EXHIBIT 2.1
DISTRIBUTION AGREEMENT
BY AND BETWEEN
PENN OCTANE CORPORATION
AND
RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
_____________, 2003
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (this "Agreement") is dated ______ __,
2003, by and among PENN OCTANE CORPORATION., a Delaware corporation ("POC"), RIO
VISTA ENERGY PARTNERS L.P., a Delaware limited partnership ("RVP"), and the Tax
Subsidiaries (as defined in Article 1) of RVP.
WITNESSETH:
WHEREAS, POC is the sole limited partner of RVP and owner of 1,909,344
common units of RVP (the "RVP Common Units"); and
WHEREAS, POC desires to distribute to its stockholders all of the RVP
Common Units;
NOW, THEREFORE, in consideration of the premises and the mutual terms,
covenants and conditions herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
As used in this Agreement, the following terms have the following
respective meanings:
1.1 "Affiliate" shall mean, with respect to POC or RVP, any Person,
that directly or indirectly, is in control of, is controlled by, controls or is
under common control of POC or RVP, as the case may be. For purposes of this
definition, control shall include the ownership of 50% or more of the legal or
beneficial interest in any Person or the power to direct or cause the direction
of the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise. A Person who is an Affiliate shall
only be considered an Affiliate for so long as that Person meets the definition
of an Affiliate. An officer, director, general partner, managing member or
trustee of a Person or Affiliate of such Person shall not be considered to be an
Affiliate unless such Person is under the direct or indirect control or common
control of POC or RVP, as the case may be. For purposes of clarity, POC and RVP
shall not be considered to be an Affiliate of the other, nor shall any other
company in which a director or officer of POC or RVP is also a director, officer
or stockholder be considered an Affiliate of POC or RVP unless POC or RVP, as
the case may be, itself controls such company.
1.2 "Agreement" shall have the meaning specified in the preamble.
1.3 "Business Day" shall mean any day other than Saturday, Sunday or a
day on which commercial banks located in Houston, Texas are required or
authorized by law to close.
1.4 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.5 "Common Unit" shall mean the common units of RVP as defined in the
RVP First Amended and Restated Agreement of Limited Partnership.
1
1.6 "Distribution" shall mean the distribution by POC to its
stockholders of the RVP Common Units.
1.7 "Distribution Agent" shall mean Computershare Investor Services.
1.8 "Distribution Date" shall mean the time and date as of which the
Distribution is effective.
1.9 "Liability" shall mean any and all claims, demands, liabilities,
responsibilities, disputes, causes of action, losses, damages, assessments,
costs and expenses (including interest, awards, judgments, penalties,
settlements, fines, costs of remediation, diminutions in value, costs and
expenses incurred in connection with investigating and defending any claims or
causes of action (including, without limitation, attorneys' fees and expenses
and all fees and expenses of consultants and other professionals)) and
obligations of every nature whatsoever, liquidated or unliquidated, known or
unknown, matured or unmatured, or fixed or contingent.
1.10 "Nasdaq" shall mean The Nasdaq Stock Market, Inc.
1.11 "POC" shall mean Penn Octane Corporation, a Delaware corporation.
1.12 "POC Common Stock" shall mean POC's common stock, $.01 par value.
1.13 "Person" shall mean an individual, partnership, corporation,
business trust, limited liability company, limited liability partnership, joint
stock company, trust, unincorporated association, joint venture, governmental
authority or other entity of whatever nature.
1.14 "RVP" for purposes of the assumption and indemnification
provisions of this Agreement, shall include Rio Vista Energy Partners L.P. and
any and all predecessors or successors thereto, whether by merger, purchase or
other acquisition of substantially all of the assets or otherwise, and any and
all predecessors or successors to such entities.
1.15 "RVP Assets" shall mean, collectively, all the property, assets
and rights, tangible and intangible, owned or operated by the RVP Companies on,
before or after the Distribution Date.
1.16 "RVP Common Units" shall have the meaning specified in the
introduction to this Agreement.
1.17 "RVP Company" shall mean any Subsidiary of RVP.
1.18 "RVP First Amended and Restated Agreement of Limited Partnership"
shall mean that certain limited partnership agreement of RVP dated ____________,
2003.
1.19 "RVP Properties" shall mean the properties currently or previously
owned or operated by any RVP Company.
1.20 "Record Date" shall have the meaning specified in Section 3.1
hereof.
1.21 "SEC" shall mean the United States Securities and Exchange
Commission.
1.22 "Subsidiary" shall mean, with respect to any Person, (i) a
corporation a majority of whose Voting Stock is at the time, directly or
indirectly, owned by such Person, by one or more wholly owned subsidiaries of
such Person or by such Person and one or more wholly owned subsidiaries of such
Person, (ii) a partnership in which such Person or a wholly owned subsidiary of
such Person is, at the date of determination, a general or limited partner of
such partnership, but only if such Person or its wholly owned subsidiary is
entitled to receive more than fifty percent of the assets of such partnership
upon its dissolution or (iii) any other Person (other than a corporation or
partnership) in which such Person, a wholly owned subsidiary of such Person or
such Person and one or more wholly owned subsidiaries of such Person, directly
or indirectly, at the date of determination thereof, has (x) at least a majority
ownership interest or (y) the power to elect or direct the election of a
majority of the directors or other governing body of such Person.
1.23 "Tax Subsidiary" shall mean, with respect to POC or RVP as the
context may require, (i) any corporation or association taxable as a corporation
that is connected in an unbroken chain of stock ownership satisfying the
requirements of Section 1504(a) of the Code beginning with POC or RVP as the
case may be (provided that, for this purpose, after the Distribution Date, RVP
shall be regarded as a corporation that is the common parent of the RVP Group);
(ii) any entity not a corporation that is a "disregarded" entity for federal
income tax purposes pursuant to Treasury Regulations Sections 301.7701-3 and
that is owned by POC, RVP or any Tax Subsidiary of either (determined after
application of clause (i) above) and (iii) any "disregarded" entity owned by
POC, RVP or any Tax Subsidiary of either (determined after application of
clauses (i) and (ii) above).
1.24 "Transfer Agent" shall mean Computershare Investor Services.
1.25 "Voting Stock" shall mean, with respect to any Person, securities
of any class or classes of capital stock in such Person entitling the holders
thereof (whether at all times or only so long as no senior class of stock has
voting power by reason of any contingency) to vote in the election of the
members of the board of directors or other governing body of such Person.
ARTICLE 2
MECHANICS OF DISTRIBUTION
2.1 Mechanics of RVP Distribution. The Distribution shall be effected
by the distribution to each holder of record of POC Common Stock, as of the
record date designated for the Distribution by or pursuant to the authorization
of the Board of Directors of POC (the "Record Date"), of one RVP Common Unit for
every eight shares of POC Common Stock held by such holder. No fraction of a RVP
Common Unit shall be issued, but in lieu thereof POC shall cause the
Distribution Agent to aggregate all fractional shares that would be issued but
for this Section 2.1 and sell such aggregated fractional shares in the public
market and the aggregate net cash proceeds of those sales shall be distributed
ratably to those POC stockholders who would otherwise have received the
fractional interests.
2.2 Timing of Distribution. The Board of Directors of POC shall
formally declare the Distribution and shall authorize POC to pay it upon the
satisfaction or waiver of the conditions set forth in Article 4, by delivery of
certificates for RVP Common Units to the Transfer Agent for delivery to the
holders entitled thereto. The Distribution shall be deemed to be effective upon
notification by POC to the Transfer Agent that the Distribution has been
declared and that the Transfer Agent is authorized to proceed with the
distribution of the RVP Common Units.
ARTICLE 3
CONDITIONS TO OBLIGATIONS OF POC
The obligations of POC to consummate the Distribution hereunder shall
be subject to the fulfillment of each of the following conditions:
(a) The Board of Directors of POC and the Independent
Committee of the Board of Directors of POC shall be satisfied that, after giving
effect to the Distribution and the transactions contemplated under the
Contribution, Conveyance and Assumption Agreement dated ___________, 2003 (the
"Contribution Agreement") by and among POC, RVP, the GP (as defined therein),
the Operating GP (as defined therein) and the Operating Partnership (as defined
therein), (i) POC will not be insolvent and will not have unreasonably small
capital with which to engage in its businesses and (ii) the POC surplus (as such
term is defined by Delaware General Corporation Law) will be sufficient to
permit, without violation of Delaware law, the Distribution.
(b) POC and RVP (or its Subsidiary) shall have executed the
Purchase Contract for the sale of liquified petroleum gas by POC to RVP (or its
Subsidiary).
(c) POC and RVP shall have executed the Omnibus Agreement,
which is to govern the business relationship between POC and RVP following the
Distribution.
(d) The transactions contemplated under the Contribution
Agreement shall have been effected.
(e) The Common Units shall have been approved for trading on
the National Market System of the Nasdaq Stock Market or on such other public
market acceptable to the Board of Directors of POC, and the Nasdaq Stock Market
or such other public market shall not have (i) withdrawn its certification filed
with the SEC that the Common Units have been approved for listing, (ii)
suspended trading in either the Common Units or the POC Common Stock or (iii)
filed with the SEC a Form 25 to strike either the Common Units or the POC Common
Stock from listing and registration thereof.
(f) RVP's Registration Statement on Form 10 shall have become
effective pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended, and the SEC shall not have commenced any action to prohibit or restrict
the Distribution in any way.
(g) All material governmental and third party approvals and
consents necessary to consummate the transactions contemplated under this
Agreement and the Contribution Agreement shall have been obtained.
(h) No order, injunction or decree issued by any court or
agency of competent jurisdiction or other legal restraint or prohibition
preventing the Distribution or any of the other transactions contemplated by
this Agreement and the other agreements relating to the Distribution may be in
effect.
(i) The Board of Directors of POC and the Independent
Committee of the Board of Directors of POC shall have received a copy of an
independent appraisal of the assets to be transferred pursuant to the
Contribution Agreement, and each of the Board of Directors of POC and the
Independent Committee of the Board of Directors of POC have determined in their
sole discretion that, based on such independent appraisal, the estimated tax
liabilities to be incurred by POC as a result of the Distribution are
acceptable.
(j) The Board of Directors of POC and the Independent
Committee of the Board of Directors of POC shall not have determined, in their
sole discretion, to abandon, defer or modify the Distribution or the terms
thereof.
ARTICLE 4
MISCELLANEOUS
4.1 RVP Covenants. To assure the performance of the obligations of RVP
under this Agreement, RVP hereby covenants and agrees that it will not, and will
cause its respective Subsidiaries not to, merge, convert into another entity,
engage in a share exchange for a majority of its units, liquidate or transfer,
assign or otherwise convey or allocate, directly or indirectly, in one or more
transactions, whether or not related, a majority of its assets (determined in
good faith by a board resolution prior to the transaction on a fair value and
consolidated basis) to any Person unless the acquiring Person (i) expressly
assumes the obligations of it hereunder, (ii) executes and delivers to POC an
agreement, in form and substance satisfactory to POC, agreeing to be bound by
each and every provision of this Agreement as if it were RVP and (iii) has a net
worth on a pro forma basis after giving effect to the acquisition or business
combination equal to or greater than that of RVP (on a consolidated basis) and
RVP's compliance with the provisions Article 3 of this Agreement. Any such
assumption of liability by the acquiring Person shall not release RVP from its
obligations under this Agreement.
4.2 Governing Law. All questions arising out of this Agreement and the
rights and obligations created herein, or its validity, existence,
interpretation, performance or breach, shall be governed by and construed in
accordance with the internals laws of the State of Texas, without regard to or
the application of the rules of conflicts of laws set forth in such laws.
4.3 Notices. All notices and other communications to be given or made
hereunder shall be in writing and shall be (a) personally delivered with signed
receipt obtained acknowledging delivery; (b) transmitted by postage prepaid
registered mail, return receipt requested (air mail if international); or (c)
transmitted by facsimile; to a party at the address set out below (or at such
other address as it may have provided notification for the purposes hereof to
the other party hereto in accordance with this Section).
If to RVP or to any of the Rio Vista GP LLC
Tax Subsidiaries of RVP: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax number: (713) _________
Attention: President
With a copy to:
Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to POC: Penn Octane Corporation
▇▇-▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
With a copy to:
Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
4.4 Expenses. Except as otherwise set forth herein or in any agreement
executed in connection herewith all costs and expenses related to the
Distribution and the transactions contemplated hereby shall be borne by POC.
4.5 Entire Agreement. This Agreement, including the Schedules, Annexes
and other writings referred to herein or delivered pursuant hereto, the Omnibus
Agreement dated of even date herewith between POC and RVP and the Contribution
Agreement constitute the entire agreement between POC, RVP and the Tax
Subsidiaries of RVP with respect to the subject matter hereof and supersede all
other agreements, representations, warranties, statements, promises and
understandings, whether oral or written, with respect to the subject matter
hereof. This Agreement may not be amended, altered or modified except by a
writing signed by duly authorized officers of POC, RVP and the Tax Subsidiaries
of RVP.
4.6 Waiver. No consent or waiver, express or implied, by a party hereto
to or of any breach or default by the other party hereto in the performance by
such other party of its obligations hereunder will be deemed or construed to be
a consent or waiver to or of any other breach or default in the performance by
such other party of the same or any other obligations of such other party
hereunder. Failure on the part of a party to complain of any act or failure to
act of the other party or to declare the other party in default, irrespective of
how long such failure continues, will not constitute a waiver by such party of
its rights hereunder. The giving of
consent by a party in any one instance will not limit or waive the necessity to
obtain such party's consent in any future instance.
4.7 Binding Effect; Assignment; No Third Party Benefit.
(a) This Agreement will be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns. None of the parties to this Agreement may
assign its rights under this Agreement without the prior written consent of all
of the other parties; provided, however, POC may assign any of its rights and
obligations under this Agreement to any Subsidiary of POC, without the consent
of any other party to this Agreement.
(b) Nothing in this Agreement, express or implied, is intended
to or shall confer upon any person other than RVP, POC, the RVP Indemnified
Parties and the Tax Subsidiaries of RVP any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
4.8 Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement.
4.9 References. All references in this Agreement to Articles, Sections
and other subdivisions refer to the Articles, Sections and other subdivisions of
this Agreement unless expressly provided otherwise. The words "this Agreement",
"herein", "hereof", "hereby", "hereunder" and words of similar import refer to
this Agreement as a whole and not to any particular subdivision unless expressly
so limited.
4.10 Terminology. All personal pronouns used in this Agreement, whether
used in the masculine, feminine or neuter gender, will include all other
genders; and the singular will include the plural and vice versa. The headings
of the Articles and Sections of this Agreement are included for convenience only
and will not be deemed to constitute part of this Agreement or to affect the
construction hereof or thereof.
4.11 Severability. Any provision of this Agreement that is determined
by arbitration as provided herein or a court of competent jurisdiction to be
invalid, illegal or unenforceable shall be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that or any other
provision of this Agreement invalid, illegal or unenforceable, so long as the
material purposes of this Agreement can be determined and effectuated. Should
any provision of this Agreement be so declared invalid, illegal or
unenforceable, the parties shall agree on a valid provision to substitute for
it.
4.12 Further Assurances. Each party hereto agrees to do all acts and
things and to make, execute and deliver such written instruments, as will from
time to time be reasonably required to carry out the terms and provisions of
this Agreement.
4.13 Amendments. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived, only by a written
instrument executed by POC, RVP and the Tax Subsidiaries of RVP.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have executed this Distribution
Agreement as of the date first set forth in the introduction to this Agreement.
PENN OCTANE CORPORATION
By:_______________________________
Name:_____________________________
Title:____________________________
RIO VISTA ENERGY PARTNERS L.P.
By: RIO VISTA GP LLC,
its General Partner
By:___________________________
Name:_________________________
Title:________________________
