EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
Among
ROSEMORE, INC.,
ROSEMORE ACQUISITION CORPORATION
and
CROWN CENTRAL PETROLEUM
CORPORATION
Dated as of December 17, 2000
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
TABLE OF CONTENTS
Page
ARTICLE I
SECTION 1.01. The Merger 2
SECTION 1.02. Effective Time; Closing 2
SECTION 1.03. Effect of the Merger 3
SECTION 1.04. Charter; Bylaws 3
SECTION 1.05. Directors and Officers of the Surviving Corporation 3
ARTICLE II
SECTION 2.01. Conversion of Capital Stock 3
SECTION 2.02. Payment for Shares 4
SECTION 2.03. Employee Stock Options 6
ARTICLE III
SECTION 3.01. Organization and Qualification; Subsidiaries 8
SECTION 3.02. Charter and Bylaws. 9
SECTION 3.03. Capitalization. 9
SECTION 3.04. Authority Relative to This Agreement 10
SECTION 3.05. No Conflict; Required Filings and Consents 11
SECTION 3.06. Permits; Compliance 12
SECTION 3.07. SEC Filings; Financial Statements 12
SECTION 3.08. Absence of Certain Changes or Events 14
SECTION 3.09. Employee Benefit Plans; Labor Matters 14
SECTION 3.10. Contracts; Debt Instruments 19
SECTION 3.11. Absence of Litigation 22
SECTION 3.12. Environmental Matters 22
SECTION 3.13. Trademarks, Patents and Copyrights 25
SECTION 3.14. Taxes 25
SECTION 3.15. Property and Leases 27
SECTION 3.16. Rights Agreement 27
SECTION 3.17. Insurance 28
SECTION 3.18. Board Recommendation 28
SECTION 3.19. Opinion of Financial Advisor 28
SECTION 3.20. Brokers 29
SECTION 3.21. Vote Required; State Takeover Statutes 29
SECTION 3.22. Waiver of Certain Obligations 30
ARTICLE IV
SECTION 4.01. Organization and Qualification 30
SECTION 4.02. No Conflict; Required Filings and Consents 30
SECTION 4.03. Absence of Litigation 31
SECTION 4.04. Brokers 31
SECTION 4.05. No Activities 32
SECTION 4.06. Financing 32
SECTION 4.07. Ownership of Company Common Stock 32
ARTICLE V
SECTION 5.01. Conduct of Business by the Company Pending the
Closing 32
SECTION 5.02. Notices of Certain Events 36
SECTION 5.03. Contractual Consents 36
ARTICLE VI
SECTION 6.01. Proxy Statement; Schedule 13E-3 37
SECTION 6.02. Company Stockholders' Meeting 38
SECTION 6.03. Access to Information; Confidentiality 39
SECTION 6.04. No Solicitation of Transactions 40
SECTION 6.05. Amendment of Plans 41
SECTION 6.06. Directors' and Officers' Indemnification and
Insurance 41
SECTION 6.07. Further Action; Consents; Filings 44
SECTION 6.08. The Company Rights Plan 45
SECTION 6.09. Public Announcements 45
ARTICLE VII
SECTION 7.01. Conditions to the Obligations of Each Party to
Consummate the Merger 45
SECTION 7.02. Conditions to the Obligations of the Company 46
SECTION 7.03. Conditions to the Obligations of Parent and
Merger Sub 47
ARTICLE VIII
SECTION 8.01. Termination 48
SECTION 8.02. Notice of Termination; Effect of Termination 49
SECTION 8.03. Amendment 50
SECTION 8.04. Waiver 50
SECTION 8.05. Expenses. 50
ARTICLE IX
SECTION 9.01. Non- Survival of Representations, Warranties and
Agreements 51
SECTION 9.02. Notices 52
SECTION 9.03. Certain Definitions 53
SECTION 9.04. Severability 55
SECTION 9.05. Assignment; Merger Sub; Binding Effect;
Benefit 55
SECTION 9.06. Incorporation of Exhibits 55
SECTION 9.07. Specific Performance 55
SECTION 9.08. Governing Law 56
SECTION 9.09. Submission to Jurisdiction; Venue 56
SECTION 9.10. Headings 56
SECTION 9.11. Counterparts 56
SECTION 9.12. Entire Agreement 56
SECTION 9.13. Waiver of Jury Trial 57
GLOSSARY OF DEFINED TERMS
Aegis Muse Section 4.04
affiliate Section 9.03(a)
Agreement Preamble
AMEX Section 3.03
Articles of Merger Section 1.02
business day Section 9.03(c)
Class A Common Stock Recitals
Class B Common Stock Recitals
Closing Section 1.02
Closing Date Section 1.02
Code Section 2.02(e)
Company Preamble
Company Board Recitals
Company Certificates Section 2.02(a)
Company Common Stock Recitals
Company Option Section 2.03(a)
Company SEC Reports Section 3.07(a)
Company Independent Committee Recitals
Company Stock Award Section 2.03(b)
Company Stock Plans Section 2.03(a)
Company Stockholders' Meeting Section 6.01(a)
Company Subsidiaries Section 3.01(a)
Competing Transaction Section 6.04
Confidentiality Agreement Section 6.03(b)
control Section 9.03(c)
controlled by Section 9.03(c)
Costs Section 6.06(d)
CPP Section 7.03(d)
CSFB Section 3.19
Disclosure Schedule Section 3.01(a)
Effective Time Section 1.02
Environmental Claims Section 3.12(b)
Environmental Laws Section 3.12(b)
Environmental Permit Section 3.12(b)
ERISA Section 3.09(a)
Escrow Agent Recitals
Escrow Agreement Recitals
Exchange Act Section 3.05(b)(i)
Expenses Section 8.05(a)
Governmental Entity Section 3.05(b)
Hazardous Material Section 3.12(b)
Holdings Recitals
HSR Act Section 3.05(b)(i)
Indemnified Parties Section 6.06(d)
Indenture Section 6.07
IRS Section 3.09(a)(iii)
knowledge Section 9.03(d)
Law Section 3.05(a)(ii)
Letter of Transmittal Section 2.02(b)
Material Adverse Effect Section 3.01(a)
Material Contract Section 3.10(a)
Merger Recitals
Merger Consideration Section 2.01(a)
Merger Sub Preamble
MGCL Recitals
Multiemployer Plan Section 3.09(b)
Multiple Employer Plan Section 3.09(b)
Order Section 7.01(b)
Parent Preamble
Paying Agent Section 2.02(a)
Permits Section 3.06
person Section 9.03(e)
Plans Section 3.09(a)
Preferred Stock Section 3.03(c)
Proxy Statement Section 6.01(a)
Real Property Section 3.12(a)(ii)
Release Section 3.12(b)
Remedial Action Section 3.12(b)
Reorganization Agreement Section 3.09(b)
Representatives Section 6.02(a)
Rights Agreement Section 3.16
SAR Unit Section 2.03(a)
Schedule 13E-3 Section 6.01(a)
SDAT Section 1.02
SEC Section 3.07(a)
Seller or Sellers Recitals
Stock Purchase Agreement Recitals
subsidiary(ies) Section 9.03(f)
Superior Proposal Section 6.04
Surviving Corporation Section 1.01
Tax Returns Section 3.14
Taxes Section 3.14
Third Party Provision Section 9.05
under common control with Section 9.03(c)
U.S. GAAP Section 3.07(b)
Waivers Section 3.22
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER, dated as of December 17, 2000 (this
"Agreement"), by and among ROSEMORE, INC., a Maryland corporation
("Parent"), CROWN CENTRAL PETROLEUM CORPORATION, a Maryland corporation
(the "Company"), and ROSEMORE ACQUISITION CORPORATION, a Maryland
corporation and an indirect wholly owned subsidiary of Parent ("Merger
Sub").
WHEREAS, upon the terms and subject to the conditions of this
Agreement and in accordance with the Maryland General Corporation Law
(the "MGCL"), Parent will acquire, pursuant to the merger (the
"Merger") of Merger Sub with and into the Company, all of the issued
and outstanding shares of the Company's Class A common stock, par value
$5.00 per share (the "Class A Common Stock"), and Class B common stock,
par value $5.00 per share (the "Class B Common Stock"; and together
with the Class A Common Stock, the "Company Common Stock"), at a price
of $10.50 per share;
WHEREAS, a special committee of independent members (the "Company
Independent Committee") of the Board of Directors of the Company (the
"Company Board") has unanimously recommended to the Company Board that
it (a) approve and deem the Merger advisable upon the terms and subject
to the conditions set forth in this Agreement and (b) recommend the
approval of the Merger and this Agreement by the stockholders of the
Company, and the Company Board has unanimously (i) approved and deemed
the Merger advisable upon the terms and subject to the conditions set
forth in this Agreement and (ii) recommended the approval of the Merger
and this Agreement by the stockholders of the Company;
WHEREAS, the Board of Directors of Parent has determined that the
Merger is consistent with and in furtherance of the long-term business
strategy of Parent and has approved and adopted this Agreement, the
Merger and the other transactions contemplated by this Agreement;
WHEREAS, this Agreement has been approved and adopted by the Board
of Directors of Merger Sub and by Rosemore Holdings, Inc., a Maryland
corporation and a wholly owned subsidiary of Parent ("Holdings"), as
sole stockholder of Merger Sub; and
WHEREAS, P.A. Novelly, II and John K. Pruellage, as trustees for
The Novelly Exempt Trust U/I dated August 12, 1992, Douglas D. Hommert
and William Lauber, as trustees for The Capital Trust U/I dated
February 4, 1994, Paul A. Novelly, as trustee of the Paul A. Novelly
Living Trust U/I dated July 28,
1982, as amended and Golnoy Barge Company, Inc. (each of the
foregoing, a "Seller", and collectively, the "Sellers") and Parent have
entered into a Stock Purchase Agreement, dated as of the date hereof
(the "Stock Purchase Agreement"), whereby, subject to the terms and
conditions contained therein, the Sellers (i) irrevocably appoint the
designees of Parent as their proxies to vote in favor of the Merger,
this Agreement and the transactions contemplated hereby with respect to
the Company Common Stock held by such Sellers, and (ii) shall sell
their Company Common Stock to Parent if this Agreement is terminated;
and the Sellers, Parent and an escrow agent (the "Escrow Agent") shall
enter into an Escrow Agreement (the "Escrow Agreement") promptly after
the date hereof, to effect the transactions contemplated by the Stock
Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained and intending to be legally
bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Provided that this Agreement shall not
have been terminated in accordance with Section 8.01, upon the terms
and subject to the conditions set forth in Article VII, and in
accordance with the MGCL, at the Effective Time (as defined below),
Merger Sub shall be merged with and into the Company. As a result of
the Merger, the separate corporate existence of Merger Sub shall cease
and the Company shall continue as the surviving corporation of the
Merger (the "Surviving Corporation").
SECTION 1.02. Effective Time; Closing. Provided that this
Agreement shall not have been terminated in accordance with Section
8.01, as promptly as practicable and in no event later than the second
business day following the satisfaction or, if permissible, waiver of
the conditions set forth in clauses (a) through (c) of Section 7.01 (or
such other date as may be agreed to in writing by each of the parties
hereto), the parties hereto shall cause the Merger to be consummated by
filing the articles of merger (the "Articles of Merger") with the State
Department of Assessments and Taxation of Maryland ("SDAT") in such
form as is required by, and executed in accordance with, the relevant
provisions of the MGCL. The term "Effective Time" means the date and
time of the filing with, and the acceptance for record by, the SDAT of
the Articles of Merger (or such later time, not to exceed 30 days after
such acceptance for record, as may be agreed in writing by each of the
parties hereto and specified in
the Articles of Merger). Immediately prior to the filing of the
Articles of Merger, a closing (the "Closing") will be held at the
offices of Shearman & Sterling, 599 Lexington Avenue, New York, New
York (or such other place as the parties hereto may agree).
SECTION 1.03. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions
of the MGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all of the property, rights,
privileges, powers and franchises of the Company and Merger Sub shall
vest in the Surviving Corporation, and all debts, liabilities,
obligations, restrictions, disabilities and duties of each of the
Company and Merger Sub shall become the debts, liabilities,
obligations, restrictions, disabilities and duties of the Surviving
Corporation.
SECTION 1.04. Charter; Bylaws. At the Effective Time, (a) the
charter of Merger Sub as in effect immediately prior to the Effective
Time shall be the charter of the Surviving Corporation until thereafter
amended as provided by law, the bylaws and such charter of the
Surviving Corporation, except that Article I shall be amended to
provide that the name of the Surviving Corporation shall be "Crown
Central Petroleum Corporation" and (b) the bylaws of Merger Sub as in
effect immediately prior to the Effective Time shall be the bylaws of
the Surviving Corporation until thereafter amended as provided by law,
the charter of the Surviving Corporation and such bylaws.
SECTION 1.05. Directors and Officers of the Surviving
Corporation. The directors of the Company immediately prior to the
Effective Time shall be the directors of the Surviving Corporation,
each to hold office in accordance with the charter and bylaws of the
Surviving Corporation, and the officers of the Company immediately
prior to the Effective Time shall be the officers of the Surviving
Corporation, in each case until their respective successors are duly
elected or appointed and qualified.
ARTICLE II
CONVERSION OF SECURITIES IN THE MERGER
SECTION 2.01. Conversion of Capital Stock. At the Effective
Time, by virtue of the Merger and without any action on the part of
Merger Sub, the Company or the holders of any of the following
securities:
(a) each share of Company Common Stock (together with the
associated right to purchase Company Series A or Series
B Junior Participating Preferred Stock, no par value,
as the case may be, pursuant to the Rights Agreement (as
defined in Section 3.16 hereof)) issued and outstanding
immediately prior to the Effective Time (other than any
shares of Company Common Stock to be canceled pursuant to
Section 2.01(b) hereof) shall be converted into the right to
receive $10.50 in cash (the "Merger Consideration"), payable
without interest to the holder of such share of Company
Common Stock, upon surrender of the Company Certificate that
formerly evidenced such share of Company Common Stock;
(b) each share of Company Common Stock owned by Parent or owned
by any direct or indirect wholly owned subsidiary of the
Company or Parent shall be canceled and extinguished without
any conversion thereof and no payment shall be made with
respect thereto; and
(c) each issued and outstanding share of common stock, par value
$5.00 per share, of Merger Sub will be converted into one
validly issued, fully paid and nonassessable share of common
stock of the Surviving Corporation.
SECTION 2.02. Payment for Shares. (a) From and after the
Effective Time, a bank or trust company designated by Parent and
reasonably acceptable to the Company shall act as paying agent (the
"Paying Agent") in effecting the payment of the Merger Consideration in
respect of certificates that, prior to the Effective Time, represented
shares of Company Common Stock entitled to payment of the Merger
Consideration pursuant to Section 2.01(a) (the "Company Certificates").
From and after the Effective Time, Parent shall cause to be provided to
the Paying Agent cash in amounts necessary to pay for all of the shares
of Company Common Stock pursuant to Section 2.01(a). Such funds (and
the interest thereon) shall be invested by the Paying Agent in an
interest-bearing investment consisting of short-term U.S. Government
obligations or federally insured, interest-bearing demand deposit
accounts.
(b) Promptly after the Effective Time, the Paying Agent shall
mail to each record holder of a Company Certificate (i) a letter of
transmittal in customary form (which shall specify that delivery shall
be effected, and risk of loss and title to the Company Certificate
shall pass, only upon delivery of the Company Certificate to the Paying
Agent) (the "Letter of Transmittal") and (ii) instructions for use in
surrendering such
Company Certificate in exchange for payment therefor. Upon the
surrender of each such Company Certificate, together with such Letter
of Transmittal, duly completed and validly executed in accordance with
the instructions therein, and such other documents as may be required
pursuant to such instructions, the Paying Agent shall pay the holder of
such Company Certificate an amount in cash equal to the product of the
Merger Consideration multiplied by the number of shares of Company
Common Stock formerly represented by such Company Certificate, in
consideration therefor, and such Company Certificate shall forthwith be
cancelled. Until so surrendered, each such Company Certificate (other
than Company Certificates representing shares of Company Common Stock
to be canceled pursuant to Section 2.01(b)) shall represent solely the
right to receive the aggregate Merger Consideration represented
thereby. No interest shall be paid or accrued on the Merger
Consideration. If the Merger Consideration (or any portion thereof) is
to be paid to any person other than the person in whose name the
Company Certificate surrendered is registered, it shall be a condition
to such right to receive such payment that the Company Certificate so
surrendered shall be properly endorsed or otherwise be in proper form
for transfer and that the person surrendering such Company Certificate
shall pay to the Paying Agent any transfer or other similar Taxes
required by reason of the payment of the Merger Consideration to a
person other than the registered holder of the Company Certificate
surrendered, or shall establish to the satisfaction of the Surviving
Corporation that such Tax has been paid or is not applicable.
(c) At any time following the six-month anniversary of the
Effective Time, the Surviving Corporation shall be entitled to require
the Paying Agent to direct the delivery of any funds which previously
had been made available to the Paying Agent and were not disbursed to
holders of shares of Company Common Stock (including, without
limitation, all interest and other income received by the Paying Agent
in respect of all funds made available to it), Company Certificates and
other documents in its possession relating to the Merger, and the
Paying Agent's duties shall terminate. Thereafter, each holder of a
Company Certificate may surrender such Company Certificate to the
Surviving Corporation and receive in consideration therefor the
aggregate Merger Consideration relating thereto, without any interest.
Notwithstanding the foregoing, neither the Surviving Corporation nor
the Paying Agent shall be liable to any holder of a share of Company
Common Stock for any Merger Consideration delivered in respect of such
share to a public official pursuant to any abandoned property, escheat
or other similar law.
(d) At the close of business on the day of the Effective Time,
the stock transfer books of the Company shall be closed and there shall
be no further registration of transfers on the stock transfer books of
the Surviving Corporation of any shares of Company Common Stock which
were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Company Certificates are presented to the Surviving
Corporation or the Paying Agent, they shall be surrendered and
cancelled in return for the payment of the aggregate Merger
Consideration represented thereby, as provided in this Article II.
From and after the Effective Time, the holders of shares of Company
Common Stock outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such shares of Company Common
Stock, except as otherwise provided herein or by applicable law.
(e) The Surviving Corporation shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of shares of Company Common Stock such amounts
as it is required to deduct and withhold with respect to the making of
such payment under the Internal Revenue Code of 1986, as amended (the
"Code"), or any applicable provision of state, local or foreign Tax
law. To the extent that amounts are so withheld by the Surviving
Corporation, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the shares of
Company Common Stock in respect of which such deduction and withholding
were made by the Surviving Corporation.
(f) If any Company Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person
claiming such Company Certificate to be lost, stolen or destroyed and,
if required by the Surviving Corporation, the posting by such person of
a bond, in such reasonable amount as the Surviving Corporation may
direct as indemnity against any claim that may be made against it with
respect to such Company Certificate, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Company Certificate the
Merger Consideration to which the holder thereof is entitled pursuant
to Section 2.01(a).
SECTION 2.03. Employee Stock Options. (a) At the Effective Time,
each option to purchase shares of Company Common Stock (a "Company
Option") or stock appreciation unit award ("SAR Unit") with respect to
Company Common Stock outstanding and unexercised as of the Effective
Time granted pursuant to the Company's 1994 Long-Term Incentive Plan,
the Company's 1995 Management Stock Option Plan and the Company's 1999
Long-Term Incentive Plan, each as amended through the date of this
Agreement, and the option grant agreements and award agreements entered
into in connection therewith, (collectively, the "Company Stock
Plans"), or granted by the Company other than pursuant to the Company
Stock Plans shall (i) become fully vested and immediately exercisable
and (ii) remain outstanding and, thereafter, be a Company Option or SAR
Unit with the same rights and exercise prices as applied to such
Company Option or SAR Unit immediately prior to the Effective Time, and
otherwise subject to the terms (as in effect as of the date hereof) of
the Company Stock Plans pursuant to which such Company Option or SAR
Unit was issued, except that all references to the Company shall be
deemed to be references to the Surviving Corporation and all references
to Company Common Stock shall be deemed to be references to the common
stock of the Surviving Corporation. The Company shall take all
necessary action to approve the disposition of the Company Options in
connection with the transactions contemplated by this Agreement to the
extent necessary to exempt such dispositions and acquisitions under
Rule 16b-3 of the Exchange Act (as defined in Section 3.05(b)(i)).
Promptly after the Effective Time, Parent shall or shall cause
Surviving Corporation to provide each holder of Company Options with
the opportunity to sell its Company Options at the prices set forth in
Annex A of the Waivers (defined herein). Any payments related to such
sale of Company Options shall be subject to all applicable federal,
state and local tax withholding requirements.
(b) At the Effective Time, each performance-restricted stock award
(a "Company Stock Award") granted pursuant to the Company Stock Plans
or granted by the Company (other than pursuant to the Company Stock
Plans) shall become fully vested, the restrictions thereon shall lapse,
any restrictive legend contained on any Company Certificate related
thereto shall be removed and any Company Certificate related thereto
held in escrow by the Company pursuant to the terms of any Company
Stock Plan or otherwise shall be released to the grantee of such
Company Stock Award. At the Effective Time, each holder of a Company
Stock Award shall be paid in full satisfaction of such Company Stock
Award a cash payment in an amount in respect thereof equal to the
product of (i) the Merger Consideration and (ii) the number of shares
of Company Common Stock subject to such Company Stock Award, less any
income or employment tax withholding required under the Code or any
provision of state or local law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Merger
Sub that:
SECTION 3.01. Organization and Qualification; Subsidiaries. (a)
Except as set forth in Section 3.01(a) of the Disclosure Schedule
attached hereto and forming a part of this Agreement (the "Disclosure
Schedule"), the Company and each subsidiary of the Company (the
"Company Subsidiaries") has been duly organized, and is validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, and has the
requisite power and authority to own, lease and operate its properties
and to carry on its business as it is now being conducted. Each of the
Company and each of the Company Subsidiaries is duly qualified or
licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of the properties
owned, leased or operated by it or the nature of its business makes
such qualification or licensing necessary, except for such failures to
be so qualified or licensed and in good standing that would not
materially delay consummation of the Merger and would not have a
Material Adverse Effect. For purposes of this Agreement, "Material
Adverse Effect" means any event, circumstances, change in or effect on
the business of the Company and the Company Subsidiaries, taken as a
whole, that, when taken together with all other events, circumstances,
changes and effects occurring after the date hereof that do not
individually have a Material Adverse Effect and all other circumstances
that would, but for the fact that they do not individually have a
Material Adverse Effect, constitute a breach of any representation or
warranty made by the Company in this Agreement, is, or is reasonably
likely to be, materially adverse to the business, financial condition,
results of operations or prospects of the Company and the Company
Subsidiaries taken as a whole.
(b) A true and complete list of all the Company Subsidiaries,
together with the jurisdiction of incorporation or organization of each
Company Subsidiary and the percentage of the outstanding capital stock
of each Company Subsidiary owned by the Company and each other Company
Subsidiary, is set forth in Section 3.01(b) of the Disclosure Schedule.
Except as disclosed in Section 3.01(b) of the Disclosure Schedule, the
Company does not directly or indirectly own any equity or similar
interest in, or any interest convertible into or exchangeable or
exercisable for any equity or similar interest in, any corporation,
partnership, joint venture or other
business association or entity.
SECTION 3.02. Charter and Bylaws. The copies of the Company's
charter and bylaws, each as amended and restated, that are set forth as
exhibits to the Company's proxy statement dated March 15, 1996 and Form
10-K for the year ended December 31, 1999, as amended, and Form 10-Q
for the quarter ended September 30, 2000, respectively, are complete
and correct copies thereof. Such charter and bylaws are in full force
and effect. The Company is not in violation of any of the provisions
of its charter or bylaws.
SECTION 3.03. Capitalization. The authorized capital stock of
the Company consists of (a) 15,000,000 shares of Class A Common Stock,
(b) 15,000,000 shares of Class B Common Stock and (c) 5,000,000 shares
of preferred stock, no par value (the "Preferred Stock"), 4,818 shares
of which are designated Series A Junior Participating Preferred Stock,
no par value, and 5,254 of which are designated Series B Junior
Participating Preferred Stock, no par value. At the close of business
on (A) November 15, 2000, (i) 4,817,394 shares of Class A Common Stock
and 5,248,912 shares of Class B Common Stock, all of which were validly
issued, fully paid and nonassessable and no shares of Preferred Stock
were issued and outstanding, (ii) no shares of Class A Common Stock and
Class B Common Stock were held in the treasury of the Company or by the
Company Subsidiaries, (iii) 4,818 shares of Series A Junior
Participating Preferred Stock were reserved for issuance pursuant to
the Rights Agreement and (iv) 5,254 shares of Series B Junior
Participating Preferred Stock were reserved for issuance pursuant to
the Rights Agreement, and (B) November 30, 2000, 980,507 shares of
Class B Common Stock were reserved for issuance in connection with the
exercise of outstanding Company Options in the amounts and at the
exercise prices set forth in Section 3.03 of the Disclosure Schedule.
Except as set forth in Section 3.03 of the Disclosure Schedule, all
publicly traded shares of Company Common Stock are authorized for
listing on the American Stock Exchange (the "AMEX"). From November 15,
2000 through the date hereof, the Company has not issued any additional
shares of capital stock, except pursuant to the exercise of Company
Options outstanding on November 15, 2000, nor has the Company granted
any additional options, warrants or other rights or entered into any
agreements, arrangements or commitments of any character relating to
the issued or unissued capital stock of the Company or any Company
Subsidiary or obligating the Company or any Company Subsidiary to issue
or sell any shares of capital stock of, or other equity interests in,
the Company or any Company Subsidiary. Except as issued pursuant to
the Company
Stock Plans, the Rights Agreement, pursuant to agreements or
arrangements described in Section 3.03 of the Disclosure Schedule or as
set forth in the Company SEC Reports (as defined herein), there are no
options, warrants or other rights, agreements, arrangements or
commitments of any character to which the Company is a party or by
which the Company is bound relating to the issued or unissued capital
stock of the Company or any Company Subsidiary or obligating the
Company or any Company Subsidiary to issue or sell any shares of
capital stock of, or other equity interests in, the Company or any
Company Subsidiary. All shares of Company Common Stock subject to
issuance as aforesaid, upon issuance prior to the Effective Time on the
terms and conditions specified in the instruments pursuant to which
they are issuable, will be duly authorized, validly issued, fully paid
and nonassessable. Except as set forth in Section 3.03 of the
Disclosure Schedule, there are no outstanding contractual obligations
of the Company or any Company Subsidiary to repurchase, redeem or
otherwise acquire any shares of Common Stock or any capital stock of
any Company Subsidiary. Each outstanding share of capital stock of
each Company Subsidiary is duly authorized, validly issued, fully paid
and nonassessable and, except as set forth in Section 3.03 of the
Disclosure Schedule, each such share owned by the Company or another
Company Subsidiary is free and clear of all security interests, liens,
claims, pledges, options, rights of first refusal, agreements,
limitations on the Company's or such other Company Subsidiary's voting
rights, charges and other encumbrances of any nature whatsoever, except
where failure to own such shares free and clear would not, individually
or in the aggregate, have a Material Adverse Effect. Except as set
forth in Section 3.03 of the Disclosure Schedule, there are no material
outstanding contractual obligations of the Company or any Company
Subsidiary to provide funds to, or make any investment (in the form of
a loan, capital contribution or otherwise) in, any Company Subsidiary
or any other person, other than obligations arising in the ordinary
course of business, obligations disclosed in the Company SEC Reports
and guarantees by the Company of any indebtedness of any Company
Subsidiary.
SECTION 3.04. Authority Relative to This Agreement. The Company
has all necessary corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate
the transactions (including, without limitation, the Merger)
contemplated herein to be consummated by the Company. The execution
and delivery of this Agreement by the Company and the consummation by
the Company of such transactions have been duly and validly authorized
by all necessary corporate action, including the unanimous approval of
the Company Board and the unanimous approval of the Company Independent
Committee, and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate such
transactions (other than the adoption of this Agreement by the
requisite affirmative vote of the stockholders of the Company as
required by the MGCL). This Agreement has been duly and validly
executed and delivered by the Company and (assuming due authorization,
execution and delivery by Parent and Merger Sub) constitutes a legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms.
SECTION 3.05. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, (i)
conflict with or violate any provision of the charter or bylaws of the
Company or any equivalent organizational documents of the Company or
any Company Subsidiary, (ii) assuming that all consents, approvals,
authorizations and other actions described in Section 3.05(b) have been
obtained and all filings and obligations described in Section 3.05(b)
have been made, conflict with or violate any United States or non-
United States or supranational law, statute, ordinance, rule,
regulation, code, executive order, injunction, judgment, decree or
other order ("Law") applicable to the Company or any Company Subsidiary
or by which any property or asset of the Company or any Company
Subsidiary is bound or affected, or (iii) except as set forth in
Section 3.05(a) of the Disclosure Schedule, result in any breach of or
constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or other encumbrance on any property or asset of
the Company or any Company Subsidiary pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation, except, with respect to
clause (iii), for any such conflicts, violations, breaches, defaults,
or other occurrences which would not reasonably be expected to (A) have
a Material Adverse Effect or (B) prevent or materially delay the
performance of this Agreement by the Company.
(b) The execution and delivery of this Agreement by the Company
does not, and the performance of this Agreement by the Company will
not, require any consent, approval, authorization or permit of, or
filing with or notification to, any United States federal, state,
county or local or non-United States or
supranational government, governmental, regulatory or administrative
authority, agency, instrumentality or commission or any court, tribunal
or judicial or arbitral body ("Governmental Entity"), except (i) for
applicable requirements of the Securities Exchange Act of 1934, as
amended (together with the rules and regulations promulgated
thereunder, the "Exchange Act"), the AMEX, the pre-merger notification
requirements (A) of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder
(the "HSR Act") which requirements have been satisfied assuming the
Closing occurs before May 26, 2001, or (B) as may be applicable
pursuant to the antitrust laws of any state, (ii) for applicable
requirements relating to the filing and recordation of appropriate
merger documents pursuant to the MGCL and (iii) where failure to obtain
such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not reasonably be expected to (A)
prevent or materially delay consummation of the Merger or (B) have a
Material Adverse Effect.
SECTION 3.06. Permits; Compliance. Except as set forth in
Section 3.06 of the Disclosure Schedule, each of the Company and the
Company Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions,
consents, certificates, approvals and orders of any Governmental Entity
necessary for the Company or any Company Subsidiary to own, lease and
operate its properties or to carry on its business as it is now being
conducted (the "Permits"), except where the failure to have, or the
suspension or cancellation of, any of the Permits would not reasonably
be expected to (a) have a Material Adverse Effect or (b) prevent or
materially delay the performance of this Agreement by the Company, and
no suspension or cancellation of any of the Permits is pending or, to
the knowledge of the Company, threatened. Neither the Company nor any
Company Subsidiary is in conflict with, or in default or violation of,
(i) any Law applicable to the Company or any Company Subsidiary or by
which any property or asset of the Company or any Company Subsidiary is
bound or affected or (ii) any note, bond, mortgage, indenture,
contract, agreement, lease, license, Permit, franchise or other
instrument or obligation to which the Company or any Company Subsidiary
is a party to or by which the Company or any Company Subsidiary is
bound by, except for any such conflicts, defaults or violations that
would not reasonably be expected to (A) have a Material Adverse Effect
or (B) prevent or materially delay the performance of this Agreement by
the Company.
SECTION 3.07. SEC Filings; Financial Statements. (a) The
Company has timely filed all forms, reports and documents required to
be filed by it with the Securities and Exchange Commission ("SEC") from
December 31, 1998 through the date of this Agreement (collectively, the
"Company SEC Reports"). The Company SEC Reports and all forms, reports
and documents to be filed by the Company after the date hereof and
prior to the Closing (i) were or will be prepared in all material
respects in accordance with the requirements of the Exchange Act and
the rules and regulations promulgated thereunder, (ii) did or will not,
as of their respective dates, contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading,
and (iii) did not and will not omit any document required to be filed
as an exhibit thereto. No Company Subsidiary is required to file any
form, report or other document with the SEC.
(b) Each of the financial statements (including, in each case,
any notes thereto) contained in the Company SEC Reports and each of the
financial statements to be included in forms, reports and documents to
be filed with the SEC after the date hereof and prior to the Closing,
was or will be prepared in accordance with United States generally
accepted accounting principles as promulgated by the American Institute
of Certified Public Accountants and as interpreted from time to time by
the staff of the SEC ("U.S. GAAP"), applied on a consistent basis
throughout the periods indicated (except as may be indicated in the
notes thereto) and each presented fairly or will present fairly, the
consolidated financial position, results of operations and cash flow of
the Company, and the consolidated Company Subsidiaries as at the
respective dates thereof and for the respective periods indicated
therein in all material respects, except as otherwise noted therein in
accordance with U.S. GAAP (subject, in the case of unaudited
statements, to normal year- end adjustments which were not and are not
expected to have a Material Adverse Effect).
(c) Except as and to the extent set forth on the consolidated
balance sheet of the Company and the Company Subsidiaries as of
September 30, 2000, including the notes thereto, or in any of the
Company SEC Reports filed subsequent to September 30, 2000, neither the
Company nor any Company Subsidiary has any liabilities or obligations
of any nature (whether accrued, absolute, contingent or otherwise) that
would be required to be reflected on a balance sheet or in notes
thereto prepared in accordance with U.S. GAAP, except for liabilities
or obligations incurred in the ordinary course of
business since September 30, 2000 that would not reasonably be expected
to, individually or in the aggregate, (i) have a Material Adverse
Effect or (ii) prevent or materially delay the performance of this
Agreement by the Company.
(d) The Company has heretofore furnished to Parent a complete and
correct copy of any amendment or modification, that has not yet been
filed with the SEC, to agreements, documents or other instruments that
previously have been filed by the Company with the SEC pursuant to the
Exchange Act.
SECTION 3.08. Absence of Certain Changes or Events. Since
September 30, 2000, except as expressly contemplated by this Agreement
or as specifically disclosed in the Company SEC Reports filed
subsequent to September 30, 2000, the Company and the Company
Subsidiaries have conducted their businesses only in the ordinary
course and in a manner consistent with past practice and, since such
date, (a) there has not been any change, condition, event or
development that has had a Material Adverse Effect, (b) there has not
been any event that could reasonably be expected to prevent or
materially delay the performance of this Agreement by the Company and
(c) none of the Company or any Company Subsidiary has taken any action
that, if taken after the date of this Agreement, would constitute a
breach of any of the covenants set forth in Section 5.01.
SECTION 3.09. Employee Benefit Plans; Labor Matters. (a)
Section 3.09(a) of the Disclosure Schedule lists (i) all employee
benefit plans (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) and all bonus, stock
option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental
retirement, severance or other benefit plans, programs or arrangements,
and all employment, termination, severance or other contracts or
agreements, whether legally enforceable or not, to which the Company or
any Company Subsidiary is a party, with respect to which the Company or
any Company Subsidiary has any obligation or which are maintained,
contributed to or sponsored by the Company or any Company Subsidiary
for the benefit of any current or former employee, officer or director
of the Company or any Company Subsidiary, (ii) each employee benefit
plan for which the Company or any Company Subsidiary could incur
liability under Section 4069 of ERISA in the event such plan has been
or were to be terminated, (iii) any plan in respect of which the
Company or any Company Subsidiary could incur liability under Section
4212(c) of ERISA, and (iv) any contracts, arrangements or
understandings between the Company or any Company Subsidiary and any
employee of the Company or any Company Subsidiary
including, without limitation, any contracts, arrangements or
understandings relating in any way to a sale of the Company or any
Company Subsidiary (collectively, the "Plans"). Each Plan is in
writing and the Company has furnished or made available to Parent a
true and complete copy of each material Plan and has delivered or made
available to Parent a true and complete copy of each material document,
if applicable, prepared in connection with each such Plan, including,
without limitation, (A) a copy of each trust or other funding
arrangement, (B) each summary plan description and summary of material
modifications, (C) the most recently filed Internal Revenue Service
("IRS") Form 5500, (D) the most recently received IRS determination
letter for each such Plan, and (E) the most recently prepared actuarial
report and financial statement in connection with each such Plan.
Neither the Company nor any Company Subsidiary has any express or
implied commitment, whether legally enforceable or not, (i) to create,
incur liability with respect to or cause to exist any other employee
benefit plan, program or arrangement, (ii) to enter into any contract
or agreement to provide compensation or benefits to any individual, or
(iii) to modify, change or terminate any Plan, other than with respect
to a modification, change or termination required by ERISA or the Code.
(b) None of the Plans is a multiemployer plan (within the meaning
of Section 3(37) or 4001(a)(3) of ERISA) (a "Multiemployer Plan") or a
single employer pension plan (within the meaning of Section 4001(a)(15)
of ERISA) for which the Company or any Company Subsidiary could incur
liability under Section 4063 or 4064 of ERISA (a "Multiple Employer
Plan"). Except as set forth in Section 3.09(b) of the Disclosure
Schedule, none of the Plans (i) provides for the payment of separation,
severance, termination or similar- type benefits to any person, (ii)
obligates or obligated the Company or any Company Subsidiary to pay, or
segregate any funds to pay (into a trust or otherwise), separation,
severance, termination or similar- type benefits solely or partially as
a result of any transaction contemplated by this Agreement or pursuant
to the consummation of the transactions contemplated by the Agreement
and Plan of Reorganization, dated December 8, 1998, as amended, among
American Trading and Production Corporation, ATAPCO, Inc., American
Trading Real Estate Company, Inc. and Gateway Gathering and Marketing
Company (the "Reorganization Agreement"), or (iii) obligates or
obligated the Company or any Company Subsidiary to make any payment, or
segregate any funds to pay (into a trust or otherwise), or provide any
benefit as a result of a "change in control", within the meaning of
such term under Section 280G of the Code solely or partially as a
result of any transaction contemplated by this Agreement or the
Reorganization Agreement. Except as set forth in Section 3.09(b) of
the Disclosure Schedule, none of the Plans provides for or promises
retiree medical, disability or life insurance benefits to any current
or former employee, officer or director of the Company or any Company
Subsidiary. Each of the Plans is subject only to the Laws of the
United States or a political subdivision thereof.
(c) Each Plan is now and always has been operated in all material
respects in accordance with its terms and the requirements of all
applicable Law including, without limitation, ERISA and the Code. The
Company and the Company Subsidiaries have performed all obligations
required to be performed by them under, are not in material default
under or in violation of, and have no knowledge of any default or
violations by any party to, any Plan. No action is pending or, to the
knowledge of the Company, threatened with respect to any Plan (other
than claims for benefits in the ordinary course), and, to the Company's
knowledge, no fact or event exists that could reasonably be expected to
give rise to any such action.
(d) Each Plan that is intended to be qualified under Section
401(a) or Section 401(k) of the Code has heretofore been determined by
the IRS so to qualify, and if submitted and assuming all amendments
required by the IRS were made, the Company believes that such Plans
would receive a favorable determination letter from the IRS with
respect to the changes required by the Small Business Job Protection
Act of 1996, the General Agreement on Tariffs and Trade, the Tax Reform
Act of 1997, and the Uniformed Services Employment and Reemployment
Rights Act of 1994, and each trust established in connection with any
Plan which is intended to be exempt from federal income taxation under
Section 501(a) of the Code has received a determination letter from the
IRS that it is so exempt, and no fact or event has occurred since the
date of such determination letter or letters from the IRS to adversely
affect the qualified status of any such Plan or the exempt status of
any such trust.
(e) There has not been any prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) for which
an exemption is not available with respect to any Plan. Neither the
Company nor any Company Subsidiary has incurred any liability under,
arising out of or by operation of Title IV of ERISA (other than
liability for premiums to the Pension Benefit Guaranty Corporation
arising in the ordinary course), including, without limitation, any
liability in connection with (i) the termination or reorganization of
any employee benefit plan subject to Title IV of ERISA or (ii) the
withdrawal from any Multiemployer Plan or Multiple Employer Plan, and
no fact or event exists which could reasonably be
expected to give rise to any such liability.
(f) All contributions, premiums or payments required to be made
with respect to any Plan have been made on or before their due dates.
All such contributions have been fully deducted for income tax purposes
to the extent permitted by applicable Law and no such deduction has
been challenged or disallowed by any Governmental Entity and, to the
Company's knowledge, no fact or event exists which could reasonably be
expected to give rise to any such challenge or disallowance.
(g) Except as set forth in Section 3.09(g) of the Disclosure
Schedule, all directors and officers of the Company and the Company
Subsidiaries (other than those directors of the Company Subsidiaries
organized in England, Vermont and the Netherland Antilles who are not
employees of the Company or any Company Subsidiary) are under written
obligation to the Company and the Company Subsidiaries to maintain in
confidence all confidential or proprietary information acquired by them
in the course of their employment and to assign to the Company and the
Company Subsidiaries all inventions made by them within the scope of
their employment during such employment and for a reasonable period
thereafter.
(h) The Company currently operates and for the last five years
has operated each of the Company's Employee Savings Plan and Employee
Supplemental Savings Plan in accordance with its terms, including,
without limitation, the provision (A) permitting the participant to
direct the trustee under such plan to vote the participant's Company
Common Stock held in the participant's account in accordance with his
or her instructions and (B) providing that any shares of the Company
Common Stock in the accounts of a participant for which clear and
timely instructions of the participant are not received shall be voted
in the same proportion as such shares for which instructions are
received.
(i) Section 3.09(i) of the Disclosure Schedule sets forth a true
and accurate list of all issued and outstanding SAR Units, including
the amounts and exercise prices related thereto.
(j) Except as set forth in Section 3.09(j) of the Disclosure
Schedule or as disclosed in the Company SEC Reports, (i) there are no
controversies pending or, to the knowledge of the Company, threatened
between the Company or any Company Subsidiary and any of their
respective employees; (ii) neither the Company nor any Company
Subsidiary is a party to any collective bargaining agreement or other
labor union contract applicable to persons employed by the Company or
any Company Subsidiary, nor, to the knowledge of the Company, are there
any activities or proceedings of any labor union to organize any such
employees; (iii) neither the Company nor any Company Subsidiary has
breached or otherwise failed to comply with any provision of any such
agreement or contract, and there are no grievances outstanding against
the Company or any Company Subsidiary under any such agreement or
contract; (iv) there are no unfair labor practice complaints pending
against the Company or any Company Subsidiary before the National Labor
Relations Board or any current union representation questions involving
employees of the Company or any Company Subsidiary; and (v) there is no
strike, slowdown, work stoppage or lockout, or, to the knowledge of the
Company, threat thereof, by or with respect to any employees of the
Company or any Company Subsidiary. The consent of the labor unions
which are a party to the collective bargaining agreements listed in
Section 3.09(j) of the Disclosure Schedule is not required to
consummate the Merger or the transactions contemplated by the Stock
Purchase Agreement.
(k) Except as set forth in Section 3.09(k) of the Disclosure
Schedule or as disclosed in the Company SEC Reports, the Company and
the Company Subsidiaries are in material compliance with all applicable
laws relating to the employment of labor, including those relating to
wages, hours, collective bargaining and the payment and withholding of
taxes and other sums as required by the appropriate Governmental Entity
and has withheld and paid to the appropriate Governmental Entity or are
holding for payment not yet due to such Governmental Entity all amounts
required to be withheld from employees of the Company or any Company
Subsidiary and are not liable for any significant arrears of wages,
taxes, penalties or other sums for failure to comply with any of the
foregoing. The Company and the Company Subsidiaries have paid in full
to all employees or adequately accrued for in accordance with U.S. GAAP
consistently applied all wages, salaries, commissions, bonuses,
benefits and other compensation due to or on behalf of such employees,
and there is no claim with respect to payment of wages, salary or
overtime pay that has been asserted or is now pending or, to the
Company's knowledge, threatened before any Governmental Entity with
respect to any persons currently or formerly employed by the Company or
any Company Subsidiary. Except as set forth in Section 3.09(k) of the
Disclosure Schedule, neither the Company nor any Company Subsidiary is
a party to, or otherwise bound by, any consent decree with, or citation
by, any Governmental Entity relating to employees or employment
practices. Except as set forth in Section 3.09(k) of the Disclosure
Schedule, there is no charge or proceeding with respect to a violation
of any
occupational safety or health standards that has been asserted or is
now pending or, to the Company's knowledge, threatened with respect to
the Company. Except as set forth in Section 3.09(k) of the Disclosure
Schedule or as disclosed in the Company SEC Reports, there is no charge
of discrimination in employment or employment practices, for any
reason, including, without limitation, age, gender, race, religion or
other legally protected category, which has been asserted or is now
pending or, to the knowledge of the Company, threatened before the
United States Equal Employment Opportunity Commission, or any other
Governmental Entity in any jurisdiction in which the Company or any
Company Subsidiary have employed or employ any person.
SECTION 3.10. Contracts; Debt Instruments. (a) Set forth in
subsections (i) through (viii) of Section 3.10(a) of the Disclosure
Schedule is a true and accurate list of all contracts and agreements of
the types described in such subsections to which the Company or any
Company Subsidiary is a party as of the date hereof (such contracts,
agreements and arrangements as required to be set forth in Section
3.10(a) of the Disclosure Schedule, together with those listed in
Section 3.09(a) of the Disclosure Schedule, and subject to the proviso
at the end of paragraph (a) of this Section 3.10 being the "Material
Contracts"):
(i) as of the date of this Agreement, each contract and
agreement which (A) is likely to involve consideration
of more than $500,000, in the aggregate, during the
calendar year ending December 31, 2000 or (B) is likely
to involve consideration of more than $1,000,000, in the
aggregate, over the remaining term of such contract,
except for purchase orders for crude oil or intermediate
feedstock arising in the usual and ordinary course of
business and consistent with past practices (provided
that in any case and without regard to the proviso at
the end of paragraph (a) of this Section 3.10, the top
15 purchase orders as of November 30, 2000 are set forth
in Section 3.10(a)(i) of the Disclosure Schedule) and
which, in either case, cannot be canceled by the Company
or any Company Subsidiary without penalty or further
payment and without more than 90 days' notice;
(ii) all material broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion,
market research, marketing consulting and advertising
contracts and agreements to which the Company or any
Company Subsidiary is a party, in each case, not
cancellable without penalty on not more than 90 days'
notice;
(iii) all material management contracts (excluding contracts
for employment) and contracts with other consultants,
including any contracts involving the payment of
royalties or other amounts calculated based upon the
revenues or income of the Company or any Company
Subsidiary or income or revenues related to any product
of the Company or any Company Subsidiary to which the
Company or any Company Subsidiary is a party;
(iv) all material contracts and agreements evidencing
indebtedness of the Company or any Company Subsidiary;
(v) as of the date hereof, all material contracts and
agreements with any Governmental Entity to which the
Company or any Company Subsidiary is a party;
(vi) all contracts and agreements that materially limit, or
purport to materially limit, the ability of the Company
or any Company Subsidiary to compete in any line of
business or with any person or entity or in any
geographic area or during any period of time;
(vii) all material contracts or arrangements that result in
any person or entity holding a power of attorney from
the Company or any Company Subsidiary that relates to
the Company, any Company Subsidiary or their respective
businesses; and
(viii) all other contracts and agreements, whether or not made
in the ordinary course of business, which are material
to the Company and any Company Subsidiary or the conduct
of its businesses, or the absence of which would prevent
or materially delay consummation of the Merger or
otherwise prevent or materially delay the Company from
performing its obligations under this Agreement or would
have a Material Adverse Effect.
The foregoing provisions of this Section 3.10(a) are subject to
the following proviso. With respect to Section 3.10(a)(i): (1)
contracts for the purchase of crude oil and other feedstocks which in
the aggregate do not exceed the requirements for the combined operation
of the Company's two refineries at 105% of rated capacity for a period
of sixty (60) days and do not have a term in excess of seventy-five
(75) days shall be deemed to be in the usual and ordinary course of
business and, as such, shall not be Material Contracts and shall not be
included in the Disclosure Schedule; (2) contracts for the sale of
finished petroleum products which in the aggregate combined with the
Company's retail requirements do not exceed the combined rated
capacities of the Company's two refineries when measured over a sixty
(60) day period shall be deemed to be in the usual and ordinary course
of business and, as such, shall not be Material Contracts and shall not
be included in the Disclosure Schedule; and (3) contracts for the sale
of intermediate feedstocks, sulfur, petroleum coke and other by
products of the petroleum refining process shall, if produced by the
Company and sold from inventory or from the anticipated production of
the refineries within the next two months, be deemed to be in the usual
and ordinary course of business and, as such, shall not be Material
Contracts and shall not be included in the Disclosure Schedule. With
respect to Sections 3.10(a)(i) through (v) and Section 3.10(a)(viii)
(and without derogating from the immateriality of contracts in excess
of the following threshold which are not otherwise material), all
contracts involving consideration or the payment of less than $250,000
shall be deemed to be not material. Notwithstanding the foregoing, the
types of contracts described in clauses (1), (2) and (3) of the first
sentence of the foregoing proviso shall be deemed to be Material
Contracts with respect to clauses (b) and (c) of this Section 3.10.
(b) Except as set forth in Section 3.10(b) of the Disclosure
Schedule or as would not prevent or materially delay consummation of
the Merger or otherwise prevent or materially delay the Company from
performing its obligations under this Agreement and would not have a
Material Adverse Effect, (i) each Material Contract is a legal, valid
and binding agreement, and, to the Company's knowledge, none of the
Material Contracts is in default by its terms or has been canceled by
the other party; (ii) to the Company's knowledge, no other party is in
breach or violation of, or default under, any Material Contract; (iii)
the Company and the Company Subsidiaries are not in receipt of any
claim of default under any Material Contract; and (iv) except as set
forth in Section 3.10(b)(iv) of the Disclosure Schedule, neither the
execution of this Agreement nor the consummation of any transaction
contemplated hereby or the transactions contemplated under the Stock
Purchase Agreement shall constitute a default, give rise to
cancellation rights, or otherwise materially and adversely affect any
of the Company's rights under any Material Contract. The Company has
furnished or made available to Parent true and complete copies of all
Material Contracts, including any amendments thereto.
(c) Set forth in Section 3.10(c) of the Disclosure Schedule is a
description of any material changes to the amount and material terms of
the indebtedness of the Company and the Company Subsidiaries as
described in the notes to the financial statements incorporated in, or
otherwise disclosed in, the Company's Form 10-K for the year ended
December 31, 1999, as amended, and Form 10-Q for the period ended
September 30, 2000.
SECTION 3.11. Absence of Litigation. Except as set forth in
Section 3.11 of the Disclosure Schedule or as specifically disclosed in
the Company SEC Reports, there is no litigation, suit, claim, action,
proceeding, arbitration, review or investigation pending or, to the
knowledge of the Company, threatened against the Company or any Company
Subsidiary or any property or asset of the Company or any Company
Subsidiary before any Governmental Entity that is reasonably likely to
have a Material Adverse Effect or seeks to materially delay or prevent
the consummation of the Merger or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement.
Except as set forth in Section 3.11 of the Disclosure Schedule or as
disclosed in the Company SEC Reports, there has been no change since
September 30, 2000 in the status of any litigation, suit, claim,
action, proceeding or investigation relating to the Company or any
Company Subsidiary that would be reasonably likely to have a Material
Adverse Effect. Except as disclosed in the Company SEC Reports or as
set forth in Section 3.11 of the Disclosure Schedule, neither the
Company nor any Company Subsidiary is subject to any outstanding Order
(as defined below), writ, injunction or decree which, insofar as can be
reasonably foreseen, would have a Material Adverse Effect.
SECTION 3.12. Environmental Matters. (a) Except as disclosed in
Section 3.12(a) of the Disclosure Schedule or as disclosed in the
Company SEC Reports or as would not reasonably be expected to have a
Material Adverse Effect:
(i) The Company is in compliance with all applicable
Environmental Laws and all Environmental Permits. All past
noncompliance with Environmental Laws or Environmental Permits
identified by the Company has been resolved without any pending,
ongoing or future obligation, cost or liability, and, to the
Company's actual knowledge, there is no requirement proposed as of
the date hereof that is reasonably expected to be adopted or
implemented and give rise to liability under any Environmental Law
or Environmental Permit;
(ii) Except as expressly authorized under any
Environmental Law or Environmental Permit, there has been no
Release of Hazardous Materials on any of the real property owned
or leased by the Company or any Company Subsidiary (the "Real
Property") or, during the Company's ownership or occupancy of such
property, on any property formerly owned, leased, used or occupied
by the Company;
(iii) The Company is not conducting, and has not undertaken or
completed, any Remedial Action relating to any Release or
threatened Release on the Real Property or at any other site,
location or operation, either voluntarily or pursuant to the order
of any Governmental Entity or the requirements of any
Environmental Law or Environmental Permit;
(iv) To the Company's knowledge, there is no asbestos or
asbestos-containing material on any of the Real Property;
(v) None of the Real Property is listed or proposed for
listing, or, to the Company's knowledge, adjoins any other
property that is listed or proposed for listing, on the National
Priorities List or the Comprehensive Environmental Response,
Compensation and Liability Information System under the federal
Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA") or any analogous federal, state or local list;
(vi) There are no Environmental Claims pending or, to the
Company's knowledge, threatened against the Company or the Real
Property, and, to the Company's knowledge, there are no
circumstances that can reasonably be expected to form the basis of
any such Environmental Claim, including, without limitation, with
respect to any off-site disposal location presently or formerly
used by the Company or any of its predecessors or with respect to
any previously owned or operated facilities;
(vii) Under current Law, the Company can maintain present
production levels, or any planned expansion of production levels
upon which financial projections provided to Parent have been
based, in compliance with applicable Environmental Laws without a
material increase in capital or operating expenditures and without
modifying any Environmental Permits or obtaining any additional
Environmental Permits;
(viii) The Company has provided Parent or made
available copies of (i) any environmental assessment or audit
reports or other similar studies or analyses relating to the Real
Property or the Company, and (ii) all insurance policies issued at
in the past five years that may provide coverage to the Company
for environmental matters; and
(ix) Neither the execution of this Agreement nor the
consummation of the transactions contemplated herein will require
any Remedial Action or notice to or consent of Governmental
Entities or third parties pursuant to any applicable Environmental
Law or Environmental Permit.
(b) For purposes of this Agreement:
"Environmental Claims" means any and all actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
notices of liability or potential liability, investigations, proceedings,
consent orders or consent agreements relating in any way to any
Environmental Law, any Environmental Permit or any Hazardous Materials.
"Environmental Law" means any Law in effect and as amended as of the
Effective Time, and any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent decree
or judgment, relating to pollution or protection of the environment,
health, safety or natural resources, including, without limitation, those
relating to the use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any applicable
Environmental Law.
"Hazardous Material" means (i) petroleum and petroleum products, by-
products or breakdown products, radioactive materials, asbestos-
containing materials and polychlorinated biphenyls and (ii) any other
chemical, material or substance defined or regulated as toxic or
hazardous or as a pollutant, contaminant or waste under any applicable
Environmental Law.
"Release" means disposing, discharging, injecting, spilling,
leaking, leaching, dumping, emitting, escaping, emptying, seeping,
placing and the like into or upon any land or water or air or otherwise
entering into the environment.
"Remedial Action" means all action to (i) clean up, remove, treat or
handle in any other way Hazardous Materials in the environment; (ii)
restore or reclaim the environment or natural resources; (iii) prevent
the Release of Hazardous Materials so that they do not migrate or
endanger or threaten to endanger public health or the environment; or
(iv) perform remedial investigations, feasibility studies, corrective
actions, closures and postremedial or postclosure studies,
investigations, operations, maintenance and monitoring on, about or in
any Real Property.
SECTION 3.13. Trademarks, Patents and Copyrights. Except to the
extent the inaccuracy of any of the following (or the circumstances
giving rise to such inaccuracy) would not reasonably be expected to have
a Material Adverse Effect, the Company and each of the Company
Subsidiaries own or possess adequate licenses or other legal rights to
use all patents, patent rights, trademarks, trademark rights, trade
names, trade dress, trade name rights, copyrights, service marks, trade
secrets, applications for trademarks and for service marks, mask works,
know- how and other proprietary rights and information used or held for
use in connection with the businesses of the Company and the Company
Subsidiaries as currently conducted or as contemplated to be conducted,
and, to the Company's knowledge, there is no assertion or claim
challenging the validity of any of the foregoing. Neither the Company
nor any of the Company Subsidiaries has infringed or is infringing in any
way any patent, patent right, license, trademark, trademark right, trade
dress, trade name, trade name right, service mark, mask work or copyright
of any third party that would reasonably be expected to have a Material
Adverse Effect. To the Company's knowledge, there are no infringements
of any proprietary rights owned by or licensed by or to the Company or
any Company Subsidiary that could reasonably be expected to have a
Material Adverse Effect.
SECTION 3.14. Taxes. Except as set forth in Section 3.14 of the
Disclosure Schedule, (a) the Company and the Company Subsidiaries have
timely filed or will timely file all material federal, state, local and
foreign Tax Returns required to be filed by them with any taxing
authority with respect to Taxes for any period ending on or before the
Effective Time, taking into account any extension of time to file granted
to or obtained on behalf of the Company and the Company Subsidiaries, and
all such Tax Returns are complete and correct in all
material respects; (b) all Taxes that are shown as due on such Tax
Returns have been or will be timely paid; (c) no deficiency for any
material amount of Tax has been asserted or assessed in writing by a
taxing authority against the Company or any of the Company Subsidiaries
for which there are not adequate reserves; (d) the Company and the
Company Subsidiaries have provided adequate reserves in accordance with
U.S. GAAP in their financial statements for any Taxes that have not been
paid, whether or not shown as being due on any returns; (e) as of the
date hereof, the Company and the Company Subsidiaries have neither
extended nor waived any applicable statute of limitations with respect to
Taxes and have not otherwise agreed to any extension of time with respect
to Tax assessment or deficiency; (f) none of the Company and the Company
Subsidiaries is a party to any Tax sharing agreement or arrangement other
than with each other; (g) as of the date hereof, there are no pending or
threatened in writing material audits, examinations, investigations,
litigation, or other proceedings in respect of Taxes of the Company or
any Company Subsidiary; (h) no liens for Taxes exist with respect to any
of the assets or properties of the Company or the Company Subsidiaries,
except for statutory liens for Taxes not yet due or payable or that are
being contested in good faith for which there are adequate reserves; (i)
all Taxes which the Company or any Company Subsidiary are required to
withhold or to collect for payment have been duly withheld and collected,
and have been paid or accrued, reserved against and entered on the books
of the Company; and (j) none of the Company or any Company Subsidiary has
been a member of any group or corporation filing Tax Returns on a
consolidated, combined, unitary or similar basis other than each such
group of which it is currently a member. As used in this Agreement,
"Taxes" shall mean any and all taxes, fees, levies, duties, tariffs,
imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any Governmental Entity, including, without
limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers'
compensation, unemployment compensation, or net worth; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp,
transfer, value added, or gains taxes; license, registration and
documentation fees and customs duties, tariffs, and similar charges.
"Tax Returns" shall mean any return, declaration, report, claim for
refund or information return or statement relating to Taxes filed with a
taxing authority, including any schedule or
attachment thereto, and including any amendment thereof.
SECTION 3.15. Property and Leases. (a) The Company and the Company
Subsidiaries have sufficient title to all their properties and assets to
conduct their respective businesses as currently conducted or as
contemplated to be conducted, with only such exceptions as would not have
a Material Adverse Effect.
(b) No parcel of real property owned or leased by the Company or
any Company Subsidiary is subject to any governmental decree or order to
be sold or is being condemned, expropriated or otherwise taken by any
public authority with or without payment of compensation therefor, nor,
to the knowledge of the Company, has any such condemnation, expropriation
or taking been proposed other than as could not reasonably be expected to
have a Material Adverse Affect.
(c) There are no contractual or legal restrictions that preclude or
restrict the ability to use any real property owned or leased by the
Company or any Company Subsidiary for the purposes for which it is
currently being used other than preclusions or restrictions which do not
preclude or restrict or otherwise adversely affect the actual use which
the Company or Company Subsidiary is making of the real property on the
date of this Agreement but which may or would preclude or restrict any
expansion or enhancement or change in such use. There are no material
latent defects or material adverse physical conditions affecting the real
property, and improvements thereon, owned or leased by the Company or any
Company Subsidiary other than those that would not prevent or materially
delay consummation of the Merger or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement and
would not have a Material Adverse Effect.
SECTION 3.16. Rights Agreement. The copy of the Rights Agreement,
dated as of February 1, 2000, between the Company and First Union
National Bank, a national banking association, as rights agent, that is
set forth as an exhibit to the Company's Form 8-A filed with the SEC on
February 3, 2000, as amended by the First Amendment to Rights Agreement
dated April 10, 2000 as set forth as an exhibit to the Company's amended
Form 8-A filed with the SEC on April 19, 2000 and the Second Amendment to
Rights Agreement dated December 17, 2000 (as true and correct copy of
which has been furnished to the Parent), as set forth as an exhibit to
the Company's amended Form 8-A to be filed with the SEC on December 18,
2000 (collectively, the "Rights Agreement") is a complete and correct
copy thereof. The Company Board has taken all necessary action to amend
the Rights
Agreement, a copy of which amendment has been provided to Parent and its
Representatives (as defined herein), so that (a) neither the execution of
this Agreement, the Stock Purchase Agreement or the Escrow Agreement nor
the consummation of the Merger or the transactions contemplated by the
Stock Purchase Agreement or the Escrow Agreement will (i) cause the
Rights (as such term is defined in the Rights Agreement) issued pursuant
to the Rights Agreement to become exercisable, (ii) cause Parent or
Merger Sub to become an Acquiring Person (as such term is defined in the
Rights Agreement) or (iii) give rise to a Distribution Date (as such term
is defined in the Rights Agreement) and (b) the Rights will expire
pursuant to the terms of the Rights Agreement no later than immediately
prior to the Effective Time.
SECTION 3.17. Insurance. The Company and the Company Subsidiaries
have in effect insurance coverage with reputable insurers or are self-
insured, which, in respect of amounts, premiums, types and risks insured,
constitutes reasonable coverage for the risks customarily insured against
by companies engaged in the industries in which the Company and the
Company Subsidiaries are engaged and comparable in size and operations to
the Company and the Company Subsidiaries. The Company's current annual
premium for directors' and officers' liability insurance is approximately
$400,000 per year, and, as of the date of this Agreement, the Company has
no reason to believe that such insurance will not be renewable by it or
the Surviving Corporation upon expiration in June 2001 on similar or more
favorable terms.
SECTION 3.18. Board Recommendation. On the unanimous
recommendation of the Company Independent Committee, the Company Board,
including all of the members of the Company Independent Committee, at a
meeting duly called and held, has by unanimous vote of the Company Board
(i) determined that the transactions contemplated by this Agreement, the
Stock Purchase Agreement and the Escrow Agreement constitute an "Approved
Transaction" within the meaning of the Rights Agreement, (ii) approved
and deemed it advisable that the Company and its stockholders consummate
the Merger, upon the terms and subject to the conditions set forth in
this Agreement, and (iii) resolved to recommend that the stockholders of
the Company approve and adopt this Agreement and the transactions
contemplated herein, including the Merger.
SECTION 3.19. Opinion of Financial Advisor. Credit Suisse First
Boston Corporation ("CSFB") has delivered to the Company its verbal
opinion on December 16, 2000, with the authorization to include such
opinion in the Proxy Statement and the Schedule 13E-3 (each as defined
below), subject to CSFB being provided with a reasonable opportunity
prior to the filing thereof to
review the proposed disclosure and to comment upon any CSFB related
reference contained therein, to the effect that, as of the date of this
Agreement, the aggregate Merger Consideration to be received by the
stockholders of the Company is fair, from a financial point of view, to
the Company's stockholders (other than Parent, Sellers and their
respective affiliates). The Company expects that CSFB will deliver a
written opinion to that effect to the Company, and the Company will
promptly thereafter deliver a signed copy of such written opinion to
Parent.
SECTION 3.20. Brokers. No broker, finder or investment banker
(other than CSFB) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated hereby based
upon arrangements made by or on behalf of the Company. The Company has
heretofore made available to Parent a complete and correct copy of all
agreements between the Company and CSFB pursuant to which such firm would
be entitled to any payment relating to the transactions contemplated
hereby.
SECTION 3.21. Vote Required; State Takeover Statutes. (a) Subject
to Section 7.01(a), the only vote of the holders of any class or series
of capital stock of the Company necessary to approve the Merger, this
Agreement or the transactions contemplated by this Agreement is the
affirmative vote by the Company's stockholders representing two-thirds of
the outstanding shares of the Company's Class A Common Stock and Class B
Common Stock voting together, with each outstanding share of Class A
Common Stock representing one vote and each outstanding share of Class B
Common Stock representing one-tenth of a vote.
(b) Section 3-602 of the MGCL does not apply to Parent, Merger Sub
or any of their affiliates in connection with the Merger or the
transactions contemplated by this Agreement, the Stock Purchase Agreement
or the Escrow Agreement. The Company Board has validly amended the
bylaws of the Company to exempt any acquisition of Company Common Stock
by Parent or Merger Sub from Section 3-702 of the MGCL and has taken all
other action necessary to ensure that the provisions of Title 3,
Subtitles 6 and 7 of the MGCL or any other applicable state takeover
statutes are not and will not be applicable to this Agreement, the Merger
and the other transactions contemplated by this Agreement. No other
state takeover statute is applicable to this Agreement, the Merger or the
other transactions contemplated by this Agreement, the Stock Purchase
Agreement or the Escrow Agreement. No stockholder of the Company shall
have any statutory appraisal rights under applicable Law as a result of
the Merger, this Agreement or any of the transactions contemplated hereby
or thereby.
SECTION 3.22. Waiver of Certain Obligations. The Company and, to
the Company's knowledge, each of the individuals identified in Section
3.22 of the Disclosure Schedule has agreed to duly execute and deliver
the respective agreement provided by Parent (collectively, the
"Waivers"), true and complete copies of which have been furnished to
Parent, and such Waivers will be, when executed and delivered, in full
force and effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby jointly and severally represent and warrant
to the Company, that:
SECTION 4.01. Organization and Qualification. Each of Parent and
Merger Sub has been duly organized and is validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Each
of Parent and Merger Sub has all necessary corporate power and authority
to execute and deliver this Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated hereby to be
consummated by Parent and Merger Sub. The execution and delivery of this
Agreement by Parent and Merger Sub and the consummation by Parent and
Merger Sub of such transactions have been duly and validly authorized by
all necessary corporate action and no other corporate proceedings on the
part of Parent and Merger Sub are necessary to authorize this Agreement
or to consummate such transactions. This Agreement has been duly
authorized and validly executed and delivered by each of Parent and
Merger Sub and constitutes (assuming due authorization, execution and
delivery by the Company) a legal, valid and binding obligation of each of
Parent and Merger Sub, enforceable against each of Parent and Merger Sub
in accordance with its terms, subject to bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the rights of
creditors generally and the availability of equitable remedies.
SECTION 4.02. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Parent and Merger Sub do not,
and the performance of this Agreement and the transactions contemplated
hereby by Parent and Merger Sub will not, (i) conflict with or violate
any provision of the charter or bylaws of Parent or Merger Sub, (ii)
assuming that all consents, approvals, authorizations and other actions
described in Section 4.02(b) have been obtained and all filings and
obligations described in Section 4.02(b) have been made, conflict with or
violate any Law applicable to Parent or Merger Sub or by which any
property or asset of Parent or Merger Sub is
bound or affected, or (iii) result in any breach of or constitute a
default (or an event which with notice or lapse of time or both would
become a default) under, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation, except, with respect to clause (iii), for any such conflicts,
violations, breaches, defaults, or other occurrences which would not
reasonably be expected to prevent or materially delay the performance of
this Agreement by either Parent or Merger Sub.
(b) The execution and delivery of this Agreement by each of Parent
and Merger Sub do not, and the performance of this Agreement by Parent
and Merger Sub will not, require any consent, approval, authorization or
permit of, or filing with or notification to, any Governmental Entity,
except (i) for applicable requirements of the Exchange Act, the pre-
merger notification requirements of the HSR Act which requirements have
been satisfied assuming the Closing occurs before May 26, 2001, and the
filing and recordation of appropriate merger documents as required by the
MGCL and (ii) where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications,
would not reasonably be expected to prevent or materially delay
consummation of the Merger.
SECTION 4.03. Absence of Litigation. There is no litigation, suit,
claim, action, proceeding or investigation pending or, to the best
knowledge of Parent, threatened against Parent or Merger Sub or any of
their respective properties or assets before any court, arbitrator or
Governmental Entity which seeks to delay or prevent or would result in
the material delay of or would prevent the consummation of any of the
transactions contemplated hereby. Neither Parent nor Merger Sub or any
property or asset of Parent or Merger Sub is subject to any continuing
order of, consent decree, settlement agreement or similar written
agreement with, or, to the knowledge of Parent, continuing investigation
by, any Governmental Entity or any order, writ, judgment, injunction,
decree, determination or award of any governmental or regulatory
authority or any arbitrator which would prevent Parent or Merger Sub from
performing their respective material obligations under this Agreement or
prevent or materially delay the consummation of any of the transactions
contemplated hereby.
SECTION 4.04. Brokers. No broker, finder or investment banker
other than Aegis Muse Associates LLC and its associates (collectively,
"Aegis Muse") is entitled to any brokerage, finder's or other fee or
commission in connection with the Merger based upon arrangements made by
or on behalf of Parent.
SECTION 4.05. No Activities. Merger Sub was formed solely for the
purpose of engaging in the transactions contemplated by the Agreement and
Plan of Merger, dated as of April 7, 2000, among Parent, Merger Sub and
the Company and in any subsequent transaction to acquire the Company by
Parent and Merger Sub, including the Merger contemplated by this
Agreement. Except for obligations or liabilities incurred in connection
with its incorporation or organization and the transactions contemplated
by this Agreement and the Agreement and Plan of Merger, dated as of April
7, 2000, among Parent, Merger Sub and the Company, Merger Sub does not
have any obligations or liabilities of any nature (whether accrued,
absolute, contingent or otherwise) and has not engaged in any business
activities of any type or kind whatsoever or entered into any agreements
or arrangements with any person.
SECTION 4.06. Financing. At or prior to the Closing Date, Parent
will cause Merger Sub to have, and Merger Sub will have, all of the
financing required to consummate the transactions contemplated by this
Agreement.
SECTION 4.07. Ownership of Company Common Stock. As of the date
hereof, the information relating to Holdings' ownership of Company Common
Stock contained in the Statement of Beneficial Ownership on Schedule 13-D
filed jointly by Parent and others with the SEC on January 12, 1999, as
amended, is true and correct in all material respects.
ARTICLE V
COVENANTS
SECTION 5.01. Conduct of Business by the Company Pending the
Closing. The Company agrees that, between the date of this Agreement and
the Effective Time, except as set forth in Section 5.01 of the Disclosure
Schedule or as contemplated by any other provision of this Agreement,
unless Parent shall consent in writing, which consent shall not be
unreasonably withheld or delayed, (1) the businesses of the Company and
the Company Subsidiaries shall be conducted only in, and the Company and
the Company Subsidiaries shall not take any action except in, the
ordinary course of business consistent with past practice and (2) the
Company shall use its reasonable best efforts to keep available the
services of such of the current officers, significant employees and
consultants of the Company and the Company Subsidiaries and to preserve
the current relationships of the Company and the Company Subsidiaries
with such of the customers, suppliers and other persons with which the
Company or any Company Subsidiary has significant business
relations in order to preserve substantially intact its business
organization. By way of amplification and not limitation, except as set
forth in Section 5.01 of the Disclosure Schedule or as contemplated by
any other provision of this Agreement, the Company shall not, and shall
neither cause nor permit any Company Subsidiaries or any of the Company's
affiliates (over which it exercises control), or any of its or their
officers, directors, employees and agents (in each case, in their
capacities as such) to, between the date of this Agreement and the
Effective Time, directly or indirectly, do, or agree to do, any of the
following, without the prior written consent of Parent, which consent
shall not be unreasonably withheld or delayed:
(a) amend or otherwise change its charter or bylaws or equivalent
organizational documents;
(b) issue, sell, pledge, dispose of, grant, transfer, lease,
license, guarantee, encumber, or authorize the issuance, sale, pledge,
disposition, grant, transfer, lease, license, guarantee or encumbrance
of, (i) any shares of capital stock of the Company or any Company
Subsidiary of any class, or securities convertible or exchangeable or
exercisable for any shares of such capital stock, or any options,
warrants or other rights of any kind to acquire any shares of such
capital stock, or any other ownership interest (including, without
limitation, any phantom interest), of the Company or any Company
Subsidiary (except for the issuance of any shares of capital stock
issuable pursuant to the exercise of any Company Options outstanding on
the date of this Agreement); or (ii) any property or assets of the
Company or any Company Subsidiary, except in all cases in the ordinary
course of business and in a manner consistent with past practice;
provided that the aggregate amount of any such sale or disposition (other
than a sale or disposition of petroleum products or other inventory in
the ordinary course of business consistent with past practice, as to
which there shall be no restriction on the aggregate amount), or pledge,
grant, transfer, lease, license, guarantee or encumbrance of such
property or assets of the Company or any Company Subsidiary shall not
exceed (x) $500,000 or (y) in the case of any sale or disposition of
retail gasoline sites, $1,000,000, provided that not more than four
retail gasoline sites may be disposed of under this subsection (y)
between the date of this Agreement and the Effective Time;
(c) declare, set aside, make or pay any dividend or
other distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock, other than dividends paid by any of
the wholly owned Company Subsidiaries to the Company in the ordinary
course of business consistent with past practice;
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization, person or any
division thereof or any assets, other than (x) acquisitions of any assets
in the ordinary course of business consistent with past practice that are
not, in the aggregate, in excess of $300,000 or (y) purchases (whether
for cash or pursuant to an exchange) of crude oil or intermediate
products for refining or refined petroleum products or other inventory
for resale in the ordinary course of business and consistent with past
practice; (ii) incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person for
borrowed money, except for indebtedness for borrowed money incurred in
the ordinary course of business and consistent with past practice under
the Loan and Security Agreement, effective as of December 10, 1998 and
last amended effective as of March 16, 2000, between Congress Financial
Corporation and First Union National Bank, as lenders, Congress Financial
Corporation, as administrative agent, the Company and certain of the
Company Subsidiaries, as borrowers, or incurred to refinance outstanding
indebtedness for borrowed money existing on the date of this Agreement
(which refinancing shall not increase the aggregate amount of
indebtedness permitted to be outstanding thereunder and shall not include
any covenants that shall be materially more burdensome to the Company in
any material respect or increase costs to the Surviving Corporation after
the Effective Time in any material respect), or other indebtedness for
borrowed money with a maturity of not more than one year in a principal
amount not, in the aggregate, in excess of $1,000,000; (iii) terminate,
cancel or request any material change in, or agree to any material change
in any Material Contract or enter into any contract or agreement material
to the
business, results of operations or financial condition of the Company and
the Company Subsidiaries taken as a whole, in either case other than in
the ordinary course of business, consistent with past practice; (iv) make
or authorize any capital expenditure, other than as set forth in Section
5.01(e)(iv) of the Disclosure Schedule; or (v) enter into or amend any
contract, agreement, commitment or arrangement that, if fully performed,
would not be permitted under this Section 5.01(e);
(f) increase the compensation payable or to become payable to its
officers or employees, except for increases in accordance with past
practices in salaries or wages of employees of the Company or any Company
Subsidiary who are not officers of the Company, or grant any rights to
severance or termination pay to, or enter into any employment or
severance agreement with, any director, officer or other employee of the
Company or any Company Subsidiary, or establish, adopt, enter into or
amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option (including, without limitation, the granting
of stock options, stock appreciation rights, stock option appreciation
unit awards, performance awards or performance restricted stock awards),
stock purchase, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee, except
as contemplated by this Agreement or to the extent required by applicable
Law or the terms of a collective bargaining agreement or a contractual
obligation existing on the date hereof;
(g) take any action with respect to modifying accounting policies
or procedures, other than actions in the ordinary course of business,
consistent with past practice or the requirements of U.S. GAAP and as
advised by the Company's regular certified independent public
accountants;
(h) waive, release, assign, settle or compromise any material
claims or litigation involving money damages in excess of $250,000,
except for claims asserted by the Company or the applicable Company
Subsidiary;
(i) make any material Tax election or settle or compromise any
material federal, state, local or foreign Tax liability;
(j) authorize or enter into any formal or informal agreement or
otherwise make any commitment to do any of the foregoing;
(k) amend or modify, or propose to amend or modify, the Rights
Agreement, as amended as of the date hereof, except as contemplated in
this Agreement;
(l) take any action that will be likely to result in the
representations and warranties set forth in Article III becoming false or
inaccurate in any material respect (or, with respect to any
representation and warranty already qualified by materiality, false or
inaccurate in any respect);
(m) enter into or carry out any other transaction other than in the
ordinary and usual course of business or other than as permitted pursuant
to the other clauses in this Section 5.01;
(n) take any action or fail to take any action that could
reasonably be expected to have or result in a Material Adverse Effect; or
(o) permit or cause any Company Subsidiary to do any of the
foregoing or agree or commit to do any of the foregoing.
SECTION 5.02. Notices of Certain Events. Each of Parent and the
Company shall give prompt notice to the other of (i) any notice or other
communication from any person alleging that the consent of such person is
or may be required in connection with the Merger, (ii) any notice or
other communication from any Governmental Entity in connection with the
Merger, (iii) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened in writing against,
relating to or involving or otherwise affecting Parent, the Company or
their subsidiaries that relate to the consummation of the Merger or the
transactions contemplated by this Agreement; (iv) the occurrence of a
default or event that, with notice or lapse of time or both, will become
a default under any Material Contract; and (v) any change that is
reasonably likely to result in a Material Adverse Effect or is likely to
delay or impede the ability of either Parent or the Company to consummate
the transactions contemplated by this Agreement or to fulfill its
obligations set forth herein.
SECTION 5.03. Contractual Consents. Prior to or at the
Effective Time each of the parties hereto shall use its reasonable best
efforts to prevent the occurrence, as a result of the Merger, of the
triggering of a change of control or similar clause or any event which
constitutes a default (or an event which with notice or lapse of time or
both would become a default) under any material contract, agreement,
lease, license, permit, franchise or other instrument or obligation to
which it or any of its subsidiaries is a party.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Proxy Statement; Schedule 13E-3. (a) As promptly as
practicable after the execution of this Agreement, (i) the Company shall
prepare (in consultation with Parent) and file with the SEC a proxy
statement (together with any amendments thereof or supplements thereto,
the "Proxy Statement") relating to the meeting of the Company's
stockholders (the "Company Stockholders' Meeting") to be held to consider
approval of this Agreement and the Merger, and (ii) Parent, Merger Sub
and the Company shall, if required by the Exchange Act, prepare and file
with the SEC a Rule 13e-3 Transaction Statement on Schedule 13E-3 or an
amendment to such Schedule filed with the SEC by the same parties on May
16, 2000, as appropriate (together with all amendments and supplements
thereto, the "Schedule 13E-3"), relating to the Merger and the other
transactions contemplated by this Agreement. The Company shall furnish
all information concerning the Company that Parent may reasonably request
in connection with such actions and the preparation of the Proxy
Statement and Schedule 13E-3, if any.
(b) Subject to the fiduciary duties of the Company Board, as
described in the following proviso, the Proxy Statement shall include the
unanimous recommendation of the Company Board to the stockholders of the
Company to vote in favor of approving the Merger and this Agreement;
provided, however, that the Company Board may, at any time prior to the
date of the Company Stockholders' Meeting, withdraw, modify or change any
such recommendation to the extent that the Company Board or the Company
Independent Committee determines in good faith after consultation with
independent legal counsel that the failure to so withdraw, modify or
change their recommendation could cause the Company Board to breach its
fiduciary duties to the Company's stockholders under applicable law.
(c) No amendment or supplement to the Proxy Statement or the
Schedule 13E-3, if any, will be made or filed with the SEC by Company or
Parent, as the case may be, without the approval
of the other party (which will not be unreasonably withheld). The
Company and Parent each will advise the other, promptly after they
receive notice thereof of any request by the SEC for amendment of the
Proxy Statement or the Schedule 13E-3 or comments thereon and responses
thereto or requests by the SEC for additional information.
(d) The information supplied by Parent for inclusion in the Proxy
Statement and the Schedule 13E-3 shall not, at (i) the time the Proxy
Statement (or any amendment thereof or supplement thereto), is first
mailed to the stockholders of the Company and (ii) the time of the
Company Stockholders' Meeting, contain any untrue statement of a material
fact or fail to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If, at any
time prior to the date of the Company Stockholders' Meeting, any event or
circumstance relating to Parent, or its officers or directors, is
discovered by Parent that should be set forth in an amendment or a
supplement to the Proxy Statement or the Schedule 13E-3, Parent shall
promptly inform the Company. The Schedule 13E-3 will comply as to form
and substance in all material aspects with the applicable requirements of
the Exchange Act.
(e) The information supplied by the Company for inclusion in the
Proxy Statement and the Schedule 13E-3 shall not, at (i) the time the
Proxy Statement (or any amendment thereof or supplement thereto), is
first mailed to the stockholders of the Company and (ii) the time of the
Company Stockholders' Meeting, contain any untrue statement of a material
fact or fail to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If, at any
time prior to the date of the Company Stockholders' Meeting, any event or
circumstance relating to the Company or any Company Subsidiary, or their
respective officers or directors, is discovered by the Company that
should be set forth in an amendment or a supplement to the Proxy
Statement or the Schedule 13E-3, the Company shall promptly inform
Parent. The Proxy Statement will comply as to form and substance in all
material respects with the applicable requirements of the Exchange Act.
SECTION 6.02. Company Stockholders' Meeting. (a) The Company
shall call and hold the Company Stockholders' Meeting as promptly as
practicable for the purpose of voting upon the approval of this Agreement
and the Merger.
(b) The Company shall use all commercially reasonable efforts to
solicit from its stockholders proxies in favor of the approval of this
Agreement and the Merger, and shall use all commercially reasonable
efforts to take all other action necessary or advisable to secure the
vote or consent of its stockholders required by the MGCL and pursuant to
the terms of Section 7.01(a) hereof and the rules of the AMEX to obtain
such approvals.
(c) Parent shall cause Holdings to vote all shares of the Company
Common Stock held by it, or for which it holds proxies, in favor of the
Merger and this Agreement.
SECTION 6.03. Access to Information; Confidentiality. (a) Except
as required pursuant to any confidentiality agreement or similar
agreement or arrangement to which the Company or any of the Company
Subsidiaries is a party or pursuant to applicable Law from the date of
this Agreement to the Effective Time, the Company shall (and shall cause
the Company Subsidiaries to): (i) provide to Parent (and its officers,
directors, employees, accountants, consultants, legal counsel, agents and
other representatives, collectively, "Representatives") reasonable access
at reasonable times, upon prior notice to the Company, to the officers,
employees, agents, properties, offices and other facilities of the
Company and the Company Subsidiaries and to the books and records thereof
(including, without limitation, access to the Company's accountants, any
correspondence between the Company and such accountants and work papers
prepared with respect to the Company by such accountants), (ii) provide
to Parent and its Representatives access to the Real Property for Parent
to conduct any environmental site assessment that Parent deems
appropriate, including, without limitation, access to enter upon and
investigate and collect air, surface water, groundwater and soil samples,
and (iii) furnish promptly such information concerning the business,
properties, contracts, assets, liabilities, personnel and other aspects
of the Company and the Company Subsidiaries as Parent or its respective
Representatives may reasonably request. No investigation conducted
pursuant to this Section 6.03 shall affect or be deemed to modify any
representation or warranty made in this Agreement.
(b) The parties shall comply with, and shall cause their respective
Representatives to comply with, all of their respective obligations under
the Confidentiality Agreement dated January 26, 2000 (the
"Confidentiality Agreement") between Parent and the Company with respect
to the information disclosed pursuant to this Section 6.03.
SECTION 6.04. No Solicitation of Transactions. The Company agrees
that, from and after the date hereof until the earlier of the Effective
Time or the termination of this Agreement in accordance with Article
VIII, neither it nor any Company Subsidiary shall, and that it shall
cause its and each Company Subsidiary's Representatives not to, except as
contemplated by this Agreement, directly or indirectly, initiate, solicit
or encourage any inquiries or the making of any proposal or offer with
respect to a merger, reorganization, share exchange, consolidation,
business combination, recapitalization, liquidation, dissolution or
similar transaction involving, or any purchase or sale of all or any
significant portion of the assets of the Company (including the sale of
either of the Company's refineries or any of its terminals) and the
Company Subsidiaries, taken as a whole, or 15% or more of the equity
securities of the Company (any such proposal or offer being hereinafter
referred to as a "Competing Transaction"). The Company further agrees
that neither it nor any Company Subsidiary shall, and that it shall cause
its and each Company Subsidiary's Representatives not to, directly or
indirectly, have any discussion with or provide any confidential
information or data relating to the Company or any Company Subsidiary to
any person relating to a Competing Transaction or engage in any
negotiations concerning a Competing Transaction, or otherwise facilitate
any effort or attempt to make or implement a Competing Transaction or
accept a Competing Transaction; provided, however, that nothing contained
in this Section 6.04 shall prevent the Company or the Company Board from
(i) engaging in any discussions or negotiations with, or providing any
information to, any person in response to an unsolicited written
Competing Transaction by any such person; or (ii) recommending such an
unsolicited written Competing Transaction to the holders of Company
Common Stock if, in any such case as is referred to in clause (i) or
(ii), (A) the Company Board concludes in good faith (after consultation
with independent financial advisors) that such Competing Transaction
would, if consummated, result in a transaction more favorable to holders
of Company Common Stock than the transaction contemplated by this
Agreement (any such more favorable Competing Transaction being referred
to in this Agreement as a "Superior Proposal"), (B) either the Company
Board or the Company Independent Committee determines in good faith after
consultation with independent legal counsel that such action is necessary
for the Company Board to act in a manner consistent with its fiduciary
duties under applicable Law, (C) prior to providing any information or
data regarding the Company to any person or any of such person's
Representatives in connection
with a Superior Proposal by such person, the Company receives from such
person an executed confidentiality agreement on terms at least as
restrictive on such person as those contained in the Confidentiality
Agreement and (D) prior to providing any information or data to any
person or any of such person's Representatives or entering into
discussions or negotiations with any person or any of such person's
Representatives in connection with a Superior Proposal by such person,
the Company notifies Parent promptly of the receipt of such Superior
Proposal indicating, in connection with such notice, the name of such
person and attaching a copy of the proposal or offer or providing a
complete written summary thereof. The Company agrees that it shall keep
Parent informed, on a current basis, of the status and terms of any
discussions or negotiations related to such Superior Proposal. The
Company agrees that it will take the necessary steps to promptly inform
each Company Subsidiary and each Representative of the Company or any
Company Subsidiary of the obligations undertaken in this Section 6.04.
Immediately following the execution of this Agreement, the Company shall
terminate and cause the Company Subsidiaries to terminate any existing
activities, discussions or negotiations with any third parties that may
be ongoing with respect to any Competing Transaction and promptly after
the public announcement of the execution of this Agreement shall use all
reasonable efforts to request that all confidential information
previously furnished to any such third parties be returned promptly.
Nothing contained in this Agreement shall prohibit the Company or the
Company Board from taking or disclosing to its stockholders a position
contemplated by Rules 14d-9 and 14e-(2)(a) promulgated under the Exchange
Act.
SECTION 6.05. Amendment of Plans. At the request of Parent, the
Company shall use its best efforts to amend its Plans containing a
"change of control" or similar provision, to the satisfaction of Parent,
to clarify that a reduction in the Company's economic interest in total
refining output below 80,000 barrels per day as a result of processing
agreements, joint ventures or similar transactions, will not constitute a
"change of control" under such Plans provided that the Company retains
responsibility for staffing and operating the refineries.
SECTION 6.06. Directors' and Officers' Indemnification and
Insurance. (a) The charter and bylaws of the Surviving Corporation
shall contain the provisions regarding liability of directors and
indemnification of directors and officers that are set forth, as of the
date of this Agreement, in the charter and the bylaws, respectively, of
the Company, which provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner
that would affect adversely the rights thereunder of individuals who at
or at any time prior to the Effective Time were directors, officers,
employees, fiduciaries or agents of the Company.
(b) For a period of six years after the Effective Time, the
Surviving Corporation shall use best efforts to cause to be maintained in
effect policies of directors' and officers' liability insurance with
coverage in amount and scope at least as favorable as the Company's
existing policies with respect to claims arising from facts or events
that occurred prior to the Effective Time.
(c) This Section 6.06 is intended to be for the benefit of, and
shall be enforceable by, the indemnified parties, their heirs and
personal representatives and shall be binding on the Surviving
Corporation and its respective successors and assigns.
(d) From and after the Effective Time, the Surviving Corporation
agrees that it shall indemnify and hold harmless each present and former
director and officer of the Company, determined as of the Effective Time
(the "Indemnified Parties"), from and against any costs, judgments,
fines, losses, obligations, claims, damages, liabilities, or expenses
(including interest, penalties, reasonable out-of-pocket expenses and
reasonable attorneys' fees incurred in the investigation or defense of
any of the same or in asserting any of their rights hereunder)
(collectively, "Costs") incurred in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of, resulting from, or
pertaining to matters existing or occurring at or prior to the Effective
Time (including, without limitation, the transactions contemplated by
this Agreement), whether asserted or claimed prior to, at or after the
Effective Time, to the fullest extent that the Company would have been
permitted or required under Maryland laws and under the Company's charter
documents (as in effect on the date hereof) to indemnify such Indemnified
Parties (and the Surviving Corporation shall advance expenses as incurred
to the fullest extent permitted under applicable Law; provided that the
Indemnified Party to whom expenses are advanced provides an undertaking
to repay such advances if it is ultimately determined that such
Indemnified Party is not entitled to indemnification); provided that any
determination required to be made with respect to whether an officer's or
director's conduct complies with the standards set forth under Maryland
law and the Company's charter documents shall be made by independent
counsel selected by the Surviving Corporation.
(e) Any Indemnified Party wishing to claim indemnification under
paragraph (d) of this Section 6.06, upon learning of any such claim,
action, suit, proceeding or investigation, shall promptly notify Parent
thereof, but the failure to so notify shall not relieve the Surviving
Corporation of any liability it may have to such Indemnified Party,
except to the extent that such failure materially prejudices the
Surviving Corporation. In the event of any such claim, action, suit,
proceeding or investigation (whether arising before or after the
Effective Time), (i) the Surviving Corporation shall have the right to
assume the defense thereof, with counsel selected by Parent and
reasonably acceptable to the Indemnified Party, and the Surviving
Corporation shall not be liable to such Indemnified Parties for any legal
expenses of other counsel or any other expenses subsequently incurred by
such Indemnified Parties in connection with the defense thereof, except
that if the Surviving Corporation elects not to assume such defense or
counsel for the Indemnified Parties advises that there are issues which
raise conflicts of interest between the Surviving Corporation and the
Indemnified Parties, the Indemnified Parties may retain counsel
satisfactory to them, and the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; provided, however, that the
Surviving Corporation shall be obligated pursuant to this paragraph (f)
to pay for only one firm of counsel for all Indemnified Parties in any
jurisdiction unless the use of one counsel for such Indemnified Parties
would present such counsel with a conflict of interest, (ii) the
Indemnified Parties will cooperate in the defense of any such matter and
(iii) the Surviving Corporation shall not be liable for any settlement
effected without the prior written consent of Parent; and provided
further that the Surviving Corporation shall not have any obligation
hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall
have become final, that the indemnification of such Indemnified Party in
the manner contemplated hereby is prohibited by applicable Law. The
Surviving Corporation shall not, in the defense of any claim or
litigation, except with the consent of the Indemnified Party (which
consent shall not be unreasonably withheld or delayed), consent to entry
of judgment or enter into any settlement that provides for injunctive or
other nonmonetary relief affecting the Indemnified Party or that does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability with
respect to such claim or litigation.
(f) If the Surviving Corporation or any of its successors
or assigns shall (i) consolidate with or merge into any other
corporation or entity and shall not be the continuing or surviving
corporation or entity of such consolidation or merger or (ii) transfer
all or substantially all of its properties and assets or outstanding
voting securities to any individual, corporation or other entity, then
and in each such case, proper provisions shall be made so that the
successors and assigns of the Surviving Corporation shall expressly
assume all of the obligations set forth in this Section 6.06.
SECTION 6.07. Further Action; Consents; Filings. Upon the
terms and subject to the conditions hereof, each of the parties hereto
shall use its reasonable best efforts to (i) take, or cause to be taken,
all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable Law or otherwise to
consummate and make effective the Merger, (ii) obtain from Governmental
Entities any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained or made by Parent or the
Company or any of their subsidiaries in connection with the
authorization, execution and delivery of this Agreement and the
consummation of the Merger, (iii) make all necessary filings, and
thereafter make any other submissions either required or deemed
appropriate by each of the parties, with respect to this Agreement and
the Merger required under (A) the Exchange Act, (B) the HSR Act, which
requirements have been satisfied assuming the Closing occurs before May
26, 2001, (C) the rules of the AMEX, or (D) any other applicable Law.
The parties hereto shall cooperate and consult with each other in
connection with the making of all such filings, including by providing
copies of all such documents to the nonfiling party and its advisors
prior to filing, and none of the parties will file any such document if
any of the other parties shall have reasonably objected to the filing of
such document. No party to this Agreement shall consent to any voluntary
extension of any statutory deadline or waiting period or to any voluntary
delay of the consummation of the Merger at the behest of any Governmental
Entity without the consent and agreement of the other parties to this
Agreement, which consent shall not be unreasonably withheld or delayed.
Without limiting the foregoing, each of the parties hereto shall, and
shall cause each of its subsidiaries to, use its reasonable best efforts
to obtain (and to cooperate and coordinate with the other parties to
obtain) any consent, authorization, order or approval of, or any
exemption by, any Governmental Entity that is required to be obtained in
connection with the Merger and to take all actions reasonably necessary
to satisfy any applicable regulatory requirements relating thereto. Each
of the parties shall promptly take, in
the event that any permanent or preliminary injunction or other order is
entered or becomes reasonably foreseeable to be entered in any proceeding
that would make consummation of the transaction contemplated hereby in
accordance with the terms of this Agreement unlawful or that would
prevent or delay consummation of the transaction contemplated hereby, any
and all steps necessary to vacate, modify or suspend such injunction or
order so as to permit such consummation prior to the deadline specified
in Section 8.01(b). Each of the parties agrees to consult in good faith
and to use all commercially reasonable efforts to avoid or cure the
occurrence of an Event of Default, as such term is defined in the
Indenture dated as of January 24, 1995, as amended and as in effect as of
the date of this Agreement, between the Company and The First National
Bank of Boston as trustee (the "Indenture").
SECTION 6.08. The Company Rights Plan. Prior to the Effective Time,
the Company shall take all further action necessary to (i) amend the
Rights Agreement so as to accelerate the Final Expiration Date (as such
term is used in the Rights Agreement) to a date that is immediately prior
to the Effective Time, and (ii) ensure that after such acceleration of
the Final Expiration Date (A) neither the Company, Parent nor Merger Sub
shall have any obligations under the Rights or Rights Agreement and (B)
none of the holders of the Rights shall have any rights under the Rights
or Rights Agreement.
SECTION 6.09. Public Announcements. After the issuance of the
initial press release, Parent and the Company shall consult with each
other before issuing any press release or otherwise making any public
statement with respect to this Agreement or any transaction contemplated
hereby and shall not issue any such press release or make any such public
statement prior to such consultation, except to the extent required by
applicable Law or the requirements of the AMEX, in which case the issuing
party shall use its reasonable best efforts to consult with the other
party before issuing any such release or making any such public
statement.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party to
Consummate the Merger. The obligations of Parent, the Company and Merger
Sub to effect the Merger shall be subject to the satisfaction or, if
permitted by applicable Law, waiver prior to the Closing Date of the
following conditions:
(a) this Agreement and the transactions contemplated
hereby shall have been approved and adopted by (i) the requisite
affirmative vote of the stockholders of the Company in accordance with
the MGCL; and (ii) a majority of the votes cast by or on behalf of the
holders of all Company Common Stock not beneficially owned by Parent or
its affiliates which is represented in person or by proxy at, and votes
at, the Company Stockholders' Meeting, for which purpose: (A) the Class
A Common Stock and the Class B Common Stock shall, as provided for in
Section 5.3 of the Company's charter, vote together as a single class
with each share of Class A Common Stock entitling the holder of record
thereof to one (1) vote, and each share of Class B Common Stock entitling
the holder of record thereof to one-tenth (1/10) vote, and (B) shares of
Company Common Stock which Parent or its affiliates have the right to
acquire or have acquired prior to the Company Stockholders' Meeting
pursuant to the Stock Purchase Agreement shall be deemed to not be
beneficially owned by Parent or its affiliates and shall, if present and
voting at the Company Stockholders' Meeting, be counted toward the votes
cast by or on behalf of the holders of Company Common Stock not
beneficially owned by Parent or its affiliates, notwithstanding the
acquisition by Parent or its affiliates of, or the right of Parent or its
affiliates to acquire, such Company Common Stock;
(b) no preliminary or permanent injunction, decree or other order
(an "Order"), issued by any Governmental Entity or other legal restraint
or prohibition preventing the consummation of the transactions
contemplated by this Agreement shall be in effect, and no Law shall have
been enacted or adopted that enjoins, prohibits or makes illegal
consummation of any of the transactions contemplated hereby; and
(c) any waiting period (and any extension thereof) applicable to
the consummation of the Merger under the HSR Act (which shall not be
applicable assuming the Closing occurs before May 26, 2001) shall have
expired or been terminated.
SECTION 7.02. Conditions to the Obligations of the Company. The
obligations of the Company to effect the Merger shall be subject to the
satisfaction or, if permitted by applicable Law, waiver, prior to the
Closing Date, of the following further conditions:
(a) each of the representations and warranties of Parent and Merger
Sub contained in this Agreement shall be true and correct in all material
respects as of the Effective Time, as though made on and as of the
Effective Time, except that those representations and warranties that
address matters only as of a particular date shall remain
true and correct in all material respects as of such date, and the
Company shall have received a certificate of the Chief Financial Officer
of Parent to that effect; and
(b) Parent and Merger Sub shall have performed or complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by them on or prior to the
Effective Time, and the Company shall have received a certificate of the
Chief Executive Officer or Chief Financial Officer of Parent to that
effect.
SECTION 7.03. Conditions to the Obligations of Parent and Merger
Sub. The obligations of Parent and Merger Sub to effect the Merger shall
be subject to the satisfaction or, if permitted by applicable Law, waiver
prior to the Closing Date of the following further conditions:
(a) each of the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material
respects as of the Effective Time, as though made at and as of the
Effective Time, except that those representations and warranties that
address matters only as of a particular date shall remain true and
correct in all material respects as of such date (provided that any
representation or warranty that is qualified by materiality (including,
without limitation, qualification by reference to a Material Adverse
Effect) shall be true in all respects as of the Effective Time or as of
such particular date, as the case may be), and Parent shall have received
a certificate of the Chief Financial Officer of the Company to that
effect, it being understood that any representation and warranty of the
Company which would otherwise not be true and correct in all material
respects or in all respects, as the case may be, but was made by the
Company (i) with the approval of Mr. Henry A. Rosenberg, Jr. despite his
actual knowledge that such representation and warranty was false and (ii)
without knowledge at the date of this Agreement by any of the other
officers or directors of the Company that such representation and
warranty was false shall not be deemed to not be true and correct in all
material respects or to not be true and correct in all respects, as the
case may be, for purposes of this Section 7.03(a);
(b) the Company shall have performed or complied in all material
respects with all agreements and covenants required by this Agreement to
be performed or complied with
by it on or prior to the Effective Time, and Parent shall have received a
certificate of the Chief Financial Officer of the Company to that effect;
(c) all consents, approvals, waivers and authorizations required to
be obtained to effect the Merger shall have been obtained from all
Governmental Entities, except if the failure to obtain any such consents,
approvals and authorizations would not result in a Material Adverse
Effect; and
(d) no Event of Default (as such term is defined in the Indenture)
shall have occurred under the Indenture and the consummation of the
Merger will not result in the occurrence of an Event of Default under the
Indenture.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time,
notwithstanding any requisite approval and adoption of this Agreement, as
follows:
(a) by mutual written consent duly authorized by each of the
Company Board, the Company Independent Committee and the Board of
Directors of Parent;
(b) by either Parent or the Company, if the Effective Time shall
not have occurred on or before March 30, 2001; provided, however, that
the right to terminate this Agreement under this Section 8.01(b) shall
not be available to the party whose failure to fulfill any obligation
under this Agreement shall have been the cause of, or resulted in, the
failure of the Effective Time to occur on or before such date;
(c) by either Parent or the Company, if any Order or other legal
restraint or prohibition preventing the consummation of the Merger shall
have been entered by any Governmental Entity or any Law shall have been
enacted or adopted that enjoins, prohibits or makes illegal consummation
of the Merger;
(d) by Parent, if (i) the Company Board withdraws, modifies or
changes its recommendation of this Agreement in a manner adverse to
Parent, or shall have resolved to do so, (ii) after receiving a bona fide
proposal or offer
relating to a Competing Transaction, the Company Board shall have refused
to affirm its recommendation of this Agreement as promptly as practicable
(but in any case within ten business days) after receipt of any written
request from Parent, (iii) the Company Board shall have recommended to
the stockholders of the Company a Competing Transaction, or shall have
resolved to do so, or (iv) a tender offer or exchange offer for 15% or
more of the outstanding shares of capital stock of the Company is
commenced, and the Company Board fails to recommend against acceptance of
such tender offer or exchange offer by its stockholders (including not
taking a position with respect to the acceptance of such tender offer or
exchange offer by its stockholders);
(e) by Parent or the Company, if this Agreement shall fail to
receive the requisite vote for adoption at the Company Stockholders'
Meeting or any adjournment or postponement thereof;
(f) by Parent, upon a breach of, or failure to perform in any
material respect (which breach or failure cannot be or has not been cured
within 30 days after the giving of notice of such breach or failure), any
representation, warranty, covenant or agreement on the part of the
Company set forth in this Agreement, such that the conditions set forth
in clause (a) or (b) of Section 7.03 would not be satisfied; or
(g) by the Company, upon a breach of, or failure to perform in any
material respect (which breach or failure cannot be or has not been cured
within 30 days after the giving of notice of such breach or failure), any
representation, warranty, covenant or agreement on the part of Parent set
forth in this Agreement, such that the conditions set forth in Section
7.02 would not be satisfied.
SECTION 8.02. Notice of Termination; Effect of Termination. In the
event of termination of this Agreement by either Parent or the Company
pursuant to Section 8.01 hereof, the terminating party shall give prompt
written notice thereof to the nonterminating party. Except as provided
in Section 9.01, in the event of termination of this Agreement pursuant
to Section 8.01, this Agreement shall forthwith become void, there shall
be no liability under this Agreement on the part of Parent, the Company
or Merger Sub or any of their respective officers or directors, and all
rights and obligations
of each party hereto shall cease, subject to the remedies of the parties
set forth in Section 8.05(b), (c) and (d); provided, however, that
nothing herein shall relieve any party from liability for the breach of
any of its representations and warranties or the breach of any of its
covenants or agreements set forth in this Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by mutual
agreement of the parties hereto by action taken by or on behalf of their
respective Boards of Directors (with respect to the Company, including
approval of the Company Independent Committee) at any time prior to the
Effective Time; provided, however, that after the approval of this
Agreement by the stockholders of the Company, no amendment may be made
that would reduce the amount or change the type of consideration into
which each share of Company Common Stock shall be converted upon
consummation of the Merger.
SECTION 8.04. Waiver. At any time prior to the Effective Time, any
party hereto may (a) extend the time for the performance of any
obligation or other act of any other party hereto, (b) waive any
inaccuracy in the representations and warranties contained herein or in
any document delivered pursuant hereto, and (c) waive compliance with any
agreement or condition contained herein. Any waiver of a condition set
forth in Section 7.01 will be effective only if made in writing by each
of the Company and Parent and, unless otherwise specified in such
writing, shall thereafter operate as a waiver of such condition for any
and all purposes of this Agreement. Any such extension or waiver shall
be valid if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
SECTION 8.05. Expenses. (a) Except as otherwise set forth in this
Section 8.05, all Expenses (as defined below) incurred in connection with
this Agreement and the Merger shall be paid by the party incurring such
expenses, whether or not the Merger is consummated. "Expenses," as used
in this Agreement, shall consist of all out- of-pocket expenses
(including, without limitation, all fees and expenses of counsel,
accountants, investment bankers, (including, without limitation, any fees
or expenses payable to Aegis Muse pursuant to the terms of the engagement
letter from Aegis Muse to Parent dated January 26, 2000) experts and
consultants to a party hereto and its affiliates) reasonably incurred by
a party or on its behalf in connection with, or related to the
authorization, preparation, negotiation, execution and performance of,
this Agreement, the preparation, printing, filing and mailing of the
Proxy Statement, the solicitation of stockholder approvals and all other
matters related to the consummation of the Merger.
(b) The parties agree that if the Company or Parent shall terminate
this Agreement pursuant to Section 8.01(e) due to the failure of the
Company's stockholders to approve and adopt this Agreement and (i) at the
time of such failure to so approve and adopt this Agreement there shall
exist a Competing Transaction (which Competing Transaction shall have
become the subject of a public announcement or any person shall have
publicly announced an intention to make a proposal or offer relating
thereto) with respect to the Company and (ii) within 12 months of the
termination of this Agreement, the Company enters into an agreement with
any third party with respect to a Competing Transaction, which
transaction is subsequently consummated, then the Company shall reimburse
all reasonable and documented Expenses of Parent and Merger Sub
simultaneously with the consummation of such transaction.
(c) The parties agree that the payment of Expenses provided for in
Section 8.05(b) shall be the sole and exclusive remedy of the parties
upon a termination of this Agreement pursuant to Section 8.01(e), and
such remedy shall be limited to the payments stipulated in Section
8.05(b); provided, however, that nothing herein shall relieve any party
from liability for the willful breach of any of its representations and
warranties or the breach of any of its covenants or agreements set forth
in this Agreement.
(d) Any payment of Expenses required to be made pursuant to Section
8.05(b) shall be made by wire transfer of immediately available funds to
an account designated in writing by the party entitled to receive
payment.
(e) In the event that the Company shall fail to pay any Expenses of
Parent in accordance with Section 8.05(b) when due, the amount of any
such Expenses shall be increased to include the costs and expenses
actually incurred or accrued by Parent, acting together (including,
without limitation, fees and expenses of counsel) in connection with the
collection under and enforcement of this Section 8.05.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non- Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this
Agreement and in any certificate delivered pursuant hereto shall
terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 8.01, as the case may be, except that the agreements
set forth in Articles I and II, Section 6.06 and this Article IX shall
survive the
Effective Time and those set forth in Sections 6.03(b) and 8.05 and this
Article IX shall survive termination. Each party agrees that, except for
the representations and warranties contained in this Agreement and the
Disclosure Schedule, no party hereto has made any other representations
and warranties, and each party hereby disclaims any other representations
and warranties made by itself or any of its officers, directors,
employees, agents, financial and legal advisors or other representatives
with respect to the execution and delivery of this Agreement or the
transactions contemplated herein, notwithstanding the delivery or
disclosure to any other party or any party's representatives of any
documentation or other information with respect to any one or more of the
foregoing.
SECTION 9.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given
(and shall be deemed to have been duly given upon receipt) by delivery in
person, by telecopy and facsimile or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at
the following addresses (or at such other address for a party as shall be
specified in a notice given in accordance with this Section 9.02):
if to Parent:
Rosemore, Inc.
One North Charles Street, Suite 2300
Baltimore, Maryland 21201
Attention: Edward L. Rosenberg
President and Chief Executive Officer
Telephone: (410) 347-7090
Facsimile: (410) 347-7081
with a copy (which shall not constitute notice to Parent) to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022-6069
Attention: John A. Marzulli, Jr., Esquire
Telephone: (212) 848-8590
Facsimile: (212) 848-7179
if to the Company:
Crown Central Petroleum Corporation
One North Charles Street
Baltimore, Maryland 21201-3740
Attention: Thomas L. Owsley, Esquire
Telephone: (410) 659-4833
Facsimile: (410) 659-4763
If mailed to the Company:
P.O. Box 1168
Baltimore, Maryland 20208
with copies (which shall not constitute notice to the Company) to:
Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, NW
Washington, D.C. 20005-2111
Attention: Stephen W. Hamilton, Esquire
Telephone: (202) 371-7000
Facsimile: (202) 393-5670
and
McGuireWoods LLP
1750 Tysons Boulevard, Suite 1800
Tysons Corner, Virginia 22102-3915
Attention: Clive R. G. O'Grady, Esquire
Telephone: (703) 712-5017
Facsimile: (703) 712-5248
SECTION 9.03. Certain Definitions. For purposes of this Agreement,
the term:
(a) "affiliate" of a specified person means a person who,
directly or indirectly through one or more intermediaries, controls,
is controlled by or is under common control with such specified
person;
(b) "beneficial owner" with respect to any shares of
capital stock means a person who shall be deemed to be the
beneficial owner of such shares (i) which such person or any of its
affiliates or associates (as such terms are defined in Rule 12b-2
promulgated under the Exchange Act) beneficially owns, directly or
indirectly, (ii) which such person or any of its affiliates or
associates has, directly or indirectly, (A) the right to acquire
(whether such right is exercisable immediately or subject only to
the passage
of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of consideration rights, exchange
rights, warrants or options, or otherwise, or (B) the right to vote
pursuant to any agreement, arrangement or understanding, or (iii)
which are beneficially owned, directly or indirectly, by any other
persons with whom such person or any of its affiliates or associates
or person with whom such person or any of its affiliates or
associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares of
capital stock;
(c) "business day" means any day on which the principal
offices of the SEC in Washington, D.C. are open to accept filings
or, in the case of determining a date when any payment is due, any
day on which banks are not required or authorized to close in the
State of Maryland;
(d) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly
or as trustee or executor, of the power to direct or cause the
direction of the management and policies of a person, whether
through the ownership of voting securities, as trustee or executor,
by contract or credit arrangement or otherwise;
(e) "knowledge" means, with respect to any matter in question,
that the executive officers of Parent or the Company, as the case
may be, (i) have knowledge of such matter, or (ii) after reasonable
due investigation, should have known of such matter;
(f) "person" means an individual, corporation, company,
limited liability company, partnership, limited partnership,
syndicate, person (including, without limitation, a "person" as
defined in section 13(d)(3) of the Exchange Act), trust, association
or entity or government, political subdivision, agency or
instrumentality of a government; and
(g) "subsidiary" or "subsidiaries" of any person means any
corporation, limited liability company, partnership, joint venture
or other legal entity of which such person (either alone or through
or together with any other subsidiary) owns, directly or indirectly,
more than 50% of the stock or other equity interests, the holders of
which are generally entitled to vote for the election of the board
of directors or other governing
body of such corporation or other legal entity.
SECTION 9.04. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule
of Law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect, as long as
the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible, in a mutually acceptable manner, in order
that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.
SECTION 9.05. Assignment; Merger Sub; Binding Effect; Benefit.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether by
operation of Law or otherwise) without the prior written consent of the
other parties. Notwithstanding anything to the contrary contained in
this Agreement, Parent may transfer the shares of Merger Sub to one of
its subsidiaries prior to the consummation of the Merger. Subject to the
preceding sentence, this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns. Notwithstanding anything contained in this Agreement to the
contrary, except for the provisions of Section 6.06 (the "Third Party
Provision"), nothing in this Agreement, expressed or implied, is intended
to confer on any person other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement. The Third Party Provision may be
enforced by the beneficiaries thereof.
SECTION 9.06. Incorporation of Exhibits. The Disclosure Schedule
and any exhibits attached hereto and referred to herein are hereby
incorporated herein and made a part of this Agreement for all purposes as
if fully set forth herein.
SECTION 9.07. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this
Agreement was not performed in accordance with the terms hereof and that
the parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity.
SECTION 9.08. Governing Law. Except to the extent that the Merger
is mandatorily governed by, or pursuant to the terms of this Agreement is
subject to, the MGCL, this Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York applicable to
contracts executed in and to be performed in that State, without regard
to any conflicts of laws principles otherwise applicable. No provision
of this Agreement shall be construed to require any of the parties hereto
or any of their respective subsidiaries, affiliates, directors, officers,
employees or agents to take any action that would violate any applicable
Law.
SECTION 9.09. Submission to Jurisdiction; Venue. The parties
hereto unconditionally and irrevocably agree and consent to the exclusive
jurisdiction of, and service of process and venue in, the United States
District Court for the District of Maryland and the courts of the State
of Maryland and waive any objection with respect thereto, for the purpose
of any action, suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby; the parties further
agree not to commence any such action, suit or proceeding except in any
such court. Each party irrevocably waives any objections or immunities
to jurisdiction to which it might otherwise be entitled or become
entitled in any legal suit, action or proceeding against it arising out
of or relating to this Agreement or the transactions contemplated hereby
which is instituted in any such court.
SECTION 9.10. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 9.11. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more
counterparts, and by the different parties hereto in separate
counterparts, each of which, when executed and delivered, shall be deemed
to be an original but all of which, taken together, shall constitute one
and the same agreement.
SECTION 9.12. Entire Agreement. This Agreement (including the
exhibits attached hereto and the Disclosure Schedule) and the
Confidentiality Agreement constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings among the parties with respect thereto. No
addition to or modification of any provision of this Agreement shall be
binding upon any party hereto unless it is made in writing and signed by
all parties hereto.
SECTION 9.13. Waiver of Jury Trial. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, Parent, the Company and Merger Sub have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
ROSEMORE, INC.
By: /s/ Edward L. Rosenberg
-------------------------
Name: Edward L. Rosenberg
Title: President and Chief
Executive Officer
CROWN CENTRAL PETROLEUM CORPORATION
By:/s/ John E. Wheeler, Jr.
--------------------------
Name: John E. Wheeler, Jr.
Title: Executive Vice President
and Chief Financial Officer
ROSEMORE ACQUISITION CORPORATION
By: /s/ Edward L. Rosenberg
--------------------------
Name: Edward L. Rosenberg
Title: President