Exhibit 10.5
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PURCHASE AND SALE AGREEMENT
dated as of August 15, 2005
between
PENN OCTANE CORPORATION,
And
TRANSMONTAIGNE PRODUCT SERVICES INC.
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1. Certain Definitions . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II THE CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.1. Purchase and Sale of the Assets . . . . . . . . . . . . . . 10
SECTION 2.2. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.3. Deliveries to Buyer . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.4. Deliveries to Seller. . . . . . . . . . . . . . . . . . . . 11
SECTION 2.5. Proceedings at Closing. . . . . . . . . . . . . . . . . . . 11
ARTICLE III PURCHASE PRICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.1. Purchase Price. . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.2. Payment of Consideration and Transfer of Assets at Closing. 12
SECTION 3.3. Allocation. . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . 12
SECTION 4.1. Organization; Power and Authority . . . . . . . . . . . . . 13
SECTION 4.2. Authorizations; Execution and Validity. . . . . . . . . . . 13
SECTION 4.3. No Conflicts; Consents. . . . . . . . . . . . . . . . . . . 13
SECTION 4.4. Litigation; Orders. . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.5. Environmental Matters . . . . . . . . . . . . . . . . . . . 14
SECTION 4.6. Employee and Benefit Matters. . . . . . . . . . . . . . . . 15
SECTION 4.7. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4.8. Title to Assets . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.9. Assigned Contracts. . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.10. Sufficiency of Assets . . . . . . . . . . . . . . . . . . . 18
SECTION 4.11. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.12. Permits; Compliance with Applicable Law . . . . . . . . . . 18
SECTION 4.13. Absence of Certain Changes. . . . . . . . . . . . . . . . . 18
SECTION 4.14. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.15. Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . 20
SECTION 5.1. Organization; Power and Authority . . . . . . . . . . . . . 20
SECTION 5.2. Authorizations; Execution and Validity. . . . . . . . . . . 20
SECTION 5.3. No Conflicts; Consents. . . . . . . . . . . . . . . . . . . 20
SECTION 5.4. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.5. Investment Intent; Sophisticated Buyer. . . . . . . . . . . 21
SECTION 5.6. Financial Ability . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.7. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.8. Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . 21
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ARTICLE VI COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 6.1. Covenants of Seller . . . . . . . . . . . . . . . . . . . . 21
SECTION 6.2. Covenants of Buyer. . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.3. Other Covenants . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VII TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 7.1. Preparation and Filing of Tax Returns . . . . . . . . . . . 30
SECTION 7.2. Seller's Tax Indemnification. . . . . . . . . . . . . . . . 30
SECTION 7.3. Buyer's Tax Indemnification . . . . . . . . . . . . . . . . 30
SECTION 7.4. Tax Indemnification Procedures. . . . . . . . . . . . . . . 30
ARTICLE VIII CONDITIONS PRECEDENT TO BUYER'S OBLIGATION . . . . . . . . . . . . . . 31
SECTION 8.1. Accuracy of Representations and Warranties. . . . . . . . . 31
SECTION 8.2. Performance of Covenants. . . . . . . . . . . . . . . . . . 32
SECTION 8.3. Officers' Certificates. . . . . . . . . . . . . . . . . . . 32
SECTION 8.4. No Order. . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 8.5. Certified Resolutions . . . . . . . . . . . . . . . . . . . 32
SECTION 8.6. Secretary's Certificate . . . . . . . . . . . . . . . . . . 32
SECTION 8.7. Liens and Secured Debt. . . . . . . . . . . . . . . . . . . 32
SECTION 8.8. Consents. . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 8.9. Due Diligence . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8.10. Authorization to Assign . . . . . . . . . . . . . . . . . . 33
SECTION 8.11. Seadrift Pipeline Lease . . . . . . . . . . . . . . . . . . 33
SECTION 8.12. Exxon Contract. . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 8.13. Concurrent Closing with Rio . . . . . . . . . . . . . . . . 31
SECTION 8.14. No Change in Law. . . . . . . . . . . . . . . . . . . . . . 31
SECTION 8.15. Stockholder Approval. . . . . . . . . . . . . . . . . . . . 31
ARTICLE IX CONDITIONS PRECEDENT TO SELLER'S OBLIGATION. . . . . . . . . . . . . . . 34
SECTION 9.1. Accuracy of Representations and Warranties. . . . . . . . . 34
SECTION 9.2. Performance of Covenants. . . . . . . . . . . . . . . . . . 34
SECTION 9.3. Officer's Certificate . . . . . . . . . . . . . . . . . . . 34
SECTION 9.4. No Order. . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9.5. Certified Resolutions . . . . . . . . . . . . . . . . . . . 34
SECTION 9.6. Secretary's Certificate . . . . . . . . . . . . . . . . . . 34
SECTION 9.7. No Change in Law. . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9.8. Stockholder Approval. . . . . . . . . . . . . . . . . . . . 34
ARTICLE X TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 10.1. Termination of Agreement. . . . . . . . . . . . . . . . . . 35
SECTION 10.2. Effect of Termination . . . . . . . . . . . . . . . . . . . 35
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ARTICLE XI INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 11.1. Seller Indemnification. . . . . . . . . . . . . . . . . . . 36
SECTION 11.2. Buyer Indemnification . . . . . . . . . . . . . . . . . . . 36
SECTION 11.3. Indemnification Procedures. . . . . . . . . . . . . . . . . 37
SECTION 11.4. Limits on Indemnification . . . . . . . . . . . . . . . . . 37
SECTION 11.5. Certain Damages . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 11.6 Exclusive Remedy. . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE XII GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 12.1. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 12.2. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 12.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 12.4. Successors and Assigns; Parties in Interest . . . . . . . . 40
SECTION 12.5. Severability. . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 12.6. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . 40
SECTION 12.7. Governing Law, Consent to Jurisdiction. . . . . . . . . . . 41
SECTION 12.8. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 12.9. Release of Information; Confidentiality . . . . . . . . . . 42
SECTION 12.10. Sole Obligation . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 12.11. Certain Construction Rules. . . . . . . . . . . . . . . . . 42
SECTION 12.12. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 12.13. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 43
Exhibits
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A - Seller's Approvals and Consents
B - General Assignment, Conveyance and Xxxx of Sale
Annex 1 - Intentionally Omitted
Annex 2 - Leases
Annex 3 - Improvements
Annex 4 - Easements
Annex 5 - Personal Property
Annex 6 - Assigned Contracts
Annex 7 - Permits
C - Assumption Agreement
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Schedules
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1.1 - Seller's Individuals with Knowledge
4.3 - Seller's Conflicts/Consents
4.4 - Litigation; Orders
4.5 - Environmental Matters
4.6(a) - Business Employees
4.6(c) - Seller Plans
4.7 - Taxes
4.9 - Assigned Contracts
4.11 - Insurance
4.12 - Permits; Compliance with Applicable Law
4.13 - Certain Changes
4.14 - Fees
5.3 - Buyer's Conflicts/Consents
6.3(e)(i) - Minimum Requirement
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PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT, dated as of August 15, 2005 (this
"Agreement"), is entered into by and between PENN OCTANE CORPORATION, a Delaware
corporation ("Penn"), ("Seller"), and TRANSMONTAIGNE PRODUCT SERVICES INC.
("Buyer"). Buyer and Seller may be referred to herein individually as a "Party"
or collectively as the "Parties."
RECITALS
Seller is the owner of various leases, contracts, a pumping station and
other assets used by Seller in the purchase, transportation, marketing and sale
of LPG, all of such leases, contracts, pumping station and other assets being
more particularly described in the following provisions of this Agreement and
collectively defined as the "Assets".
Seller is also an affiliate of Rio Vista Operating Partnership L.P.
("Rio"), which, in turn, has concurrently executed a Purchase and Sale Agreement
with Buyer for the acquisition by Buyer of various leases, pipelines, terminals,
contracts and other assets used in the purchase, transportation, marketing and
sale of LPG by Rio as well as the Equity Interests (defined below) which Rio
has in Penn Octane de M xico, S. de X.X. de C.V., a limited liability company
(sociedad de responsabilidad limitada de capital variable) duly incorporated and
existing under the laws of Mexico ("POM"), and Termatsal S. de X.X. de C.V., a
limited liability company (sociedad de responsabilidad limitada de capital
variable) duly incorporated and existing under the laws of Mexico ("Termatsal").
Likewise, Rio has in place certain corporate and contractual arrangements based
on which it has certain rights for indirect control of Tergas, S.A. de C.V., a
limited liability company (sociedad de responsibilidad limitada de capital
variable) duly incorporated and existing under the laws of Mexico ("Tergas"),
which is owned by certain individuals of Mexican nationality (the "Individual
Tergas Owners") (all of such Equity Interests in POM, Termatsal and Tergas being
herein collectively referred to as the "Shares"). POM, Termatsal and Tergas are
herein collectively referred to as the "Companies."
It is the intent of the Parties hereto that the Closing of the transaction
contemplated by this Agreement is specifically contingent upon the concurrent
Closing of the transaction contemplated in the Purchase and Sale Agreement
between Rio and Buyer.
Buyer desires to purchase from Seller, and Seller is willing to sell to
Buyer the Assets, as further described in this Agreement.
NOW, THEREFORE, in consideration of the premises, the terms and provisions
set forth herein, the mutual benefits to be gained by the performance thereof
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Definitions.
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As used in this Agreement, the terms set forth below shall have
the following respective meanings:
"Actively Employed" means that the individual is an employee of Seller on
the day immediately prior to the Closing Date and on the Closing Date either
such individual is performing his or her regular occupation for his or her
employer (either at such employer's usual places of business or at some location
to which such employer's business requires the employee to travel) or is on a
previously scheduled and approved time-off, or such other leave of absence that
would not have prevented such employee (if he or she had become a U.S.
Continuing Employee as of the Closing Date) from receiving immediate coverage as
of the Closing Date under the welfare benefit plans maintained by the Buyer
Employer that will be provided to U.S. Continuing Employees as of the Closing
Date.
"Adverse Claim" means, with respect to any security or other financial
instrument, an "adverse claim" as defined in Section 8-102(a)(1) of the Uniform
Commercial Code as in effect in the State of Texas.
"Affiliate" means, with respect to any Person, (a) any Subsidiary of such
Person or (b) any other Person that, directly or indirectly, controls, is
controlled by, or is under common control with, such Person. For the purposes
of this definition, "control" means the possession of the power to direct or
cause the direction of management and policies of such Person, whether through
the ownership of voting securities, by contract, or otherwise.
"Agreement" has the meaning given in the Preamble.
"Assets" means the following assets of Penn, other than the Retained
Assets:
(a) the lessee's or tenant's entire interest under the Seadrift
Pipeline Lease including all rights thereunder to use the Seadrift Pipeline and
the easements, rights of way, property use agreements, line rights, real
property licenses and other similar interests in real property or contractual
rights permitting such pipeline to be located in its present location;
(b) all leases of real property (excluding the Seadrift Pipeline
Lease and the four executive offices located in Houston, Texas, Xxxx Xxxxx,
Xxxxxxxxxx, Xx Xxxxxxx, Xxxxxxxxxx, and Palm Desert, California and all
furniture, fixtures and equipment located therein) used in the conduct of the
Business in the United States including those described on Annex 2 to the
General Assignment (collectively, the "Leases");
(c) the Exxon Contract;
(d) all structures, fixtures, facilities, pumping facilities and
appurtenances located on or under the real property described in clauses (a) and
(b) above including those described on Annex 3 to the General Assignment
(collectively, the "Improvements");
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(e) all easements, rights of way, property use agreements, line
rights and real property licenses (including right-of-way Permits from railroads
and road crossing Permits or other Permits from Governmental Authorities) held
by Penn in connection with the conduct of the Business in the United States
including, without limitation, those described on Annex 4 to the General
Assignment (the "Easements");
(f) to the extent the same do not constitute Improvements, any and
all fittings, cathodic protection ground beds, rectifiers, local supervisory
control software (SCADA), machinery, equipment, pumps, engines, pipes, valves,
connections, gates, computer hardware and all other tangible personal property
used in the Business including those described on Annex 5 to the General
Assignment (the "Personal Property");
(g) the contracts and agreements specifically related to the sale,
purchase, marketing, transportation and storage of LPG in connection with the
Business (including the Exxon Contract) and any leases of personal property to
which Penn is a party and that are described on Annex 6 to the General
Assignment (the "Assigned Contracts");
(h) all permits, licenses, certificates, authorizations,
registrations, orders, waivers, variances and approvals granted by any
Governmental Authorities or third Persons to Penn or its predecessors in
interest for the ownership or conduct of the Business, in each case to the
extent the same are assignable by Seller including those listed on Annex 7 to
the General Assignment (the "Permits");
(i) all LPG and any other hydrocarbons (in whatever physical
state) owned by Penn in connection with the Business (including any of the same
classified as inventory) and whether located in storage facilities, pipelines,
or other facilities or structures owned or leased by Penn or other Persons;
(j) all books, records and documents relating to the ownership or
operation of the Assets and Business (other than medical records of employees or
medical records of independent contractors of Penn for which written consent of
the applicable employee or independent contractor to the release of such records
is not obtained) including all contract, tax, financial, technical, insurance
(past and present), pipeline, right of way, system mapping, engineering,
environmental, safety and permitting records, information and files (the "Books
and Records"); excluding, however the records which will be retained by Seller
(the "Retained Records"), which shall consist of (i) corporate records of Seller
not directly related to the operation of the Assets or Business (ii) records
necessary for Seller's continued operations following the Closing and (iii)
copies of any records required in connection with preparation of any Tax Returns
required to be filed by Seller or Seller's Affiliates;
(k) all deposits and all service charges, utility bills and other
goods or services prepaid by Penn in connection with the Business;
(l) all claims, causes of action, rights and remedies arising out
of the conduct of the Business or the ownership of the Assets; and
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(m) all patents and patent applications, and other intellectual
property rights, United States or foreign, owned or licensed by Penn used in the
conduct of the Business (provided, however, that the Assets shall not include
trademarks and service marks, trademark and service xxxx registrations and
applications, trade names, logos, copyrights and copyright registrations and
applications technology, know-how, and processes utilized or owned by Seller).
"Assigned Contracts" has the meaning given in the subsection (g) of the
definition of Assets.
"Assumed Liabilities" means the liabilities, obligations, or Losses that
occur and require payment, performance or resolution, as a result of and in the
course of operation of the Business and the Assets during the period on or after
the Closing Date.
"Assumption Agreement" has the meaning given in Section 2.4(b).
"Basket Amount" has the meaning given in Section 11.4(a).
"Benefit Plan" means: (a) each "employee benefit plan," as such term is
defined in Section 3(3) of ERISA, (b) each plan that would be an employee
benefit plan if it was subject to ERISA, such as foreign plans and plans for
directors, (c) each stock bonus, stock ownership, stock option, stock purchase,
stock appreciation rights, phantom stock, or other stock plan (whether qualified
or nonqualified), and (d) each bonus, deferred compensation, incentive
compensation, vacation or supplemental income plan, policy or arrangement.
"Books and Records" has the meaning given in subsection (j) of the
definition of Assets.
"Business" shall mean the business currently conducted by Penn with respect
to and including the Seadrift Pipeline, the Exxon Contract, the pumping station
and the purchase, transportation, storage and marketing of LPG.
"Business Day" means any day other than a Saturday, Sunday or day on which
commercial banks in Texas are authorized or required by Law to remain closed.
"Buyer" has the meaning given in the Preamble.
"Buyer Confidentiality Agreement" means that certain letter agreement,
dated as of June 6, 2005, by and between Rio and Buyer.
"Buyer Employer" has the meaning given in Section 6.3(g)(i).
"Closing" has the meaning given in Section 2.2.
"Closing Date" has the meaning given in Section 2.2.
"Closing Effective Time" means 7:00 a.m., central daylight time, on the
Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Company" means any of POM, Termatsal or Tergas, and "Companies" shall
mean all of them.
"Contract" means any written contract, agreement, indenture, note, bond,
loan, instrument, lease, conditional sale contract, mortgage or insurance policy
including any partnership, joint venture or operating agreement, any contract or
agreement that grants a right of first refusal or right of first negotiation or
other preferential right to a third party, any contract or agreement containing
covenants limiting the freedom to engage in any line of business or to compete
with any Person, any collective bargaining agreement, any employment, personal
services, consulting, severance or similar agreement for any employees of Seller
including, without limitation, the Assigned Contracts, the Exxon Contract and
the Seadrift Pipeline Lease.
"Deficiency Amount" means the difference between the Minimum Requirement
and actual LPG inventory comprising the Assets at the Closing Effective Time as
determined pursuant to Schedule 6.3(e)(i) in conjunction with the Purchase and
Sale Agreement between Buyer and Rio.
"Easements" has the meaning given in the subsection (e) of the definition
of Assets.
"Encumbrances" means any security interest, pledge, mortgage, lien
(statutory or otherwise), charge, encumbrance, trust, Adverse Claim,
preferential arrangement or restriction of any kind, including any restriction
on the use, transfer, or other exercise of any attributes of ownership.
"Environmental Audit" has the meaning given in Section 6.3(f)(i).
"Environmental Condition" means:
(a) the presence (or any Release) of a Hazardous Material from, in, on,
under or onto any properties or the environment in alleged violation of any
Environmental Laws;
(b) the presence (or any Release) of a Hazardous Material from, in, on,
under or onto any property or the environment that results in any Losses;
(c) any proceedings or investigatory, enforcement, cleanup, removal,
containment, remedial, or other private or governmental or regulatory action at
any time threatened in writing, instituted, or completed against or in respect
to any properties or any use or activity on any properties pursuant to any
applicable Environmental Laws relating to Hazardous Materials or alleged
violation of Environmental Laws;
(d) the presence (or any Release) of a Hazardous Material from, in, on,
under or onto any properties or the environment resulting in a Material Adverse
Effect; or
(e) any alleged violation of Environmental Laws that occurred prior to
the Closing Date.
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"Environmental Laws" means any Law or Order relating to protection of the
environment, including, persons or the public welfare from actual or potential
exposure (or the effects of exposure) to any actual or potential Release or
regarding the manufacture, processing, production, gathering, transportation,
generation, use, treatment, or storage of any Hazardous Materials.
"Equity Interests" shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents, including membership
interests (however designated, whether voting or nonvoting or certificated or
non-certificated), of equity of such Person, including, if such Person is a
partnership, partnership interests (whether general or limited) and any other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of property of, or the right to
vote in the decisions of such partnership, excluding debt securities convertible
or exchangeable into such equity.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means, with respect to any Person, any other Person that
is a member of a group described in Section 414(b), (c), (m) or (o) of the Code
or Section 4001(b)(1) of ERISA that includes the first Person, or that is a
member of the same "controlled group" as the first Person pursuant to Section
4001(a)(14) of ERISA.
"Escrow Agent" means Xxxxxxx Title Company of Cameron County, Texas , 000
Xxxxxxx Xxxx Xxxx, Xxxxxxxxxxx, Xxxxx 00000.
"Exxon Contract" means the Agreement, dated October 1, 1999, as amended on
January 20, 2000, February 29, 2000 and the third amendment effective April 1,
2005, by and between Penn and Exxon U.S.A., a division of Exxon Corporation for
the purchase of LPG for the period of October 1, 1999 through September 30,
2009.
"General Conveyance" has the meaning given in Section 2.3(a).
"Governmental Authority" means any U.S. federal, state, provincial or local
government or governmental regulatory body and any of their respective
subdivisions, agencies, instrumentalities, authorities or tribunals.
"Hazardous Materials" means any substance, whether solid, liquid, gaseous,
or any combination of the foregoing or any other substance not expressly
mentioned herein: (a) that is listed, defined, or regulated as a "hazardous
material," "hazardous waste," "solid waste," "hazardous substance," "toxic
substance," "contaminant," or "pollutant" or otherwise classified as hazardous
or toxic, in or pursuant to any Environmental Laws or otherwise prohibited,
limited or regulated under any Environmental Laws; (b) that is or contains
asbestos, polychlorinated biphenyls, radon, urea formaldehyde foam insulation,
or explosive or radioactive materials, and (c) that is or contains petroleum
hydrocarbons, petroleum products, natural gas, crude oil, or any components,
fractions, or derivatives thereof.
"Hire Date" has the meaning given in Section 6.3(g)(i).
"Improvements" has the meaning given in the subsection (d) of the
definition of Assets.
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"Indemnified Party" has the meaning given in Section 11.3.
"Indemnifying Party" has the meaning given in Section 11.3.
"Knowledge" means with respect to Seller, the actual knowledge after due
inquiry of any of the individuals specified on Schedule 1.1.
"Law" means any U.S. federal, state, provincial or local law, statute,
rule, ordinance, code or regulation.
"Leases" has the meaning given in the subsection (b) of the definition of
Assets.
"Legal Proceeding" means any judicial, administrative or arbitral action,
suit, investigation or proceeding (public or private) by or before any U.S.
court or other Governmental Authority.
"Lien" means any lien, pledge, mortgage, deed of trust, security interest,
attachment, levy or other similar encumbrance.
"Losses" means claims, judgments, causes of action, liabilities,
obligations, damages, losses, deficiencies, costs and expenses.
"LPG" means liquefied petroleum gas.
"Material Adverse Effect" means any condition, circumstance, event or
effect that would be material and adverse to the operation or condition
(financial or otherwise) of the Business, the Assets, or the financial condition
of Seller including any casualty loss to, or taking through an eminent domain
procedure of any of the Assets, in an amount of $50,000 or more.
"Materiality Requirement" has the meaning given in Section 11.4(d).
"Minimum Requirement" has the meaning given in Section 6.3(e)(i).
"Order" means any order, judgment, injunction, ruling, or decree of any
U.S. court or other Governmental Authority.
"Owned Pumping Station" means the midline pumping station owned by Seller
and located in Raymondville, Texas and associated equipment and improvements.
"Party" or "Parties" has the meaning given in the Preamble.
"Penn" has the meaning given in the Preamble.
"Permits" has the meaning given in the subsection (h) of the definition of
Assets.
"Permitted Encumbrances" shall mean, with respect to or upon any of the
Assets, any Liens, caveats, claims, rights (including rights of Governmental
Authorities), reservations, exceptions, easements, rights of way, conditions,
restrictions (including restrictive covenants and zoning and land use
restrictions imposed by applicable laws, regulations and ordinances), leases,
7
licenses and other similar title exceptions or other imperfections of title,
restrictions or encumbrances affecting such Assets that were not incurred in the
borrowing of money and, individually and in the aggregate, are not expected to
have a Material Adverse Effect or materially interfere with the use of the
Assets in the ordinary conduct of the Business.
"Person" means any natural person, corporation, partnership, limited
liability company, trust, unincorporated organization or economic unit,
Governmental Authority, government instrumentality or other entity of any kind.
"Purchase Price" has the meaning given in Section 3.1(a).
"Real Property" means the real property covered by the Seadrift Pipeline
Lease, the Leases, the Improvements and the Easements.
"Release" means any releasing, depositing, spilling, leaking, pumping,
pouring, placing, emitting, discarding, abandoning, emptying, discharging,
migrating, injecting, escaping, leaching, dumping or disposing.
"Retained Assets" means all assets of Penn which are not intended to be
transferred by Seller to Buyer including but not limited to:
(a) the four executive offices located in Houston, Texas, Xxxx Xxxxx,
Xxxxxxxxxx, Xx Xxxxxxx, Xxxxxxxxxx, and Palm Desert, California and all
furniture, fixtures and equipment (including computers) located therein;
(b) trademarks and service marks, trademark and service xxxx
registrations and applications, trade names, logos, copyrights and copyright
registrations and applications technology, know-how, and processes utilized or
owned by Seller;
(c) the Retained Records; and
(d) all cash, accounts receivable, securities, notes receivable and
other assets owned by Seller.
"Retained Liabilities" means all liabilities, obligations and Losses of
Penn relating to periods before the Closing Date other than the Assumed
Liabilities including but not limited to:
(a) all liabilities, obligations or Losses arising out of violations by
Seller of Laws, including Environmental Laws;
(b) all liabilities, obligations or Losses for criminal sanctions,
fines, penalties or assessments imposed at any time by any competent court or
Governmental Authority with respect to the conduct of the Business or operation
of the Assets;
(c) all liabilities, obligations or Losses arising from the
transportation and disposal, or arrangement thereof, of Hazardous Materials by
Seller or its agents off the Real Property or otherwise from Hazardous Materials
that resulted from the Business that are Released or threatened to be Released
from any non-Real Property;
8
(d) all liabilities, obligations or Losses arising out of the easements
and rights-of-way for the conduct of the Business or operation of the Assets
prior to the Closing Date; and
(e) all obligations, liabilities or Losses (including accounts payable
and notes payable) that occur , and require payment, performance or resolution
as a result of and in the course of operation of the Business and the Assets by
Seller during the period before the Closing Date.
"Retained Records" has the meaning given in subsection (j) of the
definition of assets.
"Rio" has the meaning given in the Recitals.
"Seadrift Pipeline Lease" means the Xxxx-Brownsville Pipeline Lease
Agreement, dated as of September 1, 1993, by and between Seadrift Pipeline
Corporation, a Delaware corporation and Penn, as amended by the letter
agreements dated May 27, 1999 and October 26, 1999.
"Seadrift Pipeline" means the pipeline covered by the Seadrift Pipeline
Lease.
"Secured Debt Facility" means the Amended and Restated Line Letter entered
into between Seller, and RZB Finance LLC, dated as of September 15, 2004, as the
same may be amended, modified or supplemented and all mortgages, guarantees,
reimbursement agreements, security agreements and other instruments, agreements
or documents entered into or delivered by Seller or any Affiliate of Seller in
connection therewith.
"Secured Debt Lender" means RZB Finance LLC in its capacity as agent under
the Secured Debt Facility.
"Seller" has the meaning given in the Preamble.
"Seller Group" means the affiliated group of corporations of which Seller
is the common parent, which join in the filing of a consolidated federal income
tax return (and any similar group under state law).
"Seller Plans" means all Benefit Plans that are sponsored, maintained or
contributed to by Seller or an Affiliate of a Seller on behalf of the
U.S. Business Employees.
"Shares" has the meaning given in the Recitals.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, sociedad anonima, sociedad de
responsabilidad limitada, whether incorporated in the U.S., Mexico or otherwise,
or other entity of which a majority of the Equity Interests having ordinary
voting power to elect a majority of the board of directors, board of managers or
other similar managing body of such corporation, partnership, limited liability
company, or other entity of any kind are owned by such Person.
"Tax" or "Taxes" means any U.S. federal, state or local income, gross
receipts, value added, ad valorem, sales and use, employment, social security,
disability, occupation, property,
9
severance, transfer, capital stock, excise or other taxes imposed by or on
behalf of any Taxing Authority, including any interest, penalty or addition
thereto.
"Tax Indemnified Party" has the meaning given in Section 7.4(a).
"Tax Indemnifying Party" has the meaning given in Section 7.4(a).
"Tax Items" has the meaning given in Section 7.1.
"Taxing Authority" means, with respect to any Tax, the U.S. Governmental
Authority that imposes such Tax, and the agency (if any) charged with the
collection of such Tax for such Governmental Authority.
"Tax Return" means any U.S. return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto.
"Tergas" has the meaning given in the Recitals.
"Termatsal" has the meaning given in the Recitals.
"U.S. Business Employee" means any individual who is an employee of Seller
and who is principally employed in the United States in connection with the
Business, but excluding any employees of Seller who occupy management positions
or administrative positions and who work in any of the Sellers four executive
offices located in Houston, Texas, Seal Beach, California, El Segundo,
California, or Palm Desert, California
"U.S. Continuing Employee" has the meaning given in Section 6.3(g)(i).
ARTICLE II
THE CLOSING
SECTION 2.1 Purchase and Sale of the Assets.
-------------------------------
At the Closing, upon the terms and subject to the satisfaction of
the conditions precedent set forth in this Agreement, Seller shall sell, assign,
transfer and convey to Buyer and Buyer shall purchase and acquire from the
Seller, all right, title and interest of Seller in and to the Assets free and
clear of any Liens or Encumbrances (other than Permitted Encumbrances). Buyer
shall have the right to designate one or more of its Affiliates (including
TransMontaigne Partners L.P.) to be the transferee of the Assets.
SECTION 2.2 Closing.
-------
The closing of the transaction contemplated hereby (the
"Closing") shall take place at the offices of Buyer in Denver, Colorado at 10:00
a.m. local time, on the fifth Business Day after the satisfaction or waiver of
the conditions set forth in Articles VIII and IX or at such other time and date
as the Parties may mutually agree (the "Closing Date").
10
SECTION 2.3 Deliveries to Buyer.
-------------------
At the Closing, Seller shall deliver, or shall cause to be
delivered, to Buyer the following:
(a) the executed General Assignment, Conveyance and Xxxx of Sale
in the form attached as Exhibit B (the "General Conveyance");
(b) the certificates referred to in Sections 8.3, 8.5, 8.6 and
8.10;
(c) copies of the consents or approvals referenced in Section 8.8,
8.11, 8.12, 8.14 and 6.3(c) that are required, in addition to any other
approvals obtained under Exhibit A;
(d) copies of the release and termination documents referenced in
Section 8.7; and
(e) the agreement required under Section 8.13.
SECTION 2.4 Deliveries to Seller.
--------------------
At the Closing, Buyer shall deliver to Seller the following:
(a) a wire transfer of immediately available funds (to such
accounts as Penn shall have specified to Buyer no later than one Business Day
prior to the Closing) in an amount equal to the Purchase Price in accordance
with Section 3.1(a);
(b) the executed Assumption Agreement in the form of Exhibit C
(the "Assumption Agreement");
(c) the certificates referred to in Section 9.3, 9.5 and 9.6;
SECTION 2.5 Proceedings at Closing. All proceedings to be taken and all
----------------------
documents to be executed and delivered by the Parties at the Closing shall be
deemed to have been taken and executed simultaneously, and no proceedings shall
be deemed taken nor any documents executed or delivered until all have been
taken, executed and delivered.
11
ARTICLE III
PURCHASE PRICE
SECTION 3.1 Purchase Price.
--------------
(a) The purchase price, for the Assets, to be paid by Buyer to Seller
at the Closing will be $10,100,000 U.S. (as adjusted by Section 6.3 (the
"Purchase Price")). Seller may instruct Buyer to pay a part of the Purchase
Price directly to the Secured Debt Lender and/or other lenders in order to
obtain a release of the Liens held by the Secured Debt Lender and/or other
lenders, respectively, on the Assets.
(b) In addition to the payment of the Purchase Price, at the Closing,
Buyer (or its designated Affiliate) shall assume the Assumed Liabilities
pursuant to the Assumption Agreement. Other than the Assumed Liabilities, Buyer
shall not assume any Liabilities or obligations of Seller.
(c) Seller will bear the cost of any documentary, stamp, sales, excise
or other Taxes (if any) payable in respect of the sale and transfer of the
Assets.
SECTION 3.2 Payment of Consideration and Transfer of Assets at Closing.
----------------------------------------------------------
At the Closing, Buyer shall pay the Purchase Price to Seller and
execute and deliver to Seller the Assumption Agreement, and Seller shall execute
and deliver to Buyer the General Conveyance pursuant to which title to the
Assets is transferred and conveyed to Buyer or one or more Affiliates of Buyer
designated by Buyer.
SECTION 3.3. Allocation.
----------
Seller and Buyer are each separately responsible for:
(a) preparing Form 8594 (the "Form") Asset Acquisition
Statement, under Section 1060 of the Code and the regulations promulgated
thereunder, or any successor form; and
(b) allocating the amount of the Purchase Price for the
Assets on the Form. Seller and Buyer will attempt to reach agreement as to
allocation of the Purchase Price to the Assets. However, if they are unable to
agree as to the allocation to any asset, each Party will prepare its Form
allocating the portion of the Purchase Price to each such asset upon which they
disagree in the manner as each may determine in its sole discretion without
regard to the manner in which the other Party allocates an amount of the
Purchase Price to such asset on its Form. Buyer or Buyer's Affiliates, may make
as necessary under applicable Tax Laws, any income tax withholdings deriving
from the sale of the Assets. Buyer and Seller hereby agree that they will
report the federal, state and other Tax consequences of the transaction
contemplated by this Agreement in a manner consistent with the allocation on
each Party's Form.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller represents and warrants to Buyer as follows as of the
Closing Date:
12
SECTION 4.1 Organization; Power and Authority.
---------------------------------
(a) Penn is a corporation duly incorporated, validly existing
and in good standing under the Laws of the State of Delaware and is also
qualified to transact business in each jurisdiction in which qualification is
required.
(b) Penn has all requisite corporate power and authority to
own and operate its assets and properties and conduct its businesses and
operations as presently being conducted.
SECTION 4.2 Authorizations; Execution and Validity. (a) Except with
---------------------------------------
respect to the transfer to Buyer or an Affiliate of Buyer of the Assets, as of
the date of execution of this Agreement, Seller has all requisite corporate, and
other power and authority to execute and deliver and to perform its obligations
under this Agreement and to consummate the transaction contemplated hereby.
(b) As of the Closing Date, and subject to obtaining the
approval of the holders of a majority of the Equity Interests in Penn, Seller
will have all requisite corporate, and other power and authority to consummate
the transfer to Buyer or to an Affiliate of Buyer of the Assets.
(c) Except with respect to the transfer to Buyer or an
Affiliate of Buyer of the Assets, as of the date of execution of this Agreement,
the execution and delivery of this Agreement by Seller, the performance by
Seller of its obligations hereunder, and the consummation by Seller of the
transaction contemplated hereby have been duly authorized by all necessary
corporate, and other action on the part of Seller.
(d) As of the Closing Date, and subject to obtaining the
approval of the holders of a majority of the Equity Interests in Penn, the
performance by Seller of its obligation to consummate the transfer to Buyer or
to an Affiliate of Buyer of the Assets and the Shares shall have been duly
authorized by all necessary corporate, partnership and other action on the part
of Seller.
(e) Except with respect to the transfer to Buyer or an
Affiliate of Buyer of the Assets, as of the date of execution of this Agreement,
this Agreement has been duly and validly executed and delivered by Seller and
constitutes a valid and binding obligation of Seller, enforceable against Seller
in accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws
now or hereafter in effect affecting creditors' rights generally or general
principles of equity.
(f) As of the Closing Date, and subject to obtaining the
approval of the holders of a majority of the Equity Interests in Penn, this
Agreement will constitute a valid and binding obligation of Seller with respect
to the performance by Seller of its obligation to consummate the transfer to
Buyer or to an Affiliate of Buyer of the Assets, and such obligation shall be
enforceable against Seller in accordance with the terms of this Agreement,
except to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium
13
or similar Laws now or hereafter in effect affecting creditors' rights generally
or general principles of equity.
SECTION 4.3 No Conflicts; Consents.
----------------------
Except as set forth on Schedule 4.3 or (in the case of (a), (c)
or (d) below) as could not be reasonably expected to have a Material Adverse
Effect, none of the execution and delivery by Seller of this Agreement, the
performance by Seller of its obligations under this Agreement or the
consummation by Seller of the transaction contemplated hereby will:
(a) violate any Law or Order;
(b) violate the certificate of incorporation or bylaws of
Penn;
(c) violate any Contract to which Seller is a party or by
which Seller, or its properties are bound; or
(d) require any consent from or filing with any Governmental
Authority or any consent from any other Person.
SECTION 4.4 Litigation; Orders.
------------------
Schedule 4.4 lists all Legal Proceedings pending or, to Seller's
Knowledge, threatened against Seller and arising out of or relating to the
Business and the Assets. There are no Legal Proceedings pending against Seller
or, to Seller's Knowledge, threatened against Seller that question the validity
of this Agreement or any action taken or to be taken by Seller in connection
with, or which seek to enjoin or obtain monetary damages in respect of, this
Agreement or the consummation by Seller of the transaction contemplated hereby.
SECTION 4.5 Environmental Matters.
---------------------
Except as set forth in Schedule 4.5 or as could not be reasonably
expected to have a Material Adverse Effect:
(a) the operations and activities of Seller in respect of the
Business and the Assets are in compliance with all applicable Environmental
Laws;
(b) Seller (in respect of the Business and the Assets) is not
subject to any existing, pending or, to Seller's Knowledge, threatened Legal
Proceedings under any Environmental Law;
(c) all Permits, if any, required to be obtained or filed by
Seller under any Environmental Law in connection with the Business or their
respective properties and the Assets have been obtained or filed and are valid
and currently in full force and effect;
(d) there has been no Release created or caused by Seller of
any Hazardous Material into the environment by Seller or, to the Knowledge of
Seller, in connection with the Business and the Assets;
(e) no Environmental Condition created or caused by Seller
exists at any of the Real Property; and
14
(f) Seller is not subject to liability under applicable
Environmental Laws arising in connection with the transportation and off-site
disposal or arrangement thereof of any Hazardous Materials by Seller or any
agent of Seller from Hazardous Materials that resulted from the Business that
are Released or threatened to be Released from any non-Real Property.
SECTION 4.6 Employee and Benefit Matters.
----------------------------
(a) Schedule 4.6(a) sets forth a true, correct and complete
list, as of the date set forth therein, of all U.S. Business Employees and the
name of each U.S. Business Employee's employer. The list described in the
preceding sentence shows each such employee's name, job title, hire date, work
location, employer's name, accrued and unused vacation, and current base salary
or base wages. No changes in such base salary or base wages for such employees
have been made, promised or authorized since December 31, 2004. There are no
loans or other obligations payable or owing by Seller to any such employee,
except salaries, wages, bonuses and salary advances and reimbursement of
expenses incurred and accrued in the ordinary course of business, nor are any
loans or debts payable or owing by any such individuals to Seller nor has Seller
guaranteed any of such individual's respective loans or obligations.
(b) With respect to the U.S. Business Employees:
(i) none are represented by a union or other collective
bargaining entity;
(ii) there has not occurred, nor, to Seller's Knowledge has
there been threatened, a labor strike, request for
representation, work stoppage or lockout in the past
five years;
(iii) Seller has not received written notice of any charges
before any Governmental Authority responsible for the
prevention of unlawful employment practices and, to the
Knowledge of Seller, no such charges are threatened;
(iv) Seller has not received written notice of any claim
relating to employment or loss of employment and, to
the Knowledge of Seller, no such claims are threatened;
(v) Seller has not received written notice of any
investigation by a Governmental Authority responsible
for the enforcement of labor or employment regulations
and, to Seller's Knowledge, no such investigation is
threatened; and
(vi) no consent of any union, works council or other
employee group is required for, and no agreement
restricts the execution of this Agreement, the
consummation of any of the transaction contemplated
hereby, or the closing or relocation of any facility.
15
(c) Seller does not sponsor, maintain, contribute or have an
obligation to contribute to any Benefit Plan. Schedule 4.6(c) sets forth a
true, correct and complete list, as of the date hereof, of all Seller Plans. On
or before the date hereof, Seller has delivered to Buyer copies of each of the
Seller Plans and, to the extent applicable, the most recent summary plan
description relating to such plans.
(d) With respect to any employee benefit plan (within the
meaning of Section 3(3) of ERISA, that is sponsored, maintained or contributed
to, or has been sponsored, maintained or contributed to within six years prior
to the date of this Agreement, by Seller or any ERISA Affiliate of Seller):
(i) no withdrawal liability, within the meaning of Section
4201 of ERISA, has been incurred, which withdrawal
liability has not been satisfied;
(ii) no liability to the Pension Benefit Guaranty
Corporation has been incurred by any such entity, which
liability has not been satisfied;
(iii) no accumulated funding deficiency, whether or not
waived, within the meaning of Section 302 of ERISA or
Section 412 of the Code has been incurred;
(iv) all contributions (including installments) to such plan
required by Section 302 of ERISA and Section 412 of the
Code have been timely made; and
(v) no condition exists or event or transaction has
occurred with respect to any such plan which would
reasonably be expected to result in Buyer incurring any
liability, fine or penalty.
SECTION 4.7 Taxes.
-----
Except as set forth on Schedule 4.7 or as could not reasonably be
expected to have a Material Adverse Effect:
(a) all Tax Returns that are required to be filed on or
before the Closing Date by Seller have been duly and timely filed;
(b) all Taxes that are shown to be due on such Tax Returns
have been timely paid in full or fully accrued;
(c) all withholding Tax requirements imposed on Seller have
been satisfied in full in all respects, except for amounts that are being
contested in good faith (which contested amounts are disclosed on Schedule 4.7);
(d) Seller does not have in force any waiver of any statute
of limitations in respect of Taxes or any extension of time with respect to a
Tax assessment or
16
deficiency;
(e) there are no pending proposed deficiencies or other
written claims for unpaid Taxes of Seller; and.
(f) that the tangible personal property being transferred to
Buyer pursuant to this Agreement constitutes the entire operating assets of a
separate branch, division, or identifiable segment of a business as such phrase
is used in Sec. 151.304(b)(2) of the Texas Tax Code and Sec. 3.316(d) of Title
34 of the Texas Administrative Code. Therefore, Buyer's acquisition of such
property (excluding motor vehicles) is exempt from Texas sales and use taxes as
an occasional sale pursuant to Sec. 151.304 of the Texas Tax Code and
Sec.3.316(d) of Title 34 of the Texas Administrative Code.
SECTION 4.8 Title to Assets.
---------------
The delivery by Seller to Buyer at the Closing of the General
Conveyance in accordance with the terms of this Agreement will vest in Buyer on
the Closing Date good and indefeasible title to the Assets free and clear of all
Encumbrances other than Permitted Encumbrances.
SECTION 4.9 Assigned Contracts.
------------------
Each Assigned Contract to which Seller is a party in connection
with the conduct of the Business or by which any of the Assets are bound or
encumbered by or subject to (excluding the secured debt documents), and each
Assigned Contract to which Seller is a party or by which any asset or property
of Seller is bound or encumbered by or subject to, is described on Schedule 4.9.
Seller has provided or made available to Buyer true and correct copies of each
Assigned Contract identified on Schedule 4.9 and each amendment thereto. Except
as described on Schedule 4.9, Seller is not in breach or default in the
performance of its duties and obligations under any Assigned Contract that could
reasonably be expected to have a Material Adverse Effect. To Seller's Knowledge,
none of the other parties to any Assigned Contract described on Schedule 4.9 is
in breach or default in the performance of its duties and obligations under such
Assigned Contract that could reasonably be expected to have a Material Adverse
Effect and none of such Assigned Contracts has been terminated or revoked by any
such other party.
17
SECTION 4.10 Sufficiency of Assets.
---------------------
The Assets to be conveyed and transferred to Buyer at the Closing
shall constitute all of the tangible and intangible property, rights, benefits,
privileges, assets and entitlements that are necessary for Buyer to continue the
Business after the Closing on substantially the same basis as the Business has
been conducted over the 12 month period preceding the Closing Date; assuming,
however, that Buyer provides the necessary managerial, administrative and
accounting personnel and systems to oversee and administer the operation of the
Business.
SECTION 4.11 Insurance.
---------
Schedule 4.11 lists all current insurance policies that are
maintained by Seller for the benefit of the Business and the Assets. Except as
listed on listed on Schedule 4.11, all of the policies listed on Schedule 4.11
are in full force and effect, all premiums due thereon have been paid, and
Seller has complied in all material respects with the provisions of such
policies.
SECTION 4.12 Permits; Compliance with Applicable Law.
---------------------------------------
Except as set forth in Schedule 4.12:
(a) Seller holds all Permits necessary for the lawful conduct
of the Business and operation of the Assets under and pursuant to, and have
complied with and are not in default under or in violation of, any applicable
Law, including, without limitation, regulations of the Texas Railroad Commission
and the Federal Energy Regulatory Commission except in each case where the
failure to hold such Permit or such non-compliance or default could not
reasonably be expected to cause a Material Adverse Effect. To Seller's
Knowledge, the Business and operation of the Assets are not being conducted in
violation of any applicable Law, Permit or any Order, except for any such
violation which could not reasonably be expected to have a Material Adverse
Effect.
(b) Seller has not received any notice or other communication
from any Governmental Authority asserting (i) any violation of Law arising out
of the conduct of the Business and operation of the Assets, (ii) any violation
of or failure to comply with the term or requirement of any Permits, or (iii)
any revocation, withdrawal, suspension, cancellation, termination or
modification of any Permit, except for violations, failures to comply,
revocations, withdrawals, suspensions, cancellations, terminations or
modifications which could not reasonably be expected to have a Material Adverse
Effect.
SECTION 4.13 Absence of Certain Changes.
--------------------------
Except as set forth on Schedule 4.13, since December 31, 2004,
there has not been any:
(a) damage to or destruction or loss of any material asset or
property of Seller, including, without limitation, the Assets;
18
(b) sale, lease or disposition of any material asset or
property of the Seller, including, without limitation, the Assets, other than
the sale of LPG in the ordinary course of the Business;
(c) cancellation or waiver of any claims or rights with
respect to the Business or Assets in excess of $20,000;
(d) material change in the accounting methods used by Seller
except as required by Law, Order or generally accepted accounting practices in
the United States;
(e) single capital expenditure by Seller in excess of $20,000
for additions to property or equipment, including, without limitation, the
Assets, or aggregate capital expenditures in excess of $40,000;
(f) termination or cancellation of a Contract that, prior to
such termination or cancellation, involved the payment to or receipt by Seller
or any Affiliate of Seller of amounts in excess of $100,000;
(g) other event or occurrence (whether or not covered by
insurance) that has resulted in a change that has a Material Adverse Effect or
could reasonably be expected to result in a change that has a Material Adverse
Effect; or
(h) legal commitment by Seller to any of the foregoing.
SECTION 4.14 Fees.
----
Except as set out in Schedule 4.14, Seller has not paid or become
obligated to pay any fee or commission to any broker, finder or intermediary in
connection with the transaction contemplated hereby.
SECTION 4.15 Disclaimer.
----------
Except to the extent expressly set forth in this Agreement,
Seller makes no representations or warranties whatsoever (whether express,
implied, by statute, common law or otherwise) and disclaims all liability and
responsibility for any other representation, warranty, statement or information
made or communicated (orally or in writing) to Buyer. Without limiting the
generality of the foregoing, SELLER EXPRESSLY DISCLAIMS AND NEGATES ANY IMPLIED
OR EXPRESS WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE
WITH RESPECT TO THE ASSETS.
19
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer represents and warrants to Seller as follows as of the Closing Date:
SECTION 5.1 Organization; Power and Authority.
---------------------------------
Buyer is a corporation duly organized, validly existing and in
good standing under the Laws of the State of Delaware. Buyer has all requisite
corporate power and authority to own and operate its assets and properties and
conduct its business and operations as presently being conducted.
SECTION 5.2 Authorizations; Execution and Validity.
--------------------------------------
(a) As of the date of execution of this Agreement, the
execution and delivery of this Agreement by Buyer, the performance by Buyer of
its obligations under this Agreement and the consummation by Buyer of the
transaction contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Buyer.
(b) This Agreement upon being executed and delivered by
Buyer, constitutes a valid and binding obligation of Buyer and is enforceable
against Buyer in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar Laws now or hereafter in effect affecting creditors'
rights generally or general principles of equity.
SECTION 5.3 No Conflicts; Consents.
----------------------
Except as set forth in Schedule 5.3, none of the execution and
delivery by Buyer of this Agreement, the performance by Buyer of its obligations
under this Agreement or the consummation by Buyer of the transaction
contemplated hereby will:
(a) violate any Law or Order, except as would not materially
adversely affect the ability of Buyer to perform its obligations under and
consummate the transaction contemplated by this Agreement;
(b) violate the certificate of incorporation, by-laws or
other corporate governance instruments of Buyer;
(c) require any consent from or filing with any Governmental
Authority, or any consent from any other Person , except as would not materially
adversely affect the ability of Buyer to perform its obligations under and
consummate the transaction contemplated by this Agreement; or
(d) violate or breach any material contract of Buyer, except
as would not material adversely affect the ability of Buyer to perform its
obligations under and consummate the transaction contemplated by this Agreement.
20
SECTION 5.4 Litigation.
----------
There are no Legal Proceedings pending or, to Buyer's knowledge,
threatened against Buyer that question the validity of this Agreement or any
action taken or to be taken by Buyer in connection with, or which seek to enjoin
or obtain monetary damages in respect of, this Agreement or the consummation by
Buyer of the transaction contemplated hereby.
SECTION 5.5 Investment Intent; Sophisticated Buyer.
--------------------------------------
Buyer:
(a) is an informed sophisticated Person with sufficient
knowledge and experience in investment and financial matters so as to be capable
of evaluating the risks and merits of its purchase of the Assets;
(b) acknowledges that the purchase of the Assets are
consistent with its general investment objectives;
(c) understands that the purchase of the Assets involves a
high degree of risk;
(d) is financially able to bear the risks of purchasing the
Assets;
(e) has had an opportunity to discuss the business,
management and financial affairs of the Business and the Assets with Seller and,
in entering into this Agreement, is relying upon the representations, warranties
and other terms and provisions of this Agreement and on its informed conclusions
of its own investigations of the Business and the Assets.
SECTION 5.6 Financial Ability.
-----------------
Buyer has, and will have as of the Closing Date, sufficient funds
with which to pay the Purchase Price and consummate the transaction contemplated
by this Agreement.
SECTION 5.7 Fees.
----
Buyer has not paid or become obligated to pay any fee or
commission to any broker, finder or intermediary in connection with the
transaction contemplated hereby.
SECTION 5.8 Disclaimer.
----------
Except to the extent expressly set forth in this Agreement, Buyer
makes no representations or warranties whatsoever (whether express, implied, by
statute, common law, or otherwise) and disclaims all liability and
responsibility for any other representation, warranty, statement or information
made or communicated (orally or in writing) to Seller.
ARTICLE VI
COVENANTS
SECTION 6.1 Covenants of Seller.
---------------------
21
Seller covenants and agrees that:
(a) Conduct of Business. Until the Closing Date, Seller
---------------------
shall (unless Buyer shall otherwise consent in writing or as necessary for
Seller to carry out its obligations under the Assigned Contracts set forth on
Schedule 4.9, required by Law or Order, or as otherwise specifically
contemplated by this Agreement):
(i) use its commercially reasonable efforts to operate the
Assets and Business in the usual, regular and ordinary
manner consistent with past practice, and use their
commercially reasonable efforts to preserve their
present business operations, organization and goodwill,
including, without limitation, those involving the
Business;
(ii) maintain books, accounts and records in the usual,
regular and ordinary manner, on a basis consistent with
prior years, and comply in all material respects with
all contractual and other obligations, including,
without limitation, those involving the Assigned
Contracts;
(iii) comply in all material respects with all applicable
Laws to which they are subject;
(iv) not create, incur or assume any debt, except in
connection with the Secured Debt Facility, for borrowed
money that is secured by a Lien on any of the Assets;
(v) not make any material election with respect to Taxes;
(vi) not amend or modify the organizational documents of the
Seller;
(vii) not amend any of the Contracts referenced on Schedule
4.9 or enter into any material Contract relating to the
Business;
(viii) not release or waive any material rights or benefits
relating to the Business or the Assets; or
(ix) not agree to take any action or actions prohibited by
any of the foregoing clauses (i) through (viii).
(b) Commercially Reasonable Efforts. Between the date of
---------------------------------
this Agreement and the Closing Date, Seller will use its commercially reasonable
efforts to cause the conditions set forth in Article VIII to be satisfied
including obtaining consents to assignment, in a form that is mutually agreed to
by both Parties, from the counterparties under each Contract comprising a part
of the Assets.
(c) No Solicitation.
----------------
(i) From and after the date of this Agreement until the
earlier of the termination of this Agreement in accordance with its terms or the
Closing, the Seller and its
22
Affiliates shall not, directly or indirectly, through any officer, director,
employee, financial advisor, representative or agent:
(A) solicit, initiate, or encourage any inquiries or proposals
that constitute, or could reasonably be expected to lead to, a proposal or offer
for (w) a transaction pursuant to which any person or entity (or group of
persons or entities) (a "Third Party") other than the Buyer or its Affiliates,
may acquire the Assets , (x) a transaction pursuant to which a Third Party may
acquire more than 50% of the outstanding Equity Interests of the Seller pursuant
to a tender offer or exchange offer or otherwise, (y) a merger or other business
combination involving the Seller pursuant to which any Third Party may acquire
more than 50% of the outstanding Equity Interests of the Seller or of the entity
surviving such merger or business combination, or (z) any other transaction
pursuant to which any Third Party may acquire control of assets of the Seller
having a fair market value equal to more than 50% of the fair market value of
all the assets of the Seller immediately prior to such transaction, other than
the transaction contemplated by this Agreement (any of the foregoing inquiries
or proposals being referred to in this Agreement as an "Acquisition Proposal"),
(B) engage in negotiations or discussions concerning, or provide
any non-public information to any Third Party relating to, any Acquisition
Proposal, or
(C) agree to or recommend any Acquisition Proposal; provided,
--------
however, that nothing contained in this Agreement shall, so long as Seller is
-------
not in material breach of its obligations under this Section 6.3(c) and subject
to the provisions of Section 6.1 (c) (iii), prevent the Seller or its Board of
Directors from:
(1) furnishing information to, or entering into discussions or
negotiations with, any Third Party in connection with an
unsolicited bona fide written Acquisition Proposal (an
"Unsolicited Acquisition Proposal") by such Third Party or
recommending an Unsolicited Acquisition Proposal to the holders
of the Equity Interests of the Seller, if and only to the extent
that:
(I) the Board of Directors of the Seller believes in good
faith (after consultation with, and receiving an opinion
from, a financial advisor) that such Unsolicited Acquisition
Proposal is reasonably likely to result in a transaction
more favorable to the holders of the Equity Interests of the
Seller, from a financial point of view, than the transaction
contemplated by this Agreement (any such more favorable
Unsolicited Acquisition Proposal being referred to in this
Agreement as a "Superior Proposal") and the Board of
Directors determines in good faith after consultation with
outside legal counsel that such action is advisable in
accordance with the fiduciary duties of the Board of
Directors to holders of the Equity Interests under
applicable law, and
(II) prior to furnishing non-public information to, or
entering into discussions or negotiations with, such Third
Party, such Board
23
of Directors receives from such Third Party an executed
confidentiality agreement with terms no less favorable to
the Seller than those contained in the confidentiality
agreement between the Buyer and the Seller dated June 6,
2005.
(2) complying with Rule 14d-9 and 14e-2 promulgated under the
Securities Exchange Act of 1934 or other applicable law or
regulation with regard to an Unsolicited Acquisition Proposal;
provided, however, that neither the Seller nor its Board of
Directors shall, except as permitted by paragraph (1) of this
Section 6.1(c)(i), propose to approve or recommend an Unsolicited
Acquisition Proposal, or
(3) entering into an agreement to consummate a Superior Proposal
(provided that the Seller shall have terminated this Agreement
pursuant to Section 10.1(e)).
(ii) The Seller will immediately cease any and all existing
activities, discussions or negotiations with any parties conducted prior to the
execution of this Agreement of the nature described in Section 6.1(c)(i) and
will use reasonable efforts to obtain the return of any confidential information
furnished to any such parties.
(iii) The Seller shall notify the Buyer promptly after receipt by
the Seller of any Unsolicited Acquisition Proposal or any request for nonpublic
information in connection with an Unsolicited Acquisition Proposal or for access
to the properties, books or records of the Seller by any Third Party that
informs the Seller that it is considering making, or has made, an Unsolicited
Acquisition Proposal.
24
SECTION 6.2 Covenants of Buyer.
------------------
Buyer covenants and agrees that:
(a) Return of Information. In the event of termination of
-----------------------
this Agreement, Buyer will return or cause to be returned to Seller all
documents and other materials obtained from, or on behalf of, Seller in
connection with the transaction contemplated hereby and will keep confidential
any such information in accordance with the terms of the Buyer Confidentiality
Agreement;
(b) Seller's Access to Documents; Preservation of Books and
-----------------------------------------------------------
Records.
-------
If the Closing occurs:
(i) For a period of three years from the Closing Date, (A) Buyer
shall not dispose of or destroy any of the Books and Records
of Seller transferred to Buyer pursuant to this Agreement,
without first offering to turn over possession thereof to
Seller by written notice to Seller at least 90 days prior to
the proposed date of such disposition or destruction, and
(B) Buyer shall allow Seller and its agents access to all
Books and Records (provided, however, that any such access
or copying shall be had or done in such a manner so as not
to unduly interfere with the normal conduct of Buyer's
businesses);
(ii) At least 90 days prior to the completion of the aforesaid
period, Seller may advise Buyer in writing whether Seller
desires to obtain possession of any of the documents which
were delivered to Buyer at Closing. To the extent that Buyer
has decided to dispose of or destroy such documents and not
continue to retain such documents pursuant to the provisions
of Section 6.2 (b)(i), Seller shall be entitled to receive
possession of such documents upon its request as provided in
this subparagraph;
(iii) The three year period referred to in Section 6.2(b)(i)
shall be extended in the event that Seller advises Buyer in
writing that any Legal Proceeding or investigation is
pending or threatened at the termination of such three year
period and such extension shall continue until any such
Legal Proceeding or investigation has been settled through
judgment or otherwise and/or is no longer pending or
threatened.
(c) Commercially Reasonable Efforts. Between the date of
---------------------------------
this Agreement and the Closing Date, Buyer will use its commercially reasonable
efforts to cause the conditions set forth in Article IX to be satisfied.
25
SECTION 6.3 Other Covenants.
---------------
(a) Tax Proration. Ad valorem and real and tangible personal
-------------
property taxes with respect to the Assets for the calendar year in which the
Closing occurs shall be prorated between Seller and Buyer as of the Closing
Date. If the amount of such Taxes with respect to any of the Assets for the
calendar year in which the Closing occurs has not been determined as of the
Closing Date, then the Taxes with respect to such Assets for the preceding
calendar year shall be used to calculate such prorations. Seller's portion of
the prorated Taxes shall be applied as a credit against (thus a reduction of)
the Purchase Price due from Buyer at the Closing.
(b) Intentionally Deleted.
---------------------
(c) Assignments Requiring Consents. To the extent that any
------------------------------
Contract, Permit, Easement or Lease is not assignable by the terms thereof or
consent to the assignment thereof cannot be obtained by Seller prior to Closing,
then if Buyer elects to proceed with the Closing without obtaining such consent,
such Contract, Permit, Easement or Lease shall be held by Seller in trust for
Buyer and shall be performed by Buyer in the name of the Seller and all benefits
and obligations derived thereunder shall be for the account of Buyer and at no
cost to Buyer; provided, where entitlement of Buyer to such Contract, Permit,
Easement or Lease is not recognized by any third Person, Seller shall at the
request of Buyer and at Buyer's expense and enforce at no cost to Buyer in a
reasonable manner and under the direction and control of Buyer, any and all
rights of Seller against such third Person or otherwise available under the
same.
(d) Removal of Seller's Name. Within 90 days after the
------------------------
Closing Date, Buyer shall remove or cause to be removed the name Penn Octane or
any variations and derivations thereof or logos relating thereto from the Assets
(including all pipeline markers) and Buyer shall not thereafter make any use
whatsoever of such names or logos.
(e) Minimum Requirement.
-------------------
(i) The Purchase Price has been determined based on the volume
and quality of (A) the LPG inventory comprising the Assets
to be transferred to Buyer at the Closing and (B) the LPG in
the storage operated by the Companies, being no less than
the minimum levels and standards for LPG inventory set forth
on Schedule 6.3(e)(i) (the "Minimum Requirement").
(ii) To determine whether the Minimum Requirement is satisfied,
Seller and Buyer shall cause the procedures described in
Schedule 6.3(e)(i) to be implemented within or by the
periods of time indicated in such Schedule 6.3(e)(i). If
pursuant to Schedule 6.3(e)(i) it is determined that the
Minimum Requirement was not satisfied as of the Closing
Effective Time, then Seller shall pay to Buyer the
Deficiency Amount as described in and determined pursuant to
such Schedule 6.3(e)(i), such payment to be made by Seller
to Buyer within five Business Days of such determination. If
pursuant to Schedule 6.3(e)(i) it is determined that the
Minimum
26
Requirement was exceeded as of the Closing Effective Time,
then Buyer shall pay to Seller the Excess Amount as
described in and determined pursuant to such Schedule
6.3(e)(i), such payment to be made by Buyer to Seller within
five Business Days of such determination.
(f) Environmental Inspection.
-------------------------
(i) Until five Business Days prior to Closing, Buyer shall have
the right to investigate, inspect, audit, study and test the
Real Property, including the soil, groundwater and all other
physical features, for the existence of Environmental
Conditions and violations of Environmental Laws (the
"Environmental Audit"). The scope, sequence and timing of
the Environmental Audit shall be at the sole discretion of
Buyer. The cost and expense of the Environmental Audit shall
be born by Buyer.
(ii) Buyer may confer with Governmental Authorities and review
and copy all records of Governmental Authorities with
respect to the Real Property in connection with the
Environmental Audit.
(iii) If the Environmental Audit reveals, or at any time prior to
Closing Buyer otherwise becomes aware of, the existence of
any Environmental Condition or violation of Environmental
Law which Buyer, in its sole discretion, is unwilling to
accept, Buyer shall have the right and option to:
(A) allow Seller additional time prior to Closing (as
determined by Buyer) in which to undertake actions
sufficient, in the reasonable judgment of Buyer, to remedy
any such Environmental Condition or violation of
Environmental Law, in which case the Closing shall be
postponed by such additional time period;
(B) attempt to negotiate with Buyer a reduction in the
Purchase Price so as to compensate Buyer for costs and
damages which may be associated with any such Environmental
Condition or violation of Environmental Law; or
(C) attempt to negotiate with Buyer any other agreement with
respect to any such Environmental Condition or violation of
Environmental Law. Buyer's obligation to close the
transaction contemplated by this Agreement shall be
conditioned upon such Environmental Condition(s) and
violation(s) of Environmental Law being fully remedied by
the Closing or Buyer and Seller having reached an agreement
that permits the Closing to occur without such full remedy
having been completed by the Closing.
27
(iv) If Seller is unable or unwilling to remedy any such
Environmental Condition or violation of Environmental Law or
if Seller and Buyer are unable to reach an agreement as
contemplated under subsections (B) or (C) above, then either
Buyer or Seller may terminate this Agreement without any
further obligation or liability of any Party.
(g) Employee and Benefit Matters.
-------------------------------
(i) Seller shall make available to Buyer all U.S. Business
Employees, as set forth on Schedule 4.6(a), to discuss
potential employment with Buyer or an Affiliate of Buyer
(such entity that makes employment offers being the "Buyer
Employer"). Seller shall provide Buyer with an updated list
of the U.S. Business Employees within five (5) days of the
date upon which any change therein has occurred. On or
before the Closing Date, but effective as of the Closing
Date and conditioned upon the occurrence of the Closing,
Buyer shall cause the Buyer Employer to make offers of
employment to the U.S. Business Employees who are employed
by Seller or an Affiliate of Seller immediately prior to the
Closing Date and who are selected by the Buyer Employer in
its sole discretion upon written notice to Seller at least
five days prior to the Closing Date. The terms and
conditions of each such offer of employment shall be on
terms and conditions determined by the Buyer Employer, in
its sole discretion, that are consistent with the provisions
of this Section 6.3(g). All offers of employment shall be
subject to the Buyer Employer's policies concerning
background and security checks and drug/substance abuse
testing. As used in this Agreement, the term "U.S.
Continuing Employee" means each U.S. Business Employee who
accepts an offer of employment from the Buyer Employer as
provided in the preceding provisions of this paragraph and
reports to work and commences active duty for the Buyer
Employer. The "Hire Date" for each U.S. Business Employee
who accepts an employment offer from the Buyer Employer
pursuant to the terms of this paragraph and who actually
becomes employed by the Buyer Employer in accordance with
such offer shall be the Closing Date, except with respect to
those individuals to whom employment offers are made and (A)
who are not Actively Employed as of the Closing Date, in
which case the Hire Date shall be the date upon which such
individual is able to and does commence active duty with the
Buyer Employer, or (B) with respect to whom Buyer and Seller
have agreed will have a later Hire Date.
(ii) For a period of not less than one year beginning on the
Closing Date, Buyer shall cause the Buyer Employer to
provide the U.S. Continuing Employees while employed by the
Buyer Employer
28
during such period with employee benefits on a basis
substantially similar to those provided to similarly
situated employees of the Buyer Employer. From and after the
applicable Hire Date, for purposes of (x) eligibility to
participate in, and vesting under, the employee benefit
plans that are intended to be qualified under Section 401 of
the Code and that are maintained after such date by the
Buyer Employer and (y) eligibility and benefit determination
under the vacation policies maintained by the Buyer
Employer, Buyer shall cause the Buyer Employer to recognize
each U.S. Continuing Employee's years of service for
corresponding purposes that were credited prior to such U.S.
Continuing Employee's Hire Date under the corresponding
Seller Plans in which the U.S. Continuing Employee
participated immediately prior to the Closing Date. Promptly
after each U.S. Continuing Employee's Hire Date, Seller
shall provide written notice to Buyer of such prior service
credit.
(iii) On or before each U.S. Continuing Employee's Hire Date,
Seller shall (A) take any necessary action to fully vest as
of such date the U.S. Continuing Employee's account balances
and other accrued benefits under all Seller Plans that are
intended to be qualified under Section 401 of the Code and
(B) take such actions, if any, as may be necessary to permit
the continuation of loan repayments after such date by the
U.S. Continuing Employee if he or she has an outstanding
loan from any such Seller Plan as of such date. Such loan
repayments shall be made directly by the U.S. Continuing
Employee to the applicable Seller Plan, and shall be
permitted so long as the U.S. Continuing Employee remains
employed by the Buyer Employer or any of its Affiliates.
(iv) Buyer and its Affiliates shall not have any responsibility
or liability with respect to the Seller Plans. Any and all
liabilities for severance payments and other amounts owed
with respect to a U.S. Business Employee (a) who is not
offered employment with Buyer, the Buyer Employer or any of
their Affiliates, or (b) who is otherwise not employed by
Buyer, the Buyer Employer or any of their Affiliates or (c)
whose employment with Seller is terminated for any reason
whatsoever shall, in each such case, remain the
responsibility of Seller.
Nothing in this Agreement shall require or be construed or
interpreted as requiring Buyer, the Buyer Employer or any of their Affiliates to
continue the employment of any of the U.S. Continuing Employees following the
Closing Date, or to prevent Buyer, the Buyer Employer or any of their Affiliates
from changing the terms and conditions of employment (including compensation and
benefits) of any of the U.S. Continuing Employees following the Closing Date.
Without limiting the generality of Section 12.4, this Section 6.3(g)
29
is not intended to confer upon any U.S. Business Employee or U.S. Continuing
Employee any rights or remedies hereunder.
(h) Schedules. If on the date on which this Agreement is
---------
executed by all Parties hereto, any schedule to this Agreement has not been
completed, then such schedule shall be completed as promptly as commercially
practical and such completed schedule shall be treated as if it had been
delivered on the date of this Agreement. No representation or warranty contained
in this Agreement shall be deemed breached as of the date of the making of such
representation or warranty by reason of the fact that the relevant schedule was
incomplete as of such date, provided that a complete schedule that renders true
such representation or warranty is delivered pursuant to this Section 6.3 (h) at
least ten Business Days before the Closing.
ARTICLE VII
TAX MATTERS
SECTION 7.1. Preparation and Filing of Tax Returns.
-------------------------------------
Seller shall cause to be included in the consolidated federal
income Tax Returns (and the state income Tax Returns of any state that permits
consolidated, combined or unitary income Tax Returns, if any) of the Seller
Group for all periods ending on or before the Closing Date, all items of income,
gain, loss, deduction or credit ("Tax Items") of Seller and associated with the
Assets that are required to be included therein, shall cause such Tax Returns to
be timely filed with the appropriate Taxing Authorities, and shall be
responsible for the timely payment (and entitled to any refund) of all Taxes due
with respect to the periods covered by such Tax Returns.
SECTION 7.2. Seller's Tax Indemnification.
----------------------------
Seller hereby agrees to protect, defend, indemnify and hold
harmless Buyer from and against, and agrees to pay all Taxes associated with the
Business and the Assets for all periods ending on or before the Closing Date and
Taxes under Section 3.1(c).
SECTION 7.3. Buyer's Tax Indemnification.
---------------------------
Buyer hereby agrees to protect, defend, indemnify and hold
harmless Seller from and against, and agrees to pay, any Taxes associated with
the Business and the Assets attributable to the time period after the Closing
Date.
SECTION 7.4. Tax Indemnification Procedures.
------------------------------
(a) If a claim ("Tax Indemnified Claim") shall be made by any
Taxing Authority that, if successful, would result in the indemnification of a
Party under this Agreement (referred to herein as the "Tax Indemnified Party"),
the Tax Indemnified Party shall promptly notify the party obligated under this
Agreement to so indemnify (referred to herein as the "Tax Indemnifying Party")
in writing of such fact.
(b) The Tax Indemnifying Party shall have the right, at its
sole cost, to control the defense, prosecution, settlement or compromise of the
Tax Indemnified Claim, and the Tax Indemnified Party shall take such action in
connection with contesting a Tax Indemnified Claim as the Tax Indemnifying Party
shall reasonably request in writing from time to time, including the selection
of counsel and experts and the execution of powers of attorney,
30
provided that the Tax Indemnifying Party shall have agreed to pay to the Tax
Indemnified Party all costs and expenses that the Tax Indemnified Party incurs
in connection with contesting such claim, including reasonable attorneys' and
accountants' fees and disbursements. The Tax Indemnified Party shall not make
any payment of such claim for at least 30 days (or such shorter period as may be
required by applicable Law) after the giving of the notice required by Section
7.4(a), shall give to the Tax Indemnifying Party any information reasonably
requested relating to such claim, and otherwise shall cooperate with the Tax
Indemnifying Party in good faith in order to contest effectively any such claim.
(c) Subject to the provisions of Section 7.4(b), the Tax
Indemnified Party shall only enter into a settlement of such contest with the
applicable Taxing Authority or prosecute such contest to a determination in a
court or other tribunal of initial or appellate jurisdiction as instructed by
the Tax Indemnifying Party.
(d) If, after actual receipt by the Tax Indemnified Party of
an amount advanced by the Tax Indemnifying Party pursuant to this Section 7.4,
the extent of the liability of the Tax Indemnified Party with respect to the
claim shall be established by the final judgment or decree of a court or other
tribunal or a final and binding settlement with an administrative agency having
jurisdiction thereof, the Tax Indemnified Party shall promptly repay to the Tax
Indemnifying Party the amount advanced to the extent of any refund received by
the Tax Indemnified Party with respect to the claim together with any interest
received thereon from the applicable Taxing Authority and any recovery of legal
fees from such Taxing Authority, net of any Taxes as are required to be paid by
the Tax Indemnified Party with respect to such refund, interest or legal fees
(calculated at the maximum applicable statutory rate of Tax in the year of
recovery without regard to any other Tax Items).
ARTICLE VIII
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION
The obligation of Buyer to consummate the transaction
contemplated hereby on the Closing Date is subject to the satisfaction of each
of the following conditions at or prior to the Closing:
SECTION 8.1. Accuracy of Representations and Warranties. Each of the
---------------------------------------------
representations and warranties of Seller contained in Article IV of this
Agreement shall be true and correct, in each case at and as of the Closing Date
as if made at and as of the Closing Date (except for the representations and
warranties that address matters only as of a particular date or only with
respect to a specific period of time, which need only be true and accurate as of
such date or with respect to such period).
31
SECTION 8.2. Performance of Covenants.
------------------------
Seller shall have performed and complied, in all material
respects, with the covenants and provisions of this Agreement, including,
without limitation those in Section 6.1 and Section 6.3, required herein to be
performed or complied with by Seller between the date hereof and the Closing
Date.
SECTION 8.3. Officers' Certificates.
----------------------
Buyer shall have received a certificate from Penn to the effect
set forth in Sections 8.1 and 8.2 hereof, dated as of the Closing Date, signed
by a duly authorized officer of Penn.
SECTION 8.4. No Order.
--------
No Order shall be in effect prohibiting, enjoining or restraining
the consummation of the transaction contemplated in this Agreement.
SECTION 8.5. Certified Resolutions.
---------------------
Buyer shall have received a certificate of the Secretary or an
Assistant Secretary of Penn, dated as of the Closing Date, setting forth the
resolutions of the board of directors of Penn, authorizing the execution and
delivery of this Agreement and the consummation of the transaction contemplated
hereby, and certifying that such resolutions were duly adopted and have not been
rescinded or amended as of the Closing Date.
SECTION 8.6. Secretary's Certificate.
-----------------------
Buyer shall have received a certificate of the Secretary or an
Assistant Secretary of Penn attesting as to the incumbency and signature of each
director or officer of Penn who shall execute this Agreement.
SECTION 8.7. Liens and Secured Debt.
----------------------
All Liens on the Assets, securing any obligations under or with
respect to the Secured Debt Facility or any other Liens involving the Assets
shall have been released and terminated and copy of the documents evidencing
such release and termination shall have been provided to Buyer.
SECTION 8.8. Consents.
--------
Each of the consents identified in Schedule 4.3 shall have been
obtained.
32
SECTION 8.9. Due Diligence.
-------------
Buyer shall have completed its due diligence inspections within
five Business Days before the Closing Date and shall be satisfied, in its sole
discretion, with the results of all due diligence conducted by Buyer with
respect to Seller, the Business and the Assets, including, without limitation,
with respect to all matters pertaining to financial assumptions, title to Real
Property, and environmental, labor, regulatory, accounting, business practices,
transparency and corporate governance issues.
SECTION 8.10. Authorization to Assign.
-----------------------
Seller shall have delivered to Buyer certified copies of the
corporate resolutions adopted by the Board of Directors and approved by the
majority of the Shareholders' of Seller authorizing the transfer of the Assets.
SECTION 8.11. Seadrift Pipeline Lease.
-----------------------
Seadrift Pipeline Corporation shall have approved of the
assignment of the Seadrift Pipeline Lease by Seller to Buyer.
SECTION 8.12.Exxon Contract.
---------------
Exxon shall have approved of the assignment of the Exxon Contract
by Seller to Buyer.
SECTION 8.13 Concurrent Closing with Rio.
-----------------------------
The concurrent Closing of the Purchase and Sale Agreement between
Rio and Buyer must take place.
SECTION 8.14 No Change In Law.
----------------
No Law, Order or Tax that was not in force as of the date of the
execution of this Agreement shall have been adopted or imposed (or shall be
reasonably imminent in being adopted or imposed), and no increase in rates of
taxation shall have occurred (or shall be reasonably imminent in occurring)
after the date of execution of this Agreement, that, in any such event, would
reasonably be expected to result in any Material Adverse Effect.
SECTION 8.15. Stockholder Approval.
--------------------
Holders of a majority of the outstanding common stock of Penn
shall have approved the principal terms of this Agreement and the transaction
contemplated hereby, as required by applicable law and the certificate of
incorporation of Penn.
33
ARTICLE IX
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION
The obligation of Seller to consummate the transaction contemplated hereby
on the Closing Date is subject to the satisfaction of each of the following
conditions at or prior to the Closing:
SECTION 9.1 Accuracy of Representations and Warranties.
------------------------------------------
Each of the representations and warranties of Buyer contained in
Article V of this Agreement shall be true and correct, in each case at and as of
the Closing Date as if made at and as of the Closing Date (except for the
representations and warranties that address matters only as of a particular date
or only with respect to a specific period of time, which need only be true and
accurate as of such date or with respect to such period).
SECTION 9.2 Performance of Covenants.
--------------------------
Buyer shall have performed and complied, in all material
respects, with the covenants and provisions in this Agreement, including,
without limitation those in Sections 6.2 and 6.3, required herein to be
performed or complied with by Buyer between the date hereof and the Closing
Date.
SECTION 9.3 Officer's Certificate.
---------------------
Seller shall have received a certificate from Buyer to the effect
set forth in Sections 9.1 and 9.2 hereof, dated as of the Closing Date, signed
by a duly authorized officer of Buyer.
SECTION 9.4 No Order.
--------
No Order shall be in effect prohibiting, enjoining or restraining
the consummation of the transaction contemplated in this Agreement.
SECTION 9.5 Certified Resolutions.
---------------------
Seller shall have received a certificate of a duly authorized
officer of Buyer, dated as of the Closing Date, setting forth the resolutions of
the board of directors of Buyer authorizing the execution and delivery of this
Agreement and the consummation of the transaction contemplated hereby, and
certifying that such resolutions were duly adopted and have not been rescinded
or amended as of the Closing Date.
SECTION 9.6 Secretary's Certificate.
------------------------
Seller shall have received a certificate of the Secretary or an
Assistant Secretary of Buyer attesting as to the incumbency and signature of
each officer of Buyer who shall execute this Agreement.
SECTION 9.7 No Change In Law.
-------------------
No Law, Order or Tax that was not in force as of the date of the
execution of this Agreement shall have been adopted or imposed (or shall be
reasonably imminent in being adopted or imposed), and no increase in rates of
taxation shall have occurred (or shall be
34
reasonably imminent in occurring) after the date of execution of this Agreement,
that, in any such event, would reasonably be expected to result in any Material
Adverse Effect.
SECTION 9.8. Stockholder Approval.
---------------------
Holders of a majority of the outstanding common stock of Penn
shall have approved the principal terms of this Agreement and the transaction
contemplated hereby, as required by applicable law and the certificate of
incorporation of Penn.
ARTICLE X
TERMINATION
SECTION 10.1. Termination of Agreement.
------------------------
Anything herein to the contrary notwithstanding, this Agreement
and the transaction contemplated hereby may be terminated at any time before the
Closing Date as follows:
(a) By mutual written consent of Seller and Buyer;
(b) By Seller or Buyer, if the Closing shall not have
occurred prior to or on October 31, 2005 (which date may be extended in writing
by the mutual agreement of Seller and Buyer);
(c) By Seller or Buyer, if consummation of the transaction
contemplated hereby would violate any non-appealable final Order of a
Governmental Authority having competent jurisdiction; or
(d) By Buyer at any time within five (5) Business Days
following completion of any schedule to this Agreement pursuant to Section
6.3(h) if Buyer is not satisfied with the contents of any Schedule; provided,
however, that Seller is afforded at least three Business Days before termination
of this Agreement to (i) provide a Schedule satisfactory to Buyer or (ii)
provide a monetary remedy.
(e) by the Seller if the Seller has, in accordance with the
terms of Section 6.1(c)(i)(3) above, entered into an agreement to consummate a
Superior Proposal. If the Seller terminates this Agreement pursuant to this
Section 10.1(e), the Seller shall pay the Buyer a termination fee of $400,000
within 60 days after such termination; provided that in no event shall the
Seller be required to pay such fee if, immediately prior to the termination of
this Agreement, the Buyer was in material breach of its obligations under this
Agreement.
SECTION 10.2. Effect of Termination.
---------------------
(a) If this Agreement shall be terminated pursuant to Section
10.1, all further obligations of the Parties shall terminate without further
liability of any Party to another (except for the obligations outlined in
section 10.1 (e)) and each Party shall pay all costs and
35
expenses incident to its negotiation and preparation of this Agreement and to
its performance of and compliance with all agreements and conditions contained
herein on its part to be performed or complied with, including the fees,
expenses and disbursements of its counsel; provided, the obligations of Buyer
under the Buyer Confidentiality Agreement shall survive any such termination.
(b) Notwithstanding Section 10.2(a), if all conditions
precedent to the obligations of a Party set forth in Article VIII or Article IX
(as applicable) have been met (or the non-breaching Party is ready, willing and
able to satisfy such conditions) and the Closing does not occur on or before the
date specified in Section 10.1(b) because of the other Party being in breach of
any of its representations, warranties or obligations hereunder, then the
breaching Party shall remain liable for the breach of such representations,
warranties and obligations.
ARTICLE XI
INDEMNIFICATION
SECTION 11.1 Seller Indemnification.
----------------------
(a) Subject to the limitations set forth in this Article XI, if
the Closing occurs, then from and after the Closing Date Seller shall indemnify
and hold Buyer and Buyer's Affiliates and their respective officers, directors,
partners, members, employees and agents thereof harmless from and against any
and all Losses arising out of, based upon, attributable to or resulting from:
(i) any breach of any representation or warranty of Seller
contained in Article IV or any inaccuracy in the certificate
delivered to Buyer pursuant to Section 8.3;
(ii) any breach of any agreement or covenant on the part of
Seller contained in this Agreement;
(iii) any Losses arising out of any act, event or omission
occurring prior to the Closing Date (and not otherwise
constituting an Assumed Liability) in the conduct by Seller
of the Business, including, without limitation, legal, tax,
title and ownership issues; and
(iv) the Retained Liabilities.
(b) The foregoing shall not apply to any breach of Seller's
representations and warranties set forth in Section 4.7, or to any breach of
Seller's covenants set forth in Article VII, it being agreed and understood that
Buyer's sole and exclusive remedies for any matters relating to Taxes shall be
as provided in Article VII.
SECTION 11.2 Buyer Indemnification.
---------------------
(a) Subject to the limitations set forth in this Article XI,
if the Closing occurs, then from and after the Closing Date Buyer shall
indemnify and hold Seller and Seller's Affiliates and their respective officers,
directors, members, partners, employees and agents thereof harmless from and
against any and all Losses arising out of, based upon, attributable to or
resulting from:
36
(i) any breach of any representation or warranty of Buyer
contained in this Agreement or any inaccuracy in the
certificate delivered to Seller pursuant to Section 9.3;
(ii) any breach of any agreement or covenant on the part of Buyer
contained in this Agreement;
(iii) any Losses arising out of any act, event or omission
occurring after the Closing Date (and not otherwise
constituting a Retained Liability) in the conduct by Buyer
of the Business or operation of the Assets; and
(iv) the Assumed Liabilities.
(b) The foregoing shall not apply to any breach of Buyer's
covenants set forth in Article VII, it being agreed and understood that Seller's
sole and exclusive remedies for matters relating to Taxes shall be as provided
in Article VII.
SECTION 11.3 Indemnification Procedures.
--------------------------
If any third Person (i.e., a Person other than a Party or any
Affiliate of a Party) asserts any claim against a Party which, if successful,
would entitle the Party to indemnification under this Article XI (the
"Indemnified Party"), it shall give notice of such claim to the Party from whom
it intends to seek indemnification (the "Indemnifying Party") and the
Indemnifying Party shall have the right to assume the defense of such claim at
its expense. If the Indemnifying Party does assume such defense, it shall
indemnify and hold the Indemnified Party harmless from and against any and all
Losses caused by or arising out of any settlement or judgment of such claim. In
addition, the Indemnified Party shall have the right to participate in the
defense of such claim at its expense, in which case (a) the Indemnifying Party
shall cooperate in providing information to and consulting with the Indemnified
Party about the claim, and (b) the Indemnifying Party shall not consent to the
entry of judgment or enter into any settlement without the prior written consent
of the Indemnified Party, which shall not be unreasonably withheld. If the
Indemnifying Party fails to assume the defense of any such claim, the
Indemnified Party may defend against or settle such claim and the Indemnifying
Party shall be liable for any settlement of any such claim.
SECTION 11.4 Limits on Indemnification.
-------------------------
Notwithstanding anything to the contrary contained in this
Agreement:
(a) Seller shall not have any obligation to provide
indemnification for Losses pursuant to Section 11.1 except to the extent that
the aggregate amount of all such Losses exceeds $50,000, in which case Seller
shall be liable to Buyer only for such Losses in excess of $50,000 (the "Basket
Amount"). The maximum obligation of Seller to provide indemnification for all
Losses pursuant to Section 11.1 shall be limited to an amount equal to the
Purchase Price. Notwithstanding the foregoing, the Basket Amount and such
liability cap will not apply with respect to any breach of Seller's
representations and warranties set forth in Sections 4.1, 4.2, 4.3, 4.8 and
4.14;
37
(b) Buyer shall not have any obligation to provide
indemnification for Losses indemnified pursuant to Section 11.2 except to the
extent that the aggregate amount of all such Losses exceeds the Basket Amount,
in which case Buyer shall be liable to Seller only for such Losses in excess of
the Basket Amount. The maximum obligation of Buyer to provide indemnification
for Losses pursuant to Section 11.2 shall be limited to an amount equal to the
Purchase Price. Notwithstanding the foregoing, the Basket Amount and such
liability cap will not apply with respect to any breach of Buyer's
representations and warranties set forth in Sections 5.1, 5.2, 5.3, 5.5 and 5.7;
(c) Seller shall not have any obligation to provide
indemnification hereunder for any Losses pursuant to Sections 11.1 unless a
written notice of claim specifying in reasonable detail the specific nature and
basis of the Losses and the estimated amount of such Losses is delivered to
Seller prior to 5:00 p.m., Houston, Texas time, on the third anniversary of the
Closing Date. Buyer shall not have any obligation to provide indemnification
hereunder for any Losses unless a written notice of claim specifying in
reasonable detail the specific nature and basis of the Losses and the estimated
amount of such Losses is delivered to Buyer prior to 5:00 p.m., Houston, Texas
time, on the third anniversary of the Closing Date;
(d) For purposes of determining Losses in order to calculate
the Basket Amount and determine rights to indemnification under this Article XI,
the representations and warranties set forth in Articles IV and V shall be read
without giving effect to any Materiality Requirement set forth therein. As used
in this Agreement, a "Materiality Requirement" shall mean any requirement in a
representation or warranty that a condition, event or state of fact be
"material," correct or true in "all material respects," have a "Material Adverse
Effect," or be or not be "reasonably expected to have a Material Adverse Effect"
(or other words or phrases of similar effect or impact) in order for such
condition, event or state of facts to cause such representation or warranty to
be inaccurate.
SECTION 11.5 Certain Damages.
---------------
NEITHER PARTY NOR ANY OF THEIR RESPECTIVE AFFILIATES OR
REPRESENTATIVES SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY OF ITS AFFILIATES
OR REPRESENTATIVES FOR PUNITIVE, SPECIAL, EXEMPLARY, INCIDENTAL, INDIRECT,
CONSEQUENTIAL, REMOTE OR SPECULATIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT
AND THE TRANSACTION CONTEMPLATED HEREBY, REGARDLESS OF WHETHER SUCH DAMAGES ARE
BASED ON CONTRACT, TORT, STRICT LIABILITY, VIOLATION OF LAW, OR ANY OTHER LEGAL
OR EQUITABLE PRINCIPLE; PROVIDED, THE FOREGOING SHALL NOT APPLY TO ANY SUCH
DAMAGES FINALLY DETERMINED TO BE PAYABLE TO A THIRD PERSON PURSUANT TO A CLAIM
COVERED BY THE INDEMNITY PROVIDED PURSUANT TO ARTICLE XI.
SECTION 11.6 Exclusive Remedy.
-----------------
Except for the tax indemnification provisions of Article VII, if
the Closing occurs, the sole and exclusive remedy of each of Buyer and Buyer's
Affiliates, and Seller and Seller's Affiliates, with respect to the purchase and
sale of the Assets shall be pursuant to the express indemnification provisions
of this Article XI and any and all (a) claims relating to the
38
representations, warranties, covenants and agreements contained in this
Agreement, (b) other claims pursuant to or in connection with this Agreement, or
(c) other claims relating to the Assets, shall be subject to the provisions set
forth in this Article XI.
Except for claims made pursuant to the express indemnification
provisions of this Article XI, Buyer on behalf of each of Buyer and Buyer's
Affiliates shall be deemed to have waived, to the fullest extent permitted under
applicable law, any right of contribution against Seller or any of Seller's
Affiliates and any and all rights, claims and causes of action it may have
against Seller or any of Seller's Affiliates, arising under or based on any
federal, state or local statute, law, ordinance, rule or regulation or common
law or otherwise.
Except for claims made pursuant to the express indemnification
provisions of this Article XI, Seller on behalf of each of Seller and Seller's
Affiliates shall be deemed to have waived, to the fullest extent permitted under
applicable law, any right of contribution against Buyer or any of Buyer's
Affiliates and any and all rights, claims and causes of action it may have
against Buyer or any of Buyer's Affiliates, arising under or based on any
federal, state or local statute, law, ordinance, rule or regulation or common
law or otherwise.
ARTICLE XII
GENERAL
SECTION 12.1 Amendments.
----------
This Agreement may only be amended by written instrument executed
by Buyer and Seller.
SECTION 12.2 Waivers.
-------
The observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) by the Party entitled to enforce such term, but such waiver shall
be effective only if it is in a written instrument signed by the Party entitled
to enforce such term and against which such waiver is to be asserted. Unless
otherwise expressly provided in this Agreement, no delay or omission on the part
of any Party in exercising any right or privilege under this Agreement shall
operate as a waiver thereof, nor shall any waiver on the part of any Party of
any right or privilege under this Agreement operate as a waiver of any other
right or privilege under this Agreement, nor shall any single or partial
exercise of any right or privilege preclude any other or further exercise
thereof or the exercise of any other right or privilege under this Agreement.
SECTION 12.3 Notices.
-------
Any notices or other communications required or permitted
hereunder shall be in writing and shall be sufficiently given (and shall be
deemed to have been duly given upon receipt) if sent by overnight mail,
registered mail or certified mail, postage prepaid, or by hand, to the Parties
at the following addresses (or at such other address for a Party as shall be
specified by like notice):
39
If to Seller, to:
Xxxxxxx Xxxxxx
Penn Octane Corporation
000 Xxxxxxx Xxxxx 0000
Xxxxxxx, Xxxxx 00000
With a copy (which shall not constitute effective notice) to:
Xxx Xxxxxxxx
Penn Octane Corporation
000 Xxxxxx Xxxxxx Xxx 000
Xx Xxxxxxx,XX 00000
If to Buyer, to:
TransMontaigne Product Services Inc.
Attn: President
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
SECTION 12.4 Successors and Assigns; Parties in Interest.
-------------------------------------------
This Agreement shall be binding upon and shall inure solely to
the benefit of the Parties and their respective successors and permitted
assigns. Neither this Agreement nor any rights or obligations hereunder may be
assigned without the written consent of the other Party, and any purported
assignment made without such written consent shall be void; provided, Buyer
shall have the right to designate one or more of its Affiliates (including
TransMontaigne Partners L.P.) to be transferee(s) at the Closing of all or any
part of the Assets. Except as expressly contemplated by Sections 11.1 and 11.2,
nothing in this Agreement, express or implied, is intended to or shall confer
upon any Person, other than the Parties and their respective successors, legal
representatives, and permitted assigns, any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement, and no Person shall be
deemed a third party beneficiary under or by reason of this Agreement.
SECTION 12.5 Severability. If any provision of this Agreement or the
------------
application of any such provision to any Person or circumstance shall be
declared judicially to be invalid, unenforceable, or void, such decision shall
not have the effect of invalidating or voiding the remainder of this Agreement,
it being the intent and agreement of the Parties that this Agreement shall be
deemed amended by modifying such provision to the extent necessary to render it
valid, legal and enforceable while preserving its intent or, if such
modification is not possible, by substituting therefor another provision that is
valid, legal, and enforceable and that achieves the same objective.
SECTION 12.6 Entire Agreement.
----------------
This Agreement (including the Exhibits and Schedules hereto and
the documents and instruments executed and delivered in connection herewith)
constitutes the entire agreement between the Parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous agreements and
understandings, whether written or oral, between the
40
Parties with respect to the subject matter hereof, and there are no
representations, understandings or agreements relating to the subject matter
hereof that are not fully expressed in this Agreement and the documents and
instruments executed and delivered in connection herewith; provided, the Buyer
Confidentiality Agreement shall remain in full force and effect according to its
terms until the Closing. All Exhibits and Schedules attached to this Agreement
are expressly made a part of, and incorporated by reference into, this
Agreement.
SECTION 12.7 Governing Law, Consent to Jurisdiction.
--------------------------------------
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS. Each Party irrevocably submits to the
jurisdiction of any Texas state court or any federal court sitting in Houston,
Texas in any action arising out of or relating to this Agreement, and hereby
irrevocably agrees that all claims in respect of such action shall be heard and
determined in such Houston, Texas state or federal court. Each Party hereby
irrevocably waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding. The
Parties further agree, to the extent permitted by Law, that final and
un-appealable judgment against any of them in any action or proceeding
contemplated above shall be conclusive and may be enforced in any other
jurisdiction within or outside the United States by suit on the judgment, a
certified copy of which shall be conclusive evidence of the fact and amount of
such judgment. Each Party waives, to the fullest extent permitted by applicable
Law, any right it may have to a trial by jury in respect of any action, suit or
proceeding arising out of or relating to this Agreement. Each Party certifies
that it has been induced to enter into this Agreement by, among other things,
the mutual waivers set forth in this Section 12.7.
41
SECTION 12.8 Expenses.
--------
Each of the Parties shall bear its own expenses (including fees
and disbursements of its counsel, accountants and other experts) incurred by it
in connection with the preparation, negotiation, execution, delivery and
performance of this Agreement, each of the other documents and instruments
executed in connection with or contemplated by this Agreement and the
consummation of the transaction contemplated hereby.
SECTION 12.9 Release of Information; Confidentiality.
------------------------------------------
The Parties shall cooperate with each other in releasing
information concerning this Agreement and the transaction contemplated hereby.
No press releases or other public announcements concerning the transaction
contemplated by this Agreement shall be made by any Party without prior
consultation with, and agreement of, the other Party, except for any legally
required communication by any Party and then only with prior consultation and as
much advance notice as is practicable under the circumstances requiring any
announcement, together with copies of all drafts of the proposed text. At the
Closing the Buyer Confidentiality Agreement shall be deemed terminated without
any further action of the Parties.
SECTION 12.10 Sole Obligation.
----------------
The obligations of Seller under and pursuant to this Agreement
shall be the sole obligations of Penn.
SECTION 12.11 Certain Construction Rules.
--------------------------
The article and section headings and the table of contents
contained in this Agreement are for convenience of reference only and shall in
no way define, limit, extend or describe the scope or intent of any provisions
of this Agreement. Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns, and verbs shall include the plural and
vice versa. In addition, as used in this Agreement, unless otherwise provided
to the contrary, (a) all references to days, months or years shall be deemed
references to calendar days, months or years, and (b) any reference to a
"Section," "Article," or "Schedule" shall be deemed to refer to a section or
article of this Agreement or a schedule attached to this Agreement. The words
"hereof," "herein," "hereunder" and words of similar import referring to this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement. Unless otherwise specifically provided for herein, the term
"or" shall not be deemed to be exclusive. The term "including" shall mean
"including without limitation."
SECTION 12.12 Survival.
--------
The representations, warranties, covenants and agreements of the
Parties set forth herein or in any certificate delivered pursuant to the terms
hereof shall survive the Closing, and such representations and warranties shall
be subject to the provisions of Article XI.
42
SECTION 12.13 Counterparts.
------------
This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute one instrument binding on Parties, notwithstanding that all Parties
are not signatories to the original or the same counterpart.
[The remainder of this page is intentionally left blank]
43
IN WITNESS WHEREOF, this Purchase and Sale Agreement has been duly executed
as of the date first above written.
SELLER:
PENN OCTANE CORPORATION
By: /s/ Xxxxxxx Xxxxxx
-------------------------
Name: Xxxxxxx Xxxxxx
Title: President
BUYER:
TRANSMONTAIGNE PRODUCT SERVICES
INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
