Exhibit 2
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
XXXXXX XXXXXXX CAPITAL GROUP, INC.,
BUFFALO MERGER SUB INC.
AND
TRANSMONTAIGNE INC.
DATED AS OF JUNE 23, 2006
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TABLE OF CONTENTS
PAGE
ARTICLE I. THE MERGER.......................................................1
Section 1.01 The Merger...................................................1
Section 1.02 Closing......................................................1
Section 1.03 Effective Time...............................................1
Section 1.04 Effect of the Merger.........................................2
Section 1.05 Certificate of Incorporation; Bylaws.........................2
Section 1.06 Directors and Officers.......................................2
ARTICLE II. CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES...............2
Section 2.01 Conversion of Securities.....................................2
Section 2.02 Exchange of Certificates.....................................3
Section 2.03 Stock Transfer Books.........................................6
Section 2.04 Options, Warrants and Restricted Stock.......................6
Section 2.05 Dissenting Shares............................................7
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................7
Section 3.01 Organization and Qualification...............................8
Section 3.02 Certificate of Incorporation and Bylaws......................8
Section 3.03 Capitalization...............................................8
Section 3.04 Authority Relative to This Agreement........................11
Section 3.05 No Conflict; Required Filings and Consents..................11
Section 3.06 Permits; Compliance.........................................12
Section 3.07 SEC Filings; Financial Statements; Undisclosed Liabilities..14
Section 3.08 Affiliate Transactions......................................15
Section 3.09 Absence of Certain Changes or Events........................15
Section 3.10 Absence of Litigation.......................................15
Section 3.11 Employee Benefit Plans......................................16
Section 3.12 Labor and Employment Matters................................17
Section 3.13 Real Property...............................................18
Section 3.14 Intellectual Property.......................................18
Section 3.15 Taxes.......................................................19
Section 3.16 Environmental Matters.......................................20
Section 3.17 Insurance...................................................21
Section 3.18 Specified Contracts.........................................21
Section 3.19 Board Approval; Vote Required...............................24
Section 3.20 Brokers.....................................................24
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER CO..........24
Section 4.01 Corporate Organization......................................24
Section 4.02 Charter Documents...........................................25
Section 4.03 Authority Relative to This Agreement........................25
Section 4.04 No Conflict; Required Filings and Consents..................25
Section 4.05 Absence of Litigation.......................................26
Section 4.06 Operations of Merger Co.....................................26
Section 4.07 Financing...................................................26
Section 4.08 Brokers.....................................................26
Section 4.09 Ownership of Company Common Stock...........................26
ARTICLE V. CONDUCT OF BUSINESS PENDING THE MERGER..........................27
Section 5.01 Conduct of Business by the Company Pending the Merger.......27
ARTICLE VI. ADDITIONAL AGREEMENTS...........................................30
Section 6.01 Proxy Statement; Other Filings..............................30
Section 6.02 Company Stockholders' Meeting...............................31
Section 6.03 Access to Information; Confidentiality; Due Diligence.......32
Section 6.04 Acquisition Proposals.......................................32
Section 6.05 Directors' and Officers' Indemnification and Insurance......35
Section 6.06 Employee Benefits Matters...................................36
Section 6.07 Notification of Certain Matters.............................37
Section 6.08 Financing...................................................38
Section 6.09 Further Action; Reasonable Best Efforts; Notice of
Certain Events.............................................38
Section 6.10 Public Announcements........................................41
Section 6.11 Resignations................................................41
Section 6.12 Guarantee of Performance....................................41
Section 6.13 Takeover Statutes...........................................41
Section 6.14 SemGroup Agreement Termination Fee..........................41
ARTICLE VII. CONDITIONS TO THE MERGER........................................42
Section 7.01 Conditions to the Obligations of Each Party.................42
Section 7.02 Conditions to the Obligations of Parent and Merger Co.......42
Section 7.03 Conditions to the Obligations of the Company................44
ARTICLE VIII. TERMINATION, AMENDMENT AND WAIVER...............................44
Section 8.01 Termination.................................................44
Section 8.02 Effect of Termination.......................................46
Section 8.03 Fees and Expenses...........................................46
Section 8.04 Amendment...................................................47
Section 8.05 Waiver......................................................47
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ARTICLE IX. GENERAL PROVISIONS..............................................47
Section 9.01 Non-Survival of Representations, Warranties and Agreements..47
Section 9.02 Notices.....................................................48
Section 9.03 Certain Definitions.........................................49
Section 9.04 Severability................................................56
Section 9.05 Entire Agreement; Assignment................................57
Section 9.06 Parties in Interest.........................................57
Section 9.07 Governing Law...............................................57
Section 9.08 Specific Performance; Submission to Jurisdiction............57
Section 9.09 Waiver of Jury Trial........................................58
Section 9.10 Headings....................................................58
Section 9.11 Counterparts................................................58
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("AGREEMENT"), dated as of June 23, 2006,
by and among Xxxxxx Xxxxxxx Capital Group, Inc., a Delaware corporation
("PARENT"), Buffalo Merger Sub Inc., a Delaware corporation and a wholly-owned
subsidiary of Parent ("MERGER CO"), and TransMontaigne Inc., a Delaware
corporation (the "COMPANY"). Certain capitalized terms have the meanings given
to such terms in Section 9.03.
RECITALS
WHEREAS, the respective Boards of Directors of each of the Company,
Merger Co and Parent, each deem it in the best interests of their respective
stockholders to consummate the merger (the "MERGER"), on the terms and subject
to the conditions set forth in this Agreement, of Merger Co with and into the
Company, and such Boards of Directors have approved this Agreement and declared
its advisability (and, in the case of the Board of Directors of the Company (the
"COMPANY BOARD"), recommended that this Agreement be adopted by the Company's
stockholders).
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the parties hereto agree
as follows:
ARTICLE I.
THE MERGER
Section 1.01 THE MERGER. Upon the terms and subject to the conditions
set forth in Article VII, and in accordance with the General Corporation Law of
the State of Delaware (the "DGCL"), at the Effective Time, Merger Co shall be
merged with and into the Company. At the Effective Time, the separate corporate
existence of Merger Co shall cease and the Company shall continue as the
surviving corporation of the Merger (the "SURVIVING CORPORATION").
Section 1.02 CLOSING. Unless this Agreement shall have been terminated
in accordance with Section 8.01, and subject to the satisfaction or waiver of
the conditions set forth in Article VII, the closing of the Merger (the
"CLOSING") will take place at 11:00 a.m., Colorado time, no later than the
second business day following the satisfaction or waiver of the conditions set
forth in Article VII (other than those that by their terms are to be satisfied
or waived at the Closing), at the offices of Xxxxxxxx & Xxxxxxxx LLP, 5200
Republic Plaza, 000 Xxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000, unless another
time, date and/or place is agreed to in writing by Parent and the Company (the
date on which the Closing occurs, the "CLOSING DATE").
Section 1.03 EFFECTIVE TIME. Upon the terms and subject to the
conditions set forth in this Agreement, on the Closing Date, the parties hereto
shall file a certificate of merger (the "CERTIFICATE OF MERGER") in such form as
is required by, and executed and acknowledged in accordance with, the relevant
provisions of the DGCL. The Merger shall become effective at such date and time
as the Certificate of Merger is duly filed with the Secretary of State of the
State of Delaware or at such subsequent date and time as Merger Co and the
Company shall
agree and specify in the Certificate of Merger. The date and time at which the
Merger becomes effective is referred to in this Agreement as the "EFFECTIVE
TIME."
Section 1.04 EFFECT OF THE MERGER. At the Effective Time, the effect
of the Merger shall be as provided in Section 259 of the DGCL.
Section 1.05 CERTIFICATE OF INCORPORATION; BYLAWS.
(a) At the Effective Time, the certificate of incorporation of the
Company shall be amended so as to read in its entirety in the form annexed
hereto as EXHIBIT A and, as so amended, shall be the certificate of
incorporation of the Surviving Corporation, until thereafter amended in
accordance with its terms and applicable Law.
(b) At the Effective Time, the by-laws of the Company shall be amended
so as to read in its entirety in the form annexed hereto as EXHIBIT B and, as so
amended, shall be the by-laws of the Surviving Corporation, until thereafter
amended in accordance with their terms, the certificate of incorporation of the
Surviving Corporation and applicable Law.
Section 1.06 DIRECTORS AND OFFICERS. The directors of Merger Co
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Charter
Documents of the Surviving Corporation, and the officers of the Company
immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation, each to hold office in accordance with the Charter
Documents of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified or until the earlier of
their death, resignation or removal.
ARTICLE II.
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.01 CONVERSION OF SECURITIES. At the Effective Time, by
virtue of the Merger and without any action on the part of Parent, Merger Co,
the Company or the holders of any of the following securities:
(a) CONVERSION OF COMPANY COMMON STOCK. Each share of common stock,
par value $.01 per share, of the Company (the "COMPANY COMMON STOCK"; all issued
and outstanding shares of Company Common Stock being hereinafter collectively
referred to as the "COMMON SHARES") issued and outstanding immediately prior to
the Effective Time (other than any Shares to be cancelled pursuant to Section
2.01(c) and any Dissenting Shares) shall be cancelled and shall be converted
automatically into the right to receive $11.35 in cash, without interest (the
"COMMON MERGER CONSIDERATION") payable upon surrender in the manner provided in
Section 2.02 of the certificate that formerly evidenced such Common Shares
subject to adjustment as provided in Section 2.01(e).
(b) CONVERSION OF COMPANY PREFERRED STOCK. Each share of Series B
Convertible Preferred Stock, par value $.01 per share, of the Company (the
"COMPANY PREFERRED STOCK"; all issued and outstanding shares of Company
Preferred Stock being hereinafter collectively referred to as the "PREFERRED
SHARES" and, together with the Common Shares, the "SHARES") issued and
outstanding immediately prior to the Effective Time (other than Shares to
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be cancelled pursuant to Section 2.01(c) and Dissenting Shares) shall
automatically be converted into the right to receive the Preferred Merger
Consideration, payable upon surrender in the manner provided in Section 2.02 of
the certificate that formerly evidenced such Preferred Share, subject to
adjustment as provided in Section 2.01(e).
(c) CANCELLATION OF TREASURY STOCK AND PARENT AND MERGER CO-OWNED
STOCK. Each share of Company Common Stock and Company Preferred Stock held in
the treasury of the Company and each share of Company Common Stock and Company
Preferred Stock owned by Parent, Merger Co or any direct or indirect wholly
owned subsidiary of Parent or Merger Co or any direct or indirect wholly owned
Subsidiary of the Company immediately prior to the Effective Time shall
automatically be cancelled without any conversion thereof and no payment or
distribution shall be made with respect thereto.
(d) CAPITAL STOCK OF MERGER CO. Each share of common stock, par value
$0.01 per share, of Merger Co issued and outstanding immediately prior to the
Effective Time shall be converted into and become one validly issued, fully paid
and nonassessable share of common stock, par value $.01 per share, of the
Surviving Corporation. Following the Effective Time, each certificate evidencing
ownership of shares of Merger Co common stock shall evidence ownership of such
shares of the Surviving Corporation.
(e) ADJUSTMENTS. If, between the date of this Agreement and the
Effective Time, there is a reclassification, recapitalization, stock split,
stock dividend, subdivision, combination or exchange of shares with respect to,
or rights issued in respect of, the Shares, the Merger Consideration shall be
adjusted accordingly, without duplication, to provide the holders of Shares the
same economic effect as contemplated by this Agreement prior to such event.
Section 2.02 EXCHANGE OF CERTIFICATES.
(a) PAYING AGENT. Prior to the Effective Time, Parent shall (i)
appoint a bank or trust company reasonably acceptable to the Company (the
"PAYING AGENT"), and (ii) enter into a paying agent agreement, in form and
substance reasonably acceptable to Parent and the Company, with such Paying
Agent for the payment of the Merger Consideration in accordance with this
Article II. At or prior to the Effective Time, Parent shall cause cash in an
amount sufficient to pay the aggregate Merger Consideration required to be paid
pursuant to Sections 2.01(a) and 2.01(b) (such cash being hereinafter referred
to as the "EXCHANGE FUND") to be deposited with the Paying Agent, for the
benefit of the holders of Shares. The Exchange Fund shall not be used for any
other purpose. The Exchange Fund shall be invested by the Paying Agent as
directed by the Parent; PROVIDED, HOWEVER, that such investments shall be in
obligations of or guaranteed by the United States of America or any agency or
instrumentality thereof and backed by the full faith and credit of the United
States of America, in commercial paper obligations rated A-1 or P-1 or better by
Xxxxx'x Investors Service, Inc. or Standard & Poor's Corporation, respectively,
or in certificates of deposit, bank repurchase agreements or banker's
acceptances of commercial banks with capital exceeding $1 billion (based on the
most recent financial statements of such bank which are then publicly
available). Any net profit resulting from, or interest or income produced by,
such investments shall be payable to Parent on demand.
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(b) EXCHANGE PROCEDURES COMMON STOCK. As promptly as practicable after
the Effective Time, but in any event within 10 days following the Effective
Time, Parent shall cause the Paying Agent to mail to each Person who was,
immediately prior to the Effective Time, a holder of record of Common Shares
entitled to receive the Common Merger Consideration pursuant to Section 2.01(a):
(i) a letter of transmittal (which shall be in customary form and shall specify
that delivery shall be effected, and risk of loss and title to the certificates
evidencing such Shares (the "COMMON CERTIFICATES") shall pass, only upon proper
delivery of the Common Certificates to the Paying Agent) and (ii) instructions
for use in effecting the surrender of the Common Certificates in exchange for
the Common Merger Consideration. Upon surrender to the Paying Agent of a Common
Certificate for cancellation, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, and
such other documents as may be required pursuant to such instructions, the
holder of such Common Certificate shall be entitled to receive in exchange
therefor the amount of cash that such holder has the right to receive in respect
of the Common Shares formerly represented by such Common Certificate pursuant to
Section 2.01(a), and the Common Certificate so surrendered shall forthwith be
cancelled. In the event of a transfer of ownership of Common Shares that is not
registered in the transfer records of the Company, payment of the Common Merger
Consideration may be made to a Person other than the Person in whose name the
Common Certificate so surrendered is registered if the Common Certificate
representing such Common Shares shall be properly endorsed or otherwise be in
proper form for transfer and the Person requesting such payment shall pay any
transfer or other taxes required by reason of the payment of the Common Merger
Consideration to a Person other than the registered holder of such Common
Certificate or establish to the reasonable satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 2.02, each Common Certificate shall be deemed at
all times after the Effective Time to represent only the right to receive upon
such surrender the Common Merger Consideration to which the holder of such
Common Certificate is entitled pursuant to this Article II. No interest shall be
paid or will accrue on any cash payable to holders of Common Certificates
pursuant to the provisions of this Article II.
(c) EXCHANGE PROCEDURES COMPANY PREFERRED STOCK. As promptly as
practicable after the Effective Time, but in any event within 10 days following
the Effective Time, Parent shall cause the Paying Agent to mail to each Person
who was, immediately prior to the Effective Time, a holder of record of
Preferred Shares entitled to receive the Preferred Merger Consideration pursuant
to Section 2.01(b): (i) a letter of transmittal (which shall be in customary
form and shall specify that delivery shall be effected, and risk of loss and
title to the certificates evidencing such Shares (the "PREFERRED CERTIFICATES"
and together with the Common Certificates, the "CERTIFICATES") shall pass, only
upon proper delivery of the Preferred Certificates to the Paying Agent) and (ii)
instructions for use in effecting the surrender of the Preferred Certificates in
exchange for the Preferred Merger Consideration. Upon surrender to the Paying
Agent of a Preferred Certificate for cancellation, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, and such other documents as may be required pursuant to
such instructions, the holder of such Preferred Certificate shall be entitled to
receive in exchange therefor the amount of cash that such holder has the right
to receive in respect of the Preferred Shares formerly represented by such
Preferred Certificate pursuant to Section 2.01(b), and the Preferred Certificate
so surrendered shall forthwith be cancelled. In the event of a transfer of
ownership of Preferred Shares that is not
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registered in the transfer records of the Company, payment of the Preferred
Merger Consideration may be made to a Person other than the Person in whose name
the Preferred Certificate so surrendered is registered if the Preferred
Certificate representing such Preferred Shares shall be properly endorsed or
otherwise be in proper form for transfer and the Person requesting such payment
shall pay any transfer or other taxes required by reason of the payment of the
Preferred Merger Consideration to a Person other than the registered holder of
such Preferred Certificate or establish to the reasonable satisfaction of the
Surviving Corporation that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.02, each Preferred Certificate
shall be deemed at all times after the Effective Time to represent only the
right to receive upon such surrender the Preferred Merger Consideration to which
the holder of such Preferred Certificate is entitled pursuant to this Article
II. No interest shall be paid or will accrue on any cash payable to holders of
Preferred Certificates pursuant to the provisions of this Article II.
(d) NO FURTHER RIGHTS. From and after the Effective Time, holders of
Certificates shall cease to have any rights as stockholders of the Company,
except as otherwise provided herein or by Law.
(e) EXCHANGE FUND FOR DISSENTING SHARES. Any portion of the Exchange
Fund deposited with the Paying Agent pursuant to Section 2.02(a) to pay for
Shares that become Dissenting Shares shall be delivered to the Parent upon
demand following the filing of a petition for appraisal of the Shares with the
Delaware Court of Chancery; PROVIDED, HOWEVER, that Parent and the Surviving
Corporation shall remain liable for payment of the Merger Consideration for such
Shares held by any stockholder who shall have failed to perfect or who otherwise
shall have withdrawn or lost such stockholder's rights to appraisal of such
Shares under Section 262 of the DGCL ("SECTION 262").
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
that remains undistributed to the holders of Shares for 180 days after the
Effective Time shall be delivered to the Parent, upon demand, and any holders of
Shares who have not theretofore complied with this Article II shall thereafter
look only to the Parent and Surviving Corporation for, and Parent and the
Surviving Corporation shall remain liable for, payment of their claim for the
Merger Consideration.
(g) NO LIABILITY. None of the Paying Agent, Parent, Merger Co or the
Surviving Corporation shall be liable to any holder of Shares for any such
Shares (or dividends or distributions with respect thereto), or cash properly
delivered to a public official pursuant to any abandoned property, escheat or
similar Law.
(h) WITHHOLDING RIGHTS. Each of the Paying Agent, Parent, the
Surviving Corporation and Merger Co shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any
holder of Shares such amounts as it is required to deduct and withhold with
respect to such payment under applicable Law and pay such withholding amount
over to the appropriate taxing authority. To the extent that amounts are so
properly withheld by the Paying Agent, Parent, the Surviving Corporation or
Merger Co, as the case may be, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the Shares in
respect of which such deduction and withholding
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was made by the Paying Agent, Parent, the Surviving Corporation or Merger Co, as
the case may be.
(i) LOST CERTIFICATES. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required by
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 Certificate, the
Paying Agent shall pay in respect of such lost, stolen or destroyed Certificate
the Merger Consideration to which the holder thereof is entitled pursuant to
Section 2.01(a).
Section 2.03 STOCK TRANSFER BOOKS. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of Shares thereafter on the records of the Company.
From and after the Effective Time, the holders of Certificates representing
Shares outstanding immediately prior to the Effective Time shall cease to have
any rights with respect to such Shares, except as otherwise provided in this
Agreement or by Law. On or after the Effective Time, any Certificates presented
to the Paying Agent or Merger Co for any reason shall be cancelled against
delivery of the Merger Consideration to which the holders thereof are entitled
pursuant to Section 2.01(a).
Section 2.04 OPTIONS, WARRANTS AND RESTRICTED STOCK.
(a) Prior to the Effective Time, the Company shall take all actions
necessary to ensure that, at the Effective Time, each option then outstanding to
purchase shares of Company Common Stock (the "COMPANY STOCK OPTIONS") and each
restricted stock award ("RESTRICTED STOCK AWARDS"), in each case granted under
any plan, arrangement or agreement (the "COMPANY EQUITY PLANS") disclosed in
Section 3.03 of Company Disclosure Schedule, whether vested or unvested, in the
case of Company Stock Options, and whether or not subject to forfeiture, in the
case of Restricted Stock Awards, shall:
(i) in the case of Company Stock Options, be cancelled by the Company
in consideration for which the holder thereof shall thereupon be entitled
to receive as soon as reasonably practicable after the Effective Time, a
cash payment from the Company in respect of such cancellation in an amount
(if any) equal to (A) the product of (x) the number of shares of Company
Common Stock subject to such Company Stock Option, whether or not then
exercisable, and (y) the excess, if any, of the Common Merger Consideration
over the exercise price per share of Company Common Stock subject to such
Company Stock Option, minus (B) all applicable federal, state and local
Taxes required to be withheld by the Company; and
(ii) in the case of Restricted Stock Awards, terminate all forfeiture
restrictions and, pursuant to the terms of Section 2.02, cause the Paying
Agent to pay to the holders thereof the Common Merger Consideration in
respect of each share of Company Common Stock subject to such award held of
record by such holder less all applicable federal, state and local Taxes
required to be withheld by the Company with respect thereto.
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(b) Subject to the terms and upon the conditions set forth herein, as
of the Effective Time, the warrant to purchase shares of the Company Common
Stock granted to Parent on November 23, 2004 (the "WARRANT") shall, in
accordance with its terms and without any action on the part of the holder
thereof, Company, Parent or Merger Co, no longer represent the right to receive
shares of Company Common Stock upon the due exercise thereof, and shall
thereafter represent the right to receive cash in accordance with the terms of
the Warrant. Prior to the Effective Time, Company shall take any and all actions
reasonably requested by Parent to effectuate this Section 2.04(b) as required by
the Warrant, including, no later than 15 days prior to the Effective Time,
delivering to the Warrant holder the notice required to be given by it pursuant
to Section 10.4 of the Warrant.
Section 2.05 DISSENTING SHARES.
(a) Notwithstanding any provision of this Agreement to the contrary
and to the extent available under the DGCL, Shares that are outstanding
immediately prior to the Effective Time and that are held by any stockholder who
is entitled to demand and properly demands (and does not timely withdraw such
demand) appraisal of such Shares (the "DISSENTING SHARES") pursuant to, and who
complies in all respects with, the provisions of Section 262 of the DGCL shall
not be converted into, or represent the right to receive, the Merger
Consideration. Any such stockholder shall instead be entitled to receive payment
of the fair value of such stockholder's Dissenting Shares in accordance with the
provisions of Section 262 of the DGCL; PROVIDED, HOWEVER, that all Dissenting
Shares held by any stockholder who shall have failed to perfect or who otherwise
shall have withdrawn, in accordance with Section 262 of the DGCL, or lost such
stockholder's rights to appraisal of such Shares under Section 262 of the DGCL
shall thereupon be deemed to have been converted into, and to have become
exchangeable for, as of the Effective Time, the right to receive the Merger
Consideration, without any interest thereon, upon surrender of the Certificate
or Certificates that formerly evidenced such Shares in the manner provided in
Section 2.02(b) and (c), as applicable.
(b) The Company shall give Parent (i) prompt notice of any demands
received by the Company for appraisal of any Shares, withdrawals of such demands
and any other instruments served pursuant to the DGCL and received by the
Company and (ii) the opportunity to participate in and direct all negotiations
and proceedings with respect to demands for appraisal under the DGCL. The
Company shall not, except with the prior written consent of Parent, make any
payment or agree to make any payment with respect to any demands for appraisal
or offer to settle or settle any such demands.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Co that the
statements contained in this Article III are true and correct, except as set
forth in the Company Disclosure Schedule, the Company's and TransMontaigne
Partners' most recent Annual Report (or Transition Report in the case of
TransMontaigne Partners) on Form 10-K, each subsequent Quarterly Report on Form
10-Q and Current Report on Form 8-K, as applicable, and the Company's most
recent Proxy Statement on Schedule 14A, in each case as filed with the SEC prior
to the date of this Agreement. The Company Disclosure Schedule shall be arranged
in
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sections and paragraphs corresponding to the numbered and lettered sections
and paragraphs contained in this Article III, and the disclosure in any section
or paragraph shall qualify (a) the corresponding section or paragraph in this
Article III and (b) the other sections and paragraphs in this Article III to the
extent that it is reasonably apparent from a reading of such disclosure that it
also qualifies or applies to such other sections and paragraphs:
Section 3.01 ORGANIZATION AND QUALIFICATION. Each of the Company and
each of its Subsidiaries is a corporation, limited company, limited partnership,
limited liability company or other business entity duly organized, validly
existing and in good standing under the Law of the jurisdiction of its
organization and has the requisite corporate, limited company, partnership,
limited liability company or other business entity (as the case may be) power
and authority and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals would not have, individually or
in the aggregate, a Company Material Adverse Effect. A true and complete list of
all the Subsidiaries, together with the jurisdiction of incorporation of such
Subsidiary, is set forth in Section 3.01 of the Company Disclosure Schedule. The
Company and each Subsidiary is duly qualified or licensed as a foreign
corporation to do business and is in good standing (in each instance where such
concepts are legally applicable) 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 where the failure to be so
qualified or licensed and in good standing would not have, individually or in
the aggregate, a Company Material Adverse Effect.
Section 3.02 CERTIFICATE OF INCORPORATION AND BYLAWS. The Company has
made available to Parent a complete and correct copy of the Charter Documents
(or similar organizational documents), each as amended to date, of the Company
and each Subsidiary. Such Charter Documents are in full force and effect.
Section 3.03 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
150,000,000 shares of Company Common Stock and 2,000,000 shares of preferred
stock, par value $.01 per share, consisting of 250,000 shares of Series A
Convertible Preferred Stock, 100,000 shares of Series B Convertible Preferred
Stock and 1,650,000 shares of undesignated preferred stock. As of December 31,
2005 (the "CAPITALIZATION DATE") (i) 49,581,917 shares of Company Common Stock
(which includes outstanding Restricted Stock Awards) were issued and
outstanding, (ii) Company Stock Options to acquire 710,102 shares of Company
Common Stock were outstanding, (iii) no shares of Company Common Stock were held
in the treasury of the Company, (iv) 5,500,000 shares of Company Common Stock
were reserved for issuance under the Warrant, and (v) no shares of the Company's
Series A Convertible Preferred Stock and 20,063 shares of the Company's Series B
Convertible Preferred Stock, which are convertible into approximately 3,039,745
shares of Company Common Stock, were issued and outstanding. All of the shares
of Company Common Stock and the Company's Series B Convertible Preferred Stock
outstanding on the date of this Agreement are duly authorized, validly issued,
fully paid and nonassessable. Since the Capitalization Date through the date of
this Agreement, other than (A) in connection with the issuance of Common Shares
pursuant to the exercise of outstanding
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Company Stock Options and Warrants, and Restricted Stock Awards, as set forth in
Section 3.03 of the Company Disclosure Schedule, and (B) in connection with the
surrender to the Company of shares issued upon the "net exercise" of such
Company Stock Options or Warrants and shares surrendered to the Company in
connection with the payment of withholding Tax upon the vesting of such
Restricted Stock Awards, and (C) the grant on March 31, 2006 of 450,000 shares
of Company Common Stock pursuant to Restricted Stock Awards, there has been no
change in the number of Shares of outstanding or reserved capital stock of the
Company or the number of outstanding Company Stock Options, Warrant or
Restricted Stock Awards.
(b) Section 3.03 of the Company Disclosure Schedule describes (i) all
outstanding Company Stock Options and other rights to purchase or receive shares
of Company Common Stock under the Company Equity Plans, as of the Capitalization
Date, together with the expiration date, exercise price and number of shares
subject thereto, (ii) the Warrant, together with the expiration date, exercise
or strike price and number of shares subject thereto, (iii) the number of
outstanding unvested shares constituting Restricted Stock Awards for Company
Common Stock, as of the Capitalization Date, and (iv) the number of Restricted
Stock Awards for Company Common Stock that, as of the date of this Agreement,
have been approved by the Company Board, but have not yet been issued.
(c) Except as set forth in Section 3.03 of the Company Disclosure
Schedule, there are no (i) subscriptions, calls, contracts, options, warrants or
other rights, agreements, arrangements, understandings, restrictions or
commitments of any character to which the Company or any Subsidiary is a party
or by which the Company or any Subsidiary is bound relating to the issued or
unissued capital stock or equity interests of the Company or any Subsidiary or
obligating the Company or any Subsidiary to issue or sell any shares of capital
stock of, other equity interests in or debt securities of, the Company or any
Subsidiary, (ii) securities of the Company or securities convertible,
exchangeable or exercisable for shares of capital stock or equity interests of
the Company or any Subsidiary, or (iii) equity equivalents, stock appreciation
rights or phantom stock, ownership interests in the Company or any Subsidiary or
similar rights. All shares of Company Common Stock subject to the Company Stock
Options and Warrant set forth in Section 3.03 are duly authorized and, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be validly issued, fully paid and nonassessable
and free of preemptive (or similar) rights. There are no outstanding contractual
obligations or rights of the Company or any Subsidiary to repurchase, redeem
(other than the redemption rights of the Company Preferred Stock) or otherwise
acquire any securities or equity interests of the Company or any Subsidiary or
to vote or to dispose of any shares of capital stock or equity interests of the
Company or any Subsidiary except pursuant to the terms of Restricted Stock
Awards. Except as set forth in Section 3.03 of the Company Disclosure Schedule,
none of the Company or any Subsidiary is a party to any stockholders' agreement,
voting trust agreement or registration rights agreement relating to any equity
securities or equity interests of the Company or any Subsidiary or any other
Contract relating to disposition, voting or dividends with respect to any equity
securities or equity interests of the Company or of any Subsidiary. No dividends
on the Company Common Stock have been declared or paid from December 31, 2005
through the date of this Agreement. All of the Shares have been issued by the
Company in compliance with applicable federal securities Law. There are no
outstanding bonds, debentures, notes or other Indebtedness of the Company or any
of its
9
Subsidiaries having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matter for which the Company's
stockholders may vote.
(d) Each outstanding share of capital stock (or other unit of equity
interest) of each Subsidiary is duly authorized, validly issued, fully paid and
nonassessable (where such concepts are legally applicable) and was issued free
of preemptive (or similar) rights, and, except as set forth in Section 3.01 of
the Company Disclosure Schedule, each such share or unit (other than directors'
qualifying shares in the case of non-United States Subsidiaries) is owned by the
Company, by one or more wholly-owned Subsidiaries, or by the Company and one or
more wholly-owned Subsidiaries, free and clear of all options, rights of first
refusal, agreements, limitations on the Company's or any Subsidiary's voting,
dividend or transfer rights, charges and other encumbrances or Liens of any
nature whatsoever.
(e) Section 3.03 of the Company Disclosure Schedule also lists any and
all Persons of which the Company directly or indirectly owns an equity or
similar interest, or an interest convertible into or exchangeable or exercisable
for an equity or similar interest, of, to the Company's knowledge, greater than
5% but less than 50% (collectively, the "INVESTMENTS"). Except as set forth in
Section 3.03 of the Company Disclosure Schedule, the Company or a Subsidiary, as
the case may be, owns all Investments free and clear of all Liens, and there are
no outstanding contractual obligations of the Company or any Subsidiary
permitting the repurchase, redemption or other acquisition of any of its
interest in the Investments or requiring the Company or any Subsidiary to
provide funds to, make any investment (in the form of a loan, capital
contribution or otherwise) in, provide any guarantee with respect to, or assume,
endorse or otherwise become responsible for the obligations of, any Investment.
(f) The General Partner is a single member Delaware limited liability
company, and the sole member of the General Partner is a wholly-owned Subsidiary
of the Company.
(g) As of the Capitalization Date (i) 3,972,500 Common Units were
issued and outstanding, of which 2,500 were owned of record and beneficially by
the Company or any Subsidiary, (ii) 3,322,266 Subordinated Units were issued and
outstanding, of which 2,872,266 were owned of record and beneficially by
Subsidiaries of the Company and 450,000 were owned, to the Company's knowledge,
by an Affiliate of Parent, (iii) all of the General Partner Interests, which
include all Incentive Distribution Rights, are owned by the General Partner, and
(iv) no Common Units or Subordinated Units were owned by, or held in the
treasury of, TransMontaigne Partners. Section 3.03 of the Company Disclosure
Schedule sets forth, as of the date hereof, the number of Common Units purchased
by TransMontaigne Services Inc. to be awarded as restricted Common Units to
employees of TransMontaigne Services Inc. pursuant to the MLP Equity Plan, and
in exchange for, and in cancellation of, up to 58,000 Phantom Units (as defined
in the MLP Equity Plan) approved by the General Partner on March 1, 2006 and
awarded on March 31, 2006. All of the Partnership Interests issued and
outstanding on the date of this Agreement are duly authorized and validly
issued, fully paid and nonassessable in accordance with the terms of the
TransMontaigne Partners Partnership Agreement. No options to purchase
Partnership Interests have been granted under the MLP Equity Plan.
10
(h) Except as set forth above or in Section 3.03 of the Company
Disclosure Schedule, there are no (i) subscriptions, calls, contracts, options,
warrants or other rights, agreements, arrangements, understandings, restrictions
or commitments of any character to which TransMontaigne Partners or any MLP
Subsidiary is a party or by which the Company or any Subsidiary is bound
relating to the issued or unissued Common Units and Subordinated Units of
TransMontaigne Partners or the equity interests of any MLP Subsidiary or
obligating TransMontaigne Partners or any MLP Subsidiary to issue or sell any
Partnership Interests in, or debt securities of, TransMontaigne Partners or any
MLP Subsidiary, (ii) securities of TransMontaigne Partners convertible,
exchangeable or exercisable for Partnership Interests or shares of capital stock
or other equity interests of TransMontaigne Partners or any MLP Subsidiary, or
(iii) equity equivalents, stock appreciation rights or phantom stock, ownership
interests in TransMontaigne Partners or any MLP Subsidiary or similar rights.
Each outstanding Partnership Interest of TransMontaigne Partners and each
outstanding equity interest of any MLP Subsidiary is duly authorized, validly
issued, fully paid and nonassessable (where such concepts are legally
applicable) and is owned by TransMontaigne Partners, or by one or more
wholly-owned MLP Subsidiaries.
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 Merger and the other
transactions contemplated by this Agreement to be consummated by the Company
(the "OTHER TRANSACTIONS"). The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the Merger and
the Other Transactions have been duly and validly authorized by all necessary
corporate action, and no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement or to consummate the Merger or such
Other Transactions (other than the Stockholder Approval and the filing of the
Certificate of Merger). This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by Parent and Merger Co, constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to the effect of any applicable bankruptcy, insolvency
(including all Law relating to fraudulent transfers), reorganization, moratorium
or similar Law affecting creditors' rights generally and subject to the effect
of general principles of equity. The Company has provided Parent with a true and
complete copy of the SemGroup Agreement, including all schedules and exhibits
thereto. The Company has complied in all material respects with its obligations
under the SemGroup Agreement, and the SemGroup Agreement has been terminated in
accordance with the terms thereof.
Section 3.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Except as set forth in Section 3.05 of the Company Disclosure
Schedule, the execution and delivery of this Agreement by the Company do not,
and the performance of this Agreement by the Company and the consummation by the
Company of the Merger and the Other Transactions will not, (i) conflict with,
violate or result in a breach of the Charter Documents of the Company,
TransMontaigne Partners or the General Partner, (ii) assuming that all consents,
approvals and other authorizations described in Section 3.05(b) have been
obtained and that all filings and other actions described in Section 3.05(b)
have been made or taken, conflict with or violate any U.S. federal, state or
local or foreign statute, law, ordinance,
11
regulation, rule, code, executive order, judgment, decree or other order ("LAW")
applicable to the Company or any Subsidiary or by which any property or asset of
the Company or any Subsidiary is bound or affected, or (iii) result in any
breach or violation of or constitute a default (or an event which, with notice
or lapse of time or both, would become a default) under, require consent or
result in a loss of a material benefit under, give rise to a material obligation
under, give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien on any property or asset of
the Company or any Subsidiary pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other binding
commitment, instrument or obligation (each, a "CONTRACT") to which the Company
or any Subsidiary is a party or by which the Company, or a Subsidiary or any
property or asset of the Company or any Subsidiary is bound or affected, except,
with respect to clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults or other occurrences that, individually or in the aggregate,
would not have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company do
not, and the performance of this Agreement by the Company and the consummation
by the Company of the Merger and the Other Transactions will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any supranational, national, provincial, federal, state or local government,
regulatory or administrative authority, or any court, tribunal, judicial or
arbitral body (a "GOVERNMENTAL AUTHORITY"), by the Company or any Subsidiary
except for (i) applicable requirements of the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT"), (ii) the pre-merger notification requirements
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR ACT"), and the competition or merger control Law of any other applicable
jurisdiction, (iii) the filing by the Company with the Securities and Exchange
Commission (the "SEC") of a proxy statement relating to the adoption of this
Agreement by the Company's stockholders (as amended or supplemented from time to
time, the "PROXY STATEMENT"), (iv) any filings required by, and any approvals
required under, the rules and regulations of the New York Stock Exchange (the
"NYSE"), (v) the filing of appropriate merger documents as required by the DGCL,
(vi) filing and notification requirements of the Federal Energy Regulatory
Commission, and (vii) such other consents, approvals, authorizations or permits,
or such filings or notifications, the failure of which to obtain or make would
not have, individually or in the aggregate, a Company Material Adverse Effect or
would not reasonably be expected to prevent or delay the Closing beyond the
Expiration Date.
Section 3.06 PERMITS; COMPLIANCE.
(a) Each of the Company and each Subsidiary is in possession of all
franchises, grants, authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates, approvals and orders of any Governmental
Authority necessary for each such entity to own, lease and operate its
properties or to carry on its business as it is now being conducted (the
"COMPANY PERMITS") and no default has occurred under any such Company Permit,
and no written notice of violation has been received from any Governmental
Authority, except where the failure to have, or the suspension or cancellation
of, or defaults under, or violations of, any Company Permit would not have,
individually or in the aggregate, a Company Material Adverse Effect. As of the
date hereof, to the knowledge of the Company, neither it nor any Subsidiary has
received any written notification from any Governmental Authority threatening to
revoke
12
any such Person's Company Permit, the revocation of which Company Permit would
have, individually or in the aggregate, a Company Material Adverse Effect.
(b) Except for employment and employee benefit matters (which are the
subject of Section 3.11), Taxes (which are the subject of Section 3.15), and
environmental matters (which are the subject of Section 3.16), each of the
Company and each Subsidiary is, and at all times since July 1, 2002 (or, if
later, its inception) has been, in compliance with any Law applicable to such
entity or by which any property or asset of such entity is bound or affected,
and has not received written notice of any violation of any such Law, except
such instances of non-compliance and such violations as would not have,
individually or in the aggregate, a Company Material Adverse Effect.
(c) The Company and TransMontaigne Partners have made all
certifications and statements required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act of 2002 and the related rules and regulations promulgated
thereunder (the "XXXXXXXX-XXXXX ACT") with respect to the Company's and
TransMontaigne Partners' filings pursuant to the Exchange Act. Each of the
Company and TransMontaigne Partners has established and maintains disclosure
controls and procedures (as defined in Rule 13a-15 under the Exchange Act) as
required by Rule 13a-15 to ensure that material information relating to the
Company and TransMontaigne Partners, as applicable, including its respective
consolidated Subsidiaries, is made known on a timely basis to the individuals
responsible for the preparation of the Company's and TransMontaigne Partners',
as applicable, filings with the SEC and other public disclosure documents. Each
of the Company and TransMontaigne Partners is in compliance with the applicable
listing and corporate governance rules and regulations of the New York Stock
Exchange except where such non-compliance would not reasonably be expected to
prevent or delay the Closing beyond the Expiration Date.
(d) (i) The Company has disclosed, based on its most recent evaluation
of internal controls, to the Company's auditors and its audit committee: (A) all
significant deficiencies and material weaknesses known to the Company in the
design or operation of its internal controls that are reasonably likely to
adversely affect the Company's ability to record, process, summarize and report
financial information, (B) any fraud, whether or not material, known to the
Company that involves management or other employees who have a significant role
in internal controls, and (C) the Company has not received a complaint,
allegation, assertion or claim in writing regarding the accounting practices,
procedures, methodologies or methods of the Company or its internal accounting
controls, including any such complaint, allegation assertion or claim that the
Company has engaged in questionable accounting or auditing practices.
(ii) TransMontaigne Partners has disclosed, based on its most recent
evaluation of internal controls, to the TransMontaigne Partners' auditors
and its audit committee: (A) all significant deficiencies and material
weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect TransMontaigne
Partners' ability to record, process, summarize and report financial
information and (B) any fraud, whether or not material, known to
TransMontaigne Partners that involves management or other employees who
have a significant role in TransMontaigne Partners' internal control over
financial reporting.
13
(e) As of the date hereof, the Company has not identified any material
weaknesses in the design or operation of internal controls over financial
reporting which has not been remedied in all material respects.
(f) Since July 30, 2002 (or, if later, since inception), none of the
Company, any Company Subsidiary, TransMontaigne Partners or any MLP Subsidiary
has extended or maintained credit, arranged for the extension of credit or
renewed an extension of credit in violation of Section 13(k) of the Exchange
Act.
Section 3.07 SEC FILINGS; FINANCIAL STATEMENTS; UNDISCLOSED
LIABILITIES.
(a) Each of the Company and TransMontaigne Partners has filed all
forms, reports, statements, schedules, certifications and other documents
required to be filed by it with the SEC since July 1, 2002 (or, if later, since
inception) (collectively, the "SEC REPORTS"). The SEC Reports (including any
documents or information incorporated by reference therein and including any
management discussion and analysis of financial condition and results of
operations, financial statements (including notes thereto) or schedules included
therein) (i) at the time they were filed complied in all material respects with
the applicable requirements of the Securities Act of 1933, as amended (the
"SECURITIES ACT"), the Exchange Act, the Xxxxxxxx-Xxxxx Act and, in each case,
the rules and regulations promulgated thereunder, and (ii) did not, at the time
they were filed, or, if amended, as of the date of such amendment, 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
the light of the circumstances under which they were made, not misleading. No
Subsidiary (other than (A) the Subsidiaries listed as guarantors on the
registration statement filed with respect to the Notes and (B) TransMontaigne
Partners) is or has been required to file any form, report, statement, schedule,
certification or other document with the SEC. Except as described in Section
3.07 of the Company Disclosure Schedule, there are no outstanding or unresolved
comments in comment letters received from the SEC staff with respect to any of
the SEC Reports.
(b) Each of the consolidated financial statements (including, in each
case, any notes and schedules thereto) contained in the SEC Reports was prepared
in accordance with United States generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods indicated (except
as may be indicated in the notes thereto or, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC and the requirements of
Regulation S-X under the Securities Act) and each fairly presents, in all
material respects, the consolidated financial position, results of operations
and cash flows of the Company or TransMontaigne Partners, as applicable, and its
consolidated subsidiaries as at the respective dates thereof and for the
respective periods indicated therein (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments and, in the case of pro
forma financial statements, to the qualifications stated therein). All of the
Subsidiaries are consolidated with the Company for accounting purposes and all
of the MLP Subsidiaries are consolidated with TransMontaigne Partners for
accounting purposes.
(c) Except as and to the extent set forth on the consolidated balance
sheet of the Company and its consolidated Subsidiaries as at December 31, 2005,
included in the Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 2005, neither
14
the Company nor any Subsidiary has any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise), except for liabilities and
obligations (i) incurred in connection with the transactions contemplated
hereby, (ii) incurred in the ordinary course of business and in a manner
consistent with past practice since December 31, 2005, or (iii) that would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(d) Except as and to the extent set forth on the consolidated balance
sheet of TransMontaigne Partners as of December 31, 2005, included in the
TransMontaigne Partners' Transitional Report on Form 10-K for the period ended
December 31, 2005, neither TransMontaigne Partners nor any MLP Subsidiary has
any liability or obligation of any nature (whether accrued, absolute, contingent
or otherwise), except for liabilities and obligations (i) incurred in connection
with the transactions contemplated hereby, if any, (ii) incurred in the ordinary
course of business and in a manner consistent with past practice since December
31, 2005, or (iii) that would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
Section 3.08 AFFILIATE TRANSACTIONS. Except as set forth in the SEC
Reports or as contemplated by this Agreement, there are no transactions,
agreements, arrangements or understandings between (i) the Company or any of its
Subsidiaries, on the one hand, and (ii) any Affiliate of the Company (other than
any of its Subsidiaries), on the other hand, of the type that would be required
to be disclosed under Item 404 of Regulation S-K under the Securities Act.
Section 3.09 ABSENCE OF CERTAIN CHANGES OR EVENTS. From December 31,
2005 through the date of this Agreement, there has not occurred any Company
Material Adverse Effect. Since December 31, 2005, and prior to the date of this
Agreement, except as expressly contemplated by this Agreement, (a) the Company
and the Subsidiaries have conducted their businesses only in the ordinary course
of business and in a manner consistent with past practice and (b) except as set
forth in Section 3.09 of the Company Disclosure Schedule, neither the Company
nor any Subsidiary has taken any action or agreed to take any action that would
be prohibited by clauses (a) through (t) of Section 5.01 if taken after the date
hereof.
Section 3.10 ABSENCE OF LITIGATION. Except as set forth in Section
3.10 of the Company Disclosure Schedule, there is no litigation, suit, claim,
action, proceeding, hearing, petition, grievance, complaint or investigation (an
"ACTION") pending or, to the knowledge of the Company, threatened in writing
against the Company or any Subsidiary, or any property or asset of the Company
or any Subsidiary, before any Governmental Authority or arbitrator except as
would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. Neither the Company nor any Subsidiary nor any
property or asset of the Company or any Subsidiary is subject to any order,
writ, judgment, injunction, decree, determination or award of, or, to the
knowledge of the Company, any continuing investigation by, any Governmental
Authority, except as would not have, individually or in the aggregate, a Company
Material Adverse Effect.
15
Section 3.11 EMPLOYEE BENEFIT PLANS.
(a) Section 3.11 of the Company Disclosure Schedule lists (i) all
material employee benefit plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) and all material
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 (ii) all
material employment, termination, severance or other contracts, agreements or
commitments to which the Company or any Subsidiary is a party, with respect to
which the Company or any Subsidiary has or may reasonably be expected to have
any obligation or which are maintained, contributed to or sponsored by the
Company or any Subsidiary for the benefit of any current or former employee,
consultant, officer or director of the Company or any Subsidiary (collectively,
the "PLANS"). The Company has made available to Merger Co a true and complete
copy (where applicable) of (i) each Plan (or, where a Plan has not been reduced
to writing, a summary of all material Plan terms of such Plan), (ii) each trust
or funding arrangement prepared in connection with each such Plan, (iii) the
most recently filed annual report on Internal Revenue Service ("IRS") Form 5500
or any other annual report required by applicable Law, (iv) the most recently
received IRS determination letter for each such Plan, (v) the most recently
prepared actuarial report and financial statement in connection with each such
Plan, (vi) the most recent summary plan description, any summaries of material
modification, any employee handbooks, and any material written communications
(or a description of any material oral communications) by the Company or the
Subsidiaries to any current or former employees, consultants, or directors of
the Company or any Subsidiary concerning the extent of the benefits provided
under a Plan.
(b) None of the Company or any Subsidiary or any other Person or
entity that, together with the Company or any Subsidiary, is or was treated as a
single employer under Section 4001 of ERISA or Sections 414(b), (c), (m) or (o)
of the Code (each, together with the Company and any Subsidiary, an "ERISA
AFFILIATE"), has now or at any time within the past six years (and in the case
of any such other Person or entity, only during the period within the past six
years that such other Person or entity was an ERISA Affiliate) contributed to,
sponsored, or maintained (i) a pension plan (within the meaning of Section 3(2)
of ERISA) subject to Section 412 of the Code or Title IV of ERISA, including a
"defined benefit plan", as defined in Section 3(35) of ERISA; (ii) a
multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA
or the comparable provisions of any other applicable Law); (iii) a single
employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) for
which an ERISA Affiliate would reasonably be expected to incur liability under
Section 4063 or 4064 of ERISA; or (iv) any plan, program or arrangement that
provides for post-retirement or other post-employment welfare benefits (other
than for health care continuation as required by Section 4980B of the Code or
any similar statute). No Plan exists that would reasonably be expected to result
in the payment to any present or former employee, director or consultant of the
Company or any Subsidiary of any money or other property or accelerate or
provide any other rights or benefits to any current or former employee, director
or consultant of the Company or any Subsidiary as a result of the consummation
of the Merger or any Other Transaction (whether alone or in connection with any
other event).
(c) Except as specified in Section 3.11 of the Company Disclosure
Schedule, each Plan that is intended to be qualified under Section 401(a) of the
United States Internal
16
Revenue Code of 1986, as amended (the "CODE"), has received a favorable
determination letter from the IRS that the Plan is so qualified, 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, to the knowledge of
the Company, no fact or circumstance exists that would reasonably be expected to
result in the revocation of such letter.
(d) Each Plan has been established and administered in accordance with
its terms, and in compliance with the applicable provisions of ERISA, the Code
and other applicable Law, except to the extent such noncompliance would not have
a Company Material Adverse Effect.
(e) With respect to any Plan, (i) no Actions (other than routine
claims for benefits in the ordinary course) are pending or, to the knowledge of
the Company, threatened, except for those that would not have a Company Material
Adverse Effect, (ii) to the knowledge of the Company, no facts or circumstances
exist that would reasonably be expected to give rise to any such Actions, and
(iii) no administrative investigation, audit or other administrative proceeding
by the Department of Labor, the IRS or other Governmental Authority is pending,
in progress or, to the knowledge of the Company, threatened, except for those
that would not have, individually or in the aggregate, a Company Material
Adverse Effect.
(f) Neither the Company nor any of its Subsidiaries maintains any Plan
that is not subject to United States Law.
(g) Section 3.11 of the Company Disclosure Schedule discloses whether
each Benefit Plan that is an "employee welfare benefit plan" as defined in ERISA
is (i) unfunded or self-insured, (ii) funded through a "welfare benefit fund,"
as such term is defined in Code Section 419(e) or other funding mechanism or
(iii) insured. Except as would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect, each such employee
welfare benefit plan may be amended or terminated without liability (other than
benefits then payable under such plan without regard to such amendment or
termination) to the Company or any Subsidiary at any time.
Section 3.12 LABOR AND EMPLOYMENT MATTERS. Neither the Company nor any
Subsidiary is, or at any time has been, a party to any collective bargaining
agreement or other labor union agreements applicable to Persons employed by the
Company or any Subsidiary. Except as disclosed in Section 3.12 of the Company
Disclosure Schedule, there are no employees represented by a works council or a
labor organization or, to the knowledge of the Company, activities or
proceedings of any labor union to organize any such employees. No work stoppage,
slowdown or labor strike against the Company or any Subsidiary is pending or, to
the knowledge of the Company, threatened in writing. Except as would not have a
Company Material Adverse Effect, the Company and its Subsidiaries (a) have no
direct or indirect liability with respect to any misclassification of any
Persons as an independent contractor rather than as an employee and (b) are in
compliance with all applicable Law respecting employment, employment practices,
terms and conditions of employment and wages and hours, in each case, with
respect to their employees. Except as would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, there are
no charges, appeals or Actions against
17
the Company or any Subsidiary pending or, to the knowledge of the Company,
threatened in writing, before or by the Equal Employment Opportunity Commission,
the Department of Labor, Occupational Safety and Health Administration, the
National Labor Relations Board or any other comparable Governmental Authority.
Except as would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, neither the Company nor any
Subsidiary has received notice during the past three years of the intent of any
Governmental Authority responsible for the enforcement of labor, employment,
occupational health and safety or workplace safety and insurance/workers'
compensation laws to conduct an investigation of or affecting the Company or a
Subsidiary and, to the knowledge of the Company, no such investigation is in
progress. Except as would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect, there are no outstanding
assessments, penalties, fines, liens, charges, surcharges, or other amounts due
or owing by the Company or Company Subsidiaries pursuant to any workplace safety
and insurance/workers' compensation Laws; neither the Company nor any Company
Subsidiary has been reassessed in any material respect under such Laws during
the past three years; there are no claims that may affect the accident cost
experience of the Company or any Subsidiary.
Section 3.13 REAL PROPERTY.
(a) Section 3.13(a) of the Company Disclosure Schedule lists by
address each parcel of real property in which the Company or any Subsidiary has
fee title interest that is currently used in and material to the conduct of the
business of the Company and the Subsidiaries, taken as a whole (the "OWNED
PROPERTIES").
(b) Section 3.13(b) of the Company Disclosure Schedule lists by
address each parcel of real property leased or subleased by the Company or any
Subsidiary that is currently used in and material to the conduct of the business
of the Company and the Subsidiaries, taken as a whole (together with the Owned
Properties, the "PROPERTIES"), with any guaranty given by the Company or any
Subsidiary in connection therewith. To the best of Company's knowledge, the
Company or one of its Subsidiaries has a defensible fee simple title to or valid
leasehold interest in all of the Properties, free and clear of all Liens, except
(i) Liens for current taxes and assessments not yet past due, (ii) inchoate
mechanics' and materialmen's Liens for construction in progress, (iii)
workmen's, repairmen's, warehousemen's and carriers' Liens arising in the
ordinary course of business of the Company or such Subsidiary consistent with
past practice, and (iv) all Liens and other imperfections of title (including
matters of record) and encumbrances that do not materially interfere with the
conduct of the business of the Company and the Subsidiaries, taken as a whole,
or would not have a Company Material Adverse Effect (collectively, "PERMITTED
LIENS"). True and complete copies of all agreements under which the Company or
any of its Subsidiaries owns, leases or subleases the Properties have been made
available to Parent. Except as would not have a Company Material Adverse Effect,
the Company or one of its Subsidiaries has the right to the use and occupancy of
the Properties, subject to the terms of the applicable deed, lease or sublease
relating thereto and Permitted Liens.
Section 3.14 INTELLECTUAL PROPERTY. The Company or its Subsidiaries
owns or has the right to use all Intellectual Property necessary to conduct the
Company's business as presently conducted, except as would not, individually or
in the aggregate, be expected to have a Company Material Adverse Effect. The
conduct of the Company's and its Subsidiaries' business
18
or use of the Intellectual Property does not infringe, violate, misappropriate
or misuse any intellectual property rights or any other proprietary right of any
Person or give rise to any obligations to any Person as a result of
co-authorship, except in each case for exceptions that would not, individually
or in the aggregate, be expected to have a Company Material Adverse Effect.
Section 3.15 TAXES.
(a) Except as would not have a Material Adverse Tax Effect, (i) the
Company and the Subsidiaries have timely filed or caused to be filed or will
timely file or cause to be filed (taking into account any extension of time to
file granted or obtained) all Tax Returns required to be filed by them, and any
such filed Tax Returns are true, correct and complete, (ii) the Company and the
Subsidiaries have timely paid or will timely pay any Taxes due and payable,
except to the extent that such Taxes are being contested in good faith and for
which the Company or the appropriate Subsidiary has set aside adequate reserves
in accordance with GAAP, (iii) without taking into account any transactions
contemplated by this Agreement and based upon activities to date, adequate
reserves in accordance with GAAP have been established by the Company and the
Subsidiaries for all Taxes not yet due and payable in respect of taxable periods
ending on or prior to the date hereof and (iv) all amounts of Tax required to be
withheld by the Company and its Subsidiaries have been or will be timely
withheld and paid over to the appropriate Governmental Authority. "MATERIAL
ADVERSE TAX EFFECT" means, for purposes of this Section 3.15, any and all
adverse tax consequences under any subsection of this Section 3.15 that are not
adequately provided for in reserves established in accordance with GAAP and
which in the aggregate would have an adverse cash consequence equal to or
greater than $3,000,000.
(b) Except as would not have a Material Adverse Tax Effect, no
deficiency for any amount of Tax has been asserted or assessed by any
Governmental Authority in writing against the Company or any Subsidiary (or, to
the knowledge of the Company, has been threatened or proposed), except for
deficiencies that have been satisfied by payment, settled or been withdrawn or
which are being contested in good faith and are Taxes for which the Company or
the appropriate Subsidiary has set aside adequate reserves in accordance with
GAAP. Except as would not have a Material Adverse Tax Effect, there are no liens
for any Taxes, other than liens for current Taxes and assessments not yet past
due or that are being contested in good faith and for which the Company or the
appropriate Subsidiary has set aside adequate reserves in accordance with GAAP,
on the assets of the Company or any Subsidiary.
(c) (i) Except as would not have a Material Adverse Tax Effect, there
are no pending or, to the knowledge of the Company, threatened audits,
examinations, investigations or other proceedings in respect of any Taxes of the
Company or any Subsidiary with respect to which the Company or a Subsidiary has
been notified in writing. (ii) Neither the Company nor any Subsidiary has waived
any statute of limitations in respect of an alleged Tax deficiency in excess of
$1,000,000 or agreed to any extension of time with respect to an assessment or
deficiency for an amount of Taxes in excess of $1,000,000 (other than pursuant
to extensions of time to file Tax Returns obtained in the ordinary course).
(d) Neither the Company nor any Subsidiary is a party to any
indemnification, allocation or sharing agreement with respect to Taxes that
could give rise to a material payment
19
or indemnification obligation (other than agreements among the Company and its
Subsidiaries and other than customary Tax indemnifications contained in credit
or other commercial lending agreements).
(e) Neither the Company nor any of its Subsidiaries is required to
make any disclosure to the Internal Revenue Service with respect to a
"reportable transaction" pursuant to section 1.6011-4(b)(1) of the Treasury
Regulations promulgated under the Code.
(f) Neither the Company nor any Subsidiary (i) has been a member of an
affiliated group filing a consolidated federal income tax return (other than a
group the common parent of which was the Company) or (ii) has any liability for
the Taxes of any Person (other than the Company or any Subsidiary) under
Treasury Regulation section 1.1502-6 (or any similar provision of Law), as a
transferee, successor, by contract or otherwise.
(g) Neither the Company nor any Subsidiary has distributed the stock
of another company in a transaction that was purported or intended to be
governed by section 355 or section 361 of the Code.
Section 3.16 ENVIRONMENTAL MATTERS.
(a) Section 3.16 of the Company Disclosure Schedule sets forth (i) a
site-by-site analysis of each location owned or leased by the Company or any of
its Subsidiaries at which the Company or such Subsidiary has primary
responsibility for any environmental remediation activity that is ongoing as of
the date of this Agreement, (ii) a description of each other location that (A)
is owned or leased by a third party at which the Company or any of its
Subsidiaries is in the chain of legal title, but in respect of which the Company
or such Subsidiary is not primarily responsible for any environmental
remediation activity that is ongoing as of the date of this Agreement or (B) is
owned or leased by the Company or any of its Subsidiaries and in respect of
which the Company or such Subsidiary is not primarily responsible for any
environmental remediation activity that is ongoing as of the date of this
Agreement, and (iii) a listing of each notice filed by the Company or any
Subsidiary since July 1, 2001 under any Law indicating past or present
treatment, storage or disposal of a hazardous waste or reporting a spill or
release of a hazardous or toxic waste, substance or constituent, or other
substance into the environment, except for any such notices required in
connection with any application for environmental permits or annual reporting
requirements in the ordinary course of business.
(b) Except as disclosed in Section 3.16 of the Company Disclosure
Schedule and except where the aggregate of all such violations or failures to
comply could not reasonably be expected to have a Company Material Adverse
Effect:
(i) the operations of the Company and each of its Subsidiaries comply
with all applicable Environmental Laws and the Company and each Subsidiary
possess and comply, and have complied, with all applicable Environmental
Permits required under such laws to operate their business as currently
operated;
(ii) none of the operations of the Company or any of its Subsidiaries
is the subject of any judicial or administrative proceeding by or on behalf
of any Person alleging the violation of any Environmental Law;
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(iii) none of the operations of the Company or any of its Subsidiaries
is the subject of any investigation by a Governmental Authority evaluating
whether the Company or any of its Subsidiaries disposed of any hazardous or
toxic waste, substance or constituent or other substance at any site that
may require remedial action, or any investigation by a Governmental
Authority evaluating whether any remedial action is needed to respond to a
release of any hazardous or toxic waste, substance or constituent, or other
substance into the environment; and
(iv) neither the Company nor any of its Subsidiaries have any
contingent liability of which the Company has knowledge in connection with
any release of any Materials of Environmental Concern into the environment,
nor has the Company or any of its Subsidiaries received any notice or
letter advising it of potential liability arising from the disposal of any
Materials of Environmental Concern into the environment.
(c) There has been no release or threatened release of Materials of
Environmental Concern that would be reasonably expected to cause any liability
to the Company or any Company Subsidiary under applicable Environmental Law at
any current or former property owned or operated by the Company or any Company
Subsidiary or any predecessor thereof or any off-site facility to which the
Company or any Company Subsidiary or any predecessor thereto shipped Materials
of Environmental Concern for treatment, storage, handling or disposal, except
where the potential liability, after giving effect to the third-party
environmental indemnification agreements set forth on Section 3.16 of the
Disclosure Schedule, would not, individually or in the aggregate, reasonably be
expected to have or result in a Company Material Adverse Effect.
Section 3.17 INSURANCE. The Company has in full force and effect the
insurance coverage with respect to its business and the businesses of its
Subsidiaries set forth in Section 3.17 of the Company Disclosure Schedule. There
is no claim pending (i) under any Directors and Officers liability insurance, or
(ii) in excess of $1,000,000 under any other insurance as to which coverage has
been questioned, denied or disputed by the underwriters of such policies or
bonds. All premiums due and payable under all such policies have been paid and
the Company and its Subsidiaries are otherwise in compliance in all material
respects with the terms of such policies. Except for (x) any broad-based
increases in insurance premiums that affect industries in which the Company and
its Subsidiaries conduct their business, so long as such changes, fluctuations
or conditions do not adversely affect the Company or its Subsidiaries in a
materially disproportionate manner relative to other similarly situated
participants in the industries or markets in which they operate, and (y) as set
forth in Section 3.17 of the Company Disclosure Schedule, the Company has no
knowledge of any threatened termination of, or material premium increase with
respect to, any of such policies.
Section 3.18 SPECIFIED CONTRACTS.
(a) Except as would not have a Company Material Adverse Effect or as
specified in Section 3.18 of the Company Disclosure Schedule, (i) each Specified
Contract is a legal, valid and binding obligation of the Company or a
Subsidiary, as applicable, in full force and effect and enforceable against the
Company or a Subsidiary in accordance with its terms, subject to the effect of
any applicable bankruptcy, insolvency (including all Law relating to
21
fraudulent transfers), reorganization, moratorium or similar Law affecting
creditors' rights generally and subject to the effect of general principles of
equity, (ii) to the knowledge of the Company, each Specified Contract is a
legal, valid and binding obligation of the counterparty thereto, in full force
and effect and enforceable against such counterparty in accordance with its
terms, subject to the effect of any applicable bankruptcy, insolvency (including
all Law relating to fraudulent transfers), reorganization, moratorium or similar
Law affecting creditors' rights generally and subject to the effect of general
principles of equity, (iii) neither the Company nor any of its Subsidiaries is
and, to the Company's knowledge, no counterparty is, in breach or violation of,
or in default under, any Specified Contract, (iv) none of the Company or any of
the Subsidiaries has received any written claim of default under any Specified
Contract and (v) to the Company's knowledge, no event has occurred that would
result in a breach or violation of, or a default under, any Specified Contract
(in each case, with or without notice or lapse of time or both).
(b) For purposes of this Agreement, the term "SPECIFIED CONTRACT"
means any of the following Contracts (together with all exhibits and schedules
thereto) to which the Company or any Subsidiary is a party:
(i) any limited liability company agreement, joint venture or other
similar agreement or arrangement with respect to any material business of
the Company and the Subsidiaries, taken as a whole, other than any such
limited liability company, partnership or joint venture that is a
Subsidiary;
(ii) any Contract relating to or evidencing Indebtedness in an amount
in excess of $5,000,000, other than equipment leases that are treated as
operating leases in accordance with GAAP and entered into in the ordinary
course of business;
(iii) any Contract filed or required to be filed as an exhibit to the
Company's Annual Report on Form 10-K pursuant to Item 601(b)(10) of
Regulation S-K under the Securities Act or disclosed or required to be
disclosed by the Company in a Current Report on Form 8-K, other than Plans
disclosed in Section 3.11(a);
(iv) any Contract that purports to limit the right of the Company or
the Subsidiaries (A) to engage or compete in any line of business or (B) to
compete with any Person or operate in any geographic area, in the case of
each of (A) and (B), in any respect material to the business of the Company
and the Subsidiaries, taken as a whole, or that purports to limit the right
of any Affiliate of the Company or any of the Subsidiaries (other than the
Company or one of its Subsidiaries) to engage or compete in any line of
business or to compete with any Person or operate in any geographic area;
(v) any Contract that (A) contains most favored customer pricing
provisions (other than pricing provisions governed by reference to a
pricing service or other third-party pricing mechanism) with any third
party (other than Contracts terminable by the Company or applicable
Subsidiary upon not more than 60 days notice without incurring premium or
penalty entered into in the ordinary course of business consistent with
past practice) or (B) grants any exclusive rights, rights of first refusal,
rights of first
22
negotiation or similar rights to any Person (other than the Company or
any of its Subsidiaries);
(vi) any Contract entered into after July 1, 2005 or not yet
consummated for the acquisition or disposition, directly or indirectly (by
merger or otherwise), of assets or capital stock or other equity interests
of any Person for an aggregate consideration under such Contract in excess
of $10,000,000 individually, or $20,000,000 in the aggregate or any
contract for the disposition of the assets of the Company to the MLP;
(vii) any Contract of the type specified in Section 5.01(m) or between
or among the Company or a Subsidiary, on the one hand, and any of their
respective Affiliates (other than the Company or any Subsidiary), on the
other hand, that involves amounts of more than $60,000 (other than
contracts or agreements included in Section 3.18(b)(iii));
(viii) any acquisition Contract pursuant to which the Company or any
of its Subsidiaries has continuing indemnification (other than
environmental remediation and indemnification obligations, which are
expressly covered in Section 3.16), "earn-out" or other contingent payment
obligations, except for any such earn-out or contingent payment obligations
for which the Company has properly accrued a liability on its financial
statements referred to in Section 3.07(c) in accordance with GAAP;
(ix) any Contract that, individually or in the aggregate, would, or
would reasonably be expected to, prevent or delay beyond the Expiration
Date the Company's ability to consummate the transactions contemplated by
this Agreement;
(x) any Contract that contains a put, call, right of first refusal or
similar right pursuant to which the Company or any Subsidiary would be
required to purchase or sell, as applicable, any ownership interests of any
Person;
(xi) each Contract in effect on December 31, 2005, or, to the
knowledge of the Company, in effect on the date hereof, with (A) each of
the five largest (by anticipated dollar amount in 2006) customers of the
Company and its Subsidiaries for terminaling services and (B) each of the
five largest (by anticipated dollar amount in 2006) customers of the
Company and its Subsidiaries for delivery of refined petroleum products;
(xii) any Contract with any supplier of, or vendor or provider of
services to, the Company or any Subsidiary (other than for purchase of
product inventory) providing for minimum annual payments from the Company
and its Subsidiaries in excess of (A) $500,000 with respect to operating
leases (other than real estate leases set forth in Section 3.13 of the
Company Disclosure Schedule) and (B) $1,000,000 with respect to other
contractual obligations, in each case, that was in effect as of December
31, 2005, or, to the knowledge of the Company, in effect as of the date
hereof and having payments in excess of such amount due in calendar 2006 or
any subsequent year.
A true and complete list of the Specified Contracts referred to in
subsections (i) through (xii) above is set forth in Section 3.18 of the Company
Disclosure Schedule, except for Specified Contracts filed prior to the date
hereof as exhibits to SEC Reports. The Company has made available to Parent true
and correct copies of each Specified Contract.
23
Section 3.19 BOARD APPROVAL; VOTE REQUIRED.
(a) The Company Board, by resolutions duly adopted at a meeting duly
called and held, which resolutions, subject to Section 6.04, have not been
subsequently rescinded, modified or withdrawn in any way, has by unanimous vote
of those directors present (who constituted 100% of the directors then in
office) duly (i) determined that this Agreement, the Merger and the Other
Transactions are fair to and in the best interests of the Company and its
stockholders, (ii) approved this Agreement, the Merger and the Other
Transactions and declared their advisability, and (iii) recommended that the
stockholders of the Company adopt this Agreement and directed that this
Agreement be submitted for consideration by the Company's stockholders at the
Company Stockholders' Meeting. Assuming the accuracy of Parent's representations
and warranties in Section 4.09, the approval of this Agreement by the Company
Board constitutes approval of this Agreement and the Merger for purposes of
Section 203 of the DGCL ("SECTION 203") and represents the only action necessary
to ensure that the restrictions of Section 203 do not apply to the execution and
delivery of this Agreement or the consummation of the Merger and the Other
Transactions. No "fair price," "moratorium," "control share acquisition," or
other similar anti-takeover statute or regulation enacted under state or federal
Law in the United States (with the exception of Section 203) applicable to the
Company is applicable to the transactions contemplated by this Agreement.
(b) Assuming the accuracy of Parent's representations and warranties
set forth in Section 4.09, the only vote of the holders of any class or series
of capital stock or other securities of the Company necessary to adopt this
Agreement or consummate the Merger and the Other Transactions is the affirmative
vote of the holders of a majority of the outstanding shares of Common Stock and
the Company Preferred Stock (voting on an as converted basis as provided in the
Certificate of Designations governing the terms of the Company Preferred Stock),
voting together as a single class, in favor of the adoption of this Agreement
(the "STOCKHOLDER APPROVAL").
Section 3.20 BROKERS. No broker, finder or investment banker other
than UBS Securities LLC 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 delivered to
Parent complete and accurate copies of all agreements under which any fees or
expenses are or may be payable to UBS Securities LLC.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER CO
Each of Parent and Merger Co, jointly and severally, hereby represents
and warrants to the Company that, except as set forth in the Parent Disclosure
Schedule:
Section 4.01 CORPORATE ORGANIZATION. Each of Parent and Merger Co is a
corporation, duly organized, validly existing and in good standing under the Law
of the State of Delaware; and each has the requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals would not, individually or in
the
24
aggregate, prevent or delay consummation of the Merger beyond the Expiration
Date or otherwise prevent or materially delay either Parent or Merger Co from
performing its obligations under this Agreement.
Section 4.02 CHARTER DOCUMENTS. Each of Parent and Merger Co has
heretofore furnished to the Company a complete and correct copy of its Charter
Documents as amended to date. Such Charter Documents are in full force and
effect.
Section 4.03 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent and
Merger Co has all necessary corporate or other power and authority, as
applicable, to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the Merger. The execution, delivery and performance
of this Agreement by each of Parent and Merger Co and the consummation by each
of Parent and Merger Co of the Merger have been duly and validly authorized by
all necessary corporate or other action, and no other corporate or other
proceedings on the part of Parent or Merger Co are necessary to authorize this
Agreement or to consummate the Merger. This Agreement has been duly and validly
executed and delivered by each of Parent and Merger Co and, assuming due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of each of Parent and Merger Co, enforceable against each
of Parent and Merger Co in accordance with its terms, subject to the effect of
any applicable bankruptcy, insolvency (including all Law relating to fraudulent
transfers), reorganization, moratorium or similar Law affecting creditors'
rights generally and subject to the effect of general principles of equity.
Section 4.04 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by each of Parent and
Merger Co do not, and the performance of this Agreement by each of Parent and
Merger Co and the consummation by each of Parent and Merger Co of the Merger
will not, (i) conflict with or violate the respective Charter Documents of
Parent or Merger Co, (ii) assuming that all consents, approvals, authorizations
and other actions described in Section 4.04(b) have been obtained and all
filings and obligations described in Section 4.04(b) have been made, conflict
with or violate any Law applicable to either Parent or Merger Co or by which any
property or asset of either of them is bound or affected, or (iii) result in any
breach or violation 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
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a Lien on any property or asset of either Parent or Merger Co
pursuant to any Contract to which either Parent or Merger Co is a party or by
which either Parent or Merger Co or any of their respective properties or assets
is bound or affected, except, with respect to clauses (ii) and (iii), for any
such conflicts, violations, breaches, defaults or other occurrences which would
not, individually or in the aggregate, prevent or delay beyond the Expiration
Date consummation of the Merger or otherwise prevent or delay beyond the
Expiration Date either Parent or Merger Co from performing its material
obligations under this Agreement.
(b) The execution and delivery of this Agreement by each of Parent and
Merger Co do not, and the performance of this Agreement by each of Parent and
Merger Co and the consummation by each of Parent and Merger Co of the Merger
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any Governmental
25
Authority, except for those consents, approvals, authorizations, or permits or
such filings or notifications referred to in Section 3.05(b)(i) through (vi),
and such other consents, approvals, authorizations or permits or such filings or
notifications, the failure of which to obtain or make would not, individually or
in the aggregate, prevent or delay beyond the Expiration Date the consummation
of the Merger or otherwise prevent or delay beyond the Expiration Date either
Parent or Merger Co from performing its material obligations under this
Agreement.
Section 4.05 ABSENCE OF LITIGATION. As of the date of this Agreement,
there is no Action pending or, to the knowledge of Parent and Merger Co,
threatened, in writing against either Parent or Merger Co or any of their
Affiliates before any Governmental Authority that would or seeks to materially
delay or prevent the consummation of the Merger. As of the date of this
Agreement, neither Parent nor Merger Co nor any of their Affiliates, including
their officers and directors, is subject to any continuing order of, consent
decree, settlement agreement or other similar written agreement with or
continuing investigation by, any Governmental Authority, or any order, writ,
judgment, injunction, decree, determination or award of any Governmental
Authority that, in each case would or seeks to delay or prevent beyond the
Expiration Date the consummation of the Merger.
Section 4.06 OPERATIONS OF MERGER CO. Merger Co was formed solely for
the purpose of engaging in the transactions contemplated hereby, has engaged in
no other business activities and has conducted its operations only as
contemplated by this Agreement.
Section 4.07 FINANCING. Parent has and will have at the Effective Time
sufficient funds (including pursuant to any existing or committed credit
facilities) to enable it to pay the aggregate Merger Consideration and all
related fees and expenses (such funds, the "FINANCING"). The Financing will not
cause (i) the fair salable value of the assets of the Surviving Corporation to
be less than the total amount of its existing liabilities; (ii) the fair salable
value of the assets of the Surviving Corporation to be less than the amount that
will be required to pay its probable liabilities on its existing debts as they
mature; (iii) the Surviving Corporation not to be able to pay its existing debts
as they mature; or (iv) the Surviving Corporation to have an unreasonably small
capital with which to engage in its business.
Section 4.08 BROKERS. Except to the extent payable after, and
conditioned on, Closing, the Company will not be responsible for any brokerage,
finder's or other similar fee or commission to any broker, finder or investment
banker in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of either Parent or Merger Co.
Section 4.09 OWNERSHIP OF COMPANY COMMON STOCK. Except as disclosed in
Xxxxxx Xxxxxxx'x statement on Schedule 13D, as amended, filed with the SEC on or
prior to the date hereof, neither Parent nor any of Parent's "Affiliates" or
"Associates" directly or indirectly "owns," and at all times during the two-year
period prior to the date of this Agreement, neither Parent nor any of Parent's
Affiliates directly or indirectly has "owned," beneficially or otherwise, 10% or
more of the outstanding Company Common Stock, as those terms are defined in
Section 203 of the DGCL.
26
ARTICLE V.
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.01 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER.
The Company agrees that, between the date of this Agreement and the Effective
Time, except as expressly contemplated by this Agreement or as set forth in
Section 5.01 of the Company Disclosure Schedule, the businesses of the Company
and the Subsidiaries shall be conducted only in, and the Company and the
Subsidiaries shall not take any action except in, the ordinary course of
business and in a manner consistent with past practice, and the Company shall,
and shall cause each of the Subsidiaries to, use its reasonable best efforts
consistent with past practice to preserve substantially intact the business
organization of the Company and the Subsidiaries, to preserve the assets and
properties of the Company and the Subsidiaries in good repair and condition, to
keep available the services of its present officers and employees and to
preserve the current relationships of the Company and the Subsidiaries with
customers, suppliers and other Persons with which the Company or any Subsidiary
has material business relations, in each case in the ordinary course of business
and in a manner consistent with past practice. Without limiting the generality
of the foregoing, except as contemplated by any other provision of this
Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule,
the Company agrees that neither the Company nor any Subsidiary shall, between
the date of this Agreement and the Effective Time, directly or indirectly, do
any of the following without the prior written consent of Parent, which consent
shall not be unreasonably withheld, delayed or conditioned:
(a) amend or otherwise change the Charter Documents of the Company or
the General Partner;
(b) issue, deliver, sell, transfer, dispose of, pledge or encumber any
shares of its capital stock or equity interests, any other voting securities or
any securities convertible into, or any rights, warrants or options to acquire,
any such shares of capital stock or equity interests, voting securities or
convertible securities, other than (i) the issuance of shares of Company Common
Stock issuable pursuant to Company Stock Options and Warrant outstanding on the
date hereof and set forth in Section 3.03 of the Company Disclosure Schedule or
(ii) the issuance of shares of Company Common Stock or options therefor (A) to
newly hired or promoted employees of the Company or any Subsidiary (other than
executive officers of the Company) pursuant to the Company Equity Plans in the
ordinary course of business consistent with past practice or (B) to any Person
in connection with any acquisition by the Company or any Subsidiary made in
accordance with Section 5.01(e)(i);
(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 or equity interests, other than scheduled dividends on the
Company Preferred Stock, except for dividends by any direct or indirect wholly
owned Subsidiary to the Company or any other wholly owned Subsidiary;
(d) reclassify, combine, split, subdivide or, other than as required
by the terms of outstanding Company Stock Options or Restricted Stock Awards,
redeem, or purchase or otherwise acquire, directly or indirectly, any capital
stock or equity interests of the Company or any Subsidiary;
27
(e) (i) acquire (including by merger, consolidation, or acquisition of
stock or assets or any other business combination) any corporation, partnership,
other business or business organization or any division or business unit thereof
in any other Person, other than the Authorized Acquisition; (ii) incur,
guarantee or modify, either individually or in the aggregate, any Indebtedness
in excess of $10,000,000 in principal amount outstanding at any time, other than
the incurrence of Indebtedness under the Company Credit Facility in the ordinary
course of business consistent with past practice; (iii) authorize, or make any
commitment with respect to, any capital expenditures which are, in the
aggregate, in excess of $10,000,000; (iv) enter into any new line of business;
(v) other than in the ordinary course of business and consistent with past
practice, make any loans, advances or capital contributions to, or investments
in, Persons other than wholly owned Subsidiaries or (vi) sell, lease, license,
encumber or otherwise dispose of (by merger, consolidation, sale of stock or
assets or otherwise) assets having an aggregate value from the date of this
Agreement to the Expiration Date of greater than $10,000,000 (excluding sales of
inventory in the ordinary course of business); PROVIDED that, anything in this
Section 5.01 to the contrary notwithstanding, neither the Company nor any
Subsidiary shall sell, contribute or otherwise directly or indirectly transfer,
exchange, or dispose of (A) any Partnership Interests (other than Common Units
under the MLP Equity Plan) or any equity interest in the General Partner, (B)
the common stock, par value $0.01 per share of Lion Oil Company, an Arkansas
corporation, or (C) any assets to TransMontaigne Partners, except for the
Authorized Acquisition and except pursuant to the exercise by TransMontaigne
Partners of its rights to purchase assets from the Company and its Subsidiaries
pursuant to the terms of the Omnibus Agreement;
(f) adopt or enter into a plan of complete or partial liquidation,
dissolution, restructuring, recapitalization or other reorganization of the
Company or any Subsidiary (other than the Merger);
(g) (i) make any increase in the salary, wages, benefits, bonuses or
other compensation payable or to become payable to its current or former
officers, except for increases required under employment agreements existing on
the date hereof and disclosed to Parent prior to the date hereof; (ii) make any
increase in the Company's employee compensation expense in the aggregate other
than increases at the time and in amounts consistent with past practice
(excluding increases approved by the Company Board prior to the date of this
Agreement and that have been previously disclosed to Parent); (iii) enter into
any employment, change of control or severance agreement with, or establish,
adopt, enter into or amend any Plan, bonus, profit sharing, thrift, stock
option, restricted stock, pension, retirement, welfare, deferred compensation,
employment, change of control, termination, severance or other benefit plan,
agreement, policy or arrangement for the benefit of, any current or former
director, officer or employee; (iv) exercise any discretion to accelerate the
vesting or payment of any compensation or benefit under any Plan; or (v) take
any action to fund the payment of compensation or benefits under any Plan,
except (A) in the case of clauses (iii) and (v), in the ordinary course of
business, consistent with past practices with respect to employees that are not
officers or directors, (B) for the payment of a pro-rated portion of annual cash
bonuses for the period from January 1, 2006 through the Effective Time in
amounts consistent with past practice, and (C) as may be required by the terms
of any such plan, agreement, policy or arrangement in effect on the date hereof
or to comply with applicable Law;
28
(h) (i) except as required by Law or the Treasury Regulations
promulgated under the Code, make any change (or file any such change) in any
method of Tax accounting for a material amount of Taxes, (ii) make, change or
rescind any material Tax election with respect to the Company or any Subsidiary,
(iii) settle or compromise any material Tax liability or otherwise pay or
consent to any material assessment as the result of an audit, without the
consent of Parent, (iv) file any amended Tax Return involving a material amount
of additional Taxes (except as required by Law), (v) enter into any closing
agreement relating to a material amount of Taxes, or (vi) waive or extend the
statute of limitations in respect of Taxes (other than pursuant to extensions of
time to file Tax Returns obtained in the ordinary course of business), other
than, in each case, in the ordinary course of business and consistent with past
practice;
(i) make any change to its methods of accounting in effect as of
December 31, 2005, except (i) as required by changes in GAAP or (ii) as may be
required by a change in applicable Law;
(j) write up, write down or write off the book value of any of its
assets, other than (i) in the ordinary course of business and consistent with
past practice or (ii) as may be required by GAAP;
(k) enter into any agreement that restricts the ability of the Company
or any of its Subsidiaries to engage or compete in any line of business in any
respect material to the business of the Company and the Subsidiaries, taken as a
whole, or that restricts the ability of any Affiliate of the Company (other than
any Subsidiary) to engage or compete in any line of business or in any
geographic area;
(l) other than (i) in the ordinary course of business and on terms not
materially adverse to the Company and the Subsidiaries taken as a whole, enter
into, amend, modify, cancel or consent to the termination of any Specified
Contract or any Contract that would be a Specified Contract if in effect on the
date of this Agreement and (ii) any modification to the terms of the Xxxxxx
Xxxxxxx Agreements that is not subject to cancellation by the Company within six
months after the Closing Date;
(m) enter into, renew or amend in any material respect any
transaction, agreement, arrangement or understanding between (i) the Company or
any Subsidiaries, on the one hand, and (ii) any Affiliate of the Company (other
than any of the Company's Subsidiaries), on the other hand, of the type that
would be required to be disclosed under Item 404 of Regulation S-K under the
Securities Act;
(n) (i) assign, transfer, license or sublicense, mortgage or encumber
any material Intellectual Property, except for non-exclusive licenses or
non-exclusive sublicenses of Intellectual Property owned by the Company in the
ordinary course of business, or (ii) fail to pay any fee, take any action or
make any filing reasonably necessary to maintain its ownership of the material
Intellectual Property owned by the Company;
(o) pay, discharge, settle, compromise, commence or satisfy in an
amount individually or in the aggregate in excess of $1,000,000 any pending or
threatened action, litigation or arbitration, other than (A) pursuant to and on
the existing terms of the agreements
29
listed in Section 5.01(o) of the Company Disclosure Schedules and (B) pursuant
to court orders entered against the Company listed in Section 5.01(o) of the
Company Disclosure Schedules;
(p) close any of the facilities of the Company or any Subsidiary or
discontinue any line of business;
(q) enter into any contract with a term of more than twelve months
that is not terminable by the Company with or without cause and without penalty
on 90 days' notice or less, other than the renewal of leases in the ordinary
course of business consistent with past practice;
(r) (i) take any action that would reasonably be likely to prevent or
delay beyond the Expiration Date satisfaction of the conditions contained in
Section 7.01 or 7.02 or the consummation of the Merger, or (ii) take any action
that would have a Company Material Adverse Effect;
(s) take or permit any action to be taken that would result in a
breach of any representation or warranty in this Agreement (subject to fiduciary
obligations under applicable Law); or
(t) announce an intention, enter into any formal or informal agreement
or otherwise make or permit to be made a commitment to do any of the foregoing.
ARTICLE VI.
ADDITIONAL AGREEMENTS
Section 6.01 PROXY STATEMENT; OTHER FILINGS. As promptly as
practicable following the date of this Agreement, (a) the Company shall prepare
and file with the SEC the preliminary Proxy Statement, and (b) each of the
Company, Parent and Merger Co shall, or shall cause their respective Affiliates
to, prepare and file with the SEC all other documents that are required to be
filed by such party in connection with the transactions contemplated hereby (the
"OTHER FILINGS"). Each of the Company, Parent and Merger Co shall furnish all
information concerning itself and its Affiliates that is required to be included
in the Proxy Statement or, to the extent applicable, the Other Filings, or that
is customarily included in proxy statements or other filings prepared in
connection with transactions of the type contemplated by this Agreement. Each
party shall promptly notify the other parties upon the receipt of any comments
from the SEC or its staff or any request from the SEC or its staff for
amendments or supplements to the Proxy Statement or the Other Filings and shall
provide the other parties with copies of all correspondence between it and its
representatives, on the one hand, and the SEC and its staff, on the other hand,
relating to the Proxy Statement or the Other Filings. Each of the Company,
Parent and Merger Co shall use its reasonable best efforts to respond as
promptly as practicable to any comments of the SEC with respect to the Proxy
Statement or the Other Filings, and the Company shall use its reasonable best
efforts to cause the definitive Proxy Statement to be mailed to the Company's
stockholders as promptly as reasonably practicable after the date of this
Agreement. If at any time prior to the Effective Time, any information relating
to the Company, Parent, Merger Co or any of their respective Affiliates,
officers or directors, should be discovered by the Company, Parent or Merger Co
which should be set forth in an amendment or supplement to the Proxy Statement
or the Other Filings, so that the Proxy Statement or the Other
30
Filings shall not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading, the party that discovers such information shall promptly
notify the other parties, and an appropriate amendment or supplement describing
such information shall be filed by the Company with the SEC and, to the extent
required by applicable Law, disseminated to the stockholders of the Company. The
Company shall use its reasonable best efforts to cause the Proxy Statement to be
mailed to the Company stockholders as soon as reasonably practicable.
Notwithstanding anything to the contrary stated above, prior to filing or
mailing the Proxy Statement or filing the Other Filings (or, in each case, any
amendment or supplement thereto) or responding to any comments of the SEC with
respect thereto, the Company shall provide the other parties an opportunity to
review and comment on such document or response and shall include in such
document or response comments reasonably proposed by the other party. The Proxy
Statement and the Other Filings that are filed by the Company will comply as to
form in all material respects with the requirements of the Exchange Act and the
rules and regulations promulgated thereunder.
The Company hereby covenants and agrees that none of the information
included or incorporated by reference in the Proxy Statement or in the Other
Filings to be made by the Company will, in the case of the Proxy Statement, at
the date it is first mailed to the Company's stockholders or at the time of the
Company Stockholders' Meeting or at the time of any amendment or supplement
thereof, or, in the case of any Other Filing, at the date it is first mailed to
the Company's stockholders or at the date it is first filed with the SEC,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading, except that no covenant is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by Parent or Merger Co or any Affiliate of Parent or Merger Co in
connection with the preparation of the Proxy Statement or the Other Filings for
inclusion or incorporation by reference therein. Parent and Merger Co hereby
covenant and agree that none of the information supplied by Parent or Merger Co
or any Affiliate of Parent or Merger Co for inclusion or incorporation by
reference in the Proxy Statement or the Other Filings will, in the case of the
Proxy Statement, at the date it is first mailed to the Company's stockholders or
at the time of the Company Stockholders' Meeting or at the time of any amendment
or supplement thereof, or, in the case of any Other Filing, at the date it is
first mailed to the Company's stockholders or, at the date it is first filed
with the SEC, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading. No covenant is made by either Parent or Merger Co with respect
to statements made or incorporated by reference therein based on information
supplied by the Company in connection with the preparation of the Proxy
Statement or the Other Filings for inclusion or incorporation by reference
therein. All Other Filings that are filed by Parent or Merger Co will comply as
to form in all material respects with the requirements of the Exchange Act and
the rules and regulations promulgated thereunder.
Section 6.02 COMPANY STOCKHOLDERS' MEETING. Subject to Sections 6.01
and 6.04, the Company shall duly call, give notice of, convene and hold a
meeting of its stockholders (the "COMPANY STOCKHOLDERS' MEETING"), as promptly
as practicable after the date of this Agreement, for the purpose of voting upon
the adoption of this Agreement. Subject to Section
31
6.04, (i) the Company Board will recommend to holders of the Shares that they
adopt this Agreement and the Company shall include such recommendation in the
Proxy Statement and (ii) the Company will use reasonable best efforts to solicit
from its stockholders proxies in favor of the adoption of this Agreement and
will take all other action necessary or advisable to secure the Stockholder
Approval.
Section 6.03 ACCESS TO INFORMATION; CONFIDENTIALITY; DUE DILIGENCE.
(a) Except as otherwise prohibited by applicable Law or as would
violate any attorney-client privilege (it being understood that the parties
shall make appropriate substitute disclosure arrangements to cause such
information to be provided in a manner that does not result in such violation),
from the date of this Agreement until the Effective Time, the Company shall (and
shall cause the Subsidiaries to): (i) provide to Parent and to the officers,
directors, employees, accountants, consultants, legal counsel, financing
sources, agents and other representatives (collectively, "REPRESENTATIVES") of
Parent reasonable access, during normal business hours and upon reasonable prior
notice by Parent, to the officers, employees, agents, properties, offices and
other facilities of the Company and the Subsidiaries and to the books and
records thereof, (ii) furnish promptly to Parent such other information
concerning the business, properties, contracts, assets, liabilities, personnel
and other aspects of the Company and the Subsidiaries as Parent or its
Representatives may reasonably request, and (iii) furnish to Parent routine
updates, in a form to be agreed upon by the parties, on the Company's market
positions with respect to risk management activities.
(b) All information obtained by Parent or its Representatives pursuant
to this Section 6.03 shall be kept confidential in accordance with the
Confidentiality Agreement, dated October 20, 2005, between Parent and the
Company (the "CONFIDENTIALITY AGREEMENT").
Section 6.04 ACQUISITION PROPOSALS.
(a) Until the earlier of the Effective Time and the termination of
this Agreement pursuant to Article VIII, the Company shall not, nor shall the
Company permit any of its Subsidiaries or the officers, directors, employees,
representatives or agents of the Company or its Subsidiaries to, directly or
indirectly, (i) solicit, initiate or knowingly encourage (including by way of
furnishing non-public information or providing access to its properties, books,
records or personnel) any inquiries regarding, or the making of any proposal or
offer that constitutes, or could reasonably be expected to lead to, an
Acquisition Proposal or (ii) have any discussions or participate in any
negotiations regarding an Acquisition Proposal, or execute or enter into any
agreement, understanding or arrangement with respect to an Acquisition Proposal,
or approve or recommend or propose to approve or recommend an Acquisition
Proposal or any agreement, understanding or arrangement relating to an
Acquisition Proposal (or resolve or authorize or propose to agree to do any of
the foregoing actions) or (iii) other than in connection with the Merger and the
Other Transactions, take any action to exempt any Person from the restrictions
on "business combinations" contained in Section 203 of the DGCL or otherwise
cause such restrictions not to apply or (iv) waive, terminate, modify or fail to
enforce any provisions of any Standstill Agreement or similar obligation into
which any Person has entered.
32
(b) Notwithstanding Section 6.04(a), if, prior to obtaining the
Stockholder Approval (i) the Company receives an Acquisition Proposal by any
Person, and (ii) the Company Board determines in good faith, (A) after
consultation with its financial advisor, that such Acquisition Proposal
constitutes or could reasonably be expected to lead to a Superior Proposal and
(B) after consultation with outside legal counsel, that the failure to take the
actions set forth in clauses (x) and (y) below with respect to such Acquisition
Proposal could result in a breach of the fiduciary obligations of the members of
the Company Board or any applicable Law, the Company may, in response to such
Acquisition Proposal, (x) furnish non-public information with respect to the
Company to the Person who has made such Acquisition Proposal pursuant to a
Confidentiality Agreement on terms substantially similar to and no more
favorable to such Person than those contained in the Confidentiality Agreement;
and (y) participate in discussions and negotiations regarding such Acquisition
Proposal. The Company shall advise Parent orally and in writing of the receipt
of any Acquisition Proposal or any inquiry with respect to, or that could
reasonably be expected to lead to, any Acquisition Proposal (in each case within
one business day of receipt thereof), specifying the material terms and
conditions thereof, the identity of the party making such Acquisition Proposal
or inquiry, a copy of all written materials provided to the Company or any of
its Subsidiaries in connection with any such Acquisition Proposal and a copy of
any information provided by the Company to such Person in connection with such
Acquisition Proposal that has not previously been provided to Parent. The
Company agrees that it and its Subsidiaries will not enter into any
Confidentiality Agreement with any Person subsequent to the date hereof which
prohibits the Company from providing such information to Parent. The Company
shall notify Parent (within one business day) orally and in writing of any
material modifications to the financial or other material terms of such
Acquisition Proposal or inquiry and shall provide to Parent, within one business
day, a copy of all written materials subsequently provided to or by the Company
or any Subsidiary in connection with any such Acquisition Proposal. For purposes
of this Agreement, "ACQUISITION PROPOSAL" means any proposal or offer from any
Person or group (other than Parent and its Affiliates) relating to any direct or
indirect acquisition or purchase of 20% or more of the assets of the Company and
its Subsidiaries, taken as a whole, or 20% or more of any class of equity
securities of the Company then outstanding, any tender offer or exchange offer
that if consummated would result in any Person beneficially owning 20% or more
of any class of equity securities of the Company then outstanding, and any
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company, other than the
transactions contemplated by this Agreement.
(c) Except as set forth in Sections 6.04(d), (e) and (f), the Company
Board shall not, directly or indirectly, (i) withdraw or modify, or propose
publicly to withdraw or modify, or resolve to withdraw or modify, in a manner
adverse to Parent, the approval or recommendation by the Company Board of the
Merger, this Agreement, or the Other Transactions; (ii) approve or recommend, or
propose publicly to approve or recommend, or resolve to approve or recommend,
any Acquisition Proposal (any of the actions referred to in the foregoing
clauses (i) and (ii), a "CHANGE IN BOARD RECOMMENDATION"); (iii) approve or
recommend or allow the Company or any of its Subsidiaries to enter into any
letter of intent, acquisition agreement or any similar agreement or
understanding (A) constituting or related to, or that is intended to or could
reasonably be expected to lead to, any Acquisition Proposal or (B) requiring it
to abandon, terminate or fail to consummate the Merger or any Other Transaction
33
contemplated by this Agreement; or (iv) effect any transaction contemplated by
any Acquisition Proposal.
(d) Notwithstanding Section 6.04(c), the Company Board may, prior to
obtaining the Stockholder Approval and only in response to a Superior Proposal
received by the Company Board or an independent committee thereof after the date
of this Agreement, terminate this Agreement to enter into an agreement with
respect to such Superior Proposal (and the Company may (1) exempt such Person
from the restrictions on business combinations contained in Section 203 of the
DGCL and (2) waive or modify any Standstill Agreement or similar obligation into
which such Person has entered), but only if:
(i) the Company Board shall have first provided prior written notice
to Parent that it is prepared to terminate this Agreement to enter into an
agreement with respect to a Superior Proposal, which notice shall attach
the most current version of any written agreement relating to the
transaction that constitutes such Superior Proposal;
(ii) Parent does not make, within three business days after the
receipt of such notice, a binding, written and complete (including any
schedules or exhibits) proposal that the Company Board determines in good
faith, after consultation with its financial advisor, is at least as
favorable to the stockholders of the Company as such Superior Proposal and
which, by its terms, may be accepted at any time prior to the later of the
end of such three business day period and one full business day after
receipt by the Company Board of such notice; and
(iii) in the event of any termination of this Agreement by the Company
pursuant to this paragraph 6.04(d), the Company pays the Termination Fee
under Section 8.03(c) concurrently with and as a condition of such
termination.
(e) Notwithstanding Section 6.04(a) or (c), at any time prior to
obtaining the Stockholder Approval, if the Company Board or an independent
committee thereof has concluded in good faith, following consultation with its
outside legal counsel, that the failure of the Company Board to make a Change in
Board Recommendation could result in a breach of the fiduciary obligations of
the members of the Company Board or any applicable Law, then the Company Board
or such independent committee may make a Change in Board Recommendation, but
only if:
(i) the Company Board shall have first provided prior written notice
to Parent that it is prepared to make a Change in Board Recommendation,
which notice shall include a reasonably detailed explanation of the reasons
for such Change in Board Recommendation; and
(ii) Parent does not make, within three business days (or such shorter
period as the Company Board determines in good faith (as set forth in a
resolution of the Company Board or a committee of the Company Board), after
consultation with legal counsel, is necessary in order to satisfy any
applicable requirement of Law) after the receipt of such notice, a binding,
written and complete (including any schedules or exhibits) proposal that
causes the Company Board to determine in good faith, after
34
consultation with its financial advisor and legal counsel, to refrain
from making such Change in Board Recommendation and which, by its terms,
may be accepted at any time prior to the later of the end of such three
business day period and one full business day after receipt by the Company
Board of such notice.
(f) Nothing contained in this Section 6.04 shall prohibit the Company
from complying with Rules 14a-9, 14d-9 or 14e-2 promulgated under the Exchange
Act; provided that the Company also complies with its obligations under Section
6.04(d) and (e) to the extent applicable.
(g) For purposes of this Agreement, "SUPERIOR PROPOSAL" means any bona
fide written Acquisition Proposal that (1) relates to an acquisition by a Person
or group acting in concert of either of (A) more than 50% of the outstanding
Shares pursuant to a tender offer, merger or otherwise or (B) more than 50% of
the assets of the Company and the Subsidiaries, taken as a whole, (2) is on
terms that the Company Board determines in its good faith judgment (after
consultation with its financial advisor) are more favorable to the Company's
stockholders (in their capacities as stockholders) from a financial point of
view than this Agreement (taking into account any alterations to this Agreement
agreed to by Parent or Merger Co in response thereto) and (3) which the Company
Board determines in good faith (after consultation with a financial advisor of
nationally recognized reputation and its outside legal counsel) is reasonably
capable of being consummated.
Section 6.05 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) For a period of six years after the Effective Time, unless
otherwise required by applicable Law, the Surviving Corporation shall, and
Parent shall cause the Surviving Corporation to, cause the Charter Documents of
the Surviving Corporation and its Subsidiaries to contain provisions no less
favorable with respect to the indemnification of and advancement of expenses to
directors and officers than are set forth in the Charter Documents of the
Company (or the relevant Subsidiary) as in effect on the date hereof. Parent
shall, and shall cause the Surviving Corporation to, indemnify and advance
expenses to, each present and former director or officer of the Company and each
present and former director or officer of each Subsidiary (collectively, the
"INDEMNIFIED PARTIES"), in respect of actions, omissions or events through the
Effective Time to the fullest extent permitted by Law. Without limiting the
generality of the preceding sentence, if any Indemnified Party becomes involved
in any actual or threatened action, suit, claim, proceeding or investigation
covered by this Section 6.05 after the Effective Time, Parent shall cause the
Surviving Corporation to, to the fullest extent permitted by Law, promptly
advance to such Indemnified Party his or her legal or other expenses (including
the cost of any investigation and preparation incurred in connection therewith).
(b) The Surviving Corporation shall either (i) cause to be obtained a
"tail" insurance policy with a claims period of at least six years from the
Effective Time with respect to directors' and officers' liability insurance in
amount and scope at least as favorable as the Company's existing policies for
claims arising from facts or events that occurred prior to the Effective Time or
(ii) maintain the existing officers' and directors' liability insurance policies
maintained by the Company (PROVIDED that the Surviving Corporation may
substitute therefor policies of at least the same coverage containing terms and
conditions that are not less favorable
35
to the Indemnified Parties) for a period of six years after the Effective Time
so long as the annual premium therefor is not in excess of 250% of the last
annual premium paid prior to the date hereof; PROVIDED, HOWEVER, that if the
existing officers' and directors' liability insurance policies expire, are
terminated or cancelled during such six-year period or require an annual premium
in excess of 250% of the current premium paid by the Company for such insurance,
the Company will obtain as much coverage as can be obtained for the remainder of
such period for a premium not in excess of 250% (on an annualized basis) of such
current premium.
(c) If Parent or the Surviving Corporation or any of its successors or
assigns (i) shall 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 shall cease to continue to exist for any reason or
(ii) shall transfer all or substantially all of its properties and assets 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 Parent or the
Surviving Corporation and the transferee or transferees of such properties and
assets, as applicable, shall assume all of the obligations set forth in this
Section 6.05.
(d) The Indemnified Parties shall be third party beneficiaries of this
Section 6.05. The provisions of this Section 6.05 are intended to be for the
benefit of each such Indemnified Party, his or her heirs and his or her
representatives.
Section 6.06 EMPLOYEE BENEFITS MATTERS.
(a) The Surviving Corporation shall honor the terms of all employment
agreements and pay or provide the benefits required thereunder in accordance
with their terms, recognizing that the consummation of the transactions
contemplated hereby will constitute a "change in control" for purposes of any of
the employment agreements and Plans that include a definition of "change in
control."
(b) With respect to employees of the Company and the Subsidiaries as
of the Effective Time (each, an "EMPLOYEE"), for the period from the Effective
Time to the first anniversary of the Effective Time, or such earlier date on
which any Employee's employment is terminated (except with respect to any
benefits payable upon or after termination of employment), the Surviving
Corporation shall, and Parent shall cause the Surviving Corporation to, provide
salary, discretionary bonus and employee benefits (other than (i) equity-based
compensation, (ii) those benefits listed in Section 6.06 of the Company
Disclosure Schedule as terminating at the Effective Time, and (iii) any employee
welfare or benefit Plan that is not listed in Section 3.11 of the Company
Disclosure Schedule) that are no less favorable in the aggregate than those
provided to such Employees immediately prior to the Effective Time. From and
after the Effective Time, the Surviving Corporation and its subsidiaries shall,
and Parent shall cause the Surviving Corporation and its subsidiaries to, honor
in accordance with their terms (including, without limitation, terms which
provide for amendment or termination), all contracts, agreements, arrangements,
policies, plans and commitments of the Company and the Subsidiaries as in effect
immediately prior to the Effective Time that are applicable to any current or
former employees or directors of the Company or any Subsidiary. Nothing herein
shall be deemed to change the "at will" employment status of any Employee or
otherwise be a
36
guarantee of employment for any Employee, or to restrict the right of the
Surviving Corporation to terminate any Employee.
(c) Employees shall, to the extent permitted by the applicable Law,
receive credit for service accrued or deemed accrued prior to the Effective Time
for all purposes (including for purposes of eligibility to participate, vesting,
benefit accrual and eligibility to receive benefits, but excluding benefit
accruals under any defined benefit pension plan) under any employee benefit
plan, program or arrangement established or maintained by Parent, the Surviving
Corporation or any of their respective subsidiaries under which each Employee
may be eligible to participate on or after the Effective Time, to the same
extent recognized by the Company or any of the Subsidiaries under comparable
Plans immediately prior to the Effective Time; PROVIDED, HOWEVER, that such
crediting of service shall not operate to duplicate any benefit or the funding
of any such benefit.
(d) With respect to the welfare benefit plans, programs and
arrangements maintained, sponsored or contributed to by Parent or the Surviving
Corporation ("PURCHASER WELFARE BENEFIT PLANS") in which an Employee may be
eligible to participate on or after the Effective Time, Parent shall, to the
extent permitted by applicable Law (i) waive, or use reasonable best efforts to
cause its insurance carrier to waive, all limitations as to preexisting and
at-work conditions, if any, with respect to participation and coverage
requirements applicable to each active Employee under any Purchaser Welfare
Benefit Plan to the same extent waived under a comparable Plan and (ii) make
reasonable best efforts to cause any eligible expenses incurred by any Employee
and his or her covered dependents to be taken into account under the Purchaser
Welfare Benefit Plans for purposes of satisfying all deductible, coinsurance and
maximum out-of-pocket requirements applicable to such Employee and his or her
dependents as if such amounts had been paid in accordance with the Purchaser
Welfare Benefit Plans.
(e) Nothing in this Section 6.06, expressed or implied, shall be
construed to prevent Parent or any subsidiary of Parent (including, after the
Effective Time, the Surviving Corporation) from terminating or modifying to any
extent or in any respect any benefit plan that Parent or any subsidiary of
Parent (including, after the Effective Time, the Surviving Corporation) may
establish or maintain; PROVIDED that appropriate provision is made to comply
with the provisions of this Section 6.06. Nothing in this Section 6.06 is
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
Section 6.07 NOTIFICATION OF CERTAIN MATTERS. Subject to applicable
Law and the instructions of any Governmental Authority, each of the Company and
Parent shall keep the other apprised of the status of matters relating to
completion of the transactions contemplated hereby, including promptly
furnishing the other with copies of notices or other communications received by
Parent or the Company, as the case may be, or any of its Subsidiaries, from any
third Person and/or any Governmental Authority with respect to the Merger and
the Other Transactions contemplated by this Agreement. Between the date hereof
and the Effective Time, (i) the Company shall promptly notify Parent in writing
of any breach of any representation, warranty or covenant of the Company
contained herein or the failure of any representation or warranty of the Company
contained herein to remain accurate (other than any such representation or
warranty that expressly spoke only as of the date of this Agreement or as a
result of any transaction permitted by Section 5.01 or in accordance with
Article VI of this
37
Agreement), (ii) Parent will promptly notify the Company in writing of any
breach of any representation, warranty or covenant of Parent or Merger Co
contained herein or the failure of any representation or warranty of Parent or
Merger Co contained herein to remain accurate (other than any such
representation or warranty that expressly spoke only as of the date of this
Agreement or as a result of any transaction in accordance with Article VI of
this Agreement), and (iii) the Company will notify Parent in writing and Parent
will notify the Company in writing of any communication received (A) from any
Person alleging a consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement or (B) from any
Governmental Authority in connection with the transactions contemplated by this
Agreement.
Section 6.08 FINANCING. The Company agrees to provide, and shall cause
the Subsidiaries and its and their Representatives to provide, such cooperation
(including with respect to timeliness) in connection with the arrangement of the
Financing as may be reasonably requested by Parent (PROVIDED that such requested
cooperation does not unreasonably interfere with the ongoing operations of the
Company and the Subsidiaries), including (i) participation in meetings, drafting
sessions and due diligence sessions, (ii) furnishing Parent and its financing
sources with financial and other pertinent information regarding the Company and
its Subsidiaries, and the General Partner, TransMontaigne Partners, and the MLP
Subsidiaries, as may be reasonably requested by Parent, including all financial
statements and financial data of the type required by Regulation S-X and
Regulation S-K under the Securities Act and of type and form customarily
included in private placements under Rule 144A of the Securities Act to
consummate the offering of secured or unsecured senior or senior subordinated
notes, (iii) assisting Parent and its financing sources in the preparation of
(A) offering documents for any of the Financing and (B) materials for rating
agency presentations, (iv) cooperating with the marketing efforts of Parent and
its financing sources for any of the Financing, (v) providing and executing
documents as may be reasonably requested by Parent, including a certificate of
the chief financial officer of the Company with respect to solvency matters,
consents of accountants for use of their reports in any materials relating to
the Financing and revocable notices of redemption of debt, (vi) facilitating the
pledging of collateral, and (vii) using reasonable best efforts to obtain legal
opinions, accountants' comfort letters, surveys and title insurance as
reasonably requested by Parent. Parent shall, promptly upon request by the
Company, reimburse the Company for all reasonable out-of-pocket costs incurred
by the Company or the Subsidiaries in connection with such cooperation.
Section 6.09 FURTHER ACTION; REASONABLE BEST EFFORTS; NOTICE OF
CERTAIN EVENTS.
(a) Upon the terms and subject to the conditions of this Agreement,
subject to Sections 6.09(b) and (c), each of the Company, Parent and Merger Co
agrees to use its reasonable best efforts to effect the consummation of the
Merger as soon as practicable after the date hereof. Without limiting the
foregoing, (i) each of the Company, Parent and Merger Co agrees to use its
reasonable best efforts to take, or cause to be taken, all actions necessary to
comply promptly with all legal requirements that may be imposed on itself with
respect to the Merger (which actions shall include furnishing all information
required under the HSR Act, as provided in Section 6.09(b) below, and in
connection with approvals of or filings with any other Governmental Authority)
and shall promptly cooperate with and furnish information to each other in
connection with any such requirements imposed upon any of them or any of their
Subsidiaries in connection with the Merger, (ii) each of the Company, Parent and
Merger Co
38
shall, and shall cause its subsidiaries to, use its or their reasonable best
efforts to obtain (and shall cooperate with each other in obtaining) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Authority or other public or private third Person required to be
obtained or made by Parent, Merger Co, the Company or any of their subsidiaries
in connection with the Merger or the taking of any action contemplated thereby
or by this Agreement, and (iii) each of the Company, Parent and Merger Co shall,
and shall cause its subsidiaries to, use its reasonable best efforts to cause
the conditions set forth in Section 7.01(b) and 7.03(d) to be satisfied. The
Company, Parent and Merger Co each hereby agree promptly (and in any event
within three business days) to notify each other party hereto of any event,
circumstance or condition of which the Company, Parent or Merger Co becomes
aware that could reasonably be expected to constitute or give rise to a material
breach of any representation or warranty, covenant or condition contained in
this Agreement.
(b) Without limiting the generality of the foregoing:
(i) Each party agrees to make an appropriate filing of a Notification
and Report Form pursuant to the HSR Act with respect to the transactions
contemplated hereby as promptly as practicable following the date of this
Agreement and to supply promptly any additional information and documentary
material (a "SECOND REQUEST") that may be requested pursuant to the HSR
Act. In the event a Second Request is made, the Expiration Date shall
automatically be extended until December 31, 2006.
(ii) Parent, Merger Co and the Company shall:
(A) take promptly any or all of the following actions to the
extent necessary to eliminate any concerns on the part of any
Governmental Authority with jurisdiction over the enforcement, of any
applicable antitrust Law ("GOVERNMENT ANTITRUST AUTHORITY") regarding
the legality under any antitrust Law of the Merger: entering into
negotiations, providing information, making proposals, entering into
and performing agreements or submitting to judicial or administrative
orders, or selling or otherwise disposing of, or holding separate
(through the establishment of a trust or otherwise), particular assets
or categories of assets, or businesses, of (1) the Parent and Merger
Co or any of their subsidiaries (which for purposes of this Section
6.09 shall only be deemed to include an entity in which Parent owns,
directly or indirectly, 50% or more of the voting securities or equity
of such entity) or (2) the Company and its Subsidiaries;
(B) use their reasonable best efforts to prevent the entry in a
judicial or administrative proceeding brought under any antitrust Law
by any Government Antitrust Authority of any permanent or preliminary
injunction or other order that would make consummation of the Merger
in accordance with the terms of this Agreement unlawful or that would
prevent or delay such consummation;
(C) take promptly, in the event that such an injunction or order
has been issued in such a proceeding, any and all steps, including,
without limitation, the appeal thereof, the posting of a bond or the
other steps contemplated by clause (A) above, necessary to vacate,
modify or suspend such injunction or order so as
39
to permit such consummation on a schedule as close as possible to
that contemplated by this Agreement; and
(D) take promptly all other actions and do all other things
necessary and proper to avoid or eliminate each and every impediment
under any antitrust Law that may be asserted by any Government
Antitrust Authority or any other party to the consummation of the
Merger by Parent and Merger Co in accordance with the terms of this
Agreement.
(iii) Notwithstanding anything to the contrary set forth in this
Section 6.09(b), none of Parent, Merger Co nor the Company (nor any
Affiliate of the foregoing) shall be required to take any of the actions
described in subsections (A) through (D) of Section 6.09(b)(ii), if to do
so would result in a divestiture of, or "hold separate" agreement with
respect to, stock or other assets having an aggregate fair market value of
at least $50 million, or another operational restriction that would be
expected, in the reasonable, good faith judgment of the board of directors
of Parent, to have an adverse financial impact on Parent and its
Subsidiaries and Affiliates (including the Surviving Corporation, the
General Partner, TransMontaigne Partners, and the MLP Subsidiaries), taken
as a whole, following the Merger, in excess of $50 million. If after
complying with all of the terms of this Section 6.09, Parent, Merger Co or
any of their Subsidiaries or Affiliates would be required to agree to or
take any action referred to in, or having the effect referred to in, this
Section 6.09(b)(iii), Parent shall have the option of terminating this
Agreement upon (A) a final determination by the Government Antitrust
Authority that taking or agreeing to take such action is required in order
to consummate the Merger and (B) payment to the Company of the Reverse
Termination Fee.
(c) Notwithstanding anything to the contrary set forth in this Section
6.09, neither Parent nor Merger Co, nor any of their respective Affiliates,
shall be required to take any action that, in the opinion of Parent after
consultation with outside counsel, is reasonably likely to cause Xxxxxx Xxxxxxx
or any of its subsidiaries or Affiliates, other than persons so subject as of
the date hereof, to be subject to the reporting requirements of Section 13(a) or
15(d) of the Exchange Act or otherwise be required to file periodic reports
under the Exchange Act.
(d) Prior to the Closing, at the written request of Parent, the
Company shall commence a tender offer and consent solicitation with respect to
any or all of the Notes in accordance with the written terms and conditions
provided by Parent to the Company and applicable Law (collectively, the "DEBT
TENDER"). Unless otherwise agreed by the Company in writing, the Debt Tender
shall not be required to close on or prior to the Closing. In the event this
Agreement is terminated by either party pursuant to Article VIII, then Parent
shall promptly reimburse the Company for any reasonable out-of-pocket costs,
fees and expenses incurred by the Company (including reasonable fees and
expenses incurred by counsel and financial advisers to the Company and any other
third parties engaged by the Company with the consent of Parent) in connection
with the Debt Tenders and shall indemnify the Company and its officers,
directors, employees, agents and other representatives (collectively, the
"INDEMNITEES") for any other liabilities incurred by the Company and the
indemnitees in connection with the Debt Tender except for liabilities resulting
from actions taken, or failed to be taken, by the Company or the indemnitees
that are contrary to the written instructions of the Parent.
40
Section 6.10 PUBLIC ANNOUNCEMENTS. The initial press release relating
to this Agreement shall be a press release issued jointly by the parties, or
separate press releases issued by each party, in either case the text of which
has been agreed to by each of Parent and the Company. Thereafter, each of Parent
and the Company shall consult with each other before issuing any press release
or otherwise making any public statements with respect to this Agreement or the
Merger, except to the extent public disclosure is required by applicable Law or
the requirements of the NYSE, 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 6.11 RESIGNATIONS. The Company shall use its reasonable best
efforts to obtain and deliver to Parent at the Closing evidence reasonably
satisfactory to Parent of the resignation, effective as of the Effective Time,
of those directors of the Company or any Subsidiary designated by Parent to the
Company in writing at least ten business days prior to the Closing.
Section 6.12 GUARANTEE OF PERFORMANCE. Parent hereby unconditionally
guarantees the full and timely performance by Parent and Merger Co of each of
their obligations under this Agreement.
Section 6.13 TAKEOVER STATUTES. If any of the limitations on business
combinations contained in any restrictive provision of any "fair price,"
"moratorium," "control share acquisition," "interested stockholder" or other
similar anti-takeover statute or regulation (including, without limitation,
Section 203 of the Delaware Law to the extent applicable) ("TAKEOVER STATUTE")
is or may become applicable to the Merger or the other transactions contemplated
by this Agreement or the parties hereto, the Company and the Company Board shall
grant all approvals and take all actions as are necessary so that such
transactions may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise act to eliminate the effects of
such Takeover Statute on such transactions.
Section 6.14 SEMGROUP AGREEMENT TERMINATION FEE.
(a) As soon as practicable following the valid execution and delivery
of this Agreement by the Company, Parent will pay to the order of the Company
$7,500,000. Notwithstanding anything to the contrary in this Agreement, and
except as set forth in paragraph (b) below, immediately upon termination of this
Agreement, the Company shall pay to Parent $7,500,000 (the "Reimbursement"). All
payments made pursuant to this Section 6.14 shall be made by wire transfer of
immediately available funds to an account designated in writing by the
recipient. Any payment pursuant to this paragraph shall be in addition to and
without prejudice to any provision for payment under Article VIII, except as
specifically provided in Section 8.03(e).
(b) Parent shall not be entitled to receive the Reimbursement in the
event that any of (i) (A) this Agreement is terminated pursuant to Section
8.01(i), and (B) the Company has complied in all material respects with its
obligations pursuant to Sections 6.09(a) and (b), (ii) the Company terminates
this Agreement pursuant to Section 8.01(e) or (iii) the Company terminates this
Agreement pursuant to Section 8.01(b) and, at the time of such termination, the
condition set
41
forth in Sections 7.01(a), 7.01(b), 7.01(d) (other than with respect to
circumstances described in Section 8.01(i)), 7.01(e) and 7.01(f) and Section
7.02 (provided, however, that the certificates contemplated by Sections 7.02(c)
and (e) may be dated the termination date) have been satisfied.
ARTICLE VII.
CONDITIONS TO THE MERGER
Section 7.01 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The
obligations of the Company, Parent and Merger Co to consummate the Merger are
subject to the satisfaction or waiver in writing (where permissible) as of the
Closing of the following conditions:
(a) COMPANY STOCKHOLDER APPROVAL. This Agreement shall have been
adopted by the requisite affirmative vote of the stockholders of the Company in
accordance with the DGCL and the Company's Charter Documents.
(b) REDEMPTION OF NOTES. Provision shall have been made with respect
to the Company's outstanding 9 1/8% Series B Senior Subordinated Notes due 2010
(the "NOTES") to either: (a) redeem in whole all such Notes, pursuant to the
terms and conditions set forth therein, it being understood that the Company
shall have no obligation to call the Notes or otherwise fund a defeasance trust
until the Closing has occurred; or (b) amend the terms and conditions of such
Notes to permit them to remain outstanding following the Closing of the Merger.
(c) ANTITRUST APPROVALS AND WAITING PERIOD. Any waiting period (and
any extension thereof) applicable to the consummation of the Merger under
applicable United States antitrust Law, including the HSR Act, shall have
expired or been terminated, and any approvals required thereunder shall have
been obtained.
(d) NO ORDER. No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any injunction, order, decree or ruling
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of making consummation of the Merger illegal or otherwise preventing
or prohibiting consummation of the Merger.
(e) GOVERNMENTAL CONSENTS. Any other approval of any Governmental
Authority or waiting periods under any applicable Law shall have been obtained
or have expired (without the imposition of any material condition) if the
failure to obtain any such approval or the failure of any such waiting period to
expire would constitute a Company Material Adverse Effect.
(f) TRANSMONTAIGNE PARTNERS CREDIT FACILITY. Appropriate provision
shall have been made pursuant to the Financing (or Parent shall have otherwise
provided) to replace the existing TransMontaigne Partners Credit Facility on
terms reasonably acceptable to the General Partner.
Section 7.02 CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER CO.
The obligations of Parent and Merger Co to consummate the Merger are subject to
the satisfaction or waiver in writing (where permissible) as of the Closing of
the following additional conditions:
42
(a) REPRESENTATIONS AND WARRANTIES.
(i) The representations and warranties of the Company set forth in
Section 3.03 and Section 3.04 shall be true and correct in all respects as
of the Closing Date as though made on and as of such date (except (A) to
the extent that any such representation and warranty expressly speaks as of
an earlier date, in which case such representation and warranty shall be
true and correct as of such earlier date and (B) to the extent of any
change resulting from the Company's compliance with, or actions authorized
by, Section 5.01); and
(ii) The other representations and warranties of the Company set forth
in this Agreement shall be true and correct (disregarding any Company
Material Adverse Effect, materiality or similar qualifiers therein) as of
the Closing Date as though made on and as of such date (except (A) to the
extent that any such representation and warranty expressly speaks as of an
earlier date, in which case such representation and warranty shall be true
and correct (disregarding any Company Material Adverse Effect, materially
or similar qualifiers) as of such earlier date and (B) to the extent of any
change resulting from the Company's compliance with, or actions authorized
by, Section 5.01); PROVIDED, HOWEVER, that notwithstanding anything herein
to the contrary, the condition set forth in this Section 7.02(a)(ii) shall
be deemed to have been satisfied even if the representations and warranties
of the Company are not so true and correct, unless the failure of such
representations and warranties of the Company to be so true and correct,
individually or in the aggregate, would reasonably be expected to have a
Company Material Adverse Effect.
(b) AGREEMENTS AND COVENANTS. 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.
(c) OFFICER'S CERTIFICATE. The Company shall have delivered to each of
Parent and Merger Co a certificate, dated the date of the Closing, signed by an
officer on behalf of the Company and certifying as to the satisfaction of the
conditions specified in Sections 7.02(a) and 7.02(b).
(d) NO COMPANY MATERIAL ADVERSE EFFECT. Since the date of this
Agreement, there shall not have occurred and continue to be in effect any event,
circumstance or condition that has resulted in, or would reasonably be expected
to result in, any Company Material Adverse Effect.
(e) FIRPTA AFFIDAVIT. Prior to the Closing on the Closing Date, the
Company shall cause to be delivered to Parent an executed affidavit, in
accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an
interest in the Company is not a U.S. real property interest within the meaning
of Section 897(c) of the Code and sets forth the Company's name, address and
taxpayer identification number.
(f) APPRAISAL RIGHTS. The aggregate number of shares of Company Common
Stock immediately prior to the Effective Time, the holders of which have
properly demanded,
43
and are entitled to, appraisal of their shares from the Company in accordance
with the provisions of Section 262 of the DGCL, shall not exceed 15% of the sum
of (i) the total number of shares of Company Common Stock outstanding as of the
record date for the Company Stockholder's Meeting, plus (ii) the total number of
shares of Company Common Stock issuable upon conversion of the Company Preferred
Stock outstanding as of the record date for the Company Stockholder's Meeting.
Section 7.03 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company to consummate the Merger are subject to the
satisfaction or waiver in writing (where permissible) as of the Closing of the
following additional conditions:
(a) REPRESENTATIONS AND WARRANTIES.
(i) The representations and warranties of Parent and Merger Co set
forth in Section 4.03 shall be true and correct in all respects as of the
Closing Date as though made on and as of such date (except to the extent
that any such representation and warranty expressly speaks as of an earlier
date, in which case such representation and warranty shall be true and
correct as of such earlier date); and
(ii) The other representations and warranties of Parent and Merger Co
set forth in this Agreement shall be true and correct in all material
respects as of the Closing Date as though made on and as of such date
(except to the extent that any such representation and warranty expressly
speaks as of an earlier date, in which case such representation and
warranty shall be true and correct as of such earlier date); PROVIDED,
HOWEVER, that notwithstanding anything herein to the contrary, the
condition set forth in this 7.03(a)(ii) shall be deemed to have been
satisfied even if any representations and warranties of Parent and Merger
Co are not so true and correct, unless the failure of such representations
and warranties of Parent and Merger Co to be so true and correct,
individually or in the aggregate, would prevent the consummation of the
Merger or prevent Parent or Merger Co from performing its obligations under
this Agreement.
(b) AGREEMENTS AND COVENANTS. Merger Co 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.
(c) OFFICER'S CERTIFICATE. Merger Co shall have delivered to the
Company a certificate, dated the date of the Closing, signed by an officer on
behalf of Merger Co, certifying as to the satisfaction of the conditions
specified in Sections 7.03(a) and 7.03(b).
(d) The Company shall be satisfied in its reasonable discretion that
the deposit required by Section 2.02(a) will be made contemporaneously with the
Closing.
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 by action taken
or authorized by the Board of Directors of the terminating party or parties,
notwithstanding any requisite adoption of
44
this Agreement by the stockholders of the Company, and whether before or after
the stockholders of the Company have approved this Agreement at the Company
Stockholders' Meeting, as follows (the date of any termination of this
Agreement, the "TERMINATION DATE"):
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if the Effective Time shall not
have occurred on or before the Expiration Date; 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 has 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 Governmental Authority
shall have enacted, issued, promulgated, enforced or entered any injunction,
order, decree or ruling or taken any other action (including the failure to have
taken an action) which, in either such case, has become final and non-appealable
and has the effect of making consummation of the Merger illegal or otherwise
preventing or prohibiting consummation of the Merger;
(d) by Parent if (i) any of the representations and warranties of the
Company herein are or become untrue or inaccurate such that Section 7.02(a)
would not be satisfied, or (ii) there has been a breach on the part of the
Company of any of its covenants or agreements herein such that Section 7.02(b)
would not be satisfied, and, in either such case, (A) such breach has not been,
or cannot be, cured within 30 days after notice to the Company (but in no event
later than the Expiration Date), and (B) at the time of such termination the
conditions in Sections 7.03(a) and (b) would be satisfied if the Closing
otherwise were to occur on such date;
(e) by the Company if (i) any of the representations and warranties of
either Parent or Merger Co herein are or become untrue or inaccurate such that
Section 7.03(a) would not be satisfied, or (ii) there has been a breach on the
part of either Parent or Merger Co of any of its covenants or agreements herein
such that Section 7.03(b) would not be satisfied, and, in either such case, (A)
such breach has not been, or cannot be, cured within 30 days after notice to
Parent or Merger Co, as applicable (but in no event later than the Expiration
Date), and (B) at the time of such termination the conditions in Sections
7.02(a) and (b) would be satisfied if the Closing otherwise were to occur on
such date;
(f) by either Parent or the Company if this Agreement shall fail to
receive the Stockholder Approval at the Company Stockholders' Meeting;
(g) by Parent if the Company Board or an independent committee of the
Company Board shall have (i) effected a Change in Board Recommendation, or (ii)
taken any position contemplated by Rule 14e-2(a) of the Exchange Act with
respect to any Acquisition Proposal other than recommending rejection of such
Acquisition Proposal;
(h) by the Company pursuant to and in accordance with the terms of
Section 6.04(d) or following a Change in Board Recommendation pursuant to
Section 6.04(e), but only if the Company pays the Termination Fee under Section
8.03(c) concurrently and as a condition to such termination; or
45
(i) by either the Parent or the Company if such party is not then in
violation of Section 6.09(b) and a Government Antitrust Authority has entered a
final order not subject to further appeal requiring the actions described in the
first sentence of Section 6.09(b)(iii) by such party as a condition to the
Closing of the Merger.
Section 8.02 EFFECT OF TERMINATION. In the event of the termination of
this Agreement pursuant to Section 8.01, this Agreement shall forthwith become
void, and there shall be no liability under this Agreement on the part of any
party hereto (except that the provisions of Section 6.03(b), Section 6.14, this
Section 8.02, Section 8.03 and Article IX shall survive any such termination);
PROVIDED, HOWEVER, that nothing herein shall relieve any party from liability
for any willful and material breach of any of its representations, warranties,
covenants or agreements set forth in this Agreement prior to such termination.
Section 8.03 FEES AND EXPENSES. Except as otherwise expressly set
forth in this Agreement, all Expenses incurred in connection with this Agreement
shall be paid by the party incurring such expenses, whether or not the Merger is
consummated. "EXPENSES," as used in this Agreement, shall include all reasonable
out-of-pocket documented expenses (including all fees and expenses of counsel,
accountants, investment bankers, financing sources, hedging counterparties,
experts and consultants to a party hereto and its Affiliates) incurred by a
party or on its behalf (or, with respect to Parent and Merger Co, incurred by
their stockholders or on their behalf) in connection with or related to the
transactions contemplated hereby, including the authorization, preparation,
negotiation, execution and performance of this Agreement, the Commitment Letters
and the other transactions contemplated hereby or thereby (including the
Financing), the preparation, printing, filing and mailing of the Proxy
Statement, the solicitation of stockholder approval, Financing and all other
matters related to the closing of the Merger.
(a) The Company agrees that if this Agreement shall be terminated by
Parent or the Company pursuant to Section 8.01(f), if (A) at or prior to the
Company Stockholders' Meeting, a Person or group shall have made a bona fide
Acquisition Proposal, or amended an Acquisition Proposal made prior to the date
of this Agreement, to the Company or the stockholders of the Company and such
Acquisition Proposal is not withdrawn prior to such meeting and (B) no later
than 12 months after the Termination Date, a transaction in respect of an
Acquisition Proposal is consummated or the Company enters into, or submits to
the stockholders of the Company for adoption, an agreement with respect to an
Acquisition Proposal, then the Company will pay to Parent, on the date of the
consummation of the transaction in respect of such Acquisition Proposal, the
Termination Fee in immediately available funds, as directed by Parent in
writing, PROVIDED, that for the purpose of this Section 8.03(a), all references
to "20%" in the definition of Acquisition Proposal shall be changed to "50%".
(b) The Company agrees that if this Agreement shall be terminated by
Parent pursuant to Section 8.01(g) within 10 days of the initial Change in Board
Recommendation pursuant to Section 6.04(e) or the taking of a position specified
in Section 8.01(g)(ii), as applicable, then the Company shall pay the
Termination Fee to Parent on the Termination Date, in immediately available
funds, as directed by Parent in writing.
46
(c) The Company agrees that if this Agreement shall be terminated by
the Company pursuant to Section 8.01(h), then the Company shall pay the
Termination Fee to Parent on the Termination Date, in immediately available
funds, as directed by Parent in writing.
(d) Parent agrees that in the event that:
(i) either Parent or the Company is entitled to terminate and
terminates this Agreement pursuant to Section 8.01(b) or Section 8.01(i)
and, at the time of such termination, the conditions set forth in Sections
7.01(a), 7.01(b), 7.01(d) (other than with respect to circumstances
described in Section 8.01(i)), 7.01(e) and 7.01(f) and Section 7.02
(provided, however, that the certificates contemplated by Sections 7.02(c)
and (e) may be dated the termination date) have been satisfied, Parent
shall pay to the Company an amount equal to the Reverse Termination Fee in
immediately available funds on the termination date (in the case of
termination by Parent), and no later than two business days after the
termination date (in the case of termination by the Company); and
(ii) the Company is entitled to terminate and terminates this
Agreement pursuant to Section 8.01(e), Parent shall pay to the Company an
amount equal to 50% of the Termination Fee in immediately available funds,
no later than two business days after the termination date..
(e) For purposes of this Agreement, "TERMINATION FEE" means an amount
equal to $15,000,000 and "REVERSE TERMINATION FEE" means an amount equal to
$25,000,000, PROVIDED that the payment described in the first sentence of
Section 6.14(a) shall be credited against any payment of the Reverse Termination
Fee, unless the Company has previously paid the Reimbursement.
(f) Each of the Company and Parent acknowledges that the agreements
contained in this Section 8.03 and Section 6.14 are an integral part of the
transactions contemplated by this Agreement. In the event that Parent or the
Company shall fail to pay the Reverse Termination Fee or the Termination Fee or
amounts due pursuant to Section 6.14 when due, the Company or Parent, as
appropriate, shall reimburse the other party for all reasonable costs and
expenses actually incurred or accrued by such party (including reasonable fees
and expenses of counsel) in connection with the collection under and the
enforcement of this Section 8.03 and Section 6.14, as applicable.
(g) Notwithstanding anything to the contrary in this Agreement, the
provision for, or payment of, any Reverse Termination Fee, Termination Fee or
the Reimbursement shall not limit any party's liability for damages for a
willful breach of this Agreement.
Section 8.04 AMENDMENT. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; PROVIDED, HOWEVER, that, after the
adoption of this Agreement by the stockholders of the Company, no amendment
shall be made except as allowed under applicable Law. This Agreement may not be
amended except by an instrument in writing signed by each of the parties hereto.
47
Section 8.05 WAIVER. 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 of any other party
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any agreement of any other party or any condition to its own
obligations contained herein. 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. The failure of any party to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of those rights.
ARTICLE IX.
GENERAL PROVISIONS
Section 9.01 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. The representations and warranties in this Agreement and in any
certificate delivered pursuant hereto shall terminate at the Effective Time.
This Section 9.01 shall not limit any covenant or agreement of the parties which
by its terms contemplates performance after the Effective Time.
Section 9.02 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given (a) on
the date of delivery if delivered personally, (b) on the first business day
following the date of dispatch if delivered by a nationally recognized next-day
courier service, (c) on the fifth business day following the date of mailing if
delivered by registered or certified mail (postage prepaid, return receipt
requested) or (d) if sent by facsimile transmission, when transmitted and
receipt is confirmed. All notices under Section 6.04 or Article VIII shall be
delivered by courier and facsimile transmission to the respective parties at the
addresses provided in accordance with this Section 9.02. All notices hereunder
shall be delivered 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 or Merger Co:
Xxxxxx Xxxxxxx Capital Group, Inc.
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 00
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. XxXxx, Secretary
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Silk, Esq.
Xxxxxxxx X. Xxxxxxx, Esq.
if to the Company:
TransMontaigne Inc.
0000 Xxxxxxxx, Xxxxx 0000
00
Xxxxxx, XX 00000
(000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Chief Executive Officer
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxx Xxxxx
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
(000) 000-0000
Attention: Xxxxxxx Xxxxxx, Esq.
Section 9.03 CERTAIN DEFINITIONS.
(a) For purposes of this Agreement:
"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.
"AUTHORIZED ACQUISITION" shall have the meaning set forth in Section
5.01 of the Company Disclosure Schedule.
"BENEFICIAL OWNER," with respect to any Shares, has the meaning
ascribed to such term under Rule 13d-3(a) of the Exchange Act.
"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 City of New York.
"CHARTER DOCUMENTS" mean the certificate of incorporation and by-laws
of a corporation, limited liability company agreement and/or operating agreement
of a limited liability company, partnership agreement of a partnership and any
analogous constitutive or governing documents of other forms of entities.
"COMMON UNITS" has the meaning set forth in the TransMontaigne
Partners Partnership Agreement.
"COMPANY CREDIT FACILITY" means the Amended and Restated Senior
Working Capital Credit Facility, dated May 27, 2005, as amended, by and among
the Company, each of the lenders party thereto, JPMorgan Chase Bank, N.A. and
UBS AG, Stamford Branch, as syndication agents, Societe Generale, New York
Branch and Xxxxx Fargo Foothill, LLC, as the documentation agents, and Wachovia
Bank, National Association, as agent.
"COMPANY DISCLOSURE SCHEDULE" means the disclosure schedule delivered
by the Company to Parent and Merger Co concurrently with execution and delivery
of this Agreement.
49
"COMPANY MATERIAL ADVERSE EFFECT" means (A) a TransMontaigne Partners
Material Adverse Effect, or (B) any event, circumstance, development, change or
effect that, either individually or in the aggregate, is or would be materially
adverse to the business, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole (it being
understood that for these purposes, the Company and its Subsidiaries includes
the value of TransMontaigne Partners, the General Partner, and the MLP
Subsidiaries to the extent owned by the Company and any of its subsidiaries);
PROVIDED that none of the following shall constitute, or shall be considered in
determining whether there has occurred a Company Material Adverse Effect: (i)
any event, circumstance, development, change or effect (including any
litigation) resulting from the announcement of the execution of this Agreement
or the consummation of the transactions contemplated hereby, except as would
breach any of the Company's representations or warranties herein but for the
application of this clause (i), (ii) changes in the national or world economy or
financial markets as a whole, changes or fluctuations in commodity markets that
affect the industries in which the Company and its Subsidiaries conduct their
business or changes in general economic conditions that affect the industries in
which the Company and its Subsidiaries conduct their business, so long as such
changes, fluctuations or conditions do not adversely affect the Company or its
Subsidiaries in a materially disproportionate manner relative to other similarly
situated participants in the industries or markets in which they operate, (iii)
any change in any applicable Law, rule or regulation or GAAP or interpretation
thereof after the date hereof, (iv) any failure by the Company to meet any
published or internally prepared estimates of revenues or earnings for any
period ending on or after the date of this Agreement and prior to the Closing,
or (v) a decline in the price of the Company Common Stock on the NYSE (it being
understood that for purposes of clauses (iv) and (v) of this definition the
facts and circumstances giving rise to any such matters may be deemed to
constitute and may be taken into account in determining whether there has been a
Company Material Adverse Effect if such facts and circumstances are not
otherwise included in clauses (i)-(iii) of this definition).
"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.
"ENVIRONMENTAL LAWS" means all foreign, federal, state, or local
statutes, common law, regulations, ordinances, codes, orders or decrees relating
to the protection of the environment, including the ambient air, soil, surface
water or groundwater, or relating to the protection of human health from
exposure to Materials of Environmental Concern.
"ENVIRONMENTAL PERMITS" means all permits, licenses, registrations,
and other authorizations required under applicable Environmental Laws.
"EXPIRATION DATE" means September 30, 2006 or, if extended pursuant to
Section 6.09(b)(i), January 31, 2006; PROVIDED, HOWEVER, that if the Company
Stockholders' Meeting has not been held or the vote on this Agreement and the
related transactions has not been completed at least 15 business days prior to
the Expiration Date, the Company shall have no right to terminate this Agreement
due to the Expiration Date having occurred until 15 business days after such
Company Stockholders' Meeting is held and such vote completed.
50
"GENERAL PARTNER" means TransMontaigne GP L.L.C., a Delaware limited
liability company.
"GENERAL PARTNER INTEREST" has the meaning set forth in the
TransMontaigne Partners Partnership Agreement.
"INCENTIVE DISTRIBUTION RIGHTS" has the meaning set forth in the
TransMontaigne Partners Partnership Agreement.
"INDEBTEDNESS" means (i) indebtedness of the Company or any of its
Subsidiaries for borrowed money (including the aggregate principal amount
thereof, the aggregate amount of any accrued but unpaid interest thereon and any
prepayment penalties or other similar amounts payable in connection with the
repayment thereof on or prior to the Closing Date), (ii) obligations of the
Company or any of its Subsidiaries evidenced by bonds, notes, debentures,
letters of credit or similar instruments and (iii) all obligations of any of the
Company or any of its Subsidiaries to guarantee any of the foregoing types of
obligations on behalf of any Person other than the Company or any of its
Subsidiaries.
"INTELLECTUAL PROPERTY" means all patents and patent applications,
brand names, brand marks, fictitious names, trademarks, trademark registrations
and applications, service marks, service xxxx registrations and applications,
logos, designs, slogans and general intangibles of like nature, together with
all goodwill related to the foregoing; trade names, copyrights, copyright
registrations and applications; computer programs; technology, trade secrets,
know-how, confidential information, proprietary processes and formulae.
"KNOWLEDGE OF THE COMPANY" or "COMPANY'S KNOWLEDGE" means the actual
knowledge of the following executive officers of the Company: Xxxxxx X.
Xxxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxxxx X. Xxxxxx and Xxxx X.
Xxxxxxx.
"LIENS" means any pledges, claims, liens, charges, encumbrances,
options to purchase or lease or otherwise acquire any interest, conditional
sales agreement, restriction (whether on voting, sale, transfer, disposition or
otherwise) and security interests of any kind or nature whatsoever.
"MATERIALS OF ENVIRONMENTAL CONCERN" means: (i) any hazardous, acutely
hazardous, or toxic substance or waste defined or regulated as such under
Environmental Laws, including the federal Comprehensive Environmental Response,
Compensation and Liability Act and the federal Resource Conservation and
Recovery Act; (ii) petroleum, asbestos, lead, polychlorinated biphenyls, radon,
or toxic mold; or (iii) any other substance the exposure to which would
reasonably be expected, because of hazardous or toxic qualities, to result in
liability under applicable Environmental Laws.
"MERGER CONSIDERATION" means the Preferred Merger Consideration and
the Common Merger Consideration.
"MLP EQUITY PLAN" means the TransMontaigne Services Inc. Long-Term
Incentive Plan.
51
"MLP SUBSIDIARY" means each subsidiary of TransMontaigne Partners.
"XXXXXX XXXXXXX AGREEMENTS" means the Product Supply Agreement, dated
November 4, 2004, together with the other agreements contemplated thereby, in
each case as amended and as more fully described in Section 3.18 of the Company
Disclosure Schedule.
"OMNIBUS AGREEMENT" means the Omnibus Agreement, as amended, between
the Company, TransMontaigne Partners, the General Partner, TransMontaigne
Operating GP L.L.C. and TransMontaigne Operating Company L.P., as amended on
October 31, 2005 and January 1, 2006.
"PARTNERSHIP INTERESTS" has the meaning set forth in the
TransMontaigne Partners Partnership Agreement.
"PERSON" means an individual, corporation, partnership, limited
partnership, limited liability company, syndicate, Person (including 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.
"PREFERRED MERGER CONSIDERATION" means an amount per share of Company
Preferred Stock equal to $1719.70.
"PREFERRED TRANSMITTAL LETTER" means the transmittal letter in
customary form reasonably acceptable to the Company and Merger Co, to be
distributed by the Paying Agent to the holders of the Company Preferred Stock as
set forth in Section 2.02(c) of this Agreement.
"SEMGROUP AGREEMENT" means that certain Agreement and Plan of Merger,
dated as of March 27, 2006, by and among SemGroup, L.P., SemGroup Subsidiary
Holding, L.L.C., TMG Acquisition Company and the Company.
"STANDSTILL AGREEMENT" means any Contract pursuant to which a Person
has agreed to restrict its ability to commence a proxy fight or consent
solicitation with respect to the holders of Company Common Stock or to acquire
shares of the Company Common Stock by tender offer or otherwise.
"SUBORDINATED UNITS" has the meaning set forth in the TransMontaigne
Partners Partnership Agreement.
"SUBSIDIARY" means (i) solely with respect to the representations and
warranties of the Company contained in Article III hereof and except as
otherwise expressly excluded from a specific representation, warranty, covenant,
definition or other provision contained therein, each subsidiary of the Company,
which includes the General Partner, TransMontaigne Partners and each MLP
Subsidiary, and (ii) with respect to all of the other representations and
warranties, covenants and provisions of this Agreement, each subsidiary of the
Company other than the General Partner, TransMontaigne Partners and each MLP
Subsidiary, except to the extent the General Partner, TransMontaigne Partners or
an MLP Subsidiary is expressly identified by name and included in a specific
provision.
52
"SUBSIDIARY" or "SUBSIDIARIES" of any Person means each other Person
controlled by such Person, directly or indirectly, through one or more
intermediaries, and, without limiting the foregoing, includes any entity in
respect of which such Person, directly or indirectly, beneficially owns 50% or
more of the voting securities or equity.
"TAX" or "TAXES" means any and all federal, state, local and foreign
income, gross receipts, payroll, employment, excise, stamp, customs duties,
capital stock, franchise, profits, withholding, social security, unemployment,
real property, personal property, sales, use, transfer, value added, alternative
or add-on minimum, estimated, or other taxes (together with interest, penalties
and additions to tax imposed with respect thereto) imposed by any Governmental
Authority.
"TAX RETURNS" means returns, declarations, claims for refund, or
information returns or statements, reports and forms relating to Taxes filed or
required to be filed with any Governmental Authority (including any schedule or
attachment thereto) with respect to the Company or the Subsidiaries, including
any amendment thereof.
"TRANSMONTAIGNE PARTNERS" means TransMontaigne Partners L.P., a
Delaware limited partnership.
"TRANSMONTAIGNE PARTNERS CREDIT FACILITY" means the Senior Secured
Credit Facility, dated as of May 9, 2005, as amended, by and among
TransMontaigne Partners, each of the financial institutions party thereto, Bank
of America, N.A. and JPMorgan Chase Bank, N.A., as syndication agents, BNP
Paribas and Societe Generale, as documentation agents, and Wachovia Bank,
National Association, as administrative agent.
"TRANSMONTAIGNE PARTNERS MATERIAL ADVERSE EFFECT" means (i) an "Event
of Withdrawal" occurs under Section 11.1 of the TransMontaigne Partners
Partnership Agreement, (ii) any of the events specified in clauses (iv) and (v)
of Section 11.1 of the TransMontaigne Partners Partnership Agreement occurs with
respect to TransMontaigne Partners (as if such clauses referred to
TransMontaigne Partners in each place the phrase "General Partner" is used),
(iii) TransMontaigne Partners is dissolved under Section 12.1 of the
TransMontaigne Partners Partnership Agreement, (iv) the adoption of any law, or
the taking of any other action, by any Governmental Authority that would, or
would reasonably be expected to, (x) prevent or materially hinder or delay, or
(y) materially increase the cost to consummate, any proposed sale, contribution
or other transfer of assets from the Parent or the Company or their respective
Subsidiaries to TransMontaigne Partners, other than (A) compliance by Parent,
the Company and TransMontaigne Partners with the conflict of interest policies
and procedures currently in effect with respect to such transactions and (B)
changes in the applicable tax rates, (v) the occurrence of any circumstances
that would permit removal of the General Partner without the consent of the
Company and its Subsidiaries (including the General Partner) or (vi) the sale of
all or substantially all the assets of TransMontaigne Partners or the General
Partner.
"TRANSMONTAIGNE PARTNERS PARTNERSHIP AGREEMENT" means the first
Amended and Restated Agreement of Limited Partnership of TransMontaigne Partners
dated May 27, 2005.
53
(b) The following terms have the meanings set forth in the Sections
set forth below:
DEFINED TERM LOCATION OF DEFINITION
Acquisition Proposal ss. 6.04
Action ss. 3.10
Affiliate ss. 9.03
Agreement Preamble
Authorized Acquisition ss. 9.03
beneficial owner ss. 9.03
business day ss. 9.03
Capitalization Date ss. 3.03
Certificate of Merger ss. 1.03
Certificates ss. 2.02
Change in Board Recommendation ss. 6.04
Charter Documents ss. 9.03
Closing ss. 1.02
Closing Date ss. 1.02
Code ss. 3.11
Common Certificates ss. 2.02
Common Merger Consideration ss. 2.01
Common Shares ss. 2.01
Common Units ss. 9.03
Company Preamble
Company Board Recitals
Company Common Stock ss. 2.01
Company Credit Facility ss. 9.03
Company Disclosure Schedule ss. 9.03
Company Equity Plans ss. 2.04
Company Material Adverse Effect ss. 9.03
Company Permits ss. 3.06
Company Preferred Stock ss. 2.01
Company Stock Options ss. 2.04
Company Stockholders' Meeting ss. 6.02
Company's knowledge ss. 9.03
Confidentiality Agreement ss. 6.03
Contract ss. 3.05
control ss. 9.03
controlled by ss. 9.03
Debt Tender ss. 6.09
DGCL ss. 1.01
Dissenting Shares ss. 2.05
Effective Time ss. 1.03
Employee ss. 6.06
Environmental Laws ss. 9.03
54
DEFINED TERM LOCATION OF DEFINITION
Environmental Permits ss. 9.03
ERISA ss. 3.11
ERISA Affiliate ss. 3.11
Exchange Act ss. 3.05
Exchange Fund ss. 2.02
Expenses ss. 8.03
Expiration Date ss. 9.03
Financing ss. 4.07
GAAP ss. 3.07
General Partner ss. 9.03
General Partner Interest ss. 9.03
Government Antitrust Authority ss. 6.09
Governmental Authority ss. 3.05
HSR Act ss. 3.05
Incentive Distribution Rights ss. 9.03
Indebtedness ss. 9.03
Indemnified Parties ss. 6.05
indemnitees ss. 6.09
Intellectual Property ss. 9.03
Investments ss. 3.03
IRS ss. 3.11
knowledge of the Company ss. 9.03
Law ss. 3.05
Liens ss. 9.03
Material Adverse Tax Effect ss. 3.15
Materials of Environmental Concern ss. 9.03
Merger Recitals
Merger Co Preamble
Merger Consideration ss. 9.03
MLP Equity Plan ss. 9.03
MLP Subsidiary ss. 9.03
Xxxxxx Xxxxxxx Agreements ss. 9.03
Notes ss. 7.01
NYSE ss. 3.05
Omnibus Agreement ss. 9.03
Other Filings ss. 6.01
Other Transactions ss. 3.04
Owned Properties ss. 3.13
Parent Preamble
Partnership Interests ss. 9.03
Paying Agent ss. 2.02
Permitted Liens ss. 3.13
Person ss. 9.03
Plans ss. 3.11
55
DEFINED TERM LOCATION OF DEFINITION
Preferred Certificates ss. 2.02
Preferred Merger Consideration ss. 9.03
Preferred Shares ss. 2.01
Preferred Transmittal Letter ss. 9.03
Properties ss. 3.13
Proxy Statement ss. 3.05
Purchaser Welfare Benefit Plans ss. 6.06
Reimbursement ss. 6.14
Representatives ss. 6.03
Restricted Stock Awards ss. 2.04
Xxxxxxxx-Xxxxx Act ss. 3.06
SEC ss. 3.05
SEC Reports ss. 3.07
Second Request ss. 6.09
Section 203 ss. 3.19
Section 262 ss. 2.02
Securities Act ss. 3.07
SemGroup Agreement ss. 9.03
Shares ss. 2.01
Specified Contract ss. 3.18
Standstill Agreement ss. 9.03
Stockholder Approval ss. 3.19
Subordinated Units ss. 9.03
subsidiaries ss. 9.03
subsidiary ss. 9.03
Subsidiary ss. 9.03
Superior Proposal ss. 6.04
Surviving Corporation ss. 1.01
Takeover Statute ss. 6.13
Tax or Taxes ss. 9.03
Tax Returns ss. 9.03
Termination Date ss. 8.01
Termination Fee ss. 8.03
TransMontaigne Partners ss. 9.03
TransMontaigne Partners Credit Facility ss. 9.03
TransMontaigne Partners Material Adverse Effect ss. 9.03
TransMontaigne Partners Partnership Agreement ss. 9.03
under common control with ss. 9.03
Warrant ss. 2.04
(c) When a reference is made in this Agreement to Sections, Schedules
or Exhibits, such reference shall be to a Section, Schedule or Exhibit of this
Agreement, respectively, unless otherwise indicated. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words
56
"without limitation." The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not any particular provision of this Agreement. The term "or" is not
exclusive. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms. References to a Person are
also to its permitted successors and assigns. Whenever the context may require,
any pronoun shall include the corresponding masculine, feminine and neuter
forms.
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 so 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 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement and the
Confidentiality Agreement constitute the entire agreement among the parties
hereto with respect to the subject matter hereof and thereof and supersede all
prior agreements and undertakings, both written and oral, among the parties
hereto, or any of them, with respect to the subject matter hereof and thereof.
This Agreement shall not be assigned (whether pursuant to a merger, by operation
of Law or otherwise), except that Parent or Merger Co may assign all or any of
their rights and obligations hereunder to an Affiliate, to a lender or financial
institution as collateral for indebtedness or, after the Closing, in connection
with a merger, consolidation or sale of all or substantially all of the assets
of Parent or the Surviving Corporation and its Subsidiaries provided, however,
that no such assignment shall relieve the assigning party of its obligations
hereunder if such assignee does not perform such obligations.
Section 9.06 PARTIES IN INTEREST. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
Person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, other than Section 6.05 (which is intended to be for the
benefit of the Persons covered thereby and may be enforced by such Persons).
Section 9.07 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the Law of the State of Delaware (without giving
effect to the choice of law principles therein).
Section 9.08 SPECIFIC PERFORMANCE; SUBMISSION TO JURISDICTION. The
parties agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in the Court of Chancery or other courts of the State of Delaware,
this being in addition to any other remedy to which such party is entitled at
law or in equity. In addition, each
57
of the parties hereto (i) consents to submit itself to the personal jurisdiction
of the Court of Chancery or other courts of the State of Delaware in the event
any dispute arises out of this Agreement or any of the transactions contemplated
by this Agreement or any of the transactions contemplated by this Agreement,
(ii) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from such court, (iii) agrees
that it will not bring any action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than the Court of
Chancery or other courts of the State of Delaware and (iv) to the fullest extent
permitted by Law, consents to service being made through the notice procedures
set forth in Section 9.02. Each party hereto hereby agrees that, to the fullest
extent permitted by Law, service of any process, summons, notice or document by
U.S. registered mail to the respective addresses set forth in Section 9.02 shall
be effective service of process for any suit or proceeding in connection with
this Agreement or the transactions contemplated hereby.
Section 9.09 WAIVER OF JURY TRIAL. Each of the parties hereto hereby
waives to the fullest extent permitted by applicable Law any right it may have
to a trial by jury with respect to any litigation directly or indirectly arising
out of, under or in connection with this Agreement or the Merger. Each of the
parties hereto (a) certifies that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce that foregoing waiver and (b)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement and the Merger, as applicable, by, among other things, the
mutual waivers and certifications in this Section 9.09.
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 or other electronic transmission) in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
58
If the Company has failed to validly execute and deliver to Parent its
executed counterpart to this Agreement by 7:00 am Denver time on Friday, June
23, 2006, this Agreement and the execution of this Agreement by Parent and
Merger Co shall be void ab initio and shall be deemed to have never taken
effect.
IN WITNESS WHEREOF, Parent, Merger Co and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
XXXXXX XXXXXXX CAPITAL GROUP, INC.
By: /s/ Xxxx Xxxxxxx
----------------------------------
Name: Xxxx Xxxxxxx
Title: Chairman and President
BUFFALO MERGER SUB INC.
By: /s/ Xxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxx
Title: President
TRANSMONTAIGNE INC.
By
----------------------------------
Name:
Title:
59
