EXHIBIT 2
ASSET PURCHASE AND SALE AGREEMENT
between
▇▇▇▇▇▇▇▇ REFINING & MARKETING, L.L.C.,
▇▇▇▇▇▇▇▇ GENERATING MEMPHIS, L.L.C.,
▇▇▇▇▇▇▇▇ MEMPHIS TERMINAL, INC.,
▇▇▇▇▇▇▇▇ PETROLEUM PIPELINE SYSTEMS, INC.
AND
▇▇▇▇▇▇▇▇ MID-SOUTH PIPELINES, LLC
Sellers
and
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.,
Sellers' Guarantor
and
THE PREMCOR REFINING GROUP, INC.
Purchaser
and
PREMCOR INC.
Purchaser's Guarantor
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...................................................................................1
1.1 Defined Terms.................................................................................1
1.2 Other Definitional Provisions.................................................................9
ARTICLE II PURCHASE AND SALE OF ASSETS..................................................................10
2.1 Purchase and Sale of Assets..................................................................10
2.2 Purchase Price...............................................................................10
2.3 Adjustment to Base Purchase Price............................................................10
2.4 Inventory Estimate; Final Inventory Amounts..................................................10
2.5 Method of Payment; Allocation of Purchase Price..............................................11
2.6 Limited Assumption and Retention of Liabilities..............................................12
ARTICLE III CLOSING......................................................................................12
3.1 Closing......................................................................................12
3.2 Closing Obligations..........................................................................12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS AND SELLERS' GUARANTOR.............................16
4.1 Organization and Standing....................................................................16
4.2 Authority and Binding Obligations............................................................16
4.3 Consent; Non-Contravention...................................................................16
4.4 Litigation...................................................................................17
4.5 Contracts and Commitments....................................................................17
4.6 Leases and Easements; Encumbrances...........................................................17
4.7 Conditions of Improvements and Equipment.....................................................18
4.8 Compliance with Laws.........................................................................18
4.9 Due Diligence................................................................................18
4.10 Permits......................................................................................18
4.11 Taxes........................................................................................19
4.12 Environmental Matters........................................................................19
4.13 Good and Marketable Title....................................................................19
4.14 Condemnation.................................................................................19
4.15 Labor Matters................................................................................20
4.16 Actions and Proceedings......................................................................20
4.17 Disclaimer...................................................................................20
4.18 Sellers' Guarantor's Representations and Warranties..........................................20
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PURCHASER'S GUARANTOR........................22
5.1 Purchaser's Representations and Warranties...................................................22
5.2 Purchaser's Guarantor's Representations and Warranties.......................................25
ARTICLE VI COVENANTS....................................................................................27
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6.1 Brokers' Fees................................................................................27
6.2 Conduct of Business by the Sellers Pending Closing...........................................28
6.3 Access to Assets, Personnel and Information..................................................30
6.4 Additional Arrangements......................................................................31
6.5 Public Announcements.........................................................................31
6.6 Payment of Expenses..........................................................................31
6.7 Further Assurances...........................................................................31
6.8 Preservation of Files and Records............................................................32
6.9 Business Employees...........................................................................32
6.10 Bonds and Guaranties.........................................................................36
6.11 Environmental Insurance......................................................................36
6.12 Use of Trademarks, ▇▇▇▇▇▇▇▇ Marks............................................................36
6.13 Purchaser's Notice...........................................................................37
6.14 Other Tax Matters............................................................................37
6.15 Information Technology.......................................................................37
6.16 Non-Software Copyright License...............................................................38
6.17 Software License.............................................................................38
6.18 HSR Act Filing...............................................................................39
6.19 Consents to Assignment.......................................................................39
6.20 Casualty.....................................................................................40
6.21 Payment of Transfer Taxes; Recording Fees....................................................41
6.22 Payment of Certain Expenses Due and Payable After the Effective Time; Cooperation............41
6.23 Relationship of the Parties..................................................................42
6.24 Preparation of Audited Financial Statements..................................................42
6.25 Financing Covenants..........................................................................43
6.26 Stockholder Approval of Issuance of Guarantor Common Stock...................................43
6.27 Listing of Guarantor Common Stock............................................................43
ARTICLE VII CONDITIONS...................................................................................44
7.1 Conditions to Each Party's Obligation to Close...............................................44
7.2 Conditions to Obligations of Purchaser.......................................................44
7.3 Conditions to Obligation of Sellers..........................................................46
ARTICLE VIII TERMINATION..................................................................................46
8.1 Termination Rights...........................................................................46
8.2 Effect of Termination........................................................................47
ARTICLE IX INDEMNIFICATION AND THIRD PARTY CLAIMS.......................................................47
9.1 Indemnification..............................................................................47
9.2 Defense of Third Party Claims................................................................48
9.3 Limits on Indemnity Obligations..............................................................49
9.4 Environmental Indemnity......................................................................50
9.5 Exclusive Remedy for Environmental Matters; Indemnification by Purchaser.....................52
9.6 Environmental Fines and Penalties............................................................52
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9.7 Survival.....................................................................................53
ARTICLE X REGISTRATION RIGHTS..........................................................................53
10.1 Registration Rights..........................................................................53
ARTICLE XI DISPUTES.....................................................................................59
11.1 Dispute Resolution...........................................................................59
11.2 Place........................................................................................59
11.3 Arbitrators..................................................................................59
11.4 Statute of Limitations.......................................................................60
11.5 Discovery....................................................................................60
11.6 Costs........................................................................................60
11.7 Breach.......................................................................................60
11.8 Consent to Jurisdiction......................................................................61
ARTICLE XII MISCELLANEOUS................................................................................61
12.1 Governing Law................................................................................61
12.2 Counterparts.................................................................................61
12.3 Assignment; Binding Effect...................................................................61
12.4 Entire Agreement.............................................................................61
12.5 Notices......................................................................................62
12.6 Amendment....................................................................................63
12.7 Severability.................................................................................63
12.8 Waivers......................................................................................63
12.9 Execution....................................................................................63
iii
Index of Schedules
------------------
Schedule 2.4(a) Method for Determining Value of Inventory
Schedule 4.3(a) Required Consents - Sellers
Schedule 4.3(b) Conflicts and Violations - Sellers
Schedule 4.4 Litigation - Sellers
Schedule 4.5 Material Contracts
Schedule 4.6(a) Lease and Easements
Schedule 4.6(b) Easements, Leaseholds and Rights of Way Burdening the Real
Property
Schedule 4.6(c) Real Property Encumbrances
Schedule 4.8 Compliance with Laws
Schedule 4.10 Permits
Schedule 4.12 Environmental Matters
Schedule 4.13(a) Legal Description
Schedule 4.13(b) Exceptions to Good and Marketable Title
Schedule 4.15 Pending Labor Matters
Schedule 4.16 Pending Actions and Proceedings
Schedule 4.18(c)(i) Required Consents - Sellers' Guarantor
Schedule 4.18(c)(ii) Violations and Other Conflicts - Sellers' Guarantor
Schedule 4.18(d) Litigation - Sellers' Guarantor
Schedule 4.18(e) No Breach - Sellers' Guarantor
Schedule 4.18(f) Actions and Proceedings - Sellers' Guarantor
Schedule 5.1(c)(i) Required Consent - Purchaser
Schedule 5.1(c)(ii) Violations and Other Conflicts - Purchaser
Schedule 5.1(d) Litigation - Purchaser
Schedule 5.1(e) No Breach - Purchaser
Schedule 5.1(f) Actions and Proceedings - Purchaser
Schedule 5.2(c)(i) Required Consents - Purchaser's Guarantor
Schedule 5.2(c)(ii) Violations and Other Conflicts - Purchaser's Guarantor
Schedule 5.2(d) Litigation - Purchaser's Guarantor
Schedule 5.2(e) No Breach - Purchaser's Guarantor
Schedule 5.2(f) Actions and Proceedings - Purchaser's Guarantor
Schedule 6.2(l) Repairs to Fluid Catalytic Cracking Unit
Schedule 6.2(m) Capital Expenditures
Schedule 6.2(n) Project Continuation
Schedule 6.9(a) Business Employees
Schedule 6.9(b) Collective Bargaining Agreements
Schedule 6.10 Bonds and Guaranties
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Page
Index of Exhibits
Exhibit A Transition Services Agreement
Exhibit B Form of Special Warranty Deed
Exhibit C Opinion of In-House Counsel of Sellers
Exhibit D Sellers' Guaranty
Exhibit E Form of Opinion of Legal Counsel of Purchaser
Exhibit F Form of Purchaser's Guaranty
Exhibit G Form of Opinion of Legal Counsel of Purchaser's Guarantor
Exhibit H Financing Commitments
Exhibit I Environmental Pollution Legal Liability Policy
Exhibit J Tax Certificates of Sellers
Exhibit K Irrevocable Standby Letter of Credit
Schedules and exhibits shall be furnished supplementally to Commission upon
request.
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ASSET PURCHASE AND SALE AGREEMENT
This Asset Purchase and Sale Agreement (the "Agreement") is made and
entered into as of the 25th day of November, 2002, by and among ▇▇▇▇▇▇▇▇
Refining & Marketing, L.L.C. ("Refining"), ▇▇▇▇▇▇▇▇ Generating Memphis, L.L.C.
("Generating"), ▇▇▇▇▇▇▇▇ Memphis Terminal, Inc. ("Terminal"), ▇▇▇▇▇▇▇▇ Petroleum
Pipeline Systems, Inc. ("Pipeline"), ▇▇▇▇▇▇▇▇ Mid-South Pipelines, LLC
("Mid-South"), and The ▇▇▇▇▇▇▇▇ Companies ("Sellers' Guarantor") and Premcor
Refining Group, Inc., a Delaware corporation ("Purchaser") and Premcor Inc., a
Delaware corporation ("Purchaser's Guarantor"). Any reference in the Agreement
to "Sellers" shall mean either all or each of Refining, Generating, Terminal,
Pipeline and/or Mid-South, whichever currently owns the Assets referred to or
relevant in the particular context.
RECITALS
A. Sellers own refining and marketing assets located in and around
Memphis, Tennessee, which consist of a light sweet crude refinery, commonly
known as the Memphis Refinery (the "Refinery"), and other related storage,
terminal, pipeline, supply, distribution and logistics assets and include crude
oil storage facilities at St. ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇, Louisiana and the peaking
power plant owned by Sellers' Affiliate and located adjacent to the Refinery.
The business and Operations conducted by the Sellers are sometimes referred to
in this Agreement as the "Business."
▇. ▇▇▇▇▇▇▇ desire to sell or cause the sale and Purchaser desires to
buy the Assets, as hereinafter defined.
C. Purchaser, Sellers, Purchaser's Guarantor and Sellers' Guarantor
(the "Parties") desire to evidence their agreement to the terms and conditions
of the purchase and sale of the Assets as set forth in this Agreement.
In consideration of the recitals and the representations, warranties
and covenants set forth in this Agreement and the agreements contemplated
hereby, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, each of the following
terms has the meaning specified below:
"Affiliate" means, with respect to any Person, each other Person that
directly or indirectly (through one or more intermediaries or otherwise)
controls, is controlled by, or is under common control with such Person. The
term "control" (including the terms "controlled by" and "under common control
with") means the possession, directly or indirectly, of the actual power to
direct or cause the direction of the management policies of a Person, whether
through the ownership of stock, by contract, credit arrangement or otherwise.
1
"Agreement" means this Asset Purchase and Sale Agreement, as amended,
supplemented or modified from time to time in accordance with the express terms
hereof.
"Applicable Law" means any applicable statute, law, ordinance, rule or
regulation, including Environmental Law.
"Assets" means the Improvements, the Contracts, the Equipment, the Real
Property, the ▇▇▇▇▇▇▇▇ Feedstock Inventory, the ▇▇▇▇▇▇▇▇ Product Inventory, the
▇▇▇▇▇▇▇▇ Other Inventory, Prepaid Expenses and Deposits, Records and the
▇▇▇▇▇▇▇▇ Other Assets, but shall exclude (i) the Excluded Assets and (ii) all of
those assets now owned by Sellers or hereafter acquired by Sellers and which are
transferred, used or otherwise disposed of prior to Closing in the ordinary
course of business.
"Base Purchase Price" has the meaning specified in Section 2.2.
"Base Rate" shall mean the lesser of (i) the per annum rate of interest
calculated on a daily basis using the 3-month Treasury ▇▇▇▇ rate published in
the Wall Street Journal for the applicable day (with the rate for any day for
which such rate is not published being the rate most recently published) plus
two hundred (200) basis points; and (ii) the maximum nonusurious rate of
interest permitted by Applicable Law, such Base Rate to be adjusted
automatically as and to the extent that either (i) or (ii) immediately above
changes from time to time.
"Business" has the meaning specified in the Recitals to this Agreement.
"Business Employee" has the meaning specified in Section 6.9(a) of this
Agreement.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, or any successor statutes and any
regulations promulgated thereunder.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System List.
"Claim" has the meaning specified in Section 9.1.
"Closing" means the consummation of the purchase and sale of the Assets
contemplated by this Agreement.
"Closing Date" has the meaning specified in Section 3.1.
"Closing Purchase Price" has the meaning specified in Section 2.2.
"Code" means the Internal Revenue Code of 1986, as amended.
2
"Contracts" means all commercial contracts and agreements (including
Material Contracts) relating to the Assets, the Business or the Operations and
to which a Seller is a party.
"Confidentiality Agreement" means the letter agreement dated July 10,
2002, between Purchaser or Purchaser's Affiliate and Sellers or Sellers'
Affiliate relating to the furnishing of information to Purchaser in connection
with Purchaser's evaluation of the possibility of the transactions contemplated
in this Agreement.
"CPA Firm" has the meaning specified in Section 2.4(c).
"Deductible" has the meaning specified in Section 9.3(b).
"Disclosure Schedule" means the Disclosure Schedule attached hereto and
any documents listed on such Disclosure Schedule and expressly incorporated
therein by reference.
"Dispute" has the meaning specified in Section 11.1.
"Effective Time" means 12:01 a.m. Central time on the day of the
Closing Date.
"Environmental Law" means any applicable federal, state, local or
foreign statute, code, ordinance, rule, regulation, policy, guideline, permit,
consent, approval, license, judgment, order, writ, decree, common law,
injunction or other authorization in effect on the date hereof or at a previous
time relating to (a) emissions, discharges, releases or threatened releases of
Hazardous Materials into the natural environment, including into ambient air,
soil, sediments, land surface or subsurface, buildings or facilities, surface
water, groundwater, publicly-owned treatment works or land; (b) the generation,
treatment, storage, disposal, use, handling, manufacturing, transportation or
shipment of Hazardous Materials; or (c) otherwise relating to the pollution of
the environment, solid waste handling treatment or disposal, protection of
environmentally sensitive areas or protection of human health, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. Section 9601 et seq.; the Toxic Substance
Control Act, 15 U.S.C. Section 2601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1802 et seq.; the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq.; the Clean Water Act, 33 U.S.C.
Section 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300F et
seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Oil Pollution Act
of 1990, 33 U.S.C. Section 2701 et seq., and any other federal, state and local
legal requirements relating to: (i) a Release or the containment, removal,
remediation, response, cleanup or abatement of a Hazardous Substance; (ii) the
manufacture, generation, formulation, processing, labeling, distribution,
introduction into commerce, use, treatment, handling, storage, or transportation
of a Hazardous Substance; (iii) exposure of persons, including employees, to a
Hazardous Substance; (iv) occupational safety or health matters; and (v) the
physical structure or condition of a building, facility, fixture or other
structure, including, without limitation, those relating to the management, use,
storage, disposal, cleanup or removal of asbestos, asbestos-containing
materials, polychlorinated biphenyls or any other Hazardous Substance.
3
"Environmental Permit" shall mean any approval, registration,
authorization, certificate, certificate of occupancy, consent, license, order,
permit, variance or other similar authorization of any government agency
required by Environmental Laws in effect on or prior to the Closing for the
ownership, use or operation of the Assets.
"Equipment" means all furniture, furnishings, fittings, equipment,
machinery, apparatus, tanks, pumping stations, sewers, appliances, trucks,
automobiles, other vehicles, signs and other articles of tangible personal
property owned or leased by Sellers of every kind whatsoever and wherever
located and used in the operation of the Assets, except all property owned by
Sellers or their Affiliates located in Tulsa, Oklahoma.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" means (i) all of the cash, deposits and bank accounts
of Sellers; (ii) all accounts receivable owed to Sellers by reason of deliveries
made by Sellers or their Affiliates or on account of the Assets prior to the
Effective Time; (iii) the financial books and records of Sellers and the
personnel, employment and other records of Sellers as to their former employees
other than the Refinery Records; (iv) any claims or other rights to receive
monies arising prior to or after the date of execution hereof which Sellers or
their Affiliates have or may have which are attributable to its ownership of the
Assets prior to the Effective Time; (v) all Sellers minute books and similar
materials related to maintenance of Sellers records other than the Refinery
Records; (vi) all ▇▇▇▇▇▇▇▇ Marks and all Intellectual Property not transferred
as a Contract or by Article VI of this Agreement; and (vii) all of Sellers' or
their Affiliates' assets and property not expressly included in the definition
of Assets.
"Financing Commitments" has the meaning set forth in Section 5.1(i).
"GAAP" means generally accepted accounting principles, as recognized by
the U.S. Financial Accounting Standards Board (or any generally recognized
successor), consistently applied.
"Governmental Action" means any authorization, application, approval,
consent, exemption, filing, license, notice, registration, permit or other
requirement of, to or with any Governmental Authority.
"Governmental Authority" means any national, state, county or municipal
government, domestic or foreign, any agency, board, bureau, commission, court,
department or other instrumentality of any such government, or any arbitrator in
any case that has jurisdiction over Sellers or Purchaser, as the case may be, or
any of its properties or assets.
"Guarantor Common Stock" has the meaning specified in Section 2.5.
"Hazardous Material" means (a) any "hazardous substance," as defined by
CERCLA; (b) any "hazardous waste" or "solid waste," in either case as defined by
RCRA; (c) any solid, hazardous, dangerous or toxic chemical, material, waste or
substance, within the meaning of and regulated by any Environmental Law; (d) any
radioactive material, including any naturally occurring
4
radioactive material, and any source, special or byproduct material (as defined
in 42 U.S.C. ▇▇.▇▇. 2011 et seq., and any amendments or authorizations thereof);
(e) any asbestos-containing materials in a friable condition; (f) any
polychlorinated biphenyls in any form or condition; or (g) petroleum, petroleum
hydrocarbons, or any fraction or byproducts thereof defined as hazardous
materials under (a), (b) or (c) above.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"Improvements" means any and all buildings, processing facilities,
tanks, pipelines, utilities or other improvements attached or affixed to the
Real Property.
"Indemnified Person" has the meaning specified in Section 9.1.
"Indemnifying Party" has the meaning specified in Section 9.1.
"Intellectual Property" means any and all patents and patent rights and
any applications for same, trade secrets, trademarks (both registered and
unregistered), trade names, copyrights (including software licenses),
proprietary and technical information, supplier lists and other supplier
information, customer lists and other customer information, price lists,
advertising and promotional materials, field performance data, research
materials, other proprietary intangibles, databases, processes, technical
know-how, business and product know-how, engineering and other drawings,
designs, plans, methods, engineering and manufacturing specifications,
technology, inventions, processes, methods, formulas, procedures, sales history,
model numbers, literature and phone numbers, and operating and quality control
manuals and data directly relating to Sellers' assets and used exclusively in
the Business and which are material thereto.
"Inventory" means the ▇▇▇▇▇▇▇▇ Feedstock Inventory and the ▇▇▇▇▇▇▇▇
Product Inventory .
"Knowledge" (whether or not capitalized) means (a) with respect to a
natural Person, the actual knowledge of that Person, and (b) with respect to a
Person which is a business entity, the actual knowledge of each of the executive
officers of such entity, except in the case of the Sellers, with respect to
which it means the actual knowledge of the following-named employees of Sellers
or Sellers' Affiliates:. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Germany, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇▇.
"Late Payment Rate" shall mean the lesser of (i) the Base Rate, plus
five hundred (500) basis points per annum, or (ii) the maximum rate of interest
permitted by Applicable Law, such rate to be adjusted automatically as and to
the extent that either (i) or (ii) immediately above changes from time to time.
"Leases and Easements" shall mean, collectively, those real property
leases and easements described on the Disclosure Schedule.
5
"Leased Real Property" means each parcel of real property leased or
subleased to the Sellers.
"Lien" means any lien, mortgage, security interest, pledge,
restriction, burden, encumbrance, rights of a vendor under any title retention,
or conditional sale or lease agreement or other arrangement substantially
equivalent thereto.
"Material Adverse Effect" means (a) when used with respect to Sellers,
a result or consequence that (i) would materially adversely affect the condition
(financial or otherwise) of the Assets, taken as a whole, or the Business, taken
as a whole, (ii) would materially impair the ability of Sellers to own, hold,
develop and operate their Assets, or (iii) would materially impair Sellers'
ability to perform its obligations hereunder or consummate the transactions
contemplated hereby; and (b) when used with respect to Purchaser, a result or
consequence that would impair Purchaser's ability to perform its obligations
hereunder or consummate the transactions contemplated hereby; provided, however
with respect to both (a) and (b), a Material Adverse Effect shall not include an
adverse effect arising from matters that generally affect the economy or the
industry in which the relevant party is engaged.
"Material Contracts" means any written or oral agreement, contract,
commitment or understanding to which Sellers is a party that either (a) involves
in excess of $1,000,000 per year, or (b) is necessary for Sellers to carry on
the Business as it is presently being conducted other than contracts relating to
employee benefit plans.
"Operations" means those activities conducted by Sellers prior to the
Closing Date utilizing the Assets.
"OSHA" means the Occupational Safety and Health Act of 1970, as
amended.
"Owned Real Property" means each parcel of real property fee title to
which is owned by Sellers.
"Parties" has the meaning specified in the Recitals of this Agreement.
"Permits" means the permits, licenses, variances, exemptions, orders,
franchises, approvals, consents, registrations and authorizations of all
Governmental Authorities necessary for the lawful conduct of the Business
conducted by Sellers or the lawful ownership, use and operation of the Assets.
"Permitted Liens" means shall mean any Liens that (a) do not result in
a Material Adverse Effect on Purchaser, (b) are listed on the Disclosure
Schedule, or (c) that are of record provided, however, that unless Purchaser has
expressly agreed herein to assume liability for a specific indebtedness,
Permitted Liens shall not include any indebtedness, whether or not of record,
which exists to Sellers' knowledge and is not disclosed to Purchaser.
6
"Person" (whether or not capitalized) means any natural person,
corporation, company, limited or general partnership, joint stock company, joint
venture, association, limited liability company, trust, bank, trust company,
business trust or other entity or organization, whether or not a Governmental
Authority.
"Purchase Price" has the meaning specified in Section 2.2.
"Purchaser" has the meaning specified in the introductory paragraph of
this Agreement.
"Purchaser Claims" has the meaning specified in Section 9.3(b).
"Purchaser's Employee" has the meaning specified in Section
6.9(c)(iii).
"Purchaser's Guarantor" has the meaning specified in the introductory
paragraph of this Agreement.
"Purchaser Representative" means any director, officer, employee,
agent, advisor (including legal, accounting and financial advisors), Affiliate
or other representative or agent authorized to act on behalf of Purchaser.
"RCRA" means the Resource Conservation and Recovery Act, as amended, or
any successor statutes or regulations promulgated thereunder.
"Real Property" shall mean the Owned Real Property and the Leased Real
Property.
"Records" means Sellers' books and records, in any form or media,
operational, maintenance, construction, environmental and technical records
exclusively used in connection with the Business or Assets up to the Effective
Time. For the avoidance of doubt, Records specifically excludes (i) any of the
Sellers' business plans, strategies and financial records which address or
reflect activities outside of the Business; (ii) any of Sellers' minute books
and records, tax returns or other materials which do not pertain to the Assets
or ongoing day-to-day operation of the Operations and (iii) medical or other
records for which the Purchaser's Employee's written consent to the release of
such record is not obtained.
"Refinery" has the meaning specified in the Recitals of this Agreement.
"Related Persons" (whether or not capitalized) has the meaning
specified in Section 9.1.
"Release" shall mean any spilling, leaking, seeping, pumping, pouring,
emitting, emptying, injecting, discharging, escaping, leaching, dumping,
disposing or releasing of a Hazardous Substance into the environment (including
the air, soil, surface water, groundwater, sewer, septic system, or waste
treatment, storage, or disposal systems) of any kind whatsoever, including, but
not limited to, the abandonment or discarding of barrels, containers, tanks or
other receptacles containing or previously containing a Hazardous Substance.
Migration after the Closing from a Release that occurred prior to the Closing
shall not be considered a new Release for purposes of this Agreement.
7
"Responsible Officer" means, with respect to any Party, the Chairman,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer or any Vice President of such Party.
"Sellers" has the meaning specified in the introductory paragraph of
this Agreement.
"Sellers' Employee" has the meaning specified in Section 6.9(d)(v).
"Sellers' Guarantor" has the meaning specified in the introductory
paragraph of this Agreement.
"Sellers Representative" means any director, officer, employee, agent,
advisor (including legal, accounting and financial advisors), Affiliate or other
representative or agent authorized to act on behalf of Sellers.
"Taxes" means taxes of any kind, levies or other like assessments,
customs, duties, or imposts, including income, gross receipts, ad valorem, value
added, excise, real or personal property, asset, sales, use, federal royalty,
license, payroll, transaction, capital, net worth and franchise taxes, estimated
taxes, withholding, employment, social security, workers compensation, utility,
severance, production, unemployment compensation, occupation, premium, windfall
profits, transfer and gains taxes or other governmental taxes imposed or payable
to the United States or any state, local or foreign governmental subdivision or
agency thereof, and in each instance such term shall include any interest,
penalties or additions to tax attributable to any such Tax, including penalties
for the failure to file any Tax Return or report.
"Third-Party Consent" means the consent or approval of any Person other
than Sellers, Purchaser, Purchaser's Guarantor, Sellers' Guarantor or any
Governmental Authority.
"Transition Services Agreement" means the form of agreement attached as
Exhibit A pursuant to which Sellers or their Affiliates agree to provide certain
services to Purchaser subsequent to the Closing.
"▇▇▇▇▇▇▇▇ Feedstock Inventory" means crude oil and intermediate
petroleum products (including gas-oil/FCC feed, alkylate, butanes, naphtha,
iso-butanes, isomerates, FCC gasoline, reformate, slurry/No. 6 oil) owned and/or
paid for (including pre-pays) by Sellers and located on Real Property and/or in
pipelines, barges, terminals, tank cars or tank trucks of third parties or
Sellers, including crude oil and intermediate petroleum products located in
Refinery process units, piping located on Real Property, Leases and Easements,
linefill, volumes in transit, positive net exchange volumes owed to Sellers and
tank bottoms but excluding water, sediment and sludge.
"▇▇▇▇▇▇▇▇ Other Assets" shall mean any and all Intangible Property,
Contracts which are transferred to Purchaser hereunder, Leases and Easements,
Permits which are transferred to Purchaser hereunder, and Intellectual Property
or licenses therefor, the membership interests in the peaking power plant
entities of ▇▇▇▇▇▇▇▇ Generating Memphis, L.L.C. and ▇▇▇▇▇▇▇▇ Power
8
Marketing, LLC, and all other assets owned by Sellers and located in or on the
Real Property and not an Excluded Asset.
"▇▇▇▇▇▇▇▇ Other Inventory" means the catalysts, chemicals, additives,
spare parts, store stocks and supplies owned by Sellers of every kind whatsoever
located at the Refinery or on the Real Property.
"▇▇▇▇▇▇▇▇ Product Inventory " means refined petroleum products
(including propane and propane/propylene mix) intended for sale which are owned
and/or paid for (including pre-pays) by Sellers and located on Real Property
and/or in pipelines, barges, terminals, tank cars or tank trucks of third
parties or Sellers, including refined petroleum products located in Refinery
process units, piping on Real Property, Leases and Easements, linefill, positive
net exchange volumes owed to Sellers, volumes in transit and tank bottoms but
excluding water, sediment and sludge.
"▇▇▇▇▇▇▇▇ Marks" has the meaning set forth in Section 6.12.
1.2 Other Definitional Provisions.
(a) All references in this Agreement to Exhibits, Articles,
Sections, subsections and other subdivisions refer to the corresponding
Exhibits, Articles, Sections, subsections and other subdivisions of or to this
Agreement unless expressly provided otherwise. References in a Section of this
Agreement to any Disclosure Schedule shall refer to (i) that section of the
Disclosure Schedule which corresponds to the number of such Section, and (ii)
any other section or schedule of the Disclosure Schedules which contains
information or disclosures that reasonably relate to the substance of such
Section. Titles appearing at the beginning of any Articles, Sections,
subsections or other subdivisions of this Agreement are for convenience only, do
not constitute any part of this Agreement, and shall be disregarded in
construing the language hereof.
(b) Exhibits and Schedules to this Agreement are attached hereto
and by this reference incorporated herein for all purposes.
(c) The words "this Agreement," "herein," "hereby," "hereunder"
and "hereof," and words of similar import, refer to this Agreement as a whole
and not to any particular subdivision unless expressly so limited. The words
"this Article," "this Section" and "this subsection," and words of similar
import, refer only to the Article, Section or subsection hereof in which such
words occur. The word "or" is not exclusive, and the word "including" (in its
various forms) means including without limitation.
(d) Pronouns in masculine, feminine or neuter genders shall be
construed to state and include any other gender, and words, terms and titles
(including terms defined herein) in the singular form shall be construed to
include the plural and vice versa, unless the context otherwise requires.
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ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 Purchase and Sale of Assets. At the Closing, Purchaser shall
purchase from Sellers, and Sellers shall sell to Purchaser, the Assets on the
terms and subject to the conditions set forth in this Agreement.
2.2 Purchase Price.
(a) The consideration for the purchase of the Assets is the cash
sum of U.S. $315,000,000 less the adjustment described in Section 2.3 (the "Base
Purchase Price"), plus the value of the Inventory of Sellers at the Effective
Time (not including that Inventory located in the Refinery process units and
related piping) calculated as set forth in Section 2.4 below (together with the
Base Purchase Price, the "Purchase Price").
(b) The amount to be paid by Purchaser at Closing shall be the
Base Purchase Price plus an amount equal to an estimate of the value of the
Inventory of Sellers (not including Inventory located in the Refinery process
units and related piping) calculated as set forth in Section 2.4 (the "Closing
Purchase Price").
2.3 Adjustment to Base Purchase Price. The Base Purchase Price shall be
reduced by the actual reasonable out-of-pocket costs incurred by Purchaser in
connection with obtaining the Financing Commitments, which costs shall include
commitment fees, takedown fees, ticking fees and related expenses; provided,
however, that in no event shall the adjustment to the Base Purchase Price
described in this Section 2.3 exceed an aggregate of $5,000,000.
2.4 Inventory Estimate; Final Inventory Amounts.
(a) The value of the Inventory at the Effective Time to be
included in the Closing Purchase Price ("Inventory Estimate") shall be estimated
by Sellers and provided to Purchaser at least five (5) business days before the
Closing Date using the method of determination as described on the Disclosure
Schedule. Not later than 10 days after the Closing, the actual value of the
Inventory at the Effective Time to be included as part of the Purchase Price
shall be calculated pursuant to the method of determination as described on the
Disclosure Schedule.
(b) Not later than 5 days after the Inventory adjustments have
become the Final Inventory Amounts, Sellers or Purchaser, as the case may be,
shall make a payment plus interest with respect to the Purchase Price based on
any differences between the Inventory Estimate and the Final Inventory Amounts.
The interest at the Late Payment Rate shall be calculated for the period from
the Closing Date to the payment date.
(c) If Purchaser disagrees with the Sellers' proposed Inventory
adjustment, it may, within ten (10) days after its receipt thereof, deliver a
notice to the Sellers disagreeing with such calculation and setting forth its
calculation of such amount ("Objection"). If Purchaser does
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not timely deliver an Objection, the Sellers' proposed Inventory adjustment
shall be deemed final (the "Final Inventory Amounts"). If the Purchaser timely
delivers an Objection, the Sellers shall then have ten (10) days from the date
of receipt to review and respond to the Objection (the "Review Period"). The
Sellers and the Purchaser shall use their respective commercially reasonable
best efforts to reach agreement on the disputed items or amounts.
If the Purchaser and Sellers are unable to resolve their disagreements
over the Inventory adjustments within ten (10) days following the expiration of
the Review Period, the dispute shall be resolved by the accounting firm of KPMG
LLP ("CPA Firm"). The CPA Firm shall promptly review this Agreement and the
disputed items or amounts subject to any scope that the Parties jointly agree
upon. The Purchaser and Sellers shall make readily available to the CPA Firm all
books and records relating to the Inventory volumes and price calculation and
any other items reasonably requested by the CPA Firm. In resolving the dispute,
the CPA Firm shall consider only those items or amounts on which the Parties
have disagreed.
The CPA Firm shall deliver to the Parties, as promptly as practicable,
a report resolving the disputed Inventory adjustments. Such report shall be
final and binding upon each Party. When received by the Parties the Inventory
adjustments determined in the report shall be deemed the Final Inventory
Amounts. The cost of such review and report shall be borne equally by Sellers
and Purchaser. Neither Purchaser nor Sellers has retained the CPA Firm during
the past two years, and neither Party will retain the CPA Firm at any time while
the CPA Firm is reviewing the disputed Inventory adjustments in accordance with
this Section 2.4(c).
2.5 Method of Payment; Allocation of Purchase Price.
(a) All amounts to be disbursed at or, pursuant to the terms of
this Agreement, prior to the Closing or paid after Closing based on adjustments,
shall be made in immediately available U.S. funds, by wire transfer to a U.S.
bank account designated by Sellers.
However, if Purchaser notifies Sellers that the condition to
Purchaser's obligation to Close set forth in Section 7.2(e) of this Agreement
has not been met to the extent necessary to finance the full amount of the
Purchase Price in cash, Sellers may (but shall not be obligated to), within five
(5) business days following receipt of such notice, elect to notify Purchaser in
writing that Sellers will, in lieu of cash, accept shares of the common stock of
Purchaser's Guarantor ("Guarantor Common Stock") valued, as set forth below, in
the amount of up to $100,000,000 to be applied toward the Base Purchase Price.
If Sellers elect to accept shares of Guarantor Common Stock as
part of the Purchase Price, such shares shall be valued at the lesser of (i)
$15.00 per share less the amount of four and one-half percent (4.5%)
representing a customary underwriting spread in a public offering of comparable
equity securities, or (ii) the amount of the net proceeds per share (net of
underwriting discounts) received by Purchaser's Guarantor in the event that it
effects a public offering of Guarantor Common Stock prior to Closing of an
amount less than the size contemplated by the Purchaser's Guarantor as necessary
to enable Purchaser to pay the full amount of the Purchase Price entirely in
cash. In such event, at Closing, Purchaser's Guarantor will issue a certificate
to Sellers or
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its designee evidencing such shares and the balance of the Purchase Price shall
be paid in cash by wire transfer. In the event that such shares are issued to
Sellers as part of the Purchase Price, Sellers or its designee, as the case may
be, shall have the registration rights provided in Article X below with respect
to such shares.
(b) The Parties agree that $18,750,000 of the Purchase Price
shall be allocated to the Riverside Terminal located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in
Memphis, Tennessee and its related dock facilities.
2.6 Limited Assumption and Retention of Liabilities.
(a) Upon the condition that the Closing shall occur, Purchaser
shall assume and agrees to discharge all liabilities relating to or arising from
the ownership or operation of the Assets from and after the Effective Time and
those additional liabilities and obligations specifically provided for herein
including, but not limited to, all environmental liabilities and obligations
covered by Purchaser's indemnity obligations under Article IX.
(b) Sellers shall retain and be liable for liabilities and
obligations of Sellers related to or arising from the ownership or operation of
the Assets prior to the Effective Time except:
(i) environmental and other liabilities and obligations
expressly assumed by the Purchaser pursuant to this Agreement; and
(ii) obligations arising after the Effective Time to be
performed after the Effective Time under Contracts, Leases and Easements and
Permits that have been assigned to and assumed by Purchaser pursuant to this
Agreement.
ARTICLE III
CLOSING
3.1 Closing. The Closing will take place at the offices of Sellers or
their attorneys in Tulsa, Oklahoma on March 1, 2003, or, if the conditions to
Closing set forth in this Agreement have not been satisfied by such date, on the
earlier of the first business day following the day on which all such conditions
have been satisfied or waived or March 31, 2003, or at such other time and place
as the Parties may mutually agree (the "Closing Date").
3.2 Closing Obligations. At the Closing:
(a) Sellers shall deliver to Purchaser:
(i) a properly executed and acknowledged special warranty deed
or deeds to the Owned Real Property, the Improvements thereon, and the
appurtenances thereto, each such deed to be substantially in the form of Exhibit
B, subject to any applicable requirements for a special warranty deed under
applicable state law;
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(ii) properly executed assignments of Leases and Easements,
Contracts and Permits to the extent such can be assigned;
(iii) duly executed and recordable, if applicable, releases of
all Liens (including those Permitted Liens set forth on Disclosure Schedule
4.6(c), but excluding all other Permitted Liens) affecting the Assets;
(iv) properly executed and acknowledged general conveyances of
all of the Assets for which no specific conveyance is clearly applicable;
(v) copies of resolutions of Sellers, certified as being
correct and complete and then in full force and effect, authorizing the
execution of this Agreement and any other agreements and the consummation of the
transactions contemplated under this Agreement and the other agreements
contemplated hereby;
(vi) certificates of incumbency and specimen signatures of the
signatory officers of Sellers;
(vii) a certificate of existence and good standing by the
State of Delaware for each Sellers, and copies of Sellers' registration to do
business in the State of Tennessee and any other states in which any Assets are
located, as a foreign company;
(viii) such other certificates and documents as may be called
for under this Agreement or as Purchaser shall reasonably request;
(ix) a Transition Services Agreement in the form of Exhibit A
hereto executed on behalf of Sellers;
(x) the Environmental Insurance Policy described in Section
6.11;
(xi) written opinion of in-house counsel to Sellers, covering,
in the aggregate, Sellers' due organization, valid existence and good standing
as legal entities in Delaware, registration and good standing in Tennessee and
any other states in which any Assets are located, and the due authorization,
execution and delivery by Sellers of this Agreement, which opinion shall be
substantially in the form attached hereto as Exhibit C; and
(xii) a certificate or certificates dated the Closing Date and
executed on behalf of Sellers by one of each of their Responsible Officers to
the effect that Sellers' representations, warranties and covenants contained
herein are true and correct as of the Closing Date (except to the extent set
forth in such certificate) as if made on and as of the Closing Date.
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(b) Sellers' Guarantor shall deliver to Purchaser:
(i) a certificate or certificates dated the Closing Date and
executed on behalf of Sellers' Guarantor by one of its Responsible Officers to
the effect that Sellers' Guarantor's representations, warranties and covenants
contained herein are true and correct as of the Closing Date (except to the
extent set forth in such certificate) as if made on and as of the Closing Date;
(ii) copies of resolutions of Sellers' Guarantor's board of
directors, certified as being correct and complete and then in full force and
effect, authorizing the execution of this Agreement and the other agreements
contemplated hereby, the Sellers' Guaranty, and the consummation of the
transactions contemplated under this Agreement;
(iii) certificates of incumbency and specimen signatures of
the signatory officers of Sellers' Guarantor;
(iv) a certificate of existence and good standing issued by
the State of Delaware;
(v) such other certificates and documents as may be called for
under this Agreement or as Sellers shall reasonably request; and
(vi) the performance guaranty in the form as specified in
Exhibit D (the "Sellers' Guaranty").
(c) Purchaser shall deliver to Sellers:
(i) the Closing Purchase Price, plus payment for all costs
related to the Audited Financial Statements as required by Section 6.24 and the
actions taken by Sellers at Purchaser's request as described in Section 6.2(n)
of this Agreement, by wire transfer to the account designated by Sellers, in
immediately available funds;
(ii) a certificate or certificates dated the Closing Date and
executed on behalf of Purchaser by one of its Responsible Officers to the effect
that Purchaser's representations, warranties and covenants contained herein are
true and correct as of the Closing Date (except to the extent set forth in such
certificate) as if made on and as of the Closing Date;
(iii) copies of resolutions of the Purchaser, certified as
being correct and complete and then in full force and effect, authorizing the
execution of this Agreement and any other agreements contemplated hereby, and
the consummation of the transactions contemplated under this Agreement and the
other agreements contemplated hereby;
(iv) certificates of incumbency and specimen signatures of the
signatory officers of Purchaser;
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(v) certificate of existence and good standing issued by the
State of Delaware and a copy of Purchaser's certificate of registration to do
business in the State of Tennessee and any other states in which any Assets are
located, as a foreign company;
(vi) such other certificates and documents as may be called
for under this Agreement or as Sellers shall reasonably request;
(vii) written opinion of counsel to Purchaser, covering, in
the aggregate, Purchaser's due organization, valid existence and good standing
as a corporation in Delaware, registration and good standing in Tennessee and
any other states in which any Assets are located and the due authorization,
execution and delivery by Purchaser of this Agreement, which opinion shall be in
substantially the form attached hereto as Exhibit E; and
(viii) a Transition Services Agreement in the form of Exhibit
A hereto executed on behalf of Purchaser.
(d) Purchaser's Guarantor shall deliver to Sellers:
(i) a certificate or certificates dated the Closing Date and
executed on behalf of Purchaser's Guarantor by one of its Responsible Officers
to the effect that Purchaser's Guarantor's representations, warranties and
covenants contained herein are true and correct as of the Closing Date (except
to the extent set forth in such certificate) as if made on and as of the Closing
Date;
(ii) copies of resolutions of Purchaser's Guarantor's board of
directors, certified as being correct and complete and then in full force and
effect, authorizing the execution of this Agreement, the Purchaser's Guaranty,
and the consummation of the transactions contemplated under this Agreement and
the Purchaser's Guaranty;
(iii) certificates of incumbency and specimen signatures of
the signatory officers of Purchaser's Guarantor;
(iv) a certificate of existence and good standing issued by
the State of Delaware;
(v) such other certificates and documents as may be called for
under this Agreement or as Sellers shall reasonably request;
(vi) the guaranty as specified in Exhibit F (the "Purchaser's
Guaranty");
(vii) written opinion of counsel to Purchaser's Guarantor,
covering, in the aggregate, Purchaser Guarantor's due organization, valid
existence and good standing as a corporation in Delaware, and the due
authorization, execution and delivery by Purchaser's Guarantor of this Agreement
and the Purchaser's Guaranty, and that upon the issuance of the Guarantor
15
Common Stock, if any, in accordance with this Agreement, such
Guarantor Common Stock will be duly authorized, validly issued, fully paid and
non-assessable, which opinion shall be substantially in the form attached hereto
as Exhibit G; and
(vii) a certificate for the Guarantor Common Stock, if any, to
be issued pursuant to Section 2.5. .
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
AND SELLERS' GUARANTOR
Sellers represent and warrant (except with regards to Section 4.18,
which Section is only applicable to Sellers' Guarantor) to Purchaser to the
Knowledge of Sellers, except with respect to Sections 4.1, 4.2, and 4.13 which
shall not be limited to the Knowledge of Sellers, as follows:
4.1 Organization and Standing. Each of the Sellers and ▇▇▇▇▇▇▇▇ Power
Marketing, LLC is a corporation or limited liability company, as indicated in
the first paragraph of this Agreement, duly organized, validly existing and in
good standing under the laws of the State of Delaware and is in good standing as
a corporation or limited liability company, as the case may be, in all
jurisdictions where the nature of its properties or business requires it.
4.2 Authority and Binding Obligations. Each of the Sellers has the
power and authority to execute, deliver and perform its obligations under this
Agreement and the other agreements contemplated hereby, as applicable. The
execution, delivery, and performance of this Agreement and the other agreements
contemplated hereby by Sellers:
(a) have been duly authorized by requisite company action; and
(b) do not conflict or result in a violation or breach of or
result in the acceleration of rights, benefits or payments under the
organizational documents of the Sellers.
Each of this Agreement and the other agreements contemplated hereby constitute a
legal, valid and binding obligation of Sellers, enforceable against Sellers in
accordance with their respective terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity).
4.3 Consent; Non-Contravention.
(a) Except as otherwise set forth in the Disclosure Schedule and
for the filing of a pre-merger notification report by Sellers under the HSR Act
and the expiration or termination of the applicable waiting period thereunder,
no consent, waiver, approval, order, authorization or other action by or filings
with any Governmental Authority or other Person is required in connection with
16
the execution, delivery and performance by Sellers of this Agreement or the
other agreements contemplated hereby.
(b) Except as specified in the Disclosure Schedule, neither the
execution and delivery of this Agreement or the other agreements contemplated
hereby by Sellers, nor the consummation of the transactions contemplated hereby
or thereby will violate or conflict with or result in the acceleration of
rights, or benefits or payments under any agreement, instrument, statute,
regulation, rule, order, writ, judgment or decree to which the Sellers are
directly or indirectly a party or are directly or indirectly subject, except for
such violations, conflicts and accelerations which will not (i) prevent or
materially delay consummation of the transactions contemplated by this Agreement
or the other agreements contemplated hereby, (ii) prevent Sellers from
performing their obligations under this Agreement or the other agreements
contemplated hereby, or (iii) result in a Material Adverse Effect.
4.4 Litigation. Except as set forth in the Disclosure Schedule, there
are no lawsuits or other proceedings pending or threatened against the Sellers,
the Business or any of the Assets by or before any Governmental Authority which
there is a reasonable probability of an adverse determination that would have a
Material Adverse Effect.
4.5 Contracts and Commitments. The Disclosure Schedule contains an
accurate and complete list of each Material Contract which is not otherwise
listed in the Leases and Easements sections of the Disclosure Schedule (the
"Commitments"). Each Commitment is a legal, valid and binding obligation of the
Sellers enforceable against Sellers in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and general principles of equity (regardless of whether enforceability
is considered in a proceeding at law or in equity). Except as specified in the
Disclosure Schedule, no Seller is in default under any of the Commitments where
such default would result in a Material Adverse Effect. Except as specified in
the Disclosure Schedule since the date of this Agreement, Sellers has not
received written notice of cancellation or termination of any Commitment from
any party thereto.
4.6 Leases and Easements; Encumbrances.
(a) Except for Leases and Easements, the failure of which to
possess or hold would not have a Material Adverse Effect, the Disclosure
Schedule contains an accurate and complete list of Leases and Easements held by
Sellers. All Leases and Easements are (i) legal, valid and binding obligations
of the Sellers enforceable against the Sellers in accordance with their terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity), and
(ii) in full force and effect except as would not have a Material Adverse
Effect. Except for matters that do not materially interfere with Sellers'
rights, Sellers have peaceful and undisturbed possession under the Easements and
Leases.
17
(b) All pipelines, pipelines easements, utility lines, utility
easements and other easements, leaseholds and rights of way burdening any of the
Real Property, except for such which would not have a Material Adverse Effect,
are set forth on the Disclosure Schedule.
(c) The Real Property is also encumbered by the terms set forth on
the Disclosure Schedule.
4.7 Conditions of Improvements and Equipment. The Improvements,
Equipment, ▇▇▇▇▇▇▇▇ Other Inventory and other tangible property comprising the
Assets are being sold "AS IS," "WHERE IS," WITHOUT WARRANTY OF ANY KIND (EXCEPT
AS TO TITLE) EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY,
CONDITION OR FITNESS, AND ALL SUCH WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.
PURCHASER WAIVES THE UNIFORM COMMERCIAL CODE WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO SUCH IMPROVEMENTS, EQUIPMENT
AND INVENTORY.
4.8 Compliance with Laws. As of the date of this Agreement, Sellers are
in compliance with all Applicable Laws, excluding Environmental Laws (which are
subject to Section 4.12 below), relating to the Assets or the Business, except
as set forth on the Disclosure Schedule or where the noncompliance with which
would not result in a Material Adverse Effect.
4.9 Due Diligence.
(a) Sellers have or will (i) made or make available to Purchaser
all books, records, financial statements, business plans, management appraisals,
documents, Contracts, Leases and Easements, Permits and other material
information requested in writing by Purchaser; (ii) instructed their and their
Affiliates' employees, counsel, advisors and auditors to respond in writing to
all written inquiries from Purchaser (subject to any confidentiality agreements,
applicable legal restrictions and any applicable privileges); and (iii) to the
extent requested in writing, provided full access to the Assets, except, with
respect to (i), (ii) and (iii) above where Sellers have expressly declined in
writing to comply with any such request with respect to identified items or
categories of information; and
(b) No books, records, financial statements, documents, Contracts,
Leases and Easements, Permits or other material information requested in writing
by Purchaser that Sellers failed to fully disclose when so requested would have
a Material Adverse Effect, provided that Sellers shall have no liability to
Purchaser for the breach of this representation or warranty to the extent that
the facts or circumstances that give rise to such breach were actually known to
Purchaser on or prior to the Effective Time.
4.10 Permits. The Disclosure Schedule contains a true and complete list
of the material Permits which Sellers have obtained and hold or, in the ordinary
course of business have applied for, that are required by Sellers to conduct the
Business as it has been conducted by Sellers. Sellers are in compliance in all
material respects with the terms of its Permits.
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4.11 Taxes. There are no tax liens open, pending against or, threatened
against the Assets. Sellers have filed (or will cause to be filed) all tax
returns that are required to be filed with respect to the Assets and Business
through the Closing Date, and such tax returns are (and will be) true, correct
and complete in all material respects and were (and will be) prepared in
conformity with all Applicable Law, and Sellers have paid (or will pay when due)
all Taxes due on such tax returns as owing which are attributable to any taxable
period or portion thereof that ends on or before the Closing Date except for
amounts being contested in good faith by appropriate proceedings.
4.12 Environmental Matters. Except as set forth in the Disclosure
Schedule:
(a) Sellers have not been notified by any Governmental Authority
that any of its Assets are the subject of any investigation or inquiry by any
Governmental Authority evaluating whether any remedial action is needed to
respond to a release of any Hazardous Material or to the improper storage or
disposal (including storage or disposal at off-site locations) of any Hazardous
Material;
(b) Neither Sellers nor any other Person have filed any notice
under any federal, state or local law indicating that (i) Sellers are
responsible for the improper release into the environment, or the improper
storage or disposal, of any Hazardous Material, or (ii) any Hazardous Material
is or has been improperly stored or disposed of upon any of the property of
Sellers;
(c) Sellers have not received any claim, complaint, notice, letter
of violation, inquiry or request for information involving any matter which
remains unresolved as of the date hereof with respect to any alleged violation
by Sellers of any Environmental Law or regarding potential liability under any
Environmental Law relating to or in connection with the operation of the
Business or on any property or other assets of Sellers;
(d) None of the Assets, and no property on which any of the
Business or a Sellers' assets are being or has been operated, is listed on the
National Priorities List pursuant to CERCLA or on the CERCLIS or on any other
federal or state list as sites requiring investigation or cleanup.
4.13 Good and Marketable Title.
(a) The Disclosure Schedule contains a true and complete
description of the Real Property.
(b) Except as specified in Section 4.6 or the Disclosure Schedule,
Sellers have good and marketable title to all of the Assets, free and clear of
any Liens, other than Permitted Liens, except for Assets sold, consumed or
otherwise disposed of in the ordinary course of business and consistent with
past practices.
4.14 Condemnation. There are no pending or threatened condemnation or
eminent domain proceedings or contemplated sales in lieu thereof, involving a
partial or total taking of any of the Assets.
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4.15 Labor Matters. Except as set forth on the Disclosure Schedule,
Sellers have not received any charges of discrimination, notification of any
unfair labor practice charges or complaints pending before any court or agency
having jurisdiction thereof nor are there any current union representation
claims involving any of the Business Employees. Sellers are not aware of any
strike, work stoppages, work slowdowns or lockouts or of any threats thereof,
except for routine grievance matters, by or with respect to any of the Business
Employees. Since January 1, 2000, there have been no significant labor disputes,
strikes, slowdowns, work stoppages, lockouts or similar matters except for
routine grievance matters involving Business Employees.
4.16 Actions and Proceedings. Except as set forth in the Disclosure
Schedule, no proceeding or investigation is pending or threatened before any
court, arbitrator or administrator or Governmental Authority, bureau or agency
to restrain or prohibit, or to obtain damages, a discovery order or other relief
in connection with this Agreement or any of the other agreements contemplated
hereby or any material part of the transactions contemplated hereby or thereby.
4.17 Disclaimer. Except as and to the extent set forth in this
Agreement and the other documents and instruments delivered in connection with
this Agreement, the Sellers make no other representations or warranties, and
disclaims all liability and responsibility for any representation, warranty,
statement or information made or communicated (orally or in writing) to
Purchaser.
4.18 Sellers' Guarantor's Representations and Warranties. Sellers'
Guarantor represents and warrants to Purchaser to the Knowledge of Sellers'
Guarantor, except with respect to Sections 4.18(a) and 4.18(b) which shall not
be limited to the Knowledge of Sellers' Guarantor, as follows:
(a) Organization and Standing.
Sellers' Guarantor is a corporation duly organized, validly
existing in good standing under the laws of the State of Delaware and is in good
standing as a corporation in all jurisdictions where the nature of its
properties or business requires it.
(b) Authority and Binding Obligations.
Sellers' Guarantor has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the
Sellers' Guaranty. The execution, delivery, and performance of this Agreement
and the Sellers' Guaranty by Sellers' Guarantor have been duly and validly
authorized by all necessary corporate action and do not conflict or result in a
violation or breach of the articles of incorporation and by-laws of the Sellers'
Guarantor. This Agreement and the Sellers' Guaranty constitute legal, valid and
binding obligations of the Sellers' Guarantor enforceable against Sellers'
Guarantor in accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or equity).
20
(c) No Consent Required; Non-Contravention.
(i) Except as specified in the Disclosure Schedule, no
consent, waiver, approval, order, authorization or other action by or filings
with any Governmental Authority or other entity is required in connection with
the execution, delivery and performance by Sellers' Guarantor of this Agreement
or the Sellers' Guaranty.
(ii) Except as specified in the Disclosure Schedule, neither
the execution and delivery of this Agreement or the Sellers' Guaranty by
Sellers' Guarantor, nor the consummation of the transactions contemplated hereby
will violate or conflict with or result in the acceleration of rights, or
benefits or payments under any agreement, instrument, statute, regulation, rule,
order, writ, judgment or decree to which the Sellers' Guarantor is directly or
indirectly a party or is directly or indirectly subject, except for such
violations, conflicts and accelerations which will not (x) prevent or materially
delay consummation of the transaction contemplated by this Agreement or the
Sellers' Guaranty; (y) prevent Sellers' Guarantor from performing its
obligations under this Agreement or the Sellers' Guaranty; or (z) result in a
Material Adverse Effect.
(d) Litigation.
Except as specified in the Disclosure Schedule, there are no
lawsuits, actions, arbitrations or other proceedings pending or threatened by
any Person against or affecting the Sellers' Guarantor by or before any court,
arbitrator or Governmental Authority which would prohibit the Sellers' Guaranty.
(e) No Breach.
Except as specified in the Disclosure Schedule, neither the
execution and delivery of this Agreement or the Sellers' Guaranty by Sellers'
Guarantor, nor the consummation of the transactions contemplated hereby or
thereby will violate or conflict with, or result in the acceleration of rights,
benefits or payments under; (i) any provision of the Sellers' Guarantor's
articles of incorporation or bylaws; (ii) any statute, law, regulation or
governmental order to which the Sellers' Guarantor or the assets and properties
of any thereof are bound or subject; (iii) any commitment to which the Sellers'
Guarantor is a party or by which it or any of its properties may be bound or
subject; and (iv) any agreement, contract or commitment of the Sellers'
Guarantor or to which it is a party or by which it or any of its properties may
be bound or subject, except, with respect to clauses (ii), (iii) and (iv), for
such violations and conflicts which will not (y) prevent or materially delay
consummation of the transactions contemplated by this Agreement, and the
Sellers' Guaranty or (z) prevent Sellers' Guarantor from performing its
obligations under this Agreement and the Sellers' Guaranty.
(f) Actions and Proceedings.
Except as specified in the Disclosure Schedule, no proceeding or
investigation is pending or threatened before any court, arbitrator or
administrator or Governmental Authority, bureau or agency to restrain or
prohibit, or to obtain damages, a discovery order or other relief in
21
connection with this Agreement, or the Sellers' Guaranty or any material part of
the transactions contemplated hereby or thereby.
(g) No Knowledge of Breaches.
Except for any breaches of representations or covenants, the
consequences of which have been waived by Sellers' Guarantor, Sellers' Guarantor
has no knowledge of any breaches of any representation or covenant herein by
Purchaser.
(h) Financial Capacity; Future Performance. Sellers' Guarantor has
or will have the financial capacity to guaranty the Sellers' payments and
performance under the Agreement. Sellers' Guarantor is not aware of any facts or
circumstances that now or in the future would have a Material Adverse Effect on
its financial condition, results of operations, business, properties, assets, or
liabilities. Sellers' Guarantor is solvent, is not in the hands of a receiver,
nor is any receivership pending, and no proceedings are pending by or against it
for bankruptcy or reorganization in any state or federal court.
(i) Disclaimer.
Except as and to the extent set forth in this Agreement and the
other documents and instruments delivered in connection with this Agreement,
Sellers' Guarantor makes no other representations or warranties, and disclaims
all liability and responsibility for any representation, warranty, statement or
information made or communicated (orally or in writing) to Purchaser.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER AND PURCHASER'S GUARANTOR
5.1 Purchaser's Representations and Warranties. Purchaser represents
and warrants to Sellers to the Knowledge of Purchaser, except with respect to
Sections 5.1(a) and 5.1(b) which shall not be limited to the Knowledge of
Purchaser, as follows:
(a) Organization and Standing.
Purchaser is a corporation duly organized, validly existing in
good standing under the laws of the State of Delaware and is in good standing as
a corporation in all jurisdictions where the nature of its properties or
business requires it.
(b) Authority and Binding Obligations.
Purchaser has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement and the other
agreements contemplated hereby. The execution, delivery, and performance of this
Agreement and the other agreements contemplated hereby by Purchaser have been
duly and validly authorized by all necessary corporate action and do not
conflict
22
or result in a violation or breach of the articles of incorporation and by-laws
of the Purchaser. Each of this Agreement and the other agreements contemplated
hereby, constitutes a legal, valid and binding obligation of Purchaser
enforceable against Purchaser in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general principles of equity (regardless of whether enforceability is considered
in a proceeding at law or in equity).
(c) No Consent Required; Non-Contravention.
(i) Except as otherwise specified in the Disclosure Schedule,
no consent, waiver, approval, order, authorization or other action by or filings
with any Governmental Authority or other Person is required in connection with
the execution, delivery and performance by Purchaser of this Agreement or the
other agreements contemplated hereby.
(ii) Except as specified in the Disclosure Schedule, neither
the execution and delivery of this Agreement or the other agreements
contemplated hereby by Purchaser nor the consummation of the transactions
contemplated hereby will violate or conflict with or result in the acceleration
of rights, or benefits or payments under any agreement, instrument, statute,
regulation, rule, order, writ, judgment or decree to which the Purchaser is
directly or indirectly a Party or is directly or indirectly subject, except for
such violations and conflicts which will not (x) prevent or materially delay
consummation of the transactions contemplated by this Agreement or the other
agreements contemplated hereby, (y) prevent Purchaser or its Affiliate which is
a party from performing its obligations under this Agreement or (z) result in a
Material Adverse Effect.
(d) Litigation.
Except as specified in the Disclosure Schedule, there are no
lawsuits, actions, arbitrations or other proceedings pending or threatened by
any Person against or affecting the Purchaser by or before any court, arbitrator
or Governmental Authority which (i) would prohibit any of the transactions
contemplated by this Agreement or (ii) if adversely determined would have an
adverse determination that would have a Material Adverse Effect.
(e) No Breach.
Except as specified in the Disclosure Schedule, neither the
execution and delivery of this Agreement by Purchaser, nor the consummation of
the transactions contemplated hereby will violate or conflict with, or result in
the acceleration of rights, benefits or payments under: (i) any provision of the
Purchaser's articles of incorporation or bylaws; (ii) any statute, law,
regulation or governmental order to which the Purchaser or the assets and
properties of any thereof are bound or subject; (iii) any commitment to which
the Purchaser is a Party or by which it or any of its properties may be bound or
subject; and (iv) any agreement, contract or commitment of the Purchaser or to
which it is a Party or by which it or any of its properties may be bound or
subject, except, with respect to clauses (ii), (iii) and (iv), for such
violations and conflicts which will not (x) prevent or materially delay
consummation of the transactions contemplated by this Agreement and other
23
agreements contemplated hereby; (y) prevent Purchaser from performing its
obligations under this Agreement and other agreements contemplated hereby; or
(z) result in a Material Adverse Effect.
(f) Actions and Proceedings.
Except as specified in the Disclosure Schedule, no proceeding or
investigation is pending or threatened before any court, arbitrator or
administrator or Governmental Authority, bureau or agency to restrain or
prohibit, or to obtain damages, a discovery order or other relief in connection
with this Agreement or any of the other agreements contemplated hereby or any
material part of the transactions contemplated hereby or thereby.
(g) Independent Decision.
Purchaser has made its own independent analysis and judgment of
the commercial potential, condition and usefulness of the Assets and the
Business, and is not relying upon any projections from Sellers regarding
prospective operations of the Assets in the future.
(h) No Knowledge of Breaches.
Except for any breaches of representations or covenants, the
consequences of which have been waived by Purchaser, Purchaser has no knowledge
of any breaches of any representation or covenant herein by Sellers.
(i) Financial Capacity; Future Performance.
(i) Subject to the conditions set forth in Section 7.2(e),
Purchaser has or will have the financial capacity to consummate the purchase and
to operate the Assets after the purchase. Purchaser is, as of the date hereof,
not aware of any facts or circumstances that now or in the future would have a
Material Adverse Effect on its financial condition, results of operations,
business, properties, assets, or liabilities. Purchaser is solvent, is not in
the hands of a receiver, nor is
any receivership pending, and no proceedings are pending by or against it for
bankruptcy or reorganization in any state or federal court.
(ii) Attached as Exhibit H are copies of the financing
commitment letters from Blackstone Management Associates III, Occidental C.O.B.
Partners, ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Capital Group Inc. (the "Financing Commitments"). The Financing
Commitments are in full force and effect and have not been modified, amended,
revised or otherwise changed in any respect and the financing parties thereunder
have not given any indication that the prospects of obtaining the financing have
changed adversely in any respect. Purchaser fully expects that all conditions
required for such financing will be fully performed and satisfied on its part
and has no reason to believe that the financing contemplated by the Financing
Commitments will not be effected.
24
(j) Disclaimer.
Except as and to the extent set forth in this Agreement and the
other documents and instruments delivered in connection with this Agreement,
Purchaser makes no other representations or warranties, and disclaims all
liability and responsibility for any representation, warranty, statement or
information made or communicated (orally or in writing) to Sellers.
5.2 Purchaser's Guarantor's Representations and Warranties. Purchaser's
Guarantor represents and warrants to Sellers to the Knowledge of Purchaser's
Guarantor, except with respect to Sections 5.2(a) and 5.2(b) which shall not be
limited to the Knowledge of Purchaser's Guarantor as follows:
(a) Organization and Standing.
Purchaser's Guarantor is a corporation duly organized, validly
existing in good standing under the laws of the State of Delaware and is in good
standing as a corporation in all jurisdictions where the nature of its
properties or business requires it.
(b) Authority and Binding Obligations.
Purchaser's Guarantor has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the
Purchaser's Guaranty. The execution, delivery, and performance of this Agreement
and the Purchaser's Guaranty by Purchaser's Guarantor have been duly and validly
authorized by all necessary corporate action and do not conflict or result in a
violation or breach of the articles of incorporation and by-laws of the
Purchaser's Guarantor. This Agreement and the Purchaser's Guaranty constitute
legal, valid and binding obligations of the Purchaser's Guarantor enforceable
against Purchaser's Guarantor in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general principles of equity (regardless of whether enforceability is considered
in a proceeding at law or equity).
(c) No Consent Required; Non-Contravention.
(i) Except as specified in the Disclosure Schedule, no
consent, waiver, approval, order, authorization or other action by or filings
with any Governmental Authority or other entity is required in connection with
the execution, delivery and performance by Purchaser's Guarantor of this
Agreement or the Purchaser's Guaranty.
(ii) Except as specified in the Disclosure Schedule, neither
the execution and delivery of this Agreement or the Purchaser's Guaranty by
Purchaser's Guarantor, nor the consummation of the transactions contemplated
hereby will violate or conflict with or result in the acceleration of rights, or
benefits or payments under any agreement, instrument, statute, regulation, rule,
order, writ, judgment or decree to which the Purchaser's Guarantor is directly
or indirectly a party or is directly or indirectly subject, except for such
violations and conflicts which will not
25
(x) prevent or materially delay consummation of the transaction contemplated by
this Agreement or the Purchaser's Guaranty; (y) prevent Purchaser's Guarantor
from performing its obligations under this Agreement or the Purchaser's
Guaranty; or (z) result in a Material Adverse Effect.
(d) Litigation.
Except as specified in the Disclosure Schedule, there are no
lawsuits, actions, arbitrations or other proceedings pending or threatened by
any Person against or affecting the Purchaser's Guarantor by or before any
court, arbitrator or Governmental Authority which would prohibit any of the
transactions contemplated by this Agreement or the Purchaser's Guaranty.
(e) No Breach.
Except as specified in the Disclosure Schedule, neither the
execution and delivery of this Agreement or the Purchaser's Guaranty by
Purchaser's Guarantor, nor the consummation of the transactions contemplated
hereby or thereby will violate or conflict with, or result in the acceleration
of rights, benefits or payments under; (i) any provision of the Purchaser's
Guarantor's articles of incorporation or bylaws; (ii) any statute, law,
regulation or governmental order to which the Purchaser's Guarantor or the
assets and properties of any thereof are bound or subject; (iii) any commitment
to which the Purchaser's Guarantor is a party or by which it or any of its
properties may be bound or subject; and (iv) any agreement, contract or
commitment of the Purchaser's Guarantor or to which it is a party or by which it
or any of its properties may be bound or subject, except, with respect to
clauses (ii), (iii) and (iv), for such violations and conflicts which will not
(y) prevent or materially delay consummation of the transactions contemplated by
this Agreement, and the Purchaser's Guaranty or (z) prevent Purchaser's
Guarantor from performing its obligations under this Agreement, and the
Purchaser's Guaranty.
(f) Actions and Proceedings.
Except as specified in the Disclosure Schedule, no proceeding or
investigation is pending or threatened before any court, arbitrator or
administrator or Governmental Authority, bureau or agency to restrain or
prohibit, or to obtain damages, a discovery order or other relief in connection
with this Agreement, or the Purchaser's Guaranty or any material part of the
transactions contemplated hereby or thereby.
(g) Independent Decision.
Purchaser's Guarantor has made its own analysis and independent
judgment of the commercial potential, condition and usefulness of the Assets,
and is not relying upon any projections from Sellers regarding prospective
operations of the Assets in the future.
(h) No Knowledge of Breaches.
26
Except for any breaches of representations or covenants, the
consequences of which have been waived by Purchaser's Guarantor, Purchaser's
Guarantor has no knowledge of any breaches of any representation or covenant
herein by Sellers.
(i) Financial Capacity; Future Performance.
(i) Purchaser's Guarantor has or will have the financial
capacity to guaranty the purchase and operation of the Assets. Purchaser's
Guarantor is not aware of any facts or circumstances that now or in the future
would have a Material Adverse Effect on its financial condition, results of
operations, business, properties, assets, or liabilities. Purchaser's Guarantor
is solvent, is not in the hands of a receiver, nor is any receivership pending,
and no proceedings are pending by or against it for bankruptcy or reorganization
in any state or federal court.
(ii) The Financing Commitments are still in full force and
effect and have not been modified, amended, revised or otherwise changed in any
respect and the financing parties thereunder have not given any indication that
the prospects of obtaining the financing have changed adversely in any respect.
(j) Guarantor Common Stock.
The authorized equity securities of the Purchaser's Guarantor
consist of 150,000,000 shares of common stock, par value $0.01 per share, of
which 58,041,435 shares are issued and outstanding. For as long as necessary
under the terms of this Agreement, there will be sufficient authorized but
unissued shares to issue the Guarantor Common Stock as contemplated by Section
2.5 of this Agreement and such Guarantor Common Stock, if and when issued, will
be duly authorized, validly issued, fully paid and nonassessable.
(k) Disclaimer.
Except as and to the extent set forth in this Agreement and the
other documents and instruments delivered in connection with this Agreement,
Purchaser's Guarantor makes no other representations or warranties, and
disclaims all liability and responsibility for any representation, warranty,
statement or information made or communicated (orally or in writing) to Sellers.
ARTICLE VI
COVENANTS
6.1 Brokers' Fees. Each of Sellers and Purchaser represents and
warrants to the other that it has not incurred any liability for brokerage fees,
finder's fees, agent's commissions, or other similar forms of compensation in
connection with or in any way related to the transactions contemplated by this
Agreement, except with respect to the fee owed to ▇▇▇▇▇▇ Brothers Inc., which
fee shall be paid by Sellers. Each of Sellers and Purchaser agrees to indemnify,
defend and hold the other and its related persons harmless from any claim or
demand for any commission, fee or other
27
compensation by any broker, finder, agent or similar intermediary claiming to
have been employed by or on behalf of the indemnifying party, and to bear the
cost of attorneys' fees and expenses incurred in defending against any such
claim.
6.2 Conduct of Business by Sellers Pending Closing. Sellers covenant
and agree with Purchaser that, from the date of this Agreement until the Closing
Date, Sellers will conduct the Business only in the ordinary and usual course
consistent with past practices. Notwithstanding the preceding sentence, Sellers
covenant and agree with Purchaser that, except as specifically contemplated in
this Agreement, from the date of this Agreement until the Closing Date, without
the prior written consent of Purchaser or as set forth in the Disclosure
Schedule:
(a) Sellers will not (i) merge or consolidate with, or transfer all
or substantially all of the Assets to another business entity; (ii) liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution); or (iii) enter
into any contract, agreement, commitment or arrangement with respect to any of
the foregoing.
(b) Sellers will not (i) acquire any corporation, partnership or
other business entity or any interest therein; (ii) sell, lease or sublease,
transfer or otherwise dispose of, mortgage, pledge or otherwise encumber any
assets that have a value at the time of such sale, lease, sublease, transfer,
disposition or encumbrance in excess of $500,000, individually, or $5,000,000,
in the aggregate (other than sales of products in the ordinary course of
business); (iii) make any material loan, advance or capital contribution to, or
investment in, any Person (other than loans or advances in the ordinary course
of business); or (iv) enter into any contract, agreement, commitment or
arrangement with respect to any of the foregoing.
(c) Other than loans or other advances received from Sellers,
Sellers will not (i) incur any material indebtedness for borrowed money; (ii)
incur any other material obligation or liability (other than liabilities
incurred in the ordinary course of business); (iii) assume, endorse, guarantee
or otherwise become liable or responsible (whether directly, contingently or
otherwise) for the liabilities or obligations of any Person or its Affiliates
(other than endorsements of negotiable instruments in the ordinary course of
business); or (iv) enter into any contract, agreement, commitment or arrangement
with respect to any of the foregoing.
(d) Sellers will not enter into any new employee benefit plan,
program or arrangement or any new employment, severance or consulting agreement,
grant any general increase in the compensation of officers or employees
(including any such increase pursuant to any bonus, pension, profit-sharing or
other plan or commitment) or grant any increase in the compensation payable or
to become payable to any employee, except in accordance with pre-existing
contractual provisions or in the ordinary course of business.
(e) Sellers will keep and maintain accurate books, records and
accounts in accordance with GAAP.
(f) Sellers will not create, incur, assume or permit to exist any
Lien on any of its assets except for Permitted Liens.
28
(g) Sellers will (i) pay or accrue all Taxes, assessments and other
governmental charges imposed upon any of the Assets or with respect to the
Business before any penalty or interest accrues thereon; (ii) pay all claims
(including claims for labor, services, materials and supplies) that have become
due and payable and which by law have or may become a Lien upon any of its
assets prior to the time when any penalty or fine shall be incurred with respect
thereto or any such Lien shall be imposed thereon; and (iii) comply in all
material respects with the requirements of all Applicable Laws of any
Governmental Authority, obtain or take all Governmental Actions necessary in the
operation of its business, and comply with and enforce the provisions of all
Material Contracts to which it is a party, including paying when due all
rentals, royalties, expenses and other liabilities relating to its business or
assets; provided, however, that Sellers may contest the imposition of any such
Taxes, assessments and other governmental charges, any such claim, or the
requirements of any applicable law, rule, regulation or order or any Material
Contract if done so in good faith by appropriate proceedings and if adequate
reserves are established in accordance with GAAP or as may be determined as
sufficient by Sellers.
(h) Sellers will preserve and keep in full force and effect its
legal existence and material rights and franchises.
(i) Sellers shall maintain in full force and effect the insurance
in accordance with past practices.
(j) Sellers will cause the construction financing with regard to
the "peaking power" turbine located in Memphis to be paid or satisfied in full
on or prior to the Closing Date.
(k) Sellers will not engage in any practice, take any action or
permit by inaction any of the representations and warranties contained in
Article IV to become untrue.
(l) Sellers shall endeavor to complete the actions described on the
Disclosure Schedule in connection with repairing the Fluid Catalytic Cracking
unit and related equipment at the Refinery before Closing. If such Fluid
Catalytic Cracking unit repairs have been commenced before Closing, the Closing
Date shall be automatically extended for a reasonable amount of time, if
necessary, to allow Sellers to complete such repairs. If Sellers have not
initiated the shutdown of the Fluid Catalytic Cracking unit to complete the
repairs prior to Closing, the Base Purchase Price shall be reduced by the amount
of $10,000,000 less any costs incurred by Sellers or their Affiliates in
preparing for the repair of the Fluid Catalytic Cracking unit and related
equipment and conducting such repairs. In connection with any actions taken by
the Sellers with respect to repairing the Fluid Catalytic Cracking unit and
related equipment, Purchaser shall be allowed to have representatives present
during any repairs to be performed by or at the request of Sellers on the Fluid
Catalytic Cracking unit and related equipment provided that such representatives
do not interfere with the actions taken in connection with this Section, the
Operations or the Business.
(m) Sellers shall perform and pay for all maintenance and capital
projects with respect to the Assets in accordance with the Disclosure Schedule.
29
(n) During the period from the execution of this Agreement to the
Closing Date, Sellers shall endeavor to take the actions requested by Purchaser
listed on the Disclosure Schedule, and Purchaser shall reimburse Sellers for all
costs incurred relating to such actions at Closing.
(o) Subject to the terms of this Agreement and until the Closing
Date, Sellers shall continue to maintain and repair the Assets in the same
condition as of the date of this Agreement, normal wear and tear excepted.
6.3 Access to Assets, Personnel and Information.
(a) From the date hereof until the Closing Date, Sellers will
afford to Purchaser and the Purchaser Representatives, at Purchaser's sole risk
and expense, during normal business hours and on reasonable prior notice,
reasonable access to any of the assets, books and records, contracts, employees,
representatives, agents, consultants and facilities of Sellers and shall, upon
request, furnish promptly to Purchaser, at Purchaser's expense, a copy of any
file, book, record, report, contract, permit, correspondence, or other written
information, document or data (excluding personnel files) concerning Sellers or
the Assets that is within the possession or control of Sellers.
(b) Purchaser and the Purchaser Representatives shall have the
right to make a physical assessment of the Assets and Operations of Sellers and,
in connection therewith, shall have the right to enter premises of Sellers and
inspect its assets and all buildings and improvements in or on which the
Sellers' Operations and the Assets are located and conduct such examinations and
studies as Purchaser deems necessary, desirable or appropriate for the
preparation of reports relating to Sellers. Sellers shall be provided not less
than 48 hours prior notice of such activities and all such activities shall be
conducted in a commercially reasonable manner, and Sellers and Sellers'
Representatives shall have the right to witness all such investigations.
Purchaser shall (and shall cause the Purchaser Representatives to) keep any data
or information acquired by any such examinations and the results of any analyses
of such data and information strictly confidential and will not (and will cause
the Purchaser Representatives not to) disclose any of such data, information or
results to any Person unless otherwise required by law or regulation and then
only after written notice to Sellers of the determination of the need for
disclosure. Purchaser shall indemnify, defend and hold Sellers and the Sellers'
Representatives harmless from and against any and all claims to the extent
directly resulting from the activities of Purchaser and the Purchaser
Representatives with respect to the assets and Operations of Sellers in
connection with conducting such physical assessment, except to the extent of and
limited by the fault, negligence or willful misconduct of Sellers or any Sellers
Representative.
(c) Sellers will cause the Sellers' Representatives to cooperate in
all reasonable respects with Purchaser and the Purchaser Representatives in
connection with Purchaser's examinations, evaluations and investigations
described in this Section 6.3.
(d) Except as required by law or regulation, Purchaser will not
(and will cause the Purchaser Representatives not to) use any information
obtained pursuant to this Section 6.3 for any purpose unrelated to the
consummation of the transactions contemplated by this Agreement.
30
(e) Notwithstanding anything in this Section 6.3 to the contrary,
Sellers shall not be obligated under the terms of this Section 6.3 to disclose
to Purchaser or the Purchaser Representatives, or grant Purchaser or the
Purchaser Representatives access to, information that is within Sellers'
possession or control but subject to a valid and binding confidentiality
agreement with a third party without first obtaining the consent of such third
party, and, to the extent reasonably requested by Purchaser, Sellers will use
reasonable efforts to obtain any such consent.
(f) Notwithstanding anything to the contrary in this Section 6.3 or
elsewhere in this Agreement, the Confidentiality Agreement shall remain in full
force and effect and shall apply to the Parties hereto as fully as if each were
a signing party thereto following the execution of this Agreement until the
Closing, unless terminated as described therein and is hereby incorporated
herein by reference and shall constitute a part of this Agreement for all
purposes. Any and all information received by Purchaser pursuant to the terms
and provisions of this Agreement shall be governed by the applicable terms and
provisions of the Confidentiality Agreement.
6.4 Additional Arrangements. Subject to the terms and conditions herein
provided, each of Sellers and Purchaser shall take, or cause to be taken, all
action and shall do, or cause to be done, all things necessary, appropriate or
desirable under any applicable laws and regulations or under applicable
governing agreements to consummate and make effective the transactions
contemplated by this Agreement, including using such Party's reasonable efforts
to obtain all necessary waivers, consents and approvals and effecting all
necessary registrations and filings. Each of Sellers and Purchaser shall take,
or cause to be taken, all action or shall do, or cause to be done, all things
necessary, appropriate or desirable to cause the covenants and conditions
applicable to the transactions contemplated hereby to be performed or satisfied
as soon as practicable. In addition, if any Governmental Authority shall have
issued any order, decree, ruling or injunction, or taken any other action that
would have the effect of restraining, enjoining or otherwise prohibiting or
preventing the consummation of the transactions contemplated hereby, each of
Sellers and Purchaser shall use reasonable efforts to have such order, decree,
ruling or injunction or other action declared ineffective as soon as
practicable.
6.5 Public Announcements. Sellers may issue a press release announcing
the sale, price, and terms upon execution of this Agreement. Prior to the
Closing, Purchaser and Sellers will consult with the other before issuing any
other press release or otherwise making any other public statement with respect
to the transactions contemplated by this Agreement, and the party desiring to
issue a press release shall not issue any press release or make any such public
statement prior to obtaining the approval of the other party, which approval
shall not be unreasonably withheld; provided, however, that prior notice shall
be required but prior approval shall not be required where such release or
announcement is required by applicable law, securities regulations or stock
exchange rules; and provided further, that either Sellers or Purchaser may
respond to inquiries by the press or others regarding the transactions
contemplated by this Agreement, so long as such responses are consistent with
such party's previously issued press releases.
6.6 Payment of Expenses. Each Party shall bear its own expenses
incurred in connection with the transactions contemplated herein, including all
fees and expenses of agents, representatives, counsel and accountants engaged by
it, whether or not the Closing occurs.
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6.7 Further Assurances. Sellers and Purchaser each agrees that, from
time to time after the Closing Date, it will execute and deliver such further
instruments, including instruments of conveyance and transfer, and take such
other action as the other Party may reasonably request in order more effectively
to convey and transfer to Purchaser the Assets and to assist in completing the
other transactions contemplated by this Agreement.
6.8 Preservation of Files and Records. For a period of seven years
after the Closing Date: (a) Purchaser shall preserve all files and records
relating to the Assets that are less than seven years old, shall allow Sellers
or its designee reasonable access to such files and records and the right to
make copies and extracts therefrom at any time during normal business hours and
shall not dispose of any thereof without first offering them to Sellers; and (b)
Sellers shall preserve all files and records relating to the Assets that are
less than seven years old and that are retained by Sellers, shall allow
Purchaser or its designee reasonable access to such files and records relating
to the Assets or any of them as may be in Sellers' possession and the right to
make copies and extracts therefrom at any time during normal business hours and
shall not dispose of any thereof without first offering them to Purchaser.
6.9 Business Employees.
(a) Employees in General
The Disclosure Schedule contains a true and complete list of each
employee who performs services directly related to the Business as of the
Effective Date and is represented by the Union (as defined in 6.9(b) herein)
(each, a "Represented Employee"), and each regular, full-time and regular,
part-time employee who performs services directly related to the Business as of
the Effective Date and is not represented by the Union (each, a "Non-Represented
Employee"). The Represented Employees and Non-Represented Employees are
sometimes collectively referred to herein as "Business Employees."
(b) Represented Employees
Sellers represent that they are bound by the Collective Bargaining
Agreement and all existing Memoranda of Agreement or Understanding, which are
listed on the Disclosure Schedule ("Collective Bargaining Agreements"), between
Sellers and PACE International Union, Local 5-0631 (the "Union"). Purchaser
agrees to: (i) comply with all legal requirements that may be applicable as a
result of the Represented Employees being represented by any labor organization,
(ii) recognize the Union as the exclusive bargaining unit for the Representative
Employees and (iii) assume all rights and obligations of Sellers under the
Collective Bargaining Agreement.
(c) Offers of Employment
(i) At least 30 days before Closing, Purchaser shall offer
full-time employment to each Represented Employee meeting Purchaser's written
employment qualifications and shall consider as a candidate for employment each
Non-Represented Employee, provided that,
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any such consideration or offers shall be conditioned upon the Closing and shall
require acceptance at least ten (10) business days before Closing. Sellers or
their Affiliates may not make offers of continuing employment to the Business
Employees except pursuant to a protocol mutually agreed by the Parties. As soon
as practicable after the signing of this Agreement, Sellers shall provide, and
cause their Affiliates, as appropriate, to provide, Purchaser with the current
title, title history, years of service, current salary, salary history, position
description, detailed organization charts, current bonus eligibility and level
and payment history and accrued vacation of each Business Employee; provided,
however, Sellers shall have no obligation to provide any such information with
respect to any employee if the consent of such employee is necessary and Sellers
are unable to obtain such consent after reasonable effort.
(ii) Purchaser shall notify Sellers of the acceptance of any
employment offer made by Purchaser, within five (5) business days of the
acceptance of such offer.
(iii) Upon Closing, Sellers shall terminate and Purchaser
shall thereupon employ each Business Employee who accepts Purchaser's offer of
employment and satisfies all of Purchaser's written employment qualifications.
Sellers agree to use their reasonable efforts to assist Purchaser in the orderly
transition to Purchaser of any such Business Employees. Each such accepting
Business Employee shall, from the Closing Date, be known as a "Purchaser's
Employee."
(iv) Purchaser shall provide Non-Represented Employees who
become Purchaser's Employees with an opportunity for compensation, including
incentive compensation, and benefits, excluding retiree welfare benefits, that
is consistent with the compensation and benefits that Purchaser pays its
similarly situated employees.
(d) Employee Benefits for Purchaser's Employees
(i) The Represented Employees' participation in Purchaser's
employee pension benefit plans and employee welfare benefit plans shall be
subject to the legal obligations that exist as a result of the Represented
Employees being represented by any labor organization. Purchaser shall permit
the Non-Represented Employees who become Purchaser's Employees to participate in
all of the Purchaser's employee pension benefit plans (as that term is defined
by Section 3(2) of the Employee Retirement Income Security Act of 1974
("ERISA")), employee welfare benefit plans (as that term is defined by Section
3(1) of ERISA), and other benefit programs, policies, and practices that are or
will be generally available to Purchaser's similarly situated employees,
excluding retiree welfare benefits.
(ii) With respect to each Purchaser's Employee and/or
dependent of a Purchaser's Employee who elects to participate in Purchaser's
employee welfare benefit plans, to which they are eligible, Purchaser shall
waive any pre-existing-condition exclusions to coverage, any
evidence-of-insurability provisions, and any waiting-period requirements, as
permitted under Purchaser's contractual obligations, under its employee welfare
benefit plans that had been waived or otherwise satisfied under comparable
employee welfare benefit plans sponsored by the Sellers or an Affiliate of
Sellers, provided the Purchaser's Employee enrolls within thirty-one (31) days
of his or her employment commencement date. For each Purchaser's Employee and/or
dependent of a
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Purchaser's Employee, Purchaser shall also apply towards any deductible
requirements and out-of-pocket maximum limits under its employee welfare benefit
plans applicable to the calendar year in which the Closing occurs any amounts
paid by such Purchaser's Employee or dependent of a Purchaser's Employee toward
such requirements and limits under the Sellers or an Affiliate of Sellers'
employee welfare benefit plans in which he or she participated during such year.
Purchaser shall notify Sellers if a Purchaser's Employee and dependent of a
Purchaser's Employee fails to enroll in one of Purchaser's health plans upon
initial eligibility.
(iii) Purchaser shall cause all its employee welfare benefit
plans programs, policies, and practices in which the Purchaser's Employees
participate, including Purchaser's vacation and sick leave programs and
severance plans or programs, to recognize that service as recognized by the
Sellers' or an Affiliate of Sellers' employee welfare benefit plans, programs,
policies and practices, including vacation and sick leave programs, for all
purposes, including eligibility to participate, eligibility for enrollment,
eligibility for the commencement of benefits, and eligibility for the levels of
benefits. Purchaser shall cause its employee pension benefit plans (whether
defined contribution plans, as defined in Section 3(34) of ERISA, or defined
benefit plans, as defined in Section 3(35) of ERISA) to recognize that service
as recognized by the Sellers' or an Affiliate of Sellers' employee pension
benefit plans for all purposes, including eligibility to participate,
eligibility for enrollment, eligibility for vesting, eligibility for the
commencement of benefits, eligibility for the forms of benefits, including death
benefits, and eligibility for the levels of benefits. Purchaser shall not be
required to recognize or cause its employee pension benefit plans to recognize
for purposes of benefit accruals that service recognized by the Sellers'
employee pension benefit plans.
(iv) With respect to all Purchaser's Employees, Purchaser
shall assume, without duplication of benefits, all current calendar year accrued
but unused paid-time-off under the Sellers' or their Affiliates' paid-time-off
program as of the Effective Date using the same methodology used by the Sellers
or their Affiliates immediately prior to the Effective Date for crediting
service and determining the amount of such paid-time-off benefits; provided,
however, the paid-time-off to be assumed pursuant to this Section 6.9(d)(iv)
shall not include any paid-time-off carried over from the prior calendar year
regardless of whether the Sellers' or their Affiliates' paid-time-off programs
provides for such carryover. With respect to Purchaser's Employees, Purchaser
shall also be responsible for vacation earned after the Effective Time.
(v) Sellers or their Affiliates shall pay such a Severance
Benefit as is consistent with The ▇▇▇▇▇▇▇▇ Companies, Inc. Severance Pay Plan in
effect at the applicable time ("The ▇▇▇▇▇▇▇▇ Companies, Inc. Severance Pay
Plan"), to each Business Employee that Sellers or their Affiliates terminate as
a result of this sale, and to whom Purchaser does not offer employment prior to
Closing or to whom Purchaser offers employment and such offered employment is
not at a comparable level as described under The ▇▇▇▇▇▇▇▇ Companies, Inc.
Severance Pay Plan ("Sellers' Employee"). Sellers will be liable for the first
$2,000,000 of such Severance Benefits and Purchaser and Purchaser's Guarantor
shall be jointly and severally liable for the cost of any Severance Benefit that
exceeds the $2,000,000 payable by the Sellers and their Affiliates pursuant to
this subparagraph. The "Severance Benefit" shall mean the cash payment
applicable to Sellers' Employee under The ▇▇▇▇▇▇▇▇ Companies, Inc. Severance Pay
Plan and any other separation related expenses and
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liabilities including, without limitation, any payments due in connection with
WARN Act (as defined below) liability, continuing healthcare coverage,
outplacement assistance.
(vi) Effective as of the Closing Date, Purchaser's Employees
shall become fully vested in their account balances in any defined contribution
or 401(k) Plan, including the Mid-South Savings and Retirement Plan, maintained
by Sellers or their Affiliates on behalf of such Purchaser's Employees (the
"Seller Savings Plan") and distributions of such account balances shall be made
available to such Purchaser's Employee as soon as reasonable following the
Closing Date, in accordance with the provisions of the Seller Savings Plan and
applicable law. Thereafter, Purchaser shall accept rollover contributions from
the Seller Savings Plan into a defined contribution or 401(k) Plan maintained by
Purchaser of the account balances distributed to the Purchaser's Employees from
the Sellers Savings Plan.
(e) Liabilities
(i) Purchaser shall indemnify Sellers and their Affiliates
against all liabilities arising out of the notification or other requirements of
the Worker Adjustment and Retraining Notification Act of 1988, as amended (the
"WARN Act"), with respect to the Purchaser's Employees in connection with
actions taken by Purchaser after the Effective Time. Sellers shall indemnify
Purchaser against all liabilities under the WARN Act with respect to Business
Employees in connection with actions taken by Sellers prior to the Effective
Time, subject to the limitations set forth in Section 6.9(d)(v).
(ii) Sellers shall be responsible for workers' compensation
claims with respect to any Purchaser's Employee if the incident or alleged
incident giving rise to the claim occurred prior to the Effective Time.
Purchaser shall be responsible for any workers' compensation claims with respect
to any Purchaser's Employee if the incident or alleged incident giving rise to
the claim occurs after the Effective Time. In the event of doubt as to the date
of the occurrence of the incident or alleged incident, Purchaser shall process
the claim; provided, however, the processing of such claim shall not result in
Purchaser being liable for the entire claim. In such case, Purchaser and Sellers
will agree on an equitable manner to allocate the actual liability.
(f) Indemnities
(i) To the maximum extent permitted by Applicable Law, Sellers
shall defend, indemnify, and hold harmless Purchaser from and against any
damages, and any fines, penalties and assessments, arising out of Claims by
Business Employees that arise prior to, on, or after the Effective Time and
relate to their employment with, or the termination of their employment from,
the Sellers, except to the extent such damages, fines, penalties and assessments
are assumed by Purchaser hereunder.
(ii) To the maximum extent permitted by Applicable Law,
Purchaser shall defend, indemnify, and hold harmless Sellers and their
Affiliates from and against any damages, and any fines, penalties and
assessments, arising out of Claims by the Purchaser's Employees that arise
35
on or after the Effective Time which relate to their employment with, or the
termination of their employment from, the Purchaser.
(iii) To the maximum extent permitted by Applicable Law,
Purchaser shall defend, indemnify, and hold harmless Sellers and their
Affiliates from and against any damages, and any fines, penalties and
assessments, arising out of Claims that arise prior to, on or after the
Effective Time and relate to Purchaser's interviews of Business Employees,
Purchaser's hiring selection criteria and procedures, and/or Purchaser's failure
or refusal to hire any of the Business Employees.
(g) Enforceability
The provisions of this Section 6.9 are intended to be for the
benefit of, and shall be enforceable by, Sellers and their Affiliates and
Purchaser and its Affiliates and their respective successors.
6.10 Bonds and Guaranties. Upon Closing, Purchaser will assume all
obligations for bonding for state motor fuel tax purposes with respect to the
Business conducted by Purchaser after Closing. Schedule 6.10 of the Disclosure
Schedule lists the motor fuel tax bonds that Sellers currently have in place.
Upon Closing, Sellers will terminate the guaranties that are listed on Schedule
6.10 of the Disclosure Schedule and Purchaser will assume all obligation to
replace such guaranties as the counterparties thereto require.
6.11 Environmental Insurance. Sellers shall purchase from AIG a fully
pre-paid, ten (10)-year environmental pollution legal liability policy naming
Purchaser as an additional named insured for all coverages, except A 1, and
covering all unknown environmental response activities and all third-party
liabilities arising from unknown pre-Closing releases of Hazardous Materials
upon any properties of Sellers as specified in such policy, a specimen of which
is attached as Exhibit I (the "Environmental Insurance Policy"). The
Environmental Insurance Policy shall have the deductibles and limits set forth
in such specimen policy. Purchaser covenants and agrees to comply with the terms
of the Environmental Insurance Policy.
6.12 Use of Trademarks, ▇▇▇▇▇▇▇▇ Marks.
(a) Any and all trademarks, service marks, trade names and
associated goodwill, slogans and other like property owned by Sellers or their
Affiliates in which the name "▇▇▇▇▇▇▇▇" or any derivatives or variations thereof
is used, the ▇▇▇▇▇▇▇▇ logos and any derivatives or variations thereof, and any
and all rights to use any such trade-marks, service marks, trade names or
slogans owned by any other party are referred to as the "▇▇▇▇▇▇▇▇ Marks". Except
as specifically provided herein, no license to the ▇▇▇▇▇▇▇▇ Marks is hereby
granted, and Purchaser is precluded from any use of the ▇▇▇▇▇▇▇▇ Marks on any of
its products or services as a means of corporate identity or in any of its
communications. Purchaser acknowledges and agrees with Sellers that as between
Sellers and Purchaser, Sellers and their Affiliates have the absolute and
exclusive proprietary right to all ▇▇▇▇▇▇▇▇ Marks and other marks owned by
Sellers or their Affiliates, and all rights to which, and that the goodwill
represented thereby and pertaining thereto are being retained by Sellers and
their Affiliates.
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(b) Effective upon the Closing Date, the Sellers and their
Affiliates grant to Purchaser a nonexclusive, nontransferable, royalty-free
license, without right to sublicense, to use, solely in the Business as they are
presently conducted, any and all ▇▇▇▇▇▇▇▇ Marks owned by Sellers and their
Affiliates solely to the extent appearing on existing Inventory, advertising
materials and property of Sellers or their Subsidiaries (such as signage,
vehicles, and equipment) for a period of three (3) months from the Closing Date
("License Period").
(c) The Purchaser may use such existing Inventory, advertising
materials and property during the License Period, but shall not create new
Inventory, advertising materials or property using the ▇▇▇▇▇▇▇▇ Marks. Purchaser
shall promptly replace or remove the ▇▇▇▇▇▇▇▇ Marks on Inventory, advertising
materials and property, provided that all such use shall cease no later than the
end of the License Period.
(d) The nature and quality of all uses of the ▇▇▇▇▇▇▇▇ Marks by
the Purchaser shall conform to the Sellers' existing quality standards.
Immediately upon expiration of the License Period, the Purchaser shall cease all
further use of the ▇▇▇▇▇▇▇▇ Marks and shall adopt new trademarks, service marks,
and trade names which are not confusingly similar to the ▇▇▇▇▇▇▇▇ Marks.
(e) All rights not expressly granted in this section with respect
to the ▇▇▇▇▇▇▇▇ Marks are hereby reserved. In the event the Purchaser breaches
the provisions of this section, Sellers may immediately terminate the License
Period upon 15 days written notice. In such event, Sellers shall be entitled to
specific performance of this Section 6.12 and to injunctive relief against
further violations, as well as any other remedies at law or in equity.
6.13 Purchaser's Notice. Not later than ten (10) days prior to the
Closing Date, and, again, on the Closing Date prior to the Closing, Purchaser
shall notify Sellers of any breaches of representations or covenants herein by
Sellers of which Purchaser has knowledge at the time of such notice and with
respect to which a prior notice has not been given pursuant to this Section.
6.14 Other Tax Matters.
(a) Sellers agree to provide Purchaser and Purchaser agrees to
provide Sellers with such cooperation and information as the other shall
reasonably request in connection with the preparation or filing of any tax
return required under this Agreement.
(b) At the Closing, Sellers shall deliver to Purchaser a
certificate (i) stating that it is not a foreign corporation, foreign
partnership, foreign trust or foreign state, (ii) providing its U.S. Employer
Identification Number and (iii) providing its address, all pursuant to Section
1445 of the Code, such certificates to be substantially in the form attached
hereto as Exhibit J.
(c) The obligations and agreements contained in this Section 6.14
shall survive without limitation.
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6.15 Information Technology. As soon as practical after the execution
of this Agreement, the Parties shall each designate representatives to a
migration team (the "IT Migration Team") that shall assist Purchaser with
identifying the specific software and hardware necessary for Purchaser to
continue operations of the Business in the manner in which they operate as of
the Closing Date. The IT Migration Team shall also assist Purchaser with
developing a detailed plan to include cost estimates and timetables for the
conversion, loading and integrating of Sellers' existing data into Purchaser's
information technology systems, and the transfer or replacement of licenses and
maintenance agreements not currently held in the Sellers' names ("IT Migration
Plan"). The IT Migration Team shall complete the creation of the IT Migration
Plan no later than thirty (30) days after Closing. The time period for
implementation of the IT Migration Plan, which period shall proceed no longer
than ninety (90) days after Closing, shall be referred to as the "IT Migration
Period."
On or before the expiration of the IT Migration Period, Sellers shall,
and shall cause their Affiliates, at Sellers' sole option, to either: (i) assign
(to the extent assignable) to Purchaser all of their respective right, title and
interest in the Intellectual Property that is licensed from non-Affiliates, and
secure any consents necessary for such assignment and for the use by Sellers and
Sellers' Affiliates thereof on behalf of Purchaser during the IT Migration
Period; or (ii) obtain for the Purchaser, on commercially reasonable terms,
comparable replacements for any such Intellectual Property that is not assigned
pursuant to (i) above. Fees, costs and expense for license transfers or
replacements shall be borne by Purchaser. Each Party shall bear its respective
labor costs in connection with the creation of the IT Migration Plan and any
implementation of the IT Migration Plan that occurs during thirty (30) days
after Closing. Thereafter, all costs related to the implementation of the IT
Migration Plan shall be borne by Purchaser.
Purchaser shall assume or pay all termination costs related to the
hardware leases identified during development of the IT Migration Plan,
including but not limited to servers and personal computers, at the time such
costs are identified.
6.16 Non-Software Copyright License. Effective upon the Closing Date,
Sellers, for themselves and on behalf of their Affiliates, hereby grants to
Purchaser a nonexclusive royalty-free, perpetual license, without right to
sublicense, to use, copy, modify, enhance, and to upgrade, solely for their
internal business purposes and not as a service bureau, all manuals, user
guides, standards and operation procedures and similar documents owned by
Sellers and/or their Affiliates and used in the Business. All copies of the
foregoing must reproduce and include all copyright and other intellectual
property rights notices provided by Sellers.
6.17 Software License. Effective upon the Closing Date, Sellers, for
themselves and on behalf of their Affiliates, hereby grant to Purchaser, a
nonexclusive royalty-free, perpetual license, without right to sublicense, to
use, copy, modify, enhance, and upgrade, solely for their internal business
purposes and not as a service bureau, all computer software owned by Sellers
and/or their Affiliates which is used in connection with the Business as
conducted as of the Closing Date and with respect to which Sellers or their
Affiliates have the right to grant such a license ("Licensed Software"). Any
copies of the Licensed Software and any documentation related thereto must
contain all copyright and other intellectual property rights notices included
thereon. Purchaser shall not be entitled to receive and Sellers and their
Affiliates shall have no obligation to provide any
38
modifications, enhancements, or upgrades made to the Licensed Software developed
subsequent to the Closing Date. Ownership of all intellectual property rights in
the Licensed Software remains with Sellers and their Affiliates. Purchaser shall
not take any action inconsistent with Sellers' and their Affiliates' rights in
the Licensed Software. All rights not expressly granted herein to Purchaser are
retained by Sellers and their Affiliates. Except as otherwise expressly provided
in this section, the Licensed Software and any related documentation are
provided on an "as is" basis. Sellers and their Affiliates hereby expressly
disclaim any implied warranty of merchantability or fitness for a particular
purpose. Sellers and their Affiliates do not warrant that the Licensed Software
or documentation are error-free or that Purchaser's use thereof will be
uninterrupted.
6.18 HSR Act Filing.
(a) Purchaser and Sellers agree to take or cause to be taken all
actions necessary to (i) make the filings required of Purchaser and Sellers, or
any of their respective Affiliates, under the HSR Act promptly, but in no event
later than ten (10) business days of the date hereof; (ii) comply at the
earliest practicable date with any request for additional information or
documentary material (or any similar request for information and/or documents)
received by Purchaser, Sellers, or any of their respective Affiliates from the
Antitrust Division of the United States Department of Justice, the United States
Federal Trade Commission, or the antitrust or competition law authorities of any
State of the United States (the "Antitrust Authority") pursuant to any
applicable antitrust law; and (iii) cooperate in connection with any filing
under applicable antitrust laws and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated hereby
commenced by any Antitrust Authority pursuant to any applicable antitrust law.
Purchaser shall promptly inform Sellers, and Sellers shall promptly inform
Purchaser of any material communication made to, or received by such party from
any Antitrust Authority regarding any of the transactions contemplated hereby.
Sellers and Purchaser agree that the other Party will have the right and be
given the opportunity to have representatives attend all meetings with any
Antitrust Authority regarding the transactions contemplated hereby or any of the
matters described in this Section 6.18.
(b) Without limiting the generality of subsection 6.18(a),
Sellers, Purchaser and their Affiliates shall take all actions (using
commercially reasonable best efforts) that are necessary or reasonably advisable
to (A) obtain approval of any Antitrust Authority of the transactions
contemplated hereby or (B) avoid delay in consummation of the transactions
contemplated hereby caused or likely to be caused by an investigation by any
Antitrust Authority; provided, however, each Party's obligations in connection
with the foregoing shall be limited to the extent that any such actions to be
taken by a Party are likely to result in a Material Adverse Effect with respect
to such Party.
6.19 Consents to Assignment.
(a) Prior to Closing, Sellers agree to use reasonable business
efforts to obtain all consents to assignment of the Contracts, the Leases and
Easements and the Permits that are required to be obtained under this Agreement,
even though failure to obtain certain of the consents is not a condition
precedent to the Closing, except as provided for herein; provided, that neither
Party shall be obligated to make payments or incur obligations to third parties
or governmental agencies to
39
obtain such consents except to pay such Party's reasonable expenses or to pay
normal fees to governmental agencies.
(b) To the extent that any Contracts, Leases and Easements or
Permits that would otherwise be assigned under this Agreement are not capable of
being assigned, transferred, subleased or sublicensed without the consent of, or
waiver by, any other party thereto or any other Person, or if such assignment,
transfer, sublease or sublicense or attempted assignment, transfer, sublease or
sublicense would constitute a breach thereof or a violation of any Applicable
Law, this Agreement shall not constitute an assignment, transfer, sublease or
sublicense, or an attempted assignment, transfer, sublease or sublicense of any
such Contract, Lease or Easement or Permit. For a period of one hundred and
twenty (120) days after Closing, Sellers shall continue to use their reasonable
efforts to obtain a consent to an assignment from Sellers to Purchaser of each
Contract, each of the Leases and Easements and Permits that, but for the first
sentence of this Section, would be assigned; provided, however, that Sellers
shall not be required to pay any consideration or suffer any financial
disadvantages to obtain such assignment.
6.20 Casualty. Sellers shall bear the risk of loss with respect to
any and all physical damage, destruction or loss of any kind to the Improvements
and Equipment occurring during the period from the date of this Agreement until
the Closing Date ("Casualty"). If any Improvement or Equipment has been
materially damaged, destroyed or lost by Casualty occurring during the period
from date of this Agreement until the Closing Date, a good faith estimate for
appropriate repairs and/or replacements shall be immediately obtained by
Sellers' or their Affiliates' employees or third-party vendors hired by Sellers
or their Affiliates, at Sellers' sole cost and expense, if any, from a reputable
adjuster, independent contractor and/or vendor, as appropriate in Sellers' sole
discretion. If the total of the estimates for any one Casualty, or series of
related Casualties, exceeds One Hundred Thousand Dollars ($100,000), Sellers
shall notify Purchaser of the same in writing immediately after Sellers receive
such estimates. Written notification of such Casualty shall include a copy of
each of the employee's, adjuster's, contractor's and/or vendor's estimates
stating with reasonable specificity the materials and work to be provided in
regard to such repairs and/or replacements. In such event, and on the condition
that the estimates provided by the employee, adjuster, contractor and/or vendor
are reasonably acceptable to Purchaser, Purchaser shall have the option to have
Sellers either (i) complete, at Sellers' expense and prior to the Closing Date
if reasonably possible, any repairs and/or replacements necessary to restore
such Improvements and Equipment to at least their condition prior to the
occurrence of such Casualty, or (ii) convey or assign to Purchaser, no later
than the Closing Date, any insurance proceeds to which Sellers or their
Affiliates may be entitled as a result of the subject Casualty and credit to
Purchaser against the Purchase Price at the Closing the amount of any shortfall
between such insurance proceeds so conveyed or assigned and the total amount of
the estimates described above. If Sellers fail to obtain in a timely manner
estimates from a reliable employee, adjuster, independent contractor and/or
vendor under those circumstances where such are contemplated by this Section or
if the estimates provided to Purchaser by Sellers pursuant to this Section are
not reasonably acceptable to Purchaser, then Purchaser may obtain such estimates
itself and shall provide copies of same to Sellers immediately upon Purchaser
receiving same. The cost of obtaining such estimates, if any, shall be borne by
Purchaser.
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6.21 Payment of Transfer Taxes; Recording Fees. Purchaser shall pay (or
if paid or required to be paid by Sellers, reimburse Sellers for ) all Taxes
which are assessed or imposed with respect to the transfer of the Assets from
Sellers to Purchaser, and all costs to record any deeds. Each Party shall
cooperate with the other to take advantage of all applicable tax exemptions and
provide applicable tax exemption certificates. Purchaser shall pay any title
insurance premium due for any title insurance policies obtained by Purchaser and
Seller shall pay for the costs of any title search fees and survey costs for
searches and surveys initiated by Sellers.
6.22 Payment of Certain Expenses Due and Payable After the Effective
Time; Cooperation.
(a) Purchaser shall pay, as and when due, all emissions fees,
permit fees and utility bills due and payable after the Effective Time, and
Sellers shall reimburse Purchaser within thirty (30) days after invoice for any
amounts under such bills attributable to any period prior to the Effective Time.
Purchaser shall pay, and be entitled to collect, any rents due subsequent to the
Effective Time under leases which are assumed Leases, and Sellers shall either
pay, or be entitled to receive from Purchaser, as the case may be, within thirty
(30) days after invoice or notice, any amounts attributable to any period prior
to and including the Effective Time.
(b) Purchaser shall file, or cause to be filed, all required
reports and returns incident to all ad valorem taxes, real property taxes,
personal property taxes and similar obligations, which reports and returns are
due on or after the Effective Time and shall pay or cause to be paid to the
taxing authorities all such taxes reflected on such reports or returns even if
same are for periods prior to the Effective Time and Sellers shall reimburse
Purchaser within thirty (30) days after invoice for any such taxes and similar
obligations which are attributable to any period prior to the Effective Time;
however, under no circumstances shall such reimbursement be greater than the
result of (i) the pro-rated amount Sellers or their Affiliates would have paid
if Sellers or their Affiliates had remained the owner of the Assets, less (ii)
any liabilities attributable to the Assets which are paid by Sellers directly to
any local Governmental Authority or school district.
(c) Sellers and Purchaser agree to cooperate with the other in the
event one of them or their Affiliates are involved in a tax controversy
concerning the Assets and the other has either records or personnel which may be
of assistance to the Party engaged in the controversy. Sellers and Purchaser
further agree that if, in such Party's view, such cooperation becomes an
unreasonable financial burden, they will agree upon a reasonable method of
reimbursement to the burdened Party.
(d) Purchaser shall pay the transfer tax or registration fee for
all vehicles transferred to Purchaser as part of the Assets.
(e) If a Party hereto makes or has made any payment to a third
party pursuant to any assigned Contract, Lease, agreement or commitment; and (i)
such payment is made in respect of work performed, services provided or goods
delivered during a period of time which includes the Effective Time; or (ii) the
Effective Time intervenes between the making of such payment and the performance
of the work or services or delivery of goods, the Parties will allocate the
burden of such payment in a manner which reflects the relative benefit of such
work performed, services provided or
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goods delivered to each Party; provided, however, it shall be presumed that any
work performed, services provided or goods delivered prior to and including the
Effective Time are for the benefit of Sellers and any work performed, services
provided or goods delivered after the Effective Time are for the benefit of
Purchaser.
6.23 Relationship of the Parties.
(a) Nothing in this Agreement or the other agreements contemplated
hereby shall be construed to create any joint venture, partnership, agency or
other similar fiduciary relationship between the parties hereto or thereto. The
Parties and their Affiliates under this Agreement and the other agreements
contemplated hereby are nothing other than independent contractors for the sale
or purchase of specific property, goods or services. The Parties hereto
acknowledge that, for purposes of this Agreement and the other agreements
contemplated hereby, (i) none of the Parties or their Affiliates shall be
considered to be the agent, representative, employee, master, or servant of the
others for any purpose, (ii) none of the Parties or their Affiliates shall have
any obligation to manage or operate any of their respective businesses with any
duty or standard of care to the other Party or their Affiliates, and (iii) none
of the Parties or their Affiliates have any authority, right or power to enter
into a contract or commitment, assume any obligation or make any representation
or warranty on behalf of the others (except as expressly specified in this
Agreement or the other agreements contemplated hereby). The Parties agree and
acknowledge that except as expressly provided herein or in the other agreements
contemplated hereby, none of the Parties or their Affiliates shall owe duties,
fiduciary or otherwise, to the other. The Parties and their Affiliates are, and
will be after Closing, competitors with the right to pursue any business
opportunity for their respective individual benefit and make no representation
or warranty regarding the manner in which they will conduct their respective
businesses and operations. None of the Parties or their Affiliates shall have
any obligation to refrain from (i) engaging in the same or similar activities or
lines of business as the Parties or their Affiliates, (ii) developing or
marketing any products or services that compete, directly or indirectly with
those Parties or their Affiliates, (iii) investing or owning any interest
publicly or privately in, or developing a business relationship with, any Person
engaged in the same or similar activities or lines of business as, or otherwise
in direct or indirect competition with, the Parties or their Affiliates, or (iv)
doing business with any client or customer of the Parties or their Affiliates.
None of the Parties or their Affiliates shall have any obligation to offer any
business opportunity and may modify or otherwise change any of their respective
businesses or operations at any time.
6.24 Preparation of Audited Financial Statements. Sellers covenant and
agree with Purchaser that Sellers will take such actions as are reasonable
necessary to ensure audited consolidated financial statements of Sellers for the
years ended 1999, 2000 and 2001 and unaudited consolidated financial statements
of Sellers for the nine-month stub period ended September 30, 2002 relating to
the Assets (the "Audited Financial Statements") are made available to Purchaser
as soon as practical after the execution of this Agreement. The Audited
Financial Statements are to be prepared in accordance with GAAP, and all of the
costs relating to the audit are to be paid by Purchaser.
6.25 Financing Covenants. Purchaser and Purchaser's Guarantor will use
their commercially reasonable best efforts to secure the financing which is a
condition for the Purchaser to perform its obligations hereunder as provided in
Section 7.2(e). In this regard, Purchaser and
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Purchaser's Guarantor will take or cause to be taken all action that is
reasonably required in order to comply with or satisfy the Financing
Commitments. Additionally, unless Purchaser has the fully-committed financing
and cash on hand to complete the purchase contemplated by this Agreement at
Closing, between the date of signing of this Agreement and the Closing,
Purchaser and Purchaser's Guarantor will not enter into any commitment or
transaction which would limit, hinder or impair Purchaser's ability to
consummate its purchase obligations hereunder. Purchaser and Purchaser's
Guarantor will keep Sellers informed of any revisions, revocations, expirations,
withdrawals or other changes in any of the Financing Commitments that Purchaser
or Purchaser's Guarantor may receive and in the actions or prospects
contemplated thereby. In the event that Purchaser or Purchaser's Guarantor
intends to issue a press release relating to the financing described by this
Section, Purchaser or Purchaser's Guarantor must first consult with and obtain
Sellers' approval of such press release, which approval will not be unreasonably
withheld.
6.26 Stockholder Approval of Issuance of Guarantor Common Stock. If
stockholder approval is determined to be necessary under stock exchange rules
applicable to Purchaser's Guarantor in connection with the issuance of shares of
Guarantor Common Stock in lieu of a portion of the cash Purchase Price pursuant
to Section 2.5, Purchaser's Guarantor, shall:
(a) at Closing, issue to Sellers (i) that number of shares of
Guarantor Common Stock which it is permitted to issue without stockholder
approval, and (ii) an exchangeable or convertible promissory note which will,
upon receipt of such stockholder approval, be automatically exchanged for or
converted into the number of shares of Guarantor Common Stock which, when added
to the number of shares issued at Closing, would equal the total amount of
Guarantor Common Stock which Sellers would have been entitled to receive at
Closing but for the requirement to obtain stockholder approval;
(b) duly call, give notice of, convene and hold a special meeting
of its stockholders promptly following a determination that stockholder approval
is necessary for the purpose of considering and taking action upon a proposal to
approve such action as may be necessary for the issuance of the shares of
Guarantor Common Stock upon the exchange or conversion of such note;
(c) prepare and file with the Commission a preliminary proxy
statement and use its commercially reasonable efforts (x) to obtain and furnish
the information required to be included by the Commission in the definitive
proxy statement, and, after consultation with the Sellers, to respond promptly
to any comments made by the Commission with respect to the preliminary proxy
statement and cause a definitive proxy statement to be mailed to its
stockholders and (y) to obtain the necessary approval of the necessary action by
its stockholders; and
(d) include in the proxy statement the recommendation of its Board
of Directors that stockholders of the Purchaser's Guarantor vote in favor of the
approval of the stockholder proposal.
6.27 Listing of Guarantor Common Stock. Purchaser's Guarantor shall use
its commercially reasonable best efforts to cause the shares of Guarantor Common
Stock, if any, to be issued under this Agreement to be approved for listing on
the New York Stock Exchange, subject to
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official notice of issuance.
ARTICLE VII
CONDITIONS
7.1 Conditions to Each Party's Obligation to Close. The respective
obligations of each Party to be performed at the Closing shall be subject to the
satisfaction, on or prior to the Closing Date, of the following conditions:
(a) Filings; Waiting Periods; Approvals. The waiting period
applicable to the consummation of the transactions contemplated herein under the
HSR Act shall have expired or been terminated and all filings required to be
made prior to the Closing Date with, and all consents, approvals, permits,
releases and authorizations required to be obtained prior to the Closing Date
from, any Governmental Authority or other Person in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by Sellers and Purchaser shall have been made
or obtained (as the case may be), except where the failure to obtain such
consents, approvals, permits, releases and authorizations would not be
reasonably likely to result in a Material Adverse Effect on Sellers' assets,
taken as a whole, or the Business or to materially adversely affect the Closing
or to be contrary to Applicable Laws.
(b) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition, including
legislation, preventing the consummation of the transactions contemplated herein
shall be in effect; provided, however, that prior to invoking this condition,
each Party shall have complied fully with its obligations under Section 6.4 and,
in addition, shall have used all reasonable efforts to have any such decree,
ruling, injunction or order vacated, except as otherwise contemplated by this
Agreement.
7.2 Conditions to Obligations of Purchaser. The obligations of
Purchaser to be performed at the Closing are subject to the satisfaction of the
following conditions, any or all of which may be waived in whole or in part by
Purchaser:
(a) Representations and Warranties. The representations and
warranties of Sellers and Sellers' Guarantor set forth in Article IV shall be
true and correct in all material respects (provided, that any such
representation or warranty that is qualified by a materiality standard or a
Material Adverse Effect qualification shall not be further qualified hereby as
to materiality) as of the Closing Date as though made on and as of the Closing
Date, and Purchaser shall have received a certificate signed by a Responsible
Officer of Sellers and Sellers' Guarantor to such effect.
(b) Performance of Covenants and Agreements by Sellers. Sellers
shall have performed in all material respects all covenants and agreements
required to be performed by it under this Agreement on or prior to the Closing
Date, and Purchaser shall have received a certificate signed by a Responsible
Officer of Sellers to such effect.
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(c) Deliveries. Sellers shall have delivered to Purchaser all of
the documents required to be delivered by Sellers pursuant to Section 3.2(a) and
the Audited Financial Statements required to be delivered by Sellers pursuant to
Section 6.24.
(d) Required Consents and Authorizations. Sellers shall have
received (and shall have furnished copies thereof to Purchaser) all consents and
authorizations of third parties required to transfer the contracts between
Sellers and FedEx Corporation, between Sellers and MLG&W, and relating to
Sellers' rights in the Capline and Southcap pipelines; provided however, if such
consents are not obtained, Sellers may elect to provide to Purchaser the
economic benefit of such contracts until such consents are obtained.
(e) Equity and Debt Financing. Purchaser shall have obtained, on
terms and conditions reasonably satisfactory to it, all of the financing it
needs, including but not limited to, the sale of equity securities, in order to
consummate the transactions contemplated hereby and to fund the working capital
needs of the Business after Closing. Purchaser's failure to obtain such
financing will excuse Purchaser's obligation to be performed at Closing only if
it has notified Sellers of its inability to obtain such financing not less than
ten business days prior to Closing, which notification shall be accompanied by a
notice from Purchaser's lead investment banker regarding its opinion as to the
dollar amount of equity financing that is available to Purchaser at such time,
and Sellers have not, within five business days after receipt of Purchaser's
notice, notified Purchaser that Sellers will accept shares of Guarantor Common
Stock as part of the Purchase Price, pursuant to its rights under Section 2.5,
in sufficient number to provide the financing that Purchaser needs.
(f) Taking of Assets. In the event that prior to Closing there
shall be instituted or threatened any proceeding or other action, including,
without limitation, eminent domain, condemnation or other governmental
proceeding, that results in a reasonable probability of Sellers or Purchaser
(after Closing) losing any portion of or interest in the Assets, Sellers shall
immediately notify Purchaser, and Purchaser, if such proceeding has a reasonable
probability of a taking of Assets with a value in excess of Twenty-Five Million
Dollars ($25,000,000), shall have the right to terminate this Agreement within
ten (10) days from the date of such notice, by giving notice to Sellers of the
election to terminate. If Purchaser is not entitled to or, if entitled, does not
timely terminate this Agreement, then Sellers shall assign to Purchaser at
Closing any rights Sellers may have to receive any payments (net of any
expenses) as a result of any such proceeding or other action.
(g) Material Adverse Change. Prior to the Closing, there shall not
have been any change (other than changes affecting the economy generally or
affecting the petroleum industry, including refining, marketing, transportation,
terminaling and trading) that individually or in any combination thereof result
in adverse effect in excess of Twenty-Five Million Dollars ($25,000,000.00) with
respect to the value of any of the Assets (for the types of purposes to which
the same have been or could lawfully have been devoted at any time during the
six (6) month period immediately prior to the date of this Agreement). In the
event of such material adverse change, the Parties agree that Sellers shall have
the right, but not the obligation, to correct or cure any the material adverse
change at its sole option and cost prior to Closing. In addition, Sellers shall
have the right, but not the obligation, to extend the Closing Date for up to
thirty (30) days within which to use reasonable business efforts to cure or
correct any such material adverse change.
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7.3 Conditions to Obligation of Sellers. The obligations of Sellers to
be performed at the Closing are subject to the satisfaction of the following
conditions, any or all of which may be waived in whole or in part by Sellers:
(a) Representations and Warranties. The representations and
warranties of Purchaser and Purchaser's Guarantor set forth in Article V shall
be true and correct in all material respects (provided, that any such
representation or warranty that is qualified by a materiality standard or a
Material Adverse Effect qualification shall not be further qualified hereby as
to materiality) as of the Closing Date as though made on and as of the Closing
Date, and Sellers shall have received a certificate signed by a Responsible
Officer of each of Purchaser and Purchaser's Guarantor to such effect.
(b) Performance of Covenants and Agreements by Purchaser and
Purchaser's Guarantor. Purchaser and Purchaser's Guarantor shall have performed
in all material respects all covenants and agreements required to be performed
by them under this Agreement on or prior to the Closing Date, and Sellers shall
have received a certificate signed by a Responsible Officer of Purchaser and
Purchaser's Guarantor to such effect.
(c) Deliveries. Purchaser and Purchaser's Guarantor shall have
delivered to Sellers all of the documents required to be delivered pursuant to
Section 3.2(c) and (d), respectively.
ARTICLE VIII
TERMINATION
8.1 Termination Rights. This Agreement may be terminated at any time
prior to the Closing Date:
(a) By mutual written consent of Purchaser and Sellers;
(b) By either Sellers or Purchaser if any Governmental Authority
shall have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the Closing and such
order, decree, ruling or other action shall have become final and nonappealable
(provided, however, that the right to terminate this Agreement pursuant to this
Section 8.1(b) shall not be available to any Party until such Party has used all
reasonable efforts to remove such injunction, order, decree or ruling);
(c) By Purchaser if (i) there has been a breach of the
representations and warranties made by Sellers or Sellers' Guarantor in Article
IV that results in a Material Adverse Effect as to Sellers (provided, however,
that Purchaser shall not be entitled to terminate this Agreement pursuant to
this clause (i) unless Purchaser has given Sellers at least 30 days prior notice
of such breach, Sellers has failed to cure such breach within such 30-day
period, and the condition described in Section 7.2(a), other than the provision
thereof relating to the certificate signed by a Responsible Officer of Sellers,
would not be satisfied if the Closing were to occur on the day on
46
which Purchaser gives Sellers notice of such termination); or (ii) Sellers has
failed to comply in any material respect with any of its covenants or agreements
contained in this Agreement, and such failure has not been, or cannot be, cured
within a reasonable time after notice and a demand for cure thereof; or
(d) By Sellers if (i) the Closing has not occurred by March 31,
2003 (provided, however, that the right to terminate this Agreement pursuant to
this clause (i) shall not be available to Sellers if Sellers' breach of any
representation or warranty or failure to perform any covenant or agreement under
this Agreement has been the cause of or resulted in the failure of the Closing
to occur on or before such date); (ii) there has been a breach of the
representations and warranties made by Purchaser or Purchaser's Guarantor in
Article V that results in a Material Adverse Effect as to the Purchaser or
Purchaser's Guarantor (provided, however, that Sellers shall not be entitled to
terminate this Agreement pursuant to this clause (ii) unless Sellers have given
Purchaser at least 30 days prior notice of such breach, Purchaser has failed to
cure such breach within such 30-day period, and the condition described in
Section 7.3(a), other than the provision thereof relating to the certificate
signed by a Responsible Officer of Purchaser, would not be satisfied if the
Closing were to occur on the day on which Sellers gives Purchaser notice of such
termination); (iii) Purchaser has failed to comply in any material respect with
any of its covenants or agreements contained in this Agreement, and such failure
has not been, or cannot be, cured within a reasonable time after notice and a
demand for cure thereof; or (iv) the Purchaser has not effected the financing
contemplated by Section 7.2(e).
8.2 Effect of Termination. Except as otherwise provided, if this
Agreement is terminated by either Sellers or Purchaser pursuant to the
provisions of Section 8.1, this Agreement shall forthwith become void except
for, and there shall be no further obligation under this Agreement on the part
of either Party or its respective Affiliates, directors, officers, or
stockholders except pursuant to, the provisions of Sections 6.3(d), 6.3(f) and
6.6 and Article X (which shall continue pursuant to their terms); provided,
however, that a termination of this Agreement shall not relieve either Party
from any liability for damages incurred as a result of a breach by such Party of
its representations, warranties, covenants, agreements or other obligations
hereunder occurring prior to such termination (including without limitation,
Sellers' and Purchaser's rights to liquidated damages in certain events as
provided in Section 11.7 below).
ARTICLE IX
INDEMNIFICATION AND THIRD PARTY CLAIMS
9.1 Indemnification.
(a) Each of Sellers and Purchaser (each an "Indemnifying Party")
hereby agrees to be responsible for, pay for and indemnify, defend and hold
harmless the other Party, and its directors, officers, manager, owners,
shareholders, employees and Affiliates (hereinafter, collectively, "related
persons"), from and against any and all Claims (as that term is defined below in
Section 9.1(d)) asserted against, resulting to, imposed upon or incurred by such
other Party or such other Party's related persons (each an "Indemnified
Person"), relating to, arising from or resulting from:
47
(i) the inaccuracy or breach of any representation or warranty
of the Indemnifying Party contained in or made pursuant to this Agreement, other
than Section 4.12 (concerning Environmental Matters) which is covered by a
separate indemnity set forth in Section 9.4 or any certificate delivered
pursuant to this Agreement; and
(ii) the breach of any covenant or agreement of the
Indemnifying Party contained in or made pursuant to this Agreement.
(b) Purchaser shall be responsible for, shall pay for and shall
indemnify, defend, and hold Sellers and their related persons harmless from and
against, any and all Claims:
(i) relating to, arising from or resulting from all
environmental matters that are not covered by Sellers' indemnity in Section 9.4
(excluding anything for which Sellers would have been otherwise obligated to
indemnify Purchaser but for the Sellers' limitations on its indemnification
obligations described in Sections 9.4(c)(iii) and 9.7) and from the ownership or
operation of the Assets from and after Effective Time; and
(ii) relating to, arising from or resulting from its
obligations under the provisions of Section 6.9 of this Agreement.
(c) Sellers shall be responsible for, shall pay for and shall
indemnify, defend, and hold Purchaser and its related persons harmless from and
against, any and all Claims:
(i) relating to, arising from or resulting from the ownership
or operation of the Assets prior to the Effective Time except for Claims which
are specifically addressed by the provisions of Section 9.4, which Claims shall
be governed by that section; and
(ii) relating to, arising from or resulting from their
obligations under the provisions of Section 6.9 of this Agreement.
(d) As used in this Article IX, the term "Claim" shall include (x)
all debts, liabilities and obligations; (y) all losses, damages, costs and
expenses, including pre- and post-judgment interest, penalties, fines, court
costs and attorneys' fees and expenses; and (z) all demands, claims, actions,
costs of investigation, causes of action, proceedings, arbitrations, controversy
judgments, settlements and assessments, whether or not ultimately determined to
be valid and whether based on contract, tort, statute, strict liability,
negligent acts or omissions or other legal or equitable theory.
9.2 Defense of Third Party Claims. In the event any Claim is asserted
against any Indemnified Person by a third party, the Indemnified Person shall,
with reasonable promptness, notify the Indemnifying Party of such Claim. If the
Indemnified Person does not so notify the Indemnifying Party within 30 days
after becoming aware of such Claim, then the Indemnifying Party shall, if such
delay materially prejudices the Indemnifying Party with respect to the defense
of such Claim, be relieved of liability hereunder in respect of such Claim only
to the extent of the damage
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caused by such delay. Within fifteen (15) days of the receipt of a notice of a
Claim, the Indemnifying Party shall notify the Indemnified Party whether the
Indemnifying Party elects to defend such Claim. In any such proceeding,
following receipt of notice properly given, the Indemnifying Party shall be
entitled, at its sole discretion, to assume the entire defense of such Claim
(with counsel selected by it which is reasonably satisfactory to the Indemnified
Person or Persons), and the Indemnifying Party shall bear the entire cost of
defending such Claim; provided that if, in the Indemnified Party's and the
Indemnifying Party's reasonable judgment, a conflict of interest exists between
the Indemnified Party and the Indemnifying Party with respect to such Claim, or
if the Indemnifying Party elects not to defend such Claim, or if the
Indemnifying Party fails to notify the Indemnified Party within the fifteen (15)
day notice period that it elects to defend such Claim, such Indemnified Party
shall be entitled to select counsel of its own choosing, in which event the
Indemnifying Party shall be obligated to pay the reasonable fees and expenses of
such counsel to the extent that the Indemnifying Party is finally determined to
be obligated to indemnify the Indemnified Party under this Agreement. The
Indemnifying Party shall not have the right to settle any such Claim without the
written consent of the Indemnified Person or Persons, which consent shall not be
unreasonably withheld; provided that the Indemnifying Party shall not enter into
any such settlement, compromise or judgment without the prior written consent of
the Indemnified Party if it would result in the imposition of any non-monetary
liability or obligation on the Indemnified Party. In the event of the assumption
of the defense by the Indemnifying Party, the Indemnifying Party shall not be
liable for any further legal or other expenses subsequently incurred by the
Indemnified Persons in connection with such defense unless otherwise agreed to
in writing by the Indemnifying Party or as herein provided; provided, however,
the Indemnified Persons shall have the right to participate in such defense, at
their own cost, and shall have the obligation to cooperate therewith. If the
Indemnifying Party refuses or fails at any time to defend the Indemnified Party
against any Claim, the Indemnified Party shall have the right to undertake the
defense, and to compromise or settle such Claim on behalf of and for the account
and at the risk of the Indemnifying Party to the extent that the Indemnifying
Party is finally determined to be obligated to indemnify the Indemnified Party
under this Agreement with respect to such Claim.
9.3 Limits on Indemnity Obligations. The indemnity obligations of the
Parties under this Article IX, except for those under Sections 9.4 through 9.6
(which are subject to the restrictions and limitations stated in those sections)
unless otherwise specifically stated in this Section 9.3, are subject to the
following restrictions and limitations:
(a) No Indemnified Person shall be entitled to seek indemnification
from any Indemnifying Party with respect to any Claim under Section 9.1(a)(i)
unless such Indemnified Person notifies such Indemnifying Party of such Claim
within the survival period set forth in Section 9.7.
(b) No individual Claim of the Purchaser or any of its related
persons under Section 9.1 shall be made for indemnification hereunder unless it
exceeds an amount equal to $150,000 ("Purchaser Claims"). Furthermore, if the
total amount of all Purchaser Claims (exclusive of Purchaser Claims covered by
Section 9.4), including the immediately preceding sentence, does not exceed an
amount equal to $5,000,000 (the "Deductible"), then Sellers shall have no
obligation under this Article IX with respect to any such Claim. If the total
amount of all Purchaser Claims exceeds the Deductible, then Sellers' obligations
under this Article IX shall be
49
limited to the amount by which the aggregate amount of all Purchaser Claims
exceeds the Deductible.
(c) Sellers' obligations under this Article IX (excluding any
amounts it is required to pay under Section 9.4) shall be limited to an
aggregate maximum amount of $50,000,000 (the "Ceiling").
(d) Except as otherwise specifically provided in this Agreement, in
the absence of fraud, the sole and exclusive remedy of both Purchaser and
Sellers hereunder or otherwise in connection with Claims for matters covered in
Section 9.1 shall be restricted to the rights set forth in this Article IX,
excluding, however, any cause of action for specific performance.
(e) No Claims shall be recoverable by an Indemnified Person with
respect to any matter which is covered by insurance or a third party indemnitor,
to the extent that proceeds of such insurance or other third party indemnitor
are paid net of any costs incurred in connection with the collection thereof
(including, but not limited to, present, retrospective or future premiums,
self-insured retention amounts, deductibles, legal and administrative costs and
costs of investigations); and an Indemnified Person, hereby agrees to exhaust
all reasonable remedies against all applicable insurers or indemnitors prior to
recovering any amounts hereunder. All Claims shall be reduced by any tax savings
to be realized by the Indemnified Person in connection with such matter.
9.4 Environmental Indemnity
(a) Sellers shall indemnify, defend and hold harmless Purchaser and
its related parties from and against any Claims suffered or incurred by
Purchaser solely (i) as a consequence of a breach of the representations and
warranties contained in Section 4.12; (ii) as a consequence of any Claims for
environmental liabilities known to Sellers before Closing but not disclosed in
the Disclosure Schedule; and (iii) as a consequence of any Claims for
environmental liabilities not known to Sellers prior to Closing. Notwithstanding
anything in the preceding sentence to the contrary, Sellers' environmental
indemnities shall not apply to Claims suffered or incurred by Purchaser arising
out of any EPA Section 114 proceedings or actions relating to the Assets,
including such proceedings or actions as may arise with respect to all scheduled
environmental liabilities or with respect to environmental liabilities not known
to Sellers before Closing ("Purchaser's Section 114 Environmental Obligations").
With respect to all environmental liabilities not known to Sellers prior to the
Closing, Purchaser understands and acknowledges that Sellers have purchased the
Environmental Insurance Policy naming the Purchaser as an additional insured and
that Purchaser has agreed to comply with the terms of the Environmental
Insurance Policy as a condition to Sellers' indemnity obligations under this
Section 9.4. Purchaser shall assume, and indemnify Sellers and their related
parties from and against, all environmental liabilities described on the
Disclosure Schedule and Purchaser's Section 114 Environmental Obligations.
(b) Sellers' obligation with respect to Claims by Purchaser for the
matters addressed in Section 9.4(a) shall be limited to those matters as to
which Purchaser provides Sellers with written notice (such notice to conform
with other relevant provisions of this Agreement and to contain, to the extent
available, reasonable details of the claim for which indemnity is sought) of
said
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claim within seven (7) years after the Closing Date. Sellers' obligations
with regards to Claims by Purchaser for environmental liabilities not known to
Sellers prior to Closing shall be conditioned upon Purchaser's compliance with
the terms of the Environmental Insurance Policy.
(c) With respect to Claims by Purchaser relating to matters that
are described by Section 9.4(a):
(i) Sellers shall only be required to defend, indemnify and
hold harmless Purchaser and its Indemnified Person (each a "Purchaser
Indemnified Person") to the extent that: (A) investigation, containment or
remediation of the Hazardous Material is required pursuant to an applicable
Environmental Law that is in effect as of and is enforceable as of the Closing
Date and is of the type required by any Governmental Authority at the time of
Closing; (B) the Remediation Standards (as defined in Section 9.4(f)) that must
be met in order to satisfy the requirements of the applicable Environmental Law
are no more stringent than the Remediation Standards that (i) were in effect as
of and were enforceable as of the Closing Date under the applicable
Environmental Law that is the source of the obligation to conduct a remediation,
or, where no such Remediation Standards had been promulgated and were
enforceable as of the Closing Date, Remediation Standards that were applied,
within one year prior to the Closing Date, on a case-by-case basis, to
properties that are most similar to the property that is subject to a
remediation and would be the least stringent Remediation Standards, taking into
account that the normal operating condition at the affected facility shall be
maintained at all times, that would be applicable given the use of the property
as of the day before the Closing Date or as required by any Governmental
Authority; and (C) such investigation and/or remediation is conducted using the
most cost-effective methods, taking into account that the normal operating
condition at the affected facility shall be maintained at all times, for
investigation, remediation and/or containment consistent with applicable
Environmental Law. If Sellers are undertaking remedial action, Sellers shall not
be responsible for any effect the remediation has upon the business or
operations of Purchaser (including, without limitation, business interruptions
or lost profits); however, Sellers agree to use commercially reasonable efforts
to avoid or minimize any business interruption.
(ii) If the costs of an investigation or remediation at any of
the Real Property that is subject to an indemnity by Sellers hereunder are
increased due to an act or omissin (after the Closing) by a person other than
Sellers, or an Affiliate of Sellers, Sellers shall not be responsible for any
such increase in costs incurred. Sellers shall not be responsible for any
increased costs or increased Claims by Purchaser under this subsection to the
extent they arise by reason of (A) the voluntary closure of Operations at any
Real Property or (B) a material change in use of any of said property from the
use of said property as of the Closing.
(iii) Notwithstanding anything to the contrary herein, Sellers
shall not have any obligation in connection with this Section 9.4 unless each
individual Claim exceeds $50,000, regardless of whether such Claim is covered by
the Environmental Insurance Policy. In no event will Sellers be liable under
this Section 9.4 for an aggregate amount exceeding $50,000,000 in excess of the
amounts of Environmental Claims and Losses paid or provided under the
Environmental Insurance Policy described in Section 6.11.
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(d) Notwithstanding anything to the contrary herein, with respect
to claims arising pursuant to 9.4, Seller shall not be obligated to indemnify
Purchaser Indemnified Persons for the costs and expenses associated with
Purchaser Indemnified Persons' overseeing of Sellers' performance of its defense
and indemnity obligations, including, but not limited to, the costs and expenses
of overseeing of Sellers' legal counsel, consultants, or employees, and Sellers
shall not be obligated to indemnify Purchaser Indemnified Parties for any costs
or expenses of Purchaser Indemnified Parties for management and employee time
costs.
(e) To the extent that Purchaser Indemnified Persons make a claim,
pursuant to Section 9.1, for breach of the representations and warranties set
forth in Section 4.12, the provisions of this 9.4 shall be applicable to such
claim. Claims brought pursuant to this 9.4 shall be subject to the procedures
for indemnification set forth in Section 9.2 if such claims are third party
claims.
(f) For purposes of this Agreement, the term "Remediation Standard"
means a numerical standard (whether resulting from an enacted statute,
promulgated regulation, guidance or policy document issued by a regulatory
agency, or developed on a case-by-case basis through a risk assessment or other
methodology authorized pursuant to an applicable Environmental Law and
acceptable to the Governmental Authority) that defines the concentrations of
Hazardous Material that may be permitted to remain in any environmental media
after an investigation, remediation or containment of a release of Hazardous
Material.
9.5 Exclusive Remedy for Environmental Matters; Indemnification by
Purchaser. Notwithstanding anything to the contrary in this Agreement, Purchaser
Indemnified Persons hereby agree that their sole and exclusive remedy against
Sellers and its related persons, with respect to any and all matters arising
under or related to Environmental Law or Hazardous Material (with respect to the
Business), Sellers (with respect to the Business), and the Real Property, shall
be the indemnity set forth in 9.4. Except with respect to the remedy referred to
in the preceding sentence, the Purchaser Indemnified Persons hereby waive, to
the fullest extent permitted under applicable law, and forever release Sellers
and (with respect to the Business), the Real Property, from, any and all
Purchaser Claims arising under Environmental Laws or relating to Hazardous
Material or the environment.
9.6 Environmental Fines and Penalties. Without limitation as to time,
Sellers shall indemnify, defend and hold harmless Purchaser and its related
parties from and against any Claims suffered or incurred by Purchaser solely as
a consequence of any fines or penalties accessed against Purchaser that result
from Sellers' operation of the Business or ownership of the Assets prior to
Closing; provided, however, that Purchaser will notify Sellers of all EPA
Section 114 and other Governmental Authority actions, proceedings, meetings and
notices relating to the Assets and involving pre-Closing environmental matters
that might reasonably lead to any fines or penalties upon Sellers, and shall
endeavor in good faith to facilitate Sellers' participation therein.
9.7 Survival. The representations, warranties and covenants made in
this Agreement or in any certificate or instrument delivered in connection
herewith and the concomitant indemnities relating thereto shall survive the
Closing and continue to be applicable and binding thereafter for a period of
three (3) years after the Closing Date (except for the representations and
warranties contained in Sections 4.8 and 4.10, and the related indemnities,
which shall survive for a period of five (5) years after the Closing Date and
for the representations and warranties contained in Section
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4.12 and the indemnities related thereto which shall survive for a period of
seven (7) years after the Closing Date), at which time the same shall terminate
and be extinguished.
ARTICLE X
REGISTRATION RIGHTS
10.1 Registration Rights. In the event that Sellers elects to accept
shares of the Guarantor Common Stock as part of the Purchase Price pursuant to
Section 2.5, Sellers shall have the following rights:
(a) As used in this Section 10.1, the following terms have the meanings
set forth below:
"Commission" means the United States Securities and Exchange
Commission.
"Demand Registration Statement" means a registration statement on Form
S-1 or S-3 filed with the Commission under the Securities Act.
"Disadvantageous Condition" has the meaning set forth in Section
10.1(b)(iii).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holders" means the Sellers or any Person who becomes a holder of
Subject Securities after the Closing Date as a result of a No-Sale Transaction.
"No-Sale Transaction" means a transfer from a Holder of Subject
Securities that does not constitute a "sale" (as such term is understood and
defined under the Securities Act), including without limitation a distribution
from a Holder that is a corporation, partnership, joint venture, limited
liability company, association or trust to the owner of a beneficial interest in
such Holder, provided, however, that in any such transaction the recipient must
be able to tack the holding period to that of the Holder.
"Guarantor Common Stock" means the shares of common stock, par value
$__ per share, of Purchaser's Guarantor.
"Piggy-back Registration" has the meaning set forth in Section
10.1(g)(i).
"Registration Expenses" has the meaning set forth in Section 10.1(e).
"Registration Termination Date" means the second anniversary of the
date when the Commission first declares the Demand Registration Statement
effective; provided, however that the Registration Termination Date shall be
extended for a period equal to the aggregate period or periods during which the
Holders have been precluded from selling any Subject Securities under
subparagraph (b)(iii) by reason of receipt of a Suspension Notice.
Notwithstanding anything to the
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contrary, the Registration Termination Date shall occur at such earlier date as
the Subject Securities become freely transferable on the public market without
any restrictions or limitations pursuant to Rule 144(k) promulgated by the
Commission or has been sold in compliance with the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Subject Securities" means the shares of Guarantor Common Stock issued
as part of the Purchase Price pursuant to Section 2.5, and any common stock or
other security issued or issuable as a dividend or other distribution with
respect to, or in exchange for, or upon conversion or in replacement of, any of
such Guarantor Common Stock; provided, however, that a security is not a Subject
Security after (i) it has been effectively registered and disposed of under the
Securities Act, (ii) it has been publicly sold pursuant to Rule 144 (or any
similar provisions then in force) under the Securities Act, or (iii) it is
capable of being disposed of without volume restrictions pursuant to Rule 144(k)
(or any similar provisions then in force) under the Securities Act
"Suspension Notice" has the meaning set forth in Section 10.1(b)(iii).
(b) (i) If the Subject Securities are issued pursuant to Section
2.5, as promptly as practicable after receipt of a written request by the
Holders of at least 25% of the Subject Securities (but in no event more than 30
days thereafter, subject to Purchaser's Guarantor's right to extend such time in
the event that there exists any Disadvantageous Condition which would permit
Purchaser's Guarantor to issue a Suspension Notice if the Demand Registration
Statement were already effective), Purchaser's Guarantor will, on up to three
(3) occasions, prepare and file with the Commission a Demand Registration
Statement for the purpose of registering the resale in the market from time to
time of the Subject Securities by Holders or by potential assignees of such
Holders to which all or a portion of such Holders' Subject Securities may be
transferred in a No-Sale Transaction.
(ii) Purchaser's Guarantor will use its reasonable efforts to
have the Demand Registration Statement declared effective by the Commission as
promptly as practicable and thereafter to maintain the effectiveness of the
Demand Registration Statement and, subject to subparagraph (iv) below, to
maintain such Demand Registration Statement "current" (as below defined) at all
times until the Registration Termination Date. Purchaser's Guarantor shall
promptly give written notice to the Holders when the Registration Statement has
been declared effective by the Commission and is available for use by Holders
for the resale of Subject Securities.
(iii) If the Holders initiating the registration request
hereunder ("Initiating Holders") intend to distribute the Subject Securities
covered by their request by means of an underwriting, they shall so advise
Purchaser's Guarantor as a part of their request made pursuant to subsection
10.1(b)(i). The managing underwriter will be selected by the Initiating Holders
and shall be reasonably acceptable to Purchaser's Guarantor. In such event, the
right of any Holder to include its Subject Securities in such registration shall
be conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Subject Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders
and such Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such
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underwriting shall (together with Purchaser's Guarantor) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting; provided, however, that no Holder (or any of
their Permitted Transferees) shall be required to make any representations,
warranties or indemnities except as they relate to such Holder's ownership of
shares and authority to enter into the underwriting agreement and to such
Holder's intended method of distribution and as otherwise may be required by
applicable law or regulation. In addition, to the extent requested by the
Holders or the managing underwriter, Purchaser's Guarantor will conduct and
engage in the marketing activities normally or typically engaged in by an issuer
in connection with an underwritten offering of its securities.
(iv) The Demand Registration Statement shall not be considered
to be "current" at any time when, by reason of occurrence of any event or by
reason of the passage of time, the Demand Registration Statement does not meet
the requirements of Section 10, Section 12(2) or Section 17 of the Securities
Act, or the Demand Registration Statement contains an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading. The Demand
Registration Statement shall disclose that Holders may elect to resell Subject
Securities without registration of such sales under the Demand Registration
Statement, by making such sales under and as permitted by Rules 144 or 145, as
applicable, of the Commission under the Securities Act. If at any time or times
after the Demand Registration Statement is declared effective by the Commission,
Purchaser's Guarantor's Board of Directors determines that the offering of
Guarantor Common Stock under the Demand Registration Statement would be
adversely affect or impact Purchaser's Guarantor's ability to negotiate or
complete a material financing, merger, acquisition or other material transaction
or event involving Purchaser's Guarantor or its subsidiaries that has not been
publicly disclosed or the unavailability of any required financial statements
for reasons substantially beyond the control of the Purchaser's Guarantor, (a
"Disadvantageous Condition"), Purchaser's Guarantor shall be entitled to either
suspend the effectiveness of the Demand Registration Statement with the
Commission or suspend the availability of the Demand Registration for resales of
Subject Securities by Holders, or may take both such actions, and shall promptly
notify all Holders thereof by delivery of written notice (a "Suspension
Notice"); provided, however, that Purchaser's Guarantor's obligation to maintain
the Demand Registration Statement current under this Section 10.1(b) shall not
be suspended by reason of Purchaser's Guarantor's failure to disclose
information at a time when public disclosure of such information is required by
law. Upon receipt of a Suspension Notice, Holders shall immediately discontinue
the use of the Demand Registration Statement for any purpose until notified by
Purchaser's Guarantor that the Demand Registration Statement is current and
available for use by Holders for sales of Subject Securities. Purchaser's
Guarantor shall not be entitled to suspend the effectiveness of the Demand
Registration Statement for more than 60 consecutive days or an aggregate of 120
days within any twelve-month period and no subsequent suspension period shall
occur unless at least 90 days have elapsed during which Sellers can utilize the
Registration Statement. As promptly as practicable after the public disclosure
of such Disadvantageous Condition or the Purchaser's Guarantor determines that
the Disadvantageous Condition no longer exists, Purchaser's Guarantor shall
amend or supplement the Demand Registration Statement to the extent necessary to
make the Demand Registration Statement current, and shall give prompt written
notice to all Holders when the Demand Registration Statement is again available
for resales of Subject Securities.
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(v) If Purchaser's Guarantor should undertake an underwritten
public offering of its shares either after the Demand Registration Statement has
been declared effective or prior to the consummation of the transactions
contemplated by this Agreement, Sellers shall, upon the request of the managing
underwriter of such offering, agree and commit, and it does hereby agree and
commit, that it will not effect any public sale or distribution, directly or
indirectly, or make any offer to sell, contract to sell (including without
limitation any short sale), grant any option to purchase or otherwise transfer
or dispose (including sales pursuant to Rule 144) of any of the Subject
Securities, other than those which are included in a Piggy-Back Registration,
during a period of seven days prior to and up to 180 days after the closing of
such public offering without the consent of the managing underwriter. This
restriction shall not apply to the offer and sale of any Subject Securities
which may be covered by the registration statement covering such public
offering.
(vi) Purchaser's Guarantor shall promptly notify all Holders
of Subject Securities of, and confirm in writing, the issuance by the Commission
of any stop order suspending the effectiveness of the Demand Registration
Statement or the initiation of any proceedings for that purpose. Purchaser's
Guarantor shall use its reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of the Demand Registration Statement at the
earliest possible time.
(vii) Purchaser's Guarantor will cause all of the Subject
Securities to be listed on each securities exchange on which similar securities
issued by Purchaser's Guarantor are then listed no later than the effective date
of the Demand Registration Statement or Piggy-Back Registration, as the case may
be.
(c) Purchaser's Guarantor will indemnify and hold harmless each
Holder, each of such Holder's officers, directors, partners, or members, as the
case may be, and each Person controlling such Holder, with respect to which
registration or qualification of Subject Securities has been effected pursuant
to this Section 10.1 against all claims, losses, damages, and liabilities, joint
or several (or actions in respect thereof), arising out of or based upon any
untrue statement (or alleged untrue statement) of a material fact contained in
the Demand Registration Statement or Piggy-Back Registration, as the case may
be, prospectus, or offering circular, or in any document incorporated by
reference in any of the foregoing, or arising out of or based upon any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by Purchaser's Guarantor of any rule or regulation promulgated under
the Securities Act applicable to Purchaser's Guarantor and relating to action or
inaction required of Purchaser's Guarantor in connection with the Demand
Registration or Piggy-Back Registration, as the case may be and will promptly
reimburse Holder and, each of such Holder's officers, directors, partners, or
members, as the case may be, and each Person controlling such Holder, for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claims, loss, damage, liability or action;
PROVIDED, however, that Purchaser's Guarantor will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based upon any untrue statement or omission based upon
written information furnished to Purchaser's Guarantor by such Holder
specifically for inclusion in any such registration statement, prospectus or
offering circular. The obligations of Purchaser's Guarantor
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under the foregoing indemnity agreement shall survive the completion of the
offering of Subject Securities under the Demand Registration Statement or
Piggy-Back Registration, as the case may be.
(d) Each Holder with respect to which registration or qualification
of Subject Securities has been effected pursuant to this Section 10.1 will
indemnify and hold harmless Purchaser's Guarantor, each of Purchaser's
Guarantor's officers, directors, and each Person controlling Purchaser's
Guarantor, against all claims, losses, damages, and liabilities, joint or
several (or actions in respect thereof), arising out of or based upon any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, or offering circular, or in any document
incorporated by reference in any of the foregoing, or arising out of or based
upon any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by such Holder of any rule or regulation
promulgated under the Securities Act or Exchange Act applicable to such Holder
and relating to action or inaction required of such Holder in connection with
any such registration or qualification, and will promptly reimburse Purchaser's
Guarantor, each of Purchaser's Guarantor's officers, directors, and each Person
controlling Purchaser's Guarantor, for any legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claims, loss, damage, liability or action; PROVIDED, however, that such Holder
will not be liable in any such case to the extent that any such claim, loss,
damage, liability or expense does not arise out of or is not based upon any
untrue statement or omission based upon written information furnished by such
Holder specifically for inclusion in any such registration statement, prospectus
or offering circular. The obligations of Holders under the foregoing indemnity
agreement shall survive the completion of the offering of Subject Securities
under any registration statement provided for in this Section 10.1.
Notwithstanding the foregoing, in no event shall any selling Holder be liable
for an amount in excess of the proceeds from the sale of the Subject Securities
realized by such Holder. Each Holder shall furnish in writing all information to
the Purchaser's Guarantor concerning itself and its holdings of securities of
the Purchaser's Guarantor as shall be required in connection with the
preparation and filing of any Registration Statement covering any Subject
Securities.
(e) All expenses incident to Purchaser's Guarantor's performance of
or compliance with this Section 10.1, including, without limitation, all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws (including fees and disbursements of counsel in connection with
blue sky qualifications of the Subject Securities), rating agency fees, printing
expenses, messenger and delivery expenses, internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the fees and expenses incurred in connection with
the listing of the securities to be registered on the New York Stock Exchange
and all securities exchanges on which similar securities issued by Purchaser's
Guarantor are then quoted or listed, the fees and disbursements of counsel for
Purchaser's Guarantor and its independent certified public accountants
(including the expense of any special audit or comfort letters required by or
incident to such performance), securities act liability insurance (if
Purchaser's Guarantor elects to obtain such insurance), the fees and expenses of
any special experts retained by Purchaser's Guarantor in connection with such
registration, and fees and expenses of other Persons retained by Purchaser's
Guarantor, in connection with each registration hereunder (but not including
discounts, commissions, fees or expenses payable to underwriters that are
attributable to the Subject Securities offered on behalf of the Selling Holder
or to fees and expenses of counsel to
57
the Selling Holder) (collectively, the "Registration Expenses") will be borne by
Purchaser's Guarantor.
(f) Purchaser's Guarantor will also take such action as may be
required to be taken under applicable blue sky laws in connection with the
issuance of Guarantor Common Stock pursuant to this Agreement and in connection
with resale of Subject Securities by Holders pursuant to the Demand Registration
Statement; PROVIDED that Purchaser's Guarantor will not be required to become
qualified as a foreign corporation in any jurisdiction.
(g) (i) If, at any time during the period ending on the second
anniversary of the date of this Agreement, the Purchaser's Guarantor proposes to
file a registration statement under the 1933 Act with respect to an offering by
the Purchaser's Guarantor for its own account or for the account of any other
Person of any class of equity security, including any security convertible into
or exchangeable for any equity security (other than a registration statement on
Forms S-4 or S-8 (or their successor forms) or filed in connection with an
exchange offer or an offering of securities solely to the Purchaser's
Guarantor's existing stockholders, and other than as set forth in (ii) below),
then the Purchaser's Guarantor shall in each case give written notice of such
proposed filing to the Holders of the Subject Securities at least twenty days
before the anticipated filing date, and such notice shall offer such Holders the
opportunity to register such number of Subject Securities as each such Holder
may request (a "Piggy-back Registration"). Purchaser's Guarantor shall use
reasonable efforts to cause the managing underwriter or underwriters of a
proposed underwritten offering to permit the Holders of Subject Securities
requested to be included within such 20 days in the registration for such
offering to include such securities in such offering on the same terms and
conditions as any similar securities of the Purchaser's Guarantor included
therein. Notwithstanding the foregoing, if the managing underwriter or
underwriters of such offering advises to the Holders of Subject Securities that
the total amount of securities which they and any other Persons (other than the
Purchaser's Guarantor) intend to include in such offering is sufficiently large
to materially and adversely affect the success of such offering, then the amount
of Subject Securities to be offered in such event shall be allocated first to
the person on whose behalf the Registration Statement has been filed, and then,
to the extent that any additional securities can, in the opinion of such
managing underwriter or underwriters, be sold without any such material adverse
affect, pro rata among the Holders of Subject Securities and all other selling
stockholders named or proposed to be named in the Piggy-Back Registration on the
basis of the number of outstanding shares of Purchaser's Guarantor common stock
requested to be included in such registration by each such Holder and other
selling stockholder to the amount recommended by such managing underwriter.
(ii) Notwithstanding anything to the contrary contained in
this Agreement, the Purchaser's Guarantor shall not be required to include
Subject Securities in any registration statement if the proposed registration is
(A)a registration of a stock option or other employee incentive compensation or
employee benefit plan or of securities issued or issuable pursuant to any such
plan, or a registration statement relating to warrants, options or shares of
capital stock granted or to be granted or sold primarily to employees, directors
or officers of the Purchaser's Guarantor, (B) a registration of securities
issued or issuable pursuant to a stockholder reinvestment plan or other similar
plan, (C) a registration of securities issued in exchange for any securities or
any assets of, or in connection with a merger or consolidation with, an
unaffiliated Purchaser's Guarantor, (D) a
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registration of securities pursuant to a "rights" or other similar plan designed
to protect the Purchaser's Guarantor's stockholders from a coercive or other
attempt to cause a change in control of Purchaser's Guarantor, (E) registration
of securities filed pursuant to Rule 145 under the 1933 Act or any successor
rule, or (F) a registration of securities issued in connection with any debt or
preferred stock financing of Purchaser's Guarantor.
(iii) The Purchaser's Guarantor may withdraw any registration
statement and abandon any proposed offering initiated by the Purchaser's
Guarantor without the consent of any Holder of Subject Securities,
notwithstanding the request of any such Holder to participate therein in
accordance with this provision, if the Purchaser's Guarantor determines in its
sole discretion that such action is in the best interests of the Purchaser's
Guarantor and its stockholders (for this purpose, the interest of the Holders
shall not be considered).
ARTICLE XI
DISPUTES
11.1 Dispute Resolution. Any controversy, claim or dispute ("Dispute"),
whether based on contract, tort, statute or other legal or equitable theory
(including but not limited to any claim of fraud, misrepresentation or
fraudulent inducement or any question of validity or effect of this Agreement
including this section) arising out of or related to this Agreement (including
any amendments or extensions), or the breach or termination thereof, shall be
settled consultations between the Parties initiated upon the written notice of
any Party. In the event of failure of such consultations to settle such Dispute
in a manner acceptable to all Parties within thirty (30) days following such
written notice, then such Dispute shall be settled by binding arbitration in
accordance with this provision and the then current CPR Institute for Dispute
Resolution Rules for Non-Administered Arbitration of Business Disputes. The
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
Sections 1-16, to the exclusion of any provision of state law inconsistent
therewith or which would produce a different result, and judgment upon the award
rendered by the arbitrator may be entered by any court having jurisdiction.
11.2 Place. The arbitration shall be held in New York, New York.
11.3 Arbitrators. There shall be three (3) independent and impartial
arbitrators of whom Sellers shall promptly appoint one (1), Purchaser shall
promptly appoint one (1), and the third of which shall be appointed by the two
(2) Party-appointed arbitrators in accordance with the arbitration rules. The
arbitrators shall determine the Dispute of the Parties and render a final award
in accordance with Section 11.1 hereof. The arbitrators shall set forth the
reasons for the award in writing.
11.4 Statute of Limitations. Any Dispute by a Party shall be
time-barred if the asserting Party does not commence arbitration with respect to
such Dispute within one (1) year after the cause of action accrues. All statutes
of limitations and defenses based upon passage of time applicable to any Dispute
of a defending Party (including any counterclaim or setoff) shall be tolled
while the arbitration is pending.
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11.5 Discovery. The arbitrator shall order the Parties to promptly
exchange copies of all exhibits and witness lists, and, if requested by a Party,
to produce other relevant documents, to answer up to ten (10) interrogatories
(including subparts), to respond to up to ten (10) requests for admissions
(which shall be deemed admitted if not denied) and to produce for deposition
and, if requested, at the hearing all witnesses that such Party has listed and
up to four (4) other persons within such Party's control. Any additional
discovery shall only occur by agreement of the Parties or as ordered by the
arbitrators upon a finding of good cause.
11.6 Costs. Each Party shall bear its own costs, expenses and
attorneys' fees; provided that if court proceedings to stay litigation or compel
arbitration are necessary, the Party who unsuccessfully opposes such proceedings
shall pay all reasonable associated costs, expenses, and attorneys' fees in
connection with such court proceeding.
11.7 Breach.
(a) The Parties recognize that irreparable injury will result from
a breach of any provision of this Agreement and that money damages will be
inadequate to fully remedy the injury. In order to prevent such irreparable
injury, the arbitrators shall have the power to grant temporary or permanent
injunctive or other equitable relief. Prior to the appointment of the
arbitrators a Party may, notwithstanding any other provision of this agreement,
seek temporary injunctive relief from any court of competent jurisdiction;
provided that the Party seeking such relief shall (if arbitration has not
already been commenced) simultaneously commence arbitration. Such court ordered
relief shall not continue more than ten (10) days after the appointment of the
arbitrator (or in any event for longer than sixty (60) days).
(b) Notwithstanding any other provisions of this Agreement to the
contrary, upon any failure to Close the transactions contemplated herein due to
Purchaser's Guarantor's or Purchaser's breach of their representations and
warranties, due to the failure of Purchaser's Guarantor or Purchaser to perform
hereunder or due to the failure for any reason to obtain the financing
contemplated by the Financing Commitments, Purchaser shall pay to Sellers
promptly (and in no event more than three Business days after receipt of
Sellers' written notice) an amount equal to Thirty Million Dollars
($30,000,000.00), by way of liquidated damages and not as a penalty. Such amount
shall be payable in cash by wire transfer to the Sellers' account and such
amount will not be due and payable because of any failure or refusal by Sellers
to exercise their rights to elect under Section 2.5 to accept shares of
Guarantor Common Stock as part of the Purchase Price. Purchaser has provided to
Sellers that certain standby irrevocable letter of credit in the amount of
$30,000,000 issued by Fleet National Bank N.A. for a term at least until May 1,
2003, a copy of which is attached hereto as Exhibit K (the "Letter of Credit").
If Sellers are entitled to liquidated damages as provided herein, they shall
give Purchaser and Purchaser's Guarantor written notice of such fact and a
demand for payment thereof. If such amount of liquidated damages has not been
paid to Sellers within three (3) days after Purchaser's receipt of Sellers'
notice and demand, Sellers shall be entitled to draw on the Letter of Credit the
full amount of the liquidated damages due hereunder.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, upon any failure to Close the transactions contemplated herein due to
Sellers or Sellers' Guarantor's breach
60
of their representations and warranties or their failure to perform hereunder
and, within twelve (12) months from the date of this Agreement, Sellers shall
have consummated a sale of the Assets to a third party or the outstanding
securities of Sellers are acquired by a third party, Sellers shall pay to
Purchaser promptly (and in no event more than three Business days after receipt
of Purchaser's written notice) an amount equal to Twenty Million Dollars
($20,000,000.00), by way of liquidated damages and not as a penalty. Such amount
shall be payable either in cash by wire transfer to the Purchaser's account.
11.8 Consent to Jurisdiction. The Parties hereby consent to the
non-exclusive jurisdiction of the state or federal courts of New York for the
enforcement of any award rendered by the arbitrators.
ARTICLE XII
MISCELLANEOUS
12.1 Governing Law. This Agreement shall be governed by and construed
in accordance with the substantive law of the State of New York without giving
effect to the principles of conflicts of law thereof, except that the
substantive law of Tennessee relating to the ownership of real property Assets
located in Tennessee shall govern with respect to such ownership.
12.2 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
12.3 Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by either of the
Parties (whether by operation of law or otherwise) without the prior written
consent of the other Party. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the Parties
and their respective successors and assigns. Nothing in this Agreement,
expressed or implied, is intended or shall be construed to confer upon any
Person other than the Parties hereto, their successors and assigns, any
Indemnified Person, and, under certain circumstances, the Parties' Affiliates
any right, remedy or claim under or by reason of this Agreement.
12.4 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto and any documents referred to herein including, without
limitation, the Confidentiality Agreement) and the Crack Spread Retained
Interest Agreement constitute the entire agreement between the Parties, and
supersedes any prior understandings, agreements, arrangements and
representations between the Parties, written or oral, to the extent they related
in any way to the subject matter hereof.
12.5 Notices. All notices, requests, demands, claims and other
communications required or permitted to be given hereunder shall be in writing
and shall be given by (a) personal delivery (effective upon delivery), (b)
facsimile transmission (effective on the next day after transmission), (c)
recognized overnight delivery service (effective on
61
the next day after delivery to the delivery service), or (d) registered or
certified mail, return receipt requested and postage prepaid (effective on the
third day after being so mailed), in each case addressed to the intended
recipient as set forth below:
If to Purchaser or Purchaser's Guarantor:
The Premcor Refining Group Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
With a copy (which shall not constitute notice) to:
The Premcor Refining Group Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Operating Officer
If to Sellers:
c/o The ▇▇▇▇▇▇▇▇ Companies
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Tower
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Lynnwood ▇. ▇▇▇▇▇, ▇▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
General Counsel
▇▇▇▇▇▇▇▇ Energy Services
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any Party may change its address(es) for receiving notices by giving written
notice of such change to the other Party in accordance with this Section 12.5.
62
12.6 Amendment. This Agreement may be amended by the Parties at any
time only by a written instrument signed on behalf of each of the Parties.
12.7 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
12.8 Waivers. The Parties may, to the extent legally allowed: (a)
extend the time for the performance of any of the obligations or other acts of
the other Party, (b) waive any inaccuracies in the representations and
warranties of the other Party contained herein or in any document delivered
pursuant hereto, or (c) waive performance of any of the covenants or agreements,
or satisfaction of any of the conditions, contained herein. Any agreement on the
part of a Party to any such extension or waiver shall be valid only if set forth
in a written instrument signed on behalf of such Party. Except as provided in
this Agreement, no action taken pursuant to this Agreement, including any
investigation by or on behalf of either Party, shall be deemed to constitute a
waiver by the Party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
either Party of a breach of any provision hereof shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any other
provisions hereof.
12.9 Execution. This Agreement may be executed in one or more
counterparts, and by each Party in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which shall
together constitute but one and the same agreement. This Agreement may be duly
delivered by one Party by its transmission of a facsimile signature page of this
Agreement.
[The balance of this page has been left intentionally blank, with signatures on
next page]
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Signature page to that certain Asset Purchase and Sale Agreement between
▇▇▇▇▇▇▇▇ Refining & Marketing, L.L.C., ▇▇▇▇▇▇▇▇ Generating Memphis, L.L.C.,
▇▇▇▇▇▇▇▇ Memphis Terminal, Inc., ▇▇▇▇▇▇▇▇ Petroleum Pipeline Systems, Inc. and
▇▇▇▇▇▇▇▇ Mid-South Pipelines, LLC (Sellers), The ▇▇▇▇▇▇▇▇ Companies, Inc.
(Sellers' Guarantor) and Premcor Refining Group, Inc. (Purchaser) and Premcor
Inc. (Purchaser's Guarantor)
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
"Purchaser" "Sellers"
The Premcor Refining Group, Inc. ▇▇▇▇▇▇▇▇ Refining & Marketing, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------ -----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------- ------------------------
Title: Executive VP & CFO Title: President
---------------------- -----------------------
▇▇▇▇▇▇▇▇ Generating Memphis, L.L.C.
"Purchaser's Guarantor"
Premcor Inc. By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Title: President
-----------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Memphis Terminal, Inc.
-----------------------
Title: S.V.P.
----------------------
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Title: President
-----------------------
▇▇▇▇▇▇▇▇ Petroleum Pipeline Systems,
Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Title: Vice President
-----------------------
"Sellers' Guarantor"
The ▇▇▇▇▇▇▇▇ Companies, Inc. ▇▇▇▇▇▇▇▇ Mid-South Pipeline, LLC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------ -----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------- ------------------------
Title: Chief Restructuring Officer Title: President
--------------------------- -----------------------
64