SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 8)*
Crown Central Petroleum Corporation
-----------------------------------
(Name of Issuer)
Class A Common Stock
--------------------
(Title of Class of Securities)
228219-10-1
-----------
(CUSIP Number)
John A. Marzulli, Jr.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
(212) 848-4000
--------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
April 7, 2000
---------------
(Date of Event Which Requires Filing of This Statement)
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If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of ss.240.13d-1(e), 240.13d-1(f), or 240.13d-1(g),
check the following box [ ].
Note. Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 (the "Act") or otherwise subject to the liabilities of that section
of the Act, but shall be subject to all other provisions of the Act (however,
see the Notes).
<PAGE>
This Amendment No. 8 to Schedule 13D amends and supplements the
Schedule 13D filed jointly by the parties named herein with the Securities and
Exchange Commission on January 12, 1999 as previously amended.
Item 4. Purpose of Transaction
Item 4 is amended to add at the end thereof the following paragraph:
On Friday, April 7, 2000, Mr. Michael Dacey, chairman of the
independent committee of Crown's board of directors, informed Mr. Edward L.
Rosenberg, President of Rosemore, that, on the basis of the parties negotiations
if Rosemore were willing to raise its proposed price to acquire Crown's
outstanding shares from $9.35 a share to $9.50 a share, the independent
committee would be able to recommend that the Crown board accept such proposal.
After some discussion, Mr. Rosenberg agreed, and at approximately 8:30 p.m. on
April 7, 2000, Rosemore, Crown and Rosemore Acquisition Corporation, a Maryland
corporation and indirect wholly-owned subsidiary of Rosemore ("Merger Sub"),
entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant
to which Merger Sub will merge with and into Crown, with Crown being the
surviving corporation (the "Merger")and an indirect wholly-owned Subsidiary of
Rosemore. The Merger is subject to customary closing conditions, including
receipt of necessary governmental approvals. The Merger Agreement is attached
hereto as Exhibit 18 and is incorporated by reference herein.
Item 6. Contracts, Agreements, Understandings or Relationships with respect to
Securities of the Issuer.
Item 6 is amended to add at the end thereof the following paragraph:
On Friday, April 7, 2000, Rosemore, Crown and Merger Sub entered into
the Merger Agreement. The Merger Agreement is attached hereto as
Exhibit 18 and is incorporated by reference herein.
Item 7. Material To Be Filed as Exhibits
Item 7 is hereby amended by adding the following at the end
thereof:
Exhibit 17 - Joint Filing Agreement as required by Rule
13d-1(k).
Exhibit 18 - Merger Agreement dated as of April 7, 2000
between Rosemore, Crown and Rosemore Acquisition Corporation.
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
ROSEMORE, INC.
April 10, 2000 By: /s/ Edward L. Rosenberg
-----------------------
Name: Edward L. Rosenberg
Title: President
ROSEMORE HOLDINGS, INC.
April 10, 2000 By: /s/ Edward L. Rosenberg
-----------------------
Name: Edward L. Rosenberg
Title: President
April 10, 2000 Ruth Carol R. Marder*
--------------------
Ruth Carol R. Marder
April 10, 2000 Henry A. Rosenberg, Jr.*
----------------------
Henry A. Rosenberg, Jr.
April 10, 2000 Judith R. Hoffberger*
-----------------------
Judith R. Hoffberger
April 10, 2000 /s/ Edward L. Rosenberg
-----------------------
Edward L. Rosenberg
April 10, 2000 Jeffrey A. Hoffberger*
-----------------------
Jeffrey A. Hoffberger
April 10, 2000 Lisa J. Bertelsen*
-----------------------
Lisa J. Bertelsen
April 10, 2000 Frank B. Rosenberg*
-----------------------
Frank B. Rosenberg
By: /s/ Edward L. Rosenberg
-------------------------
*Edward L. Rosenberg
Attorney-in-Fact
<PAGE>
EXHIBITS
Exhibit
Number Description
17. Joint Filing Agreement as required by Rule
13d-1(k).
18. Merger Agreement, dated April 7, 2000 between Rosemore,
Crown and Rosemore Acquisition Corporation.
<PAGE>
EXHIBIT 17
The undersigned hereby agree that Amendment No. 8 ("Amendment No. 8")
to the Statement on Schedule 13D, filed jointly by the parties named herein with
the Securities and Exchange Commission on January 12, 1999, with respect to the
Class A and Class B Common Stock of Crown Central Petroleum Corporation, a
Maryland corporation, is filed on behalf of each of us pursuant to and in
accordance with the provisions of Rule 13d-1(k) under the Securities Exchange
Act of 1934, as amended, and that this Agreement shall be included as an Exhibit
to Amendment No. 8.
ROSEMORE, INC.
April 10, 2000 By: /s/ Edward L. Rosenberg
-------------------
Name: Edward L. Rosenberg
Title: President
ROSEMORE HOLDINGS, INC.
April 10, 2000 By: /s/ Edward L. Rosenberg
-------------------
Name: Edward L. Rosenberg
Title: President
April 10, 2000 Ruth Carol R. Marder*
--------------------
Ruth Carol R. Marder
April 10, 2000 Henry A. Rosenberg, Jr.*
----------------------
Henry A. Rosenberg, Jr.
April 10, 2000 Judith R. Hoffberger*
---------------------
Judith R. Hoffberger
April 10, 2000 /s/ Edward L. Rosenberg
-----------------------
Edward L. Rosenberg
April 10, 2000 Jeffrey A. Hoffberger*
----------------------
Jeffrey A. Hoffberger
April 10, 2000 Lisa J. Bertelsen*
---------------------
Lisa J. Bertelsen
April 10, 2000 Frank B. Rosenberg*
---------------------
Frank B. Rosenberg
By:/s/ Edward L. Rosenberg
-----------------------
*Edward L. Rosenberg
Attorney-in-Fact
Exhibit 18
EXECUTION COPY
================================================================================
AGREEMENT AND PLAN OF MERGER
Among
ROSEMORE, INC.,
ROSEMORE ACQUISITION CORPORATION
and
CROWN CENTRAL PETROLEUM
CORPORATION
Dated as of April 7, 2000
================================================================================
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
SECTION 1.01. The Merger......................................................2
SECTION 1.02. Effective Time; Closing.........................................2
SECTION 1.03. Effect of the Merger............................................2
SECTION 1.04. Charter; Bylaws.................................................2
SECTION 1.05. Directors and Officers of the Surviving Corporation.............3
ARTICLE II
CONVERSION OF SECURITIES IN THE MERGER
SECTION 2.01. Conversion of Capital Stock.....................................3
SECTION 2.02. Payment for Shares..............................................3
SECTION 2.03. Employee Stock Options..........................................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Organization and Qualification; Subsidiaries....................6
SECTION 3.02. Charter and Bylaws..............................................7
SECTION 3.03. Capitalization..................................................7
SECTION 3.04. Authority Relative to This Agreement............................9
SECTION 3.05. No Conflict; Required Filings and Consents......................9
SECTION 3.06. Permits; Compliance............................................10
SECTION 3.07. SEC Filings; Financial Statements..............................10
SECTION 3.08. Absence of Certain Changes or Events...........................11
SECTION 3.09. Employee Benefit Plans; Labor Matters..........................12
SECTION 3.10. Contracts; Debt Instruments....................................16
SECTION 3.11. Absence of Litigation..........................................18
SECTION 3.12. Environmental Matters..........................................18
SECTION 3.13. Trademarks, Patents and Copyrights.............................21
SECTION 3.14. Taxes..........................................................21
SECTION 3.15. Property and Leases............................................22
SECTION 3.16. Rights Agreement...............................................23
SECTION 3.17. Insurance......................................................23
<PAGE>
ii
Page
----
SECTION 3.18. Board Recommendation...........................................23
SECTION 3.19. Opinion of Financial Advisor...................................23
SECTION 3.20. Brokers........................................................24
SECTION 3.21. Vote Required; State Takeover Statutes.........................24
SECTION 3.22. Directors of the Surviving Corporation.........................24
SECTION 3.23. Waiver of Certain Obligations..................................25
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
SECTION 4.01. Organization and Qualification.................................25
SECTION 4.02. No Conflict; Required Filings and Consents.....................26
SECTION 4.03. Absence of Litigation..........................................26
SECTION 4.04. Brokers........................................................27
SECTION 4.05. No Activities..................................................27
SECTION 4.06. Financing......................................................27
SECTION 4.07. Ownership of Company Common Stock..............................27
ARTICLE V
COVENANTS
SECTION 5.01. Conduct of Business by the Company Pending the Closing.........27
SECTION 5.02. Notices of Certain Events......................................30
SECTION 5.03. Contractual Consents...........................................31
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Proxy Statement; Schedule 13E-3................................31
SECTION 6.02. Company Stockholders' Meeting..................................32
SECTION 6.03. Access to Information; Confidentiality.........................33
SECTION 6.04. No Solicitation of Transactions................................33
SECTION 6.05. Election of Directors..........................................35
SECTION 6.06. Directors' and Officers' Indemnification and Insurance.........35
SECTION 6.07. Further Action; Consents; Filings..............................37
SECTION 6.08. The Company Rights Plan........................................38
SECTION 6.09. Public Announcements...........................................38
SECTION 6.10. Amendment of Plans.............................................38
<PAGE>
iii
ge
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party to
Consummate the Merger..........................................38
SECTION 7.02. Conditions to the Obligations of the Company...................39
SECTION 7.03. Conditions to the Obligations of Parent and Merger Sub.........39
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination....................................................40
SECTION 8.02. Notice of Termination; Effect of Termination...................42
SECTION 8.03. Amendment......................................................42
SECTION 8.04. Waiver.........................................................42
SECTION 8.05. Expenses. ....................................................42
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties
and Agreements.................................................43
SECTION 9.02. Notices........................................................44
SECTION 9.03. Certain Definitions............................................45
SECTION 9.04. Severability...................................................47
SECTION 9.05. Assignment; Merger Sub; Binding Effect; Benefit................47
SECTION 9.06. Incorporation of Exhibits......................................47
SECTION 9.07. Specific Performance...........................................47
SECTION 9.08. Governing Law..................................................47
SECTION 9.09. Submission to Jurisdiction; Venue..............................48
SECTION 9.10. Headings.......................................................48
SECTION 9.11. Counterparts...................................................48
SECTION 9.12. Entire Agreement...............................................48
SECTION 9.13. Waiver of Jury Trial...........................................48
<PAGE>
i
GLOSSARY OF DEFINED TERMS
Aegis Muse.................................................... ss. 4.04
affiliate..................................................... ss. 9.03(a)
Agreement..................................................... Preamble
AMEX.......................................................... ss. 3.03
Articles of Merger............................................ ss. 1.02
beneficial owner.............................................. ss. 9.03(b)
business day.................................................. ss. 9.03(c)
Class A Common Stock.......................................... Recitals
Class B Common Stock.......................................... Recitals
Closing....................................................... ss. 1.02
Closing Date.................................................. ss. 1.02
Code.......................................................... ss. 2.02(e)
Company....................................................... Preamble
Company Board................................................. Recitals
Company Certificates.......................................... ss. 2.02(a)
Company Common Stock.......................................... Recitals
Company Option................................................ ss. 2.03(a)
Company SEC Reports........................................... ss. 3.07(a)
Company Independent Committee................................. Recitals
Company Stock Award........................................... ss. 2.03(b)
Company Stock Plans........................................... ss. 2.03(a)
Company Stockholders' Meeting................................. ss. 6.01(a)
Company Subsidiaries.......................................... ss. 3.01(a)
Competing Transaction......................................... ss. 6.04
Confidentiality Agreement..................................... ss. 6.03(b)
control....................................................... ss. 9.03(d)
controlled by................................................. ss. 9.03(d)
Costs......................................................... ss. 6.06(d)
CSFB.......................................................... ss. 3.19
Disclosure Schedule........................................... ss. 3.01(a)
Effective Time................................................ ss. 1.02
Environmental Claims.......................................... ss. 3.12(b)
Environmental Laws............................................ ss. 3.12(b)
Environmental Permit.......................................... ss. 3.12(b)
ERISA......................................................... ss. 3.09(a)
Exchange Act.................................................. ss. 3.05(b)(i)
Expenses...................................................... ss. 8.05(a)
Governmental Entity........................................... ss. 3.05(b)
Hazardous Material............................................ ss. 3.12(b)
Holdings...................................................... Recitals
HSR Act....................................................... ss. 3.05(b)(i)
Indemnified Parties........................................... ss. 6.06(d)
<PAGE>
ii
Indenture..................................................... ss. 3.22(b)
IRS........................................................... ss. 3.09(a)(iii)
knowledge..................................................... ss. 9.03(e)
Law........................................................... ss. 3.05(a)(ii)
Letter of Transmittal......................................... ss. 2.02(b)
Material Adverse Effect....................................... ss. 3.01(a)
Material Contract............................................. ss. 3.10(a)
Merger........................................................ Recitals
Merger Consideration.......................................... ss. 2.01(a)
Merger Sub.................................................... Preamble
MGCL.......................................................... Recitals
Multiemployer Plan............................................ ss. 3.09(b)
Multiple Employer Plan........................................ ss. 3.09(b)
Order......................................................... ss. 7.01(b)
Parent........................................................ Preamble
Paying Agent.................................................. ss. 2.02(a)
Permits....................................................... ss. 3.06
person........................................................ ss. 9.03(f)
Plans......................................................... ss. 3.09(a)
Preferred Stock............................................... ss. 3.03(c)
Proxy Statement............................................... ss. 6.01(a)
Real Property ................................................ ss. 3.12(a)(ii)
Release....................................................... ss. 3.12(b)
Remedial Action............................................... ss. 3.12(b)
Reorganization Agreement...................................... ss. 3.09(b)
Representatives............................................... ss. 6.02(a)
Rights Agreement.............................................. ss. 3.16
SAR Unit...................................................... ss. 2.03(a)
Schedule 13E-3................................................ ss. 6.01(a)
SDAT.......................................................... ss. 1.02
SEC........................................................... ss. 3.07(a)
subsidiary(ies)............................................... ss. 9.03(g)
Superior Proposal............................................. ss. 6.04
Surviving Corporation......................................... ss. 1.01
Tax Returns................................................... ss. 3.14
Taxes......................................................... ss. 3.14
Third Party Provision......................................... ss. 9.05
under common control with..................................... ss. 9.03(d)
U.S. GAAP..................................................... ss. 3.07(b)
Waivers....................................................... ss. 3.23
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 7, 2000 (this
"Agreement"), by and among ROSEMORE, INC., a Maryland corporation ("Parent"),
CROWN CENTRAL PETROLEUM CORPORATION, a Maryland corporation (the "Company"), and
ROSEMORE ACQUISITION CORPORATION, a Maryland corporation and an indirect wholly
owned subsidiary of Parent ("Merger Sub").
WHEREAS, upon the terms and subject to the conditions of this
Agreement and in accordance with the Maryland General Corporation Law (the
"MGCL"), Parent will acquire, pursuant to the merger (the "Merger") of Merger
Sub with and into the Company, all of the issued and outstanding shares of the
Company's Class A common stock, par value $5.00 per share (the "Class A Common
Stock"), and Class B common stock, par value $5.00 per share (the "Class B
Common Stock"; and together with the Class A Common Stock, the "Company Common
Stock"), at a price of $9.50 per share;
WHEREAS, a special committee of independent members (the
"Company Independent Committee") of the Board of Directors of the Company (the
"Company Board") has unanimously recommended to the Company Board that it, and
the Company Board unanimously has (i) approved and deemed the Merger advisable
upon the terms and subject to the conditions set forth in this Agreement and
(ii) recommended the approval of the Merger and this Agreement by the
stockholders of the Company;
WHEREAS, the Board of Directors of Parent has determined that
the Merger is consistent with and in furtherance of the long-term business
strategy of Parent and has approved and adopted this Agreement, the Merger and
the other transactions contemplated by this Agreement; and
WHEREAS, this Agreement has been approved and adopted by the
Board of Directors of Merger Sub and by Rosemore Holdings, Inc., a Maryland
corporation and a wholly owned subsidiary of Parent ("Holdings"), as sole
stockholder of Merger Sub.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained and intending to be legally
bound hereby, the parties hereto hereby agree as follows:
<PAGE>
2
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Provided that this Agreement shall
not have been terminated in accordance with Section 8.01, upon the terms and
subject to the conditions set forth in Article VII, and in accordance with the
MGCL, at the Effective Time (as defined below), Merger Sub shall be merged with
and into the Company. As a result of the Merger, the separate corporate
existence of Merger Sub shall cease and the Company shall continue as the
surviving corporation of the Merger (the "Surviving Corporation").
SECTION 1.02. Effective Time; Closing. Provided that this
Agreement shall not have been terminated in accordance with Section 8.01, as
promptly as practicable and in no event later than the second business day
following the satisfaction or, if permissible, waiver of the conditions set
forth in clauses (a) through (c) of Section 7.01 (or such other date as may be
agreed to in writing by each of the parties hereto), the parties hereto shall
cause the Merger to be consummated by filing the articles of merger (the
"Articles of Merger") with the State Department of Assessments and Taxation of
Maryland ("SDAT") in such form as is required by, and executed in accordance
with, the relevant provisions of the MGCL. The term "Effective Time" means the
date and time of the filing with, and the acceptance for record by, the SDAT of
the Articles of Merger (or such later time, not to exceed 30 days after such
acceptance for record, as may be agreed in writing by each of the parties hereto
and specified in the Articles of Merger). Immediately prior to the filing of the
Articles of Merger, a closing (the "Closing") will be held at the offices of
Shearman & Sterling, 599 Lexington Avenue, New York, New York (or such other
place as the parties hereto may agree).
SECTION 1.03. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of the
MGCL. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time, all of the property, rights, privileges, powers and
franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities, obligations, restrictions, disabilities
and duties of each of the Company and Merger Sub shall become the debts,
liabilities, obligations, restrictions, disabilities and duties of the Surviving
Corporation.
SECTION 1.04. Charter; Bylaws. At the Effective Time, (a)
subject to the provisions of Section 6.05(a), the charter of Merger Sub as in
effect immediately prior to the Effective Time shall be the charter of the
Surviving Corporation until thereafter amended as provided by law, the bylaws
and such charter of the Surviving Corporation, except that Article I shall be
amended to provide that the name of the Surviving Corporation shall be "Crown
Central Petroleum Corporation" and (b) the bylaws of Merger Sub as in effect
immediately prior to the
<PAGE>
3
Effective Time shall be the bylaws of the Surviving Corporation until thereafter
amended as provided by law, the charter of the Surviving Corporation and such
bylaws.
SECTION 1.05. Directors and Officers of the Surviving
Corporation. The directors of the Company immediately prior to the Effective
Time shall be the directors of the Surviving Corporation, each to hold office in
accordance with the charter and bylaws of the Surviving Corporation, and the
officers of the Company immediately prior to the Effective Time shall be the
officers of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified.
ARTICLE II
CONVERSION OF SECURITIES IN THE MERGER
SECTION 2.01. Conversion of Capital Stock. At the Effective
Time, by virtue of the Merger and without any action on the part of Merger Sub,
the Company or the holders of any of the following securities:
(a) each share of Company Common Stock (together with the
associated right to purchase Company Series A or Series B Junior
Participating Preferred Stock, no par value, as the case may be,
pursuant to the Rights Agreement (as defined in Section 3.16 hereof))
issued and outstanding immediately prior to the Effective Time (other
than any shares of Company Common Stock to be canceled pursuant to
Section 2.01(b) hereof) shall be converted into the right to receive
$9.50 in cash (the "Merger Consideration"), payable without interest to
the holder of such share of Company Common Stock, upon surrender of the
Company Certificate that formerly evidenced such share of Company
Common Stock;
(b) each share of Company Common Stock owned by Parent or
owned by any direct or indirect wholly owned subsidiary of the Company
or Parent shall be canceled and extinguished without any conversion
thereof and no payment shall be made with respect thereto; and
(c) each issued and outstanding share of common stock, par
value $5.00 per share, of Merger Sub will be converted into one validly
issued, fully paid and nonassessable share of common stock of the
Surviving Corporation.
SECTION 2.02. Payment for Shares. (a) From and after the
Effective Time, a bank or trust company designated by Parent and reasonably
acceptable to the Company shall act as paying agent (the "Paying Agent") in
effecting the payment of the Merger Consideration in
<PAGE>
4
respect of certificates that, prior to the Effective Time, represented shares of
Company Common Stock entitled to payment of the Merger Consideration pursuant to
Section 2.01(a) (the "Company Certificates"). From and after the Effective Time,
Parent shall cause to be provided to the Paying Agent cash in amounts necessary
to pay for all of the shares of Company Common Stock pursuant to Section 2.01.
Such funds (and the interest thereon) shall be invested by the Paying Agent in
an interest-bearing investment consisting of short-term U.S. Government
obligations or federally insured, interest-bearing demand deposit accounts.
(b) Promptly after the Effective Time, the Paying Agent shall
mail to each record holder of a Company Certificate (i) a letter of transmittal
in customary form (which shall specify that delivery shall be effected, and risk
of loss and title to the Company Certificate shall pass, only upon delivery of
the Company Certificate to the Paying Agent) (the "Letter of Transmittal") and
(ii) instructions for use in surrendering such Company Certificate in exchange
for payment therefor. Upon the surrender of each such Company Certificate,
together with such Letter of Transmittal, duly completed and validly executed in
accordance with the instructions therein, and such other documents as may be
required pursuant to such instructions, the Paying Agent shall pay the holder of
such Company Certificate an amount in cash equal to the product of the Merger
Consideration multiplied by the number of shares of Company Common Stock
formerly represented by such Company Certificate, in consideration therefor, and
such Company Certificate shall forthwith be cancelled. Until so surrendered,
each such Company Certificate (other than Company Certificates representing
shares of Company Common Stock to be canceled pursuant to Section 2.01(b)) shall
represent solely the right to receive the aggregate Merger Consideration
represented thereby. No interest shall be paid or accrued on the Merger
Consideration. If the Merger Consideration (or any portion thereof) is to be
paid to any person other than the person in whose name the Company Certificate
surrendered is registered, it shall be a condition to such right to receive such
payment that the Company Certificate so surrendered shall be properly endorsed
or otherwise be in proper form for transfer and that the person surrendering
such Company Certificate shall pay to the Paying Agent any transfer or other
similar Taxes required by reason of the payment of the Merger Consideration to a
person other than the registered holder of the Company Certificate surrendered,
or shall establish to the satisfaction of the Surviving Corporation that such
Tax has been paid or is not applicable.
(c) At any time following the six-month anniversary of the
Effective Time, the Surviving Corporation shall be entitled to require the
Paying Agent to direct the delivery of any funds which previously had been made
available to the Paying Agent and were not disbursed to holders of shares of
Company Common Stock (including, without limitation, all interest and other
income received by the Paying Agent in respect of all funds made available to
it), Company Certificates and other documents in its possession relating to the
Merger, and the Paying Agent's duties shall terminate. Thereafter, each holder
of a Company Certificate may surrender such Company Certificate to the Surviving
Corporation and receive in consideration therefor the aggregate Merger
Consideration relating thereto, without any interest.
<PAGE>
5
Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying
Agent shall be liable to any holder of a share of Company Common Stock for any
Merger Consideration delivered in respect of such share to a public official
pursuant to any abandoned property, escheat or other similar law.
(d) At the close of business on the day of the Effective Time,
the stock transfer books of the Company shall be closed and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of any shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time, Company
Certificates are presented to the Surviving Corporation or the Paying Agent,
they shall be surrendered and cancelled in return for the payment of the
aggregate Merger Consideration represented thereby, as provided in this Article
II. From and after the Effective Time, the holders of shares of Company Common
Stock outstanding immediately prior to the Effective Time shall cease to have
any rights with respect to such shares of Company Common Stock, except as
otherwise provided herein or by applicable law.
(e) The Surviving Corporation shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of shares of Company Common Stock such amounts as it is required to
deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or any applicable
provision of state, local or foreign Tax law. To the extent that amounts are so
withheld by the Surviving Corporation, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of the
shares of Company Common Stock in respect of which such deduction and
withholding was made by the Surviving Corporation.
(f) If any Company Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Company Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such person of a bond, in such reasonable
amount as the Surviving Corporation may direct as indemnity against any claim
that may be made against it with respect to such Company Certificate, the Paying
Agent will issue in exchange for such lost, stolen or destroyed Company
Certificate the Merger Consideration to which the holder thereof is entitled
pursuant to Section 2.01(a).
SECTION 2.03. Employee Stock Options. (a) At the Effective
Time, each option to purchase shares of Company Common Stock (a "Company
Option") or stock appreciation unit award ("SAR Unit") with respect to Company
Common Stock outstanding and unexercised as of the Effective Time granted
pursuant to the Company's 1994 Long-Term Incentive Plan, the Company's 1995
Management Stock Option Plan and the Company's 1999 Long-Term Incentive Plan,
each as amended through the date of this Agreement, and the option grant
agreements and award agreements entered into in connection therewith,
(collectively, the "Company Stock
<PAGE>
6
Plans"), or granted by the Company other than pursuant to the Company Stock
Plans shall (i) become fully vested and immediately exercisable and (ii) remain
outstanding and, thereafter, be a Company Option or SAR Unit with the same
rights and exercise prices as applied to such Company Option or SAR Unit
immediately prior to the Effective Time, and otherwise subject to the terms (as
in effect as of the date hereof) of the Company Stock Plans pursuant to which
such Company Option or SAR Unit was issued, except that all references to the
Company shall be deemed to be references to the Surviving Corporation and all
references to Company Common Stock shall be deemed to be references to the
common stock of the Surviving Corporation. The Company shall take all necessary
action to approve the disposition of the Company Options in connection with the
transactions contemplated by this Agreement to the extent necessary to exempt
such dispositions and acquisitions under Rule 16b-3 of the Exchange Act (as
defined in Section 3.05(b)(i)).
Promptly after the Effective Time, Parent shall or shall cause
Surviving Corporation to provide each holder of Company Options with the
opportunity to sell its Company Options at the prices set forth in Annex A of
the Waivers (defined herein). Any payments related to such sale of Company
Options shall be subject to all applicable federal, state and local tax
withholding requirements.
(b) At the Effective Time, each performance-restricted stock
award (a "Company Stock Award") granted pursuant to the Company Stock Plans or
granted by the Company (other than pursuant to the Company Stock Plans) shall
become fully vested, the restrictions thereon shall lapse, any restrictive
legend contained on any Company Certificate related thereto shall be removed and
any Company Certificate related thereto held in escrow by the Company pursuant
to the terms of any Company Stock Plan or otherwise shall be released to the
grantee of such Company Stock Award. At the Effective Time, each holder of a
Company Stock Award shall be paid in full satisfaction of such Company Stock
Award a cash payment in an amount in respect thereof equal to the product of (i)
the Merger Consideration and (ii) the number of shares of Company Common Stock
subject to such Company Stock Award, less any income or employment tax
withholding required under the Code or any provision of state or local law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and
Merger Sub that:
SECTION 3.01. Organization and Qualification; Subsidiaries.
(a) Except as set forth in Section 3.01(a) of the Disclosure Schedule attached
hereto, dated as of the date hereof
<PAGE>
7
and forming a part of this Agreement (the "Disclosure Schedule"), the Company
and each subsidiary of the Company (the "Company Subsidiaries") has been duly
organized, and is validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, as the case may be, and has
the requisite power and authority to own, lease and operate its properties and
to carry on its business as it is now being conducted. Each of the Company and
each of the Company Subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature of
its business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that would not
materially delay consummation of the Merger and would not have a Material
Adverse Effect. For purposes of this Agreement, "Material Adverse Effect" means
any event, circumstances, change in or effect on the business of the Company and
the Company Subsidiaries, taken as a whole, that, when taken together with all
other events, circumstances, changes and effects occurring after the date hereof
that do not individually have a Material Adverse Effect and all other
circumstances that would, but for the fact that they do not individually have a
Material Adverse Effect, constitute a breach of any representation or warranty
made by the Company in this Agreement, is, or is reasonably likely to be,
materially adverse to the business, financial condition, results of operations
or prospects of the Company and the Company Subsidiaries taken as a whole.
(b) A true and complete list of all the Company Subsidiaries,
together with the jurisdiction of incorporation or organization of each Company
Subsidiary and the percentage of the outstanding capital stock of each Company
Subsidiary owned by the Company and each other Company Subsidiary, is set forth
in Section 3.01(b) of the Disclosure Schedule. Except as disclosed in Section
3.01(b) of the Disclosure Schedule, the Company does not directly or indirectly
own any equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity.
SECTION 3.02. Charter and Bylaws. The copies of the Company's
charter and bylaws, each as amended and restated, that are set forth as exhibits
to the Company's proxy statement dated March 15, 1996 and Form 10-Q for the
quarter ended June 30, 1998 and the Form 10-K for the year ended December 31,
1999, respectively, are complete and correct copies thereof. Such charter and
bylaws are in full force and effect. The Company is not in violation of any of
the provisions of its charter or bylaws.
SECTION 3.03. Capitalization. The authorized capital stock of
the Company consists of (a) 15,000,000 shares of Class A Common Stock, (b)
15,000,000 shares of Class B Common Stock and (c) 5,000,000 shares of preferred
stock, no par value (the "Preferred Stock"), 4,818 shares of which are
designated Series A Junior Participating Preferred Stock, no par value, and
5,254 of which are designated Series B Junior Participating Preferred Stock, no
par value.
<PAGE>
8
At the close of business on February 29, 2000, (i) 4,817,394 shares of Class A
Common Stock and 5,253,862 shares of Class B Common Stock, all of which were
validly issued, fully paid and nonassessable and no shares of Preferred Stock
were issued and outstanding, (ii) no shares of Class A Common Stock and Class B
Common Stock were held in the treasury of the Company or by the Company
Subsidiaries, (iii) 1,227,150 shares of Class B Common Stock were reserved for
issuance in connection with the exercise of outstanding Company Options in the
amounts and at the exercise prices set forth in Section 3.03 of the Disclosure
Schedule, (iv) 4,818 shares of Series A Junior Participating Preferred Stock
were reserved for issuance pursuant to the Rights Agreement and (v) 5,254 shares
of Series B Junior Participating Preferred Stock were reserved for issuance
pursuant to the Rights Agreement (defined below). Except as set forth in Section
3.03 of the Disclosure Schedule, all publicly traded shares of Common Stock are
authorized for listing on the American Stock Exchange (the "AMEX"). From
February 29, 2000 through the date hereof, the Company has not issued any
additional shares of capital stock, except pursuant to the exercise of Company
Options outstanding on February 29, 2000, nor has the Company granted any
additional options, warrants or other rights or entered into any agreements,
arrangements or commitments of any character relating to the issued or unissued
capital stock of the Company or any Company Subsidiary or obligating the Company
or any Company Subsidiary to issue or sell any shares of capital stock of, or
other equity interests in, the Company or any Company Subsidiary. Except as
issued pursuant to the Company Stock Plans, the Rights Agreement, pursuant to
agreements or arrangements described in Section 3.03 of the Disclosure Schedule
or as set forth in the Company SEC Reports (as defined herein), there are no
options, warrants or other rights, agreements, arrangements or commitments of
any character to which the Company is a party or by which the Company is bound
relating to the issued or unissued capital stock of the Company or any Company
Subsidiary or obligating the Company or any Company Subsidiary to issue or sell
any shares of capital stock of, or other equity interests in, the Company or any
Company Subsidiary. All shares of Company Common Stock subject to issuance as
aforesaid, upon issuance prior to the Effective Time on the terms and conditions
specified in the instruments pursuant to which they are issuable, will be duly
authorized, validly issued, fully paid and nonassessable. Except as set forth in
Section 3.03 of the Disclosure Schedule, there are no outstanding contractual
obligations of the Company or any Company Subsidiary to repurchase, redeem or
otherwise acquire any shares of Common Stock or any capital stock of any Company
Subsidiary. Each outstanding share of capital stock of each Company Subsidiary
is duly authorized, validly issued, fully paid and nonassessable and, except as
set forth in Section 3.03 of the Disclosure Schedule, each such share owned by
the Company or another Company Subsidiary is free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal, agreements,
limitations on the Company's or such other Company Subsidiary's voting rights,
charges and other encumbrances of any nature whatsoever, except where failure to
own such shares free and clear would not, individually or in the aggregate, have
a Material Adverse Effect. Except as set forth in Section 3.03 of the Disclosure
Schedule, there are no material outstanding contractual obligations of the
Company or any Company Subsidiary to provide funds to, or make any investment
(in the form of a loan, capital contribution or otherwise) in, any
<PAGE>
9
Company Subsidiary or any other person, other than obligations arising in the
ordinary course of business, obligations disclosed in the Company SEC Reports
and guarantees by the Company of any indebtedness of any Company Subsidiary.
SECTION 3.04. Authority Relative to This Agreement. The
Company has all necessary corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
transactions (including, without limitation, the Merger) contemplated herein to
be consummated by the Company. The execution and delivery of this Agreement by
the Company and the consummation by the Company of such transactions have been
duly and validly authorized by all necessary corporate action, including the
unanimous approval of the Company Board (with one director having recused
himself), and the unanimous approval of the Company Independent Committee, and
no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate such transactions (other than the
adoption of this Agreement by the requisite affirmative vote of the stockholders
of the Company as required by the MGCL). This Agreement has been duly and
validly executed and delivered by the Company and (assuming due authorization,
execution and delivery by Parent and Merger Sub) constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms.
SECTION 3.05. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate any provision of the charter or bylaws of the Company or any equivalent
organizational documents of the Company or any Company Subsidiary, (ii) assuming
that all consents, approvals, authorizations and other actions described in
Section 3.05(b) have been obtained and all filings and obligations described in
Section 3.05(b) have been made, conflict with or violate any United States or
non-United States or supranational law, statute, ordinance, rule, regulation,
code, executive order, injunction, judgment, decree or other order ("Law")
applicable to the Company or any Company Subsidiary or by which any property or
asset of the Company or any Company Subsidiary is bound or affected, or (iii)
except as set forth in Section 3.05(a)(iii) of the Disclosure Schedule, result
in any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of the Company
or any Company Subsidiary pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation, except, with respect to clause (iii), for any such conflicts,
violations, breaches, defaults, or other occurrences which would not reasonably
be expected to (A) have a Material Adverse Effect or (B) prevent or materially
delay the performance of this Agreement by the Company.
<PAGE>
10
(b) The execution and delivery of this Agreement by the
Company does not, and the performance of this Agreement by the Company will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any United States federal, state, county or local or non-United
States or supranational government, governmental, regulatory or administrative
authority, agency, instrumentality or commission or any court, tribunal or
judicial or arbitral body ("Governmental Entity"), except (i) for applicable
requirements of the Securities Exchange Act of 1934, as amended (together with
the rules and regulations promulgated thereunder, the "Exchange Act"), the AMEX,
the pre-merger notification requirements (A) of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder (the "HSR Act") or (B) as may be applicable pursuant to the antitrust
laws of any state, (ii) for applicable requirements relating to the filing and
recordation of appropriate merger documents pursuant to the MGCL and as set
forth in Section 3.05(b) of the Disclosure Schedule and (iii) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not reasonably be expected to (A) prevent or
materially delay consummation of the Merger or (B) have a Material Adverse
Effect.
SECTION 3.06. Permits; Compliance. Except as set forth in
Section 3.06 of the Disclosure Schedule, each of the Company and the Company
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for the Company or any
Company Subsidiary to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Permits"), except where the failure
to have, or the suspension or cancellation of, any of the Permits would not
reasonably be expected to (a) have a Material Adverse Effect or (b) prevent or
materially delay the performance of this Agreement by the Company, and no
suspension or cancellation of any of the Permits is pending or, to the knowledge
of the Company, threatened. Neither the Company nor any Company Subsidiary is in
conflict with, or in default or violation of, (i) any Law applicable to the
Company or any Company Subsidiary or by which any property or asset of the
Company or any Company Subsidiary is bound or affected or (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, Permit, franchise or
other instrument or obligation to which the Company or any Company Subsidiary is
a party to or by which the Company or any Company Subsidiary is bound by, except
for any such conflicts, defaults or violations that would not reasonably be
expected to (A) have a Material Adverse Effect or (B) prevent or materially
delay the performance of this Agreement by the Company.
SECTION 3.07. SEC Filings; Financial Statements. (a) The
Company has timely filed all forms, reports and documents required to be filed
by it with the Securities and Exchange Commission ("SEC") since December 31,
1998 through the date of this Agreement (collectively, the "Company SEC
Reports"). The Company SEC Reports and all forms, reports and documents to be
filed by the Company after the date hereof and prior to the Closing (i) were or
will be prepared in all material respects in accordance with the requirements of
the Exchange
<PAGE>
11
Act and the rules and regulations promulgated thereunder, (ii) did or will not,
as of their respective dates, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading, and (iii) did not and will not omit any
document required to be filed as an exhibit thereto. No Company Subsidiary is
required to file any form, report or other document with the SEC.
(b) Each of the financial statements (including, in each case,
any notes thereto) contained in the Company SEC Reports and each of the
financial statements to be included in forms, reports and documents to be filed
with the SEC after the date hereof and prior to the Closing, was or will be
prepared in accordance with United States generally accepted accounting
principles as promulgated by the American Institute of Certified Public
Accountants and as interpreted from time to time by the staff of the SEC ("U.S.
GAAP"), applied on a consistent basis throughout the periods indicated (except
as may be indicated in the notes thereto) and each presented fairly or will
present fairly, the consolidated financial position, results of operations and
cash flow of the Company, and the consolidated Company Subsidiaries as at the
respective dates thereof and for the respective periods indicated therein in all
material respects, except as otherwise noted therein in accordance with U.S.
GAAP (subject, in the case of unaudited statements, to normal year-end
adjustments which were not and are not expected to have a Material Adverse
Effect).
(c) Except as and to the extent set forth on the consolidated
balance sheet of the Company and the Company Subsidiaries as of December 31,
1999, including the notes thereto, or in any of the Company SEC Reports filed
subsequent to December 31, 1999 or in Section 3.07(c) of the Disclosure
Schedule, neither the Company nor any Company Subsidiary has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
that would be required to be reflected on a balance sheet or in notes thereto
prepared in accordance with U.S. GAAP, except for liabilities or obligations
incurred in the ordinary course of business since December 31, 1999 that would
not reasonably be expected to, individually or in the aggregate, (i) have a
Material Adverse Effect or (ii) prevent or materially delay the performance of
this Agreement by the Company.
(d) The Company has heretofore furnished to Parent a complete
and correct copy of any amendment or modification, that has not yet been filed
with the SEC, to agreements, documents or other instruments that previously have
been filed by the Company with the SEC pursuant to the Exchange Act.
SECTION 3.08. Absence of Certain Changes or Events. Since
December 31, 1999, except as contemplated by or as set forth in Section 3.08 of
the Disclosure Schedule or as expressly contemplated by this Agreement or as
specifically disclosed in the Company SEC Reports filed subsequent to December
31, 1999, the Company and the Company Subsidiaries
<PAGE>
12
have conducted their businesses only in the ordinary course and in a manner
consistent with past practice and, since such date, (a) there has not been any
change, condition, event or development that has had a Material Adverse Effect,
(b) there has not been any event that could reasonably be expected to prevent or
materially delay the performance of this Agreement by the Company and (c) none
of the Company or any Company Subsidiary has taken any action that, if taken
after the date of this Agreement, would constitute a breach of any of the
covenants set forth in Section 5.01.
SECTION 3.09. Employee Benefit Plans; Labor Matters. (a)
Section 3.09(a) of the Disclosure Schedule lists (i) all employee benefit plans
(as defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) and all bonus, stock option, stock purchase,
restricted stock, incentive, deferred compensation, retiree medical or life
insurance, supplemental retirement, severance or other benefit plans, programs
or arrangements, and all employment, termination, severance or other contracts
or agreements, whether legally enforceable or not, to which the Company or any
Company Subsidiary is a party, with respect to which the Company or any Company
Subsidiary has any obligation or which are maintained, contributed to or
sponsored by the Company or any Company Subsidiary for the benefit of any
current or former employee, officer or director of the Company or any Company
Subsidiary, (ii) each employee benefit plan for which the Company or any Company
Subsidiary could incur liability under Section 4069 of ERISA in the event such
plan has been or were to be terminated, (iii) any plan in respect of which the
Company or any Company Subsidiary could incur liability under Section 4212(c) of
ERISA, and (iv) any contracts, arrangements or understandings between the
Company or any Company Subsidiary and any employee of the Company or any Company
Subsidiary including, without limitation, any contracts, arrangements or
understandings relating in any way to a sale of the Company or any Company
Subsidiary (collectively, the "Plans"). Each Plan is in writing and the Company
has furnished or made available to Parent a true and complete copy of each
material Plan and has delivered or made available to Parent a true and complete
copy of each material document, if applicable, prepared in connection with each
such Plan, including, without limitation, (A) a copy of each trust or other
funding arrangement, (B) each summary plan description and summary of material
modifications, (C) the most recently filed Internal Revenue Service ("IRS") Form
5500, (D) the most recently received IRS determination letter for each such
Plan, and (E) the most recently prepared actuarial report and financial
statement in connection with each such Plan. Neither the Company nor any Company
Subsidiary has any express or implied commitment, whether legally enforceable or
not, (i) to create, incur liability with respect to or cause to exist any other
employee benefit plan, program or arrangement, (ii) to enter into any contract
or agreement to provide compensation or benefits to any individual, or (iii) to
modify, change or terminate any Plan, other than with respect to a modification,
change or termination required by ERISA or the Code.
<PAGE>
13
(b) None of the Plans is a multiemployer plan (within the
meaning of Section 3(37) or 4001(a)(3) of ERISA) (a "Multiemployer Plan") or a
single employer pension plan (within the meaning of Section 4001(a)(15) of
ERISA) for which the Company or any Company Subsidiary could incur liability
under Section 4063 or 4064 of ERISA (a "Multiple Employer Plan"). Except as set
forth in Section 3.09(b) of the Disclosure Schedule, none of the Plans (i)
provides for the payment of separation, severance, termination or similar-type
benefits to any person, (ii) obligates or obligated the Company or any Company
Subsidiary to pay, or segregate any funds to pay (into a trust or otherwise),
separation, severance, termination or similar-type benefits solely or partially
as a result of any transaction contemplated by this Agreement or pursuant to the
consummation of the transactions contemplated by the Agreement and Plan of
Reorganization, dated December 8, 1998, as amended, among American Trading and
Production Corporation, ATAPCO, Inc., American Trading Real Estate Company, Inc.
and Gateway Gathering and Marketing Company (the "Reorganization Agreement"), or
(iii) obligates or obligated the Company or any Company Subsidiary to make any
payment, or segregate any funds to pay (into a trust or otherwise), or provide
any benefit as a result of a "change in control", within the meaning of such
term under Section 280G of the Code solely or partially as a result of any
transaction contemplated by this Agreement or the Reorganization Agreement.
Except as set forth in Section 3.09(b) of the Disclosure Schedule, none of the
Plans provides for or promises retiree medical, disability or life insurance
benefits to any current or former employee, officer or director of the Company
or any Company Subsidiary. Each of the Plans is subject only to the Laws of the
United States or a political subdivision thereof.
(c) Each Plan is now and always has been operated in all
material respects in accordance with its terms and the requirements of all
applicable Law including, without limitation, ERISA and the Code. The Company
and the Company Subsidiaries have performed all obligations required to be
performed by them under, are not in material default under or in violation of,
and have no knowledge of any default or violations by any party to, any Plan. No
action is pending or, to the knowledge of the Company, threatened with respect
to any Plan (other than claims for benefits in the ordinary course), and, to the
Company's knowledge, no fact or event exists that could reasonably be expected
to give rise to any such action.
(d) Each Plan that is intended to be qualified under Section
401(a) or Section 401(k) of the Code has heretofore been determined by the IRS
so to qualify, and if submitted and assuming all amendments required by the IRS
were made, the Company believes that such Plans would receive a favorable
determination letter from the IRS with respect to the changes required by the
Small Business Job Protection Act of 1996, the General Agreement on Tariffs and
Trade, the Tax Reform Act of 1997, and the Uniformed Services Employment and
Reemployment Rights Act of 1994, and each trust established in connection with
any Plan which is intended to be exempt from federal income taxation under
Section 501(a) of the Code has received a determination letter from the IRS that
it is so exempt, and no fact or event has occurred since the
<PAGE>
14
date of such determination letter or letters from the IRS to adversely affect
the qualified status of any such Plan or the exempt status of any such trust.
(e) There has not been any prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) for which an
exemption is not available with respect to any Plan. Neither the Company nor any
Company Subsidiary has incurred any liability under, arising out of or by
operation of Title IV of ERISA (other than liability for premiums to the Pension
Benefit Guaranty Corporation arising in the ordinary course), including, without
limitation, any liability in connection with (i) the termination or
reorganization of any employee benefit plan subject to Title IV of ERISA or (ii)
the withdrawal from any Multiemployer Plan or Multiple Employer Plan, and no
fact or event exists which could reasonably be expected to give rise to any such
liability.
(f) All contributions, premiums or payments required to be
made with respect to any Plan have been made on or before their due dates. All
such contributions have been fully deducted for income tax purposes to the
extent permitted by applicable Law and no such deduction has been challenged or
disallowed by any Governmental Entity and, to the Company's knowledge, no fact
or event exists which could reasonably be expected to give rise to any such
challenge or disallowance.
(g) Except as set forth in Section 3.09(g) of the Disclosure
Schedule, all directors and officers of the Company and the Company Subsidiaries
(other than those directors of the Company Subsidiaries organized in England,
Vermont and the Netherland Antilles who are not employees of the Company or any
Company Subsidiary) are under written obligation to the Company and the Company
Subsidiaries to maintain in confidence all confidential or proprietary
information acquired by them in the course of their employment and to assign to
the Company and the Company Subsidiaries all inventions made by them within the
scope of their employment during such employment and for a reasonable period
thereafter.
(h) The Company currently operates and for the last five years
has operated each of the Company's Employee Savings Plan and Employee
Supplemental Savings Plan in accordance with its terms, including, without
limitation, the provision (A) permitting the participant to direct the trustee
under such plan to vote the participant's Company Common Stock held in the
participant's account in accordance with his or her instructions and (B)
providing that any shares of the Company Common Stock in the accounts of a
participant for which clear and timely instructions of the participant are not
received shall be voted in the same proportion as such shares for which
instructions are received.
(i) Section 3.09(i) of the Disclosure Schedule sets forth a
true and accurate list of all issued and outstanding SAR Units, including the
amounts and exercise prices related thereto.
<PAGE>
15
(j) Except as set forth in Section 3.09(j) of the Disclosure
Schedule or as disclosed in the Company SEC Reports, (i) there are no
controversies pending or, to the knowledge of the Company, threatened between
the Company or any Company Subsidiary and any of their respective employees;
(ii) neither the Company nor any Company Subsidiary is a party to any collective
bargaining agreement or other labor union contract applicable to persons
employed by the Company or any Company Subsidiary, nor, to the knowledge of the
Company, are there any activities or proceedings of any labor union to organize
any such employees; (iii) neither the Company nor any Company Subsidiary has
breached or otherwise failed to comply with any provision of any such agreement
or contract, and there are no grievances outstanding against the Company or any
Company Subsidiary under any such agreement or contract; (iv) there are no
unfair labor practice complaints pending against the Company or any Company
Subsidiary before the National Labor Relations Board or any current union
representation questions involving employees of the Company or any Company
Subsidiary; and (v) there is no strike, slowdown, work stoppage or lockout, or,
to the knowledge of the Company, threat thereof, by or with respect to any
employees of the Company or any Company Subsidiary. The consent of the labor
unions which are a party to the collective bargaining agreements listed in
Section 3.09(j) of the Disclosure Schedule is not required to consummate the
Merger.
(k) Except as set forth in Section 3.09(k) of the Disclosure
Schedule or as disclosed in the Company SEC Reports, the Company and the Company
Subsidiaries are in material compliance with all applicable laws relating to the
employment of labor, including those relating to wages, hours, collective
bargaining and the payment and withholding of taxes and other sums as required
by the appropriate Governmental Entity and has withheld and paid to the
appropriate Governmental Entity or are holding for payment not yet due to such
Governmental Entity all amounts required to be withheld from employees of the
Company or any Company Subsidiary and are not liable for any significant arrears
of wages, taxes, penalties or other sums for failure to comply with any of the
foregoing. The Company and the Company Subsidiaries have paid in full to all
employees or adequately accrued for in accordance with U.S. GAAP consistently
applied all wages, salaries, commissions, bonuses, benefits and other
compensation due to or on behalf of such employees, and there is no claim with
respect to payment of wages, salary or overtime pay that has been asserted or is
now pending or, to the Company's knowledge, threatened before any Governmental
Entity with respect to any persons currently or formerly employed by the Company
or any Company Subsidiary. Except as set forth in Section 3.09(k) of the
Disclosure Schedule, neither the Company nor any Company Subsidiary is a party
to, or otherwise bound by, any consent decree with, or citation by, any
Governmental Entity relating to employees or employment practices. Except as set
forth in Section 3.09(k) of the Disclosure Schedule, there is no charge or
proceeding with respect to a violation of any occupational safety or health
standards that has been asserted or is now pending or, to the Company's
knowledge, threatened with respect to the Company. Except as set forth in
Section 3.09(k) of the Disclosure Schedule or as disclosed in the Company SEC
Reports, there is no charge of discrimination in employment or employment
practices, for any reason, including, without limitation, age, gender,
<PAGE>
16
race, religion or other legally protected category, which has been asserted or
is now pending or, to the knowledge of the Company, threatened before the United
States Equal Employment Opportunity Commission, or any other Governmental Entity
in any jurisdiction in which the Company or any Company Subsidiary have employed
or employ any person.
SECTION 3.10. Contracts; Debt Instruments. (a) Set forth in
subsections (i) through (viii) of Section 3.10(a) of the Disclosure Schedule is
a true and accurate list of all contracts and agreements of the types described
in such subsections to which the Company or any Company Subsidiary is a party as
of the date hereof (such contracts, agreements and arrangements as required to
be set forth in Section 3.10(a) of the Disclosure Schedule, together with those
listed in Section 3.09(a) of the Disclosure Schedule, and subject to the proviso
at the end of paragraph (a) of this Section 3.10 being the "Material
Contracts"):
(i) as of the date of this Agreement, each contract and
agreement which (A) is likely to involve consideration of more than
$500,000, in the aggregate, during the calendar year ending December
31, 2000 or (B) is likely to involve consideration of more than
$1,000,000, in the aggregate, over the remaining term of such contract,
except for purchase orders for crude oil or intermediate feedstock
arising in the usual and ordinary course of business and consistent
with past practices (provided that in any case and without regard to
the proviso at the end of paragraph (a) of this Section 3.10, the top
15 purchase orders are set forth in Section 3.10(a)(i) of the
Disclosure Schedule) and which, in either case, cannot be canceled by
the Company or any Company Subsidiary without penalty or further
payment and without more than 90 days' notice;
(ii) all material broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market research,
marketing consulting and advertising contracts and agreements to which
the Company or any Company Subsidiary is a party, in each case, not
cancellable without penalty on not more than 90 days' notice;
(iii)all material management contracts (excluding contracts
for employment) and contracts with other consultants, including any
contracts involving the payment of royalties or other amounts
calculated based upon the revenues or income of the Company or any
Company Subsidiary or income or revenues related to any product of the
Company or any Company Subsidiary to which the Company or any Company
Subsidiary is a party;
(iv) all material contracts and agreements evidencing
indebtedness of the Company or any Company Subsidiary;
(v) as of the date hereof, all material contracts and
agreements with any Governmental Entity to which the Company or any
Company Subsidiary is a party;
<PAGE>
17
(vi) all contracts and agreements that materially limit, or
purport to materially limit, the ability of the Company or any Company
Subsidiary to compete in any line of business or with any person or
entity or in any geographic area or during any period of time;
(vii) all material contracts or arrangements that result in
any person or entity holding a power of attorney from the Company or
any Company Subsidiary that relates to the Company, any Company
Subsidiary or their respective businesses; and
(viii) all other contracts and agreements, whether or not made
in the ordinary course of business, which are material to the Company
and any Company Subsidiary or the conduct of its businesses, or the
absence of which would prevent or materially delay consummation of the
Merger or otherwise prevent or materially delay the Company from
performing its obligations under this Agreement or would have a
Material Adverse Effect.
The foregoing provisions of this Section 3.10(a) are subject to the following
proviso. With respect to Section 3.10(a)(i): (1) contracts for the purchase of
crude oil and other feedstocks which in the aggregate do not exceed the
requirements for the combined operation of the Company's two refineries at 105%
of rated capacity for a period of sixty (60) days and do not have a term in
excess of seventy-five (75) days shall be deemed to be in the usual and ordinary
course of business and, as such, shall not be Material Contracts and shall not
be included in the Disclosure Schedule; (2) contracts for the sale of finished
petroleum products which in the aggregate combined with the Company's retail
requirements do not exceed the combined rated capacities of the Company's two
refineries when measured over a sixty (60) day period shall be deemed to be in
the usual and ordinary course of business and, as such, shall not be Material
Contracts and shall not be included in the Disclosure Schedule; and (3)
contracts for the sale of intermediate feedstocks, sulfur, petroleum coke and
other by products of the petroleum refining process shall, if produced by the
Company and sold from inventory or from the anticipated production of the
refineries within the next two months, shall be deemed to be in the usual and
ordinary course of business and, as such, shall not be Material Contracts and
shall not be included in the Disclosure Schedule. With respect to Sections
3.10(a)(i) through (v) and Section 3.10(a)(viii) (and without derogating from
the immateriality of contracts in excess of the following threshold which are
not otherwise material), all contracts involving consideration or the payment of
less than $250,000 shall be deemed to be not material. Notwithstanding the
foregoing, the types of contracts described in clauses (1), (2) and (3) of the
first sentence of the foregoing proviso shall be deemed to be Material Contracts
with respect to clauses (b) and (c) of this Section 3.10.
(b) Except as would not prevent or materially delay
consummation of the Merger or otherwise prevent or materially delay the Company
from performing its obligations
<PAGE>
18
under this Agreement and would not have a Material Adverse Effect, (i) each
Material Contract is a legal, valid and binding agreement, and, to the Company's
knowledge, none of the Material Contracts is in default by its terms or has been
canceled by the other party; (ii) to the Company's knowledge, no other party is
in breach or violation of, or default under, any Material Contract; (iii) the
Company and the Company Subsidiaries are not in receipt of any claim of default
under any Material Contract; and (iv) except as set forth in Section 3.10(b)(iv)
of the Disclosure Schedule, neither the execution of this Agreement nor the
consummation of any transaction contemplated hereby shall constitute a default,
give rise to cancellation rights, or otherwise materially and adversely affect
any of the Company's rights under any Material Contract. The Company has
furnished or made available to Parent true and complete copies of all Material
Contracts, including any amendments thereto.
(c) Set forth in Section 3.10(c) of the Disclosure Schedule is
a description of any material changes to the amount and material terms of the
indebtedness of the Company and the Company Subsidiaries as described in the
notes to the financial statements incorporated in, or otherwise disclosed in,
the Company's Form 10-K for the year ended December 31, 1999.
SECTION 3.11. Absence of Litigation. Except as set forth in
Section 3.11 of the Disclosure Schedule or as specifically disclosed in the
Company SEC Reports, there is no litigation, suit, claim, action, proceeding,
arbitration, review or investigation pending or, to the knowledge of the
Company, threatened against the Company or any Company Subsidiary or any
property or asset of the Company or any Company Subsidiary before any
Governmental Entity that is reasonably likely to have a Material Adverse Effect
or seeks to materially delay or prevent the consummation of the Merger or
otherwise prevent or materially delay the Company from performing its
obligations under this Agreement. Except as set forth in Section 3.11 of the
Disclosure Schedule or as disclosed in the Company SEC Reports, there has been
no change since December 31, 1999 in the status of any litigation, suit, claim,
action, proceeding or investigation relating to the Company or any Company
Subsidiary that would be reasonably likely to have a Material Adverse Effect.
Except as disclosed in the Company SEC Reports or as set forth in Section 3.11
of the Disclosure Schedule, neither the Company nor any Company Subsidiary is
subject to any outstanding Order (as defined below), writ, injunction or decree
which, insofar as can be reasonably foreseen, would have a Material Adverse
Effect.
SECTION 3.12. Environmental Matters. (a) Except as
disclosed in Section 3.12 of the Disclosure Schedule or as disclosed in the
Company SEC Reports or as would not reasonably be expected to have a Material
Adverse Effect:
(i) The Company is in compliance with all applicable
Environmental Laws and all Environmental Permits. All past
noncompliance with Environmental Laws or Environmental Permits
identified by the Company has been resolved without any pending,
ongoing or future obligation, cost or liability, and, to the Company's
actual
<PAGE>
19
knowledge, there is no requirement proposed as of the date hereof that
is reasonably expected to be adopted or implemented and give rise to
liability under any Environmental Law or Environmental Permit;
(ii) Except as expressly authorized under any Environmental
Law or Environmental Permit, there has been no Release of Hazardous
Materials on any of the real property owned or leased by the Company or
any Company Subsidiary (the "Real Property") or, during the Company's
ownership or occupancy of such property, on any property formerly
owned, leased, used or occupied by the Company;
(iii) The Company is not conducting, and has not undertaken or
completed, any Remedial Action relating to any Release or threatened
Release on the Real Property or at any other site, location or
operation, either voluntarily or pursuant to the order of any
Governmental Entity or the requirements of any Environmental Law or
Environmental Permit;
(iv) To the Company's knowledge, there is no asbestos or
asbestos-containing material on any of the Real Property;
(v) None of the Real Property is listed or proposed for
listing, or, to the Company's knowledge, adjoins any other property
that is listed or proposed for listing, on the National Priorities List
or the Comprehensive Environmental Response, Compensation and Liability
Information System under the federal Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA") or any analogous
federal, state or local list;
(vi) There are no Environmental Claims pending or, to the
Company's knowledge, threatened against the Company or the Real
Property, and, to the Company's knowledge, there are no circumstances
that can reasonably be expected to form the basis of any such
Environmental Claim, including, without limitation, with respect to any
off- site disposal location presently or formerly used by the Company
or any of its predecessors or with respect to any previously owned or
operated facilities;
(vii) Under current Law, the Company can maintain present
production levels, or any planned expansion of production levels upon
which financial projections provided to Parent have been based, in
compliance with applicable Environmental Laws without a material
increase in capital or operating expenditures and without modifying any
Environmental Permits or obtaining any additional Environmental
Permits;
(viii) The Company has provided Parent or made available
copies of (i) any environmental assessment or audit reports or other
similar studies or analyses relating to
<PAGE>
20
the Real Property or the Company, and (ii) all insurance policies
issued at in the past five years that may provide coverage to the
Company for environmental matters; and
(ix) Neither the execution of this Agreement nor the
consummation of the transactions contemplated herein will require any
Remedial Action or notice to or consent of Governmental Entities or
third parties pursuant to any applicable Environmental Law or
Environmental Permit.
(b) For purposes of this Agreement:
"Environmental Claims" means any and all actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, notices of liability or potential liability, investigations,
proceedings, consent orders or consent agreements relating in any way
to any Environmental Law, any Environmental Permit or any Hazardous
Materials.
"Environmental Law" means any Law in effect and as amended as
of the Effective Time, and any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent decree or judgment, relating to pollution or protection of the
environment, health, safety or natural resources, including, without
limitation, those relating to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous
Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under
any applicable Environmental Law.
"Hazardous Material" means (i) petroleum and petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials and polychlorinated biphenyls and (ii)
any other chemical, material or substance defined or regulated as toxic
or hazardous or as a pollutant, contaminant or waste under any
applicable Environmental Law.
"Release" means disposing, discharging, injecting, spilling,
leaking, leaching, dumping, emitting, escaping, emptying, seeping,
placing and the like into or upon any land or water or air or otherwise
entering into the environment.
"Remedial Action" means all action to (i) clean up, remove,
treat or handle in any other way Hazardous Materials in the
environment; (ii) restore or reclaim the environment or natural
resources; (iii) prevent the Release of Hazardous Materials so that
they do not migrate or endanger or threaten to endanger public health
or the environment; or (iv) perform remedial investigations,
feasibility studies, corrective actions, closures
<PAGE>
21
and postremedial or postclosure studies, investigations, operations,
maintenance and monitoring on, about or in any Real Property.
SECTION 3.13. Trademarks, Patents and Copyrights. Except to
the extent the inaccuracy of any of the following (or the circumstances giving
rise to such inaccuracy) would not reasonably be expected to have a Material
Adverse Effect, the Company and each of the Company Subsidiaries own or possess
adequate licenses or other legal rights to use all patents, patent rights,
trademarks, trademark rights, trade names, trade dress, trade name rights,
copyrights, service marks, trade secrets, applications for trademarks and for
service marks, mask works, know-how and other proprietary rights and information
used or held for use in connection with the businesses of the Company and the
Company Subsidiaries as currently conducted or as contemplated to be conducted,
and, to the Company's knowledge, there is no assertion or claim challenging the
validity of any of the foregoing. Neither the Company nor any of the Company
Subsidiaries has infringed or is infringing in any way any patent, patent right,
license, trademark, trademark right, trade dress, trade name, trade name right,
service mark, mask work or copyright of any third party that would reasonably be
expected to have a Material Adverse Effect. To the Company's knowledge, there
are no infringements of any proprietary rights owned by or licensed by or to the
Company or any Company Subsidiary that could reasonably be expected to have a
Material Adverse Effect.
SECTION 3.14. Taxes. Except as set forth in Section 3.14 of
the Disclosure Schedule, (a) the Company and the Company Subsidiaries have
timely filed or will timely file all material federal, state, local and foreign
Tax Returns required to be filed by them with any taxing authority with respect
to Taxes for any period ending on or before the Effective Time, taking into
account any extension of time to file granted to or obtained on behalf of the
Company and the Company Subsidiaries, and all such Tax Returns are complete and
correct in all material respects; (b) all Taxes that are shown as due on such
Tax Returns have been or will be timely paid; (c) no deficiency for any material
amount of Tax has been asserted or assessed in writing by a taxing authority
against the Company or any of the Company Subsidiaries for which there are not
adequate reserves; (d) the Company and the Company Subsidiaries have provided
adequate reserves in accordance with U.S. GAAP in their financial statements for
any Taxes that have not been paid, whether or not shown as being due on any
returns; (e) as of the date hereof, the Company and the Company Subsidiaries
have neither extended nor waived any applicable statute of limitations with
respect to Taxes and have not otherwise agreed to any extension of time with
respect to Tax assessment or deficiency; (f) none of the Company and the Company
Subsidiaries is a party to any Tax sharing agreement or arrangement other than
with each other; (g) as of the date hereof, there are no pending or threatened
in writing material audits, examinations, investigations, litigation, or other
proceedings in respect of Taxes of the Company or any Company Subsidiary; (h) no
liens for Taxes exist with respect to any of the assets or properties of the
Company or the Company Subsidiaries, except for statutory liens for Taxes not
yet due or payable or that are being contested in good faith for which there are
adequate reserves;
<PAGE>
22
(i) all Taxes which the Company or any Company Subsidiary are required to
withhold or to collect for payment have been duly withheld and collected, and
have been paid or accrued, reserved against and entered on the books of the
Company; and (j) none of the Company or any Company Subsidiary has been a member
of any group or corporation filing Tax Returns on a consolidated, combined,
unitary or similar basis other than each such group of which it is currently a
member. As used in this Agreement, "Taxes" shall mean any and all taxes, fees,
levies, duties, tariffs, imposts, and other charges of any kind (together with
any and all interest, penalties, additions to tax and additional amounts imposed
with respect thereto) imposed by any Governmental Entity, including, without
limitation: taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, sales, use, capital stock,
payroll, employment, social security, workers' compensation, unemployment
compensation, or net worth; taxes or other charges in the nature of excise,
withholding, ad valorem, stamp, transfer, value added, or gains taxes; license,
registration and documentation fees and customs duties, tariffs, and similar
charges.
"Tax Returns" shall mean any return, declaration, report,
claim for refund or information return or statement relating to Taxes filed with
a taxing authority, including any schedule or attachment thereto, and including
any amendment thereof.
SECTION 3.15. Property and Leases. (a) The Company and the
Company Subsidiaries have sufficient title to all their properties and assets to
conduct their respective businesses as currently conducted or as contemplated to
be conducted, with only such exceptions as would not have a Material Adverse
Effect.
(b) No parcel of real property owned or leased by the Company
or any Company Subsidiary is subject to any governmental decree or order to be
sold or is being condemned, expropriated or otherwise taken by any public
authority with or without payment of compensation therefor, nor, to the
knowledge of the Company, has any such condemnation, expropriation or taking
been proposed other than as could not reasonably be expected to have a Material
Adverse Affect.
(c) Except as set forth in Section 3.15(c) of the Disclosure
Schedule, there are no contractual or legal restrictions that preclude or
restrict the ability to use any real property owned or leased by the Company or
any Company Subsidiary for the purposes for which it is currently being used
other than preclusions or restrictions which do not preclude or restrict or
otherwise adversely affect the actual use which the Company or Company
Subsidiary is making of the real property on the date of this Agreement but
which may or would preclude or restrict any expansion or enhancement or change
in such use. There are no material latent defects or material adverse physical
conditions affecting the real property, and improvements thereon, owned or
leased by the Company or any Company Subsidiary other than those that would not
prevent or materially delay consummation of the Merger or otherwise prevent or
materially delay
<PAGE>
23
the Company from performing its obligations under this Agreement and would not
have a Material Adverse Effect.
SECTION 3.16. Rights Agreement. The copy of the Rights
Agreement, dated as of February 1, 2000, between the Company and First Union
National Bank, a national banking association, as rights agent (the "Rights
Agreement"), including all amendments and exhibits thereto, that is set forth as
an exhibit to the Company's Form 8-A filed with the SEC on February 3, 2000, is
a complete and correct copy thereof. The Company Board has taken all necessary
action to amend the Rights Agreement, a copy of which amendment has been
provided to Parent and its Representatives (as defined herein), so that (a)
neither the execution of this Agreement nor the consummation of the Merger will
(i) cause the Rights (as such term is defined in the Rights Agreement) issued
pursuant to the Rights Agreement to become exercisable, (ii) cause Parent or
Merger Sub to become an Acquiring Person (as such term is defined in the Rights
Agreement) or (iii) give rise to a Distribution Date (as such term is defined in
the Rights Agreement) and (b) the Rights will expire pursuant to the terms of
the Rights Agreement immediately prior to the Effective Time.
SECTION 3.17. Insurance. The Company and the Company
Subsidiaries have in effect insurance coverage with reputable insurers or are
self-insured, which, in respect of amounts, premiums, types and risks insured,
constitutes reasonable coverage for the risks customarily insured against by
companies engaged in the industries in which the Company and the Company
Subsidiaries are engaged and comparable in size and operations to the Company
and the Company Subsidiaries. The Company's current annual premiums for
directors' and officers' liability insurance is approximately $400,000 per year,
and, as of the date of this Agreement, the Company has no reason to believe that
such insurance will not be renewable by it or the Surviving Corporation upon
expiration in June 2001 on similar or more favorable terms.
SECTION 3.18. Board Recommendation. On the unanimous
recommendation of the Company Independent Committee, the Company Board (with one
director having recused himself), including all of the members of the Company
Independent Committee, at a meeting duly called and held, has by unanimous vote
of the Company Board (with one director having recused himself) (i) approved and
deemed it advisable that the Company and its stockholders consummate the Merger,
upon the terms and subject to the conditions set forth in this Agreement, and
(ii) resolved to recommend that the stockholders of the Company approve and
adopt this Agreement and the transactions contemplated herein, including the
Merger.
SECTION 3.19. Opinion of Financial Advisor. Credit Suisse
First Boston Corporation ("CSFB") has delivered to the Company its written
opinion, dated the date hereof, accompanied by an authorization to include such
opinion in the Proxy Statement and the Schedule 13E-3 (each as defined below) to
the effect that, as of the date of this Agreement, the aggregate Merger
Consideration to be received by the stockholders of the Company is fair, from
<PAGE>
24
a financial point of view, to the Company's stockholders (other than Parent and
its affiliates). The Company has delivered a signed copy of such written opinion
to Parent.
SECTION 3.20. Brokers. No broker, finder or investment banker
(other than CSFB) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Company. The Company has heretofore
made available to Parent a complete and correct copy of all agreements between
the Company and CSFB pursuant to which such firm would be entitled to any
payment relating to the transactions contemplated hereby.
SECTION 3.21. Vote Required; State Takeover Statutes. (a) The
only vote of the holders of any class or series of capital stock of the Company
necessary to approve the Merger, this Agreement or the transactions contemplated
by this Agreement is the affirmative vote by the Company's stockholders
representing two-thirds of the outstanding shares of the Company's Class A
Common Stock and Class B Common Stock voting together, with each outstanding
share of Class A Common Stock representing one vote and each outstanding share
of Class B Common Stock representing one-tenth of a vote.
(b) Section 3-602 of the MGCL does not apply to Parent, Merger
Sub or any of their affiliates in connection with the Merger or the transactions
contemplated by this Agreement. The Company Board has validly amended the bylaws
of the Company to exempt any acquisition of Company Common Stock by Parent or
Merger Sub from Section 3-702 of the MGCL and has taken all other action
necessary to ensure that the provisions of Title 3, Subtitles 6 and 7 of the
MGCL or any other applicable state takeover statutes are not and will not be
applicable to this Agreement, the Merger and the other transactions contemplated
by this Agreement. No other state takeover statute is applicable to this
Agreement, the Merger or the other transactions contemplated by this Agreement.
No stockholder of the Company shall have any statutory appraisal rights under
applicable Law as a result of the Merger, this Agreement or any of the
transactions contemplated hereby or thereby.
SECTION 3.22. Directors of the Surviving Corporation. (a) The
Company Board has by the two-thirds vote required by the definition of "Change
of Control" in Section 101 of the Indenture, nominated the persons identified in
Section 3.22(a) of the Disclosure Schedule for election by the sole stockholder
of the Surviving Corporation to the board of directors of the Surviving
Corporation after the Effective Time.
(b) Provided that (i) the Surviving Corporation and Holdings,
as the sole stockholder of the Surviving Corporation after the Effective Time,
take all necessary action pursuant to the MGCL after the Effective Time to elect
as the board of directors of the Surviving Corporation the persons identified in
Section 3.22(a) of the Disclosure Schedule, and (ii) the charter and bylaws of
the Merger Sub (which shall, pursuant to Section 1.04 of this Agreement,
<PAGE>
25
be the charter and bylaws of the Surviving Corporation) and all actions of the
board of directors and stockholders of Merger Sub prior to the Merger are
properly conformed to allow the implementation of the actions contemplated under
the preceding portion of this sentence and the provisions of Section 6.05
(including without limitation the reduction in the size of the board of
directors of the Surviving Corporation as of and with effect from the next
succeeding election of directors of the Surviving Corporation occurring after
the Effective Time and the election of the persons identified in Section 3.22(a)
of the Disclosure Schedule as a new board of directors of the Surviving
Corporation after the Merger), then the Merger, this Agreement and the
transactions contemplated by this Agreement, including, without limitation, the
election after the Effective Time by Holdings as the sole stockholder of the
Surviving Corporation of the individuals identified in Section 3.22(a) of the
Disclosure Schedule as the directors of the Surviving Corporation, will not
result in a "Change of Control" within the meaning of clause (ii) of the
definition of "Change of Control" contained in Section 101 of the Indenture,
dated as of January 24, 1995, as amended and as in effect as of the date of this
Agreement, between the Company and The First National Bank of Boston as trustee
(the "Indenture").
SECTION 3.23. Waiver of Certain Obligations. The Company and,
to the Company's knowledge, each of the individuals identified in Section 3.23
of the Disclosure Schedule has duly executed and delivered the respective
agreement provided by Parent (collectively, the "Waivers"), true and complete
copies of which have been furnished to Parent, and such Waivers are in full
force and effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby jointly and severally represent
and warrant to the Company, that:
SECTION 4.01. Organization and Qualification. Each of Parent
and Merger Sub has been duly organized and is validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Each of Parent
and Merger Sub has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby to be consummated by Parent and
Merger Sub. The execution and delivery of this Agreement by Parent and Merger
Sub and the consummation by Parent and Merger Sub of such transactions have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Parent and Merger Sub are necessary to
authorize this Agreement or to consummate such transactions. This Agreement has
been duly authorized and validly executed and delivered by each of Parent and
Merger Sub and constitutes (assuming due authorization, execution and
<PAGE>
26
delivery by the Company) a legal, valid and binding obligation of each of Parent
and Merger Sub, enforceable against each of Parent and Merger Sub in accordance
with its terms, subject to bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting the rights of creditors generally and the availability of
equitable remedies.
SECTION 4.02. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement by Parent and Merger Sub do not,
and the performance of this Agreement by Parent and Merger Sub will not, (i)
conflict with or violate any provision of the charter and bylaws of Parent or
Merger Sub, (ii) assuming that all consents, approvals, authorizations and other
actions described in Section 4.02(b) have been obtained and all filings and
obligations described in Section 4.02(b) have been made, conflict with or
violate any Law applicable to Parent or Merger Sub or by which any property or
asset of Parent or Merger Sub is bound or affected, or (iii) result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation, except, with respect to clause (iii), for any such conflicts,
violations, breaches, defaults, or other occurrences which would not reasonably
be expected to prevent or materially delay the performance of this Agreement by
either Parent or Merger Sub.
(b) The execution and delivery of this Agreement by each of
Parent and Merger Sub do not, and the performance of this Agreement by Parent
and Merger Sub will not, require any consent, approval, authorization or permit
of, or filing with or notification to, any Governmental Entity, except (i) for
applicable requirements of the Exchange Act, the pre-merger notification
requirements of the HSR Act and the filing and recordation of appropriate merger
documents as required by the MGCL and (ii) where failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, would not reasonably be expected to prevent or materially delay
consummation of the Merger.
SECTION 4.03. Absence of Litigation. Except as set forth in
Section 3.07(c)(ii) of the Disclosure Schedule, there is no litigation, suit,
claim, action, proceeding or investigation pending or, to the best knowledge of
Parent, threatened against Parent or Merger Sub or any of their respective
properties or assets before any court, arbitrator or Governmental Entity which
seeks to delay or prevent or would result in the material delay of or would
prevent the consummation of any of the transactions contemplated hereby. Neither
Parent nor Merger Sub or any property or asset of Parent or Merger Sub is
subject to any continuing order of, consent decree, settlement agreement or
similar written agreement with, or, to the knowledge of Parent, continuing
investigation by, any Governmental Entity or any order, writ, judgment,
injunction, decree, determination or award of any governmental or regulatory
authority or any arbitrator which would prevent Parent or Merger Sub from
performing their respective material obligations under this Agreement or prevent
or materially delay the consummation of any of the transactions contemplated
hereby.
<PAGE>
27
SECTION 4.04. Brokers. No broker, finder or investment banker
other than Aegis Muse Associates LLC and its associates (collectively, "Aegis
Muse") is entitled to any brokerage, finder's or other fee or commission in
connection with the Merger based upon arrangements made by or on behalf of
Parent.
SECTION 4.05. No Activities. Merger Sub was formed solely for
the purpose of engaging in the Merger. Except for obligations or liabilities
incurred in connection with its incorporation or organization and the
transactions contemplated by this Agreement, Merger Sub does not have any
obligations or liabilities of any nature (whether accrued, absolute, contingent
or otherwise) and has not engaged in any business activities of any type or kind
whatsoever or entered into any agreements or arrangements with any person.
SECTION 4.06. Financing. At or prior to the Closing Date,
Parent will cause Merger Sub to have, and Merger Sub will have, all of the
financing required to consummate the transactions contemplated by this
Agreement.
SECTION 4.07. Ownership of Company Common Stock. As of the
date hereof, the information relating to Holdings' ownership of Company Common
Stock contained in the Statement of Beneficial Ownership on Schedule 13-D filed
jointly by Parent and others with the SEC on January 12, 1999, as amended, is
true and correct in all material respects.
ARTICLE V
COVENANTS
SECTION 5.01. Conduct of Business by the Company Pending the
Closing. The Company agrees that, between the date of this Agreement and the
Effective Time, except as set forth in Section 5.01 of the Disclosure Schedule
or as contemplated by any other provision of this Agreement, unless Parent shall
consent in writing, which consent shall not be unreasonably withheld or delayed,
(1) the businesses of the Company and the Company Subsidiaries shall be
conducted only in, and the Company and the Company Subsidiaries shall not take
any action except in, the ordinary course of business consistent with past
practice and (2) the Company shall use its reasonable best efforts to keep
available the services of such of the current officers, significant employees
and consultants of the Company and the Company Subsidiaries and to preserve the
current relationships of the Company and the Company Subsidiaries with such of
the customers, suppliers and other persons with which the Company or any Company
Subsidiary has significant business relations in order to preserve substantially
intact its business organization. By way of amplification and not limitation,
except as set forth in Section 5.01 of the Disclosure Schedule or as
contemplated by any other provision of this Agreement, the Company shall not,
and shall neither cause nor permit any Company Subsidiaries or any of the
Company's affiliates (over which it exercises control), or any of its or their
officers, directors,
<PAGE>
28
employees and agents (in each case, in their capacities as such) to, between the
date of this Agreement and the Effective Time, directly or indirectly, do, or
agree to do, any of the following, without the prior written consent of Parent,
which consent shall not be unreasonably withheld or delayed:
(a) amend or otherwise change its charter or bylaws or
equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, transfer, lease,
license, guarantee, encumber, or authorize the issuance, sale, pledge,
disposition, grant, transfer, lease, license, guarantee or encumbrance
of, (i) any shares of capital stock of the Company or any Company
Subsidiary of any class, or securities convertible or exchangeable or
exercisable for any shares of such capital stock, or any options,
warrants or other rights of any kind to acquire any shares of such
capital stock, or any other ownership interest (including, without
limitation, any phantom interest), of the Company or any Company
Subsidiary (except for the issuance of any shares of capital stock
issuable pursuant to the exercise of any Company Options outstanding on
the date of this Agreement); or (ii) any property or assets of the
Company or any Company Subsidiary, except in all cases in the ordinary
course of business and in a manner consistent with past practice;
provided that the aggregate amount of any such sale or disposition
(other than a sale or disposition of petroleum products or other
inventory in the ordinary course of business consistent with past
practice, as to which there shall be no restriction on the aggregate
amount), or pledge, grant, transfer, lease, license, guarantee or
encumbrance of such property or assets of the Company or any Company
Subsidiary shall not exceed (x) $500,000 or (y) in the case of any sale
or disposition of retail gasoline sites, $1,000,000, provided that not
more than four retail gasoline sites may be disposed of under this
subsection (y) between the date of this Agreement and the Effective
Time;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock, other than dividends paid by any
of the wholly owned Company Subsidiaries to the Company in the ordinary
course of business consistent with past practice;
(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization, person or any
division thereof or any assets, other than (x) acquisitions of any
assets in the ordinary course of business consistent with past practice
that are not, in the aggregate, in excess of $300,000 or (y) purchases
(whether for cash or pursuant to an
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29
exchange) of crude oil or intermediate products for refining or refined
petroleum products or other inventory for resale in the ordinary course
of business and consistent with past practice; (ii) incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any person for borrowed money,
except for indebtedness for borrowed money incurred in the ordinary
course of business and consistent with past practice under the Loan and
Security Agreement, effective as of December 10, 1998 and last amended
effective as of March 16, 2000, between Congress Financial Corporation
and First Union National Bank, as lenders, Congress Financial
Corporation, as administrative agent, the Company and certain of the
Company Subsidiaries, as borrowers, or incurred to refinance
outstanding indebtedness for borrowed money existing on the date of
this Agreement (which refinancing shall not increase the aggregate
amount of indebtedness permitted to be outstanding thereunder and shall
not include any covenants that shall be materially more burdensome to
the Company in any material respect or increase costs to the Surviving
Corporation after the Effective Time in any material respect), or other
indebtedness for borrowed money with a maturity of not more than one
year in a principal amount not, in the aggregate, in excess of
$1,000,000; (iii) terminate, cancel or request any material change in,
or agree to any material change in any Material Contract or enter into
any contract or agreement material to the business, results of
operations or financial condition of the Company and the Company
Subsidiaries taken as a whole, in either case other than in the
ordinary course of business, consistent with past practice; (iv) make
or authorize any capital expenditure, other than as set forth in
Section 5.01(e)(iv) of the Disclosure Schedule; or (v) enter into or
amend any contract, agreement, commitment or arrangement that, if fully
performed, would not be permitted under this Section 5.01(e);
(f) increase the compensation payable or to become payable to
its officers or employees, except for increases in accordance with past
practices in salaries or wages of employees of the Company or any
Company Subsidiary who are not officers of the Company, or grant any
rights to severance or termination pay to, or enter into any employment
or severance agreement with, any director, officer or other employee of
the Company or any Company Subsidiary, or establish, adopt, enter into
or amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option (including, without limitation, the granting
of stock options, stock appreciation rights, stock option appreciation
unit awards, performance awards or performance restricted stock
awards), stock purchase, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust,
fund, policy or arrangement for the benefit of any director, officer or
employee, except as contemplated by this Agreement or to the extent
required by applicable Law or the terms of a collective bargaining
agreement or a contractual obligation existing on the date hereof;
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30
(g) take any action with respect to modifying
accounting policies or procedures, other than actions in the ordinary
course of business, consistent with past practice or the requirements
of U.S. GAAP and as advised by the Company's regular certified
independent public accountants;
(h) waive, release, assign, settle or compromise any
material claims or litigation involving money damages in excess of
$250,000, except for claims asserted by the Company or the applicable
Company Subsidiary;
(i) make any material Tax election or settle or compromise any
material federal, state, local or foreign Tax liability;
(j) authorize or enter into any formal or informal agreement
or otherwise make any commitment to do any of the foregoing;
(k) amend or modify, or propose to amend or modify, the Rights
Agreement, as amended as of the date hereof, except as contemplated in
this Agreement;
(l) take any action that will be likely to result in
the representations and warranties set forth in Article III becoming
false or inaccurate in any material respect (or, with respect to any
representation and warranty already qualified by materiality, false or
inaccurate in any respect);
(m) enter into or carry out any other transaction other
than in the ordinary and usual course of business or other than as
permitted pursuant to the other clauses in this Section 5.01;
(n) take any action or fail to take any action that could
reasonably be expected to have or result in a Material Adverse Effect;
or
(o) permit or cause any Company Subsidiary to do any of the
foregoing or agree or commit to do any of the foregoing.
SECTION 5.02. Notices of Certain Events. Each of Parent and
the Company shall give prompt notice to the other of (i) any notice or other
communication from any person alleging that the consent of such person is or may
be required in connection with the Merger, (ii) any notice or other
communication from any Governmental Entity in connection with the Merger, (iii)
any actions, suits, claims, investigations or proceedings commenced or, to the
best of its knowledge threatened in writing against, relating to or involving or
otherwise affecting Parent, the Company or their subsidiaries that relate to the
consummation of the Merger or the transactions contemplated by this Agreement;
(iv) the occurrence of a default or event that, with
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31
notice or lapse of time or both, will become a default under any Material
Contract; and (v) any change that is reasonably likely to result in a Material
Adverse Effect or is likely to delay or impede the ability of either Parent or
the Company to consummate the transactions contemplated by this Agreement or to
fulfill its obligations set forth herein.
SECTION 5.03. Contractual Consents. Except as set forth in
Section 5.03 of the Disclosure Schedule, prior to or at the Effective Time each
of the parties hereto shall use its reasonable best efforts to prevent the
occurrence, as a result of the Merger, of the triggering of a change of control
or similar clause or any event which constitutes a default (or an event which
with notice or lapse of time or both would become a default) under any material
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which it or any of its subsidiaries is a party.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Proxy Statement; Schedule 13E-3. (a) As promptly
as practicable after the execution of this Agreement, (i) the Company shall
prepare (in consultation with Parent) and file with the SEC a proxy statement
(together with any amendments thereof or supplements thereto, the "Proxy
Statement") relating to the meeting of the Company's stockholders (the "Company
Stockholders' Meeting") to be held to consider approval of this Agreement and
the Merger, and (ii) Parent, Merger Sub and the Company shall, if required by
the Exchange Act, prepare and file with the SEC a Rule 13e-3 Transaction
Statement on Schedule 13E-3 (together with all amendments and supplements
thereto, the "Schedule 13E-3") relating to the Merger and the other transactions
contemplated by this Agreement. The Company shall furnish all information
concerning the Company that Parent may reasonably request in connection with
such actions and the preparation of the Proxy Statement and Schedule 13E-3, if
any.
(b) Subject to the fiduciary duties of the Company Board, as
described in the following proviso, the Proxy Statement shall include the
unanimous recommendation of the Company Board to the stockholders of the Company
to vote in favor of approving the Merger and this Agreement; provided, however,
that the Company Board may, at any time prior to the date of the Company
Stockholders' Meeting, withdraw, modify or change any such recommendation to the
extent that the Company Board or the Company Independent Committee determines in
good faith after consultation with independent legal counsel that the failure to
so withdraw, modify or change their recommendation could cause the Company Board
to breach its fiduciary duties to the Company's stockholders under applicable
law.
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32
(c) No amendment or supplement to the Proxy Statement or the
Schedule 13E-3, if any, will be made or filed with the SEC by Company or Parent,
as the case may be, without the approval of the other party (which will not be
unreasonably withheld). The Company and Parent each will advise the other,
promptly after they receive notice thereof of any request by the SEC for
amendment of the Proxy Statement or the Schedule 13E-3 or comments thereon and
responses thereto or requests by the SEC for additional information.
(d) The information supplied by Parent for inclusion in the
Proxy Statement and the Schedule 13E-3 shall not, at (i) the time the Proxy
Statement (or any amendment thereof or supplement thereto), is first mailed to
the stockholders of the Company and (ii) the time of the Company Stockholders'
Meeting, contain any untrue statement of a material fact or fail to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If, at any time prior to the date of the Company Stockholders'
Meeting, any event or circumstance relating to Parent, or its officers or
directors, is discovered by Parent that should be set forth in an amendment or a
supplement to the Proxy Statement or the Schedule 13E-3, Parent shall promptly
inform the Company. The Schedule 13E-3 will comply as to form and substance in
all material aspects with the applicable requirements of the Exchange Act.
(e) The information supplied by the Company for inclusion in
the Proxy Statement and the Schedule 13E-3 shall not, at (i) the time the Proxy
Statement (or any amendment thereof or supplement thereto), is first mailed to
the stockholders of the Company and (ii) the time of the Company Stockholders'
Meeting, contain any untrue statement of a material fact or fail to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If, at any time prior to the date of the Company Stockholders'
Meeting, any event or circumstance relating to the Company or any Company
Subsidiary, or their respective officers or directors, is discovered by the
Company that should be set forth in an amendment or a supplement to the Proxy
Statement or the Schedule 13E-3, the Company shall promptly inform Parent. The
Proxy Statement will comply as to form and substance in all material respects
with the applicable requirements of the Exchange Act.
SECTION 6.02. Company Stockholders' Meeting. (a) The Company
shall call and hold the Company Stockholders' Meeting as promptly as practicable
for the purpose of voting upon the approval of this Agreement and the Merger.
(b) The Company shall use all commercially reasonable efforts
to solicit from its stockholders proxies in favor of the approval of this
Agreement and the Merger, and shall take all other action necessary or advisable
to secure the vote or consent of its stockholders required by the MGCL and the
rules of the AMEX to obtain such approvals.
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33
(c) Rosemore shall cause Holdings to vote all shares of the
Company Common Stock held by it in favor of the Merger and this Agreement.
SECTION 6.03. Access to Information; Confidentiality. (a)
Except as required pursuant to any confidentiality agreement or similar
agreement or arrangement to which the Company or any of the Company Subsidiaries
is a party or pursuant to applicable Law from the date of this Agreement to the
Effective Time, the Company shall (and shall cause the Company Subsidiaries to):
(i) provide to Parent (and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives, collectively,
"Representatives") reasonable access at reasonable times, upon prior notice to
the Company, to the officers, employees, agents, properties, offices and other
facilities of the Company and the Company Subsidiaries and to the books and
records thereof (including, without limitation, access to the Company's
accountants, any correspondence between the Company and such accountants and
work papers prepared with respect to the Company by such accountants), (ii)
provide to Parent and its Representatives access to the Real Property for Parent
to conduct any environmental site assessment that Parent deems appropriate,
including, without limitation, access to enter upon and investigate and collect
air, surface water, groundwater and soil samples, and (iii) furnish promptly
such information concerning the business, properties, contracts, assets,
liabilities, personnel and other aspects of the Company and the Company
Subsidiaries as Parent or their respective Representatives may reasonably
request. No investigation conducted pursuant to this Section 6.03 shall affect
or be deemed to modify any representation or warranty made in this Agreement.
(b) The parties shall comply with, and shall cause their
respective Representatives to comply with, all of their respective obligations
under the Confidentiality Agreement dated January 26, 2000 (the "Confidentiality
Agreement") among Parent and the Company with respect to the information
disclosed pursuant to this Section 6.03.
SECTION 6.04. No Solicitation of Transactions. The Company
agrees that, from and after the date hereof until the earlier of the Effective
Time or the termination of this Agreement in accordance with Article VIII,
neither it nor any Company Subsidiary shall, and that it shall cause its and
each Company Subsidiary's Representatives not to, except as contemplated by this
Agreement, directly or indirectly, initiate, solicit or encourage any inquiries
or the making of any proposal or offer with respect to a merger, reorganization,
share exchange, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving, or any purchase or
sale of all or any significant portion of the assets of the Company (including
the sale of either of the Company's refineries or any of its terminals) and the
Company Subsidiaries, taken as a whole, or 15% or more of the equity securities
of the Company (any such proposal or offer being hereinafter referred to as a
"Competing Transaction"). The Company further agrees that neither it nor any
Company Subsidiary shall, and that it shall cause its and each Company
Subsidiary's Representatives not to, directly or indirectly, have any
<PAGE>
34
discussion with or provide any confidential information or data relating to the
Company or any Company Subsidiary to any person relating to a Competing
Transaction or engage in any negotiations concerning a Competing Transaction, or
otherwise facilitate any effort or attempt to make or implement a Competing
Transaction or accept a Competing Transaction; provided, however, that nothing
contained in this Section 6.04 shall prevent the Company or the Company Board
from (i) engaging in any discussions or negotiations with, or providing any
information to, any person in response to an unsolicited written Competing
Transaction by any such person; or (ii) recommending such an unsolicited written
Competing Transaction to the holders of Company Common Stock if, in any such
case as is referred to in clause (i) or (ii), (A) the Company Board concludes in
good faith (after consultation with independent financial advisors) that such
Competing Transaction would, if consummated, result in a transaction more
favorable to holders of Company Common Stock than the transaction contemplated
by this Agreement (any such more favorable Competing Transaction being referred
to in this Agreement as a "Superior Proposal"), (B) either the Company Board or
the Company Independent Committee determines in good faith after consultation
with independent legal counsel that such action is necessary for the Company
Board to act in a manner consistent with its fiduciary duties under applicable
Law, (C) prior to providing any information or data regarding the Company to any
person or any of such person's Representatives in connection with a Superior
Proposal by such person, the Company receives from such person an executed
confidentiality agreement on terms at least as restrictive on such person as
those contained in the Confidentiality Agreement and (D) prior to providing any
information or data to any person or any of such person's Representatives or
entering into discussions or negotiations with any person or any of such
person's Representatives in connection with a Superior Proposal by such person,
the Company notifies Parent promptly of the receipt of such Superior Proposal
indicating, in connection with such notice, the name of such person and
attaching a copy of the proposal or offer or providing a complete written
summary thereof. The Company agrees that it shall keep Parent informed, on a
current basis, of the status and terms of any discussions or negotiations
related to such Superior Proposal. The Company agrees that it will take the
necessary steps to promptly inform each Company Subsidiary and each
Representative of the Company or any Company Subsidiary of the obligations
undertaken in this Section 6.04. Immediately following the execution of this
Agreement, the Company shall terminate and cause the Company Subsidiaries to
terminate any existing activities, discussions or negotiations with any third
parties that may be ongoing with respect to any Competing Transaction and
promptly after the public announcement of the execution of this Agreement shall
use all reasonable efforts to request that all confidential information
previously furnished to any such third parties be returned promptly. Nothing
contained in this Agreement shall prohibit the Company or the Company Board from
taking or disclosing to its stockholders a position contemplated by Rules 14d-9
and 14e-(2)(a) promulgated under the Exchange Act.
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35
SECTION 6.05. Election of Directors. (a) Prior to the
Effective Time, in accordance with the MGCL, the Company Board shall take all
further action necessary to ensure that the directors identified in Section 3.22
of the Disclosure Schedule shall become directors of the Surviving Corporation,
including, without limitation, the reduction in the size of the board of
directors to the number of persons identified in Section 3.22(a) of the
Disclosure Schedule as of and with effect from the next succeeding election of
directors of the Surviving Corporation occurring after the Merger and by
accommodating the election by the sole stockholder of the Surviving Corporation
of a new board of directors of the Surviving Corporation after the Effective
Time.
(b) If requested by Parent after the date of this Agreement
and prior to the mailing of the Proxy Statement, the Company Board shall take
all further action necessary in accordance with Parent's request to change the
size of the board of directors as with effect from the next succeeding election
of directors of the Surviving Corporation occurring after the Merger and to
modify its earlier nomination of individuals to be directors of the Surviving
Corporation referred to in Section 3.22 of this Agreement.
SECTION 6.06. Directors' and Officers' Indemnification and
Insurance. (a) The charter and bylaws of the Surviving Corporation shall contain
the provisions regarding liability of directors and indemnification of directors
and officers that are set forth, as of the date of this Agreement, in the
charter and the bylaws, respectively, of the Company, which provisions shall not
be amended, repealed or otherwise modified for a period of six years from the
Effective Time in any manner that would affect adversely the rights thereunder
of individuals who at or at any time prior to the Effective Time were directors,
officers, employees, fiduciaries or agents of the Company.
(b) For a period of six years after the Effective Time, the
Surviving Corporation shall use best efforts to cause to be maintained in effect
policies of directors' and officers' liability insurance with coverage in amount
and scope at least as favorable as the Company's existing policies with respect
to claims arising from facts or events that occurred prior to the Effective
Time.
(c) This Section 6.06 is intended to be for the benefit of,
and shall be enforceable by, the indemnified parties, their heirs and personal
representatives and shall be binding on the Surviving Corporation and its
respective successors and assigns.
(d) From and after the Effective Time, the Surviving
Corporation agrees that it shall indemnify and hold harmless each present and
former director and officer of the Company, determined as of the Effective Time
(the "Indemnified Parties"), from and against any costs, judgments, fines,
losses, obligations, claims, damages, liabilities, or expenses (including
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36
interest, penalties, reasonable out-of-pocket expenses and reasonable attorneys'
fees incurred in the investigation or defense of any of the same or in asserting
any of their rights hereunder) (collectively, "Costs") incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of, resulting from, or
pertaining to matters existing or occurring at or prior to the Effective Time
(including, without limitation, the transactions contemplated by this
Agreement), whether asserted or claimed prior to, at or after the Effective
Time, to the fullest extent that the Company would have been permitted or
required under Maryland laws and under the Company's charter documents (as in
effect on the date hereof) to indemnify such Indemnified Parties (and the
Surviving Corporation shall advance expenses as incurred to the fullest extent
permitted under applicable Law; provided that the Indemnified Party to whom
expenses are advanced provides an undertaking to repay such advances if it is
ultimately determined that such Indemnified Party is not entitled to
indemnification); provided that any determination required to be made with
respect to whether an officer's or director's conduct complies with the
standards set forth under Maryland law and the Company's charter documents shall
be made by independent counsel selected by the Surviving Corporation.
(e) Any Indemnified Party wishing to claim indemnification
under paragraph (d) of this Section 6.06, upon learning of any such claim,
action, suit, proceeding or investigation, shall promptly notify Parent thereof,
but the failure to so notify shall not relieve the Surviving Corporation of any
liability it may have to such Indemnified Party, except to the extent that such
failure materially prejudices the Surviving Corporation. In the event of any
such claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (i) the Surviving Corporation shall have the right to
assume the defense thereof, with counsel selected by Parent and reasonably
acceptable to the Indemnified Party, and the Surviving Corporation shall not be
liable to such Indemnified Parties for any legal expenses of other counsel or
any other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof, except that if the Surviving Corporation
elects not to assume such defense or counsel for the Indemnified Parties advises
that there are issues which raise conflicts of interest between the Surviving
Corporation and the Indemnified Parties, the Indemnified Parties may retain
counsel satisfactory to them, and the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; provided, however, that the
Surviving Corporation shall be obligated pursuant to this paragraph (f) to pay
for only one firm of counsel for all Indemnified Parties in any jurisdiction
unless the use of one counsel for such Indemnified Parties would present such
counsel with a conflict of interest, (ii) the Indemnified Parties will cooperate
in the defense of any such matter and (iii) the Surviving Corporation shall not
be liable for any settlement effected without the prior written consent of
Parent; and provided further that the Surviving Corporation shall not have any
obligation hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final, that the indemnification of such Indemnified Party in the manner
contemplated hereby is
<PAGE>
37
prohibited by applicable Law. The Surviving Corporation shall not, in the
defense of any claim or litigation, except with the consent of the Indemnified
Party (which consent shall not be unreasonably withheld or delayed), consent to
entry of judgment or enter into any settlement that provides for injunctive or
other nonmonetary relief affecting the Indemnified Party or that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability with respect to such
claim or litigation.
(f) If the Surviving Corporation or any of its successors or
assigns shall (i) consolidate with or merge into any other corporation or entity
and shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfer all or substantially all of its
properties and assets or outstanding voting securities to any individual,
corporation or other entity, then and in each such case, proper provisions shall
be made so that the successors and assigns of the Surviving Corporation shall
expressly assume all of the obligations set forth in this Section 6.06.
SECTION 6.07. Further Action; Consents; Filings. Upon the
terms and subject to the conditions hereof, each of the parties hereto shall use
its reasonable best efforts to (i) take, or cause to be taken, all appropriate
action, and do, or cause to be done, all things necessary, proper or advisable
under applicable Law or otherwise to consummate and make effective the Merger,
(ii) obtain from Governmental Entities any consents, licenses, permits, waivers,
approvals, authorizations or orders required to be obtained or made by Parent or
the Company or any of their subsidiaries in connection with the authorization,
execution and delivery of this Agreement and the consummation of the Merger,
(iii) make all necessary filings, and thereafter make any other submissions
either required or deemed appropriate by each of the parties, with respect to
this Agreement and the Merger required under (A) the Exchange Act, (B) the HSR
Act, (C) the rules of the AMEX, (D) any other applicable Law. The parties hereto
shall cooperate and consult with each other in connection with the making of all
such filings, including by providing copies of all such documents to the
nonfiling party and its advisors prior to filing, and none of the parties will
file any such document if any of the other parties shall have reasonably
objected to the filing of such document. No party to this Agreement shall
consent to any voluntary extension of any statutory deadline or waiting period
or to any voluntary delay of the consummation of the Merger at the behest of any
Governmental Entity without the consent and agreement of the other parties to
this Agreement, which consent shall not be unreasonably withheld or delayed.
Without limiting the foregoing, each of the parties hereto shall, and shall
cause each of its subsidiaries to, use its reasonable best efforts to obtain
(and to cooperate and coordinate with the other parties to obtain) any consent,
authorization, order or approval of, or any exemption by, any Governmental
Entity that is required to be obtained in connection with the Merger and to take
all actions reasonably necessary to satisfy any applicable regulatory
requirements relating thereto. Each of the parties shall promptly take, in the
event that any permanent or preliminary injunction or other order is entered or
becomes reasonably foreseeable to be entered in any proceeding that would make
consummation of the transaction contemplated
<PAGE>
38
hereby in accordance with the terms of this Agreement unlawful or that would
prevent or delay consummation of the transaction contemplated hereby, any and
all steps necessary to vacate, modify or suspend such injunction or order so as
to permit such consummation prior to the deadline specified in Section 8.01(b).
Each of the parties agrees to consult in good faith and to use all commercially
reasonable efforts to avoid or cure the occurrence of an Event of Default (as
such term is defined in the Indenture).
SECTION 6.08. The Company Rights Plan. Prior to the Effective
Time, the Company shall take all further action necessary to (i) amend the
Rights Agreement so as to accelerate the Final Expiration Date (as such term is
used in the Rights Agreement) to a date that is immediately prior to the
Effective Time, and (ii) ensure that after such acceleration of the Final
Expiration Date (A) neither the Company, Parent nor Merger Sub shall have any
obligations under the Rights or Rights Agreement and (B) none of the holders of
the Rights shall have any rights under the Rights or Rights Agreement.
SECTION 6.09. Public Announcements. After the issuance of the
initial press release, Parent and the Company shall consult with each other
before issuing any press release or otherwise making any public statement with
respect to this Agreement or any transaction contemplated hereby and shall not
issue any such press release or make any such public statement prior to such
consultation, except to the extent required by applicable Law or the
requirements of the AMEX, in which case the issuing party shall use its
reasonable best efforts to consult with the other party before issuing any such
release or making any such public statement.
SECTION 6.10. Amendment of Plans. At the request of Parent,
the Company shall use its best efforts to amend its Plans containing a "change
of control" or similar provision, to the satisfaction of Parent, to clarify that
any reduction in the Company's refining capacity or number of retail units
operated by the Company shall not constitute a "change of control" or similar
event under such Plans.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party to
Consummate the Merger. The obligations of Parent, the Company and Merger Sub to
effect the Merger shall be subject to the satisfaction or, if permitted by
applicable Law, waiver prior to the Closing Date of the following conditions:
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39
(a) this Agreement and the transactions contemplated hereby
shall have been approved and adopted by the requisite affirmative vote
of the stockholders of the Company in accordance with the MGCL;
(b) no preliminary or permanent injunction, decree or other
order (an "Order"), issued by any Governmental Entity or other legal
restraint or prohibition preventing the consummation of the
transactions contemplated by this Agreement shall be in effect, and no
Law shall have been enacted or adopted that enjoins, prohibits or makes
illegal consummation of any of the transactions contemplated hereby;
and
(c) any waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act shall have expired
or been terminated.
SECTION 7.02. Conditions to the Obligations of the Company.
The obligations of the Company to effect the Merger shall be subject to the
satisfaction or, if permitted by applicable Law, waiver, prior to the Closing
Date, of the following further conditions:
(a) each of the representations and warranties of Parent and
Merger Sub contained in this Agreement shall be true and correct in all
material respects as of the Effective Time, as though made on and as of
the Effective Time, except that those representations and warranties
that address matters only as of a particular date shall remain true and
correct in all material respects as of such date, and the Company shall
have received a certificate of the Chief Financial Officer of Parent to
that effect; and
(b) Parent and Merger Sub shall have performed or complied in
all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by them on or prior to
the Effective Time, and the Company shall have received a certificate
of the Chief Executive Officer or Chief Financial Officer of Parent to
that effect.
SECTION 7.03. Conditions to the Obligations of Parent and
Merger Sub. The obligations of Parent and Merger Sub to effect the Merger shall
be subject to the satisfaction or, if permitted by applicable Law, waiver prior
to the Closing Date of the following further conditions:
(a) each of the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material
respects as of the Effective Time, as though made at and as of the
Effective Time, except that those representations and warranties that
address matters only as of a particular date shall remain true and
correct in all material respects as of such date (provided that any
representation or warranty that is qualified by materiality (including,
without limitation, qualification by reference to a
<PAGE>
40
Material Adverse Effect) shall be true in all respects as of the
Effective Time or as of such particular date, as the case may be), and
Parent shall have received a certificate of the Chief Financial Officer
of the Company to that effect, it being understood that any
representation and warranty of the Company which would otherwise not be
true and correct in all material respects or in all respects, as the
case may be, but was made by the Company (i) with the approval of Mr.
Henry A. Rosenberg, Jr. despite his actual knowledge that such
representation and warranty was false and (ii) without knowledge at the
date of this Agreement by any of the other officers or directors of the
Company that such representation and warranty was false shall not be
deemed to not be true and correct in all material respects or to not be
true and correct in all respects, as the case may be, for purposes of
this Section 7.03(a);
(b) the Company shall have performed or complied in all
material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Effective Time, and Parent shall have received a certificate of the
Chief Financial Officer of the Company to that effect;
(c) all consents, approvals, waivers and authorizations
required to be obtained to effect the Merger shall have been obtained
from all Governmental Entities, except if the failure to obtain any
such consents, approvals and authorizations would not result in a
Material Adverse Effect;
(d) all consents, approvals, waivers and authorizations
(including, without limitation, waivers of termination rights) of third
parties (other than Governmental Entities) the failure of which to
obtain would result in a Material Adverse Effect shall have been
obtained; and
(e) no Event of Default (as such term is defined in the
Indenture) shall have occurred under the Indenture and the consummation
of the Merger will not result in the occurrence of an Event of Default
under the Indenture.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time,
notwithstanding any requisite approval and adoption of this Agreement, as
follows:
<PAGE>
41
(a) by mutual written consent duly authorized by each of the
Company Board, the Company Independent Committee and the Board of
Directors of Parent;
(b) by either Parent or the Company, if the Effective
Time shall not have occurred on or before August 31, 2000; provided,
however, that the right to terminate this Agreement under this Section
8.01(b) shall not be available to the party whose failure to fulfill
any obligation under this Agreement shall have been the cause of, or
resulted in, the failure of the Effective Time to occur on or before
such date;
(c) by either Parent or the Company, if any Order or other
legal restraint or prohibition preventing the consummation of the
Merger shall have been entered by any Governmental Entity or any Law
shall have been enacted or adopted that enjoins, prohibits or makes
illegal consummation of the Merger;
(d) by Parent, if (i) the Company Board withdraws, modifies or
changes its recommendation of this Agreement in a manner adverse to
Parent, or shall have resolved to do so, (ii) after receiving a bona
fide proposal or offer relating to a Competing Transaction, the Company
Board shall have refused to affirm its recommendation of this Agreement
as promptly as practicable (but in any case within ten business days)
after receipt of any written request from Parent, (iii) the Company
Board shall have recommended to the stockholders of the Company a
Competing Transaction, or shall have resolved to do so, or (iv) a
tender offer or exchange offer for 15% or more of the outstanding
shares of capital stock of the Company is commenced, and the Company
Board fails to recommend against acceptance of such tender offer or
exchange offer by its stockholders (including not taking a position
with respect to the acceptance of such tender offer or exchange offer
by its stockholders);
(e) by Parent or the Company, if this Agreement shall fail to
receive the requisite vote for adoption at the Company Stockholders'
Meeting or any adjournment or postponement thereof;
(f) by Parent, upon a breach of, or failure to perform in any
material respect (which breach or failure cannot be or has not been
cured within 30 days after the giving of notice of such breach or
failure), any representation, warranty, covenant or agreement on the
part of the Company set forth in this Agreement, such that the
conditions set forth in clause (a) or (b) of Section 7.03 would not be
satisfied; or
(g) by the Company, upon a breach of, or failure to perform in
any material respect (which breach or failure cannot be or has not been
cured within 30 days after the giving of notice of such breach or
failure), any representation, warranty, covenant or
<PAGE>
42
agreement on the part of Parent set forth in this Agreement, such that
the conditions set forth in Section 7.02 would not be satisfied.
SECTION 8.02. Notice of Termination; Effect of Termination. In
the event of termination of this Agreement by either Parent or the Company
pursuant to Section 8.01 hereof, the terminating party shall give prompt written
notice thereof to the nonterminating party. Except as provided in Section 9.01,
in the event of termination of this Agreement pursuant to Section 8.01, this
Agreement shall forthwith become void, there shall be no liability under this
Agreement on the part of Parent, the Company or Merger Sub or any of their
respective officers or directors, and all rights and obligations of each party
hereto shall cease, subject to the remedies of the parties set forth in Section
8.05(b), (c) and (d); provided, however, that nothing herein shall relieve any
party from liability for the breach of any of its representations and warranties
or the breach of any of its covenants or agreements set forth in this Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by
mutual agreement of the parties hereto by action taken by or on behalf of their
respective Boards of Directors (with respect to the Company, including approval
of the Company Independent Committee) at any time prior to the Effective Time;
provided, however, that after the approval of this Agreement by the stockholders
of the Company, no amendment may be made that would reduce the amount or change
the type of consideration into which each share of Company Common Stock shall
be converted upon consummation of the Merger.
SECTION 8.04. Waiver. At any time prior to the Effective Time,
any party hereto may (a) extend the time for the performance of any obligation
or other act of any other party hereto, (b) waive any inaccuracy in the
representations and warranties contained herein or in any document delivered
pursuant hereto, and (c) waive compliance with any agreement or condition
contained herein. Any waiver of a condition set forth in Section 7.01 will be
effective only if made in writing by each of the Company and Parent and, unless
otherwise specified in such writing, shall thereafter operate as a waiver of
such condition for any and all purposes of this Agreement. Any such extension or
waiver shall be valid if set forth in an instrument in writing signed by the
party or parties to be bound thereby.
SECTION 8.05. Expenses. (a) Except as otherwise set forth in
this Section 8.05, all Expenses (as defined below) incurred in connection with
this Agreement and the Merger shall be paid by the party incurring such
expenses, whether or not the Merger is consummated. "Expenses," as used in this
Agreement, shall consist of all out-of-pocket expenses (including, without
limitation, all fees and expenses of counsel, accountants, investment bankers,
(including, without limitation, any fees or expenses payable to Aegis Muse
pursuant to the terms of the engagement letter from Aegis Muse to Parent dated
January 26, 2000) experts and consultants to a party hereto and its affiliates)
reasonably incurred by a party or on its behalf in connection with, or related
to the authorization, preparation, negotiation, execution and performance of,
this
<PAGE>
43
Agreement, the preparation, printing, filing and mailing of the Proxy Statement,
the solicitation of stockholder approvals and all other matters related to the
consummation of the Merger.
(b) The parties agree that if the Company or Parent shall
terminate this Agreement pursuant to Section 8.01(e) due to the failure of the
Company's stockholders to approve and adopt this Agreement and (i) at the time
of such failure to so approve and adopt this Agreement there shall exist a
Competing Transaction (which Competing Transaction shall have become the subject
of a public announcement or any person shall have publicly announced an
intention to make a proposal or offer relating thereto) with respect to the
Company and (ii) within 12 months of the termination of this Agreement, the
Company enters into an agreement with any third party with respect to a
Competing Transaction, which transaction is subsequently consummated, then the
Company shall reimburse all reasonable and documented Expenses of Parent and
Merger Sub simultaneously with the consummation of such transaction.
(c) The parties agree that the payment of Expenses provided
for in Section 8.05(b) shall be the sole and exclusive remedy of the parties
upon a termination of this Agreement pursuant to Section 8.01(e), and such
remedy shall be limited to the payments stipulated in Section 8.05(b); provided,
however, that nothing herein shall relieve any party from liability for the
willful breach of any of its representations and warranties or the breach of any
of its covenants or agreements set forth in this Agreement.
(d) Any payment of Expenses required to be made pursuant to
Section 8.05(b) shall be made by wire transfer of immediately available funds to
an account designated in writing by the party entitled to receive payment.
(e) In the event that the Company shall fail to pay any
Expenses of Parent in accordance with Section 8.05(b) when due, the amount of
any such Expenses shall be increased to include the costs and expenses actually
incurred or accrued by Parent, acting together (including, without limitation,
fees and expenses of counsel) in connection with the collection under and
enforcement of this Section 8.05.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement and
in any certificate delivered pursuant hereto shall terminate at the Effective
Time or upon the termination of this Agreement pursuant to Section 8.01, as the
case may be, except that the agreements set forth in Articles I and II, Section
6.06 and this Article IX shall survive the Effective Time and those set forth in
<PAGE>
44
Sections 6.03(b) and 8.05 and this Article IX shall survive termination. Each
party agrees that, except for the representations and warranties contained in
this Agreement and the Disclosure Schedule, no party hereto has made any other
representations and warranties, and each party hereby disclaims any other
representations and warranties made by itself or any of its officers, directors,
employees, agents, financial and legal advisors or other representatives with
respect to the execution and delivery of this Agreement or the transactions
contemplated herein, notwithstanding the delivery or disclosure to any other
party or any party's representatives of any documentation or other information
with respect to any one or more of the foregoing.
SECTION 9.02. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
telecopy and facsimile or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this Section 9.02):
if to Parent:
Rosemore, Inc.
One North Charles Street, Suite 2300
Baltimore, Maryland 21201
Attention: Edward L. Rosenberg
President and Chief Executive Officer
Telephone: (410) 347-7090
Facsimile: (410) 347-7081
with a copy (which shall not constitute notice to Parent) to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022-6069
Attention: John A. Marzulli, Jr., Esquire
Telephone: (212) 848-8590
Facsimile: (212) 848-7179
<PAGE>
45
if to the Company:
Crown Central Petroleum Corporation
One North Charles Street
Baltimore, Maryland 21201-3740
Attention: Thomas L. Owsley, Esquire
Telephone: (410) 659-4833
Facsimile: (410) 659-4763
If mailed to the Company:
P.O. Box 1168
Baltimore, Maryland 20208
with copies (which shall not constitute notice to the Company)
to:
Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, NW
Washington, D.C. 20005-2111
Attention: Stephen W. Hamilton, Esquire
Telephone: (202) 371-7000
Facsimile: (202) 393-5670
and
McGuire, Woods, Battle & Boothe LLP
1750 Tysons Boulevard, Suite 1800
Tysons Corner, Virginia 22102-3915
Attention: Clive R. G. O'Grady, Esquire
Telephone: (703) 712-5017
Facsimile: (703) 712-5248
SECTION 9.03. Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" of a specified person means a person who,
directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such specified person;
(b) "beneficial owner" with respect to any shares of capital
stock means a person who shall be deemed to be the beneficial owner of
such shares (i) which such person or any of its affiliates or
associates (as such terms are defined in Rule 12b-2
<PAGE>
46
promulgated under the Exchange Act) beneficially owns, directly or
indirectly, (ii) which such person or any of its affiliates or
associates has, directly or indirectly, (A) the right to acquire
(whether such right is exercisable immediately or subject only to the
passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of consideration rights, exchange
rights, warrants or options, or otherwise, or (B) the right to vote
pursuant to any agreement, arrangement or understanding, or (iii) which
are beneficially owned, directly or indirectly, by any other persons
with whom such person or any of its affiliates or associates or person
with whom such person or any of its affiliates or associates has any
agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock;
(c) "business day" means any day on which the principal
offices of the SEC in Washington, D.C. are open to accept filings or,
in the case of determining a date when any payment is due, any day on
which banks are not required or authorized to close in the State of
Maryland;
(d) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or
as trustee or executor, of the power to direct or cause the direction
of the management and policies of a person, whether through the
ownership of voting securities, as trustee or executor, by contract or
credit arrangement or otherwise;
(e) "knowledge" means, with respect to any matter in question,
that the executive officers of Parent or the Company, as the case may
be, (i) have knowledge of such matter, or (ii) after reasonable due
investigation, should have known of such matter;
(f) "person" means an individual, corporation, company,
limited liability company, partnership, limited partnership, syndicate,
person (including, without limitation, a "person" as defined in section
13(d)(3) of the Exchange Act), trust, association or entity or
government, political subdivision, agency or instrumentality of a
government; and
(g) "subsidiary" or "subsidiaries" of any person means any
corporation, limited liability company, partnership, joint venture or
other legal entity of which such person (either alone or through or
together with any other subsidiary) owns, directly or indirectly, more
than 50% of the stock or other equity interests, the holders of which
are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal
entity.
<PAGE>
47
SECTION 9.04. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
Law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect, as long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible, in a mutually
acceptable manner, in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.
SECTION 9.05. Assignment; Merger Sub; Binding Effect; Benefit.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto (whether by operation of Law or
otherwise) without the prior written consent of the other parties.
Notwithstanding anything to the contrary contained in this Agreement, Parent may
transfer the shares of Merger Sub to one of its subsidiaries prior to the
consummation of the Merger. Subject to the preceding sentence, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns. Notwithstanding anything contained in
this Agreement to the contrary, except for the provisions of Section 6.06 (the
"Third Party Provision"), nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement. The Third Party Provision may
be enforced by the beneficiaries thereof.
SECTION 9.06. Incorporation of Exhibits. The Disclosure
Schedule and any exhibits attached hereto and referred to herein are hereby
incorporated herein and made a part of this Agreement for all purposes as if
fully set forth herein.
SECTION 9.07. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or equity.
SECTION 9.08. Governing Law. Except to the extent that the
Merger is mandatorily governed by, or pursuant to the terms of this Agreement is
subject to, the MGCL, this Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts
executed in and to be performed in that State, without regard to any conflicts
of laws principles otherwise applicable. No provision of this Agreement shall be
construed to require any of the parties hereto or any of their respective
subsidiaries, affiliates, directors, officers, employees or agents to take any
action that would violate any applicable Law.
<PAGE>
48
SECTION 9.09. Submission to Jurisdiction; Venue. The parties
hereto unconditionally and irrevocably agree and consent to the exclusive
jurisdiction of, and service of process and venue in, the United States District
Court for the District of Maryland and the courts of the State of Maryland and
waive any objection with respect thereto, for the purpose of any action, suit or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby; the parties further agree not to commence any such action,
suit or proceeding except in any such court. Each party irrevocably waives any
objections or immunities to jurisdiction to which it might otherwise be entitled
or become entitled in any legal suit, action or proceeding against it arising
out of or relating to this Agreement or the transactions contemplated hereby
which is instituted in any such court.
SECTION 9.10. Headings. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 9.11. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which, when
executed and delivered, shall be deemed to be an original but all of which,
taken together, shall constitute one and the same agreement.
SECTION 9.12. Entire Agreement. This Agreement (including the
exhibits attached hereto and the Disclosure Schedule) and the Confidentiality
Agreement constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings
among the parties with respect thereto. No addition to or modification of any
provision of this Agreement shall be binding upon any party hereto unless it is
made in writing and signed by all parties hereto.
SECTION 9.13. Waiver of Jury Trial. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.
<PAGE>
49
IN WITNESS WHEREOF, Parent, the Company and Merger Sub have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
ROSEMORE, INC.
By
------------------------------------------
Name: Edward L. Rosenberg
Title: President and Chief Executive Officer
CROWN CENTRAL PETROLEUM
CORPORATION
By
-------------------------------------------
Name: John E. Wheeler, Jr.
Title: Executive Vice President and Chief
Financial Officer
ROSEMORE ACQUISITION
CORPORATION
By
-------------------------------------------
Name: Edward L. Rosenberg
Title: President
