PURCHASE AND SALE AGREEMENT
FOR INTEREST IN
T & P SYNGAS SUPPLY COMPANY
AMONG
TCHI INC.,
GENESIS SYNGAS INVESTMENTS, L.P.
AND
GENESIS ENERGY, L.P.
Dated February 3, 2005
TABLE OF CONTENTS
Page
PART One SUBJECT MATTER, DEFINITIONS AND RULES OF CONSTRUCTION................1
1.1 Subject Matter.................................................1
1.2 Defined Terms..................................................1
1.3 Other Definitions..............................................5
1.4 Rules of Construction..........................................6
PART Two PURCHASE AND SALE OF INTERESTS.......................................7
2.1 Purchase and Sale..............................................7
2.2 Transfer of Interests..........................................7
2.3 Purchase Price.................................................7
2.4 Section 754 Election and Purchase Price Allocation.............7
2.5 Sales and Transfer Taxes......................................7
2.6 Retained Distributions.........................................7
2.7 Deposit........................................................8
2.8 Method of Payment..............................................8
2.9 PHSI Acceptance of Transfer Offer..............................9
PART Three REPRESENTATIONS AND WARRANTIES.....................................9
3.1 Seller.........................................................9
3.2 Buyer.........................................................11
3.3 Disclaimers...................................................12
PART Four COVENANTS..........................................................13
4.1 Covenants of Seller...........................................13
4.2 Covenants of Buyer............................................13
4.3 Covenants of Seller and Buyer.................................15
PART Five CONDITIONS TO CLOSING..............................................16
5.1 Seller's Closing Conditions...................................16
5.2 Buyer's Closing Conditions....................................18
PART Six INDEMNITY...........................................................19
6.1 Seller........................................................19
6.2 Buyer.........................................................19
6.3 Method of Asserting Claims....................................19
6.4 Payment.......................................................20
6.5 Limitation of Claims..........................................20
6.6 Disputed Claims...............................................21
6.7 Exclusivity; Indemnification In Case Of Strict Liability
Or Indemnitee Negligence...................................21
PART Seven GUARANTEE.........................................................22
7.1 Guarantee.....................................................22
7.2 Performance and Satisfaction by Guarantor.....................22
7.3 Continuing Guarantee..........................................22
7.4 Separate Obligation...........................................22
7.5 Liability of Guarantor........................................22
7.6 Guarantor Responsibilities....................................22
PART EIGHT MISCELLANEOUS
8.1 Successors and Assigns....................................... 23
8.2 Waivers and Amendments........................................23
8.3 Notices.......................................................23
8.4 Counterparts..................................................24
8.5 Entire Agreement..............................................24
8.6 Governing Law.................................................25
8.7 Expenses......................................................25
8.8 Assignability.................................................25
8.9 Invalidity....................................................25
8.10 No Admission..................................................25
8.11 Survival......................................................25
8.12 Dispute Resolution............................................25
8.13 Attorneys' Fees...............................................26
8.14 Further Assurances............................................26
8.15 Termination...................................................26
SCHEDULES AND EXHIBITS
Schedules
1.2 Parties' Actual Knowledge
2.4 Allocation of Purchase Price
3.1(e) Required Consents
3.1(f) Litigation
3.1(g) Encumbrances
3.1 (h) Taxes
3.1(i) Environmental
7.12 Dispute Resolution Procedures
Exhibits
A Form of Assignment and Assumption Agreement
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (this "Agreement") is entered into
effective as of February 3, 2005 (the "Effective Date") by and among TCHI Inc.,
formerly known as Texaco Hydrogen Inc., a Delaware corporation (hereinafter
"Seller"), Genesis Syngas Investments, L.P., a Delaware limited partnership
(hereinafter "Buyer") and parent of Buyer, Genesis Energy, L.P., a Delaware
limited partnership (hereinafter "Guarantor"). Seller, Buyer and Guarantor are
sometimes individually referred to herein as a "Party" and collectively as
"Parties."
RECITALS
WHEREAS, Seller desires to sell and Buyer desires to purchase Seller's
ownership interest in T & P Syngas Supply Company (the "Company"), more
particularly described below, and the Parties desire to assign and assume
certain rights and obligations associated therewith.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties, each intending to be legally bound,
hereby agree as follows:
PART One
SUBJECT MATTER, DEFINITIONS AND RULES OF CONSTRUCTION
1.1 Subject Matter. The subject matter of this Agreement is the sale by Seller
to Buyer of the Ownership Interest, the purchase by Buyer from Seller of the
Ownership Interest, and the terms and conditions upon which all of the
foregoing shall take place (the "Transaction").
1.2 Defined Terms. For purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, the terms defined
in this Section 1.2 have the meanings assigned to them and the capitalized
terms defined elsewhere in the Agreement by inclusion in quotation marks and
parentheses have the meanings so ascribed to them.
"Actual Knowledge" of a Party means the actual knowledge of
such Party's personnel set forth on Schedule 1.2 attached hereto.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling or controlled by, or under
common control with, such Person. For purposes of this definition, the
term "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with") as
applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management of
such Person, whether through ownership of voting securities or
ownership interests, by contract or otherwise, and specifically with
respect to a corporation or partnership, means direct or indirect
ownership of more than fifty percent (50%) of the voting stock in such
corporation or of the voting interest in a partnership or limited
liability company.
"Agreed Rate" means the lesser of (a) six percent (6%), or (b)
the maximum rate from time to time permitted by Applicable Laws.
"Agreement" means this Agreement, including the Exhibits and
Schedules.
"Applicable Laws" means all laws, statutes, treaties, rules,
codes, ordinances, regulations, certificates, orders, interpretations,
licenses and permits of any Governmental Entity, including the common
or civil law (and including without limitation those pertaining to
occupational health and safety, consumer product safety, employee
benefits, the environment, securities or zoning), and all judgments,
decrees, injunctions, writs, orders or like action of any court,
arbitrator or other Governmental Entity of competent jurisdiction.
"Business Day" means a day on which commercial banks are
generally open for regular business in both Houston, Texas and New
York, New York.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Closing" means the consummation of the transactions required
by this Agreement to occur on the Closing Date. The Closing shall be
effective as of 9:00a.▇. ▇▇▇▇▇▇▇ time on the Closing Date and shall be
evidenced by delivery of documents required by this Agreement at a
meeting at Seller's offices at ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ held
commencing at 9:00a.m. on the Closing Date (or, if the Closing Date is
not a Business Day, on the Business Day immediately preceding the
Closing Date), or at such other times or place as the Parties may
mutually agree upon in writing.
"Closing Date" means that date which is ten(10) Business Days
following (a) the earlier of (i) Seller's receipt of PHSI's notice of
waiver of the option to accept the Transfer Offer or (ii) the
expiration of the Transfer Offer and (b) the satisfaction or waiver of
the other conditions set forth in Part Five, or such other date as the
Parties may agree in writing.
"Code" means the Internal Revenue Code of 1986, as amended,or
any successor law, and regulations or rules issued under any of the
foregoing.
"Confidentiality Agreement" means the Confidentiality
Agreement between Genesis Energy, Inc. and Seller dated as of October
20, 2004.
"Contract" means any written or oral contract, agreement,
lease, plan, instrument or other document, commitment, arrangement,
undertaking,practice or authorization that is or may be binding on any
Person or its property under Applicable Law.
"Corporate Documents" means with respect to a Delaware
corporation, the Certificate of Incorporation and By-Laws, or the
equivalent documents of a corporation organized under the laws of
another jurisdiction; or with respect to a Delaware limited
partnership, the Certificate of Limited Partnership and Agreement of
Limited Partnership, or the equivalent documents of a limited
partnership organized under the laws of another jurisdiction.
"Environmental Laws" means all Applicable Laws relating to
pollution or protection of environment (including ambient air, surface
water, groundwater, land surface or subsurface strata), including the
Clean Air Act, as amended, CERCLA, RCRA, the Toxic Substances Control
Act, as amended, the Federal Water Pollution Control Act, as amended,
the Safe Drinking Water Act, as amended, the Hazardous Materials
Transportation Act, as amended, the Oil Pollution Act of 1990, any
state laws implementing the foregoing federal laws, and all other
Applicable Laws relating to (i) pollutants prohibited by law, and (ii)
the generation, processing, distribution, use, treatment, handling,
storage, disposal, or transportation of Hazardous Substances.
"Environmental Laws" shall also include all Applicable Laws dealing
with the same subject matter or promulgated by any Governmental
Authority thereunder to carry out the purposes of any such Applicable
Law.
"Facility" means the Facility as defined in the Partnership
Agreement.
"Governmental Entity" means any Federal, state, tribal,
county, parish, municipal, or other federal, state or local
governmental authority or judicial or regulatory agency, board, body,
department, bureau, commission, instrumentality, court, tribunal or
quasi-governmental authority in any jurisdiction (domestic or foreign)
having jurisdiction over the Facility or Parties to the Transaction,or
any transaction contemplated by this Agreement.
"Hazardous Substances" means any (a) hazardous substances as
defined by ss.101(14) of CERCLA and (b) any other contaminant,
pollutant or waste (including petroleum hydrocarbon contaminants,
pollutants or wastes) that is regulated by any Governmental Entity
under any Environmental Law; provided, however, "Hazardous Substances"
does not include non-waste petroleum substances or products including,
without limitation, natural gas and natural gas liquids that are
recoverable on a commercially reasonable basis.
"IRS" means the Internal Revenue Service.
"Lien" means any mortgage, lien, security interest, pledge,
encumbrance, restriction on transferability, defect of title, charge,
claim and any other rights of third parties.
"Losses" means any and all losses, liabilities, claims,
demands, penalties, fines, settlements, damages, actions, or suits of
whatsoever kind and nature (but expressly excluding consequential
damages suffered by a Party or its Affiliates), whether or not subject
to litigation, including without limitation (i) claims or penalties
arising from products liability, negligence, statutory liability or
violation of any Applicable Law or in tort (strict, absolute or
otherwise), (ii) loss of or damage to any property, and (iii) all
reasonable out-of-pocket costs, disbursements and expenses (including,
without limitation, legal, accounting, consulting and investigation
expenses and litigation costs).
"Material Agreement" means an agreement with a remaining
contract term of no less than one (1) year from the Effective Date and
an annual consideration of more than $250,000.
"Owners" means the Persons holding an ownership interest in
the Company pursuant to the Partnership Agreement.
"Ownership Interest" means the fifty percent(50.0%) ownership
interest in the Company owned by Seller.
"Partnership Agreement" means the T & P Syngas Supply Company
Partnership Agreement dated as of December 15, 1995 between Seller and
PHSI.
"Permitted Encumbrances" means the effect of:
(i) any applicable voting restrictions, preferential
purchase rights and other rights and obligations of Owners
set forth in the Partnership Agreement;
(ii) liens for Taxes or assessments not yet due or
delinquent or, if delinquent,that are being contested in good
faith in the ordinary course of business;
(iii) all rights to consent by, required notices to,
filings with, or other actions by Governmental Entities in
connection with the sale or conveyance of the Ownership
Interest, if the same are customarily obtained subsequent to
such sale or conveyance;
(iv) easements, road-use agreements, rights-of-way,
servitudes, permits, surface leases and other rights in
respect of surface operations, or defects or deficiencies in
title thereto, that do not materially interfere with the
operation or use of the Facility;
(v) zoning and planning laws and regulations to the
extent valid and applicable to the Facility; and
(vi) liens of carriers, warehousemen, mechanics,
workers, material suppliers or other providers of materials or
services arising by operation of Applicable Laws in the
ordinary course of business or incident to the construction
or improvement of any property in respect of obligations
which are not yet due.
"Person" means any natural person, corporation, division of a
corporation, association, company, estate, trust, partnership, joint
venture, unincorporated organization, Governmental Entity,or any other
entity.
"PHSI" means Praxair Hydrogen Supply, Inc., a Delaware
corporation.
"RCRA" means the Resource Conservation and Recovery Act of
1976, as amended.
"Release" shall have the meaning specified in CERCLA.
"Seller's Relative Responsibility" means Buyer's percentage of
Losses which are both (i) incurred by the Company and (ii)attributable
to Seller's Ownership Interest in the Company.
"Taxes" shall mean any and all fees (including, without
limitation, documentation, license, recording, filing and registration
fees), taxes(including without limitation, production, gross receipts,
ad valorem, value added, windfall profit tax, environmental tax,
turnover, sales, use, personal property (tangible and intangible),
stamp, leasing, lease, user, leasing use, excise, franchise, transfer,
heating value, fuel, excess profits, occupational, interest
equalization, lifting, oil, gas, or mineral production or severance,
and other taxes), levies, imposts, duties, charges or withholdings of
any nature whatsoever, imposed by any Governmental Entity or taxing
authority thereof, domestic or foreign, together with any and all
penalties, fines, additions to tax and interest thereon,whether or not
such tax shall be existing or hereafter adopted.
"Termination Date" means that date which is three months
following the earlier of (i) Seller's receipt of PHSI's notice of
waiver of the option to accept the Transfer Offer or (ii) the
expiration of the Transfer Offer, unless otherwise agreed to by the
Parties.
"Transfer Offer" means the Transfer Offer as defined in the
Partnership Agreement.
1.3 Other Definitions. The following terms shall have the respective
meanings ascribed to them in the Sections of the Agreement set forth below
opposite such terms:
Aggregate Threshold..................................6.5(b)
Buyer................................................Preamble
ChevronTexaco Insurance Policies.....................4.2(a)
Claim Notice.........................................6.3(a)
Claim Threshold......................................6.5(b)
Company..............................................Preamble
Deposit..............................................2.7
Disputed Claim.......................................6.6
Distributable Cash...................................4.2(b)
Effective Date.......................................Preamble
Guarantee............................................7.1
Guaranteed Obligations...............................7.1
Guarantor............................................Preamble
Indemnified Party....................................6.3(a)
Indemnifying Party...................................6.3(a)
Notice Period........................................6.3(a)
Party................................................Preamble
Post-Closing Audit...................................4.2(b)
Pre-Closing Review...................................5.1(i)
Purchase Price.......................................2.3
Retained Distributions...............................2.6
Seller...............................................Preamble
Syngas Cooler Failures...............................2.6
Transaction..........................................1.1
1.4 Rules of Construction. For purposes of this Agreement:
(a) General. Unless the context otherwise requires, (i) "or"is
not exclusive; (ii)an accounting term not otherwise defined has the
meaning assigned to it in accordance with accounting principles that
are generally accepted in the United States of America; (iii) words in
the singular include the plural and words in the plural include the
singular; (iv)words in the masculine include the feminine and words in
the feminine include the masculine; (v) any date specified for any
action that is not a Business Day shall be deemed to mean the first
Business Day after such date unless otherwise specifically provided
herein; (vi) a reference to a Person includes its successors and
assigns; and (vii) the use of the word "include" or "including" when
following any general statement, term or matter,shall not be construed
to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items
or matters, whether or not non-limiting language (such as "without
limitation," "but not limited to" or words of similar import) is used
with reference thereto, but rather shall be deemed to refer to all
other items or matters that could reasonably fall within the broadest
possible scope of such general statement, term or matter.
(b) Parts and Sections. References to Parts and Sections are,
unless otherwise specified, to Parts and Sections of this Agreement.
Neither the captions to Parts or Sections hereof nor the Table of
Contents shall be deemed to be a part of the Agreement.
(c) Exhibits and Schedules. The Exhibits and Schedules form
part of this Agreement and shall have the same force and effect as if
set out in the body of this Agreement.
(d) Other Agreements. References herein to any agreement or
other instrument shall, unless the context otherwise requires (or the
definition thereof otherwise specifies), be deemed references to that
agreement or instrument as it may from time to time be changed,amended
or extended.
PART Two
PURCHASE AND SALE OF INTERESTS
2.1 Purchase and Sale. Subject to the terms and conditions set forth herein, on
Closing (i) Seller shall sell, transfer, assign and deliver to Buyer and Buyer
shall purchase, receive and accept from Seller the Ownership Interest and (ii)
Seller shall assign (or cause its respective Affiliate to assign) to Buyer, and
Buyer shall assume and agree to perform, the rights and obligations of Seller
under the Partnership Agreement.
2.2 Transfer of Interests. At the Closing, subject to the provisions of this
Agreement, Buyer shall pay Seller the remaining unpaid portion of the Purchase
Price defined in Section 2.3 below and Seller, Seller's designated Affiliates
and Buyer shall execute two originals of an Assignment and Assumption Agreement
in the form of Exhibit A attached hereto, evidencing transfer to Buyer of the
Ownership Interest and assignment to and assumption by Buyer of the rights and
obligations of Seller under the Partnership Agreement.
2.3 Purchase Price. The purchase price shall be Thirteen Million Five
Hundred Thousand Dollars ($13,500,000.00), inclusive of the Deposit (the
"Purchase Price").
2.4 Section 754 Election and Purchase Price Allocation. The Owners have agreed
to make an election under Section 754 of the Code prior to the Closing Date.The
Parties shall determine the relative values of the assets comprising the
Seller's Ownership Interest by allocating the Purchase Price among such assets.
Such Purchase Price allocation shall be agreed upon prior to Closing. When
agreed, the allocation of Purchase Price shall be attached as Schedule 2.4
hereto. Any disagreements as to the allocation of Purchase Price shall be
resolved pursuant to the provisions of Section 8.12.
2.5 Sales and Transfer Taxes. The Purchase Price shall not include any sales or
transfer taxes imposed in connection with the sale of the Ownership Interest.
2.6 Retained Distributions. Seller shall retain the right to any distributions
paid or owed by the Company to Buyer after the Closing Date with respect to the
Ownership Interest for any period prior to the Closing Date ("Retained
Distributions") including, but not limited to, any Retained Distributions
discovered by Buyer or Seller during their respective review of the Post-
Closing Audit. Buyer agrees to pay to Seller, not later than five (5) Business
Days following receipt by Buyer of any Retained Distribution or the
determination of any Retained Distributions owed by Company as per the Post-
Closing Audit, the full amount of any such Retained Distributions with interest
at the Agreed Rate accrued (i) from the Closing Date or (ii) in the case of
Retained Distributions constituting the amount set forth in (c)in the following
sentence, from the date such Retained Distribution is received by Buyer. For
the purposes of determining Retained Distributions, a distribution will be
deemed owed by the Company to Buyer in the amount of fifty per cent (50%) of
the sum of: (a) all amounts in the operating cash account of the Company less
$100,000, which is to remain in the account as working capital, plus (b) all
receivables of the Company less any payables of the Company, plus (c) the
amount of any recovery from ▇▇▇▇-▇▇▇▇▇▇▇▇ or its successor in interest from a
claim by or on behalf of the Company in connection with losses arising from
syngas cooler failures in 2000 ("Syngas Cooler Failures").
2.7 ▇▇▇▇▇▇▇.▇▇ evidence of good faith, Buyer has tendered to Seller on or prior
to the Effective Date a cash deposit equal to Five Hundred Thousand Dollars
($500,000) (the "Deposit"), consisting of a portion of the Purchase Price. The
Deposit is non-interest bearing and non-refundable except as expressly provided
herein. At Closing, the Deposit shall be applied to the Purchase Price, and
Buyer shall pay and deliver to Seller the remaining unpaid Purchase Price as
provided herein.
EXCEPT WHERE BUYER'S OBLIGATION TO CLOSE IS EXCUSED DUE TO TERMINATION
FOR (A) A DEFAULT BY SELLER, OR (B) CONSUMMATION OF A TRANSFER OF THE
OWNERSHIP INTEREST TO PHSI OR THEIR DESIGNEE UPON ACCEPTANCE OF THE
TRANSFER OFFER SET FORTH IN SECTION 9.3 OF THE PARTNERSHIP AGREEMENT,
IF THE CLOSING FAILS TO OCCUR THE PARTIES AGREE THAT SELLER SHALL
RETAIN THE DEPOSIT AS OPTION CONSIDERATION AND AS LIQUIDATED DAMAGES,
WHICH THE PARTIES AGREE IS A REASONABLE SUM CONSIDERING ALL THE
CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, INCLUDING THE
RELATIONSHIP OF THE SUM OF THE RANGE OF HARM TO SELLER THAT REASONABLY
COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES
WOULD BE COSTLY OR INCONVENIENT. IN CAUSING ITS REPRESENTATIVE TO
INITIAL THIS PAGE BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY
OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS
REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF THIS OPTION
CONSIDERATION AND LIQUIDATED DAMAGES PROVISION AT THE TIME THIS
AGREEMENT WAS MADE.
Seller Buyer Guarantor
Initials ___RBR_____ Initials ____MJG______ Initials _____MJG______
2.8 Method of Payment.Any amounts payable under this Agreement shall be payable
in immediately available funds by means of a wire transfer. If such amount is
payable to Seller, it shall be paid on Seller's behalf to the bank account of
ChevronTexaco Global Energy Inc. at Citibank, N.A., New York, NY ABA ▇▇▇▇▇▇▇▇▇,
account number 3049 0223 (with immediate telephone notice to ▇▇▇▇▇▇▇ Malzar at
713-752-6165), or to such other account number as Seller may by written notice
direct. If such amount is payable to Buyer, it shall be paid to a United States
bank account of Buyer designated by Buyer.
2.9 PHSI Acceptance of Transfer Offer. In the event that PHSI accepts the
Transfer Offer (as defined in Section 9.3 of the Partnership Agreement) and
the transfer of the Ownership Interest to PHSI or its designee is consummated,
within 30 days of the consummation following such transfer, Seller shall pay to
Buyer the sum of $200,000 in consideration of an agreed portion of Buyer's due
diligence and other bid activities. The Parties agree that such is a reasonable
sum and that Buyer shall not be entitled to any other amount from Seller in
connection with PHSI's acceptance of the Transfer Offer.
PART Three
REPRESENTATIONS AND WARRANTIES
3.1 Seller. Seller represents and warrants to Buyer as of the Effective Date as
follows (however, no such representation and warranty shall apply to the extent
that Buyer or any of its Affiliates as of the Effective Date has been provided
with notice, or otherwise holds Actual Knowledge, of a violation or inaccuracy
thereof):
(a) Organization and Standing. Seller is a corporation duly
organized and validly existing under the laws of the State of
Delaware.
(b) Authority.Seller has the corporate power and authority to
execute, deliver and perform this Agreement. The execution, delivery
and performance of this Agreement have been duly authorized by all
requisite corporate action of Seller, and this Agreement has been duly
executed and delivered by Seller.
(c) Validity of Agreement.This Agreement constitutes a legal,
valid and binding obligation of Seller, enforceable against Seller in
accordance with the terms, except as enforcement may be limited by
bankruptcy, insolvency,reorganization or other similar Applicable Laws
affecting the enforcement of creditors' rights in general. The
enforceability of the Seller's obligations under this Agreement is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(d) No Violation. Neither the execution, delivery nor
performance by Seller of this Agreement contravenes or violates any
provision of the Corporate Documents of Seller, or contravenes or
violates any Applicable Laws to which Seller may be subject.
(e) No Consent Required. Except as set forth in Schedule
3.1(e) attached hereto, no consent, approval, permit, authorization,
filing or other action is required on the part of Seller in connection
with the execution, delivery or performance of this Agreement either
(i)from or with any Person other than a Governmental Entity except for
consents, approvals, authorizations or actions which, if not obtained,
made or taken, would not have a material adverse effect on the
execution, delivery and performance by Seller of the Agreement, or(ii)
from or with any Governmental Entity.
(f) Proceedings or Litigation.Except as set forth on Schedule
3.1(f)attached hereto, to the Actual Knowledge of Seller, there are no
ongoing or threatened proceedings, claims or litigation against the
Company or against Seller relating to the execution, delivery or
performance of this Agreement and the Transaction.
(g) Ownership of Ownership Interest. Except as set forth on
Schedule 3.1(g) and the Permitted Encumbrances, Seller has good title
to, and legal and beneficial ownership of, the Ownership Interest free
and clear of any and all proxies or proxy agreements, and voting trust
arrangements and free and clear of any Liens created by or through
Seller securing payment of monetary obligations.
(h) Taxes.Except as set forth on Schedule 3.1(h), to Seller's
Actual Knowledge (i) PHSI has duly filed all federal, state, local and
foreign governmental tax reports, returns, information statements,
schedules or certificates and all other reports and returns required
to be filed by it pursuant to any law or regulation of any authority
in connection with the determination, assessment or collection of any
Taxes or the administration of any Applicable Laws relating to any
Taxes, and (ii) PHSI has timely paid all Taxes shown to be due on such
reports or returns, if any.
(i) ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇ Seller's Actual Knowledge, and except as
set forth on Schedule 3.1(i),each of the following statements are true
and correct:
(i) As of the Effective Date,the Facility is not the
subject of any investigation, judicial, or administrative
proceeding concerning, a Release of any Hazardous Substance.
(ii) As of the Effective Date, the Facility is not
the subject of any investigation, judicial, or administrative
proceeding concerning violations of any Environmental Laws in
effect on the Effective Date.
(iii) As of the Effective Date, the Facility is not
(and would not be, if all relevant facts within Seller's
Actual Knowledge were also known to the applicable
Governmental Entity) subject to any material remedial,
clean-up or monitoring obligations under such Environmental
Laws;
(iv) As of the Effective Date, the Company has in
effect, or has applications pending for, all permits required
by applicable Environmental Laws for the operation and
ownership of the Facility,and the Company is not in violation
of the terms and conditions of such permits;
(v) As of the Effective Date, the Company (a) is not
subject to any consent decree, compliance order or
administrative order issued pursuant to applicable
Environmental Laws regarding the Facility, and (b) has not
received written notice under the citizen suit provision of
any Environmental Law or written request for information,
notice of violation, demand letter, administrative inquiry,
complaint or claim from any Governmental Entity pursuant to
applicable Environmental Laws regarding the Facility;
(vi) As of the Effective Date, no conditions or
circumstances exist or have existed with respect to the
off-site disposal of any substance pertaining to the
ownership, operation or maintenance of any Facility that is
regulated under any Environmental Law that could impose any
liability attributable to Seller or Buyer as the assignee of
the Seller (or the Seller's Ownership Interest);
(vii) As of the Effective Date, no conditions or
circumstances exist or have existed, and no activities are
occurring or have occurred, on or in connection with the
Facility that are resulting or have resulted in the exposure
of any person to a Hazardous Substance above regulatory
thresholds such that Seller or Buyer as the assignee of
Seller (or the Seller's Ownership Interest) are reasonably
likely to incur liability to such persons for personal
injuries, damages or death resulting from such exposure.
(j) Capital Accounts. The capital accounts of the Company are
as represented in the books and records maintained by the Company
pursuant to the terms of the Partnership Agreement and there are no
additional contributions to the Company required of Seller, except to
the extent that the Management Committee determines that Capital
Contributions should be made by the Partners under Section 3.2 of the
Partnership Agreement.
(k) Agreements. Seller has provided Buyer with copies of all
Material Agreements to which the Company is subject as of the
Effective Date of which Seller has Actual Knowledge.
3.2 Buyer. Buyer represents and warrants to Seller as of the Effective Date as
follows:
(a) Organization and Standing. Buyer is a limited partnership
duly organized and validly existing under the laws of Delaware.
(b) Authority. Buyer has the power and authority to execute,
deliver and perform this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all
requisite action of Buyer and this Agreement has been duly executed
and delivered by Buyer.
(c) Validity of Agreement. This Agreement constitutes a legal,
valid and binding obligation of Buyer, enforceable against Buyer in
accordance with the terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar Applicable
Laws affecting the enforcement of creditors' rights generally. The
enforceability of Buyer's obligations under this Agreement is subject
to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(d) No Violation. Neither the execution, delivery nor
performance by Buyer of its obligations under this Agreement
contravenes or violates any provision of the Corporate Documents of
Buyer, or contravenes or violates any Applicable Laws to which Buyer
may be subject.
(e) No Consent Required. No consent, approval, permit,
authorization or other action by, or filing with, any Governmental
Entity is required in connection with the execution, delivery and
performance by Buyer of this Agreement.
(f) No Bankruptcy. There are no bankruptcy, reorganization or
receivership proceedings pending, being contemplated by, or to the
Actual Knowledge of Buyer, threatened against Buyer.
(g) Knowledgeable Investor. Buyer is an experienced and
knowledgeable investor. In making its decision to participate in this
Agreement and the Transaction, Buyer has relied solely on its own
independent investigation, analysis and evaluation of the Ownership
Interest, the Facility or any business associated therewith.
(h) Securities Representation. Buyer is acquiring the
Ownership Interest for its own account and not with a view to, or for
offer of resale in connection with, a distribution thereof, within the
meaning of the Securities Act of 1933, 15 U.S.C. Section 77a et seq.,
or any other Applicable Laws pertaining to the distribution of
securities.
(i) Funding.Buyer has sufficient funds, or has arranged to have
available by the Closing Date sufficient funds, to enable Buyer to pay
in full the Purchase Price and any Retained Distributions as herein
provided and otherwise to perform its obligations under this
Agreement.
3.3 Disclaimers. Buyer acknowledges that (a) at Closing it will acquire the
Ownership Interest on the basis of its own investigation of the physical and
financial condition of the Facility, and assumes the risk that adverse
conditions outside the scope of Seller's representations and warranties set
forth in Section 3.1 may not be revealed by Buyer's own investigation and (b)
its admission as a partner in the Company shall be subject to the terms of the
Partnership Agreement and Applicable Laws. Buyer acknowledges that EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT, (i) NO WARRANTY, EXPRESS OR IMPLIED IN
FACT OR BY LAW, WHETHER OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE,
CONDITION OR OTHERWISE HAS BEEN MADE TO BUYER WITH RESPECT TO THE OWNERSHIP
INTEREST, THE COMPANY, THE FACILITY OR ANY BUSINESS ASSOCIATED THEREWITH, (ii)
SELLER'S INTEREST IN THE COMPANY IS SOLD ON AN "AS IS, WHERE IS" BASIS, AND
(iii) BUYER'S REMEDIES AGAINST SELLER, AND SELLER'S LIABILITIES TO BUYER, WITH
RESPECT TO THE OWNERSHIP INTEREST, THE COMPANY OR THE FACILITY ARE LIMITED TO
THOSE PROVIDED IN THIS AGREEMENT.
PART Four
COVENANTS
4.1 Covenants of Seller. Seller covenants with the Buyer as follows:
From the Effective Date until the Closing Date and subject to the terms
of any confidentiality obligations under the Partnership Agreement,Seller shall
permit Buyer and its representatives at reasonable times during normal business
hours to examine, in Seller's or its Affiliates' offices at their actual
location, all Contracts and other information related to the Company, in
Seller's operational files, insofar as the same may now be in existence and in
the possession of Seller, but excluding (i) all legal files, attorney-client
communications or attorney work product, and records and documents subject to
confidentiality provisions, claims of privilege or other restrictions on access
(including, without limitation, contractual obligations to third Persons) and
(ii) all proprietary information relating to the gasification of natural gas
(unless Buyer has obtained permission from GE Energy to examine such
information) and all proprietary financial models and information of
ChevronTexaco Corporation and its Affiliates.
4.2 Covenants of Buyer. Buyer covenants with Seller as follows:
(a) No Rights to Seller's Insurance
(i) Buyer acknowledges that ChevronTexaco Corporation,
Texaco Inc. and Gulf Oil Company have maintained worldwide
programs of property and liability insurance coverage for
themselves and their Affiliates (including Seller with respect
to the Company)including (i) insurance policies written or
reinsured by Heddington Insurance Company, Bermaco Insurance
Company and ▇▇▇▇▇ Limited(which are Affiliates of ChevronTexaco
Corporation or its predecessors) and (ii) insurance policies
that require the payment of retrospective premium adjustments
to cover losses. All of the insurance policies through which
such worldwide programs of coverage are presently or have
previously been provided are herein called the "ChevronTexaco
Insurance Policies."
(ii)It is the understanding and intention of Seller and
Buyer that:
(A)from and after the Closing, no insurance
coverage shall be provided for Buyer under the
ChevronTexaco Insurance Policies relating to the
Company; and
(B)from and after the Closing, no claims
regarding any matter whatsoever, whether or not arising
from events occurring prior to, at or after Closing,
shall be made against or with respect to the
ChevronTexaco Insurance Policies by Buyer with respect
to the Company and the other matters contemplated by
this Agreement.
(iii) Buyer, on behalf of itself and its successors and
assigns, hereby releases, to the extent permitted by
Applicable Laws, Seller and its Affiliates from any
claim made after the Closing against or with respect to
any of the ChevronTexaco Insurance Policies by or
through Buyer.
(iv) For the avoidance of doubt, nothing contained in
this Section 4.2 shall in any way limit, impair or constitute a
release or discharge of any right of Buyer or obligation of
Sellers with respect to any representation, warranty, covenant,
indemnity or other obligation of Sellers contained in this
Agreement (regardless of whether the same was, is or may be
covered by any insurance described herein), all of which rights
and obligations shall continue in full force and effect.
(b) Post-Closing Audit. Buyer shall (i) conduct an audit of all
records of the Company to be completed not later than 90 days after
Closing (the "Post-Closing Audit") and (ii) provide notice to PHSI of
its intent to conduct the Post-Closing Audit not later than 90 days
after Closing in accordance with Sections 8.1 and 8.3 of the
Partnership Agreement. The Post-Closing Audit shall cover the calendar
years 2003 and 2004. Buyer shall make the results of the Post-Closing
Audit available (at a place reasonably agreed to by Buyer and Seller)
to Seller upon reasonable notice and at reasonable times, it being
understood that Seller shall be entitled to make and retain copies of
any materials relating to the Post-Closing Audit and records as it
shall deem necessary at its own expense. Notwithstanding the foregoing,
Seller shall bear no cost incurred by Buyer relating to the
Post-Closing Audit. Upon Seller's review of the Post-Closing Audit, and
in the event that Seller and Buyer mutually determine that either (A)
there was, at the time immediately prior to Closing, available cash of
the Company which the Company failed to distribute to the Owners
("Distributable Cash") or (B) Buyer failed to remit any Retained
Distributions to Seller in accordance with Section 2.6 hereof, Buyer
shall use its best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable in Seller's judgment to pay such
Retained Distributions or Seller's 50% share of Distributable Cash to
Seller with interest accrued from the Closing Date at the Agreed Rate.
If Seller and Buyer cannot reach agreement, based upon their review of
the Post-Closing Audit, on the availability and amount of Distributable
Cash or that Buyer failed to remit Retained Distributions, then the
matter shall be determined by the dispute resolution procedures of
Section 8.12 herein.
(c) Taxes. Buyer shall cooperate fully and shall cause PHSI to
cooperate fully with Seller as and to the extent reasonably requested
by Seller in connection with the preparation and filing of any Tax
return, and the defense of any claim, audit, litigation or other
proceeding, with respect to Taxes of Seller relating to the Ownership
Interest for any period ending on or prior to the Closing Date. Buyer
shall and shall cause PHSI (and their respective Affiliates) to: (a)
cooperate fully with Seller in preparing the Tax Returns of Company for
any outstanding financial years or for any audits of, or disputes with
taxing authorities regarding, any Tax Returns of Company for the
calendar years 2005 and earlier; (b)make available to Seller and to any
taxing authority as reasonably requested all information, records and
documents relating to Taxes of Company for the calendar years 2005 and
earlier; (c) provide timely notice to Seller in writing of any pending
or threatened Tax audits or assessments relating to Taxes of Company
for the calendar years 2005 and earlier; and (d)furnish as soon as
reasonably practicable to Seller copies of all correspondence received
from any taxing authority in connection with any such Tax audit or
information request withrespect to the calendar years 2005 and earlier.
4.3 Covenants of Seller and Buyer. Seller and Buyer agree as follows:
(a) Satisfaction of Conditions Precedent.Seller and Buyer shall
each use its best efforts to cause the conditions precedent set forth
in Part Five applicable to such Party to be fulfilled and satisfied as
soon as practicable.
(b) Brokers. The Parties represent and warrant to each other
that no broker, finder, financial advisor or similar Person has been
retained by a Party for which the other Party shall be liable.
(c) Certain Filings and Consents. With respect to certain
filings and consents, the Parties agree that Seller shall promptly
endeavor to obtain, and Buyer shall reasonably cooperate in connection
with such endeavors, each consent set forth on Schedule 3.1(e). With
respect to consent and review rights of Governmental Entities, Seller
and Buyer shall each in a timely manner (i) make all required filings,
if any, and prepare applications to and conduct negotiations, with each
Governmental Entity as to which such filings, applications or
negotiations are necessary or appropriate for the consummation of the
transactions contemplated hereby and (ii) provide such information as
the other Party or the Governmental Entity may reasonably request in
order to make such filings, prepare such applications and conduct such
negotiations. Each Party shall cooperate with and use all reasonable
efforts to assist the other Party with respect to such filings,
applications and negotiations.
(d) Press Release. Until the Closing, neither Party nor any of
its Affiliates shall make any press release or other public
announcement regarding the existence of this Agreement, the contents
hereof or the transactions contemplated hereby without the prior
written consent of the other Party (which consent shall not be
unreasonably withheld); provided, however, the foregoing shall not
restrict disclosures by Buyer or Seller or their respective Affiliates
(i) that are required by applicable securities or other Applicable Law,
court order or the applicable rules of any stock exchange having
jurisdiction over the disclosing Party or its Affiliates or (ii) to
Governmental Entities and third Persons holding preferential rights to
purchase, rights of consent or similar rights that may be applicable to
the transactions contemplated by this Agreement, as reasonably
necessary to obtain waivers of such rights or to obtain such consents.
(e) Records. For a period of six (6) years after the Closing
Date, either Party holding such records on the Closing Date shall (i)
preserve and retain the corporate accounting, legal, auditing, Tax,
environmental, operating, maintenance and inspection and other books
and records that relate to the conduct of the business of the Company
prior to the Closing Date and (ii) other than books, records and
documents (x) subject to the attorney/client privilege, (y)
constituting attorney work product or (z) relating to proprietary
forecasts of financial or operating data, make such books and records
available (at a place reasonably agreed to by Buyer and Seller) to the
other Party upon reasonable notice and at reasonable times, it being
understood that the other Party shall be entitled to make and retain
copies of any such books and records as it shall deem necessary at the
other Party's expense. In the event the other Party desires to extend
the period referred to in the first sentence of this Section 4.3(e)
beyond six (6) years, it may do so if the applicable statute of
limitations for the years with respect to which the books and records
relate has not expired, and such extension is requested in a writing
stating that the statute of limitations has not yet expired. Each such
extension shall not be for more than twelve (12) months.
(f) Consent and Preferential Purchase Rights. Seller and Buyer
shall take all actions that may be necessary to comply with any
applicable consent and preferential purchase right requirements set
forth in the Partnership Agreement, including provision of appropriate
information to PHSI under binder of confidentiality agreements and a
Transfer Offer as set forth in Section 9.3 of the Partnership
Agreement.
(g) Necessary Actions. Seller and Buyer shall take all actions
that may be reasonably necessary to comply with the transfer of the
Ownership Interest as set forth in Partnership Agreement.
PART Five
CONDITIONS TO CLOSING
5.1 Seller's Closing Conditions. The obligations of Seller to consummate
the Closing under this Agreement are subject to the following conditions:
(a) Representations and Warranties True at Closing. The
representations and warranties of Buyer contained in this Agreement or
in any certificate or document delivered pursuant to the provisions
hereof or in connection with the Transaction, shall be true and correct
when made, and shall be true and correct on and as of the Closing Date
as though such representations and warranties were made at and as of
such date except as otherwise expressly provided herein.
(b) Compliance with Agreement. On and as of the Closing Date,
Buyer shall have performed and complied with all agreements, covenants,
and conditions required by this Agreement, to be performed and complied
with by Buyer or its Affiliates prior to or on the Closing Date.
(c) No Injunction. As of the Closing Date, no suit, action or
other proceeding shall be pending or threatened before any court or
Governmental Entity of competent jurisdiction seeking to enjoin or
prevent Seller or its Affiliates from completing the Closing or seeking
damages against Seller or its Affiliates as a result of the Closing of
this Agreement or consummation of the transactions contemplated
thereby.
(d) Certified Resolutions and Officers' Certificate. Buyer
shall have delivered to Seller (i) a certificate dated the Closing Date
signed by the Secretary or an Assistant Secretary of Buyer with respect
to the action of Buyer's Board of Directors or its designee authorizing
the Transaction, and (ii) a certificate dated the Closing Date and
signed by the President or a Vice President of Buyer certifying, in
such detail as Seller may reasonably request, the fulfillment of the
conditions specified in subparagraphs (a) and (b) of this Section 5.1.
(e) Incumbency Certificates. Seller shall have received a
certificate of Buyer dated the Closing Date certifying the incumbency
of the officers of Buyer signing for it and the authenticity of their
signatures.
(f) Approvals and Consents. Seller shall be reasonably
satisfied that all approvals and consents necessary for the
consummation of the transactions contemplated by this Agreement have
been obtained, including without limitation waivers of any applicable
preferential purchase rights set forth in the Partnership Agreement.
(g) Receipt of Purchase Price. Seller shall have received
notification from the bank referred to in Section 2.8 that the
outstanding balance of the cash portion of the Purchase Price has been
deposited to Seller's account.
(h) Resignation of Seller's Management Committee
Representatives. The Representatives of Seller on the Management
Committee shall have resigned.
(i) Waiver or Expiration of the Option to Accept the Transfer
Offer. PHSI has waived the option to accept the Transfer Offer set
forth in Section 9.3 of the Partnership Agreement or the option to
accept the Transfer Offer has expired.
5.2 Buyer's Closing Conditions. The obligations of Buyer to consummate
the Closing under this Agreement are subject to the following conditions:
(a) Representations and Warranties True at Closing. The
representations and warranties of Seller contained in this Agreement or
in any certificate or document delivered pursuant to the provisions
hereof in connection with the Transaction shall be true and correct
when made, and shall be true and correct on and as of the Closing Date
as though such representations and warranties were made at and as of
such date except as otherwise expressly provided herein.
(b) Compliance with Agreement. On and as of the Closing Date,
Seller shall have performed and complied with all agreements, covenants
and conditions required by the Agreement to be performed or complied
with by Seller or its Affiliates prior to or on the Closing Date.
(c) No Injunction. As of the Closing Date, no suit, action or
other proceeding shall be pending or threatened before any court or
Governmental Entity of competent jurisdiction seeking to enjoin or
prohibit Buyer or its Affiliates from completing the Closing or seeking
damages against Buyer or its Affiliates as a result of the Closing of
this Agreement or consummation of the transactions contemplated
thereby.
(d) Certified Resolutions and Officers' Certificate. Seller
shall have delivered to Buyer (i) a certificate dated the Closing Date
signed by the Secretary or an Assistant Secretary of Seller with
respect to the action of the Seller's Board of Directors or its
designee authorizing the transactions contemplated by the Agreement,
and (ii) a certificate dated the Closing Date and signed by the
President or a Vice President of Seller certifying in such detail as
Buyer may reasonably request the fulfillment of the conditions
specified in subparagraphs (a) and (b) of this Section 5.2.
(e) Incumbency Certificates. Buyer shall have received a
certificate of Seller dated the Closing Date certifying the incumbency
of the officers of Seller signing for it and the authenticity of their
signatures.
(f) Approvals and Consents. Buyer shall be reasonably satisfied
that all approvals and consents necessary for the consummation of the
transaction contemplated by this Agreement (other than approvals and
consents required from Buyer or its Affiliates) shall have been
obtained, including without limitation waivers of any applicable
preferential purchase rights set forth in the Partnership Agreement.
(g) Waiver or Expiration of the Option to Accept the Transfer
Offer. PHSI has waived the option to accept the Transfer Offer set
forth in Section 9.3 of the Partnership Agreement or the option to
accept the Transfer Offer has expired.
PART Six
INDEMNITY
6.1 Seller. Seller shall indemnify, defend and hold harmless Buyer, its
Affiliates and their directors, employees and agents from and against (a) all
Losses of any nature whatsoever based upon, arising out of, in connection with,
or relating to the breach of any representation or warranty made herein by
Seller; or (b) Seller's Relative Responsibility for (i) third party claims
asserted in writing within two (2) years following the Closing Date which are
attributable to ownership of the Company or operations of the Company prior to
the Closing Date, but excluding from the foregoing any Losses either resulting
from conditions or issues of which Buyer was aware prior to the Closing Date or
resulting from acts or omissions of Buyer; (ii) claims filed in the litigation
described in item 1 on Schedule 3.1(f); or (iii) third party claims based upon,
arising out of, in connection with, or relating to the Syngas Cooler Failures .
6.2 Buyer. Buyer shall indemnify, defend and hold harmless Seller, its
Affiliates and their directors, employees and agents from and against all Losses
of any nature whatsoever based upon, arising out of, in connection with, or
relating to (i) the breach of any representation or warranty made herein by
Buyer; or (ii) ownership of the Company or operations of the Company on or after
the Closing Date
6.3 Method of Asserting Claims. All claims for indemnification under the
Agreement shall be asserted and resolved as follows, provided that the
provisions of Sections 6.3 through 6.6 shall be covenants and not conditions to
the defense and indemnity obligations to which they apply:
(a) Third Person Claims. In the event that any claim for which
a Party providing indemnification (the "Indemnifying Party") would be
liable to a Party or any of its officers, directors, employees, agents
or representatives entitled to indemnification hereunder (the
"Indemnified Party") is asserted against or sought to be collected by a
third Person, the Indemnified Party shall promptly notify the
Indemnifying Party of such claim, specifying the nature of such claim
and the amount or the estimated amount thereof to the extent then
feasible (which estimate shall not be conclusive of the final amount of
such claim)(the "Claim Notice"). The Indemnifying Party shall have
thirty (30) days from its receipt of the Claim Notice (the "Notice
Period") to notify the Indemnified Party (i) whether or not it disputes
its liability to the Indemnified Party hereunder with respect to such
claim; and (ii)whether or not it desires, at its sole cost and expense,
to defend the Indemnified Party against such claim; provided, however,
that the Indemnified Party is hereby authorized prior to and during the
Notice Period to file any motion, answer or other pleading, submission
or document which it shall deem necessary or appropriate to protect its
interests. In the event that the Indemnifying Party notifies the
Indemnified Party within the Notice Period that it desires to defend
against such claim or demand, then, except as hereinafter provided, the
Indemnifying Party shall have the right to defend such claim or demand
by appropriate proceedings, which proceedings shall be promptly settled
or prosecuted to a final conclusion, in such a manner as to avoid any
risk of the Indemnified Party becoming subject to liability. If the
Indemnified Party desires to participate in, but not control, any such
defense or settlement, it may do so at its own cost and expense. If the
Indemnifying Party does not elect to defend against such claim, whether
by not giving timely notice as provided above or otherwise, the
Indemnified Party shall have the right but not the obligation to defend
against such claim, and the amount of any such claim, or if the same be
contested by the Indemnifying Party or by the Indemnified Party, then
that portion thereof as to which such defense is unsuccessful, shall be
conclusively deemed to be a liability of the Indemnifying Party
hereunder (subject, if it has timely disputed liability, to a
determination that the disputed liability is covered by this Part Six).
(b) Other Claims. In the event that the Indemnified Party shall
have a claim against the Indemnifying Party hereunder which does not
involve a claim or demand being asserted or sought to be collected from
it by a third Person, the Indemnified Party shall promptly send a Claim
Notice with respect to such claim to the Indemnifying Party. If the
Indemnifying Party does not notify the Indemnified Party within the
Notice Period that it disputes such claim, the amount of such claim
shall be conclusively deemed a liability of the Indemnifying Party
hereunder.
6.4 Payment. Payments under this Part Six and under any other indemnity
provision of this Agreement shall be made as follows:
(a) Payment of Undisputed Amount. In the event that the
Indemnifying Party is required to make any payment under this Part Six,
the Indemnifying Party shall promptly pay the Indemnified Party the
amount so determined. If there should be dispute as to the amount or
manner of determination of any indemnity obligation owed under this
Part Six, the Indemnifying Party shall nevertheless pay when due such
portion, if any, of the obligation as shall not be subject to dispute.
The difference, if any, between the amount of the obligation ultimately
determined as properly payable under this Part Six and the portion, if
any theretofore paid, shall bear interest at the Agreed Rate. Upon the
payment in full of any claim, the Indemnifying Party shall be
subrogated to the rights of the Indemnified Party against any Person or
other entity with respect to the subject matter of this claim.
(b) Payment of Interest. If all or part of any indemnification
obligation under the Agreement is not paid when due upon resolution of
the claim, then the Indemnifying Party shall pay upon demand to the
Indemnified Party interest at the Agreed Rate on the unpaid amount of
the obligation for each day from the date the amount became due until
payment in full.
6.5 Limitation of Claims. Any claim for indemnity under this Part Six shall be
subject to the following limitations:
(a) Time Limitation. No claim shall be made or be effective
unless the Indemnified Party shall have delivered to the Indemnifying
Party a Claim Notice within two (2) years after the Closing Date, if
the claim is based on misrepresentation or a breach of the
representations or warranties in Part Three.
(b) Amount Threshold. Claims for indemnity by the Indemnified
Party shall be subject to the limitation that the Indemnified Party
shall not be entitled to indemnification from the Indemnifying Party
(i) with respect to any individual claim, unless the Losses for such
claim incurred by the Indemnified Party exceeds One Hundred Thousand
dollars ($100,000) (the "Claim Threshold"), and (ii) unless and until
the aggregate Losses for all claims incurred by the Indemnified Party
exceeds Five Hundred Thousand dollars ($500,000) (the "Aggregate
Threshold"), whereupon the Indemnified Party shall be entitled to
indemnification hereunder from the Indemnifying Party for all Losses
from those claims individually exceeding the Claim Threshold.
(c) Amount Limitation. In no event shall Seller's aggregate
liability (i) under Section 6.1(a) exceed Three Million Dollars
($3,000,000); (ii) under Section 6.1(b) exceed Two Million Dollars
($2,000,000); or (iii) under all of this Part 6 exceed Three Million
Dollars ($3,000,000). In no event shall Buyer's aggregate liability
under Part 6 exceed Three Million Dollars ($3,000,000)..
6.6 Disputed Claims. If the Indemnifying Party shall notify the Indemnified
Party during the Notice Period that it disputes any claim under Section 6.3
(the "Disputed Claim"), the Disputed Claim shall be subject to the dispute
resolution procedures provided in Section 8.12.
6.7 Exclusivity; Indemnification In Case Of Strict Liability Or Indemnitee
Negligence. After the Closing, except in the case of fraud by the breaching
Party, Sections 6.1 and 6.2 shall provide the exclusive remedy for any
misrepresentation, breach of warranty, covenant, agreement or other obligation.
EXCEPT AS SPECIFICALLY PROVIDED OTHERWISE, THE INDEMNIFICATION PROVISIONS IN
THIS PART SIX SHALL BE ENFORCEABLE REGARDLESS OF WHETHER THE LIABILITY IS BASED
UPON PAST, PRESENT OR FUTURE ACTS, CLAIMS OR LEGAL REQUIREMENTS (INCLUDING ANY
PAST, PRESENT OR FUTURE BULK SALES LAW, ENVIRONMENTAL LAW, FRAUDULENT TRANSFER
ACT, OCCUPATIONAL SAFETY AND HEALTH LAW OR PRODUCTS LIABILITY, SECURITIES OR
OTHER LEGAL REQUIREMENT) AND REGARDLESS OF WHETHER ANY PERSON (INCLUDING THE
PERSON FROM WHOM INDEMNIFICATION IS SOUGHT) ALLEGES OR PROVES THE SOLE,
CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF THE PERSON SEEKING
INDEMNIFICATION OR THE SOLE OR CONCURRENT STRICT LIABILITY IMPOSED UPON THE
PERSON SEEKING INDEMNIFICATION.
PART Seven
Guarantee
7.1 Guarantee. Guarantor hereby unconditionally and irrevocably guarantees (the
"Guarantee") to Seller the due and punctual performance and observance by Buyer
of all its obligations, commitments, undertakings, warranties and indemnities
under or pursuant to this Agreement (the "Guaranteed Obligations").
7.2 Performance and Satisfaction by Guarantor. If and whenever Buyer defaults
for any reason whatsoever in the performance of any of the Guaranteed
Obligations, Guarantor shall forthwith upon demand by Seller unconditionally
perform (or procure performance of) and satisfy (or procure the satisfaction
of) the Guaranteed Obligations in regard to which such default has been made in
the manner prescribed by this Agreement and so that the same benefits shall be
conferred on Seller as it would have received if the Guaranteed Obligations had
been duly performed and satisfied by Buyer.
7.3 Continuing Guarantee. This Guarantee is to be a continuing guarantee and
accordingly is to remain in force until all the Guaranteed Obligations shall
have been performed or been satisfied or expired by the terms of this
Agreement. This Guarantee is in addition to and without prejudice to and not in
substitution for any rights or security which Seller may now or hereafter have
or hold for the performance and observance of the Guaranteed Obligations.
7.4 Separate Obligation. As a separate and independent stipulation Guarantor
agrees that any of the Guaranteed Obligations which may not be enforceable
against or recoverable from Buyer by reason of any legal limitation, disability
or incapacity on or of Buyer or any other fact or circumstance shall
nevertheless be enforceable against and recoverable from Guarantor severally as
though the same had been incurred by Guarantor and Guarantor was the sole or
principal obligor in respect thereof and shall be performed or paid by
Guarantor in accordance with the obligations of Buyer pursuant to the terms of
this Agreement.
7.5 Liability of Guarantor. The liability of the Guarantor under this Part 7:
(a) shall not be released or diminished by any variation of the
terms of the Guaranteed Obligations, or any forbearance, neglect or
delay in seeking performance of the Guaranteed Obligations or any
granting of time for such performance; and
(b) shall not be affected or impaired by reason of any other
fact or event which in the absence of this provision would or might
constitute or afford a legal or equitable discharge or release or a
defense to Guarantor.
7.6 Guarantor Representations. Guarantor on its own behalf makes the following
representations:
(a) it is a limited partnership, duly organized and validly
existing under the laws of the state of Delaware, and is in good
standing under the laws of such jurisdiction;
(b) it has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Part 7. Part 7
and the transactions contemplated hereunder have been duly authorized
by all necessary corporate action and this Agreement has been duly
executed and delivered by it, and is valid, binding and enforceable
against it, in accordance with the terms of this Part 7; and
(c) its execution, delivery and performance of this Clause 7
will not conflict with or result in a breach of its Corporate
Documents.
PART Eight
MISCELLANEOUS
8.1 Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the respective Parties.
8.2 Waivers and Amendments. All amendments and other modifications hereof shall
be in writing and signed by each of the Parties. Any Party may by written
instrument (a) waive compliance by the other Party with, or modify any of, the
covenants or agreements made by the other Party in this Agreement or (b) waive
or modify performance of any of the obligations or other acts of the other
Party. The delay or failure on the part of any Party to insist, in any one
instance or more, upon strict performance of any of the terms or conditions of
this Agreement,or to exercise any right or privilege herein conferred shall not
be construed as a waiver of any such terms, conditions, rights or privileges
but the same shall continue and remain in full force and effect. All rights and
remedies are cumulative.
8.3 Notices. All notices and consents required under this Agreement shall be in
writing and shall be deemed to have been duly given (a) when delivered by hand,
(b) when sent by facsimile (with receipt confirmed), provided that a copy is
promptly thereafter mailed in the United States of America by first class
postage prepaid mail, (c) when received by the addressee, if sent by Express
Mail, Federal Express, other express delivery service (receipt requested) or by
such other means as the Parties may agree from time to time or (d) five (5)
Business Days after being mailed in the United States of America, by first
class postage prepaid registered or certified mail, return receipt requested;in
each case to the appropriate address and facsimile number set forth below (or
to such other address and facsimile number as a Party may designate as to
itself by notice to the other Party):
(i) if to Seller:
TCHI Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
ChevronTexaco Global Energy Inc.
c/o Corporate Secretary
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(ii) if to Buyer:
Genesis Syngas Investments, L.P.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to Guarantor:
Genesis Energy, L.P.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Each Party shall have the right upon giving ten(10) Business Days prior written
notice to the other in the manner hereinabove provided, to change its address
for purposes of notice.
8.4 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same document.
8.5 Entire Agreement. This Agreement, including the Exhibits and Schedules
hereto,contains the entire agreement between the Parties hereto with respect to
the subject matter hereof and supersedes all prior discussions, understandings,
agreements and undertakings between the Parties hereto relating to the subject
matter hereof; provided, however, that the Confidentiality Agreement shall
remain in full force and effect until and unless the Closing occurs, at which
time the Confidentiality Agreements shall terminate in accordance with the
respective termination provisions set forth therein. There are no additional
terms, whether consistent or inconsistent,oral or written which are intended to
be part of the Parties' understanding which have not been incorporated into
this Agreement, including the Exhibits and Schedules.
8.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York as applied to contracts made
and performed entirely within the State of New York, without regard to the
conflict of laws principles thereof.
8.7 Expenses.Except as specified herein and as the Parties may otherwise agree,
each Party shall be solely responsible for all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby.
8.8 Assignability.The rights and obligations created or assumed hereunder shall
not be assignable or delegable by either Party and any assignment of this
Agreement shall be void ab initio.
8.9 Invalidity. If any of the terms, provisions, covenants or restrictions of
this Agreement, including the Schedule hereto, is held by a court of competent
jurisdiction to be invalid, void or unenforceable and unless the invalidity,
voidability or unenforceability thereof does substantial violence to the
underlying intent and sense of the remainder of this Agreement,such invalidity,
voidability or unenforceability shall not affect in any way the validity or
enforceability of any other provision of this Agreement except those which the
invalidated, voided or unenforceable provision comprises an integral part of or
is otherwise clearly inseparable from. In the event any term, provision,
covenant or restriction is held invalid, void or unenforceable, the Parties
shall attempt to agree on a valid or enforceable provision which shall be a
reasonable substitute for such invalid or unenforceable provision in light of
the tenor of this Agreement and, on so agreeing, shall incorporate such
substitute provision in this Agreement.
8.10 No Admission. Nothing in this Agreement shall constitute any admission,
expressed or implicit, by the Parties of any wrongdoing. Nothing herein,
expressed or implied, is intended to confer upon any Person other than the
Parties any rights or remedies hereunder.
8.11 Survival.Subject to the limitations established in Section 6.5, all of the
covenants, agreements, representations and warranties, and indemnities made by
each Party contained in this Agreement and any covenants, agreements,
representations and warranties, and indemnities contained in any attachment,
schedule, certificate or other document delivered by any such Party pursuant
hereto or in connection herewith shall survive the Closing and each Party
hereto shall be entitled to rely upon such covenants, agreements,
representations and warranties, and indemnities of the other Parties as set
forth in this Agreement.
8.12 Dispute Resolution. Seller and Buyer covenant with each other as follows:
(a) Generally. Any claim, controversy or dispute arising out
of, relating to, or in connection with the Agreement or the agreements
and transactions contemplated hereby, by Buyer, Buyer's Affiliates,
Seller or Seller's Affiliates, including the interpretation, validity,
termination or breach thereof, shall be resolved solely in accordance
with the dispute resolution procedures set forth in Schedule 8.12. The
Parties covenant that they shall not resort to court remedies except as
provided for in Schedule 8.12, or for preliminary relief in aid of
arbitration.
(b) Violations. A Party who violates the covenants in Section
8.12(a) shall pay all the legal costs incurred by the other Parties in
connection with the enforcement thereof. Suits, actions or proceedings
in connection with violations of the covenants in Section 8.12(a) and
Schedule 8.12 shall be instituted in the United States District Court
for the Southern District of Texas, and pursuant to Title 9 of the
United States Code. Each Party waives any option or objection which it
may now or thereafter have to the laying of the venue in any such suit,
action or proceeding and irrevocably submits to the jurisdiction of
such court in any such suit, action or proceeding.
(c) Governmental Entity Approvals. Unless otherwise consented
to by the Governmental Entity, as applicable, the Parties acknowledge
that their respective rights and obligations under this Agreement are
and will remain following the Closing Date subject to all conditions
and restrictions contained in any approval of any Governmental Entity
relating to this Agreement and that no resolution of any dispute
between the Parties relating to this Agreement, whether pursuant to the
voluntary agreement of the Parties or pursuant to the procedure
specified in Schedule 8.12, shall be inconsistent with such conditions
or restrictions.
8.13 Attorneys' Fees. In any arbitration, action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful Party shall be entitled to
recover reasonable attorneys' fees in addition to its cost and expense and any
other available remedy.
8.14 Further Assurances. Seller and Buyer shall provide to each other such
information regarding the Ownership Interest as may be reasonably requested and
shall execute and deliver to each other such further documents and take such
further action as may be reasonably requested by either party to document,
complete or give full effect to the terms and provisions of this Agreement and
the transactions contemplated herein.
8.15 Termination. The Agreement may be terminated at any time prior to the
Closing (i) by mutual written consent of the Parties; (ii) by Seller if PHSI
shall have exercised any applicable preferential purchase right to purchase the
Ownership Interest and such transaction shall have been consummated; (iii) by
Seller or Buyer if the other Party shall have committed a material default of
this Agreement and such breach shall not have been cured within ten (10)
Business Days following notice of default given by the non-breaching Party; or
(iv) by either Seller or Buyer if the Closing shall not have occurred on or
before the Termination Date, other than through the default of the terminating
Party. Termination under clause (i) above shall be effective as of the date of
the Parties' mutual consent; termination under any of clauses (ii), (iii) or
(iv) above shall be effective as of the date that the terminating Party
delivers written notice of the event of termination. Upon any termination the
Parties shall have no further obligations under this Agreement; provided,
however, Buyer and Guarantor shall hold all information which was obtained
relating to the Transaction, subject to the Confidentiality Agreement, and
provided further that the provisions of Sections 8.3, 8.6, 8.7, 8.12 and 8.13
hereof shall remain in full force and effect.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed by its authorized representatives as of the Effective Date.
WITNESSES: SELLER:
TCHI INC.
/s/ G ▇. ▇▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
NAME: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
TITLE: President
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Tax ID: ▇▇-▇▇▇▇▇▇▇
WITNESSES: BUYER:
GENESIS SYNGAS INVESTMENTS, L.P.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
NAME: ▇▇▇▇ ▇. ▇▇▇▇▇▇
TITLE: President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Tax ID: ▇▇-▇▇▇▇▇▇▇
WITNESSES: GUARANTOR:
GENESIS ENERGY, L.P.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
NAME: ▇▇▇▇ ▇. ▇▇▇▇▇▇
TITLE: President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Tax ID: ▇▇-▇▇▇▇▇▇▇
SCHEDULE 1.2
PARTIES' ACTUAL KNOWLEDGE
Seller's Personnel:Srimonto Ghosh, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Buyer's Personnel:▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
Guarantor's Personnel:▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
SCHEDULE 2.4
ALLOCATION OF PURCHASE PRICE
[Buyer and Seller to mutually agree to allocation of Purchase Price.]
SCHEDULE 3.1(e)
REQUIRED CONSENTS
1. Waiver of the rights of any applicable preferential purchase rights and
consent, and related rights and conditions, of PHSI pursuant to the Partnership
Agreement.
SCHEDULE 3.1(f)
LITIGATION
1. There is a Tolling Agreement dated October 28, 2004 between ▇▇▇▇▇ Liddell &
▇▇▇▇ LLP, counsel for and on behalf of the Company and PHSI and King & Spalding
LLP,counsel for and on behalf of Texaco Inc. and Texaco Development Corporation
under which the Company and PHSI agree to toll the running of all statutes of
limitations for a period that lapses February 4, 2005 for any claim of Texaco
Inc.or Texaco Development Corporation relating to the incidents and occurrences
giving rise to the allegations made in Sterling Chemicals, Inc. v. Hydrogen
Supply Company, et al., Cause No. 01-CV1202 in the 122nd Judicial Court of
Galveston County, Texas.
SCHEDULE 3.1(g)
ENCUMBRANCES
None.
SCHEDULE 3.1(h)
TAXES
None.
SCHEDULE 3.1(i)
ENVIRONMENTAL
Any investigation, judicial or administrative proceeding concerning a Release
of Hazardous Substance or violation of any Environmental Laws, remedial,
clean-up or monitoring obligations, violations of terms and conditions of
permits, consent decrees, compliance orders, administrative orders, notice of
citizen suits, requests for information, notices of violation, demand letters,
administrative inquiries, complaints or claims, conditions or circumstances
with respect to off-site disposal of substances, or conditions or circumstances
or activities resulting in the exposure of any person to Hazardous Substances
arising out of or disclosed by the following:
1. A Phase I RCRA Facility Investigation Report by ▇▇▇▇▇ & Neuse as amended by
the September 23, 1993 letter.
2. The final Work Plan for the Phase II RCRA Facility Investigation as amended
by the September 29, 1993 letter.
3. The Area K Soil-Gas Investigation dated June 1989.
4. The Preliminary RFI Report on Sold Waste Management Units B, C and N dated
October 3, 1989.
5. The Soil Boring in RCRA Facility Investigation - Facility N dated
April 23, 1991
6. The Phase II RFI Report for Facility K dated January 10, 1995
Seller has not performed a Phase I environmental study on the property upon
which the Facility is located.
SCHEDULE 8.12
DISPUTE RESOLUTION PROCEDURES
1. Resolution of Disputes. After the Closing, and in any specific
circumstances prior to the Closing as expressly set forth in the Agreement, the
Parties shall resolve any controversy or claim, whether based in contract, tort
or otherwise, arising out of, relating to or in connection with the Agreement,
the scope, breach, or validity of such Agreement; or the commercial or economic
relationship of the Parties hereto ("Dispute") in accordance with this
Schedule. The Parties' agreement to resolve Disputes pursuant to this Schedule
survives the expiration or termination of the Agreement.
2. Negotiations between Senior Management. The Parties shall first seek
to resolve any Disputes by negotiations between Senior Management (as
hereinafter defined).
2.1 Prompt notification and referral to Senior Management. The Parties
will promptly seek to resolve any Dispute by negotiations between Senior
Management of the Parties who have authority to settle the controversy. When a
Party believes there is a Dispute under the Agreement, that Party will give the
other Party written notice of the Dispute (the "Notice"). Within ten (10) days
after receipt of the Notice, the receiving Party shall submit to the other a
written response. The Notice and response shall include (1) a statement of each
Party's position and a summary of the evidence and arguments supporting its
position, (2) the supporting documentation as to the circumstances leading to
the Dispute, (3) the name and title of the senior executives who will represent
that Party and who are duly authorized to settle the Dispute (the "Senior
Management"), and (4) a schedule of the availability of the Party's Senior
Management who will negotiate the dispute during the thirty (30) day period
following the delivery of the Notice.
2.2 Meetings among Senior Management. The Senior Management shall meet
at a mutually acceptable time and place within thirty (30) days after the date
of the Notice and thereafter as often as they reasonably deem necessary to
exchange relevant information and to attempt to resolve the Dispute. If a
Senior Management intends to be accompanied at a meeting by an attorney, the
other negotiator shall be given at least three (3) Business Days' notice of
such intention and may also be accompanied by an attorney. All negotiations
pursuant to this Schedule are confidential and shall be treated as compromise
and settlement negotiations for the purposes of the Federal Rules of Evidence
and state rules of evidence.
3. Mediation. If the Dispute has not been resolved within sixty (60)
days after the date of the Notice given pursuant to Paragraph 2 of this
Schedule, or if the Party receiving such Notice will not meet within the time
periods set forth in that Paragraph, either Party may initiate mediation of the
Dispute by sending the other Party a written request that the Dispute be
mediated. The Party receiving such a written request will promptly respond to
the requesting Party so that all Parties can jointly select a neutral and
impartial mediator ("Mediator") and schedule the mediation session.
3.1 Mediation guidelines. The mediation contemplated by the Parties is
intended to be a voluntary process in which a neutral third party, who has no
power to decide the outcome, facilitates communication among the Parties to
promote understanding among them and, where possible, to arrive at a mutually
acceptable resolution of their Dispute. The Mediator will not have the authority
to impose a settlement on any Party.
3.2 The mediation process. No formal rules of evidence apply to the
mediation, and there will be no stenographic record of any mediation meeting.
Itis expected that, in the mediation, each Party will have a representative who
is not acting as legal counsel and who is authorized to make the decisions
which are part of the mediation process. Although legal and other consultants
may participate in the mediation sessions, the communications in the mediation
are intended to principally be among Party representatives and the mediator.
3.3 Withdrawal from the mediation. A Party may not withdraw from the
mediation until:
(a) A settlement has been reached;
(b) Both Parties agree that an impasse has occurred; or,
(c) The Parties have participated in a mediation of a duration of at
least three (3) days.
3.4 Confidentiality. The mediation process is confidential, and the
Parties and the mediator will not disclose confidential information regarding
the process to third parties. The information that is confidential includes,
but is not limited to, all statements or communications made in the course of
and relating to the subject matter of the mediation and which is made to or in
the presence of any Party representative or participant, Mediator or other
person. All such confidential information will be treated as compromise and
settlement negotiations for the purposes of the Federal Rules of Evidence and
state rules of evidence. The mediation sessions are private. Only the Parties,
their representatives, and the mediator may attend the mediation sessions.
Other persons may attend only with the permission of the Parties and with the
consent of the Mediator. The Parties and the Mediator shall not disclose
information regarding the proceedings, including settlement terms, to third
parties, unless the Parties otherwise agree. All third parties shall agree in
writing to keep such information confidential. All records, reports, or other
documents received by the Mediator while serving in that capacity shall be
confidential. The Mediator shall not be compelled to divulge such records or to
testify in regard to the mediation in any adversary proceeding or judicial
forum, unless the Parties otherwise agree. The Parties shall not rely on, or
introduce as evidence in any arbitration, judicial, or other proceeding:
(a) Views expressed or suggestions made by another Party with respect
to a possible settlement of the Dispute; or
(b) Admissions made by another Party in the course of the mediation
proceedings; or
(c) Proposals made or views expressed by the Mediator; or
(d) The fact that another Party has or has not indicated willingness to
accept a proposal for settlement made by the mediator, or other
Party.
Information or confidential information that is otherwise admissible shall not
be rendered inadmissible in a subsequent proceeding solely because it was used
in negotiations or a mediation pursuant to this Schedule.
3.5 Exchange of Information. If any Party has a substantial need for
documents or other material in the possession of another Party, the Parties
shall attempt to agree on the exchange of requested documents or other
material. If they fail to agree, either Party may request a joint meeting with
the Mediator who shall assist the Parties in reaching an agreement. At the
conclusion of the mediation process, upon the request of a Party which provided
documents or other material to the other Party, the recipient shall return the
same to the originating Party without retaining copies thereof.
3.6 Expenses. All expenses of the mediation, mediator compensation, and
the expenses of any witness and the cost of any proofs or expert advice
produced at the direct request of the mediator, shall be borne equally by the
Parties. The expenses of witnesses for a Party shall be paid by the Party
producing such witness.
4. Arbitration. If the Parties are unable to resolve the Dispute
pursuant to the negotiation and mediation provisions of this Schedule within
thirty (30) days following commencement of the mediation proceeding, the
Dispute shall be submitted to arbitration in accordance with the procedures set
forth below.
4.1 Initiation of Arbitration. The arbitration shall be initiated by
either Party delivering to the other a Notice of Intention to Arbitrate as
provided for in Section 6 of the AAA Commercial Arbitration Rules.
4.2 AAA Guidelines. The arbitration shall be conducted by the American
Arbitration Association in accordance with the Commercial Arbitration Rules and
the Supplementary Procedures for Large, Complex Disputes (collectively, the
"AAA Guidelines"). In the event of a conflict between the AAA Guidelines and
this Schedule, this Schedule shall govern.
4.3 Location of arbitration.If any Dispute is submitted to arbitration,
the arbitration shall take place in Houston, Texas.
4.4 Arbitration Tribunal. Unless the Parties agree to a single
arbitrator, the arbitration shall be conducted before three (3) independent and
impartial arbitrators, none of whom shall be appointed by either Party. Rather,
the arbitrators will be selected in accordance with the AAA Guidelines, and
shall be attorneys at law who have practiced commercial law for at least
fifteen (15) years. All arbitrators, prior to their service, shall disclose all
actual or perceived conflicts of interest involving the Dispute or the Parties.
No arbitrator may serve if such arbitrator has a conflict of interest involving
the subject matter of the Dispute or with the Parties. In the event the Parties
agree to a single arbitrator, the selection of the arbitrator shall be made by
mutual consent. The three (3) arbitrators (or the single arbitrator the Parties
so chose) selected shall constitute the "Tribunal."
4.5 Procedures and governing law. The arbitration shall be governed by
the United States Arbitration Act, 9 U.S.C. 1-16, to the exclusion of any
provision of State law inconsistent therewith and which would produce a
different result, and judgment upon the award rendered by the arbitrator(s) may
be entered by any court having jurisdiction thereof. The Tribunal shall
determine the claims of the Parties and render their final award in accordance
with the substantive law of the State of New York exclusive of its conflict of
law rules.The limitations on any actions will be determined under New York law.
4.6 Provisional remedies. The Tribunal may, in the course of
proceedings, order any provisional remedy or conservatory measure, including
but not limited to attachment, preliminary injunction or the deposit of
specified security, which they consider to be necessary, just and equitable.The
failure of a Party to comply with such an interim order, after due notice and
opportunity to cure such noncompliance, may be treated by the Tribunal as a
default and all or some of the claims or defenses of the defaulting Party may
be stricken and partial or final award entered against such Party, or the
Tribunal may award such lesser sanctions as they deem appropriate. A request
for interim or provisional relief to a court shall not be deemed incompatible
with the agreement to arbitrate or as a waiver of that agreement.
4.7 Preliminary Hearing. Within thirty (30) days after the Tribunal has
been appointed, a preliminary hearing among the Tribunal and counsel for the
Parties shall be held for the purpose of developing a plan for the management
of the arbitration, which shall then be memorialized in an appropriate order.
The matters which may be addressed include, in addition to those set forth in
the AAA Guidelines, the following:
(a) Definition of issues;
(b) Scope, timing and types of discovery, if any;
(c) Schedule and place(s) of hearings;
(d) Setting of other timetables;
(e) Submission of motions and briefs;
(f) Whether and to what extent expert testimony will be required,
whether the Tribunal should engage one or more neutral
experts, and whether, if this is done, engagement of experts
by the Parties can be obviated or minimized;
(g) Whether and to what extent the direct testimony of witnesses
will be received by affidavit or written witness statement;
and
(h) Any other matters which may promote the efficient,
expeditious, and cost-effective conducting of the proceeding.
4.8 Management of the Arbitration. The Tribunal shall actively manage
the proceedings as it deems best so as to make the same expeditious,
economical, and less burdensome and adversarial than litigation.
4.9 Discovery. The Tribunal shall permit and facilitate such discovery
as it shall determine is appropriate in the circumstances, taking into account
the needs of the Parties and the desirability of making discovery expeditious
and cost-effective. Such discovery may include pre-hearing depositions,
particularly depositions of witnesses who will not appear personally before the
Tribunal to testify, if there is a substantial, demonstrated need therefor.
4.10 Service of Papers and Documents. Papers, documents, and written
communications shall be served by the Parties directly upon each other and the
Tribunal.
4.11 Confidentiality. All papers, documents, briefs, written
communication, testimony and transcripts as well as any and all Tribunal
decisions shall be confidential and not disclosed to anyone other than the
Tribunal, the Parties, or the Parties' attorneys and expert witnesses (where
applicable to their testimony), except that upon prior written consent of both
Parties, such information may be divulged to additional third parties. All
third parties shall agree in writing to keep such information confidential.
4.12 Hearings. The Tribunal may limit the issues so as to focus on the
core of the Dispute, limit the time allotted to each Party for presentation of
its case, and exclude testimony and other evidence that it deems irrelevant,
cumulative or inadmissible. Notwithstanding the Parties' agreement regarding
arbitration venue in Paragraph 4.3 of this Schedule, upon motion of a Party,
the Tribunal may temporarily relocate a hearing to a place designated by the
Tribunal as may be necessary to hear the testimony of particular witnesses not
subject to subpoena at the usual hearing site. The purpose of such temporary
relocation is to permit a hearing at a place where such witnesses can be
compelled to attend. With the consent of all Parties, the testimony may be
recorded before a single member of the Tribunal.
4.13 Stenographic Record. There shall be a stenographic transcript of
the proceedings, the cost of which shall be borne equally by the Parties
pending the final award of the Tribunal.
4.14 Damages. The Tribunal is empowered to award only compensatory
damages as they may be limited by the terms of the Agreement. Each Party hereby
irrevocably waives any damages in excess of compensatory damages, including a
waiver of any punitive or multiple damages. The Tribunal may, in their
discretion, grant pre-award interest and, if so, such interest may be at
commercial rates during the relevant period. The Tribunal may award all or a
part of a Party's reasonable attorneys' fees and costs of arbitration, taking
into account the final result of arbitration, the conduct of the Parties and
their counsel in the course of the arbitration, and other relevant factors. The
Tribunal shall, in a final award, assess the amount of the costs of the
proceedings.
4.15 Draft of proposed award and final award. Prior to rendering their
final award, the Tribunal shall submit to the Parties an unsigned draft of the
proposed award and each Party, within five (5) Business Days after receipt of
such draft award, may serve on every other Party and file with the Tribunal a
written statement outlining any alleged errors of fact, law, computation, or
otherwise ("Written Statement"). Within five (5) Business Days after receipt of
the Written Statement of each Party, the Tribunal shall render their final
award. Any arbitration decision or award shall conform as closely as possible
to the order or judgment which would be rendered by a court of the State of
Texas. Any arbitration decision or award shall state the reasoning on which it
rests, including both findings of fact and conclusions of law although such
reasons shall not be used as a basis for appeal or other judicial proceeding.
4.16 Consolidation of proceedings. If an arbitration proceeding is
initiated by a Party under the Agreement, and if a Tribunal or Tribunals have
been previously selected in arbitration proceeding(s) under the Agreement which
have not yet begun ("Existing Tribunal(s)") the Parties shall determine whether
the most junior arbitration will be consolidated for hearing with any Existing
Tribunal. In ruling on such motion, the first Existing Tribunal should order
consolidation if there are one or more common questions of law and fact, and
the interests of justice, expedition and economy would be served by
consolidation.
4.17 Res Judicata. To the extent permitted by the law, any award by the
Tribunal shall not be res judicata or have any binding effect in any unrelated
litigation or arbitration where any Party to the Agreement may also be a Party.
5. Deadlines. All deadlines specified in this Schedule may be extended
by mutual written agreement.
6. Performance. Each Party is required to continue to perform its
obligations under the Agreement pending final resolution of any Dispute.
7. Injunctive Relief. The procedures specified in this Schedule shall
be sole and exclusive procedures for the resolution of Disputes between the
Parties arising out of or relating to the Agreement. However, if equitable
remedies are not available to a Party because the Tribunal may not be timely
convened as required for the relief sought, a Party may seek a preliminary
injunction or other preliminary judicial relief, if in the judgment of that
Party, such action is necessary to avoid irreparable damage or to preserve
status quo. Despite the initiation of any such judicial proceedings, the
Parties will continue to participate in good faith in the procedures specified
in this Schedule. As between all Parties, all applicable statutes of limitation
shall be tolled while the procedures specified in this Schedule are pending;
the Parties will take all actions, if any, required to effectuate such tolling.
EXHIBIT A
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment") is entered
into on [the Closing Date] by and between TCHI Inc., a Delaware corporation
("Seller"), and GENESIS SYNGAS INVESTMENTS, L.P. a Delaware limited partnership
("Buyer").
WHEREAS Seller and Buyer have entered into a Purchase and Sale
Agreement for Interest in T & P Syngas Supply Company dated February 3, 2005
(the "Purchase and Sale Agreement"), pursuant to which Seller has agreed to
sell its fifty percent (50.0%) ownership interest (the "Ownership Interest") in
the Company (as defined in the Purchase and Sale Agreement) and certain rights
associated therewith, and Buyer has agreed to acquire such Ownership Interest
and those certain rights associated therewith, all subject to the terms and
conditions provided in the Purchase and Sale Agreement:
NOW, THEREFORE, in consideration of the mutual promises contained
herein and in the Purchase and Sale Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Buyer, each intending to be legally bound, hereby agree as follows:
1. Assignment and Acceptance of Ownership Interest.
1.1 Seller hereby sells, transfers, conveys, and assigns to Buyer all
of Seller's right, title, and interest in and to the Ownership Interest
as set forth in the T & P Syngas Supply Company Partnership Agreement
(the "Partnership Agreement") effective as of December 15, 1995 between
Seller and Praxair Hydrogen Supply, Inc. ("PHSI"). Buyer hereby (i)
accepts from Seller the Ownership Interest and, with respect to the
Ownership Interest, agrees to become a substituted owner of the Company
in the place and stead of Seller; (ii) agrees to be bound by all of the
terms and conditions of the Partnership Agreement, and adopts and
ratifies the Partnership Agreement for all purposes as though Buyer
were an owner therein. After the date of this Assignment, the Ownership
Interest shall be held by Buyer and Seller shall no longer have any
interest in the Company.
1.2 Each of Seller and Buyer represents and warrants to the other, and
to PHSI, that the transactions contemplated by this Assignment are made
in accordance with all applicable laws (including state and federal
securities laws) and the terms and conditions of the Partnership
Agreement.
2. General
2.1 This Assignment shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and
assigns.
2.2 This Assignment will be governed by and construed in accordance
with the laws of the State of New York as applied to contracts made and
performed entirely within the State of New York without regard to the
conflict of laws principles thereof. Any disputes arising out of or
relating to this Assignment shall be resolved in accordance with the
provisions of the Purchase and Sale Agreement.
2.3 This Assignment is subject to the terms and conditions of the
Purchase and Sale Agreement. This Assignment shall not expand, limit or
modify any of the provisions of the Purchase and Sale Agreement, and to
the extent of any conflict therewith, the provisions of the Purchase
and Sale Agreement shall prevail. The Purchase and Sale Agreement shall
survive the execution of this Assignment, and the Purchase and Sale
Agreement shall not be merged with and into this Assignment.
2.4 Buyer's address for purposes of the notices provisions of the
Partnership Agreement is as follows:
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: General Counsel.
IN WITNESS WHEREOF, each of Seller and Buyer have caused this
Assignment to be executed by its authorized representative as of the date first
set forth above.
TCHI INC.
By:
Name:
Title:
GENESIS SYNGAS INVESTMENTS, L.P.
By:
Name:
Title: