EXHIBIT 10.33
ASSET SALE AND PURCHASE AGREEMENT
BY AND AMONG
▇▇▇▇▇▇▇▇ ALASKA PETROLEUM, INC.,
AS SELLER,
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.,
AS ▇▇▇▇▇▇▇▇ GUARANTOR,
AND
FLINT HILLS RESOURCES, LLC,
AS BUYER
DATED AS OF NOVEMBER 17, 2003
ASSET SALE AND PURCHASE AGREEMENT
This ASSET SALE AND PURCHASE AGREEMENT, is dated as of November 17,
2003, by and among ▇▇▇▇▇▇▇▇ ALASKA PETROLEUM, INC., an Alaska corporation
("Seller"), THE ▇▇▇▇▇▇▇▇ COMPANIES, INC., a Delaware corporation ("▇▇▇▇▇▇▇▇
Guarantor"), and FLINT HILLS RESOURCES, LLC, a Delaware limited liability
company ("Buyer").
RECITALS
WHEREAS, Seller desires to sell, assign, transfer and convey to Buyer
certain of its properties, assets and liabilities, and Buyer desires to acquire
such properties, assets and liabilities, all upon the terms and conditions set
forth herein;
WHEREAS, an Affiliate of Seller, an Affiliate of Buyer and ▇▇▇▇▇▇▇▇
Guarantor are concurrently with the execution of this Agreement entering into
that certain purchase agreement of even date herewith by and among ▇▇▇▇▇▇▇▇
Energy Services, LLC, as seller, ▇▇▇▇▇▇▇▇ Guarantor and ▇▇▇▇ Alaska Pipeline
Company, LLC, as buyer, (the "TAPS Purchase Agreement") relating to all of the
outstanding membership interests of ▇▇▇▇▇▇▇▇ Alaska Pipeline Company, L.L.C.
("WAPCO"); and
WHEREAS, an Affiliate of Seller, Holiday Alaska, Inc., Holiday
Stationstores, Inc. and ▇▇▇▇▇▇▇▇ Guarantor are concurrently with the execution
of this Agreement entering into that certain Asset Sale and Purchase Agreement
of even date herewith by and among ▇▇▇▇▇▇▇▇ Express, Inc., as seller, ▇▇▇▇▇▇▇▇
Guarantor, as seller's guarantor, Holiday Alaska, Inc., as buyer, and Holiday
Stationstores, Inc., as buyer's guarantor, (the "C Stores ASPA") relating to the
acquisition of certain convenience stores located in Alaska:
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, and intending to be legally bound hereby, the Parties hereto and
▇▇▇▇▇▇▇▇ Guarantor agree as follows:
ARTICLE I.
DEFINITIONS
1.1 DEFINED TERMS.
As used in this Agreement, each of the following terms has the meaning
specified below:
"ACTION" means any action, cause of action, appeal, petition, plea,
charge, complaint, claim, suit, demand, litigation, arbitration, mediation,
hearing, inquiry, investigation, or similar event, occurrence, or proceeding.
"AFFILIATE" means, with respect to any Person, each other Person that
directly or indirectly (through one or more intermediaries or otherwise)
controls, is controlled by, or is
1
under common control with such Person. The term "CONTROL" (including the terms
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH") means the possession, directly
or indirectly, of the actual power to direct or cause the direction of the
management policies of a Person, whether through the ownership of stock or other
equity, by Contract, credit arrangement or otherwise.
"AGGREGATE CAP" means the maximum amount of indemnifiable Damages from
all causes which may be recovered by all Buyer Indemnified Parties from Seller
or ▇▇▇▇▇▇▇▇ Guarantor and by all Seller Indemnified Parties from Buyer. Such
amount shall be the amount specified in paragraphs A or B below, as applicable,
plus any amount available pursuant to paragraph C below.
A. In the event that the transactions described in
(i) this Agreement, and (ii) a Retail Agreement close as
contemplated herein and therein, the amount of the Aggregate
Cap shall be $40,000,000; provided, however, that such amount
is an aggregate cap for this Agreement and the applicable
Retail Agreement. For the avoidance of doubt, this means that
for purposes of determining if such cap has been reached for
any Buyer Indemnified Parties, the Parties will look at
whether the aggregate amount of all Damages due to (i) the
Buyer Indemnified Parties under the applicable Retail
Agreement and (ii) the Buyer Indemnified Parties under this
Agreement exceeds $40,000,000. Further, for purposes of
determining if such cap has been reached for any Seller
Indemnified Parties, the Parties will look at whether the
aggregate amount of all Damages due to (i) the Seller
Indemnified Parties under the applicable Retail Agreement and
(ii) the Seller Indemnified Parties under this Agreement
exceeds $40,000,000.
B. In the event that the transactions described in
this Agreement close as contemplated herein, but the C Stores
are not sold pursuant to a Retail Agreement, the amount of the
Aggregate Cap shall be $38,000,000. For the avoidance of
doubt, this means that for purposes of determining if such cap
has been reached for any Buyer Indemnified Parties, the
Parties will look at whether the aggregate amount of all
Damages due to the Buyer Indemnified Parties under this
Agreement exceeds $38,000,000. Further, for purposes of
determining if such cap has been reached for any Seller
Indemnified Parties, the Parties will look at whether the
aggregate amount of all Damages due to the Seller Indemnified
Parties under this Agreement exceeds $38,000,000.
C. In the event that the transactions contemplated in
this Agreement close as contemplated herein and the
transactions contemplated by the TAPS Purchase Agreement close
as contemplated therein with an Affiliate of Buyer purchasing
the WAPCO Interests (as defined in the TAPS Purchase
Agreement), Buyer will be entitled to any portion of the WAPCO
Aggregate Cap (as defined in the TAPS Purchase Agreement) that
the Buyer (as defined in the TAPS Purchase Agreement) has not
used.
2
"AGREEMENT" means this Asset Sale and Purchase Agreement, as amended,
supplemented or modified from time to time in accordance with the express terms
hereof, together with all schedules and exhibits attached hereto.
"ASSETS" means all property, tangible and intangible, of any nature
that is owned or held for use primarily in connection with the ownership and
operation of Seller's North Pole refinery, Fairbanks terminal and Anchorage
terminal and the wholesale marketing of refined products produced by the North
Pole refinery, including:
(a) process units, piping, meters, loading facilities, tanks and
other fixtures and equipment that constitute the North Pole
refinery generally described on EXHIBIT A;
(b) tanks, piping, meters, loading facilities and other fixtures
and equipment that constitute the Fairbanks terminal generally
described on EXHIBIT B;
(c) tanks, piping, meters, loading facilities and other fixtures
and equipment that constitute the Anchorage terminal generally
described on EXHIBIT C;
(d) the Seller Contracts set forth on EXHIBIT D;
(e) the Intellectual Property set forth on EXHIBIT E that is
included in the Assets pursuant to the IP Side Agreement;
(f) the Inventory;
(g) the Leases set forth on EXHIBIT F;
(h) the Licensed Intellectual Property set forth on EXHIBIT G that
is included in the Assets pursuant to the IP Side Agreement;
(i) the Transferable Permits set forth on EXHIBIT H;
(j) the Real Property set forth on EXHIBIT I;
(k) all of the vehicles that are used by Seller in the operation
of (a), (b) and (c) above;
(l) all of the office equipment that is used by Seller in the
operation of (a), (b) and (c) above;
(m) all of the spare parts, warehouse stock, catalyst inventories,
and chemical inventories that are used by Seller in the
operation of (a), (b) and (c) above;
(n) any hydrocarbons located within the refinery process units,
refinery piping or terminal piping;
3
(o) any books, records, data or other documents relating to the
above; and
(p) the Gasoline Sulfur Credits described Section 4.19 of the
Disclosure Schedule;
but excluding the Excluded Assets.
"BUSINESS DAY" means any day other than Saturday, Sunday or other day
on which commercial banks located in New York, New York are authorized or
required by law to close.
"BUYER" has the meaning specified in the introductory paragraph of this
Agreement.
"BUYER CLAIMS ADMINISTRATOR" shall have the meaning set forth in
Section 10.3(e).
"BUYER INDEMNIFIED PARTY" shall have the meaning set forth in Section
10.2(a).
"C STORES ASPA" has the meaning specified in the Recitals.
"C STORES ASSETS" shall have the meaning set forth in Section 6.18.
"CLAIM NOTICE" shall have the meaning set forth in Section 10.3(a).
"CLAIMS" shall have the meaning set forth in Section 10.3(a).
"CLOSING" means the closing of the transactions contemplated by this
Agreement.
"CLOSING DATE" has the meaning assigned to that term in Section 8.1.
"CLOSING HEDGE LIQUIDATION AMOUNT" has the meaning assigned to that
term in Section 3.1.
"CLOSING INVENTORY" has the meaning assigned to that term in Section
3.3(a).
"CLOSING INVENTORY ADJUSTMENT AMOUNT" has the meaning assigned to that
term in Section 3.3(b).
"CLOSING INVENTORY AMOUNT" has the meaning assigned to that term in
Section 3.1.
"CLOSING PAYMENT" has the meaning assigned to that term in Section 3.2.
"CLOSING STATEMENT" has the meaning assigned to that term in Section
3.3(c).
"COBRA" means the Consolidated Omnibus Benefit Reconciliation Act of
1985, as amended.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder.
4
"CONFIDENTIALITY AGREEMENT" means the letter agreement dated July 12,
2002, between Flint Hills Resources, LP, an Affiliate of Buyer, and ▇▇▇▇▇▇▇▇
Guarantor relating to the furnishing of information to Flint Hills Resources, LP
and it Affiliates, including Buyer, in connection with its evaluation of the
transactions contemplated in this Agreement.
"CONSENT" means waiver, consent, approval, grant, concession, order,
authorization, declaration, registration, filing, notification, order,
authorization or exemption of, or with, any Person, including any Governmental
Authority.
"CONTRACTS" means any contract, lease, license, agreement, arrangement,
commitment, letter of intent, memorandum of understanding, heads of agreement,
promise, obligation, right, instrument, document, sale or purchase orders or
other similar understanding, whether written or oral, express or implied, except
any Plan, employment agreement, or other agreement or contract between Seller or
its Affiliates and any Employees.
"DESTRUCTION NOTICE" has the meaning assigned to that term in Section
6.6.
"DAMAGES" has the meaning assigned to that term in Section 10.3(d).
"DIRECT CLAIM" has the meaning assigned to that term in Section
10.3(a).
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto,
containing the various exceptions to the representations, warranties and
covenants of Seller and Buyer contemplated by the provisions of this Agreement.
"DISPUTE DEADLINE DATE" has the meaning assigned to that term in
Section 3.3(d).
"EFFECTIVE TIME" shall mean 11:59 p.m. Alaska time on the last day of
the month in which the Closing occurs.
"EMPLOYEE BENEFIT PLAN" has the meaning assigned to that term in
Section 4.14(b).
"EMPLOYEES" has the meaning assigned to that term in Section 6.7(a).
"ENVIRONMENTAL CAP" means the maximum amount of indemnifiable Damages
which may be recovered by all Buyer Indemnified Parties from Seller or ▇▇▇▇▇▇▇▇
Guarantor and by all Seller Indemnified Parties from Buyer arising out of,
resulting from or incident to the matters enumerated in Section 10.2(a) or
Section 10.2(b) with respect to any and all Environmental Claims. Such amount
shall be the amount specified in paragraphs A or B below, as applicable, plus
any amount available pursuant to paragraph C below.
5
A. In the event that the transactions described in
(i) this Agreement and (ii) a Retail Agreement close as
contemplated herein and therein, the amount of the
Environmental Cap shall be $32,000,000; provided, however,
that such amount is an aggregate cap for this Agreement and
the applicable Retail Agreement. For the avoidance of doubt,
this means that for purposes of determining if such cap has
been reached for any Buyer Indemnified Parties, the Parties
will look at whether the aggregate amount of such Damages due
to (i) the Buyer Indemnified Parties under the applicable
Retail Agreement and (ii) the Buyer Indemnified Parties under
this Agreement exceeds $32,000,000. Further, for purposes of
determining if such cap has been reached for any Seller
Indemnified Parties, the Parties will look at whether the
aggregate amount of such Damages due to (i) the Seller
Indemnified Parties under the applicable Retail Agreement and
(ii) the Seller Indemnified Parties under this Agreement
exceeds $32,000,000.
B. In the event that the transactions described in
this Agreement close as contemplated herein, but the C Stores
are not sold pursuant to a Retail Agreement, the amount of the
Environmental Cap shall be $30,500,000. For the avoidance of
doubt, this means that for purposes of determining if such cap
has been reached for any Buyer Indemnified Parties, the
Parties will look at whether the aggregate amount of all
Damages due to the Buyer Indemnified Parties under this
Agreement exceeds $30,500,000. Further, for purposes of
determining if such cap has been reached for any Seller
Indemnified Parties, the Parties will look at whether the
aggregate amount of all Damages due to the Seller Indemnified
Parties under this Agreement exceeds $30,500,000.
C. In the event that the transactions contemplated in
this Agreement close as contemplated herein and the
transactions contemplated by the TAPS Purchase Agreement close
as contemplated therein with an Affiliate of Buyer purchasing
the WAPCO Interests (as defined in the TAPS Purchase
Agreement), Buyer will be entitled to any portion of the WAPCO
Environmental Cap (as defined in the TAPS Purchase Agreement)
that the Buyer (as defined in the TAPS Purchase Agreement) has
not used.
"ENVIRONMENTAL CLAIMS" has the meaning assigned to that term in
Sections 10.2(a) and 10.2(b), as applicable to Buyer or Seller as the context
requires.
"ENVIRONMENTAL CONDITION" means any condition existing on, at or
originating from, each property included within the Assets which constitutes,
(a) a Release on, at or from such property of any Hazardous Materials or (b) a
violation of any applicable Environmental Laws or any Environmental Permits.
"ENVIRONMENTAL INSURANCE POLICY" has the meaning assigned to that term
in Section 6.11.
6
"ENVIRONMENTAL LAWS" means any and all Legal Requirements, rules,
codes, policies, directives, standards, licenses or Permits of any Governmental
Authority relating to Hazardous Materials, the abatement of pollution,
protection or restoration of the environment, or the ensuring of public health
and safety from environmental, occupational or workplace hazards, specifically
including those relating to the exposure to, use, Release, threatened Release,
emission, presence, storage, treatment, disposal, generation, transportation,
distribution, manufacture, processing, handling, management or control of
Hazardous Materials, previously, presently, or hereafter in effect, including
the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; the Federal Water
Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the Federal Insecticide,
Fungicide & Rodenticide Act, 7 U.S.C. Section 136 et seq.; the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq.; the Oil Pollution Act of 1990, 33
U.S.C. Section 2701 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.;
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq., as amended by the Superfund Amendments and Reauthorization
Act of 1986, 42 U.S.C. Section 9601 et seq.; the Emergency Planning and
Community Right to Know Act, 42 U.S.C. Section 11001 et seq.; the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801 et seq.; Endangered Species
Act, 16 U.S.C. Section 1531 et seq.; and the Occupational Safety and Health Act,
29 U.S.C. Section 651 et seq., and all similar statutes and regulations
thereunder adopted by the U.S., the states, the counties, the boroughs or the
municipalities in which the Assets are located, or any other Governmental
Authority, as each may be amended from time to time.
"ENVIRONMENTAL LIABILITIES" means those liabilities, actions, rights of
action, Contracts, Indebtedness, obligations, claims, causes of action, suits,
Damages, demands, costs, expenses and attorneys' fees whatsoever, known or
unknown, disclosed or undisclosed, accrued or unaccrued, existing at any time,
of every kind and nature arising directly or indirectly out of or as a
consequence of the actual or suspected use, storage, handling, generation,
transportation, manufacture, production, release, discharge, disposal or
presence of Hazardous Materials on, in, under or about the Real Property or the
air, soil or groundwater thereof, including, without limitation, any and all
costs incurred due to any investigation of the Real Property and/or Assets or
any cleanup, remediation, removal or restoration mandated by or pursuant to any
applicable Environmental Laws or agencies enforcing such applicable
Environmental Laws.
"ENVIRONMENTAL PERMITS" has the meaning assigned to that term in
Section 4.11(a) of this Agreement.
"ENVIRONMENTAL REPORTS" has the meaning assigned to that term in
Section 4.11(d).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCLUDED ASSETS" has the meaning assigned to that term in Section 2.2.
"FERC" means the Federal Energy Regulatory Commission.
"FINAL CLOSING STATEMENT" has the meaning assigned to that term in
Section 3.3(e).
7
"GAAP" means generally accepted accounting principles, as recognized by
the U.S. Financial Accounting Standards Board (or any generally recognized
successor), consistently applied.
"GENERAL CAP" means the maximum amount of indemnifiable Damages which
may be recovered by all Buyer Indemnified Parties from Seller or ▇▇▇▇▇▇▇▇
Guarantor and by all Seller Indemnified Parties from Buyer arising out of,
resulting from or incident to the matters enumerated in Section 10.2(a) or
Section 10.2(b) with respect to any and all claims for indemnity other than
Environmental Claims. Such amount shall be the amount specified in paragraphs A
or B below, as applicable, plus any amount available pursuant to paragraph C
below.
A. In the event that the transactions described in
(i) this Agreement and (ii) a Retail Agreement close as
contemplated herein and therein, the amount of the General Cap
shall be $15,000,000; provided, however, that such amount is
an aggregate cap for this Agreement and the applicable Retail
Agreement. For the avoidance of doubt, this means that for
purposes of determining if such cap has been reached for any
Buyer Indemnified Parties, the Parties will look at whether
the aggregate amount of such Damages due to (i) the Buyer
Indemnified Parties under the applicable Retail Agreement and
(ii) the Buyer Indemnified Parties under this Agreement
exceeds $15,000,000. Further, for purposes of determining if
such cap has been reached for any Seller Indemnified Parties,
the Parties will look at whether the aggregate amount of such
Damages due to (i) the Seller Indemnified Parties under the
applicable Retail Agreement and (ii) the Seller Indemnified
Parties under this Agreement exceeds $15,000,000.
B. In the event that the transactions described in
this Agreement close as contemplated herein, but the C Stores
are not sold pursuant to a Retail Agreement, the amount of the
General Cap shall be $14,500,000. For the avoidance of doubt,
this means that for purposes of determining if such cap has
been reached for any Buyer Indemnified Parties, the Parties
will look at whether the aggregate amount of all Damages due
to the Buyer Indemnified Parties under this Agreement exceeds
$14,500,000. Further, for purposes of determining if such cap
has been reached for any Seller Indemnified Parties, the
Parties will look at whether the aggregate amount of all
Damages due to the Seller Indemnified Parties under this
Agreement exceeds $14,500,000.
C. In the event that the transactions contemplated in
this Agreement close as contemplated herein and the
transactions contemplated by the TAPS Purchase Agreement close
as contemplated therein with an Affiliate of Buyer purchasing
the WAPCO Interests (as defined in the TAPS Purchase
Agreement) or TAPS Interests (as defined in the TAPS Purchase
Agreement), Buyer will be entitled to any portion of the WAPCO
General Cap (as defined in the TAPS Purchase Agreement) that
the Buyer (as defined in the TAPS Purchase Agreement) has not
used.
8
"GOVERNMENTAL ACTION" means any authorization, application, action,
order, writ, injunction, decree, stipulation, approval, consent, ruling,
decision, verdict, mandate, subpoena, command, directive, award, exemption,
filing, judgment, license, notice, registration, permit or other requirement,
determination, finding by, of, to or with any Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any (a) nation, state, county, city,
▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, or other jurisdiction of any
nature; (b) federal, state, local, municipal, foreign, or other government; (c)
governmental authority of any nature (including any governmental agency, branch,
department, official, or entity and any court or other tribunal); or (d) body
exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any nature, in
each case having jurisdiction over Seller or the Assets.
"HAZARDOUS MATERIAL" means (a) any chemicals, materials or substances
defined as "hazardous waste," "hazardous substance," "hazardous constituent,"
"extremely hazardous substance," "toxic chemical," "hazardous material,"
"hazardous chemical," "toxic pollutant," "contaminant," "chemical," "chemical
substance," "hazardous air pollutant," "pollutant," "pesticide," "toxic" or
"asbestos," as such terms are defined in any of the Environmental Laws, and
related substances, and all other substances which are regulated by any
Environmental Laws or which may be declared to constitute a material threat to
human health or to the environment, (b) any radioactive materials,
asbestos-containing materials, urea formaldehyde foam insulation, ethylene
glycol, lead, silica, and radon and (c) any Petroleum Products, except Petroleum
Products that are produced, stored, refined or otherwise handled lawfully in the
normal course of business and operation of the business.
"HIPAA" means the Health Insurance Portability and Accountability Act
of 1996, as amended.
"HIRED EMPLOYEES" has the meaning assigned to that term in Section
6.7(a).
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"IDENTIFIED SITE" has the meaning assigned to that term in Section
4.11(a).
"INDEBTEDNESS" means with respect to any Person without duplication (a)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property payment, but excluding obligations to trade creditors incurred
in the Ordinary Course of Business that are not overdue by six (6) months unless
being contested in good faith, (b) all reimbursement and other obligations with
respect to letters of credit, bankers' acceptances and surety bonds, whether or
not matured, (c) all obligations evidenced by notes, bonds, debentures or
similar instruments and (d) guaranties of indebtedness.
"INDEMNIFIED PARTY" has the meaning specified in Section 10.3(a).
"INDEMNIFYING PARTY" has the meaning specified in Section 10.3(a).
9
"INDEPENDENT AUDITOR" has the meaning assigned to that term in Section
3.3(d).
"INTELLECTUAL PROPERTY" means any and all patents, license agreements,
trade secrets, trademarks, copyrights, domain names, in-house developed
software, hardware, information technology applications, proprietary and
technical information, supplier lists and other supplier information, customer
lists and other customer information, price lists, advertising and promotional
materials, field performance data, research materials, other proprietary
intangibles, databases, processes, technical know-how, business and product
know-how, engineering and other drawings, designs, plans, methods, engineering
and manufacturing specifications, technology, inventions, processes, methods,
formulas, procedures, sales history, model numbers, literature and phone
numbers, and operating and quality control manuals and data.
"INTEREST" has the meaning assigned to that term in Section 3.3(b).
"INVENTORY" means the crude oil, feedstock, intermediate petroleum
products and refined products owned and/or paid for (including pre-pays) by
Seller (a) located on Real Property, (b) located in pipelines, barges, tank
cars, tank trucks or terminals belonging to third parties, or (c) purchased from
third parties but in transit and not yet located on Real Property. Inventory
includes tank bottoms but excludes: any hydrocarbons located within refinery
process units, refinery piping and terminal piping; water and sludge located in
tanks; Seller's accounts receivable; and Seller's accounts payable. Inventory
shall be determined in accordance with the procedures on EXHIBIT J.
"IP SIDE AGREEMENT" shall have the meaning set forth in Section 6.19 of
this Agreement.
"KNOWLEDGE" means, with respect to Seller, the actual knowledge after
due inquiry of the following individuals: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ Langenham,
▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇.
"LEASE" or "LEASES" shall mean those leases identified on EXHIBIT F.
"LEGAL REQUIREMENT" means any applicable order, constitution, law,
ordinance, regulation, statute, code or treaty issued by any federal, state,
local, municipal, foreign, international, multinational, or other administrative
body, including an arbitration panel, any principle of common law or judicial or
administrative interpretation thereof.
"LIABILITIES" shall mean, any and all direct or indirect liability,
indebtedness, obligation, commitment, expense, loss, claim, action, suit,
damages, fines, penalties, duties, deficiency, guaranty or endorsement of or by
any Person of any type, whether accrued, absolute, contingent, matured,
unmatured, liquidated, unliquidated, known or unknown, ▇▇▇▇▇▇ or inchoate or
otherwise, including tax liabilities, liabilities in respect of products and
liabilities arising under any Environmental Law.
10
"LICENSE PERIOD" shall have the meaning set forth in Section 6.8(b).
"LICENSED INTELLECTUAL PROPERTY" means the Intellectual Property used
by Seller in connection with or related to the Assets with respect to which the
rights being exercised by Seller have been licensed from another Person.
"LICENSORS" shall have the meaning set forth in Section 6.8(a).
"LIEN" means any lien, charge, mortgage, deed to secure debt, security
interest, title defect, pledge, option, deed of trust, claim, easement, right of
first refusal, production payment, restriction, proxy and voting or other
agreement, claim, easement, preemptive right, option, right of first refusal,
burden, encumbrance of any kind, rights of a vendor under any title retention,
or conditional sale or lease agreement or other arrangement substantially
equivalent thereto, in each case whether imposed by law, agreement,
understanding or otherwise.
"MATERIAL ADVERSE CHANGE (OR EFFECT)" means (a) when used with respect
to Seller or the Assets, (i) a change (or effect) in the condition (financial or
otherwise), properties, assets, liabilities, rights, obligations, operations or
business of Seller, which change (or effect), individually or in the aggregate,
has had or would reasonably be expected to have a materially adverse effect on
the condition, properties, assets, liabilities, rights, obligations, operations
or business of Seller as it relates to the Assets, (ii) a result or consequence
that would materially impair the ability of Seller to own, hold, develop or
operate the Assets, or (iii) a result or consequence that would materially
impair the ability of Seller to perform its obligations hereunder or to
consummate the transaction contemplated hereunder; and (b) when used with
respect to Buyer, a result or consequence that would impair Buyer's ability to
perform its obligations hereunder or consummate the transactions contemplated
hereby. In determining whether any individual event would result in a Material
Adverse Effect, notwithstanding that such event does not in and of itself have
such effect, a Material Adverse Effect shall be deemed to have occurred if the
cumulative effect of such event and all other then existing events would result
in a Material Adverse Effect. Material Adverse Change or (Effect) shall not
include an adverse effect arising from matters that generally affect the economy
or industry in which the relevant Party or ▇▇▇▇▇▇▇▇ Guarantor is engaged and
shall not include any settlement of the TAPS Quality Bank Litigation approved by
Buyer in writing or any post-Closing decisions relating to the TAPS Quality Bank
Litigation.
"MINIMUM INDEMNIFIABLE AMOUNT" means $100,000.
"NEW C STORES ASPA" shall have the meaning set forth in Section 6.18.
"NEW C STORES PURCHASER" shall have the meaning set forth in Section
6.18.
"NEW PERMITS" has the meaning assigned to that term in Section 6.15.
"NORTH POLE REFINERY LEASE" means the lease between the State of Alaska
and Energy Company of Alaska (now known as ▇▇▇▇▇▇▇▇ Alaska Petroleum, Inc.)
dated October 22, 1970 relating to the land under the North Pole refinery.
11
"ORDINARY COURSE OF BUSINESS" means action taken if (a) consistent in
nature, scope, and magnitude with past practices and is taken in the ordinary
course of the normal, day-to-day operations, (b) does not require authorization
by the board of directors or shareholders of Seller and does not require any
other separate or special authorization of any nature, and (c) is in accordance
with all Legal Requirements.
"ORGANIZATIONAL DOCUMENTS" means the articles of incorporation, bylaws,
operating agreement, partnership agreement, regulations concerning the board
resolutions, and other similar documents, instruments or certificates executed,
adopted, or filed in connection with the creation, formation, or organization of
a Person, including any amendments thereto.
"PARTY" and "PARTIES" means each of Seller and Buyer, but shall not
include the ▇▇▇▇▇▇▇▇ Guarantor.
"PERMITS" means the permits, licenses, certificates, variances,
exemptions, orders, franchises, approvals, filings, consents, accreditation,
registrations and authorizations of all Governmental Authorities necessary for
the lawful conduct of the business conducted by Seller or the lawful possession,
ownership, use or operation by Seller of the Assets.
"PERMITTED LIENS" means:
(a) the terms, conditions, restrictions, obligations,
exceptions, reservations, limitations and other matters
contained in any rights of way or documents under which Seller
obtained any rights of way or other property rights associated
with the Real Property, in each case that do not, and will
not, interfere materially with the possession, ownership, use,
operation or value of the Assets;
(b) liens for property taxes and assessments that are
not yet due and payable as of the Effective Time (or if
delinquent, that are being contested in good faith by Seller
by appropriate proceedings);
(c) any obligations or duties affecting the Assets to
the extent created by any Governmental Authority under any
Permit or Legal Requirement;
(d) easements, restrictive covenants, defects in
title and irregularities, and other matters that (i) are of
record and (ii) do not interfere materially with the
possession, ownership, use, operation or value of the Assets;
and
(e) mechanic's, materialmen's, repairmen's and other
statutory liens arising in the Ordinary Course of Business and
securing obligations incurred prior to the Effective Time, for
which Seller is and will remain responsible for payment and
removal of such liens and for which Seller has escrowed funds
for such payment.
12
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities.
"PETROLEUM PRODUCTS" means any crude oil, condensate, petroleum or
petroleum products, natural or synthetic gas.
"PLANS" OR "PLAN" means the savings, Code section 401(k), pension,
retirement, medical, dental, life insurance, accident and sickness, short-term
disability, long-term disability, profit-sharing, flexible spending account,
deferred compensation, stock option, vacation, stock bonus, employee stock
ownership, bonus, discount fuel purchasing, severance, or other similar plans,
programs, agreements, and arrangements, including all employee benefit plans as
defined in Section 3(3) of ERISA, which are maintained by or contributed to by
Seller or its Affiliates.
"PRELIMINARY STATEMENT" has the meaning assigned to that term in
Section 3.2.
"PROCEEDING" means any action, arbitration, audit, claim, inspection,
notice, review, hearing, investigation, litigation, or suit (whether civil,
criminal, administrative, investigative, or informal), at law or in equity,
commenced, brought, conducted, or heard by or before, or otherwise involving,
any Governmental Authority or arbitrator.
"PURCHASE PRICE" has the meaning assigned to that term in Section 3.1.
"PURCHASE PRICE ALLOCATION" has the meaning assigned to that term in
Section 3.1.
"QUALITY BANK LIABILITY" means any Liability of Seller that relates to
or arises from measurements or differences in quality or value of substances
received from and/or injected into TAPS prior to the Effective Time, whether due
as a result of normal operations, FERC and/or the Regulatory Commission of
Alaska and/or or other Governmental Authority decision or judgment, legal
settlement, or other Contract.
"REAL PROPERTY" means all real property and interests in real property
owned by Seller and constituting an Asset or leased by Seller pursuant to a
Lease, including all buildings, fixtures, structures and other improvements of
any kind or nature situated thereof, together with any easements, appurtenances,
licenses, servitudes, tenancies, options, rights-of-way (including, without
limitation, rights to adjacent streets and alleys), licenses, and other real
property rights and privileges and interest relating therein, and set forth on
EXHIBIT I.
"REIMBURSEMENT" shall have the meaning set forth in Section 10.3(b).
"RELEASE" or "RELEASED" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
migrating or disposing (including the abandoning or discarding of barrels,
containers and other closed receptacles containing any Hazardous Material) of a
substance into the environment, including the movement or continued movement of
any materials through or in the air, soil, surface water, ground water or
property.
13
"REPRESENTATIVE" means, with respect to any Person, any director,
officer, employee, agent, advisor (including legal, accounting and financial
advisors), Affiliate or other representative or agent authorized to act on
behalf of such Person.
"RETAIL AGREEMENT" shall mean either the C Stores ASPA, the New C
Stores ASPA or an agreement entered in connection with the exercise of the C
Stores Option by Flint Hills Resources, LLC.
"RESPONSIBLE OFFICER" means, with respect to Seller or Buyer, the
Chairman, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer or any Vice President of such Party.
"REQUIRED CONSENTS" has the meaning assigned to that term in Section
6.15.
"SELLER" has the meaning specified in the introductory paragraph of
this Agreement.
"SELLER CLAIMS ADMINISTRATOR" shall have the meaning set forth in
Section 10.3(f).
"SELLER CONTRACTS" has the meaning assigned to that term in Section
4.13.
"SELLER ▇▇▇▇▇▇" has the meaning assigned to that term in Section 3.1.
"SELLER INDEMNIFIED PARTY" shall have the meaning set forth in Section
10.2(b).
"SUPPLEMENTAL FINANCIAL STATEMENTS" has the meaning assigned to that
term in Section 6.10.
"SUPPLEMENTAL OPERATING SUMMARIES" has the meaning assigned to that
term in Section 6.10.
"SUPPLY AGREEMENT" has the meaning assigned to that term in Section
6.18.
"SURVEY" shall have the meaning set forth in Section 6.14(b).
"TAPS" means the Trans Alaska Pipeline System.
"TAPS PURCHASE AGREEMENT" has the meaning specified in the Recitals.
"TAPS QUALITY BANK LITIGATION" means FERC Dockets OR-89-2-000 et al.,
RCA Dockets P-89-2 et al., consolidated, and related proceedings and settlement
discussions.
"TAX RETURN" means any return, report or similar statement required to
be filed with respect to any Taxes (including any attached schedules),
including, without limitation, any information return, claim for refund, amended
return or declaration of estimated Taxes.
14
"TAXES" means taxes of any kind, levies or other like assessments,
customs, duties, or imposts, including income, gross receipts, ad valorem, value
added, excise, motor fuel, real or personal property, asset, sales, use,
license, payroll, transaction, capital, net worth and franchise taxes, estimated
taxes, withholding, employment, social security, workers compensation, utility,
severance, production, unemployment compensation, occupation, premium, windfall
profits, transfer and gains taxes or other governmental taxes imposed or payable
to the United States or any state, local or foreign governmental subdivision or
agency thereof, and in each instance such term shall include any interest,
penalties or additions to tax attributable to any such Tax, including penalties
for the failure to file any Tax Return or report.
"THREATENED" means, with respect to Seller, as follows: a claim,
Proceeding, dispute, action, or other matter will be deemed to have been
"Threatened" if any demand or statement has been made (in writing or, to
Seller's Knowledge, verbally) or any notice has been given (in writing or, to
Seller's Knowledge, verbally).
"THRESHOLD" means such amount as specified in paragraphs A or B below,
as applicable, plus any amount available pursuant to paragraph C below.
A. In the event that the transactions described in
(i) this Agreement and (ii) a Retail Agreement close as
contemplated herein and therein, the amount of the Threshold
shall be $2,000,000; provided, however, that such amount is an
aggregate threshold for this Agreement and the applicable
Retail Agreement. For the avoidance of doubt, this means that
for purposes of determining if such threshold has been reached
for any Buyer Indemnified Parties, the Parties will look at
whether the aggregate amount of Damages due to (i) the Buyer
Indemnified Parties under the applicable Retail Agreement and
(ii) the Buyer Indemnified Parties under this Agreement
exceeds $2,000,000. Further, for purposes of determining if
such threshold has been reached for any Seller Indemnified
Parties, the Parties will look at whether the aggregate amount
of Damages due to (i) the Seller Indemnified Parties under the
applicable Retail Agreement and (ii) the Seller Indemnified
Parties under this Agreement exceeds $2,000,000.
B. In the event that the transactions described in
this Agreement close as contemplated herein, but the C Stores
are not sold pursuant to a Retail Agreement, the amount of the
Threshold shall be $2,000,000. For the avoidance of doubt,
this means that for purposes of determining if such threshold
has been reached for any Buyer Indemnified Parties, the
Parties will look at whether the aggregate amount of all
Damages due to the Buyer Indemnified Parties under this
Agreement exceeds $2,000,000. Further, for purposes of
determining if such threshold has been reached for any Seller
Indemnified Parties, the Parties will look at whether the
aggregate amount of all Damages due to the Seller Indemnified
Parties under this Agreement exceeds $2,000,000.
15
C. In the event that the transactions contemplated in
this Agreement close as contemplated herein and the
transactions contemplated by the TAPS Purchase Agreement close
as contemplated therein with an Affiliate of Buyer purchasing
the WAPCO Interests (as defined in the TAPS Purchase
Agreement), Buyer will be obligated to assume any amount of
the WAPCO Threshold (as defined in the TAPS Purchase
Agreement) that the Buyer (as defined in the TAPS Purchase
Agreement) has not used.
"THIRD PARTY CLAIM" shall have the meaning set forth in Section
10.3(a).
"TITLE COMMITMENTS" shall have the meaning set forth in Section
6.14(a).
"TITLE COMPANY" shall have the meaning set forth in Section 6.14(a).
"TITLE POLICY" shall have the meaning set forth in Section 6.14(c).
"TRANSFER PERMITS" has the meaning assigned to that term in Section
6.15.
"TRANSFER TAXES" has the meaning assigned to that term in Section
6.9(a).
"TRANSFERABLE PERMITS" means those Permits and Environmental Permits
that are transferable to Buyer prior to or at Closing and that Buyer has
requested that Seller transfer to Buyer as set forth on EXHIBIT H.
"TRANSITION SERVICES AGREEMENT" means the form of agreement attached as
EXHIBIT K pursuant to which Seller agrees to provide certain services to Buyer
after the Closing.
"WARN ACT" means the Worker Adjustment and Retraining Notification Act,
as amended.
"▇▇▇▇▇▇▇▇ GUARANTOR" has the meaning specified in the introductory
paragraph of this Agreement.
"▇▇▇▇▇▇▇▇ GUARANTY" has the meaning specified in Section 8.2(b).
"▇▇▇▇▇▇▇▇ MARKS" has the meaning set forth in Section 6.8(a).
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) All references in this Agreement to Exhibits, Articles,
Sections, subsections and other subdivisions refer to the corresponding
Exhibits, Articles, Sections, subsections and other subdivisions of or to this
Agreement unless expressly provided otherwise. References in a Section of this
Agreement to any Disclosure Schedule shall refer to (i) that section or schedule
of the Disclosure Schedule which corresponds to the number of such Section, and
(ii) any other Section or Schedule that contains information or disclosures that
reasonably relate to the substance of such Section or Schedule. Titles appearing
at the beginning of any
16
Articles, Sections, subsections or other subdivisions of this Agreement are for
convenience only, do not constitute any part of this Agreement, and shall be
disregarded in construing the language hereof.
(b) Exhibits and Schedules to this Agreement are attached
hereto and by this reference incorporated herein for all purposes.
(c) The words "THIS AGREEMENT," "HEREIN," "HEREBY,"
"HEREUNDER" and "HEREOF," and words of similar import, refer to this Agreement
as a whole and not to any particular subdivision unless expressly so limited.
The words "THIS ARTICLE," "THIS SECTION" and "THIS SUBSECTION," and words of
similar import, refer only to the Article, Section or subsection hereof in which
such words occur. The word "OR" is not exclusive, and the word "INCLUDING" (in
its various forms) means including without limitation.
(d) Pronouns in masculine, feminine or neuter genders shall be
construed to state and include any other gender, and words, terms and titles
(including terms defined herein) in the singular form shall be construed to
include the plural and vice versa, unless the context otherwise requires.
ARTICLE II.
PURCHASE AND SALE OF ASSETS
2.1 ASSETS. Subject to the terms and conditions hereof, as of the
Effective Time, Seller will sell, assign, transfer and convey to Buyer or its
designee and Buyer or its designee shall purchase all of Seller's right, title
and interest in and to the Assets, free and clear of all Liens other than
Permitted Liens.
2.2 EXCLUDED ASSETS. The Assets shall not include any of the following
assets of Seller related to the Assets (hereinafter collectively called the
"Excluded Assets"):
(a) Any refunds and interest for the years 2001, 2002, 2003
and 2004 (prior to the Effective Time) ordered in the intrastate rate case
pending before the Regulatory Commission of Alaska, docket number P-03-4;
(b) The rights to any and all payments received or receivable
by Seller or its Affiliates after Closing in connection with the claims that are
being pursued in the action captioned "▇▇▇▇▇▇▇▇ Alaska Petroleum, Inc. and
▇▇▇▇▇▇▇▇ Energy Marketing & Trading v. The United States" pending in the United
States Court of Federal Claims, Case No. 02-705C;
(c) Any refunds and interest for periods prior to the
Effective Time arising out of the intrastate rate case pending before the
Regulatory Commission of Alaska, docket numbers P-97-4/P-97-7 and P-86-2;
(d) The membership interest in ▇▇▇▇▇▇▇▇ Alaska Air Cargo
Properties, L.L.C.;
(e) Seller's accounts receivable as of the Effective Time;
17
(f) Any benefits or rights under any Contracts of Seller to
the extent accruing before the Effective Time, except as specifically described
in Section 2.2(f) of the Disclosure Schedule;
(g) Seller's contract or contracts with the State of Alaska
for the purchase of crude oil;
(h) All ▇▇▇▇▇▇ with any Affiliates of Seller or ▇▇▇▇▇▇▇▇
Guarantor that affect the Assets; and
(i) The assets set forth with particularity on EXHIBIT L.
2.3 LIABILITIES. Except as otherwise expressly stated in this
Agreement, Seller shall retain, and shall pay and discharge, all Liabilities to
the extent relating to or arising out of the use, ownership or operation of the
Assets prior to the Effective Time. Notwithstanding anything to the contrary
contained herein, Buyer shall not assume, or in any way be liable or responsible
for, any Liabilities of Seller (whether accrued or contingent or due or not due)
which are not expressly stated in this Agreement. Without limiting the
generality of the foregoing, Seller's retained Liabilities shall include:
(a) The full amount of the Quality Bank Liability (for the
avoidance of doubt, this Section 2.3(a) in no way applies to any Liability to
the extent relating to or arising from measurements or differences in quality or
value of substances received from and/or injected into TAPS after the Effective
Time, whether due as a result of normal operations, FERC and/or the Regulatory
Commission of Alaska and/or or other Governmental Authority decision or
judgment, legal settlement, or other Contract);
(b) Any Liability to which Seller or its Affiliates or Buyer
or its Affiliates may become subject in connection with purchases of royalty oil
from the State of Alaska prior to the Effective Time;
(c) Any Liabilities arising from, relating to or incident to
the Excluded Assets;
(d) Seller's accounts payable as of the Effective Time; and
(e) Except as otherwise expressly stated in this Agreement,
any Liabilities arising from, relating to or incident to the possession, use,
ownership, operation or existence of the Assets, and any Liability, warranty or
indemnity of Seller or its Affiliates arising from, relating to or incident to
the Assets (whether by statute, Contract, tort or otherwise) that arises from,
relates to or is incident to the period prior to the Effective Time, including
all of the Liabilities associated with, resulting from or incident to:
(i) any assets, properties, Contracts or other
interests of Seller or its Affiliates;
18
(ii) except as described in Section 2.3(e)(ii) of the
Disclosure Schedule, any Liabilities under any Contract of Seller to the extent
accruing before the Effective Time;
(iii) a breach or violation (or acts, events or
circumstances with which notice or passage of time would constitute a breach or
violation) of any Contract that is part of the Assets prior to the Effective
Time by Seller or its Affiliates;
(iv) nonpayment of any accrued expenses, fees or
amounts due under any Contract that is part of the Assets by Seller or its
Affiliates, which amounts accrued or were otherwise due prior to the Effective
Time;
(v) personal injuries, bodily injury, sickness or
disease that arises out of or relates to events, circumstances or occurrences
prior to the Effective Time (including any arising from or relating to any
exposure or contact with any allegedly injurious or Hazardous Materials) and
relating to or arising out of the possession, use, ownership or operation of the
Assets prior to the Effective Time, except to the extent that such Liabilities
are caused or contributed to by Buyer's operations, actions or omissions after
the Effective Time;
(vi) property losses or damages to the extent the
alleged property loss or damage occurred before the Effective Time or arises out
of, or relates to, the possession, use, ownership or operation of the Assets
prior to the Effective Time, except to the extent that such Liabilities are
caused or contributed to by Buyer's operations, actions or omissions after the
Effective Time, and any and all ongoing insurance premiums, taxes, assessments,
indemnification obligations, loss payment obligations and all other costs and
expenses related to any insurance policies procured by Seller or its Affiliates
prior to the Effective Time;
(vii) any assets, products, employees or operations
of Seller or its Affiliates not included in the Assets or any facilities,
businesses or entities previously divested, sold or otherwise discontinued by
Seller, its Affiliates, or their respective predecessors;
(viii) any failures by Seller or its Affiliates to
comply with any Legal Requirement prior to the Effective Time, including any
currently pending or Threatened litigation and any fines or penalties imposed on
Seller or its Affiliates, or with respect to any of the Assets by a Governmental
Authority;
(ix) any payment obligations of Seller or its
Affiliates for goods delivered or services rendered before the Effective Time,
any and all costs for title reports and surveys, and any other operating
expenditures, associated overhead expenses and accounts payable to the extent
relating to the possession, use, ownership, or operations of the Assets for
periods up to the Effective Time;
(x) any Liabilities relating to any of Seller's or
its Affiliates' employees or former employees or the employees or former
employees of any ERISA Affiliate, including, without limitation, compensation
and Liabilities under the Plans or any employee benefit plans sponsored or
maintained by Seller, its Affiliates, or any ERISA Affiliate, including
19
any liability: (i) under Title IV of ERISA, (ii) with respect to the
continuation coverage requirements of COBRA, (iii) with respect to any
noncompliance with ERISA, the Code or any other applicable Legal Requirements,
or (iv) with respect to any suit, proceeding or claim that is brought regarding
any such Plan or any fiduciary or former fiduciary of any such Plan;
(xi) Seller's or its Affiliates' employment or
termination of employment of their respective employees and Liabilities of
Seller or any Affiliate for noncompliance with Legal Requirements related to its
or their employees, including HIPAA;
(xii) with respect to any infringement or
misappropriation, or claims of infringement or misappropriation, of any
Intellectual Property rights of any Person resulting from or related to the
Assets for periods up to the Effective Time;
(xiii) any Liability of Seller or its Affiliates
related to Taxes;
(xiv) litigation, claims or suits relating to the
Assets pending or Threatened as of the Effective Time, or related to or arising
out of any period up to the Effective Time, including any litigation disclosed
in, or arising from, the matters set forth in Section 4.10 of the Disclosure
Schedule;
(xv) any Liens on the Assets, other than the
Permitted Liens;
(xvi) any of Seller's or any of its Affiliates'
Indebtedness, including any inter-company Indebtedness;
(xvii) Environmental Liabilities to the extent
arising in, relating to or accruing in periods up to and including the Effective
Time, other than the Environmental Liabilities set forth on Section 10.2(a)(iv)
of the Disclosure Schedule;
(xviii) Seller's obligation to repay TAPS linefill
borrowed from the State of Alaska; and
(xix) Seller's obligation to deliver jet fuel owned
by Federal Express.
2.4 REVENUES AND EXPENSES.
(a) Seller shall be: (i) entitled to all operating revenues
(and related accounts receivable) attributable to the Assets, and (ii)
responsible for the payment of all Liabilities (including accounts payable,
customer deposits, customer prepayments, lease deposits, etc.) attributable to
the Assets, in each case to the extent the foregoing are earned or incurred
prior to the Effective Time.
(b) Buyer shall be: (i) entitled to all operating revenues
(and related accounts receivable) attributable to the Assets, and (ii)
responsible for the payment of all Liabilities (including accounts payable,
customer deposits, customer prepayments, lease deposits, etc.)
20
attributable to the Assets, in each case to the extent the foregoing are earned
or incurred after the Effective Time.
(c) To the extent that any Party receives any funds to which
the other Party is entitled pursuant to Section 2.4(a) or (b), the Party
receiving such funds shall deliver the funds to the other Party within five (5)
Business Days after actual receipt of such funds. If any Party pays any cost or
expense (or related account payable) that is properly borne by the other Party
pursuant to Section 2.4(a) or (b), the Party responsible for such cost or
expense (or related account payable) shall promptly reimburse the Party who made
such payment within five (5) Business Days via wire transfer of immediately
available funds or ACH. The obligations of Seller and Buyer under this Section
2.4(c) shall be performed without any right of setoff. Each Party shall give
representatives of the other Party reasonable access to its books and records
related to the Assets as are reasonably necessary for purposes of reviewing,
verifying and auditing any amount payable pursuant to this Section 2.4(c). The
term "Party" shall include ▇▇▇▇▇▇▇▇ Guarantor for purposes of this Section
2.4(c).
ARTICLE III.
PURCHASE PRICE
3.1 THE PURCHASE PRICE AND ALLOCATION. The cash purchase price for the
Assets shall be an amount equal to $125,320,000 plus the actual market value of
Inventory at the Effective Time as calculated in accordance with EXHIBIT J-1
("Closing Inventory Amount") minus the net present value of Seller's ▇▇▇▇▇▇ with
an Affiliate of Seller (the "Seller ▇▇▇▇▇▇") as calculated in accordance with
the procedures set forth on EXHIBIT M (the "Closing Hedge Liquidation Amount").
Within 120 days after the Closing Date, but in no event prior to the resolution
of any dispute under Section 3.3(d), Buyer shall prepare and deliver to Seller
an allocation of the Purchase Price (as required under the Code) among the
various Assets prepared in accordance with Section 1060 of the Code (the
"Purchase Price Allocation"). As provided in Section 6.9(b), Buyer and Seller
shall cooperate and in good faith attempt to reach an agreement regarding the
Purchase Price Allocation. In the event that Buyer and Seller are able to reach
such agreement, Buyer and Seller shall be bound by such Purchase Price
Allocation for all purposes, and neither Party shall take any contrary position
regarding such allocation in any Tax Return, audit, appeal, contest or
otherwise.
3.2 PAYMENT OF THE CLOSING PURCHASE PRICE. Not later than five (5)
Business Days prior to the Closing, Seller shall deliver to Buyer a statement
(the "Preliminary Statement") setting forth in reasonable detail Seller's good
faith estimate of the Closing Inventory Amount and the Closing Hedge Liquidation
Amount. At the Closing, Buyer shall make a cash payment to Seller in an amount
equal to $125,320,000 plus 75% of Seller's estimate of the Closing Inventory
Amount minus the Closing Hedge Liquidation Amount (the "Closing Payment") to be
made by wire transfer of immediately available funds to such account as Seller
shall designate.
3.3 CLOSING INVENTORY LIQUIDATION ADJUSTMENT. A post-closing adjustment
to the Closing Payment shall be made as follows:
21
(a) MEASUREMENT OF CLOSING INVENTORY. At the Effective Time,
Buyer and Seller shall conduct a physical inventory of the Inventory to provide
the information necessary for the determination of the Inventory as of the
Effective Time (the "Closing Inventory"), which shall be used to determine the
Closing Inventory Adjustment Amount as described in Section 3.3(b). The physical
inventory shall be conducted in accordance with the protocol described on
EXHIBIT J-2 by an independent testing agent mutually selected by Buyer and
Seller or, in the absence of such agreement, by one independent testing agent
selected by Buyer and one independent testing agent selected by Seller.
(b) DETERMINATION OF CLOSING INVENTORY ADJUSTMENT AMOUNT. If
the payment at Closing for 75% of the estimated Closing Inventory Amount exceeds
the actual Closing Inventory Amount determined using the Closing Inventory,
Seller shall pay to Buyer an amount equal to such excess, plus interest at the
thirty day USD Libor rate published by the British Bankers Association two
Business Days prior to the Effective Time ("Interest") on the portion of such
excess for the actual number of days between the Effective Time and the date the
payment is made. If the payment at Closing for 75% of the estimated Closing
Inventory Amount is less than the actual Closing Inventory Amount determined
using the Closing Inventory, Buyer shall pay to Seller an amount equal to such
difference, plus Interest on such difference for the actual number of days
between the Effective Time and the date the payment is made. The amount of the
payment to be made by Buyer or Seller, as applicable, pursuant to this Section
3.3(b) shall be referred to as the "Closing Inventory Adjustment Amount." The
Closing Inventory Adjustment Amount shall be paid by Seller or Buyer, as
applicable, within five (5) Business Days of the determination of the Final
Closing Statement.
(c) CLOSING STATEMENT. As promptly as practicable after the
Closing Date, and in any event not later than forty-five (45) days after the
Effective Time, Buyer shall prepare and deliver to Seller (i) a statement (the
"Closing Statement"), which shall set forth in reasonable detail (A) the Closing
Inventory and (B) its calculations of the Closing Inventory Adjustment Amount as
described in Section 3.3(b) and (ii) a copy of the schedule of Closing
Inventory. Buyer, at no cost to Seller, shall provide all information reasonably
requested by Seller and shall give representatives of Seller reasonable access
to the premises, employees and other facilities related to the Assets and to
books and records related to the Assets as are reasonably necessary for purposes
of reviewing, verifying and auditing the Closing Inventory Adjustment Amount.
(d) DISPUTE RESOLUTION. The Closing Statement shall become
final and binding on Seller and Buyer as to the Closing Inventory Adjustment
Amount thirty (30) days following the date the Closing Statement is received by
Seller (the "Dispute Deadline Date"), unless prior to the Dispute Deadline Date,
Seller delivers notice that it disputes the Closing Inventory Adjustment Amount
and/or Closing Statement. Seller's notice shall set forth all of Seller's
disputed items together with Seller's proposed changes thereto, including an
explanation in reasonable detail of the basis on which Seller proposes such
changes. If Seller has delivered a timely notice of disagreement, then Buyer and
Seller shall use their good faith efforts to reach written agreement on the
disputed items to determine the Closing Inventory Adjustment Amount. If all of
Seller's disputed items have not been resolved by Buyer and Seller within sixty
(60) days following Seller's receipt of the Closing Statement, then Seller's
disputed items shall be submitted for final and binding determination to KPMG
LLP (the "Independent Auditor") who
22
shall act as an expert and not an arbitrator, within five (5) Business Days
after the end of the foregoing sixty (60) day period. The determination of the
Closing Inventory Adjustment Amount by the Independent Auditor shall be final
and binding upon Buyer and Seller as to the Closing Inventory Adjustment Amount.
If the Independent Auditor determines that Buyer is entitled to less than 50% of
the dollar value of the total disputed items, Buyer shall pay all of the
Independent Auditor's fees and expenses in connection with this Section 3.3(d).
If the Independent Auditor determines that Buyer is entitled to 50% or more of
the dollar value of the total disputed items, Seller shall pay all of the
Independent Auditor's fees and expenses in connection with this Section 3.3(d).
(e) FINAL CLOSING STATEMENT. The Closing Inventory Adjustment
Amount shall be deemed to be finally determined in the amount set forth in the
Closing Statement on the Dispute Deadline Date unless a dispute notice is given
in accordance with Section 3.3(d) with respect to the calculation thereof. If
such a dispute notice is given, the Closing Inventory Adjustment Amount shall be
deemed finally determined on the date that the Independent Auditor gives notice
to Buyer and Seller of its determination with respect to all disputes regarding
the calculation thereof, or, if earlier, the date on which Seller and Buyer
agree in writing on the amount thereof, in which case the Closing Inventory
Adjustment Amount shall be calculated in accordance with such determination or
agreement, as the case may be. The Closing Statement as accepted by Seller (by
absence of notice pursuant to Section 3.3(d)), as mutually agreed upon by the
Parties or as determined by the Independent Auditor shall be referred to as the
"Final Closing Statement."
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in the Disclosure Schedule, Seller represents and
warrants to Buyer the statements contained in this Article IV are correct and
complete as of the date hereof and will be correct and complete as of the
Closing Date and the Effective Time:
4.1 ORGANIZATION; AUTHORITY. Seller is a corporation, duly organized,
validly existing and in good standing under the laws of the State of Alaska and
has the requisite power and authority to own, lease and operate its assets and
properties, and to conduct the business that it is currently conducting. Seller
has full corporate power and authority necessary to execute and deliver this
Agreement and all the documents related thereto, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated in this
Agreement. The execution, delivery and performance of this Agreement by Seller
has been duly authorized by all necessary corporate, shareholder and other
action, and no further corporate, shareholder or other action is necessary on
the part of Seller to execute and deliver this Agreement and all the documents
related thereto and to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated by this Agreement.
4.2 VALIDITY AND BINDING EFFECT. Assuming the due authorization,
delivery and execution of this Agreement by Buyer, this Agreement constitutes
the legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance,
23
moratorium or similar laws affecting the enforcement of creditors' rights
generally and general equitable principles, regardless of whether enforceability
is considered in a proceeding at law or in equity.
4.3 NO VIOLATIONS. Except as specified in Section 4.3 of the Disclosure
Schedule, neither the execution and delivery of this Agreement and the other
agreements contemplated hereby by Seller, nor the consummation of the
transactions contemplated hereby or thereby will (a) violate, conflict with or
result in the breach of any provision of the Organizational Documents of Seller;
(b) result in a material violation of or conflict with any Legal Requirement or
Governmental Action applicable to or affecting Seller, or any of its assets or
properties (including the Assets); (c) result in a material breach of, or a
maturity under, or constitute a material default (or event which with the giving
of notice or lapse of time, or both, would become a material default) under, or
result in, or give to others any rights of, termination, amendment or
acceleration of any Contract (or any rights, benefits or payments thereunder) or
Permit; (d) give any Person the right or option to purchase, or trigger or give
any Person the right of first refusal or similar right with respect to, any of
the Assets; or (e) result in the creation of any Lien on any of the Assets.
4.4 GOVERNMENTAL CONSENTS AND APPROVALS. Except as set forth in Section
4.4 of the Disclosure Schedule, no Consent with, or to, any Governmental
Authority is required by or with respect to Seller in connection with the
execution and delivery of this Agreement by Seller, the performance of this
Agreement by Seller, or the consummation of the transactions contemplated by
this Agreement by Seller, except for the filing of a pre-merger notification
report by Seller under the HSR Act and the expiration or termination of the
applicable waiting period thereunder.
4.5 TITLE TO ASSETS; NO LIENS; SUFFICIENCY OF ASSETS; CONDITION.
(a) TITLE TO ASSETS. Seller owns, has a leasehold or license
interest in or rights to, all of the Assets (including the leased Real Property)
and Seller has good, valid and marketable title to all of the Assets (including
the owned Real Property) not leased or licensed.
(b) NO LIENS. The Assets are free and clear of all Liens and
Indebtedness, except for (i) Liens set forth in Section 4.5(b) of the Disclosure
Schedule and (ii) Permitted Liens.
(c) SUFFICIENCY OF ASSETS. Except as set forth in Section
4.5(c) of the Disclosure Schedule, the Assets include all assets, facilities,
properties, equipment, fixtures, Contracts, Permits, infrastructure and other
rights, privileges and interests necessary to conduct or operate the Assets as
currently operated by Seller.
(d) CONDITION OF TANGIBLE ASSETS. Except as set forth in
Section 4.5(d) of the Disclosure Schedule, each item of tangible personal
property or fixture (including all equipment and infrastructure, whether
classified as real property, personal property or a fixture under applicable
law) that is part of the Assets is in good and workable condition and repair
(normal wear and tear excepted), free of any material defect, suitable for the
purposes for which it is
24
being used, has been maintained in accordance with normal industry practices, is
not experiencing any material mechanical or integrity problems, and no material
maintenance of such Assets is due or has been delayed.
(e) NO ABANDONED FACILITIES, ETC. None of the Assets includes
any abandoned facilities, and except as set forth in Section 4.5(e) of the
Disclosure Schedule, none of the Assets require reclamation, restoration or
remediation under Legal Requirement, agreement or otherwise. No asset essential
to the use or operation of the Assets has been diverted to other uses in
contemplation of the sale of the Assets.
(f) INVENTORY. All Inventory is merchantable, is fit for the
purposes for which it is to be sold, exchanged or intended, and does not contain
any obsolete or unusable inventory.
4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Section 4.6 of the Disclosure Schedule, disclosed on an Exhibit attached hereto
or as specifically contemplated by this Agreement, since March 31, 2003:
(a) Seller has operated the Assets only in the Ordinary Course
of Business;
(b) Seller has made all reasonable efforts consistent with
past practices to preserve the relationships with customers, suppliers and
others with whom Seller deals;
(c) there has not been any Material Adverse Change;
(d) Seller has not incurred any material Liability or entered
into any material Contract;
(e) there has not been any material loss, damage, destruction,
condemnation or other casualty (whether or not covered by insurance) with
respect to any of the Assets;
(f) there has not been any change in any of the accounting
principles or policies followed by Seller;
(g) except normal periodic increases or promotions effected in
the Ordinary Course of Business, Seller has not made any change in the
compensation levels (whether it be salary, wage, commission, bonus or other
direct or indirect remuneration) of any Employees (salaried or hourly),
independent contractors, officers or directors or material changes in the manner
in which Employees of Seller are generally compensated, or any provision of
additional or supplemental benefits for Employees of Seller generally;
(h) there has not been any citation or notice received by
Seller for violation of any Legal Requirement;
(i) there has not been a material change in the terms of any
Plan that has not been disclosed to Buyer in writing or otherwise delivered in
documents made available to Buyer;
25
(j) there has not been a grant of, or the existence of, any
Lien in any of the Assets, other than Permitted Liens; and
(k) Seller has not agreed to take any action described in this
Section 4.6, whether in writing or otherwise.
4.7 ACCURACY OF STATEMENTS. To Seller's Knowledge, no representation,
warranty or other statement made by Seller to Buyer in this Agreement or any
statement, certificate or schedule furnished to Buyer pursuant to this Agreement
contains any untrue statement of a material fact or omits to state a material
fact that would make the statements contained therein misleading. Seller has no
Knowledge of any fact that has specific application to Seller that may have a
Material Adverse Effect that has not been set forth in this Agreement.
4.8 COMPLIANCE WITH LEGAL REQUIREMENTS. Except as set forth in Section
4.8 of the Disclosure Schedule, and except with respect to Environmental
Matters, Employee Matters and Taxes (which are the subject of separate
representations in Sections 4.11, 4.14 and 4.15, respectively), (a) Seller and
the Assets are not in violation of, or in default under, and no event has
occurred that (with notice or the lapse of time or both) would constitute a
material violation of or default under any applicable Legal Requirement; and (b)
no investigation or review by any Governmental Authority with respect to Seller
or the Assets is pending or Threatened.
4.9 PERMITS. Section 4.9 of the Disclosure Schedule contains a true and
complete list of all Permits issued or granted to Seller necessary to operate
the Assets. Seller has obtained and holds all of the Permits required by it to
own and operate the Assets as they have been conducted and each of these Permits
have been fully paid for. Each Permit has been validly issued and is in full
force and effect. Seller is in compliance in all material respects with the
terms of its Permits and there are no proceedings pending or Threatened, which
may result in the revocation, cancellation, limitation, suspension or
modification of any Permit.
4.10 LITIGATION. Except as set forth in Section 4.10 of the Disclosure
Schedule: (a) no Actions of any Governmental Authority or any other Person is
pending or Threatened against, related to, or affecting the Assets, Seller or
Seller's officers or directors, and Seller has no Knowledge of any matters which
are reasonably likely to result in any such Action; and (b) Seller is not
subject to or in default of any outstanding injunction, writ, judgment, order,
decree or ruling by a Governmental Authority. There is no Action pending or
Threatened, related to or affecting Seller, or any of the Assets that (i)
questions the validity or enforceability of this Agreement or any other
document, instrument or agreement to be executed and delivered by Seller in
connection with the transactions contemplated by this Agreement or (ii) which
could prohibit, limit, or delay the consummation of the transactions
contemplated by this Agreement.
4.11 ENVIRONMENTAL MATTERS.
(a) Except as set forth in Section 4.11 of the Disclosure
Schedule: (i) Seller is in compliance with, and has complied in all respects
with and, to Seller's Knowledge, there are and have been no violations of, any
Environmental Laws applicable to the Assets or to the
26
possession, use, ownership, or operation by Seller of the Assets; (ii) Seller
possesses all required Permits, identification numbers, and other authorizations
required under any applicable Environmental Laws to own or operate the Assets
("Environmental Permits"), and they may be assigned or transferred to Buyer
without the consent or approval of any Governmental Authority or other Person
and such assignment or transfer will not cause any such Environmental Permit to
be revoked, limited or terminated; (iii) to the Knowledge of Seller, Seller is
in compliance with, and has complied in all respects with, the provisions of all
Environmental Permits and there are and have been no violations of, any
Environmental Permits; (iv) there have been and, to the Knowledge of Seller, are
no Environmental Conditions on or affecting the Assets; (v) there are no
Hazardous Materials on the Real Property, except as allowed by Environmental
Laws; (vi) to the Knowledge of Seller, Seller has not caused or taken any action
that would result in, and Seller is not subject to, any Liability under any
Environmental Laws arising from the possession, use, ownership or operation of
the Assets; (vii) Seller has filed all notices required under all Environmental
Laws and Environmental Permits; (viii) Seller has and will have taken all
actions required under applicable Environmental Laws and Environmental Permits
to satisfy or obtain the approval of a Governmental Authority of the
transactions contemplated by this Agreement; (ix) the Environmental Reports
constitute all information and data, including all studies, analyses and test
results, in Seller's possession, custody or control relating to environmental
matters associated with the Assets, including all Environmental Conditions and
all Hazardous Materials, and all such Environmental Reports have been disclosed
to Buyer; (x) the Real Property is not listed or, to Seller's Knowledge,
proposed for listing under the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, or under any similar state list, or
the subject of any federal, state or local enforcement action or investigation,
or citizen's suit, under any Environmental Law ("Identified Site"); (xi) the
Real Property has never operated subject to "interim status" or other permit
requirements imposed by the Resource Conservation and Recovery Act, as amended,
or similar state statute, regardless of whether such interim status or other
permit was ever lawfully obtained; (xii) Seller has not transported or arranged
for transportation of (directly or indirectly) to any Identified Site any
Hazardous Materials generated or created by the possession, use, ownership or
operation of the Assets; and (xiii) there is not now, nor at any time in the
past has there been, at, on or in any of the Real Property, any (A) "treatment",
"recycling", "storage" or "disposal" of any "Hazardous Waste", as these terms
are defined in the Resource Conservation & Recovery Act, as amended and in the
regulations promulgated thereunder, or (B) surface impoundment, landfill lagoon
or other containment facility for the temporary or permanent "storage",
"treatment", or "disposal" of "Hazardous Waste", as these terms are defined in
the Resource Conservation & Recovery Act, as amended and in the regulations
promulgated thereunder.
(b) Except as set forth in Section 4.11 of the Disclosure
Schedule: to Seller's Knowledge, there are no facts or circumstances related to
environmental matters concerning the Assets that could reasonably be expected to
lead to any new Environmental Liabilities under any applicable Environmental
Law.
(c) Seller has disclosed to AIG all "Pollution Conditions" (as
defined in the Environmental Insurance Policy) existing prior to and known by
"Responsible Insured" (as defined in the Environmental Insurance Policy) of
Seller as of the "Inception Date" (as defined in the Environmental Insurance
Policy), provided that such Responsible Insured knew that such
27
Pollution Conditions could give rise to "Clean-up Costs" (as defined in the
Environmental Insurance Policy) or a claim under the Environmental Insurance
Policy.
(d) Seller has caused the Representatives of Seller with
responsibility for environmental matters to furnish Buyer and its
Representatives with all environmental assessments, reports, or other documents,
data and other information that exist with respect to the environmental
condition of the Assets and/or compliance with Environmental Laws, and any such
other existing documents, data and other information as Buyer has requested
(collectively, the "Environmental Reports").
4.12 INTELLECTUAL PROPERTY. The Intellectual Property identified on
EXHIBIT E and Licensed Intellectual Property identified on EXHIBIT G constitutes
all the material Intellectual Property rights used to operate the Assets and the
C Stores Assets as such assets are currently being used. Other than the
Intellectual Property identified on EXHIBIT E and Licensed Intellectual Property
identified on EXHIBIT G, no other Intellectual Property is necessary after the
Effective Time to operate the Assets and the C Store Assets in substantially the
same manner as such assets have been operated prior to the Effective Time. The
products used, manufactured, marketed, sold or licensed by Seller in connection
with the Assets, and all Intellectual Property and Licensed Intellectual
Property used in the operation of the Assets as currently conducted, to Seller's
Knowledge, do not infringe upon, violate or constitute the unauthorized use of
any rights owned or controlled by any third party, including any Intellectual
Property of any third party. Seller is not in material violation of the terms of
any Licensed Intellectual Property. Seller is current in all payments relating
to any Licensed Intellectual Property. The Intellectual Property identified on
EXHIBIT E and included in the Assets or the C Store Assets pursuant to the IP
Side Agreement and the Licensed Intellectual Property identified on EXHIBIT G
and included in the Assets or the C Store Assets pursuant to the IP Side
Agreement may be assigned by Seller without the consent of or notice to any
Person, except as set forth on Section 4.12 of the Disclosure Schedule or where
the failure to obtain such consent or provide such notice would not have a
material effect on Buyer's ability to use such Intellectual Property or the
Licensed Intellectual Property.
4.13 CONTRACTS. EXHIBIT D and EXHIBIT G contain a complete and accurate
list of all material Contracts, including, without limitation, the licenses with
respect to the Licensed Intellectual Property, of Seller which constitute Assets
hereunder (the "Seller Contracts"). Except as set forth on Section 4.13 of the
Disclosure Schedule, (a) Seller, and to Seller's Knowledge, each other Person
that has any Liability under any Seller Contract is in compliance with all
applicable material terms and requirements of each such Seller Contract, (b) no
event has occurred or circumstance exists that (with or without notice or lapse
of time) may materially contravene, conflict with, or result in a material
violation or breach of, or give Seller or any other Person the right to declare
a default under, or to accelerate the maturity or performance of, or to cancel,
terminate or modify, any Seller Contract, (c) there has not been any material
amendment or modification to any Seller Contracts, and (d) the Seller Contracts
have not been assigned in any manner. Seller has not given or received from any
other Person any notice or other communication (whether oral or written)
regarding any actual, alleged, possible, or potential violation or breach of, or
default under, any Seller Contract. Each Seller Contract is in full force and
effect, is valid and enforceable in accordance with its terms and, except as set
forth on Section 4.13 of the Disclosure Schedule, each Seller Contract may be
assigned without the consent of or notice to any Person. Except as set forth on
28
Section 4.13 of the Disclosure Schedule, there are no negotiations of, attempts
to renegotiate or outstanding rights to renegotiate any material amounts paid or
payable to Seller under any Seller Contract. Except as set forth on Section 4.13
of the Disclosure Schedule, there are no other material Contracts to which
Seller is a party affecting the Assets or necessary for the operation of the
Assets as presently operated. Except as set forth in Section 4.13 of the
Disclosure Schedule, Seller has not with respect to any Contract: (i) received
any quantity of oil or other hydrocarbons to be paid for thereafter other than
in the normal cycle of billing; or (ii) received prepayments, advance payments,
or loans which will require Buyer to perform services or provide oil, refined
products or other hydrocarbons under such Contract on or after the Effective
Time without being paid at or near the time of delivery. A true and complete
list of the Seller ▇▇▇▇▇▇ is set forth on EXHIBIT M. Except for the Seller
▇▇▇▇▇▇, the J ▇▇▇▇ ▇▇▇▇▇ and the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Seller is not a party to
any hedging contracts.
4.14 EMPLOYEE MATTERS. Except as set forth in Section 4.14 of the
Disclosure Schedule:
(a) With respect to the Employees, Seller (i) is in material
compliance with all applicable Legal Requirements respecting labor and
employment, occupational safety, plant closing and wages and hours, (ii) has not
committed any unfair labor practices, (iii) is not party to a collective
bargaining agreement, or any organization effort presently being made or
Threatened by or on behalf of a labor union, and (iv) has no pending or
Threatened claims, trade disputes or controversies regarding employment, terms
of employment or termination of employment, including any claims for unpaid
wages, discrimination, harassment, or workers' compensation.
(b) Each employee benefit plan (as defined in Section 3(3) of
ERISA) in which Employees participate (each an "Employee Benefit Plan") has in
all respects been maintained in material compliance with its terms and all
provisions of ERISA, HIPAA and the Code applicable thereto. Each Employee
Benefit Plan which is a welfare plan providing health benefits has at all times
been in material compliance with the provisions of Section 4980B of the Code.
4.15 TAXES. Except as set forth in Section 4.15 of the Disclosure
Schedule:
(a) Seller has timely filed (or has had filed on its behalf)
all Tax Returns required to be filed that relate in any way to the Assets and
has timely paid all Taxes due, whether reflected on such Tax Returns or under
any assessment, as applicable, before the date of this Agreement, and all such
Tax Returns are true, complete, and accurate;
(b) there is no Action, audit, or written claim or assessment
pending or Threatened, with respect to such Tax Returns or Taxes the non-payment
of which could give rise to a Lien upon, or otherwise could adversely affect,
any of the Assets or the use thereof or could cause Buyer to incur any
Liability;
29
(c) Seller has not received written notice of any assessment
of any Taxes;
(d) there is not in force any waiver of any statute of
limitations in respect of Tax Returns or Taxes, or any outstanding request for
such a waiver;
(e) there is not in force any extension of time for the
assessment or payment of any Taxes or the filing of any Tax Return;
(f) there are no Liens with respect to Taxes upon the Assets
except for Liens for Taxes not yet due;
(g) Seller has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other third party and all
Forms W-2 and 1099 required with respect thereto have been properly completed
and timely filed;
(h) Seller is not a party to any Tax allocation or sharing
agreement;
(i) Seller is not liable for, and has not had asserted against
it, any Liability for the Taxes of any Person under Treasury Regulation Section
1.1502-6 (or any similar provision of state, local or foreign Legal
Requirements), as a transferee or successor, by Contract or otherwise;
(j) Seller has not distributed the stock of another Person,
nor has Seller had its stock distributed by another Person, in a transaction
that was purported or intended to be governed in whole or in part by Code
section 355 or 361; and
(k) Seller is not a non-resident, alien, foreign corporation,
foreign partnership, foreign trust or foreign estate (as those terms are defined
in the Code and the rules and regulations promulgated thereunder).
4.16 REAL PROPERTY.
(a) Seller has provided Buyer with a true, complete and
correct copy of each Lease. Except as set forth on Section 4.16 of the
Disclosure Schedule, (i) Seller, and to Seller's Knowledge, each other Person
that has any Liability under any Lease is in compliance with all applicable
terms and requirements of each such Lease, (ii) no event has occurred or
circumstance exists that (with or without notice or lapse of time) may
contravene, conflict with, or result in a violation or breach of, or give Seller
or any other Person the right to declare a default under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify, any Lease, (iii)
there has not been any amendment or modification to the Leases, and (iv) the
Leases have not been assigned in any manner. Seller has not given or received
from any other Person any notice or other communication (whether oral or
written) regarding any actual or Threatened violation or breach of, or default
under, any Lease. Each Lease is in full force and effect, is valid and
enforceable in accordance with its terms, and, except as set forth on Section
4.16 of the Disclosure Schedule, each Lease may be assigned by Seller without
the consent of or notice to
30
any person. Except as set forth on Section 4.16 of the Disclosure Schedule,
there are no negotiations of, attempts to renegotiate or outstanding rights to
renegotiate any material amounts paid or payable to Seller under any Leases.
Except for those Leases set forth on Section 4.16 of the Disclosure Schedule,
there are no other written leases or occupancy agreements to which Seller is a
party affecting the Assets or necessary for the operation of the Assets as
presently operated. Seller has not assigned, transferred, conveyed, mortgaged,
deeded in trust, or encumbered any interest in the Leases, except as set forth
on Section 4.16 of the Disclosure Schedule. All facilities leased or subleased
thereunder have received all approvals of Governmental Authorities (including
Permits) required in connection with the operation thereof and have been
operated and maintained in accordance with the applicable Legal Requirements.
The lessee of each facility leased or subleased has good and valid title in the
facility and good and valid leasehold interests in the underlying parcel of real
property, free and clear of any Lien other than Permitted Liens.
(b) No material default or breach exists (or would result from
the consummation of the transactions contemplated hereunder) under any
easements, appurtenances, licenses, servitudes, tenancies, options,
rights-of-way, licenses, or other real property rights and privileges
constituting the Real Property. There are no outstanding options or rights of
first refusal to purchase any Real Property, or any portion thereof or interest
therein. To the Knowledge of Seller, there is no pending or contemplated
reassessment by any taxing authority of any property included in any parcel of
Real Property.
4.17 BANKRUPTCY. There are no bankruptcy, reorganization or
receivership proceedings pending or planned by Seller or any of its direct or
indirect parents (including ▇▇▇▇▇▇▇▇ Guarantor). Seller is not entering into
this Agreement with the intent (whether actual or constructive) to hinder,
delay, or defraud its present or future creditors.
4.18 BUSINESS RELATIONSHIPS. Except as set forth in Section 4.18 of the
Disclosure Schedule, there is no actual, pending or Threatened change in the
relationship of Seller with any of its customers, licensors, suppliers,
distributors, sales representatives or vendors that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect with
respect to Seller or the Assets.
4.19 GASOLINE SULFUR CREDITS. The gasoline sulfur credits described on
Section 4.19 of the Disclosure Schedule have been transferred to the Assets in
accordance with all Legal Requirements. The North Pole refinery is in compliance
with Tier II gasoline requirements under all Legal Requirements, and to the
Knowledge of Seller, no changes in the operations of the North Pole refinery
will be required until January 1, 2007.
4.20 DISCLAIMER. EXCEPT AS AND TO THE EXTENT SET FORTH IN THIS
AGREEMENT AND THE OTHER AGREEMENTS, DOCUMENTS AND INSTRUMENTS EXECUTED AND
DELIVERED IN CONNECTION WITH THIS AGREEMENT, SELLER DOES NOT MAKE ANY OTHER
REPRESENTATIONS OR WARRANTIES, AND DISCLAIMS ALL LIABILITY AND RESPONSIBILITY
FOR ANY SUCH OTHER REPRESENTATION, WARRANTY, STATEMENT OR INFORMATION MADE OR
COMMUNICATED (ORALLY OR IN WRITING) TO BUYER. EXCEPT AS REQUIRED BY LAW AND TO
THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE OTHER DOCUMENTS,
AGREEMENTS AND INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS
31
AGREEMENT, SELLER MAKES NO REPRESENTATION OR WARRANTY, EITHER EXPRESS OR
IMPLIED, AS TO THE MAINTENANCE, REPAIR, CONDITION, DESIGN, WORKMANSHIP,
SUITABILITY, UTILITY OR MARKETABILITY OF THE ASSETS OR ANY PORTION THEREOF OR
PROPERTY THEREON OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR
PATENT, OR ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE
OR COMMUNICATED TO BUYER OR BUYER'S REPRESENTATIVES IN CONNECTION WITH THE
CONTEMPLATED TRANSACTIONS OR ANY DISCUSSION OR PRESENTATION RELATING THERETO,
INCLUDING, WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, IT BEING THE EXPRESS
AGREEMENT OF BUYER AND SELLER THAT EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT AND THE OTHER DOCUMENTS, AGREEMENTS AND INSTRUMENTS EXECUTED AND
DELIVERED IN CONNECTION WITH THIS AGREEMENT, BUYER WILL OBTAIN RIGHTS IN THE
ASSETS IN THEIR PRESENT CONDITION AND STATE OF REPAIR, "AS IS" AND "WHERE IS"
AND "WITH ALL FAULTS." FOR THE AVOIDANCE OF DOUBT, THE FORGOING SENTENCE SHALL
NOT ABSOLVE SELLER FROM ANY CLAIM FOR FRAUD THAT BUYER MAY BRING AGAINST SELLER.
4.21 ▇▇▇▇▇▇▇▇ GUARANTOR'S REPRESENTATIONS AND WARRANTIES. ▇▇▇▇▇▇▇▇
Guarantor represents and warrants to Buyer as follows:
(a) ORGANIZATION AND STANDING. ▇▇▇▇▇▇▇▇ Guarantor is a
corporation duly organized, validly existing in good standing under the laws of
the State of Delaware and is in good standing as a corporation in all
jurisdictions where the nature of its properties or business requires it.
(b) AUTHORITY AND BINDING OBLIGATIONS. ▇▇▇▇▇▇▇▇ Guarantor has
full corporate power and authority to execute and deliver this Agreement and the
▇▇▇▇▇▇▇▇ Guaranty, to perform its obligations under this Agreement and the
▇▇▇▇▇▇▇▇ Guaranty and to consummate the transactions contemplated in this
Agreement and the ▇▇▇▇▇▇▇▇ Guaranty. The execution, delivery, and performance of
this Agreement and the ▇▇▇▇▇▇▇▇ Guaranty by ▇▇▇▇▇▇▇▇ Guarantor have been duly
and validly authorized by all necessary corporate, shareholder and other action
and no further corporate, shareholder or other action is necessary on the part
of ▇▇▇▇▇▇▇▇ Guarantor to execute and deliver this Agreement and the ▇▇▇▇▇▇▇▇
Guaranty and to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated by this Agreement and the ▇▇▇▇▇▇▇▇
Guaranty. This Agreement and the ▇▇▇▇▇▇▇▇ Guaranty constitute legal, valid and
binding obligations of ▇▇▇▇▇▇▇▇ Guarantor enforceable against ▇▇▇▇▇▇▇▇ Guarantor
in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or
equity).
(c) NO CONSENT REQUIRED; NON-CONTRAVENTION.
(i) Except as specified in Section 4.21(c) of the
Disclosure Schedule, no Consent with, or to, any Governmental Authority or other
Person is required in connection with the execution, delivery and performance by
▇▇▇▇▇▇▇▇ Guarantor of this Agreement or the ▇▇▇▇▇▇▇▇ Guaranty.
32
(ii) Except as specified in Section 4.21(c) of the
Disclosure Schedule, neither the execution and delivery of this Agreement or the
▇▇▇▇▇▇▇▇ Guaranty by ▇▇▇▇▇▇▇▇ Guarantor, nor the consummation of the
transactions contemplated hereby or thereby will (a) violate, conflict with or
result in the breach of any provision of the certificate of incorporation or
by-laws of ▇▇▇▇▇▇▇▇ Guarantor (b) result in a material violation of or conflict
with any Legal Requirement or Governmental Action applicable to or affecting
▇▇▇▇▇▇▇▇ Guarantor or any of its assets or properties; (c) result in any
material breach of, or a maturity under, or constitute a material default (or
event which with the giving of notice or lapse of time, or both, would become a
material default) under, require any Consent under, or result in, or give to
others any rights of, termination, amendment or acceleration of any material
Contract (or any rights, benefits or payments thereunder) to which ▇▇▇▇▇▇▇▇
Guarantor is a party or is subject; (d) give any Person the right or option to
purchase any of the Assets or any of the equity of, or interest in, Seller; or
(e) result in the creation of any Lien on any of the Assets.
(d) LITIGATION. Except as specified in Section 4.21(d) of the
Disclosure Schedule, there are no Actions pending or, to the actual knowledge of
▇▇▇▇▇▇▇▇ Guarantor, threatened, or anticipated by any Person against or
affecting ▇▇▇▇▇▇▇▇ Guarantor by or before any arbitrator or Governmental
Authority that (i) questions the validity or enforceability of the ▇▇▇▇▇▇▇▇
Guaranty or this Agreement or (ii) which could prohibit, limit, or delay the
consummation of the transactions contemplated by this Agreement and the ▇▇▇▇▇▇▇▇
Guaranty.
(e) ACTIONS AND PROCEEDINGS. Except as specified in Section
4.21(e) of the Disclosure Schedule, no Action is pending or, to the actual
knowledge of ▇▇▇▇▇▇▇▇ Guarantor, threatened before any arbitrator or
administrator or Governmental Authority to delay, impair, restrain, limit,
enjoin or prohibit, or to obtain damages, a discovery order or other relief in
connection with this Agreement, or the ▇▇▇▇▇▇▇▇ Guaranty or any of the
transactions contemplated hereby or thereby.
(f) FINANCIAL CAPACITY; FUTURE PERFORMANCE. ▇▇▇▇▇▇▇▇ Guarantor
has and will have the financial capacity to guaranty Seller's payments and
performance under the Agreement. Except as described in its filings with the
Securities Exchange Commission pursuant to the Securities Exchange Act of 1934,
▇▇▇▇▇▇▇▇ Guarantor is not aware of any facts or circumstances that now or in the
future would have a Material Adverse Effect on its financial condition, results
of operations, business, properties, assets, or liabilities. ▇▇▇▇▇▇▇▇ Guarantor
is solvent, is not in the hands of a receiver, nor is any receivership pending,
and no proceedings are planned or pending by or against it for bankruptcy or
reorganization in any state or federal court.
(g) OTHER INDEBTEDNESS. Section 4.21(g) of the Disclosure
Schedule contains a complete list of bonds, letters of credit and guaranties
issued by ▇▇▇▇▇▇▇▇ Guarantor affecting the Assets.
(h) DISCLAIMER. EXCEPT AS AND TO THE EXTENT SET FORTH IN THIS
AGREEMENT, THE ▇▇▇▇▇▇▇▇ GUARANTY AND THE OTHER DOCUMENTS AND INSTRUMENTS
DELIVERED IN CONNECTION WITH THIS AGREEMENT, ▇▇▇▇▇▇▇▇ GUARANTOR MAKES NO OTHER
REPRESENTATIONS OR WARRANTIES, AND DISCLAIMS ALL LIABILITY AND RESPONSIBILITY
FOR ANY SUCH OTHER REPRESENTATION, WARRANTY, STATEMENT OR INFORMATION MADE OR
COMMUNICATED (ORALLY OR IN WRITING) TO BUYER.
33
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF BUYER
Except as set forth in the Disclosure Schedule, Buyer represents and
warrants to Seller the statements contained in this Article V are correct and
complete as of the date hereof and will be correct as of the Closing Date and at
the Effective Time:
5.1 ORGANIZATION. Buyer is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and has the requisite power and authority to own, lease and operate its
properties and to conduct its business as it is presently being conducted.
5.2 AUTHORITY. Buyer has full limited liability company power and
authority necessary to execute and deliver this Agreement and to perform its
obligations hereunder. The execution, delivery and performance of this Agreement
by Buyer have been duly authorized by all necessary company, member, and other
action, and no further company, member or other action is necessary on the part
of Buyer to execute and deliver this Agreement and to consummate and perform its
obligations hereunder and consummate the transactions contemplated by this
Agreement.
5.3 VALIDITY AND BINDING EFFECT. Assuming the due authorization,
delivery and execution of this Agreement by Seller and ▇▇▇▇▇▇▇▇ Guarantor, this
Agreement has been executed and delivered on behalf of Buyer and constitutes the
legal, valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles, regardless of whether enforceability is considered
in a proceeding at law or in equity.
5.4 NO VIOLATIONS. Except as specified in Section 5.4 of the Disclosure
Schedule, neither the execution and delivery of this Agreement or the other
agreements contemplated hereby by Buyer, nor the consummation of the
transactions contemplated hereby or thereby will (a) violate, conflict with or
result in the breach of any provision of the limited liability company agreement
of Buyer; (b) result in a material violation of or conflict with any Legal
Requirement or Governmental Action applicable to or affecting Buyer, or any of
its assets or properties; or (c) result in a material breach of, or a maturity
under, or constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, or result in, or give to
others any rights of, termination, amendment or acceleration of any material
Contract (or any rights, benefits or payments thereunder) to which Buyer is
directly or indirectly a party or is directly or indirectly subject.
5.5 CONSENTS AND APPROVALS. Except as set forth on Sections 5.5 and 4.4
of the Disclosure Schedule and other than Required Consents, no Consent or
Permit from any Governmental Authority or any other Person is required by or
with respect to Buyer in connection with the execution and delivery of this
Agreement by Buyer or the consummation by
34
Buyer of the transactions contemplated hereby, except for the filing of a
pre-merger notification report by Buyer under the HSR Act and the expiration or
termination of the applicable waiting period thereunder.
5.6 LITIGATION. There is no Action pending or threatened, in writing
or, to the knowledge of Buyer, verbally, against or affecting Buyer that
questions the validity or enforceability of this Agreement or any other
document, instrument or agreement to be executed and delivered by Buyer in
connection with the transactions contemplated hereby.
ARTICLE VI.
COVENANTS
6.1 BROKERS' FEES. Each Party represents and warrants to the other
Party that it and its Affiliates have not incurred any Liability for brokerage
fees, finder's fees, agent's commissions, or other similar forms of compensation
in connection with or in any way related to the transactions contemplated by
this Agreement, except with respect to the fee owed to ▇▇▇▇▇▇ Brothers Inc.,
which fee shall be the sole obligation of, and be paid by, Seller. Each Party
agrees to indemnify, defend and hold the other Party harmless from any claim or
demand for any commission, fee or other compensation by any broker, finder,
agent or similar intermediary claiming to have been employed by or on behalf of
the indemnifying party, and to bear the cost of attorneys' fees and expenses
incurred in defending against any such claim.
6.2 CONDUCT OF BUSINESS PENDING CLOSING. Seller covenants and agrees
with Buyer that, from the date of this Agreement through the Effective Time,
Seller will own, operate and maintain the Assets, only in the Ordinary Course of
Business and Seller shall use commercially reasonable efforts to keep the Assets
intact and to preserve the goodwill of employees and customers, preserve and
keep in full force and effect its respective legal existence and material rights
and franchises, and keep and maintain accurate books, records and accounts in
accordance with GAAP and industry standards. Without limiting the preceding
sentences, Seller covenants and agrees with Buyer that, except as specifically
contemplated in this Agreement, from the date of this Agreement through the
Effective Time, Seller will not, without the prior written consent of Buyer:
(a) pay, discharge, or satisfy any Liability, other than the
payment, discharge or satisfaction in the Ordinary Course of Business;
(b) enter into or materially modify any collective bargaining
agreement;
(c) change in any respect any of the accounting principles or
practices used by Seller, except for any change required by reason of a
concurrent change in GAAP;
(d) settle or resolve any pending or Threatened Action, which
affects, relates to, or is part of the Assets;
35
(e) grant or enter into any suretyship Contract, performance
bond, working capital maintenance and support agreement, contingent obligation
agreement or other form of guaranty agreement which affects, relates to, or is
part of, the Assets;
(f) amend, modify, renew, change, or waive, release, grant,
close out or transfer (collectively, "Modifications") any rights under, any
material Contract or Permit (including hedge arrangements), except non-material
Modifications made in the Ordinary Course of Business;
(g) enter into any additional material Contracts or any
hedging arrangements that affects, relates to, or is part of, the Assets and are
performable after the Effective Time;
(h) enter into any Contract with an Affiliate, which Contract
affects, relates to, or is part of, the Assets;
(i) cancel or waive any debt, claim or right (absolute or
contingent) of which Buyer will receive the benefit under the terms of this
Agreement;
(j) make any new capital commitment in excess of $1,000,000
(current capital commitments are described on Section 6.2(j) of the Disclosure
Schedule);
(k) take any action which individually or in the aggregate is
reasonably expected to have an adverse effect on Seller's relationship with any
customer or supplier;
(l) encumber (other than Permitted Liens), sell, lease, assign
license or otherwise dispose of any interest in any of the Assets, except for
(i) sales of Inventory in the Ordinary Course of Business, and (ii) the sale or
disposal of excess and obsolete assets in the Ordinary Course of Business in
compliance with Seller's policies and in an amount not to exceed $250,000 per
month;
(m) take any other action, which individually or in the
aggregate materially affects the Assets outside the Ordinary Course of Business;
(n) except for cause, remove or dismiss any key employees
serving the Assets;
(o) change overall levels of wages of employees serving the
Assets by greater than 3% of the aggregate payroll;
(p) cancel or materially modify insurance policies relating to
the Assets or employees serving the Assets;
(q) commit or agree, or enter into any Contract, to do any of
the foregoing; and
36
(r) except to the extent necessary to comply with the
requirements of applicable Legal Requirements, (i) take, agree, or commit to
take, any action that would make any representation or warranty of Seller
hereunder inaccurate in any respect at, or as of any time prior to, the
Effective Time, (ii) omit, or agree or commit to omit, to take any action
necessary to prevent any such representation or warranty from being inaccurate
in any respect at the Effective Time, or (iii) take, agree, or commit to take,
any action that would result in, or is reasonably likely to result in, any of
the conditions set forth in Section 7.1 not being satisfied.
6.3 ACCESS TO ASSETS, PERSONNEL, AND INFORMATION. From and after the
date of this Agreement until the Effective Time, Seller shall give Buyer and its
Representatives reasonable access, during regular business hours and upon
reasonable advance notice, to such employees and the Assets, as are necessary to
allow Buyer and its Representatives to make such inspections, and to interview
or confer with Seller and its Representatives as they may require in connection
with reasonable due diligence and transition planning activities that Buyer
believes are necessary and appropriate with respect to the Assets. Seller shall
have the right to have a Representative present at all times of any such
inspections, interviews and examinations conducted at or on the offices or other
facilities or properties of Seller. The scope, sequence, and timing of these
activities shall be at the sole discretion of Buyer, except the scope of these
activities shall not include any taking, sampling or testing of soil or water.
The cost and expense of these activities shall be borne by Buyer. Buyer may
confer with regulatory agencies and review and copy any and all agency records
with respect to the Assets. Additionally, the Environmental Reports and all
other records provided to Buyer pursuant to this Section 6.3 will be deemed to
be "Confidential Information" for purposes of the Confidentiality Agreement.
Buyer, however, shall not be entitled to access to any (i) materials containing
privileged communications or (ii) information about employees, disclosure of
which might violate an employee's reasonable expectation of privacy or otherwise
be prohibited by Legal Requirements. Buyer expressly acknowledges that nothing
in this Section 6.3 is intended to give rise to any contingency to Buyer's
obligations to proceed with the transactions contemplated herein. Buyer shall
defend, indemnify and hold harmless Seller, its Affiliates and their officers,
directors, employees and agents from and against all losses, claims, demands,
lawsuits, judgments, costs, expenses (including reasonable attorney's fees) and
other Liabilities arising out of personal injury or death suffered by Buyer's or
Seller's employees or contractors during inspection of the Assets under this
Section 6.3.
6.4 PUBLIC ANNOUNCEMENTS. Prior to the Closing, neither Party nor
▇▇▇▇▇▇▇▇ Guarantor shall issue any press release or otherwise make any such
public statement or respond to any media inquiry with respect to this Agreement
and the transactions contemplated hereby prior to obtaining the approval of the
other Party, which approval will not be unreasonably withheld and all such
disclosures shall be jointly coordinated and managed; provided, however, that
prior notice shall be required but prior approval shall not be required where
such release or announcement is required by applicable Legal Requirement,
securities regulations or stock exchange rules.
6.5 PAYMENT OF EXPENSES. Except as otherwise expressly provided in this
Agreement, each Party and ▇▇▇▇▇▇▇▇ Guarantor shall bear its own expenses
incurred in connection with the transactions contemplated herein, including all
fees and expenses of agents,
37
representatives, brokers, counsel and accountants engaged by it, whether or not
the Closing occurs.
6.6 PRESERVATION OF FILES AND RECORDS. Except in the ordinary course of
business of such party regarding its own general records or in compliance with
such party's record retention policies, until the seventh anniversary of the
Effective Time, Buyer, Seller and ▇▇▇▇▇▇▇▇ Guarantor will maintain all books and
records, including electronic and computerized records that relate to the
pre-Closing business, operations, assets and properties related to the Assets,
and shall give each other party full and complete access during regular business
hours to all such books, records, and personnel to the extent reasonably
required to enable such other party to satisfy its respective obligations
hereunder or under applicable law. In addition to the foregoing, neither Seller,
▇▇▇▇▇▇▇▇ Guarantor nor Buyer shall, without ninety (90) days prior written
notification (a "Destruction Notice") to the other, destroy any pre-Closing
books and records, including electronic and computerized records, related to the
Assets, unless such destruction is to occur in the ordinary course of business
of the party destroying such books and records, or in compliance with such
party's general record retention policies. Following receipt of a Destruction
Notice, if Seller, ▇▇▇▇▇▇▇▇ Guarantor or Buyer, as applicable, advises the other
party in writing within such ninety (90) day period, the applicable party will
promptly deliver the applicable books and records to the other.
6.7 EMPLOYEE MATTERS.
(a) Seller shall use its commercially reasonable efforts to
assure that Buyer or its Affiliates may interview and/or offer employment to any
or all of those employees of Seller listed on Section 6.7 of the Disclosure
Schedule ("Employees"). Buyer shall notify Seller of Buyer's intentions as to
making offers to each of the Employees as soon as practicable, and offers of
employment shall be made by Buyer to Employees Buyer intends to retain no later
than 15 days before Closing. Offers of employment will be conditioned upon
Closing, successfully passing Buyer's drug testing and background checks and
upon the termination of such Employees' employment with Seller or any Affiliate
of Seller immediately prior to the Effective Time and shall be effective at the
Effective Time. Buyer shall provide Seller with a list of all of those Employees
Buyer or its Affiliates wishes to interview or make offers of employment to
without interviews and shall coordinate interviews with a designated
representative of Seller or its Affiliates. Buyer shall provide Seller a list of
those Employees to whom offers of employment have been made, which list shall
include the nature and title of the position, salary, and location of
employment. With respect to any Employee, Buyer's offer of employment made
pursuant to this Section 6.7(a) shall be equal to or greater than 90% of such
Employee's base compensation immediately prior to the Effective Time. Buyer
shall also provide Seller with a list of those Employees accepting such
employment offer and meeting the requirements of such offer (the "Hired
Employees") on or within two (2) Business Days after the Closing Date.
(b) The Hired Employees will become Buyer's or its Affiliates'
employees immediately following the Effective Time and at that time Buyer or its
Affiliates will become responsible for wages, salaries, benefits, other
compensation, severance pay, and severance benefits to the extent required under
any Legal Requirement or Section 6.7 of this Agreement, or
38
notices required under such Legal Requirements with respect to the Hired
Employees arising with respect to employment with Buyer.
(c) Except as otherwise provided in Section 6.7 of this
Agreement, Seller shall retain responsibility for all Damages for the following
matters, which accrue for the periods prior and up to the Effective Time as a
result of the Employees' employment with Seller:
(i) wages, salaries and bonuses to the extent payable
as of the Effective Time (including all associated taxes described in Section
4.15(g)) (for the avoidance of doubt, Buyer shall not be responsible for paying
any bonuses earned and payable prior to or at the Effective Time);
(ii) severance pay and severance benefits to the
extent required under applicable Legal Requirements or notices required under
such Legal Requirements with respect to Employees of Seller who are terminated
prior to or at the Effective Time; and
(iii) vacation pay and paid time off with respect to
the Employees to the extent payable as of the Effective Time.
(d) On the last day of the month in which the Closing occurs,
the Hired Employees' participation in Seller's or its Affiliates' medical, and
dental, and life insurance plans shall terminate.
(e) Seller shall retain responsibility for, and Buyer shall
not assume any responsibility for, any Liabilities related to or for the
administration of Seller's Plans.
(f) Following the Effective Time, all Hired Employees will be
permitted to enroll in all of Buyer's or its Affiliates' plans, as the case may
be, in accordance with the terms and conditions of this Agreement, and to the
extent not inconsistent with this Section 6.7, with the terms and conditions of
such plans in effect from time to time and on no less favorable terms than those
provided by Buyer and its Affiliates to other similarly situated employees of
Buyer and its Affiliates. Hired Employees will be given credit for prior service
with Seller and its predecessors and Affiliates for purposes of eligibility and
vesting in Buyer's or its Affiliates' plans.
(g) At the Effective Time, Buyer or its Affiliates, as the
case may be, shall waive or cause the waiver of pre-existing condition
exclusions otherwise applicable to any Hired Employee and qualified dependents
under, or with respect to, all employee welfare benefit plans maintained by
Buyer or its Affiliates provided the Hired Employee and qualified dependents
were covered by a Seller's Plan as of the Effective Time (and the Hired Employee
immediately elects coverage), including coverage for qualified dependents, under
a similar employee welfare benefit plan of Buyer or its Affiliates.
(h) Seller shall retain responsibility for all medical,
dental, life, vision, AD&D, cafeteria, short-term disability, and long-term
disability claims by any Hired Employee which were incurred on or prior to the
Effective Time or, in the case of medical, dental and
39
flexible spending accounts, prior to the last day of the month in which the
Closing occurs, while covered by the applicable Plan and for worker's
compensation claims related to injuries arising from the employment of the Hired
Employees for periods prior to and through the Effective Time, in each case to
the extent covered by the respective employee benefit plan and/or insurance plan
or policy of Seller or its Affiliates, and any claims regarding Seller's 401(k)
Plan and any other pension or retirement plan, qualified or non-qualified, which
arise out of the administration or operation of such Plans prior to, at or
following the Effective Time. Hired Employees shall be given credit for any
deductible or co-insurance amounts paid with respect to the plan year in which
the Closing occurs, to the extent, following the Effective Time, they
participate in any plan of Buyer or its Affiliates for which deductibles or
co-insurance are required. Promptly after the Effective Time, Seller shall
provide Buyer with a list of deductibles and co-insurance that have been paid by
the Hired Employees with respect to the plan year in which the Closing occurs.
Buyer shall provide written notice of all Hired Employees who have elected
coverage under the medical plans of Buyer or its Affiliates within forty (40)
days of the Effective Time, provided that Buyer shall not be required to provide
any information that would violate the provisions of HIPAA.
(i) For purposes of this Section 6.7, a claim for
reimbursement under a medical, hospital or dental, prescription drug, or similar
plan shall be deemed to be incurred on the date that the claim occurs. A claim
occurs on the date service is provided and there shall be no continuation of a
claim from one day to the next.
(j) With respect to the Hired Employees, prior employment with
Seller or an Affiliate thereof shall be recognized by Buyer or its Affiliates,
as the case may be, for the purpose of determining vacation eligibility. All
Hired Employees shall be subject to Buyer's vacation policies, provided all such
Hired Employees shall be given full credit by Buyer or its Affiliates, as the
case may be, under Buyer's or its Affiliates' policies for pre-Effective Time
years of service recognized by Seller and its Affiliates for vacation purposes.
Seller or its Affiliates shall be responsible for payment to Employees for any
accrued and earned but not used vacation and paid time off as of the Effective
Time (collectively referred to herein as "Vacation Pay Benefits"). Seller or its
Affiliates shall pay the Vacation Pay Benefits to the Employees in accordance
with Legal Requirements.
(k) The Parties expressly acknowledge that this Agreement is
not intended to create a Contract between Buyer or Seller and any Hired
Employee, and no Employee or Hired Employee may rely on this Agreement as the
basis for any breach of Contract claim against Buyer or Seller. Seller shall
not, in any manner, be responsible or liable for administration or the payment
of any benefit due under any plans maintained by Buyer or its Affiliates and,
except as otherwise specifically provided in Section 6.7 of this Agreement,
Buyer or its Affiliates shall not, in any manner, be responsible or liable for
administration or the payment of any benefit due under the Plans or any other
employment benefit plans maintained by Seller.
(l) Seller shall have caused the termination of the employment
of the Hired Employees as of the Effective Time and shall have provided such
notice of termination if and as required by the WARN Act, and shall have
complied with any Legal Requirements. Buyer shall
40
be responsible for all notification or other requirements of the WARN Act with
respect to Hired Employees in connection with actions taken by Buyer after the
Effective Time.
(m) Nothing in this Agreement shall be deemed or construed to
require Buyer to continue to employ any Hired Employees for any period after the
Effective Time.
(n) To the extent required by COBRA, continuation coverage
under COBRA shall be offered by Seller to all Employees whose employment with
Seller is terminated as a result of this transaction contemplated by this
Agreement. Seller shall continue to maintain its group health plan following the
Effective Time for a period not less than the maximum period any M&A qualified
beneficiary (as defined in the regulations issued under COBRA) could elect
COBRA. Seller shall be responsible for any and all Damages incurred by Buyer as
a result of the failure of Seller to comply with its obligations hereunder with
respect to any of the requirements of COBRA or the WARN Act. Buyer shall be
responsible for any and all Damages incurred by Seller as a result of Buyer's
failure to comply with its obligations hereunder with respect to any of the
requirements of the WARN Act.
(o) With respect to those Employees set forth on EXHIBIT N who
become Hired Employees ("ARP Employees"), Buyer shall provide such ARP Employees
the transportation benefits described on such Exhibit.
(q) The provisions of this Section 6.7 are intended to be for
the benefit of, and enforceable by, Seller and/or its Affiliates and Buyer
and/or its Affiliates and/or their respective successors.
6.8 CHANGE OF NAME; USE OF TRADEMARKS, ▇▇▇▇▇▇▇▇ MARKS.
(a) Effective at the Effective Time, Seller and its Affiliates
(the "Licensors") grant to Buyer a nonexclusive, nontransferable, royalty-free
license, without right to sublicense, to use any and all trademarks, service
marks, trade names and associated goodwill, slogans, corporate business or brand
names and other like property owned by Seller or its Affiliates and used in
connection with the Assets in which the name "▇▇▇▇▇▇▇▇" or any derivatives or
variations thereof is used and the ▇▇▇▇▇▇▇▇ logos and any derivatives or
variations thereof (the "▇▇▇▇▇▇▇▇ Marks") for the periods set forth below.
(b) Buyer may use such existing Inventory, advertising
materials, communication materials and property (such as signage, vehicles and
equipment) of Seller containing ▇▇▇▇▇▇▇▇ Marks for a period not exceeding six
months after the Effective Time, provided however, that Buyer shall have twelve
months for the uses defined in the next sentence (the "License Period"), but
shall not create new Inventory, advertising materials, communication materials
or property using the ▇▇▇▇▇▇▇▇ Marks. Buyer shall promptly replace or remove the
▇▇▇▇▇▇▇▇ Marks on Inventory, advertising materials and property, no later than
the end of the six month period after the Effective Time; provided however, that
Buyer shall have up to twelve months to paint tanks and change signage.
Immediately upon expiration of the License Period, Buyer shall cease all other
use of the ▇▇▇▇▇▇▇▇ Marks and shall adopt new trademarks, service marks, and
trade names, which are not confusingly similar to the ▇▇▇▇▇▇▇▇ Marks.
41
6.9 OTHER TAX MATTERS.
(a) SALES AND TRANSFER TAXES. Buyer shall be responsible for
and agrees to pay when due all sales, use, value added, documentary, stamp,
gross receipts, transfer, conveyance, excise, real estate recording and other
similar Taxes and fees (collectively, "Transfer Taxes") arising out of the
transfer of the Assets by Seller and the other transactions contemplated herein,
specifically including all sales and transfer Taxes with respect to any real
property or vehicles to be transferred to Buyer hereunder. Buyer shall prepare
and timely file all Tax Returns required to be filed in respect of Transfer
Taxes, provided that Seller shall be permitted to prepare any such Tax Returns
that are the primary responsibility of Seller under applicable law. Seller's
preparation of any such Tax Returns shall be subject to Buyer's approval, which
approval shall not be withheld unreasonably.
(b) PRORATION OF PROPERTY TAXES. General and special real
estate and other ad valorem taxes and assessments and other state or local
taxes, fees, charges and assessments in respect of real and personal property
assessed on the Assets, if any, for the fiscal year in which the Closing occurs
and any prior years for which taxes are unpaid at the Effective Time (including
penalties and interest) shall be prorated between Buyer and Seller as of the
Effective Time. If the Closing occurs before the tax rate or assessment is fixed
for any such fiscal year, the apportionment of such taxes and payments at the
Closing will be based upon the most recently ascertainable tax bills; provided
that Buyer and Seller will recalculate and re-prorate said taxes and payments
and make the necessary cash adjustments promptly upon the issuance, and on the
basis, of the actual tax bills received for the fiscal year in which the Closing
occurs and the amount of any payments in lieu of tax made with respect to any
such fiscal year.
(c) COOPERATION ON TAX MATTERS. After the Closing, Seller will
cooperate with Buyer, and Buyer will cooperate with Seller, to the extent
necessary in the preparation of all Tax Returns and will provide (or cause to be
provided) any records and other information the other so reasonably requests and
will provide the cooperation of its employees and auditors. Seller will
reasonably cooperate with Buyer and Buyer will reasonably cooperate with Seller
in connection with any Tax investigation, audit or other Proceeding.
6.10 FINANCIAL STATEMENTS. From the date of this Agreement through the
Effective Time, within twenty (20) days after the end of each applicable month,
Seller shall provide Buyer with copies of (a) the financial statements of Seller
for each month ending subsequent to the date of this Agreement (the
"Supplemental Financial Statements"), prepared in accordance with GAAP applied
on a consistent basis throughout the periods covered thereby (except that such
Supplemental Financial Statements do not include footnotes and shall be subject
to nonmaterial recurring year-end adjustments) and (b) monthly plant operating
summaries for each month ending subsequent to the date of this Agreement (the
"Supplemental Operating Summaries"), prepared on a basis consistent with
Seller's historically prepared operating summaries.
6.11 ENVIRONMENTAL INSURANCE. Seller shall purchase at its sole expense
from AIG a fully pre-paid, ten (10)-year environmental pollution legal liability
policy per the terms and conditions of the indication and draft policy, which is
attached as EXHIBIT O (the "Environmental
42
Insurance Policy"). The Environmental Insurance Policy shall be purchased and
placed in effect promptly after this Agreement is executed and AIG has reviewed
and accepted this Agreement. On the date the Environmental Insurance Policy is
placed in effect, such policy shall have the self insured retention and limits
set forth in EXHIBIT O. The continuity date on the Environmental Insurance
Policy shall be simultaneous with the Closing Date. After Closing, Buyer shall
comply with the terms of the Environmental Insurance Policy so as to not cause
the policy to be cancelled or otherwise materially prejudice Seller or its
Affiliates.
6.12 HSR ACT FILING. If filings pursuant to and under the HSR Act or
any similar act or law of any applicable foreign jurisdiction are required in
connection with the consummation of the transactions contemplated by this
Agreement, within fourteen days of the date of this Agreement Seller and Buyer
will compile and file (or will cause its "ultimate parent entity" to file) under
the HSR Act or such other act or law such information respecting such Party as
the HSR Act or such other act or law requires; provided, however, no Party's
obligations in connection with the foregoing shall require such Party to take
action which is likely to result in a Material Adverse Effect with respect to
such Party, provided, further, under no circumstances shall Buyer or any of its
Affiliates be required to hold separate (including in trust or otherwise) or
divest or dispose of any of its businesses or assets (categories of assets) or
waive any conditions to this Agreement or the other transactions contemplated by
this Agreement set forth in Article VIII of this Agreement, nor shall Buyer or
any of its Affiliates be required to hold separate (including by trust or
otherwise) or divest any of the Assets. HSR Act filing fees (excluding any
attorneys fees incurred by Seller or its Affiliates) shall be split equally by
Seller and Buyer.
6.13 FURTHER ACTIONS REGARDING ASSETS AND LIABILITIES. Each Party
shall, from time to time at the reasonable request of the other, and without
further consideration, execute and deliver such other instruments of sale,
transfer, conveyance, assignment, clarification, and termination, and take such
other action as the Party making the request may reasonably require to
effectuate the intentions of the Parties, including those required to sell,
transfer, convey and assign to, and vest in Buyer, and to place Buyer in
possession of the Assets, and to transfer, assign, or convey the Excluded Assets
to Seller. Seller intends to convey the Assets at the Effective Time; provided,
however, if it is determined after the Effective Time that: (a) any part of the
Assets was not in fact conveyed to Buyer, and that the title to any part of the
Assets is incorrectly in the name of Seller, or (b) any Excluded Asset is
conveyed to Buyer and that the title to such Excluded Asset is incorrectly in
the name of Buyer, then each Party shall take all such action necessary to
promptly and correctly convey any part of the Assets to Buyer, or any part of
the Excluded Assets to Seller. Seller agrees to pursue insurance proceeds for
any physical loss or damage to the Assets that occurs prior to the Effective
Time and is covered under Seller's all-risk property insurance. Any such
insurance proceeds recovered by Seller shall be promptly remitted to Buyer, less
any amounts reasonably incurred by or on behalf of Seller or for which Seller is
responsible in the repair or replacement of such loss or damage.
6.14 REAL PROPERTY MATTERS.
(a) REMOVAL OF LIENS. Seller shall remove, or cause to be
removed, all Liens with respect to the Real Property other than Permitted Liens
prior to or on the Closing Date.
43
(b) SURVEY. Buyer may obtain an ALTA survey of the Real
Property ("Survey").
(c) CONVEYANCE OF TITLE. At the Closing, Seller shall take
such actions as will enable the Title Company to issue to Buyer at Buyer's
option and sole expense an ALTA Owner's or Leasehold Policy of Title Insurance,
as applicable ("Title Policy") with extended coverage covering the Real Property
together with all endorsements reasonably requested by Buyer (including, without
limitation, zoning with parking, access, contiguity, comprehensive, survey and
tax parcel), in the amount of the Purchase Price attributed by Buyer to the Real
Property and without any of the Schedule B standard preprinted exceptions (other
than taxes not yet due and payable), subject only to the Permitted Liens.
(d) LEASES. Seller shall obtain all necessary consents
required to transfer all Leases, Permits and any other property right associated
with the Assets and requiring the consent of another Person. Seller agrees to
advise Buyer promptly in writing with respect to any Lease, Permit or other
property right, which it knows or has reason to believe will not receive any
Required Consent. To the extent that assignment by Seller to Buyer of any Lease
is not permitted or is not permitted without the consent of another Person, this
Agreement will not be deemed to constitute an undertaking to assign such Lease
if such consent is not given or if such an undertaking otherwise would
constitute a breach of, or cause a loss of benefits under, such Lease.
Additionally, Seller shall use commercially reasonable efforts to obtain and
deliver to Buyer estoppel certificates from landlords, licensors and other third
parties reasonably requested by Buyer, in such form as provided by Buyer.
6.15 PERMITS AND CONSENTS.
(a) Prior to Closing, Seller and Buyer shall use commercially
reasonable efforts to (i) obtain all approvals, consents, ratifications,
waivers, or authorizations if any, of any Person not a party to this Agreement
which are required to transfer any of the Assets, including the Licensed
Intellectual Property, to Buyer (collectively, the "Required Consents"), (ii)
obtain all Permits and Environmental Permits, if any, necessary to transfer the
Assets to Buyer (collectively, the "Transfer Permits"); (iii) transfer to Buyer
all Transferable Permits; and (iv) obtain all Permits and Environmental Permits,
other than the Transferable Permits, necessary for Buyer's lawful operation of
the Assets following the Effective Time in substantially the same manner as
presently operated by Seller (collectively, the "New Permits"); provided,
however, that Seller shall not be required to pay any consideration or suffer
any financial disadvantages to obtain such Required Consents, Transfer Permits,
Transferable Permits and/or New Permits. Prior to Closing, Buyer shall cooperate
with Seller to obtain all Required Consents, Transfer Permits and Transferable
Permits, and shall obtain all New Permits, and Seller shall cooperate with Buyer
to obtain all New Permits. To the extent that any Required Consent is not
capable of being assigned, transferred, subleased or sublicensed without the
consent of, or waiver by, any other party thereto or any other Person, or if
such assignment, transfer, sublease or sublicense or attempted assignment,
transfer, sublease or sublicense would constitute a breach thereof or a
violation of any Legal Requirement, this Agreement shall not constitute an
assignment, transfer, sublease or sublicense, or an attempted assignment,
transfer, sublease or sublicense thereof.
44
(b) In the event that Seller is unable to obtain any Required
Consent prior to Closing, either (i) Seller shall retain such Asset or Licensed
Intellectual Property, as the case may be, and shall enter into an arrangement
with Buyer to provide Buyer with the benefits of such Asset or Licensed
Intellectual Property, as the case may be, provided Buyer shall be liable for
and perform Seller's obligations and responsibilities arising in connection with
such Asset or Licensed Intellectual Property, as the case may be, after the
Closing Date until such Asset or Licensed Intellectual Property, as the case may
be, is assigned to Buyer or the right to use such Asset or Licensed Intellectual
Property, as the case may be, expires in accordance with the terms applicable to
such Asset or Licensed Intellectual Property, or (ii) Seller and Buyer shall
enter into a mutually acceptable agreement that allows Buyer to enjoy the
benefits of such Asset or Licensed Intellectual Property, as the case may be,
for which such Required Consent has not been obtained; provided, however, Buyer
shall promptly pay Seller's costs of satisfying any obligations and
responsibilities accruing under such Asset or Licensed Intellectual Property, as
the case may be, that Buyer would have otherwise incurred if the Required
Consents had been obtained and Buyer shall promptly reimburse Seller or its
Affiliates, as the case may be, for their fully loaded personnel costs, as
further described in the Transition Services Agreement attached hereto, incident
to administering the obligations and responsibilities underlying such Assets or
Licensed Intellectual Property.
(c) Seller shall continue after Closing to use commercially
reasonable efforts to obtain Required Consents that were not obtained prior to
Closing. Seller's duty to use these efforts as to Required Consents that are not
material shall expire 90 days following Closing, but Seller shall continue to
satisfy its obligations under Section 6.15(b) as to these non-material Required
Consents.
6.16 ONGOING LITIGATION. Buyer and Seller shall make commercially
reasonable efforts to cooperate in the prosecution or defense of the matters set
forth Section 4.10 of the Disclosure Schedule, and shall take any actions
reasonably requested by the other Party or its Affiliates relating to such
prosecution or defense, including providing such personnel and records
reasonably requested by such Party. Buyer shall be entitled to be reimbursed for
any reasonable out-of-pocket costs and expenses authorized in advance by and
incurred in connection with assisting Seller and its Affiliates in connection
with this Section 6.16.
6.17 BONDS, LETTERS OF CREDIT AND GUARANTIES. At the Effective Time,
Buyer will assume all obligations for bonding for state motor fuel tax purposes
with respect to the operation of the Assets by Buyer after the Effective Time.
Section 6.17 of the Disclosure Schedule lists the motor fuel tax bonds that
Seller currently has in place. Within 30 days of the Effective Time, Seller will
terminate the letters of credit and guaranties that are listed in Section 6.17
of the Disclosure Schedule and Buyer will assume all obligations to replace such
letters of credit, surety bonds and guaranties as the counterparties thereto
require.
6.18 C STORES ASPA. In the event the transactions contemplated by the C
Stores ASPA fail to close simultaneously with the Closing for any reason, (a)
Buyer shall, and ▇▇▇▇▇▇▇▇ Guarantor shall cause ▇▇▇▇▇▇▇▇ Express, Inc. to, at
the Closing, enter into a supply agreement between Buyer and ▇▇▇▇▇▇▇▇ Express,
Inc. with terms that are substantially similar to those terms
45
contained in that certain supply agreement dated April 1, 2003, between Seller
and ▇▇▇▇▇▇▇▇ Express, Inc. attached hereto as EXHIBIT Q (the "Supply
Agreement"), and (b) Buyer shall use commercially reasonable efforts to locate
another purchaser ("New C Stores Purchaser") for the convenience stores and
related assets described in the C Stores ASPA (the "C Stores Assets") on or
before the first anniversary of the Effective Time. If the New C Stores
Purchaser is acceptable to ▇▇▇▇▇▇▇▇ Guarantor acting reasonably, ▇▇▇▇▇▇▇▇
Guarantor shall cause ▇▇▇▇▇▇▇▇ Express, Inc. to enter into an asset purchase and
sale agreement relating to the C Stores Assets with terms substantially similar
as those contained in the C Stores ASPA (the "New C Stores ASPA") with the New C
Stores Purchaser. The Parties agree that the New C Stores Purchaser shall be
subject to the aggregate indemnity provisions covering this Agreement, the C
Stores ASPA and Buyer shall cause the New C Stores Purchaser to enter into a New
C Stores ASPA with such provisions. In the event that the highest price that a
New C Stores Purchaser is willing to pay for the C Stores Assets is less than
the purchase price provided for in the C Stores ASPA, Buyer shall pay ▇▇▇▇▇▇▇▇
Express, Inc. the difference between the purchase price provided for in the C
Stores ASPA and the purchase price provided for in the New C Stores ASPA upon
the closing of the transactions contemplated in the New C Stores ASPA. In
addition, for a period of 365 days beginning at the Effective Time, Buyer shall
have the option to purchase the C Stores Assets on substantially the same terms
and conditions contained in the C Stores ASPA (including the aggregate indemnity
provisions covering this Agreement and the C Stores ASPA) for the purchase price
set forth in the C Stores ASPA (the "C Stores Option"). In the event that
neither (x) the transaction contemplated in subsection (b) of this Section 6.18
has been consummated as described in this Section 6.18 nor (y) Buyer has
exercised the C Stores Option, then on the first anniversary of the Effective
Time, Buyer shall pay ▇▇▇▇▇▇▇▇ Express, Inc. $8,000,000 by wire transfer of
immediately available funds to such account as ▇▇▇▇▇▇▇▇ Express, Inc. shall
designate; provided, however, that in no event shall Buyer be required to pay,
or shall ▇▇▇▇▇▇▇▇ Express, Inc. be entitled to receive, such $8,000,000 if the
transactions contemplated by the C Stores ASPA or the New C Stores ASPA failed
to close due to a breach by ▇▇▇▇▇▇▇▇ Express, Inc. or ▇▇▇▇▇▇▇▇ Guarantor of any
of their respective representations or warranties contained in this Agreement,
the C Stores ASPA or the New C Stores ASPA or due to ▇▇▇▇▇▇▇▇ Express, Inc.'s or
▇▇▇▇▇▇▇▇ Guarantor's failure to perform any of their respective covenants or
agreements under this Agreement, the C Stores ASPA or the New C Stores ASPA. If
the C Stores Assets have not been purchased by a New C Stores Purchaser or the C
Stores Option has not been exercised on or before a date within the first
anniversary of the Effective Time, ▇▇▇▇▇▇▇▇ Express, Inc. shall be free to sell
the C Stores Assets at and in its sole and absolute discretion; provided,
however, ▇▇▇▇▇▇▇▇ Guarantor shall cause ▇▇▇▇▇▇▇▇ Express, Inc. to cause any
sale(s) of the C Store Assets to be contingent upon the execution of an
agreement with substantially similar terms as contained in the Supply Agreement
by the purchaser(s) of the C Store Assets if such purchaser(s) intend(s) to
remain in the fuel retailing business.
6.19 IP SIDE AGREEMENT. Simultaneously with the execution of this
Agreement, Seller and Buyer shall enter into the side agreement of even date
herewith attached hereto as EXHIBIT R (the "IP Side Agreement").
46
ARTICLE VII.
CONDITIONS
7.1 CONDITIONS TO CLOSING OBLIGATIONS OF BUYER. Buyer's obligation to
effect the transactions contemplated by this Agreement is subject to the
satisfaction, or waiver (by Buyer), at or prior to the Closing Date of each of
the following conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. Each
representation and warranty set forth in Article IV (excluding the
representation and warranties in Section 4.21), hereof must have been accurate
and complete in all material respects (except as to the representations and
warranties already qualified as to materiality, which must be accurate and
complete in all respects) on the date of this Agreement and as of the Closing
Date, as if made on the Closing Date. Each representation and warranty set forth
in Section 4.21 hereof must have been accurate and complete in all material
respects (except as to the representations and warranties already qualified as
to materiality, which must be accurate and complete in all respects) on the date
of this Agreement and as of the Closing Date, as if made on the Closing Date.
(b) COMPLIANCE WITH OBLIGATIONS. Seller shall have performed
and complied with all covenants and agreements to be performed or complied with
at or prior to Closing (singularly or in the aggregate) in all material
respects. ▇▇▇▇▇▇▇▇ Guarantor shall have performed and complied with all of its
covenants and agreements to be performed or complied with at or prior to Closing
(singularly or in the aggregate) in all material respects.
(c) NO MATERIAL ADVERSE CHANGE. Since the date of this
Agreement there shall have been no Material Adverse Change with respect to
Seller, ▇▇▇▇▇▇▇▇ Guarantor or the Assets.
(d) PERMITS. All Transferable Permits either shall have been
transferred to Buyer or Seller and Buyer shall have entered into a mutually
acceptable agreement that allows Buyer to enjoy the benefits of the Transferable
Permits that have not been transferred, and all Transfer Permits shall have been
obtained on or before the Closing Date. In addition, no Governmental Authority
shall have refused or indicated that it is likely to refuse to provide (by
transfer, assignment, or otherwise) any of the New Permits necessary to allow
Buyer to operate the Assets after the Effective Time.
(e) CONSENTS; HSR ACT. Seller shall have furnished to Buyer
copies of any Required Consents obtained by Seller prior to Closing, and Seller
and Buyer shall have entered into any agreements required by Sections 6.15(b)
and 6.18. The waiting period required by the HSR Act with respect to the
transactions contemplated hereby shall have expired or been terminated.
(f) NO GOVERNMENT ACTION OR ACTION; PROHIBITION BY LEGAL
REQUIREMENT. There shall have been no Governmental Action or Action pending,
threatened, issued or in effect (i) seeking to restrain or prohibit, or
restraining or prohibiting the transactions contemplated by this Agreement, (ii)
seeking to cause or causing any of the transactions contemplated by this
47
Agreement to be rescinded following consummation, or (iii) materially adversely
affecting or which is likely to materially adversely affect the right of Buyer
to own the Assets. There shall have been no Legal Requirement enacted or
promulgated, or proposed to be enacted or promulgated, by any Governmental
Authority of competent jurisdiction which prohibits the consummation of the
transactions contemplated by this Agreement or makes such transactions illegal
or invalid.
(g) CLOSING OBLIGATIONS AND DELIVERIES. Seller and ▇▇▇▇▇▇▇▇
Guarantor shall have delivered, or caused to be delivered to Buyer at the
Closing, each of the Closing deliveries described in Section 8.2(a) and (b)
hereof.
(h) TAPS. There shall have been a waiver by all holders of, or
expiration of, the initial 45-day period relating to the preferential purchase
right in Section 7.2(a) of the TAPS Agreement. The parties agree that this
condition will be met upon: (i) receipt of notice from each of the other owners
of an interest in TAPS (the "TAPS Owners") irrevocably stating that they will
not exercise the right to purchase the WAPCO Interests or any portion thereof,
or providing a waiver that would permit the transfer to occur prior to the
45-day waiting period during which the TAPS Owners have the right to exercise
the preferential right to purchase such interest, or (ii) the passage of 45 days
from the date of notice to the TAPS Owners with no action by the TAPS Owners.
(i) 10 YEAR ROYALTY OIL CONTRACT WITH THE STATE OF ALASKA.
Buyer or its Affiliate shall have entered into a 10 year royalty oil contract
with the State of Alaska that has received legislative approval and has been
signed by the Governor of Alaska, with provisions satisfactory to Buyer in its
sole and absolute discretion.
(j) TAX CERTIFICATES. Buyer shall have received from Seller,
in a form reasonably satisfactory to Buyer, a statement satisfying Buyer's
obligations under Treasury Regulation Section 1.1445-2(b)(2).
(k) NORTH POLE REFINERY LEASE. Seller shall have purchased the
land underlying the North Pole refinery and provided Buyer with good and
marketable title in such land as a part of the Assets as of the Effective Time,
without any Liens (other than Permitted Liens), or Buyer shall otherwise be
satisfied that such purchase will occur within a reasonable period of time after
Closing.
(l) ▇▇▇▇▇▇ WITH J ▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. Seller shall have
provided Buyer with consents from J ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ permitting the
assignment of Seller's hedge contracts with J ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to Buyer
as of the Effective Time.
7.2 CONDITIONS TO CLOSING OBLIGATIONS OF SELLER. Seller's obligation to
effect the transactions contemplated by this Agreement is subject to the
satisfaction, or waiver (by Seller) at or prior to the Closing Date of each of
the following conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. Each
representation and warranty set forth in Article V hereof must have been
accurate and complete in all material
48
respects (except as to the representations and warranties already qualified as
to materiality, which must be accurate and complete in all respects) on the date
of this Agreement and as of the Closing Date.
(b) COMPLIANCE WITH OBLIGATIONS. Buyer shall have performed
and complied with all of its covenants and agreements to be performed or
complied with at or prior to Closing (singularly or in the aggregate) in all
material respects.
(c) NO GOVERNMENTAL ACTION. There shall have been no
Governmental Action or Action issued and in effect restraining or prohibiting
any of the transactions contemplated by this Agreement.
(d) PROHIBITION BY LEGAL REQUIREMENT. There shall have been no
Legal Requirement enacted or promulgated by any Governmental Authority of
competent jurisdiction which prohibits the consummation of the transactions
contemplated by this Agreement or makes such transactions illegal or invalid.
(e) HSR ACT. The waiting period required by the HSR Act with
respect to the transactions contemplated hereby shall have expired or been
terminated.
(f) BUYER'S CREDIT RATING. Buyer shall have an issuer credit
rating of at least "A" from Standard & Poors and ▇▇▇▇▇'▇ Investor Services on
the Closing Date, or shall have delivered Seller a written guaranty of Buyer's
obligations under this Agreement through the Closing Date from an Affiliate with
such credit rating or better.
(g) CLOSING OBLIGATIONS AND DELIVERIES. Buyer shall have
delivered, or caused to be delivered, to Seller at the Closing, the Closing
deliveries described in Section 8.2(c) hereof.
(h) GUARANTY RELATING TO HOLIDAY ALASKA, INC. Buyer shall have
delivered a written guaranty for up to $8,000,000 relating to Holiday Alaska,
Inc.'s indemnity obligations under the C Stores ASPA to Seller; provided,
however, in the event that Buyer does not have an issuer credit rating of at
least "A" from Standard & Poors and ▇▇▇▇▇'▇ Investor Services on the Closing
Date, Buyer shall have delivered Seller a written guaranty relating to Holiday
Alaska, Inc.'s indemnity obligations under the C Stores ASPA from an Affiliate
with such credit rating or better.
ARTICLE VIII.
CLOSING
8.1 CLOSING. Subject to the terms and conditions of this Agreement, the
closing of the transactions contemplated by this Agreement (the "Closing") will
take place at the offices of Seller on the last Business Day of the month in
which all conditions to Closing contained in Articles VII and VIII have been
satisfied or waived (other than those conditions that by their nature can only
be satisfied at the Closing), or at such other time and place as the Parties may
mutually agree (the "Closing Date").
49
8.2 CLOSING OBLIGATIONS. At the Closing:
(a) Pursuant to the terms of this Agreement, Seller shall
sell, assign, transfer and convey to Buyer all of its right, title and interest
in and to the Assets, free and clear of all Liens, except for Permitted Liens.
Such sale, assignment, transfer and conveyance shall be effected or evidenced by
delivery by Seller to Buyer of appropriate deeds, bills of sale, assignments and
other documents as Buyer may reasonably require in form and substance reasonably
acceptable to Buyer and Seller, and shall be dated to effect transfer as of the
Effective Time. Such documents shall include:
(i) a certificate of the Secretary or other
appropriate officer of Seller dated as of the Closing Date, in form and
substance reasonably satisfactory to Buyer certifying: (A) that resolutions of
the Boards of Directors of Seller authorize the execution and performance of
this Agreement, the ancillary agreements and the consummation of the
transactions contemplated hereby and thereby and that such resolutions have not
been rescinded or amended, are true and complete and in full force and effect;
(B) that resolutions of (and, if any, consents of) the shareholders of Seller
authorize the execution and performance of this Agreement, all other ancillary
agreements and the consummation of the transactions contemplated hereby and
thereby and that such resolutions have not been amended or rescinded, are true
and complete and in full force and effect; and (C) as to the incumbency of the
officers of Seller executing this Agreement and/or any related agreement, and
including specimen signatures;
(ii) an Officer's Certificate, substantially in the
form of EXHIBIT S, duly executed by a Responsible Officer of Seller, to the
effect that each condition specified in Section 7.1, except that contained in
Section 7.1(i), has been satisfied;
(iii) a Transition Services Agreement, substantially
in the form of EXHIBIT K hereto signed by a Responsible Officer of Seller;
(iv) the Environmental Insurance Policy described in
Section 6.11;
(v) any Required Consents obtained by Seller prior to
the Closing Date or such other documentation evidencing the Parties obligations
with regards to any Contract for which a Required Consent has not been obtained
as required pursuant to Section 6.15(b);(vii) a certificate of existence and
good standing issued by the State of Alaska issued as of a recent date by the
Secretary of the State, together with a bring-down of such good standing as of
the Closing Date; and
(vi) such other certificates, instruments and
documents as may be called for under this Agreement or as Buyer shall reasonably
request.
(b) ▇▇▇▇▇▇▇▇ Guarantor shall deliver, or cause to be
delivered, unless waived by Buyer, the following to Buyer:
50
(i) a certificate of the Secretary or other
appropriate officer of ▇▇▇▇▇▇▇▇ Guarantor, dated as of the Closing Date,
certifying: (A) that resolutions of the Board of Directors of ▇▇▇▇▇▇▇▇ Guarantor
authorize the execution and performance of this Agreement, the ▇▇▇▇▇▇▇▇ Guaranty
and the transactions contemplated hereby and thereby, and that such resolutions
have not been rescinded or amended, are true and complete and in full force and
effect; and (B) as to the incumbency of the officers of the ▇▇▇▇▇▇▇▇ Guarantor
executing this Agreement and the ▇▇▇▇▇▇▇▇ Guaranty and any other related
agreement, and including specimen signatures;
(ii) a certificate of existence and good standing
issued by the State of Delaware issued as of a recent date by the Secretary of
the State of the State of Delaware, together with a bring-down of such good
standing as of the Closing Date;
(iii) the performance guaranty in the form as
specified in EXHIBIT T (the "▇▇▇▇▇▇▇▇ Guaranty"); and
(iv) such other certificates and documents as may be
called for under this Agreement or as Buyer shall reasonably request.
(c) Buyer shall deliver, or cause to be delivered, unless
waived by Seller, the following to Seller:
(i) a certificate of the Secretary or other
appropriate officer of Buyer, dated the Closing Date, in form and substance
reasonably satisfactory to Seller certifying: (A) that resolutions of the Board
of Managers of Buyer authorize the execution and performance of this Agreement
and the transactions contemplated hereby and that they have not been amended or
rescinded, are true and complete and in full force and effect; (B) that
resolutions of the members of Buyer authorize the execution and performance of
the Agreement and the transactions contemplated hereby and that such resolutions
have not been rescinded or amended, are true and complete and in full force and
effect; and (C) as to the incumbency of the officers of Buyer executing this
Agreement and/or any related agreement and including specimen signatures;
(ii) an Officer's Certificate, substantially in the
form of EXHIBIT U, duly executed by a Responsible Officer of Buyer, to the
effect that each condition specified in Section 7.2 has been satisfied;
(iii) a Transition Services Agreement in the form of
EXHIBIT K hereto signed by a Responsible Officer of Buyer;
(iv) to the extent required by Section 7.2(f), a
performance guaranty of an Affiliate of Buyer in the form specified in EXHIBIT
V;
(v) a guaranty for up to $8,000,000 relating to
Holiday Alaska, Inc.'s indemnity obligations under the C Stores ASPA as required
pursuant to Section 7.2(h) in the form specified in EXHIBIT W; and
51
(vi) such other certificates and documents as may be
called for under this Agreement or as Seller shall reasonably request.
ARTICLE IX.
TERMINATION
9.1 TERMINATION RIGHTS. Notwithstanding anything contained in this
Agreement to the contrary, this Agreement may be terminated and abandoned at any
time prior to the Closing Date:
(a) By written consent of the Parties and ▇▇▇▇▇▇▇▇ Guarantor;
(b) By Seller or Buyer if (i) the Closing has not occurred on
or before February 29, 2004 (provided, however, that the right to terminate this
Agreement pursuant to this clause shall not be available to any Party whose
breach of any representation or warranty or failure to perform any covenant or
agreement under this Agreement has been the cause of or resulted in the failure
of the Closing to occur on or before such date); or (ii) if any Governmental
Authority shall have issued an order, decree or ruling or taken any other action
(x) permanently restraining, enjoining or otherwise prohibiting the Closing or
(y) conditioning the Closing in a manner reasonably unacceptable to Seller or
Buyer, and in either case, such order, decree, ruling or other action shall have
become final and non-appealable;
(c) By Buyer, by giving written notice to Seller at (i) any
time within 30 days after any equity owner of TAPS exercises its preferential
purchase right with respect to ▇▇▇▇▇▇▇▇ Alaska Pipeline Company, L.L.C.'s equity
interest in TAPS; or (ii) any time prior to the Closing, if Seller has breached
any of its representations, warranties or covenants contained in this Agreement
in any material respect, which breach (x) has continued without cure for a
period of twenty (20) days following written notice thereof by Buyer to Seller
and (y) would result in a condition to Closing set forth in Section 7.1 not
being satisfied (which condition has not been waived by Buyer in writing); or
(d) By Seller, by giving written notice to Buyer at (i) any
time after December 17, 2003, but before Buyer has notified Seller that Buyer or
its Affiliate has entered into a crude oil purchase agreement with the State of
Alaska that will be presented to the legislature for approval, or that Buyer
waives the condition to Closing described in Section 7.1(i), or (ii) any time
prior to the Closing, if Buyer has breached any of its respective
representations, warranties or covenants contained in this Agreement in any
material respect, which breach (x) has continued without cure for a period of
twenty (20) days following written notice thereof by Seller to Buyer and (y)
would result in a condition to Closing set forth in Section 7.2 not being
satisfied (which condition has not been waived by Seller in writing).
9.2 EFFECT OF TERMINATION. If this Agreement is terminated by a Party
pursuant to the provisions of Section 9.1, this Agreement shall forthwith become
void and of no further force and effect and there shall be no Liability on the
part of any Party hereto or ▇▇▇▇▇▇▇▇ Guarantor, except that the obligations of
Buyer relating to "Confidential Information" in Section 6.3 and the
52
agreements contained in Sections 6.1, 6.5, 9.2, and 11.1 shall continue pursuant
to their terms; provided, however, that a termination of this Agreement shall
not relieve any Party or ▇▇▇▇▇▇▇▇ Guarantor from any liability for Damages
incurred as a result of a breach by such Party or ▇▇▇▇▇▇▇▇ Guarantor, as the
case may be, of its representations, warranties, covenants, agreements or other
obligations hereunder occurring prior to such termination (including without
limitation, Seller's and Buyer's rights to liquidated damages in certain events
as provided in Section 9.3 below).
9.3 LIQUIDATED DAMAGES. If either Seller or Buyer fails to close the
transactions contemplated by this Agreement following the receipt of all
authorizations, waivers, consents and approvals of any Governmental Authority,
for any reason except pursuant to an express right to do so as provided in this
Agreement, or fails to use its commercially reasonable efforts to satisfy all
conditions to Closing set forth in this Agreement, the Party failing to close or
failing to use such commercially reasonable efforts shall pay the other Party
$10,000,000 as the sole and exclusive remedy available to such Party or ▇▇▇▇▇▇▇▇
Guarantor, as the case may be, for such failure to close or to use commercially
reasonable efforts. Such payment will be by wire transfer of immediately
available funds immediately upon demand from the other Party and without any
right of setoff. Upon payment of such amount, each Party and ▇▇▇▇▇▇▇▇ Guarantor
shall be fully released and discharged from any and all Liabilities resulting
from its failure to close the transactions contemplated by this Agreement and
for any breach of the terms of this Agreement giving rise thereto.
ARTICLE X.
INDEMNIFICATION AND THIRD PARTY CLAIMS
10.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.
The representations, warranties, covenants and obligations of Seller, ▇▇▇▇▇▇▇▇
Guarantor and Buyer contained in this Agreement shall survive the Closing as set
forth in this Article X. Covenants and obligations shall survive until fully
performed. The representations and warranties of Seller, ▇▇▇▇▇▇▇▇ Guarantor and
Buyer shall survive for a period of three (3) years after the Effective Time;
except that:
(a) the representations and warranties of (i) Seller contained
in Sections 4.1 (Organization; Authority), 4.2 (Validity and Binding Effect),
4.5(a) (Title to Assets), (ii) ▇▇▇▇▇▇▇▇ Guarantor contained in Sections 4.21(a)
(Organization and Standing) and 4.21(b) (Authority and Binding Obligation), and
(iii) Buyer contained in Sections 5.1 (Organization), 5.2 (Authority) and 5.3
(Validity and Binding Effect) shall survive for the statute of limitations
applicable to breach of written contracts;
(b) the representations and warranties of Seller contained in
Section 4.11 (Environmental Matters) shall survive for a period of ten (10)
years after the Effective Time; and
(c) the representations and warranties of Seller contained in
Section 4.15 (Taxes) shall survive until ninety (90) days following the
expiration of the applicable statute or similar period of limitations (after
giving effect to any extensions or waivers);
53
it being understood that in the event notice of any Claim for indemnification
under Section 10.2 (a)(i) or Section 10.2(b)(i) shall have been given within the
applicable survival period, the representations and warranties that are the
subject of such indemnification Claim shall survive with respect to such Claim
until such time as such Claim is finally resolved.
10.2 INDEMNIFICATION.
(a) INDEMNIFICATION BY SELLER. FROM AND AFTER THE EFFECTIVE
TIME, TO THE FULLEST EXTENT PERMITTED BY LAW, SELLER SHALL INDEMNIFY, DEFEND AND
HOLD BUYER, ANY AFFILIATES OF BUYER, AND THEIR RESPECTIVE SHAREHOLDERS,
PARTNERS, OFFICERS, DIRECTORS, MEMBERS, MANAGERS, EMPLOYEES, AGENTS AND ASSIGNS
(EACH, A "BUYER INDEMNIFIED PARTY") HARMLESS, FROM AND AGAINST ANY AND ALL
DAMAGES INCURRED BY ANY BUYER INDEMNIFIED PARTY IN CONNECTION WITH OR ARISING OR
RESULTING FROM ANY ONE OR MORE OF THE FOLLOWING:
(i) ANY MISREPRESENTATION OR BREACH OF ANY
REPRESENTATION OR WARRANTY OR NONFULFILLMENT OF ANY COVENANT OR OBLIGATION OF
SELLER OR ▇▇▇▇▇▇▇▇ GUARANTOR UNDER THIS AGREEMENT OR ANY MISREPRESENTATION IN
ANY STATEMENT, DOCUMENT, SCHEDULE, EXHIBIT OR CERTIFICATE FURNISHED OR TO BE
FURNISHED TO BUYER PURSUANT TO THIS AGREEMENT;
(ii) SELLER'S OBLIGATIONS UNDER SECTION 6.7 (EMPLOYEE
MATTERS);
(iii) THE POSSESSION, OWNERSHIP, USE, OR OPERATION OF
THE ASSETS PRIOR TO THE EFFECTIVE TIME, EXCEPT THAT SELLER SHALL HAVE NO DUTY TO
INDEMNIFY UNDER THIS SECTION 10.2(a)(III) (A) WITH RESPECT TO BUYER'S
OBLIGATIONS UNDER SECTIONS 10.2(b)(II), 10.2(b)(v)(C) AND 10.2(b)(v)(D), (B) TO
THE EXTENT THAT DAMAGES ARE CAUSED OR CONTRIBUTED TO BY BUYER'S OPERATIONS,
ACTIONS OR OMISSIONS AFTER THE EFFECTIVE TIME AND/OR (C) WITH RESPECT TO ANY
ENVIRONMENTAL CLAIM (ENVIRONMENTAL CLAIMS, WITH THE EXCEPTION OF BREACHES OF
REPRESENTATIONS AND WARRANTIES, ARE COVERED EXCLUSIVELY BY THE PROVISIONS OF
SECTION 10.2(a)(IV));
(iv) EXCEPT TO THE EXTENT THAT DAMAGES ARE CAUSED OR
CONTRIBUTED TO BY BUYER'S OPERATIONS, ACTIONS OR OMISSIONS AFTER THE EFFECTIVE
TIME, THE FOLLOWING ENVIRONMENTAL MATTERS (HEREIN "ENVIRONMENTAL CLAIM(s)"):
(A) ANY ENVIRONMENTAL CONDITION EXISTING
PRIOR TO THE EFFECTIVE TIME, AT, ON OR UNDER OR ARISING, EMANATING, OR FLOWING
FROM ANY OF THE ASSETS, OR FROM THE PROPERTY UNDERLYING THE REAL PROPERTY,
WHETHER KNOWN OR UNKNOWN AS OF THE EFFECTIVE TIME, INCLUDING ANY LOSS, PROPERTY
DAMAGE, NATURAL RESOURCE DAMAGE, INJURY TO, OR DEATH OF ANY THIRD-PARTY ARISING
THEREFROM, BUT EXCLUDING (i) ANY AND ALL COSTS OF CLEANUP, MONITORING,
CORRECTIVE ACTIONS AND COMPLIANCE WITH REGULATIONS INCURRED AFTER THE EFFECTIVE
TIME WITH RESPECT TO THE MATTERS SET FORTH ON SECTION 10.2(a)(iv) OF THE
DISCLOSURE SCHEDULE AND (ii) ANY COSTS OF INSTALLING AIR POLLUTION CONTROL
EQUIPMENT, MAKING OTHER CAPITAL CHANGES OR RESPONDING TO INFORMATION REQUESTS
REQUIRED BY THE ENVIRONMENTAL PROTECTION AGENCY PURSUANT TO ANY ENFORCEMENT
PROCEEDINGS OR ACTIONS RELATING TO COMPLIANCE WITH CLEAN AIR ACT NEW SOURCE
REVIEW OR PREVENTION OF SIGNIFICANT
54
DETERIORATION REQUIREMENTS APPLICABLE TO THE ASSETS ("BUYER'S NSR/PSD
ENVIRONMENTAL OBLIGATIONS");
(B) LOSS, PROPERTY DAMAGE, NATURAL RESOURCE
DAMAGE, INJURY TO, OR DEATH OF ANY THIRD-PARTY ARISING OUT OF OR RELATED TO ANY
ENVIRONMENTAL CONDITION TO THE EXTENT (i) NOT LOCATED ON THE ASSETS OR THE
PROPERTY UNDERLYING THE REAL PROPERTY AND (II) EXISTING PRIOR TO THE EFFECTIVE
TIME;
(C) PAYMENT OF PENALTIES AND FINES ASSESSED
OR IMPOSED BY ANY GOVERNMENTAL AUTHORITY ARISING OUT OF OR RELATED TO ANY
ENVIRONMENTAL CONDITION EXISTING PRIOR TO THE EFFECTIVE TIME; AND
(D) ANY DAMAGES THAT ARISE, DIRECTLY OR
INDIRECTLY, FROM THE RELEASE, GENERATION, USE, PRESENCE, STORAGE, TREATMENT
AND/OR RECYCLING OF ANY HAZARDOUS MATERIALS OR PETROLEUM PRODUCTS BY SELLER OR
FROM THE POSSESSION, USE, OWNERSHIP, OR OPERATION OF THE ASSETS PRIOR TO THE
EFFECTIVE TIME, OR BY A THIRD PARTY IF ANY SUCH HAZARDOUS MATERIALS OR PETROLEUM
PRODUCTS WERE GENERATED OR USED BY SELLER, INCLUDING ANY DAMAGES ARISING FROM
HAZARDOUS MATERIALS OR PETROLEUM PRODUCTS THAT HAVE BEEN TRANSPORTED OR
OTHERWISE REMOVED FROM THE REAL PROPERTY TO AN OFFSITE LOCATION PRIOR TO THE
EFFECTIVE TIME AND/OR RELEASED DURING TRANSPORT TO AN OFFSITE LOCATION PRIOR TO
THE EFFECTIVE TIME, BUT EXCLUDING (i) ANY AND ALL COSTS OF CLEANUP, MONITORING,
CORRECTIVE ACTIONS OR COMPLIANCE WITH REGULATIONS INCURRED AFTER THE EFFECTIVE
TIME WITH RESPECT TO THE MATTERS SET FORTH ON SECTION 10.2(a)(iv) OF THE
DISCLOSURE SCHEDULE AND (ii) ANY BUYER'S NSR/PSD ENVIRONMENTAL OBLIGATIONS;
(v) THE EXCLUDED ASSETS; AND
(vi) THE ENFORCEMENT OF INDEMNIFICATION RIGHTS UNDER
THIS SECTION 10.2(a).
(b) INDEMNIFICATION BY BUYER. FROM AND AFTER THE EFFECTIVE
TIME, TO THE FULLEST EXTENT PERMITTED BY LAW, BUYER SHALL INDEMNIFY, DEFEND AND
HOLD SELLER, ANY AFFILIATES OF SELLER, AND THEIR RESPECTIVE SHAREHOLDERS,
PARTNERS, OFFICERS, DIRECTORS, MEMBERS, MANAGERS, EMPLOYEES, AGENTS AND ASSIGNS
(EACH, A "SELLER INDEMNIFIED PARTY") HARMLESS, FROM AND AGAINST ANY AND ALL
DAMAGES INCURRED BY ANY SELLER INDEMNIFIED PARTY IN CONNECTION WITH OR ARISING
OR RESULTING FROM ANY ONE OR MORE OF THE FOLLOWING:
(i) ANY MISREPRESENTATION OR BREACH OF ANY
REPRESENTATION OR WARRANTY OR NONFULFILLMENT OF ANY COVENANT OR OBLIGATION OF
BUYER UNDER THIS AGREEMENT OR ANY MISREPRESENTATION IN ANY STATEMENT, DOCUMENT
OR CERTIFICATE FURNISHED OR TO BE FURNISHED TO SELLER PURSUANT TO THIS
AGREEMENT;
(ii) BUYER'S OBLIGATIONS UNDER SECTION 6.7 (EMPLOYEE
MATTERS) AND SECTION 6.9(a) (TRANSFER TAXES);
(iii) BUYER'S OBLIGATIONS UNDER SECTION 6.15(b);
55
(iv) THE POSSESSION, OWNERSHIP, USE OR OPERATION OF
THE ASSETS AFTER THE EFFECTIVE TIME, EXCEPT THAT BUYER SHALL HAVE NO DUTY TO
INDEMNIFY UNDER THIS SECTION 10.2(b)(iv) (A) TO THE EXTENT THAT DAMAGES ARE
CAUSED OR CONTRIBUTED TO BY SELLER'S OPERATIONS, ACTIONS OR OMISSIONS BEFORE THE
EFFECTIVE TIME AND/OR (B) WITH RESPECT TO ANY ENVIRONMENTAL CONDITION
(ENVIRONMENTAL CONDITIONS ARE COVERED EXCLUSIVELY BY THE PROVISIONS OF SECTION
10.2(b)(v));
(v) (A) EXCEPT TO THE EXTENT THAT DAMAGES ARE CAUSED
OR CONTRIBUTED TO BY SELLER'S OPERATIONS, ACTIONS OR OMISSIONS BEFORE THE
EFFECTIVE TIME, THE FOLLOWING ENVIRONMENTAL MATTERS (HEREIN "ENVIRONMENTAL
CLAIM(s)"), ANY ENVIRONMENTAL CONDITION AT, ON OR UNDER OR ARISING OR EMANATING
FROM ANY OF THE ASSETS ARISING FROM BUYER'S OWNERSHIP, USE OR OPERATION OF THE
ASSETS AFTER THE EFFECTIVE TIME, INCLUDING ANY LOSS, PROPERTY DAMAGE, NATURAL
RESOURCE DAMAGE, INJURY TO, OR DEATH OF ANY THIRD-PARTY ARISING THEREFROM, (B)
EXCEPT TO THE EXTENT THAT DAMAGES ARE CAUSED OR CONTRIBUTED TO BY SELLER'S
OPERATIONS, ACTIONS OR OMISSIONS BEFORE THE EFFECTIVE TIME, ANY DAMAGES THAT
ARISE, DIRECTLY OR INDIRECTLY, FROM THE RELEASE, GENERATION, USE, PRESENCE,
STORAGE, TREATMENT AND/OR RECYCLING OF ANY HAZARDOUS MATERIALS OR PETROLEUM
PRODUCTS BY BUYER OR FROM THE POSSESSION, USE, OWNERSHIP, OR OPERATION OF THE
ASSETS AFTER THE EFFECTIVE TIME, OR BY A THIRD PARTY IF ANY SUCH HAZARDOUS
MATERIALS OR PETROLEUM PRODUCTS WERE GENERATED OR USED BY BUYER, INCLUDING ANY
DAMAGES ARISING FROM HAZARDOUS MATERIALS OR PETROLEUM PRODUCTS THAT HAVE BEEN
TRANSPORTED OR OTHERWISE REMOVED FROM THE REAL PROPERTY TO AN OFFSITE LOCATION
AFTER THE EFFECTIVE TIME AND/OR RELEASED DURING TRANSPORT TO AN OFFSITE LOCATION
AFTER THE EFFECTIVE TIME, (C) ANY AND ALL COSTS OF CLEANUP, MONITORING,
CORRECTIVE ACTIONS AND COMPLIANCE WITH REGULATIONS INCURRED AFTER THE EFFECTIVE
TIME WITH RESPECT TO THE MATTERS SET FORTH ON SECTION 10.2(a)(iv) OF THE
DISCLOSURE SCHEDULE AND (D) BUYER'S NSR/PSD ENVIRONMENTAL OBLIGATIONS; AND
(vi) THE ENFORCEMENT OF INDEMNIFICATION RIGHTS UNDER
THIS SECTION 10.2(b).
10.3 INDEMNIFICATION PROCEDURES.
(a) INDEMNIFICATION PROCESS. The Person making a claim for
indemnification under this Article X shall be, for the purposes of this
Agreement, referred to as the "Indemnified Party" (provided that for the purpose
of clause (iii) below such term shall refer to the party hereto to whom such
Person is related for purposes of obtaining the benefits of this Article X) and
the party or parties against whom such claims are asserted under this Article X
shall be, for the purposes of this Agreement, referred to as the "Indemnifying
Party." All claims by any Indemnified Party under this Article X shall be
asserted and resolved as follows:
(i) NOTICE OF CLAIMS. In the event that (i) any claim
or Action is asserted or instituted against any Indemnified Party by any Person
other than the Parties to this Agreement or their Affiliates which could give
rise to Damages for which an Indemnifying Party could be liable to an
Indemnified Party for Damages under this Agreement (such claim, demand or
Proceeding, a "Third Party Claim") or (ii) any Indemnified Party under this
Agreement shall
56
have a claim to be indemnified for Damages by any Indemnifying Party under this
Agreement which does not involve a Third Party Claim (such claim, a "Direct
Claim" and, together with Third Party Claims, "Claims"), the Indemnified Party
shall with reasonable promptness send to the Indemnifying Party a written notice
specifying the nature of such Claim, the amount of Damages sought in such Claim,
if known, and the provisions of this Agreement in respect of which such right of
indemnification is claimed or arises (a "Claim Notice"), provided that a delay
or defect in notifying the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations under this Agreement except to the extent that (and
only to the extent that) the Indemnifying Party demonstrates such failure shall
have caused the Damages for which the Indemnifying Party is obligated to be
greater than such Damages would have been had the Indemnified Party given the
Indemnifying Party timely notice.
(ii) THIRD PARTY CLAIMS. In the event of a Third
Party Claim the Indemnifying Party shall be entitled to assume and control the
defense of such Third Party Claim and to appoint counsel of the Indemnifying
Party's choice at the expense of the Indemnifying Party to represent the
Indemnified Party and any others the Indemnifying Party may reasonably designate
in connection with such Third Party Claim (in which case the Indemnifying Party
shall not thereafter be responsible for the fees and expenses of any separate
counsel retained by any Indemnified Party except as set forth below); provided
that such counsel is reasonably acceptable to the Indemnified Party, which
approval shall not be unreasonably withheld. The Indemnified Party shall
cooperate with the Indemnifying Party and its counsel in such defense and make
available to the Indemnifying Party all witnesses, records, materials, and
information in the Indemnified Party's possession or under the Indemnified
Party's control relating thereto as may be reasonably requested by the
Indemnifying Party, and in contesting any Action which the Indemnifying Party
defends, or, if appropriate and related to the Action in question, in making any
counterclaim against the Person asserting the Third Party Claim, or any
cross-complaint against any Person. In the event the Indemnifying Party fails to
assume the defense of such Third Party Claim within ten (10) days after receipt
of notice thereof in accordance with the terms hereof, (A) the Indemnified Party
against which such Third Party Claim has been asserted shall have the right to
undertake the defense, compromise or settlement of such Third Party Claim on
behalf of, at the expense of and for the account and risk of the Indemnifying
Party, and (B) the Indemnifying Party agrees to cooperate with the Indemnified
Party in such defense and make available to the Indemnified Party, all
witnesses, records, materials and information in the Indemnifying Party's
possession or under the Indemnifying Party's control relating thereto as may be
reasonably requested by the Indemnified Party.
(iii) SETTLEMENT OF THIRD PARTY CLAIMS. In connection
with the settlement or compromise of any Third Party Claim, the Indemnifying
Party shall not, without the written consent of the Indemnified Party (which
consent shall not be unreasonably withheld), (A) settle or compromise any Third
Party Claims or consent to the entry of any judgment which does not include as
an unconditional term thereof the delivery by the claimant or plaintiff to the
Indemnified Party of a written release from all liability in respect of such
Third Party Claim of all Indemnified Parties affected by such Third Party Claim
or (B) settle or compromise any Third Party Claim if the settlement or
compromise imposes equitable remedies or obligations on the Indemnified Party
other than financial obligations for which such Indemnified Party will be
indemnified hereunder or (C) settle or compromise any Third Party Claim if the
Indemnified
57
Party will be required to make any payment with respect to such compromise or
settlement due to the application of the limitations of Section 10.4. No Third
Party Claim which is being defended in good faith by the Indemnifying Party or
which is being defended by the Indemnified Party in accordance with the terms of
this Agreement shall be settled or compromised by the Indemnified Party without
the written consent of the Indemnifying Party (which consent shall not be
unreasonably withheld, conditioned or delayed); provided, however, if a Third
Party Claim is being defended by an Indemnified Party pursuant to the last
sentence of clause (ii) above (unless the Indemnifying Party and Indemnified
Party mutually agree that the Indemnified Party shall defend such Third Party
Claim), the limitations on the Indemnified Party's right to settle or compromise
set forth in this clause (iii) shall not apply to such Indemnified Party, unless
the Indemnifying Party has been advancing (in a timely manner) payment of such
Indemnified Party's costs and expenses associated with such defense upon demand
therefor by the Indemnified Party (subject to the undertaking of the Indemnified
Party to reimburse such advances in the event such costs of defense are not
ultimately to be indemnifiable under this Article X).
(b) REDUCTION OF DAMAGES. To the extent any Damages of an
Indemnified Party are reduced by receipt of payment under insurance policies,
which payments are not subject to retroactive adjustment or other reimbursement
to the insurer in respect of such payment, such payments (net of the expenses of
the recovery thereof) (such net payment, a "Reimbursement") shall be credited
against any such Damages; provided however, the pendency of such payments shall
not delay or reduce the obligation of the Indemnifying Party to timely make
payment to the Indemnified Party in respect of such Damages. The Indemnified
Party shall use commercially reasonable efforts (but in no event shall the
Indemnified Party be required to ▇▇▇ the insurer or its agent, unless the
Indemnifying Party agrees to pay all reasonable costs and expenses in connection
therewith, including reasonable attorneys' fees) to pursue payment under or from
any insurer in respect of such Damages. If any Reimbursement is obtained
subsequent to payment by an Indemnifying Party in respect of any Damages, such
Reimbursement shall be promptly paid over to the Indemnifying Party.
(c) ACCESS. From and after the delivery of a Claim Notice
under this Agreement, at the reasonable request of the Indemnifying Party, each
Indemnified Party shall grant the Indemnifying Party and its Representatives all
reasonable access to the books, records and properties of such Indemnified Party
to the extent reasonably related to the matters to which the Claim Notice
relates. All such access shall be granted during normal business hours and shall
be granted under conditions, which will not unreasonably interfere with the
business and operations of such Indemnified Party. The Indemnifying Party will
not, and shall require that its Representatives do not, use (except in
connection with such Claim Notice) or disclose to any third Person other than
the Indemnifying Party's Representatives (except as may be required by
applicable Legal Requirement) any information obtained pursuant to this Section
10.3(c) which is designated as confidential by an Indemnified Party, unless such
disclosure is required by the Indemnifying Party in defense of a Claim and such
disclosure is authorized by Indemnified Party (which authorization shall not be
unreasonably withheld if there is in place or will be put in place a protective
order or agreement covering the use by the third party of any such disclosed
confidential information).
58
(d) DEFINITION OF DAMAGES. "Damages" means all damages
(including incidental and consequential damages and lost profits), losses
(including any diminution of value), Liabilities, payments, amounts paid in
settlement, obligations, remediation costs and expenses, natural resource
damages, fines, interests, assessments, penalties, costs of burdens associated
with performing injunctive relief, other costs (including reasonable fees and
expenses of attorneys and consultants) of investigation, preparation, and
litigation in connection with any Action, threatened Action or settlement, and
other costs and expenses of any kind or nature whatsoever, whether known or
unknown, contingent or vested, matured or unmatured, and whether or not
resulting from third-party claims, strict liability claims, including those
under Environmental Laws. Notwithstanding anything to the contrary in this
Agreement, Damages shall expressly exclude punitive damages, exemplary damages
and other penalty damages, unless arising out of a Third-Party Claim.
(e) BUYER CLAIMS ADMINISTRATOR. Buyer agrees that with respect
to Claims for indemnification by any Buyer Indemnified Party pursuant to this
Agreement, the C Stores ASPA, and the TAPS Purchase Agreement (provided that the
transactions contemplated therein close with an Affiliate of Buyer purchasing
the WAPCO Interests (as defined in the TAPS Purchase Agreement)), Buyer will act
as the sole buyer claims administrator (the "Buyer Claims Administrator"). The
Buyer Claims Administrator's responsibilities and obligations will include: (i)
delivering any indemnification Claims by any Buyer Indemnified Party under this
Agreement, the TAPS Purchase Agreement (if applicable) and the C Stores ASPA to
the Seller Claims Administrator; (ii) monitoring all indemnification Claims
brought by any Buyer Indemnified Party pursuant to this Agreement, the TAPS
Purchase Agreement (if applicable) and the C Stores ASPA; (iii) keeping a
running tally of all indemnification Claims made by any Buyer Indemnified Party
under this Agreement, the TAPS Purchase Agreement (if applicable) and the C
Stores ASPA for purposes of keeping the Seller Claims Administrator informed, on
a monthly basis, with respect to the status of each indemnification Claim and
the status of the Threshold, the Aggregate Cap, the Environmental Cap and the
General Cap; and (iv) acting as a liaison between the Seller Claims
Administrator and any Buyer Indemnified Party under this Agreement, the TAPS
Purchase Agreement (if applicable) and the C Stores ASPA so that the Seller
Claims Administrator does not need to interface with anyone other than the Buyer
Claims Administrator in connection with Section 10.3 (Indemnification
Procedures) of this Agreement or the corresponding provisions of the TAPS
Purchase Agreement (if applicable) and the C Stores ASPA.
(f) SELLER CLAIMS ADMINISTRATOR. ▇▇▇▇▇▇▇▇ Guarantor agrees
that with respect to Claims for indemnification by any Seller Indemnified Party
pursuant to this Agreement, the C Stores ASPA, and the TAPS Purchase Agreement
(provided that the transactions contemplated therein close with an Affiliate of
Buyer purchasing the WAPCO Interests (as defined in the TAPS Purchase
Agreement)), ▇▇▇▇▇▇▇▇ Guarantor will act as the sole seller claims administrator
(the "Seller Claims Administrator"). The Seller Claims Administrator's
responsibilities and obligations will include: (i) delivering any
indemnification Claims by any Seller Indemnified Party under this Agreement, the
TAPS Purchase Agreement (if applicable) and the C Stores ASPA to the Buyer
Claims Administrator; (ii) monitoring all indemnification Claims brought by any
Seller Indemnified Party pursuant to this Agreement, the TAPS Purchase Agreement
(if applicable) and the C Stores ASPA; (iii) keeping a running tally
59
of all indemnification Claims made by any Seller Indemnified Party under this
Agreement, the TAPS Purchase Agreement (if applicable) and the C Stores ASPA for
purposes of keeping the Buyer Claims Administrator informed, on a monthly basis,
with respect to the status of each indemnification Claim and the status of the
Threshold, the Aggregate Cap, the Environmental Cap and the General Cap; and
(iv) acting as a liaison between the Buyer Claims Administrator and any Seller
Indemnified Party under this Agreement, the TAPS Purchase Agreement (if
applicable) and the C Stores ASPA so that the Buyer Claims Administrator does
not need to interface with anyone other than the Seller Claims Administrator in
connection with Section 10.3 (Indemnification Procedures) of this Agreement or
the corresponding provisions of the TAPS Purchase Agreement (if applicable) and
the C Stores ASPA.
10.4 LIMITATIONS ON INDEMNIFICATION.
(a) MINIMUM; THRESHOLD. Except with respect to claims for
breaches of the covenants and obligations stated in Articles II, III, VI or IX,
no amount shall be payable by any Indemnifying Party pursuant to Section 10.2(a)
or Section 10.2(b):
(i) unless the amount of Damages for each individual
and unrelated Claim exceeds the Minimum Indemnifiable Amount; and
(ii) unless the aggregate amount of Damages
(excluding Damages excluded from indemnification pursuant to clause (i) above)
under Section 10.2(a) or Section 10.2(b)), respectively, exceeds the Threshold
(at which point the Indemnified Party shall be entitled to all indemnification
amounts in excess of such Threshold, excluding Claims less than the Minimum
Idemnifiable Amount).
(b) CAP. Notwithstanding anything to the contrary contained in
this Agreement, and except with respect to claims for breaches of the covenants
and obligations stated in Articles II, III, VI or IX, the maximum amount of
indemnifiable Damages which may be recovered by any Buyer Indemnified Parties
from Seller or ▇▇▇▇▇▇▇▇ Guarantor and by any Seller Indemnified Parties from
Buyer arising out of, resulting from or incident to the matters enumerated in
Section 10.2(a) or Section 10.2(b) shall be the Environmental Cap with respect
to any and all Environmental Claims and the General Cap with respect to any and
all claims for indemnity other than Environmental Claims, but in no event shall
the amount of all indemnifiable Damages of any type which may be recovered by
any Buyer Indemnified Parties or any Seller Indemnified Parties pursuant to this
Section 10.4(b) exceed the Aggregate Cap.
10.5 EXCLUSIVITY OF REMEDIES. Except for (a) any equitable relief,
including injunctive relief or specific performance to which any Party hereto or
▇▇▇▇▇▇▇▇ Guarantor may be entitled, (b) remedies available under the ▇▇▇▇▇▇▇▇
Guaranty, and (c) fraud, the indemnification provisions of this Article X shall
be the sole and exclusive remedy of each Party (including Buyer Indemnified
Parties, Seller Indemnified Parties and ▇▇▇▇▇▇▇▇ Guarantor) with respect to any
and all Actions or Damages arising out of this Agreement from and after the
Closing.
60
ARTICLE XI.
MISCELLANEOUS
11.1 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the substantive law of the State of Texas without giving
effect to the principles of conflicts of law thereof.
11.2 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
11.3 ASSIGNMENT; BINDING EFFECT; NO THIRD PARTY BENEFICIARIES. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by either of the Parties or ▇▇▇▇▇▇▇▇ Guarantor (whether by operation
of law or otherwise) without the prior written consent of the other Parties and
▇▇▇▇▇▇▇▇ Guarantor, except, Buyer may, without prior consent of Seller or
▇▇▇▇▇▇▇▇ Guarantor, transfer or assign by operation of law or otherwise this
Agreement to any Affiliate or subsidiary of Buyer, but Buyer shall continue to
be liable for the obligations, commitments, duties and responsibilities of the
Buyer hereunder notwithstanding any such transfer or assignment. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the Parties and ▇▇▇▇▇▇▇▇ Guarantor and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended or shall be construed to confer upon any Person other than the Parties
hereto, ▇▇▇▇▇▇▇▇ Guarantor, their successors and assigns, any Indemnified
Parties, and, under certain circumstances (including those contained in Section
6.18 of this Agreement), the Parties' Affiliates any right, remedy or claim
under or by reason of this Agreement.
11.4 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules hereto and any documents referred to herein including, without
limitation, the Confidentiality Agreement, and the ▇▇▇▇▇▇▇▇ Guaranty)
constitutes the entire agreement between the Parties and ▇▇▇▇▇▇▇▇ Guarantor, and
supersedes any prior understandings, agreements, arrangements and
representations among the Parties and ▇▇▇▇▇▇▇▇ Guarantor, written or oral, to
the extent they related in any way to the subject matter hereof.
11.5 NOTICES. All notices, requests, demands, claims and other
communications required or permitted to be given hereunder shall be in writing
and shall be given by (a) personal delivery, (b) facsimile transmission, (c)
recognized overnight delivery service, or (d) registered or certified mail,
return receipt requested and postage prepaid, in each case addressed to the
intended recipient as set forth below:
If to Buyer:
Flint Hills Resources, LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
61
With a copy to:
Flint Hills Resources, LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller or ▇▇▇▇▇▇▇▇ Guarantor:
The ▇▇▇▇▇▇▇▇ Companies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Tower
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Lynnwood ▇. ▇▇▇▇▇, ▇▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any Party may change its address for receiving notices by giving
written notice of such change to the other Party in accordance with this Section
11.5. Any notice properly provided in accordance with this Section 11.5 will be
effective upon delivery; provided, however, if any notice is not delivered
during the recipient's normal business hours on a Business Day, such notice will
be effective as of the next Business Day.
11.6 AMENDMENT. This Agreement may be amended or modified at any time
only by a written instrument signed on behalf of each of the Parties and
▇▇▇▇▇▇▇▇ Guarantor.
11.7 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
11.8 WAIVERS. The Parties and ▇▇▇▇▇▇▇▇ Guarantor may, to the extent
legally allowed: (a) extend the time for the performance of any of the
obligations or other acts of the other Party or ▇▇▇▇▇▇▇▇ Guarantor, (b) waive
any inaccuracies in the representations and warranties of the
62
other Party or ▇▇▇▇▇▇▇▇ Guarantor contained herein or in any document delivered
pursuant hereto, or (c) waive performance of any of the covenants or agreements,
or satisfaction of any of the conditions, contained herein, by the Person
entitled to the benefit thereof. Any agreement to any such extension or waiver
shall be valid only if set forth in a written instrument signed on behalf of
such Party, or ▇▇▇▇▇▇▇▇ Guarantor, as the case may be, against whom enforcement
of the waiver is sought. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including any investigation by or on behalf of
either Party or ▇▇▇▇▇▇▇▇ Guarantor, shall be deemed to constitute a waiver of
compliance with any representations, warranties, covenants or agreements
contained in this Agreement. The waiver by either Party or ▇▇▇▇▇▇▇▇ Guarantor of
a breach of any provision hereof shall not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provisions hereof or
be deemed a waiver of any rights to indemnification with to such matter waived.
11.9 HEADINGS; TABLE OF CONTENTS. The descriptive headings contained in
this Agreement and table of contents of this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.
So agreed as of the date first above written.
[NEXT PAGE IS THE SIGNATURE PAGE]
63
FLINT HILLS RESOURCES, LLC ▇▇▇▇▇▇▇▇ ALASKA PETROLEUM, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- --------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------ -----------------------
Title: President Title: Senior Vice President
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Title: Senior Vice President
------------------------------
64