Western Refining, Inc. Common Stock UNDERWRITING AGREEMENT dated June 4, 2009 Merrill Lynch, Pierce, Fenner & Smith Incorporated Goldman, Sachs & Co.
Exhibit
1.1
EXECUTION
COPY
Common
Stock
dated
June 4, 2009
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxx,
Sachs & Co.
June 4,
2009
XXXXXXX
LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXXX,
SACHS & CO.
As
Representatives of the several Underwriters
c/o
Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxx
Xxxxxx Xxxx
Xxx Xxxx,
XX 00000
Ladies
and Gentlemen:
Introductory. Western
Refining, Inc., a Delaware corporation (the “Company”), proposes to issue
and sell to the several underwriters named in Schedule A (the
“Underwriters”) an
aggregate of 20,000,000 shares (the “Firm Shares”) of its Common
Stock, par value $0.01 per share (the “Common Stock”). In
addition, the Company has granted to the Underwriters an option to purchase up
to an additional 3,000,000 shares (the “Optional Shares”) of Common
Stock, as provided in Section 2. The Firm Shares and, if to the
extent such option is exercised, the Optional Shares are collectively called the
“Shares”. Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
(“Merrill”) and Xxxxxxx,
Xxxxx & Co. have agreed to act as representatives of the several
Underwriters (in such capacity, the “Representatives”) in
connection with the offering and sale of the Shares. To the extent
there are no additional Underwriters listed on Schedule A other than you, the
terms Representatives and Underwriters as used herein shall mean you, as
Underwriters. The terms Representatives and Underwriters shall mean
either the singular or plural as the context requires.
As more
fully described in the Prospectus (as defined below), concurrently with this
offering, the Company is offering $200,000,000 aggregate principal amount of
convertible senior notes due 2014 (or up to $230,000,000 aggregate principal
amount of convertible senior notes if the underwriters exercise their
over-allotment option in full) (the “Convertible Notes”) and
$600,000,000 aggregate principal amount of the Company’s senior secured notes
due 2017 in a private offering (the “Secured Notes”). In
connection with the issuance of Convertible Notes and the offering of Secured
Notes, the Company will enter into separate indentures (“New Indentures”).
The Secured Notes will be secured by
liens over substantially all of the assets of the Company and the guarantors
named therein, (the “Collateral”) pursuant to
certain security agreements, deposit account control agreements, deeds of trust,
mortgages, assignments, pledges, and other agreements or instruments evidencing
or creating security in favor of the collateral trustees, entered into by the
Company and the guarantors named therein (together, the “Security
Documents”).
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The
Company has entered into (i) the Term Loan Credit Agreement, dated
May 31, 2007, among the Company, Bank of America, N.A., as administrative
agent, and the lenders party thereto, as amended by the First Amendment to the
Term Loan Credit Agreement dated as of June 30, 2008, and the Second Amendment
to the Term Loan Credit Agreement dated as of May 29, 2009 (as so amended, the
“Term Loan Agreement”),
(ii) the Revolving Credit Agreement, dated May 31, 2007, among the
Company, Bank of America, N.A., as administrative agent, swing line lender and
L/C issuer, and the lenders party thereto, as amended by the First Amendment to
the Revolving Credit Agreement dated as of June 30, 2008, and the Second
Amendment to the Revolving Credit Agreement dated as of May 29, 2009 (as so
amended, the “Revolving Credit
Agreement”) and (iii) the Intercreditor Agreement dated as of
May 31, 2007, among the Company, the Subsidiaries, the Revolver
Administrative Agent, the Term Administrative Agent, and the Control Agent named
therein, as amended by the First Amendment to the Intercreditor Agreement dated
as of June 30, 2008 (the “Revolver/Term Loan Intercreditor Agreement,” and
together with the Term Loan Agreement and the Revolving Credit Agreement, the
“Credit
Documents”). In connection with the issuance of Convertible
Notes and Secured Notes, the Company will enter into (A) an amendment to the
Revolver/Term Loan Intercreditor Agreement to be dated as of the closing date of
the Secured Notes offering (“Revolver/Term Intercreditor Agreement
Amendment”) among the Company, the Subsidiaries, the collateral trustee
and the other parties named therein and (B) a Collateral Trust and Intercreditor
Agreement to be dated as of the closing date of the Secured Notes offering (the
“Collateral Trust and
Intercreditor Agreement”, together with the Revolver/Term Intercreditor
Agreement Amendment, the “Intercreditor Agreements”) among the Company, the
guarantors, the collateral trustee and the other parties named
therein.
The New
Indentures, the Security Documents, the Credit Documents and the Intercreditor
Agreements are hereinafter referred to collectively as the “Transaction
Documents”.
Section 1.
Representations and Warranties of the Company.
The
Company hereby represents and warrants to, and covenants with, each Underwriter
as follows:
(a) The
Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3 (File No. 333-150238),
which contains a base prospectus (the “Base Prospectus”), to be used in
connection with the public offering and sale of the Shares. Such
registration statement, as amended, including the financial statements, exhibits
and schedules thereto, at each time of effectiveness under the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the “Securities Act”), including any required information deemed
to be a part thereof at the time of effectiveness pursuant to Rule 430A,
430B and 430C under the Securities Act or the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder (collectively,
the “Exchange Act”), is called the “Registration Statement.” Any
registration statement filed by the Company pursuant to Rule 462(b) under
the Securities Act is called the “Rule 462(b) Registration Statement,” and
from and after the date and time of filing of the Rule 462(b) Registration
Statement the term “Registration Statement” shall include the Rule 462(b)
Registration Statement. Any preliminary prospectus supplement to the
Base Prospectus that describes the Shares and the offering thereof and is used
prior to filing of
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the Final
Prospectus is called, together with the Base Prospectus, a “preliminary
prospectus.” The term “Prospectus” shall mean the final prospectus
relating to the Shares that is first filed pursuant to Rule 424(b) under
the Securities Act after the date and time that this Agreement is executed and
delivered by the parties hereto (the “Execution Time”). Any reference
herein to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act;
any reference to any amendment or supplement to any preliminary prospectus or
the Prospectus shall be deemed to refer to and include any documents filed after
the date of such preliminary prospectus or Prospectus, as the case may be, under
the Exchange Act, and incorporated by reference in such preliminary prospectus
or Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual report
of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement.
(b) Compliance with Registration and
Exchange Act Requirements. The Registration Statement has been
declared effective by the Commission under the Securities Act. The
Company has complied to the Commission’s satisfaction with
all requests of the Commission for additional or supplemental
information. No stop order suspending the effectiveness of the
Registration Statement is in effect, the Commission has not issued any order or
notice preventing or suspending the use of the Registration Statement, any
preliminary prospectus or the Prospectus and no proceedings for such purpose or
pursuant to Section 8A of the Securities Act against the Company or related to
the offering have been instituted or are pending or, to the knowledge of the
Company, are contemplated or threatened by the Commission.
Each
preliminary prospectus and the Prospectus when filed complied or will comply, as
the case may be, in all material respects with the Securities Act and, if filed
by electronic transmission pursuant to the Electronic Data Gathering, Analysis
and Retrieval System (“XXXXX”) of the Commission (except as may be permitted by
Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale of
the Shares. Each of the Registration Statement and any post-effective
amendment thereto, at each time of effectiveness and at the date hereof,
complied and will comply in all material respects with the Securities Act and
did not and will not 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 therein not misleading. The Prospectus (including
any Prospectus wrapper), as amended or supplemented, as of its date, at the date
hereof, at the time of any filing pursuant to Rule 424(b) under the
Securities Act, at the Closing Date (as defined herein) and at any Subsequent
Closing Date (as defined herein), did not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The representations and warranties
set forth in the two immediately preceding sentences do not apply to statements
in or omissions from the Registration Statement or any post-effective amendment
thereto, or the Prospectus, or any amendments or supplements thereto, based upon
and in conformity with written information relating to any Underwriter furnished
to the Company by any Underwriter through the Representatives expressly for use
therein, it being understood and agreed that the only such information furnished
by any Underwriter consists of the information described as such in
Section 8 hereof. There is no
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contract
or other document required to be described in the Prospectus or to be filed as
an exhibit to the Registration Statement that has not been described or filed as
required.
The
documents incorporated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may be, conformed in
all material respects to the requirements of the Securities Act or the Exchange
Act, as applicable. Any further documents so filed and incorporated
by reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder.
(c) Disclosure
Package. The term “Disclosure Package” shall mean (i) the
Base Prospectus, as supplemented by a preliminary prospectus supplement, as may
be further amended or supplemented prior to the Applicable Time, (ii) the issuer
free writing prospectuses as defined in Rule 433 under the Securities Act
(each, an “Issuer Free Writing Prospectus”), if any, identified in Schedule B
hereto and (iii) any other free writing prospectus that the parties hereto
shall hereafter expressly agree in writing to treat as part of the Disclosure
Package. As of 7:30 a.m. (New York time) on June 5, 2009 (the
“Applicable Time”), the Disclosure Package did not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to
statements in or omissions from the Disclosure Package based upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives expressly for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the information described as such in Section 8 hereof. No
statement of material fact included in the Prospectus will be omitted from the
Disclosure Package available at the Applicable Time, and no statement of
material fact included in the Disclosure Package available at the Applicable
Time that is required to be included in the Prospectus will be omitted
therefrom.
(d) Company Not Ineligible
Issuer. (i) At the earliest time after the filing of the
Registration Statement relating to the Shares that the Company or another
offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2)) of the Securities Act and (ii) as of the
date of the execution and delivery of this Agreement (with such date being used
as the determination date for purposes of this clause (ii)), the Company
was not and is not an Ineligible Issuer (as defined in Rule 405 under the
Securities Act), without taking account of any determination by the Commission
pursuant to Rule 405 under the Securities Act that it is not necessary that
the Company be considered an Ineligible Issuer.
(e) Issuer Free Writing
Prospectuses. Each Issuer Free Writing Prospectus, as of its
issue date and at all subsequent times through the completion of the offering of
Shares under this Agreement or until any earlier date that the Company notified
or notifies the Representatives as described in the next sentence, did not, does
not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement, including
any prospectus or prospectus supplement that is or becomes part of the
Registration Statement. If at any time following issuance of an
Issuer Free Writing Prospectus there occurred or occurs an event or development
as a result of which such Issuer Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration Statement,
the
4
Company
has promptly notified or will promptly notify the Representatives and has
promptly amended or supplemented or will promptly amend or supplement, at its
own expense, such Issuer Free Writing Prospectus to eliminate or correct such
conflict. The foregoing two sentences do not apply to statements in
or omissions from any Issuer Free Writing Prospectus based upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives expressly for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the information described as such in Section 8 hereof.
(f) Accuracy of
Statements. The statements in the Disclosure Package and the
Prospectus under the headings “Description of Western Refining Capital Stock”,
“Concurrent Financing Transactions” and “Certain United States Federal Income
Tax Consequences,” in the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2008 under the caption
“Business—Governmental Regulation” and in or incorporated by reference from the
Form 8-A, dated January 9, 2006 insofar as such statements summarize legal
matters, agreements, documents or proceedings discussed therein, are accurate
and fair summaries of such legal matters, agreements, documents or
proceedings.
(g) Distribution of Offering Material By
the Company. The Company has not distributed and will not
distribute, prior to the later of the last Subsequent Closing Date (as defined
below) and the completion of the Underwriters’ distribution of the Shares, any
offering material in connection with the offering and sale of the Shares other
than a preliminary prospectus, the Prospectus, any Issuer Free Writing
Prospectus reviewed and consented to by the Representatives or included in
Schedule B hereto or the Registration Statement.
(h) The Underwriting
Agreement. This Agreement has been duly authorized, executed
and delivered by the Company.
(i) Authorization of the
Shares. The Shares to be purchased by the Underwriters from
the Company have been duly authorized for issuance and sale pursuant to this
Agreement and, when issued and delivered by the Company to the Underwriters
pursuant to this Agreement on the Closing Date or any Subsequent Closing Date,
will be validly issued, fully paid and nonassessable.
(j) No Transfer
Taxes. There are no transfer taxes or other similar fees or
charges under federal law, the laws of any state, or any political subdivision
thereof, or any other U.S. or non-U.S. governmental authority required to be
paid in connection with the execution and delivery of this Agreement or the
issuance by the Company or sale by the Company of the Shares.
(k) No Applicable Registration or Other
Similar Rights. There are no persons with registration or
other similar rights to have any equity or debt securities registered for sale
under the Registration Statement or included in the offering contemplated by
this Agreement, except for such rights as have been duly waived.
(l) No Material Adverse
Change. Except as otherwise disclosed in the Disclosure
Package and the Prospectus, subsequent to the respective dates as of which
information is given
5
in the
Disclosure Package: (i) there has been no material adverse
change, or any development that would reasonably be expected to result in a
material adverse change, in the financial condition, or in the earnings,
business, properties, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company and its
Subsidiaries, as set forth in Exhibit 21 to the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2008 (“Subsidiaries”),
considered as one entity (any such change is called a “Material Adverse
Change”); (ii) the Company and its Subsidiaries, have not incurred
any liability or obligation, indirect, direct or contingent, nor entered into
any transaction or agreement, in each case that is material to the Company and
its Subsidiaries, considered as one entity; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or
any of its Subsidiaries on any equity interests or class of capital stock or
repurchase or redemption by the Company or any of its Subsidiaries of any class
of capital stock.
(m) Independent
Accountants. Deloitte & Touche LLP and Ernst & Young
LLP, who have expressed their opinion with respect to the financial statements
of the Company (which term as used in this Agreement includes the related notes
thereto) filed with the Commission as a part of or incorporated by reference in
the Registration Statement and included or incorporated by reference in the
Disclosure Package and the Prospectus, are (or, with respect to Ernst &
Young LLP, at the relevant time were) independent registered public accountants
with respect to the Company as required by the Securities Act and the Exchange
Act. Deloitte & Touche LLP, who have expressed their opinion with
respect to the financial statements of Giant Industries, Inc. (which term as
used in this Agreement includes the related notes thereto) filed with the
Commission as a part of or incorporated by reference in the Registration
Statement and included or incorporated by reference in the Disclosure Package
and the Prospectus, were at the relevant time independent registered public
accountants with respect to Giant Industries, Inc. as required by the Securities
Act and the Exchange Act.
(n) Preparation of the Financial
Statements. The financial statements of the Company filed with
the Commission as a part of or incorporated by reference in the Registration
Statement and included or incorporated by reference in the Disclosure Package
and the Prospectus present fairly in all material respects the consolidated
financial position of the Company and its Subsidiaries as of and at the dates
indicated and the results of their operations and cash flows for the periods
specified on the basis stated therein. Such financial statements
comply as to form with the applicable accounting requirements of the Securities
Act and have been prepared in conformity with generally accepted accounting
principles (“GAAP”) applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes
thereto. No other financial statements or supporting schedules are
required to be included or incorporated by reference in the Registration
Statement. The financial data set forth in the preliminary prospectus
and the Prospectus under the captions “Summary Financial Data” and
“Capitalization” fairly present the information set forth therein on a basis
consistent with that of the audited financial statements contained in the
Disclosure Package and the Prospectus. The Company’s ratios of
earnings to fixed charges set forth in the Disclosure Package and the Prospectus
have been calculated in compliance with Item 503(d) of Regulation S-K under
the Securities Act.
(o) Organization and Good Standing of
the Company and its Subsidiaries. Each of the Company and its
Subsidiaries has been duly organized and is validly existing in
good
6
standing
under the laws of the jurisdiction of its organization and has power and
authority to own or lease, as the case may be, and operate its properties and to
conduct its business as described in the Disclosure Package and the Prospectus
and, in the case of the Company, to enter into and perform its obligations under
this Agreement. Each of the Company and its Subsidiaries is duly qualified to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a material adverse effect, on the financial condition,
or on the earnings, business, properties, operations or prospects, whether or
not arising from transactions in the ordinary course of business of the Company
and its Subsidiaries, considered as one entity (a “Material Adverse Effect”). All
of the issued and outstanding shares of capital stock or equity interests of
each Subsidiary have been duly authorized and validly issued, are fully paid and
nonassessable and are owned by the Company, directly or through Subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim except for liens under the Transaction Documents and the federal tax lien
on property currently held by Giant Industries, Inc. The Company does not own or
control, directly or indirectly, any corporation, association or other entity
other than the Subsidiaries listed in Exhibit 21 to the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31,
2008.
(p) Capitalization and Other Capital
Stock Matters. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Disclosure Package and the
Prospectus under the caption “Capitalization” (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the
Disclosure Package and the Prospectus). The Common Stock (including
the Shares) conforms in all material respects to the description thereof
contained in the Disclosure Package and the Prospectus. All of the
issued and outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable and have been issued in
compliance with federal and state securities laws. None of the
outstanding shares of Common Stock were issued in violation of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company. There are no authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or any of its
Subsidiaries other than those described in the Disclosure Package and the
Prospectus. The description of the Company’s stock plans or
arrangements, and the rights granted thereunder, set forth or incorporated by
reference in the Disclosure Package and the Prospectus accurately and fairly
summarizes in all material respects such plans, arrangements and
rights.
(q) Listing. The
Shares have been approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.
(r) Non-Contravention of Existing
Instruments; No Further Authorizations or Approvals
Required. Neither the Company nor any of its Subsidiaries is
(i) in violation or in default (or, with the giving of notice or lapse of
time, would be in default) (“Default”) under its respective organizational
documents, (ii) in Default under any indenture, mortgage, loan or credit
agreement, deed of trust, note, contract, franchise, lease or other agreement,
obligation, condition, covenant or instrument to which the Company or such
Subsidiary is a party or by
7
which it
may be bound (including, without limitation the Transaction Documents), or to
which any of the property or assets of the Company or any of its Subsidiaries is
subject (each, an “Existing Instrument”), or (iii) in violation of any statute,
law, rule, regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such Subsidiary or any of its properties, as
applicable, except with respect to clauses (ii) and (iii), for such Defaults as
would not, individually or in the aggregate, have a Material Adverse Effect. The
Company’s execution, delivery and performance of this Agreement and consummation
of the transactions contemplated hereby, by the Disclosure Package and by the
Prospectus (i) have been duly authorized by all necessary corporate action and
will not result in any Default under the respective organizational documents of
the Company or any or its Subsidiaries, (ii) will not conflict with or
constitute a breach of, or Default or a Debt Repayment Triggering Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
Subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument, except for such liens, charges or encumbrances as
contemplated by the Transaction Documents and (iii) will not result in any
violation of any statute, law, rule, regulation, judgment, order or decree
applicable to the Company or any of its Subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its Subsidiaries or any of its or
their properties. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency is required for the Company’s execution, delivery and
performance of this Agreement and consummation of the transactions contemplated
hereby, by the Disclosure Package and by the Prospectus, except (A) such
consents, approvals, authorizations, orders, registrations or qualifications
that, if not obtained or made, would not, individually or in the aggregate, have
a Material Adverse Effect and (B) such as have been obtained or made by the
Company and are in full force and effect under the Securities Act, applicable
state securities or blue sky laws and from the Financial Industry Regulatory Authority
(“FINRA”). As used herein, a “Debt Repayment Triggering Event” means any
event or condition which gives, or with the giving of notice or lapse of time
would give, the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by
the Company or any of its Subsidiaries.
(s) No Material Actions or
Proceedings. Except as disclosed in the Disclosure Package and
the Prospectus, there are no legal or governmental actions, suits or proceedings
pending or, to the Company’s knowledge, threatened (i) against or affecting the
Company or any of its Subsidiaries, (ii) which has as the subject thereof any
officer or director of, or property owned or leased by, the Company or any of
its Subsidiaries or (iii) relating to environmental or discrimination matters,
where in any such case (A) there is a reasonable possibility that such action,
suit or proceeding might be determined adversely to the Company or such
Subsidiary and (B) any such action, suit or proceeding, if so determined
adversely, would reasonably be expected to have a Material Adverse Effect or
adversely affect the consummation of the transactions contemplated by this
Agreement.
(t) Labor
Matters. No
labor problem or dispute with the employees of the Company or any of its
Subsidiaries exists or, to the knowledge of the Company, is threatened or
imminent, which would have a Material Adverse Effect.
8
(u) Intellectual Property
Rights. The Company and its Subsidiaries own, possess, license
or have other rights to use, all material patents, patent applications, trade
and service marks, trade and service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how and other
intellectual property (collectively, the “Intellectual Property”) necessary for
the conduct of their respective businesses as now conducted, and the Company has
no reason to believe that the conduct of it or its Subsidiaries’ respective
businesses will conflict in any material respect with, and has not received any
notice of any claim of conflict with, any such rights of other
parties.
(v) All Necessary Permits,
etc. Except as disclosed in the Disclosure Package and the
Prospectus, the Company and each Subsidiary possess such valid and current
licenses, certificates, authorizations or permits issued by the appropriate
state, federal or foreign regulatory agencies or bodies necessary to conduct
their respective businesses as described in the Disclosure Package and the
Prospectus, and neither the Company nor any Subsidiary has received any notice
of proceedings relating to the revocation or modification of, or non-compliance
with, any such license, certificate, authorization or permit which, individually
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect.
(w) Title to
Properties. Except as otherwise disclosed in the Disclosure
Package and the Prospectus, the Company and each of its Subsidiaries has good
and marketable title to all of the properties and assets reflected as owned in
the financial statements referred to in Section 1(n) above, in each case free
and clear of any security interests, mortgages, liens, encumbrances, equities,
claims and other defects, except such (i) that do not materially interfere with
the use made or proposed to be made of such property by the Company or such
Subsidiary, (ii) granted pursuant to the Transaction Documents and (iii) that
would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(x) Tax Law
Compliance. The Company and its consolidated Subsidiaries have
filed all necessary federal, state, local and foreign income and franchise tax
returns in a timely manner and have paid all taxes required to be paid by any of
them and, if due and payable, any related or similar assessment, fine or penalty
levied against any of them, except for any taxes, assessments, fines or
penalties as may be being contested in good faith and by appropriate proceedings
and those for which there would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect. The Company has made
appropriate provisions in the applicable financial statements referred to in
Section 1(n) above in respect of all federal, state, local and foreign income
and franchise taxes for all current or prior periods as to which the tax
liability of the Company or any of its consolidated Subsidiaries has not been
finally determined.
(y) Company Not an “Investment
Company”. The Company is not, and after giving effect to the
offering and sale of the Shares and the application of the proceeds thereof as
described in each of the preliminary prospectus and the Prospectus, will not be,
required to register as an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended and the rules and regulations of the
Commission thereunder (the “Investment Company Act”) and will conduct its
business in a manner so that it will not become subject to the Investment
Company Act.
9
(z) Compliance with Reporting
Requirements. The Company is subject to and in full compliance
with the reporting requirements of Section 13 or Section 15(d) of the
Exchange Act.
(aa) Insurance. Each of
the Company and its Subsidiaries have insurance coverage in such amounts and
with such deductibles and covering such risks that the Company and its
Subsidiaries deem to be adequate and customary for the conduct of their
respective businesses, including, but not limited to, policies covering real and
personal property owned or leased by the Company and its Subsidiaries against
theft, damage, destruction, acts of vandalism and earthquakes. All policies of
insurance and fidelity or surety bonds insuring the Company or any of its
Subsidiaries or their respective businesses, assets, employees, officers and
directors are in full force and effect. The Company and its Subsidiaries are in
compliance with the terms of such policies and instruments in all material
respects; and there are no material claims by the Company or any of its
Subsidiaries under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights clause;
and neither the Company nor any such Subsidiary has been refused any insurance
coverage sought or applied for. The Company has no reason to believe that it or
any Subsidiary will not be able (i) to renew its existing insurance coverage as
and when such policies expire or (ii) to obtain comparable coverage as may be
necessary or appropriate to conduct its business as now conducted and at a cost
that would not have a Material Adverse Effect.
(bb) No Restrictions on Dividends or
Other Distributions. No Subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends or distributions
to the Company, from making any other distribution on such Subsidiary’s equity
interests, from repaying to the Company any loans or advances to such Subsidiary
from the Company or from transferring any of such Subsidiary’s property or
assets to the Company or any other Subsidiary of the Company, except as
described in or contemplated by the Disclosure Package and the
Prospectus.
(cc) No Price Stabilization or
Manipulation. The Company has not taken and will not take,
directly or indirectly, any action designed to or that could be reasonably
expected to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares.
(dd) Related Party
Transactions. Except as described in the Disclosure Package
and the Prospectus, no relationship exists between or among the Company or any
Subsidiary, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company and its Subsidiaries, on the other hand,
that is required to be described in the Disclosure Package and the Prospectus
that is not so described.
(ee) Internal Controls and
Procedures. The Company maintains (i) effective internal
control over financial reporting as defined in Rule 13a-15 under the
Exchange Act, as amended, and (ii) a system of internal accounting controls
sufficient to provide reasonable assurance that (A) transactions are
executed in accordance with management’s general or specific authorizations;
(B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset
accountability; (C) access to assets is permitted only in accordance with
management’s general or specific authorization; and (D) the
10
recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(ff) No Material Weakness in Internal
Controls. Except as disclosed in the Disclosure Package and
the Prospectus, since the end of the Company’s most recent audited fiscal year,
there has been (i) no material weakness in the Company’s internal control
over financial reporting (whether or not remediated) and (ii) no
significant changes in the Company’s internal control over financial reporting
that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting.
(gg) Disclosure
Controls. The Company and its subsidiaries maintain an
effective system of “disclosure controls and procedures” (as defined in
Rule 13a-15 under the Exchange Act) that is designed to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Commission’s rules and forms, including
controls and procedures designed to ensure that such information is accumulated
and communicated to the Company’s management as appropriate to allow timely
decisions regarding required disclosure. The Company and its
subsidiaries have carried out evaluations of the effectiveness of their
disclosure controls and procedures as required by Rule 13a-15 under the
Exchange Act.
(hh) No Unlawful Contributions or Other
Payments. Neither the Company nor any of its Subsidiaries nor,
to the knowledge of the Company, any director, officer, employee or affiliate of
the Company or any of its Subsidiaries is aware of or has taken any action,
directly or indirectly, in furtherance of the Company’s business that would
result in a violation by such persons of the FCPA, including, without
limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA, and the Company, its Subsidiaries and, to
the knowledge of the Company, its affiliates have conducted their businesses in
compliance with the FCPA.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder.
(ii) No Conflict with Money Laundering
Laws. The operations of the Company and its Subsidiaries are
and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all applicable jurisdictions, the applicable rules and regulations thereunder
and any related or similar applicable rules, regulations or guidelines issued,
administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its Subsidiaries with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.
11
(jj) No Conflict with OFAC
Laws. Neither the Company nor any of its subsidiaries nor, to
the knowledge of the Company, any director, officer, employee or affiliate of
the Company or any of its subsidiaries is currently the subject of any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the Company will not directly or indirectly
use the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds, to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of any person
currently the subject of any U.S. sanctions administered by OFAC.
(kk) Compliance with Environmental
Laws. Except as otherwise disclosed in the Disclosure Package
and the Prospectus, (i) neither the Company nor any of its Subsidiaries is in
violation of any federal, state, local or foreign law, regulation, order, permit
or other requirement relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, “Materials of Environmental Concern”), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environment Concern (collectively,
“Environmental Laws”), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations required for
the operation of the business of the Company or its Subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company or any of its Subsidiaries received any written
communication, whether from a governmental authority, citizens group, employee
or otherwise, that alleges that the Company or any of its Subsidiaries is in
violation of any Environmental Law, except as would not, individually or in the
aggregate, have a Material Adverse Effect; (ii) there is no claim, action or
cause of action filed with a court or governmental authority, no investigation
with respect to which the Company has received written notice, and no written
notice by any person or entity alleging potential liability for investigatory
costs, cleanup costs, governmental responses costs, natural resources damages,
property damages, personal injuries, attorneys’ fees or penalties arising out
of, based on or resulting from the presence, or release into the environment, of
any Material of Environmental Concern at any location owned, leased or operated
by the Company or any of its Subsidiaries, now or in the past (collectively,
“Environmental Claims”), pending or, to the best of the Company’s knowledge,
threatened against the Company or any of its Subsidiaries or any person or
entity whose liability for any Environmental Claim that the Company or any of
its Subsidiaries has retained or assumed either contractually or by operation of
law, except as would not, individually or in the aggregate, have a Material
Adverse Effect; (iii) to the Company’s knowledge, there are no past, present or
anticipated future actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge,
presence or disposal of any Material of Environmental Concern, that reasonably
would be expected to result in a violation of any Environmental Law, require
expenditures to be incurred pursuant to any Environmental Law, or form the basis
of a potential Environmental Claim against the Company or any of its
Subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or any of its Subsidiaries has retained or
assumed either contractually or by operation of law, except as would not,
individually or in the aggregate, have a Material Adverse Effect; and (iv)
neither the Company nor any of its Subsidiaries is subject to any pending or
threatened
12
proceeding
under Environmental Law to which a governmental authority is a party and which
is reasonably likely to result in monetary sanctions of $100,000 or
more.
(ll) Periodic Review of Costs of
Environmental Compliance. In the ordinary course of its
business, the Company conducts a periodic review of the effect of Environmental
Laws on the business, operations and properties of the Company and its
Subsidiaries, in the course of which it identifies and evaluates associated
costs and liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third
parties). On the basis of such review and the amount of its
established reserves, the Company has reasonably concluded that such associated
costs and liabilities would not, individually or in the aggregate, have a
Material Adverse Effect.
(mm)
ERISA
Compliance. None
of the following events has occurred or exists: (i) a failure to
fulfill the obligations, if any, under the minimum funding standards of Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), and the regulations and published interpretations thereunder
with respect to a Plan, determined without regard to any waiver of such
obligations or extension of any amortization period; (ii) an audit or
investigation by the Internal Revenue Service, the U.S. Department of Labor, the
Pension Benefit Guaranty Corporation or any other federal or state governmental
agency or any foreign regulatory agency with respect to the employment or
compensation of employees by the Company or any of its subsidiaries that could
have a Material Adverse Effect; (iii) any breach of any contractual obligation,
or any violation of law or applicable qualification standards, with respect to
the employment or compensation of employees by the Company or any of its
subsidiaries that could have a Material Adverse Effect. None of the
following events has occurred or is reasonably likely to occur: (i) a
material increase in the aggregate amount of contributions required to be made
to all Plans in the current fiscal year of the Company and its subsidiaries
compared to the amount of such contributions made in the Company and its
subsidiaries’ most recently completed fiscal year; (ii) a material increase in
the Company and its subsidiaries’ “accumulated post-retirement benefit
obligations” (within the meaning of Statement of Financial Accounting Standards
106) compared to the amount of such obligations in the Company and its
subsidiaries’ most recently completed fiscal year; (iii) any event or condition
giving rise to a liability under Title IV of ERISA that could have a Material
Adverse Effect; or (iv) the filing of a claim by one or more employees or former
employees of the Company or any of its subsidiaries related to its or their
employment that could have a Material Adverse Effect. For purposes of
this paragraph, the term “Plan” means a plan (within the meaning of Section 3(3)
of ERISA) subject to Title IV of ERISA with respect to which the Company or any
of its subsidiaries may have any liability.
(nn) Brokers. There is
no broker, finder or other party that is entitled to receive from the Company
any brokerage or finder’s fee or other similar payment as a result of any
transactions contemplated by this Agreement.
(oo) Xxxxxxxx-Xxxxx
Compliance. There is and has been no failure on the part of
the Company and any of the Company’s directors or officers, in their capacities
as such, to comply with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations promulgated
13
in
connection therewith (the “Xxxxxxxx-Xxxxx Act”), including Section 402
related to loans and Sections 302 and 906 related to
certifications.
(pp) Subsidiaries. The
subsidiaries listed on Annex A attached hereto are the only significant
subsidiaries of the Company as defined by Rule 1-02 of
Regulation S-X.
(qq) Statistical and Market Related
Data. Nothing has come to the attention of the Company that
has caused the Company to believe that the statistical and market-related data
included in the Disclosure Package and the Prospectus is not based on or derived
from sources that are reliable and accurate in all material
respects.
Any
certificate signed by an officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
The
Company acknowledges that in accordance with the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the
Underwriters are required to obtain, verify and record information that
identifies their respective clients, including the Company, which information
may include the name and address of their respective clients, as well as other
information that will allow the underwriters to properly identify
their respective clients.
Section 2.
Purchase, Sale and Delivery of the Shares.
(a) The Firm
Shares. The Company agrees to issue and sell to the several
Underwriters the Firm Shares upon the terms herein set forth. On the
basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Underwriters
agree, severally and not jointly, to purchase from the Company the respective
number of Firm Shares set forth opposite their names on
Schedule A. The purchase price per Firm Share to be paid by the
several Underwriters to the Company shall be $8.55 per share.
(b) The Closing
Date. Delivery of certificates for the Firm Shares to be
purchased by the Underwriters and payment therefor shall be made at the offices
of Shearman & Sterling LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(or such other place as may be agreed to by the Company and the Representatives)
at 9:00 a.m., New York time, on June 10, 2009, or such other time and date as
may be agreed to by the Company and the Representatives (the time and date of
such closing are called the “Closing Date”).
(c) The Optional Shares; the Subsequent
Closing Date. In addition, on the basis of the
representations, warranties and agreements herein contained, and upon the terms
but subject to the conditions herein set forth, the Company hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
an aggregate of 3,000,000 Optional Shares from the Company at the same price as
the purchase price per share to be paid by the Underwriters for the Firm
Shares. The option granted hereunder may be exercised at any time and
from time to time upon notice by the Representatives to the Company, which
notice may be given at any time within 30 days from the date of this
Agreement. Such notice shall set forth (i) the aggregate number
of Optional Shares as to which the Underwriters are exercising the
14
option,
(ii) the names and denominations in which the certificates for the Optional
Shares are to be registered and (iii) the time, date and place at which
such certificates will be delivered (which time and date may be simultaneous
with, but not earlier than, the Closing Date; and in such case the term “Closing
Date” shall refer to the time and date of delivery of certificates for the Firm
Shares and the Optional Shares). Each time and date of delivery, if
subsequent to the Closing Date, is called a “Subsequent Closing Date” and shall
be determined by the Representatives and shall not be earlier than three nor
later than five full business days after delivery of such notice of
exercise. If any Optional Shares are to be purchased, each
Underwriter agrees, severally and not jointly, to purchase the number of
Optional Shares (subject to such adjustments to eliminate fractional shares as
the Representatives may determine) that bears the same proportion to the total
number of Optional Shares to be purchased as the number of Firm Shares set forth
on Schedule A
opposite the name of such Underwriter bears to the total number of Firm
Shares.
(d) Public Offering of the
Shares. The Representatives
hereby advise the Company that the Underwriters intend to offer for sale to the
public, as described in the Prospectus, their respective portions of the Shares
as soon after this Agreement has been executed and the Registration Statement
has been declared effective as the Representatives, in their sole judgment, has
determined is advisable and practicable.
(e) Payment for the
Shares. Payment for the Shares shall be made at the Closing
Date (and, if applicable, at any Subsequent Closing Date) by wire transfer of
immediately available funds to the order of the Company.
It is
understood that the Representatives have been authorized, for their own account
and the accounts of the several Underwriters, to accept delivery of and receipt
for, and make payment of the purchase price for, the Firm Shares and any
Optional Shares the Underwriters have agreed to purchase. The
Representatives, individually and not as the Representatives of the
Underwriters, may (but shall not be obligated to) make payment for any Shares to
be purchased by any Underwriter whose funds shall not have been received by the
Representatives by the Closing Date or any Subsequent Closing Date, as the case
may be, for the account of such Underwriter, but any such payment shall not
relieve such Underwriter from any of its obligations under this
Agreement.
(f) Delivery of the Firm Shares and the
Optional Shares. Delivery of the Firm Shares and the Optional
Shares shall be made through the facilities of The Depository Trust Company
unless the Representatives shall otherwise instruct. Time shall be of
the essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Underwriters.
(g) Delivery of Prospectus to the
Underwriters. Not later than 3:00 p.m. on the first business
day in New York City following the date of this Agreement, the Company shall
deliver or cause to be delivered, copies of the Prospectus in such quantities
and at such places as the Representatives shall reasonably request.
Section 3.
Covenants of the Company.
The
Company covenants and agrees with each Underwriter as follows:
15
(a) Representative’s Review of Proposed
Amendments and Supplements. During the period beginning on the
Applicable Time and ending on the later of the Closing Date or such date, as in
the opinion of counsel for the Underwriters, the Prospectus is no longer
required by law to be delivered in connection with sales by an Underwriter or
dealer, including in circumstances where such requirement may be satisfied
pursuant to Rule 172 under the Securities Act (the “Prospectus Delivery
Period”), prior to amending or supplementing the Registration Statement, the
Disclosure Package or the Prospectus subject to Section 3(e), the Company
shall furnish to the Representatives for review a copy of each such proposed
amendment or supplement, and the Company shall not file or use any such proposed
amendment or supplement to which the Representatives reasonably
object.
(b) Securities Act
Compliance. After the date of this Agreement, the Company
shall promptly advise the Representatives in writing (i) when the
Registration Statement, if not effective at the Execution Time, shall have
become effective, (ii) of the receipt of any comments of, or requests for
additional or supplemental information from, the Commission, (iii) of the
time and date of any filing of any post-effective amendment to the Registration
Statement or any amendment or supplement to any preliminary prospectus or the
Prospectus, (iv) of the time and date that any post-effective amendment to
the Registration Statement becomes effective and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order or notice preventing or suspending the use of the
Registration Statement, any preliminary prospectus or the Prospectus, or of any
proceedings to remove, suspend or terminate from listing or quotation the Common
Stock from any securities exchange upon which it is listed for trading or
included or designated for quotation, or of the threatening or initiation of any
proceedings for any of such purposes. The Company shall use its best
efforts to prevent the issuance of any such stop order or notice of prevention
or suspension of such use. If the Commission shall enter any such
stop order or issue any such notice at any time, the Company will use its best
efforts to obtain the lifting or reversal of such order or notice at the
earliest possible moment, or, subject to Section 3(a), will file an
amendment to the Registration Statement or will file a new registration
statement and use its best efforts to have such amendment or new registration
statement declared effective as soon as practicable. Additionally,
the Company agrees that it shall comply with the provisions of
Rules 424(b), 430B and 433, as applicable, under the Securities Act,
including with respect to the timely filing of documents thereunder, and will
use its reasonable efforts to confirm that any filings made by the Company under
such Rule 424(b) under the Securities Act were received in a timely manner
by the Commission.
(c) Exchange Act
Compliance. During the Prospectus Delivery Period, the Company
will file all documents required to be filed with the Commission pursuant to
Sections 13, 14 or 15 of the Exchange Act in the manner and within the time
periods required by the Exchange Act.
(d) Amendments and Supplements to the
Registration Statement, Disclosure Package and Prospectus and Other Securities
Act Matters. If, during the Prospectus Delivery Period, any
event or development shall occur or condition exist as a result of which the
Disclosure Package or the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein in the light of the
circumstances under which they were made or then prevailing, as the case may be,
not misleading, or if it shall be necessary to amend or supplement the
Disclosure Package or
16
the
Prospectus, or to file under the Exchange Act any document incorporated by
reference in the Disclosure Package or the Prospectus, in order to make the
statements therein, in the light of the circumstances under which they were made
or then prevailing, as the case may be, not misleading, or if in the opinion of
the Representatives it is otherwise necessary or advisable to amend or
supplement the Registration Statement, the Disclosure Package or the Prospectus,
or to file under the Exchange Act any document incorporated by reference in the
Disclosure Package or the Prospectus, or to file a new registration statement
containing the Prospectus, in order to comply with law, including in connection
with the delivery of the Prospectus, the Company agrees to (i) notify the
Representatives of any such event or condition and (ii) promptly prepare
(subject to Sections 3(a) and 3(e) hereof), file with the Commission (and use
its best efforts to have any amendment to the Registration Statement or any new
registration statement to be declared effective) and furnish at its own expense
to the Underwriters and to such dealers as the Representatives may designate,
amendments or supplements to the Registration Statement, the Disclosure Package
or the Prospectus, or any new registration statement, necessary in order to make
the statements in the Disclosure Package or the Prospectus as so amended or
supplemented, in the light of the circumstances under which they were made or
then prevailing, as the case may be, not misleading or so that the Registration
Statement, the Disclosure Package or the Prospectus, as amended or supplemented,
will comply with law.
(e) Permitted Free Writing
Prospectuses. The Company represents that it has not made, and
agrees that, unless it obtains the prior written consent of the Representatives,
it will not make, any offer relating to the Shares that constitutes or would
constitute an Issuer Free Writing Prospectus or that otherwise constitutes or
would constitute a “free writing prospectus” (as defined in Rule 405 under
the Securities Act) or a portion thereof required to be filed by the Company
with the Commission or retained by the Company under Rule 433 under the
Securities Act; provided that the prior written consent of the Representatives
hereto shall be deemed to have been given in respect of the Free Writing
Prospectuses included in Schedule B hereto and any electronic road
show. Any such free writing prospectus consented to by the
Representatives is hereinafter referred to as a “Permitted Free Writing
Prospectus”. The Company agrees that (i) it has treated and will
treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer
Free Writing Prospectus, and (ii) has complied and will comply, as the case
may be, with the requirements of Rules 164 and 433 under the Securities Act
applicable to any Permitted Free Writing Prospectus, including in respect of
timely filing with the Commission, legending and record keeping.
(f) Copies of any Amendments and
Supplements to the Prospectus. The Company agrees to furnish
the Representatives, without charge, during the Prospectus Delivery Period, as
many copies of each preliminary prospectus, the Prospectus and any amendments
and supplements thereto (including any documents incorporated or deemed
incorporated by reference therein) and the Disclosure Package as the
Representatives may request.
(g) Copies of the Registration
Statement. The Company will furnish to the Representatives and
counsel for the Underwriters signed copies of the Registration Statement
(including exhibits thereto).
(h) Blue Sky
Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the
Shares for sale under (or obtain
17
exemptions
from the application of) the state securities or blue sky laws or Canadian
provincial securities laws or other foreign laws of those jurisdictions
reasonably designated by the Representatives, shall comply with such laws and
shall continue such qualifications, registrations and exemptions in effect so
long as required for the distribution of the Shares. Notwithstanding
the foregoing, the Company shall not be required to qualify as a foreign
corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where it
would be subject to taxation as a foreign corporation, other than those arising
out of the offering or sale of the Shares in any jurisdiction where it is not
now so subject. The Company will advise the Representatives promptly
of the suspension of the qualification or registration of (or any such exemption
relating to) the Shares for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the event of
the issuance of any order suspending such qualification, registration or
exemption, the Company shall use its best efforts to obtain the withdrawal
thereof promptly.
(i) Use of
Proceeds. The Company shall apply the net proceeds from the
sale of the Shares sold by it in the manner described under the caption “Use of
Proceeds” in the Disclosure Package and the Prospectus.
(j) Transfer
Agent. The Company shall engage and maintain, at its expense,
a registrar and transfer agent for the Common Stock.
(k) Earnings
Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Representatives an
earnings statement (which need not be audited) covering the twelve-month period
ending June 30, 2010 that satisfies the
provisions of Section 11(a) of the Securities Act and Rule 158 under
the Securities Act.
(l) Periodic Reporting
Obligations. During the Prospectus Delivery Period the Company
shall file, on a timely basis, with the Commission and the New York Stock
Exchange all reports and documents required to be filed under the Exchange
Act. Additionally, the Company shall report the use of proceeds from
the issuance of the Shares as may be required under Rule 463 under the
Securities Act.
(m) Listing. The
Company will use its commercially reasonable efforts to list, subject to notice
of issuance, the Shares on the New York Stock Exchange.
(n) Agreement Not to Offer or Sell
Additional Shares. During the period commencing on the date
hereof and ending on the 90th day
following the date of the Prospectus, the Company will not, without the prior
written consent of the Representatives (which consent may be withheld at the
sole discretion of the Representatives), directly or indirectly, sell, offer,
contract or grant any option to sell, pledge, transfer or establish an open “put
equivalent position” or liquidate or decrease a “call equivalent position”
within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise
dispose of or transfer (or enter into any transaction that is designed to, or
might reasonably be expected to, result in the disposition of), or announce the
offering of, or file any registration statement under the Securities Act in
respect of, any shares of Common Stock, options or warrants to acquire shares of
the Common Stock or securities exchangeable or exercisable for or convertible
into shares of Common Stock (other than as contemplated by this Agreement with
respect to the Shares and the underwriting
18
agreement,
dated June 4, 2009 between the Company and the underwriters named therein
relating to the Convertible Notes); provided, however, that the Company may
issue shares of its Common Stock or options to purchase its Common Stock, or
Common Stock upon exercise of options, pursuant to any stock option, stock bonus
or other stock plan or arrangement described in the
Prospectus. Notwithstanding the foregoing, if (x) during the
last 17 days of the 90-day restricted period the Company issues an earnings
release or material news or a material event relating to the Company occurs, or
(y) prior to the expiration of the 90-day restricted period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the 90-day period, the restrictions imposed in this
clause shall continue to apply until the expiration of the 18-day period
beginning on the date of the issuance of the earnings release or the occurrence
of the material news or material event. The Company will provide the
Representatives and any co-managers and each individual subject to the
restricted period pursuant to the lockup letters described in Section 5(h)
with prior notice of any such announcement that gives rise to an extension of
the restricted period.
(o) Compliance with Xxxxxxxx-Xxxxx
Act. The Company will comply with all applicable securities
and other laws, rules and regulations, including, without limitation, the
Xxxxxxxx-Xxxxx Act, and use its best efforts to cause the Company’s directors
and officers, in their capacities as such, to comply with such laws, rules and
regulations, including, without limitation, the provisions of the Xxxxxxxx-Xxxxx
Act.
(p) Future Reports to
Stockholders. To furnish to its stockholders as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders’ equity and cash flows of
the Company and its consolidated Subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), to make available to
its stockholders consolidated summary financial information of the Company and
its Subsidiaries for such quarter in reasonable detail.
(q) Future Reports to the
Representatives. During the period of two years after the
Closing Date, the Company will furnish to the Representatives at 000 Xxxxxxxxx
Xxxxxx, 0xx Xxxxx, Xxxxxxx, XX 00000, Attn: Xxx XxXxxxxxxx, or make available
via XXXXX, as soon as they are available, copies of all reports or other
communications furnished to holders of the Common Stock and copies of any
reports and financial statements furnished to or filed with the Commission or
any national securities exchange or automatic quotation system.
(r) Investment
Limitation. The Company shall not invest or
otherwise use the proceeds received by the Company from its sale of the Shares
in such a manner as would require the Company or any of its Subsidiaries to
register as an investment company under the Investment Company Act.
(s) No Manipulation of
Price. The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or could
reasonably be expected to constitute, under the Exchange Act or otherwise, the
stabilization or manipulation of the price of any securities of the Company to
facilitate the sale or resale of the Shares.
19
Section 4.
Payment of Expenses.
The
Company agrees to pay all costs, fees and expenses incurred in connection with
the performance of its obligations hereunder and in connection with the
transactions contemplated hereby, including without limitation (i) all
expenses incident to the issuance and delivery of the Shares (including all
printing and engraving costs), (ii) all fees and expenses of the registrar
and transfer agent of the Common Stock, (iii) all necessary issue, transfer
and other stamp taxes in connection with the issuance and sale of the Shares to
the Underwriters, (iv) all fees and expenses of the Company’s counsel,
independent public or certified public accountants and other advisors,
(v) all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Registration Statement
(including financial statements, exhibits, schedules, consents and certificates
of experts), each Issuer Free Writing Prospectus, each Permitted Free Writing
Prospectus, each preliminary prospectus and the Prospectus, and all amendments
and supplements thereto, and this Agreement, (vi) all filing fees and
reasonable attorneys’ fees and expenses incurred by the Company or the
Underwriters in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Shares for offer and sale under the state securities or blue sky laws or the
provincial securities laws of Canada, and, if requested by the Representatives,
preparing and printing a “Blue Sky Survey” or memorandum, and any supplements
thereto, advising the Underwriters of such qualifications, registrations and
exemptions, (vii) the filing fees incident to, and the reasonable fees and
expenses of counsel for the Underwriters in connection with, FINRA’s review and
approval, if required, of the Underwriters’ participation in the offering and
distribution of the Shares, (viii) the fees and expenses associated with
listing of the Common Stock on the New York Stock Exchange, (ix) all of the
Company’s transportation and other expenses incurred in connection with
presentations to prospective purchasers of the Shares, except that the Company
and the Underwriters will each pay 50% of the cost of privately chartered
airplanes used for such purposes, (x) all other fees, costs and expenses
referred to in Item 14 of Part II of the Registration
Statement. Except as provided in this Section 4, Section 6,
Section 8 and Section 9 hereof, the Underwriters shall pay their own
expenses, including the fees and disbursements of their counsel.
Section 5.
Conditions of the Obligations of the Underwriters.
The
obligations of the several Underwriters to purchase and pay for the Shares as
provided herein on the Closing Date and, with respect to the Optional Shares,
any Subsequent Closing Date, shall be subject to the accuracy of the
representations and warranties on the part of the Company set forth in
Section 1 hereof as of the date hereof and as of the Closing Date as though
then made and, with respect to the Optional Shares, as of any Subsequent Closing
Date as though then made, to the accuracy of the statements of the Company made
in any certificates pursuant to the provisions hereof, to the timely performance
by the Company of its covenants and other obligations hereunder, and to each of
the following additional conditions:
(a) Accountants’ Comfort
Letter. On the date hereof, the Representatives shall have
received from each of (i) Deloitte & Touche LLP and Ernst & Young LLP,
independent public accountants for the Company, a letter dated the date hereof
addressed to the Underwriters and in form and substance satisfactory to the
Representatives and (ii) Deloitte & Touche LLP,
20
independent
public accountants for Giant Industries, Inc., a letter dated the date hereof
addressed to the Underwriters and in form and substance satisfactory to the
Representatives.
(b) Compliance with Registration
Requirements; No Stop Order; No Objection from FINRA. For the
period from and after effectiveness of this Agreement and prior to the Closing
Date and, with respect to the Optional Shares, any Subsequent Closing
Date:
(i) the
Company shall have filed the Prospectus with the Commission (including the
information required by Rule 430B under the Securities Act) in the manner
and within the time period required by Rule 424(b) under the Securities
Act; or the Company shall have filed a post-effective amendment to the
Registration Statement containing the information required by such
Rule 430B under the Securities Act, and such post-effective amendment shall
have become effective;
(ii) all
material required to be filed by the Company pursuant to Rule 433(d) under
the Securities Act, shall have been filed with the Commission within the
applicable time periods prescribed for such filings under such Rule 433
under the Securities Act;
(iii) no
stop order suspending the effectiveness of the Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in effect and
no proceedings for such purpose or pursuant to Section 8A of the Securities Act
against the Company or related to the offering shall have been instituted or
threatened by the Commission; and
(iv) FINRA
shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(c) No Material Adverse Change or
Ratings Agency Change. For the period from and after the date
of this Agreement, or the respective dates as of which information is given in
the Prospectus and the Disclosure Package, and prior to the Closing Date and,
with respect to the Optional Shares, any Subsequent Closing Date:
(i) in
the judgment of the Representatives there shall not have occurred any Material
Adverse Change;
(ii) there
shall not have been any change or decrease specified in the letter or letters
referred to in paragraph (a) of this Section 5 which is, in the sole judgment of
the Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Shares on the
Closing Date or the Subsequent Closing Date, as applicable, on the terms and in
the manner contemplated by this Agreement and the Prospectus; and
(iii) there
shall not have occurred any downgrading, nor shall any notice have been given of
any intended or potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change, in the rating
accorded any debt securities of the Company or any of its Subsidiaries by any
“nationally recognized statistical rating organization” as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act.
21
(d) Opinion of Counsel for the
Company. On the Closing Date and any Subsequent Closing Date,
the Representatives shall have received the favorable opinion of Xxxxx Xxxxxxxx,
Senior Vice President — Legal, General Counsel and Secretary, and Xxxxx Xxxx
& Xxxxxxxx, counsel for the Company, dated as of such Closing Date or
Subsequent Closing Date, the forms of which are attached as Exhibit A-1 and A-2,
respectively.
(e) Opinion of Counsel for the
Underwriters. On the Closing Date and
any Subsequent Closing Date, the Representatives shall have received the
favorable opinion of Shearman & Sterling LLP, counsel for the Underwriters,
dated as of such Closing Date or Subsequent Closing Date, in form and substance
satisfactory to, and addressed to, the Representatives for the benefit of all of
the Underwriters, with respect to the issuance and sale of the Shares, the
Registration Statement, the Prospectus (together with any supplement thereto),
the Disclosure Package and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.
(f) Officers’
Certificate. On each of the Closing Date and any Subsequent
Closing Date, the Representatives shall have received a written certificate
executed by the Chairman of the Board, Chief Executive Officer or President of
the Company and the Chief Financial Officer or Chief Accounting Officer of the
Company, dated as of such Closing Date or Subsequent Closing Date, to the effect
that the signers of such certificate have carefully examined the Registration
Statement, the Prospectus and any amendment or supplement thereto, any Issuer
Free Writing Prospectus, any Permitted Free Writing Prospectus and any amendment
or supplement thereto and this Agreement, to the effect set forth in
subsections (b) and (c)(iii) of this Section 5, and further to
the effect that:
(i) for
the period from and after the date of this Agreement and prior to such Closing
Date or Subsequent Closing Date there has not occurred any Material Adverse
Change;
(ii) the
representations and warranties of the Company set forth in Section 1 of
this Agreement are true and correct on and as of such Closing Date or Subsequent
Closing Date with the same force and effect as though expressly made on and as
of such Closing Date or Subsequent Closing Date; and
(iii) the
Company has complied with all the agreements hereunder and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date or Subsequent Closing Date.
(g) Bring-down Comfort
Letter. On the Closing Date and any Subsequent Closing Date,
the Representatives shall have received from each of (i) Deloitte & Touche
LLP and Ernst & Young LLP, independent public accountants for the Company,
and (ii) Deloitte & Touche LLP, independent public accounts for Giant
Industries, Inc. a letter dated such date, in form and substance satisfactory to
the Representatives, to the effect that they reaffirm the statements made in the
respective letter furnished by them pursuant to subsection (a) of this
Section 5, except that the specified date referred to therein for the
carrying out of procedures shall be no more than three business days prior to
such Closing Date or Subsequent Closing Date.
22
(h) Lock-Up Agreement from Certain
Securityholders of the Company. On or prior to the date
hereof, the Company shall have furnished to the Representatives an agreement in
the form of Exhibit B hereto
from the directors, officers and shareholders of the Company named in Schedule C, and such
agreement shall be in full force and effect on the Closing Date and any
Subsequent Closing Date.
(i) Listing of
Shares. The Shares shall
have been listed and admitted and authorized for trading on the New York Stock
Exchange, and satisfactory evidence of such actions shall have been provided to
the Representatives.
(j) Additional Documents. On or
before the Closing Date and any Subsequent Closing Date, the Representatives and
counsel for the Underwriters shall have received such information, documents and
opinions as they may reasonably require for the purposes of enabling them to
pass upon the issuance and sale of the Shares as contemplated herein, or in
order to evidence the accuracy of any of the representations and warranties, or
the satisfaction of any of the conditions or agreements, herein
contained.
If any
condition specified in this Section 5 is not satisfied when and as required
to be satisfied, this Agreement may be terminated by the Representatives by
notice to the Company at any time on or prior to the Closing Date and, with
respect to the Optional Shares, at any time prior to the applicable Subsequent
Closing Date, which termination shall be without liability on the part of any
party to any other party, except that Section 4, Section 6,
Section 8, Section 9 and Section 13 shall at all times be
effective and shall survive such termination.
Section 6. Reimbursement
of Underwriters’ Expenses.
If this
Agreement is terminated pursuant to Section 5 or Section 11 or if the
sale to the Underwriters of the Shares on the Closing Date or any Subsequent
Closing Date is not consummated because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or to comply with any
provision hereof, the Company agrees to reimburse the Representatives and the
other Underwriters (or such Underwriters as have terminated this Agreement with
respect to themselves), severally, upon demand for all out-of-pocket expenses
that shall have been reasonably incurred by the Representatives and the
Underwriters in connection with the proposed purchase and the offering and sale
of the Shares, including but not limited to reasonable fees and disbursements of
counsel, printing expenses, travel expenses, postage, facsimile and telephone
charges.
Section 7.
Effectiveness of this Agreement.
This
Agreement shall become effective upon the execution of this Agreement by the
parties hereto.
Section 8.
Indemnification.
(a) Indemnification of the
Underwriters. The Company agrees to indemnify and hold
harmless each Underwriter, its directors, officers, employees and agents, and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act or the Exchange Act against any loss, claim, damage, liability or
expense, as incurred, to which such Underwriter,
23
director,
officer, employee, agent or such controlling person may become subject, insofar
as such loss, claim, damage, liability or expense (or actions in respect thereof
as contemplated below) arises out of or is based (i) upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430A, Rule 430B or
Rule 430C under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading; or (ii) upon any untrue statement or
alleged untrue statement of a material fact contained in any Issuer Free Writing
Prospectus, any Permitted Free Writing Prospectus, any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact, in each case, necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, and to reimburse each Underwriter, its officers,
directors, employees, agents and each such controlling person for any and all
expenses (including the fees and disbursements of counsel chosen by the
Representatives) as such expenses are reasonably incurred by such Underwriter,
or its officers, directors, employees and agents or such controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided, however, that
the foregoing indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission based upon and in conformity with written information furnished
to the Company by the Representatives expressly for use in the Registration
Statement, any Issuer Free Writing Prospectus, any Permitted Free Writing
Prospectus, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in Section 8(b) hereof. The indemnity agreement set forth in this
Section 8(a) shall be in addition to any liabilities that the Company may
otherwise have.
(b) Indemnification of the Company, its
Directors and Officers. Each Underwriter agrees, severally and
not jointly, to indemnify and hold harmless the Company, each of its directors,
managers, officers and employees and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act, from and
against any loss, claim, damage, liability or expense, as incurred, to which the
Company, or any such director, manager, officer, employee or controlling person
may become subject, insofar as such loss, claim, damage, liability or expense
(or actions in respect thereof as contemplated below) arises out of or is based
upon any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Issuer Free Writing Prospectus, any Permitted Free
Writing Prospectus, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) or arises out of or is based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, and only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, any Issuer Free Writing Prospectus, any Permitted Free Writing
Prospectus, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), in reliance upon and in conformity with written information
furnished to the Company by the Representatives expressly for use therein; and
to reimburse the Company, or any such director, manager, officer, employee
or controlling person for any legal and other expense reasonably incurred by the
Company, or any such director, manager, officer,
24
employee
or controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. The Company hereby acknowledges that the only information
that the Underwriters have furnished to the Company expressly for use in the
Registration Statement, any Issuer Free Writing Prospectus, any Permitted Free
Writing Prospectus, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) are the statements set forth in the subsection
“Price Stabliziation and Short Positions” under the caption “Underwriting” in
the Prospectus. The indemnity agreement set forth in this Section 8(b)
shall be in addition to any liabilities that each Underwriter may otherwise
have.
(c) Notifications and Other
Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 8 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 8, notify the indemnifying
party in writing of the commencement thereof, but the failure to so notify the
indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise
learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. In case any such action is brought
against any indemnified party and such indemnified party seeks or intends to
seek indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it shall elect, jointly with
all other indemnifying parties similarly notified, by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party and the indemnified party
in conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of such indemnifying party’s
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof unless
(i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (other than a reasonably necessary local
counsel), reasonably approved by the indemnifying party (or by the
Representatives in the case of Section 8(b)), representing the indemnified
parties who are parties to such action) or (ii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.
25
(d) Settlements. The
indemnifying party under this Section 8 shall not be liable for any
settlement of any proceeding effected without its written consent (which consent
shall not be unreasonably withheld), but if settled with such consent or if
there is a final, non-appealable judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
Section 8(c) hereof, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party (which consent
shall not be unreasonably withheld), effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action, suit or
proceeding in respect of which any indemnified party is or could have been a
party and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent (x) includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and (y) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
Section 9.
Contribution.
If the
indemnification provided for in Section 8 is for any reason unavailable to
or otherwise insufficient to hold harmless an indemnified party in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then
each indemnifying party shall contribute to the aggregate amount paid or payable
by such indemnified party, as incurred, as a result of any losses, claims,
damages, liabilities or expenses referred to therein (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company, on
the one hand, and the Underwriters, on the other hand, from the offering of the
Shares pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company, on the one
hand, and the Underwriters, on the other hand, in connection with the statements
or omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Underwriters, on the other
hand, in connection with the offering of the Shares pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Shares pursuant to this Agreement (before
deducting expenses) received by the Company, and the total underwriting discount
received by the Underwriters, in each case as set forth on the front cover page
of the Prospectus bear to the aggregate initial public offering price of the
Shares as set forth on such cover. The relative fault of the Company,
on the one hand, and the Underwriters, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact or any such inaccurate or alleged inaccurate representation or warranty
relates to information supplied by the Company, on
26
the one
hand, or the Underwriters, on the other hand, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The
amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 8(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section
8(d) with respect to notice of commencement of any action shall apply if a claim
for contribution is to be made under this Section 9; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(d) for purposes of indemnification.
The
Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in this Section 9.
Notwithstanding
the provisions of this Section 9, no Underwriter shall be required to
contribute any amount in excess of the underwriting discount or commission
received by such Underwriter in connection with the Shares underwritten by it
and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters’ obligations to
contribute pursuant to this Section 9 are several, and not joint, in
proportion to their respective underwriting commitments as set forth opposite
their names in Schedule A. For
purposes of this Section 9, each director, officer, employee and agent of
an Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director, manager, officer and
employee of the Company and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act shall have the same rights
to contribution as the Company.
Section 10.
Default of One or More of the Several Underwriters.
If, on
the Closing Date or a Subsequent Closing Date, as the case may be, any one or
more of the several Underwriters shall fail or refuse to purchase Shares that it
or they have agreed to purchase hereunder on such date, and the aggregate number
of Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase does not exceed 10% of the aggregate number of the Shares to
be purchased on such date, the other Underwriters shall be obligated, severally,
in the proportions that the number of Firm Shares set forth opposite their
respective names on Schedule A bears
to the aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as may be specified by
the Representatives with the consent of the non-defaulting Underwriters, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date. If, on the Closing Date or a
Subsequent Closing Date, as the case may be, any one or more of the Underwriters
shall fail or refuse to purchase Shares and the aggregate number of Shares with
respect to which such default occurs exceeds 10% of the aggregate number of
Shares to be purchased on such date, and arrangements satisfactory to
the
27
Representatives
and the Company for the purchase of such Shares are not made within 48 hours
after such default, this Agreement shall terminate without liability of any
party to any other party except that the provisions of Section 4,
Section 6, Section 8 and Section 9 shall at all times be
effective and shall survive such termination. In any such case either
the Representatives or the Company shall have the right to postpone the Closing
Date or a Subsequent Closing Date, as the case may be, but in no event for
longer than seven days in order that the required changes, if any, to the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected.
As used
in this Agreement, the term “Underwriter” shall be deemed to include any person
substituted for a defaulting Underwriter under this
Section 10. Any action taken under this Section 10 shall
not relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
Section 11.
Termination of this Agreement.
Prior to
the Closing Date and, with respect to the Optional Shares, any Subsequent
Closing Date, this Agreement may be terminated by the Representatives by notice
given to the Company if at any time (i) trading or quotation in any of the
Company’s securities shall have been suspended or limited by the Commission or
by the New York Stock Exchange, or trading in securities generally on the New
York Stock Exchange shall have been suspended or limited, or minimum or maximum
prices shall have been generally established on any of such stock exchanges by
the Commission or FINRA; (ii) a general banking moratorium shall have been
declared by federal or New York authorities or a material disruption in
commercial banking or securities settlement or clearance services in the United
States has occurred; or (iii) there shall have occurred any outbreak or
escalation of national or international hostilities, or any change in the United
States or international financial markets, or any substantial change or
development involving a prospective substantial change in United States’ or
international political, financial or economic conditions, as in the judgment of
the Representatives is material and adverse and makes it impracticable or
inadvisable to market the Shares in the manner and on the terms described in the
Prospectus or to enforce contracts for the sale of securities. Any
termination pursuant to this Section 11 shall be without liability on the
part of (a) the Company to any Underwriter, except that the Company shall
be obligated to reimburse the reasonable expenses of the Representatives and the
Underwriters pursuant to Sections 4 and 6 hereof or (b) any
Underwriter to the Company.
Section 12.
No Advisory or Fiduciary Responsibility.
The
Company acknowledges and agrees that: (i) the purchase and sale
of the Shares pursuant to this Agreement, including the determination of the
public offering price of the Shares and any related discounts and commissions,
is an arm’s-length commercial transaction between the Company, on the one hand,
and the several Underwriters, on the other hand, and the Company is capable of
evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by this Agreement; (ii) in
connection with each transaction contemplated hereby and the process leading to
such transaction each Underwriter is and has been acting solely as a principal
and is not the financial advisor, agent or fiduciary of the Company or its
affiliates, stockholders, creditors or employees or any other
28
party;
(iii) no Underwriter has assumed or will assume an advisory, agency or
fiduciary responsibility in favor of the Company with respect to any of the
transactions contemplated hereby or the process leading thereto (irrespective of
whether such Underwriter has advised or is currently advising the Company on
other matters) and no Underwriter has any obligation to the Company with respect
to the offering contemplated hereby except the obligations expressly set forth
in this Agreement; (iv) the several Underwriters and their respective
affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Company and that the several
Underwriters have no obligation to disclose any of such interests by virtue of
any advisory, agency or fiduciary relationship; and (v) the Underwriters
have not provided any legal, accounting, regulatory or tax advice with respect
to the offering contemplated hereby and the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed
appropriate.
This
Agreement supersedes all prior agreements and understandings (whether written or
oral) between the Company and the several Underwriters, or any of them, with
respect to the subject matter hereof. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company
may have against the several Underwriters with respect to any breach or alleged
breach of agency or fiduciary duty.
Section 13.
Representations and Indemnities to Survive Delivery.
The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement (i) will remain operative and
in full force and effect, regardless of any (A) investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter, the officers
or employees of any Underwriter, or any person controlling the Underwriter, the
Company, the officers or employees of the Company or any person controlling the
Company, as the case may be or (B) acceptance of the Shares and payment for
them hereunder and (ii) will survive delivery of and payment for the Shares
sold hereunder and any termination of this Agreement.
Section 14. Notices.
All
communications hereunder shall be in writing and shall be mailed, hand delivered
or telecopied and confirmed to the parties hereto as follows:
If to the
Representatives:
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxx
Xxxxxx Xxxx
Xxx Xxxx,
XX 00000
Facsimile: (000)
000-0000
Attention: Syndicate
Department
and
29
Xxxxxxx,
Xxxxx & Co.
00 Xxxxx
Xxxxxx, 00xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Registration Department
with a
copy to:
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxx
Xxxxxx Xxxx
Xxx Xxxx,
XX 00000
Facsimile: (000)
000-0000
Attention: ECM
– Legal
If to the
Company:
000 X.
Xxxxx Xxx., Xxxxx 000
Xx Xxxx,
Xxxxx 00000
Facsimile: (000)
000-0000
Attention: Xxxxx
Xxxxxxxx
Any party
hereto may change the address for receipt of communications by giving written
notice to the others.
Section 15.
Successors and Assigns.
This
Agreement will inure to the benefit of and be binding upon the parties hereto,
including any substitute Underwriters pursuant to Section 10 hereof, and to
the benefit of (i) the Company, its directors, any person who controls the
Company within the meaning of the Securities Act or the Exchange Act and any
officer of the Company who signs the Registration Statement, (ii) the
Underwriters, the officers, directors, employees and agents of the Underwriters,
and each person, if any, who controls any Underwriter within the meaning of the
Securities Act or the Exchange Act, and (iii) the respective successors and
assigns of any of the above, all as and to the extent provided in this
Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term “successors and assigns” shall not
include a purchaser of any of the Shares from any of the several Underwriters
merely because of such purchase.
Section 16.
Partial Unenforceability.
The
invalidity or unenforceability of any Section, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
30
Section 17.
Governing Law Provisions
THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
Section 18.
General Provisions.
This
Agreement constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter
hereof. This Agreement may be executed in two or more counterparts,
each one of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This
Agreement may not be amended or modified unless in writing by all of the parties
hereto, and no condition herein (express or implied) may be waived unless waived
in writing by each party whom the condition is meant to benefit. The
Section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this
Agreement.
Each of
the parties hereto acknowledges that it is a sophisticated business person who
was adequately represented by counsel during negotiations regarding the
provisions hereof, including, without limitation, the indemnification provisions
of Section 8 and the contribution provisions of Section 9, and is
fully informed regarding said provisions. Each of the parties hereto
further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration
Statement, any preliminary prospectus and the Prospectus (and any amendments and
supplements thereto), as required by the Securities Act and the Exchange
Act.
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If the
foregoing is in accordance with your understanding of our agreement, kindly sign
and return to the Company the enclosed copies hereof, whereupon this instrument,
along with all counterparts hereof, shall become a binding agreement in
accordance with its terms.
Very truly yours, | ||||
WESTERN REFINING, INC. | ||||
By:
|
/s/ Xxxxx Xxxxxxxx | |||
Name:
|
Xxxxx Xxxxxxxx | |||
Title:
|
Senior Vice President - Legal, General Counsel and Secretary |
The
foregoing Underwriting Agreement is hereby confirmed and accepted by the
Representatives as of the date first above written.
XXXXXXX
LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXXX,
SACHS & CO.
Acting as
Representatives of the
several
Underwriters named in
the
attached Schedule A.
By: Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
By:
|
/s/ Xxxxx Xxxxxxx | |
Managing
Director
|
By: Xxxxxxx,
Xxxxx & Co.
By:
|
/s/ Xxxxxxx, Sachs & Co. | |
(Xxxxxxx,
Xxxxx & Co.)
|
32