<PAGE>
EXHIBIT 10.10
REFINERY PURCHASE AND SALE AGREEMENT
DATED AS OF MARCH 14, 2005,
BY AND BETWEEN
LA GLORIA OIL AND GAS COMPANY,
AS SELLER,
AND
DELEK REFINING, LTD.,
DELEK PIPELINE TEXAS, INC.
AND
DELEK TEXAS LAND, INC.,
AS BUYERS
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
ARTICLE 1
DEFINITIONS....................................................
1
Section 1.1
Certain Defined Terms.....................................
1
Section 1.2
References, Gender, Number................................
1
Section 1.3
Interpretation............................................
2
ARTICLE 2 SALE AND PURCHASE OF ASSETS AND NEWCO
SHARES................... 3
Section 2.1 Sale
and Purchase......................................... 3
ARTICLE 3 PURCHASE PRICE AND
PAYMENT..................................... 3
Section 3.1
Purchase Price............................................
3
Section 3.2
Earnest Money Deposit and Closing Payment.................
3
Section 3.3
Purchase Price for Inventory..............................
4
Section 3.4
Prepayments...............................................
6
Section 3.5 Post
Closing Review of Adjustment Amount.................. 7
Section 3.6
Purchase Price Allocations................................
9
ARTICLE 4 REPRESENTATIONS AND
WARRANTIES................................. 9
Section 4.1
Representations and Warranties of Seller..................
9
Section 4.2
Representations and Warranties of Buyers..................
22
ARTICLE 5 ACCESS TO
INFORMATION.......................................... 24
Section 5.1
General Access............................................
24
Section 5.2
Limitations on Access.....................................
25
Section 5.3
Confidential Information..................................
25
Section 5.4 No
Exclusivity............................................
26
ARTICLE 6 ENVIRONMENTAL
MATTERS.......................................... 26
Section 6.1
Environmental Review and Audit............................
26
ARTICLE 7 TITLE
MATTERS..................................................
28
Section 7.1
Title Commitment and Survey...............................
28
Section 7.2
Limited Title Warranty....................................
28
Section 7.3 No
Other Breach...........................................
29
ARTICLE 8 TRANSFER
REQUIREMENTS.......................................... 29
Section 8.1
Compliance................................................
29
Section 8.2
Transfer Requirements.....................................
29
</TABLE>
-i-
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
Section 8.3
Post-Closing Consents.....................................
30
ARTICLE 9 COVENANTS OF SELLER AND
BUYERS................................. 30
Section 9.1
Conduct of Business Pending Closing.......................
30
Section 9.2
Related Agreements........................................
32
Section 9.3
Actions and Efforts by Parties............................
34
Section 9.4
Records...................................................
37
Section 9.5
Recording.................................................
38
Section 9.6
Casualty and Condemnation.................................
38
Section 9.7
Release and Replacement of Bonds, Guarantees, etc.........
40
Section 9.8
Crown Central Name, Logos, etc............................
40
Section 9.9 Tax
Matters............................................... 40
Section 9.10
Employee Benefits........................................
45
Section 9.11
Accounts Receivable and Accounts Payable.................
47
Section 9.12
Insurance................................................
47
Section 9.13
Amendment of Schedules...................................
48
Section 9.14
Closing Deposit..........................................
48
Section 9.15
Buyer Deposit............................................
49
Section 9.16
Capitalization of Refinery Buyer.........................
50
ARTICLE 10 CLOSING
CONDITIONS............................................ 51
Section 10.1
Seller's Closing Conditions..............................
51
Section 10.2
Buyers' Closing Conditions...............................
52
ARTICLE 11
CLOSING.......................................................
54
Section 11.1
Closing..................................................
54
Section 11.2
Seller's Closing Obligations.............................
54
Section 11.3
Buyers' Closing Obligations..............................
55
ARTICLE 12 EFFECT OF
CLOSING............................................. 55
Section 12.1 Property Tax
Proration................................... 55
Section 12.2
Shared Receivables and Payables..........................
57
Section 12.3
Survival.................................................
58
ARTICLE 13
LIMITATIONS...................................................
59
</TABLE>
-ii-
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
Section 13.1
Disclaimer of Warranties.................................
59
Section 13.2
Deceptive Trade Practices Act Waiver.....................
60
Section 13.3
Limitation of Damages....................................
60
Section 13.4
Environmental Release....................................
61
Section 13.5
General Liability Limitation.............................
61
ARTICLE 14 TERMINATION;
REMEDIES......................................... 61
Section 14.1
Termination..............................................
61
Section 14.2
Remedies.................................................
63
ARTICLE 15
INDEMNIFICATION...............................................
63
Section 15.1
Indemnification by Seller................................
63
Section 15.2
Indemnification by Buyers................................
64
Section 15.3
Indemnification and Defense Procedures...................
65
Section 15.4
Liability Limitations....................................
68
Section 15.5
Exclusive Remedy.........................................
70
ARTICLE 16
MISCELLANEOUS.................................................
71
Section 16.1
Counterparts.............................................
71
Section 16.2
Governing Law; Jurisdiction..............................
71
Section 16.3
Entire Agreement.........................................
71
Section 16.4
Expenses.................................................
71
Section 16.5
Notices..................................................
72
Section 16.6
Successors and Assigns...................................
74
Section 16.7
Amendments and Waivers...................................
74
Section 16.8
Agreement for the Parties' Benefit Only..................
75
Section 16.9
Attorneys' Fees..........................................
75
Section 16.10
Severability............................................
75
Section 16.11
Time of Essence.........................................
75
Section 16.12
Arbitration.............................................
76
</TABLE>
-iii-
<PAGE>
Appendix A - Definitions
EXHIBITS
Exhibit 8.2 -- Form of
Amendment to Earnest Money Deposit Escrow Agreement
Exhibit 9.2(a) -- Form
of Deed
Exhibit 9.2(b) -- Form
of Conveyance
Exhibit 9.2(c) -- Form
of Transition Services Agreement
Exhibit 9.2(d) -- Form
of Agreement and Plan of Merger
Exhibit 9.2(f) -- Form
of Trademark Assignment
Exhibit 9.2(g) -- UCC
Financing Statements to be Terminated
Exhibit 9.2(h) -- Form
of Radio Tower License Agreement
Exhibit 9.14 -- Form of Closing
Deposit Escrow Agreement
Exhibit 9.15 -- Form of Buyer
Deposit Escrow Agreement
Exhibit 10.1(i) -- Form of Buyers' Counsel's Opinion
Exhibit 10.2(l) -- Form of Seller's Counsel's Opinion
Exhibit 11.2(e) -- Form of Affidavit of Non-Foreign Status
SCHEDULES
Schedule A-1
-- Part I - Refinery Site and Miscellaneous Sites
Part II - Tank Farm Site
Schedule A-2
-- [Intentionally Omitted]
Schedule A-3
-- Contracts and Agreements
Schedule A-4
-- Environmental Permits
Schedule A-5
-- Other Permits
Schedule A-6
-- Names of Certain Managers
Schedule A-7
-- Old Refinery Site
Schedule A-8
-- Letter to DOJ
Schedule 3.3
-- Part I - Physical Inventory Procedures
Schedule 3.3
-- Part II - Inventory Valuation Formulae
Schedule 3.6
-- Purchase Price Allocations
Schedule 4.1(g) -- Financial
Statements
Schedule 4.1(i) -- Seller's
Consents
Schedule 4.1(j)(i) --
Intellectual Property/Intellectual Property Contracts
Schedule 4.1(j)(ii) -- Permits and Licenses
Schedule 4.1(k) -- Seller's
Actions
Schedule 4.1(1) -- Compliance
with Laws
Schedule 4.1(n) -- Environmental
Matters
Schedule 4.1(o) -- Tax
Matters
Schedule 4.1(p) -- Part I: Title
Matters
-iv-
<PAGE>
Schedule 4.1(p) -- Part II:
Material Leases
Schedule 4.1(p) -- Part III:
McMurrey Pipeline System
Schedule 4.1(q) -- Employee
Plans
Schedule 4.1(r) -- Labor
Relations Matters
Schedule 4.1(s) -- Compliance
with Material Contracts
Schedule 4.1(t) -- Material
Contracts
Schedule 4.1(u) -- Sufficiency
and Condition of Assets
Schedule 4.1(w) -- Events
Subsequent to Report Date
Schedule 4.1(y) -- Insurance
Schedule 4.2(e) -- Buyer's
Consents
Schedule 4.2(f) -- Buyer's
Actions
Schedule 4.2(k) -- Seller's EPA
Waiver
Schedule 8.1
-- Certain Transfer Requirements
Schedule 9.1
-- Conduct of Business
Schedule 9.2(d) -- Access
Easement to Old Refinery Site
Schedule 9.3(b) -- Restrictions
and Restricted Properties
Schedule 9.7
-- Existing Credit Support
Schedule 9.10(a) -- Personnel
Schedule 9.10(c) -- Severance Plans
Schedule 10.1(g) -- Permissibly Delayed
Consents
Schedule 10.2(k) -- Refinery
Turnaround
-v-
<PAGE>
REFINERY PURCHASE AND SALE AGREEMENT
THIS REFINERY PURCHASE AND SALE AGREEMENT (this "Agreement"), dated
as
of March 14, 2005, is by and between LA GLORIA OIL AND GAS COMPANY,
a Delaware
corporation ("Seller"), DELEK REFINING, LTD., a Texas limited
partnership
("Refinery Buyer"), DELEK PIPELINE TEXAS, INC., a Texas corporation
("Pipeline
Buyer"), and DELEK TEXAS LAND, INC., a Texas corporation ("Land
Buyer")
(Refinery Buyer, Pipeline Buyer and Land Buyer being herein
sometimes
individually referred to as a "Buyer" and collectively as "Buyers"
and, together
with Seller, the "Parties").
WHEREAS, Seller is the owner of an oil refinery located in the City
of
Tyler, Smith County, Texas; and
WHEREAS,
Seller is the owner of all of the issued and outstanding
capital stock of McMurrey Pipe Line Company, a Texas corporation
(the
"Company"), a wholly-owned subsidiary of Seller; and
WHEREAS, Seller desires to sell to Buyers, and Buyers desire to
purchase from Seller, the Assets and the Newco Shares (as
hereinafter defined)
upon the terms and subject to the conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, the Parties agree as
follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Certain Defined Terms. Unless the context otherwise
requires, the respective terms defined in APPENDIX A shall, when
used herein,
have the respective meanings therein specified, with each such
definition to be
equally applicable both to the singular and the plural forms of the
term so
defined.
Section 1.2 References, Gender, Number. All references in this
Agreement to an "Appendix," "Article," "Section," "subsection,"
"Exhibit" or
"Schedule" shall be to an Appendix, Article, Section, subsection,
Exhibit or
Schedule of this Agreement, unless the context requires otherwise.
Unless the
context otherwise requires, the words "this Agreement," "hereof,"
"hereunder,"
"herein," "hereby," or words of similar import shall refer to this
Agreement as
a whole and not to a particular Article, Section, subsection,
clause or other
subdivision hereof. Cross-references in this Agreement to a
subsection or a
clause within a Section may be made by reference to the number or
other
subdivision reference of such subsection or clause preceded by the
word
"Section," such as, by way of example, Section 4.1(k)(i)(A).
Whenever the
context requires, the words used herein shall include the
masculine, feminine
and neuter gender, and the singular and the plural.
<PAGE>
Section 1.3 Interpretation. It is expressly agreed that this
Agreement
shall not be construed against any Party, and no consideration
shall be given or
presumption made, on the basis of who drafted this Agreement or any
particular
provision hereof or who supplied the form of Agreement. Each Party
agrees that
this Agreement has been purposefully drawn and correctly reflects
its
understanding of the transaction that this Agreement contemplates.
In construing
this Agreement:
(a) examples shall not be construed to limit, expressly or by
implication, the matter they illustrate;
(b)
the word "includes" and its derivatives means "includes, but is
not limited to" and corresponding derivative expressions;
(c) a defined term has its defined meaning throughout this
Agreement
and each Appendix, Exhibit and Schedule to this Agreement,
regardless of whether
it appears before or after the place where it is defined;
(d) each Exhibit and Schedule to this Agreement is a part of
this
Agreement, but if there is any conflict or inconsistency between
the main body
of this Agreement (including Appendix A which shall be considered
part of the
main body of this Agreement) and any Exhibit or Schedule, the
provisions of the
main body of this Agreement shall prevail;
(e) the term "cost" includes expense and the term "expense"
includes
cost;
(f) the headings and titles herein are for convenience only and
shall
have no significance in the interpretation hereof;
(g) the inclusion of a matter on a Schedule in relation to a
representation or warranty shall not be deemed an indication that
such matter
necessarily would, or may, breach such representation or warranty
absent its
inclusion on such Schedule;
(h) any reference to a statute, regulation or law shall include
any
amendment thereof or any successor thereto and any rules and
regulations
promulgated thereunder;
(i) currency amounts referenced herein, unless otherwise
specified,
are in U.S. Dollars;
(j) whenever this Agreement refers to a number of days, such
number
shall refer to calendar days unless Business Days are specified;
and
(k) if a term is defined as one part of speech (such as a noun),
it
shall have a corresponding meaning when used as another part of
speech (such as
a verb).
-2-
<PAGE>
ARTICLE 2
SALE AND PURCHASE OF ASSETS AND NEWCO SHARES
Section 2.1 Sale and Purchase. On and subject to the terms and
conditions of this Agreement, (a) Seller shall sell and convey to
Refinery
Buyer, and Refinery Buyer shall purchase from Seller, the Assets,
(b) Seller
shall sell and transfer to Land Buyer, and Land Buyer shall
purchase from
Seller, the Land Newco Shares, and (c) Seller shall sell and
transfer to
Pipeline Buyer, and Pipeline Buyer shall purchase from Seller, the
Pipeline
Newco Shares.
ARTICLE 3
PURCHASE PRICE AND PAYMENT
Section 3.1 Purchase Price. The purchase price for the sale and
conveyance of the Assets and the Newco Shares to the respective
Buyers shall be
equal to (a) $24,000,000.00 (the "Base Purchase Price"), plus (b)
the purchase
price for the Inventory as provided in Section 3.3, less (c) the
Discount Amount
(collectively, the "Purchase Price"), subject to adjustment in
accordance with
the terms of this Agreement. The Purchase Price, as so adjusted, is
referred to
herein as the "Adjusted Purchase Price." The term "Discount Amount"
as used
herein shall mean (w) $6,000,000.00 if Closing occurs on or before
April 29,
2005, (x) $5,000,000.00 if Closing occurs after April 29, 2005, but
no later
than May 16, 2005, (y) $4,000,000.00 if Closing occurs after May
16, 2005, but
no later than June 1, 2005, and (z) $3,000,000.00 if Closing occurs
after June
1, 2005.
Section 3.2 Earnest Money Deposit and Closing Payment.
(a) Contemporaneously with the execution of this Agreement,
Refinery
Buyer has deposited $1,200,000.00 (the "Earnest Money Deposit"), as
earnest
money, with the Escrow Agent pursuant to the Earnest Money Deposit
Escrow
Agreement.
(b) At the Closing, Refinery Buyer shall assume the Assumed
Liabilities and wire transfer the Closing Payment less the Closing
Deposit in
immediately available funds to Wachovia Bank, N.A., 7 Saint Paul
Street,
Baltimore, Maryland 21202, ABA No. 053000219 for the account of
Wachovia Bank,
N.A., Account No. 5000000030279 Re: Crown Central Petroleum
Corporation, or such
other account or accounts specified by Seller to Refinery Buyer on
or prior to
the Business Day immediately preceding the Closing Date. The
"Closing Payment"
shall be equal to (a) the Base Purchase Price, adjusted by the
Initial
Adjustment Amount set forth in the Adjustment Statement delivered
by Seller
pursuant to Section 3.2(c), plus (b) the Estimated Inventory
Purchase Price set
forth in the Initial Valuation Statement delivered by Seller
pursuant to Section
3.3, less (c) the amount of the Earnest Money Deposit together with
all interest
and other amounts, if any, earned thereon prior to the Closing, and
less (d) the
Discount Amount. In addition, at the Closing Refinery Buyer shall
deliver the
Closing Deposit to the Escrow Agent in accordance with the Closing
Deposit
Escrow Agreement as provided in Section 9.14.
-3-
<PAGE>
(c) Seller shall deliver to Refinery Buyer on or prior to the
second
Business Day preceding the Closing Date a statement (the
"Adjustment Statement")
setting forth Seller's preliminary determination (the "Initial
Adjustment
Amount") of the Adjustment Amount. The "Adjustment Amount" shall be
the
algebraic sum of:
(i) a negative amount equal to Seller's pro rata share of
Property
Taxes for the Current Tax Period in accordance with Section
12.1,
(ii) a positive amount equal to the aggregate amount of any
credits
for
payments made by Seller prior to Closing for which Seller is
entitled
to a
credit pursuant to Section 3.4, and
(iii) a negative amount equal to the aggregate amount of any
credits
for
amounts paid to Seller prior to Closing for which Refinery Buyer
is
entitled to a credit pursuant to Section 3.4.
If the Initial Adjustment Amount shown on the Adjustment Statement
is a positive
number, then the Base Purchase Price shall be increased by such
amount, and if
the Initial Adjustment Amount shown on the Adjustment Statement is
a negative
number, then the Base Purchase Price shall be decreased by such
amount, subject,
in each case, to adjustment after Closing pursuant to Section
3.5.
Section 3.3 Purchase Price for Inventory.
(a) Initial Valuation Statement. Seller shall deliver to
Refinery
Buyer on or prior to the second Business Day preceding the Closing
Date a
statement (the "Initial Valuation Statement") setting forth
Seller's estimate of
the purchase price for the Inventory (the "Estimated Inventory
Purchase Price"),
based on Seller's estimated volumes of Inventory to be conveyed to
Refinery
Buyer and the valuation formulas set forth in SCHEDULE 3.3, PART
II. Estimated
Inventory Purchase Price will be subject to adjustment following
Closing based
on a physical inventory (the "Physical Inventory") commenced no
more than two
(2) Business Days prior to the Closing. The Physical Inventory for
the Inventory
shall be conducted in accordance with the measurement and other
procedures
specified in SCHEDULE 3.3, PART I and shall be conducted by
independent
inspectors, the fees and reimbursable costs of such independent
inspectors to be
borne 50% by Seller and 50% by Refinery Buyer.
(b) Subsequent Valuation Statement. Within ten (10) Business Days
of
receipt of the Final Inventory Quantity Report (as provided in
Section I of
SCHEDULE 3.3, PART I), Seller, shall deliver the Subsequent
Valuation Statement
(defined below) to Refinery Buyer. As used herein, the "Subsequent
Valuation
Statement" shall mean a statement which includes an invoice (based
on the
valuation formulae set forth in SCHEDULE 3.3, PART II and the Final
Inventory
Quantity and Final Inventory Quality set forth in the Final
Inventory Quantity
Report) that indicates by product and in the aggregate the final
purchase price
for the Inventory conveyed to Refinery Buyer pursuant hereto.
-4-
<PAGE>
(c) Refinery Buyer Review of Subsequent Valuation Statement.
Refinery
Buyer shall have ten (10) Business Days from receipt of the
Subsequent Valuation
Statement to review the Subsequent Valuation Statement. During this
ten (10)
Business Day period, Refinery Buyer shall be permitted to review
the working
papers of Seller relating to, and shall be given access to the
employee of
Seller primarily responsible for the preparation of, the Subsequent
Valuation
Statement. The Subsequent Valuation Statement shall become final
and binding
upon the Parties on the tenth Business Day following delivery
thereof to
Refinery Buyer, unless Refinery Buyer gives written notice of its
disagreement
with the Subsequent Valuation Statement ("Notice of Disagreement")
to Seller
prior to such date. Any Notice of Disagreement shall (A) specify in
reasonable
detail the nature of any disagreement so asserted and (B) include
only
disagreements based on mathematical or typographical errors or the
amount to be
paid for the Inventory not being calculated in accordance with this
Section 3.3
or SCHEDULE 3.3, as the case may be. Any disagreements with or
changes to the
Subsequent Valuation Statement not included in a Notice of
Disagreement, as
required above, shall be waived by Refinery Buyer. If a Notice of
Disagreement
is received by Seller in a timely manner, then the Subsequent
Valuation
Statement (as revised in accordance with clause (A) or (B) below)
shall become
final and binding upon Seller and Refinery Buyer upon the earlier
of (A) the
date Seller and Refinery Buyer resolve in writing any differences
they have with
respect to the matters specified in the Notice of Disagreement or
(B) the date
any disputed matters specified in the Notice of Disagreement are
finally
resolved in writing by the Independent Arbitrator (as defined
below).
The Subsequent Valuation Statement, upon becoming final and binding
in
accordance with this Section 3.3, and as the same may be revised in
accordance
with the preceding clause (A) or (B), is hereinafter referred to as
the "Final
Valuation Statement".
(d) Settlement of Disputes. During the ten (10) Business Day
period
following the delivery of a Notice of Disagreement, Seller and
Refinery Buyer
shall seek in good faith to resolve in writing any differences
which they may
have with respect to the matters specified in the Notice of
Disagreement. During
such period, Seller shall have access to the working papers of
Refinery Buyer
prepared in connection with its Notice of Disagreement. At the end
of such ten
(10) Business Day period, Seller and Refinery Buyer shall submit to
an
independent arbitrator (the "Independent Arbitrator") for review
and resolution
of any and all matters which remain in dispute and which were
properly included
in the Notice of Disagreement, in the form of a written brief. The
Independent
Arbitrator for purposes of this Section 3.3 and Section 3.5 shall
be Deloitte
Touche. The Independent Arbitrator shall make a final and binding
determination
as to the submitted matters within forty-five (45) days after its
appointment.
The Independent Arbitrator's determination shall be in the form of
an opinion as
is appropriate under the circumstances and shall confirm that it
was rendered in
accordance with this Section 3.3(d). Seller and Refinery Buyer
agree that
judgment may be entered upon the determination of the Independent
Arbitrator in
any court having jurisdiction over the Party against which such
determination is
to be enforced. The fees and expenses of the Independent Arbitrator
and the
reasonable attorney's fees and expenses of the Parties incurred in
connection
with the matters submitted to the Independent Arbitrator shall be
borne by
Seller and Refinery Buyer in inverse proportion as they may prevail
on matters
resolved by the Independent Arbitrator, which proportionate
allocations shall
also be determined by the Independent Arbitrator at the time the
determination
of the Independent Arbitrator is rendered on the merits of
-5-
<PAGE>
the matters submitted. Notwithstanding the foregoing, the fees and
expenses of
Seller incurred in connection with its preparation of the
Subsequent Valuation
Statement and its review of the Notice of Disagreement shall by
borne by Seller,
and the fees and expenses of Refinery Buyer incurred in connection
with its
review of the Subsequent Valuation Statement and the preparation of
any Notice
of Disagreement shall be borne by Refinery Buyer.
(e) Final Payment. If the amounts indicated in the Final
Valuation
Statement are, in the aggregate, more than the Estimated Inventory
Purchase
Price, Refinery Buyer shall, within ten (10) days after the
Subsequent Valuation
Statement becomes final and binding pursuant to this Section 3.3,
make payment
to Seller by wire transfer in immediately available funds of the
amount of such
difference not otherwise paid by Refinery Buyer and, if not paid by
12:00 noon
Central Time on the last day of said 10-day period, together with
interest
thereon at a rate equal to the Agreed Rate from and including the
last day of
said 10-day period to but excluding the date of payment if paid by
12:00 noon
Central Time. If the amounts indicated in the Final Valuation
Statement are, in
the aggregate, less than the Estimated Inventory Purchase Price,
Seller shall,
within ten (10) days after the Subsequent Valuation Statement
becomes final and
binding pursuant to this Section 3.3, make payment to Refinery
Buyer by wire
transfer in immediately available funds of the amount of such
difference
overpaid by Refinery Buyer and, if not paid by 12:00 noon Central
Time on the
last day of said 10-day period, together with interest thereon at a
rate equal
to the Agreed Rate from and including the last day of said 10-day
period to but
excluding the date of payment if paid by 12:00 noon Central Time.
Either party
may elect, at any time in advance of the Subsequent Valuation
Statement becoming
final and binding, to pay to the other party any portion which is
not in dispute
of such difference between the Estimated Inventory Purchase Price
and the
amount(s) in the Subsequent Valuation Statement.
Section 3.4 Prepayments.
(i) If, prior to Closing, Seller pays any license fees,
tariffs,
rentals, service fees, payments for utilities, payments for
Inventory, or
other similar obligations with respect to the Assets or Seller's
Business
which under GAAP are attributable, in whole or in part, to the
period after
the
Closing Date, Seller shall be entitled to a credit in the
Adjustment
Amount with respect to the portion thereof which under GAAP is
attributable
to
the period after the Closing Date; provided that, Seller shall not
be
entitled to a credit under this Section for the prepayment of any
accounts
payable of Seller for the purchase by Seller, the shipment to
Seller or the
handling prior to delivery to Seller of any Inventory to the extent
Seller
is
paid for such Inventory pursuant to Section 3.3 and such
accounts
payable are not deducted in determining the Purchase Price for
such
Inventory. If, prior to Closing, Seller is paid any license fees,
tariffs,
rentals, service fees, payments for utilities, or other similar
revenues
with
respect to the Assets or Seller's Business which under GAAP are
attributable, in whole or in part, to the period after the Closing
Date,
Refinery Buyer shall be entitled to a credit in the Adjustment
Amount with
respect to the portion thereof which under GAAP is attributable to
the
period after the Closing Date.
-6-
<PAGE>
(ii) Refinery Buyer acknowledges that, from time to time,
Seller
enters into agreements for the future delivery of crude oil
necessary for
the
continued operation of the Facility, and that Seller may deem
it
necessary to enter into such agreements following the date hereof
and
through the Closing Date. Refinery Buyer further acknowledges that
some of
those agreements require Seller to prepay for such future
deliveries of
crude oil and others require that Seller provide the crude oil
supplier
with
letters of credit issued on behalf of Seller to secure Seller's
obligation to pay for such future deliveries of crude oil ("Crude
Supply
LCs"). Prior to Closing, Seller and Buyers shall (a) amend SCHEDULE
A-3 to
include any such crude oil supply agreements entered into by Seller
as
contemplated in this paragraph (ii) of Section 3.4 and (b) amend
SCHEDULE
9.7
to include any such Crude Supply LCs issued on behalf of Seller
as
contemplated in this paragraph (ii) of Section 3.4. At Closing,
Seller
shall be entitled to a credit in the Adjustment Statement for
such
prepayments for crude oil to the extent such crude oil is not
delivered at
the
Facility prior to Closing. At Closing, Refinery Buyer shall cause
to be
delivered to each applicable beneficiary of such Crude Supply LCs
a
replacement letter of credit or other obligation deemed
satisfactory by
such
beneficiary and shall cause the release as of the Closing Date
of
Seller and its Affiliates from all obligations and liabilities
relating to
such
Crude Supply LCs, in the manner provided in Section 9.7 with
respect
to
Existing Credit Support, provided that, Refinery Buyer shall be
entitled
to a
credit in the Adjustment Statement for the unpaid cost of any
such
crude oil which has been received at the Facility prior to the
Closing and
for
which Refinery Buyer causes to be delivered to the applicable
beneficiary a replacement letter of credit pursuant to this
paragraph (ii)
of
Section 3.4. Not less than two days prior to the Closing Date,
Seller
will
provide Refinery Buyer with an estimate of the aggregate amounts
of
(a)
prepayments for crude oil, (b) Crude Supply LCs and (c) crude
oil
received under Crude Supply LCs, as contemplated in this paragraph
(ii) of
Section 3.4, which amounts will be calculated by Seller from
Sellers' books
and
records and reflected in the Adjustment Statement, subject to
post-Closing review and adjustment in accordance with the
provisions of
Section 3.5.
Section 3.5 Post Closing Review of Adjustment Amount. After the
Closing, Seller shall review the Adjustment Statement and determine
the actual
Adjustment Amount. On or prior to the 20th day after the Closing
Date, Seller
shall present Refinery Buyer with a statement of the actual
Adjustment Amount
and such supporting documentation as is reasonably necessary to
support the
Adjustment Amount shown therein (the "Final Adjustment Statement").
Refinery
Buyer will give personnel, accountants and representatives of
Seller reasonable
access to the Assets and Refinery Buyer's premises and to its books
and records
for purposes of preparing the Final Adjustment Statement and will
cause
appropriate personnel of Refinery Buyer to assist Seller and
Seller's personnel,
accountants and representatives, at no cost to Seller, in the
preparation of the
Final Adjustment Statement. Seller will give personnel, accountants
and
representatives of Refinery Buyer reasonable access to Seller's
premises and to
its books and records for purposes of reviewing the calculation of
Adjustment
Amount and will cause appropriate personnel of Seller to assist
Refinery Buyer
and Refinery Buyer's personnel, accountants and representatives, at
no cost to
Refinery Buyer, in verification of such calculation. The Final
Adjustment
Statement shall become final and binding on Seller and Refinery
Buyer as
-7-
<PAGE>
to the Adjustment Amount 20 days following the date the Final
Adjustment
Statement is received by Refinery Buyer, except to the extent that
prior to the
expiration of such 20-day period Refinery Buyer shall deliver to
Seller one or
more notices, as hereinafter required, of its disagreement with the
contents of
the Final Adjustment Statement. Such notices shall be in writing
and set forth
all of Refinery Buyer's disagreements with respect to any portion
of the Final
Adjustment Statement, together with Refinery Buyer's proposed
changes thereto,
and shall include an explanation in reasonable detail of, and such
supporting
documentation as is reasonably necessary to support, such changes.
Any
disagreements with or changes to the Final Adjustment Statement not
included in
such notices shall be waived by Refinery Buyer. If Refinery Buyer
has timely
delivered one or more notices of disagreement to Seller in the
manner required
above, then, upon written agreement between Refinery Buyer and
Seller resolving
all disagreements of Refinery Buyer set forth in such notices, the
Final
Adjustment Statement (including any revisions thereto as are so
agreed) will
become final and binding on Refinery Buyer and Seller as to the
Adjustment
Amount. If the Final Adjustment Statement has not become final and
binding by
the 45th day following the date the Final Adjustment Statement is
received by
Refinery Buyer, then any unresolved disagreements of Refinery Buyer
set forth in
the aforesaid notices will be submitted to the Independent
Arbitrator for
determination. Seller and Refinery Buyer may submit to the
Independent
Arbitrator any facts which they deem relevant to the determination.
The written
report of the Independent Arbitrator shall be delivered to Seller
and Refinery
Buyer within thirty (30) days after such disputed items and amounts
are
submitted to the Independent Arbitrator for determination. Upon
resolution of
such unresolved disagreements of Refinery Buyer by the Independent
Arbitrator,
the Final Adjustment Statement (including any revisions thereto as
are so
resolved or agreed), shall be conclusive, final and binding on
Refinery Buyer
and Seller as to the Adjustment Amount and shall not be subject to
challenge
before any court of law or arbitration tribunal. Judgment may be
entered upon
the determination of the Independent Arbitrator in any court having
jurisdiction
over the Party against which such determination is to be enforced.
The fees and
expenses of the Independent Arbitrator shall be borne by Seller and
Refinery
Buyer in inverse proportion as they may prevail on matters resolved
by the
Independent Arbitrator, which proportionate allocations shall also
be determined
by the Independent Arbitrator at the time the determination of the
Independent
Arbitrator is rendered on the merits of the matters submitted. Any
fees and
expenses of Seller's and Refinery Buyer's own independent public
accountants
incurred in connection with their determination or review of the
Adjustment
Amount or the Final Adjustment Statement shall be borne by the
Party retaining
such independent public accountants. If the final amount of the
Adjustment
Amount is more or less than the Initial Adjustment Amount, the
Closing Payment
shall be redetermined under Section 3.2(b) using such final amount
of the
Adjustment Amount. If such redetermination under Section 3.2(b)
results in a
reduction in the Closing Payment, Seller shall pay Refinery Buyer
the amount of
such reduction. If such redetermination results in an increase in
the Closing
Payment, Refinery Buyer shall pay Seller the amount of such
increase. Within
three (3) Business Days after the Final Adjustment Statement (as so
resolved or
agreed) becomes final and binding, Seller or Refinery Buyer, as
appropriate,
shall pay to the other Party the amount of such increase or
reduction, if any,
in the Closing Payment and, if not paid by 12:00 noon Central Time
on the last
day of said 3-Business Day period, together with interest thereon
at a rate
equal to the Agreed Rate from and including the last day of said
3-Business Day
-8-
<PAGE>
period to but excluding the date of payment if paid by 12:00 noon
Central Time.
Notwithstanding the foregoing, if the actual amount(s) of any
Property Taxes for
the Current Tax Period are not known prior to the date on which the
Final
Adjustment Statement is prepared, then adjustments to the Closing
Payment with
respect to such Property Taxes for the Current Tax Period shall be
made pursuant
to Section 12.1 and not this Section.
Section 3.6 Purchase Price Allocations. The Purchase Price shall
be
allocated among the (i) Sites, (ii) the Facility, (iii) the various
items of
equipment and personal property included in the Assets, (iv) the
other Assets
and (v) the Land Newco Shares and Pipeline Newco Shares in the
manner and in
accordance with the respective values set forth in SCHEDULE 3.6.
Within ten (10)
days after the execution and delivery of this Agreement by Buyers
and Seller,
Buyers shall in good faith prepare and deliver to Seller a proposed
SCHEDULE 3.6
setting forth the foregoing allocations of the Purchase Price. The
allocations
of the Purchase Price in SCHEDULE 3.6 shall be in sufficient detail
to permit
the determination and calculation of all sales, use and similar
Taxes, if any,
which may be due on portions of the Assets in connection with this
transaction.
The allocations of the Purchase Price in the SCHEDULE 3.6 prepared
and delivered
by Buyers shall be subject to Seller's approval, which approval
will not be
unreasonably withheld, conditioned or delayed. Upon the approval by
Seller and
Buyers of SCHEDULE 3.6 pursuant to the foregoing, said approved
SCHEDULE 3.6
shall be attached to and incorporated in this Agreement for all
purposes. If any
adjustment is made to the Purchase Price pursuant to Section 3.3 or
3.5, a
corresponding adjustment shall be made to the portion(s) of the
Purchase Price
allocated to the affected Asset(s) in the SCHEDULE 3.6. The Parties
shall not
take a federal or state Tax reporting position inconsistent with
the allocations
set forth on SCHEDULE 3.6.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of Seller. Seller, as
of
the date of this Agreement, represents and warrants to Buyers as
follows:
(a) Organization and Qualification of Seller. Seller is a
corporation
duly organized, validly existing and in good standing under the
laws of the
State of Delaware and has the requisite corporate power to carry on
its business
as it is now being conducted. Seller is duly qualified to do
business, and is in
good standing, in the State of Texas, and in all jurisdictions
where the conduct
of its business would require such qualification.
(b) Organization and Qualification of Company. The Company is a
corporation duly organized, validly existing and in good standing
under the laws
of the State of Texas and has the requisite corporate power to
carry on its
business as it is now being conducted. The Company is duly
qualified to do
business, and is in good standing, in the State of Texas, and in
all
jurisdictions where the conduct of its business would require
such
qualification.
(c) Authority. Seller has all requisite corporate power and
authority
to execute and deliver this Agreement and the Related Agreements to
which Seller
is a party and to perform its obligations hereunder and thereunder.
The
execution, delivery and performance of
-9-
<PAGE>
this Agreement and the Related Agreements to which Seller is a
party and the
transactions contemplated hereby have been duly and validly
authorized by all
requisite corporate action on the part of Seller.
(d) Enforceability. This Agreement constitutes a valid and
binding
agreement of Seller enforceable against Seller in accordance with
its terms,
except as may be limited by applicable bankruptcy, insolvency,
reorganization,
moratorium or similar laws from time to time in effect that affect
creditors'
rights generally and by legal and equitable limitations on the
availability of
specific remedies and each Related Agreement to which Seller is a
party will at
and after Closing be enforceable against Seller in accordance with
its terms,
except as may be limited by applicable bankruptcy, insolvency,
reorganization,
moratorium or similar laws from time to time in effect that affect
creditors'
rights generally and by legal and equitable limitations on the
availability of
specific remedies.
(e) Company Shares. Seller holds of record and owns beneficially
all
outstanding Company Shares free and clear of any Liens, options,
warrants,
purchase rights, or other encumbrances (except as created by this
Agreement and
restrictions on sales of stock under applicable securities laws).
Upon the
purchase of the Land Newco Shares and Pipeline Newco Shares as
contemplated by
this Agreement, Land Buyer and Pipeline Buyer, respectively, will
obtain good
and valid title to the Land Newco Shares and Pipeline Newco
Shares,
respectively, free and clear of all Liens, options, warrants,
purchase rights,
or other encumbrances (other than those created by, through or
under any Buyer
and restrictions on sales of stock under applicable securities
laws). Seller is
not a party to any option, warrant, purchase right, or other
Contract (other
than this Agreement) that could require Seller to sell, transfer,
or otherwise
dispose of any Company Shares or Newco Shares. Seller is not a
party to any
voting trust, proxy or other Contract or understanding with respect
to the
voting of any Company Shares or Newco Shares.
(f) Company Capitalization, The entire authorized capital stock of
the
Company consists of 562-1/2 Company Shares, all of which Company
Shares are
issued and outstanding. All of the Company Shares are held
beneficially and of
record by Seller. All of the issued and outstanding Company Shares
have been
duly authorized and are validly issued, fully paid and
nonassessable and were
not issued in violation of the preemptive rights of any Person. The
Company does
not have outstanding, and is not a party to, any convertible
security, call,
preemptive right, option, warrant, purchase right, or other
Contract or
commitment that could, directly or indirectly, require the Company
to sell,
issue, or otherwise dispose of any Company Shares or Newco
Shares.
(g) Company Financial Statements. Attached hereto as SCHEDULE
4.1(G)
are the following financial statements (collectively the
"Financial
Statements"): (i) unaudited balance sheets, and statements of
operations as of
and for the fiscal years ended December 31, 2003 and 2002, for the
Company; and
(ii) unaudited balance sheets, and statements of operations for the
Company (the
"Most Recent Financial Statements") as of and for the nine months
ended
September 30, 2004 (the "Report Date"). The Financial Statements
present fairly,
in accordance with GAAP applied on a consistent basis throughout
the periods
covered thereby, the financial condition of the Company as of such
dates and the
results of operations of the Company for such
-10-
<PAGE>
periods, in all material respects; provided, however, that (1) the
Financial
Statements and Most Recent Financial Statements are unaudited and
lack footnotes
and other presentation items and (2) no representation or warranty
is made under
this subsection with respect to the title of the Company to any
assets of the
Company, any pending or threatened Actions, or the existence,
non-existence or
effect of any Environmental Condition or Environmental
Liabilities.
(h) No Conflict or Violation. Except for any exceptions set forth
in
Section 4.1(i) (or referenced in SCHEDULE 4.1(I)), the execution
and delivery of
this Agreement and all Related Agreements by Seller and the
consummation of the
transactions and performance of the terms and conditions
contemplated hereby and
thereby by Seller, will not, with or without the passage of time or
the giving
of notice or both:
(i) conflict with or result in a violation or breach of or
default
under any provision of the certificate of incorporation, by-laws or
other
similar governing documents of Seller or the Company,
(ii) conflict with, constitute a breach, violation or termination
of
any
provision of, or give rise to any right of termination,
cancellation or
acceleration, or loss of any material right or benefit or both,
under any
Contract or other undertaking to which Seller or the Company is a
party or
by
which Seller, the Assets, the Company or the Company's Assets are
bound,
(iii) result in the creation or imposition of any Lien or
encumbrance
upon
any of the Assets, the Company Assets, the Company Shares or the
Newco
Shares under any Contract to which Seller or the Company is a party
or by
which any of the Assets or the Company's Assets are bound, or
(iv) violate any Law applicable to Seller, the Assets, the Company
or
the
Company's Assets;
except, with respect to clauses (ii) and (iv), for such violations,
conflicts,
breaches, terminations, losses, impositions and other matters which
will not,
individually or in the aggregate, result in a Material Adverse
Effect.
Notwithstanding the foregoing, Seller makes no representation or
warranty,
express or implied, under this Section 4.1(h) relating to any
Environmental Law
or Environmental Permit.
(i) Consents. Except for (i) Post-Closing Consents, (ii) the
transfer
or obtaining of any Environmental Permit, (iii) compliance with and
filings
under the HSR Act, (iv) consents, approvals, authorizations,
permits, filings or
notices, the failure of which to obtain or with which to comply
will not,
individually or in the aggregate, have a Material Adverse Effect,
and (v)
consents, approvals, authorizations, permits, filings or notices
referenced in
SCHEDULE 4.1(I), no consent, approval, authorization or permit of,
or filing
with or notification to, any Person is required for or in
connection with the
execution and delivery of this Agreement or the Related Agreements
by Seller or
for or in connection with the consummation of the
-11-
<PAGE>
transactions and performance of the terms and conditions
contemplated hereby and
thereby by Seller.
(j) Licenses and Authorizations.
(i) SCHEDULE 4.1(J)(I) sets forth (i) a true and complete list of
all
material Intellectual Property, (ii) the name of the Person who
owns such
Intellectual Property, and (iii) in the case of such Intellectual
Property
not
owned by Seller or the Company, other than licenses for software
having
a
value of less than $25,000.00 per license, identifying
information
regarding the agreement pursuant to which Seller or the Company
uses any
such
Intellectual Property. Except as otherwise specified on
SCHEDULE
4.1(J)(I), Seller has the right to assign the Contracts or
licenses
identified in SCHEDULE 4.1(J)(I) (the "Intellectual Property
Contracts")
upon
the consummation of the transactions contemplated hereunder,
except
where the failure by Seller to have such right would not,
individually or
in
the aggregate, have a Material Adverse Effect. Except as set forth
in
SCHEDULE 4.1(J)(I), neither Seller nor the Company is in material
breach of
any
Contract, license, sublicense, assignment, or indemnification
which
relates to any of the Intellectual Property, except for such
breaches as to
which requisite waivers or consents have been or are being obtained
or
which would not, individually or in the aggregate, have a Material
Adverse
Effect.
(ii) SCHEDULE 4.1(J)(II) sets forth an accurate and complete list
of
all
material permits, licenses, or similar rights from any
Governmental
Authority (other than Environmental Permits) that are in force and
effect
with
respect to the operations or ownership of the Assets by Seller or
the
operations or ownership of the Company's Assets by the Company.
Seller
makes no representation or warranty, express or implied, under this
Section
4.l(j)(ii) relating to whether any other permits, licenses, or
similar
rights are necessary to the operation or ownership of the Assets or
the
Company's Assets.
(k) Actions. Except (i) as set forth in SCHEDULE 4.1(K),(ii)
for
matters which would not, individually or in the aggregate, have a
Material
Adverse Effect, and (iii) for any Action initiated by any Buyer or
any Affiliate
of any Buyer, (A) there is no Action pending or, to the knowledge
of Seller,
threatened to which Seller or the Company is (or is threatened to
be made) a
party and which relates to the Assets, the Company Shares or the
Company's
Assets or seeks to prevent the consummation by Seller of the
transactions
contemplated by this Agreement, and (B) there is no outstanding
order, writ,
injunction, decree or judgment entered in any Action in which
Seller or an
Affiliate of Seller has been joined as a party that is binding upon
Seller or an
Affiliate of Seller and which relates to the Assets, the Company
Shares or the
Company's Assets or would prevent the consummation by Seller of the
transactions
contemplated by this Agreement. Notwithstanding the foregoing,
Seller makes no
representation or warranty, express or implied, under this Section
4.1(k)
relating to (a) any Environmental Law, Environmental Permit, or Tax
Law or (b)
Seller's title to any Assets or Company Shares, the Company's title
to any of
the Company's Assets, or the existence or non-existence of any
title defect.
-12-
<PAGE>
(l) Compliance With Laws. Except as disclosed in SCHEDULE 4.1(L),
(i)
Seller is in compliance in all material respects with all Laws with
respect to
the Facility and the Sites and has filed with the proper
Governmental Authority
all statements and reports with respect to the Facility and the
Sites required
by all Laws; except where failures to so comply or file would not,
individually
or in the aggregate, have a Material Adverse Effect, and (ii)
Seller has not
received any written notice from any Governmental Authority or
other third party
that alleges any violation in any material respect by Seller of any
Laws with
respect to the Facility or the Sites. Except as disclosed in
SCHEDULE 4.1(L),
(i) the Company is in compliance in all material respects with all
Laws with
respect to the Company's Assets and has filed with the proper
Governmental
Authority all statements and reports with respect to the Company's
Assets
required by all Laws; except where failure to so comply or file
would not,
individually or in the aggregate, have a Material Adverse Effect,
and (ii)
neither Seller nor the Company has received any written notice from
any
Governmental Authority or other third party that alleges any
violation in any
material respect by the Company of any Laws with respect to the
Company's
Assets. Notwithstanding the foregoing, Seller makes no
representation or
warranty, express or implied, under this Section 4.1(l) relating to
(a) any
Environmental Law, Environmental Permit, or Tax Law, including any
compliance
therewith or any filings or notices with respect thereto, or (b)
Seller's title
to any Assets or Company Shares, the Company's title to any of the
Company's
Assets, or the existence or non-existence of any title defect.
(m) Brokerage Fees and Commissions. Park Avenue Equity Management
LLC
is acting as broker for Seller in connection with the sale of the
Assets and the
Newco Shares. However, neither Seller nor any Affiliate of Seller
has incurred
any obligation or entered into any Contract for any investment
banking,
brokerage or finder's fee or commission in respect of the
transactions
contemplated by this Agreement for which any Buyer or Land Newco or
Pipeline
Newco shall incur any liability.
(n) Environmental Matters. The sole representations and warranties
of
the Seller with respect to environmental matters are set forth in
this Section
4.1(n). To the extent representations and warranties in other
sections of this
Agreement also could apply to environmental matters, including, but
not limited
to, matters related to, arising under or concerning Environmental
Laws or
Environmental Liabilities, such representations and warranties
shall be
construed to exclude all environmental matters and to apply to
matters other
than environmental matters. Except as set forth in SCHEDULE 4.1(N)
or as would
not, individually or in the aggregate, have a Material Adverse
Effect:
(i) Neither Seller nor, to the knowledge of Seller, any prior owner
or
operator of the Assets or the Company's Assets has caused or
allowed the
generation, use, treatment, storage or disposal of Hazardous
Materials at
or
on any of the Assets or the Company's Assets except in accordance
with
all
applicable Environmental Laws.
(ii) There are no Actions pending or, to the knowledge of
Seller,
threatened to which Seller or the Company is (or is threatened to
be made)
a
party in which Environmental Liabilities are being asserted by or
before
any
Governmental Authority directed against Seller or the Company
relating
to
the Assets or the Company's Assets
-13-
<PAGE>
that
pertain or relate to (1) any remedial obligations presently
required
under any applicable Environmental Law, (2) violations by Seller or
the
Company of any Environmental Law, (3) personal injury or property
damage
claims relating to a release of Hazardous Materials, or (4)
response,
removal or remedial costs under any Environmental Law.
(iii) With respect to the current operation of the Assets, Seller
is
in
compliance, in all material respects, and with respect to the
current
operation of the Company's Assets, the Company is in compliance, in
all
material respects, with all limitations, restrictions, standards
and
obligations established under Environmental Laws.
(iv) Seller has secured all Environmental Permits necessary to
operate
the
Assets in the manner they are currently operated, all such
Environmental Permits have been duly obtained or filed and are in
full
force and effect, and Seller is in compliance, in all material
respects,
with
such Environmental Permits. To Seller's knowledge, the current
operation of the Assets does not provide a basis for revocation
or
suspension of any Environmental Permit related to the operation of
the
Assets. The Company has secured all Environmental Permits necessary
to
operate the Company's Assets in the manner they are currently
operated, all
such
Environmental Permits have been duly obtained or filed and are in
full
force and effect, and the Company is in compliance, in all
material
respects, with such Environmental Permits. To Seller's knowledge,
the
current operation of the Company's Assets does not provide a basis
for
revocation or suspension of any Environmental Permit related to
the
operation of the Company's Assets.
(v) There are no Actions pending or, to the knowledge of
Seller,
threatened against Seller or the Company that are based upon or
arise under
any
Environmental Law and relate to the Assets or the Company's
Assets.
(vi) Seller is not currently operating or required to be operating
the
Assets, and the Company is not currently operating or required to
be
operating the Company's Assets, under any Order arising or imposed
under
Environmental Laws.
(vii) None of the Assets or the Company's Assets is encumbered by
a
Lien
arising or imposed under Environmental Laws.
(viii) There are no Hazardous Materials present in or on the
soil,
sediments, surface water or ground water on, under or from or
migrating
from
any of the Sites or the Targeted Company Assets in amounts that
are
reasonably likely to give rise to an obligation to perform
remediation or
other corrective action pursuant to Environmental Laws.
(o) Tax Matters.
(i) With respect to the Seller's Business, the Facility and the
Sites,
except as set forth in SCHEDULE 4.1(O), Seller has filed all Tax
Returns
required to be filed, taking
-14-
<PAGE>
into
account all applicable extension periods, on or before the date
hereof
by
or with respect to it in respect of any Taxes for any period ending
on
or
before the date hereof (collectively, "Seller's Returns"). Seller
has
timely paid all Taxes that have been shown as due and payable on
Seller's
Returns, and Seller is not delinquent in the payment of any Taxes
except
those which would not, individually or in the aggregate, have or
reasonably
be
expected to have a Material Adverse Effect and those being
contested in
good
faith. SCHEDULE 4.1(O) lists all pending Tax disputes with respect
to
the
Assets.
(ii) With respect to the Company, except as set forth in
SCHEDULE
4.1(O), (1) all Tax Returns required to be filed, taking into
account all
applicable extension periods, on or before the date hereof by the
Company
(or
the common parent of each Seller Group of which the Company is
a
member) (the "Company's Returns") with respect to any Taxes have
been
timely filed with the appropriate governmental agencies in all
jurisdictions in which the Company's Returns are required to be
filed; (2)
the
Company's Returns are true and complete in all material respects,
and
all
Taxes reported on the Company's Returns have been paid; (3) the
Company
(or
the common parent of each Seller Group of which the Company is
a
member) has not extended or waived the application of any statute
of
limitations of any jurisdiction regarding the assessment or
collection of
any
Tax; and (4) there are no Actions, assessments or levies pending
or, to
the knowledge of
Seller, threatened against the Company by any taxing
authority. Notwithstanding anything in this Section 4.1(o) to the
contrary,
no
representation or warranty is made with respect to the amount,
availability, expiration, limitation or reduction of any net
operating
losses of the Company.
(p) Title.
(i) Except as set forth in SCHEDULE 4.1(P), PART I and except for
such
failures that, individually or in the aggregate, would not have a
Material
Adverse Effect, (A) Seller has Defensible Title in and to the
Assets and
(B)
the Company has Defensible Title in and to the McMurrey
Pipeline
System.
(ii) Except as set forth in SCHEDULE 4.1(P), PART I and excluding
any
representation or warranty relating to Environmental Laws or
Environmental
Permits, Seller has not received any written notice to the effect
that (i)
any
betterment assessments have been levied against, or condemnation
or
re-zoning proceedings are pending or threatened with respect to the
Sites
or
the Facility, (ii) any Action has been initiated to annex the Sites
or
Facility into the boundaries or jurisdiction of any Governmental
Authority
to
which the Sites or Facility are not currently subject, or (iii)
any
zoning, building or similar law or regulation is or will be
violated by the
continued maintenance, operation or use of any buildings or
other
improvements on the Sites as used and operated on the date of
this
Agreement. There are
no outstanding abatement or protest proceedings or
appeals with respect to the assessment of the Sites or the Facility
for the
purpose of real property taxes, and, except as referenced in
SCHEDULE
4.1(P), PART I, there is no written agreement with any
Governmental
Authority with respect to such assessments or tax rates on the
Sites or the
Facility.
-15-
<PAGE>
(iii) SCHEDULE 4.1(P), PART II sets forth a list of material
leases
related to the Sites or the Facility where Seller is the lessee or
lessor.
(iv) All pipelines, pipeline easements, utility lines, utility
easements and other easements, leaseholds, servitudes and
rights-of-way
burdening or
benefiting the Sites will not at Closing unreasonably
interfere with or prevent any operations conducted on the Sites by
Seller
in
the manner operated on the date of this Agreement, except for (i)
such
interference or prevention that, individually or in the aggregate,
would
not
have a Material Adverse Effect and (ii) any Permitted
Encumbrances.
Except as set forth on SCHEDULE 4.1(P), PART I, and for
Permitted
Encumbrances, with respect to any pipeline, utility, access or
other
easements, servitudes or leaseholds located on or directly serving
the
Sites or the Facility and owned or used by Seller in connection
with its
operations at the Sites: (1) Seller either has the contractual
right to use
or
is the exclusive or nonexclusive legal and beneficial owner of
the
respective easement and leasehold established thereunder; (2)
such
leaseholds, easements, servitudes and the rights and interests of
Seller
thereunder are in all material respects in full force and effect;
and (3)
no
defaults by Seller exist thereunder and no events or conditions
exist
which, with or without notice or lapse of time or both, would
constitute a
default by Seller thereunder or result in a termination; except for
such
failures, defaults, terminations and other matters under (1), (2)
or (3)
that, individually or in the aggregate, would not have a Material
Adverse
Effect.
(v) Except as set forth in SCHEDULE 4.1(P), PART III, the Company
has
sufficient title to all pipelines, easements, rights of way, pump
stations,
leases and appurtenant facilities for the transportation of crude
oil in
the
McMurrey Pipeline System that it owns and operates as reflected in
the
Most Recent Financial
Statements, as is necessary to operate the McMurrey
Pipeline System and the Company's Business as currently operated by
the
Company. A schematic diagram of the McMurrey Pipeline System is set
forth
in
SCHEDULE 4.1(P), PART III. Except as set forth in SCHEDULE 4.1(P),
PART
III,
and except for such failures that, individually or in the
aggregate,
would not have a Material Adverse Effect, the pipeline
easements,
rights-of-way, surface leases, fee interests and licenses on which
the
McMurrey Pipeline System is located (other than pump stations,
storage
sites or work sites adjacent to or near the McMurrey Pipeline
System as to
which public and/or private ingress and egress rights adequate for
their
present use exist) are contiguous with one another so as to
constitute a
continuous right of way for the McMurrey Pipeline System from its
point(s)
of
origin to point of termination.
(vi) Except as set forth in SCHEDULE 4.1(P), PART III, and
excluding
any
representation or warranty relating to Environmental Laws or
Environmental Permits, neither Seller nor the Company has received
any
written notice to the effect that, and Seller has no knowledge
that, (1)
any betterment
assessments have been levied against, or condemnation or
re-zoning proceedings are pending or threatened with respect to
the
McMurrey Pipeline System or (2) any zoning, building or similar Law
is or
will
be violated by the continued maintenance, operation or use of any
pump
stations, buildings or other improvements on the McMurrey Pipeline
System
as
used and operated on the date of this Agreement. There are no
outstanding abatement or protest proceedings or
-16-
<PAGE>
appeals with respect to the assessment of the McMurrey Pipeline
System for
the
purpose of real property taxes, and, except as referenced in
SCHEDULE
4.1(P), PART III, there is no written agreement with any
Governmental
Authority with respect to such assessments or tax rates on the
McMurrey
Pipeline System.
(vii) SCHEDULE 4.1(P), PART III sets forth a list of material
leases
related to the McMurrey Pipeline System where the Company is the
lessee or
lessor.
(viii) All pipelines, pipeline easements, utility lines,
utility
easements and other easements, leaseholds, servitudes and
rights-of-way
burdening or benefiting the McMurrey Pipeline System will not at
Closing
unreasonably interfere with or prevent any operations conducted on
the
McMurrey Pipeline System by the Company in the manner operated on
the date
of
this Agreement, except for (i) such interference or prevention
that,
individually or in the
aggregate, would not have a Material Adverse Effect
and
(ii) any Permitted Encumbrances. Except as set forth in SCHEDULE
4.1
(P),
PART III and for Permitted Encumbrances, with respect to any
pipeline,
utility, access or other easements, servitudes or leaseholds
located on or
directly serving the McMurrey Pipeline System and owned or used by
the
Company in connection with its operation of the McMurrey Pipeline
System:
(1)
the Company either has the contractual right to use or is the
exclusive
or
non-exclusive legal and beneficial owner of the respective easement
and
leasehold established thereunder; (2) such leaseholds,
easements,
servitudes and the rights and interests of the Company thereunder
are in
all
material respects in full force and effect; and (3) no defaults by
the
Company exist thereunder and no events or conditions exist which,
with or
without notice or lapse of time or both, would constitute a default
by the
Company thereunder or result in a termination; except for such
failures,
defaults, terminations and other matters under (1), (2) and (3)
that,
individually or in the aggregate, would not have a Material Adverse
Effect.
(q) Employee and Labor Matters.
(i) SCHEDULE 4.1(Q) lists each employee benefit plan constituting
an
employee welfare benefit plan as defined in section 3(1) of ERISA
and an
employee pension benefit plan as defined in section 3(2) of ERISA,
and each
other material
existing Seller Employee Benefit Plan maintained by Seller
or
any ERISA Affiliate of Seller with respect to any of Seller's
and
Company's employees identified in SCHEDULE 9.10(A) (the
"Personnel"). Such
plans are the "Employee Plans."
(ii) Seller or its ERISA Affiliate has made available for
Buyer's
inspection copies of all Employee Plans and related documents,
including
the
summary plan descriptions, the most recent determination
letters
received from the Internal Revenue Service, the most recent Forms
5500
Annual Report, the most recent actuarial valuation reports, and all
trust
agreements, insurance contracts and other funding arrangements.
-17-
<PAGE>
(iii) Each Employee Plan has been maintained in compliance with
its
terms and with the requirements prescribed by ERISA and the Code,
except
where failure to so comply would not, individually or in the
aggregate,
have
a Material Adverse Effect.
(iv) Each Employee Plan which is intended to be qualified under
section 401 (a) of the Code is so qualified and has been so
qualified
during the period from its adoption to date, and each trust forming
a part
thereof is exempt from
federal income tax pursuant to section 501 (a) of
the
Code.
(v) All contributions (including all employer contributions and
employee salary reduction contributions) and premiums or other
payments
that
are due have been paid to each such Employee Plan when due.
(vi) No asset of Seller or any ERISA Affiliate of Seller is the
subject of any lien arising under section 302(f) of ERISA or
section 412(n)
of
the Code; neither Seller nor any ERISA Affiliate has been required
to
post
any security under section 307 of ERISA or section 401(a)(29) of
the
Code; and no fact or event exists that could reasonably be expected
to give
rise
to any such lien or requirement to pose any such security.
(vii) The Pension Benefit Guaranty Corporation ("PBGC") has not
instituted proceedings to terminate any Employee Plan that is an
employee
pension benefit plan, and Seller is not aware of any condition that
could
reasonably present a material risk that such proceedings will
be
instituted.
(viii) No Employee Plan that is an employee pension benefit plan
had
an
accumulated funding deficiency as defined in section 302 of ERISA
and
section 412 of the Code, whether or not waived, as of the last day
of the
most
recent fiscal year of the plan ending on or prior to the Closing
Date.
(ix) Neither Seller nor any ERISA Affiliate has incurred any
liability
under Title IV of ERISA that has not been satisfied (other than
liability
to
the PBGC for the payment of premiums pursuant to section 4007 of
ERISA),
and
Seller is not aware of any condition that could reasonably be
expected
to
result in Seller or an ERISA Affiliate incurring any such
liability
other than liability to the PBGC for the payment of premiums
pursuant to
section 4007 of ERISA (which premiums have been paid when due).
(x) Neither Seller nor any ERISA Affiliate contribute to, nor ever
has
contributed to, nor ever has been required to contribute to any
multiemployer plans as defined in section 3(37) or section
4001(a)(3) of
ERISA, nor has any liability (including withdrawal liability) under
any
multiemployer plan.
(xi) Seller is in compliance in all material respects with the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
with
respect to the Personnel and their spouses and dependents.
-18-
<PAGE>
(r) Labor Relations. Except as and to the extent set forth on
SCHEDULE
4.1(R), (1) there is no labor strike, stoppage, lockout or material
dispute or
material slowdown pending or, to the knowledge of Seller,
threatened by persons
employed in connection with the Facility or the McMurrey Pipeline
System, and
(2) neither Seller nor the Company is a party to or bound by any
collective
bargaining agreement with any labor organization that covers
persons employed in
connection with the Facility or the McMurrey Pipeline System.
(s) Compliance with Material Contracts. Except (a) for any such
breaches, defaults or events as to which requisite waivers or
consents have been
obtained or which would not, individually or in the aggregate, have
a Material
Adverse Effect or (b) as disclosed in SCHEDULE 4.1(S), (i) neither
Seller nor
the Company is in breach of or default under any Material Contract
included in
the Assets or the Company's Assets, (ii) there does not exist under
any
provision thereof any event that, with the giving of notice or the
lapse of time
or both, would constitute such a breach or default by Seller or the
Company
under any Material Contract, (iii) no other party to any Material
Contract is,
to the knowledge of Seller, in breach of or default under such
Material
Contract, and (iv) each Material Contract is in full force and
effect and no
other party to any Material Contract has, to the knowledge of
Seller, repudiated
any material provision of any such Material Contract.
(t) Material Contracts. Except as set forth in SCHEDULE 4.1(T) and
for
Contracts the existence, loss or breach of which would not,
individually or in
the aggregate, have a Material Adverse Effect, neither the Assets
nor the
Company's Assets include any Material Contracts. "Material
Contracts" shall mean
any of the following Contracts with respect to the Assets or the
Company's
Assets (excluding any Contracts to be executed and delivered
pursuant to this
Agreement and all Intellectual Property Contracts):
(i) any
indenture, trust agreement, loan agreements, note or other
Contract under which Seller or the Company has outstanding
indebtedness for
borrowed money with respect to the Assets or the Company's Assets
or with
respect to which Seller or the Company has guaranteed the
obligations of
any
other Person for borrowed money with respect to the Assets or
the
Company's Assets;
(ii) any Contract of surety, guarantee or indemnification by
Seller
outside the ordinary course of business of Seller with respect to
the
Assets or by the Company outside the ordinary course of business of
the
Company with respect to the Company's Assets;
(iii) any Contract containing a covenant not to compete with
respect
to the Assets or the
Company's Assets;
(iv) any Contract between Seller and any Affiliate of Seller
relating
to
the provision of goods or services to the Sites or the Facility
by
Seller or any Affiliate of Seller which will survive the Closing,
or any
Contract between the Company and any Affiliate of the Company
relating to
the
provision of goods or services to the McMurrey
-19-
<PAGE>
Pipeline System by the Company or any Affiliate of the Company
which will
survive the Closing;
(v) any Contract that, to the knowledge of Seller, is
reasonably
expected either (1) to commit Seller to aggregate expenditures of
more than
$150,000.00 in any calendar year with respect to the Assets or
Seller's
Business or to commit the Company to aggregate expenditures of more
than
$150,000.00 in any calendar year with respect to the Company's
Assets or
the
Company's Business or (2) to give rise to anticipated receipts of
more
than
$150,000.00 in any calendar year with respect to the Assets or
Seller's Business or the Company's Assets or the Company's
Business;
(vi) any Contract that, to the knowledge of Seller, is
reasonably
expected to commit Seller to aggregate royalties of more than
$150,000.00
in
any calendar year with respect to the Assets or Seller's Business
or to
commit the Company to aggregate royalties of more than $150,000.00
in any
calendar year with respect to the Company's Assets or the
Company's
Business;
(vii) any management service, consulting or other similar type
of
Contract that, to the knowledge of Seller, is reasonably expected
to commit
Seller to aggregate fees or other compensation of more than
$150,000.00 in
any
calendar year with respect to the Assets or the Seller's Business
or to
commit the Company to aggregate fees or other compensation of more
than
$150,000.00 in any calendar year with respect to the Company's
Assets or
the
Company's Business;
(viii) any Contract for the purchase and sale of refined
petroleum
products that could reasonably be expected to involve an aggregate
sum in
excess of $150,000.00 in any calendar year;
(ix) any Contract for the purchase or sale of Inventory, except
any
such
Contract entered into by Seller in accordance with its ordinary
and
usual course of business consistent with past practice;
(x) any collective bargaining agreement; and
(xi) any Contract creating a joint venture or other partnership
with
any
third Person.
(u) Sufficiency and Condition of Assets. Except as set forth in
SCHEDULE 4.1(U): (i) the Assets and the Company's Assets are in
adequate and
sufficient operating condition and repair (normal wear and tear
excepted taking
into account the age of any individual asset) to enable Seller to
operate the
Assets and conduct Seller's Business in the manner it is being
conducted as of
the date hereof; and (ii) the Assets constitute all of the assets,
real and
personal, tangible and intangible, necessary to operate the
Seller's Business in
the manner presently conducted, and the Company's Assets constitute
all of the
assets, real and
-20-
<PAGE>
personal, tangible and intangible, necessary to operate the
Company's Business
in the manner presently conducted.
(v) Status of Seller. Neither Seller nor the Company is (i) a
"public-utility company" or a "holding company," or a "subsidiary
company" of a
"holding company," or an "affiliate" of either a "holding company"
or a
"subsidiary company" of a "holding company," in each case within
the meaning of
the Public Utility Holding Company Act of 1935, as amended, or (ii)
an
"investment company" or a company "controlled" by an "investment
company" within
the meaning of the Investment Company Act of 1940, as amended.
(w) Events Subsequent to Report Date. Except in each case as set
forth
in SCHEDULE 4.1(W) or as otherwise disclosed in the Financial
Statements, since
the Report Date the Company (and with respect to the Assets and the
Company
Shares, Seller) has engaged in business in a manner consistent with
its past
practices, and there has not been any:
(1) destruction, damage to, or loss, in any material respect, of
any
of
the Assets or the Company's Assets;
(2) change in accounting policies or practices (including,
without
limitation, any change in depreciation or amortization policies) by
the
Company, except as required under GAAP;
(3) transfer, sale or other disposition of any of the assets used
in
connection with the Seller's Business or the Company's Business
except (i)
in
the ordinary course of business or (ii) any item of personal
property or
equipment having a value of less than $20,000.00;
(4) employment agreement (not terminable at will) entered into
with
respect to any of the Personnel or change in compensation or
benefits with
respect to any of the Personnel other than as required under
Employee
Plans;
(5) (i) dividend or other distribution in respect of the
Company
Shares or (ii) other transactions between the Company and Seller or
any
other Affiliate of Seller which are not consistent with the
Company's past
practices;
(6) change in any employee benefit plans (within the meaning of
section 3(3) of ERISA) or any other employee benefit plan or
program not
subject to ERISA,
established, contributed to, or maintained by the Company
with
respect to the Personnel, except as required by Law;
(7) labor dispute or work stoppages or slowdowns or, to the
knowledge
of
Seller, threats thereof, in each case by or with respect to
persons
employed by the Company;
(8) settlement entered into or consent made to any order, decree
or
judgment relating to or arising out of any Action relating to the
Seller's
Business,
-21-
<PAGE>
the
Assets, the Company Shares, the Company's Business or the
Company's
Assets; or
(9) any single capital expenditure commitment by Seller or the
Company
in
excess of $50,000.00 for additions to property, plant, equipment
or
intangible capital assets that is likely to become due and payable,
in
whole or in part, after the Closing Date.
(x) No Subsidiaries or Unrelated Assets. The Company does not have
any
Subsidiaries or any material assets unrelated to the McMurrey
Pipeline System
that are not disclosed in schedules to this Agreement.
(y) Insurance. SCHEDULE 4.1(Y) sets forth a list of all
insurance
policies (the "Insurance Policies") maintained by Seller or the
Company with
respect to Seller's Business, the Assets, the Company's Business
and the
Company's Assets and also lists the insurance provider, policy
limits,
deductibles and brief description of the type of coverage with
respect to such
policies. Each Insurance Policy is in full force and effect.
(z) Bankruptcy. There are no bankruptcy, reorganization or
arrangement
proceeding pending against, being contemplated by, or to the
knowledge of
Seller, threatened against Seller.
Section 4.2 Representations and Warranties of Buyers. As of the
date
of this Agreement, Buyers represent and warrant to Seller as
follows:
(a) Organization and Qualification. Refinery Buyer is a limited
partnership duly organized, validly existing and in good standing
under the laws
of the State of Texas and has the requisite partnership power to
carry on its
business as it is now being conducted. Land Buyer is a corporation
duly
organized, validly existing and in good standing under the laws of
the State of
Texas and has the requisite corporate power to carry on its
business as it is
now being conducted. Pipeline Buyer is a corporation duly
organized, validly
existing and in good standing under the laws of the State of Texas
and has the
requisite corporate power to carry on its business as it is now
being conducted.
(b) Authority. Buyers have all requisite power and authority to
execute and deliver this Agreement and to perform their respective
obligations
under this Agreement. The execution, delivery and performance of
this Agreement
and the transactions contemplated hereby have been duly and validly
authorized
by all requisite partnership and/or corporate action on the part of
Buyers.
(c) Enforceability. This Agreement constitutes a valid and
binding
agreement of Buyers enforceable against Buyers in accordance with
its terms,
except as may be limited by applicable bankruptcy, insolvency,
reorganization,
moratorium or similar laws from time to time in effect that affect
creditors'
rights generally and by legal and equitable limitations on the
availability of
specific remedies.
-22-
<PAGE>
(d) No Conflict or Violation. Except for any exceptions set forth
in
Section 4.2(e) (or referenced in SCHEDULE 4.2(E)), the execution
and delivery of
this Agreement by Buyers and the consummation of the transactions
and
performance of the terms and conditions contemplated hereby by
Buyers will not,
with or without the passage of time or the giving of notice or
both,
(i) conflict with or result in a violation or breach of or
default
under any provision of the certificate of limited partnership,
limited
partnership agreement, certificate of incorporation, by-laws or
other
similar governing documents of any Buyer,
(ii) conflict with, constitute a breach, violation or termination
of
any
provision of, or give rise to any right of termination,
cancellation or
acceleration, or loss of any material right or benefit or both,
under any
Contract or other undertaking to which any Buyer is a party or by
which any
Buyer or its material properties may be bound, or
(iii) violate any Law applicable to any Buyer or any of its
material
properties;
except, with respect to clauses (ii) and (iii), for such
violations, conflicts,
breaches, terminations, losses and other matters which will not,
individually or
in the aggregate, result in a Material Adverse Effect, prevent or
materially
delay the consummation of the transactions contemplated by this
Agreement or
prevent any Buyer from performing its obligations under this
Agreement.
(e) Consents. Except for (i) Post-Closing Consents, (ii) the
transfer
or obtaining of any Environmental Permit, (iii) compliance with and
filings
under the HSR Act, (iv) consents, approvals, authorizations,
permits, filings or
notices, the failure of which to obtain or with which to comply
will not,
individually or in the aggregate, have a Material Adverse Effect,
and (v)
consents, approvals, authorizations, permits, filings or notices
referenced in
SCHEDULE 4.2(E), no consent, approval, authorization or permit of,
or filing
with or notification to, any Person is required for or in
connection with the
execution and delivery of this Agreement by any Buyer or for or in
connection
with the consummation of the transactions and performance of the
terms and
conditions contemplated hereby by any Buyer.
(f) Actions. Except (i) as set forth in SCHEDULE 4.2(F) and (ii)
for
any Action initiated by Seller or any Affiliate of Seller, (A)
there is no
Action pending or, to the knowledge of any Buyer, threatened to
which any Buyer
is (or is threatened to be made) a party and which would,
individually or in the
aggregate, have a Material Adverse Effect or seeks to prevent the
consummation
by any Buyer of the transactions contemplated by this Agreement,
and (B) there
is no outstanding order, writ, injunction, decree or judgment
entered in any
Action in which any Buyer or an Affiliate of any Buyer has been
joined as a
party that is binding upon any Buyer or an Affiliate of any Buyer
and which
would, individually or in the aggregate, have a Material Adverse
Effect or would
prevent the consummation by any Buyer of the transactions
contemplated by this
Agreement.
(g) Brokerage Fees and Commissions. Lehman Brothers is acting
as
investment banker for Buyers in connection with the purchase of the
Assets and
the Newco
-23-
<PAGE>
Shares. However, no Buyer nor any Affiliate of any Buyer has
incurred any
obligation or entered into any Contract for any investment banking,
brokerage or
finder's fee or commission in respect of the transactions
contemplated by this
Agreement for which Seller shall incur any liability.
(h) Funds. At Closing Buyers will have sufficient funds available
to
enable Buyers to consummate the transactions contemplated hereby
and to pay the
Closing Payment and all related fees and expenses of Buyers.
(i) No Distribution.
Buyers have made their own independent judgment
of the commercial potential, condition and usefulness of the Assets
and the
Newco Shares, taking into consideration all current Laws,
including
Environmental Laws, and assuming all risks associated with the
likelihood that
such Laws will change in the future. Buyers have such experience
and knowledge
in business and financial affairs in general, and of the oil
refining business
as conducted and regulated in Texas in particular, as to be capable
of
evaluating all of the merits and risks of this transaction. Buyers
are able to
bear the economic risks of their acquisition and ownership of the
Assets and the
Newco Shares. Prior to entering into this Agreement, Buyers were
advised by
their counsel and such other persons they have deemed appropriate
concerning
this Agreement and the Assets and the Newco Shares. Each of
Refinery Buyer and
Pipeline Buyer is an "accredited investor," as such term is defined
in
Regulation D of the Securities Act of 1933, as amended, and will
acquire the
Assets and the Pipeline Newco Shares, as the case may be, for its
own account
and not with a view to a sale or distribution thereof in violation
of the
Securities Act of 1933, as amended, and the rules and regulations
thereunder,
any applicable state blue sky laws or any other applicable
securities laws.
(j) Bankruptcy. There are no bankruptcy, reorganization or
arrangement
proceedings pending against, being contemplated by, or to the
knowledge of any
Buyer, threatened against any Buyer or any Affiliate of any
Buyer.
(k) EPA Waiver Application. Contemporaneously with the execution
of
this Agreement, Refinery Buyer has submitted to the EPA an
Application for a
Hardship Waiver containing all information required under 40 C.F.R.
Section
80.270, requesting approval to comply with the gasoline sulfur
standards
referenced in such Application for a period of 36 months, in
respect of Refinery
Buyer's contemplated acquisition and operation of the Facility.
Except for the
period (e.g. 36 months) for which such waiver has been applied for,
Refinery
Buyer's Application seeks approval for operation of the Facility on
the same
basis as approved by the EPA for Seller's currently effective
Hardship Waiver
for the Facility, a copy of which waiver in favor of Seller is set
forth in
SCHEDULE 4.2(K).
ARTICLE 5
ACCESS TO INFORMATION
Section 5.1 General Access. Subject to Section 5.2, Section
5.3,
Section 5.4 and Section 6.1 (which shall govern all environmental
reviews,
inspections and audits), promptly
-24-
<PAGE>
following the execution of this Agreement and until the first to
occur of (i)
the Closing Date and (ii) the termination of this Agreement, Seller
shall:
(a) permit Buyers and their Representatives to have reasonable
access
during normal business hours in the Seller's and the Company's
offices, and in a
manner so as not to interfere unduly with the business operations
of Seller or
the Company, to Seller's and the Company's books, records,
contracts, abstracts
of title, title opinions, title files, ownership maps, lease files,
assignments,
and documents relating to the Assets and the Company Shares and
Company's Assets
insofar as the same are in Seller's or the Company's possession and
insofar as
Seller has been able to do so without (i) violating legal
constraints or any
legal obligation or (ii) waiving any attorney/client, work product
or like
privilege; and
(b) subject to any required consent of any third Person, permit
Buyers
and their Representatives during normal business hours and at
Buyers' sole risk,
cost and expense, to conduct, in the presence of Seller's
Representatives,
reasonable inspections of the Assets and the Company's Assets in a
manner so as
not to interfere unduly with the business operations of Seller or
the Company;
provided, however, Buyers shall repair any damage to the Assets or
the Company's
Assets resulting from such inspections and Buyers do hereby,
jointly and
severally, indemnify and hold harmless, release and agree to defend
the Seller
Indemnitees from and against any and all Covered Liabilities
arising, in whole
or in part, from Buyers' foregoing access or inspection of the
Assets or the
Company's Assets, REGARDLESS OF ANY NEGLIGENCE OR STRICT LIABILITY
ON THE PART
OF SELLER OR ANY OTHER SELLER INDEMNITEE AND REGARDLESS OF THE FORM
OF CLAIM
WHETHER AT COMMON LAW, STRICT LIABILITY, NEGLIGENCE OR UNDER ANY
STATUTE OR
REGULATION.
Section 5.2 Limitations on Access. Nothing in this Agreement shall
be
construed to permit Buyers or their Representatives to have access
to any files,
records, contracts or documents of Seller or any Affiliate of
Seller relating to
(i) Seller's or any of its Affiliate's feedstock and product
pricing information
for transactions between Seller and any of its Affiliates or
internally within
Seller or any of its Affiliates, internal transfer prices, hedging
activity
records and hydrocarbon inventory valuation procedures and records,
or (ii) this
transaction, including any bids or offers heretofore or hereafter
received by
Seller for the sale of the Assets and/or the Newco Shares in
competition with
the Buyers' bid or offer, it being agreed that all such competing
bids or offers
shall be the sole property of Seller.
Section 5.3 Confidential Information.
(a) General Restrictions. Buyers shall maintain all information
made
available to them pursuant to or in connection with this Agreement
confidential
and shall cause their directors, officers, employees,
Affiliates,
Representatives and advisors to maintain all information made
available to them
pursuant to or in connection with this Agreement confidential, all
as provided
in the Confidentiality Agreement, which shall continue in full
force and effect
and the terms of which are incorporated herein by reference and
made a part of
this Agreement. Subject to Section 5.3(b), following the Closing,
the foregoing
information with
-25-
<PAGE>
respect to the Assets or Seller's Business and the Company's Assets
or the
Company's Business and the Confidential Information with respect to
the Assets
or Seller's Business and the Company's Assets or the Company's
Business that is
or has been made available pursuant to or in connection with this
Agreement or
the Confidentiality Agreement shall cease to be subject to the
Confidentiality
Agreement.
(b) Special Confidential Information. Notwithstanding anything to
the
contrary in this Agreement, any Confidential Information that
relates to any
settlement or agreement with any third party relating to
Environmental
Liabilities shall remain subject to the Confidentiality Agreement
in accordance
with the terms of the Confidentiality Agreement.
Section 5.4 No Exclusivity. The rights of Buyers under this Article
5
are not exclusive, and Seller shall have the right at any time or
times prior to
Closing to permit third Persons selected by Seller access to
Seller's and the
Company's books, records, and other documents and materials
mentioned in Section
5.1(a), and to permit such third Persons to conduct inspections of
the Assets
and the Company's Assets; provided, however, (a) the foregoing
provisions of
this Section 5.4 shall not be construed to permit Seller to enter
into any
agreement with any such third Persons the performance of which
would prevent
Seller from consummating the transactions with Buyers contemplated
hereby in
accordance with the terms and conditions hereof, and (b) Seller
shall not
furnish any such third Persons copies of this Agreement or any
Related Agreement
or otherwise disclose to any such third Persons the terms hereof or
thereof.
ARTICLE 6
ENVIRONMENTAL MATTERS
Section 6.1 Environmental Review and Audit.
(a) Environmental Access. Promptly following the execution of
this
Agreement and until the first to occur of (i) the Closing Date,
(ii) the
expiration of the 30-day period commencing on the execution of this
Agreement
and (iii) the termination of this Agreement (the "Environmental
Examination
Period"), subject to the restrictions contained in this Agreement
and any
required consent or waiver of any third Person, Seller shall permit
Buyers
(acting through their authorized employees and the Environmental
Consultant) to
have reasonable access during normal business hours (i) in the
Seller's and the
Company's offices, and in a manner so as not to interfere unduly
with the
business operations of Seller or the Company, to Seller's and the
Company's
environmental files and records in Seller's or the Company's
possession relating
to the Assets and the Company's Assets insofar as Seller may do so
without (1)
violating legal constraints or any legal obligation or (2) waiving
any
attorney/client, work product or other privilege, and (ii) to the
Assets and the
Company's Assets for the purpose of allowing Buyers and their
Environmental
Consultant to conduct a Phase I Environmental Assessment and a
limited
compliance review with respect to the Assets and the Company's
Assets, but
expressly excluding any right to collect samples (including soil
and groundwater
samples), drill holes or to conduct or perform any other tests or a
Phase II
environmental audit with respect to the Assets or the Company's
Assets without
the express
-26-
<PAGE>
written consent of Seller, which consent shall not be unreasonably
withheld,
conditioned or delayed (collectively, "Buyers' Environmental
Review"), all at
Buyers' sole risk, cost and expense.
(b) Conduct of Review. Prior to conducting Buyers'
Environmental
Review, Buyers shall furnish Seller with a proposed scope of
Buyers'
Environmental Review, including a description of the activities to
be conducted
and the locations of such activities. No third Person, other than
the
Environmental Consultant and Buyers' authorized employees, may
conduct Buyers'
Environmental Review. Buyers shall not commence any activity
proposed to be
included in Buyers' Environmental Review unless and until such
activity
(including the location thereof) has been approved in writing by
Seller which
approval shall not be unreasonably withheld, conditioned or
delayed. Seller
shall have the right to be present during any inspection or testing
(including
sampling) undertaken pursuant to Buyers' Environmental Review and
shall have the
right, at its option and expense, to split samples with Buyers.
Buyers shall
give Seller notice not more than seven (7) days and not less than
48 hours
before any visits by Buyers or the Environmental Consultant to the
Assets or the
Company's Assets; provided, however, to the extent that a visit is
scheduled
under the terms of a written proposal for Phase II environmental
audit
activities submitted by Buyers and approved by Seller in writing,
no additional
notice of such visit shall be required hereunder.
(c) Buyers' Responsibility for Review. In connection with
Buyers'
Environmental Review, Buyers agree that Buyers, the Environmental
Consultant and
Buyers' employees, agents and contractors shall comply with all
Laws and any
reasonable restrictions imposed by Seller, including restrictions
related to
worker safety, and shall exercise due care with respect to the
Assets and the
Company's Assets and their condition, taking into consideration
the
characteristics of any wastes or substances found thereon, and in
light of all
relevant facts and circumstances. Specifically, but without
limitation, when
handling solid waste or hazardous substances, if any, discovered
during the
inspection of the Assets and the Company's Assets, Buyers, the
Environmental
Consultant and Buyers' employees, agents and contractors shall
handle such waste
or substances in accordance with all Laws. Any soil or water
samples taken by
Buyers from the Assets or the Company's Assets shall become the
sole property
and possession of Buyers and will be managed and disposed of
consistent with the
applicable rules and regulations of the EPA and other applicable
Governmental
Authority with regulatory authority. Promptly after completing any
sampling
approved in writing by Seller, Buyers shall, at their sole cost and
expense,
remove and dispose of in compliance with all Laws all drill
cuttings, soil,
debris or liquids generated from or in connection with Buyers'
Environmental
Review and restore the Assets and the Company's Assets to their
original
condition, in accordance with good engineering practice and all
Laws, if changed
due to Buyers' Environmental Review. Failure by Buyers to comply
with the
requirements of this subsection within a reasonable time period
will entitle
(but shall not obligate) Seller to take any action deemed necessary
or
appropriate by Seller to correct such failure, all at Buyers'
expense. Buyers
shall maintain and shall cause their Representatives, contractors,
consultants
and advisors to maintain all information obtained pursuant to
Buyers'
Environmental Review strictly confidential and shall not disclose
the same to
any third Person without the prior written consent of Seller,
except to the
extent required by Law. Buyers shall provide Seller's counsel
with
-27-
<PAGE>
copies of any reports prepared and analytical test results received
by Buyers or
the Environmental Consultant promptly following Buyers' or the
Environmental
Consultant's preparation or receipt of the same. Buyers, jointly
and severally,
do hereby indemnify and hold harmless, release and agree to defend
the Seller
Indemnitees from and against any and all Covered Liabilities,
including all
Environmental Liabilities, arising out of any violation by Buyers,
the
Environmental Consultant, or Buyers' or the Environmental
Consultant's
Representatives, contractors, consultants and advisors of the
provisions of this
Section 6.1 or, in whole or in part, from Buyers' or the
Environmental
Consultant's inspection or testing of the Assets and the Company's
Assets or
handling any substances or samples in connection therewith,
REGARDLESS OF ANY
NEGLIGENCE OR STRICT LIABILITY ON THE PART OF SELLER OR ANY OTHER
SELLER
INDEMNITEE AND REGARDLESS OF THE FORM OF CLAIM WHETHER AT COMMON
LAW, STRICT
LIABILITY, NEGLIGENCE OR UNDER ANY STATUTE OR REGULATION. For the
avoidance of
doubt, Buyers' obligation for indemnification under this Section
6.1 shall not
be construed to impose liability on Buyers solely as a result of
the discovery
of Environmental Conditions in the course of Buyers' inspection of
the Assets
pursuant to this Section 6.1.
ARTICLE 7
TITLE MATTERS
Section 7.1 Title Commitment and Survey. Prior to the execution
of
this Agreement, Seller has provided Refinery Buyer with (i) a
recent survey of
each Site (the "Surveys"), (ii) a recent title policy commitment
issued by
Stewart Title Company (the "Title Company") covering each Site (the
"Title
Commitment") and (iii) copies of all documents referenced as
exceptions to title
in each of the Title Commitments. Seller shall not be obligated to
furnish any
policy of title insurance issued by the Title Company or otherwise
in respect of
any Site (a "Title Policy"), and it shall not be a requirement of
or condition
to the Closing that any Buyer obtain or be able to obtain any Title
Policy or
that any Buyer have or be able to have the survey exception in any
Title Policy
modified in any manner or that any other special endorsements be
made to any
Title Policy, including any endorsement regarding restrictive
covenants. All
costs of any Title Policies shall be borne solely by Refinery
Buyer.
Notwithstanding the foregoing, if requested by Refinery Buyer prior
to Closing,
Seller shall use reasonable best efforts to cause the Title Company
to provide
to Refinery Buyer at Closing, upon Refinery Buyer's payment of the
premium
therefor, a pro forma Title Policy consistent with the Title
Commitment and
reflecting the form in which the Title Policy shall be issued to
Refinery Buyer
incident to Closing.
Section 7.2 Limited Title Warranty. Except for the representations
and
warranties set forth in Section 4.1(p), Seller makes no warranty
or
representation, express, implied, statutory or otherwise, with
respect or in any
manner relating to Seller's title to any of the Assets or the
Company's title to
any of the Company's Assets. Seller's warranties and
representations under
Section 4.1(p) shall cease and terminate and be of no further force
and effect
upon the expiration of the applicable survival periods therefor set
forth in
Section 12.3. For the avoidance of doubt, the immediately preceding
sentence
hereof shall not be construed to limit Seller's special warranty of
title to be
contained in the Deed to be delivered to Refinery Buyer at
Closing.
-28-
<PAGE>
Section 7.3 No Other Breach. Notwithstanding anything provided to
the
contrary in Section 4.1 or Article 15, Buyers' sole recourse and
remedy with
respect to or on account of any encumbrance against title, or loss
or lack of
title, or defect in title to any Asset or any of the Company's
Assets shall be
pursuant to Seller's limited representations and warranties set
forth in Section
4.1(p) for the respective survival periods therefor, if any, and
Buyers shall be
precluded from also asserting such matter as the basis of the
breach of any
other representation or warranty under Section 4.1 or for recovery
on any
indemnity under Article 15 (except with respect to Section 4.1(p)
for the
respective survival periods therefor, if any).
ARTICLE 8
TRANSFER REQUIREMENTS
Section 8.1 Compliance. Refinery Buyer's purchase of the Assets
is
expressly subject to all validly existing and applicable Transfer
Requirements.
To Seller's knowledge, all agreements containing a Transfer
Requirement (other
than Restrictions with respect to Restricted Properties, Transfer
Requirements
with respect to Environmental Permits, and Post-Closing Consents)
burdening any
material Asset are set forth in SCHEDULE 8.1. As promptly as
practicable after
the date of execution of this Agreement but in any event prior to
the Closing
Date, Seller shall initiate all procedures which in Seller's good
faith judgment
are reasonably required to comply with all Transfer Requirements
set forth in
SCHEDULE 8.1 with respect to the transactions contemplated by this
Agreement.
Seller shall not be obligated to pay any consideration to (or incur
any cost or
expense for the benefit of) the holder of any Transfer Requirement
in order to
comply therewith. Restrictions with respect to Restricted
Properties and
Transfer Requirements with respect to Environmental Permits are
governed by
Section 9.3(b) and 9.3(c), respectively, and are not governed by
this Article 8.
Section 8.2 Transfer Requirements. If a Transfer Requirement
governed
by this Article 8 (other than a Post-Closing Consent) which is
required to be
obtained, complied with or otherwise satisfied before title to an
Asset or
portion thereof can be transferred to Refinery Buyer as
contemplated by this
Agreement is not obtained, complied with or otherwise satisfied
prior to the
Closing Date, then, unless such Transfer Requirement affects a
material Asset or
portion thereof or unless otherwise mutually agreed by Seller and
Refinery
Buyer, any Asset or portion thereof affected by such Transfer
Requirement (a
"Retained Asset") shall be held back from the Assets to be
transferred and
conveyed to Refinery Buyer at Closing and the Purchase Price to be
paid at
Closing shall be reduced by the portion of the Purchase Price which
Refinery
Buyer and Seller mutually agree to allocate to such Retained Asset.
Any Retained
Asset so held back at the initial Closing will be conveyed to
Refinery Buyer at
a delayed closing (which shall become the new Closing Date with
respect to such
Retained Asset), within ten (10) days following the date on which
Seller
obtains, complies with or otherwise satisfies all such Transfer
Requirements
with respect to such Retained Asset as contemplated above in this
Section, for a
purchase price equal to the amount by which the Purchase Price was
reduced on
account of the holding back of such Retained Asset; provided,
however, if all
such Transfer Requirements with respect to any Retained Asset so
held back at
the initial Closing are not obtained, complied with or otherwise
satisfied as
contemplated by above in this Section within 365 days after the
initial Closing
has occurred with respect to any Assets, then such Retained
-29-
<PAGE>
Asset shall be eliminated from the Assets and this Agreement,
unless Seller and
Refinery Buyer mutually agree to proceed with a closing on such
Retained Asset
in which case Refinery Buyer shall be deemed to have waived any
objection with
respect to non-compliance with such Transfer Requirements. If
Refinery Buyer and
Seller are unable to mutually agree on the portion of the Purchase
Price to be
allocated to a Retained Asset, (i) the allocation of the Purchase
Price to such
Retained Asset shall be determined by arbitration pursuant to
Section 16.12,
(ii) the Closing shall not be delayed as a result of such dispute,
(iii) on the
Closing Date for the original Closing under this Agreement, Seller,
Refinery
Buyer and the Escrow Agent shall execute and deliver an amendment
to the Earnest
Money Deposit Escrow Agreement, in substantially the form of
EXHIBIT 8.2, and
Refinery Buyer shall pay to the Escrow Agent to be held in escrow
in accordance
with the Earnest Money Deposit Escrow Agreement (as so amended) an
amount equal
to the larger of the portions of the Purchase Price which either
Party proposes
to allocate to such Retained Asset, (iv) if the portion of the
Purchase Price
determined, by arbitration or the subsequent mutual agreement of
the Parties, to
be allocable to such Retained Asset is less than the amount
required to be paid
into escrow with respect to such dispute, an amount equal to the
difference,
together with all interest and other amounts earned thereon, shall
be paid by
the Escrow Agent to Seller, and (v) the remaining amount paid into
escrow in
connection with such dispute, together with all interest and other
amounts
earned thereon, shall be paid by the Escrow Agent to (a) Seller if
the Closing
subsequently occurs with respect to such Retained Asset or (b)
Refinery Buyer if
such Retained Asset is subsequently eliminated from the Assets
pursuant to this
Section. Seller and Refinery Buyer each agree to execute and
deliver to the
Escrow Agent written instructions to the Escrow Agent directing the
Escrow Agent
to deliver the amount paid into escrow, together with all interest
and other
amounts, if any, earned thereon, to Seller or Refinery Buyer, as
the case may
be, in accordance with the provisions of this Section 8.2 and the
terms of the
Earnest Money Deposit Escrow Agreement as so amended.
Section 8.3 Post-Closing Consents. Refinery Buyer will use its
commercially reasonable best efforts after Closing to obtain all
approvals,
consents and permits, give all notices, and make all filings
required to comply
with the Post-Closing Consents in connection with the assignment
and transfer of
the Assets from Seller to Refinery Buyer.
ARTICLE 9
COVENANTS OF SELLER AND BUYERS
Section 9.1 Conduct of Business Pending Closing. Except as
disclosed
in SCHEDULE 9.1 or as otherwise contemplated herein or consented to
or approved
by Buyers (which consent or approval shall not be unreasonably
withheld,
conditioned or delayed), from the date hereof through the Closing
Date, Seller
(subject to and except for the constraints of and actions required
by the
existing agreements of Seller relating to the Assets) covenants and
agrees that
Seller shall:
(a) conduct its operations of the Assets according to its ordinary
and
usual course of business consistent with past practice; and cause
the Company to
conduct its operations of the McMurrey Pipeline System according to
the
Company's ordinary and usual course of business consistent with its
past
practice,
-30-
<PAGE>
(b) use reasonable best efforts to keep available the services
of
Seller's or its Affiliate's employees who are currently employed in
connection
with the operation of the Assets or the McMurrey Pipeline
System,
(c) use reasonable best efforts to maintain Seller's present
relationships with customers, service providers and others having
business
relationships with the Assets; and cause the Company to use
reasonable efforts
to maintain the Company's present relationships with customers,
service
providers and others having business relationships with the
McMurrey Pipeline
System,
(d) not transfer, sell or dispose of any tangible property, or
remove
any books and records at the site of the Assets used or useful in
the business
being conducted at the Assets, except for (i) sales of Inventory,
spent
catalysts, chemicals and acids in the ordinary course of business
consistent
with past practice, (ii) personal property or equipment which is
replaced with
personal property or equipment of comparable or better value and
utility in
connection with the maintenance, repair and operation of the
Assets, (iii) any
item of personal property or equipment having a value of less than
$20,000.00,
and (iv) Excluded Assets; and cause the Company not to transfer,
sell or dispose
of any tangible property, or remove any books and records at the
site of the
Company's Assets used or useful in the business being conducted at
such sites,
except for (i) personal property or equipment which is replaced
with personal
property or equipment of comparable or better value and utility in
connection
with the maintenance, repair and operation of the Company's Assets,
(ii) any
item of personal property or equipment having a value of less than
$20,000.00,
and (iii) Excluded Assets,
(e) not place, and cause the Company not to place, any Lien on
the
Assets or the McMurrey Pipeline System except (i) in connection
with the
performance by Seller or the Company of an obligation or agreement
existing on
the date hereof, and which has been disclosed in writing to Buyers,
or pursuant
to this Agreement and (ii) Permitted Encumbrances,
(f) not grant any general wage or benefit increase to the
Personnel
except consistent with past practice or as provided for in the PACE
Local 4-202
Labor Agreements,
(g) notify Buyers promptly, and in any event prior to the Closing,
of
any written notice of a material violation or written threatened
notice of a
material violation received from any Governmental Authority after
the date of
this Agreement relating to Environmental Laws or Environmental
Permits at the
Facility or the Sites or with respect to the McMurrey Pipeline
System,
(h) not allow the Company to declare or pay any dividends, or make
any
distributions, in respect of, or issue any of, its equity
securities or
securities convertible into its equity securities, or repurchase,
redeem or
otherwise acquire any such securities or make or propose to make
any other
change in its capitalization other than pursuant to Section
9.11;
(i) not allow the Company to merge into or with or consolidate
with
any other Person or acquire all or substantially all of the
business or assets
of any Person;
-31-
<PAGE>
(j) not allow the Company to make any change in its articles of
incorporation or by-laws;
(k) not allow the Company to take any action or to enter into
any
commitment with respect to or in contemplation of any liquidation,
dissolution,
recapitalization, reorganization or other winding up of its
business or
operations;
(l) not allow the Company to change its accounting policies or
practices (including any change in depreciation or amortization
policies),
except as required under GAAP;
(m) not allow the Company to enter into any employment agreement
not
terminable at will;
(n) not amend any Material Contract in any material respect and
not
enter or allow the Company to enter into any Contract which, if it
existed on
the date of execution of this Agreement, would constitute a
Material Contract,
if such Contract would become binding upon Buyer at Closing or
would materially
and adversely affect the operation of the Assets or the Company's
Assets after
Closing;
(o) not allow the Company to pay or provide for any loan or payment
or
advance of any nature whatsoever to Seller or any Affiliate of
Seller;
(p) not allow the Company to enter into, amend or terminate any
collective bargaining or labor agreement;
(q) not allow the Company to make any single capital expenditure
or
commitment in excess of $50,000.00 for additions to property,
plant, equipment
or intangible capital asset or for any other purpose, or make such
capital
expenditures or commitments exceeding in the aggregate
$100,000.00;
(r) not agree to the settlement or resolution of any Action
involving
the Company unless in the ordinary course of business consistent
with past
practices, not involving Affiliates and not exceeding $50,000.00
individually or
$100,000.00 in the aggregate;
(s) not allow the Company to create or change any employee
benefit
plans (within the meaning of section 3(3) of ERISA) or any other
employee
benefit plan or program not subject to ERISA, established,
contributed to, or
maintained by the Company with respect to the Personnel, except as
required by
Law.
Notwithstanding the foregoing, Seller may take (or not take, as the
case may be)
any actions contrary to the foregoing to the extent reasonably
necessary under
emergency circumstances (or if required or prohibited, as the case
may be,
pursuant to Law) and provided Buyers are notified as soon
thereafter as
practicable.
Section 9.2 Related Agreements. Upon the terms and subject to
the
conditions of this Agreement, at or prior to the Closing, Seller
and/or Buyers,
as provided below, shall
-32-
<PAGE>
execute and deliver or cause the execution and delivery of the
following deeds,
assignments, bills of sale, contracts and agreements (the "Related
Agreements"):
(a) Deed Covering Land. Seller shall execute and deliver a Deed
or
Deeds to Refinery Buyer covering the Sites with special warranty of
title, in
substantially the form of EXHIBIT 9.2(A) (the "Deed"). The Deed
shall include
restrictive covenants running with the Sites that limit the use of
the Sites to
non-residential uses and prohibit the use of groundwater from the
Sites.
(b) General Conveyance. Seller and Refinery Buyer shall execute
and
deliver to each other an Assignment, Bill of Sale and Conveyance
conveying the
Assets (other than the Sites) to Refinery Buyer, in substantially
the form of
EXHIBIT 9.2(B) (the "Conveyance").
(c) Transition Services Agreement. Seller and Refinery Buyer
shall
execute and deliver to each other an agreement, in substantially
the form of
EXHIBIT 9.2(C) (the "Transition Services Agreement"), under which
Seller will
provide certain transition services to Refinery Buyer and Pipeline
Buyer in
connection with Seller's Business and the Assets and the Company's
Business and
the Targeted Company Assets after the Closing.
(d) Divisive Merger. Seller shall execute an agreement and plan
of
merger in substantially the form of EXHIBIT 9.2(D) (the "Agreement
and Plan of
Merger") pursuant to which Seller shall effect a merger of the
Company pursuant
to the provisions of the Texas Business Corporation Act, the
principal purpose
of which will be to divide the Company into (i) a newly formed
Texas corporation
owning the Arp Pipeline Segment and liabilities associated
therewith ("Land
Newco"), (ii) a newly-formed Texas corporation owning the McMurrey
Pipeline
System (other than the Arp Pipeline Segment) and liabilities
associated
therewith and all of the Company's right, title and interest in and
to the name
or mark "McMurrey" and all variations and derivations thereof
("Pipeline Newco")
and (iii) a surviving corporation continuing the remaining business
of the
Company and owning the Old Refinery Site and liabilities associated
therewith.
Immediately upon effecting such merger, Seller shall cause Pipeline
Newco to
execute and deliver to such surviving corporation a perpetual
easement and
right-of-way over and across the land to be owned by Pipeline Newco
for ingress
and egress to and from the Old Refinery Site, which easement and
right-of-way
shall be located substantially as described in SCHEDULE 9.2(D).
(e) Escrow Agreements. The Closing Deposit Escrow Agreement and
the
Buyer Deposit Escrow Agreement.
(f) Trademark Assignment. Seller shall execute a Trademark
Assignment
for the "La Gloria" mark and all variations or derivations thereof
in favor of
Refinery Buyer, in substantially the form of EXHIBIT 9.2(F).
(g) Release of Liens. Seller shall deliver to Buyers UCC-3
termination
statements terminating the financing statements described in
EXHIBIT 9.2(G).
-33-
<PAGE>
(h) Radio Tower License. Seller and Pipeline Buyer shall execute
and
deliver to each other a Radio Tower License Agreement in
substantially the form
of EXHIBIT 9.2(H).
Section 9.3 Actions and Efforts by Parties.
(a) Parties Efforts and Further Assurances.
(i) Buyers shall take all actions which are necessary for them to
be
in
compliance with their warranties and representations contained
in
Sections 4.2(h) and 4.2(i) on the Closing Date. Each of the Parties
shall
use
its commercially reasonable best efforts (and to cause its
Affiliates
to
use their commercially reasonable best efforts) to refrain from
taking
any
action within its control which would cause a breach of any of
its
representations and warranties contained in Article 4 or which
would
prevent it from delivering to the other Party the certificate which
it is
required to deliver pursuant to Section 10.1(b) or 10.2(b), as the
case may
be.
Seller agrees to give Buyers prompt notice of the satisfaction of
the
conditions set forth in Section 10.l(h). Buyers agree to give
Seller
prompt notice of the satisfaction of the conditions set forth in
Section
10.2(h).
(ii) From time to time after the Closing Date, Seller and Buyers
will
each
execute and deliver or cause their respective Affiliates to
execute
and
deliver such further instruments, and take (or cause their
respective
Affiliates to take) such other action, as may be necessary to carry
out the
purposes and intents of this Agreement.
(iii) Upon request by a Party from time to time after the Closing
Date
and
until the fifth anniversary of the Closing, the other Party shall,
at
no
expense to such Party, cooperate to the extent reasonably possible
in
making its employees available for meetings or discussions with
the
requesting Party with respect to matters in dispute between the
requesting
Party and Third Parties concerning the Assets or any part thereof
or the
Company's Assets or any part thereof; provided such access shall be
during
normal business hours, with notice of not less than five (5)
Business Days,
and
shall not interfere unduly with the normal business activities of
such
employees.
(iv) Seller shall undertake to keep Refinery Buyer reasonably
informed
from
time to time regarding developments concerning the enforcement
action
being contemplated by the EPA and the DOJ for potential violations
of air
regulations at the Facility (the "EPA/DOJ Action") and shall
afford
Refinery Buyer and its authorized representatives a reasonable
opportunity
to
participate in discussions and to attend meetings between Seller,
on the
one
hand, and the U.S. Department of Justice and any other
Governmental
Authority, on the other hand, relating to the EPA/DOJ Action;
provided,
however, Seller shall at all times control the defense and any
settlement
of
the EPA/DOJ Action and neither Seller nor its Affiliates shall
be
required to obtain the consent or approval of Refinery Buyer or any
of its
Affiliates in connection with any Order approved or entered into by
Seller
or
any of its Affiliates arising out of or in connection with the
EPA/DOJ
Action. For the avoidance of doubt, all Environmental Fines
assessed for
violations by Seller of Environmental Laws as a result of the
EPA/DOJ
-34-
<PAGE>
Action shall constitute Retained Environmental Liabilities and all
Costs of
Compliance incurred by Refinery Buyer or any of its Affiliates
in
connection with the EPA/DOJ Action (other than Retained EPA
Compliance
Costs) shall constitute Assumed Environmental Liabilities.
(v) If Closing occurs, and if Refinery Buyer receives from the EPA
a
Hardship Waiver in respect of the operation of the Facility for a
period to
or
beyond December 31, 2009, then Buyers shall promptly notify Seller
of
such
waiver and Buyers shall pay to Seller an amount equal to the
Discount
Amount applied at Closing for purposes of computing the Purchase
Price
pursuant to Section 3.1, together with interest on such Discount
Amount at
a
rate equal to the Agreed Rate from the Closing Date to and
including the
date
of such payment.
(b) Restrictions. As used herein, the term "Restricted Property"
means
any permit, license, easement, right-of-way, contract or other
similar right of
use of real property (other than Environmental Permits, fee
interests in land,
and leases of tangible real or personal property) that (i) is
contemplated to be
transferred to Refinery Buyer (or to be apportioned or divided)
pursuant to this
Agreement or the Related Agreements and (ii) is subject to a
Restriction on such
transfer, apportionment or division. As used herein, the term
"Restriction"
means any prohibition against, or condition to, or third party
consent required
for the transfer, apportionment or division of any right, interest
or property
contemplated to be transferred to Refinery Buyer (or to be
apportioned or
divided) pursuant to this Agreement or the Related Agreements
(including the
consent of Governmental Authorities whose consent is needed for
permits to be
issued to Refinery Buyer or modified), which if not satisfied or
obtained would
result in a breach of such prohibitions or conditions or would give
an outside
party the right to terminate or limit any right of Refinery Buyer
or Seller with
respect to such right, interest or property. To Seller's knowledge,
all
Restrictions and Restricted Properties affected thereby are set
forth in
SCHEDULE 9.3(B). As promptly as practicable after the date of
execution of this
Agreement but in any event prior to the Closing date, Seller shall
initiate all
procedures which are reasonably required to comply with the
Restrictions
relating to the Restricted Properties. If a Restriction exists with
respect to a
Restricted Property and is not waived or satisfied prior to
Closing, then,
unless such Restriction affects a Restricted Property that is
material to the
operation of the Facility or conduct of Seller's Business, without
delaying the
Closing or resulting in any reduction in the Purchase Price, any
provision
contained in this Agreement or the Related Agreements shall not
become effective
with respect to such Restricted Property unless and until such
Restriction is
satisfied, waived or no longer applies. Following the Closing, when
and if such
a Restriction is so satisfied, waived or no longer applies, to the
extent
permitted by Law and any applicable contractual provisions, the
assignment of
the Restricted Property subject thereto shall become effective
automatically as
of the Closing Date, without further action on the part of Seller
or Buyer and
without payment of further consideration. Each of Seller and
Refinery Buyer
shall use its commercially reasonable efforts to obtain
satisfaction of any
Restriction with respect to a Restricted Property on a timely
basis
post-Closing. To the extent that any Restriction with respect to a
Restricted
Property exists, Seller shall use its commercially reasonable
efforts (without
infringing upon the legal rights of such third party or outside
party or
violating any Law) to provide Refinery Buyer with the equivalent
assets or
benefits thereof by
-35-
<PAGE>
subcontract or otherwise, at no additional cost to Refinery Buyer
(other than
the assumption of any related liability and the performance and
compliance by
Refinery Buyer with the terms of such Restricted Property)
effective as of the
Closing Date. Refinery Buyer shall bear the economic burden of any
related
liability and of the performance and compliance with the terms of
each
Restricted Property, at no additional cost to Seller, effective as
of the
Closing Date to the same extent as Refinery Buyer would have borne
such
liability and other obligations if this Agreement or the Related
Agreements, as
the case may be, had been effective as of the Closing Date with
respect to such
Restricted Property. In the case of a Contract and to the extent it
may do so
without infringing upon the legal rights of such third party or
outside party or
violating any Law, Seller shall exercise its rights under such
Contract at the
direction and/or for the benefit of Refinery Buyer. Notwithstanding
the
foregoing, nothing in this Section 9.3(b) shall require or obligate
Refinery
Buyer or Seller to purchase or pay consideration to acquire any new
or
additional permit, license, easement, right-of-way, contract or
other property
right or interest or to obtain any such third party consent.
(c) Environmental Permits. Immediately after Closing, Buyers
shall
undertake, at their sole cost and expense, all measures necessary
to effect the
transfer of all Environmental Permits for the Facility, the Sites
and the
McMurrey Pipeline System to Refinery Buyer's or Pipeline Buyer's
name (as
appropriate), except as provided below. If there are prohibitions
against, or
conditions to, the transfer of any Environmental Permit
contemplated to be
transferred to a Buyer pursuant to this Agreement or the Related
Agreements
without the prior written consent of third parties, including
Governmental
Authorities whose consent is needed for such Environmental Permit
to be issued
to a Buyer or modified, which i
