
SFP Offer Documents.................................................... 8.1(c)
SFP Pension Plans...................................................... 3.15(b)
SFP Post-Signing Returns............................................... 5.5
SFP Preferred Stock.................................................... 3.5(a)
SFP Proxy Statement.................................................... 3.9(a)
SFP Properties......................................................... 5.2
SFP Returns............................................................ 3.14(i)
SFP Rights Agreement................................................... 3.23
SFP Securities......................................................... 3.5(a)
SFP Stock Option....................................................... 1.4(a)
SFP Stockholder Meeting................................................ 5.2
SFP Subsidiary Securities.............................................. 3.6(b)
SFP Voting Debt........................................................ 3.5(b)
Share.................................................................. 1.2(a)
Shares................................................................. 1.2(a)
Spinoff................................................................ Recitals
Spinoff Company........................................................ Recitals
Spinoff Dividend....................................................... Recitals
Spinoff Registration Documents......................................... 3.9(b)
Stock Acquisition Date................................................. 4.20
Subsidiary............................................................. 1.2(c)
Surviving Corporation.................................................. 1.1(a)
Takeover Proposal...................................................... 5.8
Takeover Statute....................................................... 3.18
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of June 29, 1994, as amended as of
October 26, 1994 and as of December 18, 1994 (this "Agreement"), between
Burlington Northern Inc., a Delaware corporation ("BNI"), and Santa Fe Pacific
Corporation, a Delaware corporation ("SFP").
WHEREAS, the respective Boards of Directors of BNI and SFP have determined
that it is in the best interests of their respective stockholders to consummate
the merger provided for herein;
WHEREAS, the respective Boards of Directors of BNI and SFP have determined
that this Agreement is in the best interests of BNI or SFP, as the case may be,
and its respective stockholders and have duly approved this Agreement and
authorized its execution and delivery;
WHEREAS, the respective Boards of Directors of BNI and SFP have received the
opinions of Lazard Freres & Co. and Goldman, Sachs & Co., respectively, that
the Exchange Ratio (as defined in Section 1.2(a)(i)) is fair to their
respective stockholders from a financial point of view;
WHEREAS, BNI has been informed that (a) as a result of an initial public
offering of shares of common stock of SFP Gold Corporation (the "Spinoff
Company"), SFP presently owns approximately 85% of the outstanding capital
stock of the Spinoff Company, (b) the Board of Directors of SFP has declared,
pursuant to resolutions substantially in the form provided to BNI prior to the
date hereof, a dividend (the "Spinoff Dividend") of the stock of the Spinoff
Company owned by SFP, to be issued on September 30, 1994 to SFP shareholders of
record as of September 12, 1994 (the issuance of the Spinoff Dividend shall be
referred to as the "Spinoff"), and (c) SFP has received a private letter ruling
from the Internal Revenue Service to the effect that the Spinoff qualifies as a
tax-free distribution within the meaning of Section 355 of the Internal Revenue
Code of 1986, as amended (the "Code"); and
WHEREAS, it is the intention of the parties to this Agreement that for
Federal income tax purposes the Merger shall qualify as a "reorganization"
within the meaning of Section 368 of the Code.
NOW, THEREFORE, in consideration of the premises and of the representations,
warranties, covenants and agreements set forth herein, the parties hereto
hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1. The Merger. (a) At the Effective Time (as defined in Section
1.1(b)), SFP shall be merged with and into BNI in accordance with Delaware Law
(the "Merger"), whereupon the separate existence of SFP shall cease, and BNI
shall be the surviving corporation (the "Surviving Corporation").
(b) The Merger shall become effective at such time as the certificate of
merger is duly filed with the Secretary of State of the State of Delaware or at
such later time as is specified in the certificate of merger (the "Effective
Time"); such filing shall be made as soon as practicable after the Closing, as
defined in Section 1.6 of this Agreement.
(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, privileges, powers and franchises and be subject to all
of the restrictions, disabilities and duties of SFP and BNI, all as provided
under Delaware Law.
SECTION 1.2. Conversion of Shares. (a) At the Effective Time:
(i) each share (a "Share" and, collectively, the "Shares") of SFP common
stock, par value $1.00 per share (the "SFP Common Stock"), outstanding
immediately prior to the Effective Time shall, except
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as otherwise provided in Section 1.2(a)(ii) below, be converted into 0.40
shares of the common stock, no par value (the "BNI Common Stock"), of BNI
(0.40 being defined herein as the "Exchange Ratio"); and
(ii) each Share held by SFP as treasury stock or owned by BNI or any
Subsidiary (as defined in Section 1.2(c)) of BNI immediately prior to the
Effective Time shall be canceled, and no payment shall be made with
respect thereto.
(b) The BNI Common Stock (accompanied by rights issued pursuant to the BNI
Rights Agreement (as defined in Section 4.20)) to be received as consideration
pursuant to the Merger by each holder of Shares is referred to herein as the
"Merger Consideration".
(c) For purposes of this Agreement, the word "Subsidiary" when used with
respect to any Person means any corporation or other organization, whether
incorporated or unincorporated, of which (i) at least a majority of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such Person or by any one or more of its
Subsidiaries or (ii) such Person or any other Subsidiary of such Person is a
general partner, it being understood that representations and warranties of a
Person concerning any former Subsidiary of such Person shall be deemed to
relate only to the periods during which such former Subsidiary was a Subsidiary
of such Person.
(d) For purposes of this Agreement, the word "Person" means an individual, a
corporation, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or any agency or
instrumentality thereof, or any affiliate (as that term is defined in the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder (the "Exchange Act")) of any of the foregoing.
SECTION 1.3. Surrender and Payment. (a) Prior to the Effective Time, BNI
shall appoint an agent reasonably satisfactory to SFP (the "Exchange Agent")
for the purpose of exchanging certificates representing Shares as provided in
Section 1.2(a)(i). At the Effective Time, BNI will deposit with the Exchange
Agent certificates representing the aggregate Merger Consideration to be paid
in respect of the Shares. Promptly after the Effective Time, BNI will send, or
will cause the Exchange Agent to send, to each holder of Shares at the
Effective Time a letter of transmittal for use in such exchange (which shall
specify that the delivery shall be effected, and risk of loss and title shall
pass, only upon proper delivery of the certificates representing Shares to the
Exchange Agent).
(b) Each holder of Shares that have been converted into a right to receive
the Merger Consideration, upon surrender to the Exchange Agent of a certificate
or certificates representing such Shares, together with a properly completed
letter of transmittal covering such Shares, will be entitled to receive the
Merger Consideration payable in respect of such Shares. Until so surrendered,
each such certificate shall, after the Effective Time, represent for all
purposes only the right to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a Person
other than the registered holder of the Shares represented by the certificate
or certificates surrendered in exchange therefor, it shall be a condition to
such payment that the certificate or certificates so surrendered shall be
properly endorsed or otherwise be in proper form for transfer and that the
Person requesting such payment shall pay to the Exchange Agent any transfer or
other taxes required as a result of such payment to a Person other than the
registered holder of such Shares or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
(d) After the Effective Time, there shall be no further registration of
transfers of Shares. If, after the Effective Time, certificates representing
Shares are presented to the Surviving Corporation, they shall be
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canceled and exchanged for the Merger Consideration in accordance with the
procedures set forth in this Article I.
(e) Any portion of the Merger Consideration deposited with the Exchange Agent
pursuant to Section 1.3(a), and any portion of the Common Shares Trust (as
defined in Section 1.7) that remains unclaimed by the holders of Shares twelve
months after the Effective Time shall be returned to BNI, upon demand, and any
such holder who has not exchanged his Shares for the Merger Consideration in
accordance with this Article I prior to that time shall thereafter look only to
BNI for his claim for BNI Common Stock, any cash in lieu of fractional shares
of BNI Common Stock and any dividends or distributions with respect to BNI
Common Stock. Notwithstanding the foregoing, BNI shall not be liable to any
holder of Shares for any amount paid to a public official pursuant to
applicable abandoned property laws.
(f) No dividends or other distributions with respect to the BNI Common Stock
constituting part of the Merger Consideration shall be paid to the holder of
any unsurrendered certificates representing Shares until such certificates are
surrendered as provided in this Section 1.3. Upon such surrender, there shall
be paid, without interest, to the person in whose name the certificates
representing the BNI Common Stock into which such Shares were converted are
registered, (1) all dividends and other distributions in respect of BNI Common
Stock that are payable on a date subsequent to, and the record date for which
occurs after, the Effective Time and (2) all dividends or other distributions
in respect of Shares that are payable on a date subsequent to, and the record
date for which occurs before, the Effective Time.
SECTION 1.4. Stock Options. (a) At the Effective Time, each outstanding
option to purchase shares of SFP Common Stock (a "SFP Stock Option") granted
under any employee stock option or compensation plan or arrangement of SFP
shall be canceled and substituted with an option (a "BNI Option") to acquire
BNI Common Stock. Such cancellation and substitution shall comply in all
respects with, and shall be performed in accordance with, the methodology
prescribed by the provisions of Section 424(a) of the Code and the regulations
thereunder, and each BNI Option shall provide the option holder with rights and
benefits that are no less favorable to him than were provided under the SFP
Stock Option for which it was substituted.
(b) At or as soon as practicable after the Effective Time, BNI shall issue to
each holder of an SFP Stock Option which is cancelled pursuant to Section
1.4(a) an agreement that accurately reflects the terms of the BNI Option
substituted therefor as contemplated by Section 1.4(a).
(c) BNI shall take all corporate actions necessary to reserve for issuance
such number of shares of BNI Common Stock as will be necessary to satisfy
exercises in full of all BNI Options after the Effective Time. With respect to
such BNI Common Stock, BNI shall (i) as soon as practicable after the Effective
Time file with the Securities and Exchange Commission ("SEC") a Registration
Statement on Form S-8 and use its reasonable best efforts to have such
registration statement become and remain continuously effective under the
Securities Act of 1933, as amended (the "1933 Act") and (ii) file with the New
York Stock Exchange, Inc. (the "NYSE") a listing application and use its
reasonable best efforts to have such shares admitted to trading thereon upon
exercises of BNI Options. BNI shall also use its reasonable best efforts to
ensure that all incentive stock options within the meaning of the Code continue
to qualify as such at all times after the Effective Time.
SECTION 1.5. Adjustments. If, prior to the Effective Time, BNI or SFP (as the
case may be) should split or combine the BNI Common Stock or the SFP Common
Stock, or pay a stock dividend or other stock distribution in BNI Common Stock
or SFP Common Stock, or otherwise change the BNI Common Stock or SFP Common
Stock into any other securities, or make any other dividend or distribution in
respect of the BNI Common Stock or the SFP Common Stock (other than the
Spinoff, stock options permitted or contemplated by this Agreement, and normal
dividends as the same may be adjusted from time to time in accordance with this
Agreement), then the Exchange Ratio will be appropriately adjusted to reflect
such split, combination, dividend or other distribution or change.
SECTION 1.6. Closing. The closing of the Merger (the "Closing") shall take
place (i) at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New
York, New York, at 10:00 A.M. on the second business
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day after all the conditions set forth in Article IX (other than those that are
waived by the party or parties for whose benefit such conditions exist) are
satisfied or (ii) at such other place and/or time and/or on such other date as
the parties may agree. The date upon which the Closing shall occur is herein
called the "Closing Date".
SECTION 1.7. Fractional Shares. No certificates or scrip representing
fractional shares of BNI Common Stock will be issued in the Merger, but in lieu
thereof each holder of Shares otherwise entitled to a fractional share of BNI
Common Stock will be entitled to receive, from the Exchange Agent in accordance
with the provisions of this Section 1.7, a cash payment in lieu of such
fractional shares of BNI Common Stock representing such holder's proportionate
interest in the net proceeds from the sale by the Exchange Agent in one or more
transactions (which sale transactions shall be made at such times, in such
manner and on such terms as the Exchange Agent shall determine in its
reasonable discretion) on behalf of all such holders of the aggregate of the
fractional shares of BNI Common Stock which would otherwise have been issued
(the "Excess Shares"). The sale of the Excess Shares by the Exchange Agent
shall be executed on the NYSE through one or more member firms of the NYSE and
shall be executed in round lots to the extent practicable. Until the net
proceeds of such sale or sales have been distributed to the holders of Shares,
the Exchange Agent will hold such proceeds in trust (the "Common Shares Trust")
for the holders of the Shares. BNI shall pay all commissions, transfer taxes
and other out-of-pocket transaction costs, including the expenses and
compensation of the Exchange Agent, incurred in connection with this sale of
the Excess Shares. The Exchange Agent shall determine the portion of the Common
Shares Trust to which each holder of Shares shall be entitled, if any, by
multiplying the amount of the aggregate net proceeds comprising the Common
Shares Trust by a fraction the numerator of which is the amount of the
fractional BNI Common Stock Interest to which such holder of Shares is entitled
and the denominator of which is the aggregate amount of fractional share
interests to which all holders of Shares are entitled. As soon as practicable
after the determination of the amount of cash, if any, to be paid to holders of
Shares in lieu of any fractional shares of BNI Common Stock, the Exchange Agent
shall make available such amounts to such holders of Shares without interest.
SECTION 1.8. Alternative Transaction Structure. (a) At any time prior to the
Effective Time, either BNI or SFP, in its sole discretion, may notify the other
party (the "Alternative Merger Notice") that it has determined to restructure
the transaction in the manner contemplated by this Section 1.8. Upon delivery
of the Alternative Merger Notice in the manner set forth in Section 11.1 hereof
(the "Alternative Election"), the Merger contemplated by Section 1.1 of this
Agreement shall be restructured in the manner set forth in this Section 1.8. In
such event, all references to the term "Merger" in this Agreement shall be
deemed references to the transactions contemplated by this Section 1.8, all
references to the term "Surviving Corporation" shall be deemed references to
BNSF Corporation, a Delaware corporation ("BNSF"), all references to the term
"Effective Time" in this Agreement shall be deemed references to the time at
which the certificates of merger are duly filed with the Secretary of State of
the State of Delaware (or at such later time as is specified in the certificate
of merger) with respect to the Merger as restructured in the manner
contemplated by this Section 1.8 and Sections 1.2(a), 1.2(b), 1.4 and 1.7 shall
no longer be of any force or effect and the provisions of this Section 1.8
shall govern the terms of the Merger. Prior to the Effective Time, BNSF will be
controlled equally by BNI and SFP. The Merger, restructured as contemplated by
this Section 1.8, is sometimes referred to as the "Alternative Merger".
(b) Prior to the Effective Time, BNSF will be controlled equally by BNI and
SFP. Prior to the Effective Time of the Alternative Merger, BNI and SFP will
cause BNSF to incorporate two wholly owned subsidiaries as Delaware
corporations ("BNI Merger Sub" and "SFP Merger Sub"). At the Effective Time of
the Alternative Merger, (i) BNI Merger Sub will be merged with and into BNI in
accordance with Delaware Law, whereupon the separate existence of BNI Merger
Sub shall cease, and BNI shall be the surviving corporation, and (ii) SFP
Merger Sub will be merged with and into SFP in accordance with Delaware Law,
whereupon the separate existence of SFP Merger Sub shall cease, and SFP shall
be the surviving corporation.
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(c) At the Effective Time of the Alternative Merger, (i) each share of SFP
Common Stock outstanding immediately prior to such Effective Time shall, except
as otherwise provided in Section 1.8(d) below, be converted into 0.40 shares of
the common stock of BNSF, no par value (the "BNSF Common Stock"), and (ii) each
share of BNI Common Stock outstanding immediately prior to such Effective Time
shall, except as otherwise provided in Section 1.8(d) below, be converted into
1.0 share of BNSF Common Stock.
(d) Each share of BNI Common Stock or SFP Common Stock (other than the SFP
Common Stock owned by BNI, which shall remain outstanding) held by either of
BNI or SFP as treasury stock or owned by BNI, SFP or any Subsidiary of either
of them immediately prior to the Effective Time of the Alternative Merger shall
be cancelled and no payments shall be made with respect thereto.
(e) The BNSF Common Stock to be received as consideration in the Alternative
Merger by holders of BNI Common Stock or SFP Common Stock is referred to herein
as the "Merger Consideration".
(f) (i) At the Effective Time of the Alternative Merger, each outstanding
option to purchase shares of SFP Common Stock (a "SFP Stock Option") or BNI
Common Stock (or "BNI Stock Option") granted under any employee stock option or
compensation plan or arrangement of SFP or BNI, as the case may be, shall be
cancelled and substituted with an option (a "BNSF Option") to acquire BNSF
Common Stock. Such cancellation and substitution shall comply in all respects
with, and shall be performed in accordance with, the methodology prescribed by
the provisions of Section 424(a) of the Code and the regulations thereunder,
and each BNSF Option shall provide the option holder with rights and benefits
that are no less favorable to him than were provided under the SFP Stock Option
or BNI Stock Option for which it was substituted.
(ii) At or as soon as possible after the Effective Time of the Alternative
Merger, BNSF shall issue to each holder of an SFP Stock Option or BNI Stock
Option which is cancelled pursuant to Section 1.8(f)(i) an agreement that
accurately reflects the terms of the BNSF Option substituted therefor as
contemplated by Section 1.8(f)(i).
(iii) BNSF shall take all corporate actions necessary to reserve such number
of shares of BNSF Common Stock as will be necessary to satisfy exercises in
full of all BNSF Options after the Effective Time. With respect to such BNSF
Common Stock, BNSF shall (i) as soon as practicable after the Effective Time of
the Alternative Merger file with the SEC a Registration Statement on Form S-8
and use its reasonable best efforts to have such registration statement become
and remain continuously effective under the 1933 Act and (ii) file with the
NYSE a listing application and use its reasonable best efforts to have such
shares admitted to trading thereon upon exercises of BNSF Options. BNSF shall
also use its reasonable best efforts to ensure that all incentive stock options
within the meaning of the Code continue to qualify as such at all times after
such Effective Time.
(g) No certificates or scrip representing fractional shares of BNSF Common
Stock will be issued in the Alternative Merger, but in lieu thereof each holder
of SFP Common Stock otherwise entitled to a fractional share of BNSF Common
Stock will be entitled to receive, from the Exchange Agent in accordance with
the provisions of this Section 1.8 , a cash payment in lieu of such fractional
shares of BNSF Common Stock which would otherwise have been issued (the "Excess
Shares"). The sale of the Excess Shares by the Exchange Agent shall be executed
on the NYSE through one or more member firms of the NYSE and shall be executed
in round lots to the extent practicable. Until the net proceeds of such sale or
sales have been distributed to the holders of SFP Common Stock, the Exchange
Agent will hold such proceeds in trust (the "Common Shares Trust") for the
holders of the SFP Common Stock. BNSF shall pay all commissions, transfer taxes
and other out-of-pocket transaction costs, including the expenses and
compensation of the Exchange Agent, incurred in connection with this sale of
the Excess Shares. The Exchange Agent shall determine the portion of the Common
Shares Trust to which each holder of SFP Common Stock shall be entitled, if
any, by multiplying the amount of the aggregate net proceeds comprising the
Common Shares Trust by a fraction the numerator of which is the amount of the
fractional BNSF Common Stock interest to which such holder of SFP Common Stock
is entitled and the denominator of which is the aggregate amount of fractional
share
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interests to which such holder of SFP Common Stock is entitled. As soon as
practicable after the determination of the amount of cash, if any, to be paid
to holders of SFP Common Stock in lieu of any fractional shares of BNSF Common
Stock, the Exchange Agent shall make available such amounts to such holders of
SFP Common Stock without interest.
(h) Immediately prior to the Effective Time of the Alternative Merger, BNSF
will become a party to this Agreement, assume all obligations of BNI hereunder
in its capacity as the Surviving Corporation and make the following
representations and warranties to each of BNI and SFP:
(i) Corporate Existence and Power. At the Effective Time, BNSF will be a
corporation duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation and will have all corporate
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on the businesses of BNI and SFP as such
business are now conducted. At the Effective Time, BNSF will be duly
qualified to do business as a foreign corporation and will be in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where the failure to be so
qualified would not, individually or in the aggregate, have a Material
Adverse Effect on BNSF.
(ii) Corporate Authorization. At the Effective Time, the execution,
delivery and performance by BNSF of this Agreement and the consummation by
BNSF of the transactions contemplated hereby will be within the corporate
powers of BNSF and will have duly authorized by all necessary corporate
action on the part of BNSF. At the Effective Time, this Agreement will
constitute a valid and binding agreement of BNSF.
(iii) Governmental Authorization. At the Effective Time, the execution,
delivery and performance by BNSF of this Agreement and the consummation of
the Merger by BNSF will require no action by or in respect of, or filing
with, any governmental body, agency, official or authority other than (i)
the filing of a certificate of merger in accordance with Delaware Law; (ii)
compliance with any applicable requirements of the Exchange Act; (iii)
compliance with the applicable requirements of the 1933 Act; (iv)
compliance with any applicable foreign or state securities or Blue Sky
laws; (v) immaterial actions or filings relating to ordinary operational
matters; and (vi) actions that have theretofore been taken or filings that
have theretofore been made.
(iv) Non-Contravention. At the Effective Time, the execution, delivery
and performance by BNSF of this Agreement and the consummation by BNSF of
the transactions contemplated hereby will not (except, in the case of
clauses (B), (C) and (D) of this Section 1.8(h)(iv), for any such matters
that singly or in the aggregate have not had, and would not reasonably by
expected to have, a Material Adverse Effect on BNSF (A) contravene or
conflict with the certificate of incorporation or bylaws of BNSF, (B)
assuming compliance with the matters referred to in Section 1.8(h)(iii),
contravene or conflict with or constitute a violation of any provision of
any law, regulation, judgment, injunction, order or decree binding upon or
applicable to BNSF or any Subsidiary of BNSF, (C) constitute a default
under or give rise to any right of termination, cancellation or
acceleration of any right or obligation of BNSF or any of its Subsidiaries
or to a loss of any benefit to which BNSF or any of its Subsidiaries is
entitled under any agreement, contract or other instrument binding upon
BNSF or any of its Subsidiaries or any license, franchise, permit or other
similar authorization held by BNSF or any of its Subsidiaries or (D) result
in the creation or imposition of any Lien on any asset of BNSF or any
Subsidiary of BNSF.
(i) Prior to the Effective Time of the Alternative Merger, BNI and SFP shall
ensure that BNSF, BNI Merger Sub and SFP Merger Sub take no actions and
undertake no operations except as may be necessary in connection with the
consummation of the Merger and the transactions contemplated hereby.
(j) At the time of the Alternative Election, and without any further action
on the part of either SFP or BNI, this Agreement shall be deemed to have been
amended as follows:
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(i) The phrase "BNSF," will be added (x) between the phrase "operation of
the business of" and the phrase "BNI, SFP and their" in Section 9.1(iii)
and (y) between the phrase "impose on" and "BNI, SFP or any" in clause (3)
of Section 9.1(v).
(ii) A new Section 9.2(iii) and 9.3(v) will be added as follows:
BNSF shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the
Effective Time, and the representations and warranties of BNSF shall
have been accurate in all material respects at and as of the Effective
Time.
(iii) Section 9.3(ii) shall be amended to read in its entirety as
follows:
(ii) the BNSF Common Stock required to be issued hereunder shall have
been approved for listing on the NYSE, subject to official notice of
issuance.
(k) BNI and SFP agree that in the event of the Alternative Election, any
other appropriate adjustments shall be made to the other terms and conditions
of this Agreement to reflect the transactions contemplated by this Section 1.8
with a view to ensuring that the parties hereto and their stockholders are
placed in a position that is as close as possible to the position they would
have been in but for such restructuring.
ARTICLE II
CERTAIN MATTERS RELATING TO BNI
AND THE SURVIVING CORPORATION
SECTION 2.1. Directors of the Surviving Corporation. The board of directors
of the Surviving Corporation will be constituted as follows: two-thirds of the
directors will be designated by BNI, and one-third of the directors will be
designated by SFP.
SECTION 2.2. Certificate of Incorporation and Bylaws of the Surviving
Corporation. (a) The certificate of incorporation of BNI in effect at the
Effective Time shall be the certificate of incorporation of the Surviving
Corporation until amended in accordance with applicable law.
(b) The bylaws of BNI in effect at the Effective Time shall be the bylaws of
the Surviving Corporation until amended in accordance with applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SFP
SFP represents and warrants to BNI that, except as disclosed in Schedule III
hereto:
SECTION 3.1. Corporate Existence and Power. SFP is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. SFP is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the character of
the property owned or leased by it or the nature of its activities makes such
qualification necessary, except for those jurisdictions where the failure to be
so qualified would not, individually or in the aggregate, have a Material
Adverse Effect on SFP. SFP has heretofore delivered to BNI true and complete
copies of SFP's certificate of incorporation and bylaws as currently in effect.
For purposes of this Agreement, a "Material Adverse Effect" means, with respect
to any Person, a material adverse effect, whether existing or prospective, on
the financial condition, business or properties of such Person and its
Subsidiaries taken as a whole or on the ability of such Person to perform its
obligations hereunder. For purposes of this Agreement, any reference to any
event, change or effect being "material" with respect to any Person means an
event, change or effect, whether existing or prospective, which is material
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in relation to the financial condition, business or properties of such Person
and its Subsidiaries taken as a whole or on the ability of such Person to
perform its obligations hereunder.
SECTION 3.2. Corporate Authorization. The execution, delivery and performance
by SFP of this Agreement and the consummation by SFP of the transactions
contemplated hereby are within SFP's corporate powers and, except as set forth
in the next sentence, have been duly authorized by all necessary corporate
action. The affirmative vote of the holders of a majority of the outstanding
shares of SFP Common Stock entitled to vote thereon is the only vote of any
class or series of SFP capital stock necessary to approve this Agreement and
the transactions contemplated hereby. This Agreement constitutes a valid and
binding agreement of SFP.
SECTION 3.3. Governmental Authorization. The execution, delivery and
performance by SFP of this Agreement and the consummation of the Offer and the
Merger by SFP require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than (i) the filing of a
certificate of merger in accordance with Delaware Law; (ii) compliance with any
applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (the "HSR Act"); (iii) compliance with any applicable requirements
relating to approval of the Merger by the Interstate Commerce Commission (the
"ICC"); (iv) compliance with any applicable requirements of the Exchange Act;
(v) compliance with any applicable requirements of the 1933 Act; (vi)
compliance with any applicable foreign or state securities or Blue Sky Laws;
and (vii) immaterial actions or filings relating to ordinary operational
matters.
SECTION 3.4. Non-Contravention. The execution, delivery and performance by
SFP of this Agreement and the consummation by SFP of the transactions
contemplated hereby do not and will not (except in the case of clauses (ii),
(iii) and (iv) of this Section 3.4, for any such matters that singly or in the
aggregate have not had, and would not reasonably be expected to have, a
Material Adverse Effect on SFP) (i) contravene or conflict with the certificate
of incorporation or bylaws of SFP, (ii) assuming compliance with the matters
referred to in Section 3.3. contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to SFP or any of its Subsidiaries, (iii)
constitute a default under or give rise to a right of termination, cancellation
or acceleration of any right or obligation of SFP or any of its Subsidiaries or
to a loss of any benefit to which SFP or any of its Subsidiaries is entitled
under any provision of any agreement, contract or other instrument binding upon
SFP or any of its Subsidiaries or any license, franchise, permit or other
similar authorization held by SFP or any of its Subsidiaries, or (iv) result in
the creation or imposition of any Lien on any asset of SFP or any of its
Subsidiaries. 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 3.5. Capitalization. (a) The authorized capital stock of SFP consists
of six hundred million (600,000,000) shares of SFP Common Stock and two hundred
million (200,000,000) shares of preferred stock, $1.00 par value per share
("SFP Preferred Stock"). As of May 31, 1994, there were outstanding (i)
186,391,459 shares of SFP Common Stock and 3,629,728 shares were held in
treasury, (ii) no shares of SFP Preferred Stock and (iii) employee stock
options to purchase an aggregate of 9,953,575 Shares (of which options to
purchase an aggregate of 7,004,884 Shares were exercisable). As of May 31,
1994, a total of 12,000,000 shares of SFP Common Stock were approved for awards
under the SFP Long-Term Incentive Stock Plan, of which 5,281,405 remain
available for grant. All outstanding shares of capital stock of SFP have been
duly authorized and validly issued and are fully paid and nonassessable. Except
as set forth in this Section or as contemplated by Section 5.1 and except for
the exercise of employee stock options outstanding on May 31, 1994 or issued
since that date in accordance with Section 5.1, there are outstanding (x) no
shares of capital stock or other voting securities of SFP, (y) no securities of
SFP or any of its Subsidiaries convertible into or exchangeable for shares of
capital stock or voting securities of SFP and (z) no options or other rights to
acquire from SFP or any of its Subsidiaries, and no obligation of SFP or any of
its Subsidiaries to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of SFP
(the items in clauses (x), (y) and (z) being referred to collectively as the
"SFP Securities").
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There are no outstanding obligations of SFP or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any SFP Securities, except for the
Offer.
(b) As of the date hereof, there are no outstanding bonds, debentures, notes
or other indebtedness of SFP having the right to vote (or convertible into or
exercisable for SFP Securities having the right to vote) on any matters upon
which holders of SFP Common Stock may vote (collectively, "SFP Voting Debt").
SECTION 3.6. Material Subsidiaries. (a) Each Subsidiary of SFP as of the date
of this Agreement is identified on Schedule 3.6(a). For purposes of this
Agreement, the term "SFP Material Subsidiary" means each Subsidiary of SFP
identified as material on Schedule 3.6(a). Each SFP Material Subsidiary is
either (i) a corporation that is duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation, has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted and
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect on
SFP, or (ii) a partnership that is duly formed and in good standing under the
laws of its jurisdiction of formation and has all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted and is duly qualified to do business and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect on
SFP.
(b) Except as set forth in the SFP Form 10-K (as defined in Section 3.7), all
of the outstanding capital stock of, or other ownership interests in, each SFP
Subsidiary is owned by SFP, 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). Other than the Variable Rate Exchangeable Debentures Due
2010 issued by SFP Pipeline Holdings, Inc. and those obligations identified on
Schedule 3.6(b), there are no outstanding (i) securities of SFP or any of its
Subsidiaries convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any Subsidiary of SFP, or
(ii) options or other rights to acquire from SFP or any of its Subsidiaries,
and no other obligation of SFP or any of its Subsidiaries to issue, any capital
stock, voting securities or other ownership interests in, or any securities
convertible into or exchangeable for any capital stock, voting securities or
ownership interests in, any SFP Subsidiary (the capital stock of each
Subsidiary of SFP, together with the items in clauses (i) and (ii), being
referred to collectively as the "SFP Subsidiary Securities"). There are no
outstanding obligations of SFP or any Subsidiary of SFP to repurchase, redeem
or otherwise acquire any outstanding SFP Subsidiary Securities.
SECTION 3.7. SEC Filings. (a) SFP has delivered to BNI (i) its annual reports
on Form 10-K for its fiscal years ended December 31, 1989, December 31, 1990,
December 31, 1991, December 31, 1992, and December 31, 1993 (this latest Form
10-K being referred to herein as the "SFP Form 10-K"), (ii) its quarterly
report on Form 10-Q for its fiscal quarter ending March 31, 1994 (this Form 10-
Q being referred to herein as the "SFP Form 10-Q"), (iii) its proxy statements
(as defined in Regulation 14A issued pursuant to the Exchange Act) relating to
meetings of the stockholders of SFP held since January 1, 1989, (iv) its report
on Form 8-K dated June 25, 1993, as amended, and (v) all other reports,
statements, schedules and registration statements filed by SFP and its
Subsidiaries with the SEC since January 1, 1989 and through the date of this
Agreement, but including only such pre-effective amendments to such
registration statements as contain material information not fully reflected in
any subsequent amendment to such registration statements (or to any prospectus
included therein) delivered to BNI pursuant to this Section 3.7.
(b) As of its filing date, each such report or statement, as supplemented or
amended, if applicable, filed pursuant to the Exchange Act did not contain any
untrue statement of a material fact or omit to state any
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material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
(c) Each such registration statement, as supplemented or amended, if
applicable, filed pursuant to the 1933 Act as of the date such statement or
amendment became effective did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
SECTION 3.8. Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of SFP
included in the SFP Form 10-K and the SFP Form 10-Q fairly present, in
conformity with generally accepted accounting principles applied on a
consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of SFP and its consolidated Subsidiaries as of
the dates thereof, their consolidated results of operations and cash flows for
the periods then ended (subject to normal year-end adjustments in the case of
the unaudited consolidated interim financial statements) and, in the case of
the SFP Form 10-K, stockholders' equity. For purposes of this Agreement, "SFP
Balance Sheet" means the Consolidated Balance Sheet of SFP as of December 31,
1993 set forth in the SFP Form 10-K, and "Balance Sheet Date" means December
31, 1993.
SECTION 3.9. Disclosure Documents. (a) Each document required to be filed by
SFP with the SEC in connection with the transactions contemplated by this
Agreement (the "SFP Disclosure Documents"), including, without limitation, (i)
the SFP Offer Documents to be filed with the SEC in connection with the Offer
and (ii) the definitive proxy statement of SFP (the "SFP Proxy Statement") to
be filed with the SEC in connection with the Merger, and any amendments or
supplements thereto, will, when filed, comply as to form in all material
respects with the applicable requirements of the Exchange Act. At the time the
offer to purchase and form of related letter of transmittal contained in the
SFP Offer Documents or any amendment or supplement thereto are first mailed to
stockholders of SFP and at the time of consummation of the Offer, the SFP Offer
Documents, as supplemented or amended, if applicable, will not contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. At the time the SFP Proxy Statement
or any amendment or supplement thereto is first mailed to stockholders of SFP
and at the time such stockholders vote on adoption of this Agreement, the SFP
Proxy Statement, as supplemented or amended, if applicable, will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. At the time of the
filing of any SFP Disclosure Document other than the SFP Offer Documents and
the SFP Proxy Statement and at the time of any distribution thereof, such SFP
Disclosure Document will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The representations and warranties contained in this Section 3.9(a)
will not apply to statements or omissions included in SFP Disclosure Documents
based upon information furnished to SFP in writing by BNI specifically for use
therein.
(b) The registration statements on Form S-1 (the "Form S-1") and the
registration statement on Form 10 (the "Form 10") filed by SFP in connection
with the Spinoff, and any amendments or supplements thereto, or other
appropriate filings made to register the stock of the Spinoff Company under the
1933 Act or the Exchange Act, as amended and supplemented (the "Spinoff
Registration Documents"), when they became effective, complied as to form in
all material respects with the applicable requirements of the 1933 Act and the
Exchange Act. At the time of the effectiveness and at the time that the sale of
securities pursuant to the Spinoff Registration Documents was consummated, the
Spinoff Registration Documents did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The representations and warranties contained in this
Section 3.9(b) shall not apply to statements or omissions included in the
Spinoff Registration Documents based upon information furnished to SFP in
writing by BNI specifically for use therein.
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SECTION 3.10. Information Supplied. The information supplied or to be
supplied by SFP for inclusion or incorporation by reference in (i) the BNI
Offer Documents or any amendment or supplement thereto will not, at the time
the offer to purchase and form of related letter of transmittal contained in
the BNI Offer Documents or any amendment or supplement thereto are first mailed
to stockholders of SFP and at the time of the consummation of the Offer,
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, (ii) the BNI Proxy
Statement or any amendment or supplement thereto will not, at the time the BNI
Proxy Statement is first mailed to stockholders of BNI and at the time such
stockholders vote on adoption of this Agreement, contain any untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements made therein, in light of the circumstances under which
they were made, not misleading, (iii) any BNI Disclosure Document (other than
the BNI Offer Documents and the BNI Proxy Statement) will not, at the time of
effectiveness of such BNI Disclosure Document and at the time of any
distribution thereof contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading, and
(iv) the Form S-4 (as defined in Section 7.3(a)) will not, at the time the Form
S-4 becomes effective under the 1933 Act and at the Effective Time, contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
SECTION 3.11. No Material Adverse Changes. Except as contemplated by this
Agreement or as publicly disclosed prior to the date of this Agreement, and
except as set forth in Schedule 3.11, since the Balance Sheet Date, SFP and the
SFP Material Subsidiaries have conducted their business in the ordinary course
consistent with past practice and there has not been:
(a) any event, occurrence or development of a state of circumstances or
facts which has had or reasonably could be expected to have a Material
Adverse Effect on SFP (other than as a result of (i) changes in conditions,
including economic or political developments, applicable to the railroad
industry generally and (ii) the Spinoff); or
(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of SFP capital stock (other than
(x) aggregate cash dividends on the Shares not in excess of $0.10 per Share
in 1994, $0.18 per Share in 1995, $0.20 per Share in 1996 and $0.22 per
Share in 1997, in each case having record and payment dates determined in
accordance with Section 7.8 and (y) the Spinoff).
SECTION 3.12. Undisclosed Material Liabilities. Except for (i) liabilities
reflected in the SEC Reports listed in Section 3.7 and (ii) liabilities
incurred in the ordinary course of business of SFP and its Subsidiaries
consistent with past practice subsequent to the Balance Sheet Date, SFP and its
Subsidiaries have no liabilities that are material to SFP and there is no
existing condition or set of circumstances which would reasonably be expected
to result in such a liability; provided, however, that this representation does
not cover, and shall not be deemed to be breached as a result of, any such
liability that results primarily from a Customary Action (as defined in Section
5.1 below).
SECTION 3.13. Litigation. Except as set forth in the SFP Form 10-K or the SFP
Form 10-Q, and except as set forth in the Joint Proxy Statement/Prospectus of
SFP and BNI dated October 12, 1994 and the Supplemental Joint Proxy
Statement/Prospectus thereto dated October 28, 1994, (i) there is no action,
suit, investigation or proceeding (or any basis therefor) pending against, or
to the knowledge of SFP threatened against or affecting, SFP or any of its
Subsidiaries or any of their respective properties before any court or
arbitrator or any governmental body, agency or official where there is a
reasonable probability of a determination adverse to SFP or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect on SFP and (ii) as of the date of this Agreement, there is no such
action, suit, investigation or proceeding which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay the Merger, the Spinoff or
any of the other transactions contemplated hereby.
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SECTION 3.14. Taxes. Except as set forth in the SFP Balance Sheet (including
the notes thereto) or on Schedule 3.14, (i) all material tax returns,
statements, reports and forms (collectively, the "SFP Returns") required to be
filed with any taxing authority as of the date hereof by, or with respect to,
SFP and its Subsidiaries have been filed in accordance with all applicable
laws; (ii) SFP and its Subsidiaries have timely paid all taxes shown as due and
payable on the SFP Returns that have been so filed and as of the time of filing
the SFP Returns correctly reflected the facts regarding the income, business,
assets, operations, activities and the status of SFP and its Subsidiaries in
all material respects; (iii) SFP and its Subsidiaries have made provision for
all material taxes payable by SFP and its Subsidiaries for which no Return has
yet been filed or in respect of which a final determination has been made; (iv)
the charges, accruals and reserves for taxes with respect to SFP and its
Subsidiaries reflected in the SFP Balance Sheet are adequate under generally
accepted accounting principles to cover the tax liabilities accruing through
the date thereof; and (v) as of the date of this Agreement, there is no action,
suit, proceeding, investigation, audit or claim now proposed or pending against
or with respect to SFP or any of its Subsidiaries in respect of any tax where
there is a reasonable possibility of a determination or decision against SFP or
any of its Subsidiaries which would reasonably be expected to have a Material
Adverse Effect on SFP.
SECTION 3.15. ERISA. (a) Schedule III identifies (i) each "employee benefit
plan", as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974 ("ERISA") (other than multiemployer plans (as defined in Section
3(37) of ERISA)), and (ii) each employment, severance or other similar
contract, arrangement or policy and each retirement or deferred compensation
plan, stock plan, incentive compensation plan, vacation pay, severance pay,
bonus or benefit arrangement, insurance (including self-insured arrangements)
or hospitalization program, workers' compensation program, disability program,
supplemental unemployment program or fringe benefit arrangement, whether
maintained pursuant to contract or informal understanding, which does not
constitute an "employee benefit plan" (as defined in Section 3(3) of ERISA),
which, in the case of items described in both clauses (i) and (ii), is
maintained, administered or contributed to by SFP or any of its ERISA
Affiliates (as defined below), and covers any employee or former employee of
SFP or any of its Subsidiaries or with respect to which SFP or any of its ERISA
Affiliates has any liability (collectively, the "SFP Employee Plans"). True and
correct copies of each of the SFP Employee Plans, all amendments thereto, any
written interpretations thereof distributed to employees, and all contracts
relating thereto or the funding thereof, including, without limitation, all
trust agreements, insurance contracts, administration contracts, investment
management agreements, subscription and participation agreements, recordkeeping
agreements and summary plan descriptions, all as currently in effect, have been
furnished or made available to BNI. SFP has supplied or made available to BNI
an accurate description of any SFP Employee Plan that is not in written form.
To the extent applicable, true and correct copies of the three most recent
annual reports (Form 5500 including, if applicable, Schedule B thereto)
prepared in connection with any SFP Employee Plan and the most recent actuarial
valuation report prepared in connection with any such plan have been furnished
or made available to BNI. For purposes of this Agreement, "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. SFP has made
available to BNI with complete age, salary, service and related data as of the
most recent practical date for employees and former employees of SFP and any of
its Subsidiaries covered under the SFP Employee Plans.
(b) The only SFP Employee Plans that are subject to Title IV of ERISA (the
"SFP Pension Plans") are identified in the list of such plans provided or made
available to BNI by SFP in accordance with Section 3.15(a). As of the most
recent valuation date of each SFP Pension Plan, the present value of all
benefits accrued under each SFP Pension Plan determined on a termination basis
using the assumptions established by the Pension Benefit Guaranty Corporation
(the "PBGC") as in effect on such date was exceeded by the fair market value of
the assets of such SFP Pension Plan (excluding for these purposes any accrued
but unpaid contributions). No "accumulated funding deficiency", as defined in
Section 412 of the Code, has been incurred with respect to any SFP Pension
Plan, whether or not waived. SFP knows of no "reportable event", within the
meaning of Section 4043 of ERISA and the regulations promulgated thereunder,
and no event described in Section 4041 (other than a standard termination),
4042, 4062 or 4063 of ERISA has occurred in connection
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with any SFP Pension Plan, other than a "reportable event" that will not have a
Material Adverse Effect on SFP. No condition exists and no event has occurred
that could constitute grounds for termination of or the appointment of a
trustee to administer any SFP Pension Plan under Section 4042 of ERISA and, to
SFP's knowledge, neither SFP nor any of its ERISA Affiliates has engaged in, or
is a successor or parent corporation to an entity that has engaged in, a
transaction for which SFP or any of its ERISA Affiliates would have liability
under Section 4069 or 4212(c) of ERISA. To SFP's knowledge, nothing done or
omitted to be done and no transaction or holding of any asset under or in
connection with any SFP Employee Plan has or will make SFP or any of its ERISA
Affiliates or any officer or director of SFP or any of its ERISA Affiliates
subject to any liability under Title I or Section 4071 of ERISA or liable for
any tax pursuant to Section 4975 or Chapters 43, 47, or 68 of the Code that
could have a Material Adverse Effect.
(c) Each SFP Employee Plan which is intended to be qualified under Section
401(a) of the Code is so qualified and has been so qualified during the period
from its adoption to date, and each trust forming a part thereof is exempt from
tax pursuant to Section 501(a) of the Code. SFP has furnished or made available
to BNI copies of the most recent Internal Revenue Service determination letters
with respect to each such SFP Employee Plan. Each SFP Employee Plan has been
maintained in substantial compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations, including
but not limited to ERISA and the Code, which are applicable to such SFP
Employee Plan.
(d) None of the payments contemplated by the contracts, plans or arrangements
covering any employee or former employee of SFP or any of its ERISA Affiliates
and arising solely as a result of the transactions contemplated hereby would,
in the aggregate, constitute excess parachute payments as defined in Section
280G of the Code (without regard to subsection (b)(4) thereof).
(e) Except for obligations arising pursuant to any collective bargaining
agreements, no condition exists that would prevent SFP or any of its
Subsidiaries from amending or terminating any SFP Employee Plan providing
health or medical benefits in respect of any active or former employees of SFP
and its Subsidiaries.
(f) There has been no amendment to, written interpretation or announcement
(whether or not written) by SFP or any of its ERISA Affiliates relating to, or
change in employee participation or coverage under, any SFP Employee Plan which
would increase materially the expense of maintaining such SFP Employee Plan
above the level of the expense incurred in respect thereof for the fiscal year
ended on the Balance Sheet Date.
(g) To the extent applicable, each SFP Employee Plan which constitutes a
"group health plan" (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code), including any plans of current or former affiliates
which must be taken into account under Sections 4980B and 414(t) of the Code or
Section 601 of ERISA, has been operated in substantial compliance with
applicable law, including the group health plan continuation coverage
requirements of Section 4980B of the Code and Section 601 of ERISA.
(h) There are no actions, suits or claims (other than routine claims for
benefits) pending or, to SFP's knowledge, threatened involving any SFP Employee
Plan or the assets thereof and no facts exist with could give rise to any such
actions, suits or claims (other than routine claims for benefits).
(i) SFP has provided or will promptly provide BNI with a list of each
employee pension benefit plan (as defined in Section 3(2) of ERISA) which is a
multiemployer plan with respect to which SFP or any of its ERISA Affiliates may
have any liability (including any liability attributable to a current or former
member of SFP's or any of its ERISA Affiliates' "controlled group" (as defined
in Section 4001(a)(14) of ERISA)) and the maximum amount of such liability
(determined as if a complete withdrawal occurred with respect to each such plan
immediately after the Effective Time). With respect to each such plan, (i) all
contributions have been made as required by the terms of the plans, the terms
of any collective bargaining agreements and applicable law, (ii) neither SFP
nor any of its ERISA Affiliates has withdrawn, partially withdrawn or received
any notice of any claim or demand for withdrawal liability or partial
withdrawal liability that would
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have a Material Adverse Effect, and (iii) neither SFP nor any of its ERISA
Affiliates has received any notice that any such plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan
benefits or the imposition of any excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code or that
any plan is or may become insolvent.
(j) As of the Balance Sheet Date, the Expected Postretirement Benefit
Obligation (as defined in Statement of Financial Accounting Standards No. 106)
in respect of postretirement health and medical benefits for current and former
employees of SFP or any of its Subsidiaries calculated by SFP's actuary using
reasonable actuarial assumptions was $291,200,000.
SECTION 3.16. Finders' Fees. Except for Goldman, Sachs & Co., a copy of whose
engagement agreement has been or will be provided to BNI, there is no
investment banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of SFP or any of its Subsidiaries who
might be entitled to any fee or commission from BNI or any of its affiliates
upon consummation of the transactions contemplated by this Agreement.
SECTION 3.17. Environmental Matters. (a) Except as set forth in the SFP Form
10-K or otherwise previously disclosed in writing by SFP to BNI, there are no
Environmental Liabilities (as defined below) of SFP that, individually or in
the aggregate, have had or would reasonably be expected to have a Material
Adverse Effect on SFP.
(b) As used in this Agreement, "Environmental Laws" means any and all
federal, state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees, codes, plans,
injunctions, permits, concessions, grants, franchises, licenses, agreements and
governmental restrictions, whether now or hereafter in effect, relating to
human health, the environment or to emissions, discharges or releases of
pollutants, contaminants, Hazardous Substances or wastes into the environment,
including without limitation ambient air, surface water, ground water or land,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, Hazardous Substances or wastes or the clean-up or other
remediation thereof. "Environmental Liabilities" with respect to any Person
means any and all liabilities of or relating to such Person or any of its
Subsidiaries (including any entity which is, in whole or in part, a predecessor
of such Person or any of its Subsidiaries), whether vested or unvested,
contingent or fixed, actual or potential, known or unknown, which (i) arise
under or relate to matters covered by Environmental Laws and (ii) relate to
actions occurring or conditions existing on or prior to the Closing Date.
"Hazardous Substances" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and
other hydrocarbons, or any substance having any constituent elements displaying
any of the foregoing characteristics, including, without limitation, any
substance regulated under Environmental Laws.
SECTION 3.18. Takeover Statutes. No "fair price", "moratorium", "control
share acquisition" or other similar antitakeover statute or regulation enacted
under state or federal laws in the United States (each a "Takeover Statute"),
including, without limitation, Section 203 of the Delaware General Corporation
Law (the "DGCL"), applicable to SFP or any of its Subsidiaries is applicable to
the Merger or the other transactions contemplated hereby.
SECTION 3.19. Compliance With Laws. Except as publicly disclosed, and except
for any matter that would not reasonably be expected to have a Material Adverse
Effect on SFP, neither SFP nor any of its Subsidiaries is in violation of, or
has violated, any applicable provisions of any laws, statutes, ordinances or
regulations.
SECTION 3.20. Spinoff Dividend. The board of directors of SFP has declared
the Spinoff Dividend, and the Liquidation of Properties (as those terms are
defined in Section 3.21 below) has occurred prior to the date of this Agreement
in conformity with the Private Letter Ruling (as defined below).
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SECTION 3.21. Private Letter Ruling. SFP has received from the Internal
Revenue Service a valid and effective private letter ruling dated February 16,
1994 (and supplemented on May 18, 1994) (the "Private Letter Ruling") to the
effect that (i) the Spinoff qualifies as a tax-free distribution under Section
355 of the Code and (ii) the merger of SFP Properties, Inc. ("Properties") with
and into SFP (the "Liquidation") will be treated as a distribution by
Properties to SFP in complete liquidation of Properties within the meaning of
Section 322 of the Code. A copy of the Private Letter Ruling has been provided
to BNI.
SECTION 3.22. Excess Loss Accounts. The income that will be recognized, for
federal income tax purposes, upon the Spinoff arising from excess loss accounts
in the stock of the Spinoff Company and its subsidiaries will be approximately
$30 million.
SECTION 3.23. SFP Rights Agreement. Under the Rights Agreement between SFP
and First Chicago Trust Company of New York as Rights Agent, dated as of
November 28, 1994 (the "SFP Rights Agreement"), BNI will not become an
"Acquiring Person", no "Shares Acquisition Date" or "Distribution Date" (as
such terms are defined in the SFP Rights Agreement) will occur, and SFP's
shareholders will not be entitled to receive any benefits under the SFP Rights
Agreement as a result of the approval, execution or delivery of this Agreement,
the commencement or consummation of the Offer or the consummation of the
Merger.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BNI
BNI represents and warrants to SFP that, except as disclosed in Schedule IV
hereto:
SECTION 4.1. Corporate Existence and Power. BNI is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. BNI is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not, individually or in the aggregate, have a
Material Adverse Effect on BNI. BNI has heretofore delivered to SFP true and
complete copies of the certificates of incorporation and bylaws of BNI as
currently in effect.
SECTION 4.2. Corporate Authorization. The execution, delivery and performance
by BNI of this Agreement and the consummation by BNI of the transactions
contemplated hereby are within the corporate powers of BNI and, except as set
forth in the next sentence, have been duly authorized by all necessary
corporate action. The affirmative vote of the holders of a majority of the
outstanding shares of BNI Common Stock entitled to vote thereon is the only
vote of any class or series of BNI capital stock necessary to approve this
Agreement and the transactions contemplated hereby. This Agreement constitutes
a valid and binding agreement of BNI.
SECTION 4.3. Governmental Authorization. The execution, delivery and
performance by BNI of this Agreement and the consummation of the Offer and the
Merger by BNI require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than (i) the filing of a
certificate of merger in accordance with Delaware Law; (ii) compliance with any
applicable requirements of the HSR Act; (iii) compliance with any applicable
requirements relating to approval of the Merger by the ICC; (iv) compliance
with any applicable requirements of the Exchange Act; (v) compliance with the
applicable requirements of the 1933 Act; (vi) compliance with any applicable
foreign or state securities or Blue Sky laws; and (vii) immaterial actions or
filings relating to ordinary operational matters.
SECTION 4.4. Non-Contravention. The execution, delivery and performance by
BNI of this Agreement and the consummation by BNI of the transactions
contemplated hereby do not and will not
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(except, in the case of clauses (ii), (iii) and (iv) of this Section 4.4, for
any such matters that singly or in the aggregate have not had, and would not
reasonably be expected to have, a Material Adverse Effect on BNI) (i)
contravene or conflict with the certificate of incorporation or bylaws of BNI,
(ii) assuming compliance with the matters referred to in Section 4.3,
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, injunction, order or decree binding upon or
applicable to BNI or any Subsidiary of BNI, (iii) constitute a default under or
give rise to any right of termination, cancellation or acceleration of any
right or obligation of BNI or any of its Subsidiaries or to a loss of any
benefit to which BNI or any of its Subsidiaries is entitled under any
agreement, contract or other instrument binding upon BNI or any of its
Subsidiaries or any license, franchise, permit or other similar authorization
held by BNI or any of its Subsidiaries, or (iv) result in the creation or
imposition of any Lien on any asset of BNI or any Subsidiary of BNI.
SECTION 4.5. Capitalization. (a) The authorized capital stock of BNI consists
of three hundred million (300,000,000) shares of BNI Common Stock and twenty-
five million (25,000,000) shares of No Par Value Preferred Stock, including six
million nine hundred thousand (6,900,000) shares of 6 1/4% Cumulative
Convertible Preferred Stock, Series A No Par Value ("6 1/4% Convertible
Preferred Stock") and fifty million (50,000,000) shares of Class A Preferred
Stock, No Par Value ("Class A Preferred Stock"). As of May 31, 1994 there were
outstanding (i) 89,208,870 shares of BNI Common Stock (including 7,800 shares
issued after May 31, 1994 with effect prior to such date), 15,104,280 shares
were reserved for issuance pursuant to stock option plans, 303,532 shares were
reserved for issuance pursuant to "restricted stock" plans and 94,572 shares
were held in the treasury, (ii) six million nine hundred thousand (6,900,000)
shares of 6 1/4% Convertible Preferred Stock, (iii) no shares of Class A
Preferred Stock, and (iv) employee stock options to purchase an aggregate of
4,170,536 shares of BNI Common Stock (of which options to purchase an aggregate
of 2,925,611 shares were exercisable). All outstanding shares of capital stock
of BNI have been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth in this Section or as contemplated by
Section 6.1, except for the exercise of employee stock options outstanding on
May 31, 1994 or issued since that date in accordance with Section 6.1 and
except for changes since that date resulting from the conversion of shares of
the 6 1/4% Convertible Preferred Stock, there are outstanding (x) no shares of
capital stock or other voting securities of BNI, (y) no securities of BNI or
any of its Subsidiaries convertible into or exchangeable for shares of capital
stock or voting securities of BNI and (z) no options or other rights to acquire
from BNI or any of its Subsidiaries, and no obligation of BNI or any of its
Subsidiaries to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of BNI
(the items in clauses (x), (y) and (z) being referred to collectively as the
"BNI Securities"). There are no outstanding obligations of BNI or any
Subsidiary of BNI to repurchase, redeem or otherwise acquire any BNI
Securities.
(b) As of the date hereof, there are no outstanding bonds, debentures, notes
or other indebtedness of BNI having the right to vote (or convertible into or
exercisable for BNI Securities having the right to vote) on any matters on
which holders of BNI Common Stock may vote (collectively, "BNI Voting Debt").
SECTION 4.6. Material Subsidiaries. (a) Each Subsidiary of BNI is identified
on Schedule 4.6(a). For purposes of this Agreement, the term "BNI Material
Subsidiary" means each Subsidiary of BNI identified as material on Schedule
4.6(a). Each BNI Material Subsidiary is either (i) a corporation that is duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted and is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where
failure to be so qualified would not, individually or in the aggregate, have a
Material Adverse Effect on BNI, or (ii) a partnership that is duly formed and
in good standing under the laws of its jurisdiction of formation and has all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted and is duly qualified to do business
and is in good standing in each jurisdiction where the character of the
property owned or leased by it or the nature of its activities makes such
qualification necessary, except
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for those jurisdictions where failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect on BNI.
(b) Except as set forth in the BNI Form 10-K (as defined in Section 4.7(a)),
all of the outstanding capital stock of, or other ownership interests in, each
BNI Subsidiary, is owned by BNI, 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). Other than those obligations identified on Schedule
4.6(b), there are no outstanding (i) securities of BNI or any of its
Subsidiaries convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any Subsidiary of BNI, and
(ii) options or other rights to acquire from BNI or any of its Subsidiaries,
and no other obligation of BNI or any of its Subsidiaries to issue, any capital
stock, voting securities or other ownership interests in, or any securities
convertible into or exchangeable for any capital stock, voting securities or
ownership interests in, any Subsidiary of BNI (the capital stock of each
Subsidiary of BNI, together with the items in clauses (i) and (ii), being
referred to collectively as the "BNI Subsidiary Securities"). There are no
outstanding obligations of BNI or any Subsidiary of BNI to repurchase, redeem
or otherwise acquire any outstanding BNI Subsidiary Securities.
SECTION 4.7. SEC Filings. (a) BNI has delivered to SFP (i) the annual reports
on Form 10-K for its fiscal years ended December 31, 1989, December 31, 1990,
December 31, 1991, December 31, 1992, and December 31, 1993 (this latest form
10-K being referred to herein as the "BNI Form 10-K"), (ii) its quarterly
report on Form 10-Q for its fiscal quarter ending March 31, 1994 (this Form 10-
Q being referred to herein as the "BNI Form 10-Q"), (iii) its proxy statements
(as defined in Regulation 14A issued pursuant to the Exchange Act) relating to
meetings of the stockholders of BNI held since January 1, 1989, and (iv) all
other reports, statements, schedules and registration statements filed by BNI
and its Subsidiaries with the SEC since January 1, 1989 and through the date of
this Agreement, but including only such pre-effective amendments and such
registration statements as contain material information not fully reflected in
any subsequent amendments to such registration statements (or any prospectus
included therein) delivered to SFP pursuant to this Section 4.7.
(b) As of its filing date, each such report or statement, as supplemented or
amended, if applicable, filed pursuant to the Exchange Act did not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(c) Each such registration statement, as supplemented or amended, if
applicable, filed pursuant to the 1933 Act as of the date such statement or
amendment became effective did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
SECTION 4.8. Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of BNI
included in the BNI Form 10-K and the BNI Form 10-Q fairly present, in
conformity with generally accepted accounting principles applied on a
consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of BNI and its consolidated Subsidiaries as of
the dates thereof, their consolidated results of operations and cash flows for
the periods then ended (subject to normal year-end adjustments in the case of
the unaudited consolidated interim financial statements) and, in the case of
the BNI Form 10-K, stockholders' equity. For purposes of this Agreement, "BNI
Balance Sheet" means the Consolidated Balance Sheet of BNI as of the Balance
Sheet Date set forth in the BNI Form 10-K.
SECTION 4.9. Disclosure Documents. Each document required to be filed by BNI
with the SEC in connection with the transactions contemplated by this Agreement
(the "BNI Disclosure Documents"), including, without limitation, (i) the BNI
Offer Documents to be filed with the SEC in connection with the Offer and (ii)
the definitive proxy statement of BNI (the "BNI Proxy Statement") to be filed
with the SEC in
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connection with the Merger, and any amendments or supplements thereto, will,
when filed, comply as to form in all material respects with the applicable
requirements of the Exchange Act. At the time the offer to purchase and form of
related letter of transmittal contained in the BNI Offer Documents or any
amendment or supplement thereto are first mailed to stockholders of SFP and at
the time of consummation of the Offer, the BNI Offer Documents, as supplemented
or amended, if applicable, will not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. At the time the BNI Proxy Statement or any amendment or supplement
thereto is first mailed to stockholders of BNI and at the time such
stockholders vote on adoption of this Agreement, the BNI Proxy Statement, as
supplemented or amended, if applicable, will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements made therein, in light of the circumstances under which
they were made, not misleading. At the time of the filing of any BNI Disclosure
Document other than the BNI Offer Documents and the BNI Proxy Statement and at
the time of any distribution thereof, such BNI Disclosure Document will not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The representations
and warranties contained in this Section 4.9 will not apply to statements or
omissions included in BNI Disclosure Documents based upon information furnished
to BNI in writing by SFP specifically for use therein.
SECTION 4.10. Information Supplied. The information supplied or to be
supplied by BNI for inclusion or incorporation by reference in (i) the SFP
Offer Documents or any amendment or supplement thereto will not, at the time
the offer to purchase and form of related letter of transmittal contained in
the SFP Offer Documents or any amendment or supplement thereto are first mailed
to stockholders of SFP and at the time of the consummation of the Offer,
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, (ii) the SFP Proxy
Statement or any amendment or supplement thereto will not, at the time the SFP
Proxy Statement is first mailed to stockholders of SFP and at the time such
stockholders vote on adoption of this Agreement, contain any untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements made therein, in light of the circumstances under which
they were made, not misleading and (iii) any SFP Disclosure Document (other
than the SFP Offer Documents and the SFP Proxy Statement) will not, at the time
of effectiveness of such SFP Disclosure Document and at the time of any
distribution thereof contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
SECTION 4.11. No Material Adverse Changes. Except as contemplated by this
Agreement or as publicly disclosed prior to the date of this Agreement, and
except as set forth in Schedule 4.11, since the Balance Sheet Date, BNI and the
BNI Material Subsidiaries have conducted their business in the ordinary course
consistent with past practice and there has not been:
(a) any event, occurrence or development of a state of circumstances or
facts which has had or reasonably could be expected to have a Material
Adverse Effect on BNI (other than as a result of changes in conditions,
including economic or political developments, applicable to the railroad
industry generally); or
(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of BNI Common Stock (other than
aggregate cash dividends not in excess of $1.20 per share in 1994, $1.32
per share in 1995, $1.48 per share in 1996, and $1.64 per share in 1997, in
each case having record and payment dates determined in accordance with
Section 7.8).
SECTION 4.12. Undisclosed Material Liabilities. Except for (i) liabilities
reflected in the SEC Reports listed in Section 4.7 and (ii) liabilities
incurred in the ordinary course of business of BNI and its Subsidiaries
subsequent to the Balance Sheet Date, BNI and its Subsidiaries have no
liabilities that are material to BNI and there is no existing condition or set
of circumstances which could reasonably be expected
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to result in such a liability; provided, however, that this representation does
not cover, and shall not be deemed to be breached as a result of, any such
liability that primarily results from a Customary Action (as defined in Section
5.1 below).
SECTION 4.13. Litigation. Except as set forth in the BNI Form 10-K or the BNI
Form 10-Q, and except as set forth in the Joint Proxy Statement/Prospectus of
SFP and BNI dated October 12, 1994 and the Supplemental Joint Proxy
Statement/Prospectus thereto dated October 28, 1994, (i) there is no action,
suit, investigation or proceeding (or any basis therefor) pending against, or
to the knowledge of BNI threatened against or affecting, BNI or any of its
Subsidiaries or any of their respective properties before any court or
arbitrator or any governmental body, agency or official where there is a
reasonable probability of a determination adverse to BNI or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect on BNI and (ii) as of the date of this Agreement, there is no such
action, suit, investigation or proceeding which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay the Merger or any of the
other transactions contemplated hereby.
SECTION 4.14. Taxes. Except as set forth in the BNI Balance Sheet (including
the notes thereto) or on Schedule 4.14, (i) all material tax returns,
statements, reports and forms (collectively, the "BNI Returns") required to be
filed with any taxing authority as of the date hereof by, or with respect to,
BNI and its Subsidiaries have been filed in accordance with all applicable
laws; (ii) BNI and its Subsidiaries have timely paid all taxes shown as due and
payable on the BNI Returns that have been so filed and as of the time of filing
the BNI Returns correctly reflected the facts regarding the income, business,
assets, operations, activities and the status of BNI and its Subsidiaries in
all material respects; (iii) BNI and its Subsidiaries have made provision for
all material taxes payable by BNI and its Subsidiaries for which no Return has
yet been filed or in respect of which a final determination has been made; (iv)
the charges, accruals and reserves for taxes with respect to BNI and its
Subsidiaries reflected on the BNI Balance Sheet are adequate under generally
accepted accounting principles to cover the tax liabilities accruing through
the date thereof; and (v) as of the date of this Agreement there is no action,
suit, proceeding, investigation, audit or claim now proposed or pending against
or with respect to BNI or any of its Subsidiaries in respect of any tax where
there is a reasonable possibility of a determination or decision against BNI or
any of its Subsidiaries which would reasonably be expected to have a Material
Adverse Effect on BNI.
SECTION 4.15. ERISA. (a) Schedule IV identifies (i) each "employee benefit
plan", as defined in Section 3(3) of ERISA (other than multiemployer plans (as
defined in Section 3(37) of ERISA)), and (ii) each employment, severance or
other similar contract, arrangement or policy and each retirement or deferred
compensation plan, stock plan, incentive compensation plan, vacation pay,
severance pay, bonus or benefit arrangement, insurance (including self-insured
arrangements) or hospitalization program, workers' compensation program,
disability program, supplemental unemployment program or fringe benefit
arrangement, whether maintained pursuant to contract or informal understanding,
which does not constitute an "employee benefit plan" (as defined in Section
3(3) of ERISA), which, in the case, of items described in both clauses (i) and
(ii) is maintained, administered or contributed to by BNI or any of its ERISA
Affiliates and covers any employee or former employee of BNI or any of its
Subsidiaries or with respect to which BNI or any of its ERISA Affiliates has
any liability (collectively, the "BNI Employee Plans"). True and correct copies
of each of the BNI Employee Plans, all amendments thereto, any written
interpretations thereof distributed to employees, and all contracts relating
thereto or the funding thereof, including, without limitation, all trust
agreements, insurance contracts, administration contracts, investment
management agreements, subscription and participation agreements, recordkeeping
agreements and summary plan descriptions, all as currently in effect, have been
furnished or made available to SFP. BNI has supplied or made available to SFP
an accurate description of any BNI Employee Plan that is not in written form.
To the extent applicable, true and correct copies of the three most recent
annual reports (Form 5500 including, if applicable, Schedule B thereto)
prepared in connection with any BNI Employee Plan and the most recent actuarial
valuation report prepared in connection with any such plan have been furnished
or made available to SFP. BNI has made available to SFP complete age, salary,
service and related data as of the most recent
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practical date for employees and former employees of BNI and any of its
Subsidiaries covered under the BNI Employee Plans.
(b) The only BNI Employee Plans that are subject to Title IV of ERISA (the
"BNI Pension Plans") are identified in the list of such Plans provided or made
available to SFP by BNI in accordance with Section 4.15(a). As of the most
recent valuation date of each BNI Pension Plan, the present value of all
benefits accrued under each BNI Pension Plan, determined on a termination basis
using the assumptions established by the PBGC as in effect on such date was
exceeded by the fair market value of the assets of such BNI Pension Plan
(excluding for these purposes any accrued but unpaid contributions). No
"accumulated funding deficiency", as defined in Section 412 of the Code, has
been incurred with respect to any BNI Pension Plan, whether or not waived. BNI
knows of no "reportable event", within the meaning of Section 4043 of ERISA and
the regulations promulgated thereunder, and no event described in Sections 4041
(other than a standard termination), 4042, 4062 or 4063 of ERISA has occurred
in connection with any BNI Pension Plan, other than a "reportable event" that
will not have a Material Adverse Effect on BNI. No condition exists and no
event has occurred that could constitute grounds for termination of or the
appointment of a trustee to administer any BNI Pension Plan under Section 4042
of ERISA and, to BNI's knowledge, neither BNI nor any of its ERISA Affiliates
has engaged in, or is a successor parent corporation to an entity that has
engaged in, a transaction for which BNI or any of its ERISA Affiliates would
have liability under Sections 4069 or 4212(c) of ERISA. To BNI's knowledge
nothing done or omitted to be done and no transaction or holding of any asset
under or in connection with any BNI Employee Plan has or will make BNI or any
of its ERISA Affiliates, any officer or director of BNI or any of its ERISA
Affiliates subject to any liability under Title I or Section 4071 of ERISA or
liable for any tax pursuant to Section 4975 or Chapters 43, 47 or 68 of the
Code that could have a Material Adverse Effect.
(c) Each BNI Employee Plan which is intended to be qualified under Section
401(a) of the Code is so qualified and has been so qualified during the period
from its adoption to date, and each trust forming a part thereof is exempt from
tax pursuant to Section 501(a) of the Code. BNI has furnished or made available
to SFP copies of the most recent Internal Revenue Service determination letters
with respect to each such BNI Employee Plan. Each BNI Employee Plan has been
maintained in substantial compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations, including
but not limited to ERISA and the Code, which are applicable to such BNI Plan.
(d) None of the payments contemplated by the contracts, plans or arrangements
covering any employee or former employee of BNI or any of its ERISA Affiliates
and arising solely as a result of the transactions contemplated hereby would,
in the aggregate, constitute excess parachute payments as defined in Section
280G of the Code (without regard to subsection (b)(4) thereof).
(e) Except for obligations arising pursuant to any collective bargaining
agreements, no condition exists that would prevent BNI or any of its
Subsidiaries from amending or terminating any BNI Employee Plan providing
health or medical benefits in respect of any active or former employees of BNI
and its Subsidiaries.
(f) There has been no amendment to, written interpretation or announcement
(whether or not written) by BNI or any of its ERISA Affiliates relating to, or
change in employee participation or coverage under, any BNI Employee Plan which
would increase materially the expense of maintaining such BNI Employee Plan
above the level of the expense incurred in respect thereof for the fiscal year
ended on the Balance Sheet Date.
(g) To the extent applicable, each BNI Employee Plan which constitutes a
"group health plan" (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code), including any plans of current or former affiliates
which must be taken into account under Sections 4980B and 414(t) of the Code or
Section 601 of ERISA, has been operated in substantial compliance with
applicable law, including the group health plan continuation coverage
requirements of Section 4980B of the Code and Section 601 of ERISA.
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(h) There are no actions, suits or claims (other than routine claims for
benefits) pending or, to BNI's knowledge, threatened involving any BNI Employee
Plan or the assets thereof and no facts exist which could give rise to any such
actions, suits or claims (other than routine claims for benefits).
(i) BNI has provided or will promptly provide SFP with a list of each
employee pension benefit plan (as defined in Section 3(2) of ERISA) which is a
multiemployer plan with respect to which BNI or any of its ERISA Affiliates may
have any liability (including any liability attributable to a current or former
member of BNI's or any of its ERISA Affiliates' "controlled group" (as defined
in Section 4001(a)(14) of ERISA)) and the maximum amount of such liability
(determined as if a complete withdrawal occurred with respect to each such plan
immediately after the Effective Time). With respect to each such plan, (i) all
contributions have been made as required by the terms of the plans, the terms
of any collective bargaining agreements and applicable law, (ii) neither BNI
nor any of its ERISA Affiliates has withdrawn, partially withdrawn or received
any notice of any claim or demand for withdrawal liability or partial
withdrawal liability that would have a Material Adverse Effect, and (iii)
neither BNI nor any of its ERISA Affiliates has received any notice that any
such plan is in reorganization, that increased contributions may be required to
avoid a reduction in plan benefits or the imposition of any excise tax, that
any such plan is or has been funded at a rate less than that required under
Section 412 of the Code or that any plan is or may become insolvent.
(j) As of the Balance Sheet Date, the Expected Postretirement Benefit
Obligation (as defined in Statement of Financial Accounting Standards No. 106)
in respect of postretirement life, health and medical insurance benefits for
current and former employees of BNI or any of its Subsidiaries calculated by
BNI's actuary using reasonable actuarial assumptions was $17,000,000.
SECTION 4.16. Finders' Fees. Except for Lazard Freres & Co., a copy of whose
engagement agreement has been or will be provided to SFP and whose fees will be
paid by BNI, there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of
BNI, the Surviving Corporation or any Subsidiary of BNI who might be entitled
to any fee or commission from BNI, the Surviving Corporation or any Subsidiary
of BNI upon consummation of the transactions contemplated by this Agreement.
SECTION 4.17. Environmental Matters. Except as set forth in the BNI Form 10-K
or otherwise previously disclosed in writing by BNI to SFP, there are no
Environmental Liabilities of BNI that, individually or in the aggregate, have
had or would reasonably be expected to have a Material Adverse Effect on BNI.
SECTION 4.18. Takeover Statutes. No Takeover Statute, including, without
limitation, Section 203 of the DGCL, applicable to BNI or any of its
Subsidiaries is applicable to the Merger or the other transactions contemplated
hereby.
SECTION 4.19. Compliance with Laws. Except as publicly disclosed, and except
for any matter that would not reasonably be expected to have a Material Adverse
Effect on BNI, neither BNI nor any of its Subsidiaries is in violation of, or
has violated, any applicable provisions of any laws, statutes, ordinances or
regulations.
SECTION 4.20. BNI Rights Agreement. Under the Rights Agreement between BNI
and The First National Bank of Boston, dated as of July 14, 1986 (the "BNI
Rights Agreement"), SFP will not become an "Acquiring Person", no "Stock
Acquisition Date" or "Distribution Date" (as such terms are defined in the BNI
Rights Agreement) will occur, and BNI's shareholders will not be entitled to
receive any benefits under the BNI Rights Agreement as a result of the
approval, execution or delivery of this Agreement or the consummation of the
Merger.
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ARTICLE V
COVENANTS OF SFP
SFP agrees that:
SECTION 5.1. Conduct of SFP. From the date hereof until the Effective Time,
except as provided in Schedule V, SFP and the SFP Material Subsidiaries shall
conduct their business in the ordinary course of business consistent with past
practice and shall use their reasonable best efforts to preserve intact their
business organizations and relationships with third parties; provided that
nothing in this Section shall be deemed to prevent SFP and its Subsidiaries
from undertaking any action necessary, proper or advisable to effectuate the
Spinoff and all related transactions in accordance with and subject to the
conditions set forth in this Agreement; and provided further that nothing in
this Section shall be deemed to prevent SFP and its Subsidiaries from taking
any action referred to in clauses (b)(ii), (c), (f) or (g) of this Section 5.1
where the taking of such action is not consistent with the past practices of
SFP and its Subsidiaries if, but only if, such action is a Customary Action.
For purposes of this Agreement, an action shall be considered a "Customary
Action" where such action occurs in the ordinary course of the relevant
Person's business and where the taking of such action is generally recognized
as being customary and prudent for other major enterprises in such Person's
line of business. Without limiting the generality of the foregoing, from the
date hereof until the Effective Time:
(a) SFP will not adopt or propose any change in its certificate of
incorporation or bylaws;
(b) Except for the Offer, the Merger and the Spinoff, SFP will not, and
will not permit any Subsidiary of SFP, (i) to adopt a plan of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization or (ii) make any acquisition of
any business or other assets, whether by means of merger, consolidation or
otherwise, other than in the ordinary course of business consistent with
past practices and other than acquisitions that are Customary Actions;
(c) SFP will not, and will not permit any Subsidiary of SFP to, sell,
lease, license or otherwise dispose of any material assets or property
except (i) the Spinoff, (ii) pursuant to existing contracts or commitments,
(iii) in the ordinary course of business consistent with past practice and
(iv) any such sale, lease, license or other disposition that is a Customary
Action;
(d) SFP will not, and will not permit any Subsidiary of SFP to, declare,
set aside, or pay any dividend or make any other distribution with respect
to any shares of SFP capital stock other than (i) cash dividends on SFP
Common Stock not in excess of the amounts set forth in Section 3.11(b) and
having record and payment dates determined as set forth in Section 7.8, and
(ii) the Spinoff;
(e) Except (i) as expressly permitted by this Section 5.1, Section 5.7 or
(ii) pursuant to existing contracts or commitments, SFP will not, and will
not permit any Subsidiary of SFP to, issue, deliver or sell, or authorize
or propose the issuance, delivery or sale of, any SFP Securities, any SFP
Voting Debt, any SFP Subsidiary Securities or any securities convertible
into or exchangeable for, or any rights, warrants or options to acquire,
any SFP Securities, SFP Voting Debt or SFP Subsidiary Securities;
(f) Except for (i) borrowings under existing credit facilities,
replacements therefor and refinancings thereof, (ii) borrowings not to
exceed $1.75 billion in the aggregate under credit facilities in form and
substance reasonably satisfactory to BNI to finance the Offer, to refinance
SFP's currently outstanding 12.65% Senior Notes due October 1, 2000, 8 3/8%
Notes due November 1, 2001 and 8 5/8% Notes due November 1, 2004, to pay
penalties, premiums and make-whole payments required in connection with
such refinancing and for working capital and other corporate purposes,
(iii) borrowings in the ordinary course of business consistent with past
practice or (iv) borrowings that are Customary Actions, SFP will not, and
will not permit any Subsidiary of SFP to, incur any indebtedness for
borrowed money or guarantee any such indebtedness;
(g) Except for loans, advances, capital contributions or investments made
in the ordinary course of business consistent with past practice and except
for loans, advances, capital contributions or investments
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that are Customary Actions, SFP will not, and will not permit any
Subsidiary of SFP to, make any loans, advances or capital contributions to,
or investments in, any other Person (other than to SFP or any Subsidiary of
SFP);
(h) (i) Except for any of the actions referred to in this clause (i) that
is taken in the ordinary course of business consistent in magnitude and
character with past practice and with the terms of severance or termination
arrangements in effect or pending on the date hereof with respect to
individuals with comparable positions or responsibilities, and except for
any of such actions which, in the aggregate, are not material, as
hereinafter defined, SFP will not, and will not permit any of its
Subsidiaries to, grant any severance or termination pay to, or enter into
any termination or severance arrangement with, any of its directors,
executive officers or employees and (ii) except for any of the actions
referred to in this clause (ii) that is taken in the ordinary course of
business consistent in aggregate in magnitude and character with past
practice, and except for any of such actions which in the aggregate are not
material, as hereinafter defined, SFP will not, and will not permit any of
its Subsidiaries to, establish, adopt, enter into, amend or take action to
accelerate any rights or benefits under, or grant awards under, (A) any
plan or arrangement 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, executive officers or employees. For
purposes of this subsection (h), "material" shall mean material in relation
to the overall compensation costs of SFP and its Subsidiaries.
(i) SFP will not, and will not permit any Subsidiary of SFP to, agree or
commit to do any of the actions prohibited by Sections 5.1(a) through
5.1(h).
SECTION 5.2. Stockholder Meeting. SFP shall cause a special meeting of its
stockholders (the "SFP Stockholder Meeting") to be duly called and held as soon
as reasonably practicable after the date of this Agreement for the purpose of
voting on the approval and adoption of this Agreement and the Merger. The board
of directors of SFP shall recommend approval and adoption of this Agreement and
the Merger by its stockholders; provided, however, that prior to the SFP
Stockholder Meeting such recommendation may be withdrawn, modified or amended
to the extent that, as a result of the commencement or receipt of a Takeover
Proposal (as defined in Section 5.8) relating to SFP, the board of directors of
SFP deems it necessary to do so in the exercise of its fiduciary obligations to
SFP stockholders after being so advised by counsel.
SECTION 5.3. Access to Information. Subject to any confidentiality agreements
or other confidentiality obligations binding upon SFP or any of its
Subsidiaries, from the date hereof until the Effective Time, SFP will give BNI,
its counsel, financial advisors, auditors and other authorized representatives
full access to the offices, properties, books and records of SFP and its
Subsidiaries, will furnish to BNI, its counsel, financial advisors, auditors
and other authorized representatives such financial and operating data and
other information as such Persons may reasonably request and will instruct
SFP's employees, counsel and financial advisors to cooperate with BNI in its
investigation of the business of SFP and its Subsidiaries; provided that no
investigation pursuant to this Section shall affect any representation or
warranty given by SFP to BNI hereunder; and provided further that access to
certain information will require the entry of a protective order by the ICC,
after which date full access will be granted to such information consistent
with this paragraph and subject to the terms of such order.
SECTION 5.4. Notices of Certain Events. SFP shall promptly notify BNI 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;
(ii) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement including, without limitation, the Spinoff
and the Liquidation; and
A-23
(iii) any actions, suits, claims, investigations or proceedings commenced
or, to the best of its knowledge threatened against, relating to or
involving or otherwise affecting SFP or any Subsidiary of SFP which, if
pending on the date of this Agreement, would have been required to have
been disclosed pursuant to Section 3.13 or which relate to the consummation
of the transactions contemplated by this Agreement.
SECTION 5.5. Tax Matters. From the date hereof until the Effective Time, (i)
SFP and its Subsidiaries will file all significant tax returns, statements,
reports and forms (collectively, the "SFP Post-Signing Returns") required to be
filed with any taxing authority in accordance with all applicable laws; (ii)
SFP and its Subsidiaries will timely pay all taxes shown as due and payable on
the SFP Post-Signing Returns that are so filed and as of the time of filing,
the SFP Post-Signing Returns will correctly reflect the facts regarding the
income, business, assets, operations, activities and the status of SFP and its
Subsidiaries in all material respects; (iii) SFP and its Subsidiaries will make
provision for all taxes payable by SFP and its Subsidiaries for which no SFP
Post-Signing Return is due prior to the Effective Time; and (iv) SFP and its
Subsidiaries will promptly notify BNI of any action, suit, proceeding,
investigation, audit or claim pending against or with respect to SFP or any of
its Subsidiaries in respect of any tax where there is a reasonable possibility
of a determination or decision against SFP which would reasonably be expected
to have a significant adverse effect on SFP's tax liabilities or other tax
attributes.
SECTION 5.6. Rule 145 Affiliates. At least 40 days prior to the Closing Date,
SFP shall deliver to BNI a letter identifying all persons who are, at the time
of the meeting of SFP Stockholders Meeting, deemed to be "affiliates" of SFP
for purposes of Rule 145 under the 1933 Act (the "1933 Act Affiliates"). SFP
shall use its reasonable best efforts to cause each Person who is identified as
a possible 1933 Act Affiliate to deliver to BNI at least 30 days prior to the
Closing Date an agreement substantially in the form of Exhibit A to this
Agreement.
SECTION 5.7. The Spinoff. SFP will not, and will not permit any of its
Subsidiaries (other than the Spinoff Company and its Subsidiaries) to, enter
into or undertake any transaction, arrangement or agreement with the Spinoff
Company or its Subsidiaries except for (i) transactions, arrangements or
agreements that have been entered into on or prior to the date of this
Agreement which have been provided to BNI on or prior to the date hereof, (ii)
the allocation to employees of the Spinoff Company of their share of the SFP
employee benefit plans in accordance with applicable law or (iii) such other
transactions, arrangements or agreements that are consented to by BNI (such
consent not to be unreasonably withheld). Without limiting the generality of
the foregoing, in no event may SFP or any of its Subsidiaries pay any dividend,
or make any distribution, to holders of SFP Common Stock directly or indirectly
in connection with the Spinoff, except for the Spinoff Dividend. Nothing in
this Section 5.7 shall prevent SFP or the Spinoff Company from taking actions
(including, but not limited to filings with and no-action requests of the SEC,
communications with shareholders, and the liquidation of subsidiaries of the
Spinoff Company) reasonably necessary to effectuate the Spinoff. It shall not
be a breach of this Agreement for SFP to pay any taxes arising from excess loss
accounts (not materially greater than the amount represented in Section 3.22)
in the stock of the Spinoff Company or its subsidiaries. SFP will use its
reasonable best efforts to ensure that the conditions specified in the Private
Letter Ruling are satisfied.
SECTION 5.8. No Solicitations. SFP will not, and SFP will use its reasonable
best efforts to ensure that its officers, directors, employees or other agents
of SFP do not, directly or indirectly: initiate, solicit or encourage, or take
any action to facilitate the making of, any offer or proposal which constitutes
or is reasonably likely to lead to any Takeover Proposal of SFP, or, in the
event of an unsolicited Takeover Proposal of SFP, except to the extent required
by their fiduciary duties under applicable law if so advised by outside
counsel, engage in negotiations or provide any confidential information or data
to any Person relating to any such Takeover Proposal. SFP shall notify BNI
orally and in writing of any such inquiries, offers or proposals (including,
without limitation, the terms and conditions of any such proposal and the
identity of the person making it), within 48 hours of the receipt thereof and
shall give BNI five days' advance notice of any agreement to be entered into
with or any information to be supplied to any Person making such
A-24
inquiry, offer or proposal. SFP shall immediately cease and cause to be
terminated all existing discussions and negotiations, if any, with any parties
conducted heretofore with respect to any Takeover Proposal of SFP. As used in
this Agreement, "Takeover Proposal" when used in connection with any Person
shall mean any tender or exchange offer involving such Person, any proposal for
a merger, consolidation or other business combination involving such Person or
any Subsidiary of such Person, any proposal or offer to acquire in any manner a
substantial equity interest in, or a substantial portion of the assets of, such
Person or any Subsidiary of such Person, any proposal or offer with respect to
any recapitalization or restructuring with respect to such Person or any
Subsidiary of such Person or any proposal or offer with respect to any other
transaction similar to any of the foregoing with respect to such Person or any
Subsidiary of such Person other than pursuant to the transactions to be
effected pursuant to this Agreement.
SECTION 5.9. Registration Rights. SFP hereby grants BNI the registration and
other rights set forth in Annex II hereto, which rights shall become effective
without any action by any Person in the event that this Agreement is terminated
for any reason after consummation of the Offer.
ARTICLE VI
COVENANTS OF BNI
BNI AGREES THAT:
SECTION 6.1. Conduct of BNI. From the date hereof until the Effective Time,
except as provided in Schedule VI, BNI and the BNI Material Subsidiaries shall
conduct their business in the ordinary course of business consistent with past
practice and shall use their reasonable best efforts to preserve intact their
business organizations and relationships with third parties; provided that
nothing in this Section shall be deemed to prevent BNI and its Subsidiaries
from taking any action referred to in clauses (b)(ii), (c), (f) or (g) of this
Section 6.1 where the taking of such action is not consistent with the past
practices of BNI and its Subsidiaries if, but only if, such action is a
Customary Action. Without limiting the generality of the foregoing, from the
date hereof until the Effective Time:
(a) BNI will not adopt or propose any change in its certificate of
incorporation or bylaws, except for an amendment to its certificate of
incorporation authorizing the issuance of additional shares of Class A
Preferred Stock in connection with the issuance of Rights to former holders
of SFP Common Stock upon consummation of the Merger;
(b) Except for the Offer and the Merger, BNI will not, and will not
permit any Subsidiary of BNI, (i) to adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization or (ii) make any acquisition, by
means of merger, consolidation or otherwise, other than in the ordinary
course of business consistent with past practices and other than
acquisitions that are Customary Actions;
(c) BNI will not, and will not permit any Subsidiary of BNI to, sell,
lease, license or otherwise dispose of any material assets or property
except (i) pursuant to existing contracts or commitments, (ii) in the
ordinary course of business consistent with past practice and (iii) any
such sale, lease, license or other disposition that is a Customary Action;
(d) BNI will not, and will not permit any Subsidiary of BNI to, declare,
set aside, or pay any dividend or make any other distribution with respect
to any shares of BNI capital stock (other than cash dividends on BNI Common
Stock not in excess of the amounts set forth in Section 4.11(b) and having
record and payment dates determined as set forth in Section 7.8);
(e) Except (i) as expressly permitted by this Section 6.1, (ii) as
necessary in connection with the transactions contemplated hereby
(including the issuance of Rights to former holders of SFP Common Stock
upon consummation of the Merger) or (iii) pursuant to existing contracts
and commitments, BNI will not, and will not permit any Subsidiary of BNI
to, issue, deliver or sell, or authorize or propose the issuance, delivery
or sale of, any BNI Securities, any BNI Voting Debt or any securities
convertible into
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or exchangeable for, or any rights, warrants or options to acquire, any BNI
Securities or BNI Voting Debt;
(f) Except for (i) borrowings under existing credit facilities,
replacements therefor and refinancings thereof, (ii) borrowings not to
exceed $500 million in the aggregate under credit facilities in form and
substance reasonably satisfactory to SFP to finance the Offer (iii)
borrowings in the ordinary course of business consistent with past practice
or (iv) borrowings that are Customary Actions, BNI will not, and will not
permit any Subsidiary of BNI to, incur any indebtedness for borrowed money
or guarantee any such indebtedness;
(g) Except for loans, advances, capital contributions or investments made
in the ordinary course of business consistent with past practice, except
for loans, advances, capital contributions or investments that are
Customary Actions and, except for loans, advances, capital contributions or
investments for the purchase of shares of SFP Common Stock pursuant to the
Offer, BNI will not, and will not permit any Subsidiary of BNI to, make any
loans, advances or capital contributions to, or investments in, any other
Person (other than to BNI or any Subsidiary of BNI);
(h) (i) except for any of the actions referred to in this clause (i) that
is taken in the ordinary course of business consistent in magnitude and
character with past practice and with the terms of severance or termination
arrangements in effect or pending on the date hereof with respect to
individuals with comparable positions or responsibilities, and except for
any of such actions which, in the aggregate, are not material, as
hereinafter defined, BNI will not, and will not permit any of its
Subsidiaries to, grant any severance or termination pay to, or enter into
any termination or severance arrangement with, any of its directors,
executive officers or employees and (ii) except for any of the actions
referred to in this clause (ii) that is taken in the ordinary course of
business consistent in aggregate in magnitude and character with past
practice, and except for any of such actions which in the aggregate are not
material, as hereinafter defined, BNI will not, and will not permit any of
its Subsidiaries to, establish, adopt, enter into, amend or take action to
accelerate any rights or benefits under, or grant awards under, (A) any
plan or arrangement 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, executive officers or employees. For
purposes of this subsection (h), "material" shall mean material in relation
to the overall compensation costs of BNI and its Subsidiaries.
(i) BNI will not, and will not permit any Subsidiary of BNI to, agree or
commit to do any of the actions prohibited by Sections 6.1(a) through
6.1(h).
SECTION 6.2. Stockholder Meeting. BNI shall cause a special meeting of its
stockholders (the "BNI Stockholder Meeting") to be duly called and held as soon
as reasonably practicable after the date of this Agreement for the purpose of
voting on the approval and adoption of this Agreement and the Merger. The board
of directors of BNI shall recommend approval and adoption of this Agreement and
the Merger by its stockholders; provided that prior to the BNI Stockholder
Meeting such recommendation may be withdrawn, modified or amended to the extent
that, as a result of the commencement or receipt of a Takeover Proposal (as
defined in Section 5.8) relating to BNI, the board of directors of BNI deems it
necessary to do so in the exercise of its fiduciary obligations to BNI
stockholders after being so advised by counsel.
SECTION 6.3. Access to Information. Subject to any confidentiality agreements
or other confidentiality obligations binding upon BNI or any of its
Subsidiaries, from the date hereof until the Effective Time, BNI will give SFP,
its counsel, financial advisors, auditors and other authorized representatives
full access to the offices, properties, books and records of BNI and its
Subsidiaries, will furnish to SFP, its counsel, financial advisors, auditors
and other authorized representatives such financial and operating data and
other information as such Persons may reasonably request and will instruct
BNI's employees, counsel and financial advisors to cooperate with SFP in its
investigation of the business of BNI and its Subsidiaries; provided that no
investigation pursuant to this Section shall affect any representation or
warranty given by BNI to SFP
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hereunder; and provided further that access to certain information will require
the entry of a protective order by the ICC, after which date full access will
be granted to such information consistent with this paragraph and subject to
the terms of such order.
SECTION 6.4. Notices of Certain Events. BNI shall promptly notify SFP 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;
(ii) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(iii) any actions, suits, claims, investigations or proceedings commenced
or, to the best of its knowledge threatened against, relating to or
involving or otherwise affecting BNI or any BNI Material Subsidiary which,
if pending on the date of this Agreement, would have been required to have
been disclosed pursuant to Section 4.13 or which relate to the consummation
of the transactions contemplated by this Agreement.
SECTION 6.5. Tax Matters. From the date hereof until the Effective Time, BNI
and its Subsidiaries will file all significant tax returns, statements, reports
and forms (collectively, the "BNI Post-Signing Returns") required to be filed
with any taxing authority in accordance with all applicable laws; (ii) BNI and
its Subsidiaries will timely pay all taxes shown as due and payable on the BNI
Post-Signing Returns that are so filed and as of the time of filing, the BNI
Post-Signing Returns will correctly reflect the facts regarding the income,
business, assets, operations, activities and the status of BNI and its
Subsidiaries in all material respects; (iii) BNI and its Subsidiaries will make
provision for all taxes payable by BNI and its Subsidiaries for which no BNI
Post-Signing Return has yet been filed; and (iv) BNI and its Subsidiaries will
promptly notify SFP of any action, suit, proceeding, investigation, audit or
claim pending against or with respect to BNI or any of its subsidiaries in
respect of any tax where there is a reasonable possibility of a determination
or decision against BNI which would reasonably be expected to have a
significant adverse effect on BNI's tax liabilities or tax attributes.
SECTION 6.6. Director and Officer Liability. (a) BNI shall indemnify and hold
harmless each person who is, or has been at any time prior to the date hereof
or who becomes prior to the Effective Time, an officer or director of SFP, in
respect of acts or omissions occurring prior to the Effective Time (the
"Indemnified Parties") (including but not limited to the transactions
contemplated by this Agreement) to the extent provided under SFP's certificate
of incorporation, bylaws and (A) indemnity agreements between SFP and any of
its officers or directors ("Indemnity Agreements") in effect on the date hereof
or (B) Indemnity Agreements that may be entered into by SFP from and after the
date hereof and prior to the Effective Time so long as such Agreements shall
contain terms and provisions substantially similar to Indemnity Agreements in
effect as of the date hereof; provided that such indemnification shall be
subject to any limitation imposed from time to time under applicable law. For
six years after the Effective Time, BNI shall provide, if available, officers'
and directors' liability insurance in respect of acts or omissions occurring
prior to the Effective Time, including but not limited to the transactions
contemplated by this Agreement, covering each such Person currently covered by
SFP's officers' and directors' liability insurance policy, or who becomes
covered by such policy prior to the Effective Time, on terms with respect to
coverage and amount no less favorable than those of such policy in effect on
the date hereof, provided that in satisfying its obligation under this Section,
BNI shall not be obligated to pay premiums in excess of two-hundred percent
(200%) of the amount per annum SFP paid in its last full fiscal year, which
amount has been disclosed to BNI but provided further that BNI shall
nevertheless be obligated to provide such coverage as may be obtained for such
amount.
(b) Any determination to be made as to whether any Indemnified Party has met
any standard of conduct imposed by law shall be made by legal counsel
reasonably acceptable to such Indemnified Party and BNI, retained at BNI's
expense.
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(c) This Section 6.6 is intended to benefit the Indemnified Parties, their
heirs, executors and personal representatives and shall be binding on
successors and assigns of BNI.
SECTION 6.7. No Solicitations. BNI will not, and BNI will use its reasonable
best efforts to ensure that its officers, directors, employees or other agents
of BNI do not, directly or indirectly: initiate, solicit or encourage, or take
any action to facilitate the making of, any offer or proposal which constitutes
or is reasonably likely to lead to any Takeover Proposal of BNI, or, in the
event of an unsolicited Takeover Proposal of BNI, except to the extent required
by their fiduciary duties under applicable law if so advised by outside
counsel, engage in negotiations or provide any confidential information or data
to any Person relating to any such Takeover Proposal. BNI shall notify SFP
orally and in writing of any such inquiries, offers or proposals (including,
without limitation, the terms and conditions of any such proposal and the
identity of the person making it), within 48 hours of the receipt thereof and
shall give SFP five days' advance notice of any agreement to be entered into
with or any information to be supplied to any Person making such inquiry, offer
or proposal. BNI shall immediately cease and cause to be terminated all
existing discussions and negotiations, if any, with any parties conducted
heretofore with respect to any Takeover Proposal of BNI.
ARTICLE VII
COVENANTS OF BNI AND SFP
The parties hereto agree that:
SECTION 7.1. Reasonable Best Efforts. Subject to the terms and conditions of
this Agreement, each party will use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement.
SECTION 7.2. ICC Approval. BNI and SFP shall, and each shall cause each of
its Subsidiaries to, take all such actions as are necessary to (i) cooperate
with one another to prepare and present to the ICC as soon as practicable all
filings and other presentations in connection with seeking any ICC approval,
exemption or other authorization necessary to consummate the transactions
contemplated by this Agreement (including, without limitation, the matters
contemplated by Sections 5.3 and 6.3), (ii) prosecute such filings and other
presentations with diligence, (iii) diligently oppose any objections to,
appeals from or petitions to reconsider or reopen any such ICC approval by
persons not party to this Agreement, and (iv) take all such further action as
reasonably may be necessary to obtain a final order or orders of the ICC
approving such transactions consistent with this Agreement.
SECTION 7.3. Certain Filings; Proxy Materials. (a) BNI (i) will promptly
prepare and file with the SEC, will use its reasonable best efforts to have
cleared by the SEC and will thereafter mail to its stockholders as promptly as
practicable the BNI Proxy Statement and all other proxy materials for the BNI
Stockholder Meeting, (ii) will use its reasonable best efforts to obtain the
necessary approvals by its stockholders of this Agreement and the transactions
contemplated hereby (provided that prior to the BNI Stockholder Meeting the BNI
Board's recommendation may be withdrawn, modified or amended to the extent
that, as a result of the commencement or receipt of a Takeover Proposal
relating to BNI, the board of directors of BNI deems it necessary to do so in
the exercise of its fiduciary obligations to BNI stockholders after being so
advised by counsel), (iii) will otherwise comply with all legal requirements
applicable to such meeting and (iv) will make all other filings or recordings
required under applicable Delaware law in connection with the Merger. BNI will
prepare and file with the SEC the registration statement on Form S-4 (the "Form
S-4") (in which the BNI Proxy Statement will be included as a prospectus) and
will take any action (other than qualifying to do business in any jurisdiction
in which it is now not so qualified) required to be taken under any applicable
state Blue Sky law in connection with the issuance of BNI Common Stock.
(b) SFP (i) will promptly prepare and file with the SEC, will use its
reasonable best efforts to have cleared by the SEC and will thereafter mail to
its stockholders as promptly as practicable the SFP Proxy Statement
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and all other proxy materials for the SFP Stockholder Meeting, (ii) will use
its reasonable best efforts to obtain the necessary approvals by its
stockholders of this Agreement and the transactions contemplated hereby
(provided that prior to the SFP Stockholder Meeting the SFP Board's
recommendation may be withdrawn, modified or amended to the extent that, as a
result of the commencement or receipt of a Takeover Proposal relating to SFP,
the board of directors of SFP deems it necessary to do so in the exercise of
its fiduciary obligations to SFP stockholders after being so advised by
counsel), (iii) will otherwise comply with all legal requirements applicable to
such meeting and (iv) will make all other filings or recordings required under
applicable Delaware law in connection with the Merger.
SECTION 7.4. Public Announcements. BNI and SFP will consult with each other
before issuing any press release with respect to this Agreement and the
transactions contemplated hereby and, except as may be required by applicable
law or any listing agreement with any national securities exchange, will not
issue any such press release prior to such consultation.
SECTION 7.5. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of SFP, any deeds, bills of
sale, assignments or assurances and to take and do, in the name and on behalf
of SFP, any other actions and things to vest, perfect or confirm of record or
otherwise in the Surviving Corporation any and all right, title and interest
in, to and under any of the rights, properties or assets of SFP acquired or to
be acquired by the Surviving Corporation as a result of, or in connection with,
the Merger.
SECTION 7.6. Antitakeover Statutes. If any Takeover Statute is or may become
applicable to the transactions contemplated hereby, each of BNI and SFP and the
members of their respective Boards of Directors will grant such approvals and
take such actions as are necessary so that the transactions contemplated by
this Agreement may be consummated as promptly as practicable on the terms
contemplated hereby and thereby and otherwise act to eliminate or minimize the
effects of any Takeover Statute on any of the transactions contemplated by this
Agreement.
SECTION 7.7. Cooperation. BNI and SFP shall together, or pursuant to an
allocation of responsibility to be agreed between them, coordinate and
cooperate (i) with respect to the timing of the BNI Stockholder Meeting and the
SFP Stockholder Meeting and shall use their reasonable best efforts to hold
such meetings on the same day, (ii) in connection with the preparation of the
SFP Disclosure Documents and the BNI Disclosure Documents, (iii) in determining
whether any action by or in respect of, or filing with, any governmental body,
agency, official or authority is required, or any actions, consents, approvals
or waivers are required to be obtained from parties to any material contracts,
in connection with the consummation of the transactions contemplated by this
Agreement, and (iv) in seeking any such actions, consents, approvals or waivers
or making any such filings, furnishing information required in connection
therewith or with the SFP Disclosure Documents and the BNI Disclosure Documents
and timely seeking to obtain any such actions, consents, approvals or waivers.
Subject to the terms and conditions of this Agreement, BNI and SFP will each
use its reasonable best efforts to have the Form S-4 declared effective under
the 1933 Act as promptly as practicable after the Form S-4 is filed, and (v)
shall, subject to applicable law, confer on a regular and frequent basis with
one or more representatives of one another to report operational matters of
significance to the Merger and the general status of ongoing operations insofar
as relevant to the Merger, provided that the parties will not confer on any
matter to the extent inconsistent with law.
SECTION 7.8. Dividends. From September 30, 1995 to the Effective Time, all
dividends paid by SFP and BNI to their respective stockholders shall be paid on
a quarterly basis, with identical record and payment dates, in amounts not
exceeding the amounts set forth in Section 5.1(d) or Section 6.1(d), as the
case may be.
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ARTICLE VIII
THE OFFER
SECTION 8.1. The Offer. (a) Provided that nothing shall have occurred that
would result in a failure to satisfy any of the conditions set forth in Annex I
hereto, SFP and BNI shall, as promptly as practicable, but in no event later
than December 23, 1994, commence separate tender offers (together, the "Offer")
to purchase, in the case of SFP, up to 38,000,000 shares of SFP Common Stock
and, in the case of BNI, up to 25,000,000 shares of SFP Common Stock (in each
case, together with the associated rights under the SFP Rights Plan), at a
price of $20.00 per share, net to the seller in cash, with SFP to be severally
obligated to purchase 0.60317 of any shares of SFP Common Stock accepted for
payment pursuant to the Offer and BNI severally obligated to purchase 0.39683
of any shares of SFP Common Stock accepted for payment pursuant to the Offer.
Notwithstanding any provision of this Agreement (or any Annex hereto) to the
contrary, no term of the Offer may be amended or modified without the written
consent of both parties hereto.
(b) The several obligations of BNI and SFP under the Offer shall be subject
to the condition that there shall be validly tendered in accordance with the
terms of the Offer prior to the expiration date of the Offer and not withdrawn
63,000,000 shares of SFP Common Stock and to the other conditions set forth in
Annex I hereto. Each of SFP and BNI expressly reserves the right to waive any
of the conditions to its obligation under the Offer, except that the Minimum
Condition may not be waived without the consent of each of SFP and BNI.
Furthermore, each of SFP and BNI shall have the right to determine, in its sole
reasonable discretion, whether the conditions to its obligations under the
Offer have been satisfied.
(c) As soon as practicable on the date of commencement of the Offer, SFP
shall file with the SEC an Issuer Tender Offer Statement on Schedule 13E-4 with
respect to the Offer which will contain the offer to purchase and form of the
related letter of transmittal (together with any supplements or amendments
thereto, collectively the "SFP Offer Documents"). SFP and BNI each agrees
promptly to correct any information provided by it for use in the SFP Offer
Documents if and to the extent that it shall have become false or misleading in
any material respect. BNI and its counsel shall be given an opportunity to
review and comment on the Schedule 13E-4 prior to its being filed with the SEC.
(d) As soon as practicable on the date of commencement of the Offer, BNI
shall file with the SEC a Tender Offer Statement on Schedule 14D-1 with respect
to the Offer which will contain the offer to purchase and form of the related
letter of transmittal (together with any supplements or amendments thereto,
collectively the "BNI Offer Documents"). BNI and SFP each agrees promptly to
correct any information provided by it for use in the BNI Offer Documents if
and to the extent that it shall have become false or misleading in any material
respect. SFP and its counsel shall be given an opportunity to review and
comment on the Schedule 14D-1 prior to its being filed with the SEC.
(e) Upon satisfaction (or, where permitted, waiver) of the conditions to the
Offer, BNI and SFP shall purchase shares of SFP Common Stock pursuant to the
Offer as set forth in Section 8.1(a) above, provided, however, that BNI shall
not be obligated to purchase more than 25,000,000 shares of SFP Common Stock,
and SFP shall not be obligated to purchase more than 38,000,000 shares of SFP
Common Stock.
SECTION 8.2. Action by SFP and BNI. (a) SFP represents that its Board of
Directors at a meeting duly called and held unanimously resolved to recommend
acceptance of the Offer by those of its stockholders who wish to receive cash
for a portion of their shares of SFP Common Stock. SFP and BNI agree to take
all steps necessary to cause the offer to purchase and form of the related
letter of transmittal to be disseminated to holders of shares of SFP Common
Stock as and to the extent required by applicable federal securities laws.
(b) As soon as practicable on the day that the Offer is commenced, SFP will
file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9
(the "Schedule 14D-9") which shall reflect the recommendations of SFP's Board
of Directors with respect to the Offer described in Section 8.2(a). SFP and
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BNI each agree promptly to correct any information provided by it for use in
the Schedule 14D-9 if and to the extent that it shall have become false or
misleading in any material respect. SFP agrees to take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to holders of shares of SFP Common Stock, in each case as and to
the extent required by applicable federal securities laws. BNI and its counsel
shall be given an opportunity to review and comment on the Schedule 14D-9 prior
to its being filed with the SEC.
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.1. Conditions to the Obligations of Each Party. The obligations of
SFP and BNI to consummate the Merger are subject to the satisfaction (or waiver
by the party for whose benefit such conditions exist except that the condition
set forth in clause (vii) may not be waived) of the following conditions:
(i) this Agreement shall have been adopted by the stockholders of SFP and
BNI in accordance with Delaware Law;
(ii) any applicable waiting period under the HSR Act relating to the
Merger shall have expired;
(iii) no court, arbitrator or governmental body, agency or official shall
have issued any order, and there shall not be any statute, rule or
regulation, restraining or prohibiting the consummation of the Merger or
the effective operation of the business of BNI, SFP and their respective
Subsidiaries after the Effective Time;
(iv) all actions by or in respect of or filings with any governmental
body, agency, official, or authority required to permit the consummation of
the Merger (other than ICC approval, which is addressed in clause (v)
below) shall have been obtained, but excluding any consent, approval,
clearance or confirmation the failure to obtain which could not reasonably
be expected to have a Material Adverse Effect on the Surviving Corporation
after the Effective Time;
(v) the ICC shall have issued a decision (which decision shall not have
been stayed or enjoined) that (A) constitutes a final order approving,
exempting or otherwise authorizing consummation of the Merger and all other
transactions contemplated by this Agreement (or subsequently presented to
the ICC by agreement of BNI and SFP) as may require such authorization and
(B) does not (1) require the inclusion of any other rail carriers or rail
properties material to the parties, (2) change the Exchange Ratio or (3)
impose on BNI, SFP or any of their respective Subsidiaries any other terms
or conditions (including, without limitation, labor protective provisions
but excluding conditions heretofore imposed
by the ICC in New York Dock Railway--Control--Brooklyn Eastern District,
360 I.C.C. 60 (1979)) that in the reasonable opinion of the board of
directors of BNI or of SFP, respectively, significantly and adversely
affect the economic benefits of the transactions contemplated by this
Agreement to BNI and its stockholders or SFP and its stockholders, as the
case may be;
(vi) SFP and BNI shall have obtained an opinion of nationally recognized
tax counsel to the effect that the Merger will be tax-free to BNI, SFP and
their respective stockholders for federal income tax purposes;
(vii) SFP and BNI shall have purchased shares of SFP Common Stock
pursuant to the Offer.
SECTION 9.2. Conditions to the Obligations of BNI. The obligations of BNI to
consummate the Merger are subject to the satisfaction (or waiver by BNI) of the
following further conditions:
(i) SFP shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the
Effective Time, and the representations and warranties of SFP shall have
been accurate in all material respects both when made and at and as of the
Effective Time as if made at and as of such time, except for the
representations and warranties of SFP contained in Section
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3.5(a), which shall be accurate in all respects both when made and at and
as of the Effective Time as if made at and as of that time;
(ii) all other statutory requirements for the valid consummation by SFP
of the transactions contemplated by this Agreement (including without
limitation the Spinoff and the Liquidation) shall have been fulfilled.
SECTION 9.3. Conditions to the Obligations of SFP. The obligations of SFP to
consummate the Merger are subject to the satisfaction (or waiver by SFP) of the
following further conditions:
(i) BNI shall have performed in all material respects all of its
respective obligations hereunder required to be performed by it at or prior
to the Effective Time, and (A) the representations and warranties of BNI
shall have been accurate in all material respects both when made and at and
as of the Effective Time as if made at and as of such time, except for the
representations and warranties of BNI in Section 4.5(a), which shall be
accurate in all respects when made and at and as of the Effective Time as
if made at and as of that time;
(ii) the BNI Common Stock required to be issued hereunder shall have been
approved for listing on the New York Stock Exchange, subject to official
notice of issuance;
(iii) all other statutory requirements for the valid consummation by SFP
of the transactions contemplated by this Agreement shall have been
fulfilled; and
(iv) the Spinoff shall have been consummated.
ARTICLE X
TERMINATION
SECTION 10.1. Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time (notwithstanding any
approval of this Agreement by the stockholders of BNI or SFP):
(i) by mutual written consent of BNI and SFP;
(ii) by either BNI or SFP, if the Merger has not been consummated by
December 31, 1997;
(iii) by either BNI or SFP, if any judgment, injunction, order or decree
enjoining BNI or SFP from consummating the Merger is entered and such
judgment, injunction, order or decree shall become final and nonappealable;
(iv) by BNI, if the Spinoff has not been completed by December 31, 1994
(it is understood that if BNI does not exercise the right to terminate
pursuant to this Section 10.1(iv) by January 30, 1995 this provision will
be deemed to be waived);
(v) by BNI, if any Person, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act) other than BNI acquires beneficial ownership
of 50% or more of the outstanding Shares;
(vi) by SFP, if any Person, entity or group acquires beneficial ownership
of 50% or more of the outstanding BNI Common Stock;
(vii) by either BNI or SFP if the approvals of the stockholders of BNI or
SFP contemplated by this Agreement shall not have been obtained by reason
of the failure to obtain the required vote at a duly held meeting of
stockholders or of any adjournment thereof;
(viii) by BNI, if, prior to the SFP Stockholder Meeting, the board of
directors of SFP shall have withdrawn, modified or changed in a manner
adverse to BNI its approval or recommendation of this Agreement or the
Merger;
(ix) by SFP, if, prior to the BNI Stockholder Meeting, the board of
directors of BNI shall have withdrawn, modified or changed in a manner
adverse to SFP its approval or recommendation of this Agreement or the
Merger;
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(x) by BNI, upon a breach of any representation, warranty, covenant or
agreement of SFP, or if any representation or warranty of SFP shall become
untrue, in either case such that the conditions set forth in Section 9.2(i)
would be incapable of being satisfied by December 31, 1997 (or such later
date extended), provided that a wilful breach shall be deemed to cause such
conditions to be incapable of being satisfied by such date;
(xi) by SFP, upon a breach of any representation, warranty, covenant or
agreement of BNI, or if any representation or warranty of BNI shall become
untrue, in either case such that the conditions set forth in Section 9.3(i)
would be incapable of being satisfied by December 31, 1997 (or as otherwise
extended), provided that a wilful breach shall be deemed to cause such
conditions to be incapable of being satisfied by such date;
(xii) by SFP, upon payment to BNI of the fee described in Section
11.4(b), if prior to the purchase of shares of SFP Common Stock pursuant to
the Offer, (A) the board of directors of SFP shall have withdrawn or
modified in a manner adverse to BNI its approval or recommendation of the
Offer, this Agreement or the Merger in order to permit SFP to execute a
definitive agreement in connection with a Takeover Proposal or in order to
approve another tender offer for shares of SFP Common Stock, in either
case, as determined by the board of directors of SFP, on terms more
favorable to SFP's stockholders than the transactions contemplated hereby,
or (B) the board of directors of SFP shall have recommended any other
Takeover Proposal; and
(xiii) by either BNI or SFP, if the Offer is terminated and SFP and BNI
shall not have purchased shares of SFP Common Stock pursuant to the Offer.
SECTION 10.2. Effect of Termination. If this Agreement is terminated pursuant
to Section 10.1, this Agreement shall become void and of no effect with no
liability on the part of any party hereto, except that (a) the agreements
contained in Sections 3.16, 4.16, 5.9 and 11.4 shall survive the termination
hereof and (b) no such termination shall relieve any party of any liability or
damages resulting from any breach by that party of this Agreement.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including telecopy or similar writing) and
shall be given,
if to BNI, to:
Burlington Northern Inc.
Attn: Douglas J. Babb, Esq.
3800 Continental Place
777 Main Street
Fort Worth, Texas 76102
Telecopy: (817) 333-2377
with a copy to:
Dennis S. Hersch, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy: (212) 450-4800
if to SFP, to:
Santa Fe Pacific Corporation
Attn: Jeffrey R. Moreland
1700 East Golf Road
Schaumburg, Illinois 60173
Telecopy: (708) 995-6847
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with a copy to:
Robert A. Helman, Esq.
Mayer, Brown & Platt
190 South La Salle Street
Chicago, Illinois 60603-3441
Telecopy: (312) 701-7711
or such other address or telecopy number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective (i) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in this
Section and the appropriate confirmation is received or (ii) if given by any
other means, when delivered at the address specified in this Section.
SECTION 11.2. Entire Agreement; Survival of Representations and
Warranties. (a) This Agreement (and any other agreements contemplated hereby or
executed by the parties or their designees as of the date of this Agreement),
and the Confidentiality and Standstill Agreement dated July 28, 1993 between
SFP and BNI (the "Confidentiality Agreement") constitute the entire agreement
among the parties with respect to the subject matter hereof and thereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to such subject matter. No
representation, inducement, promise, understanding, condition or warranty not
set forth herein has been made or relied upon by any party hereto. None of this
Agreement, the Confidentiality Agreement or any other agreement contemplated
hereby or executed by the parties or their designees as of the date of this
Agreement (or any provision hereof or thereof) is intended to confer upon any
Person other than the parties hereto any rights or remedies (except that
Section 6.6, is intended to confer rights and remedies on SFP's officers and
directors).
(b) The representations and warranties and agreements contained herein shall
not survive the Effective Time or the termination of this Agreement except for
the agreements set forth in Sections 6.6 and 11.4.
SECTION 11.3. Amendments; No Waivers. (a) Any provision of this Agreement may
be amended or waived prior to the Effective Time if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
SFP and BNI or in the case of a waiver, by the party against whom the waiver is
to be effective; provided that after the adoption of this Agreement by the
stockholders of SFP, no such amendment or waiver shall, without the further
approval of such stockholders, alter or change (i) the amount or kind of
consideration to be received in exchange for any shares of capital stock of
SFP, (ii) any term of the certificate of incorporation of the Surviving
Corporation or (iii) any of the terms or conditions of this Agreement if such
alteration or change would adversely affect the holders of any shares of
capital stock of SFP.
(b) No failure or delay by any party in exercising any right, power or
privilege 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, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11.4. Expenses; Certain Payments. (a) Except as otherwise provided in
this Section or agreed in writing by the parties, each party shall bear its own
expenses, including the fees and expenses of any attorneys, accountants,
investment bankers, brokers, finders or other intermediaries or other Persons
engaged by it, incurred in connection with this Agreement and the transactions
contemplated hereby.
(b) SFP agrees that if this Agreement shall be terminated pursuant to Section
10.1(v), (vii), (viii), (xii) or (xiii), it will pay BNI an amount equal to
$50,000,000 plus all out-of-pocket expenses, not to exceed $10,000,000,
incurred by BNI in connection with this Agreement, the Merger, the Offer and
all related transactions by wire transfer of immediately available funds
promptly, but in no event later than two business days, after such termination;
provided that no payment will be required pursuant to this Section 11.4(b) if
this Agreement is terminated pursuant to Section 10.1(vii), (viii) or (xiii)
unless, after December 18, 1994, a
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new Takeover Proposal involving SFP has been announced or made (it being
understood that any modification of Union Pacific Corporation's Takeover
Proposal in existence on December 18, 1994 shall be deemed a new Takeover
Proposal).
(c) SFP agrees that if this Agreement shall be terminated pursuant to Section
10.1(vii), (viii) or (xiii) and no payment is required by it pursuant to
Section 11.4(b), it will reimburse BNI for all out-of-pocket expenses incurred
by BNI in connection with this Agreement, the Merger, the Offer 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 SFP from BNI of documentation of such expenses.
SECTION 11.5. Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto.
SECTION 11.6. Governing Law. This Agreement shall be construed in accordance
with and governed by the law of the State of Delaware (without regard to
principles of conflict of laws).
SECTION 11.7. Jurisdiction. Any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby may be brought against
any of the parties in the United States District Court for the District of
Delaware or any state court sitting in the City of Wilmington, Delaware, and
each of the parties hereby consents to the exclusive jurisdiction of such
courts (and of the appropriate appellate courts) in any such suit, action or
proceeding and waives any objection to venue laid therein. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the State of Delaware. Without limiting the
foregoing, each of the parties hereto agrees that service of process upon such
party at the address referred in Section 11.1, together with written notice of
such service to such party, shall be deemed effective service of process upon
such party.
SECTION 11.8. Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have
received counterparts hereof signed by all of the other parties hereto.
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.
Burlington Northern Inc.
/s/ Gerald Grinstein
By: _________________________________
Title: Chairman and Chief
Executive Officer
Santa Fe Pacific Corporation
/s/ Robert D. Krebs
By: _________________________________
Title: Chairman, President and
Chief Executive Officer
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AMENDMENT NO. 3
TO
AGREEMENT AND PLAN OF MERGER
AMENDMENT NO. 3 dated as of January 24, 1995 (this "Amendment") between
Burlington Northern Inc., a Delaware corporation ("BNI"), and Santa Fe Pacific
Corporation, a Delaware corporation ("SFP").
WHEREAS, BNI and SFP have previously entered into that certain Agreement and
Plan of Merger dated as of June 29, 1994 between BNI and SFP, as amended by the
Amendment thereto dated as of October 26, 1994 and Amendment No. 2 thereto
dated as of December 18, 1994 (as amended, the "Merger Agreement"); and
WHEREAS, the respective Boards of Directors of BNI and SFP have determined
that it is in the best interests of BNI or SFP, as the case may be, and its
respective stockholders to amend the Merger Agreement as hereinafter set forth
and have duly approved this Amendment and authorized its execution and
delivery.
NOW, THEREFORE, the parties hereto agree as follows:
1. All capitalized terms used herein, unless otherwise defined herein,
shall have the meanings given them in the Merger Agreement, and each
reference in the Merger Agreement to "this Agreement", "hereof", "herein",
"hereunder" or "hereby" and each other similar reference shall be deemed to
refer to the Merger Agreement as amended hereby. All references to the
Merger Agreement in any other agreement between BNI and SFP relating to the
transactions contemplated by the Merger Agreement shall be deemed to refer
to the Merger Agreement as amended hereby.
2. Section 1.2(a)(i) of the Merger Agreement is hereby amended by
replacing subparagraph (a)(i) of such section in its entirety with the
following:
(a) At the Effective Time:
(i) each share (a "Share" and, collectively, the "Shares") of SFP
Common Stock, par value $1.00 per share (the "SFP Common Stock"),
outstanding immediately prior to the Effective Time shall, except as
otherwise provided in Section 1.2(a)(ii) below, be converted into a
fraction of a share of common stock, no par value (the "BNI Common
Stock"), of BNI (x) the numerator of which is 0.40, and (y) the
denominator of which is equal to (A) the number of shares of SFP
Common Stock outstanding (but excluding treasury stock and SFP
Common Stock beneficially owned by BNI or acquired in the Offer by
BNI) immediately prior to the Effective Time divided by (B) an
amount equal to the sum of (i) the number of shares of SFP Common
Stock outstanding (but excluding treasury stock and SFP Common Stock
beneficially owned by BNI or acquired in the Offer by BNI)
immediately prior to the Effective Time, and (ii) the aggregate
number of shares of SFP Common Stock repurchased by SFP, as
permitted in Section 5.1(j) hereof (such fraction being defined
herein as the "Exchange Ratio"), provided that in no event may the
Exchange Ratio exceed 0.4347; and
3. Section 1.8(c) of the Merger Agreement is hereby amended by replacing
subparagraph (c) of such section in its entirety with the following:
(c) At the Effective Time of the Alternative Merger, (i) each share
of SFP Common Stock outstanding immediately prior to such Effective
Time shall, except as otherwise provided in Section 1.8(d) below, be
converted into a fraction of a share of common stock of BNSF, $.01 par
value per share (the "BNSF Common Stock"), (x) the numerator of which
is 0.40 and (y) the denominator of which is equal to (A) the number of
shares of SFP Common Stock outstanding (but excluding treasury stock
and SFP Common Stock beneficially owned by BNI or acquired in the Offer
by BNI) immediately prior to such Effective Time divided by (B) an
amount equal to the sum of (a) the number of shares of SFP Common Stock
outstanding (but excluding treasury stock and SFP
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Common Stock beneficially owned by BNI or acquired in the Offer by BNI)
immediately prior to such Effective Time and (b) the aggregate number
of shares of SFP Common Stock repurchased by SFP, as permitted in
Section 5.1(j) hereof, provided that the fraction determined pursuant
to this clause (i) shall not exceed 0.4347, (ii) each share of BNI
Common Stock outstanding immediately prior to such Effective Time
shall, except as otherwise provided in Section 1.8(d) below, be
converted into 1.0 share of BNSF Common Stock, and (iii) each share of
BNSF Common Stock held by BNI or SFP shall be cancelled. The numbers
calculated pursuant to this subparagraph (c) shall be adjusted as
provided in Section 1.5 hereof if any of the events described in
Section 1.5 occur.
4. Section 1.8(g) of the Merger Agreement is hereby amended by replacing
subparagraph (g) of such section in its entirety with the following:
(g) No certificates or scrip representing fractional shares of BNSF
Common Stock will be issued in the Alternative Merger, but in lieu
thereof each holder of SFP Common Stock otherwise entitled to a
fractional share of BNSF Common Stock will be entitled to receive, from
the Exchange Agent in accordance with the provisions of this Section
1.8(g), a cash payment in lieu of such fractional shares of BNSF Common
Stock which would otherwise have been issued (the "Excess Shares"). The
sale of the Excess Shares by the Exchange Agent shall be executed on
the NYSE through one or more member firms of the NYSE and shall be
executed in round lots to the extent practicable. Until the net
proceeds of such sale or sales have been distributed to the holders of
SFP Common Stock, the Exchange Agent will hold such proceeds in trust
(the "Common Shares Trust") for the holders of the SFP Common Stock.
BNSF shall pay all commissions, transfer taxes and other out-of-pocket
transaction costs, including the expenses and compensation of the
Exchange Agent, incurred in connection with this sale of the Excess
Shares. The Exchange Agent shall determine the portion of the Common
Shares Trust to which each holder of SFP Common Stock shall be
entitled, if any, by multiplying the amount of the aggregate net
proceeds comprising the Common Shares Trust by a fraction the numerator
of which is the amount of the fractional BNSF Common Stock interest to
which such holder of SFP Common Stock is entitled and the denominator
of which is the aggregate amount of fractional share interests to which
all holders of SFP Common Stock are entitled. As soon as practicable
after the determination of the amount of cash, if any, to be paid to
holders of SFP Common Stock in lieu of any fractional shares of BNSF
Common Stock the Exchange Agent shall make available such amounts to
such holders of SFP Common Stock without interest.
5. Section 5.1 of the Merger Agreement is hereby amended to add a new
subsection (j), which shall provide as follows:
(j) Notwithstanding anything to the contrary in this Agreement, SFP
will be permitted to repurchase up to 10,000,000 shares of SFP Common
Stock at any time (or from time to time as long as the aggregate of
such shares repurchased does not exceed 10,000,000) between the time
shares of SFP Common Stock are purchased pursuant to the Offer and the
Effective Time, if, but only if, (a) such repurchase is permitted by
the credit agreements referred to in clause (ii) of subparagraph (f)
above entered into by SFP in connection with the Offer, as such
agreements are in effect at the time such Offer is consummated (whether
or not such agreements are in effect at the time of any such repurchase
and without regard to any waiver of any provision thereof) and (b) for
any purchases after March 31, 1995, SFP's total debt (which shall equal
the sum of short-term debt plus current maturities of long-term debt
plus long-term debt, all as shown on the consolidated balance sheet of
SFP and its consolidated subsidiaries in accordance with generally
accepted accounting principles), as of the most recent quarter-end
prior to such repurchase, does not exceed the levels set forth in Annex
A hereto and cash capital expenditures on a cumulative basis from
January 1, 1995, as of the most recent quarter-end prior to such
repurchase, are at least at the level shown in Annex A.
6. This Amendment shall be construed in accordance with and governed by
the law of the State of Delaware (without regard to principles of conflict
of laws).
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7. This Amendment may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Amendment shall
become effective when each party hereto shall have received counterparts
hereof signed by all of the other parties hereto.
8. Except as expressly amended hereby, the Merger Agreement shall remain
in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective authorized officers as of the day and year first
above written.
Burlington Northern Inc.
/s/ Gerald Grinstein
By __________________________________
Title: Chairman and
Chief Executive Officer
Santa Fe Pacific Corporation
/s/ Robert D. Krebs
By __________________________________
Title: Chairman, President and
Chief Executive Officer
A-3
AMENDMENT NO. 4
TO
AGREEMENT AND PLAN OF MERGER
AMENDMENT NO. 4 dated as of September 19, 1995 (this "Amendment")
among Burlington Northern Inc., a Delaware corporation ("BNI"), Santa Fe Pacific
Corporation, a Delaware corporation ("SFP"), and Burlington Northern Santa Fe
Corporation, a Delaware corporation ("BNSF").
WHEREAS, BNI and SFP have previously entered into that certain
Agreement and Plan of Merger dated as of June 29, 1994 between BNI and SFP, as
amended by an Amendment thereto dated as of October 26, 1994, Amendment No. 2
thereto dated as of December 18, 1994 and Amendment No. 3 thereto dated as of
January 24, 1995, (as so amended, the "Merger Agreement");
WHEREAS, BNI and SFP have elected to effect the transaction
contemplated by the Merger Agreement in accordance with Section 1.8 of the
Merger Agreement and each of BNI and SFP has executed an Alternative Merger
Notice;
WHEREAS, the respective Boards of Directors of BNI, SFP and BNSF have
determined that it is in the best interests of each of BNI, SFP and BNSF, as the
case may be, and its respective stockholders to amend the Merger Agreement as
hereinafter set forth and have duly approved this Amendment No. 4 and authorized
its execution and delivery;
NOW, THEREFORE, the parties hereto agree as follows:
1. All capitalized terms used herein, unless otherwise defined
herein, shall have the meanings given them in the Merger Agreement, and each
reference in the Merger Agreement to "this Agreement", "hereof", "herein",
"hereunder" or "hereby" and each other similar reference shall be deemed to
refer to the Merger Agreement as amended hereby. All references to the Merger
Agreement in any other agreement between BNI and SFP relating to the
transactions contemplated by the Merger Agreement shall be deemed to refer to
the Merger Agreement as amended hereby.
2. BNSF hereby becomes a party to the Merger Agreement and assumes
all obligations of BNI, in its
A-1
capacity as Surviving Corporation, under the Merger Agreement.
3. BNSF hereby represents and warrants to each of BNI and SFP as
follows:
(i) Corporate Existence and Power. At the Effective Time, BNSF will
be a corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation and will have all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on the businesses of BNI and SFP
as such businesses are now conducted. At the Effective Time, BNSF will be
duly qualified to do business as a foreign corporation and will be in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where the failure to be so
qualified would not, individually or in the aggregate, have a Material
Adverse Effect on BNSF.
(ii) Corporate Authorization. At the Effective Time, the execution,
delivery and performance by BNSF of the Merger Agreement, as amended
hereby, and the consummation by BNSF of the transactions contemplated
hereby and thereby will be within the corporate powers of BNSF and will
have been duly authorized by all necessary corporate action on the part of
BNSF. At the Effective Time, the Merger Agreement, as amended hereby, will
constitute a valid and binding agreement of BNSF.
(iii) Governmental Authorization. At the Effective Time, the
execution, delivery and performance by BNSF of the Merger Agreement, as
amended hereby, and the consummation of the Merger by BNSF will 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 Exchange Act; (C) compliance with the applicable
requirements of the 1933 Act; (D) compliance with any applicable foreign or
state securities or Blue Sky laws; (E) immaterial actions or filings
relating to ordinary operational matters; and (F) actions that have
theretofore been taken or filings that have theretofore been made.
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(iv) Non-Contravention. At the Effective Time, the execution,
delivery and performance by BNSF of the Merger Agreement, as amended
hereby, and the consummation by BNSF of the transactions contemplated
hereby and thereby will not (except, in the case of clauses (B), (C) and
(D) of this Section (3)(iv), for any such matters that singly or in the
aggregate have not had, and would not reasonably be expected to have, a
Material Adverse Effect on BNSF) (A) contravene or conflict with the
certificate of incorporation or bylaws of BNSF, (B) assuming compliance
with the matters referred to in Section (3)(iii), contravene or conflict
with or constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to BNSF or
any Subsidiary of BNSF, (C) constitute a default under or give rise to any
right of termination, cancellation or acceleration of any right or
obligation of BNSF or any of its Subsidiaries or to a loss of any benefit
to which BNSF or any of its Subsidiaries is entitled under any agreement,
contract or other instrument binding upon BNSF or any of its Subsidiaries
or any license, franchise, permit or other similar authorization held by
BNSF or any of its Subsidiaries or (D) result in the creation or imposition
of any Lien on any asset of BNSF or any Subsidiary of BNSF.
4. This Amendment shall be construed in accordance with and governed
by the law of the State of Delaware (without regard to principles of conflict of
laws).
5. This Amendment may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Amendment shall become effective
when each party hereto shall have received counterparts hereof signed by all of
the other parties hereto.
6. Except as expressly amended hereby, the Merger Agreement shall
remain in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized officers as of the day and year
first above written.
Burlington Northern Inc.
By: /s/ Gerald Grinstein
------------------------------
Title: Chief Executive Officer
Santa Fe Pacific Corporation
By: /s/ Jeffrey R. Moreland
------------------------------
Title: Vice President
Burlington Northern Santa Fe
Corporation
By: /s/ Douglas R. Babb
------------------------------
Title: President
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