EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
WESTERN REFINING, INC.,
NEW ACQUISITION CORPORATION
AND
GIANT INDUSTRIES, INC.
DATED AS OF AUGUST 26, 2006
TABLE OF CONTENTS
PAGE
ARTICLE 1 THE MERGER.............................................. 1
Section 1.1 THE MERGER........................................... 1
Section 1.2 THE CLOSING.......................................... 1
Section 1.3 EFFECTIVE TIME....................................... 2
Section 1.4 CERTIFICATE OF INCORPORATION......................... 2
Section 1.5 BYLAWS............................................... 2
Section 1.6 DIRECTORS AND OFFICERS............................... 2
ARTICLE 2 CONVERSION OF THE COMPANY SHARES........................ 2
Section 2.1 EFFECT ON CAPITAL STOCK.............................. 2
Section 2.2 DEPOSIT; EXCHANGE OF CERTIFICATES.................... 3
Section 2.3 APPRAISAL RIGHTS..................................... 6
Section 2.4 ADJUSTMENTS.......................................... 6
Section 2.5 EFFECT OF THE MERGER ON EQUITY AWARDS................ 6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY........... 7
Section 3.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY........ 7
Section 3.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS..... 8
Section 3.3 CAPITALIZATION....................................... 8
Section 3.4 SUBSIDIARIES......................................... 8
Section 3.5 NO VIOLATION......................................... 9
Section 3.6 NO CONFLICT.......................................... 10
Section 3.7 SEC DOCUMENTS........................................ 11
Section 3.8 LITIGATION AND LIABILITIES........................... 12
Section 3.9 ABSENCE OF CERTAIN CHANGES........................... 12
Section 3.10 TAXES................................................ 13
Section 3.11 EMPLOYEE BENEFIT PLANS............................... 14
Section 3.12 LABOR MATTERS........................................ 17
Section 3.13 ENVIRONMENTAL MATTERS................................ 18
Section 3.14 INTELLECTUAL PROPERTY................................ 19
Section 3.15 TITLE TO PROPERTIES.................................. 19
Section 3.16 INSURANCE............................................ 20
Section 3.17 NO BROKERS........................................... 20
Section 3.18 CONTRACTS; DEBT INSTRUMENTS.......................... 21
Section 3.19 VOTE REQUIRED........................................ 22
Section 3.20 CERTAIN APPROVALS.................................... 22
Section 3.21 NO OTHER REPRESENTATIONS OR WARRANTIES............... 23
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. 23
Section 4.1 EXISTENCE; GOOD STANDING............................. 23
Section 4.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS..... 23
Section 4.3 NO CONFLICT.......................................... 23
Section 4.4 NO BROKERS........................................... 24
Section 4.5 NO PRESENT INTENTION TO DIVEST ASSETS................ 24
Section 4.6 SUFFICIENT FUNDS..................................... 24
Section 4.7 NO OTHER REPRESENTATIONS OR WARRANTIES............... 24
ARTICLE 5 COVENANTS............................................... 24
Section 5.1 CONDUCT OF BUSINESS.................................. 24
Section 5.2 NO SOLICITATION...................................... 27
Section 5.3 STOCKHOLDER APPROVAL................................. 30
Section 5.4 FILINGS; REASONABLE BEST EFFORTS..................... 31
Section 5.5 INSPECTION........................................... 33
Section 5.6 PUBLICITY............................................ 33
Section 5.7 EXPENSES............................................. 34
Section 5.8 INDEMNIFICATION AND INSURANCE........................ 34
Section 5.9 EMPLOYEE BENEFITS.................................... 36
Section 5.10 TAX MATTERS.......................................... 38
Section 5.11 RESIGNATIONS......................................... 38
Section 5.12 409A COMPLIANCE...................................... 38
Section 5.13 DEBT TENDER OFFER.................................... 39
ARTICLE 6 CONDITIONS.............................................. 40
Section 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO
EFFECT THE MERGER.................................... 40
Section 6.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO
EFFECT THE MERGER.................................... 40
Section 6.3 CONDITIONS TO OBLIGATION OF PARENT TO
EFFECT THE MERGER.................................... 41
ARTICLE 7 TERMINATION............................................. 42
Section 7.1 TERMINATION BY MUTUAL CONSENT........................ 42
Section 7.2 TERMINATION BY PARENT OR THE COMPANY................. 42
Section 7.3 TERMINATION BY THE COMPANY........................... 42
Section 7.4 TERMINATION BY PARENT................................ 43
Section 7.5 EFFECT OF TERMINATION................................ 44
ARTICLE 8 GENERAL PROVISIONS...................................... 45
Section 8.1 SURVIVAL............................................. 45
Section 8.2 NOTICES.............................................. 45
Section 8.3 ASSIGNMENT; BINDING EFFECT; BENEFIT.................. 46
Section 8.4 ENTIRE AGREEMENT..................................... 46
Section 8.5 AMENDMENTS........................................... 47
Section 8.6 GOVERNING LAW; JURISDICTION; WAIVER OF
JURY TRIAL; ATTORNEYS' FEES.......................... 47
Section 8.7 COUNTERPARTS......................................... 47
Section 8.8 HEADINGS............................................. 47
Section 8.9 INTERPRETATION....................................... 47
Section 8.10 WAIVERS.............................................. 49
Section 8.11 SEVERABILITY......................................... 49
Section 8.12 ENFORCEMENT OF AGREEMENT; LIMITATION ON DAMAGES...... 49
Section 8.13 OBLIGATION OF MERGER SUB............................. 50
Section 8.14 EXTENSION; WAIVER.................................... 50
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
August 26, 2006, is among WESTERN REFINING, INC., a Delaware corporation
("Parent"), NEW ACQUISITION CORPORATION, a Delaware corporation and a
direct and wholly-owned subsidiary of Parent ("Merger Sub"), and GIANT
INDUSTRIES, INC., a Delaware corporation (the "Company").
RECITALS
WHEREAS, the respective boards of directors of each of Parent, Merger
Sub and the Company have approved and declared advisable this Agreement and
the merger of Merger Sub with and into the Company (the "Merger"), whereby
each share of capital stock of the Company issued and outstanding prior to
the Merger will be converted into the right to receive the Per Share Merger
Consideration provided for herein;
WHEREAS, the board of directors of the Company has determined that the
Merger is fair to and in the best interests of the Company and its
stockholders; and
WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with
this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.1 THE MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.3), Merger Sub
shall be merged with and into the Company in accordance with this
Agreement, and the separate corporate existence of Merger Sub shall
thereupon cease. The Company (sometimes hereinafter referred to as the
"Surviving Corporation") shall be the surviving corporation in the Merger
and shall be a wholly-owned, direct subsidiary of Parent. The Merger shall
have the effects specified in the Delaware General Corporation Law
("DGCL").
SECTION 1.2 THE CLOSING. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place (a)
at the offices of Andrews Kurth LLP, 600 Travis, Suite 4200, Houston, Texas
77002, at 9:00 a.m., local time, on the first business day immediately
following the day on which the last to be fulfilled or waived of the
conditions set forth in Article 6 (other than those conditions that by
their nature are to be satisfied at the Closing, but subject to fulfillment
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or waiver of those conditions) shall be fulfilled or waived in accordance
herewith or (b) at such other time, date or place as Parent and the Company
may agree in writing. The date on which the Closing occurs is hereinafter
referred to as the "Closing Date."
SECTION 1.3 EFFECTIVE TIME. If all the conditions to the Merger set
forth in Article 6 shall have been fulfilled or waived in accordance
herewith and this Agreement shall not have been terminated as provided in
ARTICLE 7, on the Closing Date, a certificate of merger (the "Certificate
of Merger") meeting the requirements of Section 251 of the DGCL shall be
properly executed and filed with the Secretary of State of the State of
Delaware. The Merger shall become effective upon the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware
in accordance with the DGCL, or at such later time that the parties hereto
shall have agreed upon and designated in such filing as the effective time
of the Merger (the "Effective Time").
SECTION 1.4 CERTIFICATE OF INCORPORATION. At the Effective Time, the
certificate of incorporation of the Company (other than the provisions of
the certificate of incorporation of the Company setting forth the name of
the Company and the incorporator of the Company, which shall not be
amended), shall be amended to read as the certificate of incorporation of
Merger Sub in effect immediately prior to the Effective Time and, as so
amended, shall be the certificate of incorporation of the Surviving
Corporation, until duly amended in accordance with applicable law.
SECTION 1.5 BYLAWS. The bylaws of Merger Sub in effect immediately
prior to the Effective Time shall be the bylaws of the Surviving
Corporation, until duly amended in accordance with applicable law.
SECTION 1.6 DIRECTORS AND OFFICERS. The directors and officers of
the Surviving Corporation shall consist of the directors and officers of
Merger Sub, as it existed immediately prior to the Effective Time, until
changed in accordance with applicable law.
ARTICLE 2
CONVERSION OF THE COMPANY SHARES
SECTION 2.1 EFFECT ON CAPITAL STOCK. At the Effective Time, the
Merger shall have the following effects on the capital stock of the Company
and Merger Sub, without any action on the part of the holder of any capital
stock of the Company or Merger Sub:
(a) Conversion of the Company Shares. Each share of common stock,
$0.01 par value per share, of the Company (each a "Share") issued and
outstanding immediately prior to the Effective Time (other than any Shares
(i) held by Parent, Merger Sub or any other wholly-owned Subsidiary (as
defined in Section 8.9) of Parent, (ii) in the treasury of the Company or
(iii) held by any wholly-owned Subsidiary of the Company, which Shares, by
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virtue of the Merger and without any action on the part of the holder
thereof, shall be cancelled and shall cease to exist with no payment being
made with respect thereto, and other than Dissenting Shares (as defined in
Section 2.3)) shall automatically be converted into the right to receive
US$83.00, without interest, in cash (the "Per Share Merger Consideration").
The aggregate amount of the Per Share Merger Consideration in respect of
all Shares entitled thereto is referred to as the "Merger Consideration."
The holder of a certificate that represented Shares (a "Certificate") shall
cease to have any rights with respect thereto, except the right to receive,
upon surrender of such Certificate, the Per Share Merger Consideration to
which such holder is entitled pursuant to this Section 2.1(a).
(b) Cancellation of Shares. As of the Effective Time, all Shares
that are issued and outstanding immediately prior to the Effective Time
(other than Dissenting Shares) shall no longer be outstanding and shall
automatically be cancelled and shall cease to exist, and each holder of a
Certificate shall cease to have any rights with respect thereto, except the
right to receive a cash amount equal to the Per Share Merger Consideration
multiplied by the number of Shares formerly represented by the Certificate,
to be paid in consideration therefor upon surrender of such Certificate in
accordance with Section 2.2.
(c) Merger Sub. At the Effective Time, each share of common stock,
par value $0.01 per share, of Merger Sub issued and outstanding immediately
prior to the Effective Time shall be converted into one fully paid and
nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation, and the Surviving Corporation shall thereby become a
wholly-owned, direct Subsidiary of Parent.
SECTION 2.2 DEPOSIT; EXCHANGE OF CERTIFICATES
(a) Deposit. On the first business day after the date hereof, Parent
shall deposit $12,500,000 (the "Deposit") into an escrow account with Wells
Fargo Bank, N.A. (the "Escrow Agent") pursuant to an Escrow Agreement of
even date among the Company, Parent and the Escrow Agent (the "Escrow
Agreement"). The Deposit shall be increased to $25,000,000 if the Closing
has not occurred on or before November 30, 2006 because the condition set
forth in Section 6.1(b) has not been satisfied. As provided in the Escrow
Agreement, the Escrow Agent shall pay the Deposit to the Paying Agent (as
defined below) to be applied towards the Merger Consideration at the
Closing, or if this Agreement is terminated, to the Company or Parent, as
the case may be, as provided in Section 7.5(b).
(b) Paying Agent; Payment of Merger Consideration. Prior to the
Closing Date, Parent shall appoint a bank or trust company to act as paying
agent (the "Paying Agent") for the payment of the Merger Consideration. On
or before the Closing Date, Parent shall deposit (or cause to be deposited)
the Merger Consideration (such cash consideration being hereinafter
referred to as the "Merger Fund") with the Paying Agent. The Merger Fund
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shall not include Per Share Merger Consideration for any Dissenting Shares,
and the holders of Dissenting Shares shall not be entitled to receive
payment of the Per Share Merger Consideration related to such Dissenting
Shares from the Merger Fund. The Merger Fund shall not be used for any
other purpose.
(c) Exchange Procedures. Promptly after the Effective Time (but not
later than five (5) business days after the date on which the Effective
Time occurs), Parent shall cause the Paying Agent to mail or deliver to
each Person (as defined in Section 8.9) who was, at the Effective Time, a
holder of record of Shares and whose Shares are being converted into the
right to receive the Per Share Merger Consideration pursuant to this
Article 2 a letter of transmittal (which shall be in customary form and
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the
Paying Agent and shall otherwise be in a form and have such other
provisions as Parent may reasonably specify) containing instructions for
use by holders of Certificates to effect the exchange of their Certificates
for the Per Share Merger Consideration as provided herein. As soon as
practicable after the Effective Time, each holder of an outstanding
Certificate or Certificates shall, upon surrender to the Paying Agent of
such Certificate or Certificates and such letter of transmittal duly
executed and completed in accordance with the instructions thereto
(together with such other documents as the Paying Agent may reasonably
request) and acceptance thereof by the Paying Agent (or, if such Shares are
held in book-entry or other uncertificated form, upon the entry through a
book-entry transfer agent of the surrender of such Shares on a book-entry
account statement (it being understood that any references herein to
"Certificates" shall be deemed to include references to book-entry account
statements relating to the ownership of Shares)), be entitled to an amount
of cash (payable by check) equal to the Per Share Merger Consideration
multiplied by the number of Shares formerly represented by such Certificate
or Certificates. The Paying Agent shall accept such Certificates upon
compliance with such reasonable terms and conditions as the Paying Agent
may impose to effect an orderly exchange thereof in accordance with normal
exchange practices. If cash is to be remitted to a Person other than the
Person in whose name the Certificate surrendered for exchange is
registered, it shall be a condition of such exchange that the Certificate
so surrendered shall be properly endorsed, with signature guaranteed, or
otherwise in proper form for transfer and that the Person requesting such
exchange shall pay to the Paying Agent any transfer or other Taxes (as
defined in Section 8.9) required by reason of the payment of the Per Share
Merger Consideration to a Person other than the registered holder of the
Certificate so surrendered, or shall establish to the satisfaction of the
Paying Agent that such Tax either has been paid or is not applicable.
Until surrendered as contemplated by this Section 2.2(c), at any time after
the Effective Time, each Certificate shall be deemed to represent only the
right to receive the Per Share Merger Consideration upon such surrender.
No interest shall be paid or shall accrue on any cash payable as Per Share
Merger Consideration.
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(d) No Further Ownership Rights. All cash paid upon the surrender
for exchange of Certificates formerly representing Shares in accordance
with the terms of this Article 2 shall be deemed to have been paid in full
satisfaction of all rights pertaining to the Shares formerly represented by
such Certificates, and, after the Effective Time, there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the Shares which were issued and outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates
are presented to the Surviving Corporation for transfer, then they shall be
cancelled and exchanged as provided in this Article 2.
(e) Investment of Merger Fund. The Paying Agent shall invest the
Merger Fund as directed by Parent, provided that no gain or loss thereon
shall affect the amounts payable to the Company's stockholders pursuant to
Section 2.1(a).
(f) Termination of Merger Fund. Any portion of the Merger Fund which
remains undistributed to the holders of Certificates for six (6) months
after the Effective Time shall be delivered to Parent, and any holders of
Certificates who have not theretofore complied with this ARTICLE 2 shall
thereafter look only to Parent for payment of the Merger Consideration,
subject to abandoned property, escheat and similar laws. Notwithstanding
the foregoing, none of Parent, Surviving Corporation, the Paying Agent or
any other Person shall be liable to any holder of a Certificate with regard
to Per Share Merger Consideration delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law.
(g) Lost, Stolen or Destroyed Certificates. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the Person claiming such Certificate to be
lost, stolen or destroyed, and if required by Parent, the posting by such
Person of a bond in such reasonable amount as Parent may require as
indemnity against any claim that may be made against it with respect to
such Certificate, the Paying Agent will distribute such Per Share Merger
Consideration payable pursuant to this Agreement.
(h) Withholding. Parent or the Paying Agent shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to
this Agreement to any holder of Shares such amounts as Parent or the Paying
Agent 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"),
the Treasury Regulations promulgated thereunder (the "Treasury
Regulations") or under any provision of state, local or foreign Tax law.
To the extent that amounts are so withheld by Parent or the Paying Agent,
such withheld amounts shall be treated for all purposes of this Agreement
as having been paid to the holder of the Shares in respect of which such
deduction and withholding was made by Parent or the Paying Agent.
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SECTION 2.3 APPRAISAL RIGHTS. The Shares outstanding immediately
prior to the Effective Time and held by a holder who neither shall have
voted in favor of the Merger nor shall have consented thereto in writing
and who shall have properly demanded appraisal for such Shares in
accordance with the DGCL are referred to herein as "Dissenting Shares".
Notwithstanding any other provision of this Agreement to the contrary,
Dissenting Shares shall not be converted into a right to receive the Per
Share Merger Consideration, and instead shall be entitled only to such
rights as are provided under the DGCL. If, after the Effective Time, such
holder fails to perfect, withdraws or loses its right to appraisal, such
Shares shall no longer be deemed to be Dissenting Shares and shall be
treated as if they had been converted at the Effective Time into the right
to receive the Per Share Merger Consideration. The Company shall give
Parent prompt notice of any demands received by the Company for appraisal
of such Shares. Except as required by applicable law or with the prior
written consent of Parent, the Company shall not make any payment with
respect to, or settle or offer to settle, any such demands.
SECTION 2.4 ADJUSTMENTS. In the event that prior to the Effective
Time, there shall have been declared or effected a stock split,
subdivision, reverse stock split, consolidation and division, stock
dividend or stock distribution (including any dividend, or distribution, of
securities convertible into Shares), reorganization, recapitalization,
reclassification or similar event made with respect to the Shares, the Per
Share Merger Consideration shall be adjusted to reflect fully the
appropriate effect of such event.
SECTION 2.5 EFFECT OF THE MERGER ON EQUITY AWARDS.
(a) Stock Options. The board of directors of the Company (or the
appropriate committee thereof) shall adopt such resolutions or take such
other actions as shall be required to cause each Stock Option (as defined
in Section 3.3) to terminate and be cancelled at the Effective Time, with
each holder of a Stock Option entitled to receive from Parent at the
Effective Time a Cash Amount in settlement of such Stock Option. The "Cash
Amount" shall be equal to the net amount of (i) the product of (A) the
excess, if any, of the Per Share Merger Consideration over the exercise
price per share of such Stock Option, multiplied by (B) the number of
shares subject to such Stock Option, less (ii) any applicable withholdings
for Taxes. If the exercise price per share of any Stock Option equals or
exceeds the Per Share Merger Consideration, the Cash Amount therefor shall
be $0.01 per share. Payment of the Cash Amount shall be communicated to
each holder of Stock Options in a written notice from the Company that has
been approved by Parent stating that, upon acceptance of the Cash Amount,
such holder understands that no further payment is due to such holder on
account of any Stock Options and all of such holder's rights under such
Stock Options have terminated. All amounts payable to a holder of an
outstanding Stock Option shall be rounded to the nearest cent.
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(b) Restricted Stock. The Board of Directors of the Company (or the
appropriate committee thereof) shall adopt such resolutions or take such
other actions as shall be required to cause all restrictions on the then-
outstanding shares of Restricted Stock (as defined in Section 3.3) to lapse
immediately prior to the Effective Time. Each holder of Restricted Stock
shall be treated as a holder of Shares issued and outstanding immediately
prior to the Effective Time.
(c) Cancellation. As of the Effective Time, except as provided in
this Section 2.5, all rights under any Stock Options and any provision of
the Company's stock option plans providing for the issuance and grant of
any other interest in respect of the capital stock of the Company shall be
cancelled. The Company shall use its reasonable best efforts to ensure
that, as of and after the Effective Time, except as provided in this
Section 2.5, no Person shall have any rights with respect to securities of
the Company, the Surviving Corporation or any Subsidiary thereof.
(d) Section 16 Exemption. Prior to the Effective Time, the Company
and Parent shall use their reasonable best efforts to cause the
transactions contemplated by this Section 2.5 and any other dispositions of
equity securities of the Company (including derivative securities) in
connection with this Agreement by each individual who is subject to Section
16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") with respect to the Company to be exempt under Rule 16b-3 of the
Exchange Act.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure letter delivered to Parent
concurrently with the execution hereof (the "Disclosure Letter") or except
for events or facts disclosed with reasonable specificity in the Company
Reports (as defined in Section 3.7(a)) furnished or filed with the SEC on
or after January 1, 2006 and prior to the date hereof, the Company
represents and warrants to Parent and Merger Sub that:
SECTION 3.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware. The Company is duly
qualified to transact business as a foreign corporation and is in good
standing under the laws of each jurisdiction in which the character of the
properties owned or leased by it therein or in which the transaction of its
business makes such qualification necessary, except where the failure to be
so qualified has not had and would not reasonably be expected to have a
Material Adverse Effect (as defined in Section 8.9). The Company has all
requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as now conducted. The copies of
the Company's restated certificate of incorporation and bylaws previously
made available to Parent are true and correct and contain all amendments as
of the date hereof.
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SECTION 3.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. The
Company has the requisite corporate power and authority to execute and
deliver this Agreement and all other agreements and documents contemplated
hereby to which it is a party. The consummation by the Company of the
transactions contemplated hereby has been duly authorized by all requisite
corporate action, other than, with respect to the Merger, the approval and
adoption of this Agreement by the Company's stockholders. This Agreement
constitutes the valid and legally binding obligation of the Company,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws now or hereafter in effect relating to or limiting creditors'
rights generally and general principles of equity.
SECTION 3.3 CAPITALIZATION. The authorized capital stock of the
Company consists of 50,000,000 Shares and 10,000,000 shares of Preferred
Stock, $0.01 par value per share, of the Company ("Preferred Stock"). As
of the date hereof, there were (a) 14,639,312 Shares issued and
outstanding, (b) 3,751,980 Shares held by the Company as treasury shares,
(c) no shares of Preferred Stock issued and outstanding, (d) 97,500 Shares
subject to stock options to purchase Shares ("Stock Options"), all of which
are vested as of the date hereof, and (e) 38,100 shares of restricted stock
("Restricted Stock") issued and outstanding (all of which Shares of
Restricted Stock are included in the issued and outstanding Shares
described in clause (a)). All issued and outstanding Shares (i) are duly
authorized, validly issued, fully paid, nonassessable and free of
preemptive rights, (ii) were not issued in violation of the terms of any
agreement or other understanding binding upon the Company and (iii) were
issued in compliance with the restated certificate of incorporation and
bylaws of the Company and all applicable federal and state securities laws,
rules and regulations. Except (x) as set forth in this Section 3.3, (y)
for any Shares issued pursuant to the exercise of the Stock Options
referred to in subsection (d) above and (z) for Stock Options issued under
the Company's stock option plans after the date of this Agreement in
compliance with Section 5.1 and the Shares issued pursuant to the exercise
of such Stock Options, there are no outstanding shares of capital stock and
there are no options, warrants, calls, subscriptions, stockholder rights
plan or similar instruments, convertible securities, or other rights,
agreements or commitments which obligate the Company or any of its
Subsidiaries to issue, transfer or sell any shares of capital stock or
other voting securities of the Company or any of its Subsidiaries. The
Company has no outstanding bonds, debentures, notes or other obligations
the holders of which have the right to vote (or which are convertible into
or exercisable for securities having the right to vote) with the
stockholders of the Company on any matter.
SECTION 3.4 SUBSIDIARIES. Each of the Company's Subsidiaries is a
corporation or limited liability company duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation or
organization, has the corporate or limited liability company power and
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authority to own, operate and lease its properties and to carry on its
business as it is now being conducted, and is duly qualified to transact
business and is in good standing (where applicable) in each jurisdiction in
which the ownership, operation or lease of its property or the conduct of
its business requires such qualification, except for jurisdictions in which
such failure to be so qualified or to be in good standing has not had and
would not reasonably be expected to have a Material Adverse Effect. All of
the outstanding shares of capital stock of, or other ownership interests
in, each of the Company's Subsidiaries is duly authorized, validly issued,
fully paid and nonassessable, and is owned, directly or indirectly (as
specified on Schedule 3.4 of the Disclosure Letter), by the Company free
and clear of all Liens (as defined in Section 3.6), except to the extent of
any Liens set forth on Schedule 3.4 of the Disclosure Letter. Schedule 3.4
of the Disclosure Letter sets forth, for each Subsidiary of the Company,
its name and jurisdiction of incorporation or organization. Except as set
forth on Schedule 3.4 of the Disclosure Letter, no options, warrants or
other rights to purchase, agreements or other obligations to issue or other
rights (whether by law, pre-emptive or contractual) to convert any
obligations into or otherwise acquire shares of capital stock or ownership
interests in any of the Subsidiaries of the Company are outstanding or will
come into existence as a result of the execution of this Agreement or
consummation of the transactions contemplated hereby.
SECTION 3.5 NO VIOLATION. Neither the Company nor any of its
Subsidiaries is, or has received notice that it would be with the passage
of time, in violation of any term, condition or provision of (a) its
charter documents or bylaws or operating agreement, as applicable, (b) any
loan or credit agreement, note, bond, mortgage, indenture, contract,
agreement, lease, license or other instrument or (c) any order of any
federal, state, county or municipal government, domestic or foreign, any
agency, board, bureau, commission, court, department or other
instrumentality of any such government, any other regulatory body or
arbitration board or tribunal (a "Governmental Authority"), or any law,
ordinance, governmental rule or regulation to which the Company or any of
its Subsidiaries or any of their respective properties or assets is
subject, or is delinquent with respect to any report required to be filed
with any Governmental Authority, except, in the case of matters described
in clause (b) or (c), as have not had and would not reasonably be expected
to have a Material Adverse Effect. Except as has not had and would not
reasonably be expected to have a Material Adverse Effect, (i) the Company
and its Subsidiaries hold all permits, licenses, variances, exemptions,
orders, franchises and approvals of all Governmental Authorities necessary
for the lawful conduct of their respective businesses as now conducted or
currently proposed to be conducted (the "Company Permits") and (ii) the
Company and its Subsidiaries are in compliance with the terms of the
Company Permits. As of the date of this Agreement, to the knowledge of the
Company, no material investigation by any Governmental Authority with
respect to the Company or any of its Subsidiaries is pending or threatened.
As of the Closing Date, no investigation by any Governmental Authority with
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respect to the Company will be pending or threatened, except for any such
investigation that would not reasonably be expected to have a Material
Adverse Effect.
SECTION 3.6 NO CONFLICT.
(a) Neither the execution and delivery by the Company of this
Agreement nor the consummation by the Company of the transactions
contemplated hereby in accordance with the terms hereof will: (i) conflict
with or result in a breach of any provisions of the restated certificate of
incorporation or bylaws of the Company; (ii) violate, or conflict with, or
result in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination or in a right of termination
or cancellation of, or give rise to a right of purchase under, or
accelerate the performance required by, or result in the creation of any
liens, pledges, security interests, claims, preferential purchase rights or
other similar rights, interests or encumbrances ("Liens") upon any of the
properties of the Company or its Subsidiaries under, or result in being
declared void, voidable, or without further binding effect, or otherwise
result in a detriment to the Company or its Subsidiaries under any of the
terms, conditions or provisions of, any note, bond, mortgage, indenture,
deed of trust, Company Permit, lease, contract, agreement, joint venture or
other instrument or obligation to which the Company or any of its
Subsidiaries is a party, or by which the Company or any of its Subsidiaries
or any of their properties is bound or affected; or (iii) contravene or
conflict with or constitute a violation of any provision of any law, rule,
regulation, judgment, order or decree binding upon or applicable to the
Company or any of its Subsidiaries, except, in the case of matters
described in clause (ii) or (iii), as have not had and would not reasonably
be expected to have a Material Adverse Effect.
(b) Neither the execution and delivery by the Company of this
Agreement nor the consummation by the Company of the transactions
contemplated hereby in accordance with the terms hereof will require any
consent, approval or authorization of, or filing or registration with, any
Governmental Authority, other than (i) the filings provided for in ARTICLE
1 of this Agreement, (ii) filings required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the
Exchange Act, the Securities Act of 1933, as amended (the "Securities Act")
or applicable state securities and "Blue Sky" laws, and applicable state or
foreign competition or antitrust laws, (iii) such other consents,
approvals, authorizations, filings or registrations as may be required
under any Environmental Health or Safety Law (as defined in Section 3.13)
pertaining to any notification, disclosure or required approval
necessitated by the Merger, and (iv) such other consents, approvals,
authorizations, filings or registrations the failure of which to obtain or
make has not had and would not reasonably be expected to have a Material
Adverse Effect ((i), (ii), (iii) and (iv), collectively, the "Regulatory
Filings")).
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(c) Other than as contemplated by Section 3.6(b), no consents,
assignments, waivers, authorizations or other certificates are necessary in
connection with the transactions contemplated hereby to provide for the
continuation in full force and effect of all of the Company Permits and any
contracts or leases of the Company or any of its Subsidiaries or for the
Company to consummate the transactions contemplated hereby, except where
the failure to receive such consents or other certificates has not had and
would not reasonably be expected to have a Material Adverse Effect.
(d) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will: (i) result in
any payment from the Company (including severance, unemployment
compensation, parachute payment, bonus or otherwise) becoming due to any
director, employee or independent contractor of the Company under any
Company Plan (as defined in Section 3.11) or otherwise; (ii) increase any
benefits otherwise payable under any Company Plan or otherwise; or (iii)
result in the acceleration of the time of payment or vesting of any such
benefits.
SECTION 3.7 SEC DOCUMENTS.
(a) The Company has made available to Parent each registration
statement, report, proxy statement or information statement (other than
preliminary materials) or other documents filed or furnished by it with the
Securities and Exchange Commission ("SEC") on or after January 1, 2005,
each in the form (including exhibits and any amendments thereto) filed or
furnished with the SEC prior to the date hereof (collectively, the "Company
Reports"), and the Company has filed or furnished all forms, reports and
documents required to be filed or furnished by it with the SEC pursuant to
relevant securities statutes, regulations, policies and rules since such
time. As of their respective dates, the Company Reports (i) were prepared
in accordance with the applicable requirements of the Securities Act, the
Exchange Act, and the rules and regulations thereunder and complied with
the then applicable accounting requirements and (ii) did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made
therein (with respect to any prospectus, in the light of the circumstances
under which they were made) not misleading.
(b) Each of the consolidated balance sheets included in or
incorporated by reference into the Company Reports (including the related
notes and schedules) fairly presents in all material respects the
consolidated financial position of the Company and its Subsidiaries as of
its date and each of the consolidated statements of operations, cash flows
and stockholders' equity included in or incorporated by reference into the
Company Reports (including any related notes and schedules) fairly presents
in all material respects the results of operations, cash flows or changes
in stockholders' equity, as the case may be, of the Company and its
Subsidiaries for the periods set forth therein, in each case in accordance
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with generally accepted accounting principles consistently applied during
the periods involved, except, in the case of unaudited statements, for
year-end audit adjustments and as otherwise may be noted therein. There
are no obligations or liabilities of any nature, whether accrued, absolute,
contingent or otherwise, of the Company or any of its Subsidiaries, other
than those liabilities and obligations (i) that are disclosed or otherwise
reflected or reserved for in the financial statements and the notes thereto
included in the Company Reports (the "Company Financial Statements"),
provided that such liabilities are reasonably apparent on the face of the
Company Financial Statements, (ii) that are not required under generally
accepted accounting principles to be disclosed, reflected or reserved for
in the Company Financial Statements, (iii) that have been incurred in the
ordinary course of business since June 30, 2006, (iv) related to expenses
associated with the transactions contemplated by this Agreement or (v) that
have not had and would not reasonably be expected to have a Material
Adverse Effect.
(c) Based on the evaluation of its controls and procedures conducted
in connection with the preparation and filing of the Company's most recent
Quarterly Report on Form 10-Q, the Company has no knowledge of (i) any
significant deficiencies or material weaknesses in the design or operation
of the Company's internal control over financial reporting that are likely
to adversely affect the Company's ability to record, process, summarize and
report financial data; or (ii) any fraud, whether or not material, that
involves management or other employees who have a role in the Company's
internal control over financial reporting.
(d) Since the date of the most recent evaluation of such controls and
procedures, there have been no significant changes in the Company's
internal controls that materially affected or are reasonably likely to
materially affect the Company's internal controls over financial reporting.
SECTION 3.8 LITIGATION AND LIABILITIES. There are no actions, suits
or proceedings pending or, to the Company's knowledge, threatened against
the Company or any of its Subsidiaries, at law or in equity, or before or
by any Governmental Authority, other than those that have not had and would
not reasonably be expected to have a Material Adverse Effect. There are no
outstanding judgments, decrees, injunctions, awards or orders of any
Governmental Authority against the Company or any of its Subsidiaries,
other than those that have not had and would not reasonably be expected to
have a Material Adverse Effect.
SECTION 3.9 ABSENCE OF CERTAIN CHANGES. Since December 31, 2005,
except as contemplated by this Agreement, the Company has conducted its
business only in the ordinary and usual course of business and, during such
period, there has not been (i) any event, condition, action or occurrence
that has had or would reasonably be expected to have a Material Adverse
Effect; (ii) any change by the Company or any of its Subsidiaries in any of
its accounting methods, principles or practices, except for changes
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required by generally accepted accounting principles, or any of its Tax
methods, practices or elections, except for any changes that have not had
and would not reasonably be expected to have a Material Adverse Effect;
(iii) any damage, destruction, or loss to the business or properties of the
Company and its Subsidiaries not covered by insurance, except as has not
had and would not be reasonably expected to have a Material Adverse Effect;
(iv) any declaration, setting aside or payment of any dividend or other
distribution in respect of the capital stock of the Company, or any direct
or indirect redemption, purchase or any other acquisition by the Company of
any such stock; (v) any change in the capital stock or in the number of
shares or classes of the Company's authorized or outstanding capital stock
(other than as a result of issuances under the Company's stock option plans
permitted hereunder pursuant to Section 5.1 or exercises of outstanding
Stock Options); or (vi) any increase in or establishment of any bonus,
insurance, severance, deferred compensation, pension, retirement, profit
sharing, stock option, stock purchase or other employee benefit plan for
the benefit of any directors, officers or key employee of the Company or
any of its Subsidiaries, other than bonuses and salary increases for
employees who are not directors or officers of the Company or its
Subsidiaries in the ordinary course of business consistent with past
practice.
SECTION 3.10 TAXES.
(a) Each of the Company and its Subsidiaries and each affiliated,
consolidated, combined, unitary or similar group of which any such
corporation is or was a member has (i) duly filed (or there has been filed
on its behalf) on a timely basis (taking into account any extensions of
time to file before the date hereof) with appropriate Governmental
Authorities all Tax Returns (as defined in Section 8.9) required to be
filed by or with respect to it, except to the extent that any failure to
file would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, and (ii) duly paid or deposited in
full on a timely basis or made adequate provisions in accordance with
generally accepted accounting principles (or there has been paid or
deposited or adequate provision has been made on its behalf) for the
payment of all Taxes required to be paid by it other than those being
contested in good faith by the Company or a Subsidiary of the Company and
adequately provided for on the Company Financial Statements.
(b) Except for matters that would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (i) the
federal income Tax Returns of the Company and each of its Subsidiaries have
been examined by the Internal Revenue Service (the "IRS") (or the
applicable statutes of limitation for the assessment of federal income
taxes for such periods have expired) for all periods; (ii) there is no
pending or, to the knowledge of the Company, threatened examination,
investigation, audit, suit, action, claim or proceeding relating to Taxes
of the Company or any of its Subsidiaries; (iii) all deficiencies asserted
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as a result of any examinations of the Company and its Subsidiaries by any
Tax Authority (as defined in Section 8.9) have been paid fully, settled or
adequately provided for in the Company Financial Statements; (iv) as of the
date hereof, neither the Company nor any of its Subsidiaries has granted
any requests, agreements, consents or waivers to extend the statutory
period of limitations applicable to the filing of any Tax Return or the
assessment of any Taxes of the Company or any of its Subsidiaries that will
be outstanding as of the Effective Time; (v) neither the Company nor any of
its Subsidiaries has granted a power of attorney that remains outstanding
with regard to any Tax matter; (vi) neither the Company nor any of its
Subsidiaries is a party to, is bound by or has any obligation under any Tax
sharing, allocation or indemnity agreement or any similar agreement or
arrangement; and (vii) there are no Tax Liens on any assets of the Company
or its Subsidiaries except for (A) Taxes not yet currently due and
(B) matters being contested by the Company or its Subsidiaries in good
faith for which adequate reserves are reflected in the Company Financial
Statements.
(c) Neither the Company nor any of its Subsidiaries is now or has
ever been a United States real property holding company within the meaning
of Section 897(c)(2) of the Code.
(d) Neither the Company nor any of its Subsidiaries has ever
participated, directly or indirectly, in a transaction which is described
in Treasury Regulation Sections 1.6011-4(b), and neither the Company nor
any of its Subsidiaries has ever held "an interest" in a "potentially
abusive tax shelter," as those terms are defined in Treasury Regulation
Section 301.6112-1.
(e) Neither the Company nor any of its Subsidiaries has ever been a
"distributing corporation" or a "controlled corporation" in connection with
a distribution described in Section 355 of the Code.
(f) The Company and its Subsidiaries have properly withheld and paid
all material Taxes required to have been withheld and paid in connection
with amounts paid or owing to employees, independent contractors,
creditors, stockholders and other third parties.
Each reference to a provision in this Section 3.10 shall be treated
for state, local and foreign Tax purposes as a reference to analogous or
similar provisions of state, local and foreign law.
SECTION 3.11 EMPLOYEE BENEFIT PLANS.
(a) For purposes of this Section 3.11, the Subsidiaries of the
Company shall include any enterprise which, with the Company, forms or
formed a controlled group of corporations, a group of trades or business
under common control or an affiliated service group, within the meaning of
Section 414(b), (c) or (m) of the Code.
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(b) All employee benefit plans, programs, arrangements and agreements
(whether or not described in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), whether or not written or oral
and whether or not legally enforceable (in part or in full)) covering
active, former or retired employees of the Company and its Subsidiaries
which provide material benefits to such employees, or as to which the
Company or any of its Subsidiaries has any material liability or material
contingent liability, are listed on Schedule 3.11(b) of the Disclosure
Letter (the "Company Plans").
(c) The Company has made available to Parent a true, correct and
complete copy of each of the Company Plans, and all contracts relating
thereto, or to the funding thereof, including, without limitation, all
trust agreements, insurance contracts, administration contracts, investment
management agreements, subscription and participation agreements, and
record-keeping agreements, each as in effect on the date hereof. In the
case of any Company Plan that is not in written form, Parent has been
supplied with an accurate description of such Company Plan as in effect on
the date hereof. A true, correct and complete copy of the most recent
annual report, actuarial report, accountant's opinion of the plan's
financial statements, summary plan description and IRS determination or
opinion letter with respect to each Company Plan, to the extent applicable,
and the most recent schedule of assets (and the fair market value thereof
assuming liquidation of any asset which is not readily tradable) held with
respect to any funded Company Plan have been made available to Parent.
There have been no material changes in the financial condition in the
respective plans from that stated in the annual reports and actuarial
reports supplied that have had or would reasonably be expected to have a
Material Adverse Effect.
(d) All Company Plans comply in form and have been administered in
operation in all material respects with all applicable requirements of law,
excluding any deficiencies that have not had and would not reasonably be
expected to have a Material Adverse Effect, no event has occurred which
will or could cause any such Company Plan to fail to comply with such
requirements, excluding any deficiencies that have not had and would not
reasonably be expected to have a Material Adverse Effect, and no notice has
been issued by any Governmental Authority questioning or challenging such
compliance.
(e) All required employer contributions under any such plans have
been made or will be timely made as of the Effective Time or properly
reflected on the Company Financial Statements in accordance with generally
accepted accounting principals, except for any deficiencies that have not
had and would not reasonably be expected to have a Material Adverse Effect.
No changes in contributions or benefit levels with respect to any of the
Company Plans have been communicated to employees or are scheduled to occur
after the date of this Agreement other than in the ordinary course of
business.
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(f) To the extent applicable, the Company Plans comply in all
material respects with the requirements of ERISA, the Code and any other
applicable Tax act and other applicable laws, and any Company Plan intended
to be qualified under Section 401(a) of the Code has received or made
timely application for a favorable determination or opinion letter from the
IRS that such Company Plan is in compliance with "GUST," all amendments
required to be made to such Company Plan after the issuance of the "GUST"
determination or opinion letter have been timely made and no amendment has
been made or action taken that could cause the loss of such qualified
status.
(g) No Company Plan is or has ever been subject to Title IV of ERISA
or Section 412 of the Code.
(h) There are no pending or, to the knowledge of the Company,
anticipated material claims against or otherwise involving any of the
Company Plans and no material suit, action or other litigation has been
brought against or with respect to any Company Plan or any of the
fiduciaries thereof.
(i) Neither the Company nor any of its Subsidiaries has incurred or
reasonably expects to incur any liability under Section 412 of the Code,
Section 302 of ERISA or subtitle C or D of Title IV of ERISA with respect
to any "single-employer plan," within the meaning of section 4001(a)(15) of
ERISA, currently or formerly sponsored, maintained, or contributed to (or
required to be contributed to) by the Company, any of its Subsidiaries or
any entity which is considered one employer with the Company under Section
4001 of ERISA.
(j) Neither the Company nor any of its Subsidiaries has incurred and
or reasonably expects to incur any liability under subtitle E of Title IV
of ERISA with respect to any "multiemployer plan," within the meaning of
Section 4001(a)(3) of ERISA.
(k) None of the assets of any Company Plan is invested in employer
securities (as defined in Section 407(d)(1) of ERISA) or employer real
property (as defined in Section 407(d)(2) of ERISA).
(l) There have been no material "prohibited transactions" (as
described in Section 406 of ERISA or Section 4975 of the Code) with respect
to any Company Plan.
(m) There have been no acts or omissions by the Company or any of its
Subsidiaries which have given rise to or may give rise to material fines,
penalties, Taxes or related charges under Section 502 of ERISA or Chapters
43, 47, 68 or 100 of the Code for which the Company or any of its
Subsidiaries are or may be liable.
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(n) Each Company Plan which constitutes a "group health plan" (as
defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code),
including any plans of current and former affiliates which must be taken
into account under Sections 4980B and 414(t) of the Code or Section 601 of
ERISA, has been operated in material compliance with applicable law,
including coverage requirements of Sections 4980B of the Code, Chapter 100
of the Code and Section 601 of ERISA to the extent such requirements are
applicable.
(o) Neither the Company nor any of its Subsidiaries has any liability
or contingent liability for providing, under any Company Plan or otherwise,
any post-retirement medical or life insurance benefits, other than
statutory liability for providing group health plan continuation coverage
under Part 6 of Title I of ERISA and Section 4980B of the Code.
(p) Obligations under the Company Plans are properly reflected in the
Company Financial Statements in accordance with generally accepted
accounting principles.
(q) Each Company Plan may be amended or terminated without material
liability (other than with respect to the payment of benefits in the
ordinary course) to the Company or any of its Subsidiaries at any time and
without contravening the terms of such plan, or any law or agreement.
Except as set forth in this Agreement, following the Effective Time, Parent
or any of its Subsidiaries (or any successors thereto) may amend or
terminate or cause to be amended or terminated any Company Plan without
material liability (other than with respect to the payment of benefits in
the ordinary course) to Parent or any of its Subsidiaries (or successors
thereto).
(r) Except with respect to the Merger Consideration or as otherwise
specifically provided for in this Agreement, neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated hereby will result in any payment becoming due to any employee
or group of employees. No Company Plan provides for the payment of any
amounts that could reasonably be expected to be an "excess parachute
payment" within the meaning of Section 280G(b)(1) of the Code.
(s) Each Company Plan that is a non-qualified deferred compensation
plan subject to Section 409A of the Code has been administered in material
compliance with Section 409A of the Code since January 1, 2005 and either
has been or shall be timely amended to comply in form with Section 409A of
the Code and applicable guidance issued pursuant thereto.
SECTION 3.12 LABOR MATTERS.
(a) Neither the Company nor any of its Subsidiaries is a party to, or
bound by, any collective bargaining agreement, contract or other agreement
or understanding with a labor union or labor organization.
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(b) Neither the Company nor any of its Subsidiaries is subject to any
labor dispute, strike or work stoppage that has had or would reasonably be
expected to have a Material Adverse Effect.
(c) To the Company's knowledge, there are no organizational efforts
with respect to the formation of a collective bargaining unit presently
being made or threatened involving employees of the Company or any of its
Subsidiaries.
SECTION 3.13 ENVIRONMENTAL MATTERS.
(a) The Company and its Subsidiaries and their respective businesses
and operations have been and are in compliance in all material respects
with all applicable final and binding orders of any court, Governmental
Authority or arbitration board or tribunal and any applicable law, policy,
decree, edict, ordinance, rule, regulation, standard or other legal
requirement (including common law) related to human health and the
environment ("Environmental Health and Safety Laws") and possess and are in
compliance in all material respects with any permits or licenses required
under Environmental Health and Safety Laws. There are no past or present
facts, conditions or circumstances that materially interfere with the
conduct of the business and operations of the Company and its Subsidiaries
in the manner now conducted or which materially interfere with continued
compliance with any Environmental Health and Safety Law.
(b) There are no judicial or administrative proceedings or
governmental investigations pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries that allege the
material violation of or seek to impose material liability pursuant to any
Environmental Health and Safety Law, and there are no past or present
facts, conditions or circumstances at, on or arising out of, or otherwise
associated with the businesses and operations of the Company and its
Subsidiaries, including but not limited to on-site or off-site disposal,
release or spill of any material, substance or waste classified,
characterized or otherwise regulated as hazardous, toxic, pollutant,
contaminant or words of similar meaning under Environmental Health and
Safety Laws, including petroleum or petroleum products or byproducts
("Hazardous Materials") which constitute a material violation of
Environmental Health and Safety Law or are reasonably likely to give rise
to (i) material costs, expenses, liabilities or obligations for any
cleanup, remediation, disposal or corrective action under any Environmental
Health and Safety Law, (ii) material claims arising for personal injury,
property damage or damage to natural resources, or (iii) material fines,
penalties or injunctive relief.
(c) Neither the Company nor any of its Subsidiaries has (i) received
any written notice of material noncompliance with, material violation of,
or material liability or potential liability under any Environmental Health
and Safety Law nor (ii) entered into any material consent decree, order or
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similar agreement. Neither the Company nor any of its Subsidiaries is
subject to any material order of any court or Governmental Authority or
tribunal under any Environmental Health and Safety Law relating to the
cleanup of any Hazardous Materials
(d) Neither the Company nor any of its Subsidiaries has received
notice of any material claim under Environmental Health and Safety Laws
relating to the business or operations of the Company or its Subsidiaries.
(e) Schedule 3.13 of the Disclosure Schedule lists all material
permits, licenses or similar approval documents which are required for
operation in compliance with applicable Environmental Health and Safety
Laws.
SECTION 3.14 INTELLECTUAL PROPERTY. The Company and its Subsidiaries
own or possess all necessary licenses or other valid rights to use all
patents, patent rights, trademarks, trademark rights and proprietary
information used or held for use in connection with their respective
businesses as currently being conducted, free and clear of material Liens,
except where the failure to own or possess such licenses and other rights
has not had and would not reasonably be expected to have a Material Adverse
Effect, and neither the Company nor any of its Subsidiaries has received
any notice of any assertions or claims challenging the validity of any of
the foregoing, except for any such assertions or claims that would not
reasonably be expected to have a Material Adverse Effect. Except in the
ordinary course of business, neither the Company nor any of its
Subsidiaries has granted to any other Person any license to use any of the
foregoing. Except as has not had and would not reasonably be expected to
have a Material Adverse Effect, the conduct of the Company's and its
Subsidiaries' respective businesses as currently conducted does not
conflict with any patents, patent rights, licenses, trademarks, trademark
rights, trade names, trade name rights or copyrights of others. As of the
date of this Agreement, to the knowledge of the Company, there is no
infringement of any proprietary right owned by or licensed by or to the
Company or any of its Subsidiaries. As of the Closing Date, there will be
no infringement of any proprietary right owned by or licensed by or to the
Company, except for any such infringement as would not reasonably be
expected to have a Material Adverse Effect.
SECTION 3.15 TITLE TO PROPERTIES.
(a) Except for goods and other property sold, used or otherwise
disposed of since June 30, 2006 in the ordinary course of business for fair
value, as of the date hereof, the Company and its Subsidiaries have good
and indefeasible title to, or hold valid leasehold interests in, or valid
rights of way, easements or licenses over, under and across, all their
respective properties, interests in properties and assets, real and
personal, reflected in the Company Financial Statements, free and clear of
any Lien, except: (i) Liens reflected in the balance sheet of the Company
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as of June 30, 2006 included in the Company Reports; (ii) Liens for current
Taxes not yet due and payable; (iii) Liens of mechanics, materialmen,
workmen and operators arising by operation of law in the ordinary course of
business, or by written agreement existing as of the date hereof, for sums
not yet due or being contested in good faith by appropriate proceedings;
and (iv) such imperfections of title, easements and Liens that have not had
and would not reasonably be expected to have a Material Adverse Effect.
All leases and other agreements pursuant to which the Company or any of its
Subsidiaries leases, subleases or otherwise acquires or obtains operating
rights affecting any real or personal property are valid, binding and
enforceable in accordance with their terms, except where the failure to be
valid, binding and enforceable has not had and would not reasonably be
expected to have a Material Adverse Effect; and there is not, under any
such leases, any existing or prospective default or event of default or
event which with notice or lapse of time, or both, would constitute a
default by the Company or any of its Subsidiaries that has had or would
reasonably be expected to have a Material Adverse Effect. No consents or
other approvals of any lessor, or its lender, are required under any
material lease as a result of the consummation of the transactions
contemplated by this Agreement.
(b) The tangible assets, including without limitation, refinery
improvements, terminal improvements, pipelines and equipment of the Company
and its Subsidiaries (i) are in good operating condition and repair,
subject to ordinary wear and tear, and have been maintained in accordance
with standard industry practice, (ii) are adequate for the purpose for
which they are being used and are capable of being used in the business as
presently conducted without present need for replacement or repair, except
in the ordinary course of business, (iii) conform in all material respects
with all applicable legal requirements, and (iv) in the aggregate provide
the capacity to engage in their respective businesses on a continuous
basis, subject to routine maintenance.
SECTION 3.16 INSURANCE. The Company and its Subsidiaries maintain
insurance coverage as set forth on Schedule 3.16 of the Disclosure Letter.
True and complete copies of each insurance policy maintained by the Company
and its Subsidiaries have been previously provided to Parent.
SECTION 3.17 NO BROKERS. The Company has not entered into any
contract, arrangement or understanding with any Person which may result in
the obligation of Parent, Merger Sub or the Company to pay any finder's
fees, brokerage or agent's commissions or other like payments in connection
with the negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby, except that the Company has retained
Deutsche Bank Securities Inc. to act as its financial advisor in connection
with the Merger, the terms of which (including the fees owed by the Company
in connection therewith) have been disclosed in writing to Parent prior to
the date hereof.
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SECTION 3.18 CONTRACTS; DEBT INSTRUMENTS.
(a) Set forth on Schedule 3.18(a) of the Disclosure Letter are the
following contracts (such contracts, together with the contracts filed as
exhibits to the Company Reports, are collectively referred to as the
"Material Contracts"):
(i) The current list of contracts maintained by the Company in
the ordinary course of business for financial reporting purposes;
(ii) contracts that involve a sharing of profits, losses, costs
or liabilities with other Persons;
(iii) contracts with respect to any partnership, joint venture or
strategic alliance with any other Person;
(iv) all employment agreements other than those that are
terminable at will by the Company without liability to the Company or any
of its Subsidiaries with respect to such termination in excess of $100,000,
all severance agreements providing for severance payments in excess of
$100,000, and all director or officer indemnification agreements;
(v) contracts containing covenants purporting to limit the
freedom of the Company or any of its Subsidiaries, or that will limit the
freedom of Parent, the Surviving Corporation or any of their Subsidiaries,
to compete in any line of business in any geographic area or to solicit
customers, clients or employees, other than (A) covenants restricting
solicitation of employees of customers or suppliers and (B) customary
covenants not to compete in a limited geographic area entered into by the
Company or its Subsidiaries in connection with the sale of retail locations
and associated convenience stores; or
(vi) upon which the Company's business is substantially
dependent or the termination or cancellation of which would reasonably be
expected to have a Material Adverse Effect.
As of the date of this Agreement, neither the Company nor any of its
Subsidiaries is a party to or bound by any contract that is material to the
conduct of their respective business other than the Material Contracts.
(b) Neither the Company nor any of its Subsidiaries is in violation
of or in default under (nor does there exist any condition which with the
passage of time or the giving of notice or both would cause such a
violation of or default under) any Material Contract to which it is a party
or by which it or any of its properties or assets is bound except for such
violations or defaults that would not result in a material liability to the
Company or otherwise have a Material Adverse Effect. Each Material
Contract is in full force and effect, and is a legal, valid and binding
obligation of the Company or its Subsidiaries, as applicable, and each of
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the other parties thereto, enforceable in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws now
or hereafter in effect relating to or limiting creditors' rights generally
and general principles of equity and except as would not result in a
material liability to the Company and has not had and would not reasonably
be expected to have a Material Adverse Effect. No condition exists or
event has occurred that (whether with or without notice or lapse of time or
both) would reasonably be expected to constitute a default by any other
party thereto under any Material Contract or that would result in a right
of termination of any Material Contract except for any such defaults or
terminations that would not result in a material liability to the Company
and have not had and would not reasonably be expected to have a Material
Adverse Effect.
(c) Schedule 3.18(c) of the Disclosure Letter lists all loan or
credit agreements, notes, bonds, mortgages, indentures and other agreements
and instruments as of the date hereof pursuant to which any indebtedness of
the Company or any of its Subsidiaries in excess of $1,000,000 is
outstanding or may be incurred, indicating the respective principal amounts
outstanding thereunder as of the date hereof and the respective maturity
dates.
(d) There is no contract, commitment, judgment, injunction, order or
decree to which the Company or any of its Subsidiaries is a party or
subject to that has had or would reasonably be expected to have the effect
of prohibiting or impairing the conduct of business by the Company or any
of its Subsidiaries or any contract that may be terminable as a result of
Parent's or any of Parent's Subsidiaries' status as a competitor of any
party to such contract, except, in each case, for any prohibition,
impairment or termination right that has not had and would not reasonably
be expected to have a Material Adverse Effect.
SECTION 3.19 VOTE REQUIRED. The Company's board of directors has
unanimously approved, adopted and declared advisable this Agreement and the
transactions contemplated hereby, including the Merger. The affirmative
vote of the holders of a majority of the Shares outstanding as of the
applicable record date, either at a meeting of the Company's stockholders
(or an adjournment thereof) or by written consent of stockholders, is the
only vote necessary to approve and adopt this Agreement and the
transactions contemplated hereby, including the Merger (as applied to this
Agreement and the transactions contemplated hereby, including the Merger,
the "Requisite Vote").
SECTION 3.20 CERTAIN APPROVALS. The Company's board of directors has
taken any and all necessary and appropriate action to render inapplicable
to this Agreement and the transactions contemplated hereby, including the
Merger, the restrictions and voting requirements contained in Section 203
of the DGCL and any other "fair price," "moratorium," control share
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acquisition, interested stockholder or other similar antitakeover provision
or regulation applicable to the Company and any restrictive provision of
any antitakeover provision in the restated certificate of incorporation or
bylaws of the Company.
SECTION 3.21 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties of the Company contained in this Agreement,
the Company is not making and has not made, and no other Person is making
or has made on behalf of the Company, any express or implied
representations or warranties in connection with this Agreement or the
transactions contemplated hereby, and no Person is authorized to make any
such representations or warranties on behalf of the Company.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Parent and Merger Sub, jointly and severally, represent and warrant to
the Company that:
SECTION 4.1 EXISTENCE; GOOD STANDING. Each of Parent and Merger Sub
is a corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware. The copies of each of Parent's
and Merger Sub's charter documents previously made available to the Company
are true and correct and contain all amendments as of the date hereof.
SECTION 4.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Each
of Parent and Merger Sub has the requisite corporate power and authority to
execute and deliver this Agreement and all other agreements and documents
contemplated hereby to which it is a party. The consummation by each of
Parent and Merger Sub of the transactions contemplated hereby has been duly
authorized by all requisite corporate action. This Agreement constitutes
the valid and legally binding obligation of each of Parent and Merger Sub,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws now or hereafter in effect relating to or limiting creditors'
rights generally and general principles of equity.
SECTION 4.3 NO CONFLICT.
(a) Neither the execution and delivery by Parent and Merger Sub of
this Agreement nor the consummation by Parent and Merger Sub of the
transactions contemplated hereby in accordance with the terms hereof will:
(i) conflict with or result in a breach of any provisions of the
certificate of incorporation or bylaws of Parent or Merger Sub; or (ii)
contravene or conflict with, or constitute a material violation of, any
provision of any law, rule, regulation, judgment, order or decree binding
upon or applicable to Parent or any of its Subsidiaries.
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(b) Neither the execution and delivery by Parent and Merger Sub of
this Agreement nor the consummation by Parent or Merger Sub of the
transactions contemplated hereby in accordance with the terms hereof will
require any consent, approval or authorization of, or filing or
registration with, any Governmental Authority, other than the Regulatory
Filings.
SECTION 4.4 NO BROKERS. Parent will pay all fees and charges of any
advisor or broker retained by it in connection with the transactions
contemplated by this Agreement.
SECTION 4.5 NO PRESENT INTENTION TO DIVEST ASSETS. As of the date of
this Agreement, Parent has no present intention to cause the Surviving
Corporation to divest any of its refineries, any significant number of its
retail outlets or any significant amount of assets comprising the wholesale
operation of the Company following the Closing, and as of the Effective
Time, Parent shall have no such present intentions except as may be
required to satisfy the requirements of any Governmental Authority in order
to obtain necessary approvals to consummate the transactions contemplated
hereby.
SECTION 4.6 SUFFICIENT FUNDS. At Closing, Parent will have
sufficient funds available to pay the Merger Consideration and to perform
its other obligations pursuant to this Agreement. Parent has received a
commitment letter, dated as of August 15, 2006 from Bank of America, N.A.,
pursuant to which such lender has committed, subject to the terms and
conditions set forth therein, to provide to Parent sufficient funds to pay
the Merger Consideration. A true and complete copy of such commitment
letter as in effect on the date of this Agreement has been furnished to the
Company.
SECTION 4.7 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties of Parent and Merger Sub contained in this
Agreement, Parent and Merger Sub are not making and have not made, and no
other Person is making or has made on behalf of Parent or Merger Sub, any
express or implied representations or warranties in connection with this
Agreement or the transactions contemplated hereby, and no Person is
authorized to make any such representations or warranties on behalf of
Parent or Merger Sub.
ARTICLE 5
COVENANTS
SECTION 5.1 CONDUCT OF BUSINESS.
(a) The Company's Business. Prior to the Effective Time, except as
set forth in Schedule 5.1 of the Disclosure Letter or as expressly
contemplated by this Agreement or as consented to in writing by Parent, the
Company:
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(i) shall, and shall cause each of its Subsidiaries to, conduct
its operations in the ordinary course consistent with past practices;
(ii) shall, and shall cause each of its Subsidiaries to, use its
commercially reasonable efforts to preserve intact its business
organization and goodwill, keep available the services of its officers and
key employees and maintain satisfactory relationships with those Persons
having business relationships with it;
(iii) shall not amend its restated certificate of incorporation
or bylaws;
(iv) shall promptly notify Parent of any material adverse change
in its financial condition or business or any termination, cancellation,
repudiation or material breach of any Material Contract or any other
relationship with a significant customer (or communications expressly
indicating the same may be contemplated), or the institution of any
material litigation or governmental complaints, investigations or hearings
(or communications in writing indicating the same may be contemplated), or
the breach of any representation or warranty contained herein;
(v) shall promptly make available (in paper form or via the
Internet) to Parent true and correct copies of any report, statement or
schedule filed with the SEC subsequent to the date of this Agreement;
(vi) shall not (A) except pursuant to the exercise of options,
warrants, conversion rights and other contractual rights existing on the
date hereof and disclosed in the Disclosure Letter or referred to in clause
(B) below, issue any shares of its capital stock, dispose of any treasury
shares, effect any stock split or otherwise change its capitalization as it
existed on the date hereof; (C) grant, confer or award any option, warrant,
conversion right or other right not existing on the date hereof to acquire
any shares of its capital stock except pursuant to contractual commitments
existing on the date of this Agreement and disclosed in the Disclosure
Letter; (D) increase any compensation or benefits of any officer, director,
employee or agent of the Company or any of its Subsidiaries, or enter into
or amend any employment agreement or severance agreement with any of its
present or future officers, directors or employees, or (E) adopt any new
employee benefit plan (including any stock option, stock benefit or stock
purchase plan) or amend (except as required by law or this Agreement) any
existing employee benefit plan in any material respect;
(vii) shall not declare, set aside or pay any dividend or make
any other distribution or payment with respect to any shares of its capital
stock;
(viii) shall not, and shall not permit any of its Subsidiaries
to, redeem, purchase or otherwise acquire any shares of its capital stock,
any shares of capital stock of any of the Company's Subsidiaries, or any
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option, warrant, conversion right or other right to acquire such shares, or
make any commitment for any such action;
(ix) shall not, and shall not permit any of its Subsidiaries to,
sell, lease or otherwise dispose of any of its assets (including the
capital stock of its Subsidiaries), except in the ordinary course of
business;
(x) shall not, and shall not permit any of its Subsidiaries to,
except pursuant to contractual commitments in effect on the date hereof and
disclosed in the Disclosure Letter authorize, propose, agree to, enter into
or consummate any merger, consolidation or business combination transaction
(other than the Merger) or acquire or agree to acquire by merging or
consolidating with, or by purchasing an equity interest in or the assets
of, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof;
(xi) shall not, except as may be required as a result of a
change in law or in generally accepted accounting principles, change any of
the accounting principles or practices used by it;
(xii) shall, and shall cause each of its Subsidiaries to, use
reasonable best efforts to maintain with financially responsible insurance
companies insurance in such amounts and against such risks and losses as
are consistent with past practices;
(xiii) shall not, and shall not permit any of its Subsidiaries
to, (A) make or rescind any express or deemed election relating to Taxes,
(B) settle or compromise any claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to Taxes for an
amount in excess of $100,000, (C) file an amended Tax Return, (D) consent
to any extension or waiver of the limitation period applicable to any Tax
claim or assessment, or (E) change (or make a request to any Tax Authority
to change) in any respect any of its methods of accounting for Tax
purposes;
(xiv) except as set forth on the budget and capital expenditure
schedule included in the Disclosure Letter, shall not, nor shall it permit
any of its Subsidiaries to, (A) incur any indebtedness for borrowed money
(except under credit lines in existence as of the date of this Agreement)
or guarantee any such indebtedness or issue or sell any debt securities or
warrants or rights to acquire any debt securities of such party or
guarantee any debt securities of others, (B) except in the ordinary course
of business, enter into any material lease (whether such lease is an
operating or capital lease) or create any material Liens on the property of
the Company of any of its Subsidiaries in connection with any indebtedness
thereof or (C) make or commit, or enter into agreements that would require
them to make, capital expenditures;
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(xv) subject to Section 5.4, shall not take any action that is
reasonably expected to delay materially or adversely affect the ability of
any of the parties hereto to obtain any consent, authorization, order or
approval of any Governmental Authority or the expiration of any applicable
waiting period required to consummate the Merger;
(xvi) terminate, amend, modify or waive any provision of any
confidentiality or standstill agreement (provided that such restrictions
shall not apply to non-disclosure or confidentiality agreements entered
into in the ordinary course of business with third parties that are not
material in scope) to which it or any of its Subsidiaries is a party; and
during such period shall enforce, to the fullest extent permitted under
applicable law, the provisions of such agreement, including by obtaining
injunctions to prevent any breaches of such agreements and to enforce
specifically the terms and provisions thereof in any court of the United
States of America or any state having jurisdiction;
(xvii) shall not enter into or amend, in any material respect,
any agreement with any holder of the Company's capital stock with respect
to holding, voting or disposing of such shares;
(xviii) except as specifically contemplated by Section 2.5, shall
not by resolution of its board of directors cause or permit the
acceleration of rights, benefits or payments under any Company Plans;
(xix) shall not split, combine, subdivide or reclassify its
outstanding shares of capital stock;
(xx) shall not purchase any shares of capital stock of Parent;
(xxi) shall not, and shall not permit any of its Subsidiaries to,
(A) do business in any country in which the Company and its Subsidiaries
are not doing business as of the date hereof or (B) enter into any joint
venture, partnership or other joint business venture with any Person;
(xxii) subject to Section 5.6 hereof, shall not issue any press
release or make any public announcement, except in accordance with the
Company's past practices or as required to comply with applicable law or
any applicable listing standards of a national securities exchange; and
(xxiii) shall not, and shall not permit any of its Subsidiaries
to, agree in writing or otherwise to take any of the foregoing actions.
(b) Parent's Business. Prior to the Effective Time, except as
expressly contemplated by this Agreement or as consented to in writing by
the Company, Parent:
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(i) shall not, and shall not permit any of its Subsidiaries to,
except pursuant to contractual commitments in effect on the date hereof and
disclosed to the Company, authorize, propose, agree to, enter into or
consummate any merger, consolidation or business combination transaction
(other than the Merger) or acquire or agree to acquire by merging or
consolidating with, or by purchasing an equity interest in or the assets
of, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof, if such
transaction would materially delay the consummation of the transactions
described in this Agreement;
(ii) shall not adopt a plan of complete or partial liquidation;
(iii) subject to Section 5.4, shall not take any action that is
reasonably expected to materially delay or adversely affect the ability of
any of the parties hereto to obtain any consent, authorization, order or
approval of any Governmental Authority or the expiration of any applicable
waiting period required to consummate the Merger;
(iv) shall not, and shall not permit any of its Subsidiaries to,
acquire beneficial ownership of Shares constituting more than 4.9% of the
then-outstanding Shares, except pursuant to the Merger; and
(v) shall not, and shall not permit any of its Subsidiaries to,
agree in writing or otherwise to take any of the foregoing actions.
(c) No Control. Notwithstanding the provisions of Section 5.1(a),
nothing contained in this Agreement shall give Parent, directly or
indirectly, the right to control or direct the operations of the Company
prior to the Effective Time. Prior to the Effective Time, the Company
shall exercise, consistent with the terms and conditions of this Agreement,
complete control and supervision of its operations.
SECTION 5.2 NO SOLICITATION
(a) The Company agrees that, from the date hereof until the earlier
of the Effective Time or the termination of this Agreement, it (i) will not
(and the Company will not permit its officers, directors, employees, agents
or representatives, including any investment banker, attorney or accountant
retained by the Company, to) solicit, initiate or encourage (including by
way of furnishing non-public information) any inquiry, proposal or offer
(including any proposal or offer to its stockholders) with respect to a
third party tender offer, merger, consolidation, business combination, sale
of assets, sale of stock or joint venture or similar transaction involving
any assets or class of capital stock of the Company, or any acquisition of
the capital stock of the Company or a business or assets (other than sales
of current assets in the ordinary course of business) of the Company in a
single transaction or a series of related transactions, or any combination
of the foregoing (any such proposal, offer or transaction being hereinafter
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referred to as an "Acquisition Proposal") or engage in any discussions or
negotiations concerning an Acquisition Proposal; and (ii) will immediately
cease and cause to be terminated any existing discussions or negotiations
with any third parties conducted heretofore with respect to any Acquisition
Proposal; provided that, subject to Section 7.3(b), nothing contained in
this Agreement shall prevent the Company or its board of directors from (A)
taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) under the Exchange Act or making any disclosure to the Company's
stockholders if the Company's board of directors determines in good faith
that the failure to make such disclosure would result in a breach of its
fiduciary duties under applicable law or (B) providing information
(pursuant to a confidentiality agreement in reasonably customary form and
which does not contain terms that prevent the Company from complying with
its obligations under this Section 5.2) to or engaging in any negotiations
or discussions with any Person or group who has made an unsolicited bona
fide Acquisition Proposal with respect to all of the outstanding shares of
capital stock of the Company or all or substantially all of the assets of
the Company if, with respect to the actions set forth in clause (B), (x)
the Company's board of directors determines in good faith and after
consultation with its financial advisors, taking into account all financial
considerations, including the legal, financial, regulatory and other
aspects of the Acquisition Proposal deemed relevant by the Company's board
of directors, the identity of the Person making the Acquisition Proposal,
and the conditions and prospects for completing the Acquisition Proposal,
that such Acquisition Proposal is reasonably likely to result in a
transaction more favorable to the holders of the Shares from a financial
point of view than the Merger (a "Superior Proposal") and (y) the board of
directors of the Company, after consultation with its outside legal
counsel, determines in good faith that the failure to do so would result in
a breach of its fiduciary obligations under applicable law.
(b) The Company agrees that it will notify Parent promptly (and in
any event within 24 hours) if any proposal or offer relating to or
constituting an Acquisition Proposal is received by, any information is
requested from, or any discussions or negotiations are sought to be
initiated or continued with, the Company or any of its officers, directors,
employees, agents or representatives. In connection with such notice, the
Company shall indicate the identity of the Person or group making such
request or inquiry or engaging in such negotiations or discussions and the
material terms and conditions of any Acquisition Proposal. Thereafter, the
Company shall keep Parent fully informed on a prompt basis (and in any
event within 24 hours) of any material changes, additions or adjustments to
the terms of any such proposal or offer. Prior to taking any action
referred to in clause (B) of the proviso of Section 5.2(a)(i), if the
Company intends to participate in any such discussions or negotiations or
provide any such information to any such third party, the Company shall
give prior written notice to Parent.
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(c) Nothing in this Section 5.2 shall permit the Company to enter
into any agreement with respect to an Acquisition Proposal during the term
of this Agreement, it being agreed that, during the term of this Agreement,
the Company shall not enter into any agreement with any Person that
provides for, or in any way facilitates, an Acquisition Proposal, other
than a confidentiality agreement and/or standstill agreement permitted
under Section 5.2(a)(i) in reasonably customary form and which does not
contain terms that prevent the Company from complying with its obligations
under this Section 5.2.
SECTION 5.3 STOCKHOLDER APPROVAL
(a) The Company, acting through its board of directors, shall, in
accordance with applicable laws:
(i) promptly prepare and file with the SEC a preliminary proxy
statement on Schedule 14A relating to the Merger and this Agreement and (x)
obtain and furnish the information required to be included by the SEC in
such filing and, after consultation with Parent, respond promptly to any
comments made by the SEC with respect to the preliminary proxy statement
and, subject to compliance with the Exchange Act, and SEC rules and
regulations promulgated thereunder, cause a notice of a special meeting and
a definitive proxy statement (the "Proxy Statement") to be mailed to the
Company's stockholders no later than the time required by applicable laws
and the restated certificate of incorporation and bylaws of the Company,
and (y) subject to Section 7.3(b), seek to obtain the necessary approvals
of the Merger and this Agreement by the Company's stockholders;
(ii) duly call, give notice of, convene and hold a special
meeting of the Company's stockholders (the "Stockholders' Meeting") as soon
as practicable after the date on which the Proxy Statement has been mailed
to the Company's stockholders for the purpose of considering and taking
action upon the Merger and this Agreement; and
(iii) include in the Proxy Statement the recommendation of the
Company's board of directors that its stockholders vote in favor of the
approval and adoption of the Merger and this Agreement; provided, however,
that at any time prior to the Requisite Vote being obtained, the Company's
board of directors may (a) fail to make, withdraw, or propose to withdraw
the recommendation or declaration of advisability by the Company's board of
directors of this Agreement, or (b) only to the extent permitted by and in
compliance with Section 7.3(b), recommend or propose to recommend any
Superior Proposal or enter into a transaction that constitutes a Superior
Proposal, if, in the case of either (a) or (b), the Company's board of
directors, after consultation with its outside legal counsel, determines in
good faith that the failure to do so would result in a breach of its
fiduciary obligations under applicable law.
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(b) If, at any time prior to the Stockholders' Meeting, any event
shall occur relating to the Company or the transactions contemplated by
this Agreement that should be set forth in an amendment or a supplement to
the Proxy Statement, the Company shall promptly notify in writing Parent of
such event. In such case, the Company, with the cooperation of Parent,
shall promptly prepare, file with the SEC and mail such amendment or
supplement.
(c) Parent shall furnish to the Company information relating to
Parent and Merger Sub required under the Exchange Act and SEC rules and
regulations promulgated thereunder to be set forth in the Proxy Statement
and any amendments or supplements thereto. All such information shall be
true and correct and shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the information, in light of the circumstances
under which the information is provided, not misleading.
(d) The Company shall consult with Parent with respect to the Proxy
Statement, and any amendments or supplements thereto, and shall afford
Parent reasonable opportunity to comment thereon prior to finalization of
the Proxy Statement. The Company agrees to notify Parent at least three
(3) business days prior to the mailing of the Proxy Statement, or any
amendments or supplements thereto, to the Company's stockholders.
(e) Parent agrees that it will (i) vote, or cause to be voted, all of
the Shares, if any, owned by it or any of its Subsidiaries to approve and
adopt the Merger and this Agreement and (ii) take, or cause to be taken,
all corporate actions necessary for it to approve and adopt the Merger and
this Agreement.
SECTION 5.4 FILINGS; REASONABLE BEST EFFORTS.
(a) Subject to the terms and conditions herein provided, the Company
and Parent shall:
(i) promptly make their respective filings under the HSR Act and
any applicable state antitrust laws with respect to the Merger and
thereafter shall promptly make any other required submissions under the HSR
Act or such state laws;
(ii) use their reasonable best efforts to satisfy the conditions
to closing in Article 6 as promptly as practicable and to cooperate with
one another in (1) determining which filings are required to be made prior
to the Effective Time with, and which consents, approvals, permits or
authorizations are required to be obtained from Governmental Authorities or
other Persons in connection with the execution and delivery of this
Agreement and the consummation of the Merger and the transactions
contemplated hereby; and (2) timely making all such filings and timely
seeking all such consents, approvals, permits or authorizations;
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(iii) promptly notify each other of any communication concerning
this Agreement or the Merger from any Governmental Authority and, subject
to applicable law, permit the other party to review in advance any proposed
communication concerning this Agreement or the Merger to any Governmental
Authority;
(iv) not agree to participate in any substantive meeting or
discussion with any Governmental Authority in respect of any filings,
investigation or other inquiry concerning this Agreement or the Merger
unless it consults with the other party in advance and, to the extent
permitted by such Governmental Authority, gives the other party the
opportunity to attend and participate thereat;
(v) furnish counsel to the other party with copies of all
correspondence, filings and communications (and memoranda setting forth the
substance thereof) between them and their affiliates and their respective
representatives on the one hand, and any Governmental Authorities or
members of their respective staffs on the other hand, with respect to this
Agreement and the Merger; and
(vi) furnish the other party with such necessary information and
reasonable assistance as such other party and its respective affiliates may
reasonably request in connection with their preparation of necessary
filings, registrations or submissions of information to any Governmental
Authorities, including any filings necessary or appropriate under the
provisions of the HSR Act; provided that if the provisions of the HSR Act
would prevent a party from disclosing such information to the other party,
then such information may be disclosed to such party's counsel.
(b) Without limiting Section 5.4(a), Parent and the Company shall:
(i) each use its reasonable best efforts to respond promptly to
any requests for additional information made by the Department of Justice
("DOJ") or the Federal Trade Commission ("FTC"), and to cause the waiting
periods under the HSR Act to terminate or expire at the earliest possible
date after the date of filing;
(ii) not extend, directly or indirectly, any waiting period
under the HSR Act or any applicable state antitrust law or enter into any
agreement with a Governmental Authority to delay or not consummate the
Merger except with the prior written consent of the other;
(iii) each use its reasonable best efforts to avoid the entry
of, or to have vacated or terminated, any decree, order or judgment that
would restrain, prevent or delay the Closing, including defending through
litigation on the merits any claim asserted in any court by any party; and
(iv) each use reasonable best efforts to avoid or eliminate each
and every impediment under any antitrust, competition or trade regulation
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law that may be asserted by any Governmental Authority with respect to the
Merger so as to enable the Closing to occur as soon as reasonably possible
(and in any event no later than 60 days following the termination of all
applicable waiting periods under the HSR Act, unless the parties are in
litigation with the government, in which case at the conclusion of such
litigation); provided that, notwithstanding anything to the contrary in
this Section 5.4 or the remainder of this Agreement, neither Parent nor any
of its Subsidiaries shall be required to agree to any divestitures,
licenses, hold separate arrangements or similar matters, including
covenants affecting business operating practices.
(c) In connection with its obligations under this Section 5.4, the
Company shall not, without Parent's prior written consent, commit to any
divestitures, licenses, hold separate arrangements or similar matters,
including covenants affecting business operating practices (or allow its
Subsidiaries to commit to any divestitures, licenses, hold separate
arrangements or similar matters) in connection with the transactions
contemplated under this Agreement.
SECTION 5.5 INSPECTION. From the date hereof to the Effective Time,
the Company shall allow all designated officers, attorneys, accountants and
other representatives of Parent access at all reasonable times upon
reasonable notice to the records and files, correspondence, audits and
properties, as well as to all information relating to commitments,
contracts, titles and financial position, or otherwise pertaining to the
business and affairs of the Company and its Subsidiaries, including
inspection of such properties; provided that no investigation by Parent
pursuant to this Section 5.5 shall affect any representation or warranty
given by the Company hereunder, and provided further that notwithstanding
the provision of information or investigation by the Company, the Company
shall not be deemed to make any representation or warranty except as
expressly set forth in this Agreement. Notwithstanding the foregoing, the
Company shall not be required to provide any information which it
reasonably believes it may not provide to any other party by reason of
applicable law, rules or regulations, which the Company reasonably believes
constitutes information protected by attorney/client privilege, or which it
is required to keep confidential by reason of contract or agreement with
third parties. The parties hereto will make reasonable and appropriate
substitute disclosure arrangements under circumstances in which the
restrictions of the preceding sentence apply. Parent will not, and will
cause its representatives not to, use any information obtained pursuant to
this Section 5.5 for any purpose unrelated to the consummation of the
transactions contemplated by this Agreement. All nonpublic information
obtained pursuant to this Agreement shall be governed by the
Confidentiality Agreement dated July 11, 2006 between Parent and the
Company (the "Confidentiality Agreement").
SECTION 5.6 PUBLICITY. The Company and Parent will consult with each
other and will mutually agree upon any press releases or public
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announcements pertaining to this Agreement or the transactions contemplated
hereby and shall not issue any such press releases or make any such public
announcements prior to such consultation and agreement, except as may be
required by applicable law or by obligations pursuant to any listing
agreement with any national securities exchange, in which case the party
proposing to issue such press release or make such public announcement
shall use its reasonable best efforts to consult in good faith with the
other party before issuing any such press releases or making any such
public announcements.
SECTION 5.7 EXPENSES. Whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses, except as expressly provided in Section 7.5 and provided that
Parent shall reimburse the Company for its reasonable out of pocket
expenses incurred in replying to any second request for additional
information under the HSR Act in connection with the Merger.
SECTION 5.8 INDEMNIFICATION AND INSURANCE.
(a) From and after the Effective Time, Parent and the Surviving
Corporation shall indemnify, defend and hold harmless to the fullest extent
permitted under applicable law each person who is immediately prior to the
Effective Time, or has been at any time prior to the Effective Time, an
officer or director of the Company and each person who immediately prior to
the Effective Time is serving or prior to the Effective Time has served at
the request of the Company as a director, officer, trustee or fiduciary of
another corporation, partnership, joint venture, trust, pension or other
employee benefit plan or enterprise, including the members of the
Administrative Committee of the Company Plans (individually, an
"Indemnified Party" and, collectively, the "Indemnified Parties") against
all losses, claims, damages, liabilities, costs or expenses (including
attorneys' fees), judgments, fines, penalties and amounts paid in
settlement in connection with any claim, action, suit, proceeding or
investigation arising out of or pertaining to acts or omissions, or alleged
acts or omissions, by them in their capacities as such, whether commenced,
asserted or claimed before or after the Effective Time. In the event of
any such claim, action, suit, proceeding or investigation (an "Action"),
(i) Parent and the Surviving Corporation shall pay, as incurred, the fees
and expenses of counsel selected by the Indemnified Party, which counsel
shall be reasonably acceptable to Parent, in advance of the final
disposition of any such Action to the fullest extent permitted by
applicable law, and, if required, upon receipt of any undertaking required
by applicable law, and (ii) Parent and the Surviving Corporation shall
cooperate in the defense of any such matter; provided, however, neither
Parent nor the Surviving Corporation shall be liable for any settlement
effected without their written consent (which consent shall not be
unreasonably withheld or delayed), and provided further that neither Parent
nor the Surviving Corporation shall be obligated pursuant to this Section
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5.8(a) to pay the fees and disbursements of more than one counsel for all
Indemnified Parties in any single Action, unless, in the good faith
judgment of any of the Indemnified Parties, there is or may be a conflict
of interests between two or more of such Indemnified Parties, in which case
there may be separate counsel for each similarly situated group. In no
event shall Parent or the Surviving Corporation be required to indemnify
any of the Indemnified Parties or advance any expenses on behalf of any of
the Indemnified Parties pursuant to this Section 5.8 to any greater extent
than the Company, as applicable, would have been required to so indemnify
or advance expenses pursuant to the restated certificate of incorporation
or bylaws of the Company or contractual indemnification agreements binding
on the Company (including board resolutions relating to the Administrative
Committee of the Company Plans) which such contractual indemnification
agreements and board resolutions are disclosed on Schedule 5.8(a) of the
Disclosure Letter, each as in existence on the date hereof.
(b) The parties agree that the rights to indemnification hereunder,
including provisions relating to advances of expenses incurred in defense
of any action or suit, in the restated certificate of incorporation, bylaws
and any board resolutions relating to the Administrative Committee of the
Company Plans and indemnification agreement of the Company with respect to
matters occurring through the Effective Time, shall survive the Merger and
shall continue in full force and effect for a period of six years from the
Effective Time; provided, however, that all rights to indemnification and
advancement of expenses in respect of any Action pending or asserted or
claim made within such period shall continue until the disposition of such
Action or resolution of such claim.
(c) For a period of six years after the Effective Time, Parent shall,
or shall cause the Surviving Corporation to, maintain or cause to be
maintained officers' and directors' liability insurance ("D&O Insurance")
covering the Indemnified Parties who are or at any time prior to the
Effective Time were covered by the Company's existing D&O Insurance
policies on terms substantially no less advantageous to such Indemnified
Parties than such existing D&O Insurance with respect to acts or omissions,
or alleged acts or omissions, prior to the Effective Time (whether claims,
actions or other proceedings relating thereto are commenced, asserted or
claimed before or after the Effective Time); provided, however, that, after
the Effective Time, Parent and the Surviving Corporation shall not be
required to pay annual premiums in excess of 200% of the 2006 annual
premium paid by the Company (the amount of which premium is set forth in
Schedule 5.8(c) of the Disclosure Letter) (the "the Company Maximum
Premium"), but in such case shall purchase as much coverage as reasonably
practicable for such amount. The Company shall have the right, subject to
the consent of Parent, which consent shall not be unreasonably withheld, to
cause coverage to be extended under the Company's D&O Insurance policy by
obtaining a six-year "tail" policy on terms and conditions no less
advantageous than the Company's existing D&O Insurance, and such "tail"
policy shall satisfy the provisions of this Section 5.8 with respect to
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Indemnified Parties who are or at any time prior to the Effective Time were
covered by the Company's existing D&O Insurance.
(d) The provisions of this Section 5.8 shall survive the consummation
of the transactions contemplated hereby and are expressly intended to
benefit each of the Indemnified Parties. In the event Parent or the
Surviving Corporation or any of their successors or assigns (i) is
consolidated with or merges into any other Person and shall not be the
continuing or surviving entity in such consolidation or merger and the
obligations of Parent or the Surviving Corporation under this Section 5.8
do not become the obligations of the successor under operation of law or
(ii) transfers all or substantially all of its assets to any Person, then
and in either such case, Parent and the Surviving Corporation shall cause
proper provision be made so that the successors and assigns of Parent or
the Surviving Corporation shall expressly assume in writing the obligations
of Parent and the Surviving Corporation set forth in this Section 5.8 that
still survive.
SECTION 5.9 EMPLOYEE BENEFITS.
(a) Parent hereby agrees to honor, and agrees to cause its
Subsidiaries to honor, all employee benefit plans, contracts, agreements
and binding commitments of the Company maintained or entered into by the
Company prior to the date hereof that apply to any current or former
employee or current or former director of the Company or any Subsidiaries
of the Company (each, an "Employee"), including all Company Plans and the
employment agreements between the Company and certain of its key employees
(copies of which employment agreements have been furnished to Parent);
provided, however, that, except as otherwise expressly provided in this
Section 5.9, Parent reserves the right to modify or terminate any such
plan, contract, agreement or binding commitment in accordance with its
terms.
(b) Notwithstanding the provisions of Section 5.9(a):
(i) Parent shall honor all binding commitments of the Company
set forth in the ESOP Substitute Excess Deferred Compensation Benefit Plan,
the amounts of which commitments are set forth in Schedule 5.9(b)(i) of the
Disclosure Letter.
(ii) Parent agrees that if the Closing has not occurred, the
Company may make routine grants of Restricted Stock in December 2006;
provided, however, that the terms of such grants of Restricted Stock shall
provide that the entire amount of such grants will be forfeited immediately
prior to the Effective Time.
(iii) Parent covenants and agrees that for a period of at least
one year following the Effective Time, the benefits taken as a whole
offered under the Surviving Corporation's and/or the Parent's benefit
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plans, programs, policies and arrangements to Employees will be no less
favorable, taken as a whole, to such Employees than the benefits offered
under the Company Plans as of the Closing. Without limiting the generality
of the foregoing, Employees shall be given credit for years of service with
the Company under all applicable plans, programs, policies and arrangements
of Parent, there shall be no gaps or lapses of coverage for Employees under
group health plans, and Parent shall cause (A) such Employees and their
eligible dependents who are participating in the Company group health plan
as of the Effective Time to be credited under Parent's group health plans
for the year during which such coverage under such group health plans
begins, with any deductibles and copayments already incurred during such
year under the group health plans of the Company, and (B) Parent's group
health plan to waive any preexisting condition restrictions to the extent
necessary to provide immediate coverage to the extent such preexisting
condition restrictions have been waived, or would have been waived, under
the Company's group health plans or as otherwise required by applicable
law.
(iv) Parent agrees to implement a severance plan on the terms
set forth in Schedule 5.9(b)(iv) of the Disclosure Letter with respect to
any Employee whose employment is terminated without cause within one year
following the Effective Time.
(v) Parent agrees that (A) bonuses will continue to accrue under
the Company's existing 2006 Management Discretionary Bonus Plan through the
Effective Time, shall be allocated to Employees by the Company's board of
directors and senior officers in accordance with such plan, and shall be
paid by the Company promptly after the allocation is made, and (B) the
Company may establish a bonus pool, which shall be allocated and paid at
the Effective Time to Employees as the Company's board of directors shall
determine in its sole discretion, provided, however, that the aggregate
amount of bonuses paid under the plans described in clauses (A) and (B)
shall not in the aggregate exceed $13,000,000.
(vi) To the extent not made by the Company prior to the
Effective Time, Parent shall make (A) the allocations due up to the
Effective Time under the Giant Industries, Inc. and Affiliated Companies
Deferred Compensation Plan, and set aside corresponding amounts in the
grantor trust associated therewith, and (B) any mandatory matching and 3%
supplemental contributions due up to the Effective Time under the Giant
Industries, Inc. & Affiliated Companies 401(k) Plan, in each case as set
forth in Schedule 5.9(b)(vi) of the Disclosure Letter.
(c) In addition to the foregoing:
(i) Parent shall pay or reimburse the Employees who have
employment agreements with the Company as of the date of this Agreement for
any excise taxes imposed on compensation payable to them as a result of the
Merger as set forth in Schedule 5.9(c)(i) of the Disclosure Letter.
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(ii) Parent agrees to continue in effect the retiree medical
coverage described in Schedule 5.9(c)(ii) or provide equivalent coverage,
subject to the limitations described in Schedule 5.9(c)(ii).
(d) Nothing in this Section 5.9 shall be construed as a contract of
employment, and this Section 5.9 shall not give any employee the right to
be retained in the employ of Parent or any of its Subsidiaries. Except as
provided in Section 5.9(b) and Section 5.9(c), nothing in this Section 5.9
shall be construed to require the provision of coverage or benefits to an
Employee except to the extent such coverage or benefits is otherwise
required pursuant to applicable law, the terms of the applicable plan or
arrangement or any employment agreement or employment offer letter.
(e) Except for the rights conferred pursuant to Section 5.9(c),
nothing herein shall be construed to cause the Employees to be third party
beneficiaries with respect to the provisions of this Section 5.9 or have
any rights to enforce such provisions against the parties.
SECTION 5.10 TAX MATTERS.
(a) Each of the Company and its Subsidiaries shall duly and timely
file all Tax Returns that it is required to file and shall pay all unpaid
Taxes shown on such Tax Returns, subject to timely extensions permitted by
law; provided, however, that the Company shall promptly notify Parent of
any such extensions.
(b) The Company shall provide Parent with a certification in
accordance with the requirements of Treasury Regulation Section 1.1445-
2(c)(3) that it is not a United States real property holding corporation.
SECTION 5.11 RESIGNATIONS. At or prior to the Closing, the Company
shall deliver to Parent the written resignations of all members of the
board of directors of the Company and all officers of the Company to be
effective at the Effective Time.
SECTION 5.12 409A COMPLIANCE. Parent agrees that prior to the
Effective Time, the Company shall be permitted to amend the Company Plans
impacted by Code Section 409A to the extent necessary to preserve the
intended benefits and avoid adverse tax consequences under Code Section
409A to the participants; provided, however, that no amendment shall be
made that could reasonably be expected to result in an increase in cost to,
or liability of, the Company except for the time value of money if payment
of benefits is required to be accelerated. Parent further agrees that, to
the extent that additional amendments may be necessary after the Effective
Time to preserve the intended benefits and avoid adverse tax consequences
under Code Section 409A to the participants, Parent shall cause such
amendments to be made, provided that no such amendment shall be made that
could reasonably be expected to result in an increase in cost to, or
liability of, the Parent or the Surviving Corporation except for the time
value of money if payment of benefits is required to be accelerated.
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SECTION 5.13 DEBT TENDER OFFER. (a) In the event and at such time as
requested by Parent (provided that Parent shall coordinate with the Company
regarding such timing), the Company shall (i) commence a cash tender offer
to purchase all of the Company's outstanding 11% Senior Subordinated Notes
due 2012 (the "11% Notes") and the Company's outstanding 8% Senior
Subordinated Notes due 2014 (the "8% Notes", and together with the 11%
Notes, the "Senior Subordinated Notes"), or either the 11% Notes or 8%
Notes, as requested by Parent, and (ii) solicit the consent of the holders
of the Senior Subordinated Notes (or the 8% Notes or 11% Notes, as
requested by Parent), regarding the amendments (the "Indenture Amendments")
described on Schedule 5.13 hereto to the covenants contained in the
indentures to which the Senior Subordinated Notes (or the 8% Notes or 11%
Notes, as applicable) are subject. Any such offer to purchase and consent
solicitation (the "Debt Offer") shall be made on such terms and conditions
as are described on Schedule 5.13 and such other terms and conditions
agreed to by Parent; provided, that, in any event, the parties agree that
the terms and conditions of the Debt Offer shall provide that the closing
thereof shall be contingent upon the closing of the Merger. The Company
shall waive any of the conditions to the Debt Offer and make any other
changes in the terms and conditions of the Debt Offer as may be reasonably
requested by Parent, and the Company shall not, without Parent's prior
consent, waive any condition to the Debt Offer described on Schedule 5.13,
or make any changes to the terms and conditions of the Debt Offer. The
Company covenants and agrees that, subject to the terms and conditions of
this Agreement, including but not limited to the terms and conditions to
the Debt Offer, it will accept for payment, and pay for, the Senior
Subordinated Notes (or the 8% Notes or 11% Notes, as applicable) and effect
the Indenture Amendments, in each case contemporaneously with, and
contingent upon, the Effective Time. The Company shall enter into a
customary dealer manager agreement and a customary information agent
agreement with a dealer manager and information agent, respectively,
recommended by Parent (and reasonably acceptable to the Company) on terms
acceptable to Parent. Parent shall pay directly to the dealer manager and
the information agent all compensation owed to them under their respective
agreements relating to the Debt Offer, whether or not the Merger is
consummated.
(b) Promptly upon the request of Parent, the Company shall prepare,
subject to advice and comments of Parent, an offer to purchase the Senior
Subordinated Notes (or the 8% Notes or 11% Notes, as applicable) and forms
of the related letters of transmittal and summary advertisement, as well as
all other information and exhibits that may be necessary or advisable in
connection with the Debt Offer (collectively, the "Offer Documents"). In
the event that this Agreement is terminated in accordance with Article 7,
the Company will have the right to amend the Offer Documents without
Parent's consent. All mailings to the holders of Senior Subordinated Notes
in connection with the Debt Offer shall be subject to the prior review,
comment and approval of Parent; provided, however, that Parent's comment
and approval shall not be unreasonably withheld or delayed. The Company
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will use its reasonable best efforts to cause the Offer Documents to be
mailed to the holders of the Senior Subordinated Notes as promptly as
practicable following receipt of the request from Parent under paragraph
(a) above to do so.
(c) If at any time prior to the Effective Time any information should
be discovered by any party hereto, which should be set forth in an
amendment or supplement to the Offer Documents mailed to holders of Senior
Subordinated Notes (or the 8% Notes or 11% Notes, as applicable) so that
such documents would not include any misstatement of a material fact or
omit to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
the party which discovers such information shall promptly notify the other
parties hereto and, to the extent required by applicable law, an
appropriate amendment or supplement describing such information shall
promptly be prepared by the Company and, if required, filed by the Company
with the SEC or disseminated by the Company to the holders of the Senior
Subordinated Notes (or the 8% Notes or 11% Notes, as applicable).
ARTICLE 6
CONDITIONS
SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger
shall be subject to the fulfillment or waiver by mutual agreement of the
parties at or prior to the Closing Date of the following conditions:
(a) The Company Requisite Vote shall have been obtained.
(b) (i) The waiting period (and any extension thereof) applicable to
the consummation of the Merger shall have expired or been terminated under
the HSR Act and (ii) any mandatory waiting period or required consent under
any applicable state or foreign competition or antitrust law or regulation
shall have expired or been obtained except where the failure to observe
such waiting period or obtain a consent referred to in this clause (ii)
would not reasonably be expected to delay or prevent the consummation of
the Merger or have a material adverse effect on the expected benefits of
the transactions contemplated by this Agreement to Parent.
(c) None of the parties hereto shall be subject to any decree, order
or injunction of a court of competent jurisdiction, U.S. or foreign, which
prohibits the consummation of the Merger, and no statute, rule or
regulation shall have been enacted by any Governmental Authority which
prohibits or makes unlawful the consummation of the Merger.
SECTION 6.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE
MERGER. The obligation of the Company to effect the Merger shall be
subject to the fulfillment by Parent and Merger Sub or waiver by the
Company at or prior to the Closing Date of the following conditions:
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(a) Parent and Merger Sub shall have performed in all material
respects their respective covenants and agreements contained in this
Agreement required to be performed on or prior to the Closing Date and the
representations and warranties of Parent and Merger Sub contained in this
Agreement and in any document delivered in connection herewith (i) to the
extent qualified by any materiality qualification shall be true and correct
and (ii) to the extent not qualified by any materiality qualification shall
be true and correct in all material respects, in each case as of the date
of this Agreement and as of the Closing Date (except for representations
and warranties made as of a specified date, which need be true and correct
only as of the specified date), and the Company shall have received a
certificate of Parent, executed on its behalf by its Chief Executive
Officer, Chief Financial Officer or Chief Administrative Officer, dated the
Closing Date, certifying to such effect.
SECTION 6.3 CONDITIONS TO OBLIGATION OF PARENT TO EFFECT THE MERGER.
The obligations of Parent and Merger Sub to effect the Merger shall be
subject to the fulfillment by the Company or waiver by Parent at or prior
to the Closing Date of the following conditions:
(a) The Company shall have performed in all material respects its
covenants and agreements contained in this Agreement required to be
performed on or prior to the Closing Date and the representations and
warranties of the Company contained in this Agreement and in any document
delivered in connection herewith (i) to the extent qualified by Material
Adverse Effect or any other materiality qualification shall be true and
correct and (ii) to the extent not qualified by Material Adverse Effect or
any other materiality qualification shall be true and correct in all
material respects, in each case as of the date of this Agreement and as of
the Closing Date (except for representations and warranties made as of a
specified date, which need be true and correct only as of the specified
date), and Parent shall have received a certificate of the Company,
executed on its behalf by its Chief Executive Officer or Chief Financial
Officer, dated the Closing Date, certifying to such effect.
(b) The Consulting and Non-Competition Agreement entered into on the
date hereof between Parent and Fred L. Holliger, which is to be effective
as of the Effective Time, shall remain in full force and effect.
(c) The number of Dissenting Shares shall not exceed 10% of the total
number of Shares.
(d) If Parent has requested the Company to conduct the Debt Offer,
not less than a majority of the aggregate principal amount of the Senior
Subordinated Notes (or the 11% Notes or the 8% Notes, as applicable) shall
have been tendered and accepted for payment by the Company in accordance
with the terms and conditions of the Debt Offer, and the Indenture
Amendments shall have been approved and shall have become effective, in
each case concurrently with the effectiveness of the Merger.
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ARTICLE 7
TERMINATION
SECTION 7.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated at any time prior to the Effective Time by the mutual written
agreement of the Company and Parent approved by action of their respective
boards of directors.
SECTION 7.2 TERMINATION BY PARENT OR THE COMPANY. At any time prior
to the Effective Time, this Agreement may be terminated by the Company or
Parent, in either case by action of its board of directors, if:
(a) The Merger shall not have been consummated by March 31, 2007;
provided, however, that the right to terminate this Agreement pursuant to
this Section 7.2(a) shall not be available to any party whose failure or
whose affiliates' failure to perform or observe in any material respect any
of its obligations under this Agreement in any manner shall have been the
principal cause of, or resulted in, the failure of the Merger to occur on
or before such date; or
(b) A Governmental Authority shall have issued an order, decree or
ruling or taken any other action (including the enactment of any statute,
rule, regulation, decree or executive order) permanently restraining,
enjoining or otherwise prohibiting the Merger and such order, decree,
ruling or other action (including the enactment of any statute, rule,
regulation, decree or executive order) shall have become final and non-
appealable; provided, however, that the party seeking to terminate this
Agreement pursuant to this Section 7.2(b) shall have complied with Section
5.4 and with respect to other matters not covered by Section 5.4 shall have
used its reasonable best efforts to remove such injunction, order or
decree.
SECTION 7.3 TERMINATION BY THE COMPANY. At any time prior to the
Effective Time, this Agreement may be terminated by the Company, by action
of its board of directors, if:
(a) (i) There has been a breach by Parent or Merger Sub of any
representation, warranty, covenant or agreement set forth in this Agreement
or if any representation or warranty of Parent or Merger Sub shall have
become untrue, in either case such that the conditions set forth in Section
6.2 would not be satisfied and (ii) such breach is not curable, or, if
curable, is not cured within 30 days after written notice of such breach is
given to Parent by the Company; provided, however, that the right to
terminate this Agreement pursuant to this Section 7.3(a) shall not be
available to the Company if it, at such time, is in material breach of any
representation, warranty, covenant or agreement set forth in this Agreement
such that the conditions set forth in Section 6.3(a) shall not be
satisfied;
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(b) At any time prior to obtaining the Requisite Vote, the board of
directors of the Company shall have withdrawn the Board's approval or
recommendation of this Agreement and the Merger and recommended and
declared advisable a Superior Proposal, or resolved to do the foregoing,
after the board of directors shall have determined in good faith after
consultation with its outside legal counsel that the failure to so withdraw
its recommendation and recommend such Superior Proposal would result in a
breach of its fiduciary obligations under applicable law; provided,
however, that the Company shall not have the right to terminate pursuant to
this Section 7.3(b) until it (i) shall have delivered to Parent written
notice at least four business days prior to such termination of the
Company's intention to terminate pursuant to this Section 7.3(b), which
notice shall state the most recent terms and conditions of the Superior
Proposal, the identity of the Person or group making the Superior Proposal,
and a copy of the definitive agreement proposed to be entered into in
connection with the Superior Proposal; and (ii) shall have provided Parent
with a reasonable opportunity to make such adjustments in the terms and
conditions of this Agreement and negotiate in good faith with respect
thereto during such four-business day period, so that such proposal no
longer constitutes a Superior Proposal (which shall be considered by the
Company's board of directors in good faith, after consultation with
nationally recognized outside legal counsel, which may be its current
outside legal counsel), in which case the Company shall no longer have the
right to terminate under this Section 7.3(b) with respect to such proposal;
provided that, prior to such termination, the Company shall have paid the
fee and reimbursed the expenses required by Section 7.5 by wire transfer in
same day funds to an account designated by Parent.
SECTION 7.4 TERMINATION BY PARENT. At any time prior to the
Effective Time, this Agreement may be terminated by Parent, by action of
its board of directors, if:
(a) (i) There has been a breach by the Company of any representation,
warranty covenant or agreement set forth in this Agreement or if any
representation or warranty of the Company shall have become untrue, in
either case such that the conditions set forth in Section 6.3(a) would not
be satisfied and (ii) such breach is not curable, or, if curable, is not
cured within 30 days after written notice of such breach is given by Parent
to the Company; provided, however, that the right to terminate this
Agreement pursuant to this Section 7.4(a) shall not be available to Parent
if it, at such time, is in material breach of any representation, warranty,
covenant or agreement set forth in this Agreement such that the conditions
set forth in Section 6.2(a) shall not be satisfied; or
(b) The board of directors of the Company shall have withdrawn,
modified, withheld or changed, in a manner adverse to Parent, its approval
or recommendation of this Agreement or the Merger, or recommended a
Superior Proposal, or resolved to do any of the foregoing.
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SECTION 7.5 EFFECT OF TERMINATION.
(a) If this Agreement is terminated:
(i) by the Company pursuant to Section 7.3(b); or
(ii) by Parent pursuant to Section 7.4(b);
then the Company shall pay to Parent the Termination Amount (as defined
below) and, in addition, reimburse Parent for all expenses incurred by
Parent in connection with this Agreement up to $1,000,000 (the "Maximum
Reimbursement Amount") prior to or upon termination of this Agreement. All
payments under this Section 7.5 shall be made in cash by wire transfer to
the account designated in Schedule 7.5 of the Disclosure Letter or such
other account designated by Parent in writing to the Company prior to the
time of such termination. The term "Termination Amount" shall mean
$37,500,000. The Company acknowledges that the agreements contained in
this Section 7.5 are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Parent would not enter
into this Agreement; accordingly, if the Company fails promptly to pay the
amounts due pursuant to this Section 7.5, and, in order to obtain such
payments, Parent commences a suit which results in a judgment against the
Company for the payments set forth in this Section 7.5, the Company shall
pay to Parent its costs and expenses (including attorneys' fees) in
connection with such suit, together with interest on the Termination Amount
and the Maximum Reimbursement Amount from the date payments were required
to be made until the date of such payments at the prime rate of Bank of
America, N.A. in effect on the date such payments were required to be made
plus one percent (1%). If this Agreement is terminated pursuant to a
provision that calls for a payment to be made under this Section 7.5, it
shall not be a defense to the Company's obligation to pay hereunder that
this Agreement could have been terminated under a different provision or
could have been terminated at an earlier or later time.
(b) If this Agreement is terminated by the Company or Parent pursuant
to Section 7.2(a) and on the date of termination the conditions set forth
in Section 6.1(b) have not been satisfied, or if this Agreement is
terminated by the Company pursuant to Section 7.3(a), the Escrow Agent
shall pay the Deposit to the Company pursuant to the Escrow Agreement as
liquidated damages and not as a penalty, and such termination and
liquidated damages shall be the Company's sole remedy in such events. If
this Agreement is terminated for any other reason, the Escrow Agent shall
pay the Deposit to Parent pursuant to the Escrow Agreement.
(c) In addition to the foregoing, if this Agreement is terminated for
any reason other than by Parent pursuant to Section 7.4(a) and the Company
has undertaken the Debt Offer at the request of Parent, then Parent shall
reimburse the Company within two business days following such termination
for its reasonable costs and expenses incurred in connection with the Debt
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Offer (other than the dealer manager and information agent fees, which
Parent agrees to pay directly in all circumstances), up to a maximum of
$250,000.
ARTICLE 8
GENERAL PROVISIONS
SECTION 8.1 SURVIVAL.
(a) In the event of termination of this Agreement and the abandonment
of the Merger pursuant to Article 7, all rights and obligations of the
parties hereto shall terminate, except the obligations of the parties
pursuant to Sections 5.6, 5.7 and 7.5 and except for the provisions of this
Section 8.1 and Sections 8.3, 8.4, 8.6, 8.8, 8.9, 8.11 and 8.12 and the
Confidentiality Agreement; provided, however, that nothing herein shall
relieve any party from any liability for any willful and material breach by
such party of any of its covenants or agreements set forth in this
Agreement and, subject to Sections 7.5 and 8.12, all rights and remedies of
such nonbreaching party under this Agreement in the case of such a breach,
at law or in equity, shall be preserved.
(b) None of the representations, warranties and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the consummation of the Merger; provided, however, that ARTICLE 2,
this ARTICLE 8 and the agreements contained in Sections 5.7, 5.8, 5.9 and
5.12 shall survive the consummation of the Merger, unless otherwise
expressly provided herein.
SECTION 8.2 NOTICES. Any notice required to be given hereunder shall
be sufficient if in writing, and sent by facsimile transmission or by
courier service (with proof of service), hand delivery or certified or
registered mail (return receipt requested and first-class postage prepaid),
addressed as follows:
(a) if to Parent or Merger Sub:
Western Refining, Inc.
6500 Trowbridge Road
El Paso, Texas 79905
Facsimile: (915) 775-5587
Attn: Paul L. Foster, President and Chief Executive Officer
with a copy to (which shall not constitute notice):
Andrews Kurth LLP
600 Travis, Suite 4200
Houston, Texas 77002
Facsimile: (713) 220-4285
Attn: W. Mark Young
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(b) if to the Company:
Giant Industries, Inc.
23733 North Scottsdale Road
Scottsdale, Arizona 85255
Facsimile: (480) 585-8894
Attn: Fred L. Holliger, Chief Executive Officer
with a copy to (which shall not constitute notice):
Ballard Spahr Andrews & Ingersoll, LLP
3300 Tower, Suite 1800
3300 North Central Avenue
Phoenix, AZ 85012-2518
Facsimile: (602) 798-5595
Attn: Karen McConnell
or to such other address as any party shall specify by written notice so
given, and such notice shall be deemed to have been delivered as of the
date so telecommunicated, personally delivered or mailed.
SECTION 8.3 ASSIGNMENT; 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. 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. Except for the provisions of ARTICLE 2 and as provided in
Sections 5.8, 5.9(c) and 5.12, notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, expressed or implied,
is intended to confer on any person other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
SECTION 8.4 ENTIRE AGREEMENT. This Agreement, the Confidentiality
Agreement, the exhibits to this Agreement, the Disclosure Letter and any
other documents contemplated hereby or thereby 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 made in writing and
signed by all parties hereto. EACH PARTY HERETO AGREES THAT, EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, NONE OF
PARENT, MERGER SUB OR THE COMPANY MAKES ANY OTHER REPRESENTATIONS OR
WARRANTIES AND EACH HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR
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 HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO ANY
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OTHER PARTY OR ANY OTHER PARTY'S REPRESENTATIVES OF ANY DOCUMENT OR OTHER
INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
SECTION 8.5 AMENDMENTS. This Agreement may be amended by the parties
hereto, by action taken or authorized by their boards of directors, at any
time before or after approval of matters presented in connection with the
Merger by the stockholders of the Company, but after any such stockholder
approval, no amendment shall be made which by law requires the further
approval of stockholders without obtaining such further approval. This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
SECTION 8.6 GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL;
ATTORNEYS' FEES. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. EACH OF THE COMPANY,
MERGER SUB AND PARENT HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO
SUBMIT TO THE JURISDICTION OF THE COMPETENT COURTS OF THE STATE OF DELAWARE
AND OF THE UNITED STATES OF AMERICA, IN EITHER CASE LOCATED IN WILMINGTON,
DELAWARE (THE "DELAWARE COURTS") FOR ANY LITIGATION ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY (AND
AGREES NOT TO COMMENCE ANY LITIGATION RELATING THERETO EXCEPT IN SUCH
COURTS), WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
IN THE DELAWARE COURTS AND AGREES NOT TO PLEAD OR CLAIM IN ANY DELAWARE
COURT THAT SUCH LITIGATION BROUGHT THEREIN HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. THE PREVAILING PARTY IN ANY LITIGATION ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL
BE ENTITLED TO RECEIVE OR BE REIMBURSED FOR ITS REASONABLE ATTORNEYS' FEES.
SECTION 8.7 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of
which together shall be deemed to be one and the same instrument.
SECTION 8.8 HEADINGS. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and shall be given
no substantive or interpretative effect whatsoever.
SECTION 8.9 INTERPRETATION. In this Agreement:
(a) Unless the context otherwise requires, words describing the
singular number shall include the plural and vice versa, and words denoting
any gender shall include all genders and words denoting natural persons
shall include corporations and partnerships and vice versa.
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(b) The words "include", "includes" and "including" are not limiting.
(c) The phrase "to the knowledge of" and similar phrases relating to
knowledge of the Company shall mean, with respect to the Company, the
actual knowledge of those officers and employees of the Company set forth
on Schedule 8.9 of the Disclosure Letter, without duty of inquiry.
(d) "Material Adverse Effect" shall mean any change, event or effect
that, individually or together with other changes, events or effects, has
been or would reasonably be expected to be materially adverse to (a) the
business, assets and liabilities (taken together), results of operations or
financial condition of the Company and its Subsidiaries on a consolidated
basis or (b) the ability of the Company to consummate the Merger or the
other transactions contemplated by this Agreement or fulfill the conditions
to closing set forth in ARTICLE 6, except to the extent that such change,
event or effect results from (i) general political or economic conditions
(including prevailing interest rates and stock market levels) in the United
States or other countries in which the Company or its Subsidiaries operate,
(ii) effects of conditions or events that are generally applicable to the
petroleum refining industry, including effects of changes in the price of
crude oil and product prices, (iii) changes in laws or regulations
affecting the petroleum refining industry generally, or (iv) the
announcement or pendency of the Merger, or changes or effects resulting
from the taking of any action required to comply with the express terms of
this Agreement; provided, however, that such changes, events or effects
described in clauses (i), (ii) or (iii) do not affect the Company in a
materially disproportionate manner relative to other companies in the
petroleum refining industry.
(e) "Person" or "person" means an individual, a corporation, a
limited liability company, a partnership, an association, a trust or other
entity or organization.
(f) "Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated,
of which such party directly or indirectly owns or controls at least a
majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the board of directors or
others performing similar functions with respect to such corporation or
other organization, or any organization of which such party is a general
partner.
(g) "Tax" (including, with correlative meaning, "Taxes" and
"Taxable") means (i)(A) any net income, gross income, business and
occupation, admissions, gross receipts, sales, use, value added, ad
valorem, transfer, transfer gains, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, rent,
recording, occupation, premium, real or personal property, intangibles,
environmental or windfall profits tax, alternative or add-on minimum tax,
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customs duty or other tax, fee, duty, levy, impost, assessment or charge of
any kind whatsoever, together with (B) any interest and any penalty,
addition to tax or additional amount imposed by any governmental body
(domestic or foreign) (a "Tax Authority") responsible for the imposition of
any such tax; (ii) any liability for the payment of any amount of the type
described in the immediately preceding clause (i) as a result of being a
member of a consolidated, affiliated, unitary or combined group with any
other corporation or entity at any time prior to the Closing Date; and
(iii) any liability for the payment of any amount of the type described in
the preceding clauses (i) or (ii) as a result of a contractual obligation
to any other Person.
(h) "Tax Return" means any report, return or other information
(including any attached schedules or any amendments to such report, return,
document, declaration or any other information) required to be supplied to
or filed with any Tax Authority or jurisdiction (foreign or domestic) with
respect to any Tax, including an information return or any document with
respect to or accompanying payments.
SECTION 8.10 WAIVERS. Except as provided in this Agreement, no
action taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any
representations, warranties, covenants or agreements contained in this
Agreement. The waiver by any party hereto of a breach of any provision
hereunder shall not operate or be construed as a waiver of any prior or
subsequent breach of the same or any other provision hereunder. The
failure of any party to this Agreement to assert any of its rights under
this Agreement shall not constitute a waiver of such rights.
SECTION 8.11 SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to
be unenforceable, the provision shall be interpreted to be only so broad as
is enforceable.
SECTION 8.12 ENFORCEMENT OF AGREEMENT; LIMITATION ON DAMAGES. The
parties hereto agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance
with its specific terms or was otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions
to prevent breaches of this Agreement and to enforce specifically the terms
and provisions hereof in any Delaware Court, this being in addition to any
other remedy to which they are entitled at law or in equity. IN NO EVENT
SHALL ANY PARTY BE LIABLE IN RESPECT OF THIS AGREEMENT FOR PUNITIVE OR
EXEMPLARY DAMAGES.
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SECTION 8.13 OBLIGATION OF MERGER SUB. Whenever this Agreement
requires Merger Sub (or its successors) to take any action prior to the
Effective Time, such requirement shall be deemed to include an undertaking
on the part of Parent to cause Merger Sub to take such action and a
guarantee of the performance thereof.
SECTION 8.14 EXTENSION; WAIVER. At any time prior to the Effective
Time, each party may, to the extent legally allowed, (a) extend the time
for the performance of any of the obligations or other acts of the other
parties hereto, (b) waive any inaccuracies in the representations and
warranties made to such party contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any agreement
on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of
such party.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement and
caused the same to be duly delivered on their behalf on the day and year
first written above.
WESTERN REFINING, INC.
By: /s/ Paul L. Foster
------------------------------------------
Name: Paul L. Foster
Title: CEO
NEW ACQUISITION CORPORATION
By: /s/ Paul L. Foster
------------------------------------------
Name: Paul L. Foster
Title: CEO
GIANT INDUSTRIES, INC.
By: /s/ Fred L. Holliger
------------------------------------------
Name: Fred L. Holliger
Title: Chairman and Chief Executive Officer
Signature Page to Agreement and Plan of Merger