Exhibit 10.01
CAPITAL CONTRIBUTION AGREEMENT
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CAPITAL CONTRIBUTION AGREEMENT (as amended, supplemented or modified
from time to time, this "Agreement"), dated as of August 19, 1999, among
BLACKSTONE CAPITAL PARTNERS III MERCHANT BANKING FUND L.P., a Delaware limited
partnership ("Blackstone Capital Partners"), BLACKSTONE OFFSHORE CAPITAL
PARTNERS III L.P., a Cayman Islands limited partnership ("Blackstone Offshore
Partners" and, together with Blackstone Capital Partners, being collectively
referred to herein as the "Fund"), BLACKSTONE FAMILY INVESTMENT PARTNERSHIP III
L.P., a Delaware limited partnership ("Blackstone Family Partnership"), ▇▇▇▇▇
REFINING HOLDINGS INC., a Delaware corporation ("Holdings"), SABINE RIVER
HOLDING CORP., a Delaware corporation (the "General Partner"), NECHES RIVER
HOLDING CORP., a Delaware corporation (the "Limited Partner"), PORT ▇▇▇▇▇▇ ▇▇▇▇▇
COMPANY L.P., a Delaware limited partnership (the "Partnership") and BANKERS
TRUST COMPANY, a New York banking corporation, as collateral trustee (the
"Collateral Trustee") for the Secured Parties (as defined in the Common Security
Agreement referred to below). All capitalized terms used herein and not
otherwise defined shall have the respective meanings provided such terms in the
Common Security Agreement referred to below.
W I T N E S S E T H:
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WHEREAS, the Partnership, Port ▇▇▇▇▇▇ Finance Corp., a Delaware
corporation (the "Borrower"), the General Partner, the Limited Partner, the
Collateral Trustee, the Agents, and the Depositary Bank are parties to a Common
Security Agreement, dated as of August 19, 1999 (as amended, modified or
supplemented from time to time, the "Common Security Agreement");
WHEREAS, each of Blackstone Capital Partners, Blackstone Offshore
Partners, Blackstone Family Partnership, Holdings, the General Partner, the
Limited Partner, the Partnership and the Borrower will obtain benefits as a
result of (i) the extensions of credit to the Borrower under the Senior Loan
Agreements and (ii) the coverage provided under the Oil Payment Insurance
Policy;
WHEREAS, it is a condition precedent to the entering into the Common
Security Agreement that each of the Fund, Blackstone Family Partnership,
Holdings, the General Partner, the Limited Partner and the Partnership shall
have executed and delivered this Agreement;
WHEREAS, each of Blackstone Capital Partners, Blackstone Offshore
Partners and Blackstone Family Partnership are willing to make certain capital
investments in Holdings through the purchase of additional shares in Holdings
(the "Shares") and are willing to execute
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and deliver this Agreement in order to permit the Secured Parties to be assured
that such capital investments will be made; and
WHEREAS, in order to induce (i) the Initial Senior Lenders to make the
extensions of Initial Senior Debt contemplated by the Common Security Agreement
and the Senior Loan Agreements and (ii) the Oil Payment Insurers to issue the
Oil Payment Insurance Policy and to satisfy the conditions precedent referred to
in the second recital, above, each of the Fund, Blackstone Family Partnership,
Holdings, the General Partner, the Limited Partner and the Partnership desires
to execute and deliver this Agreement.
NOW, THEREFORE, it is agreed:
1. Certain Defined Terms. As used herein, the following terms shall
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have the following meanings:
"Agents" shall mean Deutsche Bank AG, New York Branch, as
Administrative Agent for the Bank Senior Lenders, Winterthur International
Insurance Company Limited, as Administrative Agent for the Oil Payment Insurers,
and HSBC Bank USA, as Capital Markets Trustee for the Capital Markets Lenders.
"Agreement" shall have the meaning provided in the first paragraph of
this Agreement.
"Blackstone Capital Partners" shall have the meaning provided in the
first paragraph of this Agreement.
"Blackstone Family Partnership" shall have the meaning provided in the
first paragraph of this Agreement.
"Blackstone Offshore Partners" shall have the meaning provided in the
first paragraph of this Agreement.
"Capital Call Amount" shall mean, on any date of determination, an
amount of cash equal to $121,499,100, less any and all amounts previously funded
and actually received by the Partnership pursuant to Section 2(a), 2(b) or 2(d)
or by the Selling Lenders pursuant to Section 2(c) of this Agreement.
"Capital Call Acceleration Event" shall mean:
(i) the occurrence of an Insolvency Event with respect to any
of the Designated Capital Call Investors, Holdings, the General Partner,
the Limited Partner, the Partnership or the Borrower; or
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(ii) the taking of Enforcement Action as provided under the
Common Security Agreement pursuant to which the Senior Debt shall have been
declared to be immediately due and payable by reason of any Event of
Default.
"Capital Call Percentages" shall mean (i) with respect to Blackstone
Capital Partners, 79.7852%, (ii) with respect to Blackstone Offshore Partners,
14.2148% and (iii) Blackstone Family Partnership, 6.0000%, in each case as such
Capital Call Percentage may be reallocated among such partners at any time and
from time to time.
"Capital Markets Trustee" shall mean HSBC Bank USA, as Capital Markets
Trustee under the Common Security Agreement, or any successor thereto.
"Chattel Paper" shall have the meaning ascribed thereto in the Uniform
Commercial Code in effect in the State of New York on the date hereof.
"Collateral", for purposes of this Agreement only, shall mean,
collectively, this Agreement, all rights (including all contract rights and
rights to receive payments and capital contributions) under this Agreement and
all Proceeds (as defined in the Uniform Commercial Code in effect in the State
of New York on the date hereof) hereof and thereof.
"Collateral Trustee" shall have the meaning provided in the first
paragraph of this Agreement.
"Common Security Agreement" shall have the meaning provided in the
first recital of this Agreement.
"Depositary Bank" shall mean Bankers Trust Company, as Depositary
Bank under the Common Security Agreement, or any successor thereto.
"Designated Capital Call Investors" shall mean, collectively,
Blackstone Capital Partners, Blackstone Offshore Partners and Blackstone Family
Partnership.
"Equity Commitment Letter" shall mean the Equity Commitment Letter
dated June 28, 1999 from Holdings and Occidental Petroleum Corporation to the
General Partner.
"Fund" shall have the meaning provided in the first paragraph of this
Agreement.
"General Partner" shall have the meaning provided in the first
paragraph of this Agreement.
"Grantors" shall mean, collectively, all of the parties to this
Agreement (other than the Designated Capital Call Investors and the Collateral
Trustee).
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
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"Instrument" shall have the meaning ascribed thereto in the Uniform
Commercial Code in effect in the State of New York on the date hereof.
"Investment" shall mean a cash contribution not to exceed the Capital
Call Amount made (or deemed made) by a Designated Capital Call Investor after
the date hereof to the equity capital of Holdings.
"Limited Partner" shall have the meaning provided in the first
paragraph of this Agreement.
"Partnership" shall have the meaning provided in the first paragraph
of this Agreement.
"Selling Lenders" shall have the meaning provided in Section 2(c) of
this Agreement.
"Shares" shall have the meaning provided in the fourth recital of this
Agreement.
"Transaction Parties" shall mean, collectively, the parties to the
Common Security Agreement and the other Secured Parties.
2. (a) Subject to the satisfaction of the conditions described in
Section 12 of this Agreement, each Designated Capital Call Investor hereby
agrees with the Collateral Trustee for the benefit of the Secured Parties and
their respective successors, indorsees, transferees and assigns, to make
Investments (each, a "Capital Contribution") to the equity capital of Holdings
from time to time in an aggregate amount equal to such Designated Capital Call
Investor's Capital Call Percentage of the Capital Call Amount as of the date of
this Agreement, for further contribution by Holdings to the equity capital of
the General Partner, for further contribution of (i) one percent (1.00%) of such
Capital Contribution by the General Partner to the equity capital of the
Partnership and (ii) ninety-nine percent (99.00%) of such Capital Contribution
by the General Partner to the equity capital of the Limited Partner, for further
contribution by the Limited Partner to the equity capital of the Partnership.
Each such Capital Contribution shall be made by a deposit of funds into the Bank
Loan Drawdown and Equity Funding Account (x) on or before each date required by
the Partnership in order to obtain an advance of Senior Debt under the Bank
Senior Term Loan Agreement in such amount as may be requested by the Partnership
from time to time, in writing, at least 10 days in advance of the date on which
such Capital Contribution is required to be made or (y) on such earlier date
required pursuant to Section 2(b). Each of Holdings, the General Partner and the
Limited Partner agree, for the benefit of the Secured Parties and their
respective successors, indorsees, transferees and assigns, to make the further
Capital Contributions immediately upon receipt of the Investments as provided in
the first sentence of this Section 2(a).
(b) Subject to Section 2(c) of this Agreement, each of the Designated
Capital Call Investors hereby severally and not jointly agrees on an absolute,
irrevocable and unconditional basis that, within fifteen Business Days after the
occurrence of a Capital Call Acceleration Event,
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it will make a payment by deposit of cash into the Bank Loan Drawdown and Equity
Funding Account in an amount equal to its Capital Call Percentage of the Capital
Call Amount (determined as of the date of the occurrence of the Capital Call
Acceleration Event). All such payments shall be characterized as equity
investments as provided in Section 3(a) of this Agreement, except in the case of
payments made as loans pursuant to Section 2(d).
(c) To the extent the General Partner or the Limited Partner is
prohibited or excused by operation of law from contributing any amounts
corresponding to Capital Contributions by the Designated Capital Call Investors
to the equity capital of the Partnership as contemplated by Section 2(a) due to
any Insolvency Event relating to the Partnership or for any other reason
whatsoever, then, at the election of the Collateral Trustee (acting at the
direction of the Majority Lenders), the Designated Capital Call Investors'
respective Investments shall instead be promptly made by means of the purchase
by such Designated Capital Call Investors from each of the Bank Senior Lenders
and any of the Capital Markets Senior Lenders who request such purchase in
writing within 30 days of such Insolvency Event or any other event or
circumstance (collectively, the "Selling Lenders") of a subordinated
participation in such Selling Lenders' outstanding Senior Debt, allocated pro
rata among the Selling Lenders based on the aggregate amount of their respective
shares of Senior Debt outstanding and any undrawn Senior Debt Commitments at
such time. Such participations shall be evidenced by, and the payments required
by this Section 2(c) shall be subject to a subordinated participation agreement
in form and substance satisfactory to the Collateral Trustee (and which shall
conform to all of the subordination terms set forth in Appendix Q to the Common
Security Agreement) and reasonably satisfactory to the Designated Capital Call
Investors (it being expressly understood and agreed (and the subordinated
participation agreement shall provide) that no payment or distribution of any
kind or character, whether in cash, property, securities or otherwise, shall be
made under any circumstances whatsoever with respect to any such subordinated
participation except from funds that are on deposit in the Distribution Account)
and it being further expressly understood and agreed that completion of
documentation of such subordinated participation interest shall not be a
condition precedent to the Designated Capital Call Investors' obligation to make
payment therefor. Any payments made pursuant to this Section 2(c) shall be
deposited into the Bank Loan Drawdown and Equity Funding Account or such other
account or accounts as may be directed by the Selling Lenders.
(d) Each Designated Capital Call Investor hereby severally and not
jointly agrees on an unconditional and irrevocable basis that, to the extent
that, by reason of an Insolvency Event with respect to Holdings, the General
Partner or the Limited Partner, Capital Contributions required under this
Agreement are not contributed to the equity capital of the Partnership as
contemplated herein, then such Designated Capital Call Investor will make a
subordinated loan to the Partnership promptly upon demand by the Collateral
Trustee, on terms complying with all applicable provisions of the Common
Security Agreement, including without limitation all of the subordination terms
set forth in Appendix Q to the Common Security Agreement, in an amount equal to
its Capital Call Percentage of the Capital Call Amount not so contributed to the
capital of the Partnership.
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3. (a) All payments received by the Collateral Trustee pursuant to
Section 2(a) or (b) (other than loans to the Partnership pursuant to Section
2(d)) shall automatically be deemed (as of the date of receipt by the Collateral
Trustee of such respective payments) to be Investments by the respective
Designated Capital Call Investors in Holdings which have been further
contributed (as cash) by Holdings to the equity capital of General Partner, 1%
of which have been further contributed (as cash) by the General Partner to the
Partnership and 99% of which have been further contributed (as cash) by the
General Partner to the equity capital of the Limited Partner and further
contributed by the Limited Partner to the equity capital of the Partnership.
(b) All payments received by the Collateral Trustee pursuant to
Section 2(a) (b) or (d) shall be promptly deposited into the Bank Loan Drawdown
and Equity Funding Account.
(c) Each of the Designated Capital Call Investors, the General
Partner, the Limited Partner, Holdings and the Partnership hereby consents on an
absolute, irrevocable and unconditional basis to the application of the payments
received by the Collateral Trustee pursuant to Section 2(a) (b) or (d) in the
manner contemplated by this Section 3.
(d) As evidence of the contributions described herein, Holdings shall
from time to time, at the time of each such contribution, deliver to each
Designated Capital Call Investor certificates registered in such Designated
Capital Call Investor's name representing such Designated Capital Call
Investor's pro rata portion of the Shares to be issued in exchange for such
contribution, such number of Shares to be calculated by dividing the amount of
such contribution by $9.90. Concurrently with the execution and delivery hereof
and the making of the initial capital contributions under this Agreement,
General Partner shall deliver to Holdings certificates registered in Holdings'
name representing 6,046,364 shares of common stock of the General Partner.
(e) In order to provide adequate initial retained capital, each of the
General Partner and the Limited Partner may retain, from amounts otherwise to be
contributed to the Partnership under Section 2(a), an initial amount not to
exceed $25,000 for each of the General Partner and the Limited Partner.
4. All payments required to be made by any Designated Capital Call
Investor, the General Partner, the Limited Partner, Holdings and/or the
Partnership pursuant to this Agreement shall be made in full in Dollars and in
immediately available funds, free and clear of any and all taxes, levies,
imposts, assessments, deductions, withholdings or other similar charges imposed
by any taxing authority in any jurisdiction.
5. The obligations of each of the Designated Capital Call Investors
under this Agreement are independent of the obligations of the Partnership, the
Borrower or any other party, and a separate action or actions may brought and
prosecuted against any of the Designated Capital Call Investors whether or not
an action is brought against the Partnership or any other party and whether or
not the Partnership or any other party shall be joined in any such action or
actions. Each of the Designated Capital Call Investors, Holdings, each Partner
and the Partnership hereby waives, to the fullest extent permitted by law, the
benefit of any statute of
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limitations affecting its liability under this Agreement or the enforcement of
any provision hereof.
6. Each of the Designated Capital Call Investors, Holdings, the
General Partner, the Limited Partner and the Partnership hereby waives notice of
acceptance of this Agreement and notice of any liability to which it may apply,
and waives presentment, demand of payment, protest, notice of dishonor, or
nonpayment of any such liability, suit or taking of other action by Holdings,
General Partner, Limited Partner and/or the Partnership (in the case of the
Designated Capital Call Investors), the Agents, the Collateral Trustee or any
Secured Party against, and any other notice to any such person or any other
party liable thereon.
7. (a) As security for the prompt and complete payment and
performance when due, whether at the stated maturity, by acceleration, upon one
or more dates set for prepayment or otherwise of the Senior Debt Obligations and
Oil Payment Insurance Obligations, each of the Grantors hereby grants to the
Collateral Trustee, for the benefit of the Secured Parties, a first priority
security interest in the Collateral. Such security interests is granted as
security only and shall not subject any of the Agents, the Collateral Trustee or
the Secured Parties to, or in any way alter or modify, any obligation or
liability of any Grantor with respect to or arising out of the Collateral. All
rights of the Collateral Trustee under this Agreement, the security interest and
all obligations of the Grantors under this Agreement shall be absolute,
irrevocable and unconditional.
(b) Each Grantor covenants and agrees with the Collateral Trustee,
for the benefit of the Secured Parties, from and after the date of this
Agreement until this Agreement and the security interests created hereby are
terminated pursuant to Section 17:
(i) If any amount payable under or in connection with any of
the Collateral shall be or become evidenced by any promissory note, other
Instrument or Chattel Paper, such promissory note, Instrument or Chattel
Paper shall be immediately delivered to the Collateral Trustee, duly
indorsed in a manner reasonably satisfactory to the Collateral Trustee, to
be held as Collateral pursuant to this Agreement.
(ii) Each Grantor shall cause the filing of Uniform Commercial
Code financing statements in each of the jurisdictions listed on Schedule I
hereto with respect to it. Each Grantor shall maintain the security
interests created by this Agreement as first priority perfected security
interests and shall defend such security interests against any and all
claims and demands of all persons whomsoever.
(iii) At any time and from time to time, upon the written
request of the Collateral Trustee, and at the sole expense of a Grantor,
such Grantor shall promptly and duly execute and deliver all such further
instruments and documents and take such further action as the Collateral
Trustee may reasonably request for the purpose of obtaining or preserving
the full benefits of this Section 7 and of the rights and powers herein
granted, including, without limitation, the filing of any financing or
continuation statements under
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the Uniform Commercial Code in effect in any jurisdiction with respect to the
security interests created hereby.
(iv) No Grantor shall, except (x) upon prior written notice to
the Collateral Trustee and (y) if filings under the Uniform Commercial Code
or otherwise have been made which maintain in favor of the Collateral
Trustee a valid, legal and perfected security interest in the Collateral,
free and clear of any Liens,
(A) change the location of its chief executive office and
chief place of business from that specified on Schedule II hereto; or
(B) change its (1) corporate name or any trade name used
to identify it in its conduct of business or in the ownership of its
properties without prior written notice to each of the Agents and the
Collateral Trustee, (2) identity or (3) corporate or partnership
structure in any manner such that any financing statement filed in
favor of the Collateral Trustee in connection with this Agreement
would become seriously misleading.
(v) Each Grantor shall advise the Collateral Trustee promptly,
in reasonable detail, at its address set forth in Appendix P of the Common
Security Agreement or as set forth immediately below its signature below,
as the case may be, of:
(A) any Lien (other than the security interests created
hereby) on any material portion of the Collateral; and
(B) the occurrence of any other event which could
reasonably be expected to impair any of the security interests created
hereby or on the aggregate value of the Collateral.
(vi) Notwithstanding anything to the contrary provided herein,
the Collateral Trustee assumes no liabilities with respect to any claims
regarding each Grantor's ownership (or purported ownership) of, or rights
or obligations (or purported rights or obligations) arising from, the
Collateral or any use (or actual or alleged misuse), whether arising out of
any past, current or future event, circumstance, act or omission or
otherwise, or any claim, suit, loss, damage, expense or liability of any
kind or nature arising out of or in connection with the Collateral. All of
such liabilities shall, as between the Collateral Trustee and the Grantors,
be borne exclusively by the Grantors.
(vii) The Partnership agrees to pay all expenses of the
Collateral Trustee and to indemnify the Collateral Trustee with respect to
any and all losses, claims, damages, liabilities and related expenses in
respect of this Agreement or the Collateral in each case to the same extent
the Partnership is required to do so with respect to the Common Security
Agreement and the other Financing Documents pursuant to Section 14.10 of
the Common Security Agreement. Any amounts payable as provided in this
clause (vii) shall be additional Senior Debt Obligations secured hereby and
by the Security Documents.
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Without prejudice to the survival of any other agreements contained in this
Agreement, all indemnification and reimbursement obligations contained
herein shall survive the payment in full of all Senior Debt Obligations and
Oil Payment Reimbursement Obligations and the termination of this
Agreement.
(viii) A Grantor shall not (A) make or permit to be made any
assignment, pledge or hypothecation of the Collateral, and shall grant no
other security interest in such Collateral or (B) make or permit to be made
any transfer of such Collateral. Each Grantor shall remain at all times in
possession of its Collateral except for transfers to the Collateral Trustee
pursuant to the provisions of this Agreement.
(ix) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under this Agreement to observe and perform all
the conditions and obligations to be observed and performed by it under
this Agreement, all in accordance with and pursuant to the terms and
provisions of this Agreement. None of the Agents, the Collateral Trustee or
the Secured Parties shall have any obligation or liability under this
Agreement by reason of or arising out of this Agreement or the receipt by
any such Secured Party of any payment relating to this Agreement pursuant
hereto, nor shall any of the Agents, the Collateral Trustee or the Secured
Parties be obligated in any manner to perform any of the obligations of a
Grantor under or pursuant to this Agreement, to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by
it or as to the sufficiency of any performance by any party under this
Agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
(x) Each Grantor waives and agrees not to assert any rights
or privileges it may acquire under Section 9-112 of the Uniform Commercial
Code as from time to time in effect in the State of New York.
8. Each of the Agents, the Collateral Trustee and the Secured Parties
(or any of them) may (except as shall be required by applicable statute and
cannot be waived) at any time and from time to time without the consent of, or
notice to, any of the Designated Capital Call Investors, the General Partner,
the Limited Partner, Holdings or the Partnership, in each case without incurring
responsibility to any such person, without impairing or releasing the
obligations of any such person under this Agreement, upon or without any terms
or conditions and in whole or in part:
(i) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, alter or increase any of
the Senior Debt Obligations or Oil Payment Reimbursement Obligations, any
security therefor, or any liability incurred directly or indirectly in
respect thereof;
(ii) take and hold security for the payment of the Senior
Debt Obligations or Oil Payment Reimbursement Obligations and sell,
exchange, release, impair, surrender,
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realize upon or otherwise deal with in any manner and in any order any
property by whomsoever at any time pledged or mortgaged to secure, or
howsoever securing, the Senior Debt Obligations, Oil Payment Reimbursement
Obligations or any liabilities (including any of those under this
Agreement) incurred directly or indirectly in respect thereof or hereof,
and/or any offset there against;
(iii) exercise or refrain from exercising any rights against
the Partnership, any other Transaction Party or others or otherwise act or
refrain from acting;
(iv) settle or compromise any of the Senior Debt Obligations
or Oil Payment Reimbursement Obligations, any security therefor or any
liability (including any of those under this Agreement) incurred directly
or indirectly in respect thereof or hereof, and may subordinate the payment
of all or any part thereof to the payment of any liability (whether due or
not) of the Partnership to creditors of the Partnership other than the
Secured Parties;
(v) release or substitute any one or more endorsers,
guarantors or other obligors;
(vi) consent to or waive any breach of, or any act, omission
or default under, any of the Financing Documents or any of the instruments
or agreements referred to therein, or otherwise amend, modify or supplement
any of the Financing Documents or any of such other instruments or
agreements;
(vii) act or fail to act in any manner referred to in this
Agreement which may deprive any of the Designated Capital Call Investors,
the General Partner, the Limited Partner or Holdings of any right to
subrogation against the Partnership to recover any payments made pursuant
to this Agreement;
(viii) pursue its rights and remedies under this Agreement
and/or under any guaranty of all or any part of the Senior Debt Obligations
or Oil Payment Reimbursement Obligations in whatever order, or
collectively, and the Agents, the Collateral Trustee and the Secured
Parties shall be entitled to the strict performance of each Designated
Capital Call Investor, the General Partner, the Limited Partner, Holdings
and the Partnership under this Agreement, notwithstanding any action taken
(or not taken) by any of the Agents, the Collateral Trustee or the Secured
Parties to enforce any of its rights or remedies against any Designated
Capital Call Investor, the General Partner, the Limited Partner, Holdings,
the Partnership or any other person, for all or any part of the Senior Debt
Obligations, Oil Payment Reimbursement Obligations or any payment received
under this Agreement or any other such guaranty; and/or
(ix) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of any Designated Capital Call Investor, the General Partner, the
Limited Partner, Holdings or the Partnership from its liabilities under
this Agreement.
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9. No invalidity, irregularity or unenforceability of all or any of
the Senior Debt Obligations or of any security therefor shall affect, impair or
be a defense to this Agreement, and the obligations of the Designated Capital
Call Investors, the General Partner, the Limited Partner, Holdings and the
Partnership under this Agreement shall be absolute, irrevocable and
unconditional notwithstanding the occurrence of any event or the existence of
any circumstance, including, without limitation, any Insolvency Event with
respect to any Designated Capital Call Investor, the General Partner, the
Limited Partner, the Borrower, Holdings or any of its Subsidiaries or any event
or circumstance which would constitute a legal or equitable discharge, except
payment in full in cash of all Senior Debt Obligations in accordance with the
Common Security Agreement.
10. Each of the Designated Capital Call Investors, the General
Partner, the Limited Partner, Holdings and the Partnership severally makes the
following representations, warranties and agreements (but only to the extent
applicable to itself and not jointly with such other parties):
(a) (i) Each of Blackstone Capital Partners, Blackstone Offshore
Partners, Blackstone Family Partnership and the Partnership is a duly
organized and validly existing limited partnership in good standing under
the laws of the State of Delaware (or, in the case of Blackstone Offshore
Partners, the Cayman Islands) and has the power and authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (ii) Holdings is a duly organized and
validly existing corporation in good standing under the laws of the State
of Delaware and has the power and authority to own its property and assets
and to transact the business in which it is engaged and presently proposes
to engage.
(b) Each of the Designated Capital Call Investors, the General
Partner, the Limited Partner, Holdings and the Partnership has, to the
extent applicable to it, the full power and authority to grant the security
interest in the Collateral pursuant hereto and to execute, deliver and
perform the terms and provisions of this Agreement, and has taken all
necessary action to authorize the execution, delivery and performance by it
of this Agreement. Each of the Designated Capital Call Investors, the
General Partner, the Limited Partner, Holdings and the Partnership has duly
executed and delivered this Agreement, and this Agreement constitutes its
legal, valid and binding obligation enforceable against it in accordance
with its terms, except to the extent that the enforceability hereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at
law).
(c) Neither the execution, delivery or performance by any of the
Designated Capital Call Investors, the General Partner, the Limited
Partner, Holdings or the Partnership of this Agreement, nor compliance by
it with the terms and provisions hereof, nor the consummation of the
transactions contemplated herein, (i) will contravene any provision of any
applicable law, statute, rule or regulation or any applicable order, writ,
injunction or decree of any court or governmental instrumentality, (ii)
will conflict with
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or result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of
the property or assets of such person pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan agreement or any
other material agreement, contract or instrument to which it is a party or
by which it or any of its property or assets is bound or to which it may be
subject or (iii) will violate any provision of any of the organizational
documents of such person, in the case of sub-clause (ii), which could
reasonably be expected to (A) have a materially adverse effect on the
assets, business, operations, properties, liabilities, profits or condition
(financial or otherwise) of such person, (B) result in a material
impairment of the ability of such person to perform any of its material
obligations under this Agreement or (C) result in an impairment of the
validity or enforceability of the security interest created, or a material
impairment of the material rights, remedies or benefits available to the
Secured Parties or the Collateral Trustee, under this Agreement.
(d) Other than the filing of financing statements in appropriate form
in the jurisdictions specified on Schedule I hereto, no other order,
consent, approval, license, authorization or validation of, or filing,
recording or registration with, or exemption or any other action by, any
Governmental Authority is or will be required to authorize, or is required
(i) in connection with the execution, delivery and performance of this
Agreement or (ii) to ensure the legality, validity, binding effect or
enforceability of this Agreement.
(e) This Agreement is effective to create in favor of the Collateral
Trustee, for the benefit of the Secured Parties, a legal, valid and
enforceable security interest in the Collateral and, upon the filing of
financing statements in appropriate form in the jurisdictions specified on
Schedule I hereto, this Agreement will constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the Grantors
in and to such Collateral and, subject to (S) 9-306 of the Uniform
Commercial Code, the Proceeds thereof, in each case prior and superior in
right to any other person, other than with respect to Permitted Liens.
(f) Each Grantor's chief executive office and chief place of business
is located at the location listed on Schedule II hereto.
(g) There are no actions, suits or proceedings pending or, to the
knowledge of any of the Designated Capital Call Investors, the General
Partner, the Limited Partner, Holdings or the Partnership, threatened (i)
with respect to this Agreement or (ii) that could reasonably be expected to
(A) materially and adversely affect the business, operations, property,
assets, liabilities or condition (financial or otherwise) of such person or
(B) have a material adverse effect on the rights or remedies of any of the
Agents, the Collateral Trustee or the Secured Parties hereunder or on the
ability of such person to perform its obligations to the Agents, the
Collateral Trustee or the Secured Parties hereunder.
13
(h) Each of the Designated Capital Call Investors, the General
Partner, the Limited Partner, Holdings and the Partnership is in compliance
with all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property,
except to the extent that such noncompliances could not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on
either (i) the business, operations, property, assets, liabilities or
condition (financial or otherwise) of such person or (ii) the rights or
remedies of any of the Agents, the Collateral Trustee or the Secured
Parties under this Agreement or on its ability to perform its obligations
under this Agreement.
(i) (i) Each of Blackstone Capital Partners and Blackstone Offshore
Partners (or, in each case, the general partner thereof) has, and will at
all times during the term of this Agreement have, the right to call cash
capital contributions from the respective partners of Blackstone Capital
Partners or Blackstone Offshore Partners, as the case may be, in amounts,
and at times, sufficient to fund in a timely manner all of the respective
obligations of Blackstone Capital Partners or Blackstone Offshore Partners,
as the case may be, under this Agreement and (ii) Blackstone Family
Partnership has, and will at all times during the term of this Agreement
have, access to sufficient assets to fund in a timely manner all of its
obligations under this Agreement.
(j) Each of the Designated Capital Call Investors is acquiring the
Shares for investment solely for its own account and not with a view to, or
for resale in connection with, the distribution or other disposition
thereof.
(k) Each of the Designated Capital Call Investors is an "accredited
investor" within the meaning of Rule 501 of Regulation D under the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, as the same may be amended from time to time.
(l) The financial situation of each of the Designated Capital Call
Investors is such that it can afford to bear the economic risk of holding
the Shares for an indefinite period of time, has adequate means for
providing for its current needs and contingencies, and can afford to suffer
a complete loss of its investment in the Shares.
(m) Each of the Designated Capital Call Investors has sufficient
knowledge and experience in financial and business matters are such that it
is capable of evaluating the merits and risks of the investment in the
Shares.
(n) Each of the Designated Capital Call Investors understands that
the Shares are a speculative investment which involves a high degree of
risk of loss, there are substantial restrictions on the transferability of
the Shares, and, on the date hereof and for an indefinite period following
the date hereof, there will be no public market for the Shares and,
accordingly, it may not be possible for such Designated Capital Call
Investor to liquidate its investment in case of emergency, if at all.
14
(o) Each of the Designated Capital Call Investors understands and has
taken cognizance of all the risk factors related to the purchase of the
Shares, and, other than as set forth in this Agreement, no representations
or warranties have been made to such Designated Capital Call Investor or
its representatives concerning the Shares of Holdings or their prospects or
other matters.
(p) In making its decision to purchase the Shares hereby subscribed
for, each of the Designated Capital Call Investors has relied upon
independent investigations made by it and, to the extent believed by such
Designated Capital Call Investor to be appropriate, its representatives,
including its own professional, financial, tax and other advisors.
(q) Each of the Designated Capital Call Investors has received
information about Holdings and been given the opportunity to examine all
documents and to ask questions of, and to receive answers from, Holdings
and its representatives concerning Holdings and the terms and conditions of
the purchase of the Shares and to obtain any additional information which
such Designated Capital Call Investor deems necessary.
(r) All information which each of the Designated Capital Call
Investors has provided to Holdings and its representatives concerning such
Designated Capital Call Investor and its financial position is complete and
correct in all material respects as of the date of this Agreement.
11. (a) Each of Blackstone Capital Partners and Blackstone Offshore
Partners (and, in each case, the general partner thereof) agrees to take all
reasonable action as may be necessary so that, at all times prior to the
satisfaction and release of all of the respective obligations of Blackstone
Capital Partners or Blackstone Offshore Partners, as the case may be, under this
Agreement pursuant to Section 17, Blackstone Capital Partners or Blackstone
Offshore Partners, as the case may be (and/or, in each case, the general partner
thereof) shall have the right to call cash capital contributions from the
respective partners of Blackstone Capital Partners or Blackstone Offshore
Partners, as the case may be, in amounts, and at times, sufficient to fund in a
timely manner all of the respective obligations of Blackstone Capital Partners
or Blackstone Offshore Partners, as the case may be, under this Agreement.
(b) Blackstone Family Partnership (and the general partner thereof)
agrees to take all action as may be necessary so that, at all times prior to the
satisfaction and release of all of its obligations under this Agreement pursuant
to Section 17, Blackstone Family Partnership shall have access to sufficient
assets to fund in a timely manner all of its obligations under this Agreement.
12. The obligations of each of the Designated Capital Call Investors
to make the Investments described in Section 2 are conditioned on:
(a) the entry into by Holdings and the General Partner of a
Stockholders' Agreement substantially in the form attached hereto as
Exhibit A;
15
(b) the issuance to Blackstone Capital Partners and its affiliates of
warrants to purchase 2.43 million shares of Holdings' common stock, with
such warrants having an exercise price of $.01 per share, substantially in
the form attached hereto as Exhibit B;
(c) the issuance to Occidental Petroleum Corporation and its
affiliates of warrants to purchase 30,000 additional shares of the common
stock of the General Partner, which shares will be exchangeable for 270,000
shares of Holdings' Class F common stock, with such warrants having an
exercise price of $.09 per share, substantially in the form attached hereto
as Exhibit C;
(d) the issuance of the Project Bonds (as defined in the Equity
Commitment Letter);
(e) the entry into the definitive agreement for the Bank Financing
(as defined in the Equity Commitment Letter); and
(f) the purchase of all of the shares of the General Partner to be
purchased on the Project Closing Date (as defined in the Equity Commitment
Letter) as described in the Equity Commitment Letter.
13. No failure or delay on the part of the Collateral Trustee, any
Secured Party, any Designated Capital Call Investor, the General Partner, the
Limited Partner, Holdings, the Partnership or any other Transaction Party in
exercising any right, power or privilege under this Agreement and no course of
dealing between or among any of the Agents, the Collateral Trustee, the Secured
Parties, any Designated Capital Call Investor, the General Partner, the Limited
Partner, Holdings, the Partnership or any other Transaction Party shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege under this Agreement preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights,
powers and remedies expressly provided in this Agreement are cumulative and not
exclusive of any rights, powers or remedies which the Agents, the Collateral
Trustee or any Secured Party would otherwise have. No notice to or demand on
any Designated Capital Call Investor, the General Partner, the Limited Partner,
Holdings or the Partnership in any case shall entitle such person to any other
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agents, the Collateral Trustee or any Secured Party
to any other or further action in any circumstances without notice or demand.
14. This Agreement shall be binding upon each Designated Capital Call
Investor, the General Partner, the Limited Partner, Holdings and the
Partnership, and their respective successors and assigns (including, without
limitation, any executors or administrators) and shall inure to the benefit of
the Collateral Trustee and the Secured Parties and their respective successors
and assigns. Each of the Designated Capital Call Investors, the General
Partner, the Limited Partner, Holdings and the Partnership acknowledges and
agrees that this Agreement is made for the benefit of the Agents, the Collateral
Trustee and the Secured Parties and that each of the Agents, the Collateral
Trustee or the Secured Parties may enforce all of the obligations of the
Designated Capital Call Investors, the General Partner, the Limited Partner,
Holdings and the
16
Partnership under this Agreement directly against them. Except as permitted in
the Transfer Restrictions Agreement, none of the Designated Capital Call
Investors, the General Partner, the Limited Partner, Holdings nor the
Partnership may assign any of its rights or obligations under this Agreement
without the prior written consent of Majority Lenders.
15. This Agreement is expressly made for the benefit of the Agents,
the Collateral Trustee, and the Secured Parties. Neither this Agreement nor any
provision hereof may be changed, modified, amended or waived except with the
prior written consent of each Designated Capital Call Investor, the General
Partner, the Limited Partner, Holdings, the Partnership and the Collateral
Trustee (acting at the direction of the Majority Lenders).
16. All notices and other communication under this Agreement shall be
made at the addresses, in the manner and with the effect provided in Section
14.08 of the Common Security Agreement, provided that, for this purpose, the
address of Blackstone Capital Partners, Blackstone Offshore Partners, Blackstone
Family Partnership shall be the address specified immediately below its
respective signature below.
17. (a) This Agreement and the security interests created hereby
shall terminate and be of no further force and effect (except to the extent any
party's obligations, if any, arising prior to such time under this Agreement
have not theretofore been fulfilled) upon the earliest of (i) the making of
Capital Contributions by the Designated Capital Call Investors in an aggregate
Capital Call Amount as contemplated in Section 2(a), (ii) the making of the
payments required pursuant to Section 2(c) in an amount equal to the Capital
Call Amount, (iii) so long as no Capital Call Acceleration Event has theretofore
occurred, January 1, 2002, and (iv) the date on which all Senior Debt
Obligations shall have been repaid in full in cash in accordance with the
requirements of the Common Security Agreement and the Senior Loan Agreements and
all commitments of the Bank Senior Lenders (as defined in the Common Security
Agreement) under the Bank Senior Loan Agreements (as defined in the Common
Security Agreement) shall have terminated.
(b) In connection with any termination pursuant to paragraph (a)
above, (i) the Partnership shall, on behalf of the Grantors, deliver to the
Collateral Trustee a certificate signed by a Responsible Officer of the
Partnership certifying that such termination is permitted pursuant to Section
17(a), and the Collateral Trustee shall be entitled (but not required) to
conclusively rely thereon and in any event shall not incur any liability to any
person in acting (or refraining from acting) in reliance thereon and (ii) the
Collateral Trustee shall execute and deliver to each Grantor, at the sole
expense of such Grantor or the Partnership, all Uniform Commercial Code
termination statements and similar documents that such Grantor shall reasonably
request to evidence such termination. Any execution and delivery of termination
statements or documents pursuant to this Section 17 shall be without recourse to
or warranty by the Collateral Trustee.
18. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH
DESIGNATED CAPITAL CALL INVESTOR, THE PARTNERSHIP, THE GENERAL PARTNER, THE
LIMITED PARTNER, HOLDINGS, THE AGENTS, THE COLLATERAL TRUSTEE AND THE SECURED
PARTIES HEREUNDER SHALL BE
17
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN ANY FEDERAL OR STATE COURT IN THE BOROUGH OF
MANHATTAN, THE CITY OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PARTY HERETO HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING. EACH PARTY HERETO HEREBY
FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER
SUCH PERSON, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY
SUCH COURT LACKS JURISDICTION OVER SUCH PERSON. EACH PARTY HERETO HEREBY
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO SUCH PERSON, AT ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 14.08 OF
THE COMMON SECURITY AGREEMENT OR AS SET FORTH IMMEDIATELY BELOW ITS SIGNATURE
BELOW, AS THE CASE MAY BE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH
MAILING. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER HEREBY IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER THAT SERVICE OF PROCESS
WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE COLLATERAL AGENT OR ANY SECURED PARTY TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANY DESIGNATED CAPITAL CALL INVESTOR, THE PARTNERSHIP, THE GENERAL PARTNER, THE
LIMITED PARTNER OR HOLDINGS IN ANY OTHER JURISDICTION.
(c) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (b) ABOVE AND HEREBY FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. EACH PARTY HERETO FURTHER IRREVOCABLY WAIVES ANY RIGHT IT
MAY HAVE TO TRIAL BY JURY IN ANY COURT OR JURISDICTION, INCLUDING, WITHOUT
LIMITATION, THOSE REFERRED TO IN CLAUSE (b) ABOVE, IN RESPECT OF ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
18
19. The Partnership hereby agrees to pay all reasonable out-of-pocket
costs and expenses of the Collateral Trustee in connection with the
administration and enforcement of any amendment, waiver or consent relating to,
this Agreement (including, without limitation, in each case, the reasonable
fees and disbursements of counsel employed by the Collateral Trustee), in each
case within 10 Business Days after any request is made by the Collateral Trustee
for any such payment.
20. If any of the Designated Capital Call Investors, Holdings, the
General Partner, the Limited Partner or the Partnership shall default in the
payment of all or any portion of the Capital Call Amount or any other amount
becoming due under this Agreement, such person shall on demand from time to time
pay interest, to the extent permitted by law, directly to the Collateral Trustee
on such defaulted amount for the period beginning on the date of such default up
to (but not including) the date of actual payment (after as well as before
judgment) at a rate per annum (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to 2% per annum in excess of the
rate applicable to Bank Senior Term Debt from time to time. Notwithstanding
the foregoing, if on the date the Capital Call Amount (or any portion thereof)
shall have become due and payable under this Agreement the Designated Capital
Call Investors are prohibited or excused by operation of law from making
Investments in Holdings as contemplated by Section 2(c) due to any Insolvency
Event relating to Holdings, the General Partner, the Limited Partner or the
Partnership or for any other reason whatsoever, no interest under this Section
20 shall accrue on the Capital Call Amount (or such portion thereof) for the
period beginning on the date when the Capital Call Amount (or such portion
thereof) shall have become due and payable under this Agreement up to (but not
including) the earlier of: (a) the date on which such legal prohibition on the
ability of the Designated Capital Call Investors to make Investments shall, in
the reasonable opinion of the Collateral Trustee, have ceased to exist and (b)
the date on which the Collateral Trustee shall have exercised its election to
require the Designated Capital Call Investors to purchase from the Selling
Lenders subordinated participations in the Senior Debt in accordance with
Section 2(c).
21. The Collateral Trustee shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any person that the Collateral Trustee believed to be the proper person, and,
with respect to all legal matters pertaining to this Agreement and any other
Financing Document and its duties under this Agreement and thereunder, upon
advice of counsel selected by the Collateral Trustee.
22. This Agreement may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with each Designated Capital Call Investor,
the General Partner, the Limited Partner, Holdings, the Partnership and the
Collateral Trustee.
19
23. Notwithstanding anything contained herein to the contrary, the
Collateral Trustee agrees that (a) in an action to collect any amounts due
under, or otherwise in respect of, this Agreement, no future, current or former
partner in any Designated Capital Call Investor in its capacity as such will be
personally liable for any amounts due or any other liability under this
Agreement, and no deficiency or personal judgment will be sought against any
such partner in its capacity as such for payment of any amount contemplated
herein and (b) no property or assets of any such future, current or former
partner in any Designated Capital Call Investor in its capacity as such shall be
sold, levied upon or otherwise used to satisfy any judgment rendered in
connection with any action brought with respect to this Agreement; provided,
however, that nothing contained in this Section 23 shall (i) affect, limit,
restrict or impair in any way whatsoever (A) the obligations and liability of
the Designated Capital Call Investors under this Agreement as parties hereto or
(B) the validity of the obligations evidenced by this Agreement, (ii) prevent
the taking of any action permitted by law against any of the Designated Capital
Call Investors, the General Partner, the Limited Partner, Holdings or the
Partnership (or, in each case, their respective assets or the proceeds thereof)
in respect of such obligations or (iii) in any way whatsoever affect or impair
the right of the Collateral Trustee or any Secured Party to take any action
permitted by law to realize upon any Collateral or any other collateral or
security which may secure such obligations of the Designated Capital Call
Investors or the General Partner, the Limited Partner, Holdings or the
Partnership.
* * *
20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
▇▇▇▇▇ REFINING HOLDINGS INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: EVP & CFO
PORT ▇▇▇▇▇▇ ▇▇▇▇▇ COMPANY L.P.
By: Sabine River Holding Corp.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: EVP & CFO
SABINE RIVER HOLDING CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: EVP & CFO:
NECHES RIVER HOLDING CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: EVP & CFO
21
BLACKSTONE CAPITAL PARTNERS III
MERCHANT BANKING FUND L.P.
By: Blackstone Management Associates
III L.L.C., its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Member
Address: ▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
BLACKSTONE OFFSHORE CAPITAL
PARTNERS III L.P.
By: Blackstone Management Associates
III L.L.C., its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Member
Address: ▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
BLACKSTONE FAMILY INVESTMENT
PARTNERSHIP III L.P.
By: Blackstone Management Associates
III L.L.C., its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Member
Address: ▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
22
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Collateral Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Vice President
SCHEDULE I
----------
LIST OF
JURISDICTIONS FOR UNIFORM COMMERCIAL CODE FILINGS
▇▇▇▇▇ REFINING HOLDINGS INC.: NY, DE, TX and MO
PORT ▇▇▇▇▇▇ ▇▇▇▇▇
COMPANY L.P.: NY, DE and TX
SABINE RIVER HOLDING CORP.: NY, DE and TX
NECHES RIVER HOLDING CORP.: NY, DE and TX
SCHEDULE II
-----------
LIST OF
CHIEF EXECUTIVE OFFICES AND CHIEF PLACES OF BUSINESS
▇▇▇▇▇ REFINING HOLDINGS INC.: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PORT ▇▇▇▇▇▇ ▇▇▇▇▇
COMPANY L.P.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Number 36
Port ▇▇▇▇▇▇, Texas 77640
SABINE RIVER HOLDING CORP.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Number 36
Port ▇▇▇▇▇▇, Texas 77640
NECHES RIVER HOLDING CORP.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Number 36
Port ▇▇▇▇▇▇, Texas 77640
EXHIBIT A
FORM OF STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT
-----------------------
STOCKHOLDERS' AGREEMENT, dated as of August 4, 1999 (the "Agreement"),
---------
among SABINE RIVER HOLDING CORP., a Delaware corporation (the "Company"), ▇▇▇▇▇
-------
REFINING HOLDINGS INC., a Delaware corporation ("Holdings ), and OCCIDENTAL
--------
PETROLEUM CORPORATION, a Delaware corporation ("Oxy").
---
WHEREAS, on the date hereof, the Company and Holdings are entering into a
Subscription Agreement, dated the date hereof, whereby Holdings will acquire
90,000 of the outstanding shares (the "Funded Holdings Shares") of common stock,
----------------------
par value $.01 per share, of the Company ("Common Stock");
------------
WHEREAS, on the date hereof, the Company and Oxy are entering into a
Subscription Agreement, dated the date hereof, whereby Oxy will acquire 10,000
of the outstanding shares (the "Funded Oxy Shares") of Common Stock;
-----------------
WHEREAS, on August 19, 1999, the Company and Holdings will enter into a
Capital Contribution Agreement, dated as of August 19, 1999 (the "Holdings
--------
Contribution Agreement"), whereby Holdings will acquire 6,046,364 of the
----------------------
outstanding shares (together with the Funded Holdings Shares, the "Holdings
--------
Shares") of Common Stock;
------
WHEREAS, on August 19, 1999, the Company and Oxy will enter into a Capital
Contribution Agreement, dated as of August 19, 1999 (the "Oxy Contribution
----------------
Agreement"; together with the Holdings Contribution Agreement, the "Contribution
--------- ------------
Agreements"), whereby Oxy will acquire 671,818 of the outstanding shares
----------
(together with the Funded Oxy Shares, the "Oxy Shares") of Common Stock; and
----------
WHEREAS, pursuant to Section 12(c) of the Oxy Contribution Agreement, Oxy
will acquire warrants to purchase 30,000 additional shares of Common Stock (the
"Warrants"); and
--------
WHEREAS, pursuant to Section 12(a) of each of the Contribution Agreements,
Holdings and Oxy are obligated to enter into a Stockholders Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions as
hereinafter set forth, the parties hereto do hereby agree as follows:
ARTICLE 24.
DEFINITIONS
SECTION 1.01 Certain Defined Terms. As used in this Agreement, the
----------------------
following terms have the following meanings:
26
"Accepting Party" has the meaning specified in Section 3.04(b).
---------------
"affiliate" of a specified Person means a Person who, directly or
---------
indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such specified Person.
"Agreement" means this Stockholders' Agreement.
---------
"beneficial owner" or "beneficially own" has the meaning given such term in
---------------- ----------------
Rule 13d-3 under the Exchange Act as in effect on the date hereof, provided
--------
that beneficial ownership under Rule 13d-3(l)(i) shall be determined based on
whether a Person has a right to acquire beneficial ownership within 60 days
or thereafter.
"Board" means the Board of Directors of the Company.
-----
"Business Day" means any day that is not a Saturday, a Sunday or other day
------------
on which banks are required or authorized by law to be closed in the City of
New York.
"Capital Stock" means, with respect to any Person at any time, any and all
-------------
shares. interests, participation or other equivalents (however designated,
whether voting or non-voting) of capital stock, partnership interests
(whether general or limited) or equivalent ownership interests in or issued
by such Person and any and all warrants, options or other rights to purchase
or acquire any of the foregoing.
"Cash Equivalents" means (a) marketable direct obligations issued or
----------------
unconditionally guaranteed by the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof,
(b) marketable direct obligations issued by any state of the United States or
any political subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of acquisition thereof and, at
the time of acquisition, having the highest rating obtainable from any of
Standard & Poor's Corporation, ▇▇▇▇▇'▇ Investors Service, Inc. or Duff &
▇▇▇▇▇▇ Credit Rating Co. or (c) commercial paper maturing not more than one
year from the date of issuance thereof and, at the time of acquisition,
having the highest rating obtainable from either Standard & Poor's
Corporation or ▇▇▇▇▇'▇ Investors Service, Inc.
"Cause" has the meaning specified in Section 2.02(c).
-----
"Common Stock" means the Common Stock, par value $.01 per share, of the
------------
Company.
"Company" means Sabine River Holding Corp., a Delaware corporation.
-------
"Contribution Agreements" has the meaning specified in the fourth recital
-----------------------
hereof.
27
"control" (including the terms "controlled by" and "under common control
------- ------------- --------------------
with"), with respect to the relationship between or among two or more
----
Persons, means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities,
as trustee or executor, by contract or otherwise.
"Director" means a member of the Board.
--------
"Encumbrance" means any security interest, lien, claim, pledge, limitation
-----------
on voting rights, charge or other encumbrance of any nature whatsoever.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Exchange Notice" has the meaning specified in Section 4.02(a).
---------------
"Exchange Ratio" has the meaning specified in Section 4.02(b).
--------------
"Exchange Shares" has the meaning specified in Section 4.02(a).
---------------
"Funded Holdings Shares" has the meaning specified in the first recital
----------------------
hereof.
"Funded Oxy Shares" has the meaning specified in the second recital hereof.
-----------------
"Governmental Entity" means any administrative, governmental or regulatory
-------------------
authority or body or any court or tribunal, domestic or foreign.
"Holdings" means ▇▇▇▇▇ Refining Holdings Inc., a Delaware corporation.
--------
"Holdings Contribution Agreement" has the meaning specified in the third
-------------------------------
recital hereof.
"Holdings Shares" means the Shares owned from time to time by Holdings and
---------------
any Person to whom any of such shares are transferred from time to time.
"Holdings Stockholders' Agreement" means the Second Amended and Restated
--------------------------------
Stockholders' Agreement, dated November 3, 1997, between ▇▇▇▇▇ USA, Inc. and
Occidental C.O.B. Partners.
"Initial Oxy Shares" has the meaning specified in Section 2.01.
------------------
"Laws" means any federal, state, local or foreign law, statute, ordinance,
----
rule, regulation, order, judgment or decree.
"Marketable Securities" means securities that are (a) (i) securities of or
---------------------
other interests in any Person that are traded on a national securities
exchange, reported on by NASDAQ or otherwise actively traded over-the-counter
or (ii) debt securities of a Person that has debt or
28
equity securities that are so traded or so reported on and in which a
nationally recognized securities firm has agreed to make a market, and (b)
not subject to restrictions on transfer as a result of any applicable
contractual provisions or the provisions of the Securities Act or any other
applicable Law.
"Minimum Sale Price" has the meaning specified in Section 3.04(d).
------------------
"NASDAQ" means the National Association of Securities Dealers, Inc.
------
National Market System.
"Nominee" has the meaning specified in Section 2.03(a).
-------
"Notice of Acceptance" has the meaning specified in Section 3.04(b).
--------------------
"Offer" has the meaning specified in Section 3.04(a).
-----
"Offer Notice" has the meaning specified in Section 3.04(a).
------------
"Offer Notice Date" has the meaning specified in Section 3.04(b).
-----------------
"Offer Period" has the meaning specified in Section 3.04(b).
------------
"Offer Price" has the meaning specified in Section 3.04(a).
-----------
"Offered Shares" has the meaning specified in Section 3.04(a).
--------------
"Oxy" means Occidental Petroleum Corporation, a Delaware corporation.
---
"Oxy Contribution Agreement" has the meaning specified in the fourth
--------------------------
recital hereof.
"Oxy Director" has the meaning specified in Section 2.01.
------------
"Oxy Shares" means the Shares owned from time to time by Oxy and any Person
----------
to whom any of such shares are transferred from time to time.
"Parties" means the Company, Holdings and Oxy.
-------
"Permitted Designee" has the meaning specified in Section 3.04(b).
------------------
"Permitted Transferee" means (a) the Company or any Subsidiary of the
--------------------
Company, (b) Oxy, (c) Holdings, (d) any affiliate of Oxy; provided, however,
-------- -------
that any such affiliate shall cease to be a Permitted Transferee in the event
it shall cease to be an affiliate of Oxy or (e) any affiliate of Holdings;
provided, however, that any such affiliate shall cease to be a Permitted
-------- -------
Transferee in the event it shall cease to be an affiliate of Holdings.
29
"Person" means an individual, partnership, corporation (including a
------
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Prospective Seller" has the meaning specified in Section 3.04(a).
------------------
"Prospective Transferee" has the meaning specified in Section 3.05(a).
----------------------
"Public Offering" means an underwritten public offering of equity
---------------
securities of the Company pursuant to a registration statement that has been
declared effective by the SEC under the Securities Act, in which such equity
securities are widely distributed and after which such equity securities are
traded on a national securities exchange or reported on by NASDAQ.
"Recapitalization" means any stock split, dividend or combination, or any
----------------
recapitalization, merger, consolidation, exchange or other similar
reorganization.
"Registrable Securities" has the meaning specified in Section 3.07 hereof.
----------------------
"Restricted Shares" means all Shares other than (a) Shares that have been
-----------------
registered on a registration statement pursuant to the Securities Act, (b)
Shares with respect to which a Sale has been made in reliance on and in
accordance with Rule 144 and (c) Shares with respect to which the holder
thereof shall have delivered to the Company either (i) an opinion, in form
and substance reasonably satisfactory to the Company, of counsel, who shall
be reasonably satisfactory to the Company, or (ii) a "no action" letter from
the staff of the SEC, to the effect that subsequent transfers of such Shares
may be effected without registration under the Securities Act or compliance
with Rule 144.
"Rule 144" means Rule 144 (or any successor provision) under the Securities
--------
Act.
"Rule 144 Transaction" means any Sale of Oxy Shares or Holdings Shares made
--------------------
in reliance upon Rule 144.
"Sale" means any sale, assignment, transfer, distribution or other
----
disposition of Shares or of a participation therein, whether voluntarily or
by operation of law.
"SEC" means the Securities and Exchange Commission, and any successor
---
commission agency having similar powers.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Share" means any share of Company Common Stock and any securities issued
-----
in respect thereof, or in substitution therefor, in connection with any
Recapitalization.
30
"Stockholder" means each Person (other than the Company) who shall be a
-----------
party to this Agreement, whether in connection with the execution and
delivery hereof as of the date hereof, pursuant to Section 3.05, or
otherwise, so long as such Person shall beneficially own any Shares or any
options, warrants or similar rights to acquire Shares.
"Subsidiary" means, with respect to any Person, any corporation,
----------
partnership, limited liability company, joint venture, association or other
entity controlled by such Person directly or indirectly through one or more
intermediaries.
"Tagging Stockholder" has the meaning specified in Section 3.07 hereof.
-------------------
"Third Party" means, with respect to any Stockholder, any other Person
-----------
other than a Permitted Transferee.
"Trading Day" has the meaning specified in Section 3.04(g).
-----------
"Transferring Stockholder" has the meaning specified in Section 3.07
------------------------
hereof.
"Warrants" has the meaning specified in the fifth recital hereof.
--------
ARTICLE II
CORPORATE GOVERNANCE
SECTION 2.01. Composition of the Board. (a) So long as Oxy and any
------------------------
Permitted Transferee that acquires more than 50% of the Shares owned by Oxy on
August 19, 1999 (the "Initial Oxy Shares") own in the aggregate at least 20% of
------------------
the Initial Oxy Shares, Oxy or, at Oxy's election, any Permitted Transferee that
acquires more than 50% of the Initial Oxy Shares shall be entitled to designate
one Director for election to the Board (the "Oxy Director"). Each Stockholder
------------
shall vote all voting Shares owned or held of record by such Person at any
meeting of stockholders of the Company, or execute a written consent with
respect to all such Shares owned or held of record by it, in favor of the
election of the Oxy Director as a Director. In the event Oxy, and any Permitted
Transferee that acquires more than 50% of the Initial Oxy Shares shall at any
time not own in the aggregate at least 20% of the Initial Oxy Shares, Oxy and
such affiliates shall cause the Oxy Director to tender his or her written
resignation as a Director to the Secretary of the Company as soon as
practicable.
(b) The remainder of the Directors shall be designated by Holdings;
provided, however, that one Director so designated shall be (i) unaffiliated
-------- -------
with both Oxy and its affiliates and Holdings and its affiliates and (ii)
subject to any consents as are required pursuant to any project financing
documents relating to the Port ▇▇▇▇▇▇ ▇▇▇▇▇ Company L.P.
SECTION 2.02. Removal. (a) Upon the written request of Oxy, each
-------
Stockholder shall vote all of his, her or its voting Shares in favor of the
removal of the Oxy Director. Each
31
Stockholder agrees that, if, at any time, he, she or it is then entitled to vote
for the removal of Directors, he, she or it will not vote any of his, her or its
voting Shares in favor of the removal of the Oxy Director unless such removal
shall be for Cause (as defined below) or Oxy shall have consented to or directed
such removal in writing.
(b) With respect to any Director designated by Holdings, upon the written
request of Holdings, each Stockholder shall vote all of his, her or its voting
Shares in favor of the removal of such Director. Each Stockholder agrees that,
if, at any time, he, she or it is then entitled to vote for the removal of
Directors, he, she or it will not vote any of his, her or its voting Shares in
favor of the removal of a Director designated by Holdings unless Holdings shall
have consented to or directed such removal in writing.
(c) Removal for "Cause" shall mean removal of a Director because of such
-----
Director's (a) willful and continued failure to substantially perform his or her
duties as a Director, (b) willful conduct which is significantly injurious to
the Company, momentarily or otherwise, (c) conviction for, or guilty plea to, a
felony or a crime involving moral turpitude or (d) abuse of illegal drugs or
other controlled substances or habitual intoxication.
SECTION 2.03. Vacancies. (a) If, as a result of death disability,
---------
retirement, resignation, removal (with or without Cause) or otherwise, there
shall exist or occur any vacancy on the Board due to the absence of a Director
who shall have been designated pursuant to Section 2.01(a), and the requirements
of Section 2.01(a) shall remain satisfied in all respects, (i) Oxy may
designate, in a writing executed by Oxy, another individual to fill such vacancy
and to serve as a Director (the "Nominee") and (ii) each Stockholder then
-------
entitled to vote for the election of Directors shall vote his, her or its voting
Shares at any meeting of stockholders of the Company, or execute a written
consent with respect to all such Shares, as the case may be, in favor of the
election of the Nominee as a Director.
(b) If, as a result of death, disability, retirement, resignation, removal
(with or without Cause) or otherwise, there shall exist or occur any vacancy on
the Board due to the absence of a Director who shall have been designated by
Holdings, (i) Holdings may designate, in a writing executed by Holdings, a
Nominee and (ii) each Stockholder then entitled to vote for the election of
Directors shall vote his, her or its voting Shares at any meeting of
stockholders of the Company, or execute a written consent with respect to all
such Shares, as the case may be, in favor of the election of such Nominee as a
Director.
ARTICLE III
TRANSFER OF SHARES
SECTION 3.01. General Restriction. No Stockholder shall, directly or
-------------------
indirectly, make or solicit any Sale of, or create, incur, assume or suffer to
exist any Encumbrance with respect to, any Share beneficially owned by such
Stockholder, except in compliance with the Securities Act and the rules and
regulations thereunder, this Agreement and any financing documents relating to
32
the Port ▇▇▇▇▇▇ ▇▇▇▇▇ project including, without limitation, the Common Security
Agreement (as defined in the Contribution Agreements).
SECTION 3.02. Legends. (a) The Company shall affix to each certificate
-------
evidencing Shares issued to Stockholders a legend in substantially the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCKHOLDERS' AGREEMENT BETWEEN SABINE RIVER HOLDING CORP. (THE "COMPANY"),
▇▇▇▇▇ REFINING HOLDINGS INC. AND OCCIDENTAL PETROLEUM CORPORATION, A COPY
OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. NO TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT AND (A) PURSUANT TO A
REGISTRATION STATEMENT EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) IF THE COMPANY HAS BEEN FURNISHED WITH AN OPINION IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS
THEREUNDER. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS
CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH
STOCKHOLDERS' AGREEMENT."
(b) In the event that any Shares shall cease to be Restricted Shares, the
Company shall, upon the written request of the holder thereof, issue to such
holder a new certificate evidencing such Shares with a legend in substantially
the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCKHOLDERS' AGREEMENT BETWEEN SABINE RIVER HOLDING CORP. (THE "COMPANY"),
▇▇▇▇▇ REFINING HOLDINGS INC. AND OCCIDENTAL PETROLEUM CORPORATION, A COPY
OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. NO TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF SUCH STOCKHOLDERS' AGREEMENT. THE HOLDER OF THIS CERTIFICATE,
BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE
PROVISIONS OF SUCH STOCKHOLDERS' AGREEMENT."
(c) In the event that any Shares shall cease to be subject to the
restrictions on transfer set forth in this Agreement as provided in Section
3.03(b), the Company shall, upon written
33
request of the holder thereof, issue to such holder a new certificate evidencing
such Shares with a legend in substantially the following form:
"NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A)
PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR (B) IF THE COMPANY HAS BEEN FURNISHED WITH AN OPINION
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
RULES AND REGULATIONS THEREUNDER. "
(d) In the event that any Shares shall cease to be Restricted Shares and
shall cease to be subject to the restrictions on transfer set forth in this
Agreement as provided in Section 3.03(b), the Company shall, upon the written
request of the holder thereof, issue to such holder a new certificate evidencing
such Shares without the legend required by Section 3.02(a) endorsed thereon.
SECTION 3.03. Certain Restrictions on Transfer. (a) Each Stockholder
--------------------------------
agrees that it will not, directly or indirectly, make or solicit any Sale of, or
create, incur, assume or suffer exist any Encumbrance (other than a pledge or
hypothecation of Shares to one or more bona fide financial institutions and any
foreclosure thereof, in each case subject to Section 3.05) with respect to any
Share beneficially owned by such Stockholder other than (i) any Sale to a
Permitted Transferee, (ii) any Sale for cash, Cash Equivalents or Marketable
Securities to a Third Party that is made in compliance with the procedures, and
subject to the limitations, set forth in Section 3.04 (if applicable), (iii) any
Sale pursuant to a Public Offering or (iv) any Sale in a Rule 144 Transaction.
Notwithstanding the foregoing, except as otherwise expressly provided in this
Agreement, all Sales permitted by the foregoing clauses (i) and (ii) shall be
subject to, and shall not be made other than in compliance with, the provisions
of Sections 3.01, 3.02 and 3.05.
(b) The restrictions on transfer set forth in this Agreement shall cease to
apply (i) to any particular Shares at such time as such Shares are sold pursuant
to a Public Offering or a Rule 144 Transaction and (ii) upon the termination of
this Agreement.
SECTION 3.04. Right of First Refusal. (a) If any Stockholder other than
----------------------
Holdings receives from a Third Party dealing at arm's length a bona fide offer
to purchase for cash, Cash Equivalents or Marketable Securities (an "Offer") any
-----
of the Oxy Shares owned or held by such Stockholder, and such Stockholder
intends to sell such Oxy Shares to such Third Party, such Stockholder (for
purposes of this Section 3.04, the "Prospective Seller") shall provide Holdings
------------------
written notice of such Offer (an "Offer Notice"). The Offer Notice shall
------------
identify the Third Party making the Offer, the number and class of Oxy Shares
with respect to which the Prospective Seller has such an Offer (the "Offered
-------
Shares"), the price per Offered Share at which a sale is proposed to be made,
------
determined in accordance with Section 3.04(g) ("Offer Price"), the form of
-----------
34
consideration in which the Offer Price is proposed to be paid, and all other
material terms and conditions of the Offer.
(b) The receipt of an Offer Notice by Holdings from a Prospective Seller
(the date of such receipt being referred to herein as the "Offer Notice Date")
-----------------
shall constitute an offer by such Prospective Seller to sell to Holdings and any
designee or designees of Holdings ("Permitted Designees") the Offered Shares at
-------------------
the Offer Price in cash. Such offer shall be irrevocable during the Offer
Period (as hereinafter defined). Holdings and any Permitted Designees shall
have the right to accept such offer as to any or all of the Offered Shares by
giving a written notice of acceptance (the "Notice of Acceptance") to the
--------------------
Prospective Seller prior to the expiration of the Offer Period (Holdings or any
Permitted Designees so accepting such offer, an "Accepting Party"); provided,
--------------- --------
however, that Holdings and any Permitted Designees shall provide a single Notice
-------
of Acceptance to the Prospective Seller and such Notice of Acceptance must
accept the offer as to all of the Offered Shares on the same terms and
conditions as the Offer (other than as expressly set forth herein). If Holdings
or any Permitted Designee so accepts the Prospective Seller's offer, such Person
will purchase for cash from the Prospective Seller, and the Prospective Seller
will sell to such Accepting Party, such number of Offered Shares as to which
such Accepting Party shall have accepted the Prospective Seller's offer (which
must total, as to all Accepting Parties, all of the Offered Shares). The price
per Offered Share to be paid by such Accepting Party shall be the Offer Price.
The Notice of Acceptance shall specify (i) each Accepting Party's acceptance of
the Prospective Seller's offer and (ii) the number of Offered Shares to be
purchased by each Accepting Party. "Offer Period" means (i) in the event the
------------
Third Party making the Offer is engaged in the refining business, the twenty
Business Day period commencing on the date the Offer Notice is received by
Holdings, or (ii) in all other cases, the ten Business Day period commencing on
the date the Offer Notice is received by Holdings.
(c) The consummation of such purchases by and sales to the Accepting
Parties all take place on such date, not later than 90 days after receipt of the
Offer Notice by Holdings (or such longer period as may be specified in the Offer
Notice), as the Accepting Parties and the Prospective Seller shall select. Upon
the consummation of such purchase and sale, the Prospective Seller shall (i)
deliver to the Accepting Party certificates evidencing the Offered Shares
purchased and sold duly endorsed in blank or accompanied by written instruments
of transfer in form satisfactory to such Accepting Party duly executed by the
Prospective Seller, and (ii) assign all its rights under this Agreement with
respect to the Offered Shares purchased and sold pursuant to an instrument of
assignment reasonably satisfactory to such Accepting Party.
(d) In the event that (i) Holdings shall have received an Offer Notice from
a Prospective Seller but the Prospective Seller shall not have received from
Holdings and Permitted Designees a Notice of Acceptance with respect to all the
Offered Shares prior to the expiration of the Offer Period or (ii) an Accepting
Party shall have given a Notice of Acceptance to the Prospective Seller but such
Accepting Party shall have failed to consummate, other than as a result of the
fault of the Prospective Seller, a purchase of the Offered Shares with respect
to which such Notice of Acceptance was given within 90 days after receipt of the
Offer Notice by Holdings (or such longer period as may be specified in the Offer
Notice), such Prospective Seller shall have the right thereafter to make a sale
of the Offered Shares so long as all the Offered
35
Shares that are sold by the Prospective Seller (which number of Offered Shares
shall be not less than the number of Offered Shares specified in such Offer
Notice) are sold for cash, Cash Equivalents or Marketable Securities (i) within
180 days after the date of receipt of such Offer Notice by Holdings, (ii) at an
amount not less than the Minimum Sale Price (as hereinafter defined) and (iii)
to the Third Party that made the Offer. "Minimum Sale Price" means (x) if the
------------------
Prospective Seller's right sell the Offered Shares results from the event
described in clause (i) of the preceding sentence, (A) an amount equal to 97
percent of the Offer Price set forth in the Offer Notice if such sale is
consummated within 30 days after the expiration of the Offer Period or (B) an
amount equal to 95 percent of the Offer Price set forth in the Offer Notice if
such sale is consummated thereafter, or (y) if the Prospective Seller's right to
sell the Offered Shares results from the event described in clause (ii) of the
preceding sentence, an amount equal to 90 percent of the Offer Price set forth
in the Offer Notice.
(e) In the event (i) that Holdings shall have received an Offer Notice from
a Prospective Seller, (ii) the Prospective Seller shall not have received a
Notice of Acceptance for all the Offered Shares prior to the expiration of the
Offer Period and (iii) such Prospective Seller shall not have sold the remaining
Offered Shares before the expiration of the 180-day period in accordance with
paragraph (d) above, then such Prospective Seller shall not give another Offer
Notice for a period of 120 days after the last day of such 180-day period.
(f) Anything in this Section 3.04 or in Section 3.03(a) to the contrary
notwithstanding, the provisions of this Section 3.04 shall not be applicable to
Sales of Capital Stock described in clauses (i), (iii) and (iv) of Section
3.03(a).
(g) For the purpose of determining the Offer Price with respect to an Offer
that contemplates the payment of consideration in the form of Cash Equivalents
or Marketable Securities, the value of such Cash Equivalents or Marketable
Securities shall be determined as forth in this Section 3.04(g). The value of
Cash Equivalents shall be the fair market value of such Cash Equivalents as of
the Offer Notice Date as determined by a nationally recognized investment
banking firm selected by Holdings and reasonably acceptable to the Prospective
Seller. The value of Marketable Securities shall be, if such securities are
listed or admitted to trading on a national securities exchange, the average of
the last sale prices for such securities during the twenty consecutive Trading
Days preceding the Offer Notice Date, reported in the principal consolidated
transaction reporting system for securities listed on principal national
securities exchange on which such securities are listed or admitted to trading
or, if such securities are not listed or admitted to trading on any national
securities exchange, the average during the twenty consecutive Trading Days
preceding the Offer Notice Date of the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use, or, if on any such date
such shares are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in such shares selected by a majority of the Directors. If no market maker is
making a market in such securities at such time, the fair value of such
securities on the Offer Notice shall be determined in good faith by a nationally
recognized investment banking firm selected by Holdings and reasonably
acceptable to the Prospective Seller (the fees and expenses of which shall be
paid one-half by Holdings and one-
36
half by the Prospective Seller). If such securities are not publicly held or not
so listed or traded, the value of such securities shall mean the fair value of
such securities as of the Offer Notice Date as determined in good faith by a
nationally recognized investment banking firm selected by the Company and
reasonably acceptable to the Prospective Seller (the fees and expenses of which
be paid one-half by the Company and one-half by the Prospective Seller), whose
determination shall be conclusive for all purposes. The term "Trading Day" shall
-----------
mean, if securities are listed or admitted to trading on any national
securities exchange, a day on which the principal national securities exchange
on which such shares are listed or admitted to trading is open for the
transaction of business or, if such shares are not so listed or admitted, a
Business Day.
SECTION 3.05. Transferees to Execute Agreement. (a) Each Stockholder
--------------------------------
agrees that it will not, directly or indirectly, make any Sale of or create,
incur, assume or suffer to exist Encumbrance with respect to, any Shares
beneficially owned by such Stockholder unless, contemporaneously with or prior
to the consummation of any such Sale or the creation, incurrence, assumption or
existence of such Encumbrance, the Person to whom such is proposed to be made or
the Person in whose favor such Encumbrance is proposed to be created, incurred,
assumed or suffered to exist, in any case, (a "Prospective Transferee") executes
----------------------
and delivers to the Company its written agreement, in form and substance
reasonably satisfactory to the Company, whereby such Prospective Transferee (i)
confirms that, with respect to the Shares that are the subject of such Sale or
Encumbrance, it shall be deemed to be a Stockholder for purposes of this
Agreement and agrees to be bound by all the terms of this Agreement, and (ii)
represents and warrants that, upon the consummation of Sale or the creation,
incurrence, assumption or existence of such Encumbrance, such Agreement is a
legal, valid and binding obligation of such Prospective Transferee enforceable
against such Prospective Transferee in accordance with its terms, subject to the
effect of any applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
enforceability, to the effect of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Upon the execution and delivery by such Prospective Transferee of the agreement
referred to in the preceding sentence, such Prospective Transferee shall be
deemed a Stockholder for purposes of this Agreement and shall have the rights
and be subject to the obligations of a Stockholder under this Agreement, in each
case with respect to the Shares beneficially owned by such Prospective
Transferee or in respect of which such Encumbrance shall have been created,
incurred, assumed or suffered to exist.
(b) Anything in this Section 3.05 or in Section 3.03 to the contrary
notwithstanding, the provisions of this Section 3.05 will not be applicable to
any Sale of Shares pursuant to a Public Offering or a Rule 144 Transaction.
SECTION 3.06. Improper Sale or Encumbrance. Any attempt not in
----------------------------
compliance with Agreement to make any Sale of, or create, incur or assume any
Encumbrance with respect any Shares shall be null and void and of no force and
effect, the purported transferee will have no rights or privileges in or with
respect to the Company, and the Company shall give any effect in the Company's
stock records to such attempted Sale or Encumbrance.
37
SECTION 3.07 Tag-Along Rights. i. So long as this Agreement shall
----------------
remain in effect and Holdings beneficially owns on a fully diluted basis an
aggregate number of shares of Common Stock not less than one-fourth (1/4) of the
shares of Common Stock owned by Holdings on August 19, 1999, with respect to any
proposed Transfer by Holdings (in such capacity, a "Transferring Stockholder")
------------------------
of Common Stock, other than a Transfer to any affiliate of Holdings or any
stockholder, partner or other equity owner of any such affiliate or Holdings or
(ii) pursuant to a Public Offering, the Transferring Stockholder shall have the
obligation, and Oxy and its Permitted Transferees shall have the right, to
require the proposed transferee to purchase from Oxy and its Permitted
Transferees (in such capacity, a "Tagging Stockholder") a number of the Oxy
-------------------
Shares and any additional Shares issued in connection with any Recapitalization
("Registrable Securities") up to the product (rounded up to the nearest whole
----------------------
number) of (i) the quotient determined by dividing (A) the aggregate number of
Registrable Securities owned by the Tagging Stockholder and sought by the
Tagging Stockholder sought to be included in the contemplated Transfer by (B)
the aggregate number of shares of Common Stock owned by the Transferring
Stockholder and the Tagging Stockholder to be included in the contemplated
Transfer, and (ii) the total number of shares of Common Stock proposed to be
directly or indirectly Transferred to the transferee in the contemplated
Transfer, and at the same price per share of Common Stock and upon the same
terms and conditions (including without limitation time of payment and form of
consideration) applicable to the Transferring Stockholder; provided that in
--------
order to be entitled to exercise its right to sell shares of Common Stock to the
proposed transferee pursuant to this Section 3.07, the Tagging Stockholder must
agree to make to the transferee the same representations, warranties, covenants,
indemnities and agreements that the Transferring Stockholder agrees to make in
connection with the proposed Transfer of the shares of Common Stock of the
Transferring Stockholder; and provided further, that all representations and
-------- -------
warranties shall be made by the Tagging Stockholder and the Transferring
Stockholder severally and not jointly and that the liability of the Transferring
Stockholder and the Tagging Stockholder (whether pursuant to a representation,
warranty, covenant, indemnification provision or agreement) for liabilities in
respect of the Company shall be evidenced in writings executed by them and the
transferee and shall be borne by each of them on a pro rata basis.
ii. The Transferring Stockholder shall give notice to the holders of the
Oxy Shares of each proposed Transfer giving rise to the rights of the Tagging
Stockholder set forth in the first sentence of Section 3.07(a) at least 15
business days prior to the proposed consummation of such Transfer, setting forth
the number of shares of Common Stock proposed to be so transferred, the name and
address of the proposed transferee, the proposed amount and form of
consideration and the other terms and conditions offered by the proposed
transferee, and a representation that the proposed transferee has been informed
of the tag-along rights provided for in this Section 3.07 and has agreed to
purchase shares of Common Stock in accordance with the terms hereof. The tag-
along rights provided by this Section 3.07 must be exercised by the Tagging
Stockholder within 5 business days following receipt of the notice required by
the preceding sentence, by delivery of a written notice to the Transferring
Stockholder indicating such Tagging Stockholder's desire to exercise its rights
and specifying the number of shares of Common Stock it desires to sell. The
Transferring Stockholder shall be entitled under this Section 3.07 to Transfer
to the proposed transferee the number of shares of Common Stock equal to the
38
difference between the number referred to in clause (ii) of paragraph (a) above
and the aggregate number of shares of Common Stock set forth in the written
notice, if any, delivered by the Tagging Stockholder pursuant to the preceding
sentence (up to the maximum number of Registrable Securities beneficially owned
by such Tagging Stockholder required to be purchased by the proposed transferee
pursuant to the first sentence of Section 3.07(a)). If the proposed transferee
fails to purchase Registrable Securities from any Tagging Stockholder that has
properly exercised its tag-along rights under Section 3.07(a), then the
Transferring Stockholder shall not be permitted to make the proposed Transfer,
and any such attempted Transfer shall be void and of no effect, as provided in
Section 3.06 hereof.
iii. If the Tagging Stockholder exercises its rights under Section
3.07(a), the closing of the purchase of the Registrable Securities with respect
to which such rights have been exercised shall take place concurrently with the
closing of the sale of the Transferring Stockholder's Common Stock. At the
closing, the Tagging Stockholder shall deliver to the proposed transferee the
certificate or certificates representing the shares of Common Stock to be sold
pursuant to such sale by such Tagging Stockholder, duly endorsed for transfer,
against receipt of the purchase price thereof.
SECTION 3.08. Drag-Along Rights. So long as this Agreement shall remain
-----------------
in effect and Holdings beneficially owns on a fully diluted basis an aggregate
number of shares of Common Stock not less than one-fourth (1/4) of the Common
Stock owned by Holdings on August 19, 1999, if Holdings receives an offer from a
Third Party to purchase all, but not less than all, of the outstanding shares of
Common Stock owned by Holdings and such offer is accepted by Holdings, then the
holders of the Oxy Shares hereby agree that they will Transfer all Registrable
Securities beneficially owned by them to such Third Party upon the terms and
conditions of the offer (including without limitation time of payment and form
of consideration) applicable to Holdings, provided that the holders of the Oxy
--------
Shares must agree to make to the Third Party the same representations,
warranties, covenants, indemnities and agreements that Holdings agrees to make
in connection with the proposed Transfer; and provided further, that all
-------- -------
representations and warranties shall be made by the holders of the Oxy Shares
and Holdings severally and not jointly and that the liability of the holders of
the Oxy Shares and Holdings (whether pursuant to a representation, warranty,
covenant, indemnification provision or agreement) for liabilities in respect of
the Company shall be evidenced in writings executed by them and the Third Party
and shall be borne by each of them on a pro rata basis. At the closing of any
such Transfer, the holders of the Oxy Shares shall deliver to the Third Party
the certificate or certificates representing the shares of Common Stock to be
sold pursuant to such sale by such holder, duly endorsed for transfer, against
receipt of the purchase price thereof. The closing of the purchase of the
Common Stock with respect to which such rights have been exercised shall take
place concurrently with the closing of the sale of Holdings Common Stock.
ARTICLE IV
ADDITIONAL RIGHTS OF THE COMPANY
39
SECTION 4.01 Right to Require Exchange. (a) If, at any time, the Board
-------------------------
determines, upon advice from its counsel, that it is no longer necessary for
Port ▇▇▇▇▇▇ Finance Corp. to be bankruptcy remote, the Company will so notify
the holders of the Oxy Shares. At any time after such notice, the holders of
the Oxy Shares may, at their election, and the Company may, by notice to the
holders of the Oxy Shares (the "Exchange Notice"), require the holders of the
---------------
Oxy Shares to, exchange (and such holders hereby agree to exchange), all of the
Oxy Shares as are then outstanding not fewer than thirty (30) nor more than
ninety (90) days after the date of the Exchange Notice for newly issued shares
of Class F Common Stock, par value $.01 per share, of Holdings (the "Exchange
--------
Shares") based on a valuation of the Oxy Shares at the Exchange Ratio (defined
------
below). The closing under this Section 4.01 shall take place at the offices of
the Company at 10:00 a.m. local time on a date not more than one hundred twenty
(120) days after the date the Exchange Notice is received by the holders of the
Oxy Shares as the Company shall specify by such notice, or at such other time
and place as the Company and the holders of a majority in interest of the Oxy
Shares may agree upon. At the closing, the holders of the Oxy Shares will
deliver to the Company, free and clear of all Liens and claims of third parties,
a certificate or certificates evidencing the Oxy Shares to be exchanged
(properly endorsed or accompanied by stock powers or assignments with
signature(s) guaranteed or similar appropriate documentation of authority to
transfer), and the Company will deliver to the holders of the Oxy Shares, free
and clear of all Liens and claims of third parties, a certificate or
certificates evidencing the Exchange Shares (properly endorsed or accompanied by
stock powers or assignments with signature(s) guaranteed or similar appropriate
documentation of authority to transfer).
(b) The exchange ratio shall be calculated to yield to the holders of the
Oxy Shares Exchange Shares that have a fair market value equivalent to the then
fair market value of the Oxy Shares being exchanged (the ratio in such exchange
being referred to as the "Exchange Ratio"). The procedure for determining the
--------------
relative values of the Oxy Shares, the Exchange Shares and the Exchange Ratio
will be as provided in this Section 4.01(b). Upon a request for an exchange,
Holdings will within 30 days propose an Exchange Ratio reflective of its
determination of relative values, based on the advice of an investment banking
or valuation firm. The holders of a majority in interest of the Oxy Shares will
have 20 days from the receipt of such proposed Exchange Ratio and valuations to
agree to such Exchange Ratio or negotiate with Holdings an alternative Exchange
Ratio. Absent such agreement, such holders will by the end of such 20 day
period propose an alternative Exchange Ratio based on their determination of
values, based on the advice of an investment banking or valuation firm. If
within seven days of the holders presenting such alternative Exchange Ratio and
values Holdings and such holders are not able to agree on the Exchange Ratio to
be used, they will jointly engage a third mutually agreed nationally recognized
investment banking or valuation firm whose mandate will be to select within 20
days one or the other of the two proposed Exchange Ratios, which will then be
the Exchange Ratio upon which the exchange will be consummated.
(c) The Exchange Shares (as well as the shares issuable upon exercise of
the Warrants) will constitute registrable shares entitled to the benefits of the
existing registration rights held by Oxy pursuant to the Holdings Stockholders'
Agreement.
40
(d) Neither the Company nor Holdings shall avoid or seek to avoid the
observance or performance of any of the terms of this Section 4.01, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of any action as may be reasonably necessary or appropriate to protect
the rights of Oxy against impairment of Oxy's rights hereunder.
(e) Holdings shall at all times have authorized a sufficient number of
shares of Class F Common Stock, par value $.01 per share, of Holdings so that
Holdings will be able to deliver the Exchange Shares to Oxy in accordance with
the terms of this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
SECTION 5.01. Representations and Warranties of Each Party. Each Party
--------------------------------------------
hereby makes the following representations and warranties to the other Parties:
(a) Organization and Qualification. Such entity is a corporation or a
------------------------------
general partnership duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization.
(b) Authority. Such entity has all requisite corporate or partnership
---------
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by such entity and the
consummation by it of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate or partnership action and
no other proceedings on the part of such entity are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by such entity
and, assuming the due authorization, execution and delivery by the other
parties hereto, constitutes a legal, valid and binding obligation of such
entity, enforceable against such entity in accordance with its terms.
(c) No Conflict; Required Filings and Consents. (i) The execution of and
------------------------------------------
delivery of this Agreement by such entity do not, and the performance this
Agreement by such entity will not, (A) conflict with or violate the
Certificate of Incorporation, By-Laws or similar organizational documents
of such entity, (B) conflict with or violate any Laws applicable to such
entity or by which any of its properties or assets is bound or (C) result
in any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or
result in the creation of an Encumbrance on any of the properties or assets
of such entity pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which such entity is a party or by which such entity or any
of its properties is bound, except in any case for such
41
conflicts, violations, breaches, defaults or other effects which would not
prevent or materially delay the performance by such entity of its
obligations hereunder.
(ii) The execution and delivery of this Agreement by such entity do
not, and the performance of this Agreement by such entity will not, require
any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or by registered or certified mail (postage prepaid, return receipt requested)
to the respective parties at the following addresses (or at such other address
for a party as shall be specified in a notice given in accordance with this
Section 6.01):
(a) If to the Company:
Sabine River Holding Corp.
Port ▇▇▇▇▇▇ Refinery
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Office Number 36
Port ▇▇▇▇▇▇, Texas 77640
Attention: ▇.▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(or if sent by U.S. Mail:
Port ▇▇▇▇▇▇ ▇▇▇▇▇ Company L.P.
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇.▇. ▇▇▇▇)
With copies to:
▇▇▇▇▇ Refining & Marketing, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Oxy:
42
c/o Occidental Petroleum Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President, Corporate Development
With a copy to:
Occidental Petroleum Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
(c) If to Holdings:
▇▇▇▇▇ Refining Holdings Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SECTION 6.02. Public Announcements. The Parties shall consult with each
--------------------
other before issuing any press release or otherwise making any public statements
with respect to this Agreement and, except as may be required by Law or any
listing agreement with any securities exchange, shall not issue any such press
release or make any such public statement without the consent of the other
parties.
SECTION 6.03. Headings. The descriptive headings contained in this
--------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 6.04. Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the
43
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any Party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the Parties shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the Parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
SECTION 6.05. Entire Agreement. This Agreement constitutes the entire
----------------
agreement among the Parties and supersedes all prior agreements and
undertakings, both written and oral, among the Parties, or any of them, with
respect to the subject matter hereof.
SECTION 6.06. Assignment. Except as otherwise provided herein, this
----------
Agreement shall be binding upon and shall inure to the benefit of the Parties
and their respective successors and permitted assigns; provided, however, that
-------- -------
this Agreement shall not inure to the benefit of any Prospective Transferee
unless such Prospective Transferee shall have complied with the terms of Section
3.05. No Stockholder may assign any of its rights hereunder to any Person other
than a transferee that has complied with the requirements of Section 3.05 in all
respects.
SECTION 6.07. Parties in Interest. Nothing in this Agreement, express or
-------------------
implied, is intended to or shall confer upon any Person other than the Parties
and their respective successors and assigns any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
SECTION 6.08. Amendment. (a) Any term of this Agreement may be amended and
---------
the observance of any such term may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the Company and the Stockholders.
(b) No failure or delay by any party in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive any rights or
remedies provided by law.
SECTION 6.09. Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of New York. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined in a New York state or federal court sitting in the City of New York,
and the Parties hereby irrevocably submit to the exclusive jurisdiction of such
courts in any such action or proceeding and irrevocably waive the defense of an
inconvenient forum to the maintenance of any such action proceeding.
SECTION 6.10. Counterparts. This Agreement may be executed (by original or
------------
telecopied signature) in one or more counterparts, and by the different Parties
in separate counterparts, each of which when so executed shall be deemed to be
an original but all of which taken together shall constitute one and the same
agreement.
44
SECTION 6.11. Specific Performance. The Parties agree that irreparable
--------------------
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
SABINE RIVER HOLDING CORP.
By: _________________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
OCCIDENTAL PETROLEUM CORPORATION
By: _________________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President __
Corporate Development and Chief
Financial Officer
▇▇▇▇▇ REFINING HOLDINGS INC.
By: _________________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
EXHIBIT B
FORM OF WARRANT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
PURPOSES ONLY AND NOT WITH A VIEW TO THE DISTRIBUTION THEREOF AND HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES OR BLUE SKY LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER SUCH ACT OR LAWS AND THE
RULES AND REGULATIONS THEREUNDER. IN ADDITION, THIS WARRANT, AND THE WARRANT
SHARES TRANSFERABLE UPON THE EXERCISE HEREOF, ARE SUBJECT TO THE TERMS OF THE
SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT DATED AS OF NOVEMBER 3, 1997
BETWEEN ▇▇▇▇▇ USA, INC. AND OCCIDENTAL C.O.B. PARTNERS.
August 4, 1999
Warrant to Purchase 1,938,780.36 Shares
of Common Stock, $.01 par value,
of ▇▇▇▇▇ Refining Holdings Inc., a Delaware corporation
-------------------------------------------------------
This certifies that Blackstone Capital Partners III Merchant Banking Fund
L.P., a Delaware limited partnership ("Blackstone"; and together with its
----------
successors and assigns (the "Holder")), is entitled to purchase from ▇▇▇▇▇
------
Refining Holdings Inc., a Delaware corporation ("Issuer"), an aggregate of
------
1,938,780.36 shares of Common Stock, $.01 par value (the "Common Stock"), of
------------
Issuer, at a per share price equal to U.S. $0.01 (as adjusted from time to time
as provided in Section 3 hereof, the "Exercise Price"), at any time or from time
--------------
to time after the date hereof.
As used in this Warrant, the term "Stockholders Agreement" means the Second
----------------------
Amended and Restated Stockholders Agreement dated as of November 3, 1997 between
▇▇▇▇▇ USA, Inc. and Occidental C.O.B. Partners.
Certain terms used in this Warrant are defined in Section 11 hereof.
SECTION 1. Exercise of Warrant.
-------------------
The rights represented by this Warrant may be exercised by the Holder
hereof, in whole or in part at any time or from time to time. Such exercise
shall be made by delivering to Issuer at its office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or at such other office of Issuer as it may designate by
notice in writing to the Holder at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10154) the following three items:
(i) a written notice executed by the Holder (or its authorized
representative) electing to exercise all or any portion of this Warrant,
and if the Holder is exercising this Warrant in part, identifying the
number of Warrant Shares to be acquired, such notice to be substantially in
the form of the Notice of Exercise attached hereto,
(ii) this Warrant, and
(iii) payment to Issuer of the Exercise Price for each share being
purchased from it by delivery of cash, wire transfer or check.
Upon any exercise of this Warrant, if the Warrant Shares are to be transferred
to a Person other than the Holder (which transfer shall be subject in all
respects to the Stockholders Agreement), the Notice of Exercise shall also state
the name of the Person to whom the certificates for the Warrant Shares are to be
transferred, and if the number of Warrant Shares to be transferred does not
include all the Warrant Shares purchasable hereunder, it shall also state the
name of the Person (which Person must be Holder or an Affiliate thereof) to whom
a new Warrant for the unexercised portion of the rights hereunder is to be
delivered. In the event of any exercise of the rights represented by this
Warrant, Issuer shall deliver within a reasonable period of time, not exceeding
ten Business Days, after such exercise a certificate or certificates
representing the Warrant Shares to the Person entitled to receive the same, such
number of Warrant Shares to be transferred upon such exercise, and shall deliver
to the Person entitled to receive the same, within a reasonable time, not
exceeding ten Business Days, after the rights represented by this Warrant shall
have been so exercised, a new Warrant representing the number of Warrant Shares,
if any, with respect to which this Warrant shall not then have been exercised.
The Person in whose name any certificate for Warrant Shares is transferred upon
exercise of this Warrant shall for all purposes be deemed to have become the
Holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Exercise Price was made, irrespective of the date
of delivery of such certificate. The Holder shall pay all expenses, transfer
taxes and other charges payable in connection with the preparation and delivery
of certificates for the Warrant Shares and new Warrants for any unexercised
portion.
SECTION 2. Covenants of Issuer. Issuer covenants and agrees that:
-------------------
(a) Notwithstanding any other provision hereof, if the exercise of any
portion of this Warrant is to be made in connection with a public offering of
the Securities of Issuer or sale of effective voting control of Issuer, the
exercise of any portion of this Warrant may, at the election of the Holder, be
conditioned upon the consummation of the public offering or sale in which case
such exercise shall not be deemed to be effective until the consummation of such
transaction.
(b) Issuer shall not avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be reasonably necessary or appropriate to protect the rights of the Holder
hereof against impairment of the Holder's rights hereunder.
47
(c) Issuer or its Affiliates shall at all times have authorized a
sufficient number of shares of Common Stock so that Issuer or its Affiliates
will be able to deliver to the Holder the number of Warrant Shares obtainable
upon exercise of this Warrant.
SECTION 3. Adjustment of Number of Shares and Exercise Price. In order
-------------------------------------------------
to prevent dilution or avoidance of the rights granted under this Warrant, the
Exercise Price shall be subject to adjustment from time to time as provided in
this Section 3, and the number of Warrant Shares obtainable upon exercise of
this Warrant shall be subject to adjustment from time to time as provided in
this Section 3.
(a) Subdivision or Combination of Common Stock. If Issuer at any time
------------------------------------------
subdivides (by any stock split, stock dividend or other distribution payable in
shares of Common Stock, recapitalization or otherwise) the outstanding shares of
Common Stock into a greater number of shares, the Exercise Price in effect
immediately prior to such subdivision shall be proportionately reduced and the
number of Warrant Shares obtainable upon exercise of this Warrant shall be
proportionately increased. If Issuer at any time combines (by reverse stock
split or otherwise) the outstanding shares of Common Stock into a smaller number
of shares, the Exercise Price in effect immediately prior to such combination
shall be proportionately increased and the number of Warrant Shares obtainable
upon exercise of this Warrant shall be proportionately decreased.
(b) Reorganization, Reclassification, Consolidation, Merger or Sale. Any
---------------------------------------------------------------
recapitalization (other than a subdivision or combination of Common Stock
described in Section 3(a) hereof), reorganization, reclassification,
consolidation, merger, sale of all or substantially all of Issuer's assets
(determined on a consolidated basis) to another Person or other transaction
which is effected in such a way that holders of Common Stock are entitled to
receive (either directly or upon subsequent liquidation) stock, cash, securities
or assets with respect to or in exchange for Common Stock is referred to herein
as an "Organic Change." In the event of any Organic Change, the Holder shall
--------------
thereafter have the right to acquire and receive in lieu of or addition to (as
the case may be) the Warrant Shares immediately theretofore acquirable and
receivable upon the exercise of this Warrant, such shares of stock, cash,
securities or assets as such Holder would have received in connection with such
Organic Change if such Holder had exercised such Warrant immediately prior to
such Organic Change.
(c) Notices. Issuer shall:
-------
(i) promptly upon any adjustment of the Exercise Price, give written
notice thereof to the Holder, setting forth in reasonable detail and
certifying the calculation of such adjustment;
(ii) give written notice to the Holder promptly in the event that
Issuer proposes to take any action or of the date on which Issuer closes its
books or takes a record (A) with respect to any dividend or distribution upon
the Common Stock, (B) with respect to any pro rata subscription offer to
holders of Common Stock or (C) for determining rights to vote with respect to
any Organic Change, dissolution or liquidation; and
48
(iii) also give written notice to the Holder of the date on which
any Organic Change, dissolution or liquidation shall take place.
SECTION 4. Dividends; Purchase Rights.
--------------------------
(a) If Issuer declares or pays a dividend upon the Common Stock payable
(i) in cash out of earnings or earned surplus (determined in accordance with
generally accepted accounting principles, consistently applied) (a "Cash
----
Dividend") or (ii) otherwise than in cash out of earnings or earned surplus
--------
(determined in accordance with generally accepted accounting principles,
consistently applied) except for a stock dividend payable in shares of Common
Stock (a "Liquidating Dividend"), then Issuer shall pay to the Holder of this
--------------------
Warrant at the time of payment thereof the Liquidating Dividend or Cash
Dividend, as the case may be, which would have been paid to such Holder on the
Warrant Shares had this Warrant been fully exercised immediately prior to the
date on which a record is taken for such Liquidating Dividend or Cash Dividend,
as the case may be, or, if no record is taken, the date as of which the record
holders of Common Stock entitled to such dividends are to be determined.
(b) If at any time Issuer grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of Common Stock (the "Purchase
--------
Rights"), then the Holder of this Warrant shall be entitled to acquire, upon the
------
terms applicable to such Purchase Rights, the aggregate number or amount of such
stock, warrants, securities or other property which such Holder could have
acquired if such Holder had held the Warrant Shares acquirable upon complete
exercise of this Warrant immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of Common Stock are to be
determined for the grant, issue or sale of such Purchase Rights.
SECTION 5. No Voting Rights. The Holder shall not be entitled to any
----------------
voting rights as a stockholder of Issuer by reason of the rights granted under
this Warrant until the Holder shall purchase shares of Common Stock hereunder.
SECTION 6. Exchange and Transfer of Warrant.
--------------------------------
(a) Exchange of Warrant. The Holder may exchange this Warrant for another
-------------------
Warrant or Warrants of like kind and tenor representing in the aggregate the
right to purchase the same number of Warrant Shares which could be purchased
pursuant to this Warrant. In order to effect such exchange, the Holder shall
deliver this Warrant to Issuer accompanied by a written request signed by the
Holder specifying the number and denominations of Warrants to be issued in such
exchange and the names in which such Warrants are to be issued. As soon as
reasonably practicable after receipt of such a request, Issuer shall execute and
deliver to the Holder the Warrant or Warrants to be issued in such exchange.
(b) Transfer of Warrant. This Warrant may be transferred by the Holder
-------------------
hereof by delivering this Warrant to Issuer accompanied by a properly completed
Assignment Form and an executed copy of an agreement to become a party to, and
be bound by, the Stockholders Agreement, duly executed by such transferee, and
any other documents reasonably requested by
49
Issuer. As soon as reasonably practicable after receipt of such Assignment Form,
Issuer shall execute and deliver to the Holder a new Warrant or Warrants of like
kind and tenor representing in the aggregate the right to purchase the same
number of Warrant Shares which could be purchased pursuant to the Warrant being
transferred. In all cases of transfer by an attorney, the original power of
attorney, duly approved, or a copy thereof, duly certified, shall be delivered
to and shall remain with Issuer. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced and may be required to be
deposited and remain with Issuer in its discretion.
SECTION 7. Loss, Theft, Destruction of Warrant Certificates. Upon
------------------------------------------------
receipt of evidence satisfactory to Issuer of the ownership of and the loss,
theft, destruction or mutilation of any Warrant and, in the case of any such
loss, theft or destruction, upon receipt of indemnity or security satisfactory
to Issuer (it being understood and agreed that if the Holder of such Warrant is
Blackstone or one of its Affiliates, then a written agreement of indemnity given
by such Person alone shall be satisfactory to Issuer and no further security
shall be required) or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, Issuer will make and deliver, in lieu of such
lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and
representing the right to purchase the same aggregate number of Warrant Shares.
SECTION 8. Successors. All the provisions of this Warrant by or for the
----------
benefit of the Issuer or the Holder shall bind and inure to the benefit of their
respective successors and assigns.
SECTION 9. Headings. The headings of sections of this Warrant have been
--------
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
SECTION 10. Remedies; Amendment and Waiver.
------------------------------
(a) No failure or delay of any party in exercising any power or right
hereunder shall operate as a waiver thereof (except where a specific time period
for the exercise of such power or right is expressly set forth herein), nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No notice or demand on any party in any case shall entitle such
party to any other or future notice or demand in similar or other circumstances.
The rights and remedies of the Holder or the Issuer are cumulative and not
exclusive of any rights or remedies which it would otherwise have.
(b) This Warrant may only be amended or modified by a written instrument
signed by the Holder and the Issuer. The provisions of this Warrant may be
waived only by a writing signed by the party to be charged with such waiver.
SECTION 11. Severability. Whenever possible, each provision of this
------------
Warrant will be interpreted in such manner as to be effective and valid under
Applicable Law, but if any provision of this Warrant is held to be invalid,
illegal or unenforceable in any respect under any Applicable Law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not
50
affect any other provision or any other jurisdiction, and such invalid, void or
otherwise unenforceable provisions shall be null and void. It is the intent of
the parties, however, that any invalid, void or otherwise unenforceable
provisions be automatically replaced by other provisions which are as similar as
possible in terms to such invalid, void or otherwise unenforceable provisions
but are valid and enforceable to the fullest extent permitted by law.
SECTION 12. Definitions; Interpretation.
---------------------------
(a) Definitions. The following terms have meanings set forth below:
-----------
(i) "Affiliate" of a specified Person means a Person who, directly
---------
or indirectly through one or more intermediaries, controls, is controlled
by, or is under common control with, such specified Person.
(ii) "Applicable Law" means, with respect to any Person, property,
--------------
transaction or event, all present or future applicable laws, statutes,
regulations, treaties, judgments and decrees and all applicable official
directives, rules, consents, approvals, authorizations, orders, guidelines
and policies of any Governmental Authority or Persons having authority over
or applicable to such Person or any of its assets or properties.
(iii) "Business Day" means any day that is not a Saturday, a Sunday
------------
or other day on which banks are required or authorized by law to be closed
in the City of New York.
(iv) "control" (including the terms "controlled by" and "under
------- ------------- -----
common control with"), with respect to the relationship between or among
-------------------
two or more Persons, means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
affairs or management of a Person, whether through the ownership of voting
securities, as trustee or executor, by contract or otherwise.
(v) "Convertible Securities" means any stock or other securities
----------------------
convertible into or exchangeable for Common Stock.
(vi) "Governmental Authority" means any administrative, governmental
----------------------
or regulatory authority or body or any court or tribunal, domestic or
foreign.
(vii) "Options" means any rights or options to subscribe for or to
-------
purchase Common Stock.
(viii) "Person" means an individual, partnership, corporation
------
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency thereof.
(ix) "Securities" means, with respect to any Person, such Person's
----------
capital stock or any options, warrants or other Securities which are
directly or indirectly convertible into, or exercisable or exchangeable
for, such Person's capital stock (whether or not such derivative Securities
are issued by Issuer).
51
(x) "Warrant Shares" means the shares of Common Stock issued or
--------------
issuable upon exercise of this Warrant; provided, however, that if there is a
-------- -------
change such that the securities issuable upon exercise of this Warrant are
issued by an entity other than Issuer or there is a change in the class of
securities so issuable, then the term "Warrant Shares" shall mean the
securities issuable upon exercise of this Warrant.
(b) Terms Generally. The definitions contained in this Warrant shall
---------------
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including"
shall be deemed to be followed by the phrase "without limitation."
(c) Currency. Unless otherwise specified herein, all statements or
--------
references to dollar amounts or $ set forth herein shall refer to United States
Dollars.
SECTION 13. Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
-------------
INTERPRETATION AND VALIDITY OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER IN THE STATE
OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 14. Notices. All notices, demands and requests of any kind to be
-------
delivered to any party hereto in connection with this Warrant shall be in
writing, (a) delivered personally, (b) sent by internationally-recognized
overnight courier, (c) sent by first class, registered or certified mail, return
receipt requested or (d) by telecopy with confirmed receipt (with hard copy to
follow). Any notice, demand or request so delivered shall constitute valid
notice under this Warrant and shall be deemed to have been received (i) on the
day of actual delivery in the case of personal delivery, (ii) on the next
Business Day after the date when sent, in the case of delivery by
internationally-recognized overnight courier, (iii) on the fifth Business Day
after the date of deposit in the U.S. mail in the case of mailing or (iv) one
business day after being sent by telecopy with confirmed receipt (with hard copy
to follow). The mailing addresses of Issuer and Holder are set forth in Section
1 hereof. Any party hereto may, from time to time by notice in writing served
upon the other as aforesaid, designate a different mailing address or a
different Person to which all such notices, demands or requests thereafter are
to be addressed.
SECTION 15. Conflicting Agreements. Issuer shall not enter into any
----------------------
agreements or arrangements of any kind with any Person with respect to the
Warrant Shares containing terms inconsistent with the provisions of this
Warrant, including agreements or arrangements with respect to the acquisition or
disposition of securities of Issuer in a manner which is inconsistent with this
Warrant.
IN WITNESS WHEREOF, Issuer has caused this Warrant to be executed by its
duly authorized officers and this Warrant to be dated as of the date first set
forth above.
52
▇▇▇▇▇ REFINING HOLDINGS INC.
By: _______________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
ACCEPTED:
BLACKSTONE CAPITAL PARTNERS III
MERCHANT BANKING FUND L.P.
By: Blackstone Management Associates III,
L.L.C., its general partner
By: _______________________________________
Name:
Title:
53
FORM OF EXERCISE
[To be signed upon exercise of Warrant]
To ▇▇▇▇▇ REFINING HOLDINGS INC., a Delaware corporation:
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, _________ shares of Common Stock AND herewith tenders
payment of [identify amount of payment] in full payment of the purchase price
for such shares, and requests that such shares be transferred to, and the
certificates for such shares be issued in the name of, and be delivered to,
_________________, whose address is ___________________________.
Dated: ____________________ ______________________________________
(Signature)
(Address)
FORM OF ASSIGNMENT
[To be signed only upon transfer of Warrant]
For value received, the undersigned hereby sells, assigns and
transfers unto _________________, all of the rights represented by the within
Warrant to purchase ___ shares of the Common Stock to which the within Warrant
relates.
Dated: ____________________
_____________________________
(Signature)
(Address of Assignor)
Signed in the presence of:
Address of Assignee:
EXHIBIT C
FORM OF WARRANT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
PURPOSES ONLY AND NOT WITH A VIEW TO THE DISTRIBUTION THEREOF AND HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES OR BLUE SKY LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER SUCH ACT OR LAWS AND THE
RULES AND REGULATIONS THEREUNDER. IN ADDITION, THIS WARRANT, AND THE WARRANT
SHARES TRANSFERABLE UPON THE EXERCISE HEREOF, ARE SUBJECT TO THE TERMS OF THE
STOCKHOLDERS AGREEMENT DATED AS OF AUGUST 4, 1999 AMONG SABINE RIVER HOLDING
CORP., ▇▇▇▇▇ REFINING HOLDINGS INC. AND OCCIDENTAL PETROLEUM CORPORATION.
August 4, 1999
Warrant to Purchase 30,000 Shares
of Common Stock, $.01 par value,
of Sabine River Holding Corp., a Delaware corporation
-----------------------------------------------------
This certifies that Occidental Petroleum Corporation, a Delaware
corporation ("Oxy"; and together with its successors and assigns (the
---
"Holder")), is entitled to purchase from Sabine River Holding Corp., a Delaware
------
corporation ("Issuer"), an aggregate of 30,000 shares of Common Stock, $.01 par
------
value (the "Common Stock"), of Issuer, at a per share price equal to U.S. $0.09
------------
(as adjusted from time to time as provided in Section 3 hereof, the "Exercise
--------
Price"), at any time or from time to time after the date hereof.
-----
As used in this Warrant, the term "Stockholders Agreement" means the
----------------------
Stockholders Agreement dated as of August 4, 1999 among Issuer, Holder and ▇▇▇▇▇
Refining Holdings Inc., a Delaware corporation ("▇▇▇▇▇ Holdings").
--------------
Certain terms used in this Warrant are defined in Section 11 hereof.
SECTION 1. Exercise of Warrant.
-------------------
The rights represented by this Warrant may be exercised by the Holder
hereof, in whole or in part at any time or from time to time. Such exercise
shall be made by delivering to Issuer at its office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or at such other office
of Issuer as it may designate by notice in writing to the Holder at its office
at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ 90024) the following three
items:
(i) a written notice executed by the Holder (or its authorized
representative) electing to exercise all or any portion of this Warrant,
and if the Holder is exercising this Warrant in part, identifying the
number of Warrant Shares to be acquired, such notice to be substantially in
the form of the Notice of Exercise attached hereto,
(ii) this Warrant, and
(iii) payment to Issuer of the Exercise Price for each share
being purchased from it by delivery of cash, wire transfer or check.
Upon any exercise of this Warrant, if the Warrant Shares are to be transferred
to a Person other than the Holder (which transfer shall be subject in all
respects to the Stockholders Agreement), the Notice of Exercise shall also state
the name of the Person to whom the certificates for the Warrant Shares are to be
transferred, and if the number of Warrant Shares to be transferred does not
include all the Warrant Shares purchasable hereunder, it shall also state the
name of the Person (which Person must be Holder or an Affiliate thereof) to whom
a new Warrant for the unexercised portion of the rights hereunder is to be
delivered. In the event of any exercise of the rights represented by this
Warrant, Issuer shall deliver within a reasonable period of time, not exceeding
ten Business Days, after such exercise a certificate or certificates (with any
legends required by Section 3.2 of the Stockholders Agreement affixed thereto)
representing the Warrant Shares to the Person entitled to receive the same
(which Warrant Shares shall be subject, in all respects, to the Stockholders
Agreement), such number of Warrant Shares to be transferred upon such exercise,
and shall deliver to the Person entitled to receive the same, within a
reasonable time, not exceeding ten Business Days, after the rights represented
by this Warrant shall have been so exercised, a new Warrant representing the
number of Warrant Shares, if any, with respect to which this Warrant shall not
then have been exercised. The Person in whose name any certificate for Warrant
Shares is transferred upon exercise of this Warrant shall for all purposes be
deemed to have become the Holder of record of such shares on the date on which
this Warrant was surrendered and payment of the Exercise Price was made,
irrespective of the date of delivery of such certificate. The Holder shall pay
all expenses, transfer taxes and other charges payable in connection with the
preparation and delivery of certificates for the Warrant Shares and new Warrants
for any unexercised portion.
SECTION 2. Covenants of Issuer.Issuer covenants and agrees that:
-------------------
(a) Notwithstanding any other provision hereof, if the exercise
of any portion of this Warrant is to be made in connection with a public
offering of the Securities of Issuer or sale of effective voting control of
Issuer, the exercise of any portion of this Warrant may, at the election of the
Holder, be conditioned upon the consummation of the public offering or sale in
57
which case such exercise shall not be deemed to be effective until the
consummation of such transaction.
(b) Issuer shall not avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be reasonably necessary or appropriate to protect the rights of
the Holder hereof against impairment of the Holder's rights hereunder.
(c) Issuer or its Affiliates shall at all times have authorized a
sufficient number of shares of Common Stock so that Issuer or its Affiliates
will be able to deliver to the Holder the number of Warrant Shares obtainable
upon exercise of this Warrant.
SECTION 3. Adjustment of Number of Shares and Exercise Price. In
-------------------------------------------------
order to prevent dilution or avoidance of the rights granted under this Warrant,
the Exercise Price shall be subject to adjustment from time to time as provided
in this Section 3, and the number of Warrant Shares obtainable upon exercise of
this Warrant shall be subject to adjustment from time to time as provided in
this Section 3.
(a) Subdivision or Combination of Common Stock. If Issuer at any
------------------------------------------
time subdivides (by any stock split, stock dividend or other distribution
payable in shares of Common Stock, recapitalization or otherwise) the
outstanding shares of Common Stock into a greater number of shares, the Exercise
Price in effect immediately prior to such subdivision shall be proportionately
reduced and the number of Warrant Shares obtainable upon exercise of this
Warrant shall be proportionately increased. If Issuer at any time combines (by
reverse stock split or otherwise) the outstanding shares of Common Stock into a
smaller number of shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased and the number of Warrant Shares
obtainable upon exercise of this Warrant shall be proportionately decreased.
(b) Reorganization, Reclassification, Consolidation, Merger or Sale.
---------------------------------------------------------------
Any recapitalization (other than a subdivision or combination of Common Stock
described in Section 3(a) hereof), reorganization, reclassification,
consolidation, merger, sale of all or substantially all of Issuer's assets
(determined on a consolidated basis) to another Person or other transaction
which is effected in such a way that holders of Common Stock are entitled to
receive (either directly or upon subsequent liquidation) stock, cash, securities
or assets with respect to or in exchange for Common Stock is referred to herein
as an "Organic Change." In the event of any Organic Change, the Holder shall
--------------
thereafter have the right to acquire and receive in lieu of or addition to (as
the case may be) the Warrant Shares immediately theretofore acquirable and
receivable upon the exercise of this Warrant, such shares of stock, cash,
securities or assets as such Holder would have received in connection with such
Organic Change if such Holder had exercised such Warrant immediately prior to
such Organic Change.
(c) Notices. Issuer shall:
-------
58
(i) promptly upon any adjustment of the Exercise Price, give
written notice thereof to the Holder, setting forth in reasonable detail
and certifying the calculation of such adjustment;
(ii) give written notice to the Holder promptly in the event
that Issuer proposes to take any action or of the date on which Issuer
closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any pro rata
subscription offer to holders of Common Stock or (C) for determining rights
to vote with respect to any Organic Change, dissolution or liquidation; and
(iii) also give written notice to the Holder of the date on
which any Organic Change, dissolution or liquidation shall take place.
SECTION 4. Dividends; Purchase Rights.
--------------------------
(a) If Issuer declares or pays a dividend upon the Common Stock
payable (i) in cash out of earnings or earned surplus (determined in accordance
with generally accepted accounting principles, consistently applied) (a "Cash
----
Dividend") or (ii) otherwise than in cash out of earnings or earned surplus
--------
(determined in accordance with generally accepted accounting principles,
consistently applied) except for a stock dividend payable in shares of Common
Stock (a "Liquidating Dividend"), then Issuer shall pay to the Holder of this
--------------------
Warrant at the time of payment thereof the Liquidating Dividend or Cash
Dividend, as the case may be, which would have been paid to such Holder on the
Warrant Shares had this Warrant been fully exercised immediately prior to the
date on which a record is taken for such Liquidating Dividend or Cash Dividend,
as the case may be, or, if no record is taken, the date as of which the record
holders of Common Stock entitled to such dividends are to be determined.
(b) If at any time Issuer grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of Common Stock (the
"Purchase Rights"), then the Holder of this Warrant shall be entitled to
---------------
acquire, upon the terms applicable to such Purchase Rights, the aggregate number
or amount of such stock, warrants, securities or other property which such
Holder could have acquired if such Holder had held the Warrant Shares acquirable
upon complete exercise of this Warrant immediately before the date on which a
record is taken for the grant, issuance or sale of such Purchase Rights, or, if
no such record is taken, the date as of which the record holders of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights.
SECTION 4. No Voting Rights. The Holder shall not be entitled to
----------------
any voting rights as a stockholder of Issuer by reason of the rights granted
under this Warrant until the Holder shall purchase shares of Common Stock
hereunder.
SECTION 5. Exchange and Transfer of Warrant.
--------------------------------
59
(a) Exchange of Warrant. The Holder may exchange this Warrant for
-------------------
another Warrant or Warrants of like kind and tenor representing in the aggregate
the right to purchase the same number of Warrant Shares which could be purchased
pursuant to this Warrant. In order to effect such exchange, the Holder shall
deliver this Warrant to Issuer accompanied by a written request signed by the
Holder specifying the number and denominations of Warrants to be issued in such
exchange and the names in which such Warrants are to be issued. As soon as
reasonably practicable after receipt of such a request, Issuer shall execute and
deliver to the Holder the Warrant or Warrants to be issued in such exchange.
(b) Transfer of Warrant. This Warrant may be transferred by the
-------------------
Holder hereof (but only with the prior written consent of Issuer if the
transferee is not an Affiliate of Holder) by delivering this Warrant to Issuer
accompanied by a properly completed Assignment Form and an executed copy of an
agreement to become a party to, and be bound by, the Stockholders Agreement,
duly executed by such transferee, and any other documents reasonably requested
by Issuer. As soon as reasonably practicable after receipt of such Assignment
Form, Issuer shall execute and deliver to the Holder a new Warrant or Warrants
of like kind and tenor representing in the aggregate the right to purchase the
same number of Warrant Shares which could be purchased pursuant to the Warrant
being transferred. In all cases of transfer by an attorney, the original power
of attorney, duly approved, or a copy thereof, duly certified, shall be
delivered to and shall remain with Issuer. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced and may be required to be
deposited and remain with Issuer in its discretion.
SECTION 6. Loss, Theft, Destruction of Warrant Certificates. Upon
------------------------------------------------
receipt of evidence satisfactory to Issuer of the ownership of and the loss,
theft, destruction or mutilation of any Warrant and, in the case of any such
loss, theft or destruction, upon receipt of indemnity or security satisfactory
to Issuer (it being understood and agreed that if the Holder of such Warrant is
Oxy or one of its Affiliates, then a written agreement of indemnity given by
such Person alone shall be satisfactory to Issuer and no further security shall
be required) or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, Issuer will make and deliver, in lieu of such
lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and
representing the right to purchase the same aggregate number of Warrant Shares.
SECTION 7. Successors. All the provisions of this Warrant by or for
----------
the benefit of the Issuer or the Holder shall bind and inure to the benefit of
their respective successors and assigns.
SECTION 8. Headings. The headings of sections of this Warrant have
--------
been inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
SECTION 9. Remedies; Amendment and Waiver.
------------------------------
60
(a) No failure or delay of any party in exercising any power or right
hereunder shall operate as a waiver thereof (except where a specific time period
for the exercise of such power or right is expressly set forth herein), nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No notice or demand on any party in any case shall entitle such
party to any other or future notice or demand in similar or other circumstances.
The rights and remedies of the Holder or the Issuer are cumulative and not
exclusive of any rights or remedies which it would otherwise have.
(b) This Warrant may only be amended or modified by a written
instrument signed by the Holder and the Issuer. The provisions of this Warrant
may be waived only by a writing signed by the party to be charged with such
waiver.
SECTION 10. Severability. Whenever possible, each provision of this
------------
Warrant will be interpreted in such manner as to be effective and valid under
Applicable Law, but if any provision of this Warrant is held to be invalid,
illegal or unenforceable in any respect under any Applicable Law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, and such invalid, void or
otherwise unenforceable provisions shall be null and void. It is the intent of
the parties, however, that any invalid, void or otherwise unenforceable
provisions be automatically replaced by other provisions which are as similar as
possible in terms to such invalid, void or otherwise unenforceable provisions
but are valid and enforceable to the fullest extent permitted by law.
SECTION 11. Definitions; Interpretation.
---------------------------
(a) Definitions. The following terms have meanings set forth below:
-----------
(i) "Affiliate" of a specified Person means a Person who,
---------
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person.
(ii) "Applicable Law" means, with respect to any Person,
--------------
property, transaction or event, all present or future applicable laws,
statutes, regulations, treaties, judgments and decrees and all applicable
official directives, rules, consents, approvals, authorizations, orders,
guidelines and policies of any Governmental Authority or Persons having
authority over or applicable to such Person or any of its assets or
properties.
(iii) "Business Day" means any day that is not a Saturday, a
------------
Sunday or other day on which banks are required or authorized by law to be
closed in the City of New York.
(iv) "control" (including the terms "controlled by" and "under
------- ------------- -----
common control with"), with respect to the relationship between or among
-------------------
two or more Persons, means the
61
possession, directly or indirectly or as trustee or executor, of the power
to direct or cause the direction of the affairs or management of a Person,
whether through the ownership of voting securities, as trustee or executor,
by contract or otherwise.
(v) "Convertible Securities" means any stock or other
----------------------
securities convertible into or exchangeable for Common Stock.
(vi) "Governmental Authority" means any administrative,
----------------------
governmental or regulatory authority or body or any court or tribunal,
domestic or foreign.
(vii) "Options" means any rights or options to subscribe for or
-------
to purchase Common Stock.
(viii) "Person" means an individual, partnership, corporation
------
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency thereof.
(ix) "Securities" means, with respect to any Person, such
----------
Person's capital stock or any options, warrants or other Securities which
are directly or indirectly convertible into, or exercisable or exchangeable
for, such Person's capital stock (whether or not such derivative Securities
are issued by Issuer).
(x) "Warrant Shares" means the shares of Common Stock issued or
--------------
issuable upon exercise of this Warrant; provided, however, that if there is
-------- -------
a change such that the securities issuable upon exercise of this Warrant
are issued by an entity other than Issuer or there is a change in the class
of securities so issuable, then the term "Warrant Shares" shall mean the
securities issuable upon exercise of this Warrant.
(b) Terms Generally. The definitions contained in this Warrant shall
---------------
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including"
shall be deemed to be followed by the phrase "without limitation."
(c) Currency. Unless otherwise specified herein, all statements or
--------
references to dollar amounts or $ set forth herein shall refer to United States
Dollars.
SECTION 12. Governing Law. ALL QUESTIONS CONCERNING THE
-------------
CONSTRUCTION, INTERPRETATION AND VALIDITY OF THIS WARRANT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE
(WHETHER IN THE STATE OF NEW YORK
62
OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 13. Notices. All notices, demands and requests of any kind
-------
to be delivered to any party hereto in connection with this Warrant shall be in
writing, (a) delivered personally, (b) sent by internationally-recognized
overnight courier, (c) sent by first class, registered or certified mail, return
receipt requested or (d) by telecopy with confirmed receipt (with hard copy to
follow). Any notice, demand or request so delivered shall constitute valid
notice under this Warrant and shall be deemed to have been received (i) on the
day of actual delivery in the case of personal delivery, (ii) on the next
Business Day after the date when sent, in the case of delivery by
internationally-recognized overnight courier, (iii) on the fifth Business Day
after the date of deposit in the U.S. mail in the case of mailing or (iv) one
business day after being sent by telecopy with confirmed receipt (with hard copy
to follow). The mailing addresses of Issuer and Holder are set forth in Section
1 hereof. Any party hereto may, from time to time by notice in writing served
upon the other as aforesaid, designate a different mailing address or a
different Person to which all such notices, demands or requests thereafter are
to be addressed.
SECTION 14. Conflicting Agreements. Issuer shall not enter into any
----------------------
agreements or arrangements of any kind with any Person with respect to the
Warrant Shares containing terms inconsistent with the provisions of this
Warrant, including agreements or arrangements with respect to the acquisition or
disposition of securities of Issuer in a manner which is inconsistent with this
Warrant.
IN WITNESS WHEREOF, Issuer has caused this Warrant to be executed by
its duly authorized officers and this Warrant to be dated as of the date first
set forth above.
SABINE RIVER HOLDING CORP.
By:______________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
ACCEPTED:
OCCIDENTAL PETROLEUM CORPORATION
63
By: ____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President -
Corporate Development and
Chief Financial Officer
64
FORM OF EXERCISE
[To be signed upon exercise of Warrant]
To SABINE RIVER HOLDING CORP., a Delaware corporation:
The undersigned, the holder of the within Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, _________ shares of Common Stock AND herewith
tenders payment of [identify amount of payment] in full payment of the purchase
price for such shares, and requests that such shares be transferred to, and the
certificates for such shares be issued in the name of, and be delivered to,
_________________, whose address is ___________________________.
Dated: ____________________ ______________________________________
(Signature)
(Address)
FORM OF ASSIGNMENT
[To be signed only upon transfer of Warrant]
For value received, the undersigned hereby sells, assigns and
transfers unto _________________, all of the rights represented by the within
Warrant to purchase ___ shares of the Common Stock to which the within Warrant
relates.
Dated: ____________________
_____________________________
(Signature)
(Address of Assignor)
Signed in the presence of:
Address of Assignee: