EXHIBIT 10.3
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
JLM TERMINALS, INC.
AND
CTI OF NORTH CAROLINA, INC.
OCTOBER 1, 2001
TABLE OF CONTENTS
Page
RECITALS -------------------------------------------------------- 8
AGREEMENT ----------------------------------------------- 8
ARTICLE I: DEFINITIONS; INTERPRETATION -------------------------------- 8
1.1 Definitions -------------------------------------- 8
1.2 Interpretation -------------------------------------- 12
ARTICLE II: TRANSFER OF ASSETS; ASSUMPTION OF LIABILITIES ---------- 12
2.1 Transfer of Assets ------------------------------------- 12
2.2 Excluded Assets -------------------------------------- 13
2.3 Assumption of Liabilities ------------------------------ 15
2.4 Excluded Liabilities ------------------------------ 16
2.5 Purchase Price -------------------------------------- 16
2.6 Closing Procedure ------------------------------ 16
2.7 Allocation of Purchase Price --------------------- 16
2.8 Prorations -------------------------------------- 17
2.9 Inventory -------------------------------------- 17
ARTICLE III: REPRESENTATIONS AND WARRANTIES OF SELLER --------------- 17
3.1 Organization; Capitalization --------------------- 17
3.2 No Violation or Conflict; Consents --------------------- 17
3.3 Authorization -------------------------------------- 18
3.4 Assets ----------------------------------------------- 18
3.5 Compliance with Law ---------------------------------- 18
3.6 Litigation -------------------------------------- 18
3.7 Employees and Employee Benefits --------------------- 19
3.8 Employment Matters ------------------------------ 19
3.9 Environmental Matters ------------------------------ 19
3.10 No Broker -------------------------------------- 20
3.11 Material Facts -------------------------------------- 20
ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF BUYER ---------------------- 20
4.1 Organization -------------------------------------- 20
4.2 Authorization -------------------------------------- 20
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4.3 Noncontravention ------------------------------ 21
4.4 No Broker -------------------------------------- 21
ARTICLE V: COVENANTS ----------------------------------------- 21
5.1 Access to Information ----------------------------- 21
5.2 Further Assurances; Consents --------------------- 21
5.3 Publicity -------------------------------------- 22
5.4 Confidentiality ------------------------------------ 22
5.5 Employment of Seller's Employees --------------------- 22
5.6 Employee Obligations ------------------------------ 23
5.7 Covenant Not to Compete ------------------------------ 23
5.8 Cooperation -------------------------------------- 23
ARTICLE VI: CONDITIONS PRECEDENT TO CONSUMMATION OF THE
CLOSING ----------------------------------------------- 23
6.1 Condition Precedent to Each Party's Obligations
to Close ---------------------------------------- 23
6.2 Conditions Precedent to Obligations of Buyer ----------- 24
6.3 Conditions Precedent to Obligations of Seller ---------- 25
ARTICLE VII: SURVIVAL; INDEMNIFICATION ---------------------------------- 26
7.1 Limitation on and Survival of Representations and
Warranties ------------------------------------------ 26
7.2 Indemnification by Seller ------------------------------ 27
7.3 Indemnification by Buyer ------------------------------ 28
7.4 Limitation of Liability ------------------------------ 30
7.5 Exclusive Remedy --------------------------------------- 30
ARTICLE VIII: TERMINATION --------------------------------------------- 30
8.1 Termination -------------------------------------------- 30
8.2 Effect of Termination ---------------------------------- 31
8.3 Extension; Waiver -------------------------------------- 31
8.4 Damage or Destruction Prior to Closing ----------------- 31
8.5 Condemnation Prior to Closing ------------------------ 31
ARTICLE IX: MISCELLANEOUS ------------------------------------------------ 32
9.1 Entire Agreement --------------------------------------- 32
9.2 Expenses -------------------------------------- 32
9.3 Governing Law -------------------------------------- 32
9.4 Assignment -------------------------------------- 32
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9.5 Notices ----------------------------------------------- 32
9.6 Counterparts; Headings ------------------------------ 33
9.7 Specific Performance ------------------------------ 33
9.8 Severability -------------------------------------- 33
9.9 No Reliance -------------------------------------- 33
9.10 Amendment -------------------------------------- 34
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SCHEDULES
Schedule 2.1(a) Real Property
Schedule 2.1(c) Equipment
Schedule 2.1(d) Real Property Leases
Schedule 2.1(e) Personal Property Leases
Schedule 2.1(f) Licenses, Contracts and Service Agreements
Schedule 2.1(g) Customer List
Schedule 2.2 Non-Assignable Permits
o DSP Permit
o Air Permits
o Title V Air Permit and Air Permit Application
with all supporting documentation
o NPDES Permit for Stormwater Discharge - Rescinded
o Certification of Water & Sewer Availability
o Zoning Verification
o Fire Department Permit
o DOT Hazardous Materials Certification
Schedule 2.9 Denaturant Inventory
Schedule 3.2 Required Consents
Schedule 3.4 Permitted Liens
Schedule 3.5 Permits
Schedule 3.6 Litigation
Schedule 3.9 Environmental Matters
o all technical reports in JLM's
possession, not subject to a court
order preventing such disclosure,
including but not limited to:
Corrective Action Plan, December 1992 including
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all subsequent revisions made through reports or
correspondence
Phase I Environmental Site Assessment, May 2001
Hazardous Waste Certificates and Manifests
o All releases of Hazardous substances
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EXHIBITS
Exhibit A Form of Deed
Exhibit B Form of ▇▇▇▇ of Sale
Exhibit C Form of Assignment and Assumption Agreement
Exhibit D Allocation of Purchase Price
Exhibit E Covenant Not to Compete
Exhibit F Employee List
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made as of October 1, 2001,
by and among CTI of North Carolina, Inc., a Delaware corporation ("Buyer") and
JLM Terminals, Inc., a North Carolina corporation ("Seller").
RECITALS
A. Seller owns and operates a bulk liquids terminal business located in
Wilmington, North Carolina (the "Facility");
B. Seller desires to sell and assign to Buyer, and Buyer desires to purchase
from Seller, on the terms and subject to the conditions set forth in this
Agreement, the Assets of Seller that are currently used by Seller in connection
with the Facility.
AGREEMENT
The parties, in consideration of the premises and of the mutual representations,
warranties, covenants, conditions and agreements set forth herein, and intending
to be bound, agree as set forth below:
ARTICLE I
DEFINITIONS; INTERPRETATION
1.1 DEFINITIONS. When used in this Agreement, the following terms shall have
the meanings specified:
(a) ACCOUNTS RECEIVABLE. "Accounts Receivable" shall mean
(i) all trade accounts receivable and other rights to payment from
customers of Seller and the full benefit of all security for
such accounts or rights to payment, including all trade
accounts receivable representing amounts receivable in respect
of goods shipped or products sold or services rendered to
customers of Seller;
(ii) all other accounts or notes receivable of Seller and the full
benefit of all security for such accounts or notes; and
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(iii) any claim, remedy or other right related to any of the
foregoing.
(b) ACTION. "Action" shall mean any action, claim, suit, litigation,
arbitration, or governmental investigation.
(c) AGREEMENT. "Agreement" shall mean this Agreement, together with the
Exhibits and Schedules attached hereto, as the same may be amended
from time to time in accordance with the terms hereof.
(d) ASSETS. "Assets" shall have the meaning given in SECTION 2.1.
(e) ASSUMED LIABILITIES. "Assumed Liabilities" shall have the meaning
given in SECTION 2.3.
(f) BUYER. "Buyer" shall mean CTI of North Carolina, Inc., a Delaware
corporation.
(g) BUYER CLAIM. "Buyer Claim" shall mean a claim for indemnification by
Buyer pursuant to SECTION 7.2.
(h) CLOSING. "Closing" shall mean the conference held at 10:00 a.m.,
local time, on the Closing Date, at the offices of Ellis, Painter,
▇▇▇▇▇▇▇▇▇ & Bart, LLP, 10th Floor, ▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇.
(i) CLOSING DATE. "Closing Date" shall mean not later than the first
business day occurring on or after sixty (60) days from the date of
this Agreement, and the parties will use their best efforts to close
within thirty (30) days from the date of this Agreement.
(j) CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(k) CONTRACT. "Contract" means collectively those agreements identified
in Schedules 2.1(d), 2.1(e) and 2.1(f).
(l) ENVIRONMENTAL, HEALTH AND SAFETY LIABILITIES. "Environmental, Health
and Safety Liabilities" shall mean any cost, damages, expense,
liability, obligation or other responsibility arising from or under
any Environmental Law, including those consisting of or relating to:
(i) any environmental, health or safety matter or condition
(including on-site or off-site contamination, occupational
safety and health and regulation of any chemical substance or
product);
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(ii) any fine, penalty, judgment, award, settlement, legal or
administrative proceeding, damages, loss, claim, demand or
response, remedial or inspection cost or expense arising under
any Environmental Law;
(iii) financial responsibility under any Environmental Law for
cleanup costs or corrective action, including any cleanup,
removal, containment or other remediation or response actions
("Cleanup") required by any Environmental Law (whether or not
such Cleanup has been required or requested by any
Governmental Authority or any other Person) and for any
natural resource damages; or
(iv) any other compliance, corrective or remedial measure required
under any Environmental Law.
(m) ENVIRONMENTAL LAWS. "Environmental Laws" shall mean all material
federal, state or local statutes, laws, codes, rules, regulations,
ordinances, orders, standards, permits, licenses or requirements
(including consent decrees, judicial decisions and administrative
orders), presently in force, as amended or reauthorized, pertaining
to the protection, preservation, conservation or regulation of the
environment, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq. ("CERCLA"), the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., the Emergency
Planning and Community Right to Know Act, 42 U.S.C. Section 11001 et
seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Federal
Water Pollution Control Act, 33 U.S.C. Section 1251 et seq., the
Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., and
the Safe Drinking Water Act, 42 U.S.C. Section 300F et seq.
(n) ERISA. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
(o) GOVERNMENTAL AUTHORITY. "Governmental Authority" shall mean any
federal, state, provincial, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, or
any court, in each case whether of the United States, any of its
possessions or territories, or of any foreign nation.
(p) HEALTH AND SAFETY LAWS. " Health and Safety Laws" shall mean all
material federal, state or local statutes, laws, codes, rules,
regulations, ordinances, orders, standards, permits, licenses or
requirements (including consent decrees, judicial decisions and
administrative orders), presently in force, as amended or
reauthorized, pertaining to or imposing requirements relating to
public or employee health and safety, including without limitation,
the Occupational Health Act, 29 U.S.C. Section 651 et seq.
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(q) KNOWLEDGE OF SELLER. "Knowledge of Seller" shall mean the actual
knowledge, after due inquiry, of the following officers or employees
of Seller: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇▇▇.
(r) LAWS. "Laws" shall mean any federal, state, local or other law or
governmental requirement of any kind, and the rules, regulations and
orders promulgated thereunder, all of the foregoing as in effect on
the date hereof.
(s) LIENS. "Liens" shall mean any and all liens, encumbrances,
mortgages, charges, claims, restrictions, pledges, security
interests and impositions.
(t) LISTED EMPLOYEE. "Listed Employee" shall have the meaning given in
SECTION 5.5.
(u) LOSSES. "Losses" shall have the meaning given in SECTION 7.2(A).
(v) MAXIMUM INDEMNITY AMOUNT. "Maximum Indemnity Amount" shall have the
meaning given in SECTION 7.4.
(w) PERMITTED LIENS. "Permitted Liens" shall mean (i) liens for Taxes
not yet due and payable, (ii) title defects that do not interfere
with the existing use of Seller's assets and do not affect the
insurability of title or the marketability thereof, including
mechanics liens, materialmen liens and other inchoate liens, and
(iii) those liens, encumbrances, mortgages, charges, claims,
restrictions, pledges, security interests, impositions and other
matters that are listed on SCHEDULE 3.4 attached hereto.
(x) PERMITS. "Permits" shall mean all written permits, licenses and
governmental authorizations, registrations and approvals required,
as of the date hereof, for the operation of the Facility identified
on SCHEDULE 3.5.
(y) PERSON. "Person" shall mean an individual, partnership, corporation,
business trust, limited liability company, limited liability
partnership, joint stock company, trust, unincorporated association,
joint venture or other entity or a Governmental Authority.
(z) PURCHASE PRICE. "Purchase Price" shall mean the amount specified in
SECTION 2.5 hereof.
(aa) REQUIRED CONSENTS. "Required Consents" shall mean those consents
required from parties to the Contracts and Permits that are
necessary or required in order to give effect to the transactions
contemplated herein and that are specifically identified on SCHEDULE
3.2 attached hereto.
(bb) SELLER. "Seller" shall mean JLM Terminals, Inc., a North Carolina
corporation.
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(cc) SELLER CLAIM. "Seller Claim" shall mean a claim to indemnification
by Seller pursuant to SECTION 7.3.
(dd) TAX RETURNS. "Tax Returns" shall mean any report, return,
information statement, payee statement or other information required
to be provided to any Governmental Authority, with respect to Taxes,
including any return of an affiliated, combined or unitary group.
(ee) TAXES. "Taxes" shall mean any and all taxes, levies, imposts,
duties, assessments, charges and withholdings imposed or required to
be collected by or paid over to any Governmental Authority,
including any interest, penalties, fines, assessments or additions
imposed in respect of the foregoing, or in respect of any failure to
comply with any requirement regarding Tax Returns.
1.2 INTERPRETATION. Unless the context requires otherwise, all words used in
this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the
singular and all words in any gender shall extend to and include all
genders.
ARTICLE II
TRANSFER OF ASSETS; ASSUMPTION OF LIABILITIES
2.1 TRANSFER OF ASSETS. On the terms and subject to the conditions set forth
in this Agreement, Seller shall, at the Closing, sell, transfer and assign
to Buyer, and Buyer shall purchase and acquire from Seller, as of the
Closing Date, the following assets of Seller directly related to, or
necessarily used in conjunction with, the Facility (collectively, except
for the excluded assets set forth in Section 2.2 hereof, the "Assets"):
(a) the real property owned by Seller and more fully described on
SCHEDULE 2.1(a) attached hereto, together with all easements and
appurtenances, subject to the Permitted Liens;
(b) all tanks, pipes, facilities and fixtures located on or appurtenant
to the Facility which are either owned, leased, subleased or rented
and therefore assignable by Seller;
(c) the equipment, machinery, vehicles, furniture, fixtures, furnishings
and leasehold improvements owned by Seller and used by Seller in the
operation of the Facility, as set forth on SCHEDULE 2.1(c) attached
hereto;
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(d) Seller's interest in the real property leases to which Seller is a
party that are used in connection with the Facility, which leases
are set forth in SCHEDULE 2.1(d) attached hereto;
(e) Seller's interest in the personal property leases to which Seller is
a party that are used in connection with the operation of the
Facility, which leases are set forth in SCHEDULE 2.1(e) attached
hereto;
(f) Seller's interest in all licenses, contracts, service agreements and
other agreements with respect to the operation of the Facility to
which Seller is a party that are identified in SCHEDULE 2.1(f)
attached hereto;
(g) A list of the names and addresses of all customers of Seller who
have used or leased Seller's tanks since January 1, 1999, as set
forth in SCHEDULE 2.1(g) attached hereto.
(h) all of Seller's books, records and other documents and information
relating to the Assets, including blueprints, technical records and
manuals, maintenance records, capital improvement and replacement
records and the like;
(i) all Permits with respect to the Facility, to the extent they are
assignable;
(j) goodwill and other related intangible assets used by Seller
exclusively in the conduct of the Facility; and
(k) all rights to recovery by Seller related to any Environmental
Liabilities at the Facility after the Closing Date.
The parties hereto expressly agree that Buyer is not assuming any of the
liabilities, obligations or undertakings relating to the Assets, except for
those liabilities and obligations specifically assumed by Buyer in SECTION 2.3
hereof.
2.2 EXCLUDED ASSETS.
(a) Notwithstanding the terms of SECTION 2.1 hereof, the following
assets shall be retained by Seller and shall not be sold,
transferred or assigned to Buyer in connection with the purchase of
the Assets:
(i) all cash, cash equivalents and Accounts Receivable;
(ii) such licenses, Permits or other certificates of authority
which, by their terms, are nonassignable including, but not
limited to, those identified in SCHEDULE 2.2; provided,
however, Seller will allow Buyer to (i) operate under its
Distilled Spirits Permit and bond (the "DSP Permit") after the
Closing Date
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until such time as there is a simultaneous transfer but in no
event beyond six (6) months after the Closing Date, (ii)
operate under the existing air permits for the Facility (the
"Air Permits") after the Closing Date until the same are
transferred to Buyer but in no event beyond six (6) months
after the Closing Date; and (iii) operate under the existing
NPDES permits for the Facility (the "NPDES Permits") after the
Closing Date until the same are transferred to Buyer but in no
event beyond six (6) months after the Closing Date.
Simultaneous with the signing of this Agreement Buyer agrees
that it will have made application for all applicable Permits
as defined by this Section. Buyer further agrees to indemnify
Seller for any violations of these Permits after the Closing
Date on all bonds associated with and maintained by Seller in
association with these Permits. If any application by Buyer
for any applicable Permit is denied for any reason, Seller
shall not be responsible to maintain any current Permit unless
mutually agreed by the parties. Buyer will be responsible as
of the Closing Date for all reporting due under any applicable
Permits and shall indemnify Seller for Buyer's failure to do
so.
(iii) all insurance policies of Seller obtained in connection with
the Facility and all rights of Seller (including rights to
receive dividends) under or arising out of such insurance
policies;
(iv) any and all rights to recovery by Seller arising out of
litigation or any other proceeding with respect to the
adjacent Southern Metals facility that commences or is pending
prior to the Closing Date (excluding recovery rights related
to any Environmental Liability at the Facility), it being
understood that Seller may seek to recover all Seller's legal
fees, Seller's fees associated with any and all assessment of
the possible Southern Metals contamination, and any possible
fees which may be incurred by Seller associated with continued
Southern Metals litigation), and Buyer shall be entitled to
retain any such fees or expenses it may recover if it becomes
a party to such litigation.
(v) all rights of Seller relating to deposits and prepaid
expenses, claims for refunds and rights to offset in respect
thereof, including all claims for refund of Taxes and other
governmental charges of whatever nature.
(b) Seller is not selling and Buyer is not buying any of Seller's
accounts receivable. If Buyer receives any funds intended by the
payor to pay an account receivable of Seller, Buyer shall remit
those funds to Seller within five (5) business days. If Seller
receives any funds intended by the payor to pay an account
receivable of Buyer, Seller shall remit those funds to Buyer within
five (5) business days.
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2.3 ASSUMPTION OF LIABILITIES.
(a) Buyer shall assume, pay, perform in accordance with their terms or
otherwise satisfy only the following liabilities of Seller
(collectively, the "Assumed Liabilities"):
(i) All obligations under each of the agreements identified in
SCHEDULES 2.1(d), 2.1(e) AND 2.1(f) which arise from
transactions occurring on or after the Closing Date;
(ii) All Environmental Liabilities arising out of future operation
of the Facility after the closing or future leasing, ownership
or operation of real property in connection with the operation
of the Facility.
(b) ENVIRONMENTAL, HEALTH AND SAFETY LIABILITIES. Buyer shall not
assume, or be responsible for, the claims of any person or entity
related to any Environmental, Health or Safety Liability which is
based in whole or in part on any event(s) occurring at, or on
property near or adjacent to, the Facility at anytime prior to the
Closing Date except:
(i) Buyer will be responsible for the cost of any cleanup costs or
corrective action, including fines, cleanup, removal,
containment or other remediation or response actions
("Cleanup") at the Facility required by any Environmental Law,
but until three (3) years after the Closing Date, Buyer does
not assume any liability for any Cleanup of property near, or
adjacent to, the Facility, which Cleanup is occasioned by
events occurring prior to the Closing Date, however, Buyer
further agrees for themselves, their successors, heirs,
assigns, or for anyone who may lease, sublease or rent from
them, any properties Buyer now currently owns, leases,
subleases, has had assigned to them, or rented by them, not to
hold Seller liable.
(ii) If any compliance, corrective or remedial measure under any
Environmental Law (occasioned by events occurring prior to the
Closing Date) is required, or proposed, by any governmental or
regulatory agency at the Facility, Seller will reimburse Buyer
up to Seventy-Five Thousand ($75,000) Dollars (the
"Contribution"), of the costs incurred by Buyer in
investigating and assessing the Cleanup. Said Contribution
shall be paid as Buyer incurs costs in investigating and
assessing any cleanup.
(c) CLAIM AGAINST SOUTHERN METALS. At Closing, and except as specified
in Section 2.2(a)(iv) hereof, Seller will assign and transfer to
Buyer, as owner of the Facility, all rights of Seller against
Southern Metals, Inc. for the release of hazardous materials onto
the Facility from property owned by Southern Metals adjacent to the
Facility. In the meantime, Seller agrees (i) not to settle the
pending litigation with Southern Metals without the written consent
of Buyer, and (ii) if settled by Seller
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prior to closing, to assign to Buyer all proceeds except amounts
paid to Seller for its legal fees or assessment costs associated
with the Southern Metals contamination.
2.4. EXCLUDED LIABILITIES. Other than as set forth in SECTION 2.3 hereof,
Seller shall retain, and Buyer shall not assume, and nothing contained in
this Agreement shall be construed as an assumption by Buyer of, any
liabilities, obligations or undertakings of Seller (related to the
Facility, Assets, Seller's employees not expressly retained by Buyer, or
otherwise) of any nature whatsoever, whether accrued, absolute, fixed or
contingent, known or unknown due or to become due, unliquidated or
otherwise. Seller shall be responsible for all of the liabilities,
obligations and undertakings of Seller not expressly assumed by Buyer
pursuant to SECTION 2.3 hereof.
2.5. PURCHASE PRICE. The total aggregate purchase price for the Assets (the
"Purchase Price") will be the sum of $6,250,000.00, to be paid by Buyer to
Seller at the Closing, as the same may be adjusted in accordance with
SECTIONS 2.8 AND 2.9.
2.6 CLOSING PROCEDURE. At the Closing, each party shall deliver to the party
entitled to receipt thereof the documents required to be delivered
pursuant to Article VI hereof and such other documents, instruments and
materials (or complete and accurate copies thereof, where appropriate) as
may be reasonably required in order to effectuate the intent and
provisions of this Agreement, and all such documents, instruments and
materials shall be satisfactory in form and substance to counsel for the
receiving party. The conveyance, transfer, assignment and delivery of the
Assets shall be effected by Seller's execution and delivery to Buyer of
(i) Special Warranty Deed in the form attached as EXHIBIT A (the "Deed");
(ii) a ▇▇▇▇ of sale substantially in the form attached hereto as EXHIBIT B
(the "▇▇▇▇ of Sale"); and (iii) such other instruments of conveyance,
transfer, assignment and delivery as Buyer shall reasonably request to
cause Seller to transfer, convey, assign and deliver the Assets to Buyer.
The assignment and assumption of the Assumed Liabilities to Buyer shall be
effected by Seller's and Buyer's execution of an assignment and assumption
agreement substantially in the form attached hereto as EXHIBIT C (the
"Assignment and Assumption Agreement").
2.7 ALLOCATION OF PURCHASE PRICE. Buyer and Seller have mutually agreed to
allocate the Purchase Price among the Assets in the manner set forth in
EXHIBIT D, which exhibit shall be updated as of the Closing Date in such a
manner as determined by Buyer and Seller after taking into account the
applicable treasury regulations ("Treasury Regulations") promulgated under
the Code, and the fair market value of such items. Buyer shall prepare for
filing all Tax Returns that may be required with respect to the
transaction provided for herein pursuant to Section 1060 of the Code, any
Treasury Regulations promulgated thereunder, any other similar provisions
of the Code and any other similar or applicable foreign, state or local
tax law or regulation. Seller shall provide information that may be
reasonably required by Buyer for the purpose of preparing such Tax
Returns.
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2.8 PRORATIONS. All (i) real estate taxes, for the year 2001 and other
expenses of the Facility which the parties mutually agree are capable of
proration, shall be prorated on the basis of a 365 day year through the
day preceding the day of Closing. If Closing is extended by mutual
agreement, all adjustments shall be made as of the day prior to the
extended date. Any post-closing adjustments for real estate taxes which
shall be made within ten (10) days after written demand therefore is made
by either party hereto to the other party with a copy of the actual tax
▇▇▇▇(s) attached. Notwithstanding anything to the contrary contained in
this Agreement, the provisions of this SECTION 2.8 shall survive Closing.
Seller shall be responsible for the transfer tax associated with the
recordation of the Deed. Buyer shall be responsible for the cost of any
title insurance, survey and any other due diligence testing requested by
Buyer.
2.9 INVENTORY. Purchaser agrees to buy all of Seller's good and merchantable
denaturant inventory existing at the Facility as of the Closing Date at
Seller's cost in the quantities set forth in SCHEDULE 2.9.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
3.1 ORGANIZATION; CAPITALIZATION. Seller is duly organized, validly existing
and in good standing under the laws of the State of North Carolina. Seller
has full corporate power and authority to conduct its business as it is
now being conducted and to own its properties and to lease those
properties leased by it.
3.2 NO VIOLATION OR CONFLICT; CONSENTS. Except as set forth on SCHEDULE 3.2,
the execution, delivery and performance of this Agreement and all of the
other documents and instruments contemplated hereby to which Seller case
is a party do not and will not (a) conflict with, violate or breach any
Laws, judgment, order or decree binding on Seller, the articles of
incorporation or bylaws of Seller, or any material Contract to which
Seller is a party or by which is bound, or (b) give any party to any
material Contract to which Seller is a party or by which it is bound any
right of termination, cancellation, acceleration or modification
thereunder. Except for the Required Consents, prior to the Closing, no
consent of any other Person, and no notice to, filing or registration
with, or authorization, consent or approval of, any governmental,
regulatory or self-regulatory agency is necessary or is required to be
made or obtained by Seller in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated
hereby.
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3.3 AUTHORIZATION. Seller has all necessary right, power, capacity and
authority to execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to perform its respective
obligations hereunder, and no other actions on the part of Seller is
necessary to authorize the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby.
3.4 ASSETS.
(a) Seller has good and merchantable title to, or sufficient leasehold
interest in, all of the Assets, whether tangible or intangible,
real, personal or mixed, free and clear of all liens or
encumbrances, except for Permitted Liens shown on SCHEDULE 3.4
attached hereto. Any such leasehold interest is pursuant to a lease
that is, as to Seller and, to the Knowledge of Seller, the other
parties to such lease, (i) valid, binding and enforceable in
accordance with its terms (subject to any applicable bankruptcy,
insolvency, reorganization, moratorium, or other laws affecting
creditors' rights generally), and (ii) in full force and effect.
(b) Subject to ordinary wear and tear as is usual in this line of
business, all Assets are in good operating condition and repair, the
parties understand that all Assets have previously been inspected by
Buyer and are sold where is.
(c) Seller shall provide Buyer with evidence of good and merchantable
fee simple title to the real property described in Schedule 2.1(a)
and shall have thirty (30) days from the date of signature of this
Agreement to cure any defects which may exist. Any easements,
restrictions or other encumbrances on the real property must not, in
the reasonable opinion of Buyer's counsel, adversely affect the
title to said property or Buyer's intended use thereof.
3.5 COMPLIANCE WITH LAW. To the Knowledge of Seller, except as reflected on
SCHEDULE 3.5 attached hereto, Seller has obtained all Permits required
under, and is in compliance with, all applicable Laws with respect to the
Facility.
3.6 LITIGATION. To the Knowledge of Seller and except as disclosed in SCHEDULE
3.6, there is no claim, legal action, suit, litigation, arbitration,
dispute or investigation, judicial, administrative or otherwise, or any
order, decree or judgment, now pending or in effect, or, threatened or
contemplated, that, in the reasonable judgment of Seller, if adversely
determined, would have a material adverse effect on the transactions
contemplated by this Agreement.
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3.7 EMPLOYEES AND EMPLOYEE BENEFITS.
(a) Buyer shall be under no obligation to hire any of Seller's employees
at the Facility, but shall provide Seller with a list of all
employees which it intends to hire simultaneously with signature of
this Agreement and effective upon Closing. Seller shall remain
solely and exclusively liable for all wages, severance payments if
applicable, COBRA and similar benefits, and other amounts and
benefits, if any, due to those employees that Buyer does not hire.
Buyer shall not be legally obligated to offer employment to any of
Seller's employees.
(b) Buyer agrees to hire those employees on the list so provided to the
Seller, at their current wages and on the same terms and conditions
as provided by the Buyer to its other employees of similar length of
service and job responsibility. Buyer shall have no obligation to
any of Seller's employees at the Facility it may hire with respect
to any accrued sick leave, accrued vacation, bonus, incentive,
pension, retirement, profit-sharing or other form of remuneration or
employee benefit provided or promised by Seller.
3.8 EMPLOYMENT MATTERS. Seller is not party to, bound by, or negotiating in
respect of any collective bargaining agreement or any other agreement with
any labor union, association or other employee group, nor, to the
Knowledge of Seller, is any employee of Seller represented by any labor
union or similar association. No labor union or employee organization has
been certified or recognized as the collective bargaining representative
of any employees of Seller. To the Knowledge of Seller, there are no
formal union organizing campaigns or representation proceedings in process
or threatened with respect to any employees of Seller, nor, to the
Knowledge of Seller, are there any existing or threatened labor strikes,
work stoppages, organized slowdowns, unfair labor practice charges, or
labor arbitration proceedings affecting any employee of Seller.
3.9 ENVIRONMENTAL MATTERS. To the Knowledge of Seller, except as set forth in
SCHEDULE 3.9: (i) Seller is in compliance with all applicable
Environmental Laws; (ii) Seller has not received a notice, report or
information regarding any liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise) that have not been satisfied, or
any corrective, investigatory or remedial obligations that have not been
satisfied, arising under applicable Environmental Laws with respect to its
past or present operations or properties; (iii) Seller has obtained, and
have been in compliance with all terms and conditions of, all permits,
licenses and other authorizations required pursuant to Environmental Laws
for the conduct of the Facility, (iv) SCHEDULE 3.9, to the Knowledge of
Seller, lists all releases of hazardous substances at the Facility. The
term "hazardous substances," as used herein, shall mean substances deemed
hazardous pursuant to CERCLA; (v) Seller and its attorneys have provided
Buyer with copies of all notices, reports, studies and information in
their possession related to the presence or release of hazardous
substances at the Facility or any adjacent properties as that term is
defined by CERCLA, and (vi) Seller and its attorneys have provided Buyer
with copies of the Corrective Action Plan for Unocal Chemicals Division
Carolina Terminal, and Buyer agrees to continue all requisite actions
under the plan.
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3.10 NO BROKER. Seller (i) has not had any dealings, negotiations or
communications with or retained any broker or other intermediary in
connection with the transactions contemplated by this Agreement or
(ii) is not committed to any liability for any brokers' or finders' fees
or any similar fees in connection with the transactions contemplated by
this Agreement.
3.11 MATERIAL FACTS. To the best of Seller's knowledge neither this Agreement
nor any Schedule or Exhibit attached hereto nor any document furnished by
Seller to Buyer in connection with the consummation of the transactions
contemplated hereby contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact which is
necessary to make the statements contained herein or therein not
misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller:
4.1 ORGANIZATION. Buyer is a corporation, duly incorporated, validly existing
and in good standing under the laws of Delaware. Buyer is duly qualified
as a foreign corporation in good standing in each jurisdiction in which
the conduct of the Facility requires such qualification, except where the
failure to be so qualified would not prevent, materially delay or affect
consummation of the transactions contemplated hereby.
4.2 AUTHORIZATION. Buyer has full power and authority to execute, deliver and
perform this Agreement and each agreement or instrument (to which it is a
party) executed in connection herewith or delivered pursuant hereto and to
consummate the transactions contemplated hereby. Buyer's execution,
delivery and performance of this Agreement and all agreements and
instruments executed in connection herewith or delivered pursuant hereto
and the transactions contemplated hereby have been duly authorized by all
requisite action. This Agreement and all agreements or instruments
executed by Buyer in connection herewith or delivered by Buyer pursuant
hereto have been or will be duly executed and delivered by Buyer, and this
Agreement and all agreements and instruments executed by Buyer in
connection herewith or delivered by Buyer pursuant hereto constitute and
will constitute the legal, valid and binding obligations of Buyer,
enforceable in accordance with their respective terms.
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4.3 NONCONTRAVENTION. The execution, delivery and performance by Buyer of this
Agreement and each agreement or instrument executed in connection herewith
or delivered pursuant hereto and the consummation of the transactions
contemplated herein will not, with or without the giving of notice or the
passage of time, or both, (i) conflict with, or result in a violation or
breach of, or a default, right to accelerate or loss of rights under, or
result in the creation of any Lien under or pursuant to, any provision of
Buyer's articles of incorporation or bylaws or any Laws, or any finding,
order, judgment, writ, injunction or decree to which Buyer is a party or
by which Buyer or its assets may be bound or affected; or (ii) require the
approval, consent or authorization of, or prior notice to, filing with or
registration with, any Governmental Authority, or any other Person.
4.4 NO BROKER. Buyer has not had any dealings, negotiations or communications
with any broker or other intermediary in connection with the transactions
contemplated by this Agreement and is not committed to any liability for
any brokers' or finders' fees or any similar fees in connection with the
transactions contemplated by this Agreement.
ARTICLE V
COVENANTS
5.1 ACCESS TO INFORMATION. Between the date hereof and the Closing Date, at
Buyer's expense, Buyer and its authorized agents, officers and
representatives shall have reasonable access to the Facility, books,
records, contracts, information and documents of Seller to conduct such
examinations and investigations of Seller as Buyer deems necessary;
PROVIDED, HOWEVER, that such examinations and investigations: (a) shall be
conducted during the normal business hours of Seller, (b) shall not
unreasonably interfere with the operations and activities of Seller, and
(c) shall be subject to the prior approval of Seller, if the information
or documents requested are, in the opinion of Seller, of a nature that may
compromise the competitive position of Seller. Seller shall cooperate in
all reasonable respects with Buyer's examinations and investigations.
5.2 FURTHER ASSURANCES; CONSENTS. Each of the parties hereto hereby agrees to
proceed diligently (a) to obtain any and all approvals of Governmental
Authorities and third party consents, approvals, notations and
authorizations required in connection with the consummation of the
transactions contemplated by this Agreement, (b) to comply with all
conditions and covenants applicable or related to it as contemplated by
this Agreement and (c) to take all such commercially reasonable actions as
are necessary or advisable in order to cause the consummation of the
transactions contemplated hereby.
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5.3 PUBLICITY. All general notices, releases, statements and communications to
employees, suppliers, distributors and customers of Seller and to the
general public and the press relating to the transactions covered by this
Agreement shall be made only at such times and in such manner as may be
agreed upon in advance by the parties; PROVIDED, HOWEVER, that any party
hereto shall be entitled to make a public announcement of the foregoing
if, in the opinion of its legal counsel, such announcement is required to
comply with any Law and if it first gives prior written notice to the
other parties hereto of its intention to make such public announcement.
5.4 CONFIDENTIALITY. Notwithstanding any other provision of this Agreement to
the contrary, Buyer agrees that unless and until the transactions
contemplated herein are consummated,
Buyer shall remain subject to all of the terms and conditions of the
Confidentiality Agreement, dated April 23, 2001, by and between Seller and
Buyer, the terms of which Confidentiality Agreement are incorporated
herein by reference; PROVIDED, HOWEVER, that the provisions of the
Confidentiality Agreement shall be waived as and to the extent necessary
to permit public announcements to the extent provided in SECTION 5.3
hereof.
5.5 EMPLOYMENT OF SELLER'S EMPLOYEES.
(a) SCHEDULE F attached hereto contains a comprehensive list of all
employees engaged at the Facility to whom Buyer intends to make
offers of employment (the "Listed Employees"). On or prior to the
Closing, Buyer shall make an offer of employment to each employee of
Seller so listed by Buyer on the same terms and conditions as
provided by the Buyer to its other employees of similar length of
service and job responsibility. Any offers of employment will be
conditioned on, and only effective upon, the Closing. Any employee
employed by Buyer shall be an employee at will. Nothing contained in
this Agreement, whether expressed or implied, shall confer upon any
employee, or the legal representatives of any such person, any
rights or remedies, including, without limitation, any right of
employment, or any right of employment for any period of time, or of
any nature or kind whatsoever under or by reason of this Agreement.
(b) In the event that a Listed Employee does not wish to be employed by
Buyer, Buyer shall not assume, and Seller shall remain liable or
otherwise responsible for, any employment or employee benefit
obligation, or any wage, bonus, salary or other employee payment
obligation arising with respect to such Listed Employee.
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5.6 EMPLOYEE OBLIGATIONS.
(a) Seller shall provide written notice to the Buyer a minimum of five
business days prior to the hiring, transfer, or dismissal of any
Listed Employee.
(b) Seller, after the date of this Agreement, will not permit:
(i) any increase in the salary of a Listed Employee at the
Facility prior to a twelve (12) month period from the last
date that the Listed Employee received a raise; or
(ii) any increase in the salary of a Listed Employee on the annual
review of any such Listed Employee by more than five percent
(5%).
5.7 COVENANT NOT TO COMPETE. At the Closing Seller will execute a Covenant Not
to Compete with Buyer in the bulk liquids terminal business for a period
of two (2) years from the Closing within a fifty (50) mile radius of the
Facility, in the form attached hereto as EXHIBIT E.
5.8 COOPERATION. Seller will cooperate with Buyer in good faith and with due
diligence with respect to the following matters:
(a) TRANSITION WITH CUSTOMERS AND VENDORS. Seller and Buyer will take
reasonably necessary steps to effect the smooth transition from
Seller to Buyer of relations with customers and vendors at and after
the Closing Date with the objective of vesting in Buyer (insofar as
reasonably practicable) the economic benefit and customer
relationships with all of Seller's customers and vendors of the
Facility.
(b) CONDUCT OF BUSINESS. Before the closing, Seller will operate its
business in the ordinary course, and will not intentionally make any
changes or enter into any transactions outside of the ordinary
course of business which would result in any material adverse impact
on Buyer's use, enjoyment and business at the Facility after
closing.
ARTICLE VI
CONDITIONS PRECEDENT TO CONSUMMATION OF THE CLOSING
6.1 CONDITION PRECEDENT TO EACH PARTY'S OBLIGATIONS TO CLOSE. The respective
obligations of each party to consummate the transactions contemplated by
this Agreement on the Closing Date are subject to the satisfaction or
waiver at or prior to the Closing of the following conditions precedent:
No order, decree or injunction shall have been enacted, entered,
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promulgated or enforced by any United States court of competent
jurisdiction or any United States Governmental Authority that prohibits
the consummation of the transactions contemplated by this Agreement;
PROVIDED, HOWEVER, that the parties hereto shall use their reasonable best
efforts to have any such order, decree or injunction vacated or reversed.
6.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. The obligation of Buyer to
consummate the transactions contemplated by this Agreement on the Closing
Date is subject to the satisfaction or waiver at or prior to the Closing
of the following conditions precedent:
(a) the representations and warranties of Seller contained in ARTICLE
III shall be true and correct in all material respects at and as of
the Closing Date with the same force and effect as if those
representations and warranties had been made at and as of such time
(with such exceptions, if any, necessary to give effect to events or
transactions expressly permitted herein);
(b) the Board of Directors of the Buyer and Buyer's lenders must have
approved of this transaction not later than five (5) business days
after the date of this Agreement;
(c) there shall have been obtained all consents, approvals and
authorizations, there shall have been given all notices and there
shall have been made all registrations and filings under all laws,
statutes, rules, regulations, judgments, orders, injunctions,
contracts or other instruments to which Seller is a party or by
which it and/or any of its properties are bound or subject, in each
case that are required to permit the consummation of the
transactions contemplated by this Agreement without contravention,
violation or breach by Seller of any of the terms thereof, except
where the failure to obtain or make any such consent, approval,
authorization, notice, registration or filing would not have a
material adverse effect on the Facility, following the Closing;
(d) Seller shall have performed, in all material respects, all
obligations and complied with all covenants contained herein that
are necessary to be performed or complied with by each of them at or
before Closing;
(e) Seller shall have delivered to Buyer all of the following:
(i) the Deed, ▇▇▇▇ of Sale and such other instruments of
conveyance, transfer, assignment and delivery as Buyer shall
have reasonably requested pursuant to Section 2.6;
(ii) the Assignment and Assumption Agreement;
(iii) a certificate from an authorized officer of Seller, dated as
of the Closing Date, certifying the satisfaction of the
conditions set forth in this SECTION 6.2;
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(iv) copies of the third party and governmental consents and
approvals required by SCHEDULE 3.2;
(v) a copy of the Articles of Incorporation of Seller, certified
by the Secretary of State of the State of North Carolina , and
a Certificate of Good Standing from the Secretary of State of
the State of North Carolina evidencing the good standing of
Seller in North Carolina;
(vi) An affidavit in form acceptable to the Buyer's title insurance
company sufficient to remove any exception for mechanics' and
materialmen's liens and parties in possession and appropriate
lien waivers, if necessary;
(vii) An affidavit certifying that the Seller is not a foreign
entity under the Foreign Investment in Real Property Act; and
(viii) A settlement statement mutually agreeable to the parties
showing the Purchase Price and all prorations made at Closing
(the "Settlement Statement");
(ix) such other certificates, documents and instruments as Buyer
reasonably requests related to the transactions contemplated
hereby; and
(f) all actions, corporate or other, to be taken by Seller in connection
with the transactions contemplated by this Agreement, and all
documents incident thereto, shall be reasonably satisfactory in form
and substance to Buyer and Buyer's counsel.
6.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The obligations of Seller
to consummate the transactions contemplated by this Agreement on the
Closing Date are subject to the satisfaction or waiver at or prior to the
Closing of the following conditions precedent:
(a) the representations and warranties of Buyer contained in ARTICLE IV
shall be true and correct in all material respects at and as of the
Closing Date with the same force and effect as if those
representations and warranties had been made at and as of such time
(with such exceptions, if any, necessary to give effect to events or
transactions expressly permitted herein);
(b) Buyer shall have performed, in all material respects, all
obligations and complied with all covenants contemplated herein that
are necessary to be performed or complied with by it at or before
Closing;
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(c) Seller shall have obtained the written consent of its lender, GATX
Capital Corporation, to the sale of the Assets not later than ten
(10) business days after the date of this Agreement;
(d) there shall have been obtained all consents, approvals and
authorizations, there shall have been given all notices and there
shall have been made all registrations and filings under all laws,
statutes, rules, regulations, judgments, orders, injunctions,
contracts or other instruments to which Buyer is a party or by which
it is bound or subject, in each case that are required to permit the
consummation of the transactions contemplated by this Agreement
without contravention, violation or breach by Buyer of any of the
terms thereof;
(e) Buyer shall have delivered to Seller:
(i) the Purchase Price, payable to Seller, by wire transfer of
immediately available funds to the account designated by
Seller;
(ii) an executed copy of the Assignment and Assumption Agreement;
(iii) a certificate from an authorized officer of Buyer, dated as of
the Closing Date, certifying the satisfaction of the
conditions set forth in this SECTION 6.3; and
(iv) a Settlement Statement mutually agreeable to the parties.
(f) all actions, corporate or other, to be taken by Buyer in connection
with the transactions contemplated by this Agreement, and all
documents incident thereto, shall be reasonably satisfactory in form
and substance to Seller and its counsel.
ARTICLE VII
SURVIVAL; INDEMNIFICATION
7.1 LIMITATION ON AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(a) Buyer acknowledges and agrees that no representations or warranties
have been made by Seller in connection with the transactions
contemplated by this Agreement, except for those representations and
warranties made in ARTICLE III hereof.
(b) Subject to paragraph (a) of this SECTION 7.1, all representations
and warranties contained in this Agreement, or in any agreements or
instruments executed in connection herewith or delivered pursuant
hereto, shall survive the Closing for a period of three (3) years
beginning on the Closing Date, but not longer. Such
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representations and warranties shall only be effective with respect
to any breach or claim when notice of such breach or claim shall
have been given in writing to the other party in breach or against
whom indemnification is sought within such period. Any claim for
indemnification for which notice has been given within the
prescribed period may be prosecuted to conclusion notwithstanding
the subsequent expiration of such period. No party to this Agreement
shall be entitled to pursue any remedy for the breach of any
representation or warranty to the extent such party was informed in
writing of such breach prior to the Closing Date and such party
proceeds with the Closing.
7.2 INDEMNIFICATION BY SELLER.
(a) Subject to the limitations set forth in SECTIONS 7.1 AND 7.4, Seller
hereby agrees, to indemnify and hold Buyer harmless from and against
any and all claims, demands, suits, proceedings, judgments, losses,
liabilities, damages, costs and expenses (including, but not limited
to, reasonable attorneys' fees) (collectively, "Losses") imposed
upon or incurred by Buyer as a result of or in connection with any
of the following:
(i) Any material inaccuracy or breach of a representation or
warranty made by Seller in ARTICLE III of this Agreement; or
(ii) The breach of, or default in the performance by Seller of, any
covenant, agreement or obligation to be performed by Seller
pursuant to this Agreement or any agreement or instrument
executed in connection herewith or pursuant hereto;
(iii) The operation of the Facility prior to the Closing, except the
Environmental Liabilities and Health and Safety Liabilities
expressly assumed by Buyer herein.
(b) Promptly after receipt by Buyer of notice of an Action or other
event giving rise to a Buyer Claim with respect to which Buyer is
entitled to indemnification under this SECTION 7.2, Buyer shall
notify (the "Buyer Claim Notice") Seller in writing of the
commencement of such Action or the assertion of such Buyer Claim;
PROVIDED, HOWEVER, that failure to give such notice shall not affect
the right to indemnification hereunder except to the extent of
actual prejudice to Seller. Seller shall have the option, and shall
notify Buyer in writing within ten business days after the date of
the Buyer Claim Notice of its election, either: (A) to participate
(at Seller's expense) in the defense of such Action or Buyer Claim
(in which case the defense of such Action or Buyer Claim shall be
controlled by Buyer) or (B) to take charge of and control the
defense of such Action or Buyer Claim (at Seller's expense). If
Seller elects to control the defense, it will not compromise or
settle the Action or Buyer
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Claim if (X) the amount to be paid in settlement exceeds the Maximum
Indemnity Amount or (Y) the settlement does not include a provision
releasing Buyer from all liabilities with respect thereto. If Seller
fails to notify Buyer of its election within the applicable response
period, then such party shall be deemed to have elected not to
control the defense of such Action or Buyer Claim. If Seller elects
to assume the defense of any Action or Buyer Claim, Buyer shall have
the right to employ separate counsel and participate in the defense
of such Action or Buyer Claim, but the fees and expenses of such
counsel shall be at the expense of Buyer unless: (1) the named
parties in such Action or Buyer Claim (including any impleaded
parties) include both Buyer and an indemnifying party and Buyer
shall have been advised by such counsel that there may be one or
more legal defenses available to it that are different from or
additional to those available to the indemnifying party, or (2)
Buyer has reasonably determined that Losses that may be incurred may
exceed either individually, or when aggregated with other Buyer
Claims, the Maximum Indemnity Amount (in which case, the
indemnifying party shall not have the right to control the defense
of such Action or Buyer Claim on behalf of Buyer, it being
understood, however, that the indemnifying party shall not, in
connection with such Action or Buyer Claim, be liable for the fees
and expenses of more than one separate firm of attorneys (in
addition to any local counsel) and that all such fees and expenses
shall be reimbursed as they are incurred).
(c) If Seller does not control the defense of any Action or Buyer Claim,
then Buyer may settle such Action or Buyer Claim with the written
consent of Seller (not to be unreasonably withheld).
7.3 INDEMNIFICATION BY BUYER.
(a) Subject to the limitations set forth in SECTIONS 7.1 AND 7.4, Buyer
hereby agrees to indemnify and hold Seller harmless from and against
any and all Losses imposed upon or incurred by Seller (any of such
Losses by Seller, a "Seller Claim") as a result of or in connection
with any of the following:
(i) Any material inaccuracy or breach of a representation or
warranty made by Buyer in this Agreement or in any agreement
or instrument executed in connection herewith or pursuant
hereto;
(ii) The breach of or default in the performance by Buyer of any
covenant, agreement or obligation to be performed by Buyer
pursuant to this Agreement or any agreement or instrument
executed in connection herewith or pursuant hereto; and
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(iii) The operation of the Facility after the date of Closing
including, but not limited to, operating under the DSP Permit,
the Air Permits and the NPDES Permits in Seller's name
pursuant to SECTION 2.2.
(b) Promptly after receipt by Seller of notice of the commencement of an
Action or other event giving rise to a Seller Claim with respect to
which Seller is entitled to indemnification, the party receiving
such notice shall notify (the "Seller Claim Notice") Buyer in
writing of the commencement of such Action or the assertion of such
Seller Claim; PROVIDED, HOWEVER, that failure to give such notice
shall not affect the right to indemnification hereunder except to
the extent of actual prejudice to Buyer. Buyer shall have the
option, and shall notify each indemnified party in writing within
ten business days after the date of the Seller Claim of its
election, either: (A) to participate (at its Buyer's expense) in the
defense of the Action or Seller Claim (in which case the defense of
such Action or Seller Claim shall be controlled by the indemnified
party) or (B) to take charge of and control defense of such Action
or Seller Claim (at its Buyer's expense). If Buyer fails to notify
the indemnified party of its election within the applicable response
period, then Buyer shall be deemed to have elected not to control
the defense of such Action or Seller Claim. If Buyer elects to
assume the defense of any Action or Seller Claim, each indemnified
party shall have the right to employ separate counsel and
participate in the defense of any such Action or Seller Claim, but
the fees and expenses of such counsel shall be at the expense of the
indemnified party unless: (1) the named parties in such Action or
Seller Claim (including any impleaded parties) include both the
indemnified party and Buyer and the indemnified party shall have
been advised by such counsel that there may be one or more legal
defenses available to it that are different from or additional to
those available to Buyer, or (2) the indemnified party has
reasonably determined that Losses that may be incurred may exceed
either individually, or when aggregated with other Seller Claims,
the Maximum Indemnity Amount (in which case, Buyer shall not have
the right to assume the defense of such Action or Seller Claim on
behalf of the indemnified party, it being understood, however,
that Buyer shall not, in connection with such Action or Seller Claim
be liable for the fees and expenses of more than one separate firm
of attorneys (in additional to any local counsel) and that such fees
and expenses shall be reimbursed as they are incurred).
(c) If Buyer does not control the defense of any Action or Seller Claim,
then the indemnified party or parties may settle such Action or
Seller Claim with the written consent of Buyer (not to be
unreasonably withheld).
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7.4 LIMITATION OF LIABILITY. Notwithstanding the foregoing, (i) Seller shall
not be obligated to indemnify Buyer, and Buyer shall not be obligated to
indemnify Seller pursuant to this ARTICLE VII unless and until the amount
of all Losses incurred by Buyer, or by Seller, as the case may be, exceeds
Ten Thousand Dollars ($10,000.00) in the aggregate (the "Basket"),
in which event the party seeking indemnity may recover all Losses incurred
in excess of the Basket from the first dollar above the Basket, and (ii)
the maximum liability of Seller together for Losses under SECTION 7.2 and
Buyer's maximum liability for Losses under SECTION 7.3 shall be, in each
case limited to actual damages, not to exceed Six Million Two Hundred
Fifty Thousand Dollars ($6,250,000.00) (the "Maximum Indemnity Amount").
7.5 EXCLUSIVE REMEDY. After the Closing, the parties' sole monetary recourse
against each other for any Loss or claim of Losses arising out of or
relating to this Agreement shall be expressly limited to the provisions of
this ARTICLE VII, provided, however, that nothing in this Section 7.5
shall prevent a party from seeking injunctive relief or other equitable
remedies as may be appropriate.
ARTICLE VIII
TERMINATION
8.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated by this Agreement may be abandoned at any time, prior to the
Closing only as follows:
(a) by mutual written consent of Buyer and Seller;
(b) by Buyer or Seller if the Closing Date shall not have occurred on or
before January 1, 2002 (provided that the right to terminate this
Agreement under this SECTION 8.1(b) shall not be available to any
party whose failure (or, in the case of Seller, its failure) to
fulfill any obligation under this Agreement has been the cause of,
or has resulted in, the failure of the Closing Date to occur on or
before such date); or
(c) by Buyer or Seller, if any court of competent jurisdiction in the
United States or other United States governmental body shall have
issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions
contemplated hereby and such order, decree, ruling or other action
shall have become final and nonappealable.
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8.2. EFFECT OF TERMINATION. If this Agreement is terminated pursuant to SECTION
8.1 and the transactions contemplated by this Agreement are not
consummated, all further obligations of the parties under or pursuant to
this Agreement shall terminate without further liability of either party
to the other; PROVIDED, HOWEVER, the obligations contained in this SECTION
8.2, SECTION 5.4, SECTION 5.5, and SECTION 9.2 of this Agreement shall
survive any such termination. Nothing contained in this SECTION 8.2 shall
relieve any party from liability for any breach of this Agreement.
8.3 EXTENSION; WAIVER. At any time prior to the Closing, the parties may (a)
extend the time for the performance of any of the obligations or other
acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document,
certificate or writing delivered pursuant hereto, or (c) waive compliance
with any of the covenants, agreements or conditions contained herein. Any
agreement on the part of any party to any such extension or waiver shall
be valid only if set forth in an instrument in writing signed on behalf of
such party.
8.4 DAMAGE OR DESTRUCTION PRIOR TO CLOSING. Seller shall bear the risk of all
loss or damage to the Facility from all causes through the time of Closing
and Seller shall maintain its current fire and extended insurance
coverage. . If more than 5% of the Facility is damaged by fire or other
casualty prior to Closing, then the Buyer shall have the right to either
(i) terminate this Agreement or (ii) proceed to Closing without a
reduction in Purchase Price and receive an assignment of all of Seller's
right, title and interest in and to any insurance proceeds relating to
such casualty. If less than 5% of the Facility is damaged by fire or other
casualty prior to Closing, then the Purchaser, subject to the other terms
of this Agreement, shall be obligated to proceed to Closing without a
reduction in Purchase Price but shall receive an assignment of all of
Seller's right, title and interest in and to any insurance proceeds
relating to such casualty. Seller shall in no event be liable to Buyer for
any damages, out-of-pocket expenses of other claims arising out of a fire
or other casualty to the Facility.
8.5 CONDEMNATION PRIOR TO CLOSING. If, after the date hereof and prior to the
Closing, all or any portion of the Facility is condemned or taken by
eminent domain (or is the subject of a pending or contemplated
condemnation proceeding or taking by eminent domain which has not been
completed), Seller shall promptly give Buyer reasonably detailed notice of
such condemnation or taking. Upon receipt of such notice, Buyer shall have
thirty (30) days to elect to either (i) proceed to Closing without a
reduction in the Purchase Price in which event Purchaser shall be entitled
to any and all claims that Seller may have to condemnation awards or any
and all causes of action with respect to such condemnation or taking of
the Facility or (ii) terminate this Agreement.
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ARTICLE IX
MISCELLANEOUS
9.1 ENTIRE AGREEMENT. Except as set forth in SECTION 5.5 hereof, this
Agreement and the documents referred to herein and to be delivered
pursuant hereto constitute the entire agreement between the parties
pertaining to the subject matter hereof, and supersede all prior and
contemporaneous agreements, understandings, negotiations and discussions
of the parties, whether oral or written, and there are no warranties,
representations or other agreements between the parties in connection with
the subject matter hereof, except as specifically set forth herein or
therein.
9.2 EXPENSES. Whether or not the transactions contemplated by this Agreement
are consummated, each of the parties hereto shall pay the fees and
expenses of their respective counsel, investment bankers, financial
advisors, accountants and other experts and the other expenses incident to
the negotiation and preparation of this Agreement and consummation of the
transactions contemplated hereby, subject to SECTION 9.3 hereof.
9.3 GOVERNING LAW. This Agreement shall be construed and interpreted according
to the laws of the State of North Carolina without regard to the conflicts
of law rules thereof.
9.4 ASSIGNMENT. This Agreement and each party's respective rights hereunder
may not be assigned at any time except as expressly set forth herein
without the prior written consent of the other parties. In the event
Seller liquidates or makes other distributions of cash or property to its
parent company, JLM Industries, Inc., such that the net worth of the
Seller is reduced to less than $6,250,000.00, then Seller agrees (i) to
obtain from its parent company a written assumption of all Seller's
indemnity and other obligations to Buyer under this Agreement and (ii) to
supply Buyer with a copy of such assumption agreement. In the event Seller
fails to obtain such assumption agreement, the Buyer, the Seller, and the
Seller on behalf of its parent company, agree that all such obligations
shall pass to, and be assumed by, its parent company by operation of law.
Nothing contained in this clause shall prevent or place any limitations
upon the Seller, other than that listed in (i) and (ii) above, as it
relates to liquidation or the making of cash, property, or other
distributions to its parent company, JLM Industries, Inc.
9.5 NOTICES. All communications, notices and disclosures required or permitted
by this Agreement shall be in writing and shall be deemed to have been
given when delivered personally or by messenger or by overnight delivery
service, or when mailed by registered or certified United States mail,
postage prepaid, return receipt requested, or when received via telecopy,
telex or other electronic transmission, in all cases addressed to the
person for whom it is intended at his address set forth below or to such
other address as a party shall have designated by notice in writing to the
other party in the manner provided by this SECTION 9.6:
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If to Seller: JLM Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: 813/632-3315
If to Buyer: CTI of North Carolina, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: 912/235-3881
With a copy to: Ellis, Painter, ▇▇▇▇▇▇▇▇▇ & Bart, LLP
▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy: 912/233-2281
9.6 COUNTERPARTS; HEADINGS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such
counterparts shall together constitute but one and the same Agreement. The
Table of Contents and Article and Section headings in this Agreement are
inserted for convenience of reference only and shall not constitute a part
hereof.
9.7 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable damage
would occur in the event any of the provisions of this Agreement were not
performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or equity.
9.8 SEVERABILITY. If any provision, clause or part of this Agreement, or the
application thereof under certain circumstances, is held invalid, the
remainder of this Agreement, or the application of such provision, clause
or part under other circumstances, shall not be affected thereby.
9.9 NO RELIANCE. No third party is entitled to rely on any of the
representations, warranties and agreements contained in this Agreement,
and none of the parties hereto assumes any liability to any third party
because of any reliance on the representations, warranties and agreements
of any of the parties hereto contained in this Agreement.
9.10 AMENDMENT. This Agreement may not be amended except by an instrument in
writing signed by all of the parties.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.
JLM TERMINALS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
___________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
__________________________________
Title: President
_________________________________
CTI OF NORTH CAROLINA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
___________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
__________________________________
Title: Vice-President
_________________________________
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